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Y.C.C. AGM Information 2022

May 27, 2022

51783_rns_2022-05-27_740e407d-abe7-48dc-8d9d-e370e3a466a8.pdf

AGM Information

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Stock No: 1339

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Y.C.C. Parts MFG Co., Ltd.

2022 General Shareholders’ Meeting

Handbook for the Annual Shareholders’ Meeting

Address: No. 8, Xingye Rd., Changhua Coastal Industrial Park, Lukang Township, Changhua County, Taiwan (R.O.C.)

1

Table of Contents

Table of Contents
One. 2022General Shareholders' Meeting Procedure 3
Two. 2022Shareholders' Meeting Agenda 4
Three. Report Items 5
Four. Proposals 6
Five. Discussion 7
Six. Election Matters 7
Seven. Other Matters 8
Eight. Extemporary Motion 8
Nine. Adjournment 8
Ten. Attachment
I. 2021Business Report 9
II. Auditing Committees' Review Report 10
III. 2021 Financial Statements 11
IV. Earnings Distribution Table 34
V. Before and After Revision Comparison Tables of the Articles of Incorporation
35
VI. Before and After Revision Comparison Tables of Regulations Governing the
Acquisition and Disposal of Assets 37
Eleven. Appendix
I. Articles of Incorporation (Before Revision) 43
VI.Full Texts of Regulations Governing the Acquisition and Disposal of Assets
Before Revision 49
III. Procedures for Shareholders’ Meeting (Complete Procedures) 60
IV. Shareholdings of All Directors 64
V. Impact of Issuance of bonus shares on the Company’s Business Performance,
Earnings per Share and Shareholder’s Return Rate 65
VI. List of Candidates of Directors 66
VII. Measures for the Election of Directors 69

2

One. 2022General Shareholders' Meeting Procedure

  • I. Call the Meeting to Order

  • II. Chairman’s Remarks

  • III. Report Items

  • IV. Proposals

  • V. Discussion

  • VI.Election Matters

  • VII. Other Matters

VIII. Extempore Motion

  • IX. Adjournment

3

Two. 2022 Shareholders' Meeting Agenda

I. Time: 9:30 am, May 27, 2022 (Friday)

II. Venue: No. 8, Xingye Rd., Changhua Coastal Industrial Park, Lukang Township, Changhua County, Taiwan (R.O.C.)

III. Call the Meeting to Order

  • IV. Chairman’s Remarks

  • V. Report Items

  • (I). 2021 Business Report

(II). Audit Committee’s Review Report on 2021 Financial Statements

(III). Appropriation to Special Reserve

(IV). Distribution of 2021 Remuneration to Employees and Directors (V). 2021 Earnings Distribution.

  • VI. Proposals

(I). To Approve 2021 Business Report and Financial Statements

(II). To Approve 2021 Earnings Distribution

VII. Discussion

(I). Motion: Partial amendments to the “Articles of Incorporation.”

(II). Partial amendments to the “Regulations Governing the Acquisition and Disposal of Assets”

VIII. Election Matters

Full election of directors of the Company.

  • IX. Other Matters

Proposal to Release Non-Compete Restrictions on All of the Company’s Newly Appointed Directors.

X. Extemporary Motion

  • XI. Adjournment

4

Three. Report Items

I. 2021 Business Report

Explanation: For the 2021 Business Report, please refer to pages 9 (Attachment I).

  • II. Audit Committee’s Review Report on 2021 Financial Statements

  • Explanation: For the Audit Committee’s Review Report on the 2021 Financial Statements, please refer to page 10 (Attachment II).

  • III. Appropriation to Special Reserve

  • Explanation: The Company’s reversal of special reserve is carried out pursuant to Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865 dated April 6, 2012, issued by the Financial Supervisory Commission (FSC). The amount of appropriation is as follows:

    1. The Company’s net deduction of other equity as of December 31, 2021 is NT$ -120,040,686. Related accounting titles are as follows:

  • (1) Exchange differences from the translation of foreign financial statement:

  • NT$ -86,492,902.

    • (2) Unrealized profits and losses from investments in equity instruments at FVTOCI: NT$-33,547,784.

    • The Company’s special reserve as of December 31, 2021: NT$ 105,211,485. Special reserve reversal: NT$ 14,829,201.

  • IV. Distribution of 2021 Remuneration to Employees and Directors.

  • Explanation: (I). 2021 Remuneration to employees, Directors and Supervisors is distributed in accordance with the Company Act and Article 26 of the Company’s “Articles of Incorporation” 

     - (II). Article 26 of the Company's “Articles of Incorporation” stipulates that, if the Company has earnings for the year, no less than 1% - 3% of the earnings should be appropriated to pay remuneration to employees and no more than 3% of the earnings should be appropriated to pay remuneration to Directors and Supervisors. However, profits must first be taken to offset cumulative losses, if any.

 - (III). The Company’s 2021 remuneration to Directors and Supervisors was approved by the Remuneration Committee on March 10, 2022. The remuneration to Directors is NT$ 4,016,691 and Remuneration to employees is NT$ 4,670,571.

5

  • V. 2021 Earnings Distribution.

  • Explanation: (I). According to Article 27 of the Company’s articles of incorporation, the board of directors is authorized to resolve all or part of the dividends and bonuses to be distributed in cash and shall report such distribution proposal to the shareholders’ meeting.

    • (II). The cash dividends of NT$148,247,750 are distributed among shareholders at NT$2 per share and the cash dividend are rounded off to the nearest NTD. The Chairman is authorized to have dedicated personnel to adjust the fractional-cent amount.

    • (III). This Proposal has been reviewed and approved by the Auditing Committee and was approved by the board of directors on March 10, 2022. The Chairman was authorized to set the ex-dividends base date, distribution date and determine other related matters; when the number of outstanding common stocks changes, the Chairman is also authorized to have dedicated personnel to adjust it.

    • (IV). The proposal has been submitted to the shareholders’ meeting for report.

6

Four. Proposals

Motion 1 (Proposed by the Board of Directors)

Motion: To Approve 2021 Business Report and Financial Statements

Explanation: I. The Company's 2021 business report and financial statements have been reviewed by the CPAs and are submitted to the Auditing Committee for review.

  • II. For the 2021 business report, CPAs’ Report, and financial statements, please refer to pages 9-33 (Attachments I-III).

III. Please approve.

Resolutions:

Motion 2 (Proposed by the Board of Directors)

Motion: To Approve the 2021 Earnings Distribution.

  • Explanation: The Company’s 2021 distributable earnings are NT$ 1,165,980,2940, 10% (NT$ 13,637,466) of which is set aside as a legal reserve and the special reserve reversal is NT$ 14,829,201. The distributable amount is as follows:

  • I. Cash dividends to shareholders are NT$ 148,247,750 at NT$ 2 per share. The Board of Directors authorizes the Chairman to determine the ex-dividends date and other related matters.

  • II. The cash dividends are rounded off to the nearest NTD. The Chairman is authorized to adjust the fractional-cent amount to certain shareholders.

  • III. The Chairman is authorized to adjust the dividends if the number of common stocks is affected by the “Company's repurchase, transfer or retirement of treasury stock or domestic seasoned equity ”

  • offering .

  • IV. Please refer to Attachment IV for the 2021 earnings distribution table.

  • V. Please approve.

Resolutions:

7

Five. Discussion

Motion 1:

(Proposed by the Board of Directors)

Motion: Partial amendments to the “Articles of Incorporation.”

Explanation: I. The Company’s “Articles of Incorporation” are amended in

  • accordance with the addition of Article 172-2 to the Company Act.

  • II. Please refer to Attachment V for the details of the revised/amended articles.

Resolutions:

Motion 2: (Proposed by the Board of Directors)

Motion: Partial amendments to the “Regulations Governing the Acquisition and Disposal of Assets”.

  • Explanation: I. Partial amendment to the Company’s “Regulations Governing the Acquisition and Disposal of Assets” is conducted in response to the amendment of legal orders.

  • II. These Regulations shall be submitted to the shareholders’ meeting for resolution after the approval by the board of directors and the same shall apply to the amendments.

  • III. Please refer to Attachment VI for the details of the revised/amended articles.

Resolutions:

Six. Election Matters

(Proposed by the Board of Directors)

Motion: Full re-election of directors of the Company.

  • Explanation: I. The Company currently has elected nine directors (including four independent directors) for a term of office from May 29, 2020 to May 28, 2023. It is hereby proposed to fully re-elect all nine directors (including the four independent directors) prior to the end of their term of office and elect nine directors. (Please refer to Appendix VI for the list of candidates for directors).

  • II. The term of office of the newly-appointed directors will be from May 27, 2022 to May 26, 2025, with a term of three years; the board of directors of the 12th session shall be dismissed by the shareholders’ meeting at the time the directors of the 13th session are officially elected.

  • III. Please discuss.

8

Seven. Other Matters

(Proposed by the Board of Directors) Motion: Proposal to Release Non-Compete Restrictions on All of the Company’s Newly Appointed Directors

  • Explanation: I. As stipulated in Article 209 of the Company Act, “a director who does anything for himself or on behalf of another person that is within the scope of the company's business shall explain at the shareholders’ meeting the essential contents of such an act and secure its approval.”

  • II. Due to business needs, it is proposed to release the non-compete restriction on the Company's Directors and representatives acting as a natural person when serving concurrently in other companies within the same business scope listed in the Company’s “Articles of Incorporation.” in accordance with Article 209 of the Company Act. This matter is proposed to be resolved at the (2022) Shareholders’ Meeting.

  • III. This proposal is reported to Shareholders’ Meeting for discussion after being approved by the Board.

IV. Please discuss.

Director Status of Release Non-Compete Restrictions Kuo-Hua Chang Independent Director, Auditing Committee Member and Remuneration Committee Member of Shining Victory Motor Electronic Co., Ltd.

Resolutions:

Eight. Extempore Motion

Nine. Adjournment

9

Ten. Attachment

Attachment I

2021 Business Report

Dear Shareholders:

I hope that you are all doing well and I would like to thank you for attending the 2021 Shareholders' Meeting, and also for your continued support. On behalf of the Company, we would like to express our sincerest gratitude to our shareholders.

In 2021, the epidemic that has lasted for the past two years has affected the global development and supply chain, which makes it difficult to obtain available containers due to the soaring maritime freight demands. This has resulted in the inevitable rise in price of raw materials and inflation. A majority of the global population are forced to stay locked down at home due to the epidemic, which results in a sharp drop in the demand for collision parts and a decrease in revenue of NT$244 million in 2020 compared to that in 2019. We further revised downward the 2021 revenue. In addition, since 2020, we have diversified our management to mitigate significant impact on a single industry due to force majeure factors. The equipment and devices required for our management diversification of have been purchased from abroad and are expected to be delivered to the premises of the plant for installation by the end of 2022. They will be put into commissioning for mass production at the beginning of 2023 and afterwards adopted to continue to increase revenue and enhance profitability as the return for the long-time support from our shareholders and hard-working staff.

2021 Business Results

(I) 2021 Results of the business plan

The Company’s 2021 net revenue was NT$ 1,918,100 thousand; net profit before tax was NT$ 170,406 thousand; net profit after tax was NT$ 135,753 thousand; and EPS after tax was NT$ 1.83.

(II) 2021 Revenues, expenses, and profitability analysis

Items Year Year 2021 2020
Financial
structure (%)		 Ratio of liabilities to assets 29.72 32.33
Ratio of long-term capital
to fixed assets		 142.32 147.46
Profitability (%) Return on assets 2.91 2.45
Return on equity 3.93 3.38
As a
percentage
of paid-in		 Operating
profit		 23.54 47.27
Net income 22.98 24.10

10

capital before tax
Net profit rate 7.08 5.55
Earnings per share (NT$) 1.83 1.59

(III) Research and development

Actively research and develop various equipment related to process automation to gradually reduce the labor demand and increase the stability of the product quality at the production lines.

Chairman: Hao-Chen Lin, General Manager: Jui-Tse Lin Head of Accounting: Wei-Yang Hehan Investment Co., Ltd. Shen

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11

Attachment II

Audit Committees' Review Report

We have reviewed the Company's 2021 financial statements, business report and earnings distribution proposal. The Board retained

PricewaterhouseCoopers to audit the 2021 financial statements and issue a review report on their unqualified opinion.

We are responsible for supervision the procedures of financial reporting.

The communication with CPAs regarding 2021 financial statements is as follows:

  1. CPAs’ responsibilities for the audit of the financial statements

  2. Scope and period of audit

  3. Major accounting estimate and accounting principles

  4. Material findings in the audit

  5. Statement of independence

  6. Key audit matter

We found no misstatements in the 2021 financial statements, business report and earnings distribution proposal and has issued the report as presented above in accordance with Article 219 of the Company Act.

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Yours sincerely,

For

2022 General Shareholders’ Meeting of YCC Manufacturing Co., Ltd. Convener of the Auditing Committee: Hung-Lung Huang

March 10, 2022

12

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Y.C.C. PARTS MFG. CO., LTD.

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2021, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the entity that is required to be included in the consolidated financial statements of affiliates, is the same as the entity required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard No. 10. Additionally, if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

Y.C.C. PARTS MFG. CO., LTD.

Representative:

March 10, 2022

~13~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Y.C.C. Parts Mfg. Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Y.C.C. Parts Mfg. Co., Ltd. and subsidiaries (the “Group”) as at December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of 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 at December 31, 2021 and 2020, 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 the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

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

Key audit matters

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

~14~

Key audit matters for the Group’s 2021 consolidated financial statements are stated as follows:

Cut-off of sales revenue recognition

Description

For the accounting policy of revenue recognition, please refer to Note 4(29); and for details of operating revenue, please refer to Note 6(22). The Group is primarily engaged in manufacturing and trading automobile parts. Sale revenue is recognised when the control over the goods was transferred under the transaction terms.

The sales revenue recognition involves the use of several manual judgements and procedures. As a result, the timing of sales revenue recognition may be inappropriate. Therefore, we included the cut-off of sales revenue recognition as one of the key areas of focus for this year.

How our audit addressed the matter:

Our audit procedures in relation to the above key audit matter included:

  1. Understanding and evaluating the operating procedures and internal controls over sales revenue, and assessing the effectiveness on how the management controls the timing of recognizing sales revenue.

  2. Examined the transaction documents to ensure that transactions had been recorded in the proper period for a certain period around the balance sheet date.

Assessment of allowance for inventory valuation loss

Description

For the accounting policy of inventory assessment, please refer to Note 4(14); for accounting estimates and assumption uncertainty in relation to inventory valuation, please refer to Note 5; and for details of allowance for inventory valuation losses, please refer to Note 6(6). The Group is primarily engaged in manufacturing and trading automobile parts. Sale revenue is recognised when the control over the goods was transferred under the transaction terms.

~15~

As of December 31, 2021, the balances of inventories and allowance for inventory valuation losses were NT$ 383,913 thousand and NT$ 70,223 thousand, respectively.

The Group is primarily engaged in manufacturing and trading automobile parts. Inventories that are over a certain age and separately recognised as impaired inventories are stated at the lower of cost and net realisable value. Those inventory items separately identified as obsolete and damaged are corroborated against supporting documents in recognising valuation losses. Considering that the Group’s inventories were material to its financial statements, and the determination of net realisable value as at balance sheet date involved judgements and estimates, we identified the assessment of allowance for inventory valuation losses a key audit matter.

How our audit addressed the matter:

Our audit procedures in relation to the above key audit matter included:

  1. Obtained an understanding of the nature of the Group’s business and industry and assessed the reasonableness of provision policies in the determination of allowance for inventory valuation losses.

  2. Reviewed the Group’s annual counting plan and conducted their physical counts on inventories to evaluate the control effectiveness on inventory classification.

  3. Obtained the Group’s inventory aging report and verified dates of movements with supporting documents. Ensured the proper categorisation of inventory aging report in accordance with the Group’s policy.

  4. Obtained the net realisable value statement of each inventory, assessed whether the estimation policy was consistently applied, tested the estimation basis of the net realisable value with relevant information, including verifying the sales and purchase prices with supporting evidence, and recalculated and evaluated the reasonableness of the inventory valuation.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Y.C.C. Parts Mfg. Co., Ltd. as at and for the year ended December 31, 2021. We have also audited and expressed an unqualified opinion on the parent company only financial statements of Y.C.C. Parts Mfg. Co., Ltd., with an other matter paragraph, as at and for the year ended December 31,

~16~

2020.

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 the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, 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 audit committee, are responsible for overseeing the Group’s financial reporting process

Auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards 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 the generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

~17~

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

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

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

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

5.

6.

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

~18~

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.

