Y.C.C. — Audit Report / Information 2020

Nov 14, 2020

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

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2020 AND 2019

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

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, 2020 and 2019, 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, 2020 and 2019, 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 2020 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 2020 parent company only financial statements are stated as follows:

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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 automobiles 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. Checked the completeness and performed cut-off tests on sales revenue for a certain period around the balance sheet date, including reviewing the transaction terms and verifying the transaction documents to ensure that transactions had been recorded in the proper period.

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 automobiles parts. Sale revenue is recognised when the control over the goods was transferred under the transaction terms.

As of December 31, 2020, the balances of inventories and allowance for inventory valuation losses were NT$ 181,599 thousand and NT$ 16,279 thousand, respectively.

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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. Considering 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.

Other matter – Scope of the audit

The parent company only financial statements of the Company for the year ended December 31, 2019, were audited by other independent auditors whose report thereon dated March 26, 2020 expressed an unqualified opinion on those statements.

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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.

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

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of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

3.

4.

5.

6.

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

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the 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.

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.

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 audit. We remain solely responsible for our audit opinion.

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

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

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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 Liu, Mei-Lan For and on behalf of PricewaterhouseCoopers, Taiwan March 16, 2021

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only 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 parent company only 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. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 6(5) 7(2) 7(2) 6(6) 6(3) 6(7) 6(8) and 8 6(9) 6(26) 6(10) and 8	December 31, 2020 AMOUNT % $ 379,919 9 18,301 - 413,918 9 7,915 - 179,011 4 11,201 - 3,405 - 304,925 7 165,320 4 29,487 1 1,513,402 34 52,241 1 585,044 13 2,132,603 48 5,589 - 101,932 2 106,959 2 2,984,368 66 $ 4,497,770 100	December 31, 2019	December 31, 2019
		AMOUNT $ 379,919 18,301 413,918 7,915 179,011 11,201 3,405 304,925 165,320 29,487 1,513,402 52,241 585,044 2,132,603 5,589 101,932 106,959 2,984,368 $ 4,497,770	AMOUNT $ 539,669 42,045 74,950 4,744 286,717 2,682 5,643 302,596 159,263 10,488 1,428,797 57,542 598,958 2,052,791 3,724 98,177 338,977 3,150,169 $ 4,578,966	%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at amortised cost - current Notes receivable, net Accounts receivable, net Accounts receivable - related parties, net Other receivables Other receivables - related parties Inventories Other current assets Total current assets Non-current assets Non-current financial assets at fair value through other comprehensive income -non- current Investments accounted for under equity method Property, plant and equipment Right-of-use assets Deferred tax assets Other non-current assets Total non-current assets Total assets				12 1 2 - 6 - - 7 3 -
				31
				1 13 45 - 2 8
				69
				100

(Continued)

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Y.C.C. PARTS MFG. CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2020 December 31, 2019 Notes AMOUNT % AMOUNT % 6(11) $ - - $ 120,000 3 6(2) 27,305 1 6,742 - 6(19) 1,694 - - - 109,707 2 101,308 2 34,725 1 33,349 1 7(2) - - 1,705 - 6(12) 62,367 1 93,106 2 78,828 2 50,501 1 6(13) 108,334 2 163,368 4 750 - 1,997 - 423,710 9 572,076 13 6(13) 569,959 13 513,929 11 20,630 1 - - 6(14)(15) 13,454 - 6,995 - 604,043 14 520,924 11 1,027,753 23 1,093,000 24 6(16) 741,389 16 741,389 16 6(17) 1,193,259 27 1,193,024 26 6(18) 317,795 7 280,161 6 119,480 3 88,059 2 1,203,831 27 1,303,340 28 ( 105,211) ( 3) ( 119,481) ( 2 ) 6(16) ( 526) - ( 526) - 3,470,017 77 3,485,966 76 9 $ 4,497,770 100 $ 4,578,966 100

Current liabilities Short-term borrowings Financial liabilities at fair value through profit or loss - current Contract liabilities - current Notes payable Accounts payable Accounts payable - related parties Other payables Income tax liabilities - current Long-term liabilities, current portion Other current liabilities - others Total current liabilities Non-current liabilities Long-term borrowings Income tax liabilities - non-current Other non-current liabilities Total non-current liabilities Liabilities Equity Share capital Share capital - common stock Capital surplus Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Other equity interest Treasury shares Total Equity Significant contingent liabilities and unrecognised contract commitments Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

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Y.C.C. PARTS MFG. CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Items

Year ended December 31 2020 2019 Notes AMOUNT % AMOUNT % 6(19) $ 1,264,279 100 $ 1,486,171 100 6(6)(24)(25) ( 763,789) ( 61) ( 795,601) ( 54) 500,490 39 690,570 46 6(24)(25) ( 92,232) ( 7) ( 105,168) ( 7) ( 60,096) ( 5) ( 61,544) ( 4) ( 22,060) ( 2) ( 27,074) ( 2) 12(2) 7,523 1 437 - ( 166,865) ( 13) ( 193,349) ( 13) 333,625 26 497,221 33 6(20) 13,520 1 32,327 2 6(21) and 7(2) 30,519 2 33,177 2 6(22) ( 105,571) ( 8) 9,874 1 6(23) ( 4,522) - ( 9,052) ( 1) 6(7) ( 91,080) ( 7) ( 97,834) ( 6) ( 157,134) ( 12) ( 31,508) ( 2) 176,491 14 465,713 31 6(26) ( 58,812) ( 5) ( 89,350) ( 6) 117,679 9 376,363 25 $ 117,679 9 $ 376,363 25 6(15) $ 143 - $ 184 - 6(3) ( 5,301) - ( 6,627) - 6(26) ( 28) - ( 37) - ( 5,186) - ( 6,480) - 19,571 1 ( 24,959) ( 2) 19,571 1 ( 24,959) ( 2) $ 14,385 1 ($ 31,439) ( 2) $ 132,064 10 $ 344,924 23 6(27) $ 1.59 $ 5.08 $ 1.58 $ 5.07

Sales revenue Operating costs Gross profit Operating expenses Selling expenses General and administrative expenses Research and development expenses Expected credit impairment loss Total 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 under equity method Total non-operating income and expenses Profit before income tax Income tax expense Profit from continuing operations Profit for the year Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss Other comprehensive income, before tax, actuarial gains (losses) on defined benefit plans Unrealised losses on valuation of equity instrument at fair value through profit or loss Income tax related to components of other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss Financial statements translation differences of foreign operations Components of other comprehensive income (loss) that will be reclassified to profit or loss Other comprehensive income (loss) for the year Total comprehensive income for the year Basic earnings per share Basic earnings per share Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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Y.C.C. PARTS MFG. CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Notes Year 2019 Balance at January 1, 2019 Profit for the year Other comprehensive income (loss) for the year 6(3) Total comprehensive income (loss) Appropriation and distribution of 2018 earnings 6(18) Legal reserve Special reserve Cash dividends Treasury share transactions 6(16) Difference between consideration and carrying amount of subsidiaries acquired 6(7) Changes in ownership interests in subsidiaries Disposal of equity investments at fair value through other comprehensive income 6(3) Balance at December 31, 2019 Year 2020 Balance at January 1, 2020 Profit for the year Other comprehensive income (loss) for the year 6(3) Total comprehensive income (loss) Appropriation and distribution of 2019 earnings 6(18) Legal reserve Special reserve Cash dividends Acquisition of non-controlling interests in subsidiaries 6(7) Balance at December 31, 2020	Notes		Ordinary share	Capital surplus, additional paid- in capital	Capital surplus, additional paid- in capital			Retained earnings	Retained earnings	Retained earnings	Other equity interest	Other equity interest	Treasury shares		Total equity
							Legal reserve	Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
			$ 741,389 - - - - - - - - - - $ 741,389 $ 741,389 - - - - - - - $ 741,389		$ 1,188,790 - - - - - - - 2,035 2,199 - $ 1,193,024 $ 1,193,024 - - - - - - 235 $ 1,193,259		$ 249,371 - - - 30,790 - - - - - - $ 280,161 $ 280,161 - - - 37,634 - - - $ 317,795		$ 39,601 - - - - 48,458 - - - - - $ 88,059 $ 88,059 - - - - 31,421 - - $ 119,480	$ 1,154,490 376,363 147 376,510 ( 30,790 ) ( 48,458 ) ( 148,248 ) - - - ( 164 ) $ 1,303,340 $ 1,303,340 117,679 115 117,794 ( 37,634 ) ( 31,421 ) ( 148,248 ) - $ 1,203,831	($ 70,208 ) - ( 24,959 ) ( 24,959 ) - - - - - - - ($ 95,167 ) ($ 95,167 ) - 19,571 19,571 - - - - ($ 75,596 )	($ 17,851 ) - ( 6,627 ) ( 6,627 ) - - - - - - 164 ($ 24,314 ) ($ 24,314 ) - ( 5,301 ) ( 5,301 ) - - - - ($ 29,615 )	$ - - - - - - - ( 526 ) - - - ($ 526 ) ($ 526 ) - - - - - - - ($ 526 )	$ 3,285,582 376,363 ( 31,439 ) 344,924 - - ( 148,248 ) ( 526 ) 2,035 2,199 - $ 3,485,966 $ 3,485,966 117,679 14,385 132,064 - - ( 148,248 ) 235 $ 3,470,017

The accompanying notes are an integral part of these parent company only financial statements.

