WKG - Annual Report 2020 | FinancialReports.eu

StockCode ： 4581

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World Known MFG (Cayman) Limited

2020 Annual R rt epo

This annual report is available at http://mops.twse.com.tw Company Websites ： http://www.wkgroup.com Printed on May31, 2021

1.Spokesperson and acting spokesperson

Spokesperson Name ： Yu Shen Fen Acting spokesperson Name ： Tseng,Kuo-Hsien Title ： Chief Financial Officer Title ： Taiwan Subsidiary General Manger Tel ： 886-4-2567-7958 Tel ： 886-4-2567-7958 E-mail ： [email protected] E-mail ： [email protected]

2.Contact information of the head office, branch offices andfactories

(1)Head office Name ： World Known MFG (Cayman) Limited Adress ： The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands Tel ： 886-4-2567-7958

(2)CHINA Subsidiary Name ： World Known Precision Industry (Fuzhou) Co., Ltd. Adress ： No. 161, North Hu-Wen Rd., Wen Wu Sha Town, Chang-Le Dist., Fuzhou, Fujian Prov., China Tel ： 86-591-28780988 (3)TAIWAN Subsidiary Name ： World Known Precision Industry Co., Ltd. Adress ： No,470,Sec3,Ya-Tan Rd.,Daya Dist., Taichung City Taiwan. Tel ： 886-4-2567-7958

(4)SAMOA Subsidiary Name ： Honour Glory International Ltd. Adress ： Offshore Chambers, P.O.Box 217 , Apia, Samoa Tel ： 886-4-25677958

(5)AMERICAN Subsidiary Name ： WKP HITECH USA, INC. Adress ： 1955 Brookfield Court, Columbus, IN, USA Tel ： 886-4-25677958

3.Stock Transfer Agency (Name, Address, Website and Telephonenumber)

Name ： JihSun Securities Co., Ltd. Website ： https://www.jihsun.com.tw/ Adress ： 7F., No. 85, Sec. 2, Nanjing E. Rd., Tel ： 02-2562-6288 Zhongshan Dist., Taipei City , Taiwan (R.O.C.)

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

Name ： Chang-Hsieh Chen, Tsu-Hsin Chang Website ： http://www.kpmg.com.tw Firm ： KPMG Tel ： 02-8101-6666 Adress ： 68F, No.7, Sec. 5, Xinyi Road, Xinyi District, Taipei City

5.Name of the stock exchange where company’s listed overseas securities are traded and the access to information on such listed overseas securities: N/A.

6.Company Website ： http://www.wkgroup.com

7.Responsible person for litigation and non-litigation (name, title and contact information):

Name ： Lu,Huang-Fu Title ： Chairman Tel ： 886-4-2567-7958 E-mail ： [email protected]

8.Directors

8.Directors
Title	Name	Nationality	Education/Qualifications
Chairman	Lu, Huang-Fu	R.O.C	1.The College of Law, Tunghai University 2.School of Management Development, Feng Chia University 3.Vice President of World Known Mfg. Co., Ltd.
Director	Lu, Chung-Wen	R.O.C	1.Ming-Der Vocational School 2.Director of Board, Lucky Bank, Inc. 3.Officerof Taichung Credit Union
Director	Chang, Wu-Lung	R.O.C	1.Department of Mechanical Engineering, Provincial Taipei Vocational School of Industry 2.Singer Taiwan Limited. 3.President of World Know Precision Industry (Fuzhou) Co.,Ltd.
Director	Sheng, Chien-Chih	R.O.C	1.MBA, Peter F. Drucker and Masatoshi Ito Graduate School of Management 2.Director of Board, Hota Industrial MFG. Co., Ltd. 3.Managerof Tong-An Investment Co.,Ltd.
Director	Lin, Yen-Huey	R.O.C	1.Department of Business Administration, Pacific Western University 2.Vice President of Hota Industrial MFG. Co.,Ltd.
Director	AmTrust Investment Consulting Corp.	R.O.C	—
	Ho,Jung-Shu	R.O.C	1.MBA, Business Administration, National Taiwan University 2.Vice President, Globaltop Assets Management Consulting Corp. 3.Manager of Investment Department, Industrial Bank of Taiwan) 4.Deputy Manager of Asset Management Dep., CapitalSecurities Corporation
	Chen, Ming-Chieh	R.O.C	1.EMBA, National Cheng Kung University 2.MBA, Department of Electronic and Computer Engineering, National Taiwan University of Science and Technology 3.Department of Electronic and Computer Engineering, National Taiwan University of Science and Technology 4.Director of Investment Department, AmTrust Investment Consulting Corp. 5.Special Assistant of President, Industrial Technology Research Institute 6.Engineer of Information and Communications Research, ITRI

Title	Name	Nationality	Education/Qualifications
Independent Director	Wang, Wei	R.O.C	1.PhD, Master Program of Agricultural Economics and Marketing, National Chung HsingUniveristy 2.Dean of College of Business, Feng Chia University 3.Diector of Taiwan Economic Association 4.Committee member of Internationtal Trade Commission Ministry of EconomicAffairs
Independent Director	Hon, Jau-Shin	R.O.C	1.Phd, Department of Management science, National Chiao Tung University 2.Chair / Associate Professor of Department of Industrial Engineering and Enterprise Information, Tunghai University 3.CEO of School of Exterrsion, Tunghai University
Independent Director	Hsu, Fu-Hsiung	R.O.C	1.Master of Department of Financial & Economic Law, Chung Yuan Christian University 2.Lin,Zih-YingLaw Firm 3.Chen,Yi-ChengLaw Firm 4.DingLui Law Firm

Table of Contents	Table of Contents
I.LETTERTOSHAREHOLDERS .......................................................................................... 1
II.COMPANYPROFILE ....................................................................................................... 4
A.	DATE OF INCORPORATION AND AN INTRODUCTION TO THE COMPANY AND
	BUSINESSGROUP ..................................................................................................................................... 4
B.	A BRIEF HISTORY OF THE COMPANY ANDTHEGROUP ................................................................. 5
III.CORPORATEGOVERNANCEREPORT ........................................................................ 6
A.	ORGANIZATIONALSYSTEM .................................................................................................................. 6
B.	INFORMATION ON THE COMPANY'S DIRECTORS, SUPERVISORS, GENERAL
	MANAGER,DEPUTY GENERAL MANAGERS, DEPUTY ASSISTANT GENERAL MANAGERS, AND
	THE SUPERVISORS OF ALL THE COMPANY'S DIVISIONS AND BRANCH UNITS ...................8
C.	REMUNERATION PAID DURING THE MOST RECENT FISCAL YEAR TO DIRECTORS,
	SUPERVISORS, GENERAL MANAGER AND DEPUTYGENERALMANAGER ............................. 19
D.	CORPORATE GOVERNANCE IMPLEMENTATION.......................................................................... 25
E.	INFORMATION REGARDING THE COMPANY’S AUDIT FEE AND INDEPENDENCE ............... 52
F.	INFORMATION ON REPLACEMENTOFCPAS .................................................................................. 52
G.	THE COMPANY’S CHAIRMAN, GENERAL MANAGER, MANAGERS IN CHARGE OF ITS
	FINANCE AND ACCOUNTING OPERATIONS DID NOT HOLD ANY POSITIONS
	WITHINTHECOMPANY’SINDEPENDENTAUDITFIRMORITSAFFILIATESINTHE
	PASTYEAR ............................................................................................................................................. 53
H.	ANY TRANSFER OF EQUITY INTERESTS AND/OR PLEDGE OF OR CHANGE IN EQUITY
	INTERESTS (DURING THE MOST RECENT FISCAL YEAR OR DURING THE CURRENT
	FISCAL YEAR UP TO THE DATE OF PUBLICATION OF THE ANNUAL REPORT) BY A
	DIRECTOR, SUPERVISOR, MANAGERIAL OFFICER,OR SHAREHOLDER WITH A STAKE
	OF MORE THAN 10 PERCENT DURING THE MOST RECENT FISCAL YEAR OR DURING
	THE CURRENT FISCAL YEAR UP TO THE DATE OF PUBLICATION OF THE ANNUAL
	REPORT. WHERE THE COUNTERPARTY IN ANY SUCH TRANSFER OR PLEDGE OF
	EQUITY INTERESTS IS A RELATED PARTY, DISCLOSE THE COUNTERPARTY'S NAME,
	ITS RELATIONSHIP BETWEEN THAT PARTY AND THE COMPANY AS WELL AS THE
	COMPANY'S DIRECTORS, SUPERVISORS, AND TEN-PERCENT SHAREHOLDERS,AND
	THE NUMBER OF SHARES TRANSFERREDORPLEDGED ............................................................. 54
I.	INFORMATION ABOUT ANY ONE OF THE TOP 10 SHAREHOLDERS WHO IS THE
	INTERESTED PARTY TO, OR HAS MARRIAGE RELATIONSHIP WITH AND IS A
	RELATIVE WITHIN THE SECOND DEGREE OF KINSHIPOFANOTHER ...................................... 54
J.	THE SHARES OF THE SAME RE-INVESTED ENTERPRISE HELD RESPECTIVELY BY THE
	COMPANY, ITS DIRECTORS AND SUPERVISORS, MANAGERS, AND ANY COMPANIES
	CONTROLLED DIRECTLY OR INDIRECTLY BY THE COMPANY, AND THE COMBINED
	PERCENTAGE OF SHARES HELD BY SUCH ENTITIESANDPERSONS ........................................ 55
IV.CAPITALRAISING ......................................................................................................... 56
A.	CAPITALANDSHARES ......................................................................................................................... 56
B.	CORPORATEBONDS ............................................................................................................................. 60
C.	PREFERREDSHARES ............................................................................................................................ 60
D.	OVERSEASDEPOSITARYRECEIPTS .................................................................................................. 60
E.	EMPLOYEESTOCKOPTIONS ............................................................................................................... 60
F.	EMPLOYEERESTRICTEDSTOCK ........................................................................................................ 60
G.	NEW SHARE ISSUANCE IN CONNECTION WITH MERGERSANDACQUISITIONS
	61IMPLEMENTATION PLANOFFUNDING ........................................................................................ 60
H.	IMPLEMENTATION PLAN OF FUNDING .......................................................................................... 60
V.OVERVIEW OFBUSINESSOPERATION ..................................................................... 61
A.	BUSINESSACTIVITIES ......................................................................................................................... 61
B.	MARKET AND THE OVERVIEW OF PRODUCTIONANDSALES ................................................... 70
C.	THE NUMBER OF EMPLOYEES IN THE MOST RECENT TWO YEARS AND AS OFTHE
	DATE OF PUBLICATION OF THEANNUALREPORT ....................................................................... 76
D.	ENVIRONMENTALPROTECTIONEXPENSES ................................................................................... 76
E.	LABORRELATION ................................................................................................................................ 76
F.	IMPORTANTCONTRACTS ................................................................................................................... 78

VI.OVERVIEW OF COMPANYFINANCIALSTATUS ................................................... 80	VI.OVERVIEW OF COMPANYFINANCIALSTATUS ................................................... 80
A.	THE CONSOLIDATED FINANCIAL STATEMENTS AND INFORMATION FOR THE
	RECENT FIVE FISCAL YEAR, WHICH INCLUDES CPAS’ NAMES WITH AUDIT
	OPINIONS ............................................................................................................................................... 80
B.	FINANCIAL ANALYSES FOR THE PAST FIVEFISCALYEARS ...................................................... 83
C.	AUDIT COMMITTEE’S REVIEW REPORT FOR THE MOST RECENT FINANCIAL STATEMENTS ... 85
D.	THE FINANCIAL STATEMENTS IN THE MOST RECENT FISCAL YEAR, INCLUDING AN
	AUDITOR'S REPORT PREPARED BY CPAS, AND 2-YEAR COMPARATIVE BALANCE SHEET,
	STATEMENT OF COMPREHENSIVE INCOME, STATEMENT OF CHANGES IN EQUITY, CASH
	FLOW CHART, AND ANY RELATED FOOTNOTES OR ATTACHED APPENDICES ................... 86
E.	STANDALONE FINANCIAL STATEMENTS IN THE MOST RECENT FISCAL YEAR,
	CERTIFIED BYACPA ............................................................................................................................ 86
F.	IF THE COMPANY OR ITS AFFILIATES HAVE EXPERIENCED FINANCIAL DIFFICULTIES
	IN THE MOST RECENT FISCAL YEAR AND AS OF THE DATE OF PUBLICATION OF THE
	ANNUAL REPORT, THE ANNUAL REPORT SHALL EXPLAIN HOW SUCHDIFFICULTIES
	AFFECT THE COMPANY'SFINANCIALSITUATION ........................................................................ 86
VII.REVIEW AND ANALYSIS OF THE COMPANY’S FINANCIAL STATUS,
FINANCIAL PERFORMANCE, ANDRISKMANAGEMENT ................................. 87
A.	FINANCIALSTATUS ............................................................................................................................. 87
B.	FINANCIALPERFORMANCE ............................................................................................................... 87
C.	CASHFLOW ............................................................................................................................................ 88
D.	THE IMPACT OF MAJOR CAPITAL EXPENDITURES IN THE MOST RECENT YEAR ON
	FINANCIALSTATUS ............................................................................................................................. 89
E.	REINVESTMENT POLICY IN THE MOST RECENT YEAR, REINVESTMENTRESULTSWITH
	REASONS AND IMPROVEMENT PLANS, AND INVESTMENT PLAN FOR THE
	UPCOMINGYEAR .................................................................................................................................. 89
F.	RISKMANAGEMENT ............................................................................................................................ 90
G.	OTHER MATTERS ................................................................................................................................. 94
VIII.SPECIALDISCLOSURE ............................................................................................ 95
A.	INFORMATION RELATED TO THECOMPANY’SAFFILIATES..................................................... 95
B.	TRANSACTION ABOUT THE COMPANY’S PRIVATE PLACEMENT OF SECURITIES
	DURINGTHEMOSTRECENTFISCALYEARORDURINGTHECURRENTFISCALYEAR
	UP TO THE DATE OF PUBLICATION OF THEANNUALREPORT ................................................ 97
C.	HOLDING OR DISPOSAL OF SHARES IN THE COMPANY BY THE COMPANY'S
	SUBSIDIARIES DURING THE MOST RECENT FISCAL YEAR OR DURING THE CURRENT
	FISCAL YEAR UP TO THE DATE OF PUBLICATION OF THEANNUALREPORT ...................... 97
D.	OTHER MATTERS THAT REQUIREADDITIONALDESCRIPTION ............................................... 97
E.	ANY MATTERS LISTED IN SUBPARAGRAPH 2, PARAGRAPH 3, ARTICLE 36 OF THE
	SECURITIES AND EXCHANGE ACT, WHICH MIGHT MATERIALLY AFFECT SHAREHOLDERS'
	EQUITY OR THE PRICE OF THE COMPANY'S SECURITIES, HAS OCCURRED INTHEMOST
	RECENT FISCALYEARAND DATE OF PUBLICATION OF THE ANNUAL
	REPORT,SUCHSITUATIONS .............................................................................................................. 97

APPENDIX

CONSOLIDATED FINANCIAL STATEMENTS IN THE MOST RECENTYEAR

I.Letter to Shareholders

A.Overview of business in 2020

(I)Performance of the business plan

The net amount of the Company’s revenue for 2020 is NT$863,749,000, or NT$172,150 ,000 less than 2019 (about 16.62%). The net profit after tax is NT$68,565,000, or NT$24,506,000 less than 2019 (about 26.33%). Revenue decline in 2020 is mainly due to the recession of COVID-19 pandemic, customers in North America and Europe who accounts majority of our sales are worst impacted. With the relief of pandemic since August, 2020, delivery has gradually recovered but revenue as a whole is still less compare to previous year.

(II)Execution of budget

Pursuant to the current regulations, the Company has not disclosed the forecast of 2020 finance and thus is not applicable.

(III)Analysis of financial incomes and profitability

finance and thus is not applicable. Analysis of financial incomes andprofitability	finance and thus is not applicable. Analysis of financial incomes andprofitability
Item		2019	2020	Difference %
Net amount of operatingrevenue		1,035,899	863,749	(16.62)
Operatingmargin		267,301	201,800	(24.50)
Operating profit		111,008	78,839	(28.98)
After-tax netprofit		93,071	68,565	(26.33)
Financial structure	Liabilityto asset ratio %	35.15	34.27	(2.50)
	Long-term fund to fixed asset ratio %	252.30	340.49	34.95
Solvency	Current ratio %	212.58	173.16	(18.54)
	Quick ratio %	145.34	118.80	(18.26)
Profitability	Return on assets	8.05%	5.53%	(31.30)
	Return on shareholder’s equity	12.69%	8.47%	(33.25
	Netprofit margin	8.96%	7.94%	(11.38)
	Earningsper share(NT$)	3.09	2.06	(33.33)

The profitability of 2020 decreased from 2019, the main reasons are, other than the 16.62% decline of revenue:

After the outbreak of COVID-19 in first quarter of 2020, production was resumed with limited capacity due to unfavorable factors such as shortage of labor hands, disruption in supply chain and insufficient logistic services. Revenue in the period is lower than that of same period of previous year. Manufacturing cost amortized to each product unit is higher and thus drove up product cost.
Customers with higher margin profit were severely impacted by pandemic. Demand dropped drastically and customers became conservative on posting forecast and releasing orders. Therefore margin profit dropped as product portfolio changed. Alternative energy product business is more mature and is witnessing strong competition from mainland China. Selling

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price is reduced upon customer demand which led to lower margin profit.

In a nutshell, for 2020, under the impact of the client and product profolio , the net profit after-tax declined from 2019.

(IV) Research and development status

Under the light trend of automotive industry, we keep developing and improving production technology on aluminum alloy products. Besides, we strengthen the automation level and computer measurement technology to elevate production precision and product yield, to provide better product service to customers.

B.Summary of the 2021 Business Plan

(I)Guidelines of operations
Orders for aluminum products is gradually increasing despite recession. Strengthen aluminum alloy casting skills by increasing personnel training; invest moderately in aluminum casting and processing automation equipment for better production efficiency and product quality while alleviating demand of workmanship.
Continuously expand customer base and diversify business in various industry to increase turnover and spread business risk; Proactively seek large workpiece business opportunity and enhance utilization rate of large horizontal CNC machines.
In response to logistics problem such as destination port congestion and freight containers shortage, proactively adjust procurement and production schedule and make advance shipment to reduce the risk of air transport.
(II)Expected sales volume and the basis

The Company expect the shipment volume in 2021 to grow continuously, with the stable orders to the existing products from the major clients, combining with the mass production of new products. The estimated shipment volume is based on the long-term demand forecasts provided by the clients, the progress of new product development and the plan of capacities.

C.Strategies of Future Development
(I)Marketing strategies:
1. Seeking opportunities to expand supply to the existing clients; through the experience of partnering with current clients, the Company seeks participation to the development projects of major international car makers; strives for the R&D for technologies improving production process, to enhance the R&D capability of the Company; and continuing the development parts for new car models.
2. Continuously monitor the development of commercial vehicles sector ,seeking aluminum electric motor housing business opportunity from renown electric vehicle manufacturers; In response to the trend of lightweight vehicles, develop aluminum alloy chassis parts in cooperation with existing clients; Tap into relevant initiative of energy-saving, carbon-reducing and emission control regulations, expand supply of aluminum alloy EGR parts; Participate in the development of electric-mechanical brake system parts that meets higher safety regulations to satisfy client’s diverse demands.
3. Intensify existing client service, strive to provide customer integrated services with multi- casting material, multi-manufacturing and assembly processes, satisfying the one-stop-procurement demands of the clients
4. In the post-epidemic era, strengthen digital marketing capability. Tap and dig into potential customers to develop and categorize their requirements efficiently and systematically, and ultimately transform them into clients with real business needs.

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  5. Develop customers from new industry by contacting relevant trade association and legal entities.

(II)Production strategies:
1. Promotion of smart logistic; enhancement of supports to operations; Continuously improve production automation to build smart manufacturing infrastructure and to weather labor shortage risk; Promote equipment and information visualization management thus to advance manufacturing management system efficiency. Speed up progress tracking and abnormality disposal process. Speed up decision-making process to reduce waste.
2. Enhance supply chain management efficiency; Implement flexible production to satisfy the needs of small-batch, multi-items from customer; Integrate manufacturing process from various material forming processes such as casting, forging, to heat treatment, surface treatment, and assembling to expanding scope of product catalogue of different material and craftsmanship.
3. Search and develop potential raw parts supplier through relevant trade association to expand non-iron casting supply base.
4. Strengthen role of cross-functional team for new product development, R&D staff focus on new product design, new process planning and absorption and conversion of new technologies while engineering team focus on on-site process improvement and new product sample fabrication; Establish a process to shorten development lead time for new products so as to meet ever demanding delivery deadline from customers.
(III)Management strategies
1. Review and simplify existing processes. Improve operational efficiency by maximizing ERP and electronic document management systems; Strengthen company's KPI management, and thus to enhance overall operation performance and implement corporate governance.
2. Digital transformation, Optimize front-to-back management system through digital technology; Improve efficiency of communication within the organization; Further integrate internal and external information to improve customer awareness and obtain high-quality data and information; Enhance company's competitiveness.
D.Under the influences of external competitions, regulations, and macro- operational environment With the safety regulations upgrade in various countries, tighter environmental regulations, the trends of being smart, electrical or with new energies, as well as the rapid evolving macro environment, in the regards of industry and market, the Company will follow the trends of clients’ markets, by expanding the precise processing technologies of multiple materials (cast iron, aluminum and steel), to provide the one-stop procurement to the clients, for the purpose of enhancing the Company’s competitiveness and growth momentum, At a post-pandemic era where “Rise of online communication, Decline of physical interaction” is trending, invest both in software and hardware to achieve digitization on operation management, supply chain, product and services become imperative. Meanwhile, it is necessary to review and evaluate potential risks that company might confront and establish a contingency plan to maximize shareholder’s value and fulfill social responsibility as a business entity

Finally, we’d like to express our appreciations for the supports and encouragements from our shareholders. We thank you sincerely and wish you all the best and healthy.

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Chairman:

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Manager:

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Head of Accounting:

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II. Company Profile

A. Foundation Date: November 19, 2015

B. Company History

Year	Key events
2004	World Known Precision Industry (Fuzhou) Co., Ltd. (hereinafter referred to as “WKPF”) was established. The major product is the brake disk (drum) providedforthe after-salesmarketinthe U.S.
2005	Passed the quality review by “C” Company in Germany in March, to supply the parts ofadjustment valvesforgasrecyclinginanengine.
2006	Certified by Siemens VDO of Germany to develop the advanced diesel engine parts, system of recycling emission (EBV), and emission circular filtering cooler(EGR-Cooler), collaboratively.
2007	WKPFwas certified with ISO14001:2004.
2009	Contracted with “A” Company (hereinafter referred to as the “A Company”) for parts of engine and parts for energy-saving and emission-reductionsystem.
2010	1. Certified by a Swedish manufacturer for braking system parts, E Company, to supply the parts of ADB system at the vehicle chassis. 2. WKPFwas certified with ISO/TS16949.
2011	WKPFwas certified withthe third versionof ISO/TS16949:2009.
2012	1. Passed the quality review of F Company in the U.S., to supply parts of engines in May. 2. In November, an expert workstation was established with Fuzhou University in Fujian, to research and develop the turbocharger for diesel engines together.
2013	1. Certified by Axle Tech in the U.S. and MahleBher in Germany, to supply the parts of chassis and engines, respectively. 2. WKPFwas certified withOHSAS18000:2007.
2014	1. In February, the Well-Known Trademark of Fuzhou City certificate and the High-Tech Enterprise Certification were obtained. 2. In August, passed the quality review of the client MAHLE (Germany), to produce thefiltercaps ofthe screening program forships.
2015	1. Established the joint lab of turbocharger design and test with Fuzhou University in March. 2. In November, became the supplier of Navistar in the U.S., and developed the Navistar EGR component project with the Chinese listed company, Zhejiang Yinlun Machinery Co., Ltd. 3. In November, the World Known MFG (Cayman) Limited (hereinafter referred to as “WKM” or “the Company”) was established in Cayman Islandsfor listingin Taiwan.
2016	1. Passed the quality review of client G Company, to supply aluminum recast emission parts of engines in March. 2. In November, World Known Precision Industry Co., Ltd. (hereafter “WKPT”) was established.
2017	1. Acquired 100% stake of Honour Glory International Ltd. (hereinafter referred to as “Honour”) through cash acquisition and share exchange. 2. Added the production lines for aluminum recast and expanded the operation scope, to produce high-end aluminum cast parts for energy-saving and carbon reduction, as wellas the precisionprocessing

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Year	Key events
	of these parts. 3. WKPF obtained the certification of Requirements of System Fused with InformatizationandIndustrialization(Trial)
2018	1. WKPT obtained IATF 16949 certification and ISO 9001:2015 certification 2. Client G’s EGR valve seat of diesel engine for Stage Five Emission started mass production, and prototype of EGR for Stage Six Emission were developed and sampled. 3. WKPT introduced thefirst smart automated processingline.
2019	1. The application for the initial public offeringwas reviewed and approved by Securities Listing Review Committee of Taiwan Stock Exchange CorporationinOctober
2020	1. In March, the Company’s shares went listed in TWSE. 2. In November, WKPT obtained ISO 14001:2015 certification and ISO 45001:2018 certification.

With respect to the most recent fiscal year as well as the current fiscal year up to the date of publication of the annual report, including information on the following: merger and acquisition activities; strategic investments in affiliated enterprises; corporate reorganization; instances in which a major quantity of shares belonging to directors, supervisors, or shareholders holding greater than a 10 percent stake in the company is transferred or otherwise changes hands; any change in managerial control; any material change in operating methods or type of business; and any other matters of material significance that could affect shareholders' equity. None.

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III.Corporate Governance Report

A. Organizational System

(I) Organizational Structure

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

Shareholders’
Meeting
Remuneration
Committee
Board of
Directors
Audit Office Audit
Committee
Chairman
General
Manager
Finance HR and Public Relation and Information Investment
Department of the Group Administration Department of the Group Legal Department of the Group Finance Department Department of the Group Department of the Group
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(II) Functions of the Major Departments

Department	Functions
Board of Directors	Implement the resolutions
Audit Committee	Supervising the business and financial status of the Group, the fair presentation of financialstatements, and the effectiveimplementationoftheinternalcontrols.
Remuneration Committee	Establishing the policies, systems, standards and structures of the performance evaluations and remuneration for directors and managers, with regular reviews; regularly evaluating and deciding the remunerations to directors and managers.
Audit Office	Establishing various audits and internal controls of the Group, assessing, implementing, and supervising such implementation, while providing improvementrecommendations and tracking progress.
Finance Department of the Group	In charge of accounting affairs, formulating and implementing the accounting policy and system, while supervising the financial position of each subsidiary.
HR and Administration Department of the Group	1. In charge of supervising and managing the human resources, administration and general affairs, environmental and occupational safety, as well as the occupational health. 2. Planning and implementing the affairs of the Board of Directors meetings, shareholders’ meeting, and shareholder services. 3. Assisting the evaluation and plan for the policies and operating guidelines of the Group andformulating and promoting the system.
Public Relations and Legal Department of the Group	In charge of the planning and management of public relations, ethical management, legal affairs within the Group.

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Department	Functions
Information Department of the Group	In charge of establishing the framework of information security risk management, information security policies and overseeing and managing the information/communicationsecurityforthe Group
Investment Department of the Group	In charge of the planning, assessment, oversight and management of investment and business activities within the Group.

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

(I) Information on the company's directors and supervisors:

1. Directors

							As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share	As of April30,2021 Unit: 1,000share
Title	Nation ality or Place 0f Registr ati on	Name	Gend e r	Date Elected	Term	Date First Elected	Shareholding When Elected		Current Shareholding		Spouse&Minor Shareholding		Shareholding in the name of others		Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are spouses or within two degrees of kinship			note
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relat ion
Chairman	R.O.C	Lu, Huang-Fu	Male	2018.10.19	3years	2015.11.19	1,170	3.90%	1,352	3.99%	─	─	2,730 (Note2)	8.05% (Note2)	1.The College of Law, Tunghai University 2.School of Management Development, Feng Chia University 3. Vice President of World Known Mfg. Co., Ltd.	1.Chairman of World Known Precision Industry Co., Ltd. 2. Chairman of WKP USA. 3.Chairman of World Known Precision (Fuzhou) Industry Co., Ltd. 4. Chairman of Lavender Hill Limited	Director	Lu, Chung- Wen	Parent -child	Note 4
Director	R.O.C	Lu, Chung-We n	Male	2018.10.19	3years	2015.11.19	900	3.00%	894	2.64%	1,050	3.10%	5,097 (Note3)	15.04% (Note3)	1. Ming-Der Vocational Schoo 2. Director of Board, Lucky Bank, Inc. 3. Officer of Taichung Credit Union	1. Director of World Known MFG Co., Ltd. 2. Chairman of Ancient Enterprise Corp. 3.Director of Scopio Investments Limited 4.Director os Germander Group Limited 5. Chairman of Chung Yin Investment Development Co., Ltd. 6.Director of Fu-YingCo.,Ltd	Chairma n	Lu, Huang- Fu	Parent -child	─
Director	R.O.C	Chang, Wu-Lung	Male	2018.10.19	3years	2015.11.19	676	2.25%	666	1.96%	235	0.69%	─	─	1. Department of Mechanical Engineering, Provincial Taipei Vocational School of Industry 2.Engineer of Singer Taiwan Limited. 3. President of World Know Precision Industry (Fuzhou) Co.,Ltd.	1. Chairman of World Known MFG Co., Ltd. 2.Executive Director and Vice Chairman of Taiwan Foundry Society 3.Director&General Manager of Ancient Enterprise Corp	─	─	─	─

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Title	Nation ality or Place 0f Registr ati on	Name	Gend e r	Date Elected	Term	Date First Elected	Shareholding When Elected	Shareholding When Elected	Current Shareholding	Current Shareholding	Spouse&Minor Shareholding	Spouse&Minor Shareholding	Shareholding in the name of others	Shareholding in the name of others	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	note
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relat ion
Director	R.O.C	Lin, Yen-Huey	Male	2018.10.19	3years	2015.11.19	─	─	─	─	─	─	─	─	1. Department of Business Administration, Pacific Western University 2. Vice President of Hota Industrial MFG. Co., Ltd.	1.Director ofHota Industrial MFG Co., Ltd.	─	─	─	─
Director	R.O.C	Sheng, Chien-Chi h	Female	2018.10.19	3years	2018.10.19	─	─	─	─	─	─	─	─	1. MBA, Peter F. Drucker and Masatoshi Ito Graduate School of Management 2. Director of Board, Hota Industrial MFG. Co., Ltd. 3. Manager of Tong-An Investment Co., Ltd.	1. Supervisor of Kao Fong Machinery Co., Ltd. 2.Independent director of Orange Electronic Co., Ltd. 3. Director ofHota Industrial MFG Co., Ltd. 4.CEO of Hota Industrial MFG Co., Ltd.	─	─	─	─

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Title	Nation ality or Place 0f Registr ati on	Name	Gend e r	Date Elected	Term	Date First Elected	Shareholding When Elected	Shareholding When Elected	Current Shareholding	Current Shareholding	Spouse&Minor Shareholding	Spouse&Minor Shareholding	Shareholding in the name of others	Shareholding in the name of others	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	note
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relat ion
Director	R.O.C	AmTrust Investment Consulting Corp		2018.10.19	3years	2018.10.19	2,000	6.67%	2,000	5.90%	─	─	─	─	─	─	─	─	─	─
	R.O.C	Representa tive:： Ho,Jung-S hu	Male				─	─	─	─	─	─	─	─	1. MBA, Business Administration, National Taiwan University 2. Deputy and investment officer, Te-Hung Investment Management Consulting Co 3. Manager of Investment Department, Industrial Bank of Taiwan) 4. Deputy Manager of Asset Management Dep., Capital Securities Corporation	1. General manager and director of Yuan-Chuang Industrial Investment Consulting Co. 2.Independent director of Net Publishing Co., Ltd.	─	─	─	─
Direct	R.O.C	AmTrust Investment Consulting Corp		2018.10.19	3years	2018.10.19	2,000	6.67%	2,000	5.90%	─	─	─	─	─	─	─	─	─	─

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Title	Nation ality or Place 0f Registr ati on	Name	Gend e r	Date Elected	Term	Date First Elected	Shareholding When Elected	Shareholding When Elected	Current Shareholding	Current Shareholding	Spouse&Minor Shareholding	Spouse&Minor Shareholding	Shareholding in the name of others	Shareholding in the name of others	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	note
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relat ion
	R.O.C	Representa tive: Chen, Ming-Chie h	Male				─	─	─	─	─	─	─	─	1. EMBA, National Cheng Kung University 2. MBA, Department of Electronic and Computer Engineering, National Taiwan University of Science and Technology 3. Department of Electronic and Computer Engineering, National Taiwan University of Science and Technology 4. Director of Investment Department, AmTrust Investment Consulting Corp 5. Special Assistant of President, Industrial Technology Research Institute 6. Engineer of Information and Communications Research, ITRI	1Deputy General Manager of Yuanchuang Industrial Investment Consulting Co., Ltd 2. Director (legal representative) of Hong Wei Electrical Industry 3. Director (legal representative) of Joy Industrial Co., Ltd. 4. .Independent director of China Communications Media Group Co., Ltd. 5.Independent director of BioLASCO Taiwan Co., Ltd	─	─	─	─
Independent Direct or	R.O.C	Wang, Wei	Female	2018.10.19	3year	2018.10.19	─	─	─	─	─	─	─	─	1.PhD, Master Program of Agricultural Economics and Marketing, National Chung HsingUniveristy 2. Dean of College of Business, Feng Chia University 3. Diector of Taiwan Economic Association 4. Committee member of Internationtal Trade Commission Ministry of Economic Affairs	1.Dean for Academic Affairs,Feng Chia University 2.Professor ofdepartment of economics,Feng Chia University	─	─	─	─

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Title	Nation ality or Place 0f Registr ati on	Name	Gend e r	Date Elected	Term	Date First Elected	Shareholding When Elected	Shareholding When Elected	Current Shareholding	Current Shareholding	Spouse&Minor Shareholding	Spouse&Minor Shareholding	Shareholding in the name of others	Shareholding in the name of others	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	Executives, Directors or Supervisors who are spouses or within two degrees of kinship	note
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relat ion
Independ ent Director	R.O.C	Hon, Jau-Shin	Male	2018.10.19	3years	2018.10.19	─	─	─	─	─	─	─	─	1. Phd, Department of Management science, National Chiao Tung University 2. Chair / Associate Professor of Department of Industrial Engineering and Enterprise Information, Tunghai University 3. CEO of School of Exterrsion, Tunghai University	1. Associate Professor of Department of Industrial Engineering and Enterprise Information, Tunghai University 2.Director of Promotion Departmentof Tunghai University 3. Director of Giantplus’ Independent	─	─	─	─
Independ ent Director	R.O.C	Hsu, Fu-Hsiung	Male	2018.10.19	3years	2018.10.19	─	─	─	─	─	─	─	─	1.Master of Department of Financial & Economic Law, Chung Yuan Christian University 2.林姿瑛Law Firm 3.陳怡成Law Firm 4.DingLui Law Firm	DAU,SHIUANJoint Law Firm Co-Counsel	─	─	─	─

Note 1: For representatives of institutional shareholders, this section shall indicate the names of the institutional shareholders, and complete the following form.