Wang, Yu-Chuan

[Liu, Mei Lan ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 10, 2022

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets
Current assets
1100
Cash and cash equivalents
1110
Financial assets at fair value through
profit or loss - current
1136
Current financial assets at amortised
cost
1150
Notes receivable, net
1170
Accounts receivable, net
1200
Other receivables
130X
Inventories
1470
Other current assets
11XX
Current Assets
Non-current assets
1517
Non-current financial assets at fair
value through other comprehensive
income
1535
Non-current financial assets at
amortised cost
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Investment property, net
1780
Intangible assets
1840
Deferred income tax assets
1900
Other non-current assets
15XX
Non-current assets
1XXX
Total assets		 Notes December31,2021
AMOUNT
%
$
635,392
13
117,251
2
199,416
4
55,055
1
441,993
9
10,792
-
313,690
6
52,099
1
1,825,688
36
48,308
1
300
-
2,830,766
56
140,137
3
15,477
-
11,147
-
108,171
2
71,871
2
3,226,177
64
$
5,051,865
100		 December31,2020 December31,2020
AMOUNT
$
635,392
117,251
199,416
55,055
441,993
10,792
313,690
52,099
1,825,688
48,308
300
2,830,766
140,137
15,477
11,147
108,171
71,871
3,226,177
$
5,051,865		 AMOUNT
$
742,410
18,301
261,058
29,553
591,658
3,579
302,754
86,426
2,035,739
52,241
300
2,767,101
146,668
16,506
8,203
115,287
156,356
3,262,662
$
5,298,401		 %
14
-
5
-
11
-
6
2
38
1
-
52
3
1
-
2
3
62
100

(Continued)

~20~

Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity
Current liabilities
2100
Short-term borrowings
2110
Short-term notes and bills payable
2120
Financial liabilities at fair value
through profit or loss - current
2130
Current contract liabilities
2150
Notes payable
2170
Accounts payable
2200
Other payables
2230
Current income tax liabilities
2320
Long-term liabilities, current portion
2399
Other current liabilities, others
21XX
Current Liabilities
Non-current liabilities
2540
Long-term borrowings
2560
Current tax liabilities-non - current
2600
Other non-current liabilities
25XX
Non-current liabilities
2XXX
Total Liabilities
Equity attributable to owners of
parent
Share capital
3110
Share capital - common stock
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3500
Treasury shares
31XX
Equity attributable to owners of
the parent
36XX
Non-controlling interests
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
3X2X
Total liabilities and equity		 December31,2021
December31,2020
Notes
AMOUNT
%
AMOUNT
%
$
264,320
5 $
333,396
6
50,000
1
-
-
12,111
-
27,305
1
17,912
-
20,177
-
92,502
2
118,492
2
157,602
3
251,103
5
145,514
3
134,314
3
68,729
2
78,868
1
105,835
2
137,261
3
1,703
-
1,507
-
916,228
18
1,102,423
21
540,190
11
575,299
11
31,538
1
20,630
-
13,651
-
14,388
-
585,379
12
610,317
11
1,501,607
30
1,712,740
32
741,389
15
741,389
14
1,193,349
24
1,193,259
23
329,574
6
317,795
6
105,211
2
119,480
2
1,194,447
24
1,203,831
23
(
120,040 ) (
3 ) (
105,211) (
2)
(
526 )
- (
526)
-
3,443,404
68
3,470,017
66
106,854
2
115,644
2
3,550,258
70
3,585,661
68
$
5,051,865
100 $
5,298,401
100		 
按一下這裡以輸入文字。

~21~

Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items
4000
Sales revenue
5000
Operating costs
5900
Net operating margin
Operating expenses
6100
Selling expenses
6200
General and administrative
expenses
6300
Research and development
expenses
6450
Impairment loss (impairment
gain and reversal of impairment
loss) determined in accordance
with IFRS 9
6000
Total operating expenses
6900
Operating profit
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year		 YearendedDecember31
2021
2020
Notes
AMOUNT
%
AMOUNT
%
$
1,918,100
100
$
2,120,901
100
(
1,472,524) (
77) (
1,483,398)(
70)
445,576
23
637,503
30
(
113,494 ) (
6) (
127,736) (
6)
(
115,548 ) (
6) (
127,769) (
6)
(
37,564 ) (
2) (
31,247) (
2)
(
4,481)
- (
308)
-
(
271,087) (
14) (
287,060)(
14)
174,489
9
350,443
16
2,584
-
8,105
1
21,917
1
21,278
1
(
10,009 )
- (
184,903) (
9)
(
18,575) (
1) (
16,226)(
1)
(
4,083)
- (
171,746)(
8)
170,406
9
178,697
8
(
42,707) (
2) (
59,084)(
3)
$
127,699
7
$
119,613
5

(Continued)

~22~

Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items YearendedDecember31
2021
2020
Notes
AMOUNT
%
AMOUNT
$
776
-
$
143
(
3,933 )
- (
5,301)

(
155 )
- (
28)

(
3,312 )
- (
5,186)
(
11,542 ) (
1)
21,593

(
11,542 ) (
1)
21,593
($
14,854 ) (
1) $
16,407
$
112,845
6
$
136,020
$
135,753
7
$
117,679
(
8,054 )
-
1,934
$
127,699
7
$
119,613
$
121,545
6
$
132,064
(
8,700 )
-
3,956
$
112,845
6
$
136,020
$
1.83
$
$
1.83
$		 YearendedDecember31 YearendedDecember31 YearendedDecember31
2021 2020
%
AMOUNT

-
$
143

- (
5,301)
- (
28)
- (
5,186)

1)
21,593

1)
21,593

1) $
16,407
6
$
136,020

7
$
117,679
-
1,934
7
$
119,613

6
$
132,064
-
3,956
6
$
136,020
1.83
$
1.83
$		 2020
%
Other comprehensive income
Components of other
comprehensive income that will
not be reclassified to profit or loss
8311
Other comprehensive income,
before tax, actuarial gains
(losses) on defined benefit plans
8316
Unrealised gains (losses) on
valuation of equity instrument at
fair value through profit or loss
8349
Income tax related to components
of other comprehensive income
that will not be reclassified to
profit or loss
8310
Components of other
comprehensive income that will
not be reclassified to profit or
loss
Components of other
comprehensive income that will
be reclassified to profit or loss
8361
Financial statements translation
differences of foreign operations
8360
Components of other
comprehensive income that will
be reclassified to profit or loss
8300
Total other comprehensive (loss)
income for the year
8500
Total comprehensive income for
the year
Profit (loss), attributable to:
8610
Owners of parent
8620
Non-controlling interests
Total
Comprehensive income attributable
to:
8710
Owners of parent
8720
Non-controlling interests
Total
Basic earnings per share
9750
Basic earnings per share
9850
Diluted earnings per share		 -

-

-

-
1
1
1
6
5
-
5
6
-
6
1.59
$ $ 1.58

按一下這裡以輸入文字。 ~23~

Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Year 2020
Balance at January 1, 2020
Profit for the year
Other comprehensive income (loss) for
the year
Total comprehensive income (loss) for
the year
Appropriation and distribution of 2019
earnings
Legal reserve
Special reserve
Cash dividends
Acquisition of non-controlling interests
in subsidiaries
Balance at December 31, 2020
Year 2021
Balance at January 1, 2021
Profit (loss) for the year
Other comprehensive income (loss) for
the year
Total comprehensive income (loss) for
the year
Appropriation and distribution of 2020
earnings
Legal reserve
(Reversal of) Special reserve
Cash dividends
Acquisition of non-controlling interests
in subsidiaries
Balance at December 31, 2021		 Notes Equity attr ib utable to owners o fthe parent fthe parent Non-controlling
interests		 Total equity
Share capital -
common stock		 Capital surplus,
additional paid-in
capital		 RetainedEarnings Otherequityinterest Treasuryshares Total
Legal reserve Special reserve Total
unappropriated
retained earnings
(accumulated
deficit)		 Financial
statements
translation
differences of
foreign operations		 Total Unrealised
gains (losses)
from financial
assets measured at
fair value through
other
comprehensive
income




$
741,389
-
-
-
-
-
-
-
$
741,389
$
741,389
-
-
-
-
-
-
-
$
741,389		 $ 1,193,024
-
-
-
-
-
-
235
$ 1,193,259
$ 1,193,259
-
-
-
-
-
-
90
$ 1,193,349		 $
280,161
-
-
-
37,634
-
-
-
$
317,795
$
317,795
-
-
-
11,779
-
-
-
$
329,574		 $
88,059
-
-
-
-
31,421
-
-
$
119,480
$
119,480
-
-
-
-
(
14,269 )
-
-
$
105,211		 $ 1,303,340
117,679
115
117,794
(
37,634 )
(
31,421 )
(
148,248 )
-
$ 1,203,831
$ 1,203,831
135,753
621
136,374
(
11,779 )
14,269
(
148,248 )
-
$ 1,194,447		 ($
95,167 )
-
19,571
19,571
-
-
-
-
($
75,596 )
($
75,596 )
-
(
10,896 )
(
10,896 )
-
-
-
-
($
86,492 )		 ($
24,314 )
-
(
5,301 )
(
5,301 )
-
-
-
-
($
29,615 )
($
29,615 )
-
(
3,933 )
(
3,933 )
-
-
-
-
($
33,548 )		 ($
526 )
-
-
-
-
-
-
-
($
526 )
($
526 )
-
-
-
-
-
-
-
($
526 )		 $ 3,485,966
117,679
14,385
132,064
-
-
(
148,248 )
235
$ 3,470,017
$ 3,470,017
135,753
(
14,208 )
121,545
-
-
(
148,248 )
90
$ 3,443,404		 $
111,923
1,934
2,022
3,956
-
-
-
(
235 )
$
115,644
$
115,644
(
8,054 )
(
646 )
(
8,700 )
-
-
-
(
90 )
$
106,854		 $ 3,597,889
119,613
16,407
136,020
-
-
(
148,248 )
-
$ 3,585,661
$ 3,585,661
127,699
(
14,854 )
112,845
-
-
(
148,248 )
-
$ 3,550,258

s.

~24~

Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense (including investment
property)
Depreciation expense - right-of-use assets
Amortisation expense
Expected credit impairment loss
Net gain (loss) on financial assets or liabilities at
fair value through profit or loss
Interest expense
Interest income
Government grant revenues
Dividend income
Gain on disposal of property, plant and
equipment
Impairment loss
Unrealised foreign exchange (gain) loss
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable, net
Accounts receivable, net
Other receivables
Inventories
Other current assets
Other non-current assets
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Other current liabilities
Net defined benefit liability
Cash inflow generated from operations
Interest received
Interest paid
Dividend received
Income taxes paid
Net cash flows from operating activities		 YearendedDecember31
Notes
2021
2020
$
170,406 $
178,697
334,048
298,443
5,698
4,744
7,483
10,313
4,481
308
(
47,204 )
5,912
18,575
16,226
(
2,584 ) (
8,105 )
(
966 ) (
436 )
(
4,111 ) (
4,036 )
(
4,528 ) (
246 )
-
84,794
(
5,119 )
15,091
(
25,502 ) (
6,673 )
146,459
163,769
(
7,515 )
541
(
10,936 ) (
38,867 )
9,589 (
31,644 )
-
1,849
(
2,265 )
5,851
(
25,990 )
5,063
(
93,501 )
3,327
(
3,985 ) (
33,888 )
190
391
(
209 ) (
184 )
462,514
671,240
2,886
10,532
(
18,678 ) (
13,922 )
4,111
4,036
(
25,903 ) (
13,692 )
424,930
658,194

(Continued)

~25~

Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through
profit or loss
Proceeds from disposal of financial assets at fair
value through profit or loss
Decrease (increase) in financial assets at amortised
cost
Acquisition of property, plant and equipment
Payment for capitalized interest
Gain on disposal of property, plant and equipment
Acquisition of intangible assets
Acquisition of use-of-right assets
Decrease in other current assets
(Increase) decrease in other non-current assets
Increase in refundable deposits
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Decrease in short-term borrowings
Increase in short-term notes and bills payable
Proceeds from long-term borrowings
Repayments of long-term borrowings
Increase in guarantee deposits received
Repayment of principal portion of lease liabilities
Cash dividends paid
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 YearendedDecember31
Notes
2021
2020
($
121,127 ) ($
36,751 )
57,760
75,146
65,268 (
112,036 )
(
306,802 ) (
139,043 )
(
1,972 ) (
3,333 )
7,667
4,709
(
6,868 ) (
4,000 )
- (
32,819 )
24,738
7,727
973 (
136,135 )
(
17 ) (
833 )
(
280,380 ) (
377,368 )
987,609
468,280
(
1,054,832 ) (
389,391 )
50,000
-
75,860
200,100
(
143,101 ) (
364,707 )
-
398
(
594 ) (
99 )
(
148,248 ) (
148,248 )
(
233,306 ) (
233,667 )
(
18,262 ) (
5,379 )
(
107,018 )
41,780
742,410
700,630
$
635,392 $
742,410

26

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Y.C.C. Parts Mfg. Co., Ltd.

Opinion

We have audited the accompanying parent company only balance sheets of Y.C.C. Parts Mfg. Co., Ltd. (the “Company”) as at December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2021 and 2020, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

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

Key audit matters

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

Key audit matters for the Company’s 2021 parent company only financial statements are stated as

~27~

follows:

Cut-off of sales revenue recognition

Description

For the accounting policy of revenue recognition, please refer to Note 4(28); and for details of operating revenue, please refer to Note 6(19). The Company is primarily engaged in manufacturing and trading automobile parts. Sale revenue is recognised when the control over the goods was transferred under the transaction terms.The sales revenue recognition involves the use of several manual judgements and procedures. As a result, the timing of sales revenue recognition may be inappropriate, which also affected the Company’s subsidiary accounted for using equity method. Therefore, we included the cut-off of sales revenue recognition as one of the key areas of focus for this year.

How our audit addressed the matter:

Our audit procedures in relation to the above key audit matter included:

  1. Understanding and evaluating the operating procedures and internal controls over sales revenue, and assessing the effectiveness on how the management controls the timing of recognizing sales revenue.

  2. Examined the transaction documents to ensure that transactions had been recorded in the proper period for a certain period around the balance sheet date.

Assessment of allowance for inventory valuation loss

Description

For the accounting policy of inventory assessment, please refer to Note 4(13); for accounting estimates and assumption uncertainty in relation to inventory valuation, please refer to Note 5; and for details of allowance for inventory valuation losses, please refer to Note 6(6). The Company is primarily engaged in manufacturing and trading automobile parts. Sale revenue is recognised when the control over the goods was transferred under the transaction terms.

~28~

As of December 31, 2021, the balances of inventories and allowance for inventory valuation losses were NT$ 196,045 thousand and NT$ 18,920 thousand, respectively.

The Company is primarily engaged in manufacturing and trading automobile parts. Inventories that are over a certain age and separately recognised as impaired inventories are stated at the lower of cost and net realisable value. Those inventory items separately identified as obsolete and damaged are corroborated against supporting documents in recognising valuation losses. Considered that the Company’s inventories were material to its financial statements, and the determination of net realisable value in the balance sheet date involved judgements and estimates, which also affected the Company’s subsidiary accounted for using equity method. We identified the assessment of allowance for inventory valuation losses a key audit matter.

How our audit addressed the matter:

Our audit procedures in relation to the above key audit matter included:

  1. Obtained an understanding of the nature of the Company’s business and industry and assessed the reasonableness of provision policies in the determination of allowance for inventory valuation losses.

  2. Reviewed the Company’s annual counting plan and conducted their physical counts on inventories to evaluate the control effectiveness on inventory classification.

  3. Obtained the Company’s inventory aging report and verified dates of movements with supporting documents. Ensured the proper categorisation of inventory aging report in accordance with the Company’s policy.

  4. Obtained the net realisable value statement of each inventory, assessed whether the estimation policy was consistently applied, tested the estimation basis of the net realisable value with relevant information, including verifying the sales and purchase prices with supporting evidence, and recalculated and evaluated the reasonableness of the inventory valuation.

~29~

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards 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 parent company only financial statements.

~30~

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

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

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

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

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

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

  6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company 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.

~31~

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 parent company only 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.

Wang, Yu-Chuan For and on behalf of PricewaterhouseCoopers, Taiwan March 10, 2022

[Liu, Mei Lan ]

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~32~

Y.C.C. PARTS MFG. CO., LTD. BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets Notes December31,2021
AMOUNT
%
$
508,757
11
113,654
3
180,449
4
16,066
-
167,171
4
21,967
1
8,164
-
233,495
5
177,125
4
29,757
1
1,456,605
33
48,308
1
300
-
661,787
15
2,140,379
48
3,942
-
94,895
2
69,012
1
3,018,623
67
$
4,475,228
100		 December31,2020 December31,2020
AMOUNT
$
508,757
113,654
180,449
16,066
167,171
21,967
8,164
233,495
177,125
29,757
1,456,605
48,308
300
661,787
2,140,379
3,942
94,895
69,012
3,018,623
$
4,475,228		 AMOUNT
$
537,053
18,301
256,784
7,915
179,011
11,201
3,405
304,925
165,320
29,487
1,513,402
52,241
300
585,044
2,132,603
5,589
101,932
106,659
2,984,368
$
4,497,770		 %
Current assets
Cash and cash equivalents
Current financial assets at fair value through
profit or loss
Current financial assets at amortised cost
Notes receivable, net
Accounts receivable, net
Accounts receivable due from related parties,
net
Other receivables
Other receivables due from related parties
Current inventories
Other current assets
Current assets
Non-current assets
Non-current financial assets at fair value
through other comprehensive income
Non-current financial assets at amortised cost
Investments accounted for using equity method
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Other non-current assets
Non-current assets
Current tax assets		 12
-
6
-
4
-
-
7
4
1
34
1
-
13
48
-
2
2
66
100

(Continued)

~33~

Y.C.C. PARTS MFG. CO., LTD. BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity December31,2021
December31,2020
Notes
AMOUNT
%
AMOUNT
%
$
50,000
1 $
-
-

12,111
-
27,305
1
2,485
-
1,694
-
92,502
2
109,707
2
24,588
1
34,725
1
90,541
2
62,367
1
68,709
2
78,828
2
105,835
2
108,334
2
603
-
750
-
447,374
10
423,710
9
540,190
12
569,959
13
31,538
1
20,630
1
12,722
-
13,454
-
584,450
13
604,043
14
1,031,824
23
1,027,753
23
741,389
17
741,389
16
1,193,349
27
1,193,259
27
329,574
7
317,795
7
105,211
2
119,480
3
1,194,447
27
1,203,831
27
(
120,040 ) (
3 ) (
105,211) (
3)
(
526 )
- (
526)
-
3,443,404
77
3,470,017
77

$
4,475,228
100 $
4,497,770
100
Current liabilities
Short-term notes and bills payable
Current financial liabilities at fair value through
profit or loss
Current contract liabilities
Notes payable
Accounts payable
Other payables
Current tax liabilities
Long-term liabilities, current portion
Other current liabilities, others
Current liabilities
Non-current liabilities
Long-term borrowings
Income tax liabilities - non-current
Other non-current liabilities
Non-current liabilities
Liabilities
Equity
Share capital
Ordinary share
Capital surplus
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated retained earnings
Other equity interest
Other equity interest
Treasury shares
Equity
Significant contingent liabilities and unrecognised
contract commitments
Total liabilities and equity

.