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

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 Loss on market value decline and obsolescence Unrealised foreign exchange 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

Year ended December 31 Notes 2020 2019 $ 176,491 $ 465,713 6(8)(24) 225,605 225,874 6(9)(24) 1,165 - 6(24) 4,904 7,473 12(2) ( 7,523 ) ( 437 ) 6(22) 5,912 1,628 6(23) 4,522 9,052 6(20) ( 13,520 ) ( 32,327 ) ( 436 ) - 6(21) ( 4,036 ) ( 4,797 ) 6(7) 91,080 97,834 6(22) ( 3,110 ) ( 29 ) - ( 5,033 ) 35,555 14,231 ( 3,171 ) 8,921 113,513 ( 77,733 ) ( 8,519 ) - ( 48 ) ( 11,212 ) ( 11,045 ) - ( 6,057 ) 21,281 ( 18,999 ) ( 683 ) ( 828 ) - ( 282 ) - 8,399 ( 11,526 ) 1,376 11,489 ( 1,705 ) - ( 9,971 ) 9,881 135 ( 445 ) ( 184 ) ( 160 ) 579,223 728,995 15,806 34,321 ( 240 ) ( 9,487 ) 4,036 - ( 13,638 ) ( 177,639 ) 585,187 576,190

(Continued)

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

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 Increase in financial assets at amortised cost Decrease (increase) in other receivables due from related parties Decrease in other current assets Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of investments accounted for under equity method Proceeds from capital reduction 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 other non-current assets Increase in refundable deposits Dividends received Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Repayment of principal portion of lease liabilities Cash dividends paid Payments to acquire treasury shares 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

Year ended December 31 Notes 2020 2019 ($ 36,751 ) ($ 42,949 ) 75,146 15,153 ( 354,836 ) ( 74,950 ) ( 4,131 ) 117,099 89,940 88,207 - 792 6(7) ( 57,360 ) ( 172,979 ) 6(7) - 150,000 6(28) ( 68,121 ) ( 74,749 ) 6(8) ( 3,333 ) - 3,952 29 ( 4,000 ) - ( 115,891 ) ( 144,649 ) ( 810 ) - - 4,797 ( 476,195 ) ( 134,199 ) 160,000 740,000 ( 280,000 ) ( 1,060,000 ) 200,100 11,500 ( 195,369 ) ( 296,020 ) 6(29) ( 99 ) - 6(29) ( 148,248 ) ( 148,248 ) 6(29) - ( 526 ) ( 263,616 ) ( 753,294 ) ( 5,126 ) - ( 159,750 ) ( 311,303 ) 539,669 850,972 $ 379,919 $ 539,669

The accompanying notes are an integral part of these parent company only financial statements.

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Y.C.C. PARTS MFG. CO., LTD. NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2020 AND 2019

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

1. History and Organisation

Y.C.C. PARTS MFG. CO., LTD. (the “Company”) was incorporated in March 1986 and has been listed on the Taiwan Stock Exchange since April 2012. The Company is primarily engaged in manufacturing and trading automobile parts, import and export as well as operating and reinvesting related businesses.

1. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These parent company only financial statements were authorized for issuance by the Board of Directors on March 16, 2021.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

New standards, interpretations and amendments endorsed by the FSC ollows:	effective from 2020 are as
	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 1 and IAS 8, ‘Disclosure initiative-definition of material’	January 1, 2020
Amendments to IFRS 3, ‘Definition of business’	January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’	January 1, 2020
Amendments to IFRS 16, ‘Covid-19-related rent concessions’	June 1, 2020 (Note)

Note: Earlier application from January 1, 2020 is allowed by FSC.

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

ollows:
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform— Phase 2’	January 1, 2021 January 1, 2021

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The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018-2020	January 1, 2022 To be determined by International Accounting Standard Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation

• A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:

• (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

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• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

• (3) Foreign currency translation

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional and presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the Company entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

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iii.All resulting exchange differences are recognised in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

• (c) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash equivalents

• Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are

~17~

recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (7) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

  • (a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (8) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

  • (a) The objective of the Company’s business model is achieved by collecting contractual cash flows.

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. The Company’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(9) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured

~18~

at initial invoice amount as the effect of discounting is immaterial.

(10) Impairment of financial assets

• For financial assets at amortised cost, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

• －

• (12) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(13) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads. It excludes borrowing costs. Except for the same types of inventory, the item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(14) Investments accounted for using equity method-subsidiaries

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. Unrealised gains on transactions between the Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company recognise loss continuously in proportion to its ownership.

• D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Difference of adjustment

~19~

  - of non-controlling interest and fair value of consideration paid or received is recognised in equity.

• E. When the Company loses control of a subsidiary, the Company remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. If the Company loses significant influence over the subsidiary, the amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of.

• F. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the non-consolidated financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the non-consolidated financial statements shall equal to equity attributable to owners of the parent in the consolidated financial statements.

• (15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

~20~

Buildings and structures 10 ~ 20 years Machinery and equipment 2 ~ 15 years Molding equipment 2 ~ 12 years Transportation equipment 5 ~ 10 years Furniture equipment 3 ~ 5 years Other equipment 3 ~ 20 years

(16) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.

• The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date;

• (c) Any initial direct costs incurred by the lessee.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

(17) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 3 to 5 years.

(18) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the

~21~

circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(19) Borrowings

• Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(20) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of held for trading. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

(22) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(23) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(24) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions

(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent

~22~

of a cash refund or a reduction in the future payments.

  - (b) Defined benefit plans

     - i.Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

     - ii.Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

     - iii.Past service costs are recognised immediately in profit or loss.

• C. Employees’ compensation and directors’ and supervisors’ remuneration

  • Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

• (25) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or

~23~

loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

• (26) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(27) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities.

• (28) Revenue recognition

Sales of goods

• A. The Company manufactures and sells automobile parts. Sales are recognised when control of the products has transferred. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.

• B. Sales revenue was recognized based on the contract price net of sales discount. Goods are often sold with sales discounts and allowances based on future estimated sales volume. Accumulated experience is used to estimate and provide for the sales discounts and allowances, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. The sales usually are made with a credit term of 60 to 180 days after the delivery date, which is consistent with market practice. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money.

• C. A receivable is recognised when the goods are delivered as this is the point in time that the

~24~

consideration is unconditional because only the passage of time is required before the payment is due.

(29) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Company will comply with conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognised as noncurrent liabilities and are amortised to profit or loss over the estimated useful lives of the related assets using the straight-line method.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year ; and the related information is addressed below:

(1) Critical judgements in applying the Company’s accounting policies

None.

(2) Critical accounting estimates and assumptions

• Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. As net realisable value of inventories is estimated at the estimated selling price in the ordinary course of business, less the estimated cost of completion and estimated selling expenses, the estimates are based on current market conditions and historical sales experience of similar products and the result of the estimates might be significantly influence by changes in market conditions. As of December 31, 2020, the carrying amount of inventories was $165,320.

6. Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts Cash and cash equivalents
Cash on hand Checking accounts and demand deposits Time deposits Short-term notes and bills - Re-Purchase Interest rate range Time deposits	December31,2020 141 $ 72,868 249,452 57,458 379,919 $ 0.10%~0.41%	December31,2019
		167 $ 13,966 495,428 30,108
		539,669 $
		0.01%~2.55%

~25~

• A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The time deposits maturing over three months and time deposits that are restricted and are not held for the purpose of meeting short-term cash commitments were presented as ‘financial assets at amortised cost’. Refer to Note 6(4) for details.

(2) Financial assets and liabilities at fair value through profit or loss - current

Items Financial assets mandatorily measured at fair value through profit or loss Listed stocks Valuation adjustment Total Financial liabilities held for trading Foreign exchange swap contracts Items Financial assets mandatorily measured at fair value through profit or loss Non-derivative financial assets - Domestic listed stocks Financial liabilities held for trading Derivative instruments (not designated as hedging) - Foreign exchange swap contracts

December31,2020 20,213 $ 1,912) ( 18,301 $ 27,305) ($ December31,2019 42,045 $ 6,742) ($

• A. The Company recognised financial assets and liabilities at fair value through profit or loss of ($5,912) and ($1,628) for the years ended December 31, 2020 and 2019, respectively.

• B. Explanations of the transactions and contract information in respect of derivative financial assets and liabilities that the Company does not adopt hedge accounting are as follows:

Derivative financial assets (liabilities) Foreign exchange swap contracts Derivative financial assets (liabilities) Foreign exchange swap contracts	December31,2020	December31,2020
	Contract amount (Notionalprincipal)	Contractperiod
	Contract amount (Notionalprincipal)	Maturity period
	USD 18,450 thousand	2020.01.03 ~ 2020.01.31

• C. The Company has no financial assets and liabilities at fair value through profit or loss pledged to others as collateral.

• D. Information relating to credit risk of financial assets and liabilities at fair value through profit or loss is provided in Note 12(2).

~26~

(3) Financial assets at fair value through other comprehensive income-non-current

Items		December31,2020
Non-current items:
Equity instruments
Listed stocks	$	81,856
Valuation adjustment	(	29,615)
	$	52,241
Items		December31,2019
Equity instruments - domestic listed stocks	$	57,542

Equity instruments - domestic listed stocks

• A. The Company has elected to classify investments that are considered to be strategic investments or steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $52,241 and $57,542 as at December 31, 2020, and 2019, respectively.