Note 2: Lu, Huang-Fu owns 100% stake of Lavender Hill Limited; and Lavender Hill Limited owns 2,730,000 shares of the Company, so the percentage of shareholdings is 8.05%.

Note 3: Lu, Chung-Wen owns 60.13% stake of Germander Group Limited, and Germander Group Limited owns 4,230,000 shares of the Company, so the percentage of shareholdings is 12.48%. He also owns 100% stake of Chung-Ying Investment and Development Limited, and Chung-Ying Investment and Development Limited owns 867,000 shares of the Company, so the percentage of shareholdings is 2.56%. As a total, 5,097,000 shares of the Company are held under others’ names, or 15.04% as the shareholding.

Note 4: The Chairman and the General Manager of the Company are the same person. The reason is that each subsidiary of the Company has its own dedicated general manager for its business, and none of them is the spouse of or a relative to the first degree of kinship of the Chairman. Moreover, the Company has established the Audit Committee, consisting of three independent directors; the majority of the directors do not concur the employees or managers. Also there is an internal audit to fulfill the duties of overseeing the Company.

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2. Supervisor:

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

3. Major shareholders of institutionalshareholders.

Major shareholders of institutional shareholders

	As of April 30,2021	As of April 30,2021	As of April 30,2021
Name of InstitutionalShareholders	MajorShareholders	(%)
AmTrust Investment Consulting Corp	Bright EleganceInc.	9.38
	ShihlinElecrric&Engineering Co.	7.81
	Yuan HengInvestmentCorp	7.81
	AsustekComputer Inc	7.81
	ShyeShyangMechanical IndustrialCo.,Ltd.	7.81
	Sanben InternationalCo.,Ltd.	6.25
	YFY DevelopmentCorp.	5.47
	Min FoungIndustry Co.,Ltd.	4.69
	Formosa Plastics Corporation	3.91
	Nan Ya Plastics Corp.	3.91
	As of April 30,2021
Name of InstitutionalShareholders	MajorShareholders		(%)
	Wu,Shang-Hsi		90.00
BRIGHT ELEGANCE INC.	Wu,Hai-Ching		10.00
ShihlinElecrric& Engineering Co.	Mitsubishi Electric Corporation		21.16
	TheAmbassador HotelCo.,Ltd.		8.50
	The Trust Property Account Entrusted To CTBC Bank		7.52
	The Major Investment Account Of The First Worldsec Securities Entrusted To Citibank (Taiwan)		6.42
Yuan Heng Investment Corp.	Lin,Yen-Heng		48.00
	Lin,Wen-Ting		24.00
	Yeh,Mei-Yin		3.90
	Yeh,Tai-Chiang		0.10
ASUSTeK Computer Inc	Jonney Shih		4.05
	Cathay United Bank Managed Expert Union LimitedInvestment Account		2.78
	ASUS’s Certificate Of Depository With Citibank (Taiwan)		2.77
	Taiwan Bank Managed Silchester International InvestorsInternationalValueEquityTrust		2.19
ShyeShyang Mechanical Industrial Co., Ltd.	Futaba IndustrialCo.,Ltd.		25.00
	XiefenginvestmentCo.,Ltd		19.00
	China MotorCorporation		10.00
	JtektCorporation		10.00
~~Sanben International Co. Ltd.~~	Wu, Chien-Li		63.08

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Name of InstitutionalShareholders	MajorShareholders	(%)
	Liao,Yu-Wua	13.85
	Wu,Pei-Ru	11.54
	Wu,Pei-Zhen	11.54
YFY DevelopmentCorp.	YFY Inc.	100.00
Min Foung Industry Co., Ltd.	Hsi, Chih-Hsiung	22.40
	Hsi,Pi-Fang	10.50
Formosa Plastics Corporation	Chang GungMedical Foundation	9.44
	FormosaChemicals &Fibre Corporation	7.64
	CreditSuisseAg-CreditSuisse SingaporeBranch	6.26
Nan Ya Plastics Corp.	Chang GungMedical Foundation	11.05
	Formosa Plastics Corporation	9.87
	Formosa Chemicals &Fibre Corporation	5.21

4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors	4. Professionalqualifications and independence analysis of directors andsupervisors
Criter Name （note）	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience			ndependence Attribute (Note 2)												Numb er of Other Public Comp anies Concu rrently Servin g as an Indep endent Direct or
	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialists Who Has Passed a National Examination and Been Awarded a Certificate in a Profession Necessaryfor the Business of theCompany	Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
Lu, Huang-Fu				－			－			－			－			－
Lu, Chung-Wen					－	－	－						－			－
Chang, Wu-Lung					－											－
Lin, Yen-Huey						－	－									－
Sheng, Chien-Chih																1
Ho,Jung-Shu (AmTrust Investment Consulting CorpRepresenta tive)								－								1

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Chen, Ming-Chieh (AmTrust Investment Consulting CorpRepresenta tive)								－								2
Wang, Wei																－
Hon, Jau-Shin																1
Hsu, Fu-Hsiung																－

Note: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office.
(1) Not an employee of the company or any of its affiliates.
(2) Not a director or supervisor of the company or any of its affiliates. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
(3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding two subparagraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
(6) If a majority of the company's director seats or voting shares and those of any other company are controlled by the same person: not a director, supervisor, or employee of that other company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
(7) If the chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses: not a director (or governor), supervisor, or employee of that other company or institution. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
(8) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent, if the specified company or institution holds 20 percent or more and no more than 50 percent of the total number of issued shares of the public company.
(9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
(10) Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
(11) Not been a person of any conditions defined in Article 30 of the Company Law.
(12) Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

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(II)Management Team

(II)Management Team	(II)Management Team	(II)Management Team	(II)Management Team	(II)Management Team
					As of								April 19,2020 Unit: 1,000shar
Title	Nation ality	Name	Gender	Inauguration date	Shareholding		Spouse&Minor Shareholding		Shareholding in the name of others		Experience (Education)	Current Positions at Other Companies	Managers who are spouses or within two degrees of kinship			Note
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
Chairman & General Manager of World Known MFG(Cayman) Limited	R.O.C	Lu, Huang- Fu	Male	2017.01.01	1,352	3.99%	─	─	2,730 (Note1)	8.05 (Note1)	The College of Law, Tunghai University School of Management Development, Feng Chia University Vice President of World Known Mfg. Co., Ltd.	1. Chairman of World Known Precision Industry Co., Ltd. 2. Chairman of WKP USA. 3.Chairman of World Known Precision (Fuzhou) Industry Co., Ltd. 4. Chairman of Lavender Hill Limited	─	─	─	Note2
Chief Financial officer of World Known MFG(Cayman) Limited	R.O.C	Yu Shen-F en	Femal e	2017.01.01	148	0.44%	─	─	─	─	Department of Accounting, Tamkang University Assistant Manager , Deloitte Touche Tohmatsu Limited Finance Manager of World Known MFG. Co.,Ltd.	─	─	─	─	─
Investment Business Dept. Director of World Known MFG(Cayman) Limited	R.O.C	Chen, Ming-C hieh	Male	2017.01.01	27	0.08%	─	─	─	─	Department of Materials Science and Engineering, Feng Chia University EMBA,Tunghai University Project Manager of World Known MFG. Co.,Ltd Special Assistant of General Manager, K&W Tools Co.,Ltd.	─	─	─	─	─
Chief Audit Executive of World Known MFG(Cayman) Limited	R.O.C	Lai, Yi-Ling	Femal e	2017.01.01	8	0.02%	─	─	─	─	Department of Accounting, Tunghai University KPMG International Cooperative Audit Manager of Jourdeness International GroupCo.,Ltd.	─	─	─	─	─

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Title	Nation ality	Name	Gender	Inauguration date	Shareholding	Shareholding	Spouse&Minor Shareholding	Spouse&Minor Shareholding	Shareholding in the name of others	Shareholding in the name of others	Experience (Education)	Current Positions at Other Companies	Managers who are spouses or within two degrees of kinship	Managers who are spouses or within two degrees of kinship	Managers who are spouses or within two degrees of kinship	Note
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
General Manager of World Known Precision (Fuzhou) Industry Co., Ltd.	R.O.C	Huang, Yu-Tin g	Male	2009.05.01	331	0.98%	─	─	─	─	Department of Industrial Engineering and Systems Management, Feng Chia University Special Assistant of President, World Known MFG. Co., Ltd.	─	─	─	─	─
Vice General Manager of World Known Precision (Fuzhou) Industry Co., Ltd.	R.O.C	Chang, Chia-A n	Male	2003.12.10	261	0.77%	48	0.14%	─	─	Taichung Municipal Taichung Second Senior High School Production Manager, World Known MFG. Co., Ltd.	─	─	─	─	─
QA Director, World Known Precision (Fuzhou) Industry Co., Ltd.	R.O.C	Huang, Mao-Y uan	Male	2012.3.15	24	0.07%	─	─	─	─	Department of Industrial Engineering and Management Technology, Nan-Tai Institute of Technology Production Section Manager, Tyn-Jian International Co., Ltd. Yen Sun TechnologyCorp.	─	─	─	─	─
General Manager of World Known Precision Industry Co., Ltd.	R.O.C	Tseng, Kuo-Hs ien	Male	2017.01.01	50	0.15%	30	0.09%	─	─	Department of Engineering Science, National Cheng Kung University Master, Department of Mechanical and Automation Engineering, Da-Yeh University QA & PM Manager, IRON FORCE INDUSTRIAL CO., LTD. Executive Vice General Manager, World Known MFG. Co.,Ltd.	─	─	─	─	─

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Title	Nation ality	Name	Gender	Inauguration date	Shareholding	Shareholding	Spouse&Minor Shareholding	Spouse&Minor Shareholding	Shareholding in the name of others	Shareholding in the name of others	Experience (Education)	Current Positions at Other Companies	Managers who are spouses or within two degrees of kinship	Managers who are spouses or within two degrees of kinship	Managers who are spouses or within two degrees of kinship	Note
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
Production / R&D Director, World Known Precision Industry Co., Ltd.	R.O.C	Lin, Kuo-Hs iung	Male	2017.01.01	31	0.09%	─	─	─	─	Department of Machinery Engineering, Chin-Yi Junior College of Engineering Production Director, World Known MFG. Co., Ltd.	─	─	─	─	─

Note1 ： Lu, Huang-Fu owns 100% of Lavender Hill Limited and Lavender Hill Limited owns 2,730,000 shares of the Company with a stake of 8.05%. 。

Note2 ： Where the President or person of an equivalent post (the highest level manager) and Chairman of the Board of Directors are the same person, spouses, or relatives within the first degree of kinship, the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto (such as increasing the number of independent director seats, and more than half of all directors must not concurrently serve as employees or managers) must be disclosed.

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

(I)Remuneration paid to Directors (including IndependentDirectors)

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

Title	Name	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%)	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%)	Remuneratio n from ventures other than subsidiaries or from the parent company (Note 1)
		Base Compensation (A)		Severance Pay (B)		Directors Compensation(C)		Allowances (D)				Salary, Bonuses, and Allowances (E)		Severance Pay (F)		Employee Compensation (G)
		The compan y	All companie s in the consolida ted financial statement	The company	All companie s in the consolidat ed financial statement	The compa ny	All companie s in the consolidat ed financial statement	The comp any	All comp anies in the conso lidate d financ ial state ment	The compan y	All compa nies in the consoli dated financi al stateme nt	The com pany	All com panie s in the cons olida ted finan cial state ment	Th e co m pa ny	All comp anies in the conso lidate d finan cial state ment	The company		All companies in the consolidated financial statement		The company	All companies in the consolidated financial statement
																Cash	Stock	Cash	Stock
Chairman	Lu,Huang-Fu	─	─	─	─	1,544	1,544	130	130	2.44 %	2.44 %	3,103	4,713	─	─	50	─	50	─	7.04%	9.39%	None
Director	Lu,Chung-Wen
Director	Chang,Wu-Lung
Director	Lin,Yen-Huey
Director	Sheng,Chien-Chih
Director	AmTrust Investment ConsultingCorp
	Representative： Ho,Jung-Shu and Chen, Ming-Chieh
Independent Director	Wang, Wei	1,080	1,080	─	─	─	─	108	108	1.73 %	1.73 %	─	─		─	─	─	─	─	1.73%	1.73%	None
Independent Director	Hon, Jau-Shin
Independent Director	Hsu, Fu-Hsiung
1. Please describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time i independent director remuneration payment policy is the monthly payment system. 2. In addition to the above remuneration, director remuneration shall be disclosed as follows when received from companies included in the consolidated directors for their services,such as beingindependent contractors.：None																nput with the amount of remuneration:：The company's financial statements in the most recent year to compensate

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Range of Remunerations

	Range of Remunerations	Range of Remunerations	Range of Remunerations	Range of Remunerations
Range of remunerations paid to Directors	Name of Directors
	Total Remuneration (A+B+C+D)		Total Remuneration (A+B+C+D+E+F+G)
	The Company	All companies in the consolidated financial report	The Company	All companies in the consolidated financial report
Under NT$ 1,000,000	Lu, Huang-Fu、Lu, Chung-Wen、Chang, Wu-Lung、Lin, Yen-Huey、AmTrust Investment Consulting Corp、Wang, Wei、Hon, Jau-Shin、Hsu, Fu-Hsiung、Sheng, Chien-Chih	Lu, Huang-Fu、Lu, Chung-Wen、Chang, Wu-Lung、Lin, Yen-Huey、AmTrust Investment Consulting Corp、Wang, Wei、Hon, Jau-Shin、Hsu, Fu-Hsiung、Sheng, Chien-Chih	Lu, Chung-Wen、Chang, Wu-Lung、Lin, Yen-Huey、Wang, Wei、AmTrust Investment Consulting Corp、Hon, Jau-Shin、 Hsu, Fu-Hsiung、Sheng, Chien-Chih	Lu, Chung-Wen、Chang, Wu-Lung、Lin, Yen-Huey、 Wang, Wei、Hon, Jau-Shin、AmTrust Investment Consulting Corp、Hsu, Fu-Hsiung、 Sheng, Chien-Chih
NT$1,000,000(included)～NT$2,000,000(excluded)	─	─	─	─
NT$2,000,000(included)～NT$3,500,000(excluded)	─	─	─	─
NT$3,500,000(included)～NT$5,000,000(excluded)	─	─	Lu,Huang-Fu	─
NT$5,000,000(included)～NT$10,000,000(excluded)	─	─	─	Lu,Huang-Fu
NT$10,000,000(included)～NT$15,000,000(excluded)	─	─	─	─
NT$15,000,000(included)～NT$30,000,000(excluded)	─	─	─	─
NT$30,000,000(included)～NT$50,000,000(excluded)	─	─	─	─
NT$50,000,000 (included)～NT$100,000,000 (excluded)	─	─	─	─
Over NT$100,000,000	─	─	─	─
Total	9	9	9	9

(II)Remunerations paid to Supervisors: N/A. The Company has established the AuditCommittee.

-20-

(III)Remuneration paid during the most recent fiscal year general manager and deputy generalmanager

								Unit: NT$ 1,000/1,000 shares	Unit: NT$ 1,000/1,000 shares	Unit: NT$ 1,000/1,000 shares	Unit: NT$ 1,000/1,000 shares	Unit: NT$ 1,000/1,000 shares	Unit: NT$ 1,000/1,000 shares	Unit: NT$ 1,000/1,000 shares
Title	Name	Sslary(A)		Severance Pay and Pensions (B)		Bonus and Allowances (C)		Employees’ Profit Sharing Bonus(D)				Ratio of total compensation (A+B+C+D)tonetincome(%)		Compensati on paid to directors from an invested company other than the company’s subsidiary
		The Comp any	All companie s in the consoli dated financi al report	The Co mp any	All companie s in the consoli dated financi al report	The Com p any	All companie s in the consoli dated financi al report	The Company		All companies in the consolidated financial report		The Comp any	All companies in the consoli dated financi al report
								Cash	Stock	Cash	Stock
General Manager of World Known MFG(Cayman)Limited	Lu, Huang-Fu	3,442	10,113	60	168	792	4,812	168	─	168	─	6.51%	22.26%	None
Chief Financial officer of World Known MFG(Cayman)Limited	Yu Shen-Fen
General Manager of World Known Precision (Fuzhou) Industry Co., Ltd.	Huang, Yu-Ting
Vice General Manager of World Known Precision (Fuzhou) Industry Co., Ltd.	Chang, Chia-An
General Manager of World Known Precision Industry Co., Ltd.	Tseng, Kuo-Hsien

-21-

Range of Remunerations

	Range of Remunerations	Range of Remunerations
Range of remunerations paid to general manager and deputy general manager	Name ofgeneral managerand deputy general manager
	The Company	Allcompaniesin the consolidatedfinancial report
Under NT$1,000,000	─	─
NT$1,000,000(included)～NT$ 2,000,000(excluded)	Yu Shen-Fen	Tseng,Kuo-Hsien、Yu Shen-Fen
NT$2,000,000(included)～NT$ 3,500,000(excluded)	Lu,Huang-Fu	Huang,Yu-Ting、Chang,Chia-An
NT$3,500,000(included)～NT$ 5,000,000(excluded)	─	Lu,Huang-Fu
NT$5,000,000(included)～NT$10,000,000(excluded)	─	─
NT$10,000,000(included)～NT$15,000,000(excluded)	─	─
NT$15,000,000(included)～NT$30,000,000(excluded)	─	─
NT$30,000,000(included)NT$50,000,000(excluded)	─	─
NT$50,000,000(included)～NT$100,000,000(excluded)	─	─
Over NT$100,000,000	─	─
Total	Twoperson	Fiveperson

-22-

(IV)Employees’ Profit Sharing Bonus Paid to ManagementTeam

Unit: NT$ 1,000

						Unit: NT$1,000
	Title	Name	Stock	Cash	Total	Employees’ Profit Sharing Bonus Paid to Management Team as % of 2019 Net Income
Manager	Chairman & General Manager of World Known MFG(Cayman) Limited	Lu, Huang-Fu	─	246	246	0.36%
	Chief Financial officer of World Known MFG(Cayman) Limited	Yu Shen-Fen
	Investment Business Dept. Director of World Known MFG(Cayman)Limited	Chen, Ming-Chieh
	Chief Audit Executive of World Known MFG(Cayman)Limited	Lai, Yi-Ling
	General Manager of World Known Precision (Fuzhou) Industry Co.,Ltd.	Huang, Yu-Ting
	Vice General Manager of World Known Precision (Fuzhou)Industry Co.,Ltd.	Chang, Chia-An
	QA Director,World Known Precision (Fuzhou) Industry Co.,Ltd.	Huang, Mao-Yuan
	General Manager of World Known Precision Industry Co., Ltd.	Tseng, Kuo-Hsien
	Production / R&D Director, World Known Precision IndustryCo.,Ltd.	Lin, Kuo-Hsiung

-23-

(V)Comparison of the ratio of total remuneration paid to directors, supervisors, general managers and deputy general managers by the Company and all companies in the consolidated financial statement to net income in individual financial statements in 2019 and 2020. Explanation of remuneration policies, standards and packages, the procedure to determine remuneration, and the linkage to operating performance and future riskexposure.
Comparison between the ratio of the total remuneration paid to directors, supervisors, general managers and deputy general managers by the Company and all companies in the consolidated financial statement to net income in individual financial statements in 2019 and 2020

Unit: NT$ 1,000

Year Item	Ratio of the total remuneration paid to net income(%)	Ratio of the total remuneration paid to net income(%)	Ratio of the total remuneration paid to net income(%)	Ratio of the total remuneration paid to net income(%)
	2019		2020
	The Company	Consolidated financial report	The Company	Consolidated financial report
Directors total remunerationpaid	7,527	9,195	6,015	7,625
Ratio of the total remuneration paid to the directorsnet income(%)	8.11	9.91	8.77	11.12
General Manager and Deputy General Manage total remunerationpaid	4,328	15,301	4,462	15,261
Ratio of the total remuneration paid to General Manager and Deputy General Manager net income(%)	4.66	16.48	6.51	22.26

Remuneration policies, standards and packages, the procedure to determine remuneration, and the linkage to operating performance and future riskexposure.

The Company has established a Remuneration Committee, which consists of all Independent Directors. The remuneration policy includes policies, systems, standards and structures in relation to the amount of remuneration paid to Directors and managers.

Remuneration, which is determined by the Remuneration Committee, based on roles, contribution to the Company through engagement in operations and industry levels. The merit-based remuneration policy and the amount of remuneration paid to Directors and managers both will be reviewed regularly.

-24-

D.Corporate GovernanceImplementation

(I)Board of Directors MeetingStatus

Six meetings were held in fiscal years 2020. The Directors’ attendance status is as follow

Title	Name	Name	Attendance in Person	Attendance in Person	By Proxy	By Proxy	Attendance Rate in Person(%)	Attendance Rate in Person(%)	Note
Chairman	Lu,Huang-Fu		6		－		100.00%		－
Director	Lu, Chung-Wen		5		1		83.33%		－
Director	Chang, Wu-Lung		6		－		100.00%		－
Director	Lin, Yen-Huey		5		1		83.33%		－
Director	Sheng, Chien-Chih		4		2		66.67%		－
Director	AmTrust Investment Consulting Corp Representative ： Ho,Jung-Shu &Chen, Ming-Chieh		6		－		100.00%		－
Independent Director	Wang, Wei		5		1		83.33%		－
Independent Director	Hon, Jau-Shin		6		－		100.00%		－
Independent Director	Hsu, Fu-Hsiung		6		－		100.00%		－
Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified: (1) Matters referred to in Article 14-3 of the Securities and Exchange Act.：The Securities and Exchange Act §14-3 is not be applicable because the Company has established the Audit Committee. For relevant information, please refer to the “Audit Committee Meeting Status” in this Annual Report. (2) Other matters involving objections or expressed reservations by independent directors that were recorded or stated in writing that require a resolution by the board of directors.：None。 2. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion,causes for avoidance and votingshould be specified:： Date of Board of Directors Meeting/ Intake Name of Director Description of Proposal Reason of recusal Status of participation to voting December 18, 2020 13th meeting, 2nd Intake Lu, Huang-Fu  Proposal of the amount to be distributed to managers as the year-end bonus for The Chairman is concurring the general manager,due to He recused himself when voting. Other attending
Date of Board of Directors Meeting/ Intake		Name of Director		Description of Proposal		Reason of recusal		Status of participation to voting
December 18, 2020 13th meeting, 2nd Intake		Lu, Huang-Fu		 Proposal of the amount to be distributed to managers as the year-end bonus for		The Chairman is concurring the general manager,due to		He recused himself when voting. Other attending

-25-

			2020	his own interest.	directors passed without dissent.

-26-

(II) Audit Committee

Five meetings were held in fiscal years 2020.

The attendance of the independent directors was as follows:

Title	Name	Attendance in Person	By Proxy	Attendance Rate (%)	Remarks
Independent director	Wang, Wei	4	1	80%	－
Independent director	Hon, Jau-Shi n	5	－	100%	－
Independent director	Hsu, Fu-Hsi ung	5	－	100%	－
Other mentionable items: 1.If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, resolutions of the Audit Committee and the Company’s response to the Audit Committee’s opinion should be specified: (1)Matters referred to in Article 14-5 of the Securities and Exchange Act.： Date of Meeting/ Intake Description of Proposal Resolutions of the Audit Committee and the Company’s treatments to suchopinions March 27, 2020/ 7nd meeting, 1st Intake  Proposal of Statement of Internal Control System from January 1, 2019 to December 31, 2019.  Proposal to amend partial clauses of “Rules of Procedures for Shareholders’ Meetings,” “Guidelines of Operating Procedures for Board of Directors Meetings,” “Regulations Governing Procedures for Board of Directors Meetings,” “Articles of Association for the Audit Committee,” “Guidelines of Operating Procedures for the Audit Committee,” “Articles of Association for the Remuneration Committee,” “Guidelines of Operating Procedures for the Remuneration Committee,” “Guidelines Governing Financial Statement Preparation” and “Operational Procedures for Loaning Funds to Others.”  Proposal to establish some clauses for the “Corporate Governance Best Practice Principles,” “Corporate Social Responsibility Best Practice Principles,” and “Procedures for Ethical Management and Guidelines for Conduct.”  Proposal to establish the “Guidelines Governing Performance Evaluation for the Board of Directors and Functional All independent directors had no dissent and approved as proposed.

-27-

	Committee.”  Proposal to loan funds to the subsidiary, WKPT.  Proposal of the 2017 Restated Consolidated Financial Report, 2018 Consolidated Financial Reports, 2018 Business Report, 2019 Consolidated Financial Reports and 2019 Business Report.  Proposal of of the earnings distribution for 2018 and2019.
May 11, 2020/ 8rd meeting, 1st Intake	 The subsidiary, WKPT’s plan to book a credit facility from financial institutions in 2020.  The subsidiary, WKPF’s plan to book a credit facility from financial institutions in 2020.	All independent directors had no dissent and approved as proposed.
August 7, 2020/ 9th meeting, 1st Intake	 Proposal to review the engagement of attesting accountants, and their remuneration.  Proposal to provide a pledge of US$1.2 million to E.Sun bank for the subsidiary, WKPF to increase US$1.2 million in fogiegn debt to E.Sun bank.  The subsidiary, WKPF pre-sale within US$2.5millionquota.	All independent directors had no dissent and approved as proposed.
November 4, 2020/ 10th meeting, 1st Intake	 Proposal to amend partial clauses of the “Rules of Responsibility Scope for Independent Director” and “Rules of Organization for RemunerationCommittee.”  Proposal of the first guaranteed convertible bondsin R.O.C.(Taiwan).	All independent directors had no dissent and approved as proposed.
December 18, 2020/ 11th meeting, 1st Intake	 Proposal to amend internal control partial clauses of the “Cycle of Financing.”  Proposal of 2021 audit plan.  Proposal of the consolidated budget and budget of capital expenditures  Proposal to review the engagement of attesting accountants, and evaluations of their expertise and independence.  Ratification the subsidiary, WKPF’s acquisition of securities for the year 2020  Proposal to apply for a guaranteed amount ofguaranteed convertible bonds.	All independent directors had no dissent and approved as proposed.

-28-

。 specified: None 3.Communications between the independent directors, the Company's chief internal auditor and CPAs (e.g. the material items, methods and results of audits of corporate finance or operations, etc.) ： The head of audit reports the actual implementation of audit plans every quarter, with good communications with the independent directors. The accountants participated the Board meetings to express their opinions after reviewing the financial statements and internal controls; they have sufficient communications with the independent directors.

-29-

(III)Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx

Listed Companies

Listed Companies
	ImplementationStatus			Deviations from
		NO		“the Corporate
				Governance
				Best-Practice
Evaluation Item				Principles for
	YES		Abstract Illustration
				TWSE/TPEx

				Listed
				Companies” and
				Reasons
1.Does the Company follow the “Corporate Governance Best Practice	V		The Company has established the “Corporate Governance	No Significant
Principles for TWSE/TPExListed Companies” to establish and disclose				Difference
			Practices”.
itscorporategovernancepractices?
2.Shareholding Structure & Shareholders’Rights			(1)The Company has established the “Rules of Procedure for Shareholders’ Meetings” and designated staff responsible to handle shareholder suggestions, concerns or disputes and facilitate coordination among relevant departments。 (2) The Company owns the list of major shareholders of controlling companies and beneficial owners of these major shareholders and regularly track and monitorchanges. (3)Every affiliated corporation’s assets and financial situation has been managed independently and complied with the Company’s internal control system to ensure its implementation of risk management andfirewalls. (4)The Company has established the “Guidelines Governing Handling Internal Material Information and Prevention of Insider Trading,”prohibiting insiders of the Company from	No Significant Difference No Significant Difference No Significant Difference No Significant Difference
(1)Does Company have Internal Operation Procedures for handling
shareholders’ suggestions,concerns, disputes and litigation matters.If yes,	V
hasthese procedures been implemented accordingly?

(2)Does Company possess a list of major shareholdersof controlling
companies and beneficial owners of these major shareholders?

(3)Has the Company built and executed a risk managementsystem and
“firewall” between the Company and its affiliates?	V

(4)Has the Company established internal rules prohibiting insider trading
on undisclosed information?

	V



	V

-30-

	ImplementationStatus	ImplementationStatus	ImplementationStatus	Deviations from
		NO		“the Corporate
				Governance
				Best-Practice
Evaluation Item				Principles for
	YES		Abstract Illustration
				TWSE/TPEx

				Listed
				Companies” and
				Reasons
			trading exchangeable securities with information not yet disclosed to the market, in order to protect investors and the Company’s interests.
3.CompositioandResponsibilities of the Board ofDirectors
(1) HastheCompany establishedadiversificationpolicy for thecomposition of
its Board of Directors andhasitbeen implemented accordingly?	V		(1)The Company has the “Guidelines of Director Elections” in	No Significant
			place, requiring diversification for the composition of the	Difference
(2) Otherthanthe RemunerationCommitteeandthe Audit Committee, which			members, as well as their knowledge, skills and experience
are required by law, does the Company plan to set up other			for fulfilling their duties, for the implementation. Please
Boardcommittees?			refer to Table 1 for the details of the implementation of the
			diversified policy on board members.
(3) HastheCompanyestablishedmethodologyforevaluatingtheperformance	V
of its Board of Directors, on an annualbasis?				It may be established
			(2)In addition to Remuneration Committee and Audit	in the future,
(4) Does the Company regularly evaluate its externalauditor’s			Committee, the Company has not set up any other	depending on the
independence?			functional committee. The Company may establish other	operations。
			functional committees depending on actual operations and
	V		legal requirements.

				No Significant
			(3)The Company has established the “Guidelines Governing	Difference
			Performance Evaluation for the Board of Directors and
	V		Functional Committee” and the “Guidelines Governing
			Remunerations to Directors.”

				No Significant
			(4)The Company’s Finance Department assesses the	Difference
			independence of attesting accountant every year and
			submits suchassessment totheAuditCommittee andthe

-31-

			ImplementationStatus	ImplementationStatus	Deviations from
		NO			“the Corporate
					Governance
					Best-Practice
Evaluation Item					Principles for
	YES		Abstract Illustration
					TWSE/TPEx

					Listed
					Companies” and
					Reasons
		H	Board of Directors for review and approval. The outcomes
			of independence assessment were submitted to the Board of
			Directors for review and approval on December 18, 2020.
			The major items of independence assessment are listed as
			the following:

			Evaluation Item	Independence
			Does any external auditor have direct financial interests ormaterial indirect financial interests in the Company?	YES
			In there any close commercial or potential employment relationship between the external auditor andthe Company?	YES
			Has any external auditor or any member of the external audit team currently acted as a Director, manager or any other role, which may have material impact in the auditing process or its results? Or did any of them acted as one of such roles in themostrecent two years?	YES
			Has any external auditor provided non-auditing service to the Company, which may directly influence auditing process anditsresults?	YES
			Is any external audit a relative of the Company’s Director(s),manager(s) or	YES

-32-

			ImplementationStatus	ImplementationStatus	Deviations from
		NO			“the Corporate
					Governance
					Best-Practice
Evaluation Item					Principles for
	YES		Abstract Illustration
					TWSE/TPEx

					Listed
					Companies” and
					Reasons
			other person(s) who may have material impactonauditing?
			Has any external auditor act as a stockbroker for the Company'sstock or othersecurities?	YES


4.HastheCompany established a full- (orpart-)time corporate governance unit	V		The Company is responsible for corporate overnance-related		No Significant
or personnel to be in charge of corporate governanceaffairs (including but			matters by the Group's HR and Administration Department		Difference

not limited to provision of information required by directors and			,include shareholders’ meetings and board meetings as well
supervisors for business execution, by laws for matters relating to board			as facilitating suchmeeting.

meetings andshareholders’ meetings, and information on corporate
registration and amendment registration, as well as record minutes of
board meetings and shareholders meetings,etc.)?
5.Has theCompany establishedameansofcommunicating with its	V		The Company has established communication channels for		No Significant
Stakeholders(including but not limited to shareholders, employees,			employees and investors, and created a Stakeholders Section		Difference

customers, suppliers, etc.) or created a Stakeholders Section on itsCompany			on the Company’s website, Stakeholders may express the
website? Does the Companyrespond to stakeholders’questionsoncorporate			issues of their concerns sufficiently through this channel.
responsibilities?
6.Has the Companyappointed a professional registrar for itsShareholders’			The Company has appointed the “Department of		No Significant
Meetings?	V		Transfer Agency Service, JihSun Securities Co., Ltd ”		Difference

			to handle matters relating to Shareholders’ Meetings.