~34~

Y.C.C. PARTS MFG. CO., LTD. STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items YearendedDecember31
2021
2020
Notes
AMOUNT
%
AMOUNT
%
$
1,134,285
100
$
1,264,279
100
(
745,780 ) (
66) (
763,789) (
61)
388,505
34
500,490
39
(
81,162 ) (
7) (
92,232) (
7)
(
54,867 ) (
5) (
60,096) (
5)
(
29,595 ) (
2) (
22,060) (
2)

(
694 )
-
7,523
1
(
166,318 ) (
14) (
166,865) (
13)
222,187
20
333,625
26
9,218
1
13,520
1
36,894
3
30,519
2
(
13,246 ) (
1) (
105,571) (
8)
(
5,986 ) (
1) (
4,522)
-
(
70,630 ) (
6) (
91,080) (
7)
(
43,750 ) (
4) (
157,134) (
12)
178,437
16
176,491
14
(
42,684 ) (
4) (
58,812) (
5)
135,753
12
117,679
9
$
135,753
12
$
117,679
9
$
776
-
$
143
-
(
3,933 )
- (
5,301)
-
(
155 )
- (
28)
-
(
3,312 )
- (
5,186)
-
(
10,896 ) (
1)
19,571
1
(
10,896 ) (
1)
19,571
1
($
14,208 ) (
1) $
14,385
1
$
121,545
11
$
132,064
10
$
1.83
$
1.59
$
1.83
$
1.58
Operating revenue
Operating costs
Gross profit from operations
Operating expenses
Selling expenses
Administrative expenses
Research and development expenses
Impairment loss (impairment gain and reversal
of impairment loss) determined in accordance
with IFRS 9
Operating expenses
Net operating income
Non-operating income and expenses
Interest income
Other income
Other gains and losses
Finance costs
Share of loss of associates and joint ventures
accounted for using equity method
Non-operating income and expenses
Profit before income tax
Income tax expense
Profit from continuing operations
Profit
Other comprehensive income
Components of other comprehensive income
that will not be reclassified to profit or loss
Gains on remeasurements of defined benefit
plans
Unrealised gains (losses) from investments in
equity instruments measured at fair value
through other comprehensive income
Income tax related to components of other
comprehensive income that will not be
reclassified to profit or loss
Components of other comprehensive
income that will not be reclassified to profit
or loss
Components of other comprehensive income
that will be reclassified to profit or loss
Exchange differences on translation
Components of other comprehensive
income that will be reclassified to profit or
loss
Other comprehensive (loss) income
Total comprehensive income
Basic earnings per share
Basic earnings per share
Diluted earnings per share

.

~35~

Y.C.C. PARTS MFG. CO., LTD. STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Year 2020
Balance at January 1, 2020
Profit for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss)
Appropriation and distribution of 2019 earnings
Legal reserve
Special reserve
Cash dividends
Acquisition of non-controlling interests in subsidiaries
Balance at December 31, 2020
Year 2021
Balance at January 1, 2021
Profit for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss)
Appropriation and distribution of 2020 earnings
Legal reserve
(Reversal of) Special reserve
Cash dividends
Acquisition of non-controlling interests in subsidiaries
Balance at December 31, 2021		 Notes Ordinary share Capital surplus,
additional
paid-incapital		 Capital surplus,
additional
paid-incapital		 RetainedEarnings RetainedEarnings RetainedEarnings Otherequityinterest Otherequityinterest
Treasury shares		 Totalequity
Legal reserve Special reserve Unappropriated
retained
earnings		 Exchange
differences on
translation of
foreign
financial
statements		 Unrealised
gains (losses)
from financial
assets measured
at fair value
through other
comprehensive
income
$ 741,389
-
-
-
-
-
-
-
$ 741,389
$ 741,389
-
-
-
-
-
-
-
$ 741,389		 $ 1,193,024
-
-
-
-
-
-
235
$ 1,193,259
$ 1,193,259
-
-
-
-
-
-
90
$ 1,193,349		 $ 280,161
-
-
-
37,634
-
-
-
$ 317,795
$ 317,795
-
-
-
11,779
-
-
-
$ 329,574		 $
88,059
-
-
-
-
31,421
-
-
$ 119,480
$ 119,480
-
-
-
-
(
14,269 )
-
-
$ 105,211		 $ 1,303,340
117,679
115
117,794
(
37,634 )
(
31,421 )
(
148,248 )
-
$ 1,203,831
$ 1,203,831
135,753
621
136,374
(
11,779 )

14,269
(
148,248 )
-
$ 1,194,447		 ($
95,167 )
-
19,571
19,571

-

-

-
-
($
75,596 )
($
75,596 )
-
(
10,896 )
(
10,896 )

-
-

-
-
($
86,492 )		 ($
24,314 )
-
(
5,301 )
(
5,301 )
-
-
-
-
($
29,615 )
($
29,615 )
-
(
3,933 )
(
3,933 )
-
-
-
-
($
33,548 )		 ($
526 )
-
-
-
-
-
-
-
($
526 )
($
526 )
-
-
-
-
-
-
-
($
526 )		 $ 3,485,966
117,679
14,385
132,064
-
-
(
148,248 )
235
$ 3,470,017
$ 3,470,017
135,753
(
14,208 )
121,545
-
-
(
148,248 )
90
$ 3,443,404

Click here to enter text.

~36~

Y.C.C. PARTS MFG. CO., LTD.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense
Depreciation expense - right-of-use assets
Amortisation expense
Expected credit impairment loss
Net loss on financial assets or liabilities at fair
value through profit or loss
Interest expense
Interest income
Government grant
Dividend income
Share of loss (profit) of associates accounted
for under equity method
Gain on disposal of property, plant and
equipment
Unrealised foreign exchange (gain) loss
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable
Accounts receivable
Accounts receivable-related parties
Other receivables
Other receivables-related parties
Inventories
Other current assets
Other non-current assets
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Accounts payable-related parties
Other payables
Other current liabilities
Net defined benefit liability
Cash inflow generated from operations
Interest received
Interest paid
Dividend received
Income taxes paid
Net cash flows from operating activities		 YearendedDecember31
Notes
2021
2020
$
178,437 $
176,491
260,624
225,605
1,647
1,165
6,108
6,257
694 (
7,523 )
(
47,257 )
5,912
5,986
4,522
(
9,218 ) (
13,520 )
(
966 ) (
436 )
(
4,111 ) (
4,036 )
70,630
91,080
(
3,455 ) (
3,110 )
(
22,941 )
35,555
(
8,151 ) (
3,171 )
12,421
113,513
(
10,766 ) (
8,519 )
(
5,122 ) (
48 )
5,604 (
11,045 )
(
11,805 ) (
6,057 )
(
270 ) (
18,999 )
(
2,130 ) (
2,181 )
791 (
282 )
(
17,205 )
8,399
(
10,137 )
1,376
- (
1,705 )
7,068 (
6,132 )
(
153 )
135
(
209 ) (
184 )
396,114
583,062
9,581
15,806
(
4,014 ) (
4,079 )
4,111
4,036
(
25,868 ) (
13,638 )
379,924
585,187

(Continued)

~37~

Y.C.C. PARTS MFG. CO., LTD.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through
profit or loss
Proceeds from disposal of financial assets at fair
value through profit or loss
Decrease (increase) in financial assets at amortised
cost
Decrease (increase) in other receivables due from
related parties
Decrease in other current assets
Acquisition of investments accounted for under
equity method
Acquisition of property, plant and equipment
Payment for capitalized interests
Gain on disposal of property, plant and equipment
Acquisition of intangible assets
Increase in refundable deposits
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Decrease in short-term borrowings
Increase in short-term notes and bills payable
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayment of principal portion of lease liabilities
Cash dividends paid
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 YearendedDecember31
Notes
2021
2020
($
117,477 ) ($
36,751 )
57,760
75,146
82,042 (
197,702 )
75,651 (
4,131 )
-
89,940
(
158,179 ) (
57,360 )
(
211,586 ) (
184,012 )
(
1,972 ) (
3,333 )
5,300
3,952
(
5,435 ) (
4,000 )
- (
810 )
(
273,896 ) (
319,061 )
730,000
160,000
(
730,000 ) (
280,000 )
50,000
-
75,860
200,100
(
108,334 ) (
195,369 )
(
594 ) (
99 )
(
148,248 ) (
148,248 )
(
131,316 ) (
263,616 )
(
3,008 ) (
5,126 )
(
28,296 ) (
2,616 )
537,053
539,669
$
508,757 $
537,053

38

Attachment IV

==> picture [71 x 71] intentionally omitted <==

Y.C.C. Parts MFG Co., Ltd.

Statement of Retained Earnings

2021

2021
Unit: NT$
Beginning undistributed earnings
Add: Current period net profit
Remeasurement of the defined benefit plan recorded in retained earnings
Disposal of equity instrument at FVTOCI, accumulated gain or loss is directly transferred to retained earnings
The sum of the total amount of after-tax net income for the period and other profit items adjusted to the current
year’s undistributed earnings
Less: Legal reserve (10%)
Less: Reversal (appropriation) of special reserve
Current distributable earnings
Allocation:
Cash dividend to (NT$ 2 / share)
Ending undistributed earnings		 1,058,072,300
135,753,491
621,170
0
136,374,661
(13,637,466)
(14,829,201
1,165,980,294
(148,247,750)
1,017,732,544
1,165,980,294
(148,247,750)
1,017,732,544

Note:

(1) 2021 earnings are distributed first.

(2) The distributable cash dividends are rounded off to the nearest NTD. The Chairman is authorized to have dedicated personnel to adjust the fractional-cent amount.

(3)The legal reserve shall be appropriated based on “the sum of the total amount of after-tax net income for the period and other profit items adjusted to the current year’s undistributed earnings” in accordance with Jing-Shang-Zi Letter No. 1082432410.

39

Attachment V

Y.C.C. Parts MFG Co., Ltd. Before and After Revision Comparison Tables of Articles of Incorporation

Clauses after the
amendments		 Clauses before the
amendments		 Explanation
Article 10-1 The Company’s
shareholders’ meeting may
be held by video conference
or other methods announced
by the Ministry of
Economic Affairs.		 Article 172-2
of the Company
Act is
newly-added
Article 29 The Articles of Incorporation are
adopted on February 19, 1986.
The 1st amendment on June 1,
1986.
The 2nd amendment on October
15, 1989.
The 3rd amendment on October 7,
1994.
The 4th amendment on August
15, 1996.
The 5th amendment on November
13, 1998.
The 6th amendment on November
5, 1999.
The 7th amendment on December
1, 2000.
The 8th amendment on December
1, 2000.
The 9th amendment on June 10,
2002.
The 10th amendment on June 5,
2003.
The 11th amendment on
December 17, 2003.
The 12th amendment on June 4,
2004.
The 13th amendment on June 18,
2004.
The 14th amendment on
November 24, 2004.
The 15th amendment on October
5, 2005.
The 16th amendment on June 5,
2007.
The 17th amendment on July 5,
2007.
The 18th amendment on
September 14, 2007.
The 19th amendment on
December 20, 2007.
The 20th amendment on June 22,
2010.
The 21st amendment on May 17,
2011.
The 22nd amendment on July 15,
2011.		 The Articles of Incorporation are
adopted on February 19, 1986.
The 1st amendment on June 1,
1986.
The 2nd amendment on October
15, 1989.
The 3rd amendment on October 7,
1994.
The 4th amendment on August
15, 1996.
The 5th amendment on November
13, 1998.
The 6th amendment on November
5, 1999.
The 7th amendment on December
1, 2000.
The 8th amendment on December
1, 2000.
The 9th amendment on June 10,
2002.
The 10th amendment on June 5,
2003.
The 11th amendment on
December 17, 2003.
The 12th amendment on June 4,
2004.
The 13th amendment on June 18,
2004.
The 14th amendment on
November 24, 2004.
The 15th amendment on October
5, 2005.
The 16th amendment on June 5,
2007.
The 17th amendment on July 5,
2007.
The 18th amendment on
September 14, 2007.
The 19th amendment on
December 20, 2007.
The 20th amendment on June 22,
2010.
The 21st amendment on May 17,
2011.
The 22nd amendment on July 15,
2011.		 Added
amendment date

40

The 23rd amendment on June 26,
2012.
The 24th amendment on June 23,
2014.
The 25th amendment on
December 18, 2014.
The 26th amendment on June 20,
2016.
The 27th amendment on June 19,
2017.
The 28th amendment on October
1, 2018.
The 29th amendment on May 29,
2019.
The 30th amendment on May 29,
2020.
The 31st amendment on
November 23, 2020.
The 32nd amendment on August
30, 2021.
The 33rd amendment on February
14, 2022.
The 34th amendment on May 27,
2022.		 The 23rd amendment on June 26,
2012.
The 24th amendment on June 23,
2014.
The 25th amendment on
December 18, 2014.
The 26th amendment on June 20,
2016.
The 27th amendment on June 19,
2017.
The 28th amendment on October
1, 2018.
The 29th amendment on May 29,
2019.
The 30th amendment on May 29,
2020.
The 31st amendment on
November 23, 2020.
The 32nd amendment on August
30, 2021.
The 33rd amendment on February
14, 2022.

41

Attachment VI

Y.C.C. Parts MFG Co., Ltd. Before and After Revision of the Comparison Tables of Regulations Governing the Acquisition and Disposal of Assets

Clauses after the amendments Clauses before the amendments Explanation
Article 4 Professional appraisers and their
officers, certified public accounts,
attorneys, and securities
underwriters that provide the
Company with appraisal reports,
certified public accountants
opinions, attorney's opinions or
underwriter's opinions shall meet
the following requirements:
1~3 omitted.
When issuing appraisal reports or
opinions, the personnel referred to
in the preceding Paragraph shall
comply withthe self-discipline
regulations of their respective
associations and the following
matters:
I. Prior to accepting a case, they
shall prudently assess their
own professional capabilities,
practical
experience
and
independence.
II. Whenexecutinga case, they
shall appropriately plan and
execute adequate working
procedures,
in
order
to
produce a conclusion and use
the conclusion as the basis
for issuing the report or
opinion. The related working
procedures, data collected
and conclusion shall be fully
and accurately specified in
the case working papers.
III.
They
shall
undertake
an
item-by-item evaluation of the
comprehensiveness, accuracy,
appropriateness
and
reasonableness of the sources
of data used, the parameters
and the information, as the
basis for issuance of the
appraisal report or the opinion.
IV. They shall issue a statement
attestingto theprofessional		 Professional appraisers and their
officers, certified public accounts,
attorneys, and securities
underwriters that provide the
Company with appraisal reports,
certified public accountants
opinions, attorney's opinions or
underwriter's opinions shall meet
the following requirements:
1~3 omitted.
When issuing appraisal reports or
opinions, the personnel referred to
in the preceding Paragraph shall
comply
with
the
following
matters:
I. Prior to accepting a case, they
shall prudently assess their
own professional capabilities,
practical
experience
and
independence.
II. When~~examining~~a case, they
shall appropriately plan and
execute adequate working
procedures,
in
order
to
produce a conclusion and use
the conclusion as the basis
for issuing the report or
opinion. The related working
procedures, data collected
and conclusion shall be fully
and accurately specified in
the case working papers.
III.
They
shall
undertake
an
item-by-item evaluation of the
~~comprehensiveness, accuracy~~
and reasonableness of the
sources of data used, the
parameters,
and
the
information, as the basis for
the issuance of the appraisal
report or the opinion.
IV. They shall issue a statement
attesting to the professional
competence and independence
of thepersonnel whoprepared		 Article 5 is
amended based
on Regulations
Governing the
Acquisition and
Disposal of
Assets by Public
Companies

42

competence and independence the report or opinion and that of the personnel who prepared they have evaluated and found the report or opinion and that that the information used is they have evaluated and found reasonable ~~and accurate~~ and that the information used is that they have complied with adequate and reasonable and the applicable laws and that they have complied with regulations. the applicable laws and regulations. Article 6 Operating Procedures Operating Procedures Added approval procedures for the I. Degrees of Authority Delegated I. Degrees of Authority Delegated Audit Committee and Levels and Levels The acquisition or disposal of The acquisition or disposal of assets by the Company shall be assets by the Company shall be adjudicated by the competent adjudicated by the competent authority within the scope of authority within the scope of authorization under the following authorization under the following circumstances, provided. circumstances, provided. However, if it falls under Article However, if it falls under Article 185 of the Company Act, it shall 185 of the Company Act, it shall first be submitted to the first be submitted to the shareholders’ meeting for shareholders’ meeting for approval: approval: (I)-(VII) omitted. (I)-(VII) omitted. With respect to the Company’s With respect to the Company’s acquisition or disposal of assets acquisition or disposal of assets that is subject to the approval of that is subject to the approval of the board of directors under the the board of directors under the company's procedures or other company's procedures or other laws or regulations, if a director laws or regulations, if a director expresses dissent and it is expresses dissent and it is contained in the minutes or a contained in the minutes or a written statement, the Company written statement, the Company shall submit the director's shall submit the director's dissenting opinion to each dissenting opinion to the Audit member of the Audit Committee. Committee. Where the position of Where the position of independent director has been independent director has been created by the Company, when a created by the Company, when a transaction involving the transaction involving the acquisition or disposal of assets is acquisition or disposal of assets is submitted for discussion by the submitted for discussion by the board of directors pursuant to the board of directors pursuant to the preceding paragraph, the board of preceding paragraph, the board of directors shall take into full directors shall take into full consideration each independent consideration each independent director's opinions. If an director's opinions. If an independent director objects to or independent director objects to or expresses reservations about any expresses reservations about any matter, it shall be recorded in the matter, it shall be recorded in the minutes of the board of directors’ minutes of the board of directors’

