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TYC Annual Report 2021

Jun 24, 2022

51846_rns_2022-06-24_adb119c8-74c7-44d7-b2ea-5ae17d517b13.pdf

Annual Report

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Stock Code：1522

==> picture [239 x 93] intentionally omitted <==

T.Y.C. BROTHER IND. CO., LTD.

2021 Annual Report

Date of Publication: May 31, 2022

T.Y.C. annual report is available at：http://mops.twse.com.tw

Company website：http://www.tyc.com.tw

  1. Spokesman: 1.1 Name : WENG,YI-FENG 1.2 Title: Deputy General Manager, Finance Division 1.3 Tel: (06) 265 8781 1.4 E-mail: [email protected]

  2. Deputy Spokesperson：

  3. 2.1 Name：HUANG, CHIN-YUEH

  4. 2.2 Title：Executive Assistant to the Chairman 2.3 Tel：(06)2658781 2.4 E-mail：[email protected]

  5. Head office and Branch office：

Address Tel Head office 72-2 Shin-leh Rd., Tainan (06)2658781 Branch factory 377 Sec.2 Bentian Rd., Tainan (06)3841888

  1. Stock Transfer Agent：

  2. 4.1 Name：Capital Securities Corporation.

  3. 4.2 Address：RF 2[nd] , 97, Sec. 2, Dunhua South Rd., Taipei

  4. 4.3 Web site：http://www.capital.com.tw

  5. 4.4 Tel：(02)27023999

  6. Certified Public Accountants for Financial Statements： ERNST & YOUNG, TAIWAN

  7. 5.1 Name of Accountants：HUANG, SHIH-CHIEH、LEE,FANG-WEN 5.2 Address： 5F, No. 189, Sec. 1, Yongfu Rd., West Central Dist. Tainan City 700019, Taiwan (R.O.C.)

  8. 5.3 Web site：http://www.ey.com

  9. 5.4 Tel：(06)2925888

  10. Name of overseas marketable securities trading exchange and inquiry method: None

  11. Company Website：http：// www.tyc.com.tw

Contents

I.Letter to Shareholders ..................................................................................................... - 1 - 1.Operating Performance in 2021 ........................................................................................... - 1 - 2.Overview of Business Plan for 2022...................................................................................... - 2 - 3. The future development strategy of the company is affected by the external competitive environment, regulatory environment and overall business environment ..... - 2 - II.Company Profile ............................................................................................................. - 3 - 1.Date of Incorporation ........................................................................................................... - 3 - 2.Company History ................................................................................................................... - 3 - III.Corporate Governance Report ....................................................................................... - 7 - 1.Company Organization.......................................................................................................... - 7 - 2.Information of directors, supervisors, general managers, deputy general managers, associates, heads of departments and branches ................................................................. - 9 - 3.Remuneration of Directors, General Managers and Deputy General Managers paid in the latest year ..................................................................................................................... - 14 - 4.Corporate Governance Status ............................................................................................. - 18 - 5.CPA Public Fee Information ................................................................................................ - 41 - 6.Change of accountant information ..................................................................................... - 41 - 7.If the chairman, general manager, or manager in charge of financial or accounting matters of the Company has worked for the firm of the certified public accountant or its affiliates within the past year, he/she should disclose his/her name, title, and period of employment with the firm of the certified public accountant or its affiliates .............. - 41 - 8.The following are the movements in shareholdings and pledges of shareholdings of directors, supervisors, managers and shareholders holding more than 10 percent of the shares during the latest year and up to the date of printing of the annual report. .......... - 42 - 9. Information on the relationship between the top 10 shareholders and their respective shareholdings. ..................................................................................................................... - 43 - 10.Consolidated shareholding: .............................................................................................. - 44 - IV.Fund raising situation .................................................................................................. - 45 - 1.Capital and share capital ..................................................................................................... - 45 - 2.Handling of corporate bonds .............................................................................................. - 53 - 3.Special shares ...................................................................................................................... - 54 - 4.Data of preferred shares with warrants: Not applicable .................................................... - 56 - 5.Overseas Depositary Receipts: Not applicable ................................................................... - 56 - 6.Employee stock option certificate application situation: Not applicable ........................... - 56 - 7.Matters to be recorded in the case of M & A or transfer of shares of other companies to issue new shares: Not applicable ....................................................................................... - 56 -

8.Implementation of the fund use plan: The Company does not issue or privately places securities; therefore, it is not applicable. ........................................................................... - 56 - V.Operations Profile ........................................................................................................ - 57 - 1.Business Content ................................................................................................................. - 57 - 2. Market and Production Overview. ..................................................................................... - 61 - 3.Number of employees, average years of service, average age and education distribution ratio in the past two years .................................................................................................. - 66 - 4.Environmental Expenditure Information. ........................................................................... - 67 - 5.Labor relations .................................................................................................................... - 67 - 6. Cyber Security Management.............................................................................................. - 69 - 7.Important Contract ............................................................................................................. - 69 - VI. Financial Overview ..................................................................................................... - 70 - 1. Condensed balance sheet and consolidated profit and loss account for the past five years, name of accountant and his audit opinion. ............................................................. - 70 - 2.Financial analysis for the past five years ............................................................................ - 74 - 3.Report of the Audit Committee on the examination of the latest annual financial report- 78 - 4.Latest Annual Financial Statements .................................................................................... - 79 - 5.Individual financial statements for the past year verified by accountants ...................... - 185 - 6.Financial turnaround difficulties experienced by the Company and its affiliates in the most recent year and as of the date of publication of the annual report ....................... - 297 - VII.Analysis of the Financial Status, Business Outcomes and Risk Issues .......................... - 298 - 1.Analysis of the financial status .......................................................................................... - 298 - 2.Financial Performance Review Analysis ............................................................................ - 299 - 3.Cash flow analysis ............................................................................................................. - 300 - 4.Impact of significant capital expenditures on financial operations in the past year ....... - 300 - 5.Recent annual investment policy,the main reasons for its profit or loss, improvement plan and investment plan for the next year ..................................................................... - 301 - 6.Risk Event Analysis Assessment. ....................................................................................... - 301 - 7.Other important matters. ................................................................................................. - 303 - VIII.Special notes ： ........................................................................................................ - 304 - 1.Related information on affiliated companies. .................................................................. - 304 - 2.Private securities in the past year and as of the date of publication of the annual report . 313 3.Holding or disposal of the company’s shares by affiliates in the past year and as of the date of publication of the annual report .............................................................................. 313 4.Other necessary supplementary information ....................................................................... 313 IX.Matters in the past year and as of the date of publication of the annual report which have a substantial impact on the owner’s equity as stipulated in item 2, paragraph 2 of Article 36 of the Securities Exchange Law. .................................................................. 313

I.Letter to Shareholders

1.Operating Performance in 2021：

(1) Consolidated financial results：

In the past year, TYC's operating revenue reached NTD14,446,208 thousand dollars, a 17.64% increase from the net operating revenue of NTD17,539,920 thousand dollars for the same period in 2020, with a gross profit on sales of $2,857,442 thousand dollars and a net profit before tax of $407,901 thousand dollars, thanks to the concerted efforts of all our employees.

of all our employees.
Unit: (In Thousand NTD)
Item 2020 Performance 2021 Performance Growth Rate %
Operating income 14,446,208 16,576,615
14.75%
OperatingCosts 11,588,766 13,569,207 17.09%
Gross profit 2,857,442 3,007,408
5.25%
OperatingExpenses 2,590,956 2,578,705 (0.47)%
OperatingBenefit 266,486 428,703 60.87%
Non-operating income
and expenses		 141,415 (99,282)
(170.21)%
Net income before tax 407,901 329,421
(19.24)%
Income tax 121,214 92,812
(23.43)%
Net income after tax 286,687 236,609 (17.47)%
  • (2) Budget implementation：Undisclosed financial forecast for 2021.

(3) Financial Revenue and Expenditure & Profitability analysis：

Item Year Year 2020 2021
Financial structure
(%)		 Debt to asset ratio 70.52% 65.95%
Longterm capital to fixed assets ratio 197.41% 208.22%
Profitability (%) Return on assets(%) 1.73% 1.48%
Return on equity (%) 4.23% 3.18%
Paid-in capital
ratio(%)		 Operatingincome 8.52% 12.50%
Profit before tax 13.04% 9.61%
Netprofit ratio 1.98% 1.43%
Earningsper share(in NT$) 0.84 0.62

(4) Research and development status ：

  • A. R&D expenses for the Past Two Years

  • (a) Research and development expenses in 2019 were 425,047 thousand dollars, accounting for 2.94% of the operating income of 2020

  • (b) Research and development expenses in 2021 were 344,453 thousand dollars, accounting for 2.08% of the operating income of 2021.

  • 1 -

    • B.Successful R&D projects：

      • (1) LED edge-lit light bar tail light

      • (2) Adaptive Driving Beam (ADB) headlamp design (with AFS function)

      • (3) Full-function reflective LED motorcycle headlamp control by CAN BUS

  • 2.Overview of Business Plan for 2022：

  • (1) Operating principle

    • A.Continue to pass product certification and expand the performance of the relevant product group to enhance turnover and profit.

    • B.Actively invest in the development of electronic and electronic control technologies for smart lighting to ensure technological leadership of our products.

    • C.Utilize internal and external resources to make the cost and quality of products more competitive.

    • D.Speed up the development of new products and shorten the time to market effectively in order to obtain the first market opportunity.

  • (2) Expected sales volume and its basis：

    • A.Expected sales volume：Both AM and OEM sales are expected to grow in 2022 compared to 2021, but are subject to change depending on the global COVID-19 development.

    • B.Sales basis：Planning based on estimated domestic and international market demand.

  • (3) Important Production and Marketing Policies：

    • A. Eliminate internal waste and continuously improve to strengthen operating quality and market price competitiveness.

    • B. Continue to build manpower-savings and automated production systems to improve

      • output and production efficiency.

    • C. Effective management of expenditure of fixed assets, reduce the fixed cost allocationand promote the flexible use of funds.

    • D.Through the analysis of production and sales data, we can accurately predict the seasonal demand of the market and provide customers with more timely delivery requirements.

  • The future development strategy of the company is affected by the external competitive environment, regulatory environment and overall business environment：

The revenue in the OEM market was slightly declined last year due to IC shortage, which affected the order numbers from automobile manufacturer. Even though the demands on aftermarket was high and orders are fully loaded, the goods were unable to ship due to port congestion, container shortage, and the exorbitant shipping cost, so the revenue cannot reflect the order demands. The rising price in raw material and strengthening New Taiwan Dollar also have impact on profit. Fortunately, the revenue of CAPA product in North America is continuously growing. As for the European and general regional markets, they will continue to increase the product group and enhance the price competitiveness of products in order to ensure that it meets the revenue targets after COVID-19 slowdown and US rate rise.

We would like to thank all the shareholders for taking the time to attend the shareholders' meeting. The operation team and staff will do everything we can to meet the expectations of all shareholders. We wish you all good health and all the best.

C hai rm an ：WU, CHUN-CHI Manager ： CHEN , CHIN-CHAO

  • 2 -

Chief accountant ： WENG,YI-FENG

II.Company Profile

1.Date of Incorporation ：September 9, 1986

2.Company History ：

  • (1) Status of acquisitions in the past year and as of the date of publication of the annual report: None.

  • (2) Status of re-investments in affiliated companies in the past year and as of the date of publication of the annual report.：Refer to page 304.

  • (3) Status of reorganisation in the past year and as of the date of publication of the annual report：None.

  • (4) Particulars about changes in shareholding and equity pledge of directors, supervisors and shareholders holding more than 10% of the company's shares in the past year and as of the date of publication of the annual report : None.

  • (5) Changes in operating rights, significant changes in the manner of operation or business content and other events of sufficient importance to affect shareholders' equity and their impact on the Company in the past year and as of the date of publication of the annual report : None.

  • (6) Other information：

  • 1986 T.Y.C. Brother Ind. Co., Ltd. was established on September 9, with a capital of NT$6 million. Business: Manufacture and sale of automotive lamps and parts.

  • 1987 The new construction of the office and factory was completed in April, and the production operation was officially moved to 72-2, Xinle Rd., An-Ping Industrial Park.

  • 1987 Capital increased to NT$36 million in October and 150 employees. 1988 Capital increased to NT$100 million in June.

  • 1988 Purchased an office building on the 12th floor of No. 76 Songjiang Road in Taipei in December and set up the Taipei office.

  • 1989 Purchased a factory site on Xin-Yi Road in An-Ping Industrial Park in January and established the second factory of TYC (Xin-Yi Factory) to engage in plastic injection and extrusion molding operations.

  • 1989 Capital increased to NT$170 million in March and 200 employees. 1989 Capital increased to NT$420 million in December.

  • 1990 Acquired TKK TECH CO., LTD. in January and established Anshun factory to produce electric jack, air filter, car waxer, air compressor and car department etc.

  • 1990 Capital of NT$420 million, 300 employees and investment in BRICH PARTS PTE. LTD. The company serves as a base for entering the Middle East, Southeast Asia, and China markets, and its main business is import trading.

  • 1991 The quality of the lamp passed the TUV certification and reached the ECE standard, and entered the European common market.

  • 1991 Self-designed and developed the light of KYMCO Jockey 125 and joined the OEM of Kwang Yang Motor Co., Ltd.

  • 1991 March investment in TYC INDUSTRIAL U.S.A. The company's main business is import/export trading, as an entry point into the American market (renamed GENERA CORPORATION four years later).

  • 1993 Founded Juoku Technology in January, engaged in the design,

  • 3 -

development and manufacture of high-tech molds.

  • 1993 Passed ISO 9002 certification in June, and expanding into European markets aggressively

  • 1995 The Securities Commission of the Ministry of Finance approved a supplemental public offering in March with a capital of NT$420 million.

  • 1995 Established the Daimao lamp factory in Changzhou, China in March.

  • 1995 June capital increased to NT$478.8 million.

  • 1995 September investment in INNOVA HOLDING CORP. 100% reinvestment in LANDFORCE CORPRATION as a point of entry into the US East market.

  • 1996 July capital increase of NT$605 million. 1997 Capital increased to NT$726 million in May and was listed on the stock exchange on October 6.

  • 1998 The capital increase in July was NT$1,143,800,000 and the company passed the QS9000 certification for the three major U.S. car manufacturers in December.

  • 1999 The capital increase in July was NT$1,372,560,000 and we invested and established T.I.T INTERNATIONAL CO., LTD in December in Thailand, which is engaged in the manufacture of car lights.

  • 2000 Established a joint venture with DBM Canada in January to manufacture full-stage electroforming dies in Taiwan.

  • 2000 The capital increase in July was NT$1,647,072,000. 2000 Signed a contract with Nationwide, which is the third largest insurance company in the United States, in September and was selected as the world's only certified automotive lamp supplier.

  • 2001 Invested and established Thailand TIT INDUSTRIAL LO., LTD in March 2001 The capital increase in June was NT$1,696,484,000. 2001 Established Changzhou Damao Precision Mould Factory in August. 2002 The capital increase in June was NT$1,832,203,000. 2002 Approved to set up operational headquarters in Tainan Technology Park. 2003 ISO14001 certification in July. 2003 The capital increase in July was NT$1,923,813,050. 2003 TS-16949 certified in October. 2004 Invested in Changchun FAW's Sihua Lighting Plant in February. 2004 First domestic convertible bond issue approved in June for NT$1 billion. 2004 Established a joint venture with IC AUTO COMP. in June to establish a sales and distribution warehouse in Europe and Spain.

  • 2004 The capital increase in August was NT$2,164,289,680. 2004 The European Lithuanian lamp assembly line was set up in September. 2004 Convertible bonds converted to NT$1,880,430 in October and increased capital to NT$ 2,166,170,110.

  • 2005 Selected as one of the top 20 best brands in Taiwan. 2005 Officially joined the CAPA organization of the American Insurance System in July. The first set of lamps was certified for the market in September and received the CAPA certificate of compliance.

  • 2005 Passed FORD Q1 quality certification in August. 2005 The capital increase in September was NT$2,426,110,520. 2005 Convertible bonds converted to NT$23,507,230 in December and increased capital to NT$ 2,449,617,750.

  • 2006 Received Q1 Quality Award Certificate in March. 2006 Convertible bonds converted to NT$1,081,310 in April and increased capital to NT$ 2,450,699,060.

  • 4 -

  • 2006 Convertible bonds converted to NT$35,683,980 in July and increased capital to NT$ 2,486,383,040.

  • 2006 Convertible bonds converted to NT$4,231,280 in December and increased capital to NT$ 2,490,614,320.

  • 2007 Convertible bonds converted to NT$94,020 in April and increased capital to NT$ 2,490,708,340.

  • 2007 Signed technical support contract with TAFACO Vietnam in May.

  • 2007 The capital increase in September was NT$2,528,068,960.

  • 2007 IRAM Argentina certification in October.

  • 2007 Convertible bonds converted to NT$82,613,610 in October and increased capital to NT$ 2,610,682,570.

  • 2007 Convertible bonds converted to NT$7,105,260 in December and increased capital to NT$ 2,617,787,830.

  • 2008 Convertible bonds converted to NT$58,797,390 in April and increased capital to NT$2,676,585,220.

  • 2008 Officially joined the LKQ/KEYSTONE AQRP system in May and the first set of lights were certified and launched in December.

  • 2008 Convertible bonds were converted to NT$95,370 in July and capital increased to NT$2,676,680,590.

  • 2008 Approved the execution of the first buyback of 6,103,000 shares of the company in September.

  • 2008 The capital increase from the November earnings was NT$2,783,217,540. 2008 The treasury stock was cancelled in December, amounting to NT$61,030,000, resulting in a capital reduction of NT$2,722,187,540.

  • 2008 Approved the execution of the second buyback of 3,300,000 shares of the company in December.

  • 2009 The HID high efficiency street light was officially launched in January. 2009 The capital increase in October was NT$2,802,863,160. 2010 SABA South Africa certificate obtained in February. 2010 The capital increase from October's earnings was NT$3,079,849,480. 2010 Passed the AEO (Quality Enterprise) certification by the General Administration of Customs and Excise, Ministry of Finance in December.

  • 2010 Passed OHSAS18001 and TOSHMS certification in December. 2010 Awarded the 19th Taiwan Excellence Award by the Ministry of Economic Affairs, Taiwan Trade Office in December.

  • 2011 Selected for the 2011 AMPA Innovation Product Award by the Foreign Trade Association in April.

  • 2011 Approved the execution of the third buyback of 8,000,000 shares of the company in October.

  • 2011 The capital increase from the October earnings was NTD 3,171,254,960.

  • 2012 Cancelled NTD 47,870,000 of treasury stock in January, resulting in a capital reduction of $3,123,384,960 respectively.

  • 2012 Approved the execution of the fourth buyback of 3,000,000 shares of the company in November.

  • 2012 After the capital increase of NTD 31,233,850 and the cancellation of

  • NTD 12,000,000 of treasury stock in October, the paid-in capital amounted to NTD $3,142,618,810 respectively.

  • 2012 Passed NSF-APCP certification in October and became a qualified supplier.

  • 2012 Selected for the 21st Taiwan Excellence Award by the Ministry of Economic Affairs, Taiwan Trade Office in December.

  • 5 -

  • 2013 Approved the execution of the fifth buyback of 3,000,000 shares of the Company in January.

  • 2013 Awarded the 2013 AMPA Innovation Product Award by the Foreign Trade Association in April.

  • 2013 The treasury stock was cancelled for NTD 13,640,000, and the capital was reduced to NTD 3,128,978,810 in May.

  • 2013 Awarded the 22nd Taiwan Excellence Award by the Bureau of International Trade, Ministry of Economic Affairs in December.

  • 2013 Passed Taiwan's first LED streetlight environmental "Carbon Footprint" certification in December.

  • 2014 Awarded the 2014 AMPA Innovation Product Award by the Foreign Trade Association in April.

  • 2015 All-LED locomotive headlights win 2015 Innovation Award in January.

  • 2016 Received the 2015 Manufacturing Site - Carbon Reduction Initiative Award in January.

  • Selected for the 25th Taiwan Excellence Award by the Bureau of International Trade, Ministry of Economic Affairs in December.

  • 2017 Taiwan excellence award for 5-in-1 bus headlight, Taiwan excellence award for full led cruiser heavy locomotive headlight, Taiwan excellence award for full led motorcycle headlight in February.

  • 2018 ISO/TS 16949 quality management system certification successfully changed to IATF 16949 in April.

  • Received ISO 26262 Functional Safety Management System certification from Rheinland in July.

  • 2019 Taiwan Excellence Silver Award for Full Function LED Motorcycle Tail Light

  • 2020 Investing in the establishment of TYC Vietnam VIETNAM INDUSTRIAL CO., LTD. in July.

  • ISO 45001 certificate obtained in September.

  • Awarded the 29th Taiwan Excellence Award (T-type Innovative Full-function LED Motorcycle Headlight, V-type Innovative Full-function LED Motorcycle Headlight).

  • 2021 After issuing 30,000,000 special shares on August 10, the paid-in capital amount was NT$3,428,978,810.

  • Awarded the 30th Taiwan Excellence Award (Full LED Motorcycle Headlamp).

  • 6 -

III.Corporate Governance Report

1.Company Organization：

  • (1) Organizational structure：

==> picture [738 x 369] intentionally omitted <==

  • 7 -

(2) Major Corporate Functions：

Department Functions
Audit Department
Responsible for company-wide internal rules and regulations and
various management systems, executing audit work plans,
implementing various systems management and improvement.
Safety and Health
Room
1. Formulate occupational disaster prevention plans and emergency
response plans, and provide guidance to relevant departments on
their
implementation.
2. Planning and supervising the inspection and checking of safety and
health facilities.
General
Manager's Room		 Supervision and management of the approval and execution of medium
and long-termpolicies and objectives of each overseas business unit.
Administration
Division		 1. Maintenance and development of the human resources framework.
2. Maintain high performance operation of the company's information
services and management strategies.
Financial
Division		 1. Processing of financial and accounting operations and providing
information necessary for management decisions.
2. To keep track of domestic and international financial trends and
manage the use of funds.
Sales and
Marketing
Division		 1. Obtain customer and domestic and international market
Dynamics in a timely manner, and further explore consumer
demand trends, and develop sales strategies.
2. Integrate the activities of production and related departments to
make the team work efficiently and start strong and profitable sales
activities to improve customer satisfaction and increase company
profitability.
Production
Division		 1. Cultivate and develop the various functions, promote the balance
of productivity, and realize stable production.
2. Implement the quality of operation, improve the production system
in a timely manner to enhance product quality and productivity.
Manufacturing
Division		 1. Mold fabrication and modification, mold manufacturing
technology, mold repair and maintenance of related equipment, etc.
2. Evaluate the feasibility and cost analysis of manufacturing new
development molds.
Material Supply
Division
1. Planning and integrating procurement resources to strengthen the
systematic production and marketing system.
2. Understand market trends and procurement policies.
Quality Control
Department		 1. To establish a complete quality system and further improve the
quality of products.
2. Feedback from customer voices.
R&D Division 1. Promote appropriate quality system or system to ensure product
quality, continuous improvement and reduce variation and waste.
2. Start product evaluation, planning, mold development, trial
production to mass production development plan.
  • 8 -

2.Information of directors, supervisors, general managers, deputy general managers, associates, heads of departments and branches：

(I) Directors' Information：

2022/3/31

Title Nationality/
Place of
Incorporation		 Name Gender
Age		 Date Elected Term
(Years)		 Date of
initial
election		 Shareholding when
Elected		 Shareholding when
Elected		 Current Shareholding Current Shareholding Shares held
minor ch		 by spouse,
ildren		 Holding s
the name o		 hares in
f others		 Experience（Education） Other Position Executives, D
Spouses or w		 irectors or Supervisors Who are
ithin Two Degrees of Kinship		 irectors or Supervisors Who are
ithin Two Degrees of Kinship		 Remark
Holding
shares in the
name of
others		 Holding
shares in
the name
of others		 Shares % Shares % Shares % Title Name Relation
Chairman Taiwan WU ,
CHUN-CHI		 Male
71-80
years
old		 2021/8/3 3 1997/4/26 824,081 0.26% 824,081 0.26% 828,278 0.26% 0 0 CEO
Juoku Technology
Education: National
Pei-men Senior High
School		 CEO
TYC
TAYITA
DBM REFLEX		 Director
Director		 WU ,
CHUN-LANG
WU , CHUN-I		 Brother
Brother		 N/A
Vice-president Taiwan WU ,
CHUN-LANG		 Male
61-70
years
old		 2021/8/3 3 1997/4/26 5,401,383 1.73% 5,401,383 1.73% 828,278 0.26% 0 0 CEO of Yuan-Hong
Investment Co., Ltd.
Education: National
Pei-men Senior High
School		 Vice-presidentof
TYC
Director of
TAYIH Invest.		 Director
Director		 WU ,
CHUN-CHI
WU , CHUN-I		 Brother
Brother		 N/A
Director Taiwan WU , CHUN-I Male
71-80
years
old		 2021/8/3 3 2018/6/21 4,593,613 1.47% 4,593,613 1.47% 823,474 0.26% 0 0 CEO of TAYIH Ind.
Co., Ltd
Education: National
Pei-men Senior High
School		 Director of Ta Yih Ta
Investment Co., Ltd
CEO of Prokia
Technology Co.,Ltd.		 Director
Director		 WU ,
CHUN-CHI
WU ,
CHUN-LANG		 Brother
Brother		 N/A
Director Taiwan CHEN ,
CHIN-CHAO		 Male
51-60
years
old		 2021/8/3 3 2012/6/21 0 0 0 0 475 0 0 0 Director
Juoku Technology
Education: NCKU
department of
mechanical engineering		 GM of TYC
Director of TAMAO
Consulting		 N/A N/A N/A N/A
Legal
representativey
uan-Hong
Investment Co.,
Ltd.		 2006/6/21 5,354,451 1.71% 5,354,451 1.71% 0 0 0 0 N/A N/A N/A N/A
Director Taiwan WU ,
KUO-CHEN		 Male
41-50
years
old
 2021/8/3 3 2015/6/17 0 0 296,211 0.09% 0 0 0 0 Supervisor
VarrocTYC Auto
Lamps Co., Ltd.
Education: University
of Southern California
Business School
master's degree		 Executive Directorof
TYC
Director of
Kuo-Chi-Min
Investment Co., Ltd.		 CEO WU ,
CHUN-CHI		 Father-Son N/A
Legal
representative
of
KUO-CHI-MI
N
INVESTMENT
CO.,LTD.		 2006/6/21 9,931,756 3.17% 9,931,756 3.17% 0 0 0 0 N/A N/A N/A N/A
Director Taiwan CHUANG,
TAI-SHIE		 Male
61-70
years
old		 2021/8/3 3 2021/8/3 0 0 0 0 0 0 0 0 Director, Ford Motor Greater
China
Education: Master of
College of Management,
Yuan Ze University		 CEO
VarrocTYC Auto
Lamps Co., Ltd		 N/A N/A N/A N/A
Independent
Director		 Taiwan HUANG ,
CHUNG-HUI		 Male
61-70
years
old		 2021/8/3 3 2015/6/17 0 0 0 0 0 0 0 0 Certified accountant
Education：Dept. of
Management, NCKU		 Supervisor of
MANZA.Independent
Director of
Nnamliong,
Independent Director
of O-TA Precision
namliong		 N/A N/A N/A N/A
Independent
Director		 Taiwan HOU,
RONG-XIAN		 Male
51-60
years
old		 2021/8/3 3 2012/6/21 0 0 0 0 0 0 0 0 Certified accountant
Education：Master of
Management, NCKU		 Independent Director,
PHD, Jiyuan
Packaging Holdings
Limited		 N/A N/A N/A N/A
Independent
Director		 Taiwan HSU ,
CHIANG		 Male
71-80
years
old		 2021/8/3 3 2019/6/21 0 0 0 0 0 0 0 0 Chair Professor, CJCU
Education: Ph.D
HE UNIVERSITY OF
WYOMING		 Chair Professor,
CJCU
Independent Director,
KNH Enterprise Co.,
Ltd.		 N/A N/A N/A N/A
  • 9 -

1.Major Shareholders of corporate shareholder：

jor Shareholders of corporate shareholder：
2021/3/31
Name of corporate shareholder Major Shareholders of corporate shareholder
YUAN-HONG INVESTMENT CO., LTD. WU , CHUN-LANG.WU-TSAI, LIANG-WEN, TIEN-LING.WU, CHENG-YUAN.WU,
CHENG-HUNG
KUO-CHI-MIN INVESTMENT CO., LTD. WU , CHUN-CHI.WANG, LI-HSIA.WU, YING-CHEN.WU , KUO-CHEN.WU, CHI-CHEN.WU,
MIN-CHEN

2.Major Shareholders are juridical person：Not applicable

3.Directors' Information:

KUO-CHI-MIN INVESTMENT CO., LTD.
, -., -., -. , -., -
MIN-CHEN
2.Major Shareholders are juridical person：Not applicable
3.Directors' Information:		 KUO-CHI-MIN INVESTMENT CO., LTD.
, -., -., -. , -., -
MIN-CHEN
2.Major Shareholders are juridical person：Not applicable
3.Directors' Information:		 KUO-CHI-MIN INVESTMENT CO., LTD.
, -., -., -. , -., -
MIN-CHEN
2.Major Shareholders are juridical person：Not applicable
3.Directors' Information:		 .,
A. Disclosure of directors’professional qualifications and independence:
Condition
Name		 Professional qualification and experience (Note 1) Compliance with the case of independence (Note 2) Number of
independent
directors of
other public
offering
companies
WU , CHUN-CHI 1.
Chairman of Board of Directors
2.
Expertise in operation management/risk management/engineering
management/leadership decision/cross-industry management
3.
Not been a person of any conditions defined in Article 30 of the
Company Law		 1.
Not an employee of the Company or its affiliates
2.
Does not 1% or more of the total number of outstanding shares of the Company or
ranking in the top 10 in holdings
3.
Not a governmental, juridical person or its representative as defined in Article 27 of
the Company Law		 0
WU , CHUN-LANG 1.
Expertise in operation management/risk management/leadership
decision/cross-industry management
2.
Not been a person of any conditions defined in Article 30 of the
Company Law		 1.
Not an employee of the Company or its affiliates
2.
Not a governmental, juridical person or its representative as defined in Article 27 of
the Company Law		 0
WU , CHUN-I 1.
Expertise in operation management/risk management/engineering
management/leadership decision
2.
Not been a person of any conditions defined in Article 30 of the
Company Law		 1.
Not an employee of the Company or its affiliates
2.
Not a governmental, juridical person or its representative as defined in Article 27 of
the Company Law		 0
CHUANG, TAI-SHIE 1.
Expertise in operation management/foreign language/risk
management/engineering management/leadership decision
2.
Not been a person of any conditions defined in Article 30 of the
Company Law		 1.
Does not hold more than 1% of the total number of issued shares or the top ten
shares
2.
The said person, the person’s spouse, a relative within the second degree of kinship
(or held by the person under others’ names) does not hold company shares
3.
Not a governmental, juridical person or its representative as defined
in Article 27 of the Company Law		 0
CHEN , CHIN-CHAO - Legal
Representative of Yuan-Hong
Investment Co., Ltd.		 1.
Expertise in operation management/foreign language/risk
management/engineering management/leadership decision
2.
Not been a person of any conditions defined in Article 30 of the
Company Law		 1.
Is not a spouse or a relative within the second degree of kinship of another director.
2.
Does not provide commercial, legal, financial, and accounting services to the
Company or its affiliates in the last two years		 0
WU , KUO-CHEN - Legal
representative of KUO-CHI-MIN
Investment Co., Ltd.		 1.
Expertise in operation management/foreign language/risk
management/leadership decision
2.
Not been a person of any conditions defined in Article 30 of the
Company Law		 1.
Does not provide commercial, legal, financial, and accounting services to the
Company or its affiliates in the last two years		 0
  • 10 -
Condition
Name		 Professional qualification and experience (Note 1) Compliance with the case of independence (Note 2) Number of
independent
directors of
other public
offering
companies
HUANG , CHUNG-HUI 1.
Chairman of the Remuneration Committee and Audit Committee
2.
Expertise in Accounting and Finance/operation management/risk
management/leadership decision/cross-industry management
3.
Certified accountant, currently a certified public accountant
4.
Not been a person of any conditions defined in Article 30 of the
Company Law		 1.
The said person, the person’s spouse, a relative within the second degree of kinship
is not a director, supervisor, or employee of the Company or its affiliates
2.
The said person, the person’s spouse, a relative within the second degree of kinship
(or held by the person under others’ names) does not hold company shares
3.
Is not a director, supervisor, or employee of a company that has special relation
with the Company
4.
Does not provide commercial, legal, financial, and accounting services to the
Company or its affiliates in the last two years		 2
HOU, RONG-XIAN 1.
Member of the Remuneration Committee and Audit Committee
2.
Expertise in Accounting and Finance/operation management/risk
management/leadership decision/cross-industry management
3.
Certified accountant, currently a certified public accountant
Not been a person of any conditions defined in Article 30 of the Company
Law		 1.
The said person, the person’s spouse, a relative within the second degree of kinship
is not a director, supervisor, or employee of the Company or its affiliates
2.
The said person, the person’s spouse, a relative within the second degree of kinship
(or held by the person under others’ names) does not hold company shares
3.
Is not a director, supervisor, or employee of a company that has special relation
with the Company
4.
Does not provide commercial, legal, financial, and accounting services to the
Company or its affiliates in the last two years		 3
HSU , CHIANG 1.
Member of the Audit Committee
2.
Expertise in operation management/foreign language/risk
management/leadership decision/cross-industry management
3.
Not been a person of any conditions defined in Article 30 of the
Company Law		 1.
The said person, the person’s spouse, a relative within the second degree of kinship
is not a director, supervisor, or employee of the Company or its affiliates
2.
The said person, the person’s spouse, a relative within the second degree of kinship
(or held by the person under others’ names) does not hold company shares
3.
Is not a director, supervisor, or employee of a company that has special relation
with the Company
4.
Does not provide commercial, legal, financial, and accounting services to the
Company or its affiliates in the last two years		 1

Note: 1. Professional qualification and experience: state the professional qualifications and experience of each director. If it is a member of an Audit Committee and has accounting or financial expertise, the accounting or financial background and work experience shall be stated. Also, describe whether has been a person of any conditions defined in Article 30 of the Company Law. 

  2. Independent director shall describe whether or not he or she meets the independence requirements, including but not limited to, the person, the person’s spouse, a relative within the second degree of kinship is not a director, supervisor, or employee of the Company or its affiliates; the number of shares and proportion that the person, the person's spouse, and relative within the second degree of kinship (or held by the person under others' names) hold; whether is a director, supervisor, or employee of a company that has special relationship with the Company (in accordance with the provisions in Subparagraph 5 to 8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies); remuneration amount acquired from providing business, legal, finance, and accounting services to the Company or its affiliates in the past two years.

  • B. The Board of Directors’ diversification and independence:

  • (A) The Board of Directors’ diversification

  • I. According to Paragraph 3, Article 23 of the Company's Corporate Governance Best Practice Principles, all members of the board shall have the knowledge, skills, and experience necessary to perform their duties. To achieve the ideal goal of corporate governance, the board of directors shall possess the following abilities: 

     1. Ability to make operational judgments.

 2. Ability to perform accounting and financial analysis.

  • 11 -

  • Ability to conduct management administration.

  • Ability to conduct crisis management.

  • Knowledge of the industry.

  • An international market perspective.

  • Ability to lead.

  • Ability to make policy decisions.

  • II. The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based on the company's business operations, operating dynamics, and development needs, i.e., basic requirements and values (such as gender, nationality, and tenure as an independent director), professional knowledge and skills (accounting and finance, operation management, foreign language, risk management, engineering management, leadership decision, and cross-industry management).

  • The Company has nine directors (including three independent directors), two of whom are certified public accountants, one of whom has a professional background in business management, and the other directors have many years of experience in the industry, so they are able to carry out the duties and responsibilities of the Board of Directors and protect the interests of shareholders.

The Company pays attention on the expertise of the Board members. Each director shall have four or more expertises. All the directors have four or more expertises currently, therefore the compliance rate is 100%. The implementation status is as follow:

Diversified core Basic requirements Basic requirements Basic requirements Basic requirements
Professional knowledge and skills
Name of Director Gender Age Nationality Tenure as an
independent
director		 Financial
accounting		 Operating
management		 Foreign
language
ability		 Risk
management		 Engineering
management		 Leadership
Decisions		 Cross-Industry
Operations
Under
3years		 3 to 9
years
WU ,
CHUN-CHI		 Male 71-80
years old		 Taiwan V V V V V
WU ,
CHUN-LANG		 Male 61-70
years old		 Taiwan V V V V
WU , CHUN-I Male 71-80
years old		 Taiwan V V V V
CHEN ,
CHIN-CHAO		 Male 51-60
years old		 Taiwan V V V V V
WU ,
KUO-CHEN		 Male 41-50
years old		 Taiwan V V V V
CHUANG,
TAI-SHIE		 Male 61-70
years old		 Taiwan V V V V V
HUANG ,
CHUNG-HUI		 Male 61-70
years old		 Taiwan V V V V V V
HOU,
RONG-XIAN		 Male 61-70
years old		 Taiwan V V V V V V
HSU, CHIANG Male 71-80
years old		 Taiwan V V V V V V
  • 12 -

(B) The Board of Directors’ independence:

  1. Currently, there are nine members in the Board of Directors including three Independent Directors. The proportion of the independent director has reach 1/3, and the Company has obtained written declaration from all Independent Directors.

  2. The Company’s CEO, General Manager or equivalent position is not the same person.

  3. There are seven directors who are not employees of the Company. The proportion has reach 7/9.

  4. Relationship among Directors: Wu Chun-Chi, Wu Chun-Lang, and Wu Chun-I are brothers. Wu Chun-Chi and Wu Kuo-Chen are father and son.

  5. Not been a person of any conditions defined in Paragraph 3 and 4, Article 26-3 of the Securities and Exchange Act.

(II) Information for General Managers, Deputy General Managers, Associates, Heads of Departments and Branches：

2022/3/31

Title Nationality Name Gender
Date of
initial
election		 Shareholdings Shareholdings Shares held by
spouse, minor
children		 Shares held by
spouse, minor
children		 Holding shares
in the name of
others		 Holding shares
in the name of
others		 Experience
（Education）		 Current duties in other companies A m
spouse		 anager who is related to a
or consanguineous within
two degrees		 anager who is related to a
or consanguineous within
two degrees		 Remark
Share % Share % Share % Title Name Relationship
General Manager Taiwan CHEN , CHIN-CHAO Male 2012/2/1 0 0
475
0
0
0		 Director of Juoku Technology Co., Ltd..
Director of Tamau Management
Consultancy Co.,Ltd.
N/A		 N/A N/A N/A

University


graduation
Deputy General
Manager,
Business
Division		 Taiwan TING, CHENG-TAI Male 2006/11/1 0 0
1,055
0
0
0
College
graduation		 Director of Varroc TYC Auto
Lamps Co., Ltd		 N/A N/A N/A N/A
Executive
Director,
Business Divison		 Taiwan WU , KUO-CHEN Male 2012/2/1 296,211 0.09%
0
0
0
0
Institute
graduation		 Director of Juoku Technology N/A N/A N/A N/A
Deputy General
Manager,
Material Supply
Division		 Taiwan WU,PING-HUI Male 2006/8/10 0 0
1,690
0
0
0		 N/A N/A N/A N/A N/A

University


graduation
Deputy General
Manager,
Financial
Division		 Taiwan WENG,YI-FENG Male 2008/6/1 0 0 0
0
0
0
Institute
graduation		 Supervisor of Juoku Technology N/A N/A N/A N/A
Associate,
Administration
Office		 Taiwan HSU,YU-HUI Female
2012/2/1		 1,212 0 0
0
0
0
College
graduation		 N/A N/A N/A N/A N/A
Associate,
Business Divison		 Taiwan CHAO,YUAN-CHUN Male 2020/9/1 0 0
0
0
0
0
Institute
graduation		 N/A N/A N/A N/A N/A
Associate, R&D
Business Divison		 Taiwan LIN,MIN FENG Male 2012/2/1 0 0 0
0
0
0
University
graduation		 N/A N/A N/A N/A N/A
Associate,
Quality Control
Department		 Taiwan LIU,YU-CHUNGMR Male 2006/2/1 0 0
0
0
0
0
College
graduation		 N/A N/A N/A N/A N/A
Associate,
Production
Division		 Taiwan WU,WEN-KUEI Male 2019/3/1 0 0
0
0
0
0
University
graduation		 N/A N/A N/A N/A N/A
Associate,
Manufacturing
and SCM
Division		 Taiwan SHEN,I-CHUAN Male 2019/3/1 0 0
0
0
0
0
University
graduation		 N/A N/A N/A N/A N/A

Note: Assistant Manager Shen, I-Chuan retired on December 1, 2021.

  • 13 -

3.Remuneration of Directors, General Managers and Deputy General Managers paid in the latest year：

(1) Remuneration of general and independent directors：

2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD) 2020/12/31(Unit：NTD)
Title Name Directors' remuneration Percentage of net
income after tax
for Total of A, B,
C and D		 Part-time employees receive related remuneration The proportion of the
total of items A, B, C,
D, E, F and G to the
net tax benefit		 Receipt
of
remuner
ation
from a
subsidiar
y other
than a
transferri
ng
investme
nt
undertak
ing or a
parent
company
Remuneration
(A)		 Pension(B) Directors' remuner
ation (C)		 Implementation
expense(D)		 Salaries, bonuses and
special expenses, etc.
(E)		 Pension ((F) Employee bonus (G)
TYC All
compani
es in the
financial
report		 TYC All
compani
es in the
financial
report		 TYC All companies in the
financial report		 TYC All
companies in
the financial
report		 TYC All
companies
in the
financial
report		 TYC All companies in
the financial report		 TYC All
companies in
the financial
report		 TYC All companies in the financial report TYC All companies
in the financial
report
Cash
Amount		 Stock
Amount		 Cash
Amount		 Stock
Amount
CEO WU ,
CHUN-CHI		 21,813,327 21,813,327 0 0 5,200,000 5,200,000 240,000 240,000 14.10% 14.10% 11,620,170 20,517,734 0 0 0 0 0 0 20.11% 24.72% None
Director WU ,
CHUN-LANG
Director TING,
CHENG-TAI
Director CHUANG,
TAI-SHIE
Director CHEN ,
CHIN-CHAO
Legal
representative
of Yuan Hong
Investment
(Stock)Co. Ltd
Director WU ,
KUO-CHEN
Kuo Chi Min
Investment Co.,
Ltd
Independent
director		 HUANG ,
CHUNG-HUI		 12,000 12,000 0 0 0 0 20,000 20,000 0.84% 0.84% 0 0 0 0 0 0 0 0 .84% .84% None
Independent
director		 HUANG ,
CHUNG-HUI
Independent
director		 HUANG ,
CHUNG-HUI		 1,5 1,5 1 1 0 0
Remark 1：Please describe the policy, system, criteria and structure for the remuneration of independent directors, and the relevance of the amount of remuneration to the responsibilities, risks and time commitment：
The remuneration policy for independent directors: The remuneration policy is based on the Company's operating objectives, financial position and the duties of independent directors, and then approved by the
Compensation Committee and submitted to the Board of Directors for approval.
Remark 2：Except as disclosed in the table above, remuneration received by the directors of the Company for services rendered (such as consultants to the Company/all companies in the financial statement/re-investment business that
are not employees, etc.) in the latest year：None

Remark 3: Director Ting Cheng-Tai resigned on August 3, 2021, and Chuang Tai-Xu took office.

  • 14 -

Remuneration scale

Remuneration scale Remuneration scale Remuneration scale Remuneration scale
Levels of remuneration payable to each of the Company's
Directors		 Name of Director
Total remuneration for the first four items (A+B+C+D) Total remuneration for the first seven items (A+B+C+D+E+F+G)
TYC All companies in the financial report TYC All companies in the financial report
Less than $1,000,000 HUANG, CHUNG-HUI.
HOU, RONG- HSIEN.
HSU,CHIANG. TING, CHENG-TAI.
CHEN, CHIN-CHAO. WU, KUO-CHEN.
WU, CHUN-I.		 HUANG, CHUNG-HUI.
HOU, RONG- HSIEN.
HSU,CHIANG. TING, CHENG-TAI.
CHEN, CHIN-CHAO. WU, KUO-CHEN.
WU, CHUN-I.		 HUANG, CHUNG-HUI.
HOU, RONG- HSIEN.
HSU,CHIANG
WU, CHUN-CHI		 HUANG , CHUNG-HUI.
HOU, RONG- HSIEN.
HSU,CHIANG
WU, CHUN-CHI
NT$1,000,000 (inclusive) to NT$2,000,000 (exclusive) Kuo Chi Min Investment Co., td.
Yuan Hong Investment (Stock) Co. Ltd.		 Kuo Chi Min Investment Co., td.
Yuan Hong Investment (Stock) Co. Ltd.
CHEN, CHIN-CHAO.
WU , KUO-CHEN.
WU , CHUN-I.
TING, CHENG-TAI		 Kuo Chi Min Investment Co.,
Ltd.
Yuan Hong Investment
(Stock) Co. , Ltd.
WU , CHUN-I		 Kuo Chi Min Investment Co.,
Ltd.Yuan Hong Investment (Stock)
Co. Ltd.
WU , CHUN-I
NT$ 2,000,000 (inclusive) ~ NT$ 3,500,000 (exclusive) - -
NT$3,500,000 (inclusive) ~ NT$5,000,000 (exclusive) - - CHEN , CHIN-CHAO.
WU , KUO-CHEN.
TING, CHENG-TAI		 CHEN , CHIN-CHAO.
WU , KUO-CHEN.
TING, CHENG-TAI
NT$5,000,000 (inclusive) to NT$10,000,000 (exclusive) WU, CHUN-CHI. WU, CHUN-LANG WU, CHUN-CHI. WU, CHUN-LANG WU, CHUN-LANG.
WU, CHUN-CHI		 WU , CHUN-LANG
NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive) - - WU , CHUN-CHI
NT$15,000,000 (inclusive) ~ NT$30,000,000 (exclusive) - - -
NT$30,000,000 (inclusive) ~ NT$50,000,000 (exclusive) - - - -
NT$ 50,000,000
(inclusive)
~
NT$ 100,000,000
(exclusive)		 - - - -
Over $100,000,000 - - - -
Total 11 11 11 11
  • 15 -

(2) Remuneration of the General Manager and Deputy General Manager：

2021/12/31(Unit：NTD)

Title Name Salary (A) Salary (A) Pension (B) Pension (B) Bonuses, special expenses,
etc. (C)		 Bonuses, special expenses,
etc. (C)		 Employee bonus amount (D) Employee bonus amount (D) Employee bonus amount (D) Employee bonus amount (D) Total of A, B, C and D
as a percentage of net
income after tax (%)		 Total of A, B, C and D
as a percentage of net
income after tax (%)
Receive
remuneration
from a
business other
than a
subsidiary or
from the
parent
company
TYC All companies
in the financial
report		 TYC All companies
in the financial
report		 TYC All companies
in the financial
report		 TYC All companies
in the financial
report
Cash
amount		 Stock
amount
Cash
amount
Stock
amount
TYC		 All
companies
in the
financial
report
General Manager CHEN ,
CHIN-CHAO		 17,098,525
 17,098,525 0 0 0 0 0 0 0 0 8.85% 8.85% N/A
Executive Director WU ,
KUO-CHEN
Deputy General Manager TING,
CHENG-TAI
Deputy General Manager WENG,YI-FENG
Deputy General Manager WU,PING-HUI

Remuneration scale

Remuneration scale for each General Manager and Deputy
General Manager of the Company		 Name of General Manager and DeputyGeneral Manager Name of General Manager and DeputyGeneral Manager
TYC All companies in the financial report
Less than $1,000,000 - -
NT$1,000,000 (inclusive) to NT$2,000,000 (exclusive) - -
NT$ 2,000,000(inclusive)~ NT$ 3,500,000(exclusive) WENG,YI-FENG. WU,PING-HUI WENG,YI-FENG. WU,PING-HUI
NT$3,500,000 (inclusive) ~ NT$5,000,000 (exclusive) CHEN , CHIN-CHAO.
WU , KUO-CHEN.
TING, CHENG-TAI		 CHEN , CHIN-CHAO.
WU , KUO-CHEN.
TING, CHENG-TAI
NT$5,000,000(inclusive)to NT$10,000,000(exclusive) - -
NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive) - -
NT$15,000,000(inclusive)~ NT$30,000,000(exclusive) - -
NT$30,000,000(inclusive)~ NT$50,000,000(exclusive) - -
NT$ 50,000,000(inclusive)~ NT$ 100,000,000(exclusive) - -
Over $100,000,000 - -
Total 5 5
  • 16 -

(3) Name of the manager who was distributed the employee's remuneration and distribution：

2021/12/31(Unit：NTD 1,000) 2021/12/31(Unit：NTD 1,000)
Title Name Stock amount Cash amount Total Total as a percentage of net income
after tax (%)
M a n a g e r s General Manager CHEN , CHIN-CHAO 0 0 0 0
Executive Director WU , KUO-CHEN
Deputy General Manager TING, CHENG-TAI
Deputy General Manager WENG,YI-FENG
Deputy General Manager WU,PING-HUI
Senior manager HSU,YU-HUI
Senior manager CHAO,YUAN-CHUN
Senior manager LIN,MIN FENG
Senior manager LIU,YU-CHUNGMR
Senior manager WU,WEN-KUEI
Senior manager SHEN,I-CHUAN

Note: Assistant Manager Shen, I-Chuan retired on December 1, 2021

(4) An analysis comparing the total remuneration paid to the TYC's directors, supervisors, general manager and deputy general manager as a percentage of the net profit after tax of the individual or individual financial reports of the Company and all companies in the consolidated financial statements for the past two years respectively, and an explanation of the policy, criteria and composition of remuneration payments, the extent to which remuneration is set, and the correlation with operating performance and future risks：

2020 annual remuneration as a percentage of
Net Profit after Tax (TYC)		 2020 Total remuneration as a percentage of net
income after tax (Consolidated Financial Statements)		 2021 Total remuneration as a percentage of net
income after tax (TYC)		 2021 Total remuneration as a percentage of net income after tax
(Consolidated Financial Statements)
Directors 14.24% 16.65% 20.96% 25.56%
Supervisor 0.00% 0.00% 0.00% 0.00%
General manager and deputy
general manager		 6.95% 6.95% 8.85% 8.85%

Note: The Audit Committee was established on 21 June 2018 to replace the Supervisor function.

1.Analysis of the ratio difference: there was no significant change in the total remuneration for FY2021 compared to FY2020, mainly due to a larger ratio as a result of the decrease in net income after tax in 2021.

2.The policy of remuneration for directors and supervisors of the Company:

In accordance with the Articles of Incorporation, if there is a profit for the year, the Company shall pay no less than 1% of it for the employee bonus and (no more than 3%) for the director bonus. However, if there is still a cumulative loss, an amount to make up for the loss should be retained in advance.

Directors will be given appropriate remuneration based on evaluations of alignment of the goals and missions of the Company, awareness of the duties of a director, participation in the operation of the Company, management of internal relationship and communication, the director's professionalism and continuing education, and internal control in the “Performance Evaluation Method of the Board of Directors”.

In accordance with Article 29 of the Company's Articles of Incorporation, the Chairman of the Board of Directors is authorized to set the remuneration of the Manager in accordance with the Company's "Salary Management Regulations" from evaluation items such as professional knowledge, operation knowledge, leadership responsibility, complex problem solving, impact on operation, impact scope on operation, and interpersonal relationship difficulty, while taking into account the usual standards in the industry.

  • 17 -

4.Corporate Governance Status：

(1) Operation of the Board of Directors：

The board of directors has held six meetings in recent years, and the attendance of directors and supervisors is as follows：

Title Name Actual number of meetings
attended (B)		 No. of meetings with entrusted
attendance		 Actual attendance rate
(%) (%)【B/A】		 Remark
Chairman WU , CHUN-CHI 6 0 100 % Re-elected on
2021/8/3
Director WU , CHUN-LANG 6 0 100 % Re-elected on
2021/8/3
Director WU , CHUN-I 6 0 100 % Re-elected on
2021/8/3
Director CHEN , CHIN-CHAO—Legal representative
of Yuan Hong Investment (Stock) Co., Ltd		 6 0 100 % Re-elected on
2021/8/3
Director WU , KUO-CHEN—Legal representative of
Yuan Hong Investment (Stock) Co., Ltd		 6 0 100 % Re-elected on
2021/8/3
Director TING, CHENG-TAI 1 2 33 % Existing
Director CHUANG, TAI-SHIE 3 0 100 % Re-elected on
2021/8/3
Independent Director HUANG , CHUNG-HUI 6 0 100 % Re-elected on
2021/8/3
Independent Director HOU, RONG- HSIEN 6 0 100 % Re-elected on
2021/8/3
Independent Director HSU,CHIANG 6 0 100 % Re-elected on
2021/8/3

Other items to be recorded：

  1. The Board of Directors shall state the date and date of the Board of Directors' meeting, the date and time of the meeting, the content of the motion, the opinions of all independent directors and the Company's handling of the opinions of the independent directors if any of the following circumstances apply to the operation of the Board of Directors：

  2. (1) Items listed in article 14-3 of the securities and exchange act：None.

  3. (2) Except for the preceding items, the resolutions of the Board of Directors' meetings, which were opposed or qualified by the independent directors and for which records or written statements are available, were approved by the independent directors without dissenting opinions at each of the Board of Directors' meetings in 2020.：The results of the resolutions at each of the 2021 Board meetings were approved without objection by the independent directors.

  4. The recusal of a director from the implementation of an interest motion shall include the name of the director, the content of the motion, the reasons for the recusal and the circumstances of the vote.： Interested directors have individually recused themselves from the discussion and voting on the directors' remuneration proposals.

  5. We shall disclose information on the period and duration, scope, manner and content of the of the self- (or peer) evaluation by the directors, and shall include information on the implementation of the evaluation by the Board of Directors：Please refer to table (1-1) below for the Board's evaluation of the Performance.

  6. Assessment of the current and most recent year's targets for enhancing the Board's functions (e.g., establishment of an audit committee, enhancing information transparency, etc.) and their implementation：

  7. (1). In accordance with the provisions of the Rules of Procedure of the Board of Directors laid down by the Company.

  8. (2). The Company's (TYC) internal auditors regularly audit the operations of the Board of Directors and prepare audit reports..

  9. (3). The Company (TYC) has a person in charge of the matters that should be announced by the competent authority and the disclosure of significant information to enhance the transparency of information.

  10. (4). The Company (TYC) has established the "Code of Corporate Governance Practices", "Procedures for Handling Material Internal Information", "Code of Ethical Conduct" and "Procedures and Guidelines for Integrity Management Practices" to establish a corporate culture of integrity management and a better corporate governance system.

  11. (5). The Company (TYC) has three independent directors to enhance the functioning of the Board.

  12. (6). The Company (TYC) established an Audit Committee in 2018.

  13. (7). The Company (TYC) has assigned Corporate Governance Manager in 2021.

  14. 18 -

(1-1) Evaluation of implementation by the Board of Directors：

Evaluationcycle Evaluationperiod Evaluationscope Evaluation method Evaluationcontent
Annual 2021/1/1

2021/12/31		 Board of directors and
individual directors		 Self-evaluation by the
board of directors		 1. The degree of participation in the
operation of the Company.
2. Improve the quality of board
decisions.
3. Composition and structure of the
Board of Directors.
4. Election of Directors and
Continuing Education.
5.Internalcontrols.
Self evaluation of
directors		 1. Grasp the company's goals and
tasks.
2. Recognition of Directors '
Responsibilities.
3. The degree of participation in the
operation of the company.
4. Internal relationship management
and communication.
5. Professional and continuing
education of directors.
6. Internal control.

Evaluation result: (1) The performance evaluation score of the Board of Directors is 95.56%, which is “better than standard”.

  • (2) The performance evaluation score of the Board member is 99.03%, which is “better than standard”.

The above result will be used as a reference for directors’ election or nomination and remuneration.

(2) Operation of the Audit Committee：

The audit committee has held four meetings in the past year (A), and the attendance of the independent directors is as follows：

Title Name Actual number of
meetings attended
(B)		 Number of
delegated
attendance		 Actual attendance rate (%)
【B/A】		 Remark
Independent
Director		 HUANG , CHUNG-HUI 4 0 100 % Re-elected
on
2021/8/3
Independent
Director		 HOU, RONG- HSIEN 4 0 100 % Re-elected
on
2021/8/3
Independent
Director		 HSU,CHIANG 4 0 100 % Re-elected
on
2021/8/3

Other items to be recorded ：

  1. If the Audit Committee operates under any of the following circumstances, it shall state the date and period of the Board of Directors' meeting, the content of the motion, Independent Directors’ objection, reserved opinion, or major proposal content, the results of the Audit Committee's resolution, and the Company's handling of the Audit Committee's opinion.

  2. (1) Section 14-5 of the Securities Exchange Act.

  3. (2) In addition to the previous matters, other matters that have not been approved by the Audit Committee and have been agreed by more than two-thirds of all directors:

    • (A) Annual work priorities of the audit committee： The Audit Committee consists of three independent directors. The Audit Committee operates primarily to oversee the fair presentation of the Company's financial statements, the selection (dismissal) and independence and performance of the certified public accountants, the effective implementation of the Company's internal controls, the Company's compliance with laws and regulations, and the control of the Company's existing or potential risks.

The audit committee held four meetings in 2021, and the issues considered mainly include：

  1. Internal control system effectiveness assessment.

  2. Financial report and business report.

  3. 19 -

  4. Amendment of the Articles of Association.

  5. Appointment and independence assessment of the certifying accountant.

  6. Whether the company's disguised financing is classified as a loan of funds.

  7. Annual audit plan.

  8. (B) Review of financial reports by the Audit Committee：

The financial statements of 2020 have been checked and endorsed by Taiwan, together with the business report and the statement of profit distribution. The audit committee finds that there is no discrepancy.

  • (C) Endorsement accountant appointed by the audit committee：

In order to ensure the independence of the endorsement accounting firm, the twelfth Audit Committee of the first session and the 18th Board of Directors of the fourteenth session on March 25, 2021 deliberated and approved that Mr. Jesse Huang and M. Fang-Wen Lee from EY Taiwan, both meet the independent evaluation criteria, and are qualified to serve as the company's financial and tax endorsement accountants.

  • (D) Performance of the Audit Committee for the year：

==> picture [423 x 341] intentionally omitted <==

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

Resolution not
Matters listed in
Session and Time of the Securities and approved by the Audit
Contents of the major motion and follow-up actions Committee but
meeting Exchange Act
14-5 approved by 2/3 of the
Directors
1. Internal control system effectiveness assessment Ｖ None
in 2020.
2. Review the 2020 financial report and Business Ｖ None
Report.
12th., 1 [st] session 3. Issurance of preferred share A for cash. Ｖ None
2021.03.25 4. Review the independent evaluation of Ｖ None
endorsement Accountants.
The results of the audit committee's decisions on the above cases: all the members present agreed to
pass the case.
The company's handling of the opinions of the audit committee: all the directors present agreed to
pass the case.
1. Assign Corporate Governance Manager. V None
13th., 1 [st] session
2021.05.13 The results of the audit committee's resolution: all the members present agreed to pass the case.
The company's handling of the opinions of the audit committee: all the directors present agreed to
pass the case.
1. Consolidated Financial Report for the None
second quarter of 2021.
2. To consider whether disguised financial None
1st., 2 [nd] session accommodation is classified as a loan of funds.
2021.08.12 Results of the audit committee's resolution: all members present agreed to pass the resolution as
proposed.
Disposition of the Audit Committee's Opinion by the Company: All Directors present agreed to
approve the motion as presented.
1. Review the audit plan for 2021. V None
2. Invest in Jiangsu Dibiao Ltd. Ｖ None
2nd., 2 [nd] session Resolution of the audit committee on the above cases: all members present agreed to adopt the
2021.11.11 resolution as presented.
The company's handling of the opinions of the audit committee: all the directors present agreed to
pass the case.
----- End of picture text -----

  1. The recusal of an independent director from the implementation of an interest motion shall include the name of the independent director, the content of the motion, the reasons for the recusal, and the circumstances under which the independent director participated in the vote.：None。

  2. 20 -

  3. Communication between the independent directors and the internal auditors and accountants (including the major issues, methods and results of communication regarding the Company's financial and business conditions)：

  4. (1) Communication between the independent directors and the head of internal audit and the accountant：

    • A. Communication between the audit director, the accountant and the independent directors is conducted directly by e-mail, telephone or in person, as necessary.

    • B. We submit a monthly written summary report of the audit deficiencies and improvements to the servicemen of the previous month to the independent directors for their review and the independent directors approve the explanatory notes/reports or other recommendations on the report.

    • C. The head of internal audit of the Company conducts audit reports to the independent directors in the Audit Committee and the Board of Directors, and communicates the results of audit reports and their follow-up implementation to the independent directors.

  5. (2) Summary of historical communication between independent directors and head of internal audit：

The independent directors of our company have good communication regarding the execution and effectiveness of the audit operations.

A summary of the key communications for 2021 is as follows：

Date Communication Highlights
2021.03.25 Report on the implementation results of the internal audit plan for
2021
2021.08.12 Report on the implementation results of the internal audit plan for
2021
2021.11.11 Report on the implementation results of the internal audit plan for
2021 and the internal auditplan for 2022
  • (3) Summary of Communication between Independent Directors and Certified Public Accountants

Our company's independent directors have had good communication with the certifying accountants and a summary of the major communication items for 2020 is as follows：

Date Communication Highlights
2021.3.25 Report on the audit of individual financial statements and
consolidated financial statements, report on internal control audits for
2020
  • 21 -

(3) Corporate Governance Status and Deviations from“The Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”and Reasons

Companies”and Reasons
Evaluation Item Implementation Status Deviations from“the Corporate Governance
Best-Practice Principles for TWSE/TPEx
Listed Companies”and Reasons
Yes No Abstract Illustration
1.Has the company developed and disclosed principles
of corporate governance practices in accordance with
the Code of Corporate Governance Practices for
Listed Companies?		 V In accordance with the " principles of Corporate Governance Practices for Listed Companies", the
Company has established the "Principles of Corporate Governance Practices" for the Company at
the 8th of the 14th Board Meeting (2019.05.08) and disclosed it on the Company's website.		 No major differences from the requirements of
the Principles of Practice on Governance of
TWSE/TPEx listed companies
2.Shareholding structure and shareholders'
equity of the Company
(1) Does the company have internal procedures to
deal with shareholders' suggestions, queries,
disputes and litigation matters, and implement
them in accordance with the procedures?
(2) Does the company have a list of the
substantial shareholders and ultimate controllers
of the substantial shareholders who effectively
control the company?
(3) Has the company established and implemented a
risk control mechanism and a firewall mechanism
with its affiliates?
(4) Does the company have internal regulations that
prohibit insiders from trading marketable
securities using information not publicly available
in the market?		 V
V
V
V		 (1) The Company has a spokesperson and proxy spokesperson
system to ensure shareholders' rights and interests, and is dedicated to handling shareholders'
suggestions, queries, disputes and litigation matters.
(2) The major shareholders informed the Company of the increase, decrease or pledge of their
shares in accordance with the regulations, and the Company reported on the Market
Observation Post System in accordance with the law.
(3) The Company has established relevant system in the internal control system in accordance
with the regulation, and audits are conducted by the audit department, the finance
department or by an accountant on a regular or irregular basis.
(4) The Company has established "Internal Procedures for
Handling Material Information", "Principles of Ethical Conduct" and "Integrity
Management Regulations" to regulate internal personnel from having the opportunity to
profit from their duties.