7.InformationDisclosure
(1)Hasthe Company established acorporate website to discloseinformation	V		(1) The Company has established its website to disclose		No Significant
regarding its financials, business and corporate governancestatus?			relevant information. As theCompany goes public, its		Difference
			information on financials, businesses and corporate
			governance status is available on the Market Observation

			Post System.

-33-

	ImplementationStatus	ImplementationStatus	ImplementationStatus	Deviations from
		NO		“the Corporate
				Governance
				Best-Practice
Evaluation Item				Principles for
	YES		Abstract Illustration
				TWSE/TPEx

				Listed
				Companies” and
				Reasons
(2)Does the Company use otherinformation disclosurechannels			(2) The Companyhas has appointed a unit to be responsible	No Significant
(e.g.maintainingan English-language website,designating	V		for information collection and disclosure. The Company	Difference
stafftohandleinformationcollection anddisclosure,appointing			follows applicable regulations to appoint a spokesperson
spokespersons,webcastinginvestorsconference etc.)?			and an actingspokesperson.
(3)Does the company announce and report annualfinancial statements			(3) Currently, the Company handles the affairs pursuant to	No Significant
within two months after the end of each fiscal year, and announce and			the Securities and Exchange Act (within three months	Difference
report Q1, Q2, and Q3 financial statements, as well as monthly operation			after the close of each fiscal year, publicly announce and
results, before the prescribed time limit?			register with the annual financial reports; within 45 days
			after the end of the first, second and third quarters of each

	V		fiscal year publicly announce and register with the
			financial reports; and within the first ten days of each
			calendar month publicly announce and register the
			operating status for the preceding month), the schedule of
			announcement may be adjusted as required in the future.
8.Has the Company disclosed other information tofacilitate a better None	V		(1) Employees’ interests: The Company has a harmonious labor	No Significant
understanding of its corporategovernancepractices (e.g. including but not			relation. The employees’ interests are protected pursuant to	Difference
limited to employee rights, employee wellness, investor relations,supplier			the local labor regulations of the locations where the
relations, rights of stakeholders, directors’ training records, the			operations are. There have been no material labor disputes
implementation of risk management policies and risk evaluation measures,			in the Company and the Company has not been punished
the implementation of customer relations policies, and purchasing insurance			due to any material labor problems or violation of the
for directors)?			labor laws by the competent authorities.

			(2) For a caring workplace: the Company organizes	No Significant
			well-designed training programs and provides employees	Difference
			with reasonable compensation and benefit.

			(3) Investor relations: The Company has established the official	No Significant
			website and spokesperson system. The related information	Difference
			of financial and business and material information is

-34-

	ImplementationStatus	ImplementationStatus	ImplementationStatus	Deviations from
		NO		“the Corporate
				Governance
				Best-Practice
Evaluation Item				Principles for
	YES		Abstract Illustration
				TWSE/TPEx

				Listed
				Companies” and
				Reasons
			announced on the MOPS at the required time, to protect
			investors’ interests.

			(4) For supplier relations: The Company maintains a good	No Significant
			relationship with suppliers through reciprocal cooperation	Difference
			and win-win partnership.

			(5) For stakeholders’ rights: The Company always ensures a	No Significant
			smooth communication for stakeholders and act in good	Difference
			faith to publish information to public to maintain investor
			relations and protect stakeholders’ rights.

			(6) Continuing education of directors and supervisors: The	No Significant
			Company’s directors have taken courses of studying	Difference
			security regulations and corporate governance, pursuant to
			the “Directions for the Implementation of Continuing
			Education for Directors and Supervisors of TWSE Listed
			and TPEx Listed Companies.” Please refer to Table 2 for
			the details of the continuing education of directors for 2020.

			(7) Implementation of risk management and the standards for
			measuring risks: The Company has established various	No Significant
			internal regulations and conducts various risk managements	Difference
			and evaluations.




			(8) Implementation of customer policies: The Company
				No Significant
			endeavors toprovide the best services andproducts to

-35-

	ImplementationStatus	ImplementationStatus	ImplementationStatus	Deviations from
		NO		“the Corporate
				Governance
				Best-Practice
Evaluation Item				Principles for
	YES		Abstract Illustration
				TWSE/TPEx

				Listed
				Companies” and
				Reasons
			clients and appoints dedicated personnel to handle client	Difference
			issues.
			(9) Liability insurance purchased for directors and supervisors:	No Significant
			The Company has set for the regulations related to the	Difference
			directors’ liability insurance in the “Corporate Social
			Responsibility Best Practice Principles,” and liability
			insurance is bought for each director.
9.Please explain the improvement based on outcomes the Corporate Governance Evaluation published in the most recent years by the Corporate Governance Center of
TWSE,and the issues and measures for the unimproved items: the Companyis not included in the evaluated companies,so this is not applicable.

-36-

Table 1 ： Implementation of the diversified policy on board members

Title	Name	Gender	Management	Leadership	Industry know-how	Finance/ Accounting	Legal	International perspective
Cahairman	Lu, Huang-Fu	Male	V	V	V	V		V
Director	Lu, Chung-Wen	Male	V	V	V	V		V
Director	Chang, Wu-Lung	Male	V	V	V	V		V
Director	Lin, Yen-Huey	Male	V	V	V	V		V
Director	Sheng, Chien-Chih	Female	V	V	V	V		V
Representative of corporate director	Ho,Jung-Shu	Male	V	V	V	V		V
Representative of corporate director	Chen, Ming-Chieh	Male	V	V	V	V		V
Independent Director	Wang, Wei	Female	V	V	V	V		V
Independent Director	Hon, Jau-Shin	Male	V	V	V	V		V
Independent Director	Hsu, Fu-Hsiung	Male	V	V	V	V	V	V

Table2 ： Training courses for Directors in 2020

Title	Name	Training Date	Organizer	Course	Hours
Cahairman	Lu, Huang-Fu	2020/12/22	Taiwan Corporate Governance Association	The macro vision of the sustainable development of global enterprises-from vision 2050 to action 2020	3
		2020/12/22	Taiwan Corporate Governance Association	Competition for management rights and case analysis	3
Director	Lu, Chung-Wen	2020/12/22	Taiwan Corporate Governance Association	The macro vision of the sustainable development of global enterprises-from vision 2050 to action 2020	3
		2020/12/22	Taiwan Corporate Governance Association	Competition for management rights and case analysis	3
Director	Chang, Wu-Lung	2020/12/22	Taiwan Corporate Governance Association	The macro vision of the sustainable development of global enterprises-from vision 2050 to action 2020	3
		2020/12/22	Taiwan Corporate Governance Association	Competition for management rights and case analysis	3
Director	Lin, Yen-Huey	2020/8/13	Taiwan Corporate Governance Association	Correspondence and application of corporate governance practice and governance evaluation	3
		2020/11/12	Taiwan Corporate Governance Association	Practices of Board of Directors and Shareholders meetingofpublic offering	3
Director	Sheng,	2020/8/13	Taiwan Corporate Governance Association	Correspondence and application of corporate governance practice and governance evaluation	3

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Title	Name	Training Date	Organizer	Course	Hours
	Chien-Chih	2020/11/12	Taiwan Corporate Governance Association	Practices of Board of Directors and Shareholders meetingofpublic offering	3
Representative of corporate director	Ho,Jung-Shu	2020/12/22	Taiwan Corporate Governance Association	The macro vision of the sustainable development of global enterprises-from vision 2050 to action 2020	3
		2020/12/22	Taiwan Corporate Governance Association	Competition for management rights and case analysis	3
Representative of corporate director	Chen, Ming-Chieh	2020/12/22	Taiwan Corporate Governance Association	The macro vision of the sustainable development of global enterprises-from vision 2050 to action 2020	3
		2020/12/22	Taiwan Corporate Governance Association	Competition for management rights and case analysis	3
Independent Director	Wang, Wei	2020/12/22	Taiwan Corporate Governance Association	The macro vision of the sustainable development of global enterprises-from vision 2050 to action 2020	3
		2020/12/22	Taiwan Corporate Governance Association	Competition for management rights and case analysis	3
Independent Director	Hon, Jau-Shin	2020/12/22	Taiwan Corporate Governance Association	The macro vision of the sustainable development of global enterprises-from vision 2050 to action 2020	3
		2020/12/22	Taiwan Corporate Governance Association	Competition for management rights and case analysis	3
Independent Director	Hsu, Fu-Hsiung	2020/12/22	Accounting Research and Development Foundation	The macro vision of the sustainable development of global enterprises-from vision 2050 to action 2020	3
		2020/12/22	Accounting Research and Development Foundation	Competition for management rights and case analysis	3

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(IV) If the company has a Remuneration Committee in place, members, duties, and operation of the Remuneration Committee shall bedisclosed.
Information on members of the RemunerationCommittee

Identity	Criteria Name	Meet the Following Professional Qualification Requirements, Together with atLeastFiveYears Work Experience	Meet the Following Professional Qualification Requirements, Together with atLeastFiveYears Work Experience	Meet the Following Professional Qualification Requirements, Together with atLeastFiveYears Work Experience	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Evaluation Standards Independence（note）	Numbe r of other Taiwan ese public compa nies in which any of such membe rs concurr ently serve as a Remun eration Commi ttee Membe r
		An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting,	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting,	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting,	1	2	3	4	5	6	7	8	9	10
Independent Director	Wang, Wei		－												－
Independent Director	Hon, Jau-Shin		－												1
Independent Director	Hsu, Fu-Hsiung	－													－

Note: Please tick the corresponding boxes that apply to a member during the two years prior to being elected or during the term(s) of office.

(1) Not an employee of the company or any of its affiliates.
(2) Not a director or supervisor of the company or any of its affiliates. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
(3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding two subparagraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
(6) If a majority of the company's director seats or voting shares and those of any other company are controlled by the same person: not a director, supervisor, or employee of that other company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
(7) If the chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses: not a director (or governor), supervisor, or employee of that other company or institution. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
(8) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent, if the specified company or institution holds 20 percent or more and no more than 50 percent of the total number of issued shares of the public company.
(9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this

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restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

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

Remuneration Committee MeetingStatus
。
(1) There are three members in total in the Company’s RemunerationCommittee.
(2) The term of the Remuneration Committee members: Oct.19 2018 to Oct.18 2021. The Remuneration Committee held two meetings in the most recent year ,The attendance record of the Remuneration Committee members was as follows:

Title	Name	Attendance in Person	By Proxy	Attendance Rate(%)
Convener	Hon, Jau-Shin	2	0	100%
Committee Member	Wang, Wei	1	1	50%
Committee Member	Hsu, Fu-Hsiung	2	0	100%
Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or expressed reservations and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None.

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(V)Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies"

		ImplementationStatus	ImplementationStatus	Deviations from “the
				Corporate Social
				Responsibility
Evaluation Item
	YES	NO	Abstract Explanation	Best-Practice Principles

				for TWSE/TPEx Listed
				Companies” andReasons
1. Has the Company conducted risk evaluation for the	V		The Company has established the “Corporate Social Responsibility Best Practice Principles” and related risk control procedures, while conducting the risk assessment for the environmental issues related to the Company.	No Significant Difference
environmental, social and corporate governance issues
related to the operations of the Company based on the
materiality principle, and formulated related risk
management policies or strategies?
2. Does the Company have a special (concurrent) unit to	V		The Company has appointed Public Relations and Legal	No Significant Difference
promote CSR initiatives, supervised by a Board-appointed			Department of the Group to promote the CSR affairs and report to the Board of Directors.
member of the management team, who reports to the
Board?
3. Developing Sustainable Environment			(1) The Company has received a number of certifications, including ISO and OHSAS. For quality management, occupational health and safety and environmentprotection. (2)The Company strives to save paper, promotes ERP electronic forms and approval, while increasing the efficiency of each resource utilization. (3)The Company implements energy-saving and carbon reduction in daily courses, to save the power utilization in the offices and production units. (4)The Company has counted the greenhouse gases emission, water usage, and total weight of wastes in the past two years, and established the policies for energy-saving and carbon reduction, reduction of greenhouse gases emission, and other waste management.
(1) Does the Company establish proper environmental	V			No Significant Difference
management systems based on the characteristics of
its businesses?

(2) Is the Company committed to improving resource	V			No Significant Difference
efficiency and to the use of renewable materials with

low environmentalimpact?


(3) Does the Company evaluate the current and future	V			No Significant Difference
potential risks and opportunities brought by the climate
change, and take measure to respond to the
climaterelated issues?

(4) Does the company calculate the greenhouse gases	V			No Significant Difference
(GHG) emission, water consumption and total weight of
wastes for the past two years, and formulated the

strategies for energy conservation, carbon reduction,
GHG emission reduction, water saving and management
of otherwastes?

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	ImplementationStatus	ImplementationStatus	ImplementationStatus	Deviations from “the
				Corporate Social
				Responsibility
Evaluation Item
	YES	NO	Abstract Explanation	Best-Practice Principles

				for TWSE/TPEx Listed
				Companies”and Reasons
4.Social issues
(1) Does the Company set policies and procedures	V		(1) The Company complies with the regulations of related	No Significant Difference
incompliancewithregulations and			labor laws, and has established the regulations and systems
internationallyrecognized human rights principles?			based on the local laws of the operating locations. The
			related information is informed to the employees through
			public channels and the legal rights of employees are
			protected. The internationally recognized principles of
			basic human rights of labors are respected and the basic
			rights of labors shall not be endangered.

(2) Does the Company formulate and implement reasonable	V		(2) Except handling insurance and physical checks pursuant to	No Significant Difference
policies of staff welfare (including compensation,vacation			the local laws, the Company also provides the benefits such
and other welfares), and reflect the operating performance			as gift vouchers for holidays and subsidies for
or achievement in the compensation of the employees			wedding/funeral/celebrations, while reflecting the
properly?			operating performance on the compensations of employees.

(3) Does the Company provide employees with a safeand	V		(3) The Company has clearly indicated the fire-fighting and	No Significant Difference
healthy working environment, with regular safety and			safe exit routes at all operating venues, while inspecting the
healthtraining?			fire-fighting facilities periodically. The general medical and
			first aid supplies are provided and the safety and health
			issues are promoted from time to time.Regularly convene
			"Occupational Safety and Health Committee Meetings" to
			discuss the promotion of occupational safety and health
			management, prevent industrial safety accidents from
			occurring, and implement the company's occupational
			safety and health policies
(4) Has the Company established effective career	V		(4) The Company provides effective functional trainings to	No Significant Difference
development training plans?			employees, with external trainings from time to time, to
			supplement their job skills.

(5) Does the Company follow regulations and international	V		(5) For the marketing and labeling of products and services,	No Significant Difference
standards in the customer health, safety, customer			the Company handles such affairs pursuant to the related
privacy,marketing andlabeling of its products and			regulations andinternationalstandards.The Company also

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		ImplementationStatus	ImplementationStatus	Deviations from “the
				Corporate Social
				Responsibility
Evaluation Item
	YES	NO	Abstract Explanation	Best-Practice Principles

				for TWSE/TPEx Listed
				Companies”and Reasons
services, and set polices and appeal procedures for			provides the service platform, such as telephone and
protection ofconsumer’s rights andinterests?			internet, so that consumers may communicate the related
			problems through such platforms and thus the transparent
			and effective client complaint handling procedures are
			provided.
(6) Does the Company formulate the suppliermanagement	V		(6) The Company regulates the suppliers via the environment	No Significant Difference
policies and require suppliers to follow relevant normson			agreement, CSR policies and declaration of commitment,
environmental protection, occupational safety and health,			and requires supplier to return the signed agreement every
or labor’s human rights, and disclose theimplementation?			year.

5.Does the company reference internationally accepted		V	The Company has not yet prepared any report disclosing the	The Company has not yet
reporting standards or guidelines, and prepare reports that			non-financial information, such as the Corporate Social	prepared the Corporate Social
disclose non-financial information of the company, such as			Responsibility Report; such reports may be prepared if required	Responsibility Report.
corporate social responsibility reports? Do the reports above			in the future.
obtain assurance from a third party verification unit?
6.If the Company established its own Corporate Governance Best-Practice Principles pursuant to the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed
Companies, please state the variance between the implementation and the Principles and the reason for any such variance:
The Company has established the “Corporate Social Responsibility Best Practice Principles” pursuant to the “Corporate Governance Best Practice Principles for
TWSE/TPEx Listed Companies,”and thereisnomajorvariance.
7.Other key information helpful to understand the operation of corporate social responsibility: the Company not only values to compliance to protect all stakeholders, but also
takes a rigorous approaches to these the corporate social responsibilities concerned by the general public. Except deepening the good corporate culture of the Company, the
corporate image is also improved and thus thegoal of sustainable development is achieved.

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(VI)Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"

TWSE/GTSM Listed Companies"
Evaluation Item			ImplementationStatus	Deviations from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reason
	YES	NO	Abstract Illustration
1. Establishment of Corporate Ethics Principles and Implementation Programs (1) Does the Company have its regulations and publicly availabledocuments addressing its corporate ethics principles and programs, and the commitment regarding implementation of such programs from the Board of Directors and the managementteam? (2) Does the company establish relevant programs, which are duly enforced to prevent unethical conduct and provide implementation procedures, guidelines, consequence of violation and complaint procedures in such programs? (3) Does the company establish appropriate preventive measures for the business activities prescribed in Paragraph 2, Article 7 of the “Ethical Corporate Management Best Practice Principles for TWSE/TPExListed Companies” or any other such activities associated with high risk of unethicalconduct?	V V V		(1) The Company has established the “Corporate Ethics Principles” and the “Procedure of Implementing Corporate Ethics and Guidelines for Conduct” passed by Board of directors and put it into practice, and then ensure strict compliance in of internal management and external commercialactivities. (2) The Code of Ethics sets forth anti-bribery, corruption and illegal political contributions. (3) In the “Procedures for Ethical Management and Guidelines for Conduct,” the Company has specified the handling procedure, and procedures for reward/penalty, appealing and records of disciplinary actions. If there is any bribery acceptance or anti-bribery incident, the heads may report the penalty or reward immediately. Related systems are implemented thoroughly.	No Significant Difference No Significant Difference No Significant Difference
2. Ethic Management Practice (1) Does the company assess the ethics records of whom it has business relationship with and include business conduct and ethics related clauses in the business contracts?	V		(1) Before starting any business relationship, the Company makes all possible efforts to collect the information regarding the counterparties’ credit status and reputation in the industry, to prevent any possible unethical business behavior.	No Significant Difference

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Evaluation Item	ImplementationStatus	ImplementationStatus	ImplementationStatus	Deviations from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reason
	YES	NO	Abstract Illustration
(2) Does the company set up a unit which is dedicated to or tasked with promoting the company’s ethical standards and reports directly to the Board of Directors with periodical updates on relevant matters? (3) Does the company establish policies to prevent conflict of interests,provide appropriate communication and complaint channels and implement such policies properly (4) To implement relevant policies on ethical conducts, does the companyestablish effective accounting and internal control systems that are audited by internal auditors or CPA periodically? (5) Does the company provide internal and external ethical conduct training programs on a regular basis?	V V V V		(2) The Company has appointed Public Relation and Legal Department of the Group as the dedicate unit in charge of ethical corporate management, and reporting to the Board of Directors periodically. (3) In the “Procedures for Ethical Management and Guidelines for Conduct,” the Company sets forth the regulations related to the interest recusal, to prevent the decision-making not conforming to the ethical management principles. If there is any violation, before the official disciplinary action is decided, the investigation unit and the chief making the decision would give a chance to the involved parties for sufficient statement. (4) For activities with high risk of unethical conduct, the Company has built an effective accounting system, internal control system and auditing system. These systems are required to be reviewed and revised from time to time to ensure effectiveness of such systems and their implementation. In addition, internal auditors conduct regular auditing activities to assess compliance performance and submit auditing reports to the Board ofDirectors. (5) The Company has included ethics in the corporate slogans and fully implement the ethical management in daily operation. In the future, the internal and external trainings of ethical management will be conducted from time to time.	No Significant Difference No Significant Difference No Significant Difference No Significant Difference

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Evaluation Item	ImplementationStatus	ImplementationStatus	ImplementationStatus	Deviations from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reason
	YES	NO	Abstract Illustration
3. Implementation of Complaint Procedures (1) Does the company establish specific complaint and reward procedures,set up conveniently accessible complaint channels, and designate responsible individuals to handle the complaintreceived (2) Does the company establish standard operation procedures for investigating the complaints received and ensuring such complaints are handled in a confidentialmanner? (3) Does the company adopt proper measures to prevent a complainant fromretaliation for his/her ling a complaint?	V V V		(1) The Company provides an effective channel to receive and respond to employees’ complaints by the specified department and staff. Complainants’ identity information and substance of complaints are required to be keptconfidential. (2) The Company’s responsible person will look into complaints and then report the assessment to his/her direct supervisor. The confidentiality will be maintained thoroughly in theprocess. (3) The Company takes measures to protect the whistle blowers and their identities, and keep the information confidential, so that the employees are not in danger of improper treatments and threats due to whistle-blowing.	No Significant Difference No Significant Difference No Significant Difference
4. Information Disclosure (1)Does the company disclose its corporate ethics principles as well as information on implementation of such principles on its website and MarketObservation Post System (“MOPS”)?		V	The Company has established the “Ethical Corporate Management Best Practice Principles” and the “Procedures for Ethical Management and Guidelines for Conduct;” both are disclosed on the Company’s website and on theMOPS sufficiently.	No Significant Difference
5.If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation:None.
6.Other important information to facilitate a better understandingof the company’s ethical corporate managementpolicies(e.g.,review and amend itspolicies):None.

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(VII) If the company has adopted corporate governance best practice principles or related bylaws, the access of relevant information should be disclosed to thepublic:
The Company has established a number of regulations, for example “Corporate Governance Practices”, “Code of Ethical Conduct”,“Corporate Social Responsibility Best Practice Principles”, “Rules Governing the Scope of Powers of Independent Directors”, “Corporate Ethics Principles”, “Procedure of Implementing Corporate Ethics and Guidelines for Conduct”, “Rules of Procedure for Shareholders Meetings”, “Rules of Procedure for Meetings of the Board of Directors”, “Organization Regulations of the Audit Committee” and “Election Regulations of Directors”. The Company has carried out these regulations relating to corporate governance based on spirit of corporate governance.
Its information on corporate governance status is available on it official website.

http://www.wkgroup.com

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

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(IX) Internal control system execution status

Statement of Internal Control System ：

==> picture [385 x 323] intentionally omitted <==

==> picture [379 x 321] intentionally omitted <==

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2. Audit Report of Internal Control System Prepared by CPAs ：

==> picture [420 x 295] intentionally omitted <==

==> picture [420 x 316] intentionally omitted <==

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(X) For the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, any sanctions imposed in accordance with applicable laws upon the Company or its internal staff, any sanctions imposed by the Company upon its internal staff for violations of internal control system provisions, principal deficiencies, and the state of 。
any efforts to make improvements need to be disclosed:None
(XI) For the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, major resolutions of shareholders’ meetings and board meetings are as follows:

1. Shareholders’Meeting

ows: Shareholders’Meeting
Key Resolutions	Implementation
Proposal of the Earnings Distribution for 2018 and 2019	Cash dividends at NT$3 per share were approved to be distributed. For the base date of distribution and the date of distribution, the Chairmanwas authorized to decide.
Proposal of the amendments to the Company’s “Organizational Memorandum and Articles of Incorporation.”	Resolved to pass.
Proposal of the 2017 Restated Consolidated Financial Report, 2018 Financial Reports, 2018 Business Report, and 2019 Consolidated Financial Reports and Business Report.	Resolved to pass.
Proposal to amend partial clauses of “Rules of Procedures for Shareholders’ Meetings.”	Resolved to pass.
Proposal to amend partial clauses of “Operational Procedures for Loaning Funds to Others.”	Resolved to pass.

2. Board Meetings

Date of Meeting	Key Resolutions
11th meeting, 2nd Intake 2020.8.7	1. Approved the proposal to review the engagement of attesting accountants, and their remuneration. 2. Approved the proposal to provide a pledge of US$1.2 million to E.Sun bank for the subsidiary, WKPF to increase US$1.2 million in fogiegn debt to E.Sun bank. 3. Approved the proposal that the subsidiary, WKPF pre-sale within US$ 2.5 million quota.
12th meeting, 2nd Intake 2020.11.4	1. Approved the proposal to amend partial clauses of the “Rules of Responsibility Scope for Independent Director” and “Rules of Organization for Remuneration Committee.” 2. Approved the proposal of the first guaranteed convertible bonds in R.O.C.(Taiwan).
13th meeting,	1. Approved theproposal to amend internal controlpartial clauses of the “Cycle of

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Date of Meeting	Key Resolutions
2nd Intake 2020.12.18	Financing.” 2. Approved the proposal of 2021 audit plan. 3. Approved the proposal of the consolidated budget and budget of capital expenditures. 4. Approved the proposal to review the engagement of attesting accountants, and evaluations of their expertise and independence. 5. Approved the proposal of ratification the subsidiary, WKPF’s acquisition of securities for the year 2020. 6. Approved the proposal to apply for a guaranteed amount of guaranteed convertible bonds. 7. Approved the proposal of the amount to be distributed to managers as the year-end bonus,and to employees as bonus for 2020.
14th meeting, 2nd Intake 2021.1.19	1. Approved the proposal of the subsidiary, WKPT’s participation in land bidding for long-term development needs. 2. Approved the proposal to capital increase in cash in subsidiary,WKPT. 3. Approved theproposal the subsidiary,WKPT to implementpre-sellingUSD.
15th meeting, 2nd Intake 2021.3.24	1. Approved the proposal of Statement of Internal Control System from January 1, 2020 to December 31, 2020. 2. Approved the proposal to amend partial clauses of “Guidelines of Director Election.” 3. Approved the proposal of the 2020 Consolidated Financial Reports and Business Report. 4. Approved the proposal of the earnings distribution for 2020. 5. Approved the proposal of the remunerations to directors and employees for 2020. 6. Approved the cash dividend of US$3.5 million to be distributed by the subsidiary, WKPF this year. 7. Approve the proposal that the subsidiary, WKPT’s plan to book a credit facility from Cathay United bank. 8. Approved the proposal the subsidiary, WKPT to implement pre-selling JPY. 9. Approved the proposal to review the policies, systems, standards and structure of directors and manager’s performance evaluation and remuneration. 10. Approved the proposal of the election for all of the directors in advance. 11. Approved the proposal that the shareholder’s meeting accepts the nomination of directors (including independent directors) candidates, the number of candidates to be elected and the palce of acceptance. 12. Approved the proposal of removal of restrictions on prohibition of competition for directors and their representatives. 13. Approved theproposal to convene the 2021 Annual General Meeting.
16th meeting, 2nd Intake	1. Approved the subsidiary, WKPT’s plan to book a credit facility from financial institutions. 2. Approved theproposal to signed the “SupplementaryAgreement of Assistingin

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Date of Meeting	Key Resolutions
2021.5.10	Conducting the Legal Compliance Matters after Initial Public Offering” with host securities firm, JihSun Securities Co., Ltd.. 3. Approved the proposal to nominate and review the candidate qualifications of directors (including independent directors). 4. Approved the proposal to convene the 2021 Annual General Meeting.(Change the meeting place of the AGM)

(XII)Any Director or Supervisor had a Recorded or Otherwise Written Dissenting OpiniononMajor Resolutions made by the Board of Directors in the Most Recent Year and as of the Date of Publication of the Annual Report:None

(XIII)Resignation or Dismissal of Chairman, General Manager, and heads of Accounting, Finance, Internal Audit and R&D in the Most Recent Year and as of the Date of Publication of the AnnualReport:None

E.Information Regarding the Company’s Audit Fee and Independence

(I)Accountant Fees

				Unit: NTD1,00
Fee Items Fee Range		Audit Fee	Non-Audit Fee(NOTE)	Total
1	Under NT$ 2,000	–	V	V
2	NT$2,001~NT$4,000	V	–	V
3	NT$4,001 ~NT$6,000	–	–	–
4	NT$6,001 ~NT$8,000	–	–	–
5	NT$8,001 ~NT$10,000	–	–	–
6	Over NT$100,000	–	–	–

Note: The main business and commercial boarding and other use.

(II)If the non-audit public fee paid by the accountant, the accountant's affiliated office and its related enterprise is more than one quarter of the audit public fee, the audited and nonaudited public fee amount and the non-audit service content shall be disclosed: ： Not applicable 。

(III)The audit public fee paid for the replacement of the accounting firm and the replacement year is higher than the audit public fee for the previous year. Reducers should disclose the amount of audited public fees before and after replacement and the reasons: ： Not applicable 。
(IV)If the audit public fee is reduced by more than 15% compared with the previous year, the audit public fee reduction shall be disclosed about the less money, ratio and reason: Not applicable.
F.Information on Replacement ofCPAs:None.

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G.TheCompany’s Chairman, General Manager, Managers in Charge of its Finance and Accounting Operations did not hold any positions within the Company’s Independent Audit Firm or Its Affiliates in the PastYear: None.
H.Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report. Where the counterparty in any such transfer or pledge of equity interests is a related party, disclose the counterparty's name, its relationship between that party and the company as well as the company's directors, supervisors, and ten-percent shareholders, and the number of shares transferred or pledged
(I)directors, supervisors, and ten-percent shareholders, and the number of shares transferred or pledged.

Unit ： Shares

				Unit：Shares	Unit：Shares
Title	Name	2020		Current year to April 30 2021
		Net Change in Shareholding	Net Changein EquityPledge	Net Change in Shareholding	Net Changein EquityPledge
Chairman & General Manager	Lu, Huang-Fu	182,000	—	—	—
Director	Lu, Chung-Wen	260,000	—	34,000	—
Director	Chang, Wu-Lung	26,000	—	(36,000)	—
Director	Lin, Yen-Huey	—	—	—	—
Director	Sheng, Chien-Chih	—	—	—	—
Director	AmTrust Investment Consulting Corp	—	—	—	—
	Representative：Ho,Jung-Shu	—	—	—	—
	Representative：Chen, Ming-Chieh	—	—	—	—
Independent Director	Wang, Wei	—	—	—	—
Independent Director	Hon, Jau-Shin	—	—	—	—
Independent Director	Hsu, Fu-Hsiung	—	—	—	—
Chief Financial officer of World Known MFG(Cayman) Limited	Yu Shen-Fen	34,000	—	—	—
Investment Business Dept. Director of World Known MFG(Cayman) Limited	Chen, Ming-Chieh	15,000	—	—	—
Chief Audit Executive of World Known MFG(Cayman) Limited	Lai, Yi-Ling	8,000	—	—	—
General Manager of World Known Precision (Fuzhou) Industry Co., Ltd.	Huang, Yu-Ting	25,000	—	—	—

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Title	Name	2020	2020	Current year to April 30 2021	Current year to April 30 2021
		Net Change in Shareholding	Net Changein EquityPledge	Net Change in Shareholding	Net Changein EquityPledge
Vice General Manager of World Known Precision (Fuzhou) Industry Co., Ltd.	Chang, Chia-An	23,000	—	—	—
QA Director,World Known Precision (Fuzhou) Industry Co., Ltd.	Huang, Mao-Yuan	14,000	—	—	—
General Manager of World Known Precision Industry Co., Ltd.	Tseng, Kuo-Hsien	20,000	—	—	—
Production / R&D Director, World Known Precision Industry Co., Ltd.	Lin, Kuo-Hsiung	14,000	—	—	—
ten-percent shareholders	Germander Group Limited	—	—	—	—

(II)Shares Trading with Related Parties:None.

(III)Shares Pledge with Related Partie:None.