• B. Due to the change of investment strategy, the Company sold $793 of equity instruments and resulted in cumulative losses on disposal amounting to $164 in February 2019, and it was transferred from other equity to unappropriated retained earnings.

• C. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		Years ended	December31,	December31,
		2020		2019
Equity instruments at fair value through
other comprehensive income
Fair value change recognised in other
comprehensive loss	($	5,301)	($	6,627)
Cumulative gains reclassified to retained
earnings due to derecognition	$	-	$	164
Dividend income recognised in profit or loss
Held at end of preiod	$	2,993	$	2,993

• D. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Company were $52,241 and $57,542, respectively.

• E. The Company has no financial assets at fair value through other comprehensive income pledged to others as collateral.

• F. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

~27~

(4) Financial assets at amortised cost

Items December 31, 2020 December 31, 2019

Current items: Time deposits maturing over three months $ 413,918 $ 74,950

• A. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Company were $413,918 and $74,950, respectively.

• B. As of December 31, 2019, restricted time deposits amounted to $89,940, shown as other noncurrent assets , please refer to Note 6(10) for further information.

• C. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

(5) Notes and accounts receivable, net

Notes and accounts receivable, net	Notes and accounts receivable, net	Notes and accounts receivable, net
A. The aging analysis of notes receivable and accounts receivable are as follows: December31,2020 December31,2019 Notes receivable 7,994 $ 4,812 $ Less: Allowance for uncollectible accounts 79) ( 68) ( 7,915 $ 4,744 $ December 31, 2020 December 31, 2019 Accounts receivable 182,022 $ 299,944 $ Less: Allowance for uncollectible accounts 3,011) ( 10,545) ( 179,011 $ 289,399 $ Notesreceivable Accountsreceivable Not past due 7,994 $ 149,446 $ 0~60 days - 29,985 61~120 days - 926 121~180 days - 285 181-240 days - 2 Over 241 days - 1,378 7,994 $ 182,022 $ Notesreceivable Accountsreceivable 0 to 120 days 4,812 $ 282,009 $ 121 to 180 days - 10,617 181 to 240 days - 1,256 241 to 360 days - 449 Over 360 days - 5,613 4,812 $ 299,944 $ December31,2020 December31,2019
	Notesreceivable 7,994 $ - - - - - 7,994 $ December	Accountsreceivable
		149,446 $ 29,985 926 285 2 1,378
		182,022 $
		31,2019
	Notesreceivable 4,812 $ - - - - 4,812 $	Accountsreceivable
		282,009 $ 10,617 1,256 449 5,613
		299,944 $

A. The aging analysis of notes receivable and accounts receivable are as follows:

As of December 31, 2020 and 2019, the ageing analysis was based on past due date and invoice

~28~

date.

• B. As of December 31, 2020 and 2019, the balances of accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2019, the balances of accounts receivable and notes receivable from contracts with customers amounted to $227,121 and $13,733, respectively.

• C. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s notes receivable and accounts receivable were $7,915 and $4,744 as well as $179,011 and $289,399, respectively.

• D. Information relating to credit risk of notes receivable and accounts receivable is provided in Note 12(2).

• E. Accounts receivable due from related parties was included in the balance of accounts receivable on December 31, 2019.

(6) Inventories

on December 31, 2019. Inventories
Materials and supplies Work in progress Semi-finished goods Finished goods Merchandise Total Materials and supplies Work in progress Semi-finished goods Finished goods Merchandise Total		December31,2020
	Cost 38,000 $ 8,352 3,845 129,764 1,638 181,599 $	Allowance for valuation loss 5,301) ($ 1,463) ( 1,254) ( 8,261) ( - 16,279) ($	Bookvalue
			32,699 $ 6,889 2,591 121,503 1,638
			165,320 $
			December31,2019
			Bookvalue
			36,276 $ 9,623 1,081 106,284 5,999
			159,263 $

~29~

The cost of inventories recognised as expense for the year:

		Year ended
	December 31, 2020
Cost of goods sold	$	696,839
Unallocated fixed overheads		63,262
Loss on market value decline and obsolete and
slow-moving inventories		4,948
Gain on physical inventory	(	2,373)
Loss on scrapping inventory		1,113
	$	763,789

For the year ended December 31, 2019, the operating cost related to inventory amounted to $795,601. For the year ended December 31, 2019, the Group reversed a previous inventory write-down which recognised in operating cost in the amount of $5,033. The gain from price recovery was caused by the reversal of allowance for inventory which was subsequently scrapped or sold.

(7) Investments accounted for using equity method

nvestments accounted for using equity method
Subsidiaries RISE BRIGHT HOLDINGS LTD. (RISE BRIGHT) UNITED SKILLS CO., LTD. (UNITED SKILLS)	December31,2020 534,765 $ 50,279 585,044 $	December 31, 2019
		548,074 $ 50,884
		598,958 $

• A. To meet the development requirement of the Company’s overall operation, the Board of Directors resolved to increase its capital in the subsidiary, RISE BRIGHT HOLDINGS LTD., in the amount of US$2 million (NT$57,360) on August 11, 2020, and then reinvested in CHANG JIE TECHNOLOGY CO., LTD. without proportion to its ownership, resulting in an increase in capital surplus in the amount of 235. The payment for the investment was remitted in October 2020.

• B. In August 2019, the Board of Directors of the Company resolved to reduce the capital of UNITED SKILLS CO., LTD. in the amount of $150 million, and the paid-in capital of UNITED SKILLS CO., LTD. was $50 million after the capital reduction. The effective date for the capital reduction was set on September 16, 2019, and the registration for the capital reduction was completed on October 5, 2019.

• C. In May 2019, the Board of Directors of the Company resolved to increase its capital in RISE BRIGHT HOLDINGS LTD. in the amount of US$2,500 thousand, and then reinvested in CHANG JIE TECHNOLOGY CO., LTD. (CHANG JIE). The establishment of CHANG JIE TECHNOLOGY CO., LTD. was completed on November 19, 2019.

• D. In May 2019, the Company acquired 20% equity interests in UNITED SKILLS CO., LTD. (UNITED SKILLS) from LOFTY SUCCESS GROUP LIMITED in the amount of $32,863. The carrying amount of non-controlling interests of UNITED SKILLS CO., LTD. at the acquisition date was $34,898, and the Company’s shareholding ratio to UNITED SKILLS CO., LTD. was

~30~

increased from 80% to 100%. The transaction did not change the Company’s control over UNITED SKILLS CO., LTD., therefore, the transaction was classified as an equity transaction. The impact to the Company’s equity interests is as follows:

	YearendedDecember31,2019	YearendedDecember31,2019
Carrying amount of non-controlling interest acquired	$	34,898
Consideration paid to non-controlling interest	(	32,863)
Capital surplus
-difference between proceeds on actual acquisition
of or disposal of equity interest in a subsidiary
and its carrying amount	$	2,035

• E. In April 2015, the Company acquired CHINA FIRST HOLDINGS LTD. and CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. (CHANGSHU FUTE). Goodwill arising from acquisition of CHANGSHU FUTE amounted to US$10,556 thousand, which was generated from the expected growth in operating revenue due to CHANGSHU FUTE selling automotive parts in Mainland China. However, the actual operating revenue was lower than the expectation due to the continuous recession in the automotive parts market in Mainland China. For the years ended December 31, 2020 and 2019, the Company recognised impairment loss amounting to $84,794 and $76,013, respectively.

• F. The recoverable amount of CHANGSHU FUTE was determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by the management covering a five-year period. For the years ended December 31, 2020 and 2019, the Company used annual discount rate of 9.74% and 11.30% to calculate value-in-use, respectively. Other key assumptions included expected operating revenue and gross profit, such assumptions were based on prior operating condition of the cash-generating units and management’s forecast on the market.

• G. Share of profit or loss of subsidiaries accounted for using equity method is evaluated based on each investee’s audited financial statements for the corresponding period. For the years ended December 31, 2020 and 2019, the Company recognised loss in the amounts of $91,080 and $97,834, respectively.

• H. Please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2020 for the information regarding the Company’s subsidiaries.