(1)
No major differences from the
requirements of the Principles of
Practice on Governance of
TWSE/TPEx listed companies
(2)
No major differences from the
requirements of the Principles of
Practice on Governance of
TWSE/TPEx listed companies
(3)
No major differences from the
requirements of the Principles of
Practice on Governance of
TWSE/TPEx listed companies
(4)
No major differences from the
requirements of the Principles of
Practice on Governance of
TWSE/TPEx listed companies
3.Composition and responsibilities of the Board of
Directors
(1) Does the Board of Directors formulate and
implement a diversity policy and specific
management goal on the composition of its
members?		 V (1) In accordance with Item 3 of Article 30 of the Company's Principles of Corporate Governance
Practices, the composition of the Board of Directors should generally possess the knowledge,
skills and qualities necessary for the performance of its duties. In order to achieve the desired
objectives of corporate governance, the Board of Directors as a whole should possess the
following competencies:
1.Operational judgment ability.
2.Accounting and financial analysis capabilities.
3.Operational management capacity.
4.Crisis management capacity.
5.Industry knowledge.
6.International Market View.
7.Leadership
8.Decision-making ability.		 (1)
No major differences from the
requirements of the Principles of
Practice on Governance of
TWSE/TPEx listed companies
  • 22 -
The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.		 The Company has amended Paragraph 2, Article 23 of the Company's Corporate Governance
Best Practice Principles on March 24, 2020 to formulate an appropriate policy on diversity based
on the company's business operations, operating dynamics, and development needs, i.e., basic
requirements and values (such as gender, nationality, and tenure as an independent director),
professional knowledge and skills (accounting and finance, operation management, foreign
language, risk management, engineering management, leadership decision, and cross-industry
management).
The Company has nine directors (including three independent directors), two of whom are
certified public accountants, one of whom has a professional background in business
management, and the other directors have many years of experience in the industry, so they are
able to carry out the duties and responsibilities of the Board of Directors and protect the interests
of shareholders.
The Company pays attention on the expertise of the Board members. Each director shall have
four or more expertises. All the directors have four or more expertises currently, therefore the
compliance rate is 100%. The implementation status is as follow:
Diversity of Board Members.
Diversified Core
Basic Members Professional Capability
Programs
Term
Financial accounting
 Operating management Foreign language ability Risk management Engineering management Leadership Decisions Cross-Industry Operations
qualification

of the
independent

directors
Name of directors Gender Nationality Less
than
3
years		 3 to 9
years
WU , CHUN-CHI Male Taiwan V V V V V
WU , CHUN-LANG Male Taiwan V V V V
WU , CHUN-I Male Taiwan V V V V
CHEN , CHIN-CHAO Male Taiwan V V V V V
WU , KUO-CHEN Male Taiwan V V V V
TING, CHENG-TAI Male Taiwan V V V V V
  • 23 -
HUANG , CHUNG-HUI
Male		 Taiwan V V V V V V
HOU, RONG- HSIEN Male Taiwan V V V V V V
HSU,CHIANG Male Taiwan V V V V V V
(2) In addition to the remuneration committee and
audit committee set up in accordance with the law,
does the company voluntarily set up other
functional committees?
(3) Has the company established the
performance evaluation method of the
Board of Directors and its evaluation method,
conducted the performance evaluation every year
and regularly, and reported the results of the
performance evaluation to the Board of Directors,
and applied the reference for individual directors '
remuneration and nomination for renewal?
(4) Does the company regularly assess the
independence of the CPA?		 V
V		 V (2) In addition to the remuneration committee set up in accordance with the law,
the audit committee has been set up in 2018, and other functional committees are still under
discussion.
(3) At the 12th meeting of the 14th session of the Board of Directors (2020.03.24), the Board of
Directors approved the "Board Performance Evaluation Method", which will start to conduct
regular performance evaluation in 2021 and report the results of the evaluation to the Board
and apply it to the reference of individual directors ' remuneration and nomination for
renewal.
(4) 1. The company has passed the evaluation on the independence of
endorsement accountants in the 18th session of the 14th Board of Directors (March 25,
2021).
2. The Board of Directors evaluated the independence of the certifying accountant in
accordance with Statement of Ethics No. 10, "Integrity, Impartiality, Objectivity and
Independence," with respect to financial interests, financing and guarantees, business
relationships, family and personal relationships, employment relationships, gifts and
special
privileges, rotation of certifying accountants and non-audit engagements, and obtained a
statement of independence from the certifying accountant and was not aware of any
circumstances that might affect the independence of the certifying accountant.
(2)
The future will be based on the
development needs of the company and
the provisions of the laws and
regulations to discuss and formulate.
(3)
No major differences from the
requirements of the Principles of
Practice on Governance of
TWSE/TPEx listed companies.
(4) No major differences from the
requirements of the Principles of
Practice on Governance of TWSE/TPEx
listed companies
  • 24 -
4.Does the listed company have a suitable and
appropriate number of corporate governance
personnel and designate a corporate governance
officer to be responsible for corporate
governance-related matters (including but not limited
to providing information necessary for directors and
supervisors to perform their business, assisting
directors and supervisors in complying with laws and
regulations, conducting board and shareholders’
meeting-related matters in accordance with the law,
and preparing minutes of board and shareholders'
meetings, etc.)?		 V Passed by the Board’s resolution on May 13, 2021 to assign Financial Management Section
Manager Lin, Ya-Hsuan as the Corporate Governance Manager and in charge of supervising
corporate governance related issues. Section Manager Lin, Ya-Hsuan has over three years
experience as a financial manager in a public company. The main duties of a Corporate
Governance Manager is as follow:
(1) To assist in matters related to the board or shareholders’ meetings in accordance with the law.
(2) To produce board or shareholders’ minute meetings.
(3) To assist directors to take office and in advanced studies.
(4) To assist directors with required information for the execution of duties.
(5) To assist directors’ compliance with statutory requirements.
(6) Other matters prescribed by the Articles of Incorporation or contract agreements.
The advanced studies status of the Corporate Governance Manager is as follows:
Date
Organization
Course Name
Hours
Total
hours of
the year
From
To
2021/09/01
2021/09/01
Securities &
Futures
Institute
The 13th Taipei
Corporate
Governance
Forum
6
18
2021/10/13
2021/10/13
Securities &
Futures
Institute
2021 Briefing on
Regulation
Compliance of the
Insider Equity
Transactions
3
2021/11/12
2021/11/12
Securities &
Futures
Institute
2021 Briefing on
Insider
Transaction
Prevention
3
2022/03/24
2022/03/24
Taiwan
Corporate
Governance
Association
How the Board of
Directors Reviews
ESG Report
3
2022/04/22
2022/04/22
Taiwan
Institute for
Sustainable
Energy
Transform to Net
Zero for
Sustainability in
2030
3		 No major differences from the
requirements of the Principles of
Practice on Governance of TWSE/TPEx
listed companies.
5. Has the company established communication
channels with stakeholders (including but not limited
to shareholders, employees, customers and suppliers,
etc.) and set up a stakeholder area on the company's
website, and appropriately respond to important CSR
issues of concern to stakeholders?		 V 1. The Company has set up an Investor Zone and a Stakeholder Zone on its website to serve as a
channel for communication and feedback between investors and stakeholders, which are also
disclosed on the Company's website. The website link as follows:
http://www.tyc.com.tw/index.php/investors/view/61
2. The Company uses the above communication channels to respond appropriately
to the relevant issues of concern to the relevant stakeholders.		 No major differences from the
requirements of the Principles of
Practice on Governance of TWSE/TPEx
listed companies.
  • 25 -
6. Does the company appoint a professional stockbroker
to conduct the shareholders' meeting?
V		 The Company's appointed stockbroker is: Capital Securities Corporation ; for
details, please refer to the inner page of the annual report.		 No major differences from the
requirements of the Principles of
Practice on Governance of TWSE/TPEx listed
companies.
7. Disclosure of Information
(1) Does the company have a website to disclose
financial operations and corporate governance
information?
(2) Has the Company adopted other methods of
information disclosure (e.g., setting up an English
website, designating a person in charge of collecting
and disclosing company information, implementing
a spokesperson system, placing the company's
website in the process of corporate presentation,
etc.)?
(3) Does the company announce and report its annual
financial report within two months after the end of
the fiscal year, and announce and report its first,
second and third quarter financial reports and
monthly operations well in advance of the required
deadline?		 V
V		 V (1) The Company's website: http://www.tyc.com.tw Investor Zone discloses relevant financial
operations and corporate governance information.
(2) The Company has established a website in English and Chinese to disclose relevant
information for investors' reference, and has a person responsible for the collection and
disclosure of corporate information, and the Company has established a spokesperson system
to speak on behalf of the Company to ensure the interests of the Company and its shareholders.
(3) The Company did not announce and report its annual financial statements within two months
after the end of the fiscal year, but completed the announcement and reporting of financial
statements and monthly operations within the time limit set by the competent authorities.

(1) No major differences from the
requirements of the Principles of
practice on Governance of
TWSE/TPEx listed companies
(2) No major differences from the
requirements of the Principles of
Practice on Governance of TWSE/TPEx
listed companies。
(3) No major differences from the
requirements of the Principles of
Practice on Governance of
TWSE/TPEx listed companies
8.Does the company have other important information
to help understand the operation of corporate
governance (including but not limited to employee
rights, employee care, investor relations, supplier
relations, stakeholder rights, director and supervisor
education, implementation of risk management
policies and risk measurement standards,
implementation of customer policies, and the
company's purchase of liability insurance for directors
and supervisors)?		 V 1. Staff Rights and Employee Care.
(1) Handle employee labor and health insurance and group insurance, and arrange regular health
check-ups for employees.
(2) Actively operate the employee welfare committee to improve employee
welfare.
(3) Organize internal and external training for employees to enhance their
professional skills.
(4) Regular labor-management meetings are held to harmonize abor-management relations.
2. Investor Relations: The Company has an investor relations zone, a spokesperson and a proxy
spokesperson system to handle investor proposals.
3. Supplier relationship: There is a supply chain management system between the company and
the supplier, and the relationship is harmonious with no dispute and litigation arising.
4. Stakeholder Rights: Stakeholders may communicate with the Company in order to protect their
rights.
5. Director training situation：All directors of the Company have completed training hours in
2021.
6. Implementation of risk management policies and risk measurement standards: The Company's
auditing unit follows the internal control self-assessment procedures and actually performs the
assessment of risk management in the procedures.
7. Implementation of customer policy: The company maintains a good relationship with
customers, and there are no litigation cases.
8. Liability insurance taken out by the company for directors：
The Company had liability insurance for the Directors as of 30 June 2020.




No major differences from the
requirements of the Principles of
Practice on Governance of TWSE/TPEx listed
companies.

  • 26 -

  • Please provide information on the results of the latest annual corporate governance assessment issued by the Corporate Governance Center of the TWSE, and propose priorities and measures to enhance those that have not yet been improved. The Company's corporate governance assessment for 2021 will be improved as follows: 1. The Company will work on the disclosure of the connection between directors and manager’s performance evaluations and remunerations in 2022.

(4) Establishment of the Remuneration Committee, its composition, duties and operation：

1.Member Information of Salary and Compensation Committee：

Identity Condition
Name		 Professional qualification and experience Compliance with the case of independence Number of independent
directors of other public
offering companies
Independent Director
(Convener)		 HUANG , CHUNG-HUI Refer to Directors' Information(2) on p.10. Refer to Directors' Information(2) on p.10. 0
Independent Director HOU, RONG-XIAN Refer to Directors' Information(2) on p.10. Refer to Directors' Information(2) on p.10. 0
Other LIN, TSAI-YUAN 1.
Have more than five years experience
as a finance and accounting professor.
2.
Have more than five years experience
in finance and accounting.		 1.
The said person, the person’s spouse, a
second-tier relative is not a director,
supervisor, or employee of the
Company or its affiliates
2.
The said person, the person’s spouse, a
second-tier relative (or held by the
person under others’ names) does not
hold company shares
3.
Is not a director, supervisor, or
employee of a company that has
special relation with the Company
4.
Does not provide commercial, legal,
financial, and accounting services to
the Company or its affiliates in the last
two years
5.
Not been a person of any conditions
defined in Article 30 of the Company
Law		 1
  • 27 -

2.Information on the operation of the Remuneration Committee

  • (1) The Company's remuneration committee consists of 3 members

  • (2) The term of office of the current member: From August 3, 2021 to August 2, 2024, the most recent annual Remuneration Committee met two times (A), the qualifications and attendance of the members are as follows：

Title Name Actual Attendance (B) Number of Delegate attendance Actual Attendance (%)(B/A) Remarks
Convener HUANG CHUNG-HUI 2 0 100% -
Members HOU, RONG- HSIEN 2 0 100% -
Members LIN, TSAI-YUAN 2 0 100% -

Meeting contents and resolution results of the Remuneration Committee

Remuneration
Committee
Session / Date		 Contents of the motion Resolution The company's handling of the opinions
of the Remuneration Committee
6th of the 4th
session
2021.03.25		 Consideration of the 2020 Distribution
of Employee Remuneration and
Directors'Remuneration		 All members present agreed
to approve the motion as
presented		 The Board of Directors shall be
approved with the consent of all present
directors.
7th of the 4th
session
2021.05.06		 1. 2020 Annual Remuneration of
Directors
2. Review remuneration of directors
and managers
3. Establish “Regulations of Employee
Share Option on 2021 Preferred
Share A for Cash Capital Increase”
4. Manager share distribution for cash
capital to issue new share		 All members present agreed
to approve the motion as
presented		 The Board of Directors shall be
approved with the consent of all present
directors.

Other items to be recorded:

  • 1.If the Board of Directors does not adopt or amend the recommendation of the remuneration committee, it shall state the date and period of the Board of Directors' meeting, the content of the resolution, the result of the Board of Directors' resolution and the Company's treatment of the recommendation of the remuneration committee (if the remuneration approved by the Board of Directors is better than the recommendation of the remuneration committee, it shall state the difference and the reasons for the difference): None

2.If a member of the remuneration committee has objections or reservations to a resolution and a record or written statement is kept, the date and time of the remuneration committee, the period, the content of the resolution, the opinions of all members, and the disposition of the opinions of the members shall be stated: None.

  • 28 -

(5) Sustainable development implementation status, deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies:

TWSE/TPEx Listed Companies:
Promoted item Implementation status Differences between Sustainable Development Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Summary description
1. Has the Company set up a sustainable development governance
structure and a dedicated (or concurrent) sustainable
development promotion unit which is authorized by the Board of
Directors to be managed by high-level management and
supervised by the Board of Directors?		 V The Company has an Environmental Safety and Health Office, an
Administration Office and a General Manager's Office that are also
responsible for the operation of related affairs, obtaining relevant
information, confirming that the decisions made will promote the
realization of the Company's vision, formulating and implementing
relevant action plans in accordance with the Company's management
philosophy, and reporting regularly to the Board of Directors.		 No major differences from the requirements of Sustainable
Development Best Practice Principles for TWSE/TPEx
Listed Companies.
2. Has the Company conducted risk evaluation for environmental,
social and corporate governance issues related to the operations
of the Company based on the materiality principle, and
formulated related risk management policies or strategies?		 V The Company has not established a risk management policy for
environmental, social and corporate governance issues that have a
significant impact on the Company's investors and other stakeholders.		 The company has not yet established a sustainable
development policy or system. It is still in the process of
development.
3.Environmental issues
(1) Has the company established an appropriate environmental
management system according to its industrial
characteristics?
(2) Is the company committed to improving the efficiency of
resource utilization and using recycled materials with low
impact on the environment?		 V
V		 (1) 1. We have obtained ISO14001:2015 environmental
management system certification (Certificate No. TW005050;
valid period: 2020/09/30-2023/09/29) to promote industrial
waste reduction, energy saving and resource recycling.
2. In order to establish a safe and healthy working environment,
our company has been certified by ISO45001:2018 in
September 2020 (certification number TW005051, validation:
September 29, 2020 to December 5, 2022) and CNS45001
occupational safety and health management system to
implement safety and health management, and hold regular
fire fighting education and training for employees and regular
inspection of related equipment.
(2) 1. In the R&D and design stage, we try our best to develop green
concept products to reduce the impact on the environment and
ecology, and to introduce environment-friendly equipment
and technology solutions to properly control and prevent
pollution generation. The LED street light has been certified
on “carbon footprint” by the Environmental Protection
Administration.
2. The process wastewater in the plant is treated as secondary
water to save water resources, and the raw materials of the
production line arerecycled to achieve thereductionof raw		 (1) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
(2) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
  • 29 -
Promoted item Implementation status Differences between Sustainable Development Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Summary description
(3) Does the company evaluate the current and future potential
risks and opportunities of climate change and take
corresponding measures for climate related issues?
(4) Has the company compiled statistics on greenhouse gas
emissions, water consumption and total weight of waste for
the past two years, and has it formulated policies for energy
saving and carbon reduction, greenhouse gas reduction, water
use reduction or other waste management?		 V
V		 materials.
3. The process-related equipment is continuously integrated into
the inverter energy saving system to reduce the company's
energy consumption. The resource waste generated in the plant
is treated through the plant recycling system to reduce the
amount of waste production.
4. The plant water system has been upgraded to continuously
improve the efficiency of recycled water use.
5. The reduction of process gas emissions to reduce the emission
of volatile organic pollutants.
6. In line with Tainan City's Low Carbon Autonomy Ordinance,
the company has installed a 3,000KW solar energy system to
support the Renewable Energy Law in practice.
(3)1. Our company has established greenhouse gas inventory
practices and regularly does an inventory of greenhouse gas
emissions in accordance with the international ISO
14064-1:2006 (CNS 14064-1) carbon emission standard, and
our production plants have been awarded the Carbon
Reduction Action Award by the Environmental Protection
Agency.
2. Replace chilled water equipment with high efficiency energy
saving models to reduce energy consumption and greenhouse
gas generation.
3. Continued introduction of variable frequency equipment into
the production facilities to reduce energy consumption and
greenhouse gas
emissions within the plant.
(4)1. Water consumption: 114,227 tonnes in 2020 and 108,651
tonnes in 2021, a total reduction of 6,032 tonnes (11.36%
water saving) through process water recycling and a carbon
reduction of 916 kg in 1 year.
2. Total weight of waste: 602.584 tonnes in 2020 and 585.512
tonnes in 2021, representing a 1-year reduction of 17.072
tonnes (2.8% reduction) in business waste.
3. Electricity consumption: 32,663,311 kWh in 2020 and
35,838,400 kWh in 2021, a 1-year increase of 3,175,089 kWh.
4. In 2021, we will continue to promote the resource recovery		 (3) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
(4) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
  • 30 -
Promoted item Implementation status Differences between Sustainable Development Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Summary description
program, carry out the replacement of the inverter system of
process facilities, complete the installation of 933KW solar
energy system in the second plant of Science and Technology,
and pass the environmental management system-ISO14001
certification in 2020 as the energy saving and carbon reduction
management policy.
5. Management goal: based on 2020, the polluted water: 65,626
tonnes in 2021 and 66,759 tonnes in 2020, representing 1.6%
reduction.
6. Measures for goal reaching, climate change estimation, and
corresponding:
(A) Energy saving and carbon reduction: continue to build
solar energy electricity system-999KW in 2020, renew the
cooled water chiller unit to save the electricity on air
conditioning.
(B) Water management: use recycle waste water in process
water drencher system and air conditioning system.
(C) The Company conducts annual discussion on climate
change issue through internal and external issues and
requirement and expectation evaluation/plan of the
stakeholder. It focuses on water resource management
improvement this year and builds a reclaimed water system
that is expected to reduce cooling water usage by 30%.
4.Social issues
(1) Has the company established relevant management policies
and procedures in accordance with relevant laws and
regulations and international human rights conventions?
(2) Does the company establish and implement reasonable
employee welfare measures (including remuneration, leave
and other benefits, etc.) and properly reflect operating
performance or resultsinemployee compensation?		 V
V		 (1) In order to fulfill our corporate social responsibility and to
protect the basic human rights of all employees and stakeholders,
we have established this policy in compliance with the United
Nations Universal Declaration of Human Rights, the
International Labor Organization Convention and other relevant
human rights norms, and to abide by the Labor Standards Law of
the Republic of China, the Gender Equality Law and other
labor-related laws and regulations to ensure that human rights are
not violated and that both internal and external members of the
company are treated with respect and fairness.
(2) The Company has established work rules, welfare management
rules and related personnel management regulations, which
cover wages, working hours, vacations, employee benefits,
pensionpayments, and compensation foroccupationalaccidents		 (1) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
(2) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
  • 31 -
Promoted item Implementation status Differences between Sustainable Development Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Summary description
(3) Does the company provide a safe and healthy working
environment for employees, and regularly implement safety
and health education for employees?
(4) Does the company have an effective career development
program for its employees?
(5) Does the company comply with relevant laws and
international standards for customer health and safety,
customer privacy, marketing and labeling of products and
services, and has it established relevant consumer protection
policies and complaint procedures?
(6) Does the company have a supplier management policy that
requires suppliers to follow relevant regulations on issues
such as environmental protection, occupational safety and
health or labor human rights, and how is it implemented?		 V
V
V
V		 for the employees employed by the Company in accordance
with the Labor Standards Law, and has established an employee
welfare committee to handle welfare matters in accordance with
the law and taking into account the needs of the employees.
employee compensation policies are determined based on
individual ability, performance, contribution to the Company,
the market value of the position held and consideration of the
Company's future operational risks, and are positively related to
operational performance.
(3) Our company holds regular health checkups for employees and
has a special doctor visit the company to provide health
consultation. We implement health education and promotion,
hold regular fire safety training for employees, enhance the
ability and awareness of all employees to manage safety on their
own, and implement safety management.
(4) Our company sets up annual internal and external training
courses and provides employee training programs according to
five major categories of functions.
(5) Our company sells in more than 120 countries around the world
and produces lights that comply with the relevant international
automotive lighting regulations in each country. We listen to
and respond to our customers' needs in a timely manner,
reacting quickly to market trends and striving for consistent
precision and perfection in the design of each product.
Grievance channels: In addition to filling out the online form on
the website, customers can also use the sales headquarters
customer service mailbox ([email protected]) to file a
complaint.
(6) According to the delivery performance of manufacturers, the
implementation of hierarchical management, in order to
motivate manufacturers to improve the management level, and
through evaluation counseling, in order to go hand in hand in the
competitive market.
1. All third parties are required to pass the third party evaluation
system.		 (3) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
(4) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
(5) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
(6) No major differences from the requirements of
Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies.
  • 32 -
Promoted item Implementation status Implementation status Implementation status Differences between Sustainable Development Best Practice
Principles for TWSE/TPEx Listed Companies and Reasons
Yes No Summary description
2. For the third-party manufacturers, we will do project auditing
and monthly performance evaluation according to Q, C, D and
S. If the performance is not good, we will urge them to
improve and conduct annual evaluation, and then we will list
the past manufacturers as the elimination of integration and
continuous monitoring of the target.
3. The transaction performance is abnormal and has development
potential and is willing to cooperate with the manufacturers
for counseling, counseling staff according to the counseling
plan and urge the improvement of the progress, to confirm its
effectiveness.
4. Regular seminars and meetings with third parties, for the
annual evaluation (according to quality, delivery, cooperation
and factory inspection) outstanding results, awarded the
excellent manufacturer award as incentive.
5.Has the company made reference to international standards or
guidelines for the preparation of reports, such as ESG reports,
which disclose non-financial information about the company,
and has the former report obtained a third-party verification or
assurance opinion?		 V The Company discloses relevant ESG-related information on the
Company's website at http://www.tyc.com.tw and on the Market
Observation Post System.		 The company has not yet prepared an ESG report. It is
still in the process of development.
6.If the company has its own ESG Principle in accordance with the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies", please describe how it operates differently from the
Principle: The Company does not have a principle of ESG in place, but practices social corporate responsibility through the operation of related activities.
7.Other important information for understanding the promotion of sustainable development implementation.
The company upholds the principles of compassion, joy, gratitude, cherishing blessings and karma, and the attitude of giving people joy, hope, convenience, and confidence in doing things. Through the "Tainan
TYC Love Association" established in 1996, we have helped disadvantaged families and social welfare organizations, and have donated to 324 people and 221 families, with a total donation of $22.08 million,
torealize the concept ofgiving backto society.

  • 33 -

  • (6) The company's performance of integrity and the measures taken deviations from the Performance of Integrity Best Practice Principles for TWSE/TPEx Listed Companies::

Evaluation item Operational status Differences and reasons between the
principle of good faith operation of
listed and OTC companies
Yes No Summary Description
1.Establish integrity management policies and
programs
(1) Does the company have an ethical management
policy that is approved by the Board of
Directors, and does it state in its bylaws and
external documents its policies and practices on
ethical management, as well as the commitment
of the Board of Directors and senior
management to actively implement the
management policy?
(2) Has the company established a mechanism to
assess the risk of dishonest conduct, regularly
analyze and evaluate the business activities
within the scope of business that have a higher
risk of dishonest conduct, and accordingly
formulate a plan to prevent dishonest conduct,
and at least cover the preventive measures for
the conducts mentioned in paragraph 2 of
Article 7 of the "Principle of Conduct for Listed
Companies with Integrity"?
(3) Is the company's dishonesty prevention
program clearly defined in the operating
procedures, conduct guidelines, disciplinary
and grievance systems for non-compliance, and
implemented, and is the former program
reviewed and revised regularly?		 V
V
V		 (1) The Company's Board of Directors has approved the "Procedures and Conduct Guidelines for
Integrity Management" and a separate "Principle of Ethical Conduct", which specify the
Company's integrity management policy and important issues and require Board members and
senior management to abide by the principle of integrity; directors are prohibited from
participating in discussions and voting on matters that are harmful to the Company's interests
and are required to recuse themselves.
(2)
On March 24, 2020, the directors of the Company revised the "Operating Procedures and
Conduct Guidelines on Integrity" to include the handling of dishonest conduct by the
Company's personnel to prevent dishonest conduct, and to uphold the principle of honesty
and integrity and comply with the code of ethical conduct when performing their duties.
(3) Handling of company personnel involved in dishonest conduct
1.The Company encourages internal and external personnel to report dishonest behavior or
misconduct, and will pay a discretionary bonus according to the seriousness of the
report. Internal personnel who make false reports or malicious accusations shall be
subject to disciplinary action and shall be dismissed in serious cases.
2.The Company has established and posted an internal independent whistleblower box on
the Company's website and intranet site for use by internal and external personnel of the
Company. The whistleblower should provide at least the following information:
(1) The name and ID number of the person making the report may also be reported
anonymously, and the address, telephone number, and e-mail address where the
person can be reached.
(2) The name or other identifying information of the person being prosecuted.
(3) Specific facts that can be investigated.
3.The Company's personnel handling the whistleblower case shall declare in writing that
the identity of the whistleblower and the contents of the whistleblower case shall be kept
confidential, and the Company undertakes to protect the whistleblower from being
improperly dealt with as a result of the whistleblower case.		 (1) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
(2) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
(3) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
  • 34 -
Evaluation item Operational status Differences and reasons between the
principle of good faith operation of
listed and OTC companies
Yes No Summary Description
4.The following procedures are followed by the Company's dedicated unit for handling
complaints.
(1) Reports should be made to the department head for general employees and to the
independent directors for directors or senior executives.
(2) The Company's specialized units and the officers or personnel reported in the
preceding paragraph shall immediately ascertain the relevant facts and, if
necessary, provide assistance from regulatory compliance or other relevant
departments.
(3) If it is proven that the person being reported has violated the relevant laws and
regulations or the Company's policies and regulations on honest
behavior/operation, the Company shall immediately request the person being
reported to stop the said behavior, and if necessary, report to the competent
authorities, refer to the judicial authorities for investigation, or request for damages
through legal proceedings in order to protect the Company's reputation and rights.
(4) The acceptance of the report, the investigation process and the results of the
investigation shall be kept in writing and shall be kept for five years, and shall be
kept electronically. Before the expiration of the retention period, in the event of a
lawsuit related to the content of the report, the relevant information shall be kept
until the end of the lawsuit.
(5) If the report is verified to be true, it is responsible to the relevant units of the
Company to review the relevant internal control system and operating procedures,
and to propose improvement measures to prevent the recurrence of the same
behavior.
(6) The Company's dedicated unit shall report to the Board of Directors on the reported
cases, their handling and subsequent review of improvement measures.
2.Implementation of integrity management
(1) Does the company assess the integrity record of
its counterparties and specify the integrity
clause in the contracts signed by its
counterparties?
(2) Does the company have a dedicated unit under
the Board of Directors to promote corporate
integrity and report regularly (at least once a year)
to the Board of Directors on its integrity policy and
its plans to prevent dishonest practices and monitor
their implementation?
(3) Does the company develop conflict-of-interest
prevention policies, provide appropriate
presentation channels, and implement them?		 V
V
V		 (1) The Company has established credit principles and credit limit management system to
effectively grasp the information of customers and reduce the risk of the Company's
operation.
(2) In order to improve the management of honest behavior/operations, the human resources
department is responsible for formulating and monitoring the implementation of honesty
policies and preventive programs, and reporting to the Board of Directors when necessary.
(3)
The Company's conflict of interest prevention policy is used to identify, monitor and
manage the risk of conflicts of interest that may lead to dishonest conduct and to provide
appropriate channels for directors, managers and other interested persons attending or
participating in Board meetings to proactively state whether they have potential conflicts
of interest with the Company.		 (1) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
(2) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
(3) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
  • 35 -
Evaluation item Operational status Differences and reasons between the
principle of good faith operation of
listed and OTC companies
Yes No Summary Description
(4) Does the company implement the effective
accounting system and internal control system
established by the integrity management, and
the internal audit unit draws up the relevant
audit plan based on the assessment results of
the risk of dishonest behavior, and checks the
compliance of the plan to prevent dishonest
behavior, or entrusts the accountant to perform
the audit?
(5) Does the company regularly hold internal and
external education and training in good faith
management?		 V
V		 (4)1. The Company ensures that the design and implementation of the system is effective on an
ongoing basis by establishing and keeping under review an effective accounting system
and internal control system to prevent business activities with higher risk of dishonest
acts.
2. The Company's internal auditors regularly review compliance with the preceding system
and prepare an audit report for the Board of Directors and may appoint an accountant to
perform the review and, if necessary, engage professional assistance.
(5)1. The company has established integrity management procedures and behavior guidelines,
and the "Integrity Management Rules" are set out in the internal standard book. The
company uses announcements to inform employees of the rules when they are issued, and
they are also documented in the NOTES standard book for their reference.
2. Our company sets up annual internal and external training courses to implement the
concept of honest behavior/operations on all employees according to their functions.		 (4) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
(5) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
3.Operation of the Corporate Prosecution System
(1) Does the company have a specific reporting
and reward system, and has it established a
channel to facilitate reporting and assigned
appropriate staff to receive reports on the
subject?
(2) Does the company have standard operating
procedures for investigation of whistleblowing
matters, follow-up measures to be taken after
completion of investigation and relevant
confidentiality mechanism?		 V
V		 (1)The Company encourages internal and external personnel to report dishonest behavior or
misconduct, and will pay a discretionary bonus according to the seriousness of their reports.
Internal personnel who make false reports or malicious accusations shall be subject to
disciplinary action, and those with serious cases shall be dismissed from their positions.
(2)1. The Company has established and posted an internal independent whistleblower mailbox
on the Company's website and intranet site for use by internal and external personnel of
the Company. The whistleblower should provide at least the following information.
(1) The name and ID number of the person making the report may also be reported
anonymously, and the address, telephone number, and e-mail address where the
person can be reached.
(2) The name or other identifying information of the person being prosecuted.
(3) Specific facts that can be investigated.
2. The Company's personnel handling the report shall declare in writing that the identity of
the whistleblower and the content of the report shall be kept confidential, and the
Company undertakes to protect the whistleblower from being improperly dealt with as a
result of the report.
3. The following procedures should be followed by the company's dedicated unit for
handling complaints.
(1) Report cases involving general staff should be reported to the head of the department,
report cases involving directors or senior executives should be reported to
independent directors.
(2) The Company's specialized units and the officers or personnel reported in the
preceding paragraph shall immediately ascertain the relevant facts and, if necessary,
provide assistance from regulatory compliance or other relevant departments.		 (1) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
(2) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
  • 36 -
Evaluation item Operational status Operational status Operational status Differences and reasons between the
principle of good faith operation of
listed and OTC companies
Yes No Summary Description
(3 ) Does the company take measures to protect the
whistleblower from improper
handling/treatment?
4.Enhanced information disclosure
Does the company disclose the contents and
effectiveness of its Principle of Conduct on its
website and the Market Observation Post
System?		 V
V		 (3) If it is proved that the person being reported has violated the relevant laws and
regulations or the Company's policies and regulations on honesty, the Company shall
immediately request the person being reported to stop the said behavior, and if
necessary, report it to the competent authorities, refer it to the judicial authorities for
investigation, or seek damages through legal proceedings in order to protect the
Company's reputation and rights.
(4) If a lawsuit related to the contents of the report is filed before the expiration of the
retention period, the relevant information shall be retained until the end of the lawsuit.
(5) If the report is verified to be true, it shall be responsible to the relevant units of the
Company to review the relevant internal control system and operating procedures, and
propose improvement measures to prevent the recurrence of the same behavior.
(6) The responsible unit of the Company shall report to the Board of Directors regarding
its handling and follow-up review and improvement measures.
(3) Reports will be handled confidentially and employees will be made aware that the Company
will do its utmost to protect the safety of those who make good faith reports.
The Company discloses its "Integrity Procedures and Behavior Guidelines" and their
effectiveness on the Company's website and the Market Observation Post System.
http://www.tyc.com.tw/index.php/governance/statute。
Specific measures to operate with integrity.
http://www.tyc.com.tw/index.php/investors/view/46。		 (3) No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
No major difference from “the
Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed
Companies” and Reasons.
5.If the company has its own code of Integrity in accordance with the "Principle of Integrity Management of Listed Companies", please describe the differences between its operation and the principle set out：
The Company has established "Operating Procedures and Conduct Guidelines for Integrity" which are posted on the Company's website and there are no material differences between the Company's operations
and the prescribed operating procedures.
6.Other important information to help understand the company's integrity management operation: (Such as the company reviews and amends its code of integrity management, etc.)：
The company complies with the relevant government laws and regulations, and implements the integrity management policy, for stakeholders to prohibit acts involving dishonesty, pay attention to the rights and
interests of each stakeholder, and indeed implement the relevant provisions of corporate governance.

  • 37 -

  • (7) If the company has established a corporate governance principle and related regulations, it should disclose its inquiry method：

  • To implement corporate governance, the Company has established the relevant corporate governance rules as follows：

(1) Articles of Incorporation.

(2) Regulations Governing the Acquisition and Disposal of Assets.

(3) Procedures for Loaning Funds to Others.

(4) Procedures for dealing in derivative transactions.

(5) Procedures for endorsements and guarantees.

(6) The corporate governance best-practice principles.

(7) Internal procedures for handling material information.

(8) Integrity management practices.

(9) Integrity management procedures and conduct guidelines.

(10) Codes of Ethical Conduct.

(11) Rules of Procedure of Shareholders' Meetings.

(12) Rules of Procedure of the Board of Directors.

(13) Method of election of directors.

(14) Rules governing the areas of responsibility of independent directors.

(15) Rules for the Organization of the Audit Committee.

(16) Rules for the Organization of the Remuneration Committee.

(17) Performance evaluation method of the Board of Directors.

  1. Disclosure and inquiry methods: the company's website.

(8) Other important information that is sufficient to improve understanding of the state of corporate governance operations: None.

  • 38 -

  • (9) Status of implementation of the internal control system:

  • 1.Statement regarding the Internal Control System

.

T.Y.C. BROTHER IND. CO., LTD.

Statement regarding the Internal Control System

Date：2022/3/7

Based on the results of our self-assessment, we declare that our internal control system for the year 2021 is as follows.

  • 1.The Company recognizes that it is the responsibility of the Board of Directors and the Manager to establish, implement and maintain an internal control system, which has been established to provide reasonable assurance of the effectiveness and efficiency of operations (including profitability, performance and safeguarding of assets), reliability of reporting, timeliness, transparency and compliance with relevant regulations and compliance with relevant laws and regulations.

  • 2.The Company's internal control system has inherent limitations and no matter how well designed, an effective internal control system can only provide reasonable assurance of the achievement of the above three objectives. Furthermore, the effectiveness of the internal control system may change due to changes in circumstances and conditions, but the Company's internal control system has a self-monitoring mechanism and the Company will take corrective actions once deficiencies are identified.

  • 3.The Company determines the effectiveness of the design and implementation of the internal control system in accordance with the judgment items of the effectiveness of the internal control system stipulated in the "Guidelines Governing the Establishment of Internal Control Systems by Public Companies" (the "Guidelines"), which are divided into five components based on the management control process: 1. control environment, 2. risk assessment, 3. control operations, 4. information and communication, and 5. monitoring operations, each of which consists of certain items as described in the Guidelines.

  • 4.The Company has used the above internal control system evaluation items to assess the effectiveness of the design and implementation of the internal control system.

  • 5.Based on the results of the preceding evaluation, the Company concluded that its internal control system (including the supervision and management of subsidiaries) as of December 31, 2021[Note 2] including the understanding of the extent to which operational effectiveness and efficiency objectives have been achieved, the reporting of such internal control system is reliable, timely, transparent and in compliance with the relevant relevant laws and regulations, and the design and implementation of such internal control system is effective, which can reasonably ensure the achievement of the above objectives.

  • 6.This statement will become the main content of the Company's annual report and public statement, and will be made public, and any misrepresentation or concealment of the above-mentioned content will be subject to legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.

  • 7.This statement was approved by the Board of Directors at its meeting held on March 24, 2022, and of the nine directors present, none held an opposing view.

T.Y.C. BROTHER IND. CO., LTD

Chairman of the Board: WU , CHUN-CHI

General Manager: CHEN , CHIN-CHAO

  • 39 -

  • 2.If an accountant is engaged to review the internal control system, the accountant's review report should be disclosed: None

  • (10) For the most recent year and up to the date of printing of the annual report, the company and its internal personnel have been punished by law, or the company has punished its internal personnel for violating the provisions of the internal control system, and the result of the punishment may have a significant impact on the shareholders' equity or the price of securities, the content of the punishment, the main deficiencies and improvements should be stated: None.

  • (11) Significant resolutions of the shareholders' meeting and the Board of Directors for the latest year and up to the date of printing of the annual report:

1. Board of shareholders

Meeting date Summary of Important Proposals
Voting results		 Implementation
2021.08.03 2020 Financial Statements The case was passed by a vote
Number of voting rights: 179,629,315,
accounting for 97.93% of the shareholders
present		 Not applicable
FY 2020 Surplus Distribution
Proposal		 The case was passed by a vote
Approval right: 179,865,714, accounting for
98.06% of the shareholders present		 Cash dividend of $0.6
per share to be paid on
September 15, 2021
Amendments to “Rules for
Election of Directors”
The case was passed by a vote
Approval right: 179,881,649, accounting for
98.07% of the shareholders present		 The revised procedures have
been followed
Re-election of Directors The case was passed by a vote.
Wu, Chun-Chi received 183,685,867 votes.
Wu, Chun-Lang received 182,653,836 votes.
Wu, Chun-I received 181,256,070 votes.
CHEN , CHIN-CHAO - Legal Representative of
Yuan-Hong Investment Co., Ltd. received
180,083,619 votes.
WU , KUO-CHEN - Legal representative of
KUO-CHI-MIN Investment Co., Ltd. received
179,053,901 votes.
CHUANG, TAI-SHIE received 178,835,309
votes.
Huang, Chung-Hui received 176,817,956 votes.
Hou, Rong-Xian received 176,350,774 votes.
Hsu, Chiang received 176,037,424 votes.		 Elected 9 Directors (including
3 Independent Directors)
Lifting of non-competition
restriction on the Directors		 The case was passed by a vote
Approval right: 179,673,107, accounting for
97.95% of the shareholders present		 Agreed to lift of
non-competition restriction on
the Directors and
representatives

2. Board of Directors

Period Meeting date Summary of Important Proposals Resolution result
14-19 2021.05.13 1. Payment of Directors' remuneration.
2. Directors and managers’ remuneration.
3. Establish “Regulations of Employee Share Option on 2021
Preferred Share A for Cash Capital Increase”
4. Manager share distribution for cash capital to issue new share.
5. Assign Corporate Governance Manager.		 All the directors present
(including the independent
directors) passed the resolution
without objection.
14-15 2021.07.13 1. Re-schedule the date and venue of the 2021 annual general
meeting.
2. Investment in LSC Ecosystem Corp.		 All the directors present
(including the independent
directors) passed the resolution
without objection.
15-03 2021.11.11 1. 2022 Annual Audit Plan Case.
2. Investment in Jiangsu Dibiao Ltd.		 All the directors present
(including the independent
directors) passed the resolution
without objection.
  • 40 -
Period Meeting date Summary of Important Proposals Resolution result
All the directors present
(including the independent
directors) passed the resolution
without objection.
15-04 2022.03.24 1. 2022 Annual Operating Plan.
2. The "Assessment of the Effectiveness of the Internal Control
System" and the "Statement of Internal Control System" for the
year 2021.
3. Employee compensation and director compensation distribution
for fiscal 2021.
4. The Annual Accounts Book 2021.
5. FY 2021 Surplus Distribution Case.
6. Lending funds to Beste Motor Co., Ltd.
7. Investment in LSC Ecosystem Corp.
8. Amendment of “Regulations Governing the Acquisition and
Disposal of Assets”.
9. Review the independence assessment of the company’s certified
public accountants.
10. The 2022 Shareholders ' Meeting accepts shareholder’s
proposals.
11. Matters related to the convening of the 2022 Ordinary
Shareholders' Meeting.

  • (12)Directors' dissenting views on important resolutions passed by the Board of Directors during the latest year and up to the date of printing of the annual report, which are recorded or stated in writing: None

  • (13) Summary of the resignation and dismissal of the Chairman, President, Head of Accounting, Head of Finance, Head of Internal Audit, Head of Corporate Governance and Head of Research and Development of the Company for the most recent year and up to the date of printing of the annual report: None

  • 5.CPA Public Fee Information：

CPA Audit Fee Information

Unit: NT$1,000 Unit: NT$1,000 Unit: NT$1,000 Unit: NT$1,000 Unit: NT$1,000
Name of
accounting firm		 Name of
Accountant		 Accountant's audit
period		 Audit
Fee		 Non-audit
Fee		 Total Remarks
ERNST &
YOUNG,
TAIWAN		 HUANG,
SHIH-CHIEH		 2021.01.01~2021.12.31 7,910 1,408 9,318
LEE, FANG-WEN

Content of non-audit fee: tax compliance audit and business registration.

6.Change of accountant information: None

  • 7.If the chairman, general manager, or manager in charge of financial or accounting matters of the Company has worked for the firm of the certified public accountant or its affiliates within the past year, he/she should disclose his/her name, title, and period of employment with the firm of the certified public accountant or its affiliates: None

  • 41 -

  • 8.The following are the movements in shareholdings and pledges of shareholdings of directors, supervisors, managers and shareholders holding more than 10 percent of the shares during the latest year and up to the date of printing of the annual report.

  • 1.Changes in shareholdings of directors, supervisors, managers and substantial shareholders.

Title Name Fiscal Year 2021 Fiscal Year 2021 Current year ended March 31 Current year ended March 31
Increase (decrease)
in number of
shares held
Increase (decrease)
in the number of
shares pledged		 Increase (decrease)
in the number of
shares held		 Increase (decrease)
in the number of
pledged shares
Chairman WU , CHUN-CHI 0 0 0 0
Director WU , CHUN-LANG 0 0 0 0
Director WU , CHUN-I 0 0 0 0
Director TING, CHENG-TAI 0 0 0 0
Director CHUANG, TAI-SHIE 0 0 0 0
Director WU , KUO-CHEN —
Legal Representative
of Kuo-Chi-Min
Investment Co., Ltd.		 0 0 0 0
Director CHEN ,
CHIN-CHAO—Legal
Representative of
Yuan-Hong
Investment Co., Ltd.		 0 0 0 0
Independent
Director		 HUANG ,
CHUNG-HUI		 0 0 0 0
Independent
Director		 HOU, RONG- HSIEN 0 0 0 0
Independent
Director		 HSU,CHIANG 0 0 0 0
Major shareholder Ta Yih Ta Investment
Co., Ltd		 (54,283,887) (19,700,000) 0 0
Major shareholder Yih Heng Investment
Co., Ltd		 50,420,654 25,100,000 0 1,500,000
Manager CHEN , CHIN-CHAO
0		 0 0 0
Manager TING, CHENG-TAI 0 0 0 0
Manager WU , KUO-CHEN 0 0 0 0
Manager WENG,YI-FENG 0 0 0 0
Manager WU,PING-HUI 0 0 0 0
Manager SHEN,I-CHUAN 0 0 0 0
Manager WU,WEN-KUEI 0 0 0 0
Manager LIN,CHUN-KUEI 0 0 0 0
Manager CHAO,YUAN-CHUN
0		 0 0 0
Manager HSU,YU-HUI 0 0 0 0
Manager LIN,MIN FENG 0 0 0 0
Manager LIU,YU-CHUNGMR 0 0 0 0

Note: BILLION ALIVE INVESTMENT LIMITED has been the new major shareholder since January 11, 2021.

Note: The Manager, SHEN,I-CHUAN, resigned on December 1, 2021.

Note: The Director, TING, CHENG-TAI, resigned on August 3, 2021.

2.Information on the transfer of shares to related parties: None

3.Information on the pledge of shares by a related party: None

  • 42 -

9. Information on the relationship between the top 10 shareholders and their respective shareholdings.

Name Shares held b y owning Spouse. Minor child ren holding shares Total shareholdi
ot		 ng in the name of
hers		 The top10 shareholders are related to each other or are spouses. The names and relationships of the top ten sha
related to each other or are spouses or relatives within the second degree of consanguinity		 reholders who are Remark
Number of shares Shareholding
Ratio		 Number of
shares		 Shareholding
Ratio		 Number of
shares		 Shareholding
Ratio		 Title (or name) Relationship
s
Ta Yih Ta Investment Co., Ltd 56,655,288 18.11% 0 0 0 0 None None -
Representative：
WU , CHUN-CHI		 824,081 0.26% 828,278 0.26% 0 0 WU , CHUN-I.
Representative of YUAN-HONG INVESTMENT CO., LTD WU , CHUN-LANG
Representative of TAWEI INVESTMENTCO.,LTD. WU , CHUN-I.		 brotherhood -
YIH HENG INVESTMENT CO., LTD 50,420,654 16.11% 0 0 0 0 None None -
Representative：
WU , CHUN-LANG		 5,401,383 1.73% 828,278 0.26% 0 0 Representative of TA YIH TA INVESTMENT CO., LTD, WU , CHUN-CHI、WU , CHUN-I、
Representative of TA WEI INVESTMENT CO., LTD. WU , CHUN-I、Representative of KUO-CHI-MIN
INVESTMENT CO., LTD.WU , CHUN-CHI、Representative of CHI-MIN INVESTMENT CO., LTD.WU ,
CHUN-CHI		 brotherhood -
DING WAN INVESTMENT CO.,
LTD		 10,522,852 3.36% 0 0 0 0 None None -
Representative：WU,MAI-HUI-E 823,474 0.26% 4,593,613 1.47% 0 0 WU , CHUN-I、Representative of TA WEI INVESTMENT CO., LTD. WU , CHUN-I Spouse -
TA WEI INVESTMENT CO., LTD. 10,498,871 3.36% 0 0 0 0 None None -
Representative：
WU , CHUN-I		 4,593,613 1.47% 823,474 0.26% 0 0 Representative of DING WAN INVESTMENT COLTD. WU,MAI-HUI-E Spouse -
Representative of KUO-CHI-MIN INVESTMENT CO., LTD.WU , CHUN-CHI、
Representative of CHI-MIN INVESTMENT CO., LTD.WU , CHUN-CHI、
Representative of TA YIH TA INVESTMENT CO., LTD,WU , CHUN-CHI、
Representative of YUAN-HONGINVESTMENTCO.,LTD. WU , CHUN-LANG		 brotherhood -
Kuo-Chi-Min Investment Co., Ltd. 9,931,756 3.17% 0 0 0 0 None None -
Representative：
WU , CHUN-CHI		 824,081 0.26% 828,278 0.26% 0 0 WU , CHUN-I.
Representative of YUAN-HONG INVESTMENT CO., LTD. WU , CHUN-LANG
Representative of TAWEI INVESTMENTCO.,LTD. WU , CHUN-I		 brotherhood -
Chi-Min Investment Co., Ltd. 7,112,893 2.27% 0 0 0 0 None None -
Representative：
WU , CHUN-CHI		 824,081 0.26% 828,278 0.26% 0 0 WU , CHUN-I.
Representative of YUAN-HONG INVESTMENT CO., LTD. WU , CHUN-LANG
Representative of TAWEI INVESTMENTCO.,LTD. WU , CHUN-I		 brotherhood -
WU , CHUN-LANG 5,401,383 1.73% 828,278 0.26% 0 0 Representative of Ta Yih Ta Investment Co., Ltd. WU , CHUN-CHI.、WU, CHUN-I,、
Representative of Chi-Min Investment Co., Ltd. WU , CHUN-CHI
Representative of TAWEI INVESTMENTCO.,LTD. WU , CHUN-I		 brotherhood -
Yuan-Hong Investment Co., Ltd. 5,354,451 1.71% 0 0 0 0 None None -
Representative：
WU , CHUN-LANG		 5,401,383 1.73% 828,278 0.26% 0 0 Representative of Ta Yih Ta Investment Co., Ltd
WU , CHUN-CHI.WU , CHUN-I
Representative of KUO-CHI-MIN INVESTMENT CO., LTD.WU , CHUN-CHI.
Representative of Chi-Min Investment Co., Ltd. WU , CHUN-CHI
Representative of TAWEI INVESTMENTCO.,LTD. WU , CHUN-I		 brotherhood -
WU , CHUN-I 4,593,613 1.47% 823,474 0.26% 0 0 Representative of Ding Wan Investment Co., Ltd-WU,MAI-HUI-E Spouse -
Representative of Kuo-Chi-Min Investment Co., Ltd.-WU , CHUN-CHI.
Representative of Chi-Min Investment Co., Ltd.
WU , CHUN-CHI.
Representative of Ta Yih Ta Investment Co., Ltd
WU , CHUN-CHI.
Representative of Yuan-HongInvestmentCo.,Ltd.-WU , CHUN-LANG		 brotherhood
Chase Custodianship of the Norwegian
Central Bank Investment Account		 3,166,521 1.01% 0 0 0 0 None None -
  • 43 -

10.Consolidated shareholding:

Units: Shares；%

Units: Shares；% Units: Shares；%
Transfer of Investment Business
(Note)		 Investment of the
Company		 Investment of directors,
supervisors, managers and
directly or indirectly
controlled enterprises		 Consolidated investment
Number of
Shares		 Shareholding
ratio
Number of
Shares		 Shareholding
ratio
Number of
Shares		 Shareholding
ratio
TI YUAN INVESTMENT CO.,
LTD.		 5,731 100%
-		 -
5,731		 100%
TI FU INVESTMENT CO., LTD. 12,000 100%
-		 - 12,000 100%
JUOKU TECHNOLOGY CO.,
LTD.		 27,923,401 72.10%
1,619,792		 4.18% 29,542,091 76.29%
Tamau Management Consultancy
Co., Ltd.		 260,000 100%
-		 -
260,000		 100%
SUPRA-ATOMIC CO., LTD 65,932,450 100%
-		 - 65,932,450 100%
BESTE MOTOR CO., LTD 12,072,000 100%
-		 - 12,072,000 100%
CONTEK CO., LTD. 2,186,000 100%
-		 - 2,186,000 100%
I YUAN PRECISION
INDUSTRIAL CO., LTD.		 5,617,854 15.66%
-		 -
5,617,854		 15.66%
INNOVA HOLDING CORP. 5,549 100%
-		 - 5,549 100%
TYC VIETNAM INDUSTRIAL
CO., LTD.		 - 60%
-		 -
-
60%
TSM TECH CO., LTD. - - 300,000 100.00%
300,000		 100.00%
PT.ASTRA JUOKO - - 1,126,500 50.00%
1,126,500		 50.00%
DBM REFLEX OF TAIWAN
CO., LTD.		 - -
8,750,000		 50.00%
8,750,000		 50.00%
EUROPILOT CO., LTD - - 14,359,821 100.00% 14,359,821 100.00%
MOTOR-CURIO CO., LTD - - 1,893,400 100.00%
1,893,400		 100.00%
SPARKING CO., LTD - - 30,915,717 100.00% 30,915,717 100.00%
EUROLITE CO., LTD - - 14,697,972 100.00% 14,697,972 100.00%
UNIMOTOR INDUSTRAL CO.,
LTD		 - -
6,887,000		 100.00%
6,887,000		 100.00%
TYC EUROPE B.V - - 120,000 100.00%
120,000		 100.00%
T.I.T INTERNATION CO., LTD - - 4,994,900 99.98%
4,994,900		 99.98%
VARROC TYC CORPORATION - - 14,072,000 50.00% 14,072,000 50.00%
ATECH INTERNATIONAL
CO.,LTD.		 - -
2,250,000		 25.00%
2,250,000		 25.00%
GENERA CORPORATION - - 12,388,505 100.00% 12,388,505 100.00%
W&W REAL PROPERTY,INC. - - 1,000,000 100.00%
1,000,000		 100.00%
VARROC TYC CORPORATION - - - 50.00%
-		 50.00%
CHANGZHOU DAMAO
PRECISION INDUSTRIAL
CO.,LTD.		 - -
-		 100.00%
-		 100.00%
SUNNYTECH.CN Inc. - - - 30.00%
-		 30.00%
XIANLIANG (KUN
SHAN)AUTO PARTS CO., LTD.,		 - -
-		 20.00%
-		 20.00%
KUN SHAN TYC HIGH
PERFORMANCE LIGHTING
TECH CO., LTD.		 - -
-		 100.00%
-		 100.00%
Chin-Li-Ma Hight Performance
Luminaire Co., Ltd.		 - -
-		 30.00%
-		 30.00%
Kunshan Atech Autoparts
Manufacturing Co., Ltd.		 - -
-		 25.00%
-		 25.00%
Jiangsu imperial standard dustrial
technology co.,Ltd		 - -
-		 25.00%
-		 25.00%

Note: Long-term investments accounted for using the equity method.

  • 44 -

IV.Fund raising situation

1.Capital and share capital ：

(1) Source of share capital:

1.Share capital formation

Year/Month Issue price Authorized share capital Authorized share capital Paid-in capital Paid-in capital Remarks
Number of shares Amount Number of shares Amount Source of share capital Property other than
cash against shares		 Others
1986.09 10 600,000 6,000,000 600,000 6,000,000 Establishment None -
1987.10 10 3,600,000 36,000,000 3,600,000 36,000,000 Cash capital increase
30,000,000
None		 -
1988.06 10 10,000,000 100,000,000 10,000,000 100,000,000 Cash capital increase
64,000,000		 None -
1989.03 10 17,000,000 170,000,000 17,000,000 170,000,000 Cash capital increase
70,000,000		 None -
1989.12 10 42,000,000 420,000,000 42,000,000 420,000,000 Cash capital increase
250,000,000		 None -
1995.06 10 47,880,000 478,800,000 47,880,000 478,800,000 Surplus to capital increase
Capital reserve to increase
capital
16,800,000
42,000,000		 None Approved by TWSE (1) No. 37257 on
June 26, 1995
1996.07 10 80,000,000 800,000,000 60,500,000 605,000,000 Surplus to capital increase
Capital reserve to increase
capital
Cash capital increase
71,820,000
23,940,000
30,440,000		 None Approved by TWSE (1) No. 39773 on
July 3, 1996
1996.05 10 80,000,000 800,000,000 72,600,000 726,000,000 Surplus to capital increase
121,000,000		 None Approved by TWSE (1) No. 40709 on
May 29, 1997
1998.05 10 186,000,000 1,860,000,000 114,380,000 1,143,800,000 Surplus to capital increase
Capital reserve to increase
capital
Cash capital increase
181,500,000
36,300,000
200,000,000		 None Approved by TWSE (1) No. 37130 on
May 8, 1998
1999.06 10 190,000,000 1,900,000,000 137,256,000 1,372,560,000 Surplus to capital increase
228,760,000		 None Approved by TWSE (1) No. 52440 on
June 7, 1999
2000.06 10 280,000,000 2,800,000,000 164,707,200 1,647,072,000 Surplus to capital increase
Capital reserve to increase
capital
192,158,400
82,353,600		 None Approved by (2000) TWSE (1) No.
50760 on June 14, 2000
2001.06 10 280,000,000 2,800,000,000 169,648,416 1,696,484,160 Surplus to capital increase
49,412,160		 None Approved by TWSE (1) No. 139164 on
June 19, 2001
2002.06 10 280,000,000 2,800,000,000 183,220,290 1,832,202,900 Surplus to capital increase
135,718,740		 None Approved by TWSE No. 1 letter
0910132228 dated June 14, 2002
2003.07 10 280,000,000 2,800,000,000 192,381,305 1,923,813,050 Surplus to capital increase
91,610,150		 None Approved by TWSE No. 1 letter
0920130067 on July 7, 2003
2004.06 10 280,000,000 2,800,000,000 216,428,968 2,164,289,680 Surplus to capital increase
240,476,630		 None Approved by TWSE No. 1 letter
0930127901 on June 24, 2004
2004.10 10 280,000,000 2,800,000,000 216,617,011 2,166,170,110 Conversion of corporate
bonds into shares
1,880,430		 None Approved by MOEA No. 09301196240
on October 18, 2004
2004.07 10 280,000,000 2,800,000,000 242,611,052 2,426,110,520 Surplus to capital increase
259,940,410		 None Approved by FSC No. 0940127302 on
July 7, 2005
  • 45 -
Year/Month Issue price Authorized share capital Authorized share capital Paid-incapital Paid-incapital Remarks Remarks
Number of shares Amount Number of shares Amount Source of share capital Property other than
cashagainst shares		 Others
2005.10 10 280,000,000
2,800,000,000
244,961,775
2,449,617,750		 Conversion of corporate
bonds into shares
23,507,230
None		 Approved by MOEA No. 09501010450
on January 18, 2006
2006.04 10 280,000,000
2,800,000,000
245,069,906
2,450,699,060		 Conversion of corporate
bonds into shares
1,081,310
None		 Approved by MOEA No. 09501010450
on January 18, 2006
2006.07 10 400,000,000
4,000,000,000
248,638,304
2,486,38,3040		 Conversion of corporate
bonds into shares
35,683,980
None		 Approved by MOEA No. 09501152710
on July 28, 2006
2007.01 10 400,000,000
4,000,000,000
249,061,432
2,490,614,320		 Conversion of corporate
bonds into shares
4,231,280
None		 Approved by MOEA No. 09601011330
on January 16, 2007
2007.04 10 400,000,000
4,000,000,000
249,070,834
2,490,078,340		 Conversion of corporate
bonds into shares
94,020
None		 Approved by MOEA No. 09601079840
on April 19, 2007
2007.09 10 400,000,000
4,000,000,000
252,806,896
2,528,068,960		 Surplus to capital increase
37,360,620
None		 Approved by MOEA No. 09601222870
on September 12, 2007
2007.10 10 400,000,000
4,000,000,000
261,068,257
2,610,682,570		 Conversion of corporate
bonds into shares
82,613,610
None		 Approved by MOEA No. 09601263180
on October 25, 2007
2008.01 10 400,000,000
4,000,000,000
261,778,783
2,617,787,830		 Conversion of corporate
bonds into shares
7,105,260
None		 Approved by MOEA No. 09701013290
on January 21, 2008
2008.04 10 400,000,000
4,000,000,000
267,658,522
2,676,585,220		 Conversion of corporate
bonds into shares
58,797,390
None		 Approved by MOEA Letter No.
09701093330 on April 18, 2008
2008.07 10 400,000,000
4,000,000,000
267,668,059
2,676,680,590		 Conversion of corporate
bonds into shares
95,370
None		 Approved by MOEA No. 09701178920
on July 31, 2008
2008.11 10 400,000,000
4,000,000,000
278,321,754
2,783,217,540		 Surplus to capital increase
106,536,950
None		 Approved by MOEA No. 09701282450
on November 5, 2008
2008.12 10 400,000,000
4,000,000,000
272,218,754
2,722,187,540		 Cancellation of treasury
shares
61,030,000
None		 Approved by MOEA No. 09701318420
on December 22, 2008
2009.10 10 400,000,000
4,000,000,000
280,286,316
2,802,863,160		 Surplus to capital increase
80,675,620
None		 Approved by MOEA no.09801226020
on October 1, 2009
2010.10 10 400,000,000
4,000,000,000
307,984,948
3,079,849,480		 Surplus to capital increase
276,986,320
None		 Approved by MOEA no.09901222580
on October 4, 2010
2011.10 10 400,000,000
4,000,000,000
317,125,496
3,171,254,960		 Surplus to capital increase
91,405,480
None		 Approved by MOEA No. 10001227970
on October 6, 2011
2012.01 10 400,000,000
4,000,000,000
312,338,496
3,123,384,960		 Cancellation of treasury
shares
47,870,000
None		 Approved by MOEA Letter No.
1010101840 on January 4, 2012
2012.10 10 400,000,000
4,000,000,000
314,261,881
3,142,618,810		 Surplus to capital increase
31,233,850
None
 Approved by MOEA No. 10101203870
on October 3, 2012

Cancellation of treasury
shares
12,000,000
2013.05 10 400,000,000
4,000,000,000
312,897,881
3,128,978,810		 Cancellation of treasury
shares
13,640,000
None		 Approved by MOEA No. 10201091880
on May 17, 2013
2021.08 10 400,000,000
4,000,000,000
342,897,881
3,428,978,810		 Cash capital increase
(preferred shares)
300,000,000
None		 Approved by MOEA No. 11001147460
on August 19, 2021
  • 46 -

2. Type of shares ：

. Type of shares：
Units: Shares
Shares Approved share capital Remark
Type of Shares Outstanding
shares		 Unissued shares Total
Ordinary Shares 312,897,881
57,102,119		 400,000,000 Listed
Preferred Shares 30,000,000
  1. Information about the master reporting system: None

(2) Shareholder Structure ：

1. Ordinary Shares

Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares		 Shareholder Structure：
1. Ordinary Shares
April 25, 2022
Shareholder
Structure
Quantity
 Government Financial
organization		 Other Legal
Entities		 Foreign
Organizations and
Foreigners		 Individual Total
Number of
people		 0 0
48
87
25,048
25,183
Number of
shares held		 0 0 153,878,493
17,415,593		 141,603,795 312,897,881
Shareholding
ratio		 0.00% 0.00%
49.18%
5.56%
45.26%
100.00%
Percentage of shares held by mainland investors: None
2. Preferred Shares		 April 25, 2022
Shareholder
Structure
Quantity

Government
Financial
organization		 Other Legal
Entities		 Foreign
Organizations and
Foreigners		 Individual
Total
Number of
people		 0
2
13
2
2,555
2,572
Number of
sharesheld		 0
98,000
24,159,101
1,348		 5,741,551 30,000,000
Shareholding
ratio		 0.00%
0.33%
80.53%
0.00%
19.14%
100.00%

Percentage of shares held by mainland investors: None

  • 47 -

(3) Diversification of shareholding ：

1. Ordinary shares ：

1. Ordinary shares：
April 25, 2022
Shareholding Grades Number of
Shareholders		 Number of shares held Shareholding ratio
1 to 999 6,521 1,387,105 0.44%
1,000 to 5,000 13,658 31,240,731 9.98%
5,001 to 10,000 2,730 21,994,602 7.03%
10,001 to 15,000 725 9,242,543 2.95%
15,001 to 20,000 554 10,341,839 3.31%
20,001 to 30,000 393 10,174,078 3.25%
30,001 to 40,000 164 5,902,110 1.89%
40,001 to 50,000 119 5,566,037 1.78%
50,001 to 100,000 182 13,051,825 4.17%
100,001 to 200,000 74 10,137,180 3.24%
200,001 to 400,000 28 7,567,802 2.42%
400,001 to 600,000 7 3,322,331 1.06%
600,001 to 800,000 5 3,396,502 1.09%
800,001 to 1,000,000 7 6,118,759 1.96%
More than 1,000,001 16 173,454,437 55.43%
Total 25,183 312,897,881 100.00%

2. Preferred Shares ：

2. Preferred Shares：
April 25, 2022
Shareholding Grades Number of
Shareholders		 Number of shares held Shareholding ratio
1 to 999 978 186,566 0.62%
1,000 to 5,000 1,510 1,741,307 5.80%
5,001 to 10,000 41 331,031 1.10%
10,001 to 15,000 6 73,239 0.24%
15,001 to 20,000 5 92,020 0.32%
20,001 to 30,000 2 57,900 0.19%
30,001 to 40,000 10 385,437 1.30%
40,001 to 50,000 0 0 0.00%
50,001 to 100,000 5 454,000 1.51%
100,001 to 200,000 3 469,000 1.56%
200,001 to 400,000 4 1,600,000 5.33%
400,001 to 600,000 3 1,610,000 5.37%
600,001 to 800,000 0 0 0.00%
800,001 to 1,000,000 1 1,000,000 3.33%
More than 1,000,001 4 21,999,500 73.33%
Total 2,572 30,000,000 100.00%

(4) List of major shareholders ：

  1. Ordinary shares ：

April 25, 2022

  • 48 -
Shares
Name of Major Shareholders		 Number of shares held Holding ratio
Ta Yih Ta Investment Co., Ltd 56,655,288
18.11%
Yih Heng Investment Co., Ltd 50,420,654
16.11%
Ding Wan Investment Co., Ltd 10,522,852
3.36%
Ta Wei Investment Co., Ltd. 10,498,871
3.36%
Kuo-Chi-Min Investment Co., Ltd. 9,931,756
3.17%
Chi-Min Investment Co., Ltd. 7,112,893
2.27%
WU , CHUN-LANG 5,401,383
1.73%
Yuan-Hong Investment Co., Ltd. 5,354,451
1.71%
WU , CHUN-I 4,593,613
1.47%
Chase Custodianship of the Norwegian Central Bank
InvestmentAccount		 3,166,521
1.01%

2. Preferred Shares ：

2. Preferred Shares：
April 25, 2022
Shares
Name of Major Shareholders		 Number of shares held Holding ratio
Ta Yih Ta Investment Co., Ltd 8,000,000
26.67%
Yih Heng Investment Co., Ltd 7,000,000
23.33%
Chi-Min Investment Co., Ltd. 3,999,500
13.33%
Ta Wei Investment Co., Ltd. 3,000,000
10.00%
Yulon Motor Co.,Ltd. 1,000,000
3.33%
Kwang Dah Trading Co., Ltd. 600,000
2.00%
HUANG,CHIN-YUEH 520,000
1.73%
CAPITAL SECURITIES CORPORATION 490,000
1.63%
WU , KUO-CHEN 400,000
1.33%
CHEN , CHIN-CHAO 400,000
1.33%

(5) Stock price per share, net worth, earnings, dividends and related information for the past two years.

o years.
Item Year 2020 2021 Current year as of 31
March 2022
Price/ Share Max 29.40
26.45
19.80
Min 16.20
18.60
17.70
Average 23.04
21.52
18.78
PB Before distribution 20.60
25.29
21.03
After distribution 19.99
Notyet allocated
Notyet allocated
EPS Weighted average number of shares
311,958
311,958
311,958
EPS 0.84
0.62
0.25
DPS Cash dividends 0.6
0.5
0
Free
Allotment		 SRE 0
0
0
SCAP 0
0
0
Accumulated unpaid dividends 0
0
0
ROI analysis P/E ratio 19.99
34.71
23.98

PER		 38.40
43.04
0
Dividend yield 2.60%
2.32
0

  • 49 -

  • (6) Company Dividend Policy and Enforcement Status.