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

	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─	As of April 30 Unit：thousand shares,% Current Shareholding Spouse and Minor Shareholding Shareholding by Nominee Arrangement Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another Remar k Shares % Shares % Shares % Name Relation 4,230 12.48% ─ ─ ─ ─ ─ ─ note 894 2.64% 1,050 3.1% 5,097 15.04% Lu Huang, Ching-Ling Lu, Huang-Fu Husband- Wife Parent-Chi ld ─ 2,730 8.05% ─ ─ ─ ─ ─ ─ ─ 1,352 3.99% ─ ─ 2,730 8.05% Lu, Chung-Wen Lu Huang, Ching-Ling Parent-Chi ld Husband- Wife ─ 2,000 5.90% ─ ─ ─ ─ ─ ─ ─
Name	Current Shareholding		Spouse and Minor Shareholding		Shareholding by Nominee Arrangement		Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another		Remar k
	Shares	%	Shares	%	Shares	%	Name	Relation
Germander Group Limited Representative：Lu, Chung-Wen	4,230	12.48%	─	─	─	─	─	─	note
	894	2.64%	1,050	3.1%	5,097	15.04%	Lu Huang, Ching-Ling Lu, Huang-Fu	Husband- Wife Parent-Chi ld	─
Lavender Hill Limited Representative：Lu, Huang-Fu	2,730	8.05%	─	─	─	─	─	─	─
	1,352	3.99%	─	─	2,730	8.05%	Lu, Chung-Wen Lu Huang, Ching-Ling	Parent-Chi ld Husband- Wife	─
AmTrust Investment Consulting	2,000	5.90%	─	─	─	─	─	─	─

-54-

Name Corp Representative：Lin Hsin-I	Current Shareholding	Current Shareholding	Spouse and Minor Shareholding	Spouse and Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another	Any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another	Remar k
	Shares	%	Shares	%	Shares	%	Name	Relation
	─	─	─	─	─	─	─	─	─
E. SUN Commercial Bank, LTD. in custody for GREATER MATRIX Limited Representative：Lai Hsin-Yuan	1,766	5.21%	─	─	─	─	─	─	─
	─	─	─	─	─	─	─	─	─
Cathay Venture Inc. Representative：Chang Jen-Ho	1,478	4.36%	─	─	─	─	─	─	─
	─	─	─	─	─	─	─	─	─
E.SUN Venture Capital Representative：Lin Lung-Cheng	1,443	4.26%	─	─	─	─	─	─	─
	─	─	─	─	─	─	─	─	─
Lu, Huang-Fu	1,352	3.99%	─	─	2,730	8.05%	Lu, Chung-Wen	Parent-Chi ld	─
Lin Chen-Yao	1,291	3.81%	─	─	─	─	─	─	─
Lu Huang, Ching-Ling	1,050	3.10%	894	2.64%	─	─	Lu, Chung-Wen Lu, Huang-Fu	Husband- Wife Parent-Chi ld	─
Kao Fong Machinery Co., Ltd Representative：Shen Kuo-Jung	967	2.85%	─	─	─	─	─	─	─
	─	─	─	─	─	─	─	─	─

Note:Germander shares is jointly heldby Lu, Chung-Wen andLu, Huang-Fu, holding shares respectively59.8%and40.2%.

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

Unit: 1,000 shares /%; December 31 2020

Re-invested Enterprise (Note 1)	OwnershipbyTSMC	OwnershipbyTSMC	Ownership by Directors, Managers and Directly/IndirectlyOwned Companies	Ownership by Directors, Managers and Directly/IndirectlyOwned Companies	Total Ownership	Total Ownership
	Shares	%	Shares	%	Shares	%
Honour Glory International Ltd	6,521	100%	─	─	6,521	100%
World Known Precision Industry (Fuzhou) Co.,Ltd	Note2	100%	─	─	Note2	100%
World Known Precision Industry Co.,Ltd.	8,000	100%	─	─	8,000	100%
WKP HITECH USA, INC.	90	90%	─	─	90	90%

Note 1:The Company uses equity method to make investment Note 2: No shares due to the limited company

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IV.Capital Raising

A.Capital andShares

(I) Source ofCapital

1. Capitalization

l andShares ource ofCapital 1. Capitalization	l andShares ource ofCapital 1. Capitalization	l andShares ource ofCapital 1. Capitalization	l andShares ource ofCapital 1. Capitalization	l andShares ource ofCapital 1. Capitalization
					Unit：NTS$；shares
Date	Issuing Price (NT$)	Approved Capital		Paid-in	Capital	Remarks
		Shares	Amount	Shares	Amount	Source of Share Capital	Capital Increased by Assets Other than Cash	Others
2015.11	NTD$10	40,000,000	400,000,000	1	10	Founding Capital	─	none
2017.01	NTD$10	40,000,000	400,000,000	25,000,000	250,000,000	Capital Increase 20,770 thousand shares	─
						Share Exchange 4,230 thousand shares	note1
2017.05	NTD$34	40,000,000	400,000,000	30,000,000	300,000,000	Capital Increase 5,000 thousand shares	─
2020.03	NTD$10	40,000,000	400,000,000	33,899,000	338,990,000	Capital Increase 3,899 thousand shares	─	note2
2020.06	NTD$10	60,000,000	600,000,000	33,899,000	338,990,000	2020.06.17 Shareholders' meeting approved the increase in share capital	─

Note 1:The Company issued new shares for NT$42,300,000 for 4,230,000 shares on March 1, 2017; and through share exchange, the Company acquired 11.6% stake of Honour from its shareholders, Germander Group Limited. The face value of Honour’s shares is US$1 per share and a total of 756,000 shares were acquired. The share exchange ratio was about 5.59:1.

Note 2:With the Letter Tai-Zheng-Shang-Er-Zhi No. 10900024462 by Taiwan Stock Exchange Corporation, dated March 3, 2020, the listing in Taiwan was approved.

2. Type ofStock

listing in Taiwan was approved. 2. Type ofStock	listing in Taiwan was approved. 2. Type ofStock	listing in Taiwan was approved. 2. Type ofStock	listing in Taiwan was approved. 2. Type ofStock	listing in Taiwan was approved. 2. Type ofStock
As ofApril.19,2020;Unit:Share
Kinds of Share	Approved Capital			Remarks
	Outstanding Shares	Unissued Shares	Total
Common Stock	33,899,000	26,101,000	60,000,000	Listed Shares

3. Information about the omnibus reporting system: N/A.

(II) Composition ofShareholders

3. Information about the omnibus reporting system: N/A. Composition ofShareholders	3. Information about the omnibus reporting system: N/A. Composition ofShareholders	3. Information about the omnibus reporting system: N/A. Composition ofShareholders	3. Information about the omnibus reporting system: N/A. Composition ofShareholders	3. Information about the omnibus reporting system: N/A. Composition ofShareholders	3. Information about the omnibus reporting system: N/A. Composition ofShareholders	3. Information about the omnibus reporting system: N/A. Composition ofShareholders
As of April 30,2021;Unit:person,;Share
Type of Shareholders Quantity	Government Agencies	Financial Institutions	Other Juridical Persons	Natural Persons	Foreign Institutions and Foreigners	Total
Number of Shareholders	─	─	16	920	16	952
Shareholding	─	─	7,726,000	16,620,651	9,552,349	33,899,000
Holding Percentage (%)	─	─	22.79%	49.03%	28.18%	100.00%

Note：Chinese shareholdings ： None.

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(III) Shareholding Distribution Status

1. Distribution Profile of ShareOwnership ：

Distribution Profile of ShareOwnership：	Distribution Profile of ShareOwnership：	Distribution Profile of ShareOwnership：	Distribution Profile of ShareOwnership：
As of April 30,2021;Unit:person,;Share
Shareholder Ownership (Unit: Share)	Number of Shareholders	Ownership	Ownership Percentage
1 ~ 999	55	3,695	0.01%
1,000 ~ 5,000	665	1,245,305	3.67%
5,001 ~ 10,000	86	740,000	2.18%
10,001 ~ 15,000	22	290,000	0.86%
15,001 ~ 20,000	24	457,000	1.35%
20,001 ~ 30,000	23	602,000	1.78%
30,001 ~ 40,000	11	376,000	1.11%
40,001 ~ 50,000	13	613,000	1.81%
50,001 ~ 100,000	12	916,000	2.70%
100,001 ~ 200,000	14	1,991,000	5.87%
200,001 ~ 400,000	9	2,447,000	7.22%
400,001 ~ 600,000	2	1,074,000	3.17%
600,001 ~ 800,000	3	2,144,000	6.32%
800,001 ~ 1,000,000	4	3,660,000	10.80%
1,000,001 and above	9	17,340,000	51.15%
total	952	33,899,000	100.00%

2. Preferred Shares ： None 。

(IV) Major Shareholders

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

As of April 30,2021;Unit:person,;Share

Shares Name of Major Shareholders	Shareholding shares	Shareholding percentage
Germander Group Limited	4,230,000	12.48%
Lavender Hill Limited	2,730,000	8.05%
AmtrustInvestment Consulting Corp	2,000,000	5.90%
E. SUN Commercial Bank, LTD. in custodyforGREATER MATRIX Limited	1,766,000	5.21%
Cathay VentureInc.	1,478,000	4.36%
E.SunVenture Capital	1,443,000	4.26%
Lu,Huang-Fu	1,352,000	3.99%
Lin,Chen-Yao	1,291,000	3.81%
LuHuang, Ching-Ling	1,050,000	3.10%
Kao FongMachineryCo.,Ltd	967,000	2.85%

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(V)Market Price, Net Worth, Earnings and Dividends Per Share and related information in the past twoyears

Unit ： NT$ ； Thousand Shares

Year Item	Year Item	Year Item	2019	2020	As of Mar 31,2021
Market Price Per Share	HighestMarketPrice		NA	50.00	41.15
	Lowest Market Price		NA	29.25	35.75
	AverageMarket Price		NA	38.35	38.19
NetWorth Per Share	BeforeDistribution		27.81	25.77	26.35
	After Distribution		24.81	23.77	Note
Earnings Per Share	WeightedAverageShares		30,000	33,226	33,899
	EarningsPerShare		3.09	2.06	0.74
Dividends Per Share	Cash Dividends		3.00	2.00	None
	Bonus Shares	Bonus Shares	─	─
		Bonus Sharesout ofCapitalReserve	─	─
	Bonus Shares		─	─
Return on Investmen	Price/EarningsRatio		NA	18.62
	Price/DividendRatio		NA	19.18
	Cash Dividend Yield		NA	5.22

Note: The proposal for 2020 profit distribution is subject to approval of the shareholders meeting.

(VI) Company's dividend policy and itimplementation

1. Dividend Policy is set out in the Articles ofIncorporation

The dividends policy of the listing period set forth in Article 100 of the Company’s Articles of Incorporation is listed as follows:

Currently the Company is in the growing stage. The dividends/bonuses may be distributed to shareholders in cash and/or shares. The distribution of the dividends/bonuses shall take the capital expenditures, plans for future business expansion, financial plans and other plans required for the sustainable development into account.

Unless the laws of Cayman Islands, the regulations of public listing in TWSE or TPEx, or the Articles of Incorporation stipulates otherwise, whenever there are any earnings after the end of each fiscal year, after the Company has covered its losses (including the losses from previous years and the adjustments of the undistributed earnings, if any) and all taxes have been paid, the legal reserves shall be provided pursuant to the regulations of public listing in TWSE or TPEx (not applicable if the total legal reserves reached the total amount of paid-in capital), and then the special reserves shall be made (if any). For the remaining amount (reversed special reserves included), through the general resolution of the AGM, no less than 10% of such distributable earnings, plus all or partially accumulated undistributed earnings from previous years decided through the general resolution of the AGM, may be distributed to shareholders as dividends or bonuses. The amount of cash dividends or bonuses shall not be lower than 10% of the total amount of the dividends or bonuses to be distributed.

2. The dividends distribution proposed to the AGM:

On March 24, 2021, the Board of Directors approve the proposal to distribute cash dividends of NT$67,798,000 (or NT$2 per share); however, this proposal needs to be resolved by the AGM 2021.

Any material changes expected to the dividends policy: N/A.

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(VII)Effect upon business performance and earnings per share of any dividends distribution proposed or adopted at the shareholders' meeting: N/A

(VIII)Remunerations to employees, directors and supervisors

The percentage or scope of the remunerations to employees, directors, and supervisors specified in the Articles of Incorporation:

Unless the laws of Cayman Islands, the regulations of public listing in TWSE or TPEx or the Articles of Incorporation stipulates otherwise, shall there be any profit in the year, 1% to 8% shall be provided as the remunerations to employees, distributed in shares and/or cash, with a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors; and no more than 5% shall be provided as the remunerations to directors with a resolution adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors. However, if there is any accumulated loss (adjustments of the undistributed earnings included), the amount to offset such loss shall be set aside in advance, and the remaining amount is used to provide the remunerations to employees and directors at the aforementioned percentage. The distribution of remunerations to employees and directors shall be reported to the shareholders meeting. Unless the regulations of public listing in TWSE or TPEx, stipulates otherwise, the remunerations to directors shall not be paid in the manner of issuing new shares. The “profit” referred in the paragraph, means the pre-tax profit before deduction the distribution as remunerations to employees and directors.

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

Pursuant to the Articles of Incorporation, the remuneration of employee, director, and supervisor are estimated based on the pre-tax profit before deduction the distribution as remunerations to employees and directors. If there is any discrepancy between the actual distributed amount and the estimated figure, it is deemed as the changes to the accounting estimation and adjustment is accounted in the year of the shareholders’ meeting.

Information on any approval by the board of directors of distribution of remunerations:
(1) Amount of distributed remunerations to employees, directors, and supervisors in cash or shares. If there is any discrepancy between that amount and the estimated figure for the fiscal year these expenses are recognized, the discrepancy, its cause and the status of treatment shall be disclosed: on March 24, 2021, the Board of Director approved to distribute the employee remuneration of NT$1,543,792 and director remuneration of NT$1,543,792, all in cash. There is no discrepancy from the estimated figure.
(2) The amount of any employee remunerations distributed in shares, and the size of that amount as a percentage of the sum of the after-tax net income stated in financial reports for the current period and total employee remunerations: N/A.
The actual distribution of employee, director, and supervisor remunerations for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee, director, or supervisor remunerations, additionally the discrepancy, cause and how it is treated.

The proposal of remunerations distributed to employees and directors was reported in the shareholders’ meeting on June 17, 2020. The employee remuneration of US$33,838.06 and director remuneration of US$101,514.19 were to be distributed, and not different from the amounts proposed by the Board of Directors.

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(IX) Repurchase of CommonStock ： None 。

B.Issuance of CorporateBonds

None.

C.PreferredShares

None.

D.Overseas Depositary Receipts

None.

E.Employee Stock Options

None.

F.Employee Restricted Stock

None.

G.New Share Issuance in Connection with Mergers and Acquisitions

None.

H.Implementation plan offunding

The company's cash capital increase before listing, the actual funds raised totaling NT$162,719,000 were completed on March 5, 2020, and the plan was completed in the first quarter of 2020 for the full implementation of working capital.

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V.Overview of Operations

A.Description of Operations

(I)Scope of Operations

1. The major businesses

The major products of the Groups are the automobile parts and green-energy parts. The final products to be sold include the energy-saving and carbon-reducing parts of commercial vehicle engine, ADB calipers, rear panels of brake pad, bend pipes and accessories of turbocharger, cases of flywheel, cases of swing arms, exhaust manifolds, braces, core shafts, parts for braking system of wind power generator and processed products of machinery parts for various industries.

Operating weights of major products

Unit: Thousand NT$; %

				Unit: Thousand NT$;%	Unit: Thousand NT$;%	Unit: Thousand NT$;%
Year Service item		2019		2020
		Revenue	Weight	Revenue		Weight
Automobileparts		765,067	73.86	607,988		70.39
Green-energy parts		86,856	8.38	110,513		12.79
Others		183,976	17.76	145,248		16.82
Total		1,035,899	100.00	863,749		100.00
Currentproducts(services)of the Company
Category of products	Description of products				Area of application
Automobile parts	Energy-saving and carbon-reducing parts of commercial vehicle engine, ADB calipers, rear panels of brake pad, bend pipes and accessories of turbocharger, cases of flywheel, cases of swing arms, exhaust manifolds, braces, and core shaft.				Transmission systems for cars and trucks, engine systems, and chassis system.
Green-energy parts	Parts of braking systems				Brakes of large-size power generators(MW grade)

3. Current products (services) of the Company

4. New products (services) planned to be developed

The new products and services planned to be developed are as follows: (1) application of aluminum alloy, such as light-weight parts of engine, light-weight parts of chassis; (2) auto detecting helium production lines that infuse dry air to the parts, as the testing of pressure-resistance and air-tightness, as the enhancement of part inspection; (3) Expansion of auto-inspection production lines by applying high-precision censors that automatically contact the position to be inspected at the parts, and determine if the product is qualified automatically.

(II)Overview of Industry

The current status and development of the industry
(1) Automobile industries

According to OICA report, production of global main truck market such as United States or Europe plungedby 20-30%. It’s because of COVID-19 affect the demand of end users in those regions. Major manufacturers stopped partial or all prodcution line for

-61-

confirmed cases or prevent from infection also result in low demand. It’s estimated 1-2 years from recovery.

The vast territory of USA drives the necessary demand of heavy trucks for agriculture, mining, architecture and cargo transportation in USA for its geographical conditions. Demand of heavy truck not only lowers the transporation cost, but also increase the market demand of commercial vehicles in USA and lift empolyment rate higher. Local residents used to save cargo cost by truck transporation, so the demand of heavy truck is always there. In recent years, the demand of commercial vehicles for architecture and mining has increased. Heavy trucks are expected to have more loading and higher efficiency, plus the high dependency for these two industries, driving a higher demand of commercial vehicles. The demand and supply of commercial vehicles has growing tendancy in USA and provides a potential growing momentum in heavy truck market. Due to COVID-19 pandemic in year 2020, the sales of overall heavy truck in USA has plummeted.

Production of mid/heavy trucks of USA, 2011-2020

==> picture [421 x 254] intentionally omitted <==

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

400000 20
16.8
15.4
350000
10.2 9.4 10
300000 5.6
4.1
0
250000
‐6.4
200000 ‐10
‐14.8
150000
‐20
100000
‐30
‐32.1
50000
0 ‐40
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
----- End of picture text -----

Source: MarkLines, OICA, WKG

On the other side, the commerical vehicle in China is mainly used for raw material transporation, so the sales is affected by local economic growth and demand of infrastructure. Starting from July 1st, 2021 regulated by China law, all diesel vehicles will be under “CHINA VI vehicle emission standards”, so the market of commercial in China is expected to keep growing. The demand of commercial vehicles goes up because of “CHINA VI” and strict environmental regulations, despite of slow demand of commerical vehicles in China. Due to COVID-19 and US-China trade war, domestic economic growth and commercial momentum went slowly. Many multinational car manufacturers stopped production and layoff employees, while local brands adjusted it structure for destocking. Many automotive OEM suppliers were forced to face allowance for bad debt, as well as OEM orders to Taiwan-based automotive suppliers. However, sales of commerical vehicles of year 2020 in China surged compared to last year because of early recovery from production line, domestic demand expansion and “CHINA VI” regulation on time.

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Sales and growth rate of China commercial vehicle, 2006-2020

==> picture [430 x 234] intentionally omitted <==

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

600 40
銷量增長率
513.3
500 28.4 29.9 473.1 30
430.4 432.4
416.1
405.5
22.3
400 403.3 381.1 379.1 18.7 20
345.1 [365.1]
331.3
14.2 14
300 10
249.4 [262.5]
5.2 6.3 6.4 5.8 5.1
204
200 0
‐1.1
‐5.5
‐6.5
100 ‐9 ‐10
0 ‐20
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
----- End of picture text -----

Source: China Association of Automotive Manufacturers

(2) Green-energy industries

The market size of wind energy has doubled and became one of the most cost effective and toughness power by technology innovationand economics of scale in past decade. Total capacity of wind energy is 743GW, over 1.1 billion ton of carbon reduction, which equals to the auunal total carbon emissions in South America.

Year 2020 is the best year of global wind energy industry, with new wind energy capacity 93GW, increased 53% by last year. This indicates the wind energy is not affected by COVID-19 but made a record because installation surged in China and USA, the installed wind turbines was 75% of global amount, and total installed capacity is over half of global capacity. Wind energy is the fundemetal of net zero and green recovery. Wind energy is a cost effective flexbile energy and has the biggest potential of carbon reduction per MW. According to GWEC/Global Wind Energy Council, to keep the global average temperature increase less than 2°C compared to previous industrial era, it’s necessary to install 180GW new wind turbines around the world every year, based on the assumption from IRENA and IEA.

a. Onshore wind power market

China and USA are still the biggest two onshore wind energy market, total 75% of newly added wind turbines in year 2020. China government started to use bidding system from year 2018, as a part of reformation of energy market. However, the total turbines are still controlled by central governement. GWEC expects China can have further progress and get rid of direct subsidy in renewable energy and wind energy market.

The second big market of onshore wind energy is in USA. The main momentum for newly installed turbines is still Production Tax Credit, PTC before year 2020-2021. Future demand of newly installed turbines will be connected with Renewable portfolio standard, RPS and corporate purchase contract market, possibly with new business model and new financial model.

b. Offshore wind power market

Offshore wind energy plays an important role gradually. Newly installed offshore wind capacity in 2020 reached the second high of 6.1GW, accounting for 6.5% of total newly installed capacity.

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Newly installed offshore w ind energy capacity is aroun d 6,068M W , total g l obal installation capacity is 35,923 M W. Amon g all 24,83 7 MW (70 % ) located in Europe, rest 30% mai n ly in Asia, such as Ch i na (9,996 M W), Kore a , Taiwan a n d other Asian countri e s.

The pr o spect of g l obal wind energy is o p timistic. T he main d y namic mo m entum of w ind turbines installation is still su p ported by governme n t policy ( b idding system, rene w able energy p l an, etc). W ind energy is cost e ffective, w hich can b e proved by increa s e of business o pportunity and business model li k e power p u rchase agr e ement.

The i n vestment e n vironmen t of wind e nergy and renewable energy is still in po s itive attitude. W ind energ y as a flexi b le and exp a ndable ca p acity makes itself as a part of sol u tion while ma n y market are reeval u ating ener g y demand and mark e t design. D uring past few years, wi n d energy p rice drop a ccelerated technolog y develop m ent and hi g h efficien c y. It will still b e the key f actor for w ind power industry b e coming m a ture, altho u gh wind p o wer price wo n ’t drop fast in short te r m.

R e lations of U pstream, M idstream a nd Downs t ream Com p anies (1) Automo b ile industr i es

T he autom o tive suppl y chain are a mong the m ost complex in the w o rd – from design a ndprovisi o n of raw m aterials in t h e upstrea m to autom o tive assem b ly plants a nd a ftermarke t services i n the downs t ream. The automotive supply ch a in compan i es form a c ross-indus t ry networ k with other partners i n related in d ustries. Th e roles of a u to parts in t he automo t ive supply chain are i l lustrated i n the diagra m below.

==> picture [445 x 271] intentionally omitted <==

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

Midstre a m D ownstrea
Upstr e am
Pl a stic and R u bber
in d ustries; A uto Parts 汽車之組車廠商
C a r Assembl y
A B S, PP and r ubber B umpers, wi n dshields
Pl a nts
St e el Industry ; Engine hoods, motor
Ir o n and steel v e hicle doors
m a nufacturin g
W heel rims,
N o n-ferrous
t h ermostat
m e tal;
C o pper, zinc a nd aluminu m H eadlight, ca r
w indows
G l ass Industr y ;
R a w materials for glass
pr o duction Car b attery, elec t rical parts,
alte r nator
E E Industry Aftermarket Se r vice
Electrical co m ponents Car s ensors, TV dashboards Pro v iders
Electronic Industry
El i
So u rce: Taiwan I ndustry Econ o mics Servic e s
----- End of picture text -----

The Company mainly op e rates in th e precision metal pro c essing and productio n . At the upst r eam, iron o r aluminu m is applie d as the major material; through h i gh-temper a ture melting and forgin g or even c a sting, the f orms are m ade. At th e mid-strea m , the part s are made t h rough the machiner y processi n g. The fi n ished products are applied in the automo b ile indust r y, wind p ower ind u stry, agri c ultural m a chinery a n d constru c tion machin e ry.

( 2 ) Green-e n ergy indus t ries

Co n verting the wind ener g y to mech a nical ener g y, and then convertin g the mecha n ical energy t o electrica l scenery, i s the wind power gen e ration. The principle of wind p o wer

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generation, is utilizing winds to spin the blades of generators, and increasing the spinning speed through accelerators, so that the power is generated.

The upstream sectors for parts of wind power generation include the equipment makers, sub-system suppliers, and raw material suppliers. These industries also include the hardware parts, such as suppliers of bearing and bolts. The mid-stream sectors are the integrated services, such as planning of wind fields, construction of wind fields and maintenance of wind power generators. The downstream sectors include the comprehensive developers of wind fields and the operators of wind power generators. Among the operators of wind power generators, there are comprehensive power plants and independent power suppliers. In nutshell, from the assembly of generators at the upstream, including blades, tower frames and main generators, there are great demands for various parts. These parts include the electronic parts, to machinery parts, to compounded materials, and to paint protection for appearance, marine (land) construction, transportation, financial and even insurance.

Development trends and competition of products.
(1) Development trends

a. Automobile industry

The automobile industry is at the key node shifting from conventional internal combustion engines to the drivers with new energies. Meanwhile, technologies, such as 5G communication technology, AI technology and IoT, will even have greater influence to the commercial vehicles than the new energy technologies and the whole logistic ecosystem may be changed. From short term to long term, there are several development trends for the accessories to commercial vehicles:

(a) Upgrade of environmental technologies

Comparing to passenger vehicles, commercial vehicles needs more time to get rid of the dependence on the fossil energies. But the overall approach of clean energy will not be changed. The standards for gas emission will be only stricter and stricter, until the zero emission of hazardous substance is achieved. Therefore, the hybrid power technologies, electrical and hydrogen fuel driver will replace the conventional internal combustion engines gradually, but the replacement cycle would be longer than passenger vehicles.

(b) Unmanned driving:

Not like the unmanned driving of passenger vehicles, the purpose of commercial transportation vehicles is to transport goods and thus the demands to realize unmanned driving is even greater. The first application of unmanned driving for commercial vehicles is the technology of “one-man fleet,” i.e., the transportation is conducted with a fleet, but only the first truck is driven by a driver and the other trucks are unmanned. Currently, trials are conducted in Europe and the U.S. The two major basic technologies of unmanned driving are the AI and 5G communications. Their applications are getting mature, and the future design for the whole commercial vehicle will be innovated greatly. To lower costs, there will be no driver’s cockpit and the reduced weight may be occupied by more goods. The most expensive part of shipping expense, costs of driver, is also saved. The logistic network will be expanded to the unprecedented depth and width due to reduced costs. The demands to transportation vehicles will increase and diversify more, the landscape of the logistics market will be turned over.

b. Green-energy industries

Fossil materials are seen as the prime culprits to the drastic global climate changes. The development of emerging renewable energies is the global trend and the green-energy industries are getting important. The related research shows that among 195 countries

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around the world, more than 90% of countries have established the acts for renewable energies. The future development trends of wind power generation are described as the following:

(a) Increase the efficiency of energy conversion for wind power generators

The wind power generators from the mass production in the early stage have a common problem of ill energy conversion efficiency. The major power generator makers input R&D workforce to improve the design. The items for improvement include the material of blades, increase of the diameters of blade wheels and output power. How to maintain the market shares with better power generating performance, is the key issues to the major power generator maker.

(b) Develop the wind power generators generating more power

Among the wind power generator makers, except the aforementioned improvement of blades and blade wheels, the braking system is also a key issue with higher specifications for increasing power generation. Reducing installed quantity of brakes is becoming important to the related sub-module vendors.

Except for enhancing the generation efficiency and capacity, makers are also required to have a price reduction to save the procurement costs. Other than the general production configurations, how the suppliers at the production ends produce more efficiently, without related waste, becomes a goal sought by these suppliers other than their own capabilities.

(2) Competition of products
a. Automobile industry

The major operations of the Company are in Fuzhou, China and Taiwan, with both R&D and production. The peers of automobile products in Taiwan and China are listed as the follows:

	’
Description	of Companys products
The Company	Mainly engaging the business of precision metal processed products; the application of their products include the parts of commercial vehicles, green-energy parts, parts of agricultural machinery, and parts of construction machinery
Tsang-You	1. Cars: parts of automatic transmission are mainly applied to the transmission and gear shifting devices of cars; parts of torque convert are mainly applied to the liquid torque converters between engines and automatic transmission. 2. Heavy trucks: mainly applied to clutches of heavy trucks. 3. Industrial machinery: transmission system modules for agricultural machinery,excavators,and snowmobiles.
Yung-Hsin - KY	The main products include the brake master cylinders, brake wheel cylinders, clutch master cylinders, clutch wheel cylinders, brake calipers, boosters,brakepads and other related automobileparts. The major

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	’
Description	of Companys products
	function is the application to the automobile braking system and the major target is the automobile parts AM market.
Yu-Long	Mainly produce the precision metal parts for automobile engine systems, steering systems, transmission systems, chassis systems, medical injectors, as well as connectors for aerospace and industrial communication applications, sensors, temperature control equipment, compressors for refrigeration and air conditioning, and optical products.
Feilong Auto Components Co., Ltd.	The major products include the water pumps for automobiles, exhaust manifolds, case of turbocharger, electrical water pumps, and motor oil pumps.
Guangdong Hongtu Technology (Holdings) Co., Ltd	1. Pressed and forged precision aluminum alloy parts. 2. Proprietary vehicles. 3. External and internal automobile decorative parts. 4. Investment.

The Company mainly engages business of precision metal processing, and the end applications include the parts of commercial vehicle chassis, parts of braking system for wind power generators, and parts of machinery equipment industries. Also the Company provides services customization and small variety with large quantity, based on demands of clients, and provides the precision processing production, sales, and R&D For the Taiwanese and China competitors listed above, their major business is the production of automobile parts for passenger vehicles, or the parts of passenger vehicle AM market. In the market, there are not many famous vendors supplying the same parts of commercial vehicles. In addition, the application areas of the Company’s products are extensive, with diversified markets. Currently, the Company has reached the green-energy industry and industrial machinery. The Company also provides service of product customization, which increases the dependence of the clients to the Company indirectly. With the experience accumulated from long term cooperation with clients, the Company has better competitiveness than peers.

b. Green-energy industries

As the working conditions of wind-power equipment is ill, the requirements to the quality of parts are very high, with higher technical threshold. As the capacity of the individual wind power generator expands, the technical difficulty of part forging also increased, with higher requirement to metal fatigue. The Company has presence in the wind-power generator area, which means we have certain skill levels. Also, the clients of the Company are mainly international major companies. We are trusted by these clients as they are willing to provide the molds and new technology plans to us. Therefore, the Company has more opportunities to obtain the latest market information and technologies, to improve our own technologies and competitiveness.

(III)Overview of technologies and R&D

1. The technology level and the R&D of the business operated

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The Group mainly engages business of precision parts processing, including various precision automobile parts, parts of wind power generation and hydraulic parts. The major technologies are derived from the accumulations and legacy of long term blank forming and processing experience, with the self-developed and designed fixtures, jigs, and gauges, to provide excellent products to clients. Currently, the Company provides manufacturing and sales services of precision parts to many industries. Except sending employees to the technical trainings provided by the domestic an overseas institutes or equipment suppliers, and actively participating major international exhibitions of tools and machines, the Company also have technical interactions and engineering discussion with clients, to effectively grasp the technology sources and improve technical capabilities.

Furthermore, to enhance the levels of various development and production, the Company engages scholars with expertise in the discipline and professionals with practical experience to the Company as instructors. Except for the breakthrough of the high-level metal forming and processing key technologies, the advanced production technologies, including reversal engineering application, 3D printings and precision machinery process are introduced, to greatly improve the development speed and quality of new products. The Company also cultivate talents in school on project basis, to conduct the development and testing through the talents and resources in the professional disciplines and develop the talents needed for R&D from schools.

Up to now, the Group’s R&D outcomes are the improvement of technologies. The patents are applied in China. However, the Company has no payment as technology compensation or royalty.

R&D expenses input in the most recent year up to the printing date of the annual report

Unit: Thousand NT$	Unit: Thousand NT$	Unit: Thousand NT$
Year Item	2020	January to March, 2021
R&Dexpenses (A)	18,754	4,468
Operatingrevenue (B)	863,749	231,885
(A)/(B)	2.17%	1.93%

Technologies or products successfully developed in the most recent years and up to the printing date of the annual report.