~31~

(8) Property, plant and equipment

Property, plant and equipment
					Year ended		December31,	2020
			Beginningbalance		Additions		Decreases		Transfers			Endingbalance
Cost
Land		$	956,365	$	-	$	-	$	-		$	956,365
Buildings and structures			1,172,931		2,022		-		-			1,174,953
Machinery and equipment			790,583		5,146	(	13,946)		43,504			825,287
Molding equipment			1,578,352		15,766		-		62,509			1,656,627
Transportation equipment			27,711		2,723	(	505)		-			29,929
Furniture equipment			2,270		135	(	286)		-			2,119
Other equipment			120,025		7,511	(	80)		11,441			138,897
Unfinished construction and
equipment under acceptance			9,042		14,253		-		141,249			164,544
		$	4,657,279	$	47,556	($	14,817)	$	258,703		$	4,948,721
Accumulated Depreciation
Buildings and structures	($		638,819)	($	52,043)	$	-	$	-	($		690,862)
Machinery and equipment	(		549,344)	(	63,030)		13,104		-	(		599,270)
Molding equipment	(		1,294,784)	(	99,572)		-		-	(		1,394,356)
Transportation equipment	(		23,325)	(	1,556)		505		-	(		24,376)
Furniture equipment	(		2,106)	(	63)		286		-	(		1,883)
Other equipment	(		96,110)	(	9,341)		80		-	(		105,371)
	($		2,604,488)	($	225,605)	$	13,975	$	-	($		2,816,118)
Total		$	2,052,791								$	2,132,603

~32~

						Year ended	Year ended	Year ended	December31,	2019
			Beginningbalance			Additions			Decreases		Transfers			Endingbalance
Cost
Land		$	956,365	$		-			-	$	-		$	956,365
Buildings and structures			1,168,987			4,853	(		909)		-			1,172,931
Machinery and equipment			697,661			35,443	(		3,409)		60,888			790,583
Molding equipment			1,474,329			31,682			-		72,341			1,578,352
Transportation equipment			28,711			1,630	(		2,630)		-			27,711
Furniture equipment			2,132			138			-		-			2,270
Other equipment			114,072			3,163	(		58)		2,848			120,025
Unfinished construction and
equipment under acceptance			88			8,320			-		634			9,042
		$	4,442,345		$	85,229	($		7,006)	$	136,711		$	4,657,279
Accumulated Depreciation
Buildings and structures	($		588,801)	($		50,927)		$	909	$	-	($		638,819)
Machinery and equipment	(		491,827)	(		60,926)			3,409		-	(		549,344)
Molding equipment	(		1,192,728)	(		102,056)			-		-	(		1,294,784)
Transportation equipment	(		23,913)	(		2,042)			2,630		-	(		23,325)
Furniture equipment	(		2,049)	(		57)			-		-	(		2,106)
Other equipment	(		87,366)	(		8,802)			58		-	(		96,110)
	($		2,386,684)	($		224,810)		$	7,006	$	-	($		2,604,488)
		$	2,055,661										$	2,052,791

A. Transfers for the period were from prepayments for business facilities.

B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

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• C. Amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates for such capitalisation are as follows:

	December31,2020	December31,2020	December 31, 2019	December 31, 2019
Amount capitalised	$	3,333	$	3,749
Range of the interest rates for capitalisation		0.95%		1.16%

• (9) Lease transactions – lessee

• A. The Company leases various assets included business vehicles. Rental contracts are typically made for periods of 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes. Upon expiry of the lease, the terms of lease agreements do not give priority rights to renew the lease or purchase the property.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Transportation equipment (Business vehicles) Transportation equipment (Business vehicles)	December31,2020 December31,2019 Carrying amount Carrying amount 5,589 $ 3,724 $ Years endedDecember31,	December31,2019
		Carrying amount
		3,724 $
	2020 Depreciation charge 1,165 $	2019
		Depreciationcharge
		1,064 $

Transportation equipment (Business vehicles)

• C. For the years ended December 31, 2020 and 2019, the costs of additions to right-of-use assets were $3,030 and $0, respectively.

• D. Information on profit or loss in relation to lease contracts are as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on leases of low-value assets	Years ended December31,	Years ended December31,
	2020 5 $ 22 $	2019 - $ 22 $

• E. As of December 31, 2020, lease liabilities-current and lease liabilities-non-current amounted to $594 and $2,337, respectively.

• F. For the years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases were

• $126 and $74, respectively.

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(10) Other non-current assets

Prepayments for business facilities Guarantee deposits paid Other financial assets - non-current Other non-current assets-others	December31,2020 December31,2019 92,424 $ 235,236 $ 2,045 1,235 - 89,940 12,490 12,566 106,959 $ 338,977 $

Information about the other non-current assets that were pledged to others as collaterals is provided in Note 8.

(11) Short-term borrowings

Other payables Type of borrowings Unsecured borrowings Interest rate range Salaries and bonus payable Machinery and equipment payable Employees’ compensation payable Directors’ remuneration payable Utilities expense payable Payables on insurance premiums Others	December31,2020 - $ - December31,2020 22,622 $ 5,478 5,309 4,010 3,947 1,228 19,773 62,367 $	December31,2019
		120,000 $
		1.08%~1.13%
		December 31, 2019
		24,447 $ 26,043 6,197 4,767 3,826 3,702 24,124
		93,106 $

(12) Other payables

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- (13) Long term borrowings

Type ofborrowings	Borrowing period	Repayment term		December31,2020	December31,2020
Long-term bank
borrowings
Unsecured borrowings	From November	The loan is fully disbursed once		$	113,833
	26, 2018 to	the contract signed; interest is
	November 26,	repayable monthly; principal is
	2023	repayable monthly in 48
		installments with a year grace
		period on principal only
Unsecured borrowings	From August 31,	Starting from August 15, 2019,			59,998
	2016 to February	principal is repayable quarterly;
	15, 2023	interest is repayable monthly
Unsecured borrowings	From December	The loan is disbursed within			18,300
	26, 2019 to	three years after contract is
	December 26,	signed; interest is repayable
	2026	monthly; principal is repayable
		monthly in 48 installments with
		a 3-year grace period on
		principal only
Secured borrowings	From January 6,	Principal and interest are			294,097
	2016 to January 6,	repayable monthly after a 3-
	2031	year grace period
Secured borrowings	From December	The loan is disbursed within			193,300
	26, 2019 to	three years after contract
	December 26,	signed; interest is repayable
	2026	monthly; principal is repayable
		monthly in 48 installments with
		a 3-year grace period on
		principal only
Secured borrowings	From January 6,	Starting from February 6, 2016,
	2016 to January 6,	principal and interest are
	2021	repayable monthly			2,500
				$	682,028
Less: Current portion			(		108,334)
Less: Discount on
government grants			(		3,735)
				$	569,959
Interest rate range					0.75%~0.96%

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Unsecured borrowings

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

Type of borrowings Repayment term December 31, 2019
Long-term bank
Unsecured borrowings Starting from December 2019, principal is repayable $ 195,834
monthly in 48 installments; interest is repayable monthly
Unsecured borrowings Starting from August 2019, principal is repayable 86,666
quarterly in 15 installments; interest is repayable monthly
Unsecured borrowings Starting from August 2018, principal is repayable 14,200
quarterly in 7 installments; interest is repayable monthly
Unsecured borrowings Starting from May 2015, principal is repayable monthly in 13,333
60 installments; interest is repayable monthly
Unsecured borrowings Starting from December 2022, principal is repayable 11,500
monthly in 48 installments; interest is repayable monthly
Secured borrowings Starting from January 2019, principal is repayable monthly 323,264
in 144 installments; interest is repayable monthly
Secured borrowings Starting from February 2016, Principal is repayable
monthly in 60 installments; interest is repayable monthly 32,500
$ 677,297
Less: Current portion ( 163,368)
$ 513,929
Interest rate range
Unsecured borrowings 0.75%~1.25%
Secured borrowings 1.14%~1.19%
----- End of picture text -----

(14) Government grants

As of December 31, 2020, the Company obtained government concessional loans under the "Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan” from the Bank of Taiwan in the amounts of $193,300 and $18,300, respectively, for supporting capital expenditure and working capital, such loans will mature in December 2026. The fair values for the loans were $188,842 and $17,871, respectively which were calculated at a market rate of 1.25%. The differences between the amount obtained and the fair value were $4,458 and $429, respectively, which were deemed as a low interest loan subsidy from government and recognised in deferred revenue (shown as other non-current liabilities). The deferred revenue is reclassified to other income on a straight-line basis over their estimated useful life during the period of paying interest.

• (15) Pensions

• A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months

~37~

prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

(b) The amounts recognised in the balance sheet are as follows:

		December	31,2020		December	31,2019
Present value of defined benefit obligations		$	19,078		$	18,708
Fair value of plan assets	(		12,412)	(		11,713)
Net defined benefit liability		$	6,666		$	6,995

(c) Movements in net defined benefit liabilities are as follows:

		Year ended December31,2020	Year ended December31,2020	Year ended December31,2020	Year ended December31,2020	Year ended December31,2020
		Present value
		of defined		Fair value of		Net defined	benefit
	benefit obligations				planassets	liability
Balance at January 1	$	18,708	($		11,713)	$	6,995
Interest expense (income)		117	(		74)		43
		18,825	(		11,787)		7,038
Remeasurements:
Return on plan assets (excluding
amounts included in interest		-	(		396)	(	396)
income or expense)
Change in demographic assumptions		26			-		26
Change in financial assumptions		322			-		322
Experience adjustments	(	95)			-	(	95)
		253	(		396)	(	143)
Pension fund contribution		-	(		229)	(	229)
Balance at December 31	$	19,078	($		12,412)	$	6,666

~38~

Year ended December 31, 2019

			Present value
			of defined		Fair value of		Net		defined benefit
	benefit obligations					planassets			liability
Balance at January 1		$	18,334	($		10,995)		$	7,339
Interest expense (income)			160	(		97)			63
			18,494	(		11,092)			7,402
Remeasurements:
Return on plan assets (excluding
amounts included in interest			-	(		398)	(		398)
income or expense)
Change in demographic assumptions			35			-			35
Change in financial assumptions			347			-			347
Experience adjustments	(		168)			-	(		168)
			214	(		398)	(		184)
Pension fund contribution			-	(		223)	(		223)
Balance at December 31		$	18,708	($		11,713)		$	6,995

(d) The Bank of Taiwan was commissioned to manage the fund of the Company’s defined benefit pension plan assets in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that Fund and therefore, the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	December31,2020 0.375% 2.25%	December31,2019
		0.625%
		2.25%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory.