43

meeting.
Where
an
Audit
Committee has been established
by the Company, when the
procedures for the acquisition and
disposal of assets are adopted or
amended they shall be approved
by one-half or more of all audit
committee
members
and
submitted
to
the
board
of
directors for a resolution. If
approval of one-half or more of
all audit committee members is
not obtained, the procedures may
be implemented if approved by
two-thirds or more of all directors
and the resolution of the audit
committee shall be recorded in
the minutes of the board of
directors’meeting. The terms"all
audit committee members"and
"all directors"in the preceding
Paragraph shall be counted as the
actual
number
of
persons
currently holding those positions.
II. Omitted.		 meeting.
II. Omitted.
Article 8 Assets Appraisal Procedures
In acquiring or disposing of real
property,
equipment
or
right-of-use assets thereof where
the transaction amount reaches
20% of the company's paid-in
capital or NT$300 million or
more,
the
company,
unless
transacting
with
a
domestic
government
agency,
engaging
others to build on its own land,
engaging others to build on rented
land or acquiring or disposing of
equipment or right-of-use assets
thereof held for business use,
shall obtain an appraisal report
(the matters to be recorded in
such appraisal report are specified
in Attachment I) prior to the date
of occurrence of the event from a
professional appraiser and shall
further comply with the following
provisions.
However,
if
the
Company acquires or disposes of
assets through the court auction
process,
the
certification		 Assets Appraisal Procedures
In acquiring or disposing of real
property,
equipment
or
right-of-use assets thereof where
the transaction amount reaches
20% of the company's paid-in
capital or NT$300 million or
more,
the
company,
unless
transacting
with
a
domestic
government
agency,
engaging
others to build on its own land,
engaging others to build on rented
land or acquiring or disposing of
equipment or right-of-use assets
thereof held for business use,
shall obtain an appraisal report
(the matters to be recorded in
such appraisal report are specified
in Attachment I) prior to the date
of occurrence of the event from a
professional appraiser and shall
further comply with the following
provisions.
However,
if
the
Company acquires or disposes of
assets through the court auction
process,
the
certification		 Article 9 is
amended based
on the
Regulations
Governing the
Acquisition and
Disposal of
Assets by Public
Companies

44

documents issued by the Court documents issued by the Court may be used in lieu of the may be used in lieu of the appraisal report or CPA’s appraisal report or CPA’s opinions. opinions. 1-2 omitted. 1-2 omitted. III. For the professional III. For the professional appraiser's appraisal results, appraiser's appraisal results, unless all the appraisal unless all the appraisal results for the assets to be results for the assets to be acquired are higher than the acquired are higher than the transaction amount, or all the transaction amount or all the appraisal results for the appraisal results for the assets to be disposed of are assets to be disposed of are lower than the transaction lower than the transaction amount, the difference amount, the difference between the appraisal results between the appraisal results and the transaction price is and the transaction price is more than 20% of the more than 20% of the transaction price or the transaction price or the difference between the difference between the appraisal results from two or appraisal results from two or more professional appraisers more professional appraisers is more than 10% of the is more than 10% of the transaction price, a certified transaction price, a certified public accountant shall be public accountant shall be engaged to perform the engaged to perform the appraisal to render a specific appraisal ~~in accordance with~~ opinion regarding the reason ~~the provisions of Statement~~ for the discrepancy and the ~~of Auditing Standards No. 20~~ appropriateness of the ~~published by the ROC~~ transaction price: ~~Accounting Research and~~ IV. Omitted. ~~Development Foundation (ARDF) and~~ render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: IV. Omitted. Article 9 Obtaining the opinions of CPAs Obtaining the opinions of CPAs I. Where the Company acquires or I. Where the Company acquires or disposes of securities and the disposes of securities and the transaction amount reaches transaction amount reaches 20% or more of paid-in 20% or more of paid-in capital or NT$300 million or capital or NT$300 million or more, except obtaining the more, except obtaining the most recent CPA-certified most recent CPA-certified financial statement of the financial statement of the subject company as the subject company as the reference for the transaction reference for the transaction price, the Company shall price, the Company shall engage a certified public engage a certified public accountant prior to the date accountant prior to the date

Articles 10 and 11 are amended based on the Regulations Governing the Acquisition and Disposal of Assets by Public Companies

45

of occurrence of the event to
render an opinion on the
reasonableness
of
the
transaction
price.
This
requirement does not apply,
however, to publicly quoted
prices of securities that have
an active market or where
otherwise
provided
by
regulations of FSC. If the
Company
acquires
or
disposes of assets through
the court auction process, the
certification
documents
issued by the Court may be
used in lieu of the CPA’s
opinions.
II. Where the Company acquires
or disposes of intangible
assets or right-of-use assets
thereof or memberships and
the
transaction
amount
reaches 20% or more of
paid-in capital or NT$300
million or more, except in
transactions with a domestic
government
agency,
the
company shall engage a
certified public accountant
prior
to
the
date
of
occurrence of the event to
render an opinion on the
reasonableness
of
the
transaction price.		 of occurrence of the event to
render an opinion on the
reasonableness
of
the
transaction price;~~the CPA~~
~~shall~~
~~comply~~
~~with~~
~~the~~
~~provisions of Statement of~~
~~Auditing Standards No. 20~~
~~published by the ARDF~~
~~when any expert report is~~
~~required. T~~his requirement
does not apply, however, to
publicly quoted prices of
securities that have an active
market or where otherwise
provided by regulations of
FSC.
If
the
Company
acquires or disposes of assets
through the court auction
process,
the
certification
documents issued by the
Court may be used in lieu of
the CPA’s opinions.
II. Where the Company acquires
or disposes of intangible
assets or right-of-use assets
thereof or memberships and
the
transaction
amount
reaches 20% or more of
paid-in capital or NT$300
million or more, except in
transactions with a domestic
government
agency,
the
company shall engage a
certified public accountant
prior
to
the
date
of
occurrence of the event to
render an opinion on the
reasonableness
of
the
transaction price;~~the CPA~~
~~shall~~
~~comply~~
~~with~~
~~the~~
~~provisions of Statement of~~
~~Auditing Standards No. 20~~
~~published by the ARDF.~~
Article
11
 Procedures for Transactions
Related Parties
I. Omitted.
II.
Appraisal
and
Operation
Procedures
1. Omitted.
(I)-(VII) omitted.
With respect to the types of
transactions listed below,when to
 Procedures for Transactions
Related Parties
I. Omitted.
II.
Appraisal
and
Operation
Procedures
1. Omitted.
(I)-(VII) omitted.
The calculation of the transaction
amounts
referred
to
in
the		 Articles 15 and
the wordings are
amended based
on Regulations
Governing the
Acquisition and
Disposal of
Assets by Public
Companies

46

be conducted between the Company and its parent or subsidiaries or between its subsidiaries in which it directly or indirectly holds 100% of the issued shares or authorized capital, the Company’s board of directors may pursuant to Article 6 delegate the chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting:

(I) Acquisition or disposal of equipment or right-of-use assets thereof held for business use.

(II) Acquisition or disposal of real property right-of-use assets held for business use. Where the position of independent director has been created by the Company, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

Where the Audit Committee has been established by the Company, the matters for which Paragraph 1 requires recognition by the supervisors shall first be approved by one-half or more of all Audit Committee members and then submitted to the board of directors for a resolution, and shall be subject to the mutatis mutandis application of Article 6. Where the public company or its subsidiary that is not a domestic public company engages in any transaction specified in Paragraph 1, and the transaction amount is more than 10% of the total

preceding Paragraph shall be done in accordance with Paragraph 2 of Article 15-1 herein and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which are submitted to the approval by the board of directors and the recognition by the Audit Committee need not be counted toward the transaction amount. With respect to the types of transactions listed below, when to be conducted between the Company and its parent or subsidiaries or between its subsidiaries in which it directly or indirectly holds 100% of the issued shares or authorized capital, the Company’s board of directors may pursuant to Article 6 delegate the chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting: (I) Acquisition or disposal of equipment or right-of-use assets thereof held for business use. (II) Acquisition or disposal of real property right-of-use assets held for business use. Where the position of independent director has been created by the Company, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

3-6 omitted.

47

assets of the public company,
it shall submit the materials
listed in Paragraph 1 to the
shareholders’
meeting
for
approval to proceed to reach
the agreement and make the
payment. However, this does
not apply to the transaction
between
the
publicly
company
and
its
parent
company or subsidiaries or
the transaction between its
subsidiaries.
The calculation of the transaction
amounts
referred to
in
the
preceding Paragraph shall be
done
in
accordance
with
Paragraph 2 of Article 15-1
herein and"within the preceding
year"as used herein refers to the
year preceding the date of
occurrence
of
the
current
transaction. Items for which are
submitted to the approval by the
board
of
directors
and
the
shareholders’meeting and the
recognition
by
the
Audit
Committee need not be counted
toward the transaction amount.
3-6 omitted.
Article
13		 Appraisal and Operation
Procedures for Acquisition and
Disposal of Derivatives
1-6 omitted.
VII. Internal Audit System:
The Company's internal audit
personnel shall periodically make
a determination of the suitability
of internal controls on derivatives
and conduct a monthly audit of
how faithfully derivatives trading
by the trading department adheres
to the procedures for engaging in
derivatives trading, and prepare an
audit report. If any material
violation is discovered,each of
the
members
of
the
Audit
Committeeshall be notified in
writing.
8-9 omitted.		 Appraisal and Operation
Procedures for Acquisition and
Disposal of Derivatives
1-6 omitted.
VII. Internal Audit System:
The Company's internal audit
personnel shall periodically make
a determination of the suitability
of internal controls on derivatives
and conduct a monthly audit of
how faithfully derivatives trading
by the trading department adheres
to the procedures for engaging in
derivatives trading, and prepare an
audit report. If any material
violation is discovered,the Audit
Committeeshall be notified in
writing.
8-9 omitted.		 Amendment to
wording

48

Article
15		 Procedures for Information
Disclosure
I. Under any of the following
circumstances, the Company
acquiring or disposing of
assets
shall
publicly
announce and report the
relevant information on the
FSC’s designated website in
the appropriate format as
prescribed by the regulations
within
2
days
counting
inclusively from the date of
occurrence of the event:
(I)-(III) omitted.
(IV)
Where
an
asset
transaction other than any of
those
referred
to
in
the
preceding 3 Paragraphs, a
disposal of receivables by a
financial
institution
or
an
investment in the Mainland
China area reaches 20% or
more of paid-in capital or
NT$300 million; provided, this
shall not apply to the following
circumstances:
1.
Trading
of
domestic
government bondsor foreign
government bonds with a
credit rating not lower than
Taiwan’s sovereign credit
rating.
2. Omitted.		 Procedures for Information
Disclosure
I. Under any of the following
circumstances, the Company
acquiring or disposing of
assets
shall
publicly
announce and report the
relevant information on the
FSC’s designated website in
the appropriate format as
prescribed by the regulations
within
2
days
counting
inclusively from the date of
occurrence of the event:
(I)-(III) omitted.
(IV)
Where
an
asset
transaction other than any of
those
referred
to
in
the
preceding 3 Paragraphs, a
disposal of receivables by a
financial
institution
or
an
investment in the Mainland
China area reaches 20% or
more of paid-in capital or
NT$300 million; provided, this
shall not apply to the following
circumstances:
1.
Trading
of
domestic
government bondsor foreign
government bonds with a
credit rating not lower than
Taiwan’s sovereign credit
rating.
2. Omitted.		 Procedures for Information
Disclosure
I. Under any of the following
circumstances, the Company
acquiring or disposing of
assets
shall
publicly
announce and report the
relevant information on the
FSC’s designated website in
the appropriate format as
prescribed by the regulations
within
2
days
counting
inclusively from the date of
occurrence of the event:
(I)-(III) omitted.
(IV)
Where
an
asset
transaction other than any of
those referred to in the
preceding 3 Paragraphs, a
disposal of receivables by a
financial institution or an
investment in the Mainland
China area reaches 20% or
more of paid-in capital or
NT$300 million; provided,
this shall not apply to the
following circumstances:
1.
Trading
of
domestic
government bonds.
2. Omitted.		 Procedures for Information
Disclosure
I. Under any of the following
circumstances, the Company
acquiring or disposing of
assets
shall
publicly
announce and report the
relevant information on the
FSC’s designated website in
the appropriate format as
prescribed by the regulations
within
2
days
counting
inclusively from the date of
occurrence of the event:
(I)-(III) omitted.
(IV)
Where
an
asset
transaction other than any of
those referred to in the
preceding 3 Paragraphs, a
disposal of receivables by a
financial institution or an
investment in the Mainland
China area reaches 20% or
more of paid-in capital or
NT$300 million; provided,
this shall not apply to the
following circumstances:
1.
Trading
of
domestic
government bonds.
2. Omitted.		 Article 31 is
amended based
on the
Regulations
Governing the
Acquisition and
Disposal of
Assets by Public
Companies
Article
18		 Implementation and Amendment
These Regulations shall be
approved by the Audit Committee
in accordance with the relevant
regulations, submitted to the
board of directors for resolution
and then submitted to the
shareholders' meeting for
approval prior to implementation
and the same applies to
amendments. If a director
expresses dissent and it is
contained in the minutes or a
written statement, the Company
shall submit the director's
dissenting opinion toeach
member of the Audit Committee.		 Implementation and Amendment
These Regulations shall be
approved by the Audit Committee
in accordance with the relevant
regulations, submitted to the
board of directors for resolution
and then submitted to the
shareholders' meeting for
approval prior to implementation
and the same applies to
amendments. If a director
expresses dissent and it is
contained in the minutes or a
written statement, the Company
shall submit the director's
dissenting opinion tothe Audit
Committee.		 Amendment to
wording

49

Where the position of
independent director has been
created by the Company, when a
handling procedures involving the
acquisition or disposal of assets is
submitted for discussion by the
board of directors pursuant to the
preceding paragraph, the board of
directors shall take into full
consideration each independent
director's opinions. If an
independent director objects to or
expresses reservations about any
matter, it shall be recorded in the
minutes of the board of directors’
meeting.
The Company’s trading of major
assets or derivatives shall be
approved by more than half of all
members of the Audit Committee,
and shall be submitted for
resolution of the board of
directors. If approval of one-half
or more of Audit Committee
members is not obtained, the
procedures may be implemented
if approved by two-thirds or more
of all directors and the resolution
of the audit committee shall be
recorded in the minutes of the
board of directors meeting.		 Where the position of
independent director has been
created by the Company, when a
handling procedures involving the
acquisition or disposal of assets is
submitted for discussion by the
board of directors pursuant to the
preceding paragraph, the board of
directors shall take into full
consideration each independent
director's opinions. If an
independent director objects to or
expresses reservations about any
matter, it shall be recorded in the
minutes of the board of directors’
meeting.
The Company’s trading of major
assets or derivatives shall be
approved by more than half of all
members of the Audit Committee,
and shall be submitted for
resolution of the board of
directors. If approval of one-half
or more of Audit Committee
members is not obtained, the
procedures may be implemented
if approved by two-thirds or more
of all directors and the resolution
of the audit committee shall be
recorded in the minutes of the
board of directors meeting.
Article
20		 These Regulations are formulated
on June 4, 2009.
The 1st amendment on May 17,
2011.
The 2nd amendment on June 26,
2012.
The 3rd amendment on June 23,
2014.
The 4th amendment on December
18, 2014.
The 5th amendment on June 15,
2015.
The 6th amendment on June 19,
2017.
The 7th amendment on May 29,
2019.
The 8th amendment on May 27,
2022.		 These Regulations are formulated
on June 4, 2009.
The 1st amendment on May 17,
2011.
The 2nd amendment on June 26,
2012.
The 3rd amendment on June 23,
2014.
The 4th amendment on December
18, 2014.
The 5th amendment on June 15,
2015.
The 6th amendment on June 19,
2017.
The 7th amendment on May 29,
2019.		 Added
amendment date

50

Eleven. Appendix

Appendix I

Y.C.C. Parts MFG Co., Ltd.

Articles of Incorporation Chapter I General

  • Article 1: The Company is duly incorporated in accordance with the regulations regarding corporations in the Company Act and bears the title of Y.C.C. Parts MFG Co., Ltd.
Article 1: Chapter I
General
The Company is duly incorporated in accordance with the regulations
regarding corporations in the Company Act and bears the title of Y.C.C. Parts
MFG Co., Ltd.		 Chapter I
General
The Company is duly incorporated in accordance with the regulations
regarding corporations in the Company Act and bears the title of Y.C.C. Parts
MFG Co., Ltd.		 Chapter I
General
The Company is duly incorporated in accordance with the regulations
regarding corporations in the Company Act and bears the title of Y.C.C. Parts
MFG Co., Ltd.
Article 2: The operating businesses are listed as follows:
I. CB01010 Mechanical Equipment Manufacturing
II. CB01990 Other Machinery Manufacturing
III. CD01030 Automobiles and Parts Manufacturing
IV. F114010 Wholesale of Motor Vehicles
V. F114030 Wholesale of Motor Vehicle Parts and Motorcycle
Parts, Accessories
VI. F214010 Retail Sale of Motor Vehicles
VII. F214030 Retail Sale of Motor Vehicle Parts and Motorcycle
Parts, Accessories
VIII. CD01040 Motorcycles and Parts Manufacturing
IX. F114020 Wholesale of Motorcycles
X. F214020 Retail Sale of Motorcycles
XI. CD01050 Bicycles and Parts Manufacturing
XII. F114040 Wholesale of Bicycles and Component Parts Thereof
XIII. F214040 Retail Sale of Bicycles and Component Parts Thereof
XIV. F401010 International Trade
XV. H201010 Investment
XVI. CA04010 Surface Treatments
XVII. C805050 Industrial Plastic Products Manufacturing
XVIII. C303010 Manufacture of Non-woven Fabrics
XIX. F104110 Wholesale of Cloths, Garments, Shoes, Hats,
Umbrellas and Clothing Accessories
XX. F204110 Retail Sale of Cloths, Garments, Shoes, Hats,
Umbrellas and Clothing Accessories
XXI. CF01011 Medical Materials and Equipment Manufacturing
XXII F108031 Wholesale of Medical Materials and Equipment
XXIII. F208031 Retail Sale of Medical Materials and Equipment
XXIV. CZ99990 Manufacture of Other Industrial Products Not
Elsewhere Classified
XXV. CP01010 Hand Tools Manufacturing
XXVI. CQ01010 Mold and Die Manufacturing
XXVII. E603050 Automatic Control Equipment Engineering
XXVIII. C805020 Manufacture of Plastic Films and Bags
XXIX. F107190 Wholesale of Plastic Films and Bags
XXX. F207190 Retail Sale of Plastic Films and Bags
XXXI. C805990 Other Plastic Products Manufacturing

51

XXXII. C103050 Manufacturing of Canning, Freezing, Dehydration,
Pickled of Food
XXXIII. F102170 Wholesale of Food and Grocery
XXXIV. F203010 Retail Sale of Food, Grocery and Beverage
XXXV. C114010 Food Additives Manufacturing
XXXVI. F121010 Wholesale of Food Additives
XXXVII. F221010 Retail Sale of Food Additives
XXXVIII. C199990 Manufacture of Other Food Products Not Elsewhere
Classified
XXXIX. C802100 Cosmetics Manufacturing
XL. F108040 Wholesale of Cosmetics
XLI. F208040 Retail Sale of Cosmetics
XLII. F107990 Wholesale of Other Chemical Products
XLIII. F207990 Retail Sale of Other Chemical Products
XLIV. C110010 Beverage Manufacturing
XLV. F102040 Wholesale of Non-alcoholic Beverages
XLVI. ZZ99999 All business items that are not prohibited or
restricted by law, except those that are subject to
special approval.