Year	R&Doutcomes	Descriptionof R&Doutcomes’effects
2019	Automation of the dedicate production line of processing core shafts for automobile gear shifting devices (auto measurement included)	To cope with the massive production lines planned, the automation is increased to lower the demand to workforce, and enhance the production efficiency. Introducing robot arms to handle the material taking and placing and auto measuring, as replacement of massive labors, and controls overthe quality by automeasuring.
	Supporter (the first mass production of lost-wax casting products)	To accommodate the clients’ demands, the lost-wax casting products have the first mass production. With the heat treating refining process and surface treatment of electroplating process, a one-stop service is provided to clients.
2020	Electrical disk braking parts.	The electrical disk braking parts are developed to accommodate clients. The parts are mainly applied to the electrical buses, commercial vehicles with new energies. The prototype has been made and road trial has been conducted.
	Moisture separator (stainless steel)	Application of multi-material production process and by accommodating client’s development of parts, to increase the optimization of internal parameters of production process and integral application of machinery processing

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Year	R&Doutcomes	Descriptionof R&Doutcomes’effects
		technologies.
	Inorganic zinc primer painting stainless steel	The advanced painting production process service. To accommodate wind-power clients’ demands for the assembly and rust-proof protection for processed surfaces, the inorganic zinc primer was developed.
	Package production of parts for industrial brakes	Based on the requests of clients, the parameters of the forging materials (low-temperature shock resisting) are optimized, with the integral application of machinery processing technologies. The surface painting and shielding is provided after process, to add values for products.
2021	Seat spreader (aerospace component)	Aluminum forging 7075-T6 processing application. Improve in-house aluminum full engraving processing parameter optimization, machining integration and CATIA CAD/CAM software skills.
	Aluminum alloy case (medical equipment)	Aluminum block 6061-T6 processing application. Improve in-house aluminum full engraving processing parameter optimization, and machining integration. Advance surface treatment (anodizing and hard anodizing). To make value-add products by surface treatment andshade after processing.
	Sliding table	Gravity casting aluminum AC4C-T6 processing application. Improve in-house gravity casting processing parameter optimization, and machining integration.
	Electric-drive disc brake	Develop related components with electric-drive brake major brand D customer, which mainly applied in electric bus and commercial vehicles. Sample test and road test are done at this moment.

(IV)Long and short-term business development plans
Short-term business development plans
- (1) Expand lightweight commercial vehicle components with existing and potential commercial customers. Create values to customers by using new technology, new material as alternative product solution (i.e. iron to aluminum, steel to cast iron, etc).
- (2) All-in-one ADB (Air Disc Brake) Commercial vehicle manufacturers in China and USA who focus on drum brake started to convert to ADB gradually. Current split ADB is less competitive in China market because of multi-components, complex structure, heavy and high cost. It’s more competitve for expanding market share by using all-in-one ADB which makes clamp structure simple, lower weight and cost. It will increase our sales opportunity since we’ve done product development to D customer.
- (3) It will be our development priority to design and produce EGR component for diesel engines under “CHINA VI” regulation, which will be the most strict regulation executed from July 1[st] , 2021 in China.
- (4) 22” EMB (Electro-Machanical Brake), the new brake system for new energy automotive, is development complete for customers, while 19”one is under development, will be in mass production in 2021.
- (5) Handled trial orders for medical equipment, PCB device and seat spreader for aerospace application.

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(6) Contacted potential customers of vacuum equipment and LED equipment components. AS9100 certification will be done in 2022.
Long-term business development plans
(1) Expand production capacity gradually and widen the competitive gap between competitors.
(2) Stay on top of the market trend by cooperating with supply chain. Expand new development field and follow new automotive technoloy aggressively.
(3) Elevate corporate core competence by hiring professional workers with global prospective.
(4) Keep sales growth by expanding products and seeking potential customers.
(5) Develop in localization with F customer after building new plants in China.
(6) Keep investing in new casting technology such as low pressure casting and semi-solid gravity casting.
(7) Developmechatronics system components as ODM (such as electro valve-EGR valve, pressure reducing valve and expansion valve.

B.Overview of Market, Production, and Sales

(I)Market Analysis
Major area for product sales

	Unit: Thousand NT$ 2019 2020 Amount of sales Percentage (%) Amount of sales Percentage (%) 483,698 46.69 316,515 36.65 423,755 40.91 420,503 48.68 128,446 12.40 126,731 14.67 1,035,899 100.00 863,749 100.00	Unit: Thousand NT$ 2019 2020 Amount of sales Percentage (%) Amount of sales Percentage (%) 483,698 46.69 316,515 36.65 423,755 40.91 420,503 48.68 128,446 12.40 126,731 14.67 1,035,899 100.00 863,749 100.00	Unit: Thousand NT$ 2019 2020 Amount of sales Percentage (%) Amount of sales Percentage (%) 483,698 46.69 316,515 36.65 423,755 40.91 420,503 48.68 128,446 12.40 126,731 14.67 1,035,899 100.00 863,749 100.00	Unit: Thousand NT$ 2019 2020 Amount of sales Percentage (%) Amount of sales Percentage (%) 483,698 46.69 316,515 36.65 423,755 40.91 420,503 48.68 128,446 12.40 126,731 14.67 1,035,899 100.00 863,749 100.00
Year Sales Region	2019		2020
	Amount of sales	Percentage (%)	Amount of sales	Percentage (%)
Americas	483,698	46.69	316,515	36.65
Asia	423,755	40.91	420,503	48.68
Others	128,446	12.40	126,731	14.67
Total	1,035,899	100.00	863,749	100.00

2. Market shares

For the parts of commercial vehicles, based on the statistical data of Precision Reports, the global sales value of automobile parts in 2020 was US$223.69 billion (about NT$6,606.28 billion). The Company’s sales income of automobile parts in 2020 was NT$607,988,000, or 0.0009% as the market share. The main reason is that the commercial vehicle markets has a small weight in the overall automobile market. Based on the statistical data of the OrganisationInternationale des Constructeursd'Automobiles (OICA), the global whole-car (commercial and passenger vehicles included) production volume in 2020 was 77,622,000 units and the global whole-car production volume of heavy commercial vehicles was 4,361,000 units; in other words, the heavy commercial vehicles’ market share in the global whole-car market was only 5.62%. For the green energy parts, based on the statistical data of MOEA, the 2020 production value for the parts of wind power generator in Taiwan was NT$5.445 billion. The Company’s sales revenue of parts of wind power generator for 2020 was NT$110,513,000 and the market share was 2.03%. Based on the research report of GWEC, the capacities of global wind power generators will be growing until 2022, benefitted from the tax incentives in the North America and the Chinese subsidy policy. It is expected that the precision metal processed product of wind power generators will grow.

Future demand-supply conditions and growth of the market.
(1) Automobile industry

Global automotive sales and production declined as well as components suppliers were affected especially in major automotive purchase region like USA and Europe due to COVID-19 in year 2020. According to HIS Markit forecast, global automotive market may

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decline by 9%, new car forecast from 3.2 million to 2.9 million.Although transporation automotive forecast in following year is slow in China, but the demand of our Exhaust gas recirculation (EGR) component estimated to grow, which benefit from China adjusted transportation structure, evelated transportation efficiency and “Limits and measurement methods for emissions from light-duty vehicles (CHINA VI)”

Global demand of heavy truck component is under balance, so Europe and Asia market is rather steady. Compared to price war in passenger vehicle, customers are rather not sensitive to price and with higher loyalty in commercial vehicle market.

(2) Green-energy industries

The high cost moves development priority from onshore to offshore wind turbines in wind power market. To get better cost performance ratio, the principal development is toward higher power genernation in offshore wind power industry. 12MW is the biggest offshore wind turbine currently. Research shows the onshore and offshore power generation will increase to 470TW during year 2021 to 2025. As offshore wind turbine has became the focus of every country, there will be more demand in related brake system components as wind power market keeps growing.

4. Competitive niche

(1) Concentrating on the niche market

Through long-term development, the Group has formulated the operation strategies focusing on commercial vehicles and industrial sectors. We provide the customized, multi-items and small batch products and services. Comparing the operating method adopted by peers that seeks scale benefit to lower costs and realize profit, the Group seeks to avoid the fierce price competition through differentiation. By developing the niche market with minimum overlapped competing business and adopting the operations of light-asset and heavy external collaboration, the Group satisfies the demands of the client as much as possible, while maintaining the higher profitability.

(2) Flexible production operation

The Group values the development of external collaborative vendors. With the philosophy of light assets, the Group quickly satisfies the demands of clients with the edges of these external collaborative vendors (precision processing, surface treatment, proxy procurement, assembly, testing, logistic and storage). From the view of clients’ demands, we provide the maximum convenience of procurement to clients, to enhance their dependence to the Company.

(3) Forward looking product strategy

The positioning of the Group’s products goes along with the development trends in the automobile industry. Currently the major products of the Group are:

a. Diesel engine and chassis components, including multi-material such as iron, aluminum and steel, etc. We are the long-term stragetic partner with global brand such as A company and F company based on excellent lead time and quality.
b. EGR diesel and exhaust gas recirculation component. Demand of EGR function components keeps growing since “CHINA VI” regulation was effective from year 2020.EGR function component must be installed on diesel and gas engines of commercial vehicles. Vehicles without “CHINA VI” are not allowed for sale.
c. ADB air disc brake component. ADB has replaced drum brake gradully in China, USA and Europe market after new safety regulation became effective. There is a big growing potential in truck and trailer market respectively in North America and Europe.

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  - d. Light-weight aluminum alloy component. We prodive light-weight cases, tubes and body parts by existing gravity casting and upcoming low-pressure casting business.

  - e. EMB as Electro-Machanical Brake will be the primary brake solution in eletric commercial vehicle. EMB product is verified complete by customer and estimated in small production in Q4 2021, mass production for China and Europe market in 2022.

Positive and negative factors for future development, and the company's response to such factors
(1) Positive factors
- a. Automobile industry: by reviewing the history of human development, the trends of economic activities are influenced by the growth of populations and advancement of technologies. Although small fluctuations occurred during the history, the long term trend is always upward. The desires of seeking a better material life levels by human beings will never change and the demands to material goods and related services always go upwards. As it promotes the expansion of logistic networks, logistics frequencies and upgrades of services, the demands to logistics services and commercial vehicles also have secular growth. With the advanced technologies, driving technologies with better performance, and cleaner energies will be applied to the commercial vehicles. The stricter safety regulations will be enforced. The new product demands, such as electrical driving technologies, hydrogen energy technologies, post-treatment technologies for the wasted gas of internal combustion engines, disk brake, electrical brake and lightweight chassis will be expanded continuously and grow into new markets.
- b. Wind power industry: for the issues of energy-saving and carbon reduction, countries around the world are making their best efforts to increase the share of green energy to slow down the exhaust of energies. Therefore, the demands to the wind power generation increase, and the peripheral parts also have space to grow.
(2) Negative factors
- a. Automobile industry: advanced technologies are a double edged sword with. When breeding new markets with new demands, the sustainability of current products and business is affected. The introduction of new energy technology to the commercial vehicle area, will not generate any adverse impact on the Company’s business in the near future. However, whether or not the Company is able to maintain the competitiveness, depends on if the Company is able to develop products meeting the market needs timely by following the market trends. If the Company fails to meet the market needs timely, the potential adverse impacts may be generated to the Company’s business.
  - Response: for many years, the Company has focused on the processing production and sales of various precision metal parts. With the long term experience in the industry, the Company may provide the blank forming are designing solutions at the initial stage of product design, or the optimized product design to lower the cost of production. With the flexible production capability, the demands for small-quantity and various items and one-stop procurement of the commercial vehicle clients are satisfied. Providing customized products and developing products with clients based on their individual needs, are the major competitive niches of the Company. Thus the inter-dependence with clients is increased and the stable long term partnership is achieved. As the safety regulations of each country upgrade, with the technical development trends of intellectualization and motorization, and the new energies, the Company attempts to join the product materials and production process improving solutions at the R&D stages of the clients’ new products, with the R&D energies resulting from the long-term experience of production and manufacturing. It is sought to obtain the opportunities of orders during

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the introduction and trial production of the new products. For instance, in the recent years, the commercial vehicle makers in Mainland China and the U.S. have been shifting to air disc brakes (ADB) from the drum braking system gradually. To accommodate the application of brand new generation of electro-mechanical brakes (EMB) to the new energy commercial vehicles, the Company develops the parts simultaneously to obtain orders from clients. In the future, the Company will expand the precision processing technologies for multiple materials (cast-iron, aluminum, and steel), to meet the one-stop procurement demands of clients, and enforce the competitiveness and growth momentum.

b. Green-energy industry: except for the occurrence of the Chinese suppliers in the braking parts for the large-size wind power generators, suppliers around the word attempt to enter this area, for instance, in India, Turkey, and Brazil. With the shifting procurement strategies of end clients, certain threats will occur if the Company will stay as the supplier of the suppliers in the braking parts for the wind power generator.
Response:except for improving the technologies to lead competitors with their technologies and quality, while obtaining the development rights of clients’ new projects, the Company is also analyzing the actual prices of low-price competitors and understanding the quality of competitors through visiting exhibitions, so that the effective quotation strategies are taken. Meanwhile, the Company looks for the blank suppliers with competitiveness. For the current supply chain, the cost competitiveness is checked continuously, to avoid the costs of blanks from affecting the final product competitiveness.
c. Impact from the U.S.-China trade war and the COVID-19 pandemic

In March 2018, the President of the U.S. at that time, Donald Trump announced To levy duties on imported goods from China pursuant to Section 301 of the 1974 Trade Act for “punishing China for stealing the business secrets of intellectual properties of the U.S. China took countermeasures afterwards and levied 128 imported goods from the U.S. and thus the trade disputes started. After many tariff increases and negotiations, both parties signed the trade agreement of the first stage on January 15, 2020 and the trade dispute was suspended temporarily. However, the U.S. still reserves the tariffs levied on imported goods from China, and there are still uncertainty remaining for the future development. In December 2020, the new U.S. President, Joe Biden stated that he would not cancel the above-mentioned tariff policy and trade agreement. If the disputes are not be terminated in the near future, the economic environment of Asia or even the whole world will be impacted and thus the mid- and long term operations of the Company.

Also the global outbreak of COVID-19 in 2020, in response to the need for epidemic prevention, countries have also issued travel warnings and restrictions on entry or isolation requirements for people in affected areas in response to the development of the epidemic, which will affect the overall economic demand and supply. The automobile market was also hit hard, and it is estimated that it will take 1~2 years to recover in the future

Response: one of the major entities of the Company is located in Fuzhou, China. Other than some domestic sales in China, the major sales area is North America. Therefore, the products are listed in the US-China trade sanctions. However, other than two export clients, the transaction terms of other export clients specify that the tariffs shall be borne by the clients. Since the beginning of the trade war, the Company has negotiated with major U.S. clients, to share the operating costs resulting from the increased tariffs. Also the Company expands the awareness as the precision metal processing manufacturer for

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comm e rcial vehi c les in Chi n a. Theref o re, the d o mestic sal e s share i n the consol i dated oper a ting reven u es increas e d from 5 % in 2015 to 14.5% in 2 020. This m ay decreas e the uncer t ainties of m acroecon o mics due t o the Chin a -US trade s a nctions an d the incre a sed operati n g costs.

F o r the mi d - and lon g term, th e long ter m operati n g strategies of globalization is considered. The Com p any will e v aluate the feasibiliti e s to establi s h production based i n Southeas t ern Asia, s uch as Vi e tnam or i n the Ameri c as, such a s Mexico, f or the pur p ose of po s itioning th e future m a rket with g l obal oper a ting prese n ce and sa t isfying th e demands of clients f rom variou s regions. O r, by mo v ing some products p roduced i n the oper a ting entity i n China to the operati n g entity in Taiwan, t o diversify t h e uncertai n ties resulti n g from th e China-US trade disp u tes, and t h e possible operating r isks caused by the CO V ID-19 pa n demic.

(II)Major U sage and P roduction P rocess of K ey Produ c ts 1. M ajor usage o f key pro d ucts

The C o mpany’s p r oducts ar e mainly a p plied to t h e chassis a nd engine of comm e rcial v e hicles, br a king syste m for large - size wind p ower gen e rators, hyd r aulic pres s ure syste m and e n gine of co n struction m achinery, a s well as t r ansmissio n system of a gricultura l machiner y . 2. P r oduction p r ocess of k e y products

The ge n eral proce s s of the Gr o up’s craft s manship is as follows : (other spe c ific produ c tion p r ocesses m a y be adde d depending on the pro d ucts)

==> picture [476 x 194] intentionally omitted <==

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

a. Aut o mobile pa r ts
Machine
Forged p rocessing W ashing Q C
Pack a ging
parts (Turning R u st-proof Ins p ection
a n d milling)
b. Gre e n-energy i n dustries
Ma c hine
proc e ssing Washi n g S toving
Forged parts (tura n ning d paintiand n g a n proof d rust- inspectiQC an d on P a ckaging
mil l ing)
----- End of picture text -----

(III)Suppl i es of the m ajor materi a ls

T he Comp a ny has est a blished go o d long-ter m relations h ip with su p pliers; me a nwhile, the Co mp any also m onitors th e market co n ditions to s tabilize th e procurem e nt prices f o r key raw materials and establishes v e ndors with long term s trategic pa r tnership. T he sources of supplies are stabl e .

Maj or material s	Supp lier	Su pplying status
Cas t iron blank s	WKM, supplierA ,Shandong Huiyu Auto Parts Co., Ltd	Good

(IV) List o f major su p pliersand C lint 1. M ajor Suppliers in the L ast Two C a lendar Years

Uni t : NT$ 1,000; %

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Item	2019	2019	2019	2019	2020	2020	2020	2020
	Name	Amount	% of total annual net purchases	Relation with issuer	Name	Amount	% of total annual net purchases	Relation with issuer
1	World Known MFG Co.,Ltd	116,079	19.73	other relationsh ip	World Known MFG Co.,Ltd	99,405	25.17	other relation ship
2	Shandong Huiyu Auto Parts Co.,Ltd	88,142	14.98	none	Shandong Huiyu Auto Parts Co.,Ltd	62,687	15.87	none
3	A supplier	76,262	12.96	none	A supplier	38,646	9.78	none
4	others	307,844	52.33		others	194,249	49.18
	Total	588,327	100.00		Total	394,987	100.00

There has been no material changes in the suppliers in the most recent two years.

Major Clients in the Last Two Calendar Years

Unit: NT$ 1,000; %

				Unit: NT$1,000;%	Unit: NT$1,000;%	Unit: NT$1,000;%	Unit: NT$1,000;%
2019				2020
Name	Amount	% of total annual net sales	Relation with issuer	Name	Amount	% of total annual net sales	Relation with issuer
ACompany	366,512	35.38	none	A Company	248,209	28.74	none
others	669,387	64.62		Others	615,540	71.26
Total	1,035,899	100.00		Total	863,749	100.00
The Group has been one of the excellent suppliers to A Company. The changes are mainly resulted from the fluctuation of the business demands from end clients and the performance of the client; the changes are deemed reasonable. V) Production in the most recent twoyears Unit:NT$/PCS Year Main Product 2019 2020 Capacity Output Amount Capacity Output Amount Automotive parts 1,039,950 1,057,205 431,087 960,521 1,164,739 387,689 Green- energy parts 17,749 84,484 19,065 101,784 Others 60,148 88,502 63,679 70,012 Total 1,039,950 1,135,102 604,073 960,521 1,247,483 559,485

(V) Production in the most recent twoyears

Note: The production equipment of the Company is not product specific and is adaptive depending on the items to be produced; therefore, the capacities are calculated as a whole.

(VI) Sales in the most recent two years

Unit:NT$/PCS

Year Main Product	2019	2019	2019	2019	2020	2020	2020	2020
	domestic sales		exportsales		domestic sales		exportsales
	Quantity	Amount	Quantity	Amount	Quantity	Amount	Quantity	Amount
Automotive parts	560,136	153,276	1,948,245	611,791	568,272	149,144	1,536,102	458,844
Green- energy parts	20,673	85,612	1,016	1,244	23,263	109,854	549	659
Others	101,231	30,185	212,386	153,791	91,053	24,251	172,467	120,997
Total	682,040	269,073	2,161,647	766,826	682,588	283,250	1,709,118	580,499

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C.The Number of Employees in the Most Recent Two Years and As of the Date of Publication of the AnnualReport

Report
				Unit:person;%
Item	Year	2019	2020	As of April 30 ,2021
Staff (persons)	Manager	9	9	9
	Production Linie Worker	120	113	113
	General Employee	147	126	133
	Total	276	248	255
Average Age		37	38	39
Average Employee Tenure(Year)		3	5	6
Distribution of Education Attainment (%)	Master (and above)	3.26%	3.63%	3.14%
	Bachelor	27.90%	29.43%	29.80%
	Senior High School	55.07%	53.63%	51.77%
	Below Senior High School	13.77%	13.31%	15.29%

D.Environmental ProtectionExpenses

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

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

E.LaborRelation

(I)List any employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests:

1. Employee benefit plans and implementation:

The employee benefit plans are handled based on the related local regulations of the locations where the operations are, including social (employee/health) insurance and physical checks. Each subsidiary also plans and handles employee benefit plans, including birthday bonus, gift vouchers for holidays, and subsidies for wedding/funeral/celebrations, meal party from time to time, group recreational activities, among other things.

2. Employee continuing education and training

To enable employees to understand functions, operating objectives and related administrative processes of each department and familiarize them with the workplace and relevant regulations and systems, the Company conducts orientations for all new employees. Appraisals and reviews are conducted continuously for the purpose of enhancing employees’ performance and expertise. The Company also cultivates the technical and managerial trainees at different levels, with internal and external training provided, to enrich the competitiveness with favorable human resources.

3. Retirement systems and implementation

The subsidiaries in China join the pension insurance, pursuant to the local labor regulations, with monthly contributions while paying for the social insurance for employees to the local social security bureaus. Once employees reach the retirement age, they may claim

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pensions from the social security bureaus. All pensions of the current and retired employees are coordinated and arranged by the local governments.

For the subsidiaries in Taiwan, the Labor Standard Act is applied. Employees under the new system, pensions as 6% of their monthly salary are contributed to their personal labor pension accounts, as a protection for their rights. Employees may opt to contribute 0-6% of their monthly salary are contributed to their personal pension accounts at their will. Once employees reach the statutory age stipulated by the government, they may claim the pension from the government, paid monthly or at once.

Other companies under the Group also handle retirement pursuant to their local regulations.

Status of labor-management agreements and measures for preserving employees' rights and interests

Employees of subsidiaries of the Company are protected pursuant to the local labor and contractual regulations and other related regulations of the locations where they operate. Also at the monthly mobilization meeting, the agenda of “I have something to say” is arranged, for employees to express their opinions timely. Up to now, there has been no labor disputes for negotiation.

Working environment and safety protection guidelines of employee and its implementation

We are devoted in creating environment protection, as well as safety and healthy working environment for employee, in order to take social responsibility and corporate sustainability while corporate growing. Not only follow authority regulations, but also our subsidiary company in Fuzhou and Taiwan were both certified with ISO 45001 occupational health and safety certification and ISO 14001 environmental management certification. Related measures, programs and training are as follows.

Item	Content
Access control	1. Plant safety protection by safety guards 24/7. 2.Access control system and surveillance system.
Equipment maintenance	1. Public safety check every two year based on Regulations for inspecting and reporting buildings public security. 2. Fire safety check every year based on Fire Services Act. 3.Maintain and check high-voltage, low-voltage eletrical equipment, emergency lift and fire safety equipment regularly.
Disaster prevention and response	1. Fire drill executed annually based on “Emergency response guideline”, which defines responsibility of related department, reposonse, reporting procedure and other task contents. 2. AED in plant.
Regular working environment monitoring	Working environment monitoring implemented regularly. Check oil fog left, noise, illuminance within working environment every six month to prevent from physical and chemical hazard factor. Provide a healthy safety working environment for employee and keep them safety from occupational injury.
Regular safety and health education training	1. Safety and health education for every new employee. 2. Safety and health education training one hour per month for in-service employee.

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Item	Content
	3. Get technical license legally. (emergency, crance operator, forklift driver)
Regular health examination and maintenance	1.Health examination for in-service employee. 2. Health maintenance based on article 15 in “The Law of Occupational Safety and Hygiene”to protect employee safety.
Others	Implement“human factors engineering hazard prevention＂, “prevention plan for abnormal work loading＂,“Female protection plan＂and“occupational infringement＂, etc for employee in need when facing long working hour, maternity, bullyingor sexual harrassment in working place.

(II)List any losses suffered by the Company in the most recent fiscal year and up to the annual report publication date due to labor disputes and disclosing an estimate of possible expenses that could be incurred currently and in the future and measures being or to be taken. If a reasonable estimate cannot be made, an explanation of the facts of why it cannot be made shall be provided.

The Group have valued the labor relations. In the most recent fiscal year and up to the annual report publication date, no loss suffered due to labor disputes.

F.Important Contracts

Nature of contract	Contracted parties	The starting and end dates of the contract	Major content	Restric tive clause s
Lease contract	Party A: WKM Party B: WKPT	March 1, 2019 to February 28, 2029	Lease of plants	None
Mortgage contract	Mortgagor: WKPF Debtor: WKPF Creditor: Xiamen Bank	December 19, 2019 to November 14, 2021	The mortgagor and the creditor entered a contract to provide a guarantee to the mortgaged plant. The principal of the guaranteed credit does not exceed CNY 15 million.	None
Credit Facility Contract	Debtor: WKPT Creditor: E.Sun Bank	May 29, 2020 to May 29, 2021	E.Sun Bank provides WKPT a credit facility for NT$30 million (including the consolidated limit and exposure limit). WKPT has drawn a short-term loan NT$15 million and NT$10 million, with periods of April 6, 2021 to October 6, 2021 and February 4, 2021 to August 2, 2021, respectively. Interests are paid monthly. Up to the annual report publication date, the contract has been pending for renewal.	None

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Nature of contract	Contracted parties	The starting and end dates of the contract	Major content	Restric tive clause s
Credit Facility Contract	Debtor: WKPT Creditor: Chang Hwa Bank	April 30, 2021 to April 30, 2022	Chang Hwa Bank provides WKPT a credit facility for NT$30 million. WKPT has drawn a short-term loan NT$30 million, with periods of December 24, 2020 to June 24, 2021 and January 29, 2021 to July 29, 2021 and April 24, 2021 to October 24, 2021. Interests are paid monthly.	None
Credit Facility Contract	Debtor: WKPT Creditor: Cathay United Bank	April 29, 2021 to April 29, 2022	Cathay United Bank provides WKPT a credit facility for NT$60 million. WPKT has not drawn up to the annual report publicationdate	None
Mortgage contract	Mortgagor: WKPT Debtor: WKPT Creditor: Chang Hwa Bank	May 3, 2017 to May 3, 2023	The mortgagor and the mortgagee entered a contract to provide a guarantee to equipment. The credit of the provided maximum mortgage guarantee is NT$10.80 million.	None

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VI.Overview of Company Financial Status

A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year
(I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome

1. Condensed BalanceSheet

A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year (I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome 1. Condensed BalanceSheet	A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year (I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome 1. Condensed BalanceSheet	A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year (I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome 1. Condensed BalanceSheet	A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year (I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome 1. Condensed BalanceSheet	A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year (I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome 1. Condensed BalanceSheet	A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year (I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome 1. Condensed BalanceSheet	A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year (I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome 1. Condensed BalanceSheet	A.The Consolidated Financial Statements and Information for the Recent Five Fiscal Year (I) Condensed Balance Sheet and Condensed Statement of ComprehensiveIncome 1. Condensed BalanceSheet
Unit：NT$1,000
Year Item		Financial Information intheLastFiveYears					2021.03.31 Financial Information
		2016	2017	2018	2019	2020
Current Assets		477,418	634,587	780,136	743,390	711,791	731,667
Property, Plant and Equipment		233,892	340,321	342,829	316,550	269,694	256,735
Intangible Assets		3,318	3,598	5,475	6,513	10,265	9,472
Other Assets		133,101	64,930	28,830	81,898	337,584	345,707
Total Assets		847,729	1,043,436	1,157,270	1,148,351	1,329,334	1,343,581
Current Liabilities	Before Distribution	195,521	427,963	431,581	349,695	411,050	405,309
	After Distribution	195,521	457,963	476,581	247,998	Note	Note
Non-current	Liabilities	－	6,432	7,562	53,984	44,472	44,611
Total Liabilities	Before Distribution	195,521	434,395	439,143	403,679	455,522	449,920
	After Distribution	195,521	464,395	484,143	301,982	Note	Note
Equity Attributable to Shareholders of the Parent		212,741	608,782	717,866	744,377	873,533	893,382
Capital Stock		207,700	300,000	300,000	300,000	338,990	338,990
Capital Surplus		－	216,423	216,423	216,423	334,365	334,365
Retained Earnings	Before Distribution	(57)	90,230	208,154	255,975	222,844	247,943
	Before Distribution	(57)	60,230	163,154	154,278	Note	Note
Other EquityInterest		5,098	2,129	(6,711)	(28,021)	(22,666)	(27,916)
Treasury Stock		－	－	－	－	－	－
Equity attributable to predecessorsedinterests undercommoncontrol		439,467	－	－	－	－	－
Non-controlling Interests		－	259	261	295	279	279
Total Equity	Before Distribution	652,208	609,041	718,127	744,672	873,812	893,661
	Before Distribution	652,208	579,041	673,127	642,975	Note	Note

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

Note : The proposal of earning distribution for 2020 has been approved by the Board of Directs, but the resolution of the shareholders’ meeting is required.

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2. Condensed Statement of ComprehensiveIncome

Unit ： NT$1,000

Year Item	Financial Information intheLastFiveYears	Financial Information intheLastFiveYears	Financial Information intheLastFiveYears	Financial Information intheLastFiveYears	Financial Information intheLastFiveYears	2021.03.31
	2016	2017	2018	2019	2020
Operating Revenue	496,598	813,626	1,097,619	1,035,899	863,749	231,885
Operating Margin	208,666	266,980	312,200	267,301	201,800	66,087
Operating Net Profit	101,976	144,902	166,977	111,008	78,839	29,433
Non-operating Income andExpenses	11,677	(2,703)	25,607	14,482	7,970	657
Net profit before tax	113,653	142,199	192,584	125,490	86,809	30,090
Net Income of Continuing Business Unitforthisfiscalyear	101,742	110,713	147,918	93,071	68,565	25,099
discontinued operation income	－	－	－	－	－	－
Net Income	101,742	110,713	147,918	93,071	68,565	25,099
Other Comprehensive IncomeNet of Tax	(28,128)	(2,993)	(8,832)	(21,526)	5,340	(5,250)
Total Comprehensive Income	73,614	107,720	139,086	71,545	73,905	19,849
Net Income	(57)	90,287	147,924	92,821	68,566	25,099
Equity attributable to predecessors’ interests undercommoncontrol	101,799	20,466	－	－	－	－
Net income attributable to non-controllinginterests	－	(40)	(6)	250	(1)	－
Total comprehensive income attributable to stockholders ofthe parent	5,041	87,318	139,084	71,511	73,920	19,849
Equity attributable to predecessors’ interests undercommoncontrol	68,573	20,466	－	－	－	－
Total comprehensive income attributable tonon-controllinginterests	－	(64)	2	34	(15)	－
Earnings Per Share(NT$)	3.39	3.69	4.93	3.09	2.06	0.74

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

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

Year	AccountingFirm	Name ofCPA	Audit Opinion
2016	KPMG	Chiun-Mang, Chen	Modified unqualified opinion(note)
2017	KPMG	Chang-Hsieh Chen, Tsu-Hsin Chang	Unqualified opinion
2018	KPMG	Chang-Hsieh Chen, Tsu-Hsin Chang	Unqualified opinion
2019	KPMG	Chang-Hsieh Chen, Tsu-Hsin Chang	Unqualified opinion
2020	KPMG	Chang-Hsieh Chen, Tsu-Hsin Chang	Unqualified opinion

Note :The CPAs explained that the pro forma consolidated financial statement was made for World Known MFG(Cayman)Limited. listing application

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Reasons of changing accountants in the most recent five years:

The accountant for the FY 2016 was Chen, Chun-Man, CPA, from KPMG Taiwan. However, to accommodate the internal adjustment of KPMG Taiwan and the Company’s application of IPO, the auditing and attesting accountants for financial statements of the Company were replaced by Chen, Cheng-Hsue, CPA, and Chang, Zhi-Hsin, CPA from 2017.

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B.Financial Analyses for the Past Five FiscalYeas

Item	Year	Financial Information intheLastFiveYears	Financial Information intheLastFiveYears	Financial Information intheLastFiveYears	Financial Information intheLastFiveYears	Financial Information intheLastFiveYears	As of 2021 March 31
		2016	2017	2018	2019	2020
Financial Structure （%）	Debt to asset ratio	23.06	41.63	37.95	35.15	34.27	33.49
	Long term capital to property, plant and equipment ratio	278.85	180.85	211.68	252.30	340.49	365.46
Solvency	Current ratio（%）	244.18	148.28	180.76	212.58	173.16	180.52
	Quick ratio（%）	169.54	94.20	119.07	145.00	118.80	119.34
	Interest coverage ratio（multiple）	79.17	107.12	166.73	79.87	44.69	50.41
Operating Performance	Receivable turnover rate(times)	5.85	6.61	6.03	6.00	5.62	5.68
	Average cash recoveryday	62	55	61	61	65	64
	Inventory turnover rate (times)	1.68	2.87	3.14	2.96	2.65	2.56
	Payable turnover rate(times)	4.01	3.78	3.67	4.32	4.28	4.04
	Days sales outstanding	217	127	116	123	138	143
	Property, plant and equipment turnover rate (times)	1.95	2.83	3.21	3.14	2.95	3.52
	Total asset turnover rate(times)	0.64	0.86	1.00	0.90	0.7	0.69
Profitability	Return on assets(%)	13.18	11.83	13.53	8.18	5.53	7.66
	Return on equity (%)	17.91	17.56	22.29	12.73	8.47	11.36
	Pre-tax netprofit topaid-in capital ratio(%)	54.72	47.40	64.19	41.83	25.61	35.51
	Netprofit rate(%)	20.49	13.61	13.48	8.98	7.94	10.82
	Earningsper share(NT$)	3.39	3.69	4.93	3.09	2.06	0.74
Cash Flow （%）	Cash flow ratio	85.95	39.97	47.42	46.13	35.94	-0.46
	Cash flow adequacyratio	Note	Note	Note	Note	120.67	116.53
	Cash reinvestment ratio	5.76	19.10	16.71	10.00	3.45	-0.14
Leverage	Operatingleverage	1.38	1.39	1.37	1.66	1.88	1.56
	Financial leverage	1.01	1.01	1.01	1.01	1.03	1.02
Explain changes in financial ratios over the past two fiscal years (analyses of changes less than 20% may be waived) 1. Increased long term capital to property, plant and equipment ratio:mainly because cash increase and had not purchaede large-scale property, plant and equipment in 2020. 2. Decreased interest coverage ratio: mainly because the net incomes before income tax and interest expenses decreased and interest expenses increased in 2020. 3. Decreased total asset turnover rate:mainly because net sales decreased in 2020. 4. Decreased return on assets: mainly because the after-tax net profit decreased in 2020. 5. Decreased return on equity: mainly because the after-tax net profit decreased in 2020. 6. Decreased ratio of pre-tax net income to paid-in capital: mainly because the company’s initial listing for capital increase and the pre-tax net income decreased in 2020. 7. Decreased EPS (NT$): mainly because the gains attributed to the shareholders of the parent company decreased as due to the impact of COVID-19 in 2020, the market demand had plummeted, orders had become conservative , and profit had been reduced due to net sales had decreased and product mix factors, as well as the large exchange rate fluctions had caused the loss from foreign currency exchanges. 8. Decreased cash flow ratio:mainly because decrease in cash inflow from operating activities in 2020. 9. Increased cash reinvestment ratio: mainlybecause decrease in cash inflow from operatingactivities in 2020.