~39~

Sensitivity analysis of the effect on present value of defined benefit obligation due from the changes of main actuarial assumptions was as follows:

Increase 0.25% Decrease 0.25% December 31, 2020 Effect on present value of defined benefit obligation 322) ($ 333 $ December 31, 2019 Effect on present value of defined benefit obligation 347) ($ 358 $ Discountrate	Increase 0.25% Decrease 0.25% 322 $ 313) ($ 347 $ 338) ($ Future salaryincreases

The sensitivity analysis above is based on other condition that are unchanged but only one assumption is changed. In practice, more than one assumption may change all at once. The method utilised in sensitivity analysis is the same as the method utilised in calculating net pension liability on the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis were consistent with previous period.

• (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2021 amount to $237.

• (g) As of December 31, 2020, the weighted average duration of that retirement plan is 6.8 years. The analysis of timing of the future pension payment was as follows:

Within 1 year	$	422
1-2 year(s)		464
2-5 years		13,816
Over 5 years		617
	$	15,319

• B.(a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

  • (b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2020 and 2019 were $5,956 and $6,341, respectively.

• (16) Share capital

• A. As of December 31, 2020, the Company’s authorised capital was $1,000,000, constituting 100,000 thousand shares and the paid-in capital was $741,389 with a par value of $10 (in dollars)

~40~

per share. All proceeds from shares issued have been collected.

• (a) Movements in the number of the Company’s ordinary shares outstanding are as follows:

Expressed in thousand shares Year ended December 31, 2020 Number of shares as of beginning and end of the year 74,124

• (b) On December 31, 2019, the number of outstanding shares was as follows:

Expressed in thousand shares Year ended December 31, 2019

Number of shares as of beginning and end of the year 74,139

• B. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

==> picture [438 x 94] intentionally omitted <==

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

December 31, 2020 December 31, 2019
Name of Number of Number of
company holding Reason for thousand Carrying thousand Carrying
the shares reacquisition shares amount shares amount
To be reissued
The Company to employees 15 $ 526 15 $ 526
----- End of picture text -----

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

• (e) In order to encourage employees and retain the professionals, on November 9, 2018, the Board of Directors resolved to repurchase shares and reissue it to employees. In January 2019, the Company continuously repurchased 15 thousand shares (the carrying amount was $526).

~41~

(17) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

December 31, 2020 December 31, 2019

==> picture [459 x 237] intentionally omitted <==

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

Used to offset deficits, distributed
as cash dividends or transferred to
share capital (Note 1)
Additional paid-in capital in excess
of par-ordinary share $ 1,163,298 $ 1,158,876
Difference between consideration
and carrying amount of associates
accounted for under equity method $ 2,035 $ 2,035
Used to offset accumulated deficits
only (Note 2)
Changes in ownership interests
in associates accounted for $ 27,926 $ 27,691
under equity method
Not for any other purposes
Employee stock options $ - $ 4,422
----- End of picture text -----

• Note 1: Such capital surplus can be used in offsetting deficit and distributed as cash dividends or transferred to capital provided that the Company has no deficit. However, the amount that can be transferred to capital is limited to a certain percentage of paid-in capital every year.

• Note 2: Such capital surplus arises from the effect of changes in ownership interests in subsidiaries under equity transactions when there is no actual acquisition or disposal of subsidiaries by the Company, or from changes in capital surplus of subsidiaries accounted for using equity method.

(18) Retained earnings

• A. According to the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset against prior years’ operating losses and then be distributed as follows: 10% as legal reserve, and appropriate or reverse for special reserve until the legal reserve equals the Company’s paid-in capital. The remaining earnings, if any, may be appropriated along with the accumulated unappropriated earnings according to a resolution proposed by the Board of Directors and resolved at the shareholders’ meeting.

~42~

• B. The Company retains some earnings after taking into account the environment, growth stage and long-term financial plan of the Company, and the reminder along with the accumulated unappropriated earnings of prior years can be distributed as shareholders’ bonus, of which the cash bonus shall exceed 20% of total shareholders’ bonus, by the Board of Directors depending on the current capital position and the economic development.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• (b) The amounts previously set aside by the Company as special reserve in accordance with Order No. Financial-Supervisory-Securities-Corporate-1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

• E. The appropriation of 2019 earnings as approved by the stockholders resolved on May 29, 2020 and the appropriation of 2018 earnings had been approved by the shareholders during their meeting on May 29, 2019. Details are summarised below:

Years ended December 31,

Legal reserve appropriated Special reserve appropriated Cash dividend		2019		2018
	Amount	Dividend per share(in dollars)	Amount	Dividend per share(in dollars)
	37,634 $ 31,421 148,248	2.00 $	30,790 $ 48,458 148,248	2.00 $

• F. The appropriation of 2020 earnings proposed by the Board of Directors on March 16, 2021 is as follows:

follows:
			Year ended December31,2020
					Dividend per
			Amount		share (indollars)
Legal reserve		$	11,779
(Reversal of) special reserve	(		14,269)
Cash dividends			148,248	$	2.00

~43~

As of March 16, 2021, the appropriation of 2020 earnings has not yet been resolved at the shareholders’ meeting.

• G. Refer to Note 6 (25) for further information relating to employees’ compensation and directors’ and supervisors’ remuneration.

(19) Operating revenue

• A. Disaggregation of revenue from contracts with customers

The Company derives revenue primarily from the transfer of goods at a point in time in the following products:

Auto parts Others	2020 2019 $ 1,235,680 $ 1,475,013 28,599 11,158 $ 1,264,279 $ 1,486,171 Years endedDecember31

B. Contract liabilities

The Company has recognised the following revenue-related contract liabilities:

Contract liabilities: Contract liabilities - advance sales receipts	December31,2020
	1,694 $

• (a) As of December 31, 2019 and January 1, 2019, the contractual liabilities were $1,975 and $2,405, respectively, shown as ‘other current liabilities’.

• (b) For the year ended December 31, 2020, revenue recognised that was included in the contract liability balance at the beginning of the year amounted to $1,960.

(20) Interest income

Interest income
Interest income from bank deposits Interest income from loans to related parties	Years ended December31,
	2020 7,269 $ 6,251 13,520 $	2019
		22,033 $ 10,294
		32,327 $

(21) Other income

Other income
Rent income Dividend income Other income - others	Years ended December31,
	2020 1,843 $ 4,036 24,640 30,519 $	2019
		1,843 $ 4,797 26,537
		33,177 $

~44~

(22) Other gains and losses

Gains on disposal of property, plant and equipment Foreign exchange (losses) gains Losses on financial assets and liabilities at fair value through profit or loss Other losses

==> picture [225 x 137] intentionally omitted <==

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

Years ended December 31,
2020 2019
$ 3,110 $ 29
( 102,250) 11,530
( 5,912) ( 1,628)
( 519) ( 57)
($ 105,571) $ 9,874
----- End of picture text -----

(23) Finance costs

Finance costs	Finance costs	Finance costs	Finance costs
Expenses by nature 2020 2019 Interest expense 7,855 $ 12,801 $ Less: Capitalisation of qualifying assets 3,333) ( 3,749) ( 4,522 $ 9,052 $ Years ended December 31, Classified as Classified as Operating Costs OperatingExpenses Total Employee benefit expense 129,104 $ 56,554 $ 185,658 $ Depreciation charges on property, plant and equipment 215,709 9,896 225,605 Depreciation charges on right-of- use assets - 1,165 1,165 Amortisation 4,655 249 4,904 349,468 $ 67,864 $ 417,332 $ Classified as Classified as Operating Costs OperatingExpenses Total Employee benefit expense 133,670 $ 58,659 $ 192,329 $ Depreciation charges on property, plant and equipment 215,854 10,020 225,874 Amortisation 4,655 2,818 7,473 354,179 $ 71,497 $ 425,676 $ Year ended December31,2020 Year ended December31,2019
	Classified as Classified as Operating Costs OperatingExpenses Total 129,104 $ 56,554 $ 185,658 $ 215,709 9,896 225,605 - 1,165 1,165 4,655 249 4,904 349,468 $ 67,864 $ 417,332 $ Year ended December31,2019		Total
			185,658 $ 225,605 1,165 4,904
			417,332 $
	Classified as Operating Costs 133,670 $ 215,854 4,655 354,179 $	Classified as OperatingExpenses 58,659 $ 10,020 2,818 71,497 $	Total
			192,329 $ 225,874 7,473
			425,676 $

(24) Expenses by nature

~45~

(25) Employee benefit expense

Employee benefit expense
Wages and salaries Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses Wages and salaries Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses	Classified as Classified as Operating Costs OperatingExpenses 108,776 $ 41,883 $ 11,393 4,227 3,945 2,054 - 4,010 4,990 4,380 129,104 $ 56,554 $ Year ended December31,2020 Year ended December 31, 2019	Total
		150,659 $ 15,620 5,999 4,010 9,370
		185,658 $
	Classified as Classified as Operating Costs Operating Expenses 115,064 $ 45,324 $ 11,939 4,023 4,243 2,161 - 5,391 2,424 1,760 133,670 $ 58,659 $	Total
		160,388 $ 15,962 6,404 5,391 4,184
		192,329 $

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall appropriate 1%~3% for employees’ compensation and no higher than 3% for directors’ remuneration. If the Company has accumulated deficit, earnings should be reserved to cover losses and then be appropriated as employees’ compensation and directors’ remuneration based on the abovementioned ratios.

• B. For the years ended December 31, 2020 and 2019, the accrued employees’ compensation and directors’ remuneration were as follows:

directors’ remuneration were as follows:
Employees’ compensation Directors’ remuneration	Years endedDecember31,
	2020 5,309 $ 4,010 9,319 $	2019
		6,197 $ 4,767
		10,964 $

For the years ended December 31, 2020 and 2019, the employees’ compensation and directors’ remuneration were estimated and accrued based on 2.86% and 1.30% as well as 2.16% and 1%, respectively, of distributable profit of current year as of the end of reporting period.

• C. Employees’ compensation and directors’ remuneration of 2019 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2019 financial statements.

• D. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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• E. As at December 31, 2020 and 2019, the Company had 303 and 324 employees, including 3 and 4 non-employee directors, respectively.

• F. Average employee benefit expenses in current and previous years were $608 and $582, respectively.

• G. Average employees salaries in current and previous years were $504 and $500, respectively.

• H. Adjustments of average employees salaries were 0.8%.

• I. The Company has no supervisors as it has set up an audit committee.

• J. The directors’ remuneration includes directors’ salaries, transportation allowances and remuneration from earnings. Directors’ salaries are determined based on the pay levels in the same industry. Transportation allowances are paid based on their attendance to the board meetings. Directors’ remuneration from earnings are appropriated in accordance with the Articles of Incorporation of the Company, which shall be reviewed by the Remuneration Committee, resolved by the Board of Directors and approved at the shareholders’ meeting. The salary to an individual director is determined based on each director’s performance results assessed according to ‘Regulations Governing the Board Performance Evaluation’ and then calculated in accordance with the ‘Rules for Distribution of Remuneration to Directors’. The salary payments shall be submitted to be reviewed by the Remuneration Committee and resolved by Board of Directors. Mangers’ and employees’ emoluments include salaries, bonuses, employee compensations, pensions, etc. Salaries are determined based on the positions and responsibilities assumed by each manager or employee by reference to the pay levels for the same position in the same industry and the individual’s performance results assessed according to ‘Regulations Governing Performance Evaluation’. The managers’ emolument shall be reviewed by the Remuneration Committee and resolved by the Board of Directors.

(26) Income tax

• A. Income tax expense

• (a) Components of income tax expense

e tax ome tax expense Components of income tax expense
			Years ended	December31,
			2020		2019
Current tax:
Current tax on profits for the year		$	56,490	$	115,587
Tax on undistributed surplus earnings			7,952		3,973
Prior year income tax overestimation	(		1,847)		-
Total current tax			62,595		119,560
Deferred tax:
Origination and reversal of
temporary differences	(		3,783)	(	30,210)
Total deferred tax	(		3,783)	(	30,210)
Income tax expense		$	58,812	$	89,350

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• (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

			Years ended December31,	Years ended December31,	Years ended December31,	Years ended December31,
			2020			2019
Remeasurement of defined benefit obligations	($		28)	($		37)
Reconciliation between income tax expense and accounting profit
			Years ended	December31,
			2020			2019
Tax calculated based on profit before tax and statutory tax rate		$	35,299		$	93,143
Expenses disallowed by tax regulation			504			445
Tax exempt income by tax regulation	(		4,184)	(		8,211)
Temporary differences not recognised as deferred tax assets			18,095			-
Change in assessment of realisation of deferred tax assets			2,993			-
Prior year income tax overestimation	(		1,847)			-
Tax on undistributed surplus earnings			7,952			3,973
Income tax expense		$	58,812		$	89,350

• B. Reconciliation between income tax expense and accounting profit

• C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

Deferred tax assets: Unrealised exchange loss Allowance for inventory valuation and obsolescence losses Losses on valuation of financial instruments at fair value through profit or loss Defined benefit plan Share of profit (loss) of subsidiaries accounted for under the equity method Others	2020
	Recognised in other Recognised in comprehensive January1 profit or loss income 7,238 1,652 - 2,266 990 - 1,348 4,113 - 1,587 37) ( 28) ( 83,576 3,013) ( - 2,162 78 - 98,177 $ 3,783 $ 28) ($	December31
		8,890 3,256 5,461 1,522 80,563 2,240
		101,932 $

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2019

	2019
Deferred tax assets: Unrealised exchange loss Allowance for inventory valuation and obsolescence losses Losses on valuation of financial instruments at fair value through profit or loss Defined benefit plan Share of profit (loss) of subsidiaries accounted for under the equity method Others	Recognised in other Recognised in comprehensive January1 profit or loss income 2,550 4,688 - 3,272 1,006) ( - 1,219 129 - 1,624 - 37) ( 56,993 26,583 - 2,346 184) ( - 68,004 $ 30,210 $ 37) ($	December31
		7,238 2,266 1,348 1,587 83,576 2,162
		98,177 $

• D. The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows:

Deductible temporary differences

	December	31,	2020
$			90,475

• E. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

• F. The Company incurred an income tax of $48,654 from the 2019 profit-seeking enterprise income tax (including the filing of unappropriated retained earnings of 2018), and applied for the installment payments in accordance with Article 26 of the Tax Collection Act and Decree No.10904533690 issued by the Ministry of Finance, R.O.C. on March 19, 2020. As of December 31, 2020, the unpaid instalment payments of $35,985 were recognised as income tax liabilities - current and income tax liabilities -non-current.

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(27) Earnings per share

Earnings per share of ordinary shares:

Basic earnings per share Profit for the year Diluted earnings per share Profit for the year Assumed conversion of all dilutive potential ordinary shares -Employees’ compensation Profit for the year plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit for the year Diluted earnings per share Profit for the year Assumed conversion of all dilutive potential ordinary shares -Employees’ compensation Profit for the year plus assumed conversion of all dilutive potential ordinary shares	YearendedDecember31,2020	YearendedDecember31,2020
	Weighted average number of ordinary shares outstanding Earnings per share Amount aftertax (shareinthousands) (indollars) 117,679 $ 74,124 1.59 $ 117,679 74,124 - 148 117,679 $ 74,242 1.58 $ YearendedDecember31,2019	Earnings per share (indollars)
		1.59 $
		1.58 $
	Weighted average number of ordinary shares outstanding Amount after tax (share in thousands) 376,363 $ 74,124 376,363 74,124 - 142 376,363 $ 74,266	Earnings per share (in dollars)
		5.08 $
		5.07 $

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(28) Supplemental cash flow information

Investing activities with partial cash payments:

Supplemental cash flow information Investing activities with partial cash payments:
			Year ended December31,2020
Purchase of property, plant and equipment		$	47,556
Add: Opening balance of payable on equipment			26,043
Less: Ending balance of payable on equipment	(		5,478)
Cash paid during the year		$	68,121

(Remainder of page intentionally left blank)

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(29) Changes in liabilities from financing activities

At January 1, 2020 Changes in cash flow from financing activities Changes in other non-cash items At December 31, 2020 At January 1, 2019 Changes in cash flow from financing activities Changes in other non-cash items At December 31, 2019	Short-term borrowings		Long-term borrowings (including current portion)	Dividends payable	Lease liabilities (including non- current)	Liabilities from financing activities- gross
	120,000 $ 120,000) ( - - $ Short-term borrowings		677,297 $ 4,731 - 682,028 $ Long-term borrowings (including current portion)	- $ 148,248) ( 148,248 - $ Dividends payable	- $ 99) ( 3,030 2,931 $ Treasury shares	797,297 $ 263,616) ( 151,278 684,959 $ Liabilities from financing activities- gross
	440,000 $ 320,000) ( - 120,000 $	961,817 $ 284,520) ( - 677,297 $		- $ 148,248) ( 148,248 - $	- $ 526) ( - 526) ($	1,401,817 $ 753,294) ( 148,248 796,771 $

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7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties

RISE BRIGHT HOLDINGS LTD. (RISE BRIGHT) UNITED SKILLS CO., LTD. (UNITED SKILLS) CHINA FIRST HOLDINGS LTD. (CHINA FIRST) CHANG JIE TECHNOLOGY CO., LTD. (CHANG JIE) CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. (CHANGSHU FUTE) CHANGSHU XINXIANG AUTOMOBILE PARTS CO., LTD. (CHANGSHU XINXIANG) LIAONING HETAI AUTOMOTIVE PARTS CO., LTD. (LIAONING HETAI) YU, CHE-MING

DONGGUAN HIROSAWA AUTOMOTIVE TRIM CO., LTD. (DONGGUAN HIROSAWA)

Relationship with the Company

The Company’s subsidiary The Company’s subsidiary The Company’s subsidiary The Company’s subsidiary

The Company’s subsidiary

The Company’s subsidiary

The Company’s subsidiary Other related party (Note)

Other related party (Note)

LOFTY SUCCESS GROUP LIMITED (LOFTY SUCCESS) Other related party (Note)

Note: It is no longer a related party after the Company purchased non-controlling interests of UNITED SKILLS on May 13, 2019.

(2) Significant related party transactions

• A. Operating revenue

Years ended December 31, 2020 2019 Sales of goods: - Subsidiaries $ 57,321 $ 17,835

Goods are sold based on the price that would be available to general customers. The credit terms to related parties and general customer are 30~90 days and 60~120 days after the monthly billings, respectively.

B. Purchases

Years ended December 31, 2020 2019 Purchases of goods: Subsidiaries $ - $ 1,705

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C. Receivables from related parties

Receivables from related parties
Accounts receivable: RISE BRIGHT LIAONING HETAI Other receivables: Subsidiaries	December31,2020 8,102 $ 3,099 11,201 22,487 33,688 $	December31,2019
		2,682 $ -
		2,682
		12,952
		15,634 $

The receivables from related parties arise mainly from sales of automatic equipment and goods. Other receivables arise mainly from technical service revenue. The receivables are unsecured in nature and bear no interest. There are no allowances for uncollectible accounts held against receivables from related parties.

• D. Payables to related parties

receivables from related parties. Payables to related parties
December 31, 2020 Accounts payable: RISE BRIGHT - $	December31,2019
	1,705 $

• E. Technical service revenue (shown as other income)

CHANGSHU FUTE Subsidiaries	Years ended December 31,	Years ended December 31,
	2020 11,347 $ 7,152 18,499 $	2019
		11,823 $ 7,404
		19,227 $

Technical service revenue refers to the supervision services rendered by the Company to CHANGSHU FUTE and LIAONING HETAI, including wages and salaries, meal expenses, insurance expenses and other expenses.

• F. Loans to/from related parties

• (a) Loans to related parties

  • i. Outstanding balance

ance expenses and other expenses. to/from related parties oans to related parties . Outstanding balance
RISE BRIGHT LIAONING HETAI CHANGSHU FUTE	December31,2020 190,816 $ 89,653 - 280,469 $	December31,2019
		155,896 $ - 132,344
		288,240 $

ii. Interest receivable

Subsidiaries

December31,2020 1,969 $	December31,2019
	1,404 $

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iii. Interest income

. Interest income
		Years ended	December	31,
		2020		2019
RISE BRIGHT	$	2,425	$	2,065
CHANGSHU FUTE		2,724		7,935
LIAONING HETAI		1,102		-
UNITED SKILLS		-		294
	$	6,251	$	10,294

The loans carry interest at 1.40%~4.35% and 1.35%~4.35% per annum for the years ended December 31, 2020 and 2019, respectively.

G. Endorsements and guarantees provided to related parties

Information on provision of endorsements and guarantees to others is provided in Note 13(1)B.

(3) Key management compensation

						Years ended	December 31,	December 31,
					2020			2019
	Salaries and other short-term employee benefits		$			15,016	$	15,429
	Post-employment benefits					35		52
			$			15,051	$	15,481
	Pledged Assets
	The Group’s assets pledged as collateral are as follows:
				Book	value
	Pledged asset	December31,		2020	December 31, 2019			Purpose
	Property, plant and equipment	$	958,646		$	700,097		Short-term borrowings and
								long-term borrowings
	Financial assets at amortised cost -			300			-	Natural gas for manufacturing
	non-current (shown as other non-
	current assets)
	Other non-current assets			-		89,940		Long-term borrowings
	Guarantee deposits paid (shown as							Natural gas for manufacturing
	other non-current assets)			-		300
		$	958,946		$	790,337

8. Pledged Assets

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

None.

(2) Commitments

As at December 31, 2020 and 2019, the Company’s capital expenditure contracted but not yet incurred in respect of machinery and equipment as well as construction of plants were $174,411 and $130,552, respectively.

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10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

None.

12. Others

(1) Capital management

• A. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to maximise returns for shareholders and to optimise the balance of liabilities and equity.

• B. The Company’s capital structure comprises net liabilities (borrowings net of cash and cash equivalents) and equity (common shares, capital surplus, retained earnings, other equity interest and non-controlling interests).

• C. The Company has no obligation to comply with any external capital requirements.

• D. The key management of the Company monitors the capital structure every year, including capital costs and related risks, and the Company may adjust capital structure by paying dividends to shareholders, issuing new shares, buying shares back and issuing new bonds or repaying old bonds based on the advices from the management.

(2) Financial instruments

• A. Financial instruments by category

bonds based on the advices from the management. nancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instruments Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable (including related parties) Other receivables Other financial assets - non-current Guarantee deposits paid	December31,2020 18,301 $ 52,241 $ 379,919 $ 413,918 7,915 190,212 308,330 - 2,045 1,302,339 $	December31,2019
		42,045 $
		57,542 $
		539,669 $ 74,950 4,744 289,399 308,239 89,940 1,235
		1,308,176 $

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December 31, 2020 December 31, 2019

==> picture [455 x 190] intentionally omitted <==

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

Financial liabilities
Financial liabilities at fair value
through profit or loss
Financial liabilities held for trading $ 27,305 $ 6,742
Financial liabilities at amortised cost
-
Short-term borrowings $ $ 120,000
Notes payable 109,707 101,308
Accounts payable (including related parties) 34,725 35,054
Other payables 62,367 93,106
Long-term borrowings (including current portion) 682,028 677,297
$ 888,827 $ 1,026,765
Lease liabilities (including current portion) $ 2,931 $ -
----- End of picture text -----

Lease liabilities (including current portion)

• B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are used to hedge certain exchange rate risk. Derivatives are used for hedging exchange rate risk arising from export proceeds by using forward foreign exchange contracts.

• (b) The Company treasury performs the financial risk management for each business unit. The treasury operates in domestic and international financial markets through planning and coordination, as well as monitors and manages the financial risks related to the Company’s operation based on internal risk reports about exposure to risk with the analysis of the extent and width of risk.

  • The Board of Directors of the Company supervises the compliance by the management with financial risk policy and procedure, and reviews the appropriateness of structure of financial risk related to the Company. The internal auditors act as supervisors to assist the Board of Directors of the Company by conducting regular and irregular reviews, and report the results to the Board of Directors.

• (c) Information about derivative financial instruments that are used to hedge certain exchange rate risk are provided in Note 6(2).

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company used in various functional currency, primarily with respect to the United States Dollar and Chinese Renminbi. Foreign exchange risk arises from future

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commercial transactions and recognised assets and liabilities.

• ii. The Company is required to hedge their entire foreign exchange risk exposure with the treasury. Exchange rate risk is measured through a forecast of highly probable United States Dollar and Chinese Renminbi expenditures. The Company uses natural hedge to decrease the risk exposure in the foreign currency through the treasury.

• iii. The Company hedges foreign exchange rate by using forward exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(2).

• iv. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: New Taiwan Dollars. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations and analysis of foreign currency market risk arising from significant foreign exchange variation is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD : NTD RMB : NTD Non-monetary items Investments accounted for under equity method USD:NTD	Foreign currency amount (Inthousands) Exchangerate Book value (NTD) 31,959 $ 28.48 910,192 $ 1,684 4.37 7,359 18,777 $ 28.480 534,765 $ December 31, 2020
	31,959 $ 1,684 18,777 $

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

December 31, 2019
Foreign
currency
amount Book value
(In thousands) Exchange rate (NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD $ 40,524 29.98 $ 1,214,921
Non-monetary items
Investments accounted for
under equity method
USD:NTD $ 18,281 29.98 $ 548,074
Financial liabilities
Monetary items
USD : NTD $ 209 29.98 $ 6,371
----- End of picture text -----

v. The total exchange (loss) gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019, amounted to ($102,250) and $11,530, respectively.

• vi. Analysis of foreign currency market risk arising from significant foreign exchange variation:

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

Year ended December 31, 2020
Sensitivity analysis
Effect on other
Degree of comprehensive
variation Effect on profit or loss income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD 1% $ 9,102 $ -
RMB : NTD 1% 74 -
Year ended December 31, 2019
Sensitivity analysis
Effect on other
Degree of comprehensive
variation Effect on profit or loss income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD 1% $ 12,149 $ -
Financial liabilities
Monetary items
USD : NTD 1% $ 64 $ -
----- End of picture text -----

Price risk

• i. The Company’s equity securities, which are exposed to price risk, are the held financial assets (liabilities) at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• ii. The Company’s investments in equity securities comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, per-tax profit for the years ended December 31, 2020 and 2019 would have decreased/increased by $183 and $420 , respectively, as a result of losses/gains on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $522 and $575, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

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Cash flow and fair value interest rate risk

• i. The Company’s main interest rate risk arises from short-term and long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During years ended December 31, 2020 and 2019, the Company’s borrowings at variable rate were mainly denominated in New Taiwan Dollars and United States Dollars.

• ii. If the borrowing interest rate had increased/decreased by 1% with all other variables held constant, profit before tax for the years ended December 31, 2020 and 2019 would have increased/decreased by $682 and $797, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of equity instruments stated at amortised cost, at fair value through profit or loss and at fair value through other comprehensive income.

• ii. For banks and financial institutions, after reviewing deposit ratings, only the counterparties with good credit quality are accepted. According to the Company’s credit policy, the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. The utilisation of credit limits is regularly monitored.

• iii.The Company adopts credit risk management procedure to assess whether there has been

  • a significant increase in credit risk on that instrument since initial recognition. If the contract payments were past due over 3 months based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv.In line with credit risk management procedure, the default occurs when the contract payments are past due over 180 days.

• v. The Company used the forecastability to adjust historical and timely information to assess the default possibility of receivables (including notes receivables). On December 31, 2020 and 2019, the provision matrix is as follows:

December 31, 2020 Expected loss rate Total book value Loss allowance	Not past due	0 to 60 days	61 to 120 days	121 to 180 days		181 to 240days	Over 241 days	Total
	0%~1% 157,440 $ 674) ( 156,766 $	1%~5% 29,985 $ 540) ( 29,445 $	25%~35% 926 $ 282) ( 644 $	60%~70% 285 $ 214) ( 71 $		100% 2 $ 2) ( - $	100% 1,378 $ 1,378) ( - $	190,016 $ 3,090) ( 186,926 $

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December 31, 2019 Expected loss rate Total book value Loss allowance	0 to 120 days	121 to 180 days 1%~10% 10,617 $ 1,062) ( 9,555 $	181 to 240 days 10%~50% 1,256 $ 628) ( 628 $	241 to 360 days 50%~100% 449 $ 449) ( - $		Over 360 days 100% 5,613 $ 5,613) ( - $	Total 304,756 $ 10,613) ($ 294,143 $
	0%~1% 286,821 $ 2,861) ( 283,960 $

vi. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable are as follows:

At January 1 (Reversal of) provision for impairment At December 31 At January 1 Reversal of impairment At December 31	December31,2020
	Accountsreceivable $ 10,913 ( 368) 10,545 $

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

ii. The Company has the following undrawn borrowing facilities:

Fixed rate: Expiring within one year Expiring beyond one year Undrawn borrowing facilities	December31,2020
	300,000 $ 268,400
	568,400 $
	December31,2019
	1,398,500 $

iii. The table below analyses the Company’s non-derivative financial liabilities and net-

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settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

Non-derivative financial liabilities:	bilities:
December 31, 2020 Less than 1year Notes payable 109,707 $ Accounts payable 34,725 Other payables 62,367 Long-term borrowings 113,779 Derivative financial liabilities: December 31, 2020 Less than 1year Foreign exchange swap contracts 27,305 $	Less than 1year	Between 1 and 2 years	Between 2 and 3 years	Between 3 and 5 years Over 5 years - $ - $ - - - - 169,295 224,663 Between 3 and 5 years Over 5 years - $ - $	Total
		- $ - - 110,292 Between 1 and 2 years	- $ - - 86,515 Between 2 and 3 years		109,707 $ 34,725 62,367 704,544 Total
December 31, 2020 Foreign exchange swap contracts
	27,305 $	- $	- $		27,305 $

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2019 Non-interest bearing liabilities Floating interest rate liabilities Fixed interest rate liabilities	Less than 1 year $ 193,429 163,368 120,000 476,797 $	Over 1year - $ 513,929 - 513,929 $	Total
			$ 193,429 677,297 120,000
			990,726 $

Derivative financial liabilities:

Derivative financial liabilities:
December 31, 2019 Less than 1year Gross settled foreign exchange contracts - Inflows $ 553,003 - Outflows ( 559,745) 6,742) ($	Over 1year Total - $ 553,003 $ - 559,745) ( - $ 6,742) ($	Total
		553,003 $ 559,745) (

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the

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entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and over-the-counter stocks is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in foreign exchange swap contracts is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability.

• B. Financial instruments not measured at fair value

• The carrying amounts of financial instruments not measured at fair value are approximate to their fair value, including cash and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables, financial assets at amortised cost, guarantee deposits paid, short-term borrowings, notes payable, accounts payable (including related parties), other payables, long-term borrowings (including current portion) and guarantee deposits received.

• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2020 and 2019 are as follows:

• (a) The related information of natures of the assets and liabilities is as follows:

December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income - Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss	Level 1 18,301 $ 52,241 $ - $	Level 2 - $ - $ 27,305 $	Level3 - $ - $ - $	Total
				18,301 $
				52,241 $
				27,305 $

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

Level 1 Level 2 Level 3 Total
December 31, 2019
Assets
Recurring fair value measurements
Financial assets at fair value through
- -
profit or loss $ 42,045 $ $ $ 42,045
Financial assets at fair value through
other comprehensive income
- -
- Equity securities $ 57,542 $ $ $ 57,542
Liabilities
Recurring fair value measurements
Financial liabilities at fair value through
profit or loss $ - $ 6,742 $ - $ 6,742
----- End of picture text -----

• (b) The methods and assumptions the Company used to measure fair value are as follows:

• i. The instruments the Company used market quoted prices as their fair values (that is, Level

• 1) are listed below by characteristics:

Market quoted price

Listed shares Closing price

     - ii. Foreign exchange swap contracts are usually valued based on the current foreign exchange swap rate.

  - E. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

  - F. For the years ended December 31, 2020 and 2019, there was no transfer into or out from Level 3.

1. Supplementary Disclosures

2. (1) Significant transactions information

   • A. Loans to others: Please refer to table 1.

   • B. Provision of endorsements and guarantees to others: Please refer to table 2.

   • C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

   • D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.

   • E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

   • F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

   • G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: None.

   • H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

   • I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes

~65~

6(2) and 12(2).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 5.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 6.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to Note 13(1).

(4) Major shareholders information: Please refer to table 8.

14. Segment Information

• Not applicable.

~66~

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

Loans to others

Year ended December 31, 2020

(Note1) Table 1	Creditor	Borrower	General ledger Is a related account party	General ledger Is a related account party	Maximum outstanding balance during the year ended December 31,2020 (Note 5)	Balance at December 31, 2020 (Note 6,7and 8)	Actual amount drawn down (Note2)	Interestrate	Nature of loan (Note4)	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtfulaccounts	Collateral	Collateral	Limit on loans granted to a single party (Note 3)	Ceiling on total loans granted (Note 3) Footnote Expressed in thousands of NTD (Except as otherwise indicated)	Ceiling on total loans granted (Note 3) Footnote Expressed in thousands of NTD (Except as otherwise indicated)
													Item	Value
0 0 0 0	Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD.	UNITED SKILLS CO., LTD. RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. LIAONING HETAI AUTOMOTIVE PARTS CO.,LTD	Other receivables Other receivables Other receivables Other receivables	Y Y Y Y	77,000 $ 357,424 329,591 91,917	- $ 209,328 201,431 91,917	- $ 190,816 - 89,653	- 1.40% - 4.35%	2 2 2 2	- $ - - -	Operating capital Operating capital Operating capital Operating capital	- $ - - -	N N N N	- $ - - -	347,001 $ 347,001 347,001 347,001	1,388,007 $ 1,388,007 1,388,007 1,388,007

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Balance at December 31, 2020 and actual amount drawn down were calculated at the USD and RMB buying and selling spot exchange rate of 28.48 and 4.37 on December 31, 2020.

Note 3: Limit on total loans granted to others by the Company is 40% of the net assets and limit on loans granted to a single party is 10% of the net assets.

Note 4: The nature of the loan are as follows:

(1) Fill in ‘1’ for business transaction.

(2) Fill in ‘2’ for short-term financing.

Note 5: Loans granted to RISE BRIGHT HOLDINGS LTD. by Y.C.C whose maximum outstanding balance and balance at December 31, 2020 amounted to NT$357,424 exceed limit on loans granted to a single party. This is because the amount includes NT$166,608 that was used to repay loans which will be matured in June 2020 and February 2021. Limit on loans maintains NT$190,816 after repaying from other loans.

Note 6: Loans granted to CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. approved by the Board of Directors amounted to US$5,000 thousand and RMB 30,500 thousand.

Note 7: Loans granted to RISE BRIGHT approved by the Board of Directors amounted to US$7,350 thousand.

Note 8: Loans granted to LIAONING HETAI AUTOMOTIVE PARTS CO., LTD approved by the Board of Directors amounted to RMB 21,000 thousand.

Table 1, Page 1

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

Provision of endorsements and guarantees to others

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Year ended December 31, 2020

Number (Note 1)	Endorser/guarantor	Partybeingendorsed/guaranteed	Partybeingendorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31,2020	Outstanding endorsement/ guarantee amount at December 31, 2020 (Note 4)	Actual amount drawn down (Note 4)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/guar antees by parent company to subsidiary	Provision of endorsements/guarantees by subsidiary to parent company	Provision of endorsements/guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/guarantor(Note 2)
0 0	Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD.	RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.	2 3	694,003 $ 694,003	46,855 $ 372,708	12,460 $ 92,987	12,460 $ 92,987	- $ -	0.36% 2.68%	1,388,007 $ 1,388,007	Y Y	N N	N Y	Note 5 Note 6

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’. Note 2: Relationship between the endorser/guarantor and the Company is classified into the following three categories:

• (1) Having business relationship.

(2) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/ guaranteed company.

(3) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/ guaranteed company.

Note 3: The Company’s limit on total endorsements/guarantees is 40% of net assets and limit on endorsements/guarantees provided for a single party is 20% of net assets. Note 4: Balance at December 31, 2020 and actual amount drawn down were calculated at the USD buying and selling spot exchange rate of 28.48 on December 31, 2020. Note 5: Endorsements and guarantees to RISE BRIGHT HOLDINGS