1.Dividend policy：

  • In accordance with the revised Articles of Incorporation, the Company's industrial environment is changing rapidly and the Company is in the growth stage. Based on the capital expenditure requirements and sound financial planning for sustainable operation, if there is any surplus after each year's final accounts, in addition to paying all taxes and contributions in accordance with the law, the Company shall first make up for the deficits of previous years and then set aside 10% of the remaining amount as legal reserve, and after setting aside a special reserve or reversal of the special reserve for the net reduction in shareholders' equity that occurred in the current year and accumulated in the previous years in accordance with the regulations, the Company shall consolidate the accumulated undistributed earnings at the beginning of the period as dividends to shareholders, and distribute the remaining amount as dividends on common shares after distributing the preferred dividends in accordance with Article 7-1 of the Articles of Incorporation.

  • 2.The shareholders' committee proposed the following dividend distribution:

  • The 2021 earnings distribution is approved on the Board of Directors meeting on March 24, 2022. The total accumulated distributable earnings for fiscal 2021 amounted to NT$180,120,174 (all amounts stated below are in New Taiwan dollars). $0.5 per common share, and $0.7890411 for preferred share A. All dividend is distributed in cash.

  • (7) Effect of the proposed gratis allotment of shares at the shareholders' meeting on the Company's operating results and earnings per share: Not applicable

  • (8) Employees, Directors' Remuneration:

  • 1、 The percentage or range of remuneration of employees and directors as set out in the Articles of Association. In accordance with the revised Articles of Incorporation, the Company shall contribute not less than 1% of its annual profits to the remuneration of its employees and the remuneration of its directors (up to 3%), provided that the Company shall reserve in advance an amount to cover any accumulated losses.

  • 2、 The basis for estimating the amount of remuneration to employees and directors, the basis for calculating the number of employee compensation shares to be distributed in shares, and the accounting treatment if the actual amount distributed differs from the estimated amount.

    • Approved by the annual general meeting on August 3, 2021, the distribution for employee remuneration in 2020 (no less than 1%) is $20,000,000 and $7,250,000 for the director remuneration (no more than 3%), all payable in cash. No difference from the amount to be recognized in 2020.

  • 3、 Information on the proposed distribution of employee remuneration and other information adopted by the Board of Directors：

Approved by the Board of Directors meeting on March 24, 2022, the suggested distribution for employee remuneration in 2021 (no less than 1%) is $12,000,000 and $5,200,000 for the director remuneration (no more than 3), all payable in cash. No difference from the amount to be recognized in 2021.

  • 4、 Actual distribution of remuneration of employees and directors in the previous year：

  • (1) The actual amount of employee and director's remuneration distributed in the previous year : Actual distributions for 2020 were NT$20,000,000 for employee remuneration and NT$7,250,000 for director remuneration.

  • (2) If there is any difference between the actual amount of remuneration to employees and directors in the previous year and the estimated amount of expenses to be recognized, the amount of the difference, the reasons for the difference and the circumstances under which the difference was handled should be disclosed: No difference

  • 50 -

(9) The Company buys back shares in the Company in the following circumstances.

2022/3/31
Buyback issue 1st 2nd 3rd
Purpose of buy-back Protect the company's
credit and shareholders '
rights		 Transfer of shares to
employees		 Protect the company's
credit and shareholders '
rights
Buyback Period 2008/7/10~2008/9/8 2008/10/22~2008/12/19 2011/9/13~2011/10/14
Buyback interval price Unit price per share
NT$11 to NT$25		 Unit price per share
NT$8 to NT$18		 Unit price per share
NT$8.75 to NT$20.76
Type and number of
shares bought back		 CSTO/ 6,103,000 shares CSTO / 3,300,000 shares CSTO / 1,487,000 shares
Amount of shares bought
back		 NT$ 95,865,633 NT$ 34,476,022 NT$ 18,820,541
Number of shares
cancelled and transferred		 Approved by the Ministry
of Economic Affairs on
December 22, 2008,
application for cancellation
of registration of change of
treasury shares 6,103,000
shares		 Approved by the
Ministry of Economic
Affairs on 04/01/2012,
the application for
cancellation of the
registration of change of
treasury shares 3,300,000
shares		 Approved by the Ministry
of Economic Affairs on 04
January 2012, application
for cancellation of
registration of change of
treasury shares 1,487,000
shares
Number of shares of the
Company held
cumulatively		 - - -
Number of shares of the
Company held
cumulatively as a
percentage of the total
number of shares in issue
(%)		 - - -
  • 51 -

2022/3/31

2022/3/31
Buyback issue 4th 5th
Purpose of
buy-back		 Protect the company's credit
and shareholders'rights		 Protect the company's credit
and shareholders'rights
Buyback Period 2012/6/4~2012/8/3 2012/11/19~2013/01/18
Buyback interval
price		 Unit price per share NT$8.50
to NT$16		 Unit price per share
NT$8.50 to NT$14
Type and number
of shares bought
back		 CSTO / 1,200,000 shares CSTO/ 1,364,000 shares
Amount of shares
bought back		 NT$ 14,157,848 NT$ 14,422,096
Number of shares
cancelled and
transferred		 Approved by the Ministry of
Economic Affairs on October
3, 2012, application for
cancellation of registration of
change of treasury shares
1,200,000 shares		 Approved by the Ministry of
Economic Affairs on May
17, 2013, application for
cancellation of registration
of change of treasury shares
1,364,000 shares
Number of shares
of the Company
held cumulatively		 - -
Number of shares
of the Company
held cumulatively
as a percentage of
the total number of
shares in issue (%)		 - -
  • 52 -

2.Handling of corporate bonds:

(1) Ordinary corporate bonds.

dling of corporate bonds:
(1) Ordinary corporate bonds.		 dling of corporate bonds:
(1) Ordinary corporate bonds.
Types of corporate bonds 1st unsecured corporate bonds
Issue Date 2004/6/25
Denomination 100,000 per sheet
Place of issuance and transaction Not applicable
Par Value (NT$) The bonds were issued in full at par value.
Total amount NT$ 1,000,000,000
Interest rate Coupon rate 0 %
Duration 5-year maturity date: 24 June 2009
Assurance agency Not applicable
Trustee Taipei Fubon Bank Trust Department
Underwriter None
Attorney Chang An Attorney J.A. Huang
Accountant Diwan & CompanyTSAI,CHING-TIEN、.WU,JIAN-YUAN
Repayment method Not applicable
Outstanding principal amount NT$ 0
Terms of redemption or early repayment (1) If the closing price of the Company's common stock on the TSE
exceeds the then current conversion price of the Bonds by 50% or
more for 30 consecutive business days from the day after the first
month from the date of issuance of the Bonds to the 40th day prior
to the expiration of the issuance period, all of the Bonds may be
redeemed in cash within the next 30 business days at the
redemption price calculated based on the redemption yield rate of
the Bonds listed in (3).
(2) From the day after the first month of issuance to the 40th day
before the expiration of the issuance period, if the outstanding
balance of the Bonds is less than $100 million, the Bonds shall be
redeemed in cash at the redemption price calculated based on the
redemption yield of the Bonds listed in (3).
(3) The redemption rates are as follows.
1. From the day after the first month of the issue to the day after
the second year of the issue, the bonds shall be redeemed at a
yield rate of 1.00% per annum.
2. From the day after the second year of issue to the day after the
third year of issue, the bonds shall bear a redemption yield rate
of 1.25% per annum.
3. Redemption of this convertible bond at par value from the day
after the third year of issuance until 40 days prior to the
maturity of this convertible bond.
Restrictions None
Credit rating agency, date of assessment and corporate bond
assessment results		 None
Other rights Amount of converted (exchanged or
warrants) ordinary shares, overseas
depositary receipts or other securities as of
the date of publication of the Annual Report		 Due for redemption
Issuance and conversion (exchange or share
option) method		 Creditors convert ordinary shares by way of book transfer or to the
Company’s share agency at the conversion price.
The method of issuance and conversion, exchange or share option,
the possible dilution of shareholdings by the terms of issue and the
effect on the interests of existing shareholders.		 Not applicable
Custodian of the subject after conversion None
  • 53 -

(2) Information about the convertible corporate bond ：

Types of corporate bonds Types of corporate bonds First domestic unsecured convertible corporate bond First domestic unsecured convertible corporate bond
Item Year
2009		 Current year as of 20 April
2010
Market value of
convertible
bonds		 Max 101.00 Expired on 24 June 2009 and
fully redeemed
Min 94.10
Avg 99.14
Conversion price 20.15
Issuing (processing) date and the
conversion price at the time of
issuance		 Issued on June 25, 2004 / Conversion price at issuance
NT$33.50
Conversion method Delivery of new shares upon conversion of the issue,
with the same rights and obligations as ordinary shares

(3) Exchange of corporate bond information: Not applicable

  • (4) Omnibus reporting of issuance of corporate bonds: Not applicable

  • (5) Information on corporate bonds with warrants: Not applicable

3.Special shares:

ecial shares: ecial shares:
Item\Issuance Date August 10, 2021
TYC Preferred Share A
Denomination NT$10
Issuance Price NT$50 per share
Number of shares Total number of shares: 30,000 thousand shares
Total amount NT$1,500,000 thousand dollars
Rights and
Obligations		 Dividends and bonuses distribution (1) The dividend yield of the preferred share A is 4%
(annual rate), (record date: June 16, 2021, 5-year
interest rate swap (IRS) rate, 0.64275% + fixed
rate, 3.35725%) and calculated at the issue price
per share. The five-year IRS rate will be reset on
the next business day five years after the issue
date and every five years thereafter. The record
date of the reset is two business days of financial
institutions in Taipei prior to the reset date. The
five-year IRS rate is the arithmetic mean of the
offer
prices
of
Reuter's
TAIFXIRS
and
COSMOS3 at 11 a.m. on the record date of the
reset (business day of financial institutions in
Taipei). If the aforesaid offer prices are
unavailable on the record date of the reset, the
five-year IRS rate shall be determined by the
Company based on the principle of good faith
and reasonable market conditions
(2) Dividends distribution: The preferred share
dividends are fully distributed in cash every year.
After the financial statements are adopted in an
annual general meeting, the Board of Directors
shall authorize the chairman to set the record date
for paying the preferred share dividends of the
previous year. The number of dividends issued in
the year of issue and in the year of redemption is
calculated based on the actual number of days of
issuein the currentyear.
  • 54 -
Item\Issuance Date August 10, 2021
TYC Preferred Share A
(3) The Company shall apply the current year's
earnings, if any, to pay for taxes as stipulated by
laws and regulations, offset accumulated losses
of previous years, and allocate 10% as legal
reserve pursuant to laws and regulations. Special
reserve shall be set aside or reversed from net
shareholder’s equity reduction in current or
accumulative in prior years in accordance with
related regulations. The remaining earnings along
with the accumulated unappropriated earnings in
prior years as shareholder bonus, and shall be
appropriated as preferred share dividends in
accordance with the Article 7-1, Articles of
Incorporation.
(4) The Company has discretion over the distribution
of preferred stock dividends. If the Company
does not generate any or sufficient profits during
the year for the distribution of preferred stock
dividends, it may resolve not to pay out the
dividends and preferred stockholders have no
rights to object. The Board of Directors shall
propose a surplus earnings distribution in
accordance with Article 32-1, Articles of
Incorporation to be adopted by the annual general
meeting. After the surplus earnings distribution is
adopted, the distributable amount of preferred
share and common shares shall be distributed to
preferred shares first.
(5) The preferred shares A issued are non-cumulative;
that is, the undistributed dividends or shortages in
dividends distributed shall not be accumulated
and paid in subsequent years when profits are
generated.
(6) The preferred shareholders A are not entitled to
common shares' cash or share dividends derived
from earnings or capital reserve.
Distribution of remaining assets
Preferred shareholders A have a higher claim to the
Company's
residual
properties
than
common
stockholders. Different types of preferred shares
issued by the Company grant holders the same rights
to
claims,
and
preferred
shareholders
stay
subordinate to general creditors. The amount
preferred shareholders are entitled to is capped at the
product of number of outstanding preferred shares at
the time of distribution and issuance price.
Execution of voting rights
Preferred shareholders A have neither voting nor
election rights. However, they may be elected as
Directors. They have voting rights in preferred
shareholders' meetings or with
respect to agendas associated with the rights and
obligations of preferred shareholders in shareholders'
meetings
Others
(1) For cash offering of new shares, the preferred
shareholders have the same preemptive rights as
the common shareholders.
(2) Capital reserve issued at preferred share A
premium shall not be used as capital during the
issuance of the preferred share.
Outstanding
Preferred		 Amount of preferred shares redeemed
or converted
NT$0
Shares Balance of preferred shares redeemed
or converted		 NT$1,500,000,000
  • 55 -
Item\Issuance Date Item\Issuance Date August 10, 2021
TYC Preferred Share A
Redemption or conversion terms (1) Conversion to common share: Preferred share A
cannot be converted into common share.
(2) Expiration date: The Company’s preferred share
A does not have an expiration date. Preferred
shareholders A may not ask the Company to
redeem their preferred shares. The Company
may, at any time from the next day of the
five-year expiration of the issue, redeem all or
part of the preferred stocks based on the original
issue price. Unredeemed preferred shares shall
continue to be subject to the rights and
obligations of the aforesaid issuance terms. If the
Company decided to distribute dividend, it shall
be calculated according to the actual issuance
days of the current year.
Market
Price
per Share		 2021 Highest
48.00
Lowest 42.45
Average 44.05
Current year as of 31 March 2022 Highest 44.85
Lowest 43.55
Average 44.20
Other
Rights
Attached		 Amount of stock conversion or
subscription as of the publication date
of the Annual Report		 Preferred share A cannot be converted into common
share.
Issuance and conversion or
subscription regulations		 None
Impact of conditions of issuance on the rights and
interests of preferred shareholders and possible
dilution of shareholders' equity and impact on
existing shareholders' equity		 None

  • 4.Data of preferred shares with warrants: Not applicable

  • 5.Overseas Depositary Receipts: Not applicable

  • 6.Employee stock option certificate application situation: Not applicable

  • 7.Matters to be recorded in the case of M & A or transfer of shares of other companies to issue new shares: Not applicable

  • 8.Implementation of the fund use plan: The Company does not issue or privately places securities; therefore, it is not applicable.

  • 56 -

V.Operations Profile

1.Business Content

  • (1) Business Scope

  • Main Content：

    • (1)Manufacture, processing and sales of automobile and motorcycle parts (lighting equipment, engines, body parts, lights, horns, electronics, transceivers, cigarette lighters, mirrors, trim, wheel covers, door handles, door locks, starter switches, dashboards, rearview mirrors, and car detectors).

    • (2) Manufacturing, processing and sales of aircraft parts and marine parts.

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

    • (4)Manufacture, processing, and sales of transportation machinery and its spare parts, including AC and DC air compressors, vacuum cleaners, waxers, oil pumps, and maintenance equipment.

    • (5) Manufacturing and sales of plastic injection molded products (vacuum cleaner, waxer, air compressor, and other plastic parts and automotive parts).

    • (6) The above items are related to the import and export trading business.

    • (7) We are the agent of domestic and foreign manufacturers for the quotation, tender and distribution of the above products.

    • (8) Except for the permitted business, the business that is not prohibited or restricted by law may be carried on.

  • The company's current product, business proportion：

Product Operating share (2021) Automotive 87.25 %

Motorcycles 5.32 % Other 7.43 %

  1. Planned development of new products (services)

    • (1) Radar blind spot warning system tail light.

    • (2) Heavy locomotive ADB features LED headlights.

    • (3) CAN BUS communication full function LED ADB car headlight.

  2. (2) Industry overview：

  3. Current status and development of the industry.：

    • (1) Current status：

According to the Taiwan Vehicle Industry Association, the total output value of Taiwan's vehicle industry continues to grow, reaching $663.7 billion in 2014, the highest in history. From January to September 2021, it amounted to NT$522 billion, accounting for 4.46% of Taiwan's total manufacturing output and up by 20.80%, making it an extremely important industry in Taiwan.

Automotive industry： The record high of $230.9 billion in 2005 was followed by a up of 24.66% to $143.3
billion in January-September 2021.
Motorcycle industry： Peak of $55.7 billion in 1995, $41.6 billion in January-September 2021, down
6.89%.
Bicycle industry： 2019 to reach a record high of $65 billion, January-September 2021 to $50.2 billion,
up 20.17%.
Auto parts industry： Reached a record high of $234.2 billion in 2015, up 17.13% to $167.3 billion in
Jan-Sep 2021.
Motorcycleparts industry： Peak of $51.2 billion in 2014,$42.1 billion in Jan-Sep2021,up14.14%.
Bicycle parts industry： 2019 to reach a new record high of $72.2 billion, January-September 2021 to $77.6
billion, up 51.93%.
  • 57 -

Taiwan's auto parts industry has the advantage of small quantity and flexible manufacturing, and has become internationally competitive after continuous investment in R&D and upgrading of production technology.

In recent years, although the domestic market for complete vehicles has been fluctuating, the amount of export sales of auto parts has continued to expand every year after accumulating competitive strength. In 2017, the amount grew by approximately 1.7% to reach a record high of NT$214.9 billion, and in 2021, due to the impact of COVID-19 worldwide, the amount from January to September 2021 was NT$162.5 billion, an increase of 17.82%.

Taiwan Auto Parts Export Value Statistics
Unit: NT$ billion
Year
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019		 2020
2021/1-9
Amoun
t
1,713
1,848
1,948
1,979
2,077
2,145
2,113
2,149
2,147
2,148
1,927
1,625
Growth
rate
22.62%
7.88%
5.41%
1.60%
4.96%
3.26%
-1.47%
1.70%
-0.11%
0.02%
-10.26%
17.82%

Source: Import and export statistics, compiled by Taiwan Vehicle Industry Association.

(2) The future development trend of the industry：

In terms of new products, Taiwan SMEs have the best stage to innovate flexibly, especially related to car safety concept products combined with electronic technology, such as: MiniCCD color camera, anti-glare autodimmingrear viewmirror, wireless tire pressure monitoring systems, rain sensor, satellite navigation, etc. In addition, a variety of audio and video equipment for cars attract many buyers and so there are also innovative products launched, such as: combined with TFT LCD screen and DVD/VDC/CD/MP3/TV +AM/FM function audio and video equipment.

In summary, automotive electronics is the fastest growing project in the automotive industry. The strength of Taiwan's information electronics industry will be one of the thrusts of Taiwan's auto parts industry transformation in the future. According to Strategy Analysis estimates, the automotive electronics market related to driving information has a compound annual growth rate of about 7%, the automotive electronics market related to chassis systems has a compound annual growth rate of 8%, and the safety systems related to automotive electronics products have a compound annual growth rate of up to 14%.

The future technology and trend of the vehicle industry still lies in the development of oil-electric/electric vehicles. Taiwan already has the capability of independent research and development of key components for electric vehicles.

  • 58 -

2. The relevance of the industry in the upper, middle and lower reaches：

Upper Middle Lower

==> picture [350 x 137] intentionally omitted <==

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

Plastic industry
Automobile
Assembly Plant
Glass industry
Lighting Industry
Motor Industry
Car repair
manufacturers
Electronics Industry
----- End of picture text -----

3. Various development trends of products：

With the booming development of LED light source technology, new-style car taillights, including driving lights, brake lights, almost all LED lights emerge, mainly because LED has the advantages of power saving and shape flexibility, so that the taillight power consumption is reduced from 27W down to 5W or less. Also because of the different arrangements that can be done with LED, a variety of designs for car lights can be done unlike the traditional ones.

High-power LED luminous efficiency continues to improve and thermal resistance continues to decrease, but also provides the opportunity to use LED lighting as a light source, including LED direction lights, LED daytime running lights, LED front fog lights, LED near and far lights and so on. In 2010, the company also has the first near-lamp with diurnal lamp function LED headlamp output. Not only is it another important breakthrough in technical capabilities, but also different from Taiwan aftermarket (AM) competitors, and with the higher layer, it is bound to bring higher market profit opportunities for the company. In 2013, the full-featured LED headlights with natural heat dissipation, higher reliability and more energy-saving effect, have been approved and adopted by Ducati heavy locomotives, a subsidiary of the Audi car family!

In addition, committed to the evolution of optical design and light source, and in order to increase the safety of driving and adapt to a variety of driving conditions with automatic steering, automatic adjustment of the light type by the adaptive lighting system (AFS) has gradually become the focus of research and development of each lamp factory. The company completed the mass production of AFS headlights in 2012, using the latest technology, actively detecting the condition of the car, after MUC calculation, and then sending the signal to the lights, a real-time response to compensate for the lighting area and improve driving safety. In response to market competition and customer demand, the company actively invested in technology research and development of full-featured LED headlights, and in 2016 successfully mass-produced these lights to supply European car manufacturers.

4. Competitive Situation：

  • (1) R & D Modified Car Lights (PM)：

As the company has superior design ability and quality than competitors in the industry, the product acceptance in the market is higher than other competitors. The company still persists in improving its product design ability and product refinement, in order to enhance the company's brand value, to stay a step ahead of competition.

  • (2) General Aftermarket (AM).

TYC's products in the aftermarket focus on quality, delivery and service, and have not only passed many regulatory requirements (SAE, ECE, ADR, JIS, GB, CAPA, CCC, IRAM, SABS certification), but in order to stay ahead of its competitors and shorten the development time, we have not only used PDM/PLM systems, but have also actively set up a test mold center and mold factory exclusive to the R&D department in order to develop and market new products earlier.

  • 59 -

(3) OEM market：

OEM lamps usually require a higher level in design technology, the company in addition to the existing optical foundation, is actively engaged in the LED, PES, AFS, ADB and other aspects, seeking technological breakthroughs, and improving the development process. It has obtained factory certification and a number of product patents, synchronous design and development, and through cooperation with LED light source technology manufacturers, TYC can be more competitive in the market.

(3) Technology and R & D Overview：

1. R & D expenses invested for the year ended in the date of publication of the annual report：

Unit：NT$1,000

Unit：NT$1,000
Year
Item
2021		 Current year as at 31 March 2022
R&D costs 344,453 79,541
Operation revenue 16,576,615 4,607,284
  1. R & D expenses invested for the year ended the date of publication of the annual report：

(1) LED edge-lit light bar tail light

(2) Adaptive Driving Beam (ADB) headlamp design (with AFS function)

(3) Full-function reflective LED motorcycle headlamp control by CAN BUS

  1. Future Annual Research Development Plan.

The development of the automobile industry is growing rapidly since major automobile manufacturers have been developing in electric vehicles and related electronic industries are developing in automobile industry, while making the automobile components to be electric and communicative. The development of automatic driving component research are the key products of major car manufacturers, so the intelligent design of vehicles is the key development of various vehicle parts, the same as the previous development of high-end LED lights from the matrix LED intelligent turn lighting technology can no longer meet the next generation of automatic driving level 3 and above need to communicate and communicate with pedestrians and cyclists on the road, the future intelligent lights will be towards the development of high-resolution lighting technology (such as DMD, uAFS and other technologies) to achieve the recording and communication between vehicles, or the use of new lighting technology combined with ADAS to achieve automatic driving functions.

Intelligent lights for lamps and lanterns are used in the sensing, car news, car networking related technology lights. ADB LED headlamp technology for intelligent lights, has been the mainstream of the current advanced lamp design. In the high-power LED brightness continues to improve, the key for future research would be high pixel light source for the LED manufacturer. ADB LED headlamp technology must be more sophisticated technology, miniaturization, modular lamp design is the focus of future research. TYC has invested considerable resources in LED precision headlight technology, new LED optical research and development, thick lens and TIR light guide technology. It has actively invested in the research of a key, thick lens and TIR light guide and other key optical components of a light design, optical design, heat dissipation design, materials, LED, simulation analysis, mold design and development, production technology, etc.. Optical design which will increase the visual simulation function can increase the advantages of the development of light guide components. With the increase of LED brightness, the headlamp lens is also designed to be smaller and multi-part, so the mold technology needs to use more precise processing technology, and also invested in ultra-precision NC processing machine, which can make the product more in line with the design.

LED lights electronic design from LED driver circuit design, has entered the electronic digital and communication function design, the lights are no longer simply lighting car parts, but one of the electronic functional parts of the car, Tyvek also actively invested in CAN/LIN BUS technology capability development in recent years, has successfully established

  • 60 -

CAN/LIN BUS technology capability and developed a number of successful products. LED lights in the related electronic system functions more and more, and the lights connected to the function has been increasing, so the lights control method needs to be connected with other systems, most use CAN/LIN BUS connection to speed up the operation of each system to increase driving safety.

Intelligent lights for the function and the vehicle body-related sensing system connection, the vehicle in the driving of a variety of dynamic immediately feedback to the vehicle in the vehicle control unit in communication with the lamp for the required transformation to improve driving safety.Therefore, the automotive electronic product systems are connected to each other and communication is very important.TYC also invested in a variety of matrix high-end headlights headlights research, including ADB/AFS headlights in optical design, mold processing, electronic technology than the previous LED lamps must be higher-end technical capabilities.

  • (4) Long and short-term business development plan:

  • Short term plan:

    • (1) In order to expand the largest AM market in North America, we have invested capital and manpower to obtain CAPA certification. As of 2021, 1,869 lamps have been certified by CAPA, and it is estimated that by 2022, more than 1,950 lamps will have been certified. Now we continue to invest all resources to obtain CAPA certification to increase sales in insurance market and increase product certification to 1,869 in 2021. It is estimated that by 2022, more than 1,950 lamps will have been certified.

    • (2) The company has added new product lines and expanded TYC brand products such as mirrors, condensers, fans, water tanks, blowers, lifts, air filters, chassis parts, electrical products, and new product groups such as automotive electronics, and is actively seeking strategic alliances with high quality and competitive domestic and foreign manufacturers to strengthen its competitiveness in the market.

    • (3) We are actively developing OEM markets, strengthening quality and enhancing relationships with international car manufacturers.

  • Long-term Plan：

    • (1) Establish global distribution system and expand distribution network.

    • (2) To grasp the local market in China and expand the scale of the company's operations. (3) To build up the production and supply capacity of the ASEAN.

2. Market and Production Overview.：

(1) Market Analysis：

1. Major product sales regions

The Company's main sales regions are mainly overseas, with foreign sales comprising 92.12% and 93.29% of sales in 2020 and 2021 respectively. The high proportion of foreign sales is mainly due to the limited appetite of the domestic automobile market, and in recent years, apart from the continuous AM market expansion, the Company has also devoted itself to the development of other markets.

In addition, due to the larger market size in Europe and the United States, the quality requirements of the products are higher, and they must pass the quality test of SAE (American Society of Automotive Engineers) in the United States and obtain the quality certification of ECE (European Economic Commission) in Europe before they can be sold to Europe and the United States respectively. Sales to the U.S. amounted to NT$7,699,221 in 2021, representing 46.45% of total net sales, and sales to the Netherlands amounted to NT$2,261,440 in 2021, representing 13.64% of total net sales, with a total of NT$9,60,661 in sales to the U.S. and the Netherlands.

  • 61 -

Sales of major products in the past two years

Units: NT$1000.%

Units: NT$1000.% Units: NT$1000.%
Sales target and area 2020 2021
Amount Ratio Amount Ratio
Domestic Sales 1,138,291 7.88% 1,112,259 6.71%
Export
sales		 China 307,498 2.12% 403,521 2.43%
Netherlands 2,007,306 13.90% 2,261,440 13.64%
USA 6,717,146 46.50% 7,699,221 46.45%
Other
countries		 4,275,967 29.60% 5,100,174 30.77%
Subtotal 13,307,917 92.12% 15,464,356 93.29%
Total 14,446,208 100.00% 16,576,615 100.00%

2. Future market supply and demand conditions

  • (1) Demand in the refurbishment market is currently unsaturated, as it is in the introduction stage.

  • (2) The results of our cultivating the European locations, the increase in orders and the expansion of our sales channels have led to an increase in market share.

(3) In order to meet the new sales strategy, the company continues to strengthen the establishment and implementation of the quality assurance system, and has passed the ISO9002 certification in 1993, which has reached the internationally recognized quality standard. In order to continuously improve quality, the company began to implement the Quality System Standard (QS9000) of the Big Three in the United States in 1996 and was certified in December 1998. The company passed ISO14001 certification in July 2002, TS-16949 certification in October 2003, CAPA Certificate of Conformity in September 2005, and the Top 20 Excellent Brands in Taiwan. In March 2006, we obtained the Q1 Quality Award certificate; in February 2007, we obtained CCC certification in China; in October 2007, we obtained IRAM certification in Argentina; in February 2010, we obtained SABS certification in South Africa; in December of the same year, we obtained OHSAS18001, TOSNMS certification and AEO quality enterprise; in July 2012, we obtained CZ certification in Europe; in September, we passed the APCP factory evaluation by NSF certification agency, and in October, the first group of lamps passed the certification and we became the qualified supplier of NSF-APCP. In 2014, we were awarded one of the most valuable brands in the top 35 of the Global Best Brands (Taiwan Region) by Interbrand; in April 2018, the ISO/TS 16949 quality management system certification was successfully changed to IATF 16949; in July, we passed the ISO 26262 functional safety management system certification by Rheinland; The recognition of new technology includes two awards of the 19th Taiwan Excellence Award (LED headlamp with DRL and delicate patio light), the 20th Taiwan Excellence Award (AFS intelligent steering headlamp), and three awards of the 21st Taiwan Excellence Award (full LED tail lamp, LED light guide bar motorcycle headlamp, and sailboat LED street lamp), the 22nd Taiwan Excellence Award for LED DRL Guide Bar Headlamp, the 23rd Excellence Award for two products (Transformers Full LED Motorcycle Headlamp, Energy Saving Street Lamp-Ruyi), the 24th Excellence Award for 3D Full LED Depth of Field Tail Lamp, and the 25th Excellence Award for three products (5-in-1 Full Function Bus Headlamp, Full LED Cruiser Heavy Motorcycle Headlamp, Full LED Hawkeye Motorcycle Headlamp), the 27th Silver Award and Award of Excellence for Full Function LED Motorcycle Tail Light, the 28th Award of Excellence for two products (Innovative Thin Full LED Motorcycle Tail Light, Vertical Side Light Emitting Motorcycle Directional Light), and the 29th Award of Excellence for two products (Innovative Full Function LED Motorcycle Head Light, T Type, and Innovative Full Function LED Motorcycle Head Light, V Type), and Awarded the 30th Taiwan Excellence Award (Full LED Motorcycle Headlamp). These show that our company not only strives to improve our technology and product quality competitiveness year after year, but also speeds up the local customs clearance for foreign customers, making our company rise to the level of a world class manufacturer.

  • 62 -

  • (4) With the rising awareness on environmental protection, the Company has been actively strengthening its management system, and received the Carbon Reduction Action Award from the Environmental Protection Administration of the Executive Yuan at the end of 2015.

  • (5) In response to the development needs of the vast market in Mainland China, the company actively engages in the mainland marketing planning. It set up a lamp factory and mold factory in Changzhou, China, and set up Kunshan TYC Energy-saving Lighting Technology Co., Ltd. to produce automotive lights. In addition, through the design team owned by the company, we conducted lamp modeling modification design to meet the needs of major automakers and to actively expand the Mainland domestic demand market, hoping to master the sales network.

  • (6) In order to strengthen the supply chain in Southeast Asia, we not only produce automotive lights in Thailand, but also produce OEM lights for motorcycles in Vietnam through a joint venture. 109 years ago, our Thailand plant was awarded the honor of "2019 Honorary Manufacturer" by GM, demonstrating our ability to produce OEM quality.

  • Advantages and disadvantages of the development vision

    • (1) Advantages:

      • A. The improvement of the light distribution technology of vehicle lights and the compliance of the products with regulations and market demands have improved product quality, shortened delivery time and reduced costs, which have helped to expand sales.

      • B. The conversion of the information trade system was completed and the international network communication capacity was enhanced.

      • C. The company has a good brand image in the automotive lighting market, the best quality and technology in the industry, a long history, and a wide sales coverage, which contributes to the growth of business.

      • D. We emphasize the importance of teamwork, customer-oriented awareness and good centripetal force.

      • E. Our global production sites have been integrated to achieve significant cost reduction and internationalization.

      • F. The recession has reduced the demand for new vehicles, but the relative increase in usage of older vehicles has had a consequent impact on the demand for refurbished products.

      • G. International and corporate companies are strengthening their overseas sourcing through global division of labor, with Taiwan parts and components being one of the key sources.

    • (2) Disadvantages:

      • A. The price competition among global lamp contractors is fierce, affecting the selling price and profitability.

      • B. The wide range of changes in exchange rates affects the accuracy of the Company's forecasts of results and profitability.

      • C. The rapid development of automotive parts in mainland China has strongly carved out part of the market, while Japanese automakers have shifted their main focus to the Asia-Pacific region because of the aggressive stance of Mainland China.

      • D. Emerging countries such as Mainland China, India and Eastern Europe have a low cost advantage.

      • E. In response to environmental requirements, the selection of materials and testing has become more stringent and development costs have risen.

      • F. The technical threshold of the lamp products is getting higher and higher.

      • G. COVID-19 outbreak impacts in early 2020, city closures and unsealing times in various countries affect economic activity; will continue to impact through 2021

      • H. The high cost of outbound sea freight, the lack of space on ships and the accumulation of containers in major ports in Europe and the United States have resulted in a lack of empty containers and increased end market customer’s cost of sales.

  • 63 -

  • (2) Important applications and production processes of the main products.

  • Main products' important applications: Our main products are used in various brands of motorcycle lighting.

  • Main product production process：

    • (1) Injection molding manufacturing process：

==> picture [418 x 128] intentionally omitted <==

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

Plastic material Plastic drying Pumping to forming Injection Paint spraying
supply machine molding
(2) Component assembly manufacturing process.
Supply of base parts Locking screw parts Coated hot melt Supply of lamp
assembly adhesive housing parts
Detecting light and Assembly of various
Airtight Test shadow parts
----- End of picture text -----

  • (2) Component assembly manufacturing process.

  • (3) Supply status of main raw materials

Name of rawmaterial Supply situation
Base, lamp housing Good
Hardware and iron parts Good
Rubber Parts Housing Good
Wire group Good
Light bulb Good
Glass lamp housing Good
Plastics,BMCmaterials Good
Paper box packaging Good

The main raw materials for our motorcycle lights are lamp housings, lamp bulbs and plastic materials, which are mostly supplied by well-known domestic manufacturers, with only a few imported by ourselves. Since we have a wide range of customers and have maintained good cooperative relationships with major suppliers, the quality of the raw materials supplied is stable and the source of raw material supply should be safe.

  • 64 -

  • (4) Name of customer who has accounted for more than 10% of the total amount of goods imported (sold) in any of the past two years: 1. Key supplier information for the past two years：

Unit：NT$1,000；%

2020 2020 2021 2021 FY 2022 a s at 31 March
Item Name Amount
 Percentage
of net
purchases for
the year		 The
relationship
with the
issuer		 Name Amount Percentage
of net
purchases for
the year		 The
relationship
with the
issuer		 Name Amount Percentage
of net
purchases
for the
year		 The
relationship
with the
issuer
1 A company 743,844 9.37% Non-related
person		 A
company		 919,027 9.00% Non-relate
d person		 A
company		 216,480 8.94% Non-related
person
2 Others 7,195,880 90.63% None Others 9,296,102 91.00% None Others 2,204,606 91.06% None
Net
Purchase		 7,939,725 100.00% Net
Purchase		 10,215,129 100.00% Net
Purchase		 2,421,086 100.00%

Explanation of changes: None of the major suppliers accounted for more than 10% of total purchases in the last two years, so it is not applicable.

2. Key sales customer information for the past two years：

Unit：NT$1,000；%

2020 2020 2021 2021 FY 2022 as at 31 March
Item Name Amount Percentage
of net
purchases
for the year		 The
relationship
with the
issuer		 Name Amount Percentage
of net
purchases for
the year		 The
relationship
with the
issuer		 Name Amount Percentage
of net
purchases for
the year		 The
relationsh
ip with
the issuer
1 A company 1,741,506 12.06% Non-related
person		 A company 1,722,790 10.39% Non-related
person		 A
company		 503,728 10.93% Non-relat
ed person
2 Others 12,704,702 87.94% None Others 14,853,825 89.61% None Others 4,103,556 89.07% None
Net
Purchase		 14,446,208 100.00% - Net Purchase 16,576,615 100.00% - Net
Purchase		 4,607,284 100.00% -

Note on changes. :

(1) Turnover for FY2021 was NT$16,576,615,000 an increase from FY2020 turnover of NT$14,446,208,000 due to major sales in USA.

  • 65 -

(5) Table of production values for the past two years

Unit: pcs; NT$1000 Unit: pcs; NT$1000
Year
Production value
Main products		 2020 2021
Capacity Volume Output value Capacity Volume Output value
Car lights 31,000,000 21,154,682 14,387,557 31,000,000 22,394,862 16,587,223
Motorcycle light 3,000,000 2,013,962 734,038 3,000,000 2,325,563 1,023,856
Other categories 45,000,000 31,303,437 865,424 45,000,000 22,076,050 859,866
Total 79,000,000 54,472,081 15,987,019 79,000,000 46,796,475 18,470,944

(6) Table of sales values for the past two years

(6) Table of sales values for the past two years (6) Table of sales values for the past two years (6) Table of sales values for the past two years (6) Table of sales values for the past two years (6) Table of sales values for the past two years
Unit: pcs; NT$1000
Year
Sales value
Mainproducts
2020		 2021
Domestic Sales Export sales Domestic Sales Export sales
Volume Value Volume Value Volume Value Volume Value
Car lights 389,837 390,999 18,441,399 12,321,976 395,967 539,863 20,096,753 13,923,098
Motorcycle light 1,316,234 446,337 264,653 331,645 1,211,806 404,011 533,239 477,916
Other categories 8,010,433 300,955 31,121,532 654,296 2,162,802 168,385 31,615,079 1,063,342
Total 9,716,504 1,138,291 49,827,584 13,307,917 3,770,575 1,112,259 52,245,071 15,464,356
  • 3.Number of employees, average years of service, average age and education distribution ratio in the past two years：

2022/3/31

2022/3/31
Year 2020 2021 Current year as of
31 March 2022
No. of
employees		 Sales staff 254 241 238
Management staff 894 895 905
Factorystaff 1,588 1,619 1,610
Total 2,736 2,755 2,753
Average age 38.63 38.63 40.24
Averageyears of service 8.89 8.89 9.36
Education
distribution
ratio		 Ph. D. 0 0 0
M.D. 134 133 132
College 1,349 1,358 1,369
High School 986 996 967
Below high school 267 268 285

  • 66 -

  • 4.Environmental Expenditure Information.

(1) We produce products without creating pollution, so there is no pollution problem. The discharge of runoff water is treated by the industrial area sewage treatment plant. (2) Our pollution prevention equipment :

Unit：NT$1,000 Unit：NT$1,000 Unit：NT$1,000
Equipment
Name		 Installation
completion
date		 Useful
life		 Applicable tax
relief		 Original
cost		 Accumulated
depreciation
Undiscounted
balance
Effectiveness
Yes No As of31 March 2022
VOC waste gas
adsorption
treatment
equipment		 2004.01.31 10 ✓ 7,749
(Including
other repair
costs)		 7,749
0
Good
Exhaust
Emission Project		 2004.1.31 5 ✓ 265 265
0
Good
Air Pollution
Control Project		 2005.02.28 10 ✓ 5,866 5,866
0
Good
Sewage
Treatment Plant		 2006.11.30 10 ✓ 8,522 8,522
0
Good
Ejector Air
Pollution
Control
Equipment		 2013.10.31 10 ✓ 9,193 7,814
1,379
Good
Air pollution
system		 2013.11.30 10 ✓ 1,650 1,389
261
Good
Air pollution
control
equipment		 2015.11.30 5 ✓ 1,143 1,143
0
Good
BMC1 Air
pollution
equipment		 2017.10.31 5 ✓ 514 463
51
Good
Hot plate
machine air
emission
equipment
project		 2020.1.31 10 ✓ 1,096 247
849
Good
Air Pollution
Control/Monitor
System		 2021.08.31 10 ✓ 5,730, 382
5,348
Good

(3) No environmental pollution has occurred in the past year.

  • (4) No loss or compensation has been suffered as a result of environmental pollution in

the past year and up to the date of publication of the annual report.

  • (5) No significant environmental expenditure is planned for the next two years.

5.Labor relations:

Based on the business philosophy of "honesty, frugality, innovation, and breakthrough", our company became a leading manufacturer of "TYC" lamps through the combined honest, hard-working, frugal, and competitive work attitude of our outstanding employees.

As a result of the company's visionary leadership and decent management, and the sharing of profits with employees, the relationship between employers and employees is very harmonious, which not only makes the company strong, but also gives more and better protection to the rights of employees.

  • (1) The company's employee welfare measures, further education, training, retirement system and implementation, as well as the agreement between labor and management and the protection of employee rights and interests of the situation：

  • 1.1. Employee welfare measures and implementation：

    • (1) All employees of the company participate in labor insurance, national health

      • insurance and group insurance.

    • (2) Regular staff health checkups and health protection information dissemination.

    • (3) Food subsidies are provided to staff.

  • 67 -

  • (4) Subsidized year-end dinner party meal and sponsored gifts.

  • (5) The establishment of a staff welfare committee which discussed the following matters:

    • A. Organize staff travel or issue travel subsidies.

    • B. Issued employees birthday gifts, three holiday gifts.

    • C. Year-end party, provide year-end party lottery prizes.

    • D. Funeral grants.

    • E. Wedding congratulatory gifts.

    • F. Maternity benefits.

    • G. Organize recreational activities.

    • H. Injury and illness hospitalization consolation money.

    • I. Funding for club activities.

    • J. Sign up for an appointed shop.

  • Implementation of Staff Development and Training:

  • (1) According to the company's overall operational objectives and strategies, we train management and professional technical personnel, and assist new employees to quickly enter the situation and become competent in their work.

  • (2) In order to implement the company's education and training goals, the company's education and training system is divided into internal training and external training. In 2021, a total of 532 internal training courses, 133 external training courses were conducted reaching a total education and training fee of NT 3,331,000.

The relevant content is as follows:

Internal and
external
training
Category of
Functions		 Total
number of
classes		 Number of
trainees		 Total hours
of classes		 No. of
persons
licensed
Internal
training		 General ability
training		 172 1,886 6,541 0
The core ability
of training		 2 47 455 0
Job-specific
training		 20 356 1,953 6
Professional
ability training		 196 4,587 6,496 0
Management
ability training		 9 281 2,483 0
Subtotal 440 399 7,157 17,928
External
training		 General ability
training		 26 26 300 1
Job-specific
training		 28 28 406 22
Professional
ability training		 76 76 862 11
Management
function training		 3 3 42 2
Total 139 133 133 1,610

(3) In order to establish a safe and healthy working environment, our company has been certified by ISO45001:2018 in December 2019 (certification number TW005051, validation: December 6, 2019 to December 5, 2022) to implement safety and health management, and hold regular staff training on fire prevention and regular inspection of related equipment.

  • 68 -

  • Employee Retirement System and Implementation：

    • (1) The Company's employee retirement method under the "Labor Pension Ordinance". The Company has allocated 6% of the employee's salary per month to the personal pension account of the Labour Insurance Bureau in accordance with the employee retirement method established in the Ordinance.

    • (2) Implementation situation: The amount of pension expenses allocated by the Company in 2020 and 2021 is NT$36,403,000 and NT$39,061,000 respectively.

    • (3) The employee pension scheme established by the Company in accordance with the "Labor Standards Act", the payment of the employee pension is calculated based on the length of service and the average salary of one month at the time of approval of retirement. Two bases are given for service years within 15 years (inclusive), and one base is given for each year of service for more than 15 years, provided that the base accumulation is limited to a maximum of 45 bases. In accordance with the provisions of the Labor Standards Act, the Company allocates a pension fund on a monthly basis for 3% of the total salary, which is stored in a special account in the name of the Labor Retirement Reserve Supervision Committee in a special account of the Bank of Taiwan. In addition, the Company estimates the balance of the aforementioned workers ' retirement reserve account before the end of each year. If the balance is less than the amount of the pension calculated by the estimated workers eligible for retirement in the following year, the difference will be made by the end of March of the following year.

  • (2) Losses suffered as a result of labour disputes in the most recent year and as of the date of publication of the annual Report, and estimated amounts and countermeasures that may occur now and in the future：

The Company has not had any labor disputes so far, because the Company strives to create harmonious labor relations between employers and employees and the Company will continue to actively promote various employee welfare measures in the future, so there should not be any losses arising from labor disputes.

  1. Cyber Security Management

  2. (1) Cyber security risk management structure, cyber security policy, specific management plan, and resource invested in cyber security management:

Administrative Management Department is planned to be responsible for the Cyber Security Risk Management Unit. Relevant policy and management plan are still in the process of development and will be reported to the Board of Directors or management team when it is confirmed.

  • (2) Any losses, possible impacts therefrom, and measures to be taken due to significant cyber security incidents: None.

  • 7.Important Contract: None

  • 69 -

VI. Financial Overview

  1. Condensed balance sheet and consolidated profit and loss account for the past five years, name of accountant and his audit opinion.

  2. (1) Condensed Balance Sheet (Consolidated) - IFRS.

Unit：NT$ 1000

Year
Item		 Year
Item
Financial information for the past
Financial information for the past
Financial information for the past		 five years (Note 1) five years (Note 1) Financial
information
for the year
ended 31
March 2022
(Note2)
2017 2018 2019 2020 2021
Current assets 8,071,100 8,965,715 9,024,153 8,453,095 9,889,193 10,953,267
Real estate, plant and
equipment		 7,992,519 8,301,890 8,331,456 8,330,236 7,924,249 7,946,992
Intangible assets 104,569 114,738 116,418 90,673 71,843 65,376
Other Assets 3,996,559 4,086,533 6,140,016 5,871,131 6,169,322 6,176,591
Total assets 20,164,747 21,468,876 23,612,043 22,745,135 24,054,607 25,142,226
Current
liabilities		 Before
distribution		 6,870,008 7,682,343 7,321,703 6,300,812 8,656,900 6,923,196

After
distribution		 7,370,645 8,089,110 7,759,760 6,488,551 Not yet
distributed		 Not yet
distributed
Non-current
liabilities		 6,784,242 7,169,480 9,427,566 9,739,397 8,308,703 7,894,520
Total
liabilities		 Before
distribution		 13,654,250 14,851,823 16,749,269 16,040,209 15,863,662 16,551,420
After
distribution		 14,154,887 15,258,590 17,187,326 16,227,948 Not yet
distributed		 Not yet
assigned
Equity attributable to
owners of the parent
company		 6,291,219 6,423,718 6,648,445 6,424,948 7,889,755 8,262,394
Capitalstock 3,128,979 3,128,979 3,128,979 3,128,979 3,428,979 3,428,979
Capital r eserves 1,377,236 1,378,734 1,379,947 1,381,263 2,577,877 2,577,877
Retained
earnings
Before
distribution		 1,942,835 2,082,751 2,396,484 2,210,684 2,232,867 2,507,782
After
distribution		 1,442,198 1,675,984 1,958,427 Not yet
distributed		 Not yet
distributed		 Not yet
distributed
Other interests (151,835) (160,750) (250,969) (289,982) (343,972) (246,248)
Treasury stock (5,996) (5,996) (5,996) (5,996) (5,996) (5,996)
Non-controllinginterests 219,278 193,335 214,329 279,978 301,190 328,412
Total
equity		 Before
distribution		 6,510,497 6,617,053 6,862,774 6,704,926 8,190,945 8,590,806
After
distribution		 6,009,860 6,210,286 6,424,717 6,517,187 Not yet
distributed		 Not yet
distributed

Note1 : The 2017-2021 financial information has been audited and certified by an accountant. Note 2: 2022/3/31 The financial information was reviewed by the accountant.

  • 70 -

(2) Condensed Balance Sheet (Individual) - IFRS.

Unit：NT$ 1000

Unit：NT$ 1000 Unit：NT$ 1000 Unit：NT$ 1000 Unit：NT$ 1000 Unit：NT$ 1000
Year
Item		 Financial information for the past five years (Note 1)
2017 2018 2019 2020 2021
Current assets 4,622,690 5,258,578 4,880,185 4,536,631 5,682,648
Real estate, plant and
equipment		 5,686,408 5,925,325 6,178,708 6,381,043 6,120,820
Intangible assets 50,443 68,004 76,695 57,329 40,267
Other Assets 5,748,104 5,762,294 6,781,401 6,781,462 6,793,122
Totalassets 16,107,645 17,014,201 17,916,989 17,756,465 18,636,857
Current
liabilities		 Before
distribution		 4,457,549 5,175,767 4,670,000 3,898,799 5,098,825
After
distribution		 4,958,186 5,582,534 5,108,057 4,086,538 Not yet
distributed
Non-currentliabilities 5,358,877 5,414,716 6,598,544 7,432,718 5,648,277
Non-current
liabilities		 Before
distribution		 9,816,426 10,590,483 11,268,544 11,331,517 10,747,102
After
distribution		 10,317,063 10,997,250 11,706,601 11,519,256 Not yet
distributed
Equity attributable to
owners of the parent
company		 6,291,219 6,423,718 6,648,445 6,424,948 7,889,755
Capital stock 3,128,979 3,128,979 3,128,979 3,128,979 3,428,979
Capital r eserves 1,377,236 1,378,734 1,379,947 1,381,263 2,577,877
Retained
earnings		 Before
distribution		 1,942,835 2,082,751 2,396,484 2,210,684 2,232,867
After
distribution		 1,442,198 1,675984 1,958,430 2,022,945 Not yet
distributed
Other interests (151,835) (160,750) (250,969) (289,982) (343,972)
Treasury stock (5,996) (5,996) (5,996) (5,996) (5,996)
Non-controllinginterests - - - - -
Total equity Before
distribution		 6,291,219 6,423,718 6,648,445 6,424,948 7,889,755
After
distribution		 5,790,582 6,016,951 6,424,948 6,237,209 Not yet
distributed

Note1：The 2017-2021 financial information has been verified by accountants.

  • 71 -

(3) Condensed Consolidated Income Statement (Consolidated) -IFRS

Unite：NT$ 1,000

Year
Item		 Financial information for the past Financial information for the past Financial information for the past five years (Note 1) five years (Note 1) F i n a n c i a l
information
for the year
e n d e d 3 1
March 2022
( N o t e2)
2017 2018 2019 2020 2021
Operatingrevenues 16,063,682 16,621,903 17,539,920 14,446,208 16,576,615 4,607,284
Grossprofit 3,504,861 3,683,969 4,162,733 2,857,442 3,007,408 933,126
Operating profit or loss 531,851 618,624 1,055,804 266,486 428,703 214,899
Non-operating income
and expenses		 341,505 65,144 (72,299) 141,415 (99,282) 168,318
Netprofit before tax 873,356 683,768 983,505 407,901 329,421 383,217
Net profit for the current
period of continuing
operating units		 638,823 606,249 711,920 286,687 236,609 298,955
Losses of closed units － － － － －
Net profit ( Loss) for the
period		 638,823 606,249 711,920 286,687 236,609 298,955
Other consolidated profit
or loss for the current
period (Net aftertax)		 (116,653) (35,287) (60,645) (56,954) (39,465) 100,906
Total Consolidated
Profit or Loss for the
current period		 522,170 570,962 651,275 229,733 197,144 399,861
Net profit attributable to
owner of parent
company		 660,060 622,939 695,130 262,616 193,271 274,915
Net profit attributable to
non-controllinginterests		 (21,237) (16,690) 16,790 24,071 43,338 24,040
Total consolidated profit
or loss attributable to
owners of the parent
company		 553,787 591,464 630,281 213,244 155,932 372,639
Total consolidated profit
or loss attributable to
non-controllinginterests		 (31,617) (20,502) 20,994 16,489 41,212 27,222
EPS 2.12 2.00 2.23 0.84 0.62 0.88

Note1：The financial information for 2017-2021 has been audited and certified by an accountant. Note2：The financial information as of 31 March 2022 has been reviewed by the accountants.

  • 72 -

(4) Condensed Consolidated Income Statement (Individual) - IFRS

Unit：NT$ 1,000

Unit：NT$ 1,000 Unit：NT$ 1,000 Unit：NT$ 1,000 Unit：NT$ 1,000 Unit：NT$ 1,000
Year
Item		 Financial information for the past five years (Note 1)
2017 2018 2019 2020 2021
Operatingrevenues 10,975,127 11,467,022 11,998,508 9,391,750 11,193,999
Gross profit 1,567,541 1,707,907 2,087,034 943,343 1,151,500
Operating profit or loss 515,095 612,299 914,400 (53,877) 165,116
Non-operating income
and expenses		 269,296 35,594 (42,471) 289,023 70,399
Net profit before tax 784,391 647,893 871,929 235,146 235,515
Net profit for the current
period of continuing
operating units		 660,060 622,939 695,130 262,616 193,271
Losses of closed units － － － －
Net profit ( Loss) for the
period		 660,060 622,939 695,130 0.84 193,271
Other consolidated profit
or loss for the current
period
(Net aftertax)		 (106,273) (31,475) (64,849) (49,372) (37,339)
Total Consolidated Profit
and Loss for the current
period		 553,787 591,464 630,281 213,244 155,932
Net profit attributable to
ownerofparent company		 － － － － －
Net profit attributable to
non-controllinginterests		 － － － － －
Total consolidated profit
or loss attributable to
owners of the parent
company		 － － － － －
Total consolidated profit
or loss attributable to
non-controllinginterests		 － － － － －
EPS 2.12 2.00 2.23 0.84 0.62

Note1：The financial information for 2017-2021 has been audited and certified by an accountant.

(5) Name and audit opinion of the accountant for the past five years

Year Audit Accountant Audit comment Instructions
2016 HU,TZU-REN
HUANG, SHIH-CHIEH		 Unqualified opinion
2017 HU,TZU-REN
HUANG, SHIH-CHIEH		 Unqualified opinion
2018 HU,TZU-REN
HUANG, SHIH-CHIEH		 Unqualified opinion
2019 HU,TZU-REN
LEE,FANG-WEN		 Unqualified opinion
2020 HU,TZU-REN
LEE,FANG-WEN		 Unqualified opinion
  • 73 -

2.Financial analysis for the past five years：

(1) Financial Analysis (Consolidation) - IFRS

Year (Note1)
Analysis items (Note2)		 Year (Note1)
Analysis items (Note2)		 Financialanalysisforthe Financialanalysisforthe Financialanalysisforthe pastfive years pastfive years Financial
information
for the year
ended 31
March 2021
(Note2)
2017 2018 2019 2020 2021
Financial structure
(%)		 Debt to asset ratio 67.71 69.18 70.94 70.52 65.95 65.83
Ratio of long-term capital
to real estate, plant and
equipment		 166.34 166.06 195.53 197.41 208.22 207.44
Solvency % Current ratio 117.48 116.71 123.25 134.16 130.90 126.53
Quick ratio 51.58 53.96 56.50 59.24 53.05 56.36
Interest coverage ratio 8.67 6.29 7.35 4.27 3.42 12.81
Operating capacity Receivable turnover rate
(times)		 6.29 6.16 5.93 3.38 6.22 5.71
Average cash recovery
day		 58.02 59.25 61.34 71.19 58.68 63.92
Inventory turnover rate
(times)		 2.99 2.95 2.90 2.56 2.72 2.86
Payable turnover rate
(times)		 4.12 4.07 4.38 3.79 4.21 4.55
Days sales outstanding 122.07 123.73 125.86 142.57 134.19 127.62
Property, plant and
equipment turnover rate
(times)		 2.07 2.04 2.11 1.73 2.04 2.28
Total asset turnover rate
(times)		 0.81 0.80 0.78 0.62 0.71 0.76
Profitability Return on assets(%) 3.69 3.43 3.87 1.83 1.48 5.02
Return on Shareholders '
Equity（％）		 9.62 9.24 10.56 4.23 3.18 15.48
Ratio of Pre-tax net profit
to paid-up capital％
(Note:6)		 27.91 21.85 31.43 13.04 9.61 44.70
Netprofit ratio（％） 3.98 3.65 4.06 1.98 1.43 6.49
EPS(NT$) 2.12 2.00 2.23 0.84 0.62 0.88
Cash flow Cash Flow Ratio（％） 23.00 19.50 25.47 45.36 5.83 (16.95)
Cash Flow Allowable
ratio（％）		 70.10 67.83 69.53 84.54 69.56 209.06
Cash reinvestment ratio
(%)		 4.52 4.64 6.68 10.68 1.11 (6.37)
Leverage Operatingleverage 3.54 3.10 2.50 6.79 4.56 2.47
Financial leverage 1.27 1.26 1.23 2.79 1.46 1.18

Note1：The above financial information has been audited and certified/reviewed by the accountants.

  • 74 -

Note 2：The formula is as follows :

  1. Financial Structure

  2. (1) Debt to asset ratio = total liabilities/total assets.

(2) Long-term funds to property, plant and equipment = (total equity + non-current liabilities)/net property, plant and equipment. 2. Solvency (1) Current ratio = current assets/current liabilities. (2) Quick Ratio = (Current Assets - Inventory - Prepaid Expenses) / Current Liabilities. (3) Interest coverage multiple = net income before income taxes and interest expense/interest expense for the period. 3. Business Capability (1) Turnover rate of accounts receivable (including accounts receivable and notes receivable arising from operations) = Net sales/average balance of accounts receivable (including accounts receivable and notes receivable arising from operations) for each period.

  • (2) Average collection date = 365/receivables turnover rate.

  • (3) Inventory turnover = cost of goods sold/average inventory amount.

(4) Turnover rate of accounts payable (including accounts payable and notes payable arising from operations) = cost of goods sold/average balance of accounts payable (including accounts payable and notes payable arising from operations) for each period.

  • (5) Average number of days to sell = 365/inventory turnover rate.

  • (6) Turnover rate of property, plant and equipment = net sales/average net property, plant and equipment. (7) Total Asset Turnover = Net Sales / Total Average Assets.

  • Profitability

  • (1) Return on assets = (Profit and loss after tax + interest expense x (1 - tax rate)) / average total assets.

  • (2) Return on shareholders' equity = Profit or loss after tax / average net shareholders' equity. (3) Net profit margin = profit or loss after tax / net sales.

  • (4) Earnings per share = (Profit or loss attributable to owners of the parent company - preferred stock dividends)/weighted average number of shares outstanding.(Note 3)

  • Cash flow

  • (1) Cash flow ratio = Cash flow from operating activities / Current liabilities.

  • (2) Net cash flow fair ratio = net cash flow from operating activities for the last five years / (capital expenditures + increase in inventories + cash dividends) for the last five years.

  • (3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends)/( gross property, plant and equipment + long-term investments + non-current assets + working capital).(Note 4)

  • Leverage

  • (1) Operating leverage = (net operating income - variable operating costs and expenses)/operating income.

  • (2) Financial leverage = operating income/(operating income - interest expense).

  • Note 3: The above formula for calculating earnings per share should be measured with particular attention to the following :

  • Based on the weighted average number of ordinary shares rather than the number of shares in issue at the end of the year.

  • The weighted average number of shares shall be calculated by taking into account the period during which the shares are outstanding, where there is a cash capital increase or a treasury share trader.

  • If there is a capital increase from earnings or capital surplus, the percentage of capital increase should be adjusted retroactively when calculating earnings per share for the previous years and half-year, without regard to the issuance period of such capital increase.

  • If the preferred shares are non-convertible cumulative preferred shares, the dividends for the year, whether paid or unpaid, shall be reduced by the net income after tax or increased by the net loss after tax; if the preferred shares are non-cumulative, the dividends shall be reduced by the net income after tax if there is a net income after tax; if there is a loss, no adjustment is necessary.

  • Note 4：The cash flow analysis should pay particular attention to the following in its measurement.

  • Net cash flow from operating activities represents the net cash inflow from operating activities in the cash flow statement.

  • Capital expenditures represent the annual cash outflow from capital investments.

  • Increases in inventories are included only if the closing balance is greater than the opening balance and are calculated as nil if inventories are reduced at the end of the year.

  • Cash dividends include cash dividends on common and preferred shares.

  • Gross property, plant and equipment represents the total amount of property, plant and equipment before accumulated depreciation.

  • Note 5：Issuers should distinguish between fixed and variable operating costs and operating expenses depending on their nature, and where estimates or subjective judgements are involved, they should be reasonable and consistent.

  • Note 6：If the Company's stock has no par value or has a par value other than NT$10 per share, the calculation of the ratio of the Company's paid-in capital is based on the ratio of the Company's equity to that of the parent company's owners in the balance sheet.

  • 75 -

(2) Financial Analysis (Individual) - IFRS

Year(Note 1)
Analysisitems (Note2)		 Year(Note 1)
Analysisitems (Note2)
Financialanalysisforthe pastfive years
Financialanalysisforthe pastfive years
Financialanalysisforthe pastfive years
Financialanalysisforthe pastfive years
Financialanalysisforthe pastfive years
2016 2017 2018 2019 2021
Financial
structure
(%)		 Debt to assetratio 58.19 60.94 62.24 62.89 57.67
Ratio of long-term capital to real
estate, plant and equipment		 200.65 204.88 199.79 214.40 221.18
Solvency %
Currentratio		 108.69 103.70 101.60 104.50 111.45

Quick ratio		 83.42 80.46 78.60 78.87 84.23
Interest coverageratio 18.96 13.27 10.62 11.40 4.93
Operating
capacity		 Receivable turnover rate (times) 3.36 3.32 3.31 3.44 3.29
Average cash recovery day 108.63 109.94 110.27 106.10 110.94
Inventory turnover rate (times) 9.56 10.09 9.80 9.10 8.69
Payable turnover rate (times) 3.85 3.81 3.68 3.88 3.73
Days sales outstanding 38.18 36.17 37.25 40.11 42.00
Property, plant and equipment
turnover rate (times)		 1.99 1.93 1.94 1.94 1.83
Totalasset turnover rate (times) 0.70 0.68 0.67 0.67 0.60
Profitability Returnonassets (%) 7.08 4.57 4.10 4.36 1.34
Return on Shareholders ' Equity
（％）		 16.14 10.48 9.80 10.64 2.70

Ratio of Pre-tax net profit to
paid-up capital％
(Note:6)		 34.46 25.07 20.71 27.87 6.87
Netprofit ratio（％） 9.32 6.01 5.43 5.79 1.73
EPS(NT$) 3.17 2.12 2.00 2.23 0.62
Cash flow Cash Flow Ratio（％） 33.39 39.69 27.17 48.20 4.37
Cash Flow Allowable ratio（％） 87.87 85.46 80.66 85.19 85.98
Cash reinvestmentratio (%) 5.66 6.03 4.76 9.46 0.17
Leverage Operatingleverage 4.31 3.02 2.68 2.21 8.35
Financial leverage 1.09 1.14 1.12 1.10 1.57
Reasons for changes in financial ratios for the last two years: (Exempt from analysis if the change is
less than 20%)
1. Change in the ratio of net income before tax to paid-in capital: mainly due to the increase in net
income before tax for the current period.
2. Cash flow ratio: mainly due to the increase in net operating cash flow.
3. The change in cash reinvestment ratio was mainly due to the increase in net cash flow from
operations.

Note1：The above financial information has been audited and certified by the accountants.

  • 76 -

Note 2：The formula is as follows :

  1. Financial Structure

  2. (1) Debt to asset ratio = total liabilities/total assets.

  3. (2) Long-term funds to property, plant and equipment = (total equity + non-current liabilities)/net property, plant and equipment.

  4. Solvency

  5. (1) Current ratio = current assets/current liabilities.

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

(3) Interest coverage multiple = net income before income taxes and interest expense/interest expense for the period. 3. Business Capability (1) Turnover rate of accounts receivable (including accounts receivable and notes receivable arising from operations) = Net sales/average balance of accounts receivable (including accounts receivable and notes receivable arising from operations) for each period.

  • (2) Average collection date = 365/receivables turnover rate.

  • (3) Inventory turnover = cost of goods sold/average inventory amount.

  • (4) Turnover rate of accounts payable (including accounts payable and notes payable arising from operations) = cost of goods sold/average balance of accounts payable (including accounts payable and notes payable arising from operations) for each period.

  • (5) Average number of days to sell = 365/inventory turnover rate.

  • (6) Turnover rate of property, plant and equipment = net sales/average net property, plant and equipment. (7) Total Asset Turnover = Net Sales / Total Average Assets.

  • Profitability

  • (1) Return on assets = (Profit and loss after tax + interest expense x (1 - tax rate)) / average total assets. (2) Return on shareholders' equity = Profit or loss after tax / average net shareholders' equity.

  • (3) Net profit margin = profit or loss after tax / net sales.

  • (4) Earnings per share = (Profit or loss attributable to owners of the parent company - preferred stock dividends)/weighted average number of shares outstanding. (Note 3)

  • Cash flow

  • (1) Cash flow ratio = Cash flow from operating activities / Current liabilities.

  • (2) Net cash flow fair ratio = net cash flow from operating activities for the last five years / (capital expenditures + increase in inventories + cash dividends) for the last five years.

  • (3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends)/(gross property, plant and equipment + long-term investments + non-current assets + working capital). (Note 4)

  • Leverage

  • (1) Operating leverage = (net operating income - variable operating costs and expenses)/operating income.

  • (2) Financial leverage = operating income/(operating income - interest expense).

  • Note 3: The above formula for calculating earnings per share should be measured with particular attention to the following :

  • Based on the weighted average number of ordinary shares rather than the number of shares in issue at the end of the year.

  • The weighted average number of shares shall be calculated by taking into account the period during which the shares are outstanding, where there is a cash capital increase or a treasury share trader.

  • If there is a capital increase from earnings or capital surplus, the percentage of capital increase should be adjusted retroactively when calculating earnings per share for the previous years and half-year, without regard to the issuance period of such capital increase.

  • If the preferred shares are non-convertible cumulative preferred shares, the dividends for the year, whether paid or unpaid, shall be reduced by the net income after tax or increased by the net loss after tax; if the preferred shares are non-cumulative, the dividends shall be reduced by the net income after tax if there is a net income after tax; if there is a loss, no adjustment is necessary.

  • Note 4：The cash flow analysis should pay particular attention to the following in its measurement.

  • Net cash flow from operating activities represents the net cash inflow from operating activities in the cash flow statement.

  • Capital expenditures represent the annual cash outflow from capital investments.