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

Note: The Company was founded in 2015; therefore, there is no financial information of the most recent five years for calculation.

The formula for financial analysis is as follows:

FinancialStructure
(1) Debt Ratio = Total Liabilities / TotalAssets
(2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment
Solvency
(1) Current Ratio = Current Assets / CurrentLiabilities
(2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / CurrentLiabilities
(3) Interest coverage ratio = Earnings before Interest and Taxes / InterestExpenses

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OperatingPerformance
(1) Receivable Turnover Rate = Net Sales / Average Trade Receivables (including trade receivables and note receivables arising from operatingactivities)
(2) Average Cash Recovery Day = 365 / Receivable TurnoverRate
(3) Inventory Turnover Rate = Cost of Sales / AverageInventory
(4) Payable Turnover Rate = 365 / Average Trade Payables (including trade payables and note payables arising from operatingactivities)
(5) Days Sales Outstanding = Cost of Sales / Inventory TurnoverRate
(6) Property, Plant and Equipment Turnover Rate = Net Sales / Average Net V\value of Property, Plant and Equipment
(7) Total Asset Turnover Rate = Net Sales / Average TotalAssets
Profitability
(1) Return on Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets
(2) Return on Equity = Net Income / Average TotalEquity
(3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-inCapital
(4) Pre-tax Net Profit to Paid-in Capital Ratio = Income before Tax / Paid-inCapital
(5) Net Profit Rate = Net Income / NetSales
(6) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of SharesOutstanding
CashFlow
(1) Cash Flow Ratio = Net Cash Provided by Operating Activities / CurrentLiabilities
(2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operating Activities / Five-year Sum of Capital Expenditures, Inventory Additions, and CashDividend
(3) Cash Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends)/ (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital)
Leverage
(1) Operating Leverage = (Net Sales - Variable Cost) / Income fromOperations
(2) Financial Leverage = Income from Operations / (Income from Operations - InterestExpenses)

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C.Audit Committee Report

World Known MFG(Cayman) Limited

Audit Committee Report

The Board of Directors has prepared the 2020 Business Report, Consolidated Financial Report and proposal of earning distribution. The Consolidated Financial Report has been audited by Cheng-Hsueh Chen, CPA and Tzu-Hsin Chang, CPA of KPMG Taiwan, with an independent auditor's report with unqualified opinion. The Audit Committee has reviewed the abovementioned reports prepared by the Board of Directors and found them to be in compliance with regulatory requirements. We hereby issue this report in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of The Company Act. The report is thus made and please review.

2021 Annual General Meeting

World Known MFG(Cayman) Limited

Convener of Audit Committee:

==> picture [38 x 40] intentionally omitted <==

March 24, 2021

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D.The financial statements in the most recent fiscal year, including an auditor's report prepared by CPAs, and 2-year comparative balance sheet, statement of comprehensive income, statement of changes in equity, cash flow chart, and any related footnotes or attached appendices:Please refer to appendix.
E.Standalone financial statements in the most recent fiscal year, certified by a CPA:The Company is a foreign issuer so this is notapplicable.
F.If the company or its affiliates have experienced financial difficulties in the most recentfiscalyear and as of the date of publication of the annual report, the annual report shall explain how such difficulties affect the company's financial situation:None.

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

A.FinancialStatus

ancialStatus
					Unit：NT$1,000
Item	Year	2019	2020	Change Amount	%	Note
CurrentAssets		743,390	711,791	(31,599)	(4.25)
Property,Plant andEquipment		316,550	269,694	(46,856)	(14.80)	1
Intangible Assets		6,513	10,265	3,752	57.61
Other Assets		81,898	337,584	255,686	312.20	2
Total Assets		1,148,351	1,329,334	180,983	15.76	3
CurrentLiabilities		349,695	411,050	61,355	17.55	4
Non-currentLiabilities		53,984	44,472	(9,512)	(17.62)
Total Liabilities		403,679	455,522	51,843	12.84	5
CapitalStock		300,000	338,990	38,990	13.00	6
CapitalSurplus		216,423	334,365	117,942	54.50	7
RetainedEarnings		255,975	222,844	(33,131)	(12.94)	8
Non-controlling interests		(28,021)	(22,666)	5,355	(19.11)
Total Equity		295	279	(16)	(5.42)
Current Assets		744,672	873,812	129,140	17.34	9

Description of change analyses: (amount changed for 10% or more, and such amount reaches 1% of the total assets for the same year)

Decreases in Property, Plant and Equipment in 2020 are mainly because the company had not purchaede large-scale property, plant and equipment in 2020.
Increased other assets in 2020 are mainly because the classification of fixed deposits for more than three months into financial assets measured at amortized cost.
Increased total assets in 2020 are mainly because the company’s initial listing for capital increase in 2020.
Increased current liabilities in 2020 are mainly because the short-term loan increased.
Increased total liabilities in 2020 are mainly because the short-term loan increased.
Increased capital stock in 2020 are mainly because the company’s initial listing for capital increase in 2020.
Incerased captital surplus in 2020 are mainly because the company’s initial listing for capital increase in 2020.
Decreased retained earnings in 2020 are mainly because net profit decreased compared with last year due to net sales decreased.
Increased total equity in 2020 are mainly because the company’s initial listing for capital increase in 2020.

B.FinancialPerformance

(I)FinancialPerformanc

ialPerformance ancialPerformanc	ialPerformance ancialPerformanc
			Unit:NT$1,000
Year Item	2019	2020	Change		Note
			Amount	%
Operating NetProfit	1,035,899	863,749	(172,150)	(16.62)	1
Operating Costs	768,598	661,949	(106,649)	(13.88)	2

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Year ~~I~~tem	2019	2020	Change	Change	Note
			Amount	%
OperatingMargin	267,301	201,800	(65,501)	(24.50)	3
OperatingExpenses	156,293	122,961	(33,332)	(21.33)	4
Non-operating income and expenses	111,008	78,839	(32,169)	(28.98)	5
Net profit before tax	14,482	7,970	(6,512)	(44.97)
Operating NetProfit	125,490	86,809	(38,681)	(30.82)	5
Tax Expenses	32,419	18,244	(14,175)	(43.72)	6
NetIncome	93,071	68,565	(24,506)	(26.33)	7
Description of change analyses: (amount changed for 10% or more, and such amount reaches 1% of the total assets for the same year) 1.Operating Net Profit:Mainly because the impact of COVID-19 in 2020, the market demand had plummeted and orders had become conservative , operating net profit decreased. 2.Operating Costs:Mainly because the decreased operating revenue resulted in decreased operating costs. 3.Operating Margin:Mainly because the decreased operating revenue and product sales composition changes resulted in decreased operating margin. 4. Operating Expenses:Mainly because the decreased operating revenue resulted in export-related selling expense decreased compared with last year. 5. Non-operating income and expenses and Operating Net Profit: Mainly because the impact of COVID-19 in 2020, operating net profit decreased andthe large exchange rate fluctions caused the loss from foreign currency exchanges. 6. Tax Expenses: Mainly because the decreased revenue of 2020 resulted the corresponding income tax expenses decreased. 7. Net Income: Mainly because the impact of COVID-19 in 2020, operating net profit decreased and the large exchange rate fluctions caused the loss from foreign currency exchanges.

(II)Sales projection and itsrationale

The Company formulated the achievable sales volume based on the market demands and assessments to the sales of and supplies to the clients. Please refer to the overview of operation for the related research and analysis to markets, as well as the current status and development of the industry.

(IIII)Plans in response to possible impact on the Company’s future financialperformance

The Company has a robust financial structure, while it keeps on deepening the operations management and reasonable controls over costs and expenses, so the future business growth may be satisfied.

C.CashFlow

(I) Analysis of Cash Flow in the most recentyear

The Company has a robust financial structure, while operations management and reasonable controls over costs business growth may be satisfied. C.CashFlow (I) Analysis of Cash Flow in the most recentyear	The Company has a robust financial structure, while operations management and reasonable controls over costs business growth may be satisfied. C.CashFlow (I) Analysis of Cash Flow in the most recentyear	The Company has a robust financial structure, while operations management and reasonable controls over costs business growth may be satisfied. C.CashFlow (I) Analysis of Cash Flow in the most recentyear	The Company has a robust financial structure, while operations management and reasonable controls over costs business growth may be satisfied. C.CashFlow (I) Analysis of Cash Flow in the most recentyear	it keeps on deepening the and expenses, so the future	it keeps on deepening the and expenses, so the future
				Unit:NT$1,000 Remedies for the insufficient cashamount Investment plans Wealth management plans – –
Cash balance at the beginning of the period	Net cash flow from operating activities for the whole year	Net cash flow from investment activities and fund-raising activities for the whole year	Amount of remaining cash (exchange rate effects included)	Remedies for the insufficient cashamount
				Investment plans	Wealth management plans
351,402	147,741	(220,345)	281,626	–	–
Analyses of the changes to cash flow for 2020

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Operating activities: the net cash inflow of NT$147,741,000 is mainly the result of the profit of 2020.
Investment activities: the net cash outflow of NT$316,642,000 are mainly because the classification of fixed deposits for more than three months into financial assets measured at amortized cost.
Fund-raising activities: the net cash inflow of NT$96,297,000 is mainly because the company’s initial listing for capital increase in 2020.
Cash inflow increased NT$2,828,000 due to the fluctuating exchange rates.

(II)Improvement plans for insufficient liquidity ：

The insufficient liquidity didn’t occurred to the Company, so it isN/A.

(III) Analysis for the changes of cash flow in the next year:

The consolidated cash balance at the end of 2020 was NT$281,626,000. It is expected that the operating activities will maintain the net cash inflow due to the continuing profit. These should be sufficient to support the cash outflows from investment activities and fund-raising activities and thus no concern of illiquidity.

D.The impact of major capital expenditures in the most recent year on financialstatus

The subsidiaries of the Company, WKPT and WKPF, to reinforce the capabilities of production and quality control, continue introducing the most advanced automated production equipment and inspection equipment. In the most recent year, WKPT bought the automated machinery equipment, and WKPF bought three scanners from Zeiss. These capital expenditures for the advanced equipment will become foundation of the future development for the Company. These funds were from the operating funds and bank borrowings, with no adverse effects to the Company’s finance and business due to increased capital expenditures.

E.Reinvestment Policy in the Most Recent Year, Reinvestment Results with Reasons and Improvement Plans, and Investment Plan for the UpcomingYear
(I)The re-investment policy of the Company

The re-investment policy of the Company takes the main business as the core, and the approach is to strengthen the vertical integration of up- and downstream. various analyses and measurements of the effects to the Group are conducted for the investment projects, and the internal control system “Investment Cycle” and the “Regulations Governing the Acquisition and Disposal of Assets.”

(II)The main reasons of reinvestment performance (profit or loss) in the most recent year and following improvementplants

and measurements of the effects to the Group are conducted for the investment projects, and the internal control system “Investment Cycle” and the “Regulations Governing the Acquisition and Disposal of Assets.” )The main reasons of reinvestment performance (profit or loss) in the most recent year and following improvementplants	and measurements of the effects to the Group are conducted for the investment projects, and the internal control system “Investment Cycle” and the “Regulations Governing the Acquisition and Disposal of Assets.” )The main reasons of reinvestment performance (profit or loss) in the most recent year and following improvementplants	and measurements of the effects to the Group are conducted for the investment projects, and the internal control system “Investment Cycle” and the “Regulations Governing the Acquisition and Disposal of Assets.” )The main reasons of reinvestment performance (profit or loss) in the most recent year and following improvementplants	and measurements of the effects to the Group are conducted for the investment projects, and the internal control system “Investment Cycle” and the “Regulations Governing the Acquisition and Disposal of Assets.” )The main reasons of reinvestment performance (profit or loss) in the most recent year and following improvementplants	and measurements of the effects to the Group are conducted for the investment projects, and the internal control system “Investment Cycle” and the “Regulations Governing the Acquisition and Disposal of Assets.” )The main reasons of reinvestment performance (profit or loss) in the most recent year and following improvementplants
Unit：NT$1,00
Invested Company	Shareholding (direct and indirect)	Income or Loss from Reinvestment Recognizedin 2020	Reasons of Reinvestment Performance	Improvement Plan
Honour Glory International Ltd	100	93,089	Goodbusiness performance	－
World Known Precision Industry (Fuzhou) Co.,Ltd	100	93,089	Good business performance	－
World Known Precision Industry Co.,Ltd.	100	1,318	Good business performance	－

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Invested Company	Shareholding (direct and indirect)	Income or Loss from Reinvestment Recognizedin 2020	Reasons of Reinvestment Performance	Improvement Plan
WKP HITECH USA, INC.	90	－	In the initial stage of foundation, there has been no operating activities.	Continuous expansion of the North America market, development of new clients and increasing the competitive edges.

(III)Investment Plan for the UpcomingYear

The Company’s reinvestment policy meets the needs of operational development, every subsidiary’s business looks promising in the upcoming year, and the projected revenue is stable. The Company will draft a new investment plan where it is appropriate in respect of market trends, the Group’s business strategy and financial status.WKPT has obtained the late-stage industrial land of the Ma Chouhou Industrial Park from the Chiayi County Government through an open tender on February 4, 2021. The land area is 17,363.81 square meters, which is equivalent to 5,253 pings. The total transaction amount is NT$249,517,500.

F.Analysis of Risk Management

(I) Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future Response Measures

1. InterestRate

InterestRate
			Uint：NT$1,000 2020 Amt Ratio of Operating Net Profit 7,962 0.92% 1,987 0.23%
Year Item	2019		2020
	Amt	Ratio of Operating Net Profit	Amt	Ratio of Operating Net Profit
Interest income	1,145	0.11%	7,962	0.92%
Interest expenses	1,591	0.15%	1,987	0.23%

low in the net operating revenue; therefore, the movement of interest rates had no significant impact on the Company’s financial and business.

With regard to the funds, the Company always maintains good relationships with banks; not only obtaining sufficient credit facilities, but also seeking the lowest interest rate for borrowing. The Group will raise the required funds by considering the limits of various fund sources and costs. In the future, the movement of interest rates will always be monitored, and the necessary countermeasures will be taken, to mitigate the impact of changed interest rates on the Group.

2. ExchangeRate

The major operating locations of the Groups are China and Taiwan. The procurements are basically made locally. For sales, the export takes about 70%, and gains (loss) of exchange in 2019 and 2020 were NT$(1,817,000) and NT$(11,113,000), respectively. These gains (losses) are insignificant to the operating revenue. Also, the Group takes rigorous and conservative approach toward the foreign currency fund

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management, to mitigate any adverse impact from changed exchange rates. Meanwhile, the information of exchange rates is collect, to fully grasp the trend of exchange rates and ensure the profits, and mitigate the impacts of exchange rate fluctuations on incomes.

The Group’s countermeasures are:

(1) Closely communicating with financial institutions, to grasp the movement of exchange rates, for the purpose of adjusting asset positions in foreign currency properly and lowering the foreign exchange risks.
(2) Continuously monitoring the movement of USD to grasp the market information, while forecasting the long and short-term movement of exchange rates. If exchange rate fluctuations become wider, the transaction prices may be re-negotiated with clients properly, to mitigate the impacts of exchange rate fluctuations on the revenues and profit of the Company.
(3) In the “Regulations Governing the Acquisition and Disposal of Assets,” the regulations to hedge the foreign exchanges are set forth. The products that hedge the risks generated from the Company’s operations shall be selected for trading. The Company operates forward foreign exchanges for the receivables in foreign currencies. The supervisors in charge conducts proper hedge operations with strict controls over the hedged position, to lower the foreign exchange risks.

3. Inflation

In the past, the Group has not been significantly affected by inflation. The quotations to clients are mostly floating with market prices. If any inflation results in the increase of procurement costs, the Company will reflect the price changes of the upstream goods to the cost and quotation when appropriate, to lower the impacts of cost changes on the income of the Company.

(II)The company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby, and future mitigation measures
The Group has been concentrated on the major business and operated the business with a pragmatic approach. The financial policies are rigorous and conservative as a matter of principle. No high-risk and high-leveraged investment is made.
2.The Company has the “Operating Procedures for Loaning Funds to Others,” the “Operating Procedures for Endorsements/Guarantees,” and the “Regulations Governing the Acquisition and Disposal of Assets” in place. These regulations are adhered to, so the related risks are deemed limited.
(III) Research and development work to be carried out in the future, and further expenditures expected for research and developmentwork
1.Application of aluminum alloy: with the energy-saving and environmental friendly trend, we actively develop the aluminum alloy products, such as light-weighted parts of engine, light-weighted parts of chassis, to achieve the goal of light-weighted vehicles.
Participation of the development of parts by clients: to maintain the existing clients, and continue developing the parts required for the new vehicle models, such as E Company and other clients.
Participation of the development of parts of EGR by the domestic brands of China: cooperating with Chinese domestic brands to design and develop parts jointly, by

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integrating the Group’s experience of design, R&D, production and manufacture, to provide more complete suggestions to clients, such as G Company.

Smart plants:
(1) Replacing manual materials taking and placing by robot arms, to enhance the production efficiency, and lower the impacts from the continuing increasing costs of labor. With the auto measuring system, the outcomes of measures are fed to CNC lathe automatically to adjust the precision. The measured data may be retained for the capacity analysis of production process, to enhance the production efficiency and accuracy.
(2) Progresses of production and inspection may be presented in real-time with the visualized electronic bulletin, to accelerate the management and contingency.
Introducing the application of quick mold changing, for real-time reaction and adjustment of online production process, so that the mixed line production (simultaneous production of different items) and low-inventory trends are satisfied.
(IV) Changes of Government Policies and Regulatory Environment and the Effect on the Company's Financial Status as well as mitigationmeasures

The implementation of the Group’s business is pursuant to the domestic and overseas key policies, laws and regulations, while the trends of domestic and overseas key policies and changes to laws are monitored always. Should there be any changes, lawyers, accountants and other relevant units will be consulted or engaged to evaluate and plan related countermeasures, to respond to the evolving market environment timely with proper countermeasures.

(V) ChangesofTechnologyandIndustryandtheEffectontheCompany'sFinancialStatusaswell as mitigationmeasures

For the automobile industry, the global development of technologies and the impacts of addressing environmental friendliness and energy-saving, have driven the automobile industry to intellectual and energy-saving approaches. The developments of full electrical driving, automatic driving, electronic detection (such as tire pressure detector), and better energy-saving (such as better fuel utilization efficiency and light-weighted vehicles) have occurred. The Group shall improve the production processes and invest new equipment to meet the demands of car makers.

Countermeasures:

Except for always grasping the trends and impulses of industry market and technology, the Group also research and plan for the nature, strengths and reliability of products. For the advanced production processes, materials and frameworks, the innovative R&D has been conducted, to provide the most competitive products and services and thus the market share is expanded, as the countermeasures for the dynamic environment of the evolving industry, to introduce new technologies to products from time to time.

(VI) Effect of Changes in Corporate Image on the Company's Crisis Management and mitigation measures

The Company stays true to the philosophy of ethical management. Since foundation, the Company has continued to actively strengthen the internal management and improve the capabilities of quality assurance, in order to establish the Company’s corporate image, so that the trust of clients to the Company’s brand is enhanced. Consequently, there has been no such risk.

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(VII) Expected Benefits and Potential Risks Associated with any Merger and Acquisitions, and mitigationmeasures

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

(VIII) Expected Benefits and Potential Risks Associated with Expansion of Plants and mitigation measure

In the most recent years and up to the printing date of the annual report, there has been no expansion of plants.

(IX) Risks Associated with Concentration of Purchases and Sales and mitigationmeasures
Risks Associated with Concentration of Purchases and mitigationmeasures

The major procured materials of the Company is cast iron blanks. The largest supplier of the Company is the World Known Manufacturing Co., Ltd. The main reason is that World Known Manufacturing Co., Ltd has been a supplier to the Group for a long time, with stable delivery time, prices and quality. However, in the recent years, to diversify the concentration risk of procurement, the percentage of procurement from this supplier has been gradually on the decline. The Group also has long-term business relationship with many casting plants, to ensure the stable procurement sources. The Group has good relationships with suppliers, with stable procurement sources and there has no disruption of procurement due to materials shortage.

Risks Associated with Concentration of Sales and mitigationmeasures

Other than the close cooperation with A Company, the Company has obtained trusts from other major brands through the experience of cooperation with other clients and the technology improvement from the production process R&D. In the future, as the benefits from active expansion of new business sources and development of new client base show a gradual decline, the dependence of the Group on one single client is expected to decline continuously and the risk of higher sales weight will be lowered further.

(X)PotentialImpactandRiskAssociatedwithBulkTransferofSharesOwnedbyDirectors, Supervisors and Major Shareholders with more than 10% shares,

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

(XI) Potential Impact and Risk Associated with Management rights and Company’s mitigation measures

There is no change in the Company’s management rights in the Most Recent Year and as of the date of publication of the annual report.

(XII) Risks Associated with Litigious and Non-litigiousMatters

If any final judgment, important ongoing lawsuit, non-litigation matter or administrative litigation matter in relation to the Directors, Supervisors, general managers, de facto responsible persons of the company, and the major shareholders and affiliated companies with more than 10% of the Company’s shares, may have a significant effect on the company's shareholders' equity or securities price, its fact, claim amount, starting date of legal actions, relevant parties and update of its status

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as of the date of publication of the annual report should be disclosed :None

(XIII) Other Important Risks and Mitigation Measures ： None.

G.Other important matters ： None.

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VIII.SpecialDisclosure

A.Information Related to the Company’sAffiliates

(I) Organizational Chart:

==> picture [469 x 322] intentionally omitted <==

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

World Known MFG (Cayman)
Limited
100% 100% 90%
World Known Precision
Honour Glory WKP HITECH
Industry Co., Ltd.
International Ltd. USA, INC.
(TAIWAN)
(SAMOA) (USA)
100%
World Known Precision
Industry (Fuzhou) Co., Ltd
(CHINA)
----- End of picture text -----

(II)Basic Information of Affiliated Companies(As of December 31,2020)

Name	Date of Establishment	Address	Paid-in Capital	Main Business or Product Category
World Known Precision Industry Co.,Ltd.	2016/11	No. 470,Sec.3,Ya-Tan Rd.,DayaDist.,Taichun g City,Taiwan,428	80,000	Precision Metal processing Business
Honour Glory International Ltd.	2003/11	Offshore Chambers, P.O.Box 217 , Apia, Samoa	185,728 (USD 6,521)	General Investment
World Known Precision Industry (Fuzhou) Co., Ltd.	2004/1	No. 161, North Hu-Wen Rd., Wen Wu Sha Town, Chang-Le Dist., Fuzhou, Fujian Prov., China	242,080 (USD 8,500)	Precision Metal processing Business
WKP HITECH USA, INC.	2016/9	1955 Brookfield Court, Columbus, IN, USA	2,848 (USD100)	General Investment

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

Note ： The amount of NT dollar paid-in capital of each subsidiary is converted at the exchange rate of 28.48 as of December 31, 2020.

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。 (III)The Company is presumed the existence of controllingand subordinate relation: None

(IV) Sectors covered by the Group’s Business The man businesses for the affiliated companies of the Group include: General investment; Manufacturing and distribution of energy-saving related products for commercial vehicles powertrain systems such as air disc brakes, brake lining backplates, turbocharger housing and elbows, flywheel housings, rocker lever housings, exhaust manifolds, brackets, spindles, brake system components for wind turbines 。
and other components for industry machinery and equipments
(V) Name of Directors, Supervisors and General Manager in each Affiliated Company and their Shareshereof.

	December 31,2020 Unit：1,000shares Title Name of Representative(s) Holding Company Shareholding Shares % Chairman Lu,Huang-Fu World Known MFG (Cayman) Limited 8,000 100 General Manager Tseng,Kuo-Hsien Chairman Hunag,Shih-Hsun World Known MFG (Cayman)Limited 6,521 100 Chairman Lu,Huang-Fu Honour Glory International Ltd. Note 100 General Manager Huang,Yu-Ting Chairman Lu,Huang-Fu World Known MFG (Cayman)Limited 90 90	December 31,2020 Unit：1,000shares Title Name of Representative(s) Holding Company Shareholding Shares % Chairman Lu,Huang-Fu World Known MFG (Cayman) Limited 8,000 100 General Manager Tseng,Kuo-Hsien Chairman Hunag,Shih-Hsun World Known MFG (Cayman)Limited 6,521 100 Chairman Lu,Huang-Fu Honour Glory International Ltd. Note 100 General Manager Huang,Yu-Ting Chairman Lu,Huang-Fu World Known MFG (Cayman)Limited 90 90	December 31,2020 Unit：1,000shares Title Name of Representative(s) Holding Company Shareholding Shares % Chairman Lu,Huang-Fu World Known MFG (Cayman) Limited 8,000 100 General Manager Tseng,Kuo-Hsien Chairman Hunag,Shih-Hsun World Known MFG (Cayman)Limited 6,521 100 Chairman Lu,Huang-Fu Honour Glory International Ltd. Note 100 General Manager Huang,Yu-Ting Chairman Lu,Huang-Fu World Known MFG (Cayman)Limited 90 90	December 31,2020 Unit：1,000shares Title Name of Representative(s) Holding Company Shareholding Shares % Chairman Lu,Huang-Fu World Known MFG (Cayman) Limited 8,000 100 General Manager Tseng,Kuo-Hsien Chairman Hunag,Shih-Hsun World Known MFG (Cayman)Limited 6,521 100 Chairman Lu,Huang-Fu Honour Glory International Ltd. Note 100 General Manager Huang,Yu-Ting Chairman Lu,Huang-Fu World Known MFG (Cayman)Limited 90 90	December 31,2020 Unit：1,000shares Title Name of Representative(s) Holding Company Shareholding Shares % Chairman Lu,Huang-Fu World Known MFG (Cayman) Limited 8,000 100 General Manager Tseng,Kuo-Hsien Chairman Hunag,Shih-Hsun World Known MFG (Cayman)Limited 6,521 100 Chairman Lu,Huang-Fu Honour Glory International Ltd. Note 100 General Manager Huang,Yu-Ting Chairman Lu,Huang-Fu World Known MFG (Cayman)Limited 90 90
Company	Title	Name of Representative(s)	Holding Company	Shareholding
				Shares	%
World Known Precision Industry Co., Ltd.	Chairman	Lu,Huang-Fu	World Known MFG (Cayman) Limited	8,000	100
	General Manager	Tseng,Kuo-Hsien
Honour Glory International Ltd.	Chairman	Hunag,Shih-Hsun	World Known MFG (Cayman)Limited	6,521	100
World Known Precision Industry (Fuzhou) Co., Ltd.	Chairman	Lu,Huang-Fu	Honour Glory International Ltd.	Note	100
	General Manager	Huang,Yu-Ting
WKP HITECH USA, INC.	Chairman	Lu,Huang-Fu	World Known MFG (Cayman)Limited	90	90

Note:These Companies are limited companies without issuance of shares

(VI) Financial Status and Operational Performance of Every Affliated Companies (As of December 31,2020)

(VI) Financial Status and Operational Performance December 31,2020)	(VI) Financial Status and Operational Performance December 31,2020)	(VI) Financial Status and Operational Performance December 31,2020)	(VI) Financial Status and Operational Performance December 31,2020)	(VI) Financial Status and Operational Performance December 31,2020)	of Every Affliated Companies (As of	of Every Affliated Companies (As of	of Every Affliated Companies (As of	of Every Affliated Companies (As of
					Unit:NT$1,000;forigen currency1,000 Operating Revenue Operating Net Profit Current profit and loss EPS (NT$) 317,552 638 1,318 0.16 — USD (1) USD 3,152 USD 0.48 RMB 128,818 RMB 23,116 RMB 21,746 Note — — — 0
Company	Capital	Total Assets	Total Liabilities	Net Worth	Operating Revenue	Operating Net Profit	Current profit and loss	EPS (NT$)
World Known Precision Industry Co.,Ltd.	80,000	279,364	181,781	97,583	317,552	638	1,318	0.16
Honour Glory International Ltd.	USD 6,521	USD 23,896	USD 137	USD 23,759	—	USD (1)	USD 3,152	USD 0.48
World Known Precision Industry (Fuzhou) Co.,Ltd.	USD 8,500	RMB 210,182	RMB 55,620	RMB 154,562	RMB 128,818	RMB 23,116	RMB 21,746	Note
WKP HITECH USA, INC.	USD 100	USD 98	—	USD 98	—	—	—	0

Note:These Companies are limited companies without issuance of shares.

(VII) Consolidated Financial Statements

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

(VIII) RelationReport ： N/A.

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B.Transaction about the company’s private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annualreport
None.
C.Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annualreport
None.
D.Other matters that require supplementary explanations

None.

E.Any matters listed in Subparagraph2, Paragraph 3, Article 36 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred in the most recent fiscal year and as of the dateofpublication of the annual report, such situations:None.

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Appendix

Stock Code:4581

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) World Known MFG (Cayman) Limited and Subsidiaries

Consolidated Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2020 and 2019

Address: The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KYI-1208,Cayman Islands. Telephone: 886-4-2567-7958

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Consolidated Balance Sheets
5. Consolidated Statements of Comprehensive Income
6. Consolidated Statements of Changes in Equity
7. Consolidated Statements of Cash Flows
8. Notes to the Consolidated Financial Statements
(1)
Company history
(2)
Approval date and procedures of the consolidated financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
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Related-party transactions
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Pledged assets
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(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Major shareholders
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Independent Auditors’ Report

To the Board of Directors of World Known MFG (Cayman) Limited:

Opinion

We have audited the consolidated financial statements of World Known MFG (Cayman) Limited (the ” Company”) and its subsidiaries (the” Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China for year 2020; we conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Enforcement letter FinancialSupervisory-Securities-Auditing-1090360805 and the auditing standards generally accepted in the Republic of China for year 2019. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Appropriateness of Revenue Recognition Timing

Please refer to Note 4(m) to the consolidated financial statements for accounting policy of revenue recognition, and Note 6(t) for explanation of revenue recognition.

3-1

Description of key audit matter:

Revenue is the key performance indicator for evaluating the performance of the financial and operation of the Group. In addition, revenue is recognized when the control in each individual contract with customers is transferred. The Company recognizes revenue depending on the various sales terms in each individual contract with customers to ensure the significant risks and rewards of ownership have been transferred. Therefore, the revenue recognition is one of the key audit matters in our audit.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included assessing and testing the Group’s internal controls surrounding revenue recognition; conducting customer trend analysis to assess the existence of any significant exception; on a sample basis, inspecting contracts with customers or customers’ orders, and assessing whether the accounting treatment of the related contracts is applied appropriately, and performing test of details on sales to assess the existence, accuracy and appropriateness of revenue recognition, and performing sales cut-off test of a period before and after the financial position date by vouching related document of sales transactions to determine whether revenue have been appropriately recognized.

2. Inventory Valuation

Please refer to Note 4(h) to the consolidated financial statements for accounting policy of inventory; Note 5(b) for accounting estimations and assumptions of valuation of inventory, and Note 6(e) for explanation of valuation of inventory.

Description of key audit matter:

The Group’s belongs to precision machining of castings industry. The Group’s inventories are measured at the lower of cost and net realizable value. However, the cost of inventory might exceed its net realizable value due to the rapid advancement of technology and the changes in market demand. Therefore, inventory evaluation is one of our key audit matters.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures, included reasonable assessing the Group’ s allowance amount of inventory according to its characteristic; conducting sampling to examine accuracy of inventory aging; examine whether the Group has conduct accounting policy of inventory valuation; compare and examine past allowance method of inventory with current year, to confirm whether the assumption of allowance of inventory method are in appropriate.