  • Article 3: The Company may provide endorsement and guarantee due to business needs without being subject to Article 16 of the Company Act. Procedures for Endorsement and Guarantee and any amendments hereto, shall be implemented after approval at the shareholders’ meetings.

  • Article 4: The total amount of the Corporation’s reinvestment in other businesses shall not be subject to the restrictions of not more than 40% of the Corporation’s paid-up capital as provided in Article 13 of the Company Act. Such matter shall be resolved in accordance with the resolutions of the Board of Directors.

  • Article 5: The Company shall be based in Changhua County, Taiwan (R.O.C) and shall be free, upon resolution of the Board of Directors, to set up branch offices at various locations within and outside the territory of Taiwan (R.O.C).

  • Article 6: The Company shall make public announcements in accordance with the Company Act and other related laws and regulations.

Chapter II Shareholding

  • Article 7: The total amount of the Company’s capital stock shall be NT$ 1 billion, divided into 100 million shares, at par value of NT$ 10 per share. For shares not yet issued, the Board of Directors is authorized to issue the shares in installments.

  • Article 8: The Company’s shares shall all be name-bearing share certificates signed by the Directors representing the Company or affixed with seals thereof and shall be duly certified or authenticated by share certificate issuers pursuant to the laws before issuance thereof. After public offering, the Company may issue shares without printing share certificates in a non-physical form. However, the shares shall be registered at the Taiwan Depository & Clearing Corporation.

  • Article 9: The renaming for transfer of shares shall be suspended by 60 days before

52

general shareholders’ meeting, or 30 days before special shareholders’ meeting, or within 5 days before the Company decides to distribute dividends and bonuses or other benefits.

  • Article 9-1: The Company’s bought-back shares are assigned or transferred to subsidiary and controlling company employees who meet specific requirements. The Board of Directors is delegated to decide on such requirements and methods of transfer.

Chapter III Shareholders’ Meeting

  • Article 10: The Shareholders’ Meeting consists of regular sessions and special sessions. Regular sessions are convened by the Board in accordance with the laws once a year within 6 months after the close of each fiscal year. Special sessions are called for at any time when necessary in accordance with the law.

  • Article 11: Shareholders who are unable to attend the shareholders’ meeting in person may appoint a proxy to attend the meeting by providing a signed and sealed proxy form issued by the Company stating the scope of the proxy's authorization.

  • Article 12: Except for shares with no voting power as described in Article 179 of the Company Act, a shareholder shall have one voting power in respect of each share in his/her/its possession.

  • Article 13: Except otherwise regulated by the laws and regulations, resolutions at a shareholders’ meeting shall be adopted by a majority vote of the shareholders present, representing more than one-half of the total number of voting shares. Pursuant to laws, the Company’s shareholders may exercise his/her/its voting power by way of electronic transmission and shall be deemed to have attended the shareholders’ meeting in person. Such matters shall be handled in accordance with relevant laws and regulations.

  • Article 14: When the Company plans to withdraw public offering, such matter shall be submitted to the shareholders’ meeting for resolution, and this Article shall stay unchanged during the period when the Company's shares are listed on emerging, TPEx and TWSE stock market.

Chapter IV Directors and the Auditing Committee

  • Article 15: The Company shall establish 5-9 seats of Directors, each with a term of office for 3 years. Directors shall be elected from a candidate list with legal capacity at the shareholders’ meeting and may be eligible for re-election. The Board of Directors is authorized to determine the number of Directors. Among the aforementioned seats of the Directors, there must be at least 3 seats of Independent Directors.

  • In accordance with Article 192-1 of the Company Act, the elections for Directors of the Company shall be done by nomination system with candidates. The nomination of directors and related announcements shall comply with the Company Act's relevant regulations and the Securities and Exchange Act. Independent directors and non-independent directors shall be elected at the same time to calculate the elected places separately.

  • Article 16: The Directors shall be organized into the Board. The Board shall elect a Chairman from among the Directors and a vice-chairman when necessary by

53

a majority vote at a meeting attended by over two-thirds of the directors. The Chairman shall represent the Company externally.

  • Article 17: In calling a meeting of the Board of Directors, a notice stated with the cause of the meeting shall be given to each Director no later than 7 days prior to the scheduled meeting date. In circumstances of emergency, a Board meeting may be convened by contacting Directors in ways of written notice, e-mails or facsimile. In case the Chairman is on leave or absent or cannot exercise his power and authority for any cause, the designation of a person acting on the Chairman’s behalf shall be conducted in accordance with Article 208 of the Company Act.

  • Article 18: Unless otherwise regulated by the laws and regulations, the Board's resolutions are passed only if more than half of the Board members are present in a meeting, and with more than half of attending Directors voting in favor. In case a Director is unable to attend the Board Meeting in person, he may appoint another director to attend the meeting on his/her/its behalf. A director may accept the appointment to act as the proxy of one other director only.

  • Article 19: The Company shall pay remuneration to Chairman and Directors for their service rendered regardless of whether the Company operates at a profit or loss. The remuneration payable shall be equivalent to that of the peers in the same industry. If the Company operates at a profit, remuneration may be distributed in accordance with Article 26.

  • Article 20: The Company may take out liability insurance policies to ensure itself against liabilities that arise due to operational decisions made by directors during their terms of service. All matters regarding the said insurance is determined by the Board of Directors.

  • Article 21: For the sound supervisory capabilities and robust management capabilities, the Company may establish various functional committees taking into consideration the scale of the Board of Directors and the number of Independent Directors.

The functional committees are direct subordinates to the board of directors, and submit their proposals to the board of directors for resolution.

The Board must approve the rules and regulations of the functional committees of Directors. The said rules and regulations must cover matters include a number of committee members, tenures, duties, rules for meetings, and resources the Company must provide for committee members’ rendering of service.

  • Article 22: The Company has established a Remuneration Committee. The Remuneration Committee must consist of at least one Independent Director. The committee members shall elect the Independent Directors as the convener and chair of committee meetings.

The Remuneration Committee shall provide suggestions to the Board of Directors regarding remuneration to Directors and managerial officers.

The remuneration policy shall never abet Directors and managerial officers in

54

misconducts that exceed the Company’s risk appetite for higher remuneration.

  • Article 23: The Company has established an Audit Committee pursuant to Article 14-4 of the Securities and Exchange Act. The Audit Committee consists of all Independent Directors, one of whom shall be the committee convener, and at least one of whom shall have accounting or financial expertise.

  • All resolutions of the audit committee meetings shall be approved by more than one-half of all audit committee members. The first Audit Committee is established on the date when the independent director was first elected as provided in the preceding Article. Since the Audit Committee's establishment, the Audit Committee or the Audit Committee members are responsible for carrying out the duties and responsibilities of supervisors as stipulated in the Company Act, Securities and Exchange Act and other laws and regulations.

Chapter V Managerial Officers

Article 24: The Company may appoint managerial officers. The appointment, discharge and remuneration of the managerial officers shall be decided in accordance with Article 29 of the Company Act.

Chapter VI Accounting

  • Article 25: After each accounting period, the Board of Directors shall prepare the following reports and statements, and submit them to the Audit Committee or the committee members for review 30 days prior to the general shareholders’ meetings. The Audit Committee shall present review reports regarding the said reports and statements and present them to the general shareholders’ meeting for approval.

  • I. Business report

  • II. Financial statements

  • III. Proposal concerning the appropriation of net profits or recovering of losses

  • Article 26: If the Company operates at a profit, it shall appropriate 1% - 3% as remuneration to employees, distributed to subsidiary and controlling company employees who meet specific requirements in the form of shares or cash as determined by the Board of Directors. The Company may authorize the Board of Directors to appropriate no more than 3% of the said profit as remuneration to the Directors and Supervisors. The remuneration to employees and directors and supervisors shall be submitted to the shareholders’ meeting for review.

However, profits must first be taken to offset cumulative losses, if any, then used for the appropriation of remuneration to employees and directors and supervisors based on the preceding percentage.

  • Article 27: The Company's articles of incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, and pay any income taxes. Of the remaining balance, 10% is to be appropriated as a

55

legal reserve, but not subject to if the amount of accumulated legal capital reserve has reached the amount of the Company's paid-in capital. Then, amounts are appropriated or reversed to special reserves in accordance with relevant laws and regulations. The remaining profit, if any, together with accumulated undistributed surplus will be determined by the Board for distribution. Shall the dividend be distributed in the form of new shares, such matter shall be resolved by the Shareholders’ Meeting before distribution thereof.

The Company may distribute all or part of the dividends and bonuses, legal reserve and paid-in capital in the form of cash and report to the Shareholders’ Meeting, after such matter has been approved by at least half of the Directors in attendance in a Board meeting attended by no less than two-thirds of all Board members.

When distributing dividends, the Company takes into consideration factors including the future development plans, investment environment, capital needs and domestic and foreign competitions, and shareholders’ returns. The shareholders’ dividends shall be no less than 40% of that year’s distributable amount, with cash dividends accounting for more than 20%. Such matter is approved by the Board of Directors and submitted to the Shareholders’ Meeting for resolution.

Chapter VII Miscellaneous

Article 28: Issues that are not fully addressed in the Articles of Incorporation shall be handled in accordance with the Company Act and other laws and regulations.

Article 29: The Articles of Incorporation are adopted on February 19, 1986.

The 1st amendment on June 1, 1986.

The 2nd amendment on October 15, 1989. The 3rd amendment on October 7, 1994. The 4th amendment on August 15, 1996. The 5th amendment on November 13, 1998. The 6th amendment on November 5, 1999. The 7th amendment on December 1, 2000. The 8th amendment on December 1, 2000. The 9th amendment on June 10, 2002. The 10th amendment on June 5, 2003. The 11th amendment on December 17, 2003. The 12th amendment on June 4, 2004. The 13th amendment on June 18, 2004. The 14th amendment on November 24, 2004.

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The 15th amendment on October 5, 2005. The 16th amendment on June 5, 2007. The 17th amendment on July 5, 2007. The 18th amendment on September 14, 2007. The 19th amendment on December 20, 2007. The 20th amendment on June 22, 2010. The 21st amendment on May 17, 2011. The 22nd amendment on July 15, 2011. The 23rd amendment on June 26, 2012. The 24th amendment on June 23, 2014. The 25th amendment on December 18, 2014. The 26th amendment on June 20, 2016. The 27th amendment on June 19, 2017. The 28th amendment on October 1, 2018. The 29th amendment on May 29, 2019. The 30th amendment on May 29, 2020. The 31st amendment on November 23, 2020. The 32nd amendment on August 30, 2021. The 33rd amendment on February 14, 2022.

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Appendix II

Y.C.C. Parts MFG Co., Ltd.

Regulations Governing the Acquisition and Disposal of Assets

Article 1: Purpose and Legal Basis

These Regulations are formulated in accordance with Article 36 of the Securities and Exchange Act and the Financial Supervisory Commission (hereinafter referred to as FSC)’s “Regulations Governing the Acquisition and Disposal of Assets by Public Companies.”

  • Article 2: Scope of Assets

  • I. Investments such as stocks, public bonds, corporate bonds, financial bonds, marketable securities of commendation funds, depositary receipts, call (put) warrants, beneficiary securities and asset-based securities.

  • II. Real property (including land, houses and buildings, investment property, and construction enterprise inventory) and equipment.

  • III. Memberships.

  • IV. Patents, copyrights, trademarks, franchise rights and other intangible assets.

  • V. Right-of-use assets.

  • VI. Claims of financial institutions (including receivables, bills purchased and discounted, loans and overdue receivables).

  • VII. Derivatives.

  • VIII. Assets acquired or disposed of in connection with mergers, demergers, acquisitions or transfer of shares in accordance with the law.

  • IX. Other major assets.

Article 3: Definitions of Relevant Terms

  • I. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variables; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts or long-term purchase (sales) contracts.

  • II. Assets acquired or disposed through mergers, demergers, acquisitions or transfer of shares in accordance with the law: Refers to assets acquired or disposed through mergers, demergers or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter referred to as "transfer of shares") under Article 156-3 of the Company Act.

  • III. Related party or subsidiary: as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

  • IV. Professional appraiser: refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.

  • V. Date of occurrence: refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors’ resolutions or other dates that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.

  • VI. Mainland China area investments: refers to investments in the Mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investments or Technical Cooperation in the Mainland Area.

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  • VII. Investment professional: refers to financial holding companies, banks, insurance companies, bill finance companies, trust enterprises, securities firms operating proprietary trading or underwriting business, futures commission merchants operating proprietary trading business, securities investment trust enterprises, securities investment consulting enterprises and fund management companies, that are lawfully incorporated and are regulated by the competent financial authorities of the jurisdiction where they are located.

  • VIII. Securities exchange: "Domestic securities exchange" refers to the Taiwan Stock Exchange Corporation; "foreign securities exchange" refers to any organized securities exchange market that is regulated by the competent securities authorities of the jurisdiction where it is located.

  • IX. Over-the-counter venue (hereinafter referred to as "OTC venue", "OTC"): "Domestic OTC venue" refers to a venue for OTC trading provided by a securities firm in accordance with the Regulations Governing Securities Trading on the Taipei Exchange; "foreign OTC venue" refers to a venue at a financial institution that is regulated by the foreign competent authority and that is permitted to conduct securities business.

  • Article 4: Professional appraisers and their officers, certified public accounts, attorneys and securities underwriters that provide the Company with appraisal reports, certified public accountants opinions, attorney's opinions, or underwriter's opinions shall meet the following requirements:

  • I. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Securities and Exchange Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act or for fraud, breach of trust, embezzlement, forgery of documents or occupational crime. However, this provision does not apply if 3 years have already passed since the completion of service of the sentence, since expiration of the period of a suspended sentence or since a pardon was received.

  • II. May not be a related party or de facto related party of any party to the transaction.

  • III. If the company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.

When issuing appraisal reports or opinions, the personnel referred to in the preceding Paragraph shall comply with the following matters:

  • I. Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience and independence.

  • II. When examining a case, they shall appropriately plan and execute adequate working procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related working procedures, data collected and conclusion shall be fully and accurately specified in the case working papers.

  • III. They shall undertake an item-by-item evaluation of the comprehensiveness, accuracy and reasonableness of the sources of data used, the parameters and the information, as the basis for the issuance of the appraisal report or the opinion.

  • IV. They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion and that they have evaluated and found that the information used is reasonable and accurate and that they have complied with the applicable laws and regulations.

Article 5: Appraisal Procedures

  • I. When acquiring or disposing of securities investments or engaging in derivatives transactions, the finance department shall analyze the relevant benefits and evaluate the possible risks; for

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the acquisition or disposal of real property and other assets, the finance department shall formulate a capital expenditure plan in advance and conduct feasibility assessment on the purpose of acquisition or disposal and expected benefits, etc.; in case of acquiring or disposing of real property from a related party, the reasonableness of the transaction conditions and other matters shall be assessed in accordance with Article 11 of these Regulations.

  • II. The price determination method and reference basis for acquiring or disposing of assets shall be handled in accordance with the following circumstances, in addition to the procedures for asset appraisal in Article 8 and the requirements for obtaining CPA’s opinions as specified in Article 9:

  • (I) The acquisition or disposal of securities that have been traded on the stock exchange or the premise of a securities firm shall be determined according to the stock or bond price at that time of acquisition or disposal.

  • (II) For the acquisition or disposal of securities that are not traded on stock exchanges or the business offices of securities firms, the net value per share, technology and profitability, future development potential, market interest rates, bond coupon rates and debtor credit, etc. shall be considered and negotiated by taking reference to the most recent transaction price at that time of acquisition or disposal.

  • (III) The acquisition or disposal of real property and equipment shall be negotiated with reference to the current value of the announcement, the estimated current value, the actual transaction price or book value of the adjacent real property and the quotation of the suppliers. If the real property is purchased from a related party, the calculation shall be made according to the method specified in Article 11 herein to evaluate whether the transaction price is reasonable.

  • (IV) The acquisition or disposal of memberships shall consider the benefits that can be generated and shall be negotiated by taking reference to the latest transaction price at that time. The price shall be comprehensively evaluated by taking into account the expected value-added in the future and the benefits generated.

  • (V) For the acquisition or disposal of intangible assets such as patents, copyrights, trademarks and franchises, the international or market practices shall be considered and the price shall take into account expected future earnings, the degree of technological development and innovation, the status of legal protection, authorization and implementation factors such as production costs or implementation costs, and an overall determination shall be made based on factors related to the rights holders and the licensees.