  • Increases in inventories are included only if the closing balance is greater than the opening balance and are calculated as nil if inventories are reduced at the end of the year.

  • Cash dividends include cash dividends on common and preferred shares.

  • Gross property, plant and equipment represents the total amount of property, plant and equipment before accumulated depreciation.

  • Note 5：Issuers should distinguish between fixed and variable operating costs and operating expenses depending on their nature, and where estimates or subjective judgements are involved, they should be reasonable and consistent.

  • Note 6：If the Company's stock has no par value or has a par value other than NT$10 per share, the calculation of the ratio of the Company's paid-in capital is based on the ratio of the Company's equity to that of the parent company's owners in the balance sheet.

  • 77 -

  • 3.Report of the Audit Committee on the examination of the latest annual financial report :

TYC Brother Industrial Co., Ltd

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 financial report (including consolidated financial report), which was certified by Huang, Shih-Chieh and Lee, Fang-Wen, CPAs of ERNST & YOUNG, TAIWAN. The aforementioned reports, together with the business report and the proposal for earnings distribution were reviewed and certified correct and accurate by the Audit Committee members of TYC Brother Industrial Co., Ltd. In accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, this report is hereby submitted.

Submitted at:

2021 Annual General Meeting of TYC Brother Industrial Co., Ltd.

Chairman of the Audit Committee:

==> picture [146 x 51] intentionally omitted <==

_________ Huang, Chung-Hui

  • 78 -

4.Latest Annual Financial Statements：

TYC BROTHER INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2021 AND 2020

WITH

REPORT OF INDEPENDENT AUDITORS

The reader is advised that these financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

  • 79 -

REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of TYC BROTHER INDUSTRIAL CO., LTD. as of and for the year ended December 31, 2021 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements .” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, TYC BROTHER INDUSTRIAL CO., LTD. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

TYC BROTHER INDUSTRIAL CO., LTD.

By Wu, Chun-Chi

Chairman

March 24, 2022

  • 80 -

Independent Auditors’ Report

To TYC BROTHER INDUSTRIAL CO., LTD.

Opinion

We have audited the accompanying consolidated balance sheets of TYC BROTHER INDUSTRIAL CO., LTD. (the “Company”) and its subsidiaries (the “Group”) as of 31 December 2021 and 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2021 and 2020, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter – Making Reference to the Audits of Component Auditors section of our report), the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of 31 December 2021 and 2020, and their consolidated financial performance and cash flows for the years ended 31 December 2021 and 2020, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China on Taiwan.

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 on Taiwan. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China on Taiwan (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Loss Allowance Accounts Receivable

As of 31 December 2021, the balance of accounts receivable and allowance for doubtful accounts of the Group amounted to NT$3,026,760 thousand and NT$246,724 thousand, respectively. Net accounts receivable constituted a material amount of 11 % of the total consolidated assets, which was considered material in the consolidated statements. Since the allowance for doubtful accounts was measured at the lifetime expected credit loss, the account receivables should be appropriately grouped during the measurement process and determine the use of related assumptions in the analysis and measurement, including appropriate aging intervals and their respective loss rate. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a key audit matter.

  • 81 -

Our audit procedures included, but not limited to, evaluating and testing the process of internal control execution management established for receivables; evaluating the appropriateness of management’s provisioning policy of allowance for doubtful accounts; analyzing the appropriateness of the grouping of accounts receivable to confirm whether customer groups that have significantly different loss patterns from one another are grouped appropriately; the Group were tested by provision matrix, including evaluating the appropriateness of the aging intervals and the accuracy of the basic data by reviewing the original certificates; performing tests on subsequent collection of receivables; evaluating long-term trends of loss allowance and turnover rate of accounts receivable.

We also considered the appropriateness of disclosure of accounts receivable. Please refer to Notes 5 and 6 of the consolidated financial statements.

Valuation for inventories

As of 31 December 2021, the Group’s net inventories amounted to NT$5,579,094 thousand, and constitutes 23% of total consolidated asset, which was considered material in the consolidated statements. Considering the market economy environment change, horizontal competition and numerous inventory items, the loss allowance for loss on inventory valuation and obsolescence required significant management judgment, we therefore determined this as a key audit matter.

Our audit procedures included, but not limited to, evaluating and testing the internal control management established for inventory; evaluating the appropriateness of management’s provisioning policy of allowance; sampling net realizable value estimated by inventory valuation, including related sales certificates and recalculating price loss; testing the accuracy of inventory aging time period by sampling related documents and recalculating the accuracy of inventory allowance.

We also considered the appropriateness of disclosure of inventories. Please refer to Notes 5 and 6 of the consolidated financial statements.

Other Matter – Making Reference to the Audits of a Component Auditors

We did not audit the financial statements of certain consolidated subsidiaries, which statements reflect total assets of NT$1,547,689 thousand and NT$1,308,872 thousand, constituting 6.43% and 5.75% of consolidated total assets as of 31 December, 2021 and 2020, respectively, and total operating revenues of NT$2,489,995 thousand and NT$2,140,996 thousand, constituting 15.02% and 14.82% of consolidated operating revenues for the years ended 31 December 2021 and 2020, respectively. We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the audit reports of the other auditors. Those associates and joint ventures under equity method amounted to NT$166,913 thousand and NT$162,522 thousand, representing 0.69% and 0.71% of consolidated total assets as of 31 December 2021 and 2020, respectively. The related shares of profits from the associates and joint ventures under the equity method amounted to NT$10,243 thousand and NT$(21,005) thousand, representing 3.11% and (5.15)% of the consolidated net income before tax for the years ended 31 December 2021 and 2020, respectively, and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$(3,376) thousand and NT$(7,623) thousand, representing 8.55% and 13.38% of the consolidated other comprehensive income for the years ended 31 December 2021 and 2020, respectively.

  • 82 -

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China on Taiwan and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of the Company and its subsidiaries.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 auditing standards generally accepted in the Republic of China on Taiwan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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

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

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

  4. 83 -

  5. 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 ability to continue as a going concern of the Company and its subsidiaries. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and its subsidiaries to cease to continue as a going concern.

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2021 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s 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.

We have audited and expressed an unqualified opinion on the parent company only financial statements of the Company as of and for the years ended 31 December 2021 and 2020.

Huang, Shih-Chieh

Lee, Fang-Wen

Ernst & Young, Taiwan 24 March 2022

  • 84 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese TYC BROTHER INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

ASSETS Notes 31 Dec. 2021 31 Dec. 2020
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss, current
Financial assets measured at amortized cost, current
Notes receivable, net
Notes receivable-related parties, net
Accounts receivable, net
Accounts receivable-related parties, net
Other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Financial assets at fair value through other comprehensive income, non-current
Investments accounted for under the equity method
Property, plant and equipment
Right-of-use asset
Intangible assets
Deferred tax assets
Prepayment for equipments
Refundable deposits
Other non-current assets-others
Total non-current assets
Total assets		 Ⅳ/Ⅵ.1
Ⅳ/Ⅵ.2
Ⅳ/Ⅵ.4
Ⅳ/Ⅵ.5
Ⅳ/Ⅵ.5/Ⅶ
Ⅳ/Ⅵ.6/Ⅷ
Ⅳ/Ⅵ.6/Ⅶ
Ⅳ
Ⅳ/Ⅵ.7/Ⅷ
Ⅳ/Ⅵ.3
Ⅳ/Ⅵ.8
Ⅳ/Ⅵ.9/Ⅷ
Ⅳ/Ⅵ.20
Ⅳ/Ⅵ.10
Ⅳ/Ⅵ.24
Ⅷ		 $898,571
1,034
168,453
23,960
20,301
2,638,801
96,974
160,068
5,579,094
301,937
9,889,193
228,426
1,965,506
7,924,249
2,085,086
71,843
497,544
1,295,409
54,376
42,975
14,165,414
$24,054,607		 $989,964
-
78,676
22,416
13,561
2,450,755
61,962
115,455
4,392,436
327,870
8,453,095
191,736
1,983,646
8,330,236
1,863,728
90,673
492,841
1,243,141
50,887
45,152
14,292,040
$22,745,135

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

  • 85 -

English Translation of Consoildated Financial Statements Originally Issued in Chinese

TYC BROTHER INDUSTRIAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY Notes 31 Dec. 2021 31 Dec. 2020
Current liabilities
Short-term borrowings
Short-term notes and bills payable
Financial liabilities at fair value through profit or loss, current
Notes payable
Accounts payable
Accounts payable-related parties
Other payables
Current tax liabilities
Lease liabilities, current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term borrowings
Other long-term borrowings
Deferred tax liabilities
Lease liabilities, non-current
Net defined benefit liabilities, non-current
Other non-current liabilities-others
Total non-current liabilities
Total liabilities
Equity attributable to the parent company
Capital
Common stock
Preferred stock
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Other equity
Exchange differences resulting from translating the financial statements of foreign operations
Unrealized gains or losses on financial assets measured at fair value through other comprehensive income
Treasury stock
Total equity attributable to the parent company
Non-controlling interests
Total equity
Total liabilities and equity
Current portion of long-term liabilities		 Ⅳ/Ⅵ.11
Ⅳ/Ⅵ.12
Ⅳ/Ⅵ.13
Ⅳ
Ⅳ
Ⅳ/Ⅶ
Ⅳ
Ⅳ/Ⅵ.24
Ⅳ/Ⅵ.20
Ⅳ/Ⅵ.14
Ⅳ/Ⅵ.14
Ⅳ/Ⅵ.15
Ⅳ/Ⅵ.24
Ⅳ/Ⅵ.20
Ⅳ/Ⅵ.16
Ⅳ/Ⅵ.17
Ⅳ/Ⅵ.17
Ⅳ/Ⅵ.17
Ⅳ/Ⅵ.23
Ⅳ/Ⅵ.17
Ⅳ/Ⅵ.17		 $1,909,969
639,808
3,577
314,719
2,324,382
553,790
979,507
34,071
220,118
151,077
423,941
7,554,959
6,217,336
-
52,269
1,764,024
218,271
56,803
8,308,703
15,863,662
3,128,979
300,000
2,577,877
808,620
289,982
1,134,265
(446,242)
102,270
(5,996)
7,889,755
301,190
8,190,945
$24,054,607		 $1,229,994
-
17,020
324,990
2,325,277
610,662
940,817
7,905
188,161
233,580
422,406
6,300,812
5,774,719
1,999,439
56,815
1,587,850
270,708
49,866
9,739,397
16,040,209
3,128,979
-
1,381,263
783,394
250,969
1,176,321
(395,675)
105,693
(5,996)
6,424,948
279,978
6,704,926
$22,745,135

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

  • 86 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese TYC BROTHER INDUSTRIAL CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

ITEMS Notes 2021 2020
Operating revenues
Operating costs
Gross profit
Unrealized profit on sales
Realized profit on sales
Net gross profit
Operating expenses
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Expected credit impairment (losses) gains
Subtotal
Operating income
Non-operating income and expenses
Other income
Other gains and losses
Finance costs
Share of profit of associates and joint ventures accounted for using the equity method
Subtotal
Net income before income tax
Income tax expense
Net income
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss
Remeasurements of the defined benefit plan
Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income
Income tax related to items that will not be reclassified subsequently
Item that may be reclassified subsequently to profit or loss
Exchange differences resulting from translating the financial statements of foreign operations
Share of other comprehensive income (loss) of associates and joint ventures accounted for using the equity method
Income tax related to items that may be reclassified subsequently
Total other comprehensive income (loss), net of tax
Total comprehensive income (loss)
Net income attributable to:
Stockholders of the parent
Non-controlling interests
Comprehensive income attributable to:
Stockholders of the parent
Non-controlling interests
Earnings per share (NTD)
Earnings per share-basic
Earnings per share-diluted		 Ⅳ/Ⅵ.18/Ⅶ
Ⅳ/Ⅵ.7.20.21/Ⅶ
Ⅳ/Ⅵ.20.21
Ⅳ/Ⅵ.19
Ⅵ.22
Ⅵ.22
Ⅵ.22
Ⅳ/Ⅵ.8
Ⅳ/Ⅵ.24
Ⅳ/Ⅵ.23
Ⅳ/Ⅵ.25
Ⅳ/Ⅵ.25		 $16,576,615
(13,569,218)		 $14,446,208
(11,588,776)
3,007,397 2,857,432
(10)
21		 (21)
31
3,007,408 2,857,442
(1,433,399)
(795,939)
(344,453)
(4,914)		 (1,361,817)
(824,142)
(425,047)
20,050
(2,578,705) (2,590,956)
428,703 266,486
100,858
(136,170)
(135,854)
71,884		 216,429
(32,947)
(171,117)
129,050
(99,282) 141,415
329,421
(92,812)		 407,901
(121,214)
236,609 286,687
21,269
(2,740)
(4,254)
(81,080)
14,698
12,642		 (13,716)
49,953
2,743
(107,480)
(10,827)
22,373
(39,465) (56,954)
$197,144 $229,733
$193,271
43,338		 $262,616
24,071
$236,609 $286,687
$155,932
41,212		 $213,244
16,489
$197,144 $229,733
$0.62 $0.84
$0.62 $0.84

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

  • 87 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

TYC BROTHER INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

ITEMS Equityattributable to theparent c Equityattributable to theparent c ompany ompany Non-
controlling
interests		 Total equity
Capital Capital
surplus		 Retained Earnings Other equitity Treasurystock Total
Common
stock		 Preferred
stock		 Legal
reserve		 Special
reserve		 Unappropriated
earnings		 Exchange
differences
resulting from
translating the
financial
statements of
foreign operations		 Unrealized gains
(losses) on
financial assets
measured at fair
value through
other
comprehensive
income
Appropriation and distribution of 2019 retained earnings
Legal reserve
Special reserve
Cash dividends
Net income for the year ended 31 December 2020
Other comprehensive income (loss) for the year ended 31 December 2020
Adjustments for dividends subsidiaries received from parent company
Increase in non-controlling interests
Balance as of 31 December 2020
Balance as of 1 January 2021
Appropriation and distribution of 2020 retained earnings
Legal reserve
Special reserve
Cash dividends
Net income for the year ended 31 December 2021
Other comprehensive income (loss) for the year ended 31 December 2021
Total comprehensive income (loss)
Issuance of preference shares
Adjustments for dividends subsidiaries received from parent company
Decrease in non-controlling interests
Disposals of financial assets at fair value through other comprehensive income
Other
Balance as of 31 December 2021
Balance as of 1 January 2020
Total comprehensive income (loss)		 $3,128,979
-
-
-
-
-		 $-
-
-
-
-
-		 $1,379,947
-
-
-
-
-		 $713,881
69,513
-
-
-
-		 $160,750
-
90,219
-
-
-		 $1,521,853
(69,513)
(90,219)
(438,057)
262,616
(10,359)		 $(306,186)
-
-
-
-
(89,489)		 $55,217
-
-
-
-
50,476		 $(5,996)
-
-
-
-
-		 $6,648,445
-
-
(438,057)
262,616
(49,372)		 $214,329
-
-
-
24,071
(7,582)		 $6,862,774
-
-
(438,057)
286,687
(56,954)
- - - - - 252,257 (89,489) 50,476 - 213,244 16,489 229,733
-
-		 -
-		 1,316
-		 -
-		 -
-		 -
-		 -
-		 -
-		 -
-		 1,316
-		 -
49,160		 1,316
49,160
$3,128,979 $- $1,381,263 $783,394 $250,969 $1,176,321 $(395,675) $105,693 $(5,996) $6,424,948 $279,978 $6,704,926
$3,128,979
-
-
-
-
-		 $-
-
-
-
-
-		 $1,381,263
-
-
-
-
-		 $783,394
25,226
-
-
-
-		 $250,969
-
39,013
-
-
-		 $1,176,321
(25,226)
(39,013)
(187,739)
193,271
15,968		 $(395,675)
-
-
-
-
(50,567)		 $105,693
-
-
-
-
(2,740)		 $(5,996)
-
-
-
-
-		 $6,424,948
-
-
(187,739)
193,271
(37,339)		 $279,978
-
-
-
43,338
(2,126)		 $6,704,926
-
-
(187,739)
236,609
(39,465)
- - - - - 209,239 (50,567) (2,740) - 155,932 41,212 197,144
-
-
-
-
-		 300,000
-
-
-
-		 1,195,878
564
-
-
172		 -
-
-
-
-		 -
-
-
-
-		 -
-
-
683
-		 -
-
-
-
-		 -
-
-
(683)
-		 -
-
-
-
-		 1,495,878
564
-
-
172		 -
-
(20,000)
-
-		 1,495,878
564
(20,000)
-
172
$3,128,979 $300,000 $2,577,877 $808,620 $289,982 $1,134,265 $(446,242) $102,270 $(5,996) $7,889,755 $301,190 $8,190,945

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

  • 88 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

TYC BROTHER INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

ITEMS 2021 2020 ITEMS 2021 2020
Cash flows from operating activities:
Net income before tax
Adjustments for:
Income and expense adjustments:
Depreciation
Amortization
Expected credit impairment losses (gains)
Finance costs
Interest income
Dividend income
Share of profit of associates and joint ventures accounted for using the equity method
(Gains) Losses on disposal of property, plant and equipment
Reversal of impairmemt loss on non-financial assets
Unrealized profit on sales
Realized profit on sales
Others
Changes in operating assets and liabilities:
Financial assets at fair value through profit or loss
Notes receivable
Notes receivable-related parties
Accounts receivable
Accounts receivable-related parties
Other receivables
Inventories
Other current assets
Financial liabilities at fair value through profit or loss
Notes payable
Accounts payable
Accounts payable-related parties
Other payables
Other current liabilities
Net defined benefit pension liabilities
Cash generated from operations
Interest received
Dividend received
Interest paid
Income tax paid
Net cash provided by operating activities		 $329,421
1,627,816
42,162
4,914
135,854
(3,503)
(2,761)
(71,884)
(2,366)
-
10
(21)
(4)
(1,034)
(1,543)
(6,738)
(190,450)
(37,525)
(48,641)
(1,186,658)
25,933
(13,443)
(10,271)
(895)
(56,872)
38,304
1,535
(31,168)
540,172
3,503
105,861
(144,951)
(64,156)
440,429		 $407,901
1,640,458
48,240
(20,050)
171,117
(4,460)
(1,047)
(129,050)
1,504
(49,399)
21
(31)
(68)
410
4,406
5,436
431,935
(16,268)
72,311
275,603
(48,668)
13,608
67,251
228,520
110,463
(19,552)
9,758
(28,338)
3,172,011
4,460
34,692
(184,693)
(168,517)
2,857,953		 Cash flows from investing activities:
Acquistion of financial assets at fair value through other comprehensive income
Proceeds from redemption of financial assets at fair value through other comprehensive income
Proceeds from capital reduction of financial assets at fair value through other comprehensive income
Acquistion of financial assets measured at amortized cost
Proceeds from redemption of financial assets measured at amortized cost
Acquisition of investments accounted for using the equity method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Decrease in refundable deposits
Acquistion of intangible assets
Increase in other non-current assets
Decrease in other non-current assets
Net cash used in investing activities
Cash flows from financing activities:
Increase in short-term borrowings
Decrease in short-term borrowings
Increase in short-term notes and bills payable
Decrease in short-term notes and bills payable
Proceeds from long-term borrowings
Repayment of long-term borrowings
Increase in other long-term borrowings
Decrease in other long-term borrowings
Cash payment for the principal portion of the lease liabilties
Increase in other non-current liabilities
Decrease in other non-current liabilities
Cash dividends
Proceeds from issuing stock
Change in non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 (59,822)
1,109
19,283
(127,283)
36,496
-
(1,086,450)
11,817
(5,823)
2,152
(23,267)
(25,094)
21,404
(1,235,478)
1,744,775
(1,050,358)
800,000
(160,192)
2,777,784
(2,416,016)
-
(1,999,439)
(196,884)
575
(2,843)
(187,175)
1,495,878
(20,000)
786,105
(82,449)
(91,393)
989,964
$898,571		 -
-
-
(152,289)
86,393
(16,602)
(1,235,706)
3,761
(4,610)
1,859
(22,508)
(51,843)
56,490
(1,335,055)
1,889,575
(2,724,900)
70,000
(659,354)
4,040,684
(3,362,065)
823
-
(184,387)
6,166
(9,512)
(436,741)
-
49,160
(1,320,551)
(150,342)
52,005
937,959
$989,964

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

  • 89 -

English Translation of Financial Statements Originally Issued in Chinese TYC BROTHER INDUSTRIAL CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Stated)

I. HISTORY AND ORGANIZATION

TYC BROTHER INDUSTRIAL CO., LTD. (the “Company”) was incorporated under the laws of the Republic of China on Taiwan (the “ROC”) on 9 September 1986. The Company’s registered office and the main business location is at No.72-2, Xinle Rd., Tainan City Taiwan (R.O.C). The Company's main profitable business projects are the manufacturing, trading and import and export trade business of automobiles, motorcycles and other automobile parts and supplies. The Company became a listed company on the Taiwan Stock Exchange on 6 October 1997.

II. DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS FOR ISSUE

The consolidated financial statements of the Company and subsidiaries (hereinafter referred to as ”the Group”) for the year ended 31 December 2021 and 2020 were authorized for issue in accordance with a resolution of the Board of directors on 24 March 2022.

III. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

  1. Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after 1 January 2021. The new standards and amendments had no material impact on the Group.

  1. Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are not endorsed by FSC, and not yet adopted by the Group as at the end of the reporting period are listed below.
Items New, Revised or Amended Standards and Interpretations Effective Date issued
byIASB
1 Narrow-scope amendments of IFRS, including Amendments to
IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and
the Annual Improvements

1 January 2022

  • 90 -

  • (1) Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements

  • A. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3) The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.

  • B. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

  • C. Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)

  • The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

  • D. Annual Improvements to IFRS Standards 2018 - 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.

  • 91 -

Amendment to IAS 41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after 1 January 2022. The group determined that the newly published standards and interpretations have no material impact on the group.

  1. Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Group as at the end of the reporting period are listed below.
Items New, Revised or Amended Standards and Interpretations Effective Date issued
byIASB
1 IFRS 10 “Consolidated Financial Statements” and IAS 28
“Investments in Associates and Joint Ventures” – Sale or
Contribution of Assets between an Investor and its Associate
or Joint Ventures


To be determined by
IASB
2 IFRS 17 “Insurance Contracts” 1 January2023
3 Classification of Liabilities as Current or Non-current –
Amendments to IAS 1
1 January 2023
4 Disclosure Initiative - Accounting Policies – Amendments to
IAS 1
1 January 2023
5 Definition of AccountingEstimates – Amendments to IAS 8 1 January2023
6 Deferred Tax related to Assets and Liabilities arising from a
Single Transaction – Amendments to IAS 12
1 January 2023

  • (1) IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and －

  • Joint Ventures” Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

  • 92 -

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

  • (2) IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

  • (3) Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

  • (4) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

  • 93 -

  • (5) Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

  • (6) Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. The Group determined that the newly published standards and interpretations have no material impact on the Group.

IV. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  1. Statement of Compliance

The Group’s consolidated financial statements ended 31 December 2021 and 2020 were prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers (Regulations), IFRSs, IASs, IFRIC and SIC, which are endorsed by FSC (TIFRSs).

  1. Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

  1. Basis of consolidation

Preparation principle of consolidated financial statement

  • 94 -

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

  • a. power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

  • b. exposure, or rights, to variable returns from its involvement with the investee; and

  • c. the ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

  • a. the contractual arrangement with the other vote holders of the investee;

  • b. rights arising from other contractual arrangement;

  • c. the Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If loses control of a subsidiary, it:

  • a. derecognizes the assets (including goodwill) and liabilities of the subsidiary;

  • b. derecognizes the carrying amount of any non-controlling interest;

  • c. recognizes the fair value of the consideration received;

  • d. recognizes the fair value of any investment retained;

  • e. recognizes any surplus or deficit in profit or loss; and

  • f. reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss.

  • 95 -

The consolidated entities are as follows:

Percentage of Ownership

Percentage of Ownership Percentage of Ownership
Invest Company Investee Company Major business (%)
31 Dec.
2021		 31 Dec.
2020
The Company

The Company

The Company

The Company

The Company

The Company

The Company

The Company

The Company

TI FU
SUPRA-
ATOMIC

SUPRA-
ATOMIC

SUPRA-
ATOMIC

SUPRA-
ATOMIC
 TI YUAN INVESTMENT
CO., LTD. (TI YUAN)

TI FU INVESTMENT CO.,
LTD. (TI FU)

CONTEK CO., LTD.
(CONTEK)

SUPRA-ATOMIC CO.,
LTD. (SUPRA-ATOMIC)

TAMAU MANAGEMENT
CONSULTANCY CO.,
LTD. (TAMAU
MANAGEMENT)

BESTE MOTOR CO.,
LTD. (BESTE)

INNOVA HOLDING
CORP. (INNOVA)

JUOKU TECHNOLOGY
CO.,LTD.(JUOKU
TECHNOLOGY)

TYC VIETNAM
INDUSTRIAL CO., LTD.
(TYCVN)

DBM REFLEX OF
TAIWAN CO.,
LTD.(DBM)

SPARKING CO., LTD.
(SPARKING)

UNIMOTOR
INDUSTRIAL CO., LTD.
(UNIMOTOR)

EUROLITE CO., LTD.
(EUROLITE)

EUROPILOT CO., LTD.
(EUROPILOT)
 Marketable securities
trading business

Marketable securities
trading business

Reinvestment holding
activities

Reinvestment holding
activities

Management consult

Reinvestment holding
activities

Reinvestment holding
activities

Manufacturing and sale
of automobile parts
Manufacture and sale
automobile lights
Manufacture tooling
mold and international
trading business
Reinvestment holding
activities

Reinvestment holding
activities

Reinvestment holding
activities

Reinvestment holding
activities
 100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
72.10%
60.00%
50.00%
100.00%

100.00%

100.00%

100.00%		 100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
72.10%
60.00%
(Note 1)
50.00%
100.00%
100.00%
100.00%
100.00%
  • 96 -

Percentage of Ownership

Percentage of Ownership Percentage of Ownership
Invest Company Investee Company Major business (%)
31 Dec.
2021		 31 Dec.
2020
SUPRA-
ATOMIC

JUOKU
TECHNOLOGY
INNOVA

INNOVA

UNIMOTOR
EUROLITE

EUROPILOT

SPARKING
 MOTOR-CURIO CO.,
LTD. (MOTOR-CURIO)

TSM TECH CO., LTD.
(TSM)

GENERA
CORPORATION
(GENERA).

W&W REAL PROPERTY,
INC.(W&W)

CHANGZHOU TAMAO
PRECISION INDUSTRY
CO., LTD.(TAMAO
PRECISION)

T.I.T. INTERNATIONAL
CO., LTD. (T.I.T.)

TYC EUROPE B.V.
(TYC EUROPE)

KUN SHAN TYC HIGH
PERFORMANCE CO.,
LTD.(KUN SHAN TYC)
 Reinvestment holding
activities

Reinvestment holding
activities

Sale of automobile lights
and parts

Sale of and rental of real
estate

Manufacture of
precision molds and sale
of products.

Manufacture and sale of
lighting fixtures and
daily-use product for
automobile
Sale of automobile lights
Manufacture, process
and assemble of various
high-efficiency energy-
saving lamps and
accessories
 100.00%

100.00%

100.00%
100.00%
100.00%
99.98%
100.00%
100.00%		 100.00%
100.00%
100.00%
100.00%
100.00%
99.98%
100.00%
100.00%

Note:

  • (1) The Group invested in the establishment of TYC VIETNAM INDUSTRIAL CO., LTD. in July 2020, holding 60% ownership of the company.

The financial statements and other related information of the consolidated subsidiaries as of 31 December 2021 and 31 December 2020, partially are based solely on the reports of the other independent accountants. Their total assets amounted to NT$1,547,689 thousand and NT$1,308,872 thousand as of 31 December 2021 and 2020; their net operating revenue amounted to NT$2,489,995 thousand and NT$2,140,996 thousand for the years ended 31 December 2021 and 2020.

  • 97 -

4. Foreign currency transactions

The Group’s consolidated financial statements are presented in NT$, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

  • (a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.

  • (b) Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.

  • (c) Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

5. Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following partial disposals are accounted for as disposals:

  • 98 -

  • (a) when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and

  • (b) when the retained interest after the partial disposal of an interest in a joint arrangement or partial disposal of an interest in an associate that includes a foreign operation is financial asset that includes a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or joint arrangement that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

6. Current and non-current distinction

An asset is classified as current when:

  • (a) The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle.

  • (b) The Group holds the asset primarily for the purpose of trading.

  • (c) The Group expects to realize the asset within twelve months after the reporting period.

  • (d) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

  • (a) The Group expects to settle the liability in its normal operating cycle

  • (b) The Group holds the liability primarily for the purpose of trading

  • (c) The liability is due to be settled within twelve months after the reporting period

  • (d) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

  • 99 -

7. Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

8. Financial instruments

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

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

  • (1) Financial instruments: Recognition and Measurement

The Group accounts for regular way purchase or sales of financial assets on the trade date.

The Group classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

  • A. the Group’s business model for managing the financial assets and

  • B. the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

  • A. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

  • B. 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.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

  • 100 -

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

  • A. purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

  • B. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

  • A. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

  • B. 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.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

  • A. A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.

  • B. When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

  • C. Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

  • (a) Purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

  • (b) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

  • 101 -

In addition, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposing of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from the remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

(2) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

The Group measures expected credit losses of a financial instrument in a way that reflects:

  • A. an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes

  • B. the time value of money

  • C. reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

  • 102 -

The loss allowance is measured as follows:

  • A. At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Group measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.

  • B. At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.

  • C. For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

  • D. For lease receivables arising from transactions within the scope of IFRS 16, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

  • (3) Derecognition of financial assets

A financial asset is derecognized when:

  • A. The rights to receive cash flows from the asset have expired

  • B. The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred

  • C. The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

  • (4) Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

  • 103 -

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is classified as held for trading if:

  • A. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term

  • B. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of shortterm profit-taking

  • C. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

  • A. it eliminates or significantly reduces a measurement or recognition inconsistency; or

  • B. a group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

  • 104 -

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(5) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

9. Derivative instrument

The Group uses derivative instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as financial assets or liabilities at fair value through profit or loss except for derivatives that are designated as and effective hedging instruments which are classified as financial assets or liabilities for hedging.

  • 105 -

Derivative instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The changes in fair value of derivatives are taken directly to profit or loss, except for the effective portion of hedges, which is recognized in either profit or loss or equity according to types of hedges used.

When the host contracts are either non-financial assets or liabilities, derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not designated at fair value though profit or loss.

10. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

  • (1) In the principal market for the asset or liability, or

  • (2) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

  1. Inventories

Inventories are valued at lower of cost and net realizable value item by item.

  • 106 -

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Raw materials - Purchase cost under weighted-average cost.

Finished goods and work in progress - Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

  1. Non-current assets held for sale and discontinued operations

Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction that is highly probable within one year from the date of classification and the asset or disposal group is available for immediate sale in its present condition. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

In the consolidated statement of comprehensive income of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the statement of comprehensive income.

Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized.

13. Investments accounted for under the equity method

The Group’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Group has significant influence. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture.

  • 107 -

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the Group’s related interest in the associate or joint venture.

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Group’s percentage of ownership interests in the associate or joint venture, the Group recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a pro-rata basis.

When the associate or joint venture issues new stock, and the Group’s interest in an associate or a joint venture is reduced or increased as the Group fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in additional paid-in capital and investment accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Group disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures . If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets . In determining the value in use of the investment, the Group estimates:

  • (1) Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or

  • (2) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

  • 108 -

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets .

Upon loss of significant influence over the associate or joint venture, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

14. Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment . When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Land and improvements 3～10 years
Buildings 2～60 years
Machinery and equipment 2～15 years
Molding equipment 2～10 years
Electrical installations 5～15 years
Transportation equipment 2～10 years
Miscellaneous equipment 2～15 years
  • 109 -

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

15. Leases

The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether, throughout the period of use, has both of the following:

  • (1) the right to obtain substantially all of the economic benefits from use of the identified asset; and

  • (2) the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the stand-alone price, maximising the use of observable information.

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

  • 110 -

  • (1) fixed payments (including in-substance fixed payments), less any lease incentives receivable;

  • (2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

  • (3) amounts expected to be payable by the lessee under residual value guarantees;

  • (4) the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and

  • (5) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability on an amortized cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

  • (1) the amount of the initial measurement of the lease liability;

  • (2) any lease payments made at or before the commencement date, less any lease incentives received;

  • (3) any initial direct costs incurred by the lessee; and

  • (4) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-ofuse asset or the end of the lease term.

The Group applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

  • 111 -

Except for those leases that the Group accounted for as short-term leases or leases of lowvalue assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

Group as a lessor

At inception of a contract, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Group recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Group allocates the consideration in the contract applying IFRS 15.

The Group recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

16. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

  • 112 -

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

Patent, trademark rights and others

The cost of patent, trademark rights and others is amortized on a straight-line basis over the ～ legal period (1 25 years).

Computer software

The cost of computer software is amortized on a straight-line basis over the estimated useful ～ life (1 5 years).

17. Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cashgenerating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cashgenerating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

  • 113 -

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

  1. Treasury shares

Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity. Any difference between the carrying amount and the consideration is recognized in equity.

19. Revenue recognition

The Group’s revenue arising from contracts with customers are primarily related to sale of goods and rendering of services. The accounting policies are explained as follows:

Sale of goods

The Group manufactures and sells machinery. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Group is automobile lights and parts and revenue is recognized based on the consideration stated in the contract.

The credit period of the Group’s sale of goods is from 30 to 120 days. For most of the contracts, when the Group transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Group usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract.

20. Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

  • 114 -

21. Government subsidies

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Where the Group receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to the statement of comprehensive income over the expected useful life and pattern of consumption of the benefit of the underlying asset by equal annual installments. Where loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as additional government grant.

22. Post-employment benefits

All regular employees of the Company and its domestic subsidiaries are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore fund assets are not included in the Group’s consolidated financial statements. Pension benefits for employees of the overseas subsidiaries and the branches are provided in accordance with the respective local regulations.

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Remeasurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur.

  • 115 -

Past service costs are recognized in profit or loss on the earlier of:

  • (1) the date of the plan amendment or curtailment, and

  • (2) the date that the Group recognizes restructuring-related costs.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

23. Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

  • i. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

  • ii. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

  • 116 -

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

  • i. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

  • ii. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

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

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

24. Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The consideration transferred, the identifiable assets acquired and liabilities assumed are measured at acquisition date fair value. For each business combination, the acquirer measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and are classified under administrative expenses.

When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

  • 117 -

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognized at the acquisition-date fair value. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with IFRS 9 Financial Instruments either in profit or loss or as a change to other comprehensive income. However, if the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.

Goodwill is initially measured as the amount of the excess of the aggregate of the consideration transferred and the non-controlling interest over the net fair value of the identifiable assets acquired and the liabilities assumed. If this aggregate is lower than the fair value of the net assets acquired, the difference is recognized in profit or loss.

Goodwill is measured by cost less accumulated impairment loss. Goodwill arising from a business combination is allocated to each cash-generating units that is expected to benefit from the merge from the date of acquisition, regardless of whether other assets or liabilities of the acquiree are attribute to these cash-generating units. Each unit or unit group representative of the allocated goodwill is the lowest level of goodwill for internal management purposes, and is not greater than the operating department before aggregation.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation. Goodwill disposed of in this circumstance is measured based on the relative recoverable amounts of the operation disposed of and the portion of the cash-generating unit retained.

V. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimation and assumptions

The key assumptions concerning the future and other key sources for estimating uncertainty at the reporting date, that would have a significant risk for a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year are discussed below.

  • 118 -

(1) Fair Value of Financial Instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including income approach (for example the discounted cash flow model) or the market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

  • (2) Accounts receivables–estimation of impairment loss

  • The Group estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

(3) Inventory

Estimates of net realizable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made.

(4) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination rate, future salary increases, and decrease. For a detailed explanation of the assumptions used to measure the cost of defined benefits and defined benefits obligations, please refer to Note 6.

(5) Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company's domicile.

  • 119 -

Deferred tax assets are recognized for all carryforward of unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

Ⅵ. CONTENTS OF SIGNIFICANT ACCOUNTS

1. Cash and Cash Equivalents

Cash and Cash Equivalents
Cash on hand and petty cash
Saving account
Time deposits
Investments in bonds with resale agreements -
corporate bonds
Total
Financial assets at fair value through profit or loss

Mandatorily measured at fair value through profit
or loss:
Derivatives not designated as hedging
instruments
Forward currency contracts
Current		 31 Dec. 2021 31 Dec. 2020
$5,300
777,570
23,552
92,149
$5,376

899,779

14,091

70,718
$898,571
$989,964
31 Dec. 2021 31 Dec. 2020


$1,034		 $-

$1,034		 $-

2. Financial assets at fair value through profit or loss

The Group classified certain of its financial assets at fair value through profit or loss were not pledged.

3. Financial assets at fair value through other comprehensive income

Equity instrument investments measured at fair value
through other comprehensive income – Non-current
Listed companies stocks
Unlisted companies stocks
Total		 31 Dec. 2021 31 Dec. 2020

$108,655
119,771		 $109,721
82,015
$228,426 $191,736
  • 120 -

The Group classified certain of its financial assets at fair value through other comprehensive income were not pledged.

For equity instrument investments measured at fair value through other comprehensive income, the Group recognized dividends in the amount of NT$2,761 thousand and NT$1,047 thousand for the year ended 31 December 2021 and 2020, the full amount is related to investments held at the end of the reporting period .

4. Financial assets measured at amortized cost

Financial assets measured at amortized cost
Time deposits
Investments in bonds with resale agreements -
corporate bonds
Total
Current		 31 Dec. 2021 31 Dec. 2020
$168,453
-		 $56,182
22,494
$168,453 $78,676
$168,453 $78,676

Financial assets measured at amortized cost were not pledged.

The Group classified certain financial assets as financial assets measured at amortized cost. Please refer to Note 6.(19) for more details on loss allowance and Note 12 for more details on credit risk.

5. Notes Receivables and Notes Receivables-Related Parties

Notes receivables
Less: allowance for doubtful accounts
Subtotal
Notes receivables-related parties
Less: allowance for doubtful accounts
Subtotal
Total		 31 Dec. 2021
 31 Dec. 2020
$24,041
(81)		 $22,498
(82)
23,960 22,416
20,356
(55)		 13,618
(57)
20,301 13,561
$44,261 $35,977

Notes receivables were not pledged.

The Group adopted IFRS 9 for impairment assessment. Please refer to Note 6.(19) for more details on accumulated impairment and Note 12 for more details on credit risk.

  • 121 -

6. Accounts Receivables and Accounts Receivables-Related Parties

Accounts receivables
Less: allowance for doubtful accounts
Subtotal
Accounts receivables-related parties
Less: allowance for doubtful accounts
Subtotal
Total		 31 Dec. 2021 31 Dec. 2020
$2,881,409
(242,608)		 $2,696,063
(245,308)
2,638,801 2,450,755
100,954
(3,980)		 63,429
(1,467)
96,974 61,962
$2,735,775 $2,512,717

Please refer to Note 8 for more details on notes receivables under pledge.

Trade receivables are generally on 30-120 day terms. Accounts receivables amounted to NT$ 3,026,760 thousand and NT$2,795,608 thousand as at 31 December 2021 and 2020. Please refer to Note 6.(19) for more details on impairment of trade receivables for the year ended 31 December 2021 and 2020 and please refer to Note 12 for credit risk disclosure.

7. Inventories

Inventories
Raw materials
Work in process
Finished goods
Merchandise
Net		 31 Dec. 2021 31 Dec. 2020
$897,325
283,079
3,689,561
709,129		 $724,146
359,900
2,951,025
357,365
$5,579,094 $4,392,436

The cost of inventories recognized in expenses amounted to NT$13,569,218 thousand and NT$11,588,776 thousand for the year ended 31 December 2021 and 2020, respectively, including inventory valuation loss NT$55,834 thousand and NT$19,973 thousand for the year ended 31 December 2021 and 2020, respectively.

Please refer to Note 8 for more details on inventories under pledge.

  • 122 -

8. Investments Accounted For Under The Equity Method

Details are as follows:

tails are as follows:
31 Dec. 2021 31 Dec. 2020
Percentage
of		 Percentage
of
Investee Company Amount ownership Amount ownership
Investments in the associates：
I YUAN PRECISION INDUSTRIAL CO., LTD $236,759
18.17%
160,187
20.00%		 $238,694 18.17%
JNS AUTO PARTS LIMITED 146,736 20.00%
CHIN-LI-MA HIGHT PERFORMANCE
LUMINAIRE CO., LTD.		 -
30.00%
10,758
30.00%
54,475
25.00%
462,179
166,913
50.00%
1,336,414
50.00%
1,503,327
$1,965,506
-
30.00%
HANGZHOU SUNNYTECH CO., LTD. 10,758 11,837 30.00%
ATECH INTERNATIONAL CO.,LTD. 54,475 58,817 25.00%
Subtotal 462,179 456,084
Investment in jointly controlled entities：
PT ASTRA JUOKU INDONESIA 166,913 162,522 50.00%
VARROC TYC CORPORATION 1,336,414 1,365,040 50.00%
Subtotal 1,503,327 1,527,562
Total $1,965,506 $1,983,646

(1) Investments in associates

The Group’s investments in associates are not individually material. The aggregate carrying amount of the Group’s interests in associates is NT$462,179 thousand, and NT$456,084 thousand, as at 31 December 2021, and 2020, respectively. The aggregate financial information of the Group’s investments in associates is as follows:

Profit or loss from continuing operations
Other comprehensive income (post-tax)
Total comprehensive income		 2021
$32,091
1,920
$34,011		 2020
$33,750
(930)
$32,820

The associates had no contingent liabilities or capital commitments as at 31 December 2021, and 2020.

  • 123 -

(2) Investments in joint venture

① Information on the material joint venture of the Group:

Company name: VARROC TYC CORPORATION (VARROC)

Nature of relationship with the joint venture: VARROC engages in reinvestment holding activities. Its subsidiary, VARROC TYC AUTO LAMPS CO., LTD. (VTYC) engages in manufacture and sale of lighting fixtures and daily-use product for automobiles.

Principal place of business (country of incorporation)：CHINA

Fair value of the investment in the joint venture when there is a quoted market price for the investment: VARROC TYC is an unlisted entity.

Reconciliation of the joint venture’s summarized financial information presented to the carrying amount of the Group’s interest in the joint venture:

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Proportion of the Group’s ownership
Subtotal
Eliminations from intercompany transactions
Carrying amount of the investment
Cash and cash equivalents
Current financial liabilities excluding trade and other
payables and provisions
Non-current financial liabilities excluding trade and
other payables and provisions		 31 Dec. 2021 31 Dec. 2020
$3,300,989
2,855,016
(3,377,731)
(105,425)		 $3,499,295
2,564,227
(3,255,330)
(78,070)
2,672,849
50%		 2,730,122
50%
1,336,424
(10)		 1,365,061
(21)
$1,336,414 $1,365,040

31 Dec. 2021		 31 Dec. 2020
$572,991
(176,201)
(43,507)		 $859,979
(335,111)
-
  • 124 -
Operating revenue
Depreciation expense
Amortization expose
Interest income
Interest expense
Income tax expense or income
Profit or loss from continuing operations
Other comprehensive income
Total comprehensive income		 2021 2020
$5,170,314
210,271
133,581
7,611
5,970
(56,735)
59,100
13,215
72,315		 $4,247,161
196,361
46,291
9,821
18,730
14,495
232,609
(109)
232,500

The joint venture had no contingent liabilities or capital commitments as at 31 December 2021, and 2020. VTYC cannot distribute its profits until it obtains the consent from the two venture partners.

  • ② The Group’s investments in PT ASTRA JUOKU INDONESIA are not individually material. The aggregate carrying amount of the Group’s interests in PT ASTRA JUOKU INDONESIA is NT$166,913 thousand, and NT$162,522 thousand, as at 31 December 2021, and 2020 , respectively. The aggregate financial information of the Group’s investments in PT ASTRA JUOKU INDONESIA is as follows:
Profit or loss from continuing operations
Other comprehensive income (post-tax)
Total comprehensive income		 2021 2020
$10,243
(3,376)		 $(21,005)
(7,623)
$6,867 $(28,628)

The joint venture had no contingent liabilities or capital commitments as at 31 December 2021, and 2020. PT ASTRA JUOKU INDONESIA cannot distribute its profits until it obtains the consent from the two venture partners.

  • ③ We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method. Those associates and joint ventures under equity method amounted to NT$166,913 thousand and NT$162,522 thousand, as at 31 December 2021 and 2020, respectively. The related shares of profits from the associates and joint ventures under the equity method amounted to NT$10,243 thousand and NT$(21,005) thousand, for the years ended 31 December 2021 and 2020, respectively, and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$(3,376) thousand and NT$(7,623) thousand, for the years ended 31 December 2021 and 2020, respectively.

  • 125 -

9. Property, plant and equipment

Owner occupied property, plant and equipment

Cost:
1 Jan. 2021
Addition
Disposal
Other
Exchange difference
31 Dec. 2021
1 Jan. 2020
Addition
Disposal
Other
Exchange difference
31 Dec. 2020
Depreciation and
impairment:：
1 Jan. 2021
Depreciation
Disposal
Other
Exchange difference
31 Dec. 2021
1 Jan. 2020
Depreciation
Reversal of impairment
loss
Disposal
Other
Exchange difference
31 Dec. 2020
Net book value:
31 Dec. 2021
31 Dec. 2020		 Land Land and
improvement
Buildings		 Machinery and
equipment		 Molding
equipment
Electrical
equipment
Transportation
equipment		 Miscellaneous
equipment		 Construction
inprogress
Total
$992,938
-
-
-
(5,630)
$18,099

-

-

(4,773)
(345)		 $3,384,418

6,809

(1,156)

236,832
(8,404)
$2,427,836

48,270

(85,288)

9,274
(18,993)		 $9,808,353
934,907

(939,512)
-
(21,950)
$301,770

766

-

-
(1,845)
$214,971

3,237

(3,828)

2,084
(859)		 $1,095,146
34,002

(10,946)
32,798
(16,786)		 $237,944
11,276

-
(244,316)
3,067		 $18,481,475

1,039,267
(1,040,730)

31,899

(71,745)
$987,308
$12,981		 $3,618,499
$2,381,099		 $9,781,798
$300,691
$215,605		 $1,134,214 $7,971 $18,440,166
$999,135
-
-
-
(6,197)
$18,369

-

-

-
(270)		 $3,393,137

7,924

(367)

941
(17,217)
$2,477,076

127,439

(155,167)

-
(21,512)		 $9,455,107
1,273,398

(905,440)
-
(14,712)
$299,529

2,821

-

635
(1,215)
$215,046

10,981

(11,082)

774
(748)		 $1,127,266
22,088

(44,029)
862
(11,041)		 $227,938
12,698

-
(2,458)
(234)		 $18,212,603

1,457,349

(1,116,085)

754
(73,146)
$992,938
$18,099		 $3,384,418
$2,427,836		 $9,808,353
$301,770
$214,971		 $1,095,146 $237,944 $18,481,475
$-
-
-
-
-
$8,434

740

-

(989)

(400)		 $1,260,873

138,648

(1,004)

8,959
(9,544)
$1,734,688

149,991

(77,941)

1,420
(16,894)		 $6,171,820
1,029,931

(938,322)
-
(21,939)
$185,414

12,686

-

(229)
(1,847)
$109,227

18,419

(3,104)

-
(826)		 $680,783
100,026

(10,908)
1,937
(14,132)		 $-
-

-
-
-		 $10,151,239

1,450,441
(1,031,279)

11,098

(65,582)
$-
$7,785		 $1,397,932
$1,791,264		 $6,241,490
$196,024
$123,716		 $757,706 $- $10,515,917
$49,399
-
(49,399)
-
-
-
$7,490

1,207

-

-

-

(263)		 $1,137,797

133,069

-

(325)

-
(9,668)
$1,743,579

160,426

-

(154,511)

-
(14,806)		 $6,044,184
1,047,334
-

(905,425)
-
(14,273)
$171,850

14,668

-

-

75
(1,179)
$99,631

20,433

-

(10,882)

696
(651)		 $627,217
101,179
-

(42,685)
(80)
(4,848)		 $-
-
-

-

-
-		 $9,881,147

1,478,316

(49,399)
(1,113,828)

691

(45,688)
$-
$8,434		 $1,260,873
$1,734,688		 $6,171,820
$185,414
$109,227		 $680,783 $- $10,151,239
$987,308
$5,196		 $2,220,567
$589,835		 $3,540,308
$104,667
$91,889		 $376,508 $7,971 $7,924,249
$992,938
$9,665		 $2,123,545
$693,148		 $3,636,533
$116,356
$105,744		 $414,363 $237,944 $8,330,236
  • 126 -

The amount of capitalized interests and interest rates are as follows:

Items 2021 2020
Construction in progress and prepayment for
equipments $9,483 $13,127
The interest rate interval of borrowing cost
capitalization 0.73%~0.97% 0.93%~1.18%

The material components of building that have different useful lives are the main buildings and factories, which are depreciated over 60 years and 35 years, respectively.

The material components of equipment are mainly the processing equipment, which are depreciated over 10 years.

Please refer to Note 8 for more details on property, plant and equipment under pledge.

10. Intangible assets

Intangible assets
Cost:
1 Jan. 2021
Addition - acquired
separately
Decrease
Exchange differences
31 Dec. 2021
1 Jan. 2020
Addition - acquired
separately
Exchange differences
31 Dec. 2020
Amortization and
impairment:
1 Jan. 2021
Amortization
Decrease
Exchange differences
31 Dec. 2021
1 Jan. 2020
Amortization
Exchange differences
31 Dec. 2020
Net book value:
31 Dec. 2021
31 Dec. 2020		 Trademark
right
Patent		 Goodwill Software Other
intangible
assets		 Total
$11,947
885
(515)

-
$10,226

2,058

(422)

-
$10,174

-

-

-		 $195,602

15,636

(7,194)

228
$61,615

4,688

(17,590)
-		 $289,564

23,267

(25,721)

228
$12,317 $11,862
$10,174		 $204,272
$48,713		 $287,338
$11,398
549

-
$8,171

2,055

-
$10,174

-

-		 $180,519

15,095

(12)
$56,806

4,809
-		 $267,068

22,508

(12)
$11,947 $10,226 $10,174 $195,602
$61,615		 $289,564
$5,538
1,675
(515)

-
$2,752

956

(422)

-
$-

-

-

-		 $144,847

30,936

(7,194)

163
$45,754

8,595

(17,590)
-		 $198,891

42,162

(25,721)

163
$6,698 $3,286 $- $168,752
$36,759		 $215,495
$3,768
1,770

-
$1,864

888

-
$-

-

-		 $109,139

35,707

1
$35,879

9,875

-		 $150,650

48,240

1
$5,538 $2,752
$-		 $144,847 $45,754 $198,891
$5,619 $8,576 $10,174
$35,520		 $11,954
$71,843
$6,409
$7,474
$10,174
$50,755
$15,861
$90,673
  • 127 -

The Group did not recognized impairment loss of goodwill in 2021 and 2020.

Amortization expense of intangible under the statement of comprehensive income：

Operating cost
Operating expense
Total
Short-term Borrowings		 2021 2020
$16,118
26,044		 $15,232
33,008
$42,162 $48,240

Interest rate		 31 Dec. 2021 31 Dec. 2020
Unsecured Loans
0.82%~1.60%
Secured Loans
3.25%~3.69%		 $1,591,558 $949,222
318,411 280,772
Total $1,909,969 $1,229,994

11. Short-term Borrowings

Please refer to Note 8 for the detail of the assets including land, buildings, part of accounts receivables and inventories pledged as collateral.

12. Short-term notes and bills payable

Guarantors 31 Dec. 2021 31 Dec. 2021
Interest rate Amount Pledge or
Collateral
$170,000
160,000
150,000
160,000
none

none

none

none


31 Dec.2020
640,000
(192)
$639,808
$-
3,577		 $917
16,103
$3,577 $17,020
$3,577 $17,020

13. Financial liabilities at fair value through profit or loss

  • 128 -

14. Long-term Borrowing

Details are as follows:

Creditors 31 Dec. 2021 31 Dec. 2021
Redemption
Amount Interest rate
First Bank
First Bank
Chang Hwa Bank
Bank of Taiwan
Bank of Taiwan
DBS Bank
DBS Bank
KGI Bank		 $800,000
300,000

700,000
200,000
450,000
300,000
270,000
200,000		 0.45%
0.90%
0.50%
0.90%
0.72%

0.57%

0.85%

0.89%		 From 1 Jul. 2019 to 15 Sep. 2026.
Principal are repaid monthly, starting from
17 Oct. 2022, and interests are repaid
monthly.
From 16 Aug. 2021 to 16 Aug. 2023.
Interests are repaid monthly and bullet
repayment on expiry date.
From 9 Aug. 2019 to 15 Aug. 2029.
Principal are repaid monthly, starting from
17 Oct. 2022, and interests are repaid
monthly.
From 6 Jul. 2021 to 6 Jul. 2023. After
applying for each drawdown within the
credit line, each transaction shall not
exceed 180 days. Interests are repaid
monthly and bullet repayment on expiry
date.
Form 6 Jul. 2021 to 15 Jun. 2026. The grace
period of 2 years. Principal are repaid
monthly, and interests are repaid monthly.
From 6 Nov. 2019 to 15 Oct. 2024.
Principal are repaid monthly, starting from
17 Oct. 2022, and interests are repaid
monthly.
From 14 Apr. 2021 to 14 Apr. 2023. After
applying for each drawdown within the
credit line, pay off all principal and interest
payable of each drawn down facility on the
expiry date of each principal loan.
From 29 Dec. 2021 to 10 Jan. 2024.
Interests are repaid monthly and bullet
repayment on expiry date.
  • 129 -

31 Dec. 2021

Creditors Amount Interest rate
Redemption
Yuanta Bank
Hua Nan Bank
Hua Nan Bank
Taipei Fubon
Bank
First Bank
First Bank
Hua Nan Bank
Bank Sinopac
Yuanta Bank
Mega Bank		 550,000
500,000
100,000
350,000
358,456
445,000
80,000
150,000
180,000
70,000
0.85%
0.46%~0.66%

0.88%

0.85%
1.38%
1.25%~1.27%
1.27%
1.35%
1.30%
1.32%		 From 27 Aug. 2021 to 27 Aug. 2023. After
applying for each drawdown within the
credit line, each transaction shall not
exceed 180 days. Interests are repaid
monthly and bullet repayment on expiry
date.
From 24 Jul. 2020 to 24 Jul. 2025.
Principal are repaid monthly, starting from
15 Aug. 2023, and interests are repaid
monthly.
From 5 Feb. 2021 to 5 Feb. 2023.
Interests are repaid monthly and bullet
repayment on expiry date.
From 26 Sep. 2021 to 26 Sep. 2023. Each
transaction shall not exceed 180 days.
Interests are repaid monthly and bullet
repayment on expiry date.
From 27 Dec. 2016 to 27 Dec. 2031.
Principal are repaid by 52 quarterly
payments, starting from 27 Dec. 2018 to the
maturity date. Interests are repaid monthly.
From 26 Nov. 2021 to 20 Dec. 2023.
Interests are repaid monthly and bullet
repayment on expiry date.
From 7 Dec. 2021 to 7 Dec. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 29 Jun. 2021 to 29 Jun. 2023.
Interests are repaid monthly and bullet
repayment on expiry date.
From 30 Nov. 2021 to 29 Nov. 2023.
Interests are repaid monthly and bullet
repayment on expiry date.
Form 10 Aug. 2021 to 10 Aug. 2026. The
grace period of 2 years. Principal are repaid
monthly, and interests are repaid monthly.
  • 130 -

31 Dec. 2021

Creditors Amount
 Interest rate
Redemption
Chang Hwa Bank
California Bank &
Trust (CBT)
DBS Bank
Subtotal
Less: current
portion
Total
50,000
65,387
(USD 2,362)
249,570
(USD 9,000)		 1.25%
3.35%
0.60%

 From 27 Dec. 2021 to 26 Dec. 2023.
Interests are repaid monthly and bullet
repayment on expiry date.
Form 1 Jul. 2021 to 30 Jun. 2028. Principal
are repaid monthly, and interests are repaid
monthly.
From 14 Apr. 2021 to 14 Apr. 2023. After
applying for each drawdown within the
credit line, each transaction shall not
exceed 180 days. Interests are repaid
monthly and bullet repayment on expiry
date.
6,368,413
(151,077)
$6,217,336
Creditors 31 Dec. 2020 31 Dec. 2020
Redemption
Amount Interest rate
First Bank
First Bank
Chang Hwa Bank
Bank of Taiwan		 $800,000
200,000

700,000
200,000		 0.45%
0.95%
0.50%
0.96%		 From 1 Jul. 2019 to 15 Sep. 2026.
Principal are repaid monthly, starting from
17 Oct. 2022 , and interests are repaid
monthly.
From 14 Aug. 2020 to 14 Aug. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 9 Aug. 2019 to 15 Aug. 2029.
Principal are repaid monthly, starting from
17 Oct. 2022 , and interests are repaid
monthly.
From 24 Jun. 2020 to 24 Jun. 2022. After
applying for each drawdown within the
credit line, each transaction shall not
exceed 180 days.
Interests are repaid monthly and bullet
repayment on expiry date.
  • 131 -

31 Dec. 2020

Creditors Amount
 Interest rate
Redemption
DBS Bank
DBS Bank
Mega Bank
KGI Bank
Mizuho Bank
Yuanta Bank
Shin Kong Bank
Hua Nan Bank
First Bank		 300,000
280,000
150,000
340,000
600,000
520,000
100,000
200,000
394,304
0.57%

0.91%

0.92%

0.92%

0.90%

0.95%

0.90%

0.46%
1.38%		 From 6 Nov. 2019 to 15 Oct. 2024.
Principal are repaid monthly, starting from
17 Oct. 2022, and interests are repaid
monthly.
From 14 Apr. 2020 to 14 Apr. 2022. After
applying for each drawdown within the
credit line, each transaction shall not
exceed 180 days. Interests are repaid
monthly and bullet repayment on expiry
date.
From 14 Jun. 2020 to 13 Jun. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 29 Nov. 2020 to 29 Nov. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 20 Nov. 2020 to 20 Nov. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 19 Aug. 2020 to 18 Aug. 2022. After
applying for each drawdown within the
credit line, each transaction shall not
exceed 180 days. Interests are repaid
monthly and bullet repayment on expiry
date.
From 24 Jul. 2020 to 24 Jul. 2025, each
drawdown must not exceed 90 days,
Interests are repaid monthly and bullet
repayment on expiry date.
From 24 Jul. 2020 to 24 Jul. 2025.
Principal are repaid monthly, starting from
15 Aug. 2023, and interests are repaid
monthly.
From 27 Dec. 2016 to 27 Dec. 2031.
Principal are repaid by 52 quarterly
payments, starting from 27 Dec. 2018 to
the maturity date. Interests are repaid
monthly.
  • 132 -

31 Dec. 2020

Creditors Amount
 Interest rate
Redemption
First Bank
First Bank
First Bank
Bank Sinopac
O-bank
O-bank
O-bank
O-bank
Chang Hwa Bank
(The syndicated
loan agreement
led)
California Bank &
Trust (CBT)		 137,000
116,000
60,600
80,000
44,445
50,000
60,000
400,000
400,000
68,087
(USD 2,425)		 1.27%
1.27%
1.47%
1.40%
1.43%

1.43%
1.28%
1.30%
1.80%
3.30%		 From 31 Dec. 2020 to 31 Dec. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 31 Dec. 2020 to 31 Dec. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
Form 29 Nov. 2016 to 29 Nov. 2023,
grace period of two years. Principal are
repaid after the grace period, and interests
are repaid monthly.
From 16 Jun. 2020 to 30 Jun. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 15 Dec. 2016 to 15 Dec. 2021.
Principal are repaid by 8 quarterly
payments, starting from 15 Dec. 2019 to
the maturity date. Interests are repaid
monthly.
From 29 Jan. 2018 to 15 Jan. 2021.
Interests are repaid monthly and bullet
repayment on expiry date.
From 22 Mar. 2019 to 1 Sep. 2022.
Principal are repaid by 4 quarterly
payments, starting from 1 Dec. 2021 to the
maturity date. Interests are repaid monthly.
From 25 Dec. 2019 to 1 Jun. 2023.
Principal are repaid by 10 quarterly
payments, starting from 1 Mar. 2021 to the
maturity date. Interests are repaid monthly.
From 13 Apr. 2018 to 13 Apr. 2023.
Interests are repaid monthly and bullet
repayment on expiry date.
Form 12 Jul. 2013 to 31 Jul. 2021.
Principal are repaid monthly, and interests
are repaid monthly.
  • 133 -

31 Dec. 2020

Creditors Amount
 Interest rate
Redemption
DBS Bank
KGI Bank
Subtotal
Less: current
portion
Less: unamortized
expense
Total		 114,120
(USD 4,000)
57,060
(USD 2,000)		 0.80%
0.85%


 From 14 Apr. 2020 to 14 Apr. 2022. After
applying for each drawdown within the
credit line, each transaction shall not
exceed 180 days. Interests are repaid
monthly and bullet repayment on expiry
date.
From 29 Nov. 2020 to 29 Nov. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
6,011,616
(233,580)
(3,317)
$5,774,719

Note:

  • (1) On 31 Jan. 2018, the Company and its subsidiary, JUOKU TECHNOLOGY CO., LTD. reached a syndicated loan agreement with Chang Hwa Bank (the syndicated loan agreement lead bank) and other 12 banks, amounting to NT$3,980,000 thousand. The period of the loan agreement is five years starting from the first drawdown day of the loan within 6 months from the agreement execution date. The loan has been repaid in advance in the third quarter of 2021, and the loan amount has been written off. The Company's annual and semi-annual consolidated financial statements shall maintain specific current ratio, debt ratio, interest coverage multiple and other financial ratios during the term of the agreement and until the obligations under the agreement are fully paid off. The consolidated financial statements of the Company comply with the above joint loan covenant.

  • (2) On 1 Jul. 2021, California Bank & Trust (CBT) offered credit line of USD 2,387 thousand to W&W REAL PROPERTY, INC. From the execution date of and for the duration of the contract, the calculation of the financial ratios shall be based on the information recorded in the borrower’s latest certified financial report or audit report and shall comply with the financial ratios as follows: Debt service coverage ratio shall be no less than 1.25.

  • (3) In 2019, the Group financed with designated banks in accordance with the “Project Loan Guidelines to Welcoming Overseas Taiwanese Businesses Return to Invest in Taiwan”, and entered into contract terms and normative matters, and completed them in accordance with the approval letter.

  • 134 -

15. Other Long-term Borrowing

31 Dec. 2021 : None

Guarantors 31Dec.2020
Contractperiod Interest rate Amount
Commercialpaperpayable From 31 Jun. 2018 to
31 Jun. 2023.		 1.48% $2,000,000
(561)
Chang Hwa Bank
(The syndicated loan
agreement led)

Less: Discount of commercial
paper payable
Net
$1,999,439

16. Post-Employment Benefits

Defined contribution plan

The Group adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Group will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Group have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Subsidiaries located in the People’s Republic of China will contribute social welfare benefits based on a certain percentage of employees’ salaries or wages to the employees’ individual pension accounts.

Pension benefits for employees of overseas subsidiaries and branches are provided in accordance with the local regulations.

Expenses under the defined contribution plan for the years ended 31 December 2021 and 2020 were NT$64,800 thousand and NT$70,970 thousand, respectively.

  • 135 -

Defined benefits plan

The Group adopts a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Group contributes an amount equivalent to 2% ～ 3% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before end of each year, the Company and subsidiaries make estimates of the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the following year, the Company will make up the difference in one appropriation before the end of March of the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under a mandate, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes control and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with IAS 19. The Company expects to contribute NT$57,226 thousand to its defined benefit plan during the 12 months beginning after December 31 2021.

The defined benefit obligations were expected to mature in 2027 to 2040 and 2028 to 2040 as of December 31 2021 and 2020, respectively.

Pension costs recognized in profit or loss are as follows:

Pension costs recognized in profit or loss are as follows:
Current service cost
Net interest on the net defined benefit liabilities
Settlements from the plan
Total		 2021 2020
$2,977
867
-		 $3,310
1,848
(5,000)
$3,844 $158

Reconciliations of liabilities (assets) of the defined benefit obligation and plan assets at fair value are as follows:

are as follows:
Defined benefit obligation
Plan assets at fair value
Net defined benefit liabilities		 31 Dec. 2021 31 Dec. 2020 1 Jan. 2020
$465,362
(247,091)		 $503,471
(232,763)		 $512,085
(226,755)
$218,271 $270,708 $285,330

Reconciliations of liabilities (assets) of the defined benefit plan are as follows:

  • 136 -
As of 1 January 2020
Pension costs recognized in profit or loss：
Current service cost
Interest expenses (income)
Past service cost and gains or losses arising
from settlements
Subtotal
Remeasurements of the defined benefit
liabilities/assets:
Actuarial gains and losses arising from
changes in demographic assumptions
Actuarial gains and losses arising from
changes in financial assumptions
Experience adjustments
Remeasurements of the defined benefit
assets
Subtotal
Payment of benefit obligation
Contribution by employer
As of 31 December 2020
Pension costs recognized in profit or loss：
Current service cost
Interest expenses (income)
Subtotal
Remeasurements of the defined benefit
liabilities/assets:
Actuarial gains and losses arising from
changes in demographic assumptions
Actuarial gains and losses arising from
changes in financial assumptions
Experience adjustments
Remeasurements ofthe defined benefit
assets
Subtotal
Payment of benefit obligation
Contribution by employer
As of 31 December 2021		 Defined benefit
obligation		 Plan assets at
fair value		 Net defined
benefit liabilities
(assets)
$512,085
3,310
3,338
(5,000)		 $(226,755)
-
(1,490)
-		 $285,330
3,310
1,848
(5,000)
1,648 (1,490) 158
1,837
14,354
5,537
-		 -
-
-
(8,012)		 1,837
14,354
5,537
(8,012)
21,728 (8,012) 13,716
(31,990)
-		 31,990
(28,496)		 -
(28,496)
503,471
2,977
1,625		 (232,763)
-
(758)		 270,708
2,977
867
4,602 (758) 3,844
(2,311)
(18,619)
3,340
-		 -
-
-
(3,680)		 (2,311)
(18,619)
3,340
(3,680)
(17,590) (3,680) (21,270)
(25,121)
-		 25,121
(35,011)		 -
(35,011)
$465,362 $(247,091) $218,271
  • 137 -

The principal assumptions used in determining the Group’s defined benefit plan are shown below:

Discount Rate
Expected rate of salary increase		 31 Dec. 2021
31 Dec. 2020
0.64%~0.87%
0.50%~3.00%
0.31%~0.42%

0.50%~3.00%

Sensitivity analysis for significant assumption as at 31 December 2021 and 2020 is, as show below:

Discount Rate increase by 0.5%
Discount Rate decrease by 0.5%
Rate of future salary increase
by 0.5%
Rate of future salary decrease
by 0.5%		 2021 2021 2020 2020
Defined
benefit
obligations
increase		 Defined
benefit
obligations
decrease		 Defined
benefit
obligations
increase		 Defined
benefit
obligations
decrease
$-
28,395
55,539
-		 $(3,503)
-
-
(3,210)
$-

34,659

66,323
-
$(16,685)

-
-
(16,289)

The sensitivity analysis above was based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analysis compared to the previous period.