3. Accounts Receivable Valuation

Please refer to Note 4(g) to the consolidated financial statements for accounting policy of assessment of accounts receivable impairment; Note 5(a) to the consolidated financial statements for accounting estimations and assumptions of assessment of accounts receivable, and Note 6(c) to the consolidated financial statements for impairment of accounts receivable.

Description of key audit matter:

The Group’ s accounts receivable are concentrate within certain customers. Allowance evaluation on accounts receivable contains management’ s subjective judgment. Therefore, the assessment on accounts receivable is one of our key audit matters.

3-2

How the matter was addressed in our audit:

In relation to the key audit matter above, our audit procedure included reasonable assessing the group’s allowance amount of accounts receivable according to its characteristic; analyze the aging report of accounts receivable, receive records and customers’ credit risk concentration. Assessed whether the estimation method and the amount of the allowance of accounts receivable this period present fairly.

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

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

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

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

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 the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

3-3

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Cheng-Hsueh, Chen and Tsu-Hsin, Chang.

KPMG

Taipei, Taiwan (Republic of China) March 24, 2021

Notes to Readers

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

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) World Known MFG (Cayman) Limited and Subsidiaries

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1150 Notes receivables, net (note 6(c)) 1170 Accounts receivable, net (note 6(c)) 1180 Accounts receivable due from related parties, net (note 6(c) and 7) 1200 Other receivables (note 6(d)) 1210 Other receivables from related parties (note 6(d) and 7) 1220 Current tax assets 1310 Inventories (note 6(e)) 1476 Other financial assets - current (note 6(i) and 8) 1470 Other current assets (note 6(i)) Non-current assets: 1541 Non-current financial assets at amortized cost (note 6(b)) 1600 Property, plant and equipment (note 6(f) and 8) 1755 Right-of-use assets (note 6(g) and 8) 1780 Intangible assets (note 6(h)) 1840 Deferred income tax assets (note 6(p)) 1900 Other non-current assets (note 6(i)) Total assets	December 31, 2020 Amount % $ 281,626 21 17,585 1 134,858 10 17 - 14,319 1 98 - 315 - 218,692 17 34,176 3 10,105 1 711,791 54 262,622 20 269,694 20 70,204 5 10,265 1 1,024 - 3,734 - 617,543 46 $ 1,329,334 100	December 31, 2019 Amount % 351,402 31 10,931 1 132,280 11 6 - 11,112 1 98 - 315 - 225,057 20 - - 12,189 1 743,390 65 - - 316,550 27 78,330 7 6,513 1 1,359 - 2,209 - 404,961 35 1,148,351 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(j) and 8) 2130 Current contract liabilities(note 6(t)) 2170 Accounts payable 2180 Accounts payable to related parties (note 7) 2200 Other payables (note 6(k) and (o)) 2220 Other payables to related parties (note 7) 2230 Current income tax liabilities 2280 Current lease liabilities (note 6(n) and 7) 2300 Other current liabilities (note 6(l)) 2322 Long-term borrowings, current portion (note 6(m) and 8) Non-Current liabilities: 2540 Long-term borrowings (note 6(m) and 8) 2580 Non-current lease liabilities (note 6(n) and 7) Total liabilities Equity attributable to owners of parent: (note 6(q)) 3100 Capital stock 3211 Capital surplus 3300 Retained earnings 3400 Other equity Total equity attributable to owners of parent: 36XX Non-controlling interests Total equity attributable to owners of parent Total liabilities and equity	December 31, 2020	December 31, 2020		December 31, 2019 Amount % 35,000 3 682 - 101,173 9 42,798 3 115,368 10 2,556 - 33,012 3 7,041 1 6,916 1 5,149 - 349,695 30 2,391 - 51,593 5 53,984 5 403,679 35 300,000 26 216,423 19 255,975 22 (28,021) (2) 744,377 65 295 - 744,672 65 1,148,351 100
			Amount	%

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) World Known MFG (Cayman) Limited and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

4000 Operating revenue(note 6(t) and 7) 5000 Operating costs(note6(e), (h), (o) and 7) 5900 Gross profit from operations 6000 Operating expenses(note6(c), (h), (o), (u) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment (reversal gain) loss determined in accordance with IFRS 9 6900 Net operating income 7000 Non-operating income and expenses(note 6(f), (n) and (v)) : 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7900 Profit before income tax 7950 Income tax expenses (note 6(p)) Profit 8300 Other comprehensive income: 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8341 Exchange differences on translation of foreign financial statements 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income (loss) for the period, net of tax 8500 Total comprehensive income for the period Profit (loss) attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income (loss) attributable to: 8710 Owners of parent 8720 Non-controlling interests Earnings per share (NT dollars) (Note 6(s)) 9750 Basic earnings per share 9850 Diluted earnings per share	2020 Amount % $ 863,749 100 661,949 77 201,800 23 39,741 4 65,715 8 18,754 2 (1,249) - 122,961 14 78,839 9 7,962 1 13,170 1 (11,175) (1) (1,987) - 7,970 1 86,809 10 18,244 2 68,565 8 (43,456) (5) - - (43,456) (5) 48,796 6 - - 48,796 6 5,340 1 $ 73,905 9 $ 68,566 8 (1) - $ 68,565 8 $ 73,920 9 (15) - $ 73,905 9 $ 2.06 $ 2.06	2019 Amount % 1,035,899 100 768,598 74 267,301 26 48,122 4 88,205 9 19,697 2 269 - 156,293 15 111,008 11 1,145 - 14,790 1 138 - (1,591) - 14,482 1 125,490 12 32,419 3 93,071 9 (18,319) (2) - - (18,319) (2) (3,207) - - - (3,207) - (21,526) (2) 71,545 7 92,821 9 250 - 93,071 9 71,511 7 34 - 71,545 7 3.09 3.09

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) World Known MFG (Cayman) Limited and Subsidiaries

Consolidated Statements of Changes in Equity For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Capital Stock	Capital surplus		Retained earnings	Retained earnings	Retained earnings		Other equity interest	Total equity attributable to owners of parent	Non-controlling interests
		Legal reserve	Special reserve	Unappropriated retained earnings		Total
							Exchange differences on translation of foreign financial statements
$ 300,000 - - - - - $ 300,000 $ 300,000 - - - - - - - 38,990 - $ 338,990	216,423	-	-		208,154	208,154	(6,711) - - - (21,310) (21,310) (28,021) (28,021) - - - - - 5,355 5,355 - - (22,666)	717,866	261 - - 250 (216) 34 295 295 - - - - (1) (15) (16) - - 279
	-	-	-
	-	-	-
	- -	- -	- -
	-	-	-
	216,423 216,423	- -	- -
	- - -	9,282 - -	- 28,021 -
	-	9,282	28,021
	- -	- -	- -
	-	-	-
	117,730 212	- -	- -
	334,365	9,282	28,021

See accompanying notes to consolidated financial statements.

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

World Known MFG (Cayman) Limited and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit from continuing operations before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expect (reversal of impairment loss) credit loss recognized on accounts receivable Interest expense Interest income Employee share options-compensation cost Loss (gain) on disposal of property, plant and equipment Allowance for inventory valuation and obsolescence loss Impairment reversal gain on non-financial assets Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Increase in notes receivable Increase (decrease) in accounts receivable Increase (decrease) in accounts receivable from related parties Increase (decrease) in other receivables Decrease in other receivable from related parties Decrease in inventories Decrease in prepayments Decrease in other current assets Total changes in operating assets Changes in operating liabilities: Increase (decrease) in current contract liabilities Increase (decrease) in accounts payable Decrease in accounts payable to related parties Decrease in other payables (Decrease) increase in other payables to related parties (Decrease) increase in other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: Acquisition of other financial assets Acquisition of financial assets at amortized cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in payments for business facilities Decrease (increase) in refundable deposits Increase in non-current assets Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term loans borrowings Proceeds from long-term borrowings Repayments of lease liabilities Capital increase by cash Cash dividends paid Net cash flows from (used in) investing 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 period Cash and cash equivalents at end of period	2020 $ 86,809 66,345 2,825 (1,249) 1,987 (7,962) 212 62 5,212 - 67,432 (6,654) (1,329) (11) (3,207) - 1,153 1,223 861 (7,964) 962 41,023 (19,984) (1,139) (653) (1,862) 18,347 10,383 164,624 7,962 (1,995) (22,850) 147,741 (34,176) (262,622) (11,859) 69 (6,529) (1,355) 484 (654) (316,642) 158,522 (105,000) (5,149) (7,099) 156,720 (101,697) 96,297 2,828 (69,776) 351,402 $ 281,626	2019 125,490 70,519 2,726 269 1,591 (1,145) - (366) 6,688 (1,589) 78,693 (424) 46,320 2 8,976 76 19,216 4,037 2,257 80,460 (6,802) (66,603) (1,344) (6,069) 1,902 2,231 (76,685) 3,775 207,958 1,145 (1,573) (46,218) 161,312 - - (62,707) 738 (3,979) - (1,477) (542) (67,967) 85,000 (60,000) (5,148) (5,731) - (45,000) (30,879) (12,110) 50,356 301,046 351,402

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) World Known MFG (Cayman) Limited and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

World Known MFG (Cayman) Limited (the “ Company” ) was established in the Cayman Islands in November 2015. The main purpose of the establishment was to restructure its group entities for application to list on Taiwan Stock Exchange (“TWSE”) in the Republic of China. The Company become the holding company of Honour Glory International Ltd. (“Honour”) by using acquisition of shares for cash and share swaps with previous shareholders of Honour to restructure the group. The Company’ s shares have been listed and traded on the TWSE since March 9, 2020. The Company and its subsidiaries (together referred to as the “Group”) is primarily involved in the manufacturing and selling the energysaving and carbon-reducing parts of commercial vehicle engine, ADB calipers, rear panels of brake pad, bend pipes and accessories of turbocharger, cases of flywheel, cases of swing arms, exhaust manifolds, braces, core shafts, parts for braking system of wind power generator and processed products of machinery parts for various industries.

(2) Approval date and procedures of the consolidated financial statements

These consolidated financial statements were authorized for issue by the Board of Directors on March 24, 2021.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2020:

●Amendments to IFRS 3 “Definition of a Business”
●Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”
●Amendments to IAS 1 and IAS 8 “Definition of Material”
●Amendments to IFRS 16 “COVID-19-Related Rent Concessions”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
－
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform Phase 2”

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
Amendments to IAS 1
“Classification of Liabilities as
Current or Non-current”
Amendments to IAS 16
“Property, Plant and
Equipmentt－Proceeds before
Intended Use”
Amendments to IAS 37
“Onerous Contracts－Cost of
Fulfilling a Contract” Content of amendment
Effective date per
IASB
The amendments aim to promote consistency
in applying the requirements by helping
companies
determine
whether,
in
the
statement of balance sheet, debt and other
liabilities with an uncertain settlement date
should be classified as current (due or
potentially due to be settled within one year)
or non-current.
The amendments include clarifying the
classification
requirements
for
debt
a
company might settle by converting it into
equity.
January 1, 2023
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 recognize such sales
proceeds and related cost in profit or loss.
January 1, 2022
The amendments clarify that the ‘ costs of
fulfilling a contract’ comprises the costs that
relate directly to the contract as follows:
●the incremental costs – e.g. direct labor
and materials; and
●an allocation of other direct costs – e.g. an
allocation of the depreciation charge for
an item of property, plant and equipment
used in fulfilling the contract.
January 1, 2022

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Annual Improvements to IFRS Standards 2018-2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(4) Summary of significant accounting policies

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the Financial Supervisory Commission, R.O.C.

(b) Basis of preparation

(i) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis.

(ii) Functional and presentation currency

The Company’s functional currency is United States Dollar(USD). However, to be consistent with the Group, which is listed in the stock market in Taiwan, the operation results and the financial information are translated into and presented in NTD at the reporting date according to IAS21. Consolidated balance sheet is translated into the presentation currency at the exchange rates at the reporting date; Consolidated statement of comprehensive income is translated at the average exchange rate for the current year. Capital transactions and other equity items are translated at the exchange rate at the transaction date, from which the exchange differences are recognized in other comprehensive income. The financial information presented in NTD is expressed in thousands of NTD. The exchange rate for USD to NTD on December 31, 2020 and 2019 are 28.48 and 29.98, respectively. The average exchange rate for USD to NTD for the year 2020 and 2019 is 29.5332 and 30.911, respectively.

As of December 31, 2020 and 2019, the accumulated exchange loss arisen from the conversion from USD, the functional currency, to NTD, the presentation currency, are $(71,669) thousand and $(28,213) thousand.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(c) Basis of consolidation

(i) Principle of preparation of the consolidated financial statements

The consolidated financial statements comprised of the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which the control ceases. Intra group balances and transactions, and any unrealized income and expenses arising from intra group transactions, are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the noncontrolling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

(ii) List of subsidiaries in the consolidated financial statements

Name of investor The Company The Company The Company Honour Honour	Name of subsidiary Honour Glory International Ltd. (Honour) World Known Precision Industry Co., Ltd. (WKPT) WKP HITECH USA, INC. (WKP USA) Fullmoon Corp. (Fullmoon) World Known Precision Industry (Fuzhou) Co., Ltd. (WKPF) Quick Express Co.,Ltd. (Quick)	Principal activity Investing and holding Precision Metalworking Merchandise trading Merchandise trading Precision Metalworking Merchandise trading	Share holding December31, 2020 December31, 2019 100% 100% 100 % 100% 90% 90% - 100% Note 2 100 % 100 % - - Note 1

Note 1: Quick was substantive related parties, and the Group's sales through it. Therefore, Quick was included in the group structure. In addition, Quick completed the dissolution in May 2019.

Note 2: Fullmoon went out of business upon the resolution of the Board of Directors on November 12, 2019, and completed the dissolution on December 2, 2019.

(iii) Subsidiaries excluded from the consolidation financial statements: None.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(d) Foreign currency

(i) Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date.

Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

1) an investment in equity securities designated as at fair value through other comprehensive income;
2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) qualifying cash flow hedges to the extent that the hedges are effective.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes only part of its investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future. Exchange differences arising from such items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income, and presented in the translation reserve in equity.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(e) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as noncurrent.

(i) It is expected to be realized, or intended to be sold or consumed, in its normal operating cycle;
(ii) It is hold primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent (as defined in IAS 7), unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It is expected to settle in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) 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.

(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(g) Financial instruments

Accounts receivable are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL ：

it is held within a business model whose objective is to hold financial assets to collect contractual cash flows
it is contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Impairment of financial assets

The Group recognizes its loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, financial assets measured at amortized cost, notes and accounts receivable, other receivables, guarantee deposit paid and other financial assets).

The Group measures its loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL ：

debt securities that are determined to have low credit risk at the reporting date ； and
other debt securities and bank balances for which the credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivable and contract assets are always measured at an amount equal to lifetime ECL.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment, as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 120 days (the Group from Taiwan) and 180 days (the Group from China) past due or the debtor is unlikely to fully pay its credit obligations to the Group in full.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs resulting from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data ：

significant financial difficulty of the borrower or issuer ；
a breach of contract such as a default or being more than 360 days past due ；
the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider ；
it is probable that the borrower will enter bankruptcy or other financial reorganization ； or
the disappearance of an active market for a security because of financial difficulties.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

3)

Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instrument
1) Classification of debt or equity

Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

4) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

5) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average method and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent cost

Subsequent expenditure is capitalized only when it is probable that future economic benefits associated with the expenditure will flow to the Group.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(iii) Depreciation

Depreciation is calculated on the cost of an asset, less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

1)	Buildings and structures	2 ~ 20 years
2)	Machinery and equipment	1 ~ 10 years
3)	Office equipment	1 ~ 10 years
4)	Transportation equipment	1 ~ 10 years
5)	Other equipment	1 ~ 20 years

Depreciation methods, useful lives, and residual values are reviewed at each reporting date and adjusted if appropriate.

(j) Leases

(i) Identifying a lease

At inception of a contract, the Group assesses whether a 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, the Group assesses whether:

1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the customer has the right to direct the use of the asset throughout the period of use only if either:
－ the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or
－ the relevant decisions about how and for what purpose the asset is used are predetermined and:
- the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
- the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(ii) As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method 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. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be paid under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate;
there is a change in the Group’s estimate of the amount expected to be paid under a residual value guarantee;
there is a change of its assessment on whether it will exercise an option to purchase the underlying asset;
there is a change in the lease term resulting from a change of its assessment on whether it will exercise an extension or termination option;
there are any lease modifications.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(iii) As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(k) Intangible assets

(i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

Computer software 1~10 years

Amortization methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(l) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, deferred tax assets and employee benefits) to determine whether there is any indication of impairment. If any such indication exists, then the asset’ s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(m) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(i) Sale of goods

The Group manufactures and sells processed products of machinery parts for various industries. The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’ s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

(ii) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

(n) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Pension funds are recognized according to the labor regulations of the People’s Republic of China , these obligations should be recognized as expense in the period they occurred.

(ii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(o) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year, and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables is the best estimate of the tax amount expected to be paid or received that it is measured using tax rates enacted or substantively enacted at the reporting date.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intends to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(p) Business combination

The Company accounts for business combinations using the acquisition method. The goodwill arising from an acquisition is measured as the excess of (i) the consideration transferred (which is generally measured at fair value) and (ii) the amount of non-controlling interest in the acquiree, both over the identifiable net assets acquired at the acquisition date. If the amount calculated above is a deficit balance, the Group recognized that amount as a gain on a bargain purchase in profit or loss immediately after reassessing whether it has correctly identified all of the assets acquired and all of the liabilities assumed.

All acquisition-related transaction costs are expensed as incurred, except for the issuance of debt or equity instruments.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

For each business combination, the Group measures any noncontrolling interests in the acquiree either at fair value or at the noncontrolling interest’ s proportionate share of the acquiree’ s identifiable net assets, if the noncontrolling interests are present ownership interests and entitle their holders to a proportionate share of the acquire’ s net assets in the event of liquidation. Other components of noncontrolling interests are measured at their acquisition-date fair values, unless another measurement basis is required by the IFRSs endorsed by the FSC.

(q) Earnings per share

The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share are calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding. Diluted earnings per share are calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

(r) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may incur revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

(a) The loss allowance of accounts receivable

The Group has estimated the loss allowance of accounts receivable that is based on the risk of a default occurring and the rate of expected credit loss. The Group has considered historical experience, current economic conditions and forward-looking information at the reporting date to determine the assumptions to be used in calculating the impairments and the selected inputs. For relevant assumptions and input values, please refer to note 6(c).

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(b) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Group estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Please refer to note 6(e) for further description of the valuation of inventories.

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Petty cash and cash on hand Demand deposits Check deposits Time deposits Cash and cash equivalents in the consolidated statement of cash flows	December 31, 2020 $ 176 270,134 11,316 - $ 281,626	December 31, 2019
		221 292,424 7,791 50,966
		351,402

Please refer to note 6(w) for the exchange rate risk and sensitivity analysis of the financial assets and liabilities of the Group.

(b) Financial assets measured at amortized cost

Foreign certificates of deposit	December 31, 2020 $ 262,622	December 31, 2019
		-

The Group has assessed that these financial assets are held-to-maturity to collect contractual cash flows, which consist solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets measured at amortized cost. For credit risk, please refer to note 6(w).

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(c) Notes and accounts receivable (including related parties)

Notes receivable from operating activities Accounts receivable-measured as amortized cost Accounts receivable from related parties-measured as amortized cost Less: Loss allowance	December 31, 2020 $ 17,585 140,161 17 (5,303) $ 134,875	December 31, 2019
		10,931 138,751 6 (6,471)
		132,286

1.The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, accounts receivable has been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information.
2.The loss allowance provision in China was determined as follows:

December 31, 2020	December 31, 2020	December 31, 2020	Loss allowance provision
Gross carrying amount
			3,970 786 131 30 4,917 Loss allowance provision
	Gross carrying amount	Weighted- average loss rate % 1.03 % 16.39 % 60.87 % 100
$ 85,891 12,120 1,156 1,262 $ 100,429			883 1,987 704 1,262 4,836

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

3.The loss allowance provision in Taiwan was determined as follows:

December 31, 2020	December 31, 2020	Loss allowance provision
Gross carrying amount Weighted- average loss rate $ 49,064 % 0.39 836 % 14.52 - - 72 % 100 $ 49,972 December 31, 2019
		193 121 - 72 386 Loss allowance provision
	Weighted- average loss rate % 0.30 % 8.75 % 88.52 % 100
		143 73 1,419 - 1,635

4.The movement in the allowance for notes and accounts receivable were as follows:

Balance at January 1 Impairment loss recognized (reversed) Foreign exchange gains/(losses) Balance at December 31	For the years ended	December 31,
	2020 $ 6,471 (1,249) 81 $ 5,303	2019 6,390 269 (188) 6,471

5.The notes and accounts receivable of the Group had not been pledged as collateral as of December 31, 2020 and 2019.
6.For further credit risk and exchange rate risk information, please refer to note 6(w).

(d) Other receivables

Other receivables Other receivables-Related parties	December 31, 2020 $ 14,319 98 $ 14,417	December 31, 2019
		11,112 98
		11,210

None of the other receivables of the Group has past due as of December 31, 2020 and 2019. There is no impairment recognized in year ended December 31, 2020 and 2019.

For further credit risk information, please refer to note 6(w).

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(e) Inventories

ntories
Finished goods Work in progress Raw materials Supplies	December 31, 2020 $ 127,967 52,478 30,782 7,465 $ 218,692	December 31, 2019
		143,937 49,680 22,231 9,209
		225,057

The details of inventory loss (profit) were as follows ：

Inventory valuation and obsolescence loss Loss of inventory shortage Loss on disposal of inventory Gain on disposal of leftover bits and pieces Operating costs recognized	For the year ended December 31, 2020 2019 $ 5,212 6,688 (3) 176 78 354 (4,021) (7,177) $ 1,266 41
	2020 $ 5,212 (3) 78 (4,021) $ 1,266

As of December 31, 2020 and 2019, the Group did not provide any inventories as collateral for its loans.

(f) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group in 2020 and 2019, were as follows:

					Office
					equipment
		Building and	Machinery and	Transportation	and other	Construction
		construction	equipment	equipment	facilities	in progress	Total
Cost or deemed cost:
Balance on January 1, 2020	$	152,094	467,115	8,850	53,363	-	681,422
Additions		983	5,125	-	2,601	-	8,709
Disposal		(7,533)	(5,102)	(39)	(127)	-	(12,801)
Reclassification		-	-	-	-	-	-
Effect of movements
in exchange rates		2,256	5,752	85	603	-	8,696
Balance on December 31, 2020	$	147,800	472,890	8,896	56,440	-	686,026
Balance on January 1,2019	$	150,046	466,377	7,641	38,350	178	662,592
Additions		10,854	10,247	1,548	15,596	-	38,245
Disposal		(3,423)	(1,500)	(140)	(441)	-	(5,504)
Reclassification		178	5,325	-	1,150	(178)	6,475
Effect of movements
in exchange rates		(5,561)	(13,334)	(199)	(1,292)	-	(20,386)
Balance on December 31, 2019	$	152,094	467,115	8,850	53,363	-	681,422

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Depreciation and impairment loss: Balance on January 1,2020 Depreciation for the year Disposal Reclassification Reversal of impairment loss Effect of movements in exchange rates Balance on December 31, 2020 Balance on January 1, 2019 Depreciation for the year Disposal Reclassification Impairment loss Effect of movements in exchange rates Balance on December 31, 2019 Carrying amounts: Balance on December 31, 2020 Balance on January 1, 2019 Balance on December 31,2019	Building and construction	Machinery and equipment	Transportation equipment		Office equipment and other facilities		Construction inprogress - - - - - - - - - - - - - - - 178 -	Total 364,872 58,316 (12,670) - - 5,814 416,332 319,763 63,835 (5,132) - (1,589) (12,005) 364,872 269,694 342,829 316,550

(i) Impairment loss and subsequent reversal

Impaired equipment has been disposed and reused during the year ended December 31, 2019, therefore, reversal of impairment loss $1,589 thousand has been recognized, please refer to note 6 (v).

(ii) Collateral

As of December 31, 2020 and 2019, the property, plant and equipment of the Group had been pledged as collateral for borrowings, please refer to note 8.

(g) Right-of-use assets

The Group leases many assets including land and buildings. Information about leases for which the Group as a lessee was presented below:

Cost: Balance at January 1, 2020 Effect of movement in exchange rate Balance at December 31, 2020 Balance at January 1, 2019 Effects of retrospective application Effect of movement in exchange rate Balance at December 31, 2019	Land $ 20,630 345 $ 20,975 $ - 21,430 (800) $ 20,630	Buildings and construction 64,343 (494) 63,849 - 64,899 (556) 64,343	Total 84,973 (149) 84,824 - 86,329 (1,356) 84,973

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Land Accumulated depreciation and impairment losses: Balance at January 1, 2020 $ 525 Depreciation for the year 522 Effect of movement in exchange rate 20 Balance at December 31, 2020 $ 1,067 Balance at January 1, 2019 $ - Depreciation for the year 545 Effect of movement in exchange rate (20) Balance at December 31, 2019 $ 525 Carrying amount: Balance at December 31, 2020 $ 19,908 Balance at January 1, 2019 $ - Balance at December 31, 2019 $ 20,105	Buildings and construction 6,118 7,507 (72) 13,553 - 6,139 (21) 6,118 50,296 - 58,225	Total 6,643 8,029 (52) 14,620 - 6,684 (41) 6,643 70,204 - 78,330

As of December 31, 2020, the right-of-use assets of the Group had been pledged as collateral for borrowings, please refer to note 8.

(h) Intangible assets

The costs and amortization of the intangible assets of Group in 2020 and 2019 were as follows:

Costs: Balance at January 1, 2020 Additions Disposals Effect of movement in exchange rates Balance at December 31,2020 Balance at January 1, 2019 Additions Effect of movement in exchange rates Balance at December 31,2019 Amortization and impairment Loss: Balance at January 1, 2020 Amortization for the year Disposals Effect of movement in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Amortization for the year Effect of movement in exchange rates Balance at December 31, 2019	Computer Software $ 12,540 6,529 (261) 162 $ 18,970 $ 8,998 3,979 (437) $ 12,540 $ 6,236 2,825 (261) 105 $ 8,905 $ 3,738 2,726 (228) $ 6,236	Goodwill 209 - - (9) 200 215 - (6) 209 - - - - - - - - -	Total 12,749 6,529 (261) 153 19,170 9,213 3,979 (443) 12,749 6,236 2,825 (261) 105 8,905 3,738 2,726 (228) 6,236

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Carrying value: Balance at December 31`,`2020 Balance at January 1, 2019 Balance at December 31, 2019	Computer Software $ 10,065 $ 5,260 $ 6,304	Goodwill 200 215 209	Total 10,265 5,475 6,513

(i) Amortization expense

The following amortizations of intangible assets are included in the statement of comprehensive income:

Operating cost Operating expense	2020 $ 209 2,616 $ 2,825	2019
		180 2,546
		2,726

(ii) Collateral

As of December 31, 2020 and 2019, the Group has no collateral in respect of intangible assets.

(i) Other financial assets, other current assets and other non-current assets

The other financial assets, other current assets and other non-current assets of the Group were as follows:

Other financial assets: Restricted bank deposits Other current assets: Prepaid expense Overpaid sales tax Prepaid borrowings Other current assets - other Other non-current assets: Prepaid for equipment Refundable deposits Other non-current assets-other	December 31, 2020 $ 34,176 $ 2,903 4,316 1,888 998 $ 10,105 December 31, 2020 $ 1,355 1,183 1,196 $ 3,734	December 31, 2019
		- 4,534 3,535 2,021 2,099
		12,189 December 31, 2019
		- 1,667 542
		2,209

As of December 31, 2020 and 2019, other financial assets of the Group had been pledged as collateral for borrowings, please refer to note 8.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(j) Short-term borrowings

The short-term borrowings were summarized as follows:

Unsecured bank loans Secured bank loans Total Unused credit Lines Range of interest rates	December 31, 2020 $ 55,000 34,272 $ 89,272 $ 5,000 1.43%~1.71%	December 31, 2019
		35,000 -
		35,000 5,000 1.70%~1.96%

Assets of the Group had been pledged as collateral for borrowings, please refer to note 8.

(k) Other payables

yables
Payables on salaries $ Payables on insurance and pension Payables for plant and equipment Others $	December 31, 2020 38,139 25,511 4,429 42,992 111,071	December 31, 2019
		39,881 32,951 7,579 34,957
		115,368

(l) Other current liabilities

The other current liability were summarized as follows:

Temporary receipts Others	December 31, 2020 4,439 615 $ 5,054	December 31, 2019
		5,367 1,549
		6,916

(m) Long-term borrowings

The details were as follows:

Secured bank loans Less: Current portion Total Unused long-term credit lines	December 31, 2020 Rate Maturity Day Amount 1.645% 2021.3.14~ 2022.3.24 $ 2,391 (1,913) $ 478 $ 43,770
	Rate
	1.645%

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Secured bank loans Less:Current portion Total Unused long-term credit lines	December 31, 2019 Rate Maturity Day Amount 1.895% 2021.3.24~ 2022.3.24 $ 7,540 (5,149) $ 2,391 $ 43,050
	Rate
	1.895%

Assets of the Group had been pledged as collateral for borrowings, please refer to note 8.

(n) Lease liabilities

The carrying amounts of the Group's lease liabilities were as follows:

Current Non-current	December 31, 2020 $ 7,112 $ 43,994	December 31, 2019
		7,041 51,593

For the maturity analysis, please refer to note 6(w). For the Group leased factory and buildings from related party, please refer to note 7.

The amounts recognized in profit or loss was as follows:

Interest on lease liabilities Expenses relating to short-term leases	For the year ended December 31, 2020 For the year ended December 31, 2019	For the year ended December 31, 2020 For the year ended December 31, 2019
	$ 1,020 $ 720	898 1,015

The amounts recognized in the statement of cash flows for the Group was as follows:

Total cash outflow for leases	For the year ended December 31, 2020 For the year ended December 31, 2019	For the year ended December 31, 2020 For the year ended December 31, 2019
	$ 8,839	7,644

(i) Real estate leases

Repectively in March and May 2019, the Group leases land and buildings for its factory and office space. The leases of factory and office space typically run for 3 to 10 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(ii) Other leases

The Group leases lease with lease terms of one year, these leases are short-term and leases of low-value items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.

(o) Employee benefits

According to law of the People's Republic of China, WKPF contributed pension insurance $316 thousand and $4,491 thousand for 2020 and 2019, respectively. Provision on insurance pension payable is recognized on other payable and the balance is $15,874 thousand and $22,116 thousand on December 31, 2020 and 2019, respectively.

WKPT allocates 6% of each employee's monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of Labor Insurance amounted to $2,167 thousand and $2,032 thousand for the years ended December 31, 2020 and 2019, respectively.

(p) Income taxes

(i) WKPT local profit-seeking income tax rate is 20%. WKPF is a foreign investment in People's Republic of China, tax is calculated based on "Enterprise Income Tax Law of the People's Republic of China". On October 23, 2017, WKPF acquired high-tech enterprise authenticated certificate, which is applicable to the preferential enterprise tax rate of 15% (originated 25% tax rate), started from the day of acquisition for three years. Furthermore, the Company is registered in tax haven, tax discount is applicable according to the local law.
(ii) Income tax expense

The components of income tax in the years 2020 and 2019 were as follows:

Current tax expense: Current period Adjustment for prior periods Deferred tax expense`：` Origination and reversal of temporary differences	2020 $ 21,686 (3,777) 17,909 335 $ 18,244	2019 34,535 (1,430) 33,105 (686) 32,419

No income tax is recognized in equity and other comprehensive income in 2020 and 2019.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Reconciliation of income tax and profit before tax 2020 and 2019 is as follows:

Profit before income tax ncome tax using the Company's domestic tax rate Others income tax adjustments Changes in provision in prior periods ncome tax for repatriation of overseas earnings Changes in unrecognized temporary differences Total	2020 $ 86,809 16,151 1,503 (3,777) 5,540 (1,173) $ 18,244	2019 125,490 23,753 2,504 (1,431) 7,592 1 32,419

(iii) Deferred tax assets and liabilities

1) Unrecognized deferred tax liabilities Provision of insurance and pension for WKPF	December 31, 2020 $ 3,827	December 31, 2019
		4,943

2) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2020 and 2019 were as follows:

Deferred Tax Assets:

Balance at January 1, 2020 Recognized profit or loss Balance at December 31, 2020 Balance at January 1, 2019 Recognized profit or loss Balance at December 31, 2019	Exceed of allowance of bad debt expense $ 229 (229) $ - $ - 229 $ 229	Allowance of inventory valuation loss 875 (292) 583 389 486 875	Others 255 186 441 307 (52) 255	Total 1,359 (335) 1,024 696 663 1,359

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Deferred tax liability ：

Balance at January 1, 2020 Recognized profit Balance at December 31, 2020 Balance at January 1, 2019 Recognized profit Balance at December 31, 2019	Others $ - - $ - $ 23 (23) $ -

(iv)

Assessment of tax

The Company does not need to pay tax or declare income tax due to local law in the country registered.

WKPF’s tax returns for the years through 2019 were assessed by the local tax administration; WKPT’ s tax returns for the years through 2018 were assessed by the Taipei National Tax Administration.