  • (VI) For engaging in trading in derivatives, it shall take into account the trading conditions of the futures market, the trend of exchange rates and interest rates, etc.

  • (VII) The business nature, net value per share, asset value, technology and profitability, production capacity and future growth potential shall be taken into consideration when handling mergers, demergers, acquisitions or transfer of shares.

Article 6: Operating Procedures

  • I. Degrees of Authority Delegated and Levels

The acquisition or disposal of assets by the Company shall be adjudicated by the competent authority within the scope of authorization under the following circumstances, provided. However, if it falls under Article 185 of the Company Act, it shall first be submitted to the shareholders’ meeting for approval:

  • (I) The purchase and sale of securities at the centralized transaction market or the premise of a securities firm shall be determined by the responsible unit based on market conditions. If the transaction amount is less than NT$60 million (inclusive), it shall be approved by the chairman of the board; if it exceeds NT$60 million, it shall be submitted to the board of directors for approval.

  • (II) For the purchase and sale of securities not at the centralized transaction market or the

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premise of a securities firm, the most recent financial statements of the target company that have been certified or reviewed by the CPA shall be taken as a reference for evaluating the transaction price, and its net value per share, profitability and future development potential shall also be considered. Except for those that shall be handled by unit head based on the hierarchical responsibility, if the transaction amount is less than NT$60 million (inclusive), it shall be approved by the chairman of the board; if it exceeds NT$60 million, it shall be submitted to the board of directors for approval.

  • (III) The acquisition and disposal of real property and equipment in accordance with the regulations of the Company’s approval authority shall be handled by the supervisors of the relevant units at different levels and for the amount of any transaction less than NT$30 million (inclusive) shall be approved by the general manager; any amount of any transactions exceeding NT$30 million (inclusive) and less than 20% (inclusive) of the paid-in capital shall be approved by the chairman; and any amount of any transactions exceeding 20% of the paid-in capital shall be approved by the board of directors.

  • (IV) Memberships or intangible assets: according to the Company’s approval authority, the supervisor of the relevant unit will be responsible for handling it at different levels and any amount of any transaction below NT$ 5 million (inclusive) shall be approved by the chairman; any amount of any transactions exceeding NT$ 5 million shall be approved by the board of directors.

  • (V) Derivatives trading: when the Company engages in derivatives trading. Any transactions with a total contract value that is less than US$ 10 million (inclusive) shall be approved by the general manager and any transactions with a total contract value exceeding US$ 10 million (inclusive) shall be reported to the latest board of directors’ meeting for ratification.

  • (VI) Acquiring or disposing of real property from related parties: the relevant materials shall be prepared in accordance with Article 11 of these Regulations and submitted to the board of directors for approval and the Audit Committee for ratification.

  • (VII) Merger, demerger, acquisition or transfer of shares: The relevant procedures and preparation of materials shall be conducted in accordance with Article 14 of these Regulations, among which mergers, demergers and acquisitions shall be carried out after the resolution of the shareholders' meeting, provided, however, that such provision does not apply if there is any legal regulation that exempts the resolution of the shareholders' meeting. In addition, the transfer of shares may be made after the approval of the board of directors.

With respect to the Company’s acquisition or disposal of assets that is subject to the approval of the board of directors under the company's procedures or other laws or regulations, if a director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to the Audit Committee.

Where the position of independent director has been created by the Company, when a transaction involving the acquisition or disposal of assets is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors’ meeting.

  • II. Execution Unit and Transaction Process

  • The Company’s dedicated unit for securities and derivatives trading shall be the finance department; the execution unit for real property and other fixed assets shall be the management department; the special taskforce established by the chairman shall be responsible for matters of mergers, demergers, acquisitions or transfer of shares. After the acquisition or disposal of assets is evaluated and approved in accordance with the regulations, the execution unit will carry out the transaction processes such as contracting, payment, delivery and acceptance in accordance with the relevant operating procedures of the internal

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control system depending on the nature of the assets concerned.

  • Article 7: The total amount of investment in not-for-business real property and its right-of-use assets or securities, and the limit for individual securities.

  • I. In addition to the assets acquired for business use, the Company may invest in real property and its right-of-use assets and securities that are not-for-business, and the limits are as follows:

    • (I) The total amount of non-for-business real property and its right-of-use assets shall not exceed 25% of the net value of the Company specified in the most recent financial statements audited or certified by a CPA.

    • (II) The total amount of investment in securities shall not exceed 100% of the net value of the Company specified in the most recent financial statements audited or certified by a CPA.

    • (III) The amount of investment in each individual security shall not exceed 50% of the net value of the Company specified in the most recent financial statements audited or certified by a CPA.

  • II. For subsidiaries in which the Company holds 50% or more of its total shares, the limit of acquisition or disposal of assets shall not exceed the limits specified in the following provisions:

    • (I) The purchase of not-for-business real property and its right-to-use assets shall not exceed 25% of the Company’s net value as certified by a CPA.

    • (II) The total amount of investment in securities shall not exceed 100% of the Company’s net value certified by the CPA.

    • (III) The amount of investment in each individual security shall not exceed 50% of the net value of the Company certified by the CPA.

Article 8: Assets Appraisal Procedures

In acquiring or disposing of real property, equipment or right-of-use assets thereof where the transaction amount reaches 20% of the company's paid-in capital or NT$300 million or more, the company, unless transacting with a domestic government agency, engaging others to build on its own land, engaging others to build on rented land or acquiring or disposing of equipment or right-of-use assets thereof held for business use, shall obtain an appraisal report (the matters to be recorded in such appraisal report are specified in Attachment I) prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions. However, if the Company acquires or disposes of assets through the court auction process, the certification documents issued by the Court may be used in lieu of the appraisal report or CPA’s opinions.

  • I. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors; the same procedure shall also be followed whenever there is any subsequent change to the terms and conditions of the transaction.

  • II. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.

  • III. For the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount or all the appraisal results for the assets to be disposed of are lower than the transaction amount, the difference between the appraisal results and the transaction price is more than 20% of the transaction price or the difference between the appraisal results from two or more professional appraisers is more than 10% of the transaction price, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ROC Accounting Research and Development Foundation (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

  • IV. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date. However, where the publicly

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announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

  • Article 9: Obtaining the opinions of CPAs

  • I. Where the Company acquires or disposes of securities and the transaction amount reaches 20% or more of paid-in capital or NT$300 million or more, except obtaining the most recent CPA-certified financial statement of the subject company as the reference for the transaction price, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF when any expert report is required. This requirement does not apply, however, to publicly quoted prices of securities that have an active market or where otherwise provided by regulations of FSC. If the Company acquires or disposes of assets through the court auction process, the certification documents issued by the Court may be used in lieu of the CPA’s opinions.

    • Where the Company acquires or disposes of intangible assets or right-of-use assets thereof or memberships and the transaction amount reaches 20% or more of paid-in capital or NT$300 million or more, except in transactions with a domestic government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

  • Article 10: The calculation of the transaction amounts referred to in Article 8 and 9 shall be done in accordance with Paragraph 2 of Article 15-1 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.

  • Article 11: Procedures for Transactions Related Parties

  • I. When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised based on Article 6, if the transaction amount reaches 10% or more of the company's total assets, the company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of the preceding Section. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article 10. In addition, when judging whether or not a transaction counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.

  • II. Appraisal and Operation Procedures

    1. Where the Company acquires or disposes of real property or its right-of-use assets from any related party, or acquires or disposes of real property or other assets other than its right-of-use assets from a related party, whose transaction price reaches 20% of its paid-in capital and total assets 10% or more than NT$300 million, except for the transaction of domestic public bonds, bonds with repurchase agreement or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the following materials shall be submitted for approval by the Audit Committee and the board of directors for signing the transaction contract and payment:

    2. (I) The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.

    3. (II) The reason for choosing the related party as a transaction counterparty.

    4. (III) With respect to the acquisition of real property or right-of-use assets thereof from a related party, information regarding appraisal of the reasonableness of the preliminary

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  - transaction terms in accordance with Subparagraphs (I) to (IV) of Paragraph 3 of this Article.

  • (IV) The date and price at which the related party originally acquired the real property, the original transaction counterparty and that transaction counterparty's relationship to the company and the related party.

  • (V) Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract and evaluation of the necessity of the transaction and reasonableness of the funds utilization.

  • (VI) An appraisal report from a professional appraiser or a CPA's opinion obtained in

  • compliance with Article 11.

  • (VII) Restrictive covenants and other important stipulations associated with the transaction.

  • The calculation of the transaction amounts referred to in the preceding Paragraph shall be done in accordance with Paragraph 2 of Article 15-1 herein and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which are submitted to the approval by the board of directors and the recognition by the Audit Committee need not be counted toward the transaction amount.

  • With respect to the types of transactions listed below, when to be conducted between the Company and its parent or subsidiaries or between its subsidiaries in which it directly or indirectly holds 100% of the issued shares or authorized capital, the Company’s board of directors may pursuant to Article 6 delegate the chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next board of directors meeting:

  • (I) Acquisition or disposal of equipment or right-of-use assets thereof held for business use.

  • (II) Acquisition or disposal of real property right-of-use assets held for business use. Where the position of independent director has been created by the Company, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors meeting.

III. Reasonableness Assessment of Transaction Costs

  • (I) The Company that acquires real property or right-of-use assets thereof from a related party shall evaluate the reasonableness of the transaction costs by the following means and shall consult with the CPA for review and specific opinions:

  • Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.

  • Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70% or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the transaction counterparties.

  • (II) Where land and structures thereupon are combined as a single property purchased or leased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding (I).

  • (III) The Company that acquires real property or right-of-use assets thereof from a related party and appraises the cost of the real property or right-of-use assets thereof in accordance with the preceding (I) and (II) shall also engage a CPA to check the appraisal and render a specific opinion.

  • (IV) Where the Company acquires real property or right-of-use assets thereof from a related party and one of the following circumstances exists, the acquisition shall be conducted in

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accordance with the preceding (I) to (III) do not apply: 

  1. The related party acquired the real property or right-of-use assets thereof through inheritance or as a gift.

  2. More than 5 years will have elapsed from the time the related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction.

  3. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.

  4. The real property right-of-use assets for business use are acquired by the Company with its parent or subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100% of the issued shares or authorized capital.

  • IV. When the results of the appraisal conducted in accordance with the preceding Subparagraphs (!) and (II) are uniformly lower than the transaction price, the matter shall be handled in compliance with Paragraph 5 of this Article. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply:

  • (I) Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:

    1. Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.

    2. Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or leasing practices.

  • (II) Where the Company acquiring real property, or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of completed transactions involving neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

  • The “Completed transactions involving neighboring or closely valued parcels of land” in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions involving similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50% of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property or obtainment of the right-of-use assets thereof.

  • V. Where the Company obtains real property or its right-of-use assets from a related party and the appraisal results based on Subparagraphs 3 and 4 od this Article are both lower than the transaction price, it shall handle the following matters:

  • (I) A special reserve shall be set aside in accordance with Paragraph 1 of Article 41 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in public companies, then the special reserve called for under Paragraph 1 of Article 41 of the Securities and Exchange Act shall be set aside pro rata in a proportion

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consistent with the share of the Company’s equity stake in the other company. 

  - (II) The Audit Committee shall comply with the provisions of Article 218 of the Company Act.

  - (III) Actions taken pursuant to the preceding Sub-paragraphs (I) and (II) shall be reported to a shareholders meeting and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

  - If the Company has set aside the special surplus reserve in accordance with the provisions of the preceding Paragraph, the assets purchased or leased at the higher price shall be recognized as a loss in value or disposed of or terminated for lease, or properly compensated or restored to the original state. If there is other evidence to prove that there is nothing unreasonable, the special surplus reserve may only be used with the approval of the Financial Supervisory Commission.

  • VI. When the Company obtains real property or right-of-use assets thereof from a related party, it shall also comply with Paragraph 5 of this Article if there is other evidence indicating that the acquisition was not an arm’s length transaction.

  • Article 12: Procedures for Acquiring or Disposing of Creditor's Rights of Financial Institutions In principle, the Company does not engage in transactions to acquire or dispose of the debts of financial institutions. If it intends to do so in the future, it shall report to the board of directors for approval and then determine its appraisal and operating procedures.

  • Article 13: Appraisal and Operation Procedures for Acquisition and Disposal of Derivatives I. Types of Transaction 

     - Derivatives transaction engaged in by the Company refers to transaction contracts (such as forward contracts, options, futures, swap contracts) whose value is derived from commodities such as assets, interest rates, foreign exchange rates, index or other interests and the combination of the above commodities and financial instruments such as hybrid contracts, but may only for the purpose of hedging transactions.
    • II. Operations or Hedging Strategies

The main purpose of trading in derivatives shall be to avoid business risks and the selection of trading commodities shall be done mainly to avoid risks from foreign exchange income, expenditure, assets or liabilities generated by the Company’s business operations. In addition, the counterparty of the transaction shall also select a financial institution that has business dealings with the Company as much as possible to avoid credit risks.

III. Transaction Limit and Upper Limit of Total and Individual Contract Losses:

  • (I) Transaction Limit

  • Hedging transactions: The total amount of the Company’s overall hedging contracts shall not exceed the net position of existing assets and liabilities plus the net position of assets and liabilities generated by the Company’s business operation in the next six months.

  • Transactional operations: The Company does not engage in transactional operations.

  • (II) Upper Limit for Losses

  • The amount of individual contract losses shall not exceed 15% of the transaction contract value.

  • The maximum annual loss limit for all contracts shall not exceed 15% of the contract value.

  • IV. Segregation of Duties

  • (I) The Company’s derivatives transaction and confirmation personnel shall be appointed by the chairman of the board.

  • (II) Confirmation of transactions shall be performed by persons in the financial unit who are not responsible for the transaction. In addition, the settlement personnel shall be personnel who are not responsible for the transaction or confirmation of the financial

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unit.

  • (III) The appointment and dismissal of the transaction and confirmation personnel shall be notified to the transaction counterparty prior to the effective date in order to safeguard the Company’s rights and interests.

  • V. Performance Evaluation Essentials

  • Hedging transactions: evaluate at least twice a month and report the performance to management for reference.

  • VI. Risk Management Measures:

  • When the Company engages in derivatives trading, the scope of risk management and measures to be adopted are as follows:

  • (I) Consideration of credit risk: In principle, the counterparty of the transaction shall be based on the financial institution that has contacts with the Company or a well-known domestic and foreign financial institution with good credit and can provide professional information.

  • (II) Consideration of market price: The transaction shall be based on financial commodities that are commonly traded internationally and by taking reference to the current price in the financial market, an appropriate transaction price shall be determined with the bank.

  • (III) Consideration of liquidity: In order to ensure market liquidity, when selecting financial commodities, the priority shall be given to those with high liquidity (that is, able to be squared at any time in the market). The financial institutions entrusted with transactions shall have sufficient information and the ability to trade in any market at any time.

  • (IV) Consideration of cash flow risk: In order to ensure the stability of the Company’s working capital turnover, the Company’s source of funds for derivatives trading shall be limited to its own funds and its operating amount shall consider the needs of funds for forecasting cash income and expenses in the next three months.

  • (V) Consideration of operations: the degree of authority delegation and operating process shall be strictly observed to avoid operational risks.

  • (VI) Legal risks management: any contractual documents signed with financial institutions shall adopt the forms of international standard documents as much as possible. For the first derivative commodity transaction, it shall be formally signed after being inspected by professionals from foreign exchange, legal affairs or legal counsel to avoid legal risks.

  • (VII) Personnel engaged in derivatives trading may not serve concurrently in other operations such as confirmation and settlement.

  • (VIII) Risk measurement, monitoring and control personnel shall be assigned to a different department that the personnel in the preceding subparagraph and shall report to the board of directors or senior management personnel with no responsibility for trading or position decision-making.

  • VII. Internal Audit System:

  • The Company's internal audit personnel shall periodically make a determination of the suitability of internal controls on derivatives and conduct a monthly audit of how faithfully derivatives trading by the trading department adheres to the procedures for engaging in derivatives trading, and prepare an audit report. If any material violation is discovered, the Audit Committee shall be notified in writing.

  • VIII. Periodic Evaluation Method and Handling of Irregular Circumstances:

  • (I) Positions for hedge trades required by business shall be evaluated at least twice per month. Evaluation reports shall be submitted to senior management personnel (not those from the execution units) authorized by the board of directors.

  • (II) The senior executives designated by the board of directors of the Company shall pay attention to the supervision and control of derivatives trading risks at all times. The board of directors shall also evaluate whether or not the performance of derivatives trading is in line with the established business strategies and whether the risks undertaken are within the tolerable range of the Company.

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  • (III) Senior executives authorized by the board of directors shall manage derivatives trading in accordance with the following principles:

    1. Regularly evaluate whether or not the risk management measures currently in use are appropriate and handle them in accordance with FSC’s "Regulations Governing the Acquisition and Disposal of Assets by Public Companies" and these Regulations.

    2. When irregular circumstances are found in the course of supervising trading and profit-loss circumstances, appropriate measures shall be adopted and a report immediately made to the board of directors; where a company has independent directors, an independent director shall be present at the meeting and express an opinion.

  • IX. The Company shall establish a "Derivatives Transaction Reference Book" (Attachment IX) when engaging in derivatives transactions, detailing the types and amounts of derivatives transactions, the date of approval by the board of directors, the monthly or weekly periodic assessment report, and periodic assessment by the Board and senior executives authorized by the Board.

  • Article 14: Procedures for Merger, Demerger, Acquisition or Transfer of Shares

  • I. The Company that conducts a merger, demerger, acquisition or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a CPA, attorney or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price or distribution of cash or other property to shareholders and submit it to the board of directors for deliberation and passage.

  • However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the Company of a subsidiary in which it directly or indirectly holds 100% of the issued shares or authorized capital and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100% of the respective subsidiaries’ issued shares or authorized capital.

  • II. Prior to the convening of the shareholder’s meeting, the Company shall prepare and deliver the public document, the expert opinion required in Paragraph 1 of this Article, the notice of the shareholders' meeting and the important contents and related matters of agreements related to merger, demerger or acquisition to shareholders to the shareholders as the reference for shareholders to determine whether or not to approve the merger, demerger or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger or acquisition, this restriction shall not apply. In addition, where the shareholders meeting of any one of the companies participating in a merger, demerger or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes or other legal restrictions or the proposal is rejected at the shareholders’ meeting, the companies participating in the merger, demerger or acquisition shall immediately publicly explain the reason, the follow-up measures and the preliminary date of the next shareholders’ meeting.

  • III. Date of the meeting of directors: the company participating in a merger, demerger or acquisition shall convene a board of directors meeting and shareholders meeting on the day of the transaction to resolve matters relevant to the merger, demerger or acquisition, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent. The company participating in a transfer of shares shall call a board of directors’ meeting on the day of the transaction, unless another act provides otherwise or the FSC is notified in advance of extraordinary circumstances and grants consent.

  • IV. When participating in a merger, demerger, acquisition or transfer of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC market shall prepare a full written record of the following information and retain it for 5 years for reference:

  • (I) Basic identification data for personnel: including the occupational titles, names, and

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national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition or transfer of another company's shares prior to disclosure of the information.

  • (II) Dates of material events: including the signing of any letter of intent or memorandum of understanding, the hiring of a financial or legal advisor, the execution of a contract and the convening of a board of directors meeting.

  • (III) Important documents and minutes: Including merger, demerger, acquisition and share transfer plans, any letter of intent or memorandum of understanding, material contracts and minutes of board of directors’ meetings.

  • V. When participating in a merger, demerger, acquisition, or transfer of another company's shares, a company that is listed on an exchange or has its shares traded on an OTC market shall, within 2 days counting inclusively from the date of passage of a resolution by the board of directors, report (in the prescribed format and via the Internet-based information system) the information set out in sub-paragraphs 1 and 2 of the preceding paragraph to the FSC for recording.

  • VI. Where any of the companies participating in a merger, demerger, acquisition or transfer of another company's shares is neither listed on an exchange nor has its shares traded on an OTC market, the Company(s) so listed or traded shall sign an agreement with such company whereby the latter is required to abide by the provisions of Paragraphs 4 and 5 of this Article.

  • VII. Every person participating in or privy to the plan for merger, demerger, acquisition or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to the public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition or transfer of shares.

  • VIII. Principles for formulation or amendment to exchange ratio or acquisition price: A company that conducts a merger, demerger, acquisition or transfer of shares, prior to convening the board of directors to resolve on the matter, shall engage a CPA, attorney or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price or distribution of cash or other property to shareholders and submit it to the shareholders; meeting for review. In principle exchange ratio or acquisition price shall not be amended arbitrarily, provided that, however, the terms/conditions that the contract stipulates may be amended and that have been publicly disclosed. The conditions for changing the exchange ratio or the acquisition price are as follows:

  • (I) Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants or other equity based securities.

  • (II) An action, such as a disposal of major assets, that affects the Company's financial operations.

  • (III) An event, such as a major disaster or major change in technology, that affects shareholder equity or share price.

  • (IV) An adjustment where any of the companies participating in the merger, demerger, acquisition or transfer of shares from another company, buys back treasury stock.

  • (V) An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition or transfer of shares.

  • (VI) Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.

  • IX. Contents to be included in the contract: in addition to the provisions of Article 317-1 of the Company Act and Article 22 of the Business Mergers and Acquisitions Act, the contract for merger, division, acquisition or share transfer of a company shall also specify the following matters.

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  • (I) Handling of breach of contract.

  • (II) Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.

  • (III) The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.

  • (IV) The manner of handling changes in the number of participating entities or companies.

  • (V) Preliminary progress schedule for plan execution and anticipated completion date.

  • (VI) Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion and relevant procedures.

  • X. After public disclosure of the information, if any company participating in the merger, demerger, acquisition or share transfer intends further to carry out a merger, demerger, acquisition or share transfer with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition or share transfer; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the board of directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.

  • XI. If the Company participates in any merger, demerger, acquisition or share transfer in which any of the participating parties is not a public company, the Company shall sign an agreement with such party and handle relevant matters it in accordance with the provisions of this Article.

Article 15: Procedures for Information Disclosure

  • I. Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC’s designated website in the appropriate format as prescribed by the regulations within 2 days counting inclusively from the date of occurrence of the event:

  • (I) Acquisition of real property or right-of-use assets thereof from or to a related party, or acquisition or disposal of assets other than real property or right-of-use assets thereof from or to a related party where the transaction amount reaches 20% or more of paid-in capital, 10% or more of the company's total assets, or NT$300 million or more. Trading of domestic government bonds, bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

  • (II) Merger, demerger, acquisition or transfer of shares.

  • (III) Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company.

  • (IV) Where an asset transaction other than any of those referred to in the preceding 3 Paragraphs, a disposal of receivables by a financial institution or an investment in the Mainland China area reaches 20% or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances:

    1. Trading of domestic government bonds.

    2. Trading of bonds under repurchase and resale agreements or subscription or redemption of domestic money market funds.

    3. Acquiring or disposing of equipment for business use or its right-to-use assets and its transaction counterparty is not a related party and the transaction price does not exceed NT$500 million.

    4. Where land is acquired under an arrangement on engaging others to build on the Company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages

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or joint construction and separate sale, and furthermore the transaction counterparty is not a related party and the amount the Company expects to invest in the transaction reaches NT$500 million.

The amount of transactions above shall be calculated as follows: 

  1. The amount of each individual transaction.

  2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year.

  3. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use assets thereof within the same development project within the preceding year.

  4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

  "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Regulations need not be counted toward the transaction amount.

  • II. Procedures for Announcement and Declaration

  • Where the Company is acquiring or disposing of assets and there are items that shall be announced and the amount reaches the standard for announcement and declaration, the financial unit shall draft an announcement within two days from the date of the occurrence of the fact, which shall be submitted for the announcement and declaration at the website designated by FSC in accordance with the prescribed format and all the materials to be announced shall be submitted to the general manager for review and approval.

  • III. The Company acquiring or disposing of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney and securities underwriter opinions at the company, where they shall be retained for 5 years except where another act provides otherwise.

  • IV. When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date of knowing of such error or omission.

  • V. Under any of the following circumstances, the Company acquiring or disposing of assets shall publicly announce and report the relevant information on the FSC’s designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event:

  • (I) Change, termination, or rescission of a contract signed with regard to the original transaction.

  • (II) The merger, demerger, acquisition or transfer of shares is not completed by the scheduled date set forth in the contract.

  • (III) Change to the originally publicly announced and reported information.

  • VI. Formats for Announcement

  • (I) For the securities of parent-subsidiary companies or affiliated companies that the Company transacts at centralized transaction markets or domestic and abroad over-the-counter trading centers, the format for announcement of the relevant matters and contents to is specified in Attachment II.

  • (II) In acquiring or disposing of real property by engaging others to build on its own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, the format for announcement of the relevant matters and contents to is specified in Attachment III.

  • (III) For the acquisition or disposal of real property and equipment from related parties, the format for announcement of the relevant matters and contents to is specified in Attachment IV.

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  • (IV) For the transaction of securities, memberships, intangible assets, and the disposal of creditor's rights by financial institutions that are not conducted at the centralized transaction market or the premises of securities firms, the format for announcement of the relevant matters and contents to is specified in Attachment V.

  • (V) For the investment in the mainland China area, the format for announcement of the relevant matters and contents to is specified in Attachment VI.

  • (VI) For derivatives trading, the format of the announcement to be made within two days from the date of the occurrence of the fact is as specified in Attachment VII-1.

  • (VII) For derivatives trading, the format of the announcement to be made by the 10th date of each month is as specified in Attachment VII-2.

  • (VIII) The format of the announcement for merger, division, acquisition or share transfer is specified in Attachment VIII.

  • VII. The Company shall, on a monthly basis, upload in the prescribed format the information on the transaction of derivatives by itself and its non-domestic public subsidiaries as of the end of last month to the website designated by FSC by the 10th date of each month.

  • Article 16: Control Procedures for the Acquisition or Disposal of Assets by Subsidiaries

  • I. For the acquisition or disposal of assets by the subsidiaries reinvested by the Company, the “Regulations Governing the Acquisition and Disposal of Assets” shall be formulated and implemented in accordance with the related regulations. After being approved by the board of directors, such Regulations shall be submitted to the shareholders' meeting for approval and the same shall be applied for amendments.

  • II. When a subsidiary acquires or disposes of assets, it shall be handled in accordance with the provisions of these Regulations. The audit unit of the Company shall perform audit operations on a regular or random basis and review its self-inspection report.

  • III. For any subsidiary of this Company which is not a domestic public company and acquires or disposes of assets that shall be announced based on these Regulations, the Company shall also announce it in accordance with the provisions of these Regulations. For announcement and declaration standards of subsidiaries on the amount of paid-in capital or total assets, such amount shall be subject to the one of the public companies.

  • IV. For the standard of 10% of total assets, it shall be calculated based on the amount of total assets in the most recent individual financial report stipulated in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

In the case of a company whose shares have no par value or a par value other than NT$10—for the calculation of transaction amounts of 20% of paid-in capital under these Regulations, 10% of equity attributable to owners of the parent shall be substituted; for calculations under the provisions of these Regulations regarding transaction amounts relative to paid-in capital of NT$10 billion, NT$20 billion of equity attributable to owners of the parent shall be substituted.

Article 17: Penalties for Relevant Persons Violating the Regulations

  • Where the relevant any of the personnel in-charge of the Company’s acquisition or disposal of

  • assets violates the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” issued by FSC or these Regulations, the following provisions shall be followed according to the severity of the violation:

  • I. Those who violate the relevant regulations shall be reported regularly in accordance with the relevant regulations on rewards and punishments and appropriate punishment shall be determined after discussion by the management. Violation records will be adopted as a reference for the annual individual performance appraisal.

  • II. Those who violate the regulations shall also be reported and punished in accordance with the relevant regulations on rewards and punishments, however, such regulation does not apply to those who could provide justifiable reasons that preventions had been taken in advance.

  • III. If the execution of business by the board of directors or any of the directors violates the

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relevant regulations and the resolutions of the shareholders’ meeting, the Audit Committee shall notify the board of directors or such director to cease their actions in accordance with the provisions of Article 218-2 of the Company Act.

Article 18: Implementation and Amendment

These Regulations shall be approved by the Audit Committee in accordance with the relevant regulations, submitted to the board of directors for resolution and then submitted to the shareholders' meeting for approval prior to implementation and the same applies to amendments. If a director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the director's dissenting opinion to the Audit Committee.

Where the position of independent director has been created by the Company, when a handling procedures involving the acquisition or disposal of assets is submitted for discussion by the board of directors pursuant to the preceding paragraph, the board of directors shall take into full consideration each independent director's opinions. If an independent director objects to or expresses reservations about any matter, it shall be recorded in the minutes of the board of directors’ meeting.

The Company’s trading of major assets or derivatives shall be approved by more than half of all members of the Audit Committee, and shall be submitted for resolution of the board of directors. If approval of one-half or more of Audit Committee members is not obtained, the procedures may be implemented if approved by two-thirds or more of all directors and the resolution of the audit committee shall be recorded in the minutes of the board of directors meeting.

Article 19: Miscellaneous

Matters not covered in these Regulations shall be handled in accordance with the relevant laws and regulations.

Article 20: These Regulations are formulated on June 4, 2009. The 1st amendment on May 17, 2011.

The 2nd amendment on June 26, 2012.

The 3rd amendment on June 23, 2014. The 4th amendment on December 18, 2014. The 5th amendment on June 15, 2015. The 6th amendment on June 19, 2017. The 7th amendment on May 29, 2019.

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Annex III

Y.C.C. Parts MFG Co., Ltd. Procedures for Shareholder Meetings

  • Article 1 To establish a strong governance system and sound supervisory capabilities for the Company’s shareholders’ meetings, and to strengthen management capabilities, the Procedures for Shareholder Meetings (hereinafter referred to as “the Procedures”) are adopted pursuant to Article 5 of the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies.

  • Article 2 The rules and procedures for the Company’s shareholders’ meetings, except as otherwise provided by laws and regulations, or the Company’s Article of Incorporation, shall be as provided in the Procedures.

  • Article 3 The convening of shareholders’ meetings and shareholders’ meeting notice.

  • I. The Board shall call for the session unless otherwise specified in other applicable laws.

  • II. The Company shall prepare electronic versions of the shareholders’ meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) 30 days prior to the date of a general shareholders’ meeting or 15 days prior to the date of a special shareholders’ meeting. The Company shall prepare electronic versions of the shareholders’ meeting agenda and supplemental meeting materials and upload them to the MOPS 21 days prior to the date of the general shareholders’ meeting or 15 days prior to the date of the special shareholders’ meeting. In addition, before 15 days prior to the date of the shareholders’ meeting, the Company shall also prepare the shareholders’ meeting agenda and supplemental meeting materials and make them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent designated thereby, as well as being distributed on-site at the meeting place.

  • III. The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

  • IV. Election or dismissal of Directors or Supervisors, amendments to the Company’s Article of Incorporation, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 of the Company Act, Articles 26-1 and 43-6 of the Securities and Exchange Act, or Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the notice of the reasons for convening the shareholders’ meeting. None of the above matters may be raised as an extraordinary motion.

  • V. Shareholders holding more than 1% of the outstanding shares issued by the Company may propose motions for regular sessions in writing to the Company. Such proposals, however, are limited to one item only, and proposals containing more than one item will not be included in the meeting agenda. The Board of Directors may not have the proposals presented by shareholders that fall in the scope of Article 172-1 paragraph 4 of the Company Act included for discussion.

  • VI. Prior to the date on which share transfer registration is suspended before the convention of a general shareholders’ meeting, the Company shall give a public

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notice announcement regarding acceptance of the proposal, the place and the period for shareholders to submit proposals; and the period shall not be less than 10 days.

  • VII. Shareholder-submitted proposals are limited to 300 words, and proposals containing more than 300 words will not be included in the meeting agenda. The shareholders making the proposals shall be present in person or by proxy at the general shareholders’ meeting and discuss the proposal.

  • VIII. Prior to the date for issuance of notice of a shareholders’ meeting, the Company shall inform the shareholders who submitted proposals of the proposal screening results and shall list in the meeting notice the proposals that comply with the provisions in this Article. Regarding shareholder-submitted proposals, the Board of Directors shall explain the reasons for excluding the proposals in the meeting agenda.

  • Article 4 Attendance by proxy

  • I. A shareholder may appoint a proxy to attend the meeting by providing a proxy form issued by the Company stating the scope of the power authorized to the proxy.

  • II. A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders’ meeting, and shall deliver the proxy form to the Company 5 days prior to the date of the shareholders’ meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail, unless a declaration is made to cancel the previous proxy appointment.

  • III. After a proxy form has been delivered to the Company, if the shareholder intends to attend the meeting in person, a written notice of proxy cancellation shall be submitted to the Company 2 days prior to the meeting date. Delayed submission of cancellation shall be revoked, and the voting power exercised by the authorized proxy at the meeting shall prevail.

  • Article 5 The venue for a shareholders’ meeting shall be within the Company's premises, or a place easily accessible to shareholders and suitable for a shareholders’ meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the independent directors' opinions with respect to the place and time of the meeting.

Article 6 Presence:

  • I. The Company shall specify in its shareholders’ meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

  • II. The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the commencement of the meeting. The place at which attendance registrations are accepted shall be clearly marked and with a sufficient number of suitable personnel assigned to handle the registrations.

  • III. Shareholders and their proxies (collectively, "shareholders") may attend shareholders’ meetings only with valid attendance cards, sign-in cards, or other certificates of attendance. The Company may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.

  • IV. The Company shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in.

  • V. The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other

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meeting materials. Where there is an election of directors, pre-printed ballots shall also be furnished. 

  - VI. When the government or a legal person is a shareholder, it may be represented by more than one representative at a shareholders’ meeting. When a legal person is appointed to attend as a proxy, it may designate only one person to represent it in the meeting.

  • Article 7 Convening Shareholders’ Meeting

  • I. If a shareholders’ meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman of the Board of Directors. When the Chairman of the Board is on leave or for any reason unable to exercise the powers of the Chairman, the vice Chairman shall act in place of the Chairman; if there is no vice Chairman or the vice Chairman is also on leave or for any reason unable to exercise the powers of the vice Chairman, the Chairman shall appoint one of the managing directors to act as chair. If there no managing directors, one of the directors shall be appointed to act as chair. Where the Chairman does not make such a designation, the managing directors or the directors shall select from among themselves one person to serve as the Chair.

  • II. When a managing director or a director serves as the chair, the managing director or director shall be the one that has held that position for six months or more and who understands the financial and business conditions of the Company. The same shall be applied for a representative of a legal person director that serves as chair.

  • III. It is advisable that shareholders’ meetings, which are convened by the Board of Directors, be attended by a majority of the Directors.

  • IV. If a shareholders’ meeting is convened by a party with power to convene but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

  • V. The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders’ meeting in a non-voting capacity.

  • Article 8 The Company shall make uninterrupted audio or video recording of the shareholder’ meeting.

The recorded materials shall be retained for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

  • Article 9 Calling a Meeting

  • I. Attendance at a shareholders meeting shall be calculated based on the number of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in, plus the number of shares whose voting rights are exercised by correspondence or electronically.

  • II. The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one-third of the total number of issued shares, the chair shall declare the meeting adjourned.

  • III. If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one-third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to

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Article 175, paragraph 1 of the Company Act. The Company shall notify the shareholders of the tentative resolutions, and convene another shareholders’ meeting within 1 month.

  • IV. If, prior to the conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

  • Article 10 Discussions

  • I. If a shareholders meeting is convened by the Board of Directors, the meeting agenda shall be prepared by the Board of Directors. The meeting shall proceed in the order in accordance with the agenda, which may not be changed without a resolution of the shareholders’ meeting.

  • II. The provisions of the preceding paragraph apply mutatis mutandis to a shareholders’ meeting convened by a party with the power to convene that is not the Board of Directors.

  • III. The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda mentioned in the preceding two paragraphs (including extemporary motions), except by a resolution of the shareholders’ meeting. If the chair declares the meeting adjourned in violation of the Procedures, the other members of the Board of Directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

  • IV. The chair shall allow sufficient opportunities during the meeting for explanation and discussion of proposals and of amendments or extemporary motion put forward by the shareholders. When the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote.

  • V. After the meeting is adjourned, shareholders shall not elect another chairman to continue the meeting at the same place or any other place.

  • Article 11 Speech of the Shareholders

  • I. Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her/its shareholder account number (or attendance card number), and account name. The order in which shareholders speak shall be set by the chair.

  • II. A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

  • III. Except with the chair's consent, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

  • IV. When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the chair's consent and the shareholder presenting the speech. The chair shall stop any violation.

  • V. When a legal person shareholder appoints two or more representatives to attend a shareholders’ meeting, only one of the representatives so appointed may speak on the same motion. After an attending shareholder has spoken, the chair may respond in person or designate relevant personnel to respond.

  • Article 12 Voting and Resolution

  • I. Voting at a shareholders’ meeting shall be calculated based the number of

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shares.

  • II. With respect to resolutions of shareholders’ meeting the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

  • III. When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the Company's interests, that shareholder may not vote on that item and may not exercise voting rights as a proxy for any other shareholders.

  • IV. The number of shares for which voting rights may not be exercised under the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

  • V. Except for a trust enterprise or a shareholder services agent approved by the competent securities authorities, when one person is concurrently appointed as a proxy by two or more shareholders, the voting rights represented by that proxy may not exceed 3% of the voting rights represented by the total number of issued shares. The number of votes exceeding the limit shall not be included in the calculation.

Article 13 Voting and Resolution

  • I. A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2 of Article 179 of the Company Act.

  • II. When the Company holds a shareholders’ meeting, the shareholders may exercise voting rights by correspondence or electronic means. When voting rights are exercised by ways of correspondence or electronically, the method of exercising voting rights shall be specified in the shareholders’ meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her/its rights with respect to the extemporary motions and amendments to that meeting's original proposals.

  • III. A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company 2 days prior to the date of the shareholders’ meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail. However, it is not subject to the restriction when a declaration is made to cancel the earlier declaration of intent.

  • IV. After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the Shareholders’ Meeting in person, a written declaration of intent to retract the voting rights as mentioned in the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, at least 2 days prior to the date of the shareholders’ meeting. If the notice of retraction is submitted after that time, the voting rights that are already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders’ meeting, the voting rights exercised by the proxy in the meeting shall prevail.

  • V. Except as otherwise provided in the Company Act and the Company's Articles of Incorporation, approval of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the chair or a person designated by the chair shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. On the same day

78

after the Shareholders’ Meeting, each proposal's results, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

  • VI. The resolution shall be deemed passed. It shall have the same effect as if it was voted by casting ballots if no objection is voiced after solicitation by the Chairman and all votes by correspondence and electric means present no objection or abstentions. Where there is an objection, the procedure in the preceding paragraph shall be conducted.

  • VII. If there shall be an amendment or alternative to a motion, the Chairman may combine the amendment or alternative into the original motion, and determine their orders for resolution. When any motion among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

  • VIII.Vote monitoring and counting personnel for the voting on a motion shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company. Vote counting for shareholders’ meeting proposals or elections shall be conducted in public at the place of the shareholders’ meeting. Immediately after vote counting is completed, the voting results, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record is made of the vote.

  • Article 14 Election Matters

  • I. The director election at a shareholders’ meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected.

  • II. The ballots for the election referred to in the preceding paragraph shall be sealed with the monitoring personnel's signatures and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 15 Minute of the Shareholders’ Meeting

  • The resolutions at a shareholders’ meeting shall be compiled in a meeting minute. The preparation, distribution and other related rules are in compliance with Article 183 of the Company Act and relevant regulations issued by the competent authority.

Article 16 Announcement to the Public

  • I. The Company shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders’ meeting.

  • II. If matters put to a resolution at a shareholders’ meeting constitute material information identified by the laws and regulations, Taiwan Stock Exchange Corporation (Taipei Exchange), the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

Article 17 Order Maintenance at the Meeting Venue

  • I. Staff handling administrative affairs of a shareholders’ meeting shall wear identification cards or armbands.

  • II. The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an armband or an identification card that read “Proctor.”

  • III. At the place of a shareholders’ meeting, if a shareholder attempts to speak

79

through any device other than the public address equipment set up by the Company, the chair may stop the shareholder from so doing.

  • IV. When a shareholder violates the Procedures and defies the chair's correction, interrupting the procedure of the session, and insubordinate to instructions, the chair may command the proctors or security personnel to escort the shareholder out of the meeting venue.

Article 18 Break and Resumption of Meeting

  • I. When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

  • II. If the Shareholders’ Meeting venue is no longer available for continued use before all of the items (including extemporary motions) on the meeting agenda have been addressed, a resolution may be adopted to resume the meeting at another venue.

  • III. The provisions of Article 172 shall not apply where a shareholders’ meeting resolves to postpone the meeting for not more than, or to reconvene the meeting within, five days.

  • Article 19 The Procedures, and any amendments hereto, shall be implemented after adoption by shareholders’ meetings.

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Appendix IV

Y.C.C. Parts MFG Co., Ltd. Shareholdings of All Directors

  • I. Handled in accordance with Article 3, Paragraph 4 in the “Regulations Governing Content and Compliance Requirements for Shareholders’ Meeting Agenda Handbooks of Public Companies.”

  • II. The Company’s total common shares are 74,123,875 shares. In accordance with Article 2 in the “Rules

  • and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies,” the minimum shareholdings of all Directors shall be no less than 5,929,910 shares. Currently, the shareholding of all Directors is compliant with the rules.

Detail of the total and individual shareholding of Directors

Title Name Date for suspension
of share transfer
(March 29, 2022)
Shareholding as in
the shareholder
roster
Percentage of shareholding
Institutional
Chairman		 Hehan Investment Co.,
Ltd. Rep.: Hao-Chen Lin		 7,586,503 10.232%
Institutional
director		 Ziqun International Co.,
Ltd. Rep.: Chieh-Chang
Tien		 861,000 1.161%
Institutional
director		 Haoqun Investment and
Development Ltd.
Rep.: Jo-NingHuang		 11,791,000 15.903%
Institutional
director		 Songqun Investment and
Development Ltd. Rep:
Shu-Mei Liu
Rep.: Jui-Tse Lin		 10,731,000 14.474%
Independent
director		 Hung-Lung Huang 0 0%
Independent
director		 Chao-Chang Yang 0 0%
Independent
director		 Chin-Feng Kuo 13,000 0.018%
Independent
director		 Chih-Ping Chu 0 0%
Total All directors 30,982,503 41.788%

81

Appendix V Impact of Issuance of bonus shares on the Company’s Business Performance, Earnings per Share and Shareholder Return Rate Not applicable. The Company is not required to disclose its 2021 financial forecast.

82

Appendix VI

List and Relevant Information on Candidates of Directors

No. Type of
Candidate		 Name of
Candidate		 Education Working Experience Current Position(a) Shareholding
(unit: share)		 Government or
legal person
represented		 Does it comply with the
Regulations Governing
Appointment of
Independent Directors and
Compliance Matters for
Public Companies?
Director Hehan
Investment Co.,
Ltd.		 N/A Director, Y.C.C. Parts MFG
Co., Ltd.		 Director, Y.C.C. Parts MFG
Co., Ltd.		 7,586,503
shares		 None □Yes
□No
■N/A
Director Ziqun
International
Co., Ltd.		 N/A Director, Y.C.C. Parts MFG
Co., Ltd.		 Director, Y.C.C. Parts MFG
Co., Ltd.		 861,000
shares		 None □Yes
□No
■N/A
Director Daqun
International
Co.,Ltd.		 N/A N/A N/A 506,000
shares		 None □Yes
□No
■N/A
Director Songqun
Investment and
Development
Ltd.		 N/A Director, Y.C.C. Parts MFG
Co., Ltd.		 Director, Y.C.C. Parts MFG
Co., Ltd.		 10,731,000
shares		 None □Yes
□No
■N/A
Director Haoqun
Investment and
Development
Ltd.		 N/A Director, Y.C.C. Parts MFG
Co., Ltd.		 Director, Y.C.C. Parts MFG
Co., Ltd.		 11,791,000
shares		 None □Yes
□No
■N/A
Independent
director		 Hung-Lung
Huang		 EMBA, Department of
Accounting of
Tunghai University		 CPA, WeTec International
CPAs
Supervisor of Ding Dongliang
Investment Co., Ltd.,
wufenglins Company limited
and Changhua County
Cultural Foundation
Director of Li Cheng		 Head, WeTec International
CPAs
Independent Director, Y.C.C.
Parts MFG Co., Ltd.		 0 share None ■Yes
□No
□N/A

83

Enterprise Co., Ltd., Yu Hung
Paper Co., Ltd., Ataabu
Culture Foundation, and
Haiching Elderly Nursing
Center of Maioli County
Independent
director		 Chin-Feng Kuo Master, Department of
Economics
of
Shih
Hsin University		 Financial Manager, Shintao
Natural Gas		 Independent Director, Y.C.C.
PARTS MFG. CO., LTD.		 13,000 shares None ■Yes
□No
□N/A
Independent
director		 Lung-Fa Hsieh PhD., Department of
Business
Administration,
National
Cheng-Chi
University		 Head,
Commerce
Development
Research
Institute
Director, First Bank
Director
and
Supervisor,
Taiwan
Depository
and
Clearing Corporation
Supervisor,
Taiwan
Life
Insurance Co., Ltd.
Director, Taiwan Life Asset
Management
General
Manager
and
Business Consultant of Long
Bon International Co., Ltd.
Independent Director, Vedan
International
Limited		 0 share None ■Yes
□No
□N/A

84

(HKEX-listed)
Independent Director, Y.C.C.
Parts MFG Co., Ltd.
Vice
President,
Dayeh
University
Dean,
College
of
Management,
Dayeh
University
President,
Ming
Chi
University of Technology
Independent
director		 Kuo-Hua Chang PhD., Department of
Laws,
Meijo
University (Japan)		 Independent
Director,
Auditing Committee Member
and Remuneration Committee
Member
of
Enterex
International Limited
Independent
Director
and
Remuneration
Committee
Member
of
Vectorite
Biomedica Inc.
Founding
Dean,
Graduate
School
of
Science
and
Technology Law, YunTech
Director, Center for Patent
Infringement
Verification,		 Independent
Director,
Auditing Committee Member
and
Remuneration
Committee
Member
of
Shining
Victory
Motor
Electronic Co., Ltd.
Professor, Graduate School of
Science and Technology Law,
YunTech
CEO, Advisory Committee of
General Affairs of University
Administration, YunTech
Visiting
Scholar,
Osaka
Institute
of
Technology
(Japan)
Consultant,
Labor
Affairs
Bureau,
Taichung
City		 0 share None ■Yes
□No
□N/A

85

YunTech
Director, Center for Liberal
Arts and Science Education,
YunTech
Chief Secretary and Head for
General Affairs, YunTech		 Government

  • (1) On March 10, 2022, the board of directors of the Company reviewed the qualifications of the nominees for the 13th session of the board of directors. Among them, Mr. Hung-Lung Huang, the nominee of the independent director, has served as the independent director of the Company for three consecutive terms. According to Article 5 of the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies,” the reasons for continuing to nominate such candidate as independent directors shall be publicly announced.

  • (2) Mr. Hung-Lung Huang is able to provide informative advice for the Company with his rich financial and accounting knowledge and experience. Although he has been re-elected as an independent director of the Company for four consecutive terms, the Company still requires that he continue to serve as the independent director so that he can efficiently perform his duties. We intend to nominate, supervise and provide professional advice to the board of directors, therefore, it is planned to continue to nominate Mr. Hung-Lung Huang as a candidate for the current election of independent directors.

86

Appendix VII

Y.C.C. Parts MFG Co., Ltd.

Measures for Elections of Directors

  • Article 1 For the purpose of a fair, just and open election of directors, these Measures are hereby formulated in accordance with Articles 21 and 41 of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies."

  • Article 2 The election and appointment of directors of the Company shall be handled in accordance with these measures, unless otherwise stipulated by laws and regulations or Articles of Association.

  • Article 3 The election and appointment of directors of the Company shall take into account the overall composition of the board of directors. The composition of the board of directors shall consider diversity and formulate an appropriate diversity policy based on its own operation, operating type and development needs. It is recommended to include but not be limited to the following two standards:

  • I. Basic conditions and values: Gender, age, nationality and culture, etc.

  • II. Expertise and skills: Professional background (such as laws, accounting, industry, finance, marketing or technology), professional skills and industry experience, etc.

  • The members of the board of directors shall generally possess the necessary knowledge, skills and qualities to perform their duties and their overall abilities shall be as follows:

  • I. Ability for making operating judgment.

  • II. Accounting and financial analysis ability.

  • III. Business management ability.

  • IV. Crisis management ability.

  • V. Industry knowledge.

  • VI. Vision and insight on international markets.

  • VII. Leadership.

VIII.Decision-making ability.

  • Over half of the seats of the board of directors shall be held by members who

  • mutually have no relationships as spouses or relatives within the second degree of kinship.

  • Article 4 The qualifications of independent directors of the Company shall comply with the provisions of Articles 2, 3 and 4 of "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies."

  • The election and appointment of independent directors of the Company shall comply with Articles 5, 6, 7, 8 and 9 of "Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies" and shall be handled in accordance with Article 24 of "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies."

  • Article 5 The election and appointment of independent directors of the Company shall comply with Article 192-1 of the Company Act to review the qualifications, educational background, and the existence of any of the conditions listed in Article 30 of the Company Act, other qualifications shall not be arbitrarily requested and the review results shall be submitted to shareholders for reference to proceed the election of suitable directors.

If any director is dismissed for any reason which results in a situation where there are fewer than five active directors, the Company shall hold a by-election at the latest shareholders' meeting. However, if the vacancy of seats of directors reaches one-third

87

of the seats specified in the Articles of Association, the Company shall convene an extraordinary shareholders’ meeting for by-elections within 60 days from the date of the occurrence of such a situation.

If the number of independent directors is insufficient, based on the proviso to Paragraph 1 of Article 14-2 of "Securities and Exchange Act," relevant rules of the Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings or Standards for Determining Unsuitability for TPEx Listing under Article 10, Paragraph 1 of the Taipei Exchange Rules Governing the Review of Securities for Trading on the TPEx, a by-election shall be held at the latest shareholders' meeting; and when all independent directors are dismissed, an extraordinary shareholders’ meeting for by-elections shall be held within 60 days from the date of the occurrence of such situation.

  • Article 6 In the election of directors of the Company, the cumulative voting system shall be adopted. Each share has the equivalent voting rights as the number of directors to be elected, collectively voting for one candidate or allocated to several ones. For the election of directors of the Company, shareholders may exercise their right to vote by means of electronic or on-site voting.

  • Article 7 The person with the right to convene shall prepare ballots with a quantity equal to the number of directors to be elected, fill in the number of voting rights and distribute them to shareholders attending the shareholders’ meeting. The names of the electors may be replaced by the attendance certificate number printed on the ballots.

  • Article 8 The number of directors of the Company shall be calculated according to the number of independent directors and ordinary directors according to the Company’s Articles of Association. Candidates who obtain the same number of votes will be drawn by lot and those who do not attend in person will be drawn by the chairman on his/her behalf.

  • Article 9 Before the election begins, the chairman shall designate a number of scrutineers and tellers to perform various relevant duties, but the scrutineers shall have their identity as shareholders. The ballot box shall be prepared by the Company and opened by the scrutineers for public view before voting.

  • Article 10 If the candidate is also a shareholder, the elector shall fill in the account name and shareholder account number in the ballot; if the candidate is not a shareholder, the candidate's name and identification document number shall be filled in. However, when the government or corporate shareholder is the candidate, the name of the candidate displayed on the ballot shall be filled with the name of the government or corporation, or both names of the government or corporation and its representative; when there are several representatives, the names of these representatives shall be filled in separately.

Article 11 Ballots are invalid if having any of the following circumstances:

  • I. Ballots other than those prepared by the board of directors.

  • II. Blank ballots that are put into the ballot box.

  • III. Ballots with illegible handwriting or have been altered.

  • IV. If the candidate is also a shareholder and the account name and shareholder account number is inconsistent with the content of the shareholders roster; or if the candidate is not a shareholder and the candidate's name and identification document number are inconsistent after verification.

  • V. Containing other words or texts in addition to account names (names) or account numbers (numbers of identity documents) and the number of votes allotted.

  • VI. The name of the candidate filled in is the same as that of other shareholders and the shareholder account number or identification document number is not filled in for verification.

88

  • Article 12 After the voting is completed, the voting results will be announced on spot by the chairman or the designated personnel, which will include the list of directors elected and their respective votes. The ballots for the election referred to in the preceding paragraph shall be sealed with the monitoring personnel's signatures and kept in proper custody for at least one year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

  • Article 13 The elected directors will be awarded with the notice of appointment issued by the board of directors of the Company.

  • Article 14 The Procedures and any amendments hereto shall be implemented after adoption at the shareholders’ meetings.

  • Since the inauguration of the tenth session of the Board of Directors, the Company had established the Auditing Committee in lieu of supervisors and the provisions of measures regarding supervisors will cease to apply when the tenth session of directors are officially elected.

89

==> picture [270 x 181] intentionally omitted <==

Y.C.C. PARTS MFG. CO.,LTD. Chairman: Hehan Investment Co., Ltd. Hao-Chen Lin

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