17. Equity

(1) Capital

As of 31 December 2021 and 2020, TYC BROTHER INDUSTRIAL CO., LTD.’s registered capital was both NT$4,000,000 thousand with par value at NT$10 per share and has issued 400,000 thousand common shares, and had issued ordinary share capital in the amount of $3,128,979 with 400,000 thousand common shares. The Company has also issued preferred share capital of $300,000 and $0, 30,000 thousand shares and 0 shares respectively.

  • 138 -

Preferred stock

On 21 March, 2021, the Company’s board of directors resolved to increase each capital by issuing preference shares A, which was approved by the FSC under a letter dated 26 May, 2021, and the record date of capital increase was determined as of 5 August, 2021, it was expected to issue 30,000 thousand shares having a face value of $10 per share at the issue price of NT$50 per share. The right and obligation of this issue are as follows:

  • A. Maturity date: No maturity date. The preferred shareholders have no rights to request the Company to buy back Preferred Share A. The Company has rights to buy back all or part of the Preferred Share A as of five years after the issue date. The preferred shares still outstanding will retain the aforementioned rights and obligations. If the Company pays out dividends in the year of buyback, the dividend amount will be prorated based on the outstanding days.

  • B. Dividends: The dividend yield of the preferred share A is 4% (annual rate), (5-year interest rate swap (IRS) rate, 0.64275% + fixed rate, 3.35725%) and calculated at the issue price per share. The five-year IRS rate will be reset on the next business day five years after the issue date and every five years thereafter. The record date of the reset is two business days of financial institutions in Taipei prior to the reset date. The five-year IRS rate is the arithmetic mean of the offer prices of Reuter's TAIFXIRS and COSMOS3 at 11 a.m. on the record date of the reset (business day of financial institutions in Taipei). If the aforesaid offer prices are unavailable on the record date of the reset, the five-year IRS rate shall be determined by the Company based on the principle of good faith and reasonable market conditions.

  • C. Dividend payment: The preferred share dividends are fully distributed in cash every year. After the financial statements are adopted in an annual general meeting, the Board of Directors shall authorize the chairman to set the record date for paying the preferred share dividends of the previous year. The number of dividends issued in the year of issue and in the year of redemption is calculated based on the actual number of days of issue in the current year.

  • D. The Company shall apply the current year's earnings, if any, to pay for taxes as stipulated by laws and regulations, offset accumulated losses of previous years, and allocate 10% as legal reserve pursuant to laws and regulations. Special reserve shall be set aside or reversed from net shareholder’s equity reduction in current or accumulative in prior years in accordance with related regulations. The remaining earnings along with the accumulated unappropriated earnings in prior years as shareholder bonus, and shall be appropriated as preferred share dividends in accordance with the Article 7-1, Articles of Incorporation.

  • 139 -

  • E. The Company has discretion over the distribution of preferred stock dividends. If the Company does not generate any or sufficient profits during the year for the distribution of preferred stock dividends, it may resolve not to pay out the dividends and preferred stockholders have no rights to object. The Board of Directors shall propose a surplus earnings distribution in accordance with Article 32-1, Articles of Incorporation to be adopted by the annual general meeting. After the surplus earnings distribution is adopted, the distributable amount of preferred share and common shares shall be distributed to preferred shares first.

  • F. The preferred shares A issued are non-cumulative; that is, the undistributed dividends or shortages in dividends distributed shall not be accumulated and paid in subsequent years when profits are generated.

  • G. Participating privilege: The preferred shareholders A are not entitled to common shares' cash or share dividends derived from earnings or capital reserve.

  • H. Distribution of residual property: Preferred shareholders A have a higher claim to the Company's residual properties than common stockholders. Different types of preferred shares issued by the Company grant holders the same rights to claims, and preferred shareholders stay subordinate to general creditors. The amount preferred shareholders are entitled to is capped at the product of number of outstanding preferred shares at the time of distribution and issuance price.

  • I. Voting rights: Preferred shareholders A have neither voting nor election rights. However, they may be elected as Directors. They have voting rights in preferred shareholders' meetings or with respect to agendas associated with the rights and obligations of preferred shareholders in shareholders' meetings.

  • J. Conversion to ordinary shares: Preferred Share A is non-convertible.

  • K. Capital reserve issued at preferred share A premium shall not be used as capital during the issuance of the preferred share.

  • L. For cash offering of new shares, the preferred shareholders have the same preemptive rights as the common shareholders.

  • 140 -

(2) Capital surplus

Capital surplus

Issuance of shares
Common stock
Preferred stock
Subtotal
Treasury stock transactions
Bond conversion
Share of changes in net assets of associate and joint
ventures accounted for using the equity method
Adjustments for dividends subsidiaries received from
parent company
Other
Total		 As at
31 Dec. 2021 31 Dec. 2020
$1,023,509
1,195,878
$1,023,509

-
2,219,387
1,023,509
28,891
239,469
73,530
12,583
4,017
28,891

239,469

73,530

12,019

3,845
$2,577,877
$1,381,263

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(3) Treasury stock

As of 31 December 2021, 31 December 2020, the Company’s shares held by the subsidiary, Company TI FU INVESTMENT CO., LTD. was NT$5,996 thousand, respectively , and the number of treasury stock held by TI FU INVESTMENT CO., LTD. was 940 thousand , respectively. These shares held by Company TI FU INVESTMENT CO., LTD. were acquired for the purpose of financing before the amendment of the Company Act on 12 November 2001.

(4) Retained earnings and dividend policies

The Company’s Articles of Incorporation provide that the current net income, after deducting the previous years’ losses, shall appropriate 10% as legal reserve, and set aside or reverse special reserve based on the net deduction of shareholders’ equity that occurred in the current year and accumulated in the previous period according to the company laws and other regulations of R.O.C. If there is still more than the accumulated undistributed income in the previous year, If there is a balance, and the accumulated undistributed surplus is a shareholder dividend, the balance shall be distributed after the distribution of special dividends (not less than 50% of the available surplus for the current year, of which the cash dividend shall not be less than 10%). The board of directors shall draft a distribution proposal and submit it to the shareholders meeting for a resolution of distribution.

  • 141 -

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total paid-in capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to “other net deductions from shareholders” equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed from the special reserve.

The FSC on 31 March 2021 issued Order No. Financial-Supervisory-Securities-Corporate1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

The appropriations of earnings for 2021 were resolved at the board of directors’ meeting on 24 March 2022. The appropriations of earning for 2020 were resolved at the general shareholders’ meeting on 3 August 2021. The plans were as follows:


Legal reserve
Special reserve
Common stock -cash dividend
Preferred stock -cash dividend
(Note)		 Appropriation of earnings Appropriation of earnings Dividendper share(NT$) Dividendper share(NT$)
2021 2020 2021 2020
$20,992
53,990
156,449
23,671
$25,226

39,013

187,739

-

NT$0.50/
per share
NT$0.80/
per share
NT$0.60/
per share

Note: Calculated based on the number of days outstanding in 2021 and the interest rate of shares at 4%.

Please refer to Note 6.(21) for relevant information on estimation basis and recognized amount of employees compensations and remunerations to directors and supervisors.

  • 142 -

(5) Non-controlling interests:

Non-controlling interests:
Beginning balance
Profit (loss) attributable to non-controlling interests
Other comprehensive income attributable to non-
controlling interests, net of tax：
Remeasurements of defined benefit plans
Exchange differences resulting from translating the
financial statements of foreign operations
Unrealized gains or losses on financial assets
measured at fair value through other comprehensive
income
Distribute dividends to subsidiaries
Other
Ending balance		 2021 2020
$279,978
43,338
1,047
(3,173)
-
(20,000)
-		 $214,329
24,071
(614)
(6,445)
(523)
(10,000)
59,160
$301,190 $279,978

18. Operating revenue

Revenue from contracts with customers
Sale of goods
Other revenue
Total		 2021 2020
$15,631,209
945,406		 $13,733,967
712,241
$16,576,615 $14,446,208

Analysis of revenue from contracts with customers during the year is as follows:

(1) Disaggregation of revenue

For the year ended 31 December 2021：
Taiwan
Dept
Asian
Dept
Sale of goods
$5,451,586
$567,129
Other revenue
941,574
3,461
Total
$6,393,160
$570,590

Timing of revenue
recognition:

At a point in time
$6,393,160
$570,590		 For the year ended 31 December 2021：
Taiwan
Dept
Asian
Dept
Sale of goods
$5,451,586
$567,129
Other revenue
941,574
3,461
Total
$6,393,160
$570,590

Timing of revenue
recognition:

At a point in time
$6,393,160
$570,590		 For the year ended 31 December 2021：
Taiwan
Dept
Asian
Dept
Sale of goods
$5,451,586
$567,129
Other revenue
941,574
3,461
Total
$6,393,160
$570,590

Timing of revenue
recognition:

At a point in time
$6,393,160
$570,590		 U.S.
Dept		 European
Dept		 Total
$5,451,586
941,574		 $567,129
3,461		 $7,378,429
371		 $2,234,065
-		 $15,631,209
945,406
$6,393,160 $570,590 $7,378,800 $2,234,065 $16,576,615
$6,393,160

$570,590		 $7,378,800 $2,234,065 $16,576,615
  • 143 -

For the year ended 31 December 2020 ：

Sale of goods
Other revenue
Total
Timing of revenue
recognition:
At a point in time		 Taiwan
Dept		 Asian
Dept		 U.S.
Dept		 European
Dept		 Total
$4,902,412
710,570		 $404,336
1,170		 $6,445,609
501		 $1,981,610
-		 $13,733,967
712,241
$5,612,982 $405,506 $6,446,110 $1,981,610 $14,446,208
$5,612,982

$405,506		 $6,446,110 $1,981,610 $14,446,208

19. Expected credit losses / (gains)

Expected credit losses / (gains)
Operating Expense- Expected credit losses(gains)
Notes Receivables
Accounts Receivables
Total		 2021 2020
$(3)
4,917
$3

(20,053)
$4,914
$(20,050)

Please refer to Note 12 for more details on credit risk.

The credit risk for measured at amortized cost is assessed as low (the same as the assessment result in the beginning of the period). Therefore, the loss allowance is measured at an amount equal to 12-month expected credit losses. As the Group transacts with are financial institutions with good credit, no allowance for losses has been provided in this period.

The Group measures the loss allowance of its Trade Receivables (including note receivables and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Group’s loss allowance as at 31 December 2021 and 2020 is as follows:

The Group considers trade receivables that the credit loss is actually included in the impairment loss except for individual customers by counterparties’ credit rating, by geographical region and by industry sector and its loss allowance is measured by using provision matrix, details are as follow:

As at 31 December 2021


Gross carrying amount
Loss ratio
Lifetime expected credit
losses
Carrying amount
 Not yet due
(Note)		 Overdue Overdue Total
<=90
days		 91-180
days		 181-270
days		 >=271
days
$2,602,021
0%~1%
$204,275
10%~15%
$9,162
55%~60%
$409

100%
$210,893

100%		 $3,026,760

(246,724)
(7,533) (22,808) (5,081) (409) (210,893)
$2,594,488 $181,467
$4,081
$-
$-		 $2,780,036

As at 31 December 2020

  • 144 -
Gross carrying amount
Loss ratio
Lifetime expected credit
losses
Carrying amount
 Not yet due
(Note)		 Overdue Overdue Total
<=90
days		 91-180
days		 181-270
days		 >=271
days
$2,456,427
0%~1%
$109,364

5%~10%
$8,390
55%~60%
$5,507
80%~90%
$215,920

100%		 $2,795,608

(246,914)
(10,487) (10,936) (4,841) (4,730) (215,920)
$2,445,940
$98,428
$3,549
$777
$-		 $2,548,694

Note ： The Group’s note receivables are not overdue.

The movement in the provision for impairment of note receivables and accounts receivables during the year ended 2021 and 2020 is as follows:

during the year ended 2021 and 2020 is as follows:
1 Jan. 2021
Addition/(reversal) for the current period
Write off
31 Dec. 2021
1 Jan. 2020
Addition/(reversal) for the current period
Write off
31 Dec. 2020		 Note
receivables		 Accounts
receivables
$139
(3)
-		 $246,775

4,917
(5,104)
$136 $246,588
$136
3
-		 $286,259
(20,053)
(19,431)
$139 $246,775

20. Leases

  • (1) Group as a lessee

The Group leases various properties, including real estate such as land, buildings machinery and equipment, transportation equipment and other equipment. The lease terms range from 2 to 50 years.

The Group’s leases effect on the financial position, financial performance and cash flows are as follow:

A. Amounts recognized in the balance sheet

  • 145 -

(a) Right-of-use assets

The carrying amount of right-of-use assets

Land
Buildings
Machinery and equipment
Transportation equipment
Total		 As at As at
31 Dec. 2021
$1,208,889
874,291
-
1,906
$2,085,086		 31 Dec. 2020
$1,210,489
636,836
11,851
4,552
$1,863,728

For the year ended 31 December 2021 and 2020, the Group’s additions to right-of-use assets amounting to NT$418,676 thousand and NT$23,187 thousand.

(b) Lease liabilities

Current
Non-current
Total		 As at
31 Dec. 2021
$220,118
1,764,024
$1,984,142		 31 Dec. 2020
$188,161
1,587,850
$1,776,011

Please refer to Note 6.22(3) for the interest on lease liabilities recognized for the year ended 31 December 2021 and 2020 and refer to Note 12.(5) Liquidity Risk Management for the maturity analysis for lease liabilities as at 31 December 2021 and 2020.

B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Land
Buildings
Machinery and equipment
Transportation equipment
Other equipment
Total		 2021 2020
$2,714
171,678
337
2,646
-		 $2,684
155,602
911
2,657
288
$177,375 $162,142
  • 146 -

C. Income and costs relating to leasing activities

The expenses relating to short-term leases
The expenses relating to leases of low-value assets
(Not including the expenses relating to short-term
leases of low-value assets)		 2021 2020
$1,852
1,416		 $2,912
1,348

D. Cash outflow relating to leasing activities

For the year ended 31 December 2021 and 2020, the Group’s total cash outflows for leases amounting to NT$245,397 thousand and NT$234,979 thousand.

  1. For the year ended 31 December 2021 and 2020, the Group’s personnel, depreciation and amortization expenses are summarized as follows:
Function
Character
2021
2021
2021		 2020 2020 2020
Classified
as operating
costs
Classified
as operating
expenses
Total		 Classified
as operating
costs
Classified
as operating
expenses
Total
Employee
benefits expense
Salaries $860,328
$784,175		 $1,644,503
$790,966
$816,754		 $1,607,720
Insurances 93,945
77,782
171,727
83,145
52,324
135,469
Pensions 35,804
32,840
68,644
30,555
40,573
71,128
Other
personnel
expenses		 44,216
25,046
69,262
40,867
25,441
66,308
Depreciations 1,311,554
316,262
1,627,816
1,327,092
313,366
1,640,458
Amortization 16,118
26,044
42,162
15,232
33,008
48,240

According to the Articles of Incorporation, 1% of profit of the current year is distributable as employees’ compensation and no higher than 3% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the Board of Directors’ resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

  • 147 -

Based on the profit level, the Company estimated NT$12,000 thousand employees’ compensation and NT$5,200 thousand remuneration to directors and supervisors as salaries expenses. A resolution was approved at a Board of Directors meeting held on 24 March 2022 to distribute NT$ 12,000 thousand and NT$5,200 thousand in cash as employee’s compensation and remuneration to directors and supervisors, respectively.

There is no significant difference between the actual employee bonuses and remuneration to directors and supervisors distributed from the 2020 earnings and the estimated amount in the financial statements for the year ended 2020.

22. Non-operating income and expenses

  • (1) Other income
Other income
Rent income
Interest income
Dividend income
Government subsidy income
Other income-other
Total		 2021 2020
$3,905
3,503
2,761
39,311
51,378		 $4,447
4,460
1,047
131,867
74,608
$100,858 $216,429
  • (2) Other gains and losses
Losses (Gains) on disposal of property, plant and
equipment
Foreign exchange (losses) gains, net
Reversal (Loss) of Impairment
Gains (losses) on financial assets or liabilities at fair
value through profit or loss
Other losses
Total		 2021 2020
$2,366
(151,655)
-
19,604
(6,485)		 $(1,504)

(55,778)
49,399
(1,387)
(23,677)
$(136,170) $(32,947)

(3) Finance costs

Interest on borrowings from bank
Interest on lease liabilities
Total		 2021 2020
$(124,785)
(46,332)
$(171,117)
$(90,609)
(45,245)
$(135,854)
  • 148 -

23. Components of other comprehensive income (loss)

Year ended Dec. 31, 2021
Items that will not be reclassified subsequently to
profit or loss:
Remeasurements of defined benefit pension plans
Unrealized gains from equity instruments
investments measured at fair value through other
comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
operations
Share of other comprehensive income (loss) of
associates and joint ventures accounted for using
the equity method
Total
Year ended Dec. 31, 2020
Items that will not be reclassified subsequently to
profit or loss:
Remeasurements of defined benefit pension plans
Unrealized gains from equity instruments
investments measured at fair value through other
comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
operations
Share of other comprehensive income of
associates and joint ventures accounted for using
the equity method
Total		 Arising
during
theperiod		 Income tax
profit
(expense)		 Net of tax
$21,269
(2,740)
(81,080)
14,698
$(4,254)
-
15,581
(2,939)
$17,015

(2,740)

(65,499)
11,759
$(47,853) $8,388
$(39,465)
Arising
during
theperiod		 Income tax
profit
(expense)		 Net of tax
$(13,716)
49,953
(107,480)
(10,827)
$2,743
-
20,207
2,166
$(10,973)
49,953
(87,273)
(8,661)
$(82,070) $25,116
$(56,954)
  • 149 -

24. Income Tax

The major components of income tax expense (income) for 2021 and 2020 are as follows:

Income tax recorded in profit or loss
2021
Current income tax expense (benefit):
Current income tax charge
$72,206
Adjustments in respect of current income tax of prior
Periods
21,538
Deferred tax expense (income):
Deferred tax expense (income) related to origination and
reversal of temporary differences
(18,077)
Deferred income tax related to recognition and
derecognition of tax losses and unused tax credits
16,228
Other components of deferred tax expense (income)
917
Total income tax expense (income)
$92,812
Income tax relating to components of other comprehensive income
2021
Deferred tax expense (income):
Exchange differences on translation of foreign operations
$(15,581)
Remeasurements of the defined benefit plan
4,254
Share of other comprehensive income(loss) of associates
and joint ventures accounted for using the equity method
2,939
Income tax relating to components of other comprehensive
income
$(8,388)		 2021 2020
$72,206
21,538
(18,077)
16,228
917		 $102,897
(22,182)
49,624
(11,571)
2,446
$92,812 $121,214
2020

Deferred tax expense (income):
Exchange differences on translation of foreign operations
Remeasurements of the defined benefit plan
Share of other comprehensive income(loss) of associates
and joint ventures accounted for using the equity method
Income tax relating to components of other comprehensive
income

$(15,581)
4,254

2,939
$(20,207)
(2,743)
(2,166)
$(8,388) $(25,116)

A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rate is as follows:

Areconciliation between tax expense and the product
applicable tax rate is as follows:		 of accounting pro fit multiplied by
Accounting profit before tax from continuing operations
Tax at the domestic rates applicable to profits in the country
concerned
Tax effect of revenues exempt from taxation
Tax effect of expenses not deductible for tax purposes
Tax effect of deferred tax assets/liabilities
Adjustments in respect of current income tax of prior
periods
Total income tax expenses recorded in profit or loss		 2021 2020
$329,421 $407,901

$128,520
(34,081)
195
(23,360)
21,538		 $161,246
(34,721)
1,233
15,638
(22,182)
$92,812 $121,214
  • 150 -

Significant components of deferred income tax assets and liabilities are as follows:

For the year ended December 31, 2021

Temporary differences
Unrealized exchange losses (gains)
Allowance for doubtful debts
Allowance for inventory valuation losses
Exchange differences on translation of
foreign operations
Financial assets at fair value through profit or
loss
Unrealized profits or losses on transactions
with associates
Reserve for land value increment tax
Compensated absences provisions
Net defined benefit liabilities, non-current
Depreciation difference for tax purpose
Impairment on property, plant and equipment
Inventories difference for tax purpose
Impairment loss of assets
Other
Unused tax losses
Deferred income tax (expenses)
Deferred tax assets and liabilities net
As presented on the financial statement:
Deferred tax assets
Deferred tax liabilities		 As of
1 Jan. 2021
Recognized
in income
Recognized in
other
comprehensive
income
Exchange
differences
As of
31 Dec.
2021
$3,867
43,166
34,307
98,698

3,404
91,421
(38,717)
11,007
54,141
(14,369)
6,501
43,084
2,598
29,192
67,726
$3,351

651

14,072

-

(2,896)

6,477

-

259

(6,233)

4,046

(301)

5,516

(2,598)

(11,308)

(9,187)
$-

-

-

12,642

-

-

-

-

(4,254)

-

-

-

-

-
-		 $-
(30)
(166)
-
-
-
-
(33)
-
248
-
(597)
-
(410)
-
$7,218

43,787

48,213

111,340

508

97,898

(38,717)

11,233

43,654

(10,075)

6,200

48,003

-

17,474

58,539
$436,026 $1,849
$8,388		 $(988) $445,275



$492,841 $497,544
$(56,815) $(52,269)
  • 151 -

For the year ended December 31, 2020

Temporary differences
Unrealized exchange losses (gains)
Allowance for doubtful debts
Allowance for inventory valuation losses
Exchange differences on translation of
foreign operations
Financial assets at fair value through profit or
loss
Unrealized profits or losses on transactions
with associates
Reserve for land value increment tax
Compensated absences provisions
Net defined benefit liabilities, non-current
Depreciation difference for tax purpose
Impairment on property, plant and equipment
Inventories difference for tax purpose
Impairment loss of assets
Other
Unused tax losses
Deferred income tax (expenses)
Deferred tax assets and liabilities net
As presented on the financial statement:
Deferred tax assets
Deferred tax liabilities		 As of
1 Jan. 2020
Recognized
in income
Recognized in
other
comprehensive
income
Exchange
differences
As of
31 Dec.
2020
$17,324
52,795
30,074
76,325

600
94,469
(38,717)
10,341
57,066
7,547
16,761
39,781
2,598
29,455
56,155		 $(13,457)

(9,500)

4,809

-

2,804

(3,048)

-

827

(5,668)

(23,528)

(10,260)

5,795

-

1,602

11,571
$-

-

-

22,373

-

-

-

-

2,743

-

-

-

-

-

-		 $-
(129)
(576)
-
-
-
-
(161)
-
1,612
-
(2,492)
-
(1,865)
-
$3,867

43,166

34,307

98,698

3,404

91,421

(38,717)

11,007

54,141

(14,369)

6,501

43,084

2,598

29,192

67,726

$452,574		 $(38,053) $25,116 $(3,611) $436,026



$517,419 $492,841
$(64,845) $(56,815)
  • 152 -

The following table contains information of the unused tax losses of the Group:

Entity
Year
Tax losses for
theperiod		 Unused tax losses as at Expirationyear
31 Dec. 2021 31 Dec. 2020
TYC
2020
JUOKU
2017
2018
2019
2020
$220,069

169,608

68,571

13,876

5,808		 $217,069
134,404
68,571
13,876
5,808		 $256,006
169,608
68,571
20,876
5,808		 2030
2027
2028
2029
2030
$439,728 $520,869

Unrecognized deferred tax assets

As of 31 December 2021 and 2020, deferred tax assets have not been recognized in respect of unused tax losses, unused tax credits and deductible temporary differences amounting to NT$29,407 thousand and NT$36,448 thousand, respectively, as the future taxable profit may not be available.

The assessment of income tax returns

As of 31 December 2021, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

As of 31 December 2021, the assessment of the income tax returns
subsidiaries is as follows:		 of the Company and its
The Company
Subsidiary－JUOKU TECHNOLOGY
Subsidiary－DBM
Subsidiary－TI YUAN
Subsidiary－TI FU
Subsidiary－TAMAU MANAGEMENT		 The assessment of
income tax returns
2018
2019
2019
2019
2019
2019
  • 153 -

25. Earnings per share

Basic earnings per share amounts are calculated by dividing the net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

(1) Basic earnings per share
Profit attributable to ordinary equity holders of the Company
(in thousand NT$)
Weighted average number of ordinary shares outstanding for
basic earnings per share (in thousands)
Basic earnings per share (NT$)
(2) Diluted earnings per share
Profit attributable to ordinary equity holders of the Company
(in thousand NT$)
Weighted average number of ordinary shares outstanding for
basic earnings per share (in thousands)
Effect of dilution:
Employee bonus－stock (in thousands)
Weighted average number of ordinary shares outstanding
after dilution (in thousands)
Diluted earnings per share (NT$)		 2021 2020
$193,271
$262,616
311,958
311,958
$0.62
$0.84
2021 2020
$193,271
$262,616
311,958
759
311,958

1,064
312,717
313,022
$0.62
$0.84

During the reporting date and the date the financial statement was prepared, no other transactions affected the common shares and dilutive potential ordinary shares.

  • 154 -

VII. RELATED PARTIES TRANSACTIONS

Information of the related parties that had transactions with the Group during the financial reporting period is as follow:

Name and nature of relationship of the related parties

Name of the relatedparties

FORTOP INDUSTRIAL CO., LTD.
BRITEVIEW AUTOMOTIVE LIGHTING CO.,
LTD.
I YUAN PRECISION INDUSTRIAL CO., LTD.
TAYIH KENMOS AUTO PARTS CO., LTD.
JNS AUTO PARTS LIMITED
VARROC TYC AUTO LAMPS CO., LTD.
TA YIH INDUSTRIAL CO., LTD.
HANGZHOU SUNNYTECH CO., LTD
PT ASTRA JUOKU INDONESIA
BUILDUP INTERNATIONAL TRADING CO.,
LTD.
KUNSHAN ATECH AUTOPARTS
MANUFACTURING CO., LTD.
DBM REFLEX ENTERPRISES INC.		 Nature of relationshipof the relatedparties
Substantive related party
The Group is director of the Company

Associate
Substantive related party
Associate
Joint Venture
Substantive related party
Associate
Joint Venture
Substantive related party
Associate
Substantive related party

Significant related party transactions

(1) Sales

Sales
Joint Venture
VARROC TYC AUTO LAMPS CO., LTD.
PT ASTRA JUOKU INDONESIA
Subtotal
Other related party
BRITEVIEW AUTOMOTIVE LIGHTING CO.,
LTD.
TA YIH INDUSTRIAL CO., LTD.
FORTOP INDUSTRIAL CO., LTD.
Other
Subtotal
Total		 2021
$46,526
132,162
178,688
50,048
13,281
22,747
7,151
93,227
$271,915		 2020
$29,358
27,992
57,350
51,303
29,250
20,985
7,054
108,592
$165,942

The Group sold products to some related parties who were single manufacturers, therefore the price could not be compared. The payment term was T/T 150 days. The sales price of some related parties is equivalent to that of non-related parties, and the terms of collection are every other month, payable between 1 to 3 months, which is equivalent to ordinary transactions.

  • 155 -

(2) Purchases

Joint Venture
Associates
I YUAN PRECISION INDUSTRIAL CO., LTD.
Other
Subtotal
Other related party
FORTOP INDUSTRIAL CO., LTD.
BUILDUP INTERNATIONAL TRADING CO.,
LTD.
Other
Subtotal
Total		 2021 2020
$1,823 $1,132
506,930
12,940		 541,080
22,503
519,870 563,583
919,027
283,806
44,159		 743,844
207,929
27,774
1,246,992 979,547
$1,768,685 $1,544,262

The Group purchases goods from some related parties. The bargaining method for purchases is the same as that of non-related parties. The payment terms are the next month of the purchase, payable between 1 to 3 months, which is equivalent to ordinary transactions. The

purchase price and payment terms of other related parties are equivalent to those of ordinary transactions.

(3) Notes receivables - related parties

Joint Venture
Other related party
BRITEVIEW AUTOMOTIVE LIGHTING CO.,
LTD.
FORTOP INDUSTRIAL CO., LTD.
Subtotal
Total
Less: allowance for doubtful accounts
Net		 31 Dec. 2021 31 Dec. 2020
$8,393 $1,501
10,494
1,469		 11,716
401
11,963 12,117
20,356
(55)		 13,618
(57)
$20,301 $13,561
  • 156 -

(4) Accounts receivables - related parties

Joint Venture
PT ASTRA JUOKU INDONESIA
VARROC TYC AUTO LAMPS CO., LTD.
Subtotal
Other related party
BRITEVIEW AUTOMOTIVE LIGHTING CO.,
LTD.
TA YIH INDUSTRIAL CO., LTD.
Other
Subtotal
Total
Less: allowance for doubtful accounts
Net		 31 Dec. 2021 31 Dec. 2020
$60,246
23,213		 $17,916
26,769
83,459 44,685
9,873
5,848
1,774		 8,746
7,491
2,507
17,495 18,744
100,954
(3,980)		 63,429
(1,467)
$96,974 $61,962

(5) Other receivables - related parties

Joint Venture
Associates
Other related party
Total		 31 Dec. 2021 31 Dec. 2020
$1,802 $4,428
- 12
919 142
$2,721 $4,582

(6) Accounts payables - related parties

Joint Venture
Associates
I YUAN PRECISION INDUSTRIAL CO., LTD.
Other
Subtotal
Other related party
FORTOP INDUSTRIAL CO., LTD.
Other
Subtotal
Total		 31 Dec. 2021 31 Dec. 2020
$1,390 $121
185,744
2,341		 264,861
2,170
188,085 267,031
305,983
58,332		 302,845
40,665
364,315 343,510
$553,790 $610,662
  • 157 -

(7) Key management personnel compensation

Short-term employee benefits
Post-employment benefits
Total		 2021 2020
$50,352
728		 $47,002
670
$51,080 $47,672

VIII. ASSETS PLEDGED AS SECURITY

Item
 Amount Amount
Purpose ofpledge
31 Dec. 2021 31 Dec. 2020
Property, plant and equipment-
Land
Property, plant and equipment-
Buildings
Refundable deposits
Inventories
Accounts receivable
Total		 $356,194
840,597
29,472
484,537
626,897
$356,797

874,343

29,472

1,371,621

1,021,166		 Bank borrowings
Bank borrowings
Collateral for land lease

Bank borrowings

Bank borrowings
$2,337,697
$3,653,399
  • IX. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENT

As of 31 December 2021, the Company was involved in the following activities that were not shown in the financial statements:

  1. In order to assist the subsidiary T.I.T. INTERNATIONAL CO., LTD. in obtaining loan credit line, the Company issued a Stand-by L/C USD 2,000 thousand as a guarantee.

  2. According to “The Regulations Governing the Establishment and Management of Bonded Warehouses”, the Company paid guarantee payable of bonded warehouse registration in the amount of NT$ 8,000 thousand.

  3. On 8 July 2020, the Court of California in the United States of America dismissed all claims brought in the United States by Pilot Inc.(Pilot) in relation to commercial disputes including distribution contracts between Pilot and the Company and its subsidiary GENERA and its employees. Pilot again submitted the same dispute to the Singapore International Arbitration Centre for arbitration. The Company's appointed counsel, based on the available information, assessed that Pilot's claim for damages was not supported by relevant evidence and was not legally justified. As of the financial report adoption date of 24 March, 2022, it is not possible to assess the impact of the lawsuit on the Company's financials and business based on the information currently available.

  4. 158 -

  5. In June 2021, the Company was informed that HYUNDAI MOTOR COMPANY and KIA CORPORATION filed a patent infringement lawsuit in the Court of California in the United States, claiming that the Company and its subsidiary GENERA infringed its lamp patents nos. 478 and 931. Having been made aware of the content of the action, the Company, together with its subsidiary GENERA, has appointed lawyers to carry out the proceedings in the interests of the Company. As of the financial report adoption date of 24 March, 2022, it is not possible to assess the impact of the lawsuit on the Company's financials and business based on the information currently available.

X. SIGNIFICANT DISASTER LOSS

None.

XI. SIGNIFICANT SUBSEQUENT EVENTS

None.

XII. OTHER

  1. Categories of financial instruments

Financial Assets

Categories of financial instruments
Financial Assets
Financial assets at fair value through profit or loss：
Mandatorily measured at fair value through profit or
loss
Financial assets at fair value through other
comprehensive income
Financial assets measured at amortized cost:
Cash and cash equivalents (excludes cash on hand)
Financial assets measured at amortized cost
Notes receivables (related parties included)
Accounts receivables (related parties included)
Other receivable
Refundable deposits
Subtotal
Total		 31 Dec. 2021 31 Dec. 2020
$1,034
$-
228,426
191,736
893,271
168,453
44,261
2,735,775
160,068
54,376
984,588

78,676

35,977

2,512,717

115,455

50,887
4,056,204
3,778,300
$4,285,664
$3,970,036
  • 159 -

Financial Liabilities

Financial Liabilities
Financial liabilities measured at amortized cost:
Short-term borrowings and short-term notes and bills
payable
Payables
Long-term borrowings (current portion included)
Other long-term borrowings
Lease liabilities
Guarantee deposit (under the account of other non-
current liabilities-others)
Subtotal
Financial liabilities at fair value through profit or loss:
Held for trading
Total		 31 Dec. 2021 31 Dec. 2020

$2,549,777
4,172,398
6,368,413
-
1,984,142
44,413
$1,229,994

4,201,746

6,008,299

1,999,439

1,776,011

43,341
15,119,143
15,258,830
3,577
17,020
$15,122,720
$15,275,850

2. Financial risk management objectives and policies

The Group’s risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Group identifies measures and manages the aforementioned risks based on policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant financial activities, due approval process by the board of directors and audit committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

3. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise currency risk, interest rate risk, and other price risk (such as equity instruments related risks).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

  • 160 -

Foreign currency risk

The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense is denominated in a different currency from the Group’s functional currency) and the Group’s net investments in foreign subsidiaries.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group’s profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Group’s foreign currency risk is mainly affected by USD and EUR. Sensitivity analysis is as follows:

  • a. When NTD strengthens/weakens against USD by 1%, the profit for the years ended 31 December 2021 and 2020 decreases/increases by NT$1,140 thousand and NT$47 thousand, respectively.

  • b. When NTD strengthens/weakens against EUR by 1%, the profit for the years ended 31 December 2021 and 2020 decreases/increases by NT$4,725 thousand and NT$4,564 thousand, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s debt instrument investments at variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit for the years ended 31 December 2021 and 2020 to increase/decrease by NT$7,055 thousand and NT$5,999 thousand, respectively.

  • 161 -

Equity price risk

The Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s listed and unlisted equity securities are classified under held for trading financial assets or available-forsale financial assets, while unlisted equity securities are classified as available-for-sale. The Group manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s board of directors reviews and approves all equity investment decisions.

At the reporting date, a change of 10% in the price of the listed companies stocks classified as equity instruments investments measured at fair value through other comprehensive income could have an impact of NT$156 thousand and NT$110 thousand on the equity attributable to the Group for years ended 31 December 2021 and 2020, respectively.

Please refer to Note 12(9) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

  1. Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Credit limits are established for all customers based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group’s internal rating criteria etc. Certain customer’s credit risk will also be managed by taking credit enhancement procedures, such as requesting for prepayment or insurance.

As of 31 December 2021 and 2020, accounts receivables from top ten customers represented 20.59% and 24.01% of the total trade receivables of the Group, respectively. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group’s treasury in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counterparties.

  • 162 -

  • Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, bank borrowings and finance leases. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial instruments

31 Dec. 2021
Borrowings
Short-term notes
and bills payable
Payables
Lease
liabilities(Note)
31 Dec. 2020
Borrowings
Payables
Lease
liabilities(Note)		 Less than
1year		 2 to 3
years		 3 to 4
years		 > 5years Total
$2,079,962
640,000
4,172,398
259,693
$1,477,946
4,201,746
238,121
$4,796,324

-

-

481,818

$6,202,065

-
397,406
$1,077,071

-

-

445,026

$989,288

-
322,715
$537,132

-

-

1,005,743

$786,366

-
1,041,846
$8,490,489

640,000

4,172,398

2,192,280

$9,455,665

4,201,746
2,000,088

Note ： Information about the maturities of lease liabilities is provided in the table below:

below:
31 Dec. 2021
31 Dec. 2020		 Maturities
Less than 5years
5 to 10years		 10 to 15years Total
$1,186,537
958,242		 $444,153
438,370		 $561,590
603,476		 $2,192,280
2,000,088
  • 163 -

6. Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities as at 31 December 2021 and 2020:

1 Jan. 2021
Cash flows
Non-cash change
Foreign exchange
movement
31 Dec. 2021
1 Jan. 2020
Cash flows
Non-cash change
Foreign exchange
movement
31 Dec. 2020		 Short-term
borrowings
Short-term
notes and
billspayable		 Long-term
Borrowings
(Current
portion
included)		 Other
borrowings		 Lease
liabilities		 Total liabilities
from financing
activities
$1,229,994
694,417
-
(14,442)
$-

639,808

-
-		 $6,008,299

361,768

-
(1,654)		 $1,999,439
(1,999,439)

-
-		 $1,776,011

(196,884)

418,300

(13,285)		 $11,013,743

(500,330)

418,300
(29,381)
$1,909,969 $639,808 $6,368,413
$-		 $1,984,142 $10,902,332
Short-term
borrowings
Short-term
notes and
billspayable		 Long-term
Borrowings
(Current
portion
included)		 Other
borrowings		 Lease
liabilities		 Total liabilities
from financing
activities
$2,124,718
(835,325)
-
(59,399)		 $589,354

(589,354)

-
-		 $5,334,394

678,619

-

(4,714)		 $1,998,616

823

-
-		 $1,981,248

(184,387)

20,624

(41,474)		 $12,028,330

(929,624)

20,624
(105,587)
$1,229,994
$-		 $6,008,299 $1,999,439 $1,776,011 $11,013,743

7. Fair value of financial instruments

  • (1) The methods and assumptions applied in determining the fair value of financial instruments:

  • Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

  • A. The carrying amount of cash and cash equivalents, trade receivables, refundable deposits, accounts payable, guarantee deposit and other current liabilities approximate their fair value due to their short maturities.

  • B. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities etc.) at the reporting date.

  • 164 -

    • C. Fair value of equity instruments without market quotations (including private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities)

    • D. Fair value of debt instruments without market quotations, bank loans, short-term notes and bills payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

  • (2) Fair value of financial instruments measured at amortized cost

    • The book value of financial assets and liabilities at fair value through profit or loss approaches fair value.

  • (3) Fair value measurement hierarchy for financial instruments Please refer to Note 12.(9) for fair value measurement hierarchy for financial instruments of the Group.

  • Derivative financial instruments

The Group’s derivative financial instruments include forward currency contracts and embedded derivatives. The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as at 31 December 2021 and 2020 is as follows:

Forward currency contracts

The Group entered into forward currency contracts to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to forward currency contracts:

Items(bycontract)
As at 31 Dec. 2021
Forward currency contract

Forward currency contract

As at 31 Dec. 2020
Forward currency contract
 Notional Amount
Sell foreign currency USD 6,000
thousand

Sell foreign currency EUR 2,000
thousand

Sell foreign currency EUR 1,000
thousand
 Contract Period
From 14 Dec. 2021 to 24 Jan.
2022
From 16 Dec. 2021 to 14 Feb.
2022
From 30 Nov. 2020 to 25 Feb.
2021
  • 165 -

With regard to the forward foreign exchange contracts, as they have been entered into to hedge the foreign currency risk of net assets or net liabilities, and there will be corresponding cash inflow or outflows upon maturity and the Group has sufficient operating funds, the cash flow risk is insignificant.

Cross Currency Swaps Contract

Cross currency swaps contract is used to avoid exchange rate and interest rate risks, but these contracts were not designated as hedging instruments. The unexpired cross currency swaps contract that the Group did not apply hedging accounting are as follows:

31 December 2021 ：

Contract amount
Swap out USD 6,000 thousand
Exchange into NT$ 168,000
thousand
Contract amount

Swap out USD 3,000 thousand
Exchange into NT$ 84,600
thousand
31 December 2020：
Contract amount
Swap out USD 4,000 thousand
Exchange into NT$ 119,840
thousand
Contract amount
Swap out USD 2,000 thousand
Exchange into NT$ 59,856
thousand
Contract amount
Swap out USD 3,000 thousand
Exchange into NT$ 90,645
thousand		 Contractperiod
From 17 Apr.
2020 to 17 Apr.
2022
Contractperiod
From 17 Apr.
2020 to 17 Apr.
2022
Contractperiod
From 17 Apr.
2019 to 17 Apr.
2021
Contractperiod
From 29 Nov.
2019 to 29 Nov.
2021
Contractperiod
From 3 Jun.
2019 to 3 Jun.
2030		 Interest rate
paid
-
0.66%
Interest rate
paid
-
0.66%

Interest rate
paid
-
0.80%
Interest rate
paid
-
0.74%
Interest rate
paid
-
0.50%		 Charge
interest rate

0.61%

-
Charge
interest rate

0.61%

-
Charge
interest rate

0.81%

-
Charge
interest rate

0.85%

-
Charge
interest rate

0.75%

-
During the
exchange
From 18 Jan.
2021 to 18 Jan.
2022

During the
exchange
From 26 Mar.
2021 to 28 Mar.
2022


During the
exchange
From 10 Mar.
2020 to 10 Mar.
2021


During the
exchange
From 13 Mar.
2020 to 4 Mar.
2021


During the
exchange
From 20 Mar.
2020 to 17 Mar.
2021
  • 166 -

The aforementioned derivatives transaction counterparties are well-known domestic and foreign banks with good credit, so the credit risk is not high.

9. Fair value measurement hierarchy

  • (a) Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

  • Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

  • Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

  • Level 3 - Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

  • (b) Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value on a recurring basis is as follows:

31 Dec. 2021
Financial assets at fair value:
Financial assets at fair value through
profit or loss
Forward currency contract
Financial assets at fair value through
other comprehensive income
Equity instrument measured at fair
value through other comprehensive
income
Financial liabilities at fair value:
Financial liabilities at fair value
through profit or loss
Cross currency swaps contract		 Level 1 Level 2
Level 3		 Total
$-

108,655
-
$1,034
-
3,577
$-
119,771
-
$1,034
228,426
3,577
  • 167 -

31 Dec. 2020

31 Dec. 2020
Financial assets at fair value:
Financial assets at fair value through
other comprehensive income
Equity instrument measured at fair
value through other comprehensive
income
Financial liabilities at fair value:
Financial liabilities at fair value
through profit or loss
Forward currency contracts
Cross currency swaps contract		 Level 1 Level 2
Level 3		 Total

$109,721
-
-		 $-
917
16,103		 $82,015
-
-		 $191,736
917
16,103

Transfers between Level 1 and Level 2 during the period

During the year ended 31 December 2021 and 2020, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

movements during the period is as follows:
Beginning balances
Total gains and losses recognized:
Amount recognized in OCI(presented in
“Unrealized gains (losses) from equity
instruments investments measured at fair value
through other comprehensive income)
Acquired in the period
Proceeds from capital reduction in the period
Ending balances		 At fair value through
other comprehensive
income - stocks

2021
$82,015

7,039
50,000

(19,283)
$119,771		 At fair value through
other comprehensive
income - stocks
2020
$73,572
8,443
-
-
$82,015

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

  • 168 -

As at 31 December 2021

Valuation
techniques
Significant
unobservable inputs
Financial assets:
Financial assets
at fair value
through other
comprehensive
income
Stocks
Market
approach
discount for lack of
marketability
As at 31 December 2020
Valuation
techniques
Significant
unobservable inputs
Financial
assets:
Financial
assets at fair
value through
other
comprehensive
income
Stocks
Market
approach
discount for lack of
marketability		 Valuation
techniques
Significant
unobservable inputs
Financial assets:
Financial assets
at fair value
through other
comprehensive
income
Stocks
Market
approach
discount for lack of
marketability
As at 31 December 2020
Valuation
techniques
Significant
unobservable inputs
Financial
assets:
Financial
assets at fair
value through
other
comprehensive
income
Stocks
Market
approach
discount for lack of
marketability		 Valuation
techniques
Significant
unobservable inputs
Quantitative
information
Relationship between
inputs and fair value		 Sensitivity of the input to
fair value
30%

Quantitative
information		 The higher the discount
for lack of marketability,
the lower the fair value
of the stocks

Relationship between
inputs and fair value		 10% increase (decrease) in
the discount for lack of
marketability would result
in increase (decrease) in the
Group’s profit or loss by
NT$12,958 thousand
Sensitivity of the input to
fair value

Market
approach		 discount for lack of
marketability		 30% The higher the discount
for lack of marketability,
the lower the fair value
of the stocks		 10% increase (decrease) in
the discount for lack of
marketability would result
in increase (decrease) in the
Group’s profit or loss by
NT$8,894 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value

hierarchy

The Group’s Finance Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies at each reporting date.

  • 169 -

  • Significant assets and liabilities denominated in foreign currencies Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

is listed below:
Financial Assets 31 Dec. 2021
Foreign
Currency
$94,616
14,271
25,409
96,496
1,225
25,624		 Exchange
27.687853
31.403533
4.350654
27.687853
31.403533
4.350654
31 Dec. 2020		 NTD
$2,619,714
448,160
110,546

2,671,767

38,469

111,481
Monetary items:
USD
EUR
CNY
Financial Liabilities
Monetary items:
USD
EUR
CNY
Financial Assets
Foreign
Currency
$81,686
14,129
32,833
81,851
1,875
25,439		 Exchange
28.077249
34.433169
4.294707
28.077249
34.433169
4.294707		 NTD
$2,293,518
486,506
141,008
2,298,151
64,562
109,253
Monetary items:
USD
EUR
CNY
Financial Liabilities
Monetary items:
USD
EUR
CNY

The Group has various functional currencies, no information about the foreign exchange gains or losses by a specific currency is available. For the years ended 31 December 2021 and 2020, the foreign exchange gains or losses on monetary financial assets and financial liabilities were NT$151,655 thousand, NT$55,778 thousand, respectively.

The above information is disclosed based on the carrying amounts of the foreign currencies (after conversion to the functional currency).

  • 170 -

11. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

XIII.ADDITIONAL DISCLOSURES

  • (1) The following are additional disclosures for the Company and its affiliates as required by the R.O.C. Securities and Futures Bureau:

  • (a) Financing provided to others for the year ended 31 December 2021: Please refer to Attachment 2.

  • (b) Endorsement/Guarantee provided to others for the year ended 31 December 2021: Please refer to Attachment 3.

  • (c) Securities held as of December 31, 2021 (excluding subsidiaries, associates and joint venture): Please refer to Attachment 4.

  • (d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2021: None.

  • (e) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2021: None.

  • (f) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2021: None.

  • (g) Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock f for the year ended 31 December 2021: Please refer to Attachment 5.

  • (h) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of December 31, 2021: Please refer to Attachment 6.

  • (i) Names, locations and related information of investees as of December 31, 2020(excluding investment in Mainland China): Please refer to Attachment 7.

  • (j) Financial instruments and derivative transactions: Please refer to Note6(2), Note6(13) and Note12(8).

  • (k) The business relationship, significant transactions and amounts between parent company and subsidiaries: Please refer to Attachment 1.

  • 171 -

(2) Investment in Mainland China:

  • (a) Investee company name, main businesses and products, total amount of capital, method of investment, accumulated inflow and outflow of investments from Taiwan, net income (loss) of investee company, percentage of ownership, investment income (loss), carrying amount of investments, cumulated inward remittance of earnings and limits on investment in Mainland China: Please refer to Attachment 8.

  • (b) Directly or indirectly significant transactions through third regions with the investees in Mainland China, including price, payment terms, unrealized gain or loss, and other events with significant effects on the operating results and financial condition: Please refer to Attachment 2, Attachment 3 and Attachment 8.

  • (3) Information on major shareholders: Please refer to Attachment 9.

XIV. SEGMENT INFORMATION

For management purposes, the Group is organized into business units based on its products and services and has four reportable segments as follows:

Taiwan Market: Responsible for all orders and production of lamps and molds in Taiwan. Asian Market: Responsible for all orders and sales of lamps and molds in Asia. U.S. Market: Responsible for the order and sales of all lighting products in the Americas. European Market: Responsible for the order and sales of all lighting products in Europe.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured based on accounting policies consistent with those in the consolidated financial statements. However income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.

1. Segment information about profit and loss.

2021 Taiwan
Market		 Asian
Market		 U.S.
Market		 European
Market		 Adjustments
and
eliminations
Total
Revenue
External customers
Inter-segment(Note)
Total revenue

Segment profit
$6,393,160

6,948,915
$570,590

492,481
$7,378,800

-
$2,234,065

-
$-

(7,441,396)		 $16,576,615
-
$13,342,075
$1,063,071
$7,378,800
$2,234,065		 $(7,441,396) $16,576,615
$446,180
$(20,217)		 $156,837
$54,014
$(307,393)		 $329,421
  • 172 -

Adjustments

Adjustments
2020 Taiwan
Market		 Asian
Market		 U.S.
Market		 European
Market		 and
eliminations
Total
Revenue
External customers
Inter-segment(Note)
Total revenue

Segment profit
$5,612,982

5,829,073
$405,506

476,539
$6,446,110

-
$1,981,610

-
$-

(6,305,612)		 $14,446,208
-
$11,442,055
$882,045
$6,446,110
$1,981,610		 $(6,305,612) $14,446,208
$456,487
$10,690
$312,565
$70,327
$(442,168)		 $407,901

Note: Inter-segment revenue are eliminated on consolidation and recorded under the “adjustment and elimination” column.

1. Geographic information:

  • A. From external client revenue: based on the country of the customer
Country
Taiwan
China
Netherlands
America
Other
Total		 2021
$1,112,259
403,521
2,261,440
7,699,221
5,100,174
$16,576,615		 2020
$1,138,291
307,498
2,007,306
6,717,146
4,275,967
$14,446,208

B. Non-current assets:

Country
Taiwan
China
Others
Total		 31 Dec. 2021
$9,497,737
765,270
1,156,555
$11,419,562		 31 Dec. 2020
$9,814,927
822,939
935,064
$11,572,930
  • 173 -

2. Product information:

Product
Automobile lights
General Merchandise
Models
Others
Total
Important client information:
Client A		 2021
$14,087,277
1,247,596
296,336
945,406
$16,576,615
2021
$1,722,790		 2020
$12,406,375
1,218,794
108,798
712,241
$14,446,208
2020
$1,741,506

  1. Important client information:

  2. 174 -

Attachment 1: Significant intercompany transactions between consolidated entities

No. (Note 1) Related-party Counter party Relationship with
the Company
(Note 2)		 Transactions Transactions Transactions Transactions
Account Amount Collection periods Percentage of consolidated operating
revenues or consolidated total assets(Note 3)
0 The Company JUOKU TECHNOLOGY 1 Purchase $305,392 credit on 90 days 1.84%
0 The Company JUOKU TECHNOLOGY 1 Accounts
payables		 123,573 credit on 90 days 0.51%
0 The Company JUOKU TECHNOLOGY 1 Mold
equipment		 41,773 60% advance prepaid,and the balance 40% will
be paid after acceptance		 0.17%
0 The Company JUOKU TECHNOLOGY 1 Sales 28,597
credit on 90 days		 0.17%
0 The Company DBM 1 Mold
equipment		 72,289 60% advance prepaid,and the balance 40% will
be paid after acceptance		 0.30%
0 The Company T.I.T. 1 Purchase 237,798
credit on 60 days		 1.43%
0 The Company T.I.T. 1 Accounts
payables		 68,181 credit on 60 days 0.28%
0 The Company T.I.T. 1 Sales 108,365 T/T150 days 0.65%
0 The Company T.I.T. 1 Accounts
receivables		 47,290 T/T150 days 0.20%
0 The Company EUROPE 1 Sales 1,909,486 T/T120 days 11.52%
0 The Company EUROPE 1 Accounts
receivables		 534,600 T/T120 days 2.22%
0 The Company TAMAO PRECISION 1 Accounts
payables		 35,051 credit on 90 days 0.15%
0 The Company TAMAO PRECISION 1 Mold
equipment		 271,431 60% advance prepaid,and the balance 40% will
be paid after acceptance		 1.13%
0 The Company GENERA 1 Sales 4,253,801
T/T135 days		 25.66%
0 The Company GENERA 1 Accounts
receivables		 1,988,403 T/T135 days 8.27%
0 The Company KUN SHAN TYC 1 Sales 171,673 T/T120 days 1.04%
0 The Company KUN SHAN TYC 1 Accounts
receivables		 194,146 T/T120 days 0.81%
0 The Company KUN SHAN TYC 1 Purchase 58,850 credit on 120 days 0.36%
0 The Company KUN SHAN TYC 1 Accounts
payables		 26,369 credit on 120 days 0.11%
1 SUPRA-ATOMIC KUN SHAN TYC 3 Other
receivables		 24,867
(USD900)		 Financing 0.10%

(Note 1)The Company and its subsidiaries are coded as follows:

  1. The Company is coded "0".

  2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

  3. (Note 2)Transactions are categorized as follows:

  4. The holding company to subsidiary.

  5. Subsidiary to holding company.

  6. Subsidiary to subsidiary.

  7. (Note 3)The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item's balance at period-end.

For profit or loss items, interim cumulative balances are used as basis.

  • (Note 4)The exchange rate of the USD to the NTD is 1: 27.63.

  • 175 -

Attachment 2: Financing provided to others

No.
(Note 1)		 Lender Counter-party Financial
statement
account		 Relate
d Party		 Maximum
balance for the
period
(Note 7)		 Ending
balance		 Actual
amount
provided		 Interest
rate		 Nature of
financing
(Note 4)		 Amount of sales to
(purchases from)
counter-party (Note 5)		 Reason for
short-term
financing
(Note 6)		 Allowance
for
doubtful
accounts		 Collateral Collateral Limit of financing
amount for individual
counter-party
(Note 2)		 Limit of total
financing
amount
(Note 3)		 Note
Item Value
1 SUPRA-ATOMIC KUN SHAN TYC Other
receivables		 Y $24,867
(USD 900)		 $24,867
(USD 900)		 $24,867
(USD 900)		 2.70% 2 $- Need for
operating		 $- - $- 1,369,401 $1,369,401 (Note 8)

(Note 1) The financial information of the parent company and its subsidiaries are coded as follows:

  • (1) The Company is coded "0".

  • (2) The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

  • (Note 2) Limit of financing amount for individual counterparty:

  • (1) Business contacts: limit of financing amount for individual counterparty shall not exceed 20% of the lender's net asste's value and the amount needed for operation. The amount of operation is the amount of business transaction in recent year between the lender and the counterparty.

  • (2) Necessary of need for operating：Limit of financing amount for individual counterparty shall not exceed 20% of the lender's net assets value as of the period.

  • (3) Individual financing between foreign companies of which subsidiaries directly and indirectly hold 100% voting shares is not subject to the limit of 20% of the lender's net assets value as of the period, but is limited to 100% of total assets.

  • (Note 3) Limit of total financing amount shall not exceed 40% of the subsidiary's net asset value.

  • (1) Individual financing between foreign companies of which subsidiaries directly and indirectly hold 100% voting shares is not subject to the limit of 40% of the lender's net asset of thef period, but is limited to 100% total assets.

  • (Note 4) The financing provided to others are coded as follows:

  • (1) Business contacts is coded "1".

  • (2) Short-term financing is coded "2".

  • (Note 5) If financing provided to others is coded "1" , the amount of business transactions should be filled in. The amount of operation is the amount of business transaction in recent year between lender and the counterparty.

(Note 6) If financing provided to others is coded "2". The reasons for the necessary loans and funds and the use of the loans and counterparty shall be specified, such as repayment, purchasing equipments, necesarry for operating, etc.

(Note 7) The balance of which is the maximum balance of financing provided to others in the current year.

  • (Note 8) The above transactions made between consolidated entities in the Group have been eliminated.

  • (Note 9) The exchange rate of the USD to the NTD is 1:27.63.

  • 176 -

Attachment 3: Endorsement/Guarantee provided to others

No.
(Note1)		 Endorsor/
Guarantor		 Receiving party Receiving party Limit of
guarantee/endorse
ment amount for
receiving party
(Note 3)		 Maximum
balance for the
period
(Note 5)		 Ending balance
(Note 6)		 Actual amount
provided
(Note7)		 Amount of
collateral
guarantee/
endorsement		 Percentage of
accumulated
guarantee amount
to net assets value
from the latest
financial statement		 Limit of total
guarantee/
endorsement
amount
(Note 4)		 Parent
company's
guarantee/
endorsement
amount to
subsidiaries		 Subsidiaries'
guarantee/
endorsement
amount to
parent
company		 Guarantee/
endorsement
amount to
company in
Mainland
China		 Note
Company name Releationship
(Note 2)
0 The Company KUN SHAN TYC (2) $1,577,951 $524,970
(USD 19,000)		 $524,970
(USD 19,000)		 $442,080
(USD 16,000)		 - 6.65% $3,155,902 Y N Y (Note 8)
x The Company T.I.T. (2) 1,577,951 138,150
(USD 5,000)		 138,150
(USD 5,000)		 138,150
(USD 5,000)		 - 1.75% 3,155,902 Y N N (Note 8)
0 The Company JUOKU
TECHNOLOGY		 (2) 1,577,951 900,000 - - - - 3,155,902 Y N N (Note 8)

  • (Note 1) The Company and its subsidiaries are coded as follows:

  • (1) The Company is coded "0".

  • (2) The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

  • (Note 2) According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, the receiving parties shall be disclosed as one of the following:

  • (1) A company with which it does business.

  • (2) A company in which the public company directly and indirectly holds more than 50% of the voting shares.

  • (3) A company that directly and indirectly holds more than 50 % of the voting shares in the public company.

  • (4) A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.

  • (5) A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

  • (6) A company that all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages.

  • (7) Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

  • (Note 3) Limit of guarantee/endorsement amount for receiving party is 20% of the net worth of the financial report reviewed by the certified public accountants as of 31 December 2021.

  • (Note 4) Limit of total guarantee/ endorsement amount is 40% of the net worth of the financial report reviewed by the certified public accountants as of 31 December 2021. (Note 5) The balance of which is the maximum balance of endorsement/guarantee provided to others in the current year.

  • (Note 6) The amount the Company and its subsidiaries approved through the board of directors for the endorsements for others. (Note 7) The actual amount drawn within endorsement balance by the endorsed company.

  • (Note 8) The above transactions made between consolidated entities in the Group have been eliminated.

  • (Note 9) The exchange rate of USD to NTD is 1:27.63.

  • 177 -

Attachment 4: Securities held as of 31 December 2021. (Excluding subsidiaries, associates and joint ventures)

Holding Company Type and name of securities(Note1) Relationship Financial statement account as of 31 December 2021 as of 31 December 2021 as of 31 December 2021 as of 31 December 2021 Note
Shares(per) Book value Percentage of
ownership
(%)		 Fair value
The Company Unlisted stock-FORTOP INDUSTRIAL
CO.,LTD		 Substantive related parties of the
company		 Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 391,722 $43,157 19.59% $43,157 No guarantee or
pledge
Unlisted stock-BRITEVIEW
AUTOMOTIVE LIGHTING CO.,LTD.		 The parent company is its corporate
director		 Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 360,000 13,327 18.00% 13,327 No guarantee or
pledge
Unlisted stock-WK Technology Fund IV
Ltd.		 None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 170,467 255 1.60% 255 No guarantee or
pledge
Unlisted stock-WK Technology Fund Ltd. None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 4,219 41 0.42% 41 No guarantee or
pledge
Unlisted stock- WK Technology Fund V
Ltd.		 None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 476,850 470 1.67% 470 No guarantee or
pledge
Unlisted stock-WK Technology Fund VI
Ltd.		 None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 289,000 228 1.14% 228 No guarantee or
pledge
Listed stock-LSC Ecosystem Corporation None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 3,333,333 50,000 2.82% 50,000 No guarantee or
pledge
Listed stock-LASTER TECHCO., LTD None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 583,421 25,700 0.60% 25,700 No guarantee or
pledge
JUOKU
TECHNOLOGY		 Unlisted stock-WK Technology Fund VI
Ltd.		 Investment company measured at fair
value through other comprehensive
gains and losses		 Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 144,500 1,041 0.57% 1,041 No guarantee or
pledge
TSM Fuzhou Ching Ho Automobile Accessory
Co., Ltd.
Investment company measured at fair
value through other comprehensive
gains and losses		 Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 - 8,010 3.73% 8,010 No guarantee or
pledge
TI YUAN Unlisted stock- WK Technology Fund VII
Ltd.
None		 Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 179,200 964 1.06% 964 No guarantee or
pledge
Listed stock-I YUAN PRECISION
INDUSTRIAL CO.,LTD.		 The Company measured at fair value
for usingequitymethod.		 Investment accounting for using equity method 900,914 38,152 2.51% - No guarantee or
pledge(Note 2)
TI FU Listed stock-T.Y.C. BROTHER
INDUSTRIAL CO.,LTD.		 Holding company's parent company Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 939,707 18,230 - 18,230 No guarantee or
pledge(Note 3)
Unlisted stock-WK Technology Fund V
Ltd.		 None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 238,425 1,761 0.83% 1,761 No guarantee or
pledge
Unlisted stock-WK Technology Fund VI
Ltd.		 None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 72,250 517 0.29% 517 No guarantee or
pledge
Listed stock-LASTER TECH CO., LTD. None Financial assets measured at fair value through other
comprehensivegains and losses,non-current		 1,883,216 82,955 1.95% 82,955 No guarantee or
pledge

(Note 1)Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’. (Note 2)The investment was accounted for using the equity method in the consolidated financial statement. (Note 3)The above transactions made between consolidated entities in the Group have been eliminated.

  • 178 -

Attachment 5: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2021

Related party Counterparty Relationship IntercompanyTransactions IntercompanyTransactions IntercompanyTransactions IntercompanyTransactions Details of non-arm's Details of non-arm's Notes and accounts receivable(payable) Notes and accounts receivable(payable) Note
Purchases
(Sales)		 Amount Percentage of
total
consolidated
purchase
(Sales)		 Terms Unit price Terms Carrying amount Percentage of total
consolidated
receivables
(payable)
The Company GENERA Subsidiary of
the Company		 Sales $4,253,801 38.00% T/T 135 days The price is determined according to the US
OEM price×0.24 as the reference price		 Generally, payment is received 1 to 3 months after
the end of the month. Due to the long distance of
transportation, longer payment terms will be
imposed.		 Accounts receivable
$1,988,403		 50.15% (Note 1)
TYC EUROPE Subsidiary of
the Company		 Sales 1,909,486 17.06% T/T 120 days A single manufacturer and no other manufacturers
to compare		 Generally, payment is received 1 to 3 months after
the end of the month. Due to the long distance of
transportation, longer payment terms will be
imposed.		 Accounts receivable
534,600		 13.48% (Note 1)
KUN SHAN
TYC		 Subsidiary of
the Company		 Sales 171,673 1.53% T/T 120 days comparable to general customers Accounts receivable
194,146		 4.90% (Note 1)
T.I.T. Subsidiary of
the Company		 Sales 108,365 0.97% T/T 150 days comparable to general customers Accounts receivable
47,230		 1.19% (Note 1)
JUOKU
TECHNOLOGY		 Subsidiary of
the Company		 Purchases 305,392 3.86% credit on 90 days comparable to general customers Accounts payable
123,573		 4.70% (Note 1)
T.I.T.
Subsidiary of
the Company		 Purchases 237,798 3.01% credit on 60 days comparable to general customers Accounts receivable
68,181		 2.60% (Note 1)
FORTOP
INDUSTRIAL
CO.,LTD
Substantive
related parties of
the company		 Purchases 873,087 11.03% credit on 90 days comparable to general customers Accounts payable
294,294		 11.20% -
I YUAN
PRECISION
INDUSTRIAL
CO., LTD.		 The Company
measured at fair
value for using
equity method.		 Purchases 506,930 6.41% credit on 90 days comparable to general customers Accounts payable
179,521		 6.83% -
BUILDUP
INTERNATION
AL TRADING
CO., LTD.		 Substantive
related parties of
the Company		 Purchases 236,306 2.99% credit on 20 days comparable to general customers Accounts payable
21,200		 0.81% -
JUOKU
TECHNOLOG
Y		 The Company Holding
company's
parent company		 Sales 404,213 20.98% T/T 90 days N/A Accounts receivable
123,552		 26.67% (Note 1)
JUOKU
TECHNOLOG
Y		 PT ASTRA
JUOKU
INDONESIA
Joint ventures of
the Company		 Sales 132,162 6.86% credit on 90 days N/A Accounts receivable
60,246		 13.00% -
T.I.T. The Company Holding
company's
parent company		 Sales 211,833
(THB 260,014)		 47.01% T/T 90 days N/A Accounts receivable
69,247
(THB 84,997)		 49.41% (Note 1)
TAMAO
PRECISION		 The Company
Holding
company's
parent company		 Sales 194,211
(USD 7,029)		 71.82% T/T 90 days N/A
Accounts receivable
157,187
(USD 5,689)		 75.89% (Note 1)
KUN SHAN
TYC		 The Company
Holding
company's
parent company		 Purchases 176,104
(CNY 40,774)		 62.50% T/T 120 days N/A
Accounts payable
194,796
(CNY 45,102)		 85.54% (Note 1)
GENERA The Company
Holding
company's
parent company		 Purchases 4,106,870
(USD 148,638)		 75.27% T/T 135 days N/A
Accounts payable
1,828,473
(USD 66,177)		 83.83% (Note 1)
TYC EUROPE The Company
Holding
company's
parent company		 Purchases 1,800,466
(EUR 57,856)		 100.00% T/T 120 days N/A
Accounts payable
504,611
(EUR 16,215)		 100.00% (Note 1)
T.I.T. The Company
Holding
company's
parent company		 Purchases 103,038
(THB 126,473)		 39.18% T/T 90 days N/A
Accounts payable
40,106
(THB 49,228)		 49.87% (Note 1)

(Note 1) The above transations made between consolidated entities in the Group have been eliminated.

(Note 2) The exchange rate of USD to NTD is 1:27.63.

The exchange rate of EUR to NTD is 1:31.12.

The exchange rate of THB to NTD is 1:0.8147. The exchange rate of CNY to NTD is 1:4.319.

  • 179 -

Attachment 6: Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of December 31, 2021

Related party Counterparty Relationship Amount Average
collection
turnover		 Overdue account receivable-
related parties		 Overdue account receivable-
related parties		 Amount received
in subsequent period		 Allowance
for doubtful
debts		 Note
Amount Processing
method
The Company GENERA Subsidiary of the
Company		 $1,988,403 2.33 $371,309 Collection has
been
strengthened		 $882,379 $- ( Note 1 )
TYC EUROPE Subsidiary of the
Company		 534,600 4.47 30 Collection has
been
strengthened		 226,612 - ( Note 1 )
KUN SHAN TYC Subsidiary of the
Company		 194,146 0.95 164,265 Collection has
been
strengthened		 10,911 - ( Note 1 )
JUOKU
TECHNOLOGY		 The Company Holding company's
parent company		 123,552 3.32 - Collection has
been
strengthened		 63,154 - ( Note 1 )

(Note 1 )The above transactions made between consolidated entities in the Group have been eliminated. (Note 2)The exchange rate of the USD to the NTD is 1:27.63

  • 180 -

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2021, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2021: (Excluding investment in Mainland China)

Investor Investee company Address Main businesses
and products		 Initial Investment Initial Investment Investment as of 31 December 2021 Investment as of 31 December 2021 Investment as of 31 December 2021 Net income (loss) of
investee company		 Investment income
(loss) recognized
(Note2)		 Note
Ending balance Beginning balance Number of
shares		 Percentage of
ownership
(%)		 Book value (Note1)
The Company JUOKU TECHNOLOGY No. 25, Gongye 3rd Rd.,
Annan Dist., Tainan City		 Manufacturing, and
sale of automobile
parts		 $313,730 $313,730 27,923,401 72.10% $227,157 $56,406 $40,669 (Note4)
TI YUAN 12F., No. 212, Yuping Rd.,
Anping Dist., Tainan City		 Marketable
securities trading
business		 30,053 30,053 5,731 100.00% 53,313 1,623 1,623 (Note4)
TI FU 12F., No. 212, Yuping Rd.,
Anping Dist., Tainan City		 Marketable
securities trading
business		 30,076 30,076 12,000 100.00% 187,003 26,312 26,312 (Note4)
TAMAU MANAGEMENT 18F., No. 573, Qingping
Rd., Anping Dist., Tainan
City		 Management
consult		 1,000 1,000 260,000 100.00% 4,327 120 120 (Note4)
SUPRA-ATOMIC British Virgin Islands Reinvestment
holding activities		 2,819,741
(Note 5)		 2,836,371 65,932,450 100.00% 1,104,756 (15,760) (15,760) (Note4)
BESTE British Virgin Islands
Reinvestment
holding activities
322,939		 322,939 12,072,000 100.00% 1,336,457 29,547 29,547 (Note4)
CONTEK British Virgin Islands
Reinvestment
holding activities		 66,512 66,512 2,186,000 100.00% 56,080 (5,054) (5,054) (Note4)
I YUAN PRECISION
INDUSTRIAL CO., LTD		 No. 25, Zhongxing S. St.,
Sanchong Dist., New
Taipei City
Manufacturing,
processing and sale
of automobile parts		 126,907 126,907 5,617,854 15.66% 198,606 51,086 9,282 The Company
measured at fair value
for using equity
method.
INNOVA Delaware, U.S.A Reinvestment
holding activities		 745,370 745,370 5,549 100.00% 1,135,535 94,051 94,051 (Note4)
TYCVN Vietnam
Manufacture and
sale automobile
lights		 88,740 88,740 - 60.00% 84,445 954 572 (Note4)
  • 181 -

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2021, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2021: (Excluding investment in Mainland China)

Investor Investee company Address Main businesses
and products		 Initial Investment(Note1) Initial Investment(Note1) Investment as of 31 December 2021 Investment as of 31 December 2021 Investment as of 31 December 2021 Net income (loss) of
investee company		 Investment income
(loss) recognized
(Note2)		 Note
Ending balance Beginning balance Number of
shares		 Percentage of
ownership
(%)		 Book value (Note1)
JUOKU
TECHNOLOGY		 TSM British Virgin Islands Reinvestment
holding activities		 $10,122 $10,122 300,000 100.00% $9,284 - - (Note4)
PT ASTRA JUOKU
INDONESIA		 Indonesia
Manufacture and
sale automobile
lights		 276,640 276,640 1,126,500 50.00% 166,913 20,486 10,243 -
TI FU DBM No. 54, Xinle Rd., Tainan
City		 Manufacture
tooling mold and
international
trading business		 25,500 25,500 8,750,000 50.00% 138,975 53,114 26,557 (Note4)
SUPRA-ATOMIC EUROPILOT British Virgin Islands
Reinvestment
holding activities		 396,767
(USD 14,360)		 396,767
(USD 14,360)		 14,359,821 100.00% 483,690 37,054 37,054 (Note4)
MOTOR-CURIO British Virgin Islands
Reinvestment
holding activities
52,304
(USD 1,893)
52,304
(USD 1,893)		 1,893,400 100.00% 160,313 28,814 28,814 (Note4)
SPARKING British Virgin Islands
Reinvestment
holding activities
992,359
(USD 35,916)
992,359
(USD 35,916)		 30,915,717 100.00% 224,212 (105,413) (105,413) (Note4)
EUROLITE British Virgin Islands
Reinvestment
holding activities
573,544
(USD 20,758)
573,544
(USD 20,758)		 14,697,972 100.00% 161,240 21,248 21,248 (Note4)
UNIMOTOR British Virgin Islands
Reinvestment
holding activities
190,288
(USD 6,887)
190,288
(USD 6,887)		 6,887,000 100.00% 312,223 1,953 1,953 (Note4)
EUROPILOT TYC EUROPE Henery Moorest roat 25
1328 LS Almere
HOLLAND
Sale automobile
lights
396,767
(USD 14,360)
396,767
(USD 14,360)		 120,000 100.00% 483,658 46,195 46,195 (Note4)
EUROLITE T.I.T. 350/132 Srikrung House
Rama 3 Road Chongnonsi
Yannawa Bangkok,
Thailand		 Manufacture and
sale of lighting
fixtures and daily-
use product for
automobile		 573,544
(USD 20,758)		 573,544
(USD 20,758)		 4,994,900 99.98% 161,183 21,253 21,249 (Note4)
BESTE VARROC TYC
CORPORATION		 British Virgin Islands Reinvestment
holding activities		 388,809
(USD 14,072)		 388,809
(USD 14,072)		 14,072,000 50.00% 1,336,424 59,100 29,550 -
CONTEK ATECH
INTERNATIONAL		 Cayman Islands
Reinvestment
holding activities
62,168
(USD 2,250)
62,168
(USD 2,250)		 2,250,000 25.00% 54,475 (19,243) (4,811) -
INNOVA GENERA State of California, U.S.A. Sale of automobile
lights and parts		 342,308
(USD 12,389)		 342,308
(USD 12,389)		 12,388,505 100.00% 1,499,176
(USD54,259)		 117,179
(USD 4,241)		 117,179
(USD 4,241)		 (Note4)
W&W State of California, U.S.A. Sale of and rental
of real estate		 27,630
(USD 1,000)		 27,630
(USD 1,000)		 1,000,000 100.00% 86,454
(USD 3,129)		 6,300
(USD 228)		 6,300
(USD 228)		 (Note4)

(Note 1)The book value of the investment using the equity method is the net amount after deducting the unrealized gains and losses of downstream transactions

(Note 2)The investment income recognized didn't eliminate unrealized gain or loss on transactions between the Company and its investees.

The groups recognized I YUAN PRECISION INDUSTRIAL CO., LTD at 18.17% investment gains and losses.

(Note 3)The company treats shares of the Company that the subsidiaries hold as treasury stocks.

The book value of the investment using the equity method is the net amount after deducting the treasury stocks.

(Note 4)The above transactions made between consolidated entities in the Group have been eliminated.

(Note 5)SUPRA-ATOMIC CO., LTD. applied for a capital reduction on 5 August, 2021 and returned the share price of NT$16,630 thousand.

(Note 7)The exchange rate of USD to NTD is 1:27.63.

  • 182 -

Attachment 8: Investment in Mainland China

Attachment 8: Investment in Mainland China
Investee company Main Businesses and Products Total Amount of
Paid-in Capital		 Method of
Investment (Note 1)		 Accumulated
Outflow
of Investment from
Taiwan as of
1 January 2021		 Investment Flows Accumulated Outflow
of Investment from
Taiwan as of
31 Decembe 2021		 Net income (loss)
of investee
company		 Percentage of
Ownership		 Investment income
(loss) recognized
(Note 2)		 Carrying Value as of
31 December 2021		 Accumulated Inward
Remittance of Earnings
as of
31 December 2021
Outflow Inflow
VARROC TYC AUTO LAMPS CO.,LTD. Manufacture automobile lights $746,010
(USD 27,000)		 (1)VARROC TYC
CORPORATION		 $351,730
(USD 12,730)		 $- $- $351,730
(USD 12,730)		 $54,150 50% $27,075 $2,672,749 $523,243
CHANGZHOU TAMAO PRECISION INDUSTRY CO.,
LTD.(Note 3)		 Manufacture and sale of precision
molds		 178,683
(USD6,467)		 (1)UNIMOTOR 178,683
(USD 6,467)		 - - 178,683
(USD 6,467)		 1,957 100% 1,957 312,053 -
HANGZHOU SUNNYTECH CO., LTD. Industrial styling and product design 8,077
(CNY 1,870)		 (1)SPARKING 4,587
(USD 166)		 - - 4,587
(USD 166)		 (3,655) 30% (1,097) 10,758 -
JNS AUTO PARTS LIMITED Manufacture automobile parts 276,300
(USD 10,000)		 (1)MOTOR-CURIO 55,260
(USD 2,000)		 - - 55,260
(USD 2,000)		 154,721 20% 30,944 157,439 -
KUN SHAN TYC HIGH PERFORMANCE (Note 3) Manufacture, process and assemble
of various high-efficiency energy-
saving lamps and accessories		 828,900
(USD30,000)		 (1)SPARKING 967,050
(USD 35,000)		 - - 967,050
(USD 35,000)		 (104,215) 100% (104,215) 213,426 -
CHIN-LI-MA HIGHT PERFORMANCE LUMINAIRE
CO., LTD.		 Design amd manufacture high-
efficiency energy-saving lamps		 12,434
(USD 450)		 (2)TAMAO
PRECISION		 - - - - - 30% - - -
KUNSHAN ATECH AUTOPARTS MANUFACTURING
CO., LTD.		 Manufacture automobile parts 193,410
(USD 7,000)		 (1)ATECH
INTERNATIONAL
CO., LTD.		 48,353
(USD 1,750)		 - - 48,353
(USD 1,750)		 (13,069)
(USD (473))		 25% (3,260)
(USD (118))		 88,913
(USD 3,218)		 -
ATECH(JIANGSU) INDUSTRIAL TECHNOLOGY CO.,
LTD.		 Manufacture automobile parts 55,260
(USD 2,000)		 (1)ATECH
INTERNATIONAL
CO., LTD.		 13,815
(USD 500)		 - - 13,815
(USD 500)		 (2,514)
(USD (91))		 25% (635)
(USD (23))		 56,282
(USD 2,037)		 -
Accumulated Investment in Mainland China Investment Amounts Authorized by
Investment Commission, MOEA		 Upper Limit on Investment
$1,947,086 (USD 70,470) $1,771,884 (USD 64,129) (Note 4)

(Note 1) Methods of investment are divided into three:

(1)Indirectly investment in Mainland China through companies registered in a third region

(2)Reinvest with Mainland China company's own funds.

(3)Other

(Note 2) The investment income recognized didn't eliminate unrealized gain or loss on transactions between the Company and its investees.

(Note 3) The above transactions made between consolidated entities in the Group have been eliminated.

(Note 4) According to 97.8.22 “Regulations Governing Permission for Investment or Technical Cooperation in Mainland China" and the amendment to “Review Principles of Investment or Technical Cooperation in Mainland china", the cumulative amount of investors' investment in Mainland China according to the upper limit set for other enterprises: 60% of its net value or the consolidated net value, whichever is higher. However, enterprises for which the Industrial Development Bureau of the Ministry of Economic Affairs issued the certificate of compliance or the Taiwan subsidiaries of international enterprises shall not be subject to the restriction. The Company qualifies as business headquarters (Note 5) The exchange rate of the USD to the NTD is 1:27.63

The exchange rate of the CNY to the NTD is 1:4.319.

  • 183 -

Attachment 9:Information on major shareholders

Attachment 9:Information on major shareholders
Name of ordinary shares
Name of major shareholders		 Number of shares held Percentage of ownership
TA YIH TA INVESTMENT CO., LTD. 64,655,288 18.85%
YIH HENG INVESTMENT CO., LTD. 57,420,654 16.74%
  • (Note 1) The main shareholder information in this table is calculated based on the information available from the Taiwan Depository & Clearing Corporation on the last business day at the end of each quarter.The total number of ordinary shares and special shares held by the shareholders which have completed the dematerialized delivery and registration of the shares of the Company (including treasury shares) is more than 5%.

The share capital recorded in the Company's financial report and the number of shares actually delivered by the Company with dematerialized registration may differ because the calculation bases were different.

  • (Note 2) If the above information included the shareholders' shares transferred to a trust, it is disclosed by the individual settlor account opened by the trustee. Where the shareholders declared insider equity holding for more than 10% shareholding according to the Securities and Exchange Act, such holdings shall include the shares held by shareholders and the trusted assets with right to use. For information regarding insider shareholding declaration, please refer to the Market Observation Post System of the Taiwan Stock Exchange Corporation.

  • 184 -

5.Individual financial statements for the past year verified by accountants：

TYC BROTHER INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY

FINANCIAL STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2021 AND 2020

WITH

REPORT OF INDEPENDENT AUDITORS

The reader is advised that these financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail

  • 185 -

Independent Auditors’ Report

To TYC BROTHER INDUSTRIAL CO., LTD.

Opinion

We have audited the accompanying parent company only balance sheets of TYC BROTHER INDUSTRIAL CO., LTD. (the “Company”) as of 31 December 2021 and 2020, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2021 and 2020, and notes to the parent company only financial statements, including the summary of significant accounting policies (together “the parent company only financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter – Making Reference to the Audits of Component Auditors section of our report), the parent company only financial statements referred to above present fairly, in all material respects, the financial position of the Company as of 31 December 2021 and 2020, and its financial performance and cash flows for the years ended 31 December 2021 and 2020, in conformity with the requirements of 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 on Taiwan. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only 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 on Taiwan (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Loss Allowance Accounts Receivable

As of 31 December 2021, the balance of accounts receivable and allowance for doubtful accounts of the Company amounted to NT$3,965,098 thousand and NT$158,856 thousand, respectively. Net accounts receivable constituted a material amount of 20% of total assets, which was considered material in the parent company only financial statements. Since the allowance for doubtful accounts was measured at the lifetime expected credit loss, the account receivables should be appropriately grouped during the measurement process and determine the use of related assumptions in the analysis and measurement, including appropriate aging intervals and their respective loss rate. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net accounts receivable, we therefore determined this a key audit matter.

  • 186 -

Our audit procedures included, but not limited to, evaluating and testing the process of internal control execution management established for receivables; evaluating the appropriateness of management’s provisioning policy of allowance for doubtful accounts; analyzing the appropriateness of the grouping of accounts receivable to confirm whether customer groups that have significantly different loss patterns from one another are grouped appropriately; the Company was tested by provision matrix, including evaluating the appropriateness of the aging intervals and the accuracy of the basic data by reviewing the original certificates; performing tests on subsequent collection of receivables; evaluating long-term trends of loss allowance and turnover rate of accounts receivable.

We also considered the appropriateness of disclosure of accounts receivable. Please refer to Notes 5 and 6 of the parent company only financial statements.

Valuation for slow-moving inventories

As of 31 December 2021, the Company’s net inventories amounted to NT$1,241,867 thousand, constituting 7% of total asset, which was considered material in the parent company only financial statements. Considering the market economy environment change, horizontal competition and numerous inventory items, the loss allowance for loss on inventory valuation and obsolescence required significant management judgment. We determined this as a key audit matter.

Our audit procedures included, but not limited to, evaluating and testing the internal control management established for inventory, evaluating the appropriateness of management’s provisioning policy of allowance; sampling net realizable value estimated by inventory, including related sales certificates and recalculating price loss; testing the accuracy of inventory aging time period by sampling related documents and recalculating the accuracy of inventory allowance.

We also considered the appropriateness of disclosure of inventories. Please refer to Notes 5 and 6 of the parent company only financial statements.

Other Matter – Making Reference to the Audits of a Component Auditors

We did not audit the financial statements of certain subsidiaries, associates and joint ventures accounted for under the equity method. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the reports of other auditors. These subsidiaries, associates and joint ventures under equity method amounted to NT$732,263 thousand and NT$725,102 thousand, representing 3.93% and 4.08% of total assets as of December 31, 2021 and 2020, respectively. The related shares of profits from the subsidiaries, associates and joint ventures under the equity method amounted to NT$70,059 thousand and NT$16,379 thousand, representing 29.75% and 6.97% of the income before tax for the years ended December 31, 2021 and 2020, respectively, and the related shares of other comprehensive income (loss) from the subsidiaries, associates and joint ventures under the equity method amounted to NT$(54,299) thousand and NT$(8,569) thousand, representing 154.42% and 17.36% of the comprehensive income (loss) for the years ended December 31, 2021 and 2020, respectively.

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

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the requirements of 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

  • 187 -

In preparing the parent company only financial statements, management is responsible for assessing the ability to continue as a going concern of the Company, 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 audit committee, are responsible for overseeing the financial reporting process of the Company.

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 auditing standards generally accepted in the Republic of China on Taiwan 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 parent company only financial statements.

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

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

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

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

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Company. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only 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 auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

  5. 188 -

  6. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the accompanying notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  7. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2021 parent company only financial statements and are therefore the key audit matters. We describe these matters in our auditor’s 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.

We have audited and expressed an unqualified opinion on the parent company only financial statements of the Company as of and for the years ended 31 December 2021 and 2020.

Huang, Shih-Chieh

Lee, Fang-Wen

Ernst & Young, Taiwan 24 March 2022

  • 189 -

English Translation of Financial Statements Originally Issued in Chinese

TYC BROTHER INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

ASSETS Notes 31 Dec. 2021 31 Dec. 2020
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss, current
Financial assets measured at amortized cost, current
Notes receivable, net
Notes receivable-related parties, net
Accounts receivable, net
Accounts receivable-related parties, net
Other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Financial assets at fair value through other comprehensive income, non-current
Investments accounted for under the equity method
Property, plant and equipment
Right-of-use asset
Intangible assets
Deferred tax assets
Prepayment for equipments
Refundable deposits
Other non-current assets-others
Total non-current assets
Total assets		 Ⅳ/Ⅵ.1
Ⅳ/Ⅵ.2
Ⅳ/Ⅵ.4
Ⅳ/Ⅵ.5
Ⅳ/Ⅵ.5/Ⅶ
Ⅳ/Ⅵ.6
Ⅳ/Ⅵ.6/Ⅶ
Ⅳ/Ⅶ
Ⅳ/Ⅵ.7
Ⅳ/Ⅵ.3
Ⅳ/Ⅵ.8
Ⅳ/Ⅵ.9/Ⅷ
Ⅳ/Ⅵ.20
Ⅳ/Ⅵ.10
Ⅳ/Ⅵ.24
Ⅷ		 $280,558
1,034
55,540
12,980
11,002
996,349
2,785,911
151,546
1,241,867
145,861
5,682,648
133,178
4,387,679
6,120,820
683,209
40,267
355,403
1,191,934
17,835
23,884
12,954,209
$18,636,857		 $233,279
-
-
16,269
11,381
772,326
2,202,032
103,402
1,062,985
134,957
4,536,631
83,775
4,384,432
6,381,043
696,486
57,329
354,881
1,217,581
17,836
26,471
13,219,834
$17,756,465

(The accompanying notes are an integral part of the parent company only financial statements.)

  • 190 -

English Translation of Financial Statements Originally Issued in Chinese

TYC BROTHER INDUSTRIAL CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

LIABILITIES AND SHAREHOLDERS' EQUITY Notes 31 Dec. 2021 31 Dec. 2020
Current liabilities
Short-term borrowings
Short-term notes and bills payable
Financial liabilities at fair value through profit or loss, current
Notes payable
Accounts payable
Accounts payable-related parties
Other payables
Current tax liabilities
Lease liabilities, current
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term borrowings
Other long-term borrowings
Deferred tax liabilities
Lease liabilities, non current
Net defined benefit liabilities, non-current
Other non-current liabilities-others
Total non-current liabilities
Total liabilities
Equity
Capital
Common stock
Preferred stock
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Other equity
Exchange differences resulting from translating the financial statements of foreign operations
Unrealized gains or losses on financial assets measured at fair value through other comprehensive income
Treasury stock
Total equity
Total liabilities and equity
Current portion of long-term liabilities		 Ⅳ/Ⅵ.11
Ⅳ/Ⅵ.12
Ⅳ/Ⅵ.13
Ⅳ
Ⅳ
Ⅳ/Ⅶ
Ⅳ
Ⅳ/Ⅵ.24
Ⅳ/Ⅵ.20
Ⅳ/Ⅵ.14
Ⅳ/Ⅵ.14
Ⅳ/Ⅵ.15
Ⅳ/Ⅵ.24
Ⅳ/Ⅵ.20
Ⅳ/Ⅵ.16
Ⅳ/Ⅵ.17
Ⅳ/Ⅵ.17
Ⅳ/Ⅵ.17
Ⅳ/Ⅵ.17
Ⅳ/Ⅵ.17		 $958,000
639,808
3,577
285,951
1,567,964
772,850
383,774
24,592
39,388
111,301
311,620
5,098,825
4,858,269
-
38,717
575,440
175,259
592
5,648,277
10,747,102
3,128,979
300,000
2,577,877
808,620
289,982
1,134,265
(446,242)
102,270
(5,996)
7,889,755
$18,636,857		 $375,590
-
17,020
296,082
1,645,360
801,377
422,826
-
38,832
-
301,712
3,898,799
4,558,613
1,999,439
38,717
614,829
220,805
315
7,432,718
11,331,517
3,128,979
-
1,381,263
783,394
250,969
1,176,321
(395,675)
105,693
(5,996)
6,424,948
$17,756,465

(The accompanying notes are an integral part of the parent company only financial statements.)

  • 191 -

English Translation of Financial Statements Originally Issued in Chinese

TYC BROTHER INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Share)

ITEMS Notes 2021 2020
Operating revenues
Operating costs
Gross profit
Unealized profit on sales
Realized profit on sales
Net gross profit
Operating expenses
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Expected credit impairment losses
Subtotal
Operating income
Non-operating income and expenses
Other income
Other gains and losses
Finance costs
Share of profit of subsidiaries, associates and joint ventures accounted for using the equity method
Subtotal
Net income before income tax
Income tax benefit (expense)
Net income
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss
Remeasurements of the defined benefit plan
Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income
Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using the equity method which will not be reclassified
subsequently to profit or loss
Income tax related to items that will not be reclassified subsequently
Items that may be reclassified subsequently to profit or loss
Exchange differences resulting from translating the financial statements of foreign operations
Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using the equity method which may be reclassified subsequently to
profit or loss
Income tax related to items that may be reclassified subsequently
Total other comprehensive income (loss), net of tax
Total comprehensive income (loss)
Earnings per share (NTD)
Earnings per share-basic
Earnings per share-diluted		 Ⅳ/Ⅵ.18/Ⅶ
Ⅳ/Ⅵ.7.20.21/Ⅶ
Ⅳ/Ⅵ.19.20.21/Ⅶ
Ⅵ.22
Ⅵ.22
Ⅵ.22
Ⅳ/Ⅵ.8
Ⅳ/Ⅵ.24
Ⅳ/Ⅵ.23
Ⅳ/Ⅵ.24		 $11,193,999
(10,009,747)
1,184,252
(489,142)
456,390
1,151,500
(426,034)
(281,089)
(277,559)
(1,702)
(986,384)
165,116
32,635
(127,355)
(59,863)
224,982
70,399
235,515
(42,244)
193,271
17,804
2,058
(3,073)
(3,561)
(77,907)
14,698
12,642
(37,339)
$155,932
$0.62
$0.62		 $9,391,750
(8,463,166)
928,584
(456,378)
471,137
943,343
(357,672)
(289,686)
(347,777)
(2,085)
(997,220)
(53,877)
114,382
(67,200)
(70,638)
312,479
289,023
235,146
27,470
262,616
(11,420)
16,521
32,732
2,284
(101,035)
(10,827)
22,373
(49,372)
$213,244
$0.84
$0.84

(The accompanying notes are an integral part of the parent company only financial statements.)

  • 192 -

English Translation of Financial Statements Originally Issued in Chinese

TYC BROTHER INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

For the years ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

ITEMS Equityattributabletothe parentcompany Equityattributabletothe parentcompany Equityattributabletothe parentcompany Total equity
Capital Capital
surplus		 RetainedEarnings Otherequitity Treasury stock
Common
stock		 Preferred
stock		 Legal
reserve		 Special reserve Unappropriated
earnings		 Exchange
differences resulting
from translating the
financial statements
of foreign operations		 Unrealized gains
(losses) on
financial assets
measured at fair
value through other
comprehensive
income
Appropriation and distribution of 2019 retained earnings
Legal reserve
Special reserve
Cash dividends
Net income for the year ended 31 December 2020
Other comprehensive income (loss) for the year ended 31 December 2020
Adjustments for dividends subsidiaries received from parent company
Balance as of 31 December 2020
Balance as of 1 January 2021
Appropriation and distribution of 2020 retained earnings
Legal reserve
Special reserve
Cash dividends
Net income for the year ended 31 December 2021
Other comprehensive income (loss) for the year ended 31 December 2021
Total comprehensive income (loss)
Issuance of preference shares
Adjustments for dividends subsidiaries received from parent company
Disposals of financial assets at fair value through other comprehensive income
Other
Balance as of 31 December 2021
Balance as of 1 January 2020
Total comprehensive income (loss)		 $3,128,979
-
-
-
-
-
-
-
$3,128,979
$3,128,979
-
-
-
-
-
-
-
-
-
-
$3,128,979		 $-
-
-
-
-
-
-
-
$-
$-
-
-
-
-
-
-
300,000
-
-
-
$300,000		 $1,379,947
-
-
-
-
-		 $713,881
69,513
-
-
-
-
-
-
$783,394
$783,394
25,226
-
-
-
-
-
-
-
-
-
$808,620		 $160,750
-
90,219
-
-
-
-
-
$250,969
$250,969
-
39,013
-
-
-
-
-
-
-
-
$289,982		 $1,521,853
(69,513)
(90,219)
(438,057)
262,616
(10,359)
252,257
-
$1,176,321
$1,176,321
(25,226)
(39,013)
(187,739)
193,271
15,968
209,239
-
-
683
-
$1,134,265		 $(306,186)
-
-
-
-
(89,489)
(89,489)
-
$(395,675)
$(395,675)
-
-
-
-
(50,567)
(50,567)
-
-
-
-
$(446,242)		 $55,217
-
-
-
-
50,476		 $(5,996)
-
-
-
-
-
-
-
$(5,996)
$(5,996)
-
-
-
-
-
-
-
-
-
-
$(5,996)		 $6,648,445
-
-
(438,057)
262,616
(49,372)
213,244
1,316
$6,424,948
$6,424,948
-
-
(187,739)
193,271
(37,339)
155,932
1,495,878
564
-
172
$7,889,755
- 50,476
1,316 -
$1,381,263 $105,693
$1,381,263
-
-
-
-
-		 $105,693
-
-
-
-
(2,740)
- (2,740)
1,195,878
564
-
172		 -
-
(683)
-
$2,577,877 $102,270

(The accompanying notes are an integral part of the parent company only financial statements.)

  • 193 -

English Translation of Financial Statements Originally Issued in Chinese

TYC BROTHER INDUSTRIAL CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the years ended 31 December 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

ITEMS 2021 2020 ITEMS 2021 2020
Cash flows from operating activities:
Net income before tax
Adjustments for:
Income and expense adjustments:
Depreciation
Amortization
Expected credit impairment losses
Finance costs
Interest income
Dividend income
Share of profit of subsidiaries, associates and joint ventures accounted for using the equity method
(Gains) on disposal of property, plant and equipment
Unrealized profit on sales
Realized profit on sales
Changes in operating assets and liabilities:
Financial assets at fair value through profit or loss
Notes receivable
Notes receivable-related parties
Accounts receivable
Accounts receivable-related parties-net
Other receivables
Inventories
Other current assets
Financial liabilities at fair value through profit or loss
Notes payable
Accounts payable
Accounts payable-related parties
Other payables
Other current liabilities
Net defined benefit liabilities
Cash generated from operations
Interest received
Dividend received
Interest paid
Income tax paid
Net cash provided by operating activities		 $235,515
1,290,506
31,789
1,702
59,863
(203)
(2,473)
(224,982)
(1,889)
489,142
(456,390)
(1,034)
3,290
381
(225,724)
(583,883)
(47,967)
(178,882)
(10,904)
(13,443)
(10,131)
(77,396)
(28,527)
(39,438)
9,908
(27,742)
191,088
203
109,470
(68,960)
(9,098)
222,703		 $235,146
1,298,735
36,251
2,085
70,638
(674)
(979)
(312,479)
(515)
456,378
(471,137)
410
(865)
1,882
122,387
206,676
(32,364)
47,842
(48,725)
13,608
67,526
236,051
15,362
(62,605)
(6,918)
(19,739)
1,853,977
674
32,630
(84,214)
(41,513)
1,761,554		 Cash flows from investing activities:
Acquistion of financial assets at fair value through comprehensive income
Proceeds from capital reduction of financial assets at fair value through other comprehensive income
Acquistion of financial assets measured at amortized cost
Acquisition of investments accounted for using the equity method
Proceeds from capital reduction of investments accounted for using the equity method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Decrease in refundable deposits
Acquistion of intangible assets
Increase in other non-current assets
Decrease in other non-current assets
Net cash used in investing activities
Cash flows from financing activities:
Increase in short-term borrowings
Decrease in short-term borrowings
Increase in short-term notes and bills payable
Decrease in short-term notes and bills payable
Proceeds from long-term borrowings
Repayment of long-term borrowings
Increase in other long-term borrowings
Decrease in other long-term borrowings
Cash payment for the principal portion of the lease liabilties
Increase in other non-current liabilities
Decrease in other non-current liabilities
Cash dividends
Proceeds from issuing stock
Net cash provided by (used in) financing activities
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 (59,822)
12,477
(55,540)
-
16,630
(984,834)
4,485
(34)
35
(14,727)
(26,623)
29,210
(1,078,743)
1,430,000
(847,590)
639,808
-
2,117,070
(1,706,113)
-
(1,999,439)
(38,833)
2,009
(1,732)
(187,739)
1,495,878
903,319
47,279
233,279
$280,558		 -
-
-
(100,792)
46,792
(1,172,559)
48
(714)
1,570
(16,885)
(35,594)
32,608
(1,245,526)
1,600,825
(1,969,235)
-
(589,354)
3,871,720
(2,999,539)
823
-
(35,817)
1,501
(3,163)
(438,057)
-
(560,296)
(44,268)
277,547
$233,279

(The accompanying notes are an integral part of the parent company only financial statements.)

  • 194 -

English Translation of Financial Statements Originally Issued in Chinese TYC BROTHER INDUSTRIAL CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Stated)

I. HISTORY AND ORGANIZATION

TYC BROTHER INDUSTRIAL CO., LTD. (the “Company”) was incorporated under the laws of the Republic of China on Taiwan (the “ROC”) on 9 September 1986. The Company’s registered office and the main business location is at No.72-2, Xinle Rd., Tainan City Taiwan (R.O.C). The Company's main profitable business projects are the manufacturing, trading and import and export trade business of automobiles, motorcycles and other automobile parts and supplies. The Company became a listed company on the Taiwan Stock Exchange on 6 October 1997.

  • II. DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS FOR ISSUE

The financial statements of the Company for the year ended 31 December 2021 and 2020 were authorized for issue in accordance with a resolution of the Board of directors on 24 March 2022.

III. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

  1. Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Company applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after 1 January 2021. The new standards and amendments had no material impact on the Company.

  1. Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, but not yet adopted by the Company as at the end of the reporting period are listed below.
Items New, Revised or Amended Standards and Interpretations Effective Date
issued byIASB
1 Narrow-scope amendments of IFRS, including Amendments to
IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the
Annual Improvements

1 January 2022

  • 195 -

  • (1) Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements

  • A. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3) The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.

  • B. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

  • C. Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

  • D. Annual Improvements to IFRS Standards 2018 - 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.

Amendment to IAS 41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

  • 196 -

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after 1 January 2022. The Company determined that the newly published standards and interpretations have no material impact on the Company.

  1. Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below.
Items New, Revised or Amended Standards and Interpretations Effective Date
issued byIASB
1 IFRS 10 “Consolidated Financial Statements” and IAS 28
“Investments in Associates and Joint Ventures” — Sale or
Contribution of Assets between an Investor and its Associate or
Joint Ventures


To be determined
by IASB
2 IFRS 17 “Insurance Contracts” 1 January2023
3 Classification of Liabilities as Current or Non-current –
Amendments to IAS 1
1 January 2023
4 Disclosure Initiative - Accounting Policies – Amendments to
IAS 1
1 January 2023
5 Definition of AccountingEstimates – Amendments to IAS 8 1 January2023
6 Deferred Tax related to Assets and Liabilities arising from a
Single Transaction – Amendments to IAS 12
1 January 2023

  • (1) IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and －

  • Joint Ventures” Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

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IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

  • (2) IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

  • (3) Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

  • (4) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

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  • (5) Difination of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

  • (6) Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. The Company determined that the newly published standards and interpretations have no material impact on the Company.

IV. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  1. Statement of Compliance

The Company’s consolidated financial statements ended 31 December 2021 and 2020 were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”), IFRS, IASs, IFRIC and SIC, which are endorsed by FSC (TIFRSs).

2. Basis of preparation

The Company prepared parent company only financial statements in accordance with Article 21 of the Regulations, which provided that the profit or loss and other comprehensive income for the period presented in the parent company only financial statements shall be the same as the profit or loss and other comprehensive income attributable to stockholders of the parent presented in the consolidated financial statements for the period, and the total equity presented in the parent company only financial statements shall be the same as the equity attributable to the parent company presented in the consolidated financial statements. Therefore, the Company accounted for its investments in subsidiaries using equity method and, accordingly, made necessary adjustments.

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The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

3. Foreign currency transactions

The Company’s financial statements are presented in NT$, which is also the Company’s functional currency.

Transactions in foreign currencies are initially recorded functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

  • (a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.

  • (b) Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.

  • (c) Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

4. Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following partial disposals are accounted for as disposals:

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  • (a) when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and

  • (b) when the retained interest after the partial disposal of an interest in a joint arrangement or partial disposal of an interest in an associate that includes a foreign operation is financial asset that includes a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or joint arrangement that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

5. Current and non-current distinction

An asset is classified as current when:

  • (a) The Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle.

  • (b) The Company holds the asset primarily for the purpose of trading.

  • (c) The Company expects to realize the asset within twelve months after the reporting period.

  • (d) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

  • (a) The Company expects to settle the liability in its normal operating cycle

  • (b) The Company holds the liability primarily for the purpose of trading

  • (c) The liability is due to be settled within twelve months after the reporting period

  • (d) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

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6. Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

7. Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

  • (1) Financial instruments: Recognition and Measurement

The Company accounts for regular way purchase or sales of financial assets on the trade date.

The Company classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

  • A. the Company’s business model for managing the financial assets and

  • B. the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

  • A. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

  • B. 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.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

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Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

  • A. purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

  • B. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

  • A. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

  • B. 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.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

  • A. A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.

  • B. When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

  • C. Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

  • (a) Purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

  • (b) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

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In addition, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Company made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposing of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from the remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

  • (2) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

The Company measures expected credit losses of a financial instrument in a way that reflects:

  • A. an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes

  • B. the time value of money

  • C. reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

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The loss allowance is measured as follows:

  • A. At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Company measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.

  • B. At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.

  • C. For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

  • D. For lease receivables arising from transactions within the scope of IFRS 16, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Company needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

  • (3) Derecognition of financial assets

A financial asset is derecognized when:

  • A. The rights to receive cash flows from the asset have expired

  • B. The Company has transferred the asset and substantially all the risks and rewards of the asset have been transferred

  • C. The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

  • (4) Financial liabilities and equity

Classification between liabilities or equity

The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

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Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is classified as held for trading if:

  • A. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term

  • B. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of shortterm profit-taking

  • C. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

  • A. it eliminates or significantly reduces a measurement or recognition inconsistency; or

  • B. a group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

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Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(5) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

8. Derivative instrument

The Company uses derivative instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as financial assets or liabilities at fair value through profit or loss except for derivatives that are designated as and effective hedging instruments which are classified as financial assets or liabilities for hedging.

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Derivative instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The changes in fair value of derivatives are taken directly to profit or loss, except for the effective portion of hedges, which is recognized in either profit or loss or equity according to types of hedges used.

When the host contracts are either non-financial assets or liabilities, derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not designated at fair value though profit or loss.

9. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

  • (1) In the principal market for the asset or liability, or

  • (2) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

10. Inventories

Inventories are valued at lower of cost and net realizable value item by item.

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Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Raw materials - Purchase cost under weighted-average cost.

Finished goods and work in progress - Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

  1. Investments accounted for under the equity method

The Company’s investment in subsidiaries is presented based on Article 21 of the Securities Issuer’s Financial Report Preparation Standards, expressed as "investments using the equity method" and made necessary evaluation adjustments to enable individual financial reporting of the current period's profit and loss and other comprehensive gains and losses The current profit and loss and other comprehensive gains and losses in the financial report prepared on a consolidated basis are the same as the share of the owners of the parent company, and the owner’s equity of the individual financial report is the same as the equity of the owners of the parent company in the financial report prepared on a consolidated basis. These adjustments are mainly due to the consideration of the treatment of the consolidated financial statements of the investment subsidiary in accordance with IFRS No. 10 "Consolidated Financial Statements" and the differences in the application of IFRS at different levels of reporting entities, and debits or credits to "investment account for under the equity method", "share of profits and losses of subsidiaries, affiliates and joint ventures using the equity method" or "share of other comprehensive profits and losses of subsidiaries, affiliates and joint ventures using the equity method".

The Company’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Company has significant influence. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture.

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Company’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the Company’s related interest in the associate or joint venture.

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When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Company’s percentage of ownership interests in the associate or joint venture, the Company recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a pro-rata basis.

When the associate or joint venture issues new stock, and the Company’s interest in an associate or a joint venture is reduced or increased as the Company fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in additional paid-in capital and investment accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Company disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

The Company determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures . If this is the case the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets . In determining the value in use of the investment, the Company estimates:

  • (1) Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or

  • (2) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets .

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Upon loss of significant influence over the associate or joint venture, the Company measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

12. Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Company recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment . When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Land and improvements 3～5 years
Buildings 5～60 years
Machinery and equipment 5～10 years
Molding equipment 7 years
Electrical installations 5～10 years
Transportation equipment 5～10 years
Miscellaneous equipment 5～10 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

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13. Leases

The Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether, throughout the period of use, has both of the following:

  • (1) the right to obtain substantially all of the economic benefits from use of the identified asset; and

  • (2) the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate standalone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximising the use of observable information.

Company as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Company recognizes right-of-use asset and lease liability for all leases which the Company is the lessee of those lease contracts.

At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

  • (1) fixed payments (including in-substance fixed payments), less any lease incentives receivable;

  • (2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

  • (3) amounts expected to be payable by the lessee under residual value guarantees;

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  • (4) the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and

  • (5) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Company measures the lease liability on an amortized cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

  • (1) the amount of the initial measurement of the lease liability;

  • (2) any lease payments made at or before the commencement date, less any lease incentives received;

  • (3) any initial direct costs incurred by the lessee; and

  • (4) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Company measures the right-ofuse asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the rightof-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Company applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Company accounted for as short-term leases or leases of lowvalue assets, the Company presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Company elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

  • 213 -

Company as a lessor

At inception of a contract, the Company classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Company recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Company allocates the consideration in the contract applying IFRS 15.

The Company recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

For the rent concession arising as a direct consequence of the Covid-19 pandemic, the Company elected not to assess whether it is a lease modification but accounted it as a variable lease payment and the practical expedient has been applied to such rent concessions.

14. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

  • 214 -

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

Patent, trademark rights and others

The cost of patent, trademark rights and others is amortized on a straight-line basis over the ～ legal period (1 24 years).

Computer software

The cost of computer software is amortized on a straight-line basis over the estimated useful ～ life (1 5 years).

15. Impairment of non-financial assets

The Company assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cashgenerating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cashgenerating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

  • 215 -

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

  1. Treasury shares

Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity. Any difference between the carrying amount and the consideration is recognized in equity.

17. Revenue recognition

The Company’s revenue arising from contracts with customers are primarily related to sale of goods and rendering of services. The accounting policies are explained as follows:

Sale of goods

The Company manufactures and sells machinery. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Company is automobile lights and parts and revenue is recognized based on the consideration stated in the contract.

The credit period of the Company’s sale of goods is from 30 to 120 days. For most of the contracts, when the Company transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Company usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract.

18. Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

  • 216 -

19. Government subsidies

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Where the Company receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to the statement of comprehensive income over the expected useful life and pattern of consumption of the benefit of the underlying asset by equal annual installments. Where loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as additional government grant.

20. Post-employment benefits

All regular employees of the Company are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company. Therefore, fund assets are not included in the Company’s financial statements.

For the defined contribution plan, the Company will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Remeasurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur.

Past service costs are recognized in profit or loss on the earlier of:

  • (1) the date of the plan amendment or curtailment, and

  • (2) the date that the Company recognizes restructuring-related costs.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

  • 217 -

21. Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

  • i. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

  • ii. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

  • i. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

  • 218 -

  • ii. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities 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.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

V. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s parent company only financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimation and assumptions

The key assumptions concerning the future and other key sources for estimating uncertainty at the reporting date, that would have a significant risk for a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year are discussed below.

  • (1) Fair Value of Financial Instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including income approach (for example the discounted cash flow model) or the market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

  • 219 -

(2) Accounts receivables–estimation of impairment loss

  • The Company estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

  • (3) Inventory

Estimates of net realizable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

  • (4) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination rate, future salary increases, and decrease. For a detailed explanation of the assumptions used to measure the cost of defined benefits and defined benefits obligations, please refer to Note 6.

  • (5) Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Company company's domicile.

Deferred tax assets are recognized for all carryforward of unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

  • 220 -

Ⅵ. CONTENTS OF SIGNIFICANT ACCOUNTS

1. Cash and Cash Equivalents

Cash and Cash Equivalents
Cash on hand and petty cash
Saving account
Time deposits
Total
Financial assets at fair value through profit or loss
Mandatorily measured at fair value through profit or
loss:
Derivatives not designated as hedging instruments
Forward currency contracts
Current		 31 Dec. 2021 31 Dec. 2020
$1,617
274,589
4,352
$2,179

226,809

4,291
$280,558
$233,279
31 Dec. 2021

$1,034
$1,034
31 Dec. 2020

$-

$-

2. Financial assets at fair value through profit or loss

The Company classified certain of its financial assets at fair value through profit or loss were not pledged.

3. Financial assets at fair value through other comprehensive income

Equity instrument investments measured at fair value
through other comprehensive income – Non-current
Listed companies stocks
Unlisted companies stocks
Total		 31 Dec. 2021 31 Dec. 2020
$25,700
107,478		 $16,264
67,511
$133,178 $83,775

The Company classified certain of its financial assets at fair value through other comprehensive income were not pledged.

For equity instrument investments measured at fair value through other comprehensive income, the Company recognized dividends in the amount of NT$2,473 thousand and NT$979 thousand for the year ended 31 December 2021 and 2020, the full amount is related to investments held at the end of the reporting period .

4. Financial assets measured at amortized cost

Financial assets measured at amortized cost

Time deposits
Current		 31 Dec. 2021 31 Dec. 2020
$55,540
$-
$55,540
$-
  • 221 -

Financial assets measured at amortized cost were not pledged.

The Company classified certain financial assets as financial assets measured at amortized cost. Please refer to Note 6.(19) for more details on loss allowance and Note 12 for more details on credit risk.

5. Notes Receivables and Notes Receivables-Related Parties


Notes receivables
Less: allowance for doubtful accounts
Subtotal
Notes receivables-related parties
Less: allowance for doubtful accounts
Subtotal
Total		 31 Dec. 2021
31 Dec. 2020
$13,061
(81)
$16,351
(82)
12,980
16,269
11,057
(55)
11,438
(57)
11,002
11,381
$23,982
$27,650

Notes receivables were not pledged.

The Company adopted IFRS 9 for impairment assessment. Please refer to Note 6.(19) for more details on accumulated impairment and Note 12 for more details on credit risk.

6. Accounts Receivables and Accounts Receivables-Related Parties


Accounts receivables
Less: allowance for doubtful accounts
Subtotal
Accounts receivables-related parties
Less: allowance for doubtful accounts
Subtotal
Total		 31 Dec. 2021
31 Dec. 2020
$1,155,011
(158,662)		 $934,391
(162,065)
996,349 772,326
2,785,969
(58)		 2,202,086
(54)
2,785,911 2,202,032
$3,782,260 $2,974,358

Accounts receivables were not pledged.

Trade receivables are generally on 30-120 day terms. Accounts receivables amounted to NT$ 3,965,098 thousand and NT$ 3,164,266 thousand as at 31 December 2021 and 2020.

Please refer to Note 6.(19) for more details on impairment of trade receivables for the year ended 31 December 2021 and 2020 and please refer to Note 12 for credit risk disclosure.

  • 222 -

7. Inventories

Inventories
Raw materials
Work in process
Finished goods
Merchandise
Net		 31 Dec. 2021 31 Dec. 2020
$563,759
48,844
598,592
30,672		 $464,228
53,191
509,694
35,872
$1,241,867 $1,062,985

The cost of inventories recognized in expenses amounted to NT$10,009,747 thousand and NT$8,463,166 thousand for the year ended 31 December 2021 and 2020, respectively, including inventory valuation loss NT$6,911 thousand and NT$4,294 thousand for the year ended 31 December 2021 and 2020, respectively.

Inventories were not pledged.

8. Investments Accounted For Under The Equity Method

(1) Details are as follows:

(1) Details are as follows: (1) Details are as follows: (1) Details are as follows:
31 Dec. 2021 31 Dec. 2020
Percentage
of		 Percentage
of
Investee Company Amount ownership Amount ownership
Investments in the subsidiaries:
TI YUAN INVESTMENT CO., LTD. $53,313 100.00%
187,003 100.00%		 $51,690 100.00%
183,648 100.00%
TI FU INVESTMENT CO., LTD.
CONTEK CO., LTD. (Note 1) 56,080 100.00%
1,104,756 100.00%
227,157
72.10%
4,327 100.00%
1,336,457 100.00%
1,135,535 100.00%
84,445
60.00%
4,189,073
198,606
15.66%
$4,387,679
60,665 100.00%
1,131,620 100.00%
189,474
72.10%
4,835 100.00%
1,365,086 100.00%
1,111,681 100.00%
85,191
60.00%
4,183,890
200,542
15.66%
$4,384,432
SUPRA-ATOMIC CO., LTD. (Note 2) 1,104,756 1,131,620
JUOKU TECHNOLOGY CO.,LTD. 227,157 189,474
TAMAU MANAGEMENT CONSULTANCY CO., LTD. 4,327 4,835
BESTE MOTOR CO., LTD. 1,336,457 1,365,086
INNOVA HOLDING CORP. 1,135,535 1,111,681
TYC VIETNAM INDUSTRIAL CO.,LTD.(Note 3) 84,445 85,191
Subtotal 4,189,073 4,183,890
Investments in the associates
I YUAN PRECISION INDUSTRIAL CO.,LTD. 198,606 200,542
Total $4,387,679 $4,384,432
  • 223 -

Note ：

  • (1) The Company invested 400,000 shares in the subsidiaries: CONTEK CO., LTD. in 2020, the Company’s shareholding ratio remains unchanged.

  • (2) The Company reduction 600,000 shares in the subsidiaries: SUPRA-ATOMIC CO., LTD. in 2021, the Company’s shareholding ratio remains unchanged.

  • (3) The Company invested and established the subsidiaries: TYC VIETNAM INDUSTRIAL CO., LTD., the Company’s shareholding ratio is 60%.

We did not audit the financial statements of certain subsidiaries, associates and joint ventures accounted for under the equity method. The related shares of profits from the subsidiaries, associates and joint ventures under the equity method amounted to NT$70,059 thousand and NT$16,379 thousand, for the years ended December 31 2021 and 2020, respectively, and the related shares of other comprehensive income (loss) from the subsidiaries, associates and joint ventures under the equity method amounted to NT$(54,299) thousand and NT$(8,569) thousand, for the years ended December 31 2021 and 2020, respectively, and these subsidiaries, associates and joint ventures under equity method amounted to NT$732,263 thousand and NT$725,102 thousand as at December 31 2021 and 2020, respectively.

(1) Investment subsidiaries

The investment of subsidiaries in individual financial reports is expressed as “investment using the equity method” and necessary evaluation adjustment.

One of the Company’s subsidiaries, TI FU INVESTMENT CO., LTD. held 940 thousand shares of the Company’s stock as at December 31,2021 and 2020, respectively.

  • (2) Investment in the associates

The Company’s investments in the associates are not individually material. The aggregate carrying amount of the Company’s interests in I YUAN PRECISION INDUSTRIAL CO., LTD. is NT$198,606 thousand, and NT$200,542 thousand, as at 31 December 2021, and 31 December 2020, respectively. The aggregate financial information of the Company’s investments in associates is as follows:

Profit or loss from continuing operations
Other comprehensive income (post-tax)
Total comprehensive income		 2021 2020
$9,300
-		 $12,952
-
$9,300 $12,952

The associates had no contingent liabilities or capital commitments as at 31 December 2021, and 31 December 2020.

  • 224 -

9. Property, plant and equipment

Owner occupied property, plant and equipment

Cost:
1 Jan. 2021
Addition
Disposal
Other
30 Dec. 2021
1 Jan. 2020
Addition
Disposal
Other
30 Dec. 2020
Depreciation and
impairment
1 Jan. 2021
Depreciation
Disposal
30 Dec. 2021
1 Jan. 2020
Depreciation
Disposal
30 Dec. 2020
Net book value:
30 Dec. 2021
31 Dec. 2020		 Land Land and
improvement		 Buildings Machinery and
equipment		 Molding
equipment		 Electrical
equipment		 Transportation
equipment		 Miscellaneous
equipment		 Construction
inprogress		 Total
$731,049
-
-
-
$9,716
-
-
-		 $1,780,993
1,239
(440)
1,286
$1,439,884
14,907
(34,402)
-
$10,884,341
978,933
(910,908)
-		 $140,156
644
-
-
$177,353
1,870
(2,630)
2,084
$553,474
19,001
(2,608)
-
$-
3,370
-
(3,370)		 $15,716,966
1,019,964
(950,988)
-
$731,049 $9,716 $1,783,078 $1,420,389 $10,952,366 $140,800 $178,677 $569,867 $- $15,785,942
$731,049
-
-
-		 $9,716
-
-
-		 $1,774,993
5,064
-
936		 $1,341,050
114,824
(15,990)
-		 $10,426,609
1,341,153
(883,421)
-		 $137,190
2,331
-
635		 $177,603
10,028
(10,278)
-		 $541,232
12,837
(595)
-		 $-
1,571
-
(1,571)		 $15,139,442
1,487,808
(910,284)
-
$731,049 $9,716 $1,780,993 $1,439,884 $10,884,341 $140,156 $177,353 $553,474 $- $15,716,966
$-
-
-

$3,781
740
-		 $774,012
45,639
(440)

$1,103,447
57,040
(32,764)

$6,913,352
1,117,222
(909,703)		 $125,854
3,090
-

$78,368
16,311
(2,515)

$337,109
37,187
(2,608)

$-
-
-		 $9,335,923
1,277,229
(948,030)
$- $4,521 $819,211 $1,127,723 $7,120,871 $128,944 $92,164 $371,688 $- $9,665,122
$-
-
-		 $3,041
740
-		 $728,517
45,495
-		 $1,062,626
56,810
(15,989)		 $6,672,509
1,124,248
(883,405)		 $121,117
4,737
-		 $71,756
16,890
(10,278)		 $301,168
36,537
(596)		 $-
-
-		 $8,960,734
1,285,457
(910,268)
$- $3,781 $774,012 $1,103,447 $6,913,352 $125,854 $78,368 $337,109 $- $9,335,923
$731,049
$5,195		 $963,867
$292,666
$3,831,495		 $11,856
$86,513
$198,179		 $- $6,120,820
$731,049 $5,935 $1,006,981 $336,437 $3,970,989 $14,302 $98,985 $216,365 $- $6,381,043
  • 225 -

The amount of capitalized interests and interest rates are as follows:

Items 2021 2020
Construction in progress and prepayment for
equipments $9,483 $13,127
The interest rate interval of borrowing cost
capitalization 0.73%~0.97% 0.93%~1.18%

The material components of the Company's building that have different useful life are the main buildings and factories, which are depreciated based on useful life of 60 years and 35 years, respectively.

The material components of the Company's equipment are mainly the processing equipment, and are depreciated based on useful life of 10 years.

Please refer to Note 8 for more details on property, plant and equipment under pledge.

10. Intangible assets

Intangible assets
Cost:
1 Jan. 2021
Addition - acquired
separately
Decrease
31 Dec. 2021
1 Jan. 2020
Addition - acquired
separately
31 Dec. 2020
Amortization and
impairment:
1 Jan. 2021
Amortization
Decrease
31 Dec. 2021
1 Jan. 2020
Amortization
31 Dec. 2020
Net book value:
31 Dec. 2021
31 Dec. 2020		 Trademark
right		 Patent Software Royalty Total
$11,894
885
(515)
$9,719

2,059
(422)
$105,653

7,096
(7,194)
$22,400

4,687
(17,590)
$149,666

14,727
(25,721)
$12,264
$11,356
$105,555
$9,497
$138,672
$11,345
549
$7,664

2,055
$96,181

9,472
$17,591

4,809
$132,781

16,885
$11,894
$9,719
$105,653
$22,400
$149,666
$5,484
1,676
(515)
$2,461

921
(422)
$66,801

24,384
(7,194)
$17,591

4,808
(17,590)
$92,337

31,789
(25,721)
$6,645
$2,960
$83,991
$4,809
$98,405
$3,715
1,769
$1,607

854
$38,379

28,422
$12,385

5,206
$56,086

36,251
$5,484
$2,461
$66,801
$17,591
$92,337
$5,619
$8,396
$21,564
$4,688
$40,267
$6,410
$7,258
$38,852
$4,809
$57,329
  • 226 -

Amortization expense of intangible under the statement of comprehensive income:

Operating cost
Operating expense
Total		 2021 2020
$11,008
20,781		 $11,134
25,117
$31,789 $36,251

11. Short-term Borrowings

Short-term Borrowings
Interest rate 31 Dec. 2021 31 Dec. 2020
Unsecured Loans
0.82%		 $958,000 $375,590

12. Short-term notes and bills payable

Short-term notes and bills payable
Guarantors 31 Dec. 2021
Interest rate Amount Pledge or Collateral
Commercial paper payable
International Bills Finance Corporation
Mega Bills Finance Corporation
Dah Chung Bills Finance Corporation
China Bills Finance Corporation
Subtotal
Less: Discount of commercial paper payable
Net		 0.85%
0.85%
0.84%
0.84%		 $170,000
160,000
150,000
160,000		 none
none
none
none
640,000
(192)
$639,808

31 Dec. 2020: None

13. Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss
Held for trading：
Derivatives not designated as hedging instruments
Forward exchange agreement
Cross currency swaps agreement
Total
Current		 31 Dec. 2021 31 Dec. 2020
$-
3,577		 $917
16,103
$3,577 $17,020
$3,577 $17,020
  • 227 -

14. Long-term Borrowing

Details are as follows:

Creditors 31 Dec. 2021 31 Dec. 2021
Redemption
Amount
 Interest rate
First Bank
First Bank
Chang Hwa Bank
Bank of Taiwan
Bank of Taiwan
DBS Bank
DBS Bank
KGI Bank
Yuanta Bank
Hua Nan Bank		 $800,000
300,000

700,000
200,000
450,000
300,000
270,000
200,000
550,000
500,000		 0.45%
0.90%
0.50%
0.90%

0.72%

0.57%

0.85%

0.89%
0.85%
0.46%~0.66%		 From 1 Jul. 2019 to 15 Sep. 2026.
Principal are repaid monthly, starting from 17
Oct. 2022, and interests are repaid monthly.
From 16 Aug. 2021 to 16 Aug. 2023.
Interests are repaid monthly and bullet
repayment on expiry date.
From 9 Aug. 2019 to 15 Aug. 2029.
Principal are repaid monthly, starting from 17
Oct. 2022, and interests are repaid monthly.
From 6 Jul. 2021 to 15 Jun. 2023. After
applying for each drawdown within the credit
line, each transaction shall not exceed 180
days. Interests are repaid monthly and bullet
repayment on expiry date.
From 6 Jul. 2021 to 15 Jun. 2026. The grace
period is 2 years. Principal are repaid
monthly, and interests are repaid monthly.
From 6 Nov. 2019 to 15 Oct. 2024.
Principal are repaid monthly, starting from 17
Oct. 2022, and interests are repaid monthly.
From 14 Apr. 2021 to 14 Apr. 2023. After
applying for each drawdown within the credit
line, pay off all principal and interest payable
of each drawn down facility on the expiry
date of each principal loan.
From 29 Dec. 2021 to 10 Jan. 2024.
Interests are repaid monthly and bullet
repayment on expiry date.
From 27 Aug. 2021 to 27 Aug. 2023. After
applying for each drawdown within the credit
line, each transaction shall not exceed 180
days. Interests are repaid monthly and bullet
repayment on expiry date.
From 24 Jul. 2020 to 24 Jul. 2025.
Principal are repaid monthly, starting from 15
Aug. 2023, and interests are repaid monthly.
  • 228 -
Creditors 31 Dec. 2021 31 Dec. 2021
Redemption
Amount
 Interest rate
Hua Nan Bank
Taipei Fubon
Bank
DBS Bank
Subtotal
Less: current
portion
Total
Creditors		 100,000
350,000
249,570
(USD 9,000)		 From 5 Feb. 2021 to 5 Feb. 2023. Interests
are repaid monthly and bullet repayment on
expiry date.
From 26 Sep. 2021 to 26 Sep. 2023. Each
transaction shall not exceed 180 days.
Interests are repaid monthly and bullet
repayment on expiry date.
From 14 Apr. 2021 to 14 Apr. 2023. After
applying for each drawdown within the credit
line, each transaction shall not exceed 180
days. Interests are repaid monthly and bullet
repayment on expiry date.

Redemption
4,969,570
(111,301)
$4,858,269
Amount
 Interest rate
First Bank
First Bank
Chang Hwa Bank
Bank of Taiwan
DBS Bank		 $800,000
200,000

700,000
200,000
300,000		 0.45%
0.95%
0.50%
0.96%

0.57%		 From 1 Jul. 2019 to 15 Sep. 2026.
Principal are repaid monthly, starting from 17
Oct. 2022, and interests are repaid monthly.
From 14 Aug. 2020 to 14 Aug. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 9 Aug. 2019 to 15 Aug. 2029.
Principal are repaid monthly, starting from 17
Oct. 2022, and interests are repaid monthly.
From 24 Jun. 2020 to 24 Jun. 2022. After
applying for each drawdown within the credit
line, each transaction shall not exceed 180
days. Interests are repaid monthly and bullet
repayment on expiry date.
From 6 Nov. 2019 to 15 Oct. 2024.
Principal are repaid monthly, starting from 17
Oct. 2022, and interests are repaid monthly.
  • 229 -

31 Dec. 2020

Creditors Amount
 Interest rate
Redemption
DBS Bank
Mega Bank
KGI Bank
Mizuho Bank
Yuanta Bank
Shin Kong Bank
Hua Nan Bank
DBS Bank
KGI Bank
Subtotal
Less: current
portion
Less: unamortized
expense
Total		 280,000
150,000
340,000
600,000
520,000

100,000
200,000
114,120
(USD 4,000)
57,060
(USD 2,000)
0.91%

0.92%

0.92%

0.90%

0.95%

0.90%

0.46%
0.80%

0.85%


 From 14 Apr. 2020 to 14 Apr. 2022. After
applying for each drawdown within the credit
line, each transaction shall not exceed 180
days. Interests are repaid monthly and bullet
repayment on expiry date.
From 14 Jun. 2020 to 13 Jun. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 29 Nov. 2020 to 29 Nov. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 20 Nov. 2020 to 20 Nov. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
From 19 Aug. 2020 to 18 Aug. 2022. After
applying for each drawdown within the credit
line, each transaction shall not exceed 180
days. Interests are repaid monthly and bullet
repayment on expiry date.
From 24 Jul. 2020 to 24 Jul. 2025, each
drawdown must not exceed 90 days, Interests
are repaid monthly and bullet repayment on
expiry date.
From 24 Jul. 2020 to 24 Jul. 2025.
Principal are repaid monthly, starting from 15
Aug. 2023, and interests are repaid monthly.
From 14 Apr. 2020 to 14 Apr. 2022. After
applying for each drawdown within the credit
line, each transaction shall not exceed 180
days. Interests are repaid monthly and bullet
repayment on expiry date.
From 29 Nov. 2020 to 29 Nov. 2022.
Interests are repaid monthly and bullet
repayment on expiry date.
4,561,180
-
(2,567)
$4,558,613
  • 230 -

Note：

  • (1) On 31 Jan. 2018, the Company and its subsidiary, JUOKU TECHNOLOGY CO., LTD. reached a syndicated loan agreement with Chang Hwa Bank (the syndicated loan agreement lead bank) and other 12 banks, amounting to NT$3,980,000 thousand. The period of the loan agreement is five years starting from the first drawdown day of the loan within 6 months from the agreement execution date. The loan has been repaid in advance in the third quarter of 2021, and the loan amount has been written off. The Company's annual and semi-annual consolidated financial statements shall maintain specific current ratio, debt ratio, interest coverage multiple and other financial ratios during the term of the agreement and until the obligations under the agreement are fully paid off. The consolidated financial statements of the Company comply with the above joint loan covenant.

  • (2) In 2019, the Company financed with designated banks in accordance with the “Project Loan Guidelines to Welcoming Overseas Taiwanese Businesses Return to Invest in Taiwan”, and entered into contract terms and normative matters, and completed them in accordance with the approval letter.

15. Other Long-term Borrowing

31 Dec. 2021: None

Guarantors Contractperiod 31Dec.2020 31Dec.2020
Interest rate Amount
Commercial paper payable
Chang Hwa Bank
(The syndicated loan agreement
led)
Less: Discount of commercial paper
payable
Net		 From
31
Jun.
2018 to 31 Jun.
2023.		 1.48% $2,000,000
(561)
$1,999,439

16. Post-Employment Benefits

Defined contribution plan

The Company adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Company have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Expenses under the defined contribution plan for the years ended 31 December 2021 and 2020 were NT$39,061 thousand and NT$36,403 thousand, respectively.

  • 231 -

Defined benefits plan

The Company adopts a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company contributes an amount equivalent to 3% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before end of each year, the Company make estimates of the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the following year, the Company will make up the difference in one appropriation before the end of March of the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under a mandate, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes control and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with IAS 19. The Company expects to contribute NT$53,354 thousand to its defined benefit plan during the 12 months beginning after December 31 2021.

The defined benefit obligations were expected to mature in 6 years and 10 years as of December 31 2021 and 2020, respectively.

Pension costs recognized in profit or loss are as follows:

Pension costs recognized in profit or loss are as follows:
Current service cost
Net interest on the net defined benefit liabilities
Total		 2021 2020
$2,339
707		 $2,531
1,466
$3,046 $3,997

Reconciliations of liabilities (assets) of the defined benefit obligation and plan assets at fair value are as follows:

are as follows:
Defined benefit obligation
Plan assets at fair value
Net defined benefit liabilities		 31 Dec. 2021 31 Dec. 2020 1 Jan. 2020
$393,957
(218,698)		 $428,432
(207,627)		 $417,387
(188,263)
$175,259 $220,805 $229,124
  • 232 -

Reconciliations of liabilities (assets) of the defined benefit plan are as follows:

As of 1 January 2020
Pension costs recognized in profit or loss:
Current service cost
Interest expense (income)
Subtotal
Remeasurements of the defined benefit
liabilities/assets:
Actuarial gains and losses arising from
changes in demographic assumptions
Actuarial gains and losses arising from
changes in financial assumptions
Experience adjustments
Remeasurements of the defined benefit
assets
Subtotal
Payment of benefit obligation
Contribution by employer
As of 31 December 2020
Pension costs recognized in profit or loss:
Current service cost
Interest expenses (income)
Subtotal
Remeasurements of the defined benefit
liabilities/assets:
Actuarial gains and losses arising from
changes in demographic assumptions
Actuarial gains and losses arising from
changes in financial assumptions
Experience adjustments
Remeasurements of the defined benefit
assets
Subtotal
Payment of benefit obligation
Contribution by employer
As of 31 December 2021		 Defined benefit
obligation		 Plan assets at
fair value		 Net defined
benefit liabilities
(assets)
$417,387
2,531
2,671		 $(188,263)
-
(1,205)		 $229,124
2,531
1,466
5,202 (1,205) 3,997
1,774
11,214
5,048
-		 -
-
-
(6,616)		 1,774
11,214
5,048
(6,616)
18,036 (6,616) 11,420
(12,193)
-		 12,193
(23,736)		 -
(23,736)
428,432
2,339
1,371		 (207,627)
-
(664)		 220,805
2,339
707
3,710 (664) 3,046
(2,272)
(16,024)
3,561
-		 -
-
-
(3,068)		 (2,272)
(16,024)
3,561
(3,068)
(14,735) (3,068) (17,803)
(23,450)
-		 23,450
(30,789)		 -
(30,789)
$393,957 $(218,698) $175,259
  • 233 -

The principal assumptions used in determining the Company’s defined benefit plan are shown below:

below:
Discount Rate
Expected rate of salary increase		 31 Dec. 2021
31 Dec. 2020
0.64%
1.00%
0.32%

1.00%

A sensitivity analysis for significant assumption as at 31 December 2021 and 2020 is, as show below:

below:
Discount Rate increase by 0.5%
Discount Rate decrease by 0.5%
Rate of future salary increase
by 0.5%
Rate of future salary decrease
by 0.5%		 Jan. 1, 2021~
Dec. 31,2021		 Jan. 1, 2020~
Dec. 31,2020
Defined
benefit
obligations
increase		 Defined
benefit
obligations
decrease		 Defined
benefit
obligations
increase		 Defined
benefit
obligations
decrease
$-
25,056
52,253
-		 $(484)
-
-
(484)
$-

30,064

61,816
-
$(12,988)

-
-
(12,988)

The sensitivity analysis above was based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analysis compared to the previous period.

17. Equity

(1) Capital

As of 31 December 2021 and 2020, TYC BROTHER INDUSTRIAL CO., LTD.’s registered capital was both NT$4,000,000 thousand with par value at NT$10 per share and has issued 400,000 thousand common shares, and had issued ordinary share capital in the amount of $3,128,979 with 400,000 thousand common shares. The Company has also issued preferred share capital of $300,000 and $0, 30,000 thousand shares and 0 shares respectively.

  • 234 -

Preferred stock

On March 21, 2021, the Company’s board of directors resolved to increase each capital by issuing preference shares A, which was approved by the FSC under a letter dated 26 May, 2021, and the record date of capital increase was determined as of 5 August, 2021, it was expected to issue 30,000 thousand shares having a face value of $10 per share at the issue price of NT$50 per share. The right and obligation of this issue are as follows:

  • A. Maturity date: No maturity date. The preferred shareholders have no rights to request the Company to buy back Preferred Share A. The Company has rights to buy back all or part of the Preferred Share A as of five years after the issue date. The preferred shares still outstanding will retain the aforementioned rights and obligations. If the Company pays out dividends in the year of buyback, the dividend amount will be prorated based on the outstanding days.

  • B. Dividends: The dividend yield of the preferred share A is 4% (annual rate), (5-year interest rate swap (IRS) rate, 0.64275% + fixed rate, 3.35725%) and calculated at the issue price per share. The five-year IRS rate will be reset on the next business day five years after the issue date and every five years thereafter. The record date of the reset is two business days of financial institutions in Taipei prior to the reset date. The five-year IRS rate is the arithmetic mean of the offer prices of Reuter's TAIFXIRS and COSMOS3 at 11 a.m. on the record date of the reset (business day of financial institutions in Taipei). If the aforesaid offer prices are unavailable on the record date of the reset, the five-year IRS rate shall be determined by the Company based on the principle of good faith and reasonable market conditions.

  • C. Dividend payment: The preferred share dividends are fully distributed in cash every year. After the financial statements are adopted in an annual general meeting, the Board of Directors shall authorize the chairman to set the record date for paying the preferred share dividends of the previous year. The number of dividends issued in the year of issue and in the year of redemption is calculated based on the actual number of days of issue in the current year.

  • D. The Company shall apply the current year's earnings, if any, to pay for taxes as stipulated by laws and regulations, offset accumulated losses of previous years, and allocate 10% as legal reserve pursuant to laws and regulations. Special reserve shall be set aside or reversed from net shareholder’s equity reduction in current or accumulative in prior years in accordance with related regulations. The remaining earnings along with the accumulated unappropriated earnings in prior years as shareholder bonus, and shall be appropriated as preferred share dividends in accordance with the Article 7-1, Articles of Incorporation.

  • E. The Company has discretion over the distribution of preferred stock dividends. If the Company does not generate any or sufficient profits during the year for the distribution of preferred stock dividends, it may resolve not to pay out the dividends and preferred stockholders have no rights to object. The Board of Directors shall propose a surplus earnings distribution in accordance with Article 32-1, Articles of Incorporation to be adopted by the annual general meeting. After the surplus earnings distribution is adopted, the distributable amount of preferred share and common shares shall be distributed to preferred shares first.

  • 235 -

  • F. The preferred shares A issued are non-cumulative; that is, the undistributed dividends or shortages in dividends distributed shall not be accumulated and paid in subsequent years when profits are generated.

  • G. Participating privilege: The preferred shareholders A are not entitled to common shares' cash or share dividends derived from earnings or capital reserve.

  • H. Distribution of residual property: Preferred shareholders A have a higher claim to the Company's residual properties than common stockholders. Different types of preferred shares issued by the Company grant holders the same rights to claims, and preferred shareholders stay subordinate to general creditors. The amount preferred shareholders are entitled to is capped at the product of number of outstanding preferred shares at the time of distribution and issuance price.

  • I. Voting rights: Preferred shareholders A have neither voting nor election rights. However, they may be elected as Directors. They have voting rights in preferred shareholders' meetings or with respect to agendas associated with the rights and obligations of preferred shareholders in shareholders' meetings.

  • J. Conversion to ordinary shares: Preferred Share A is non-convertible.

  • K. Capital reserve issued at preferred share A premium shall not be used as capital during the issuance of the preferred share.

  • L. For cash offering of new shares, the preferred shareholders have the same preemptive rights as the common shareholders.

(2) Capital surplus

Capital surplus

Issuance of shares
Common stock
Preferred stock
Subtotal
Treasury stock transactions
Bond conversion
Share of changes in net assets of associate and joint
ventures accounted for using the equity method
Adjustments for dividends subsidiaries received from
parent company
Other
Total		 As at
31 Dec. 2021 31 Dec. 2020
$1,023,509
1,195,878
$1,023,509

-
2,219,387
1,023,509
28,891
239,469
73,530
12,583
4,017
28,891

239,469

73,530

12,019

3,845
$2,577,877
$1,381,263
  • 236 -

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(3) Treasury stock

As of 31 December 2021, 31 December 2020, the Company’s shares held by the subsidiary, Company TI FU INVESTMENT CO., LTD. was NT$5,996 thousand, respectively, and the number of treasury stock held by TI FU INVESTMENT CO., LTD. was 940 thousand, respectively. These shares held by Company TI FU INVESTMENT CO., LTD. were acquired for the purpose of financing before the amendment of the Company Act on 12 November 2001.

(4) Retained earnings and dividend policies

The Company’s Articles of Incorporation provide that the current net income, after deducting the previous years’ losses, shall appropriate 10% as legal reserve, and set aside or reverse special reserve based on the net deduction of shareholders’ equity that occurred in the current year and accumulated in the previous period according to the company laws and other regulations of R.O.C. If there is still more than the accumulated undistributed income in the previous year, If there is a balance, and the accumulated undistributed surplus is a shareholder dividend, the balance shall be distributed after the distribution of special dividends (not less than 50% of the available surplus for the current year, of which the cash dividend shall not be less than 10%). The board of directors shall draft a distribution proposal and submit it to the shareholders meeting for a resolution of distribution.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total paid-in capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to “other net deductions from shareholders” equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed from the special reserve.

  • 237 -

The FSC on 31 March 2021 issued Order No. Financial-Supervisory-Securities-Corporate1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

The appropriations of earnings for 2021 were resolved at the board of directors’ meeting on 24 March 2022. The appropriations of earning for 2020 were resolved at the general shareholders’ meeting on 3 August 2021. The plans were as follows:


Legal reserve
Special reserve
Common stock -cash dividend
Preferred stock -cash dividend
(Note)		 Appropriation of earnings Appropriation of earnings Dividendper share(NT$) Dividendper share(NT$)
2021 2020 2021 2020
$20,992
53,990
156,449
23,671
$25,226

39,013

187,739
-

NT$0.50/
per share
NT$0.80/
per share
NT$0.60/
per share

Note: Calculated based on the number of days outstanding in 2021 and the interest rate of shares at 4%.

Please refer to Note 6.(21) for relevant information on estimation basis and recognized amount of employees compensations and remunerations to directors and supervisors.

18. Operating revenue

Revenue from contracts with customers
Sale of goods
Other revenue
Total		 2021 2020
$10,255,505
938,494
$8,687,181

704,569
$11,193,999
$9,391,750

Analysis of revenue from contracts with customers during the year is as follows:

  • 238 -

Disaggregation of revenue

  • A. The company is a single operating department; please refer to the previous paragraph for the income information that should be disclosed by the reporting department.

  • B. The types of revenue from contracts signed with customers in 2021 and 2020 are both recognized at a certain point in time.

19. Expected credit losses / (gains)

Expected credit losses / (gains)
Operating Expense- Expected credit losses(gains)
Notes Receivables
Accounts Receivables
Total		 2021
$(3)
1,705
$1,702		 2020
$3
2,082
$2,085

Please refer to Note 12 for more details on credit risk.

The credit risk for measured at amortized cost is assessed as low (the same as the assessment result in the beginning of the period). Therefore, the loss allowance is measured at an amount equal to 12-month expected credit losses. As the Company transacts with are financial institutions with good credit, no allowance for losses has been provided in this period.

The Company measures the loss allowance of its trade receivables (including note receivables and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Company’s loss allowance as at 31 December 2021 and 2020 is as follows:

The Company considers trade receivables that the credit loss is actually included in the impairment loss except for individual customers by counterparties’ credit rating, by geographical region and by industry sector and its loss allowance is measured by using provision matrix, details are as follow:

As at 31 December 2021


Gross carrying amount

Loss ratio
Lifetime expected credit
losses
Carrying amount
 Not yet due
(Note)		 Overdue Overdue Total
<=90
days		 91-180
days		 181-270
days		 >=271
days
$3,715,720
0%~1%
$100,708

1%~5%
$923

100%
$-

-
$147,747

100%		 $3,965,098

(158,856)
(4,721) (5,465) (923) -
(147,747)
$3,710,999
$95,243
$-
$-
$-		 $3,806,242
  • 239 -

As at 31 December 2020

Gross carrying amount

Loss ratio
Lifetime expected credit
losses
Carrying amount
 Not yet due
(Note)		 Overdue Overdue Total
<=90
days		 91-180
days		 181-270
days		 >=271
days
$2,947,052
0%~1%
$61,777

1%~5%
$-

-
$-

-
$155,437

100%		 $3,164,266

(162,258)
(6,441) (380) -
-
(155,437)
$2,940,611
$61,397
$-
$-
$-		 $3,002,008

Note ： The Company’s note receivables are not overdue.

The movement in the provision for impairment of note receivables and accounts receivables during the year ended 2021 and 2020 is as follows:

1 Jan. 2021
Addition/(reversal) for the current period
Write off
31 Dec. 2021
1 Jan. 2020
Addition/(reversal) for the current period
Write off
31 Dec 2020		 Note
receivables		 Accounts
receivables
$139
(3)
-		 $162,119
1,705
(5,104)
$136 $158,720
Note
receivables		 Accounts
receivables
$136
3
-		 $179,468
2,082
(19,431)
$139 $162,119

20. Leases

  • (1) The Company as a lessee

The Company leases various properties, including real estate such as land, and buildings. The lease terms range from 5 to 20 years.

The Company’s leases effect on the financial position, financial performance and cash flows are as follow:

  • 240 -

A. Amounts recognized in the balance sheet

(a) Right-of-use assets

The carrying amount of right-of-use assets

Land
Buildings
Total		 As at As at
31 Dec. 2021
$625,688
57,521
$683,209		 31 Dec. 2020
$626,250
70,236
$696,486

(b) Lease liabilities

Current
Non-current
Total		 As at
31 Dec. 2021
$39,388
575,440
$614,828		 31 Dec. 2020
$38,832
614,829
$653,661

Please refer to Note 6.22(3) for the interest on lease liabilities recognized for the year ended 31 December 2021 and 2020 and refer to Note 12.(5) Liquidity Risk Management for the maturity analysis for lease liabilities as at 31 December 2021 and 2020.

B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Land
Buildings
Total		 2021 2020
$562
12,715		 $562
12,716
$13,277 $13,278

C. Income and costs relating to leasing activities

The expenses relating to short-term leases
The expenses relating to leases of low-value assets
(Not including the expenses relating to short-term
leases of low-value assets)		 2021 2020
$104
838		 $2,077
867
  • 241 -

D. Cash outflow relating to leasing activities

For the year ended 31 December 2021 and 2020, the Company’s total cash outflows for leases amounting to NT$48,830 thousand and NT$48,353 thousand.

  1. For the year ended 31 December 2021 and 2020, the Company’s personnel, depreciation and

amortization expenses are summarized as follows:

Function
Character
2021
2021
2021		 2020 2020 2020
Classified as
operating
costs		 Classified as
operating
expenses		 Total Classified as
operating
costs		 Classified as
operating
expenses		 Total
Employee
benefits
expense
Salaries $573,205
$317,488
$890,693
$517,574
$329,829
$847,403
Insurances 67,752 35,678 103,430 58,083 34,389 92,472
Pensions 25,012 17,095 42,107 22,714 17,686 40,400
Director's
remuneration		 - 5,200 5,200 - 7,250 7,250
Other personnel
expenses		 30,060 17,896 47,956 26,448 17,591 44,039
Depreciations 1,223,631 66,875 1,290,506 1,230,398 68,337 1,298,735
Amortization 11,008 20,781 31,789 11,134 25,117 36,251

  • (1) The number of employees of Company as of December 31, 2021 and 2020 were 1,630 and 1,651, respectively, including 7 and 6 directors who were not concurrently employees.

  • (2) Companies which have been listed on Taiwan Stock Exchange or Taiwan Over-The Counter Securities Exchange should disclose the following information:

  • A. Average employee benefits of 2021 and 2020 were NT$668 thousand and NT$623 thousand, respectively.

  • B. Average salaries of 2021 and 2020 were NT$549 thousand and NT$515 thousand, respectively.

  • C. The Company's average salary expense adjustment for the year ended December 31, 2021 decreased by 6.60%.

  • D. The Company has established an audit committee to replace the supervisor, so the supervisor’s remuneration has not been recognized.

  • E. The salary and remuneration policy of the Company:

Director’s remuneration established pursuant to Articles 32 of the Company’s Articles of Incorporation is as follows:

  • 242 -

The Company shall allocate no more than 3% of annual profit as director’s remuneration; however, the Company’s accumulated losses shall have been covered first. The managers’ remuneration and employees compensation are determined based on the salary level of the position in the industry, the position's responsibilities and contribution to the Company's operation goals. In addition to the Company's overall operating performance, factors such as personal performance achievement and contribution to the corporate performance are also considered when determining remuneration to provide reasonable compensation to employees.

According to the Articles of Incorporation, 1% of profit of the current year is distributable as employees’ compensation and no higher than 3% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the Board of Directors’ resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

Based on the profit level, the Company estimated NT$12,000 thousand employees’ compensation and NT$5,200 thousand remuneration to directors and supervisors as salaries expenses. A resolution was approved at a Board of Directors meeting held on 24 March 2022 to distribute NT$ 12,000 thousand and NT$5,200 thousand in cash as employee’s compensation and remuneration to directors and supervisors, respectively.

There is no significant difference between the actual employee bonuses and remuneration to directors and supervisors distributed from the 2020 earnings and the estimated amount in the financial statements for the year ended 2020.

22. Non-operating income and expenses

(1) Other income

Other income
Rent income
Interest income
Dividend income
Government subsidy income
Other income-other
Total		 2021 2020
$2,002
203
2,473
-
27,957		 $1,590
674
979
68,216
42,923
$32,635 $114,382
  • 243 -

(2) Other gains and losses

Gains on disposal of property, plant and equipment
Foreign exchange (losses) gains, net
Gains (Losses) on financial assets or liabilities at fair
value through profit or loss
Other losses
Total		 2021 2020
$1,889
(139,538)
19,604
(9,310)		 $515
(54,279)
(1,387)
(12,049)
$(127,355) $(67,200)

(3) Finance costs

Interest on borrowings from bank
Interest on lease liabilities
Total
23.Components of other comprehensive income (loss)
Year ended Dec. 31, 2021
Arising
during
theperiod
Items that will not be reclassified subsequently to
profit or loss:
Remeasurements of defined benefit pension plans
$17,804
Unrealized gains from equity instruments
investments measured at fair value through other
comprehensive income
2,058
Share of other comprehensive income (loss) of
associates and joint ventures accounted for using
the equity method
(3,073)
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
operations
(77,907)
Share of other comprehensive income of associates
and joint ventures accounted for using the equity
method
14,698
Total other comprehensive income
$(46,420)		 Interest on borrowings from bank
Interest on lease liabilities
Total
23.Components of other comprehensive income (loss)
Year ended Dec. 31, 2021
Arising
during
theperiod
Items that will not be reclassified subsequently to
profit or loss:
Remeasurements of defined benefit pension plans
$17,804
Unrealized gains from equity instruments
investments measured at fair value through other
comprehensive income
2,058
Share of other comprehensive income (loss) of
associates and joint ventures accounted for using
the equity method
(3,073)
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
operations
(77,907)
Share of other comprehensive income of associates
and joint ventures accounted for using the equity
method
14,698
Total other comprehensive income
$(46,420)		 2021 2020
$(50,808)
(9,055)		 $(61,046)
(9,592)
$(59,863) $(70,638)
Net of tax
$17,804
2,058
(3,073)
(77,907)

14,698
$(3,561)

-

-

15,581

(2,939)
$14,243

2,058

(3,073)

(62,326)
11,759
$(46,420) $9,081
$(37,339)
  • 244 -
Year ended Dec. 31, 2020
Items that will not be reclassified subsequently to
profit or loss:
Remeasurements of defined benefit pension plans
Unrealized gains from equity instruments
investments measured at fair value through other
comprehensive income
Share of other comprehensive income (loss) of
associates and joint ventures accounted for using
the equity method
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
operations
Share of other comprehensive income of
associates and joint ventures accounted for using
the equity method
Total other comprehensive income		 Arising
during
theperiod		 Income tax
profit
(expense)		 Net of tax
$(11,420)
16,521
32,732
(101,035)
(10,827)
$2,284

-

-

20,207
2,166
$(9,136)

16,521

32,732

(80,828)

(8,661)
$(74,029) $24,657
$(49,372)

24. Income Tax

The major components of income tax expense (income) for 2021 and 2020 are as follows:

Income tax recorded in profit or loss

Current income tax expense (benefit):
Current income tax charge
Adjustments in respect of current income tax of prior
periods
Deferred tax expense (income):
Deferred income tax expense (income) related to
origination and reversal of temporary differences
Deferred income tax related to recognition and
derecognition of tax losses and unused tax credits
Total Income tax expense		 2021 2020
$9,093
24,592
772
7,787		 $1,091
(27,313)
49,953
(51,201)
$42,244 $(27,470)
  • 245 -

Income tax relating to components of other comprehensive income

2021
2020
Deferred tax expense (income):
Exchange differences on translation of foreign operations
$(15,581)
$(20,207)
Remeasurements of the defined benefit plan
3,561
(2,284)
Share of other comprehensive income (loss) of associates
and joint ventures accounted for using the equity method
2,939
(2,166)
Income tax relating to components of other comprehensive
income
$(9,081)
$(24,657)
Areconciliation between tax expense and the product of accounting profit multiplied by
applicable tax rate is as follows:		 2021 2020

$(15,581)
3,561


2,939
$(20,207)
(2,284)
(2,166)
$(9,081) $(24,657)
Accounting profit before tax from continuing operations
Tax at the domestic rates applicable to profits in the
country concerned
Tax effect of revenues exempt from taxation
Tax effect of expenses not deductible for tax purposes
Tax effect of deferred tax assets/liabilities
Adjustments in respect of current income tax of prior
periods
Total income tax expenses recorded in profit or loss		 2021 2020
$235,515 $235,146
$47,103
(16,261)
20
(13,210)
24,592		 $47,029
(22,034)
-
(25,152)
(27,313)
$42,244 $(27,470)
  • 246 -

Significant components of deferred income tax assets and liabilities are as follows:

For the year ended December 31, 2021

Temporary differences
Unrealized exchange losses (gains)
Allowance for doubtful debts
Allowance for inventory valuation losses
Exchange differences on translation of foreign operations
Financial assets at fair value through profit or loss
Unrealized profits or losses on transactions with associates
Reserve for land value increment tax
Compensated absences provisions
Net defined benefit liabilities, non-current
Impairment loss of assets
Depreciation difference for tax purpose
Impairment on property, plant and equipment
Unused tax losses
Deferred income tax (expenses)
Deferred tax assets and liabilities net
As presented on the financial statement:
Deferred tax assets
Deferred tax liabilities		 As of
1 Jan. 2021
Recognized
in income

Recognized
in other
comprehens
ive income

As of
31 Dec.
2021
$2,896
30,802
14,170
97,568
3,404

91,420
(38,717)
6,620
44,161
2,598
3,757
6,284
51,201
$2,845

3

1,382

-

(2,895)

6,478

-

242

(5,548)

(2,598)

(597)

(84)

(7,787)
$-

-

-

12,642

-

-

-

-

(3,561)

-

-

-
-
$5,741

30,805

15,552

110,210

509

97,898

(38,717)

6,862

35,052

-

3,160

6,200

43,414
$316,164 $(8,559) $9,081
$316,686




$354,881 $355,403
$(38,717) $(38,717)
  • 247 -

For the year ended December 31, 2020

Temporary differences
Unrealized exchange losses (gains)
Allowance for doubtful debts
Allowance for inventory valuation losses
Exchange differences on translation of foreign operations
Financial assets at fair value through profit or loss
Unrealized profits or losses on transactions with associates
Reserve for land value increment tax
Compensated absences provisions
Net defined benefit liabilities, non-current
Impairment loss of assets
Depreciation difference for tax purpose
Impairment on property, plant and equipment
Unused tax losses
Deferred income tax (expenses)
Deferred tax assets and liabilities net
As presented on the financial statement:
Deferred tax assets
Deferred tax liabilities		 As of
1 Jan. 2020
Recognized
in income

Recognized
in other
comprehens
ive income

As of
31 Dec.
2020
$14,919
35,282
13,311
75,195
600

94,469
(38,717)
6,617
45,825
2,598
33,279
6,881
-		 $(12,023)

(4,480)

859

-

2,804

(3,049)

-

3

(3,948)

-

(29,522)

(597)

51,201
$-

-

-

22,373

-

-

-

-

2,284

-

-

-

-
$2,896

30,802

14,170

97,568

3,404

91,420

(38,717)

6,620

44,161

2,598

3,757

6,284

51,201
$290,259 $1,248
$24,657
$316,164



$330,327 $354,881
$(40,068) $(38,717)

The following table contains information of the unused tax losses:

Year Tax losses for
theperiod
 Unused tax losses as at Expirationyear
31 Dec. 2021 31 Dec. 2020
2021
$220,069		 $217,069 $256,006 2030

The assessment of income tax returns

As of 31 December 2021, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

The assessment of income tax returns The Company 2018

  • 248 -

25. Earnings per share

Basic earnings per share amounts are calculated by dividing the net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

(1) Basic earnings per share
Profit attributable to ordinary equity holders of the Company (in
thousand NT$)
Weighted average number of ordinary shares outstanding for basic
earnings per share (in thousands)
Basic earnings per share (NT$)
(2) Diluted earnings per share
Profit attributable to ordinary equity holders of the Company (in
thousand NT$)
Weighted average number of ordinary shares outstanding for basic
earnings per share (in thousands)
Effect of dilution:
Employee bonus－stock (in thousands)
Weighted average number of ordinary shares outstanding after
dilution (in thousands)
Diluted earnings per share (NT$)		 2021
$193,271
311,958
$0.62
2021
$193,271
311,958

759
312,717
$0.62		 2020
$262,616
311,958
$0.84
2020
$262,616
311,958
1,064
313,022
$0.84

During the reporting date and the date the financial statement was prepared, no other transactions affected the common shares and dilutive potential ordinary shares.

  • 249 -

VII. RELATED PARTIES TRANSACTIONS

Information of the related parties that had transactions with the Company during the financial reporting period is as follow:

Name and nature of relationship of the related parties

Name of the relatedparties

FORTOP INDUSTRIAL CO., LTD.

GENERA CORPORATION

JUOKU TECHNOLOGY CO., LTD.

T.I.T. INTERNATIONAL CO., LTD.

DBM REFLEX OF TAIWAN CO., LTD.

TYC EUROPE B.V.

BRITEVIEW AUTOMOTIVE LIGHTING CO.,
LTD.

I YUAN PRECISION INDUSTRIAL CO., LTD.
TAMAU MANAGEMENT CONSULTANCY
CO., LTD.

CHANGZHOU TAMAO PRECISION
INDUSTRY CO., LTD

KUN SHAN TYC HIGH PERFORMANCE
TECH CO., LTD.

TAYIH KENMOS AUTO PARTS CO., LTD.

JNS AUTO PARTS LIMITED

VARROC TYC AUTO LAMPS CO., LTD.

TA YIH INDUSTRIAL CO., LTD.

BUILDUP INTERNATIONAL TRADING CO.,
LTD.

HANGZHOU SUNNYTECH CO., LTD.

JING TAI TECHNOLOGY CO., LTD.
 Nature of relationshipof the relatedparties
Substantive related party
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Director of the company
Associate
Subsidiary
Subsidiary
Subsidiary
Substantive related party
Associate
Joint Venture
Substantive related party
Substantive related party
Associate
(Note)

(Note) The subsidiary of the Company: JING TAI merged with JUOKU TECHNOLOGY via short-form merger as of 30 September 2020. JUOKU TECHNOLOGY is the surviving company.

  • 250 -

1. Significant related party transactions

(1) Sales

Sales
Subsidiaries
GENERA CORPORATION
TYC EUROPE B.V.
Other
Subtotal
Joint Ventures
Other related parties
Total		 2021 2020
$3,561,717
1,518,614
217,742
5,298,073
221
67,651
$5,365,945
$4,253,801
1,909,486
308,635
6,471,922
236
68,802
$6,540,960

The company sold products to some related parties is mainly based on the US OEM price × 0.24 as the reference price. The payment term was T/T 135 days; some related parties who were single manufacturers, therefore the price could not be compared. The payment term was T/T 150 days; the sales price of some related parties is equivalent to that of nonrelated parties, and the terms of collection are every other month, payable between 1 to 3 months, which is equivalent to ordinary transactions.

(2) Purchases

Subsidiaries
JUOKU TECHNOLOGY CO., LTD.
T.I.T. INTERNATIONAL CO., LTD.
JING TAI TECHNOLOGY CO., LTD.
Other
Subtotal
Associates
I YUAN PRECISION INDUSTRIAL CO., LTD.
Other
Subtotal
Other related parties
FORTOP INDUSTRIAL CO., LTD.
BUILDUP INTERNATIONAL TRADING CO.,
LTD.
Other
Subtotal
Total		 2021 2020
$305,392
237,798
-
58,850		 $109,751
210,520
134,555
36,412
602,040 491,238
506,930
1,745		 527,904
3,145
508,675 531,049
873,087
236,306
22,080		 716,526
174,664
19,608
1,131,473 910,798
$2,242,188 $1,933,085
  • 251 -

The company purchases goods from related parties, the bargaining method for purchase is the same as that of non-related parties, the payment terms are the next month of the purchase, payable between 1 to 3 months, which is equivalent to ordinary transactions.

(3) Notes receivables - related parties

(3) Notes receivables - related parties
Other related parties
BRITEVIEW AUTOMOTIVE LIGHTING CO.,
LTD.
FORTOP INDUSTRIAL CO., LTD.
Subtotal
Less: allowance for doubtful accounts
Net
(4) Accounts receivables - related parties
Subsidiaries
GENERA CORPORATION
TYC EUROPE B.V.
Other
Subtotal
Joint ventures
Other related parties
Total
Less: allowance for doubtful accounts
Net
(5) Other receivables - related parties
Subsidiaries
GENERA CORPORATION
TYC EUROPE B.V.
Other
Subtotal
Joint ventures
Associates
Other related parties
Total
Less: allowance for doubtful accounts
Net		 31 Dec. 2021 31 Dec. 2020
$9,686
1,371		 $11,438
-
11,057
(55)		 11,438
(57)
$11,002 $11,381
31 Dec. 2021 31 Dec. 2020
$1,988,403
534,600
251,378		 $1,664,485
320,396
206,432
2,774,381 2,191,313
37 16
11,551 10,757
2,785,969 2,202,086
(58) (54)
$2,785,911 $2,202,032
31 Dec. 2021 31 Dec. 2020
$15,393
6,467
5,072		 $10,983
2,741
1,564
26,932 15,288
1,941 6,417
- 12
923 145
29,796
(144)		 21,862
(1,992)
$29,652 $19,870
  • 252 -

(6) Accounts payables - related parties

Accounts payables - related parties
Subsidiary
JUOKU TECHNOLOGY CO., LTD.
Other
Subtotal
Associates
I YUAN PRECISION INDUSTRIAL CO., LTD.
Other
Subtotal
Other related parties
FORTOP INDUSTRIAL CO., LTD.
Other
Subtotal
Total		 31 Dec. 2021 31 Dec. 2020
$123,573
139,831		 $114,074
115,255
263,404 229,329
179,521
634		 250,946
216
180,155 251,162
294,294
34,997		 292,804
28,082
329,291 320,886
$772,850 $801,377
  • (7) Significant asset transactions

Acquisition of property, plant and equipment

Subsidiaries
CHANGZHOU TAMAO PRECISION
INDUSTRY CO., LTD.
JUOKU TECHNOLOGY CO., LTD.
DBM REFLEX OF TAIWAN CO., LTD.
T.I.T. INTERNATIONAL CO., LTD.
Subtotal
Other related parties
Total
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Total		 Purchaseprice Purchaseprice
2021 2020
$166,905
45,716
58,918
214		 $196,852
159,767
45,481
160
271,753 402,260
25,611 19,930
$297,364 $422,190
2021 2020
$40,677
728		 $39,911
670
$41,405 $40,581

(8) Key management personnel compensation

  • 253 -

VIII. ASSETS PLEDGED AS SECURITY

Item Amount Amount Purpose ofpledge
2021 2020
Property, plant and equipment-
Land
Property, plant and equipment-
Buildings
Refundable Deposits
Total		 $161,590
248,539
16,450
$161,590

258,193

16,450		 Bank borrowings
Bank borrowings
Collateral for land lease
$426,579
$436,233
  • IX. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENT

As of 31 December 2021, the Company was involved in the following activities that were not shown in the financial statements:

  1. In order to assist the subsidiary T.I.T. INTERNATIONAL CO., LTD. in obtaining loan credit line, the Company issued a Stand-by L/C USD 2,000 thousand as a guarantee.

  2. According to “The Regulations Governing the Establishment and Management of Bonded Warehouses”, the Company paid guarantee payable of bonded warehouse registration in the amount of NT$ 8,000 thousand.

  3. On 8 July 2020, the Court of California in the United States of America dismissed all claims brought in the United States by Pilot Inc.(Pilot) in relation to commercial disputes including distribution contracts between Pilot and the Company and its subsidiary GENERA and its employees. Pilot again submitted the same dispute to the Singapore International Arbitration Centre for arbitration. The Company's appointed counsel, based on the available information, assessed that Pilot's claim for damages was not supported by relevant evidence and was not legally justified. As of the financial report adoption date of 24 March, 2022, it is not possible to assess the impact of the lawsuit on the Company's financials and business based on the information currently available.

  4. In June 2021, the Company was informed that HYUNDAI MOTOR COMPANY and KIA CORPORATION filed a patent infringement lawsuit in the Court of California in the United States, claiming that the Company and its subsidiary GENERA infringed its lamp patents nos. 478 and 931. Having been made aware of the content of the action, the Company, together with its subsidiary GENERA, has appointed lawyers to carry out the proceedings in the interests of the Company. As of the financial report adoption date of 24 March, 2022, it is not possible to assess the impact of the lawsuit on the Company's financials and business based on the information currently available.

  5. 254 -

X. SIGNIFICANT DISASTER LOSS

None.

XI. SIGNIFICANT SUBSEQUENT EVENTS

None.

XII. OTHER

1. Categories of financial instruments
Financial Assets
Financial assets at fair value through profit or loss：
Mandatorily measured at fair value through profit or
loss
Financial assets at fair value through other
comprehensive income
Financial assets measured at amortized cost:
Cash and cash equivalents (excludes cash on hand)
Financial assets measured at amortized cost
Notes receivables (related parties included)
Accounts receivables(related parties included)
Other receivables
Refundable deposits
Subtotal
Total
Financial Liabilities
Financial liabilities measured at amortized cost:
Short-term borrowings and short-term notes and bills
payable
Payables
Long-term borrowings (current portion included)
Other long-term borrowings
Lease liabilities
Guarantee deposit (under the account of other non-
current liabilities-others)
Subtotal
Financial liabilities at fair value through profit or loss:
Held for trading
Total		 31 Dec. 2021 31 Dec. 2020
$1,034 $-
133,178 83,775
278,941
55,540
23,982
3,782,260
151,546
17,835
231,100

-

27,650

2,974,358

103,402

17,836
4,310,104
3,354,346
$4,444,316
$3,438,121
31 Dec. 2021 31 Dec. 2020
$1,597,808
3,010,539
4,969,570
-
614,828
592
$375,590

3,165,645

4,558,613

1,999,439

653,661

315
10,193,337
10,753,263
3,577
17,020
$10,196,914
$10,770,283
  • 255 -

2. Financial risk management objectives and policies

The Company’s risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Company identifies measures and manages the aforementioned risks based on policy and risk appetite.

The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant financial activities, due approval process by the board of directors and audit committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.

3. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise currency risk, interest rate risk, and other price risk (such as equity instruments related risks).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a different currency from the Company’s functional currency) and the Company’s net investments in foreign subsidiaries.

The Company has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Company also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Company.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Company’s foreign currency risk is mainly affected by USD and EUR. Sensitivity analysis is as follows:

  • 256 -

  • (a) When NTD strengthens/weakens against USD by 1%, the profit for the years ended 31 December 2021 and 2020 decreases/increases by NT$28,805 thousand and NT$19,081 thousand, respectively.

  • (b) When NTD strengthens/weakens against EUR by 1%, the profit for the years ended 31 December 2021 and 2020 decreases/increases by NT$6,458 thousand and NT$4,426 thousand, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt instrument investment at variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit for the years ended 31 December 2021 and 2020 to increase/decrease by NT$5,979 thousand and NT$4,434 thousand, respectively.

Equity price risk

The Company’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company’s listed and unlisted equity securities are classified under held for trading financial assets or available-forsale financial assets, while unlisted equity securities are classified as available-for-sale. The Company manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s board of directors reviews and approves all equity investment decisions.

At the reporting date, a change of 10% in the price of the listed companies stocks classified as equity instruments investments measured at fair value through other comprehensive income could have an impact of NT$26 thousand and NT$16 thousand on the equity attributable to the Company for years ended 31 December 2021 and 2020, respectively.

  • 257 -

Please refer to Note 12.(9) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

4. Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit limits are established for all customers based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Company’s internal rating criteria etc. Certain customer’s credit risk will also be managed by taking credit enhancement procedures, such as requesting for prepayment or insurance.

As at 31 December 2021 and 2020, accounts receivables from top ten customers represented 76.62% and 74.05% of the total trade receivables of the Company, respectively. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Company’s treasury in accordance with the Company’s policy. The Company only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counterparties.

5. Liquidity risk management

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, bank borrowings and finance leases. The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

  • 258 -

Non-derivative financial instruments

31 Dec. 2021
Borrowings
Short-term notes
and bills
Payables
Lease
liabilities(Note)
31 Dec. 2020
Borrowings
Payables
Lease
liabilities(Note)		 Less than
1year		 2 to 3
years		 3 to 4
years		 > 5years Total
$1,076,071
640,000
3,010,539
47,887
$378,099
3,165,645
47,887
$3,706,780

-

-
88,389

$5,197,172

-
95,774
$945,581

-

-
80,035

$903,830

-
80,520
$280,772

-

-
467,241

$543,550

-
507,259
$6,009,204

640,000

3,010,539
683,552

$7,022,651

3,165,645
731,440

Note ： Information about the maturities of lease liabilities is provided in the table below:

31 Dec. 2021
31 Dec. 2020		 Maturities Maturities
Less than 5years
5 to 10years		 10 to 15years Total
$216,311
224,181
$183,138

191,400
$284,103

315,859
$683,552

731,440
  1. Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities as at 31 December 2021 and 2020:

1 Jan. 2021
Cash flows
Non-cash change
31 Dec. 2021
1 Jan. 2020
Cash flows
Non-cash change
31 Dec. 2020		 Short-term
borrowings
Short-term
notes and
billspayable
Long-term
Borrowings
(Current
portion
included)		 Other
borrowings
Lease
liabilities
Total liabilities
from financing
activities
$375,590
582,410

-
$-

639,808

-		 $4,558,613

410,957

-		 $1,999,439
(1,999,439)

-
$653,661

(38,833)

-
$7,587,303

(405,097)

-
$958,000
$639,808		 $4,969,570
$-
$614,828
$7,182,206
$744,000
(368,410)

-
$589,354

(589,354)

-		 $3,686,432

872,181

-		 $1,998,616

823

-
$689,478

(35,817)

-
$7,707,880

(120,577)

-
$375,590
$-		 $4,558,613 $1,999,439
$653,661
$7,587,303

  • 259 -

  • Fair value of financial instruments

  • (1) The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Company to measure or disclose the fair values of financial assets and financial liabilities:

  • A. The carrying amount of cash and cash equivalents, trade receivables, refundable deposits, accounts payable, guarantee deposit and other current liabilities approximate their fair value due to their short maturities.

  • B. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities etc.) at the reporting date.

  • C. Fair value of equity instruments without market quotations (including private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities)

  • D. Fair value of debt instruments without market quotations, bank loans, short-term notes and bills payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

  • (2) Fair value of financial instruments measured at amortized cost

  • The book value of financial assets and liabilities at fair value through profit or loss approaches fair value.

  • (3) Fair value measurement hierarchy for financial instruments

Please refer to Note 12.(9) for fair value measurement hierarchy for financial instruments of the Company.

8. Derivative financial instruments

The Company’s derivative financial instruments include forward currency contracts and embedded derivatives. The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as at 31 December 2021 and 2020 is as follows:

  • 260 -

Forward currency contracts

The Company entered into forward currency contracts to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to forward currency contracts:

Items(bycontract)
As at 31 Dec. 2021
Forward currency contract
Forward currency contract
As at 31 Dec. 2020
Forward currency contract		 Notional Amount

Sell foreign currency USD
6,000 thousand

Sell foreign currency EUR
2,000 thousand

Sell foreign currency EUR
1,000 thousand		 Contract Period
From 14 Dec. 2021 to 24
Jan. 2022
From 16 Dec. 2021 to 14
Feb. 2022
From 30 Nov. 2020 to 25
Feb. 2021

With regard to the forward foreign exchange contracts, as they have been entered into to hedge the foreign currency risk of net assets or net liabilities, and there will be corresponding cash inflow or outflows upon maturity and the Company has sufficient operating funds, the cash flow risk is insignificant.

Cross Currency Swaps Contract

Cross currency swaps contract is used to avoid exchange rate and interest rate risks, but these contracts were not designated as hedging instruments. The unexpired cross currency swaps contract that the Company did not apply hedging accounting are as follows:

31 December 2021 ：

31 December 2021：
Contract amount
Swap out USD 6,000 thousand
Exchange into NT$ 168,000
thousand
Contract amount
Swap out USD 3,000 thousand
Exchange into NT$ 84,600
thousand		 Contractperiod
From 17 Apr.
2020 to 17 Apr.
2022
Contractperiod
From 17 Apr.
2020 to 17 Apr.
2022
Interest rate
paid
-
0.66%

Interest rate
paid
-
0.66%		 Charge
interest rate

0.61%

-
Charge
interest rate

0.61%

-
During the
exchange
From 18 Jan.
2021 to 28 Jan.
2022


During the
exchange
From 26 Mar.
2021 to 28 Mar.
2022
  • 261 -

31 December 2020 ：

31 December 2020：
Contract amount
Swap out USD 4,000 thousand
Exchange into NT$ 119,840
thousand
Contract amount
Swap out USD 2,000 thousand
Exchange into NT$ 59,856
thousand
Contract amount
Swap out USD 3,000 thousand
Exchange into NT$ 90,645
thousand		 Contractperiod
From 17 Apr.
2019 to 17 Apr.
2021
Contractperiod
From 29 Nov.
2019 to 29 Nov.
2021
Contractperiod
From 3 Jun.
2019 to 3 Jun.
2030
Interest rate
paid
-
0.80%

Interest rate
paid
-
0.74%

Interest rate
paid
-
0.50%		 Charge
interest rate

0.81%

-
Charge
interest rate

0.85%

-
Charge
interest rate

0.75%

-
During the
exchange
From 10 Mar.
2020 to 10 Mar.
2021


During the
exchange
From 13 Mar.
2020 to 4 Mar.
2021


During the
exchange
From 20 Mar.
2020 to 17 Mar.
2021

The aforementioned derivatives transaction counterparties are well-known domestic and foreign banks with good credit, so the credit risk is not high.

9. Fair value measurement hierarchy

  • (a) Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

  • Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

  • Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

  • Level 3 - Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

  • 262 -

(b) Fair value measurement hierarchy of the Company’s assets and liabilities

The Company does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis is as follows:

31 Dec. 2021
Financial assets at fair value:
Financial assets at fair value through
profit or loss
Forward currency contracts
Financial assets at fair value through
other comprehensive income
Equity instrument measured at fair
value through other comprehensive
income
Financial liabilities at fair value:
Financial liabilities at fair value
through profit or loss
Cross currency swaps contract
31 Dec. 2020
Financial assets at fair value:
Financial assets at fair value through
other comprehensive income
Equity instrument measured at fair
value through other comprehensive
income
Financial liabilities at fair value:
Financial liabilities at fair value
through profit or loss
Forward currency contracts
Cross currency swaps contract		 Level Level 2
Level 3		 Total
$-

25,700
-
Level
$1,034

-
3,577
Level 2
$-

107,478
-

Level 3
$1,034
133,178
3,577
Total

$16,264
-
-		 $-
917
16,103		 $67,511
-
-		 $83,775
917
16,103

Transfers between Level 1 and Level 2 during the period

During the year ended 31 December 2021 and 2020, there were no transfers between Level 1 and Level 2 fair value measurements.

  • 263 -

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

during the period is as follows:
Beginning balances
Total gains and losses recognized:
Amount recognized in OCI (presented in
“Unrealized gains (losses) from equity
instruments investments measured at fair
value through other comprehensive income)
Acquired in the period
Proceeds from capital reduction in the period
Ending balances		 At fair value through
other comprehensive
income - stocks

2021
$67,511

2,444
50,000

(12,477)
$107,478		 At fair value through
other comprehensive
income - stocks
2020
$57,192
10,319
-
-
$67,511

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As at 31 December 2021

Financial
assets:
Financial
assets at fair
value through
other
comprehensive
income
Stocks		 Valuation
techniques
Significant
unobservable inputs
Quantitative
information

Relationship between
inputs and fair value
Sensitivity of the input to
fair value

Market
approach		 discount for lack of
marketability		 30% The higher the
discount for lack of
marketability, the
lower the fair value of
the stocks
10% increase (decrease) in
the discount for lack of
marketability would result
in increase (decrease) in the
Company’s profit or loss by
NT$12,958 thousand
  • 264 -

As at 31 December 2020

Financial
assets:
Financial
assets at fair
value through
other
comprehensive
income
Stocks		 Valuation
techniques
Significant
unobservable inputs
Quantitative
information

Relationship between
inputs and fair value
Sensitivity of the input to
fair value

Market
approach		 discount for lack of
marketability		 30% The higher the
discount for lack of
marketability, the
lower the fair value of
the stocks
10% increase (decrease) in
the discount for lack of
marketability would result
in increase (decrease) in the
Company’s profit or loss by
NT$ 8,069 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Company’s Finance Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company’s accounting policies at each reporting date.

  1. Significant assets and liabilities denominated in foreign currencies Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:
is listed below:
Financial Assets 31 Dec. 2021
Foreign
Currency
$126,236
20,565
47,128
131,207
69,674,092
$22,199		 Exchange
27.687853
31.403533
4.350654
27.687853
0.001212
27.687853		 NTD
$3,495,204
645,814
205,038
3,632,828
84,445
$614,643
Monetary items:
USD
EUR
CNY
Non- monetary items:
USD
VND
Financial Liabilities
Monetary items:
USD
  • 265 -

31 Dec. 2020

31 Dec. 2020
Financial Assets Foreign
Currency
$91,534
11,855
42,446
130,677
70,116,049
$23,573		 Exchange
28.077249
34.433169
4.294707
28.077249
0.001215
28.077249		 NTD
$2,570,023
408,205
182,293
3,669,052
85,191
$661,865
Monetary items:
USD
EUR
CNY
Non- monetary items:
USD
VND
Financial Liabilities
Monetary items:
USD

The Company has various functional currencies, no information about the foreign exchange gains or losses by a specific currency is available. For the years ended 31 December 2021 and 2020, the foreign exchange gains or losses on monetary financial assets and financial liabilities were NT$139,538 thousand, NT$54,279 thousand1 respectively.

The above information is disclosed based on the carrying amounts of the foreign currencies (after conversion to the functional currency).

11. Capital management

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

12. Other

In order to facilitate the comparison of financial statements, some accounts of the previously prepared financial statements have been reclassified.

  • 266 -

XIII.ADDITIONAL DISCLOSURES

  • (1) The following are additional disclosures for the Company and its affiliates as required by the R.O.C. Securities and Futures Bureau:

  • (a) Financing provided to others for the year ended 31 December 2021: Please refer to Attachment 1.

  • (b) Endorsement/Guarantee provided to others for the year ended 31 December 2021: Please refer to Attachment 2.

  • (c) Securities held as of December 31, 2021 (excluding subsidiaries, associates and joint venture): Please refer to Attachment 3.

  • (d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2021: None.

  • (e) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2021: None.

  • (f) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2021: None.

  • (g) Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock f for the year ended 31 December 2021: Please refer to Attachment 4.

  • (h) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of December 31, 2021: Please refer to Attachment 5.

  • (i) Names, locations and related information of investees as of December 31, 2021(excluding investment in Mainland China): Please refer to Attachment 6.

  • 、

  • (j) Financial instruments and derivative transactions: Please refer to Note6(2) Note6(13) and Note12(8).

(2) Investment in Mainland China:

  • (a) Investee company name, main businesses and products, total amount of capital, method of investment, accumulated inflow and outflow of investments from Taiwan, net income (loss) of investee company, percentage of ownership, investment income (loss), carrying amount of investments, cumulated inward remittance of earnings and limits on investment in Mainland China: Please refer to Attachment 7.

  • (b) Directly or indirectly significant transactions through third regions with the investees in Mainland China, including price, payment terms, unrealized gain or loss, and other events with significant effects on the operating results and financial condition: Please refer to Attachment 1, Attachment 2 and Attachment 7.

  • 267 -

  • (3) Information on major shareholders:

Name of major shareholders, number of shares held and proportion of shares held: Please refer to Attachment 8.

XIV. OPERATING SEGMENT INFORMATION

In accordance with Article 22 of the Regulations, the Company is not required to prepare operating segment information for the parent company only financial statements. Please refer to the consolidated financial statements of TYC BROTHER INDUSTRIAL CO., LTD. and subsidiaries for operating segment information.

  • 268 -

Attachment 1: Financing provided to others

No.
(Note 1)		 Lender Counter-party Financial
statement
account		 Related
Party		 Maximum
balance for the
period
(Note 7)		 Ending
balance		 Actual
amount
provided		 Interest rate Nature of
financing
(Note 4)		 Amount of sales to
(purchases from)
counter-party
(Note 5)		 Reason for
short-term
financing
(Note 6)		 Allowance
for
doubtful
accounts		 Collateral Collateral Limit of financing
amount for individual
counter-party
(Note 2)		 Limit of total
financing
amount
(Note 3)		 Note
Item Value
1 SUPRA-ATOMIC KUN SHAN TYC
HIGH
PERFORMANCE CO.,
LTD.		 Other
receivables		 Y $24,867
(USD 900)		 $24,867
(USD 900)		 $24,867
(USD 900)		 2.70% 2 $- Need for
operating		 $- - $- 1,369,401 1,369,401 -

(Note 1) The financial information of the parent company and its subsidiaries are coded as follows:

  • (1) The Company is coded "0".

  • (2) The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

  • (Note 2) Limit of financing amount for individual counterparty:

  • (1) Business contacts: limit of financing amount for individual counterparty shall not exceed 20% of the lender's net asste's value and the amount needed for operation. The amount of operation is the amount of business transaction in recent year between the lender and the counterparty.

  • (2) Necessary of need for operating：Limit of financing amount for individual counterparty shall not exceed 20% of the lender's net assets value as of the period.

  • (3) Individual financing between foreign companies of which subsidiaries directly and indirectly hold 100% voting shares is not subject to the limit of 20% of the lender's net assets value as of the period, but is limited to 100% of total assets.

  • (Note 3) Limit of total financing amount shall not exceed 40% of the subsidiary's net asset value.

  • (1) Individual financing between foreign companies of which subsidiaries directly and indirectly hold 100% voting shares is not subject to the limit of 40% of the lender's net asset of thef period, but is limited to 100% total assets.

  • (Note 4) The financing provided to others are coded as follows:

  • (1) Business contacts is coded "1".

  • (2) Short-term financing is coded "2".

(Note 5) If financing provided to others is coded "1" , the amount of business transactions should be filled in. The amount of operation is the amount of business transaction in recent year between lender and the counterparty.

(Note 6) If financing provided to others is coded "2". The reasons for the necessary loans and funds and the use of the loans and counterparty shall be specified, such as repayment, purchasing equipments, necesarry for operating, etc.

(Note 7) The balance of which is the maximum balance of financing provided to others in the current year.

(Note 8) The exchange rate of the USD to the NTD is 1:27.63.

  • 269 -

Attachment 2: Endorsement/Guarantee provided to others

No.
(Note1)		 Endorsor/
Guarantor		 Receiving party Receiving party Limit of
guarantee/
endorsement
amount for
receiving party
(Note 3)		 Maximum
balance for the
period
(Note 5)		 Ending balance
(Note 6)		 Actual amount
provided
(Note7)		 Amount of
collateral
guarantee/
endorsement		 Percentage of
accumulated
guarantee amount to
net assets value
from the latest
financial statement		 Limit of total
guarantee/
endorsement
amount
(Note 4)		 Parent
company's
guarantee/
endorsement
amount to
subsidiaries		 Subsidiaries'
guarantee/
endorsement
amount to
parent company		 Guarantee/
endorsement
amount to
company in
Mainland
China
Company name Releationship
(Note 2)
0 The Company KUN SHAN TYC
HIGH
PERFORMANCE CO.,
LTD.		 (2) $1,577,951 $524,970
(USD 19,000)		 $524,970
(USD 19,000)		 $442,080
(USD 16,000)		 - 6.65% $3,155,902 Y N Y
0 The Company T.I.T.
INTERNATIONAL
CO., LTD.		 (2) 1,577,951 138,150
(USD 5,000)		 138,150
(USD 5,000)		 138,150
(USD 5,000)		 - 1.75% 3,155,902 Y N N
0 The Company JUOKU
TECHNOLOGY CO.,
LTD		 (2) 1,577,951 900,000 - - - 0% 3,155,902 Y N N

  • (Note 1) The Company and its subsidiaries are coded as follows:

  • (1)The Company is coded "0".

  • (2)The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

  • (Note 2) According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, the receiving parties shall be disclosed as one of the following:

  • (1) A company with which it does business.

  • (2) A company in which the public company directly and indirectly holds more than 50% of the voting shares.

  • (3) A company that directly and indirectly holds more than 50 % of the voting shares in the public company.

  • (4) A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.

  • (5) A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

  • (6) A company that all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages.

  • (7) Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

  • (Note 3) Limit of guarantee/endorsement amount for receiving party is 20% of the net worth of the financial report reviewed by the certified public accountants as of 31 December 2021. (Note 4) Limit of total guarantee/ endorsement amount is 40% of the net worth of the financial report reviewed by the certified public accountants as of 31 December 2021.

  • (Note 5) The balance of which is the maximum balance of endorsement/guarantee provided to others in the current year.

  • (Note 6) The amount the Company and its subsidiaries approved through the board of directors for the endorsements for others.

  • (Note 7) The actual amount drawn within endorsement balance by the endorsed company.

  • (Note 8) The exchange rate of USD to NTD is 1:27.63.

  • 270 -

Attachment 3: Securities held as of 31 December 2021. (Excluding subsidiaries, associates and joint ventures)

Holding Company Type and name of securities(Note1) Relationship Financial statement account as of 31 December 2021 as of 31 December 2021 as of 31 December 2021 as of 31 December 2021 Note
Shares(per) Book value Percentage of
ownership
(%)		 Fair value
The Company Unlisted stock-FORTOP INDUSTRIAL
CO.,LTD		 Substantive related parties of the
company		 Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 391,722 $43,157 19.59% $43,157 No guarantee or
pledge
Unlisted stock-BRITEVIEW
AUTOMOTIVE LIGHTING CO., LTD.		 The parent company is its corporate
director		 Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 360,000 13,327 18.00% 13,327 No guarantee or
pledge
Unlisted stock-WK Technology Fund IV
Ltd.		 None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 170,467 255 1.60% 255 No guarantee or
pledge
Unlisted stock-WK Technology Fund Ltd. None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 4,219 41 0.42% 41 No guarantee or
pledge
Unlisted stock- WK Technology Fund V
Ltd.		 None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 476,850 470 1.67% 470 No guarantee or
pledge
Unlisted stock-WK Technology Fund VI
Ltd.		 None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 289,000 228 1.14% 228 No guarantee or
pledge
Listed stock-LSC Ecosystem Corporation None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 3,333,333 50,000 2.82% 50,000 No guarantee or
pledge
Listed stock-LASTER TECHCO., LTD None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 583,421 25,700 0.60% 25,700 No guarantee or
pledge
JUOKU TECHNOLOGY
CO., LTD.
Unlisted stock-WK Technology Fund VI
Ltd.		 Investment company measured at fair
value through other comprehensive
gains and losses		 Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 144,500 1,041 0.57% 1,041 No guarantee or
pledge
TSM TECH CO., LTD. Fuzhou Ching Ho Automobile Accessory
Co., Ltd.
Investment company measured at fair
value through other comprehensive
gains and losses		 Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 - 8,010 3.73% 8,010 No guarantee or
pledge
TI YUAN
INVESTMENT CO.,
LTD.		 Unlisted stock- WK Technology Fund VII
Ltd.
None		 Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 179,200 964 1.06% 964 No guarantee or
pledge
Listed stock-I YUAN PRECISION
INDUSTRIAL CO., LTD.		 The Company measured at fair value
for using equity method.		 Investment accounting for using equity method 900,914 38,152 2.51% - No guarantee or
pledge(Note 2)
TI FU INVESTMENT
CO., LTD.		 Listed stock-T.Y.C. BROTHER
INDUSTRIAL CO., LTD.		 Holding company's parent company Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 939,707 18,230 - 18,230 No guarantee or
pledge
Unlisted stock-WK Technology Fund V
Ltd.		 None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 238,425 1,761 0.83% 1,761 No guarantee or
pledge
Unlisted stock-WK Technology Fund VI
Ltd.		 None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 72,250 517 0.29% 517 No guarantee or
pledge
Listed stock-LASTER TECH CO., LTD. None Financial assets measured at fair value through other
comprehensive gains and losses, non-current		 1,883,216 82,955 1.95% 82,955 No guarantee or
pledge

(Note 1)Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’.

(Note 2)The investment was accounted for using the equity method in the consolidated financial statement.

  • 271 -

Attachment 4: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2021

Related party Counterparty Relationship Intercompany Transactions Intercompany Transactions Intercompany Transactions Intercompany Transactions Details of non-arm's length transaction Details of non-arm's length transaction Notes and accounts receivable (payable) Notes and accounts receivable (payable) Note
Purchases
(Sales)		 Amount Percentage of total
consolidated purchase
(Sales)		 Terms Unit price Terms Carrying amount Percentage of total
consolidated
receivables
(payable)
The Company GENERA CORPORATION Subsidiary of the Company Sales $4,253,801 38.00% T/T 135 days The price is determined according to
the US OEM price×0.24 as the
reference price		 Generally, payment is received 1 to 3 months after the end of
the month. Due to the long distance of transportation, longer
payment terms will be imposed.		 Accounts receivable
$1,988,403		 50.15% -
TYC EUROPE BV. Subsidiary of the Company Sales 1,909,486 17.06% T/T 120 days A single manufacturer and no other
manufacturers to compare		 Generally, payment is received 1 to 3 months after the end of
the month. Due to the long distance of transportation, longer
payment terms will be imposed.		 Accounts receivable
534,600		 13.48% -
KUN SHAN TYC HIGH
PERFORMANCE CO.,
LTD.		 Subsidiary of the Company Sales 171,673 1.53% T/T 120 days comparable to general customers Accounts receivable
194,146		 4.90% -
T.I.T. INTERNATIONAL
CO., LTD.		 Subsidiary of the Company Sales 108,365 0.97% T/T 150 days comparable to general customers Accounts receivable
47,230		 1.19% -
JUOKU TECHNOLOGY
CO., LTD.		 Subsidiary of the Company Purchases 305,392 3.86% credit on 90 days comparable to general customers Accounts payable
123,573		 4.70% -
T.I.T. INTERNATIONAL
CO., LTD.		 Subsidiary of the Company Purchases 237,798 3.01% credit on 60 days comparable to general customers Accounts payable
68,181		 2.60% -
FORTOP INDUSTRIAL
CO.,LTD		 Substantive related parities of
the Company		 Purchases 873,087 11.03% credit on 90 days comparable to general customers Accounts payable
294,294		 11.20% -
I YUAN PRECISION
INDUSTRIAL CO., LTD.		 The Company measured at
fair value for using equity
method.		 Purchases 506,930 6.41% credit on 90 days comparable to general customers Accounts payable
179,521		 6.83% -
BUILDUP
INTERNATIONAL
TRADING CO., LTD.		 Substantive related parties of
the Company		 Purchases 236,306 2.99% credit on 20 days comparable to general customers Accounts payable
21,200		 0.81% -
JUOKU TECHNOLOGY
CO., LTD		 The Company Holding company's parent
company		 Sales 404,213 20.98% T/T 90 days N/A Accounts receivable
123,552		 26.67% -
JUOKU TECHNOLOGY
CO., LTD		 PT ASTRA JUOKU
INDONESIA		 Joint ventures of the
Company		 Sales 132,162 6.86% credit on 90 days N/A Accounts receivable
60,246		 13.80% -
T.I.T. INTERNATIONAL
CO., LTD.		 The Company Holding company's parent
company		 Sales 211,833
(THB 260,014)		 47.01% T/T 90 days N/A Accounts receivable
69,247
(THB 84,997)		 49.41% -
CHANGZHOU TAMAO
PRECISION INDUSTRY
CO.,LTD.		 The Company Holding company's parent
company		 Sales 194,211
(USD 7,029)		 71.82% T/T 90 days N/A Accounts receivable
157,187
(USD 5,689)		 75.89% -
KUN SHAN TYC HIGH
PERFORMANCE CO.,
LTD.		 The Company Holding company's parent
company		 Purchases 176,104
(CNY 40,774)		 62.50% T/T 120 days N/A Accounts payable
194,796
(CNY 45,102)		 85.54% -
GENERA CORPORATION The Company Holding company's parent
company		 Purchases 4,106,870
(USD 148,638)		 75.27% T/T 135 days N/A Accounts payable
1,828,473
(USD 66,177)		 83.83% -
TYC EUROPE BV. The Company Holding company's parent
company		 Purchases 1,800,466
(EUR 57,856)		 100.00% T/T 120 days N/A Accounts payable
504,611
(EUR 16,215)		 100.00% -
T.I.T. INTERNATIONAL
CO., LTD.		 The Company Holding company's parent
company		 Purchases 103,038
(THB 126,473)		 39.18% T/T 90 days N/A Accounts payable
40,106
(THB 49,228)		 49.87% -

(Note 1)The exchange rate of USD to NTD is 1:27.63.

The exchange rate of EUR to NTD is 1:31.12. The exchange rate of THB to NTD is 1:0.8147.

The exchange rate of CNY to NTD is 1:4.319.

  • 272 -

Attachment 5: Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of December 31, 2021

2021
Related party Counterparty Relationship Amount Average
collection
turnover		 Overdue account
receivable-relatedparties		 Amount received
in subsequent
period		 Allowance for
doubtful debts
Amount Processing
method
The Company GENERA
CORPORATION		 Subsidiary of the
Company		 $1,988,403 2.33 $371,309 Collection has
been
strengthened		 $882,379 $-
TYC EUROPE
BV.		 Subsidiary of the
Company		 534,600 4.47 30 Collection has
been
strengthened		 226,612 -
KUN SHAN TYC
HIGH
PERFORMANCE
CO., LTD.		 Subsidiary of the
Company		 194,146 0.95 164,265 Collection has
been
strengthened		 10,911 -
JUOKU
TECHNOLOGY CO.,
LTD.		 The Company Holding
company's parent
company		 123,552 3.32 - Collection has
been
strengthened		 63,154 -

(Note 1)The exchange rate of the USD to the NTD is 1:27.63

  • 273 -

Attachment 6: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2021, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2021: (Excluding investment in Mainland China)

Investor Investee company Address Main businesses and products Initial Investment Initial Investment Investment as of 31 December 2021 Investment as of 31 December 2021 Investment as of 31 December 2021 Net income (loss)
of
investee company		 Investment income
(loss) recognized
(Note2)		 Note
Ending balance Beginning balance Number of
shares		 Percentage of
ownership
(%)		 Book value
(Note1)
The Company JUOKU TECHNOLOGY
CO.,LTD.		 No. 25, Gongye 3rd Rd.,
Annan Dist., Tainan City		 Manufacturing and sale of
automobile parts		 $313,730 $313,730 27,923,401 72.10% $227,157 $56,406 $40,669 Subsidiary of the
Company
TI YUAN INVESTMENT
CO., LTD.		 12F., No. 212, Yuping
Rd., Anping Dist., Tainan
City		 Marketable securities trading
business		 30,053 30,053 5,731 100.00% 53,313 1,623 1,623 Subsidiary of the
Company
TI FU INVESTMENT CO.,
LTD.		 12F., No. 212, Yuping
Rd., Anping Dist., Tainan
City		 Marketable securities trading
business		 30,076 30,076 12,000 100.00% 187,003 26,312 26,312 Subsidiary of the
Company
(Note 3)
TAMAU MANAGEMENT
CONSULTANCY CO.,
LTD.		 18F., No. 573, Qingping
Rd., Anping Dist., Tainan
City		 Management consult 1,000 1,000 260,000 100.00% 4,327 120 120
Subsidiary of the
Company
SUPRA-ATOMIC CO.,
LTD.		 British Virgin Islands Reinvestment holding activities 2,819,741
(Note 4)		 2,836,371 65,932,450 100.00% 1,104,756 (15,760) (15,760) Subsidiary of the
Company
BESTE MOTOR CO.,
LTD.		 British Virgin Islands Reinvestment holding activities
322,939		 322,939 12,072,000 100.00% 1,336,457 29,547 29,547 Subsidiary of the
Company
CONTEK CO., LTD. British Virgin Islands Reinvestment holding activities 66,512 66,512 2,186,000 100.00% 56,080 (5,054) (5,054) Subsidiary of the
Company
I YUAN PRECISION
INDUSTRIAL CO., LTD		 No. 25, Zhongxing S. St.,
Sanchong Dist., New
Taipei City		 Manufacturing, processing and
sale of automobile parts		 126,907 126,907 5,617,854 15.66% 198,606 51,086 9,282 The Company
measured at fair value
for using equity
method.
INNOVA HOLDING
CORP.		 Delaware, U.S.A Reinvestment holding activities 745,370 745,370 5,549 100.00% 1,135,535 94,051 94,051 Subsidiary of the
Company
TYC VIETNAM
INDUSTRIAL CO., LTD.		 Vietnam Manufacture and sale
automobile lights		 88,740 88,740 - 60.00% 84,445 954 572 Subsidiary of the
Company
  • 274 -

Attachment 6: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2021, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2021: (Excluding investment in Mainland China)

Investor Investee company Address Main businesses and products Initial Investment Initial Investment Investment as of 31 December 2021 Investment as of 31 December 2021 Investment as of 31 December 2021 Net income (loss)
of
investee company		 Investment income
(loss) recognized
(Note2)		 Note
Ending balance Beginning balance Number of
shares		 Percentage of
ownership
(%)		 Book value
(Note1)
JUOKU
TECHNOLOGY
CO., LTD.		 TSM TECH CO., LTD. British Virgin Islands Reinvestment holding activities $10,122 $10,122 300,000 100.00% $9,284 - - Sub Subsidiary of the
Company
PT ASTRA JUOKU
INDONESIA		 Indonesia Manufacture and sale
automobile lights		 276,640 276,640 1,126,500 50.00% 166,913 20,486 10,243 Joint ventures of the
Company
TI FU
INVESTMENT
CO., LTD.		 DBM REFLEX OF
TAIWAN CO., LTD.		 No. 54, Xinle Rd., Tainan
City
Manufacture tooling mold and
international trading business		 25,500 25,500 8,750,000 50.00% 138,975 53,114 26,557 Sub Subsidiary of the
Company
SUPRA-ATOMIC
CO., LTD.		 EUROPILOT CO., LTD. British Virgin Islands Reinvestment holding activities 396,767
(USD 14,360)		 396,767
(USD 14,360)		 14,359,821 100.00% 483,690 37,054 37,054 Sub Subsidiary of the
Company
MOTOR-CURIO CO.,
LTD.		 British Virgin Islands Reinvestment holding activities
52,304
(USD 1,893)
52,304
(USD 1,893)		 1,893,400 100.00% 160,313 28,814 28,814 Sub Subsidiary of the
Company
SPARKING CO., LTD. British Virgin Islands Reinvestment holding activities
992,359
(USD 35,916)
992,359
(USD 35,916)		 30,915,717 100.00% 224,212 (105,413) (105,413) Sub Subsidiary of the
Company
EUROLITE CO., LTD. British Virgin Islands Reinvestment holding activities
573,544
(USD 20,758)
573,544
(USD 20,758)		 14,697,972 100.00% 161,240 21,248 21,248 Sub Subsidiary of the
Company
UNIMOTOR CO., LTD. British Virgin Islands Reinvestment holding activities
190,288
(USD 6,887)
190,288
(USD 6,887)		 6,887,000 100.00% 312,223 1,953 1,953 Sub Subsidiary of the
Company
EUROPILOT CO.,
LTD.		 TYC EUROPE BV. Henery Moorest roat 25
1328 LS Almere		 Sale automobile lights
396,767
(USD 14,360)
396,767
(USD 14,360)		 120,000 100.00% 483,658 46,195 46,195 Sub Subsidiary of the
Company
EUROLITE CO.,
LTD.		 T.I.T. INTERNATIONAL
CO., LTD.		 350/132 Srikrung House
Rama 3 Road Chongnonsi
Yannawa Bangkok,
Thailand		 Manufacture and sale of lighting
fixtures and daily-use product
for automobile
573,544
(USD 20,758)
573,544
(USD 20,758)		 4,994,900 99.98% 161,183 21,253 21,249 Sub Subsidiary of the
Company
BESTE MOTOR
CO., LTD.		 VARROC TYC
CORPORATION		 British Virgin Islands Reinvestment holding activities 388,809
(USD 14,072)		 388,809
(USD 14,072)		 14,072,000 50.00% 1,336,424 59,100 29,550 Joint ventures of the
Company
CONTEK CO.,
LTD.		 ATECH
INTERNATIONAL
CO., LTD.		 Cayman Islands Reinvestment holding activities
62,168
(USD 2,250)
62,168
(USD 2,250)		 2,250,000 25.00% 54,475 (19,243) (4,811) The Company
measured at fair value
for using equity
method.
INNOVA
HOLDING CORP.		 GENERA
CORPORATION		 State of California, U.S.A. Sale of automobile lights and
parts		 342,308
(USD 12,389)		 342,308
(USD 12,389)		 12,388,505 100.00% 1,499,176
(USD 54,259)		 117,179
(USD 4,241)		 117,179
(USD 4,241)		 Sub Subsidiary of the
Company
W&W REAL PROPERTY,
INC.		 State of California, U.S.A. Sale of and rental of real estate
27,630
(USD 1,000)
27,630
(USD 1,000)		 1,000,000 100.00%
86,454
(USD 3,129)
6,300
(USD 228)
6,300
(USD 228)		 Sub Subsidiary of the
Company

(Note 1)The book value of the investment using the equity method is the net amount after deducting the unrealized gains and losses of downstream transactions.

(Note 2)The investment income recognized didn't eliminate unrealized gain or loss on transactions between the Company and its investees.

The Group recognized I YUAN PRECISION INDUSTRIAL CO., LTD at 18.17% investment gains and losses

(Note 3) The company treats shares of the Company that the subsidiaries hold as treasury stocks.

The book value of the investment using the equity method is the net amount after deducting the treasury stocks.

(Note4)SUPRA-ATOMIC CO., LTD. applied for a capital reduction on 5 August, 2021 and returned the share price of NT$16,630 thousand.

(Note 5)The exchange rate of USD to NTD is 1:27.63.

  • 275 -

Attachment 7: Investment in Mainland China

Investee company Main Businesses and Products Total Amount of
Paid-in Capital		 Method of Investment
(Note 1)		 Accumulated
Outflow
of Investment from
Taiwan as of
1 January 2021		 Investment Flows Investment Flows Accumulated
Outflow
of Investment from
Taiwan as of
31 Decembe 2021		 Net income (loss)
of investee
company		 Percentage of
Ownership		 Investment income
(loss) recognized
(Note 2)		 Carrying Value as of
31 December 2021		 Accumulated Inward
Remittance of Earnings
as of
31 December 2021
Outflow Inflow
VARROC TYC AUTO
LAMPS CO.,LTD.		 Manufacture automobile lights $746,010
(USD 27,000)		 (1)VARROC TYC
CORPORATION		 $351,730
(USD 12,730)		 $- $- $351,730
(USD 12,730)		 $54,150 50% $27,075 $2,672,749 $523,243
CHANGZHOU TAMAO
PRECISION INDUSTRY CO.,
LTD.		 Manufacture and sale of precision
molds		 178,683
(USD6,467)		 (1)UNIMOTOR
INDUSTRIAL CO., LTD.		 178,683
(USD 6,467)		 - - 178,683
(USD 6,467)		 1,957 100% 1,957 312,053 -
HANGZHOU SUNNYTECH
CO., LTD.		 Industrial styling and product design 8,077
(CNY 1,870)		 (1)SPARKING CO., LTD. 4,587
(USD 166)		 - - 4,587
(USD 166)		 (3,655) 30% (1,097) 10,758 -
JNS AUTO PARTS LIMITED Manufacture automobile parts 276,300
(USD 10,000)		 (1)MOTOR-CURIO CO.,
LTD.		 55,260
(USD 2,000)		 - - 55,260
(USD 2,000)		 154,721 20% 30,944 157,439 -
KUN SHAN TYC HIGH
PERFORMANCE		 Manufacture, process and assemble
of various high-efficiency energy-
saving lamps and accessories		 828,900
(USD30,000)		 (1)SPARKING CO., LTD. 967,050
(USD 35,000)		 - - 967,050
(USD 35,000)		 (104,215) 100% (104,215) 213,426 -
CHIN-LI-MA HIGHT
PERFORMANCE
LUMINAIRE CO., LTD.
Design amd manufacture high-
efficiency energy-saving lamps		 12,434
(USD 450)		 (2)CHANGZHOU
TAMAO PRECISION
INDUSTRY CO.,LTD.		 - - - - - 30% - - -
KUNSHAN ATECH
AUTOPARTS
MANUFACTURING CO.,		 Manufacture automobile parts 193,410
(USD 7,000)
(1)ATECH
INTERNATIONAL CO.,
LTD.		 48,353
(USD 1,750)		 - - 48,353
(USD 1,750)		 (13,069)
(USD (473))		 25% (3,260)
(USD (118))		 88,913
(USD 3,218)		 -
ATECH(JIANGSU)
INDUSTRIAL
TECHNOLOGY CO., LTD.		 Manufacture automobile parts 55,260
(USD 2,000)		 (1)ATECH
INTERNATIONAL CO.,
LTD.		 13,815
(USD 500)		 - - 13,815
(USD 500)		 (2,514)
(USD (91))		 25% (635)
(USD (23))		 56,282
(USD 2,037)		 -
Accumulated Investment in Mainland China Investment Amounts Authorized by
Investment Commission, MOEA		 Upper Limit on Investment
$1,947,086 (USD 70,470) $1,771,884 (USD 64,129) (Note 3)

(Note 1) Methods of investment are divided into three:

  • (1)Indirectly investment in Mainland China through companies registered in a third region

(2)Reinvest with Mainland China company's own funds.

(3)Other

(Note 2) The investment income recognized didn't eliminate unrealized gain or loss on transactions between the Company and its investees.

(Note 3) According to 97.8.22 “Regulations Governing Permission for Investment or Technical Cooperation in Mainland China" and the amendment to “Review Principles of Investment or Technical Cooperation in Mainland china", the cumulative amount of investors' investment in Mainland China according to the upper limit set for other enterprises: 60% of its net value or the consolidated net value, whichever is higher. However, enterprises for which the Industrial Development Bureau of the Ministry of Economic Affairs issued the certificate of compliance or the Taiwan subsidiaries of international enterprises shall not be subject to the restriction. The Company qualifies as business headquarters therefore the upper limit does not apply.

  • (Note 4) The exchange rate of the USD to the NTD is 1:27.63.

The exchange rate of the CNY to the NTD is 1:4.319.

  • 276 -

Attachment 8:Information on major shareholders

Attachment 8:Information on major shareholders
Name of ordinary shares
Name of major shareholders		 Number of shares held Percentage of ownership
TA YIH TA INVESTMENT CO., LTD. 64,655,288 18.85%
YIH HENG INVESTMENT CO., LTD. 57,420,654 16.74%

  • (Note 1) The main shareholder information in this table is calculated based on the information available from the Taiwan Depository & Clearing Corporation on the last business day at the end of each quarter.The total number of ordinary shares and special shares held by the shareholders which have completed the dematerialized delivery and registration of the shares of the Company (including treasury shares) is more than 5%. The share capital recorded in the Company's financial report and the number of shares actually delivered by the Company with dematerialized registration may differ because the calculation bases were different.

  • (Note 2) If the above information included the shareholders' shares transferred to a trust, it is disclosed by the individual settlor account opened by the trustee. Where the shareholders declared insider equity holding for more than 10% shareholding according to the Securities and Exchange Act, such holdings shall include the shares held by shareholders and the trusted assets with right to use. For information regarding insider shareholding declaration, please refer to the Market Observation Post System of the Taiwan Stock Exchange Corporation.

  • 277 -

TYC BROTHER INDUSTRIAL CO., LTD.

THE CONTENTS OF STATEMENT OF MAJOR ACCOUNTING ITEMS

31 December 2021

31 December 2021
ITEM INDEX
STATEMENT OF CASH AND CASH EQUIVALENTS 1
STATEMENT OF ACCOUNTS RECEIVABLE 2
STATEMENT OF ACCOUNTS RECEIVABLE-RELATED PARITES 3
STATEMENT OF INVENTORIES 4
STATEMENT OF OTHER CURRENT ASSETS 5
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED 6
FOR UNDER THE EQUITY METHOD
STATEMENT OF CHANGES IN RIGHT-OF-USE-ASSET AND 7
ACCUMULATED DEPERCIATION
STATEMENT OF SHORT-TERM BORROWINGS 8
STATEMENT OF NOTES PAYABLE 9
STATEMENT OF ACCOUNTS PAYABLE 10
STATEMENT OF ACCOUNTS PAYABLE-RELATED PPARTIES 11
STATEMENT OF OTHER PAYABLES 12
STATEMENT OF OTHER CURRENT LIABILITIES 13
STATEMENT OF LONG-TERM BORROWINGS 14
STATEMENT OF LEASE LIABILITIES 15
STATEMENT OF OPERATING REVENUES 16
STATEMENT OF OPERATING COSTS 17
STATEMENT OF OPERATING EXPENSES 18
  • 278 -

TYC BROTHER INDUSTRIAL CO., LTD.

1.STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

(Amounts in dollars of Foreign Currencies)

Item Description Amount Note
Cash and Petty cash
Bank Deposits
Savung account
Foreign currency cash
Subtotal
Time deposits
Total		 USD 7,800,656
EUR 202,151
JPY 6,737,217
GBP 116,221
SGD 33,533
1,128,875
RMB		 $1,617 The exchange rate
of the USD to
the NTD is 1:27.63
The exchange rate
of the EUR to the
NTD is 1:31.12
The exchange rate
of the JPY to the
NTD is 1:0.2385
The exchange rate
of the GBP to the
NTD is 1:37.10
The exchange rate
of the SGD to the
NTD is 1:20.37
The exchange rate
of the RMB to the
NTD is 1:4.319
41,288
215,532
6,291
1,607
4,312
683
4,876
274,589
4,352
$280,558
  • 279 -

TYC BROTHER INDUSTRIAL CO., LTD.

2.STATEMENT OF ACCONUTS RECEIVABLE

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

(Amounts in dollars of Foreign Currencies)

Client Description Amount Note
Client A
Client B
Client C
Others
Subtotal
Less:Allowance for doubtful debts
Net amount		 USD 2,462,757
USD 2,085,042
USD 1,921,807		 $68,046
57,610
53,100
976,255		 1. The exchange rate
of the USD to the
NTD is 1:27.63
2. The amount of individual
client in others does not exceed
5% of the account balance.
1,155,011
(158,662)
$996,349
  • 280 -

TYC BROTHER INDUSTRIAL CO., LTD.

3.STATEMENT OF ACCOUNTS RECEIVABLES-RELATED PARTIES

In Thousands of New Taiwan Dollars

(Amounts in dollars of Foreign Currencies)

Client Description Amount Note
GENERA CORPORATION
TYC EUROPE B.V.
KUN SHAN TYC HIGH
PERFORMANCE CO., LTD.
Others
Subtotal
Less:Allowance for doubtful debts
Net		 USD 71,965,360
EUR 16,076,143
USD 1,241,791
44,951,703
RMB		 1,988,403
$ 500,289
34,311
194,146
68,820		 1.The exchange rate of the USD
to the NTD is 1:27.63
The exchange rate of the EUR
to the NTD is 1:31.12
The exchange rate of the RMB
to the NTD is 1:4.319
2.The amount of individual client
in others does not exceed 5%.
2,785,969
(58)
$2,785,911
  • 281 -

TYC BROTHER INDUSTRIAL CO., LTD.

4.STATEMENT OF INVENTORIES

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

In Thousands In Thousands of New Taiwan Dollars
Item Description Amount Note
Cost Net Realizable
Value
Raw materials
Work in process
Finished goods
Merchandise
Subtotal
Less:Allowance for inventory valuation losses
Total		 $587,473
48,844
652,297
31,014		 $587,473
48,844
727,329
32,265		 1. Inventories were
not pledged.
2. Inventories are
valued at lower of
cost and net
realizable value item
by item.
1,319,628
(77,761)		 $1,395,911
$1,241,867
  • 282 -

TYC BROTHER INDUSTRIAL CO., LTD.

5.STATEMENT OF OTHER CURRENT ASSETS

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

Item Description Amount Note
Prepayment of purchases
Payment on behalf
Prepaid expense
Temporary paymants
Other
Total		 Payment on behalf for
mold repair and vender
complaint.
Prepaid expense for
repair, maintentance and
Temprary payments for
freight.		 $98,346
25,029
12,769
8,068
1,649
$145,861		 The amount of individual title
in others does not exceed 5% of
the account balance.
  • 283 -

TYC BROTHER INDUSTRIAL CO., LTD.

6.STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD DECEMBER 31, 2021

In Thousands of New Taiwan Dollars

Investee Company BeginningBalance BeginningBalance Ad ditions Dec rease EndingBalance EndingBalance Fair value/Net assets value Fair value/Net assets value Collateral Note
Shares Amount Shares Amount Shares Amount Shares Shareholdingratio Amount Unitprice(NTD) Total Amount
JUOKU TECHNOLOGY CO., LTD.
TI YUAN INVESTMENT CO., LTD.
TI FU INVESTMENT CO., LTD.
TAMAU MANAGEMENT CONSULTANCY CO., LTD.
I YUAN PRECISION INDUSTRIAL CO., LTD.
CONTEK CO., LTD.
INNOVA HOLDING CORP.
SUPRA-ATOMIC CO., LTD.
BESTE MOTOR CO ., LTD.
TYC VIETNAM INDUSTRIAL CO., LTD.
Total		 27,923,401
5,731
12,000
260,000
5,617,854
2,186,000
5,549
66,532,450
12,072,000
-		 $189,474
51,690
183,648
4,835
200,542
60,665
1,111,681
1,131,620
1,365,086
85,191		 $40,161 (Note1)
1,105 (Note5)
636 (Note6)
1,623 (Note1)
27,397 (Note1)
620 (Note5)
564 (Note7)
120 (Note1)
9,300 (Note1)
469 (Note2)
89,826 (Note1)
32,148 (Note1)
11,842 (Note6)
29,547 (Note1)
16,518 (Note2)
11 (Note6)		 (600,000)
(Note8)		 $(4,219) (Note2)
(20,428) (Note3)
(4,798) (Note4)
(628) (Note3)
(11,236) (Note3)
(5,054) (Note1)
(21,093) (Note2)
(44,879) (Note6)
(54,224) (Note2)
(16,630) (Note8)
(74,705) (Note3)
(86) (Note1)
(660) (Note2)		 27,923,401
5,731
12,000
260,000
5,617,854
2,186,000
5,549
65,932,450
12,072,000
-		 72.10%
100.00%
100.00%
100.00%
15.66%
100.00%
100.00%
100.00%
100.00%
60.00%		 $227,157
53,313
187,003
4,327
198,606
56,080
1,135,535
1,104,756
1,336,457
84,445		 13.59
9,302.56
20,857.42
16.64
39.50
25.65
USD 10,008.29
20.77
110.71
-		 $379,510
53,313
250,289
4,327
221,905
56,080
USD 55,536
1,369,401
1,336,467
-		 None
None
None
None
None
None
None
None
None
None
$4,384,432 $261,887 $(258,640) $4,387,679

Note1 ： Net investment income or loss accounted for using equity method.(Included unrealized gain or loss on the transaction between the Company and its investees.)

Note2 ： Exchange differences resulting from translating the financial statement of foreign poerations.

Note3 ： Cash dividends paid by subsidiaries.

Note4 ： Unrealized gains or losses on financial assets at fair value through other comprehensive income.

Note5 ： Profits or losses of the defined benefit plan.

Notr6 ： Downstream transactions are written off. Note7 ： Adjustments for dividends subsidiaries received from parent company. Note8 ： Refund of capital reduction.

  • 284 -

TYC BROTHER INDUSTRIAL CO., LTD.

7.STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS AND ACCUMULATED DEPERCIATION

FOR THE YEAR ENDED DECEMBER 31, 2021

In Thousands of New Taiwan Dollars

Item Beginning
Balance		 Additions Decrease Ending Balance Note
Cost
Land
Buildings
Total
Accumulated
depreciation
Land
Buildings
Total		 $627,374
95,668		 $-
-		 $-
-		 $627,374
95,668
$723,042 $- $- $723,042
$1,124
25,432		 $562
12,715		 $-
-		 $1,686
38,147
$26,556 $13,277 $- $39,833
  • 285 -

TYC BROTHER INDUSTRIAL CO., LTD.

8.STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

Type Description Balance, End of Year Contract Period Interest rates applied Loan
Commitments
or Collateral		 Note
Unsecured borrowings
Unsecured borrowings
Total		 Mizuho Bank
Cathay United Bank		 $820,000
138,000
$958,000		 110/12/29-111/3/29
110/12/28-111/1/27		 0.82%
0.82%		 None
None
  • 286 -

TYC BROTHER INDUSTRIAL CO., LTD.

9.STATEMENT OF NOTES PAYABLE

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

In Thousands of New Taiwan Dollars
Client Description Amount Note
Client A
Client B
Client C
Client D
Client E
Client F
Other
Total		 $86,292
76,266
33,985
32,971
29,610
19,739
7,088
$285,951		 The amount of individual client
in others does not exceed 5%
of the account balance.
  • 287 -

TYC BROTHER INDUSTRIAL CO., LTD.

10.STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

Client Description Amount Note
Client A
Client B
Others
Total		 $85,712
84,291
1,397,961		 The amount of individual client
in others does not exceed 5%
of the account balance.
$1,567,964
  • 288 -

TYC BROTHER INDUSTRIAL CO., LTD.

11.STATEMENT OF ACCOUNTS PAYABLE-RELATED PPARTIES

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

Client Description Amount Note
FORTOP INDUSTRIAL CO., LTD.
I YUAN PRECISION INDUSTRIAL CO.,
LTD.
JUOKU TECHNOLOGY CO., LTD.
T.I.T. INTERNATIONAL CO., LTD.
Other
Total		 USD
6,440,528
USD
2,458,746		 294,294
$ 178,596
925
123,573
68,181
107,281
772,850
$		 1.The exchange rate of the USD
to the NTD is 1:27.73
2.The amount of individual client
in others does not exceed 5%
of the account balance.
  • 289 -

TYC BROTHER INDUSTRIAL CO., LTD.

12.STATEMENT OF OTHER PAYABLES

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

In Thousands of New Taiwan Dollars
Item Description Amount Note
Other payables
Salaries payable and bonuses
Employee's compensation
Accrued expenses
Others
Other payables-related parties
Total		 Freight
Deposit for mold
Deposit for mold		 $166,864
80,835
61,833
63,185
11,057		 The amount of individual account title
in others does not exceed 5% of the
account balance.
$383,774
  • 290 -

TYC BROTHER INDUSTRIAL CO., LTD.

13.STATEMENT OF OTHER CURRENT LIABILITIES

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

In Thousands of New Taiwan Dollars
Item Description Amount Note
Contract liabilites
Other unearned revenue
Receipts under custody
Other
Total		 Advance sales receipts
Advance mold receipts
Receipts under custody for mold		 $81,130
177,991
52,364
135
$311,620		 The amount of individual account title
in others does not exceed 5% of the
account balance.
  • 291 -

TYC BROTHER INDUSTRIAL CO., LTD.

14.STATEMENT OF LONG-TERM BORROWINGS

DECEMBER 31,2021

TYC BROTHER INDUSTRIAL CO., LTD.
14.STATEMENT OF LONG-TERM BORROWINGS
DECEMBER 31,2021		 TYC BROTHER INDUSTRIAL CO., LTD.
14.STATEMENT OF LONG-TERM BORROWINGS
DECEMBER 31,2021		 TYC BROTHER INDUSTRIAL CO., LTD.
14.STATEMENT OF LONG-TERM BORROWINGS
DECEMBER 31,2021		 TYC BROTHER INDUSTRIAL CO., LTD.
14.STATEMENT OF LONG-TERM BORROWINGS
DECEMBER 31,2021		 TYC BROTHER INDUSTRIAL CO., LTD.
14.STATEMENT OF LONG-TERM BORROWINGS
DECEMBER 31,2021
In Thousands of New Taiwan Dollars
Creditors Description Amount due within
one year		 Amount due in one
year		 Contract Period Interest rates applied Loan Commitments or Collateral Redemption
First Bank
First Bank
Chang Hwa Bank
Bank of Taiwan
Bank of Taiwan
DBS Bank
DBS Bank
KGI Bank
Yuanta Bank
Hua Nan Bank
Hua Nan Bank
Taipei Fubon Bank
DBS Bank
Total		 Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing
Unsecured
Borrowing		 $50,000
-
25,301
-
-
36,000
-
-
-
-
-
-
-
$111,301		 $750,000
300,000
674,699
200,000
450,000
264,000
270,000
200,000
550,000
500,000
100,000
350,000
249,570
$4,858,269		 2019/07/01-2026/09/15
2021/08/16-2023/08/16
2019/08/09-2029/08/15
2021/07/06-2023/07/06
2021/07/06-2026/06/15
2019/11/06-2024/10/15
2021/04/14-2023/04/14
2021/12/29-2024/01/10
2021/08/27-2023/08/27
2020/07/24-2025/07/24
2021/02/05-2023/02/05
2021/09/26-2023/09/26
2021/04/14-2023/04/14		 0.45%
0.90%
0.50%
0.90%
0.72%
0.57%
0.85%
0.89%
0.85%
0.46%-0.66%
0.88%
0.85%
0.60%		 None
None
None
None
None
None
None
None
None
None
None
None
None		 Principal are repaid monthly, starting from 17 Oct. 2022 , and
interests are repaid monthly.
Interests are repaid monthly and bullet repayment on expiry
date.
Principal are repaid monthly, starting from 17 Oct. 2022 , and
interests are repaid monthly.
After applying for each drawdown within the credit line, each
transaction shall not exceed 180 days.
Interests are repaid monthly and bullet repayment on expiry
The grace period is 2 years. Principal are repaid monthly, and
interests are repaid monthly.
Principal are repaid monthly, starting from 17 Oct. 2022 , and
interests are repaid monthly.
After applying for each drawdown within the credit line, pay
off all principal and interest payable of each drawn down
facility on the expiry date of each principal loan.
Interests are repaid monthly and bullet repayment on expiry
date.
Each transaction shall not exceed 180 days. Interests are
repaid monthly and bullet repayment on expiry date.
Principal are repaid monthly, starting from 15 Aug. 2023, and
interests are repaid monthly.
Interests are repaid monthly and bullet repayment on expiry
date.
Each transaction shall not exceed 180 days. Interests are
repaid monthly and bullet repayment on expiry date.
After applying for each drawdown within the credit line, each
transaction shall not exceed 180 days.
Interests are repaid monthly and bullet repayment on expiry
date.
  • 292 -

TYC BROTHER INDUSTRIAL CO., LTD.

15.STATEMENT OF LEASE LIABILITIES

DECEMBER 31,2021

In Thousands of New Taiwan Dollars

Item Description Contract Periods Discount rates
applies		 Amount Note
Land
Buildings
Subtotal
(Less):Current portion
Lease liabilties, non current		 5~20 years
5~10 years		 1.42%
1.42%		 $556,089
58,739
614,828
(39,388)
$575,440
  • 293 -

TYC BROTHER INDUSTRIAL CO., LTD.

16.STATEMENT OF OPERATING REVENUES

FOR THE YEAR ENDED DECEMBER 31, 2021

In Thousands of New Taiwan Dollars

In Thousands of New Taiwan Dollars
Item Amount Note
Automobile lights
Automobile light parts
Others
Total		 $8,949,497
464,079
1,780,423		 The amount of individual account title
in others does not exceed 5% of the account balance.
Sells for water pump, fan and equipment.
$11,193,999
  • 294 -

TYC BROTHER INDUSTRIAL CO., LTD. 17.STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2021

FOR THE YEAR ENDED DECEMBER 31, 2021 DECEMBER 31, 2021
In Thousands ofNewTaiwan Dollars
Item Amount Note
Cost of Goods Sold of Self-made Product
Direct material
Beginning of year
Add: Raw material purchased
Gains on physical inventories
Less: Raw material, end of year
Scrapped
Sell
Transfer to other account title
Supplies and parts used
Direct labor
Factory overheads
Manufacturing cost
Add: Work in process, beginning of year
Less: Work in process, end of year
Transfer to other account title
Cost of finished goods
Add: Finished goods, beginning of year
Finished goods purchased
Transfer from other account title
Less: Finished goods, end of year
Losses on physical inventories
Scrapped
Transfer to other account title
Cost of Goods Sold of Self-made Product
Cost of Goods sold of Merchandise
Merchandise: Beginning of year
Add: Merchandise purchased
Transfer from other account title
Less: Merchandise, end of year
Losses on physical inventories
Scrapped
Transfer to other account title
Cost of Goods sold of Merchandise
Other operating costs
Sellraw materials
Losses on scrap of inventories
Net gains (losses) on physical inventories
Losses on Inventory Valuation
Other
Total Operating Costs		 $483,172
4,340,722
993
(587,473)
(24,156)
(446,487)
(115,778)
3,650,993
442,945
1,964,521
6,058,459
53,191
(48,844)
(29,997)
6,032,809
561,306
1,852,528
55
(652,297)
(63)
(2,451)
(567)
7,791,320
36,166
1,719,078
39
(31,014)
(26)
(4)
(16)
1,724,223
446,487
26,611
(904)
6,911
15,099
$10,009,747
  • 295 -

TYC BROTHER INDUSTRIAL CO., LTD.

18.STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2021

In Thousands of New Taiwan Dollars

Item Selling
Expenses		 General and
Administrative
Expenses		 Research and
Development
Expenses		 Expected credit
impairment
losses		 Total
Payroll expenses
Freight
Expected credit impairment losses
Repair and maintenance expenses
Depreciation
Amortization expense
Research expense
Commission expense
Export and import expense
Professional service fee
Insurance expense
Other expense
Total		 $84,867
115,466
-
3,191
22,350
1,724
-
34,850
83,214
6,665
13,011
60,696		 $113,192
37
-
16,853
39,977
10,192
-
-
-
23,308
13,370
64,160		 $124,629
2,230
-
16,214
4,548
21,689
56,666
-
-
1,002
14,683
35,898		 $-
-
1,702
-
-
-
-
-
-
-
-
-		 $322,688
117,733
1,702
36,258
66,875
33,605
56,666
34,850
83,214
30,975
41,064
160,754
$426,034 $281,089 $277,559 $1,702 $986,384

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

  • 296 -

  • 6.Financial turnaround difficulties experienced by the Company and its affiliates in the most recent year and as of the date of publication of the annual report: None

  • 297 -

VII.Analysis of the Financial Status, Business Outcomes and Risk Issues：

1.Analysis of the financial status：

Unit：NT$ 1,000；%

Unit：NT$ 1,000；% Unit：NT$ 1,000；%
Year
Item		 2020 2021 Difference
Amount %
Current assets 8,453,095 9,889,193 1,436,098 16.99%
Real estate, plant and
equipment		 8,330,236
7,924,249
(405,987)
(4.87)%
Intangible assets 90,673
71,843
(18,830)		 (20.77)%
Other Assets 5,871,131
6,169,322
298,191
5.08%
Total assets 22,745,135 24,054,607 1,309,472
5.76%
Current liabilities 6,300,812
7,554,959
1,254,147
19.90%
Non-current liabilities 9,739,397 8,308,703 (1,430,694) (14.69)%
Total liabilities 16,040,209 15,863,662
(176,547)		 (1.10)%
Share capital 3,128,979 3,428,979 300,000 9.59%
Capital Provident Fund 1,381,263 2,577,877 1,196,614
86.63%
Retentionofsurplus 2,210,684
2,232,867		 22,183 1.00%
Other interests (289,982) (343,972) (53,990) 18.62%
Treasury Stock (5,996) (5,996) 0 0.00%
Equity attributable to
owners of the parent
company		 6,424,948
7,889,755
1,464,807
22.80%
Non-controllinginterests 279,978 301,190 21,212
7.58%
Totalequity 6,704,926 8,190,945 1,486,019 22.16%
The main reasons for the significant changes in assets, liabilities and shareholders ' equity in
the last two years (changes of more than 20% and the amount of NT$ 10 million) and their
impact and future response plans:
(1) The main reasons for the change:
1. Intangible assets: This is due to the normal amortization of the intangible assets
themselves.
2. Capital surplus: This is due to the issurance of preferred shares premium.
(2) Impact: There is no significant impact.
(3)FutureResponsePlan: Not Applicable
  • 298 -

2.Financial Performance Review Analysis：

2.Financial Performance Review Analysis： 2.Financial Performance Review Analysis： 2.Financial Performance Review Analysis： 2.Financial Performance Review Analysis： 2.Financial Performance Review Analysis：
Unit：NT$ 1,000；%
Year
Item
2020		 2021 Increase
(decrease)
amount		 Change ratio
(%)
Operating revenues 14,446,208 16,576,615 2,130,407 14.75%
Gross profit 2,857,442 3,007,408 149,966 5.25%
Operating profit or loss 2,590,956 2,578,705 (12,251) (0.47)%
Non-operating income and
expenses		 266,486 428,703 162,217 60.87%
Net profit before tax 141,415 (99,282) (240,697) (170.21)%
Net profit for the current period of
continuing operating units		 407,901 329,421 (78,480) (19.24)%
Losses of closed units 121,214 92,812 (28,402) (23.43)%
Net profit ( Loss) for the period 286,687 236,609 (50,078) (17.47)%
Other consolidated profit or loss
for the current period (Net after
tax)		 (56,954) (39,465) 17,489 (30.71)%
Total Consolidated Profit and Loss
for the current period		 229,733 197,144 (32,589) (14.19)%
Net profit attributable to owner of
parent company		 262,616 193,271 (69,345) (26.41)%
Net profit attributable to
non-controlling interests		 24,071 43,338 19,267 80.04%
Total consolidated profit or loss
attributable to owners of the parent
company		 213,244 155,932 (57,312) (26.88)%
Total consolidated profit or loss
attributable to non-controlling
interests		 16,489 41,212 24,723 149.94%
The main reasons for the significant changes in operating income, net operating income and net profit before income
taxes (changes of 20% or more) in the last two years, the expected sales volume and its basis, the possible impact on
the Company's future financial operations and the corresponding plans:
(1) The main reasons for the changes.
1. Net operating income increased due to COVID-19 outbreak slowdown.
(2) Expected sales volumes and their basis: Expected AM and OEM sales volumes in 2022 are expected to be variable
due to the development of the global COVID-19 outbreak.
(3) Possible impact on future financial operations: No material impact
(4)Futureplans in response: Not applicable
  • 299 -

3.Cash flow analysis：

  • (1) Analysis of recent annual cash flow movements：
Year
Item		 2020 2021 Increase
(decrease)ratio
Cash flowratio (%) 45.36% 5.83% (39.53)%
Cash flow ratio(%) 84.54% 69.56% (14.98)%
Cash flow ratio(%) 10.68% 1.11% (9.57)%
Change analysis description：
1.Decrease in cash flow ratio: The main reason is the decrease in working capital in
thecurrent period compared with the previous period.
2. Decrease in cash flow allowable ratio: The main reason for the decrease in net cash
flow from operating activities in the current period compared with the previous period.
3. Decrease in cash reinvestment ratio: The main reason for the decrease in working
capital in the currentperiod compared with thepreviousperiod.
  • (2) Cash flow analysis for the coming year：
) Cash flow analysis for the coming year： ) Cash flow analysis for the coming year： ) Cash flow analysis for the coming year： ) Cash flow analysis for the coming year：
Unit：NT$ 1,000
Initial
cash
balance		 Annual net cash
flow from
operating
activities		 The total
cash
outflow		 Cash
Surplus
(insufficient
)amount		 Remedial measures for
cash shortfall
Investment
plan		 Financial
plan
250,000 12,190,717 12,189,688 251,029 － －
Description of the cash flow analysis for the coming year (2022).
In order to meet the business needs and new product development, some of the
equipmentwasretiredandreplaced.

  • (3) Cash flow shortage improvement plan: None.

  • 4.Impact of significant capital expenditures on financial operations in the past year :

  • (1) The use of major capital expenditure and sources of funds.

Unit：NT$ 1,000 Unit：NT$ 1,000 Unit：NT$ 1,000 Unit：NT$ 1,000 Unit：NT$ 1,000
Project Actual or
anticipated source
of funds		 Actual or
expected
completion
date		 Total funds
required
Actual or scheduled use of
funds
2021
Machines, mold
equipment, etc.		 Working capital
and loans		 2021.12 1,086,450 1,086,450

(2) Expected potential earnings：

In response to the significant increase in sales volume, market share expansion and future operational development, the Company has continued to expand its facilities to improve production efficiency and reduce production costs.

  • 300 -

  • 5.Recent annual investment policy,the main reasons for its profit or loss, improvement plan and investment plan for the next year:

The Company will reconsider based on the operation needs.

  • 6.Risk Event Analysis Assessment. :

  • (1 )Effect of interest rate, exchange rate and inflation on the Company's profit or loss and future measures.

Unit：NT$1,000

future measures. Unit：NT$1,000 Unit：NT$1,000
Year
Item		 2021 2022/3/31
Amount % Amount %
Net operating
income		 16,576,615 100.00% 4,607,284 100.00%
Netprofit before tax 329,421 1.99% 383,217 8.32%
Interest income 3,503 0.02% 629 0.01%
Interest expenses 90,609 0.55% 21,944 0.48%
Redemption(loss) (151,655) 0.91% 135,782 2.95%

Source: Financial statements audited by certified public accountants for the year 2021 Financial statements audited by certified public accountants for the first quarter of fiscal 2022

  1. Impact of interest rate changes on the Company's profit or loss and future measures.

  2. (1) Effect on profit or loss.

The Company's bank loans are fixed-rate loans and variable-rate loans; therefore, they did not have a significant impact on the Company.

  • (2) Future measures in response.

    • The Company maintains an appropriate mix of fixed and floating interest rates, supplemented by interest rate swap contracts to manage interest rate risk. The Company maintains good relationships with its counterparties and is able to control changes in interest rates at any time and adjust them opportunistically.

  • Effect of exchange rate changes on the Company's profit or loss and future measures.

  • (1) Effect on profit or loss.

The Company is primarily an external seller and is affected by changes in foreign exchange rates. The main exchange gains and losses are those arising from derivative financial instruments.

  • (2) Future measures in response.

  • A. The finance department staff keeps abreast of the exchange rate trend through newspaper publications, internet system and professional consultation with banks.

  • B. Forward foreign exchange operations to hedge the risk of foreign currency debts and exchange rate fluctuations with reference to exchange rate trend forecasts.

  • C. In accordance with the relevant provisions of the Financial Supervisory Commission's letter dated December 20, 2013, No. 1 O2O5373, "Guidelines for the Acquisition or Disposal of Assets by Public Companies", the Company regulates the procedures for engaging in derivative financial instrument transactions and strengthens the risk control management system.

  • The impact of inflation on the Company's profit and loss in the most recent year and future measures to address it.

  • There is no impact from inflation in FY2021, but changes in the prices of raw materials required for production will still be closely monitored.

  • 301 -

  • (2) The Company's policy on engaging in high-risk, highly leveraged investments, lending of funds to others, endorsement of guarantees and derivative transactions, the main reasons for profits or losses, and future measures：

    1. The Company does not engage in high-risk, highly leveraged investments. 2. Loans of funds to others: The Company's loans of funds to others are mainly due to business transactions and are made in accordance with the "Procedures for Loans of Funds to Others", with the total amount of loans not exceeding 40% of the Company's net worth.

    2. The total amount of endorsement and guarantee is limited to 40% of the Company's current net worth, of which the amount of endorsement and guarantee for a single enterprise shall not exceed 20% of the current net worth, and the balance of endorsement and guarantee is NT$900,000 and US$24,000 as of 2021.

    4 . The purpose of these transactions in 2021 is to hedge the risks arising from foreign currency debts and exchange rate fluctuations. The natural hedge and the management of exchange rate risks by means of forward exchange contracts do not meet the requirements of hedge accounting and therefore hedge accounting is not applied.

  • (3) Future R&D plans and estimated R&D costs.

Item Topic R & D
Expenses		 Estimated MPT Key influences on the success of
future R&D
1 High pixel ADB
headlamp		 8 million 4th quarter of 2022 Increase pixel in ADB headlamp to
make it more recognizable.
2 CAN BUS
communication
full function
electric car
headlight		 8 million 4th quarter of 2022 Development of ADB headlamp
technology for electric car.
3 CAN BUS
communication
full function LED
ADB car
headlight		 8 million 4th quarter of 2022 1. CAN/LIN BUS design technology
for vehicle lights.
2. Automotive ADB headlamp
technology development.

  • (4) Effect of significant domestic and foreign policy and legal changes on the Company's financial operations and measures taken in response: None.

  • (5) The impact of technological (including cyber security risk) and industrial changes on the company's financial business and the corresponding measures: We will continue to provide high technical standards and quality services through our design and development team, educate and train our sales and technical staff to adapt to product changes, maintain regular interaction with our customers, understand their operating conditions, keep abreast of market information, reduce inventory of raw materials and finished products, and make good commitment to quality and delivery to ensure the company's interests.

  • (6) Impact of corporate image change on corporate crisis management and response measures: Not applicable.

  • (7) Expected benefits, possible risks and contingencies of the merger and acquisition: Not applicable.

  • (8) Expected benefits, possible risks and response measures for plant expansion: Not applicable.

  • 302 -

  • (9) Risks of purchase or sale concentration and countermeasures：

    • The company's largest purchaser accounted for about 9% of the total purchase amount, mainly to produce the company's products sold to North America. In addition, the largest purchaser accounted for about 10.39% of the total sales amount, in view of the future growth trend of the company, and actively mapped out global sales locations, in order to maintain more balanced and stable operating results.

  • (10) The impact, risk and response measures of a significant transfer or change in the Company.： 

     - Since the establishment of the Company, there have been changes in or transfers of shareholdings of directors or substantial shareholders, but due to the Company's sound operation and maintenance of good operating results, no significant transfer or replacement of shareholdings has occurred.

  • (11) Impact of the change on the operating rights of the Company, risks and countermeasures: Not applicable.

  • (12) Litigation or non-litigation events, including litigation, non-litigation or administrative disputes that have been determined or are still pending against the Company, its directors, general manager, persons in charge of the Company, substantial shareholders holding more than 10% of the shares, and affiliated companies, the outcome of which may have a significant impact on shareholders' equity or securities pricing: None.

  • (13) Other significant risks and response measures: None.

  • 7.Other important matters: None.

  • 303 -

VIII.Special notes：

  • 1.Related information on affiliated companies.

  • (1) Report on Consolidated Operations of Affiliated Companies.

    1. Organizational chart of affiliated companies :

T.Y.C.

2021/12/31

==> picture [739 x 326] intentionally omitted <==

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

TYC Brother
Industrial Co., Ltd
72.10% 100% 100% 100% 100% 60% 100% 100%
100%
JUOKU TI FU TAMAU TI YUAN
TECHNOLOGY CO., LTD. INVESTMENT CO., LTD. CONSULTANCY MANAGEMENT INVESTMENT CO., LTD. SUPRA-ATOMIC CO.(BVI) TYCVN BESTE MOTOR (BVI) INNOVA (BVI) CONTEK CO.(BVI)
CO., LTD.
100% 50% 100% 100% 100% 100% 100% 50% 100% 100%
UNIMOTOR VARROC TYC
(BVI) TSM DBM REFLEX OF TAIWAN EUROPILOT CO.(BVI) SPARKING CO.(BVI) MTOR-CURIO CO.(BVI) EUROLITE CO.(BVI) INDUSTRIAL CO.(BVI) (BVI) GENERA (USA) Ｗ (USA) & Ｗ
CO., LTD.
99.98% 100% 100%
100% 100%
T.I.T INTERNATIONAL CHANGZHOU VARROC TYC
TYC EUROPE B.V. TYC HIGH CO., LTD (Thai) TAMAO AUTO LAMPS
ALMERE( 荷蘭 ) PERFORMANCE PRECISION CO.,LTD.
CO., LTD. INDUSTRY
CO.,LTD.
----- End of picture text -----

  • 304 -

2. Basic information on each affiliate.

2021/12/31

2021/12/31 2021/12/31 2021/12/31
Unit：NT$1,000, Foreign Currency in Original Currency
Company Name Establishment
date		 Address Paid-in capital Main business or production items Remark
TI YUAN INVESTMENT CO., LTD. 1997.09.25 12F, No. 212, Yuping, Road Anping District, Tainan City, Taiwan 57,310 Operating securities investment business
TI FU INVESTMENT CO., LTD. 1997.09.25 12F, No. 212, Yuping Road, Anping District, Tainan City, Taiwan 120,000 Operating securities investment business
DBM REFLEX OF TAIWAN CO., LTD. 2000.02.15 No. 54, Ln. 0, Xinle Rd., South Dist., Tainan City 702008 , Taiwan 175,000 Mold manufacturing and international trade
business
TAMAU MANAGEMENT
CONSULTANCY CO., LTD.		 2003.04.22 8F., No. 573, Ln. 0, Qingping Rd., Anping Dist., Tainan
City 708010 , Taiwan		 2,600 Engaged in business management consultants
CONTEK CO., LTD. 1998.01.02 Offshore Incorporations Limited of P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola , British Virgin Islands		 USD2,186,000 Engaging in re-investment holding activities (NOTE1)
BESTE MOTOR CO., LTD. 2004.07.06 Offshore Incorporations Limited of P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands		 USD12,072,000 Engaging in re-investment holding activities (NOTE1)
VARROC TYC CORPORATION 2004.07.07 Offshore Incorporations Limited of P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands		 USD28,144,000 Engaging in re-investment holding activities (NOTE1)
CHANGZHOU VARROC TYC
CORPORATION		 1995.03.16 No. 23, Hengshan Road, New & Hi-Tech Industry Development
Area, Changzhou City, Jiangsu Province, PRC		 USD27,000,000 Production and sales of lighting lamps and
lanterns, motor vehicle accessories, mould
machine,etc.		 (NOTE1)
SUPRA-ATOMIC CO., LTD. 2001.11.20 Offshore Incorporations Limited of P.O. Box 957,Offshore
Incorporations Centre, Road Town, Tortola , British Virgin
Islands

USD65,932,450		 Engaging in re-investment holding activities (NOTE1)
EUROPILOT CO., LTD. 2002.09.27 Offshore Incorporations Limited of P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands
USD14,359,821		 Engaging in re-investment holding activities (NOTE1)
MOTOR-CURIO CO., LTD. 2001.11.23 Offshore Incorporations Limited of P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands		 USD1,893,400 Engaging in re-investment holding activities (NOTE1)
SPARKING CO., LTD. 1999.09.30 Offshore Incorporations Limited of P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands		 USD30,915,717 Engaging in re-investment holding activities (NOTE1)
  • 305 -
Company Name Establishment
date		 Address Paid-in capital Main business or production items Remark
EUROLITE CO., LTD. 1999.05.10 Commonwealth Trust Limited, Sealing House, Tortola, British
Virgin Islans		 USD14,697,972 Engaging in re-investment holding activities (NOTE1)
UNIMOTOR INDUSTRIAL CO., LTD. 1995.09.04 Commonwealth Trust Limited of P.O. Box 3321, Road Town,
Tortola, British Virgin Islands		 USD6,887,000 Engaged in transfer of investment holding
activities		 (NOTE1)
TYC EUROPE B.V. 2003.01.28 Henery Moorest roat 25 1328 LS Almere Holland EUR10,150,000 Sales of car light fixtures (NOTE1)
T.I.T INTERNATIOM CO., LTD. 1999.10.23 119 Moo 3 Bankhai-Nonglalok Road Tambon Nonglalok, Amphur
Bankhai Rayong, Thailand
THB499,560,000		 Manufacture and sale of lighting fixtures and
moulds		 (NOTE1)
CHANGZHOU TAMAO PRECISION
INDUSTRY CO.,LTD.		 2001.08.17 No. 99, Taishan Road, Changzhou City New District, Jiangsu
Province, PRC.		 USD6,467,000 Production of precision molds (NOTE1)
KUN SHAN TYC HIGH PERFORMANCE
LIGHTING TECH CO., LTD.		 2000.12.24 No. 99, Dengta Road, Yushan Town, Kunshan City USD30,000,000 Manufacture and sale of lighting fixtures (NOTE1)
JUOKU TECHNOLOGY CO., LTD. 2004.01.19 No. 1, Ln. 0, Xinle Rd., South Dist., Tainan City 702008 , Taiwan 387,310 Manufacture, processing and sale of
automotive parts and accessories
TSM TECH CO., LTD. 2003.05.20 Offshore Incorporations Limited of P.O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands
USD300,000		 Engaged in the transfer of investment holding
activities		 (NOTE1)
INNOVA HOLDING CORP. 1995.07.26 Offshore, State of Delaware USD12,250,000 Engaged in the transfer of investment holding
activities		 (NOTE1)
GENERA CORPORATION 1991.03.06 2800 Saturn street, Brea, CA 92821 USA. USD 12,388,505 Sales of car light fixtures (NOTE1)
W&W REAL PROPERTY, INC 2009.06.12 2800 Saturn street, Brea, CA 92821 USA. USD1,000,000 Engaged in the trading of real estate and
rental and sale of investments		 (NOTE1)
TYC VIENTNAM INDUSTRIAL CO.,LTD. 2020.05.06 Binh Xuyen Industrial Zone, Dao Duc Town, Binh Xuyen District,
Vinh Phuc Province,Vietnam.		 USD5,000,000 Manufacture, processing and sale of
automotiveparts and accessories		 (NOTE1)

(Note1)：2021.12.31 Exchange rate USD/NTD：27.63 RMB/NTD： 4.319 THB/NTD： 0.8147 EUR/NTD：31.12

  • 306 -

  • Information on the same shareholders who are presumed to be in a controlling or subordinate relationship pursuant to Article 369 of the Companies Act: None

  • Description of business relationship:

  • (1) Industry covered by the business of the overall affiliate.

Name of Affiliated company Industry
TI YUAN INVESTMENT CO., LTD. Investment
TI FU INVESTMENT CO., LTD. Investment
DBM REFLEX OF TAIWAN CO., LTD. Manufacturing
TAMAU MANAGEMENT CONSULTANCY
CO., LTD.		 Service
CONTEK CO., LTD. Trading
BESTE MOTOR CO., LTD. Investment
VARROC TYC CORPORATION Investment
VARROC TYC CORPORATION Manufacturing
SUPRA-ATOMIC CO., LTD. Investment
EUROPILOT CO., LTD. Investment
MOTOR-CURIO CO., LTD. Investment
SPARKING CO., LTD. Investment
EUROLITE CO., LTD. Investment
UNIMOTOR INDUSTRIAL CO., LTD. Investment
TYC EUROPE B.V. Trading
T.I.T INTERNATIONAL CO., LTD. Manufacturing
CHANGZHOU DAMAO PRECISION
INDUSTRIAL CO.,LTD.		 Manufacturing
KUN SHAN TYC HIGH PERFORMANCE
LIGHTING TECH CO., LTD.		 Manufacturing
JUOKU TECHNOLOGY CO., LTD. Manufacturing
TSM TECH., LTD. Investment
INNOVA HOLDING CORP. Trading
GENERA CORPORATION Trading
W&W REAL PROPERTY, INC Investment
TYC VIENTNAM INDUSTRIAL CO., LTD. Manufacturing

  • 307 -

  • (2) The division of labor between affiliated companies whose businesses are related to each other is as follows.

Name of Affiliated Company Division of labor
DBM REFLEX OF TAIWAN CO.,
LTD.		 Third parties of the "Company"
TYC EUROPE B.V. Trading of some of the Company's products
T.I.T INTERNATIONAL CO., LTD. To buy and sell some of our products and engage
in manufacturing and sales
CHANGZHOU DAMAO
PRECISION INDUSTRIAL
CO.,LTD.		 Design, manufacture and maintenance of moulds
for use by the Company and Group companies
KUN SHAN TYC HIGH
PERFORMANCE LIGHTING
TECHCO.,LTD.		 Buying and selling part of "the company"
products and engaged in the manufacture and
sale
JUOKU TECHNOLOGY CO., LTD.
Engaged in mold design, manufacturing and
maintenance and provide for the use of the
Company and the Group enterprises, trading and
manufacturing and sales of some of the products
of the"Company"
GENERA CORPORATION Trading of some of the Company's products
  • 308 -

5. Information on directors, supervisors and general managers of affiliated companies：

2021/12/31

Company Name Title
(Note1)		 Name o r Representative (Note 2) Shareholdings Shareholdings
Number of shares
/capital contribution ($)
(Note 3)		 Shareholding
ratio (%)
TI YUAN INVESTMENT CO., LTD. Chairman WU , CHUN-CHI TYClegal representative 5,731 100.00
Director WU , CHUN-LANG TYClegal representative
Director CHEN , CHIN-CHAO TYClegal representative
Supervisor WENG,YI-FENG TYClegal representative
TI FU INVESTMENT CO., LTD. Chairman WU , CHUN-CHI TYClegal representative 12,000 100.00
Director WU , CHUN-LANG TYClegal representative
Director CHEN , CHIN-CHAO TYClegal representative
Supervisor WENG,YI-FENG TYClegal representative
DBM REFLEX OF TAIWAN CO., LTD. Chairman WU , CHUN-CHI Legal representative of TI FU
INVESTMENTCO.,LTD.		 8,750,000 Of 50.00
Director TING, CHENG-TAI Legal representative of TI FU
INVESTMENTCO.,LTD.
Supervisor WENG,YI-FENG Legal representative of TI FU
INVESTMENTCO.,LTD.
Director Christian Matte legal representative of
9265-2890 QUEBECINC.		 8,750,000 50.00
Director Bernard Caire legal representative of
9265-2890 QUEBECINC
Supervisor Nesim Benrobi legal representative of
9265-2890 QUEBECINC
TAMAU MANAGEMENT CONSULTANCY
CO., LTD.		 Chairman WU , CHUN-CHI TYClegal representative 260,000 100.00
Director C.C. Chiu TYClegal representative
Director CHEN , CHIN-CHAO TYClegal representative
Supervisor WENG,YI-FENG TYClegal representative
CONTEK CO.,LTD. Chairman WU,CHUN-CHI TYC legal representative 2,186,000 100.00
BESTE MOTORCO.,LTD. Chairman WU , CHUN-CHI TYClegal representative 12,072,000 100.00
VARROC TYC CORPORATION Chairman WU , CHUN-CHI BESTE MOTOR legal representative 14,072,000 50.00
Director TING, CHENG-TAI BESTE MOTOR legal representative
Director CHUANG,TAI-SHIE BESTE MOTOR legal representative
Director CHEN , CHIN-CHAO BESTE MOTOR legal representative
Director Tarang Jain Varroc Corp Holding B.V.
legal representative		 14,072,000 50.00
Director Stephane Vedie Varroc Corp Holding B.V.
legal representative
Director Todd Morgan Varroc Corp Holding B.V.
legal representative
Director Tharuvai R. Srinivasan Varroc Corp Holding B.V.
legal representative
VARROC TYC CORPORATION Chairman CHUANG,TAI-SHIE VARROCTYClegal representative USD27,000,000 100.00
Director TarangJain VARROC TYC legal representative
Director TING, CHENG-TAI VARROCTYClegal representative
Director Y.S. Su VARROCTYClegal representative
Director CHEN , CHIN-CHAO VARROCTYClegal representative
Director Stephane Vedie VARROC TYC legal representative
Director R.S.Feng VARROCTYClegal representative
Director Tharuvai R. Srinivasan VARROCTYClegal representative
Supervisor WU ,KUO-CHEN VARROCTYClegal representative
Supervisor Scott AnthonyTrujillo VARROC TYC legal representative
GM R.S.Feng VARROCTYClegal representative
重慶VARROC TYC CORPORATION Director Y.S. Su Legal representative- VARROC TYC
AUTOLAMPS CO.,LTD.		 RMB100,000,000 100.00
Supervisor Y.H. Liu Legal representative- VARROC TYC
AUTOLAMPS CO.,LTD.
GM R.S. Feng Legal representative- VARROC TYC
AUTOLAMPS CO.,LTD.
SUPRA-ATOMIC CO.,LTD. Chairman WU , CHUN-CHI TYClegal representative 65,932,450 100.00
EUROPILOTCO.,LTD. Chairman WU , CHUN-CHI SUPRA-AMOTIClegal representative 14,359,821 100.00
MOTOR-CURIO CO.,LTD. Chairman WU , CHUN-CHI SUPRA-AMOTIClegal representative 1,893,400 100.00
SPARKING CO.,LTD. Chairman WU , CHUN-CHI SUPRA-AMOTIClegal representative 30,915,717 100.00
EUROLITECO.,LTD. Chairman WU , CHUN-CHI SUPRA-AMOTIClegal representative 14,697,972 100.00
UNIMOTOR INDUSTRIALCO.,LTD Chairman WU , CHUN-CHI SUPRA-AMOTIClegal representative 6,887,000 100.00
TYC EUROPE B.V. Chairman TING, CHENG-TAI EUROPILOT legal representative 120,000 100.00
Director WU ,KUO-CHEN EUROPILOT legal representative
Director CHEN , CHIN-CHAO EUROPILOT legal representative
GM WU,CHIA-CHI EUROPILOT legal representative
  • 309 -
Company Name Title
(Note1)		 Name o r Representative (Note 2) Shareholdings Shareholdings
Number of shares
/capital contribution ($)
(Note 3)		 Shareholding
ratio (%)
T.I.T INTERNATIONAL CO., LTD. Chairman WU ,KUO-CHEN EUROPILOT legal representative 4,994,900 99.98
Director CHEN , CHIN-CHAO EUROPILOT legal representative
Director CHANG,CHI-JIE EUROPILOT legal representative
Director WU , CHUN-CHI EUROPILOT legal representative
GM CHANG, CHI-JIE EUROPILOT legal representative
CHANGZHOU DAMAO PRECISION
INDUSTRIAL CO.,LTD.		 Chairman WU , CHUN-CHI UNIMOTOR legal representative USD6,467,000元 100.00
Director CHEN , CHIN-CHAO UNIMOTOR legal representative
Director S.J.Huang UNIMOTOR legal representative
GM S.J.Huang UNIMOTOR legal representative
KUN SHAN TYC HIGH PERFORMANCE
LIGHTING TECH CO., LTD.		 Chairman WU , CHUN-CHI SPARKINGlegal representative USD30,000,000元 100.00
Director Y.L. Wu SPARKINGlegal representative
Director CHEN , CHIN-CHAO SPARKINGlegal representative
Supervisor WENG,YI-FENG SPARKINGlegal representative
JUOKU TECHNOLOGY CO., LTD. Chairman WU , CHUN-CHI - 176,118 0.45
Director CHEN , CHIN-CHAO TYClegal representative 27,923,401 72.10
Director S.C. Wang - 278,467 0.72
Director WU ,KUO-CHEN - 56,999 0.15
Director B.Y.Liao - 21,234 0.05
Director CHUANG,TAI-SHIE - - -
Director LIN, CHUN-KUI - 636 0
Supervisor WU, CHUN-LANG - 789,999 2.04
Supervisor C.L.Yu - 310,097 0.80
Supervisor WENG,YI-FENG - - -
TSM TECHCO.,LTD. Chairman WU , CHUN-CHI TSM legal representative 300,000 100.00
INNOVA HOLDING CORP Chairman WU ,KUO-CHEN TYClegal representative 5,549 100.00
Director WU , CHUN-CHI TYClegal representative
Director CHEN , CHIN-CHAO TYClegal representative
Director CHUANG,TAI-SHIE TYClegal representative
GENERACORPORATION Director WilliamNewman INNOVA legal representative USD12,388,505 100.00
W & WREAL PROPERTY,INC. Director WilliamNewman INNOVA legal representative USD1,000,000 100.00
TYC VIENTNAM INDUSTRIAL CO., LTD. Chairman CHEN , CHIN-CHAO TYClegal representative USD5,000,000 60.00
Director WU ,KUO-CHEN TYClegal representative
Director M.L. Lin Taiwan FCC legal representative
Director C.N. Lin DIAMOND legal representative

Note 1: If the affiliated company is a foreign company, the equivalent position is listed.

Note 2: If the director or supervisor is a legal entity, the relevant information of the representative should be disclosed separately.

Note 3: The amount of capital contributed is expressed in currency, and the rest is the number of shares.

  • 310 -

2021

6. Overview of Affiliate Operations.

2021 2021 2021 2021 2021 2021 2021 2021 2021
Unit：NT$1,000，Foreign currency
as the original currency
Company Name Capital Total assets Total liabilities Net Value Net operating
income		 Operating (Loss)
Gain		 Current profit
(loss)
(after tax)		 Eps (yuan)
(tax)		 Remarks
JUOKU TECHNOLOGY CO.,
LTD.		 387,310
2,815,758
2,436,248		 379,510 1,926,875
71,973
56,406		 -
TI YUAN INVESTMENT CO.,
LTD.		 57,310
54,241
100		 54,141 1,802 1,619
1,623		 -
TI FU INVESTMENT CO.,
LTD.		 120,000
250,777
488		 250,289 27,835 26,037
26,876		 -
DBM REFLEX OF TAIWAN
CO., LTD.		 175,000
352,372
74,422		 277,950 210,501 65,653
53,114		 -
TAMAU MANAGEMENT
CONSULTANCY CO., LTD.		 2,600
6,805
2,478		 4,327 7,619 245
120		 -
CONTEK CO., LTD. 66,005
56,080
-		 56,080 - (188) (5,054) -
BESTE MOTOR CO., LTD. 392,024
1,336,467
-		 1,336,467 - -
29,547		 -
SUPRA-ATOMIC CO., LTD. 2,084,084
1,369,401
-		 1,369,401 - (73) (15,760) -
EUROPILOT CO., LTD. 479,909
483,690
-		 483,690 - -
37,054		 -
MOTOR-CURIO CO., LTD. 56,323
160,313
-		 160,313 - -
28,814		 -
SPARKING CO., LTD. 914,090
224,212
-		 224,212 - -
(105,413)		 -
EUROLITE CO., LTD. 523,358
161,240
-		 161,240 - -
21,248		 -
UNIMOTOR INDUSTRIAL
CO., LTD.		 327,190
312,223
-		 312,223 - -
1,953		 -
TYC EUROPE B.V. 431,892
EUR 10,150,000
1,161,548

EUR 36,987,812
677,890

EUR 21,586,419		 483,658
EUR 15,401,393		 2,234,065
EUR 67,631,415		 62,689
EUR 1,897,764
46,195

EUR 1,398,447		 -
-
(NOTE 1)
T.I.T INTERNATIONAL CO.,
LTD		 440,612
THB 499,560,000
415,559

THB 499,483,513
254,344

THB 305,710,094		 161,215
THB 193,773,419		 482,940
THB 553,151,741		 26,706
THB 30,588,119
21,253
THB 24,343,331		 -
-
(NOTE 1)
KUN SHAN TYC HIGH 895,708 977,832 764,406 213,426 314,383 (112,804)
(104,215)		 -
PERFORMANCE LIGHTING
TECH CO., LTD.		 RMB191,192,050
RMB 224,755,107
RMB 175,699,061		 RMB 49,056,046 RMB 72,670,885
RMB (26,075,111)

RMB(24,089,678)		 - (NOTE 1)

-311-

Company Name Capital Total assets Total liabilities Net Value Net operating
income		 Operating (Loss)
Gain		 Current profit
(loss)
(after tax)		 Eps (yuan)
(tax)		 Remarks
CHANGZHOU DAMAO
PRECISION INDUSTRIAL
CO.,LTD.		 196,899
RMB 49,757,411
404,038

RMB 92,868,466
91,985

RMB 21,142,839
312,053

RMB 71,725,627
273,598

RMB 63,243,423		 (3,464)
RMB (800,679)
1,957

RMB 452,467		 -
-
(NOTE 1)
TSM TECH CO., LTD. 10,122
9,284
-
9,284
-
-		 - -
TYC VIETNAM
INDUSTRIAL CO., LTD		 362,468
USD 12,250,000
5,312,023

USD191,853,943
3,774,342

USD 136,317,625
1,537,681

USD 55,536,318
7,378,800

USD 264,292,161		 120,312
USD 4,309,318		 94,051
USD 3,368,704
-

-
(NOTE 1)
INNOVA HOLDING CORP. 362,468
USD 12,250,000
4,543,424

USD161,818,693
3,078,701

USD 109,651,080
1,464,723

USD 52,167,613
6,446,111

USD218,920,789		 275,358
USD 9,351,623		 200,24
USD 6,800,69		 6
-
7
-
NOTE 1)
(Note1)：2021.12.31 Exch. Rate USD/NTD：27.687853 2021.12 Average Exchange USD/NTD：27.919103
THB/NTD：0.831978 THB/NTD：0.873069
RMB/NTD：4.350654 RMB/NTD：4.326115
EUR/NTD：31.403533 EUR/NTD：33.032951
VND/NTD：0.001212 VND/NTD：0.001216

(Note 2): All affiliated companies should be disclosed regardless of their size.

(Note 3): If the related party is a foreign company, the relevant figures should be presented in Taiwan dollars using the exchange rate at the reporting date.

-312-

  • (2) Consolidated Financial Statements of Affiliated Companies:

    • Consolidated financial statements with parent and subsidiary (Please refer to P79 ~ P184)

  • (3) Relationship report: None

  • 2.Private securities in the past year and as of the date of publication of the annual report: None

  • 3.Holding or disposal of the company’s shares by affiliates in the past year and as of the date of publication of the annual report：

Unit: NT 1000;Shares；% Unit: NT 1000;Shares；% Unit: NT 1000;Shares；%
Name of
Subsidiary		 Paid-in
capital		 Source of
funds		 Percentage
of the
Company's
shareholding		 Date of
acquisition or
disposition		 No. and
amount
of shares
acquired

Number
and
amount of
shares
disposed
Profit and
Loss on
Investment		 Number and
amount of
shares held as
of the date of
publication of
the Annual
Report		 Establishment of
Authority		 Amount of
guarantee
endorsed by
the
Company
for its
subsidiaries
Amount
loaned to
subsidiaries
by the
Company
TI FU
INVESTME
NT CO.,
LTD.		 120,000 Share capital:
30,000
Surplus:
90,000		 100% No 0 0 0 939,707 shares
$5,996,000		 No 0 0

  • 4.Other necessary supplementary information: None

  • IX.Matters in the past year and as of the date of publication of the annual report which have a substantial impact on the owner’s equity as stipulated in item 2, paragraph 2 of Article 36 of the Securities Exchange Law.

-313-

T.Y.C. BROTHER IND. CO., LTD

Chairman WU , CHUN-CHI

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