(q) Capital and other equity

As of December 31, 2020 and 2019, the Company's authorized ordinary shares each amounted to $600,000 thousand and $400,000 thousand with a par value of $10 per share and a total of 60,000 and 40,000 thousand shares respectively. All shares are ordinary shares. As of that date, 33,899 and 30,000 thousand shares were issued. All issued shares were paid up upon issuance.

Reconciliation of shares outstanding for 2020 and 2019 was as follows:

(In thousands of shares) Balance on January 1 Issued for cash Balance on December 31	Ordinary shares 2020 2019 30,000 30,000 3,899 - 33,899 30,000	Ordinary shares 2020 2019 30,000 30,000 3,899 - 33,899 30,000
	2020 30,000 3,899 33,899
		30,000 -
		30,000

(i) Ordinary shares

The Company’s Board of Directors made a decision on September 16, 2019, that the Company would issue 3,899 thousand ordinary shares with par value of NTD 10 per value before initial public offering. The record date for capital issuance is March 5, 2020. The lowest underwriting price for auction is NTD 32.11 per share, higher price gets the bid, each bidder should subscribe to their bidding price. The bid price for each share is at an average of NTD 44.68. In addition, the underwriting price for public subsricption is NTD 35. A total amount of $162,719 has been raised and collected already. In addition to the total amount of funds raised above $38,990 thousand accounted for equity, deducting brokerage underwriting fees, the remaining amount of $117,730 thousand accounted for capital surplus-additonal paid in capital. This capital increase case has been approved by the Financial Supervision and Administration Commission, and the relevant statutory registration procedures have been completed

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

The remuneration cost incurred by retaining employee stock subscriptions due to the aforementioned cash capital increase is $212 thousand after the cash capital increase is completed the original account lists the capital surplus-employee stock options transferred to the capital surplus-additional paid in capital.

(ii) Capital Surplus

The balance of capital surplus was as following:

he balance of capital surplus was as following:
Additional paid in capital Difference arising from subsidiary's share price and its carrying value	December 31, 2020 $ 237,942 96,423 $ 334,365	December 31, 2019
		120,000 96,423
		216,423

(iii) Retained earnings

The Company's article of incorporation stipulates that Company's net earnings should first be used to offset the prior years' deficits (including deficits and undistributed retained earnings for prior years, if any), pay income taxes, 10% is to be appropriated as legal reserve until the accumulated legal reserve equals the Company's paid-in capital. In addition, a special reserve, in accordance with applicable laws and regulations, shall also be set aside. Then, any remaining profit, together with any undistributed retained earnings, shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval. The cash dividends shall not be more than 10% of total dividends.

The Company is now in growing phase, dividend distribution should consider capital expenditure, plan for future expansion, financial plan or other plan for the need of sustainable growth. Dividend and can be paid in cash or(and) stock to stockholders.

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash.

2) Special reserve

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

3) Earnings distribution

Earnings distribution for 2019 and 2018 was decided by the resolution adopted, at the general meeting of shareholders held on 17 June 2020 and 13 June 2019, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to common shareholders: Cash	2019 Amount per share Total amount $ 3.0 101,697	2018	2018
	Amount per share $ 3.0	Amount per share 1.5	Total amount
			45,000

On 24 March, 2021, the Company's Board of Directors resolved to appropriate the 2020 earnings. These earnings were appropriated as follows:

Dividends distributed to common shareholders: Cash	2020	2020
	Amount per share $ 2.0	Total amount
		67,798

(iv) Other equity interests (net-of-taxes)

Balance at January 1, 2020 Exchange differences on foreign operations Balance at December 31, 2020 Balance at January 1, 2019 Exchange differences on foreign operations Balance at December 31, 2019	Exchange differences on translation of foreign financial statements $ (28,021) 5,355 $ (22,666) $ (6,711) (21,310) $ (28,021)

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(r) Share-based payment

A resolution was passed during the Company’s board of director held on December 5, 2019, increase capital by cash and issue new shares, retaining 13%, totaling 507 thousand shares. Priority is given to the company’s employees to subscribe. The employees give up the subscription or the amount of under-subscribed shares, and authorize the chairman of the board to negotiate a specific person to subscribe at the issuance price.

As of December 31, 2020, share-based payment arrangements as follows:

Fair value at grant date Number of shares grandted Countract term Recipients Vesting conditions	Equity settled
	Cash capital increase reserved for employee subsciption
	2020.02.21 507 thousand shares 2020.2.21~2020.3.5 Limited to employees who have worked for the Group for one year before 2019.10.31 and have nationality of the Republic of China Immediately vested

The Group used Black-Scholes option evaluation model method in measuring the fair value of the shared-based payment at the grant date. The measurement inputs were as follows:

Fair value at grant data Share price at grant date Exercise price Expected volatility (%) Expected life (year) Expected dividend Risk-free interest rate (%)	2020
	Cash capital increase reserved for employee subscription
	$0.4175 - `$`35 23.25% 0.0164years - 0.4730%

Expected volatility is based on the weighted average of historical volatility, and it is adjusted when there is additional market information about the volatility. The Group determined the expected dividends and risk-free rate during the life of the option. These rates are determined based on government bonds, and they are in accordance with the regulations. Service and non-market performance conditions attached to the transactions are not taken into account in determining the fair value.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

The share-based basic payment expenses incurred in 2020 amounted to $212.

(s) Earnings per share

The calculation of basic earnings per share and diluted earnings per share for years 2020 and 2019 were as follows:

2020 Basic earnings per share Profit of the Company for the year $ 68,566 Weighted-average number of outstanding ordinary shares (in thousands) 33,226 $ 2.06 Diluted earnings per share Profit of the Company for the year $ 68,566 Weighted-average number of outstanding ordinary shares (in thousands) 33,226 Effect of employee share bonus 49 Weightier-average number of ordinary shares (in thousands) (after adjustment of potential diluted ordinary shares) 33,275 $ 2.06 (t) Revenue from contracts with customers (i) Disaggregation of revenue 2020 Primary geographical markets America $ 316,515 Asia 420,503 Other countries 126,731 $ 863,749 Major products 2020 Automotive parts $ 607,988 Green energy parts 110,513 Others 145,248 $ 863,749	2019 92,821 30,000 3.09 92,821 30,000 68 30,068 3.09 2019
	483,698 423,755 128,446
	1,035,899 2019
	765,067 86,856 183,976
	1,035,899

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(ii) Contract balance Contract liability	December 31, 2020 $ 1,644	December 31, 2019 682	January 1, 2019
			7,484

The amount of revenue recognized for the year ended December 31, 2020 and 2019 that was included in the contract liability balance at the beginning of the period were $455 thousand and $4,593 thousand respectively.

(u) Employee compensation and directors’ remuneration

In accordance with the articles of incorporation, the Company should contribute 1% to 8% of the profit as employee compensation and less than 5% as directors' and supervisors' remuneration when there is profit for the year. The amount of remuneration of each director and supervisor and of compensation for employees entitled to receive the abovementioned employee compensation is approved by of the Board of Directors with over two-third attendance and over half of the agreements. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit before the distribution of the compensation and remuneration. The distribution plan proposed by the Board of Directors should be submitted to the stockholders’ meeting for approval. Except from regulations for listing companies, directors' and supervisors' remuneration should not grant by issuing stocks. “Profit” as mentioned above, is income before income tax and distribution of directors' and supervisors' remuneration.

For the years ended December 31, 2020 and 2019, the Company estimated its employee remuneration amounting to $1,544 thousand and $1,046 thousand and directors' remuneration amounting to $1,544 thousand and $3,138 thousand respectively. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees and directors of each period, multiplied by the percentage of remuneration to employees and directors as specified in the Company's articles. These remunerations were expensed under operating costs or operating expenses during 2020 and 2019. Related information would be available at the Market Observation Post System website. The amounts, as stated in the consolidated financial statements, are identical to those of the actual distributions for 2020 and 2019.

(v) Non-operating income and expenses

(i) Interest income

The details of interests income for the years 2020 and 2019 were as follows:

Interests income`－`bank deposits (ii) Other income	2020 $ 7,962	2019
		1,145

The details of other income for the years 2020 and 2019 were as follows:

Subsidy income Other income`－`other	2020 $ 9,616 3,554 $ 13,170	2019
		8,861 5,929
		14,790

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(iii) Other gains and losses

The details of other gains and losses for the years 2020 and 2019 were as follows:

Foreign exchange loss Gains on non-financial assets at fair value through profit or loss Gains (losses) on disposals of property, plant and equipment	2020 $ (11,113) - (62) $ (11,175)	2019 (1,817) 1,589 366 138

(iv) Finance costs

The details of finance costs for the years 2020 and 2019 were as follows:

Interest expense`－`bank loan Interest expense`－`lease liabilities	2020 $ 967 1,020 $ 1,987	2019
		693 898
		1,591

(w) Financial Instruments

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

The major clients of Group are concentrated in medical instruments market. To minimize credit risk, the Group periodically evaluates their financial positions and requests collateral if deemed necessary. It also periodically assesses the recoverability of the trade receivable and recognizes an allowance for impairment. The impairment loss is within management’ s expectation. As of December 31, 2020 and 2019, 61% and 41%, respectively, of accounts receivable were derived from several major customers. Thus, the credit risk is significantly centralized.

3) Receivables securities

For credit risk exposure of notes and accounts receivable, please refer to note 6(c). Other financial assets at amortized cost includes other receivables, refundable deposits and other financial assets.

All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. Regarding how the financial instruments are considered to have low credit risk, please refer to note 4(g). Other financial assets at amortized cost did not have impairment provision for the years ended December 31, 2020 and 2019.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, without the impact of netting agreements.

December 31, 2020 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Accounts and notes payable (including related parties) Other payables (including related parties) Lease liabilities December 31,2019 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Accounts and notes payable (including related parties) Other payables (including related parties) Lease liabilities	Carrying amount $ 36,663 55,000 165,010 112,974 51,106 $ 420,753 $ 7,540 35,000 143,971 78,043 58,634 $ 323,188	Contractual cash flows 37,074 55,252 165,010 112,974 55,024 425,334 7,661 35,149 143,971 78,043 63,572 328,396	Within a year 36,595 55,252 165,010 112,974 8,001 377,832 5,244 35,149 143,971 78,043 8,061 270,468	1-2 year 479 - - - 6,561 7,040 1,938 - - - 8,061 9,999	2-5 year - - - - 19,684 19,684 479 - - - 19,863 20,342	Over 5 year
						- - - - 20,778
						20,778 - - - - 27,587
						27,587

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk was as follows:

December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2019 Foreign currency Exchange Rates Foreign currency 6,763 29.980 202,758 18,275 0.2760 5,044 257 29.980 7,697 118 0.2760 33
Foreign currency $ 6,774 76,106 478 1,342	Exchange Rates 28.480 0.2763 28.480 0.2763	New Taiwan Dollars	Exchange Rates Foreign currency 29.980 202,758 0.2760 5,044 29.980 7,697 0.2760 33
		192,932 21,028 13,627 371

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts and other receivables, and accounts and other payables that are denominated in foreign currency. A strengthening (weakening) 0.5% of the TWD against the USD and JPY as of December 31, 2020 and 2019 would have increased (decreased) the net profit after tax by $1,000 thousand and 1,000 thousand. The analysis is performed on the same basis for both periods.

3) Foreign exchange gain and loss on monetary items

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the years 2020 and 2019, the foreign exchange gain (loss) (including realized and unrealized portions) amounted to $(11,113) thousand and $(1,817) thousand respectively.

(iv) Interest rate analysis

Please refer to the note on liquidity risk management and the interest rate exposure of the Group’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate which increases or decreases by 0.5% when reporting to the internal management, which also represents the Group management's assessment of the reasonably possible interest rate change.

If the interest rate increases/decreases by 0.5%, with all other variable factors remaining constant, the Group’s net income would have decreased/increased by $458 thousand and $213 thousand for the years ended December 31, 2020 and 2019, respectively. This is mainly due to the Group’s borrowings in variable rates.

(v) Fair value of financial instruments
1) Categories and fair value of financial instruments

The carrying amount and fair value of the Group’ s financial assets and liabilities, including the information on fair value hierarchy, were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities disclosure of fair value information is not required:

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
BookValue		Fair Value
	Level 1 - - - - - - - - - - -	Level 2 - - - - - - - - - - -	Level 3 - - - - - - - - - - -	Total
				- - - - -
				- - - - -
				-

	December 31, 2019	December 31, 2019	December 31, 2019
BookValue		Fair Value
	Level 1 - - - - - - - - -	Level 2 - - - - - - - - -	Level 3 - - - - - - - - -	Total
				- - -
				- - - - -
				-

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

2) Valuation techniques of financial instruments not measured at fair value

The Group estimates its financial instruments, that are not measured at fair value, by methods and assumption as follows:

If there is quoted price generated by transactions for financial liabilities at amortized cost, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3) Transfer between Level 1 and Level 2

There were no transfers from one level to another level in 2020 and 2019.

(x) Financial risk management

(i) Overview

The Group is exposed to the following risks from its financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

In this note expressed the information on risk exposure and objectives, policies and procedures of risk measurement and management. For detailed information, please refer to the related notes of each risk.

(ii) Structure of risk management

The Group’ s finance management department provides business services for the overall internal department. It sets the objectives, policies and processes for managing the risk and the methods used to measure the risk arising from both the domestic and international financial market operations. The Group minimizes the risk exposure through derivative financial instruments. The Board of Directors regulates the use of derivative financial instruments in accordance with the Group’ s policy on risks arising from financial instruments such as currency risk, interest rate risk, credit risk, the use of derivative and non-derivative financial instruments, and the investments of excess liquidity. The internal auditors of the Group continue to review the amount of the risk exposure in accordance with the Group’s policies and the risk management's policies and procedures. The Group has no transactions in financial instruments (including derivative financial instruments) for the purpose of speculation.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and other receivables.

1) Accounts receivable and other receivables

The Group established a credit policy to obtain the necessary collateral to mitigate risks arising from financial loss due to default risk.

The Group established a credit evaluation policy. In addition to the publicly available financial information to analyze the new customers and give them credit ratings, the Group also assess the financial status and actual collection situation of the current customers to monitor credit risk and the counterparty's credit ratings continuously. The credit limits for each counterparty are approved and reviewed annually by the Group.

The Group did not have any collateral or other credit enhancement to avoid credit risk of the financial assets.

2) Investments

The exposure to credit risk for bank deposits and fixed income investments is measured and monitored by the Group’s finance department. The Group only deals with banks, corporate organizations and financial institutions with good credit rating. The Group does not expect any of the counterparties mentioned above to fail in meeting their obligations; hence, there is no significant credit risk arising from these counterparties.

(iv) Liquidity risk

The Group manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Group's management supervises the banking facilities and ensures compliance with the terms of loan agreements.

Loans and borrowings from the bank is an important source of liquidity for the Group. As of December 31, 2020 and 2019, the Group's unused credit lines were amounted to $48,770 thousand and $48,050 thousand respectively.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, that will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

1) Currency risk

The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Group’s entities, primarily USD 、 CNY and NTD.The currencies used in these transactions aree the USD, CNY, JPY, and EUR.

Loan interest is denominated in the currency of the loan. In general, the currency of the borrowing is the same as the currency of the cash flow generated by each operating location of the Group, which is mainly NTD, CNY, and USD. In this case, economic hedging is without need to sign derivatives, so hedging accounting is not adopted

In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

2) Interest rate risk

The Group adopts a policy of ensuring its exposure to changes in interest rates on borrowings is on a combination of fixed-rate and float-rate basis. This is achieved by using interest rate swaps as hedges of variability in cash flows attributable to movements in interest rates. The Group evaluates its hedge activity in a fix period, in order to keep the interest rate preference unchanged and ensure the most cost efficient hedge strategy is used.

(y) Capital management

The Group’s objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the dividend payment to the shareholders, reduce the capital for redistribution to shareholders, issue new shares, or sell assets to settle any liabiltities.

The Group and other entities in the same industry use the debt-to-equity ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

As of December 31, 2020, the Group’s capital management strategy is consistent with the prior year as of December 31, 2019. The Group’s debt-to-equity ratio at the end of the reporting period as of December 31, 2020 and 2019, is as follows:

Total liabilities Less: Cash and cash equivalents Net debt Total equity Adjusted equity Debt-to-equity ratio	December 31, 2020 $ 455,522 (281,626) 173,896 873,812 $ 1,047,708 16.60%	December 31, 2019 403,679 (351,402) 52,277 744,672 796,949 6.56%

(z) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, the acquisition of right-of-use assets through lease, please refer to note 6(g).

Reconciliation of liabilities arising from financing activities were as follows:

January 1,2020 Long-term borrowings $ 7,540 Short-term borrowings 35,000 Lease liability 58,634 Total liabilities from financing activities$ 101,174	Cash flows		Non-cash changes Foreign exchange movement - 750 (429) 321	December 31,2020
				2,391 89,272 51,106 142,769

January 1,2019 Long-term borrowings $ 12,688 Short-term borrowings 10,000 Lease liability 64,899 Total liabilities from financing activities$ 87,587	Cash flows		Non-cash changes Foreign exchange movement - - (534) (534)	December 31,2019
				7,540 35,000 58,634 101,174

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(7) Related-party transactions

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

Name of related party Relationship with the Group World Known MFG Co., Ltd. (WKP Taiwan) Same president with the Company Ancient Enterprise Corp. (Ancient) Same president with the Company

(b) Significant related-party transactions

(i) Sales

The amounts of significant sales by the Group to its related parties were as follows:

Other related parties - WKP Taiwan	2020 $ 32	2019
		22

The sales price of the Group to its related parties is not materially different from those to other sales. The collection terms for sales to related parties were month-end 30 to 120 days, which were not materially different from those of the third parties.

(ii) Purchases

The amounts of significant purchases and payables by the Group from its related parties were as follows:

s follows:
Other related parties - WKP Taiwan	2020 $ 99,405	2019
		116,079

The purchases price of the Group to its related parties is not materially different from those to other purchases. The payment terms for purchases to related parties were month-end 30 to 90 days, which were not materially different from those given by other vendors.

(iii) Receivables from related parties

The receivables from related parties were as follows:

Account Relationship Accounts receivable Other related parties-WKP Taiwan Other receivables Other related parties-WKP Taiwan	December 31, 2020 $ 17 $ 98	December 31, 2019
		6 98

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(iv) Payables to related parties

The payable to related parties were as follows:

The payable to related parties were as follows:
Account Relationship Accounts payable Other related parties-WKP Taiwan Other payables Other related parties-WKP Taiwan Other related parties-Ancient	December 31, 2020 $ 22,814 $ 1,777 126 $ 1,903	December 31, 2019
		42,798 2,430 126
		2,556

(v) Leases

In March and May 2019, the Group leased factory and office from other related party-WKP Taiwan, respectively. Ten-year and nine-year ten-month lease contract was signed respectively, in which the rental fee is determined based on nearby rental rates. The total value of the contract was $44,160 thousand and $22,255 thousand respectively. This lease transaction recognized an additional amount of $60,698 thousand right-of-use assets and $60,698 thousand lease liabilities, with a date of initial application of IFRS 16 on January 1, 2019. For the year ended December 31, 2020 and 2019, the Group recognized the amount of $980 thousand and $833 thousand as interest expense. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $49,680 thousand and $55,808 thousand.

In January 2019, the Group leased factory and office from other related party-Ancient. Threeyear contract was signed, in which the rental fee is determined based on nearby rental rates. The total value of the contract was $4,320 thousand. This lease transaction recognized an additional amount of $4,201 thousand right-of-use assets and $4,201 thousand lease liabilities, with a date of initial application of IFRS 16 on January 1, 2019. For the year ended December 31, 2020 and 2019, the Group recognized the amount of $40 thousand and $65 thousand as interest expense. As of December 31, 2020 and 2019, the balance of lease liability amounted to $1,426 thousand and $2,826 thousand.

(c) Key management personnel compensation

Key management personnel compensation comprised the following:

Short-term employee benefits Post-employment benefits Other long-term benefits Termination benefits Share-based payments	2020 $ 19,984 292 - - - $ 20,276	2019
		19,828 286 - - -
		20,114

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(8) Pledged assets:

The carrying values of pledged assets were as follow:

Pledged assets Other financial assets Right-of-use assets - land Property, plant and equipment	Object Short-term borrowings Long-term and short- term borrowings long-term borrowings	December 31, 2020 $ 34,176 5,382 49,408 $ 88,966	December 31, 2019
			- 5,442 53,762
			59,204

(9) Commitments and contingencies: none

(10) Losses Due to Major Disasters: none

(11) Subsequent Events

(i) For business finance plan requirement, the board of directors of WKPT resolved to issue 8,000 thousand ordinary shares, with a par value of $10, on January 19, 2021. The number of shares is fully subscribed by the Company. The Company authorized the chairman completed the issuance in stages within one year.
(ii) The board of directors of WKPT was resolved to participate in the public bidding of the Chiayi County Government Industrial Zone on January 19, 2021. The object of the bid is the industrial land of the Machouhou Industrial Park in Chiayi County. The area of the object land is 17,363.81 square meters, the total transaction amount is $249,517,500, and the land has been acquired through public auction on February 4, 2021.

(12) Other:

The followings are the summary statement of employee benefits, depreciation, depletion, and amortization expenses by function in the current period:

By function By item	2020	2020	2020	2019	2019	2019
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefits
Salary	80,347	51,515	131,862	94,211	52,242	146,453
Labor and health insurance	4,924	2,206	7,130	6,754	2,113	8,867
Pension	1,547	936	2,483	4,136	2,387	6,523
Others	1,673	1,328	3,001	1,637	1,406	3,043
Depreciation	56,599	9,746	66,345	61,426	9,093	70,519
Amortization	209	2,616	2,825	180	2,546	2,726

(Continued)

WORLD KNOWN MFG (CAYMAN) LIMITED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions, required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars or foreign currencies)

Number	Name of lender	Name of borrower	Account name	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Loss allowance	Item	Value	Individual funding loan limits	Maximum limit of fund financing
0	The company W	KPT	Other receivable related party	30,000 (USD$1,053)	30,000 (USD$1,053)	-	-	Necessary for financing	-	Operating turnover	-	-	-	87,353 (Note 2)	349,413 (Note 2)

Note 1: The number filled in as follows:

1) 0 represents the company.
2) Subsidiaries are sorted in a numerical order starting from 1.
Note 2: According to the operating procedures of the company’s capital loan to others, the amount of capital loan for individual objects shall not exceed 10% of the company’s net value; for capital loan shall not exceed 40% of the company’s net worth.

(ii) Guarantees and endorsements for other parties:

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0	The company	WKPF	Subsidiary	436,767 (Note 2)	34,176 (USD1,200)	34,176 (USD1,200)	34,176 (USD1,200)	34,176 (USD1,200)	% 3.91	436,767 (Note 2)	Y	N	Y

Note 1: The number filled in as follows:

1) 0 represents the company.
2) Subsidiaries are sorted in a numerical order starting from 1.
Note 2: According to the company's capital loan and endorsement guarantee operating procedures, the limit of single-object endorsement guarantee and the total amount of endorsement guarantee shall not exceed 20% and 50% of the company’s net worth respectively. For company that directly and indirectly hold 100% of the voting shares, the limit of endorsement guarantee shall not exceed 50% of the company’s net worth.
(iii) Securities held as of December 31, 2020 (excluding those investments in subsidiaries, associates and joint ventures):None
(iv) Individual securities acquired, or disposed, with an accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:

Name of company	Category and name of security	Account name	Name of counter- party	Relationsh ip with the company	Beginning Balance	Beginning Balance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares (thousands)	Amount	Shares (thousands)	Amount	Shares (thousands)	Price	Cost	Gain (loss) on disposal	Shares (thousands)	Amount
WKPF	Yinhua Transactional Money Market Fund	Financial assets at fair value through profit or loss	-	-	-	-	1,407	604,652	1,407	606,018	604,652	1,366	-	-

(Continued)

WORLD KNOWN MFG (CAYMAN) LIMITED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(vi) Disposal of individual real estate with an amount exceeding the lower of NT$300 million or 20% of the capital stock: None
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
WKPT	WKP Taiwan	Other related party	Purchases	99,405	% 66.32	90days	Note	90day	s (22,814	) 38.14%

Note ： Price is calculated according to agreements between both parties.

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:None

(ix) Trading in derivative instruments: None

(x) Business relationships and significant intercompany transactions:

No.	Name of company	Name of counter-party	Nature of relationship (Note2)	Intercompany transactions	Intercompany transactions	Intercompany transactions	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
1	WKPT	WKPF	3	Purchases	6,392	Price is calculated according to agreements between both parties	0.74%
1	WKPT	WKPF	3	Accounts payable	5,760	Normal payment period	0.43%

Note1 ： The number filled in as follows:

1) 0 represents the company.
2) Subsidiaries are sorted in a numerical order starting from 1.

Note2 ： Transactions labeled as follows:

1) 1 represents the transactions form parent company to subsidiaries.
2) 2 represents the transactions from subsidiaries to parent company.
3) 3 represents the transactions between subsidiaries.

(b) Information on investees:

The following is the information on investees (excluding information on investees in Mainland China):

(In thousands of shares /

In thousands of New Taiwan Dollars or Foreign currency)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2020	Balance as of December 31, 2020	Balance as of December 31, 2020	Net income (losses) of investee (Note 3)	Share of profits/losses of investee (Note 3)	Note
				December 31, 2020	December 31, 2019	Shares (thousands)	Percentage of ownership	Carrying value (Note 2)
The Company	Honour	Samoa	Investment	USD 11,521 (NTD363,510)	USD 11,521 (NTD363,510)	6,521	% 100	USD 23,759 (NTD676,656)	USD 3,152 (NTD93,089)	USD 3,152 (NTD93,089)	Note 1
The Company	WKPT	Taiwan	Manufacture of precision casting processing	80,000	80,000	8,000	% 100	97,583	1,318	1,318	Note 1
The Company	WKP USA	USA	General trading business	USD 90 (NTD2,678)	USD 90 (NTD2,678)	90	% 90	USD 88 (NTD2,506)	-	-	Note 1

Note1 ： Has been write off when preparing consolidated financial statements.

Note2 ： Exchange rate for USD to NTD is 28.48 on December 31, 2020.

Note3 ： Exchange rate for USD to NTD is 29.5332 in year 2020 on average.

(Continued)

WORLD KNOWN MFG (CAYMAN) LIMITED AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, their main businesses and products, and other information:

(In Thousands of New Taiwan Dollars or foreign currencies)

Name of investee	Main businesses and products	Total amount of capital surplus (Note 3)	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2020 (Note 3)	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2020 (Note 3)	Percentage of ownership	Net income (losses) of the investee (Note 3)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
WKPF	Manufacture of precision casting processing	USD 8,500 (NTD254,830)	Note 1	-	-	-	USD 3,152 (NTD93,089)	100.00%	USD 3,152 (NTD93,089)	USD 23,754 (NTD676,514)	-

Note1 ： Investments are made through setting up a company in the third country then invest to Mainland China.

Note2 ： Exchange rate of USD to TWD is 28.48 on December 31, 2020.

Note3 ： Exchange rate of USD to TWD is 29.5332 in year 2020 on average.

(ii) Limitation on investment in Mainland China:

itation on investment in Mainland China:
Accumulated Investment in Mainland China as of December 31, 2020	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
Note 1	Note 1	Note 1

Note 1: The Company is an offshore company, which is not applicable of the limits in "Regulations Governing the Examination of investment or Technical Cooperation in Mainland China".

(iii) Significant transactions:

The significant inter-company transactions in year 2020 with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in the “ Information on significant transactions” and “Business relationships and significant intercompany transactions”.

(d) Major shareholders

r shareholders
Shareholding Shareholder's name	Shares	Precentage
Germander Group Limited	4,230,000	% 12.47
Lavender Hill Limited	2,730,000	% 8.05
AmtrustInvestment Consulting Corp	2,000,000	% 5.89
E. SUN Commercial Bank, LTD. in custody for GREATER MATRIX Limited	1,812,000	% 5.34

(i) The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of total non-physical common stocks and preferred stocks (including treasury stocks) on the last business date of each quarter, The registered non-physical stocks may be different from the capital stocks disclosed in the financial statement due to different calculation basis.

(ii) If share are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust account. The shareholders holding more than 10% of the total shares of the company should declare insider's equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the trust assets which the insider has discretion over use. For details of the insider's equity announcement please refer to the TWSE website.

(Continued)

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

(14) Segment information

(a) General information

The Group is primarily involved in the manufacturing and selling the energy-saving and carbonreducing parts of commercial vehicle engine, ADB calipers, rear panels of brake pad, bend pipes and accessories of turbocharger, cases of flywheel, cases of swing arms, exhaust manifolds, braces, core shafts, parts for braking system of wind power generator and processed products of machinery parts for various industries. Reportable segment contains only precision casting processing department, offering products and manage related technologies and marketing strategies.

(b) Information about reportable segments and their measurement and reconciliations.

The Group uses internal management report that the chief operating decision maker reviews as the basis to determine resource allocation and make a performance evaluation. The internal management report includes profit after taxation. Gain or loss of reportable segments include depreciation and amortization, tax expense (profit), non-recurring profit or loss and other significant non-cash items. The reportable amount is similar to that in the report used by chief operating decision maker. The operating segment accounting policies are similar to those described in note4. The Group's information of segment is similar to financial report, please refer to balance sheet and statements of comprehensive income.

(c) Production information

Revenue from the external customers of the Group was as follows:

Product Automotive parts Green energy parts Others	2020 $ 607,988 110,513 145,248 $ 863,749	2019
		765,067 86,856 183,976
		1,035,899

(d) Geographical information

In presenting the information on the basis of geography, segment revenue is based on the geographical location of the customers and the segment non-current assets are based on the geographical location of the assets.

World Known MFG (Cayman) Limited and Subsidiaries Notes to the Consolidated Financial Statements

Revenue from the external customers:

Region America Asia Other countries Non-current assets: Region China Other countries		2020		2019
				483,698 423,755 128,446
				1,035,899 December 31, 2019 240,976 162,626 403,602
	$ $

Non-current assets include property, plant and equipment, right-of-use assets, intangible assets, and other assets, excluding financial instruments and deferred tax assets.

(e) Major customers’ information

Customer From Precision Casting processing department`－` Customer A From Precision Casting processing department`－` Customer B Total	2020 Amount $ 248,209 105,334 $ 353,543	2019
		Amount
		366,512 80,955
		447,467

World Known MFG (Cayman) Limited

Chairman:Lu, Huang-Fu

AI assistant

WKG — Annual Report 2020

52415_rns_2021-08-13_6934b37f-eee5-44ad-9366-b131b3f3f77d.pdf

World Known MFG (Cayman) Limited

2020 Annual R rt epo

1.Spokesperson and acting spokesperson

2.Contact information of the head office, branch offices andfactories

3.Stock Transfer Agency (Name, Address, Website and Telephonenumber)

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

5.Name of the stock exchange where company’s listed overseas securities are traded and the access to information on such listed overseas securities: N/A.

6.Company Website ： http://www.wkgroup.com

7.Responsible person for litigation and non-litigation (name, title and contact information):

8.Directors

Table of Contents

APPENDIX

I.Letter to Shareholders

A.Overview of business in 2020

(I)Performance of the business plan

(II)Execution of budget

II. Company Profile

A. Foundation Date: November 19, 2015

B. Company History

III.Corporate Governance Report

A. Organizational System

(II) Functions of the Major Departments

1. Directors

2. Supervisor:

3. Major shareholders of institutionalshareholders.

(II)Management Team

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

(I)Remuneration paid to Directors (including IndependentDirectors)

(III)Remuneration paid during the most recent fiscal year general manager and deputy generalmanager

(IV)Employees’ Profit Sharing Bonus Paid to ManagementTeam

D.Corporate GovernanceImplementation

(II) Audit Committee

2. Audit Report of Internal Control System Prepared by CPAs ：

1. Shareholders’Meeting

2. Board Meetings

IV.Capital Raising

A.Capital andShares

(I) Source ofCapital

1. Capitalization

2. Type ofStock

3. Information about the omnibus reporting system: N/A.

(II) Composition ofShareholders

(III) Shareholding Distribution Status

1. Distribution Profile of ShareOwnership ：

2. Preferred Shares ： None 。

(IV) Major Shareholders

(VI) Company's dividend policy and itimplementation

1. Dividend Policy is set out in the Articles ofIncorporation

2. The dividends distribution proposed to the AGM:

(IX) Repurchase of CommonStock ： None 。

C.PreferredShares

H.Implementation plan offunding

V.Overview of Operations

A.Description of Operations

(I)Scope of Operations

1. The major businesses

3. Current products (services) of the Company

4. New products (services) planned to be developed

(II)Overview of Industry

Production of mid/heavy trucks of USA, 2011-2020

Sales and growth rate of China commercial vehicle, 2006-2020

(2) Green-energy industries

a. Onshore wind power market

b. Offshore wind power market

( 2 ) Green-e n ergy indus t ries

a. Automobile industry

(b) Unmanned driving:

b. Green-energy industries

b. Green-energy industries

(III)Overview of technologies and R&D

1. The technology level and the R&D of the business operated

2. Market shares

(2) Green-energy industries

4. Competitive niche

(1) Concentrating on the niche market

(2) Flexible production operation

(3) Forward looking product strategy

WKG Annual Report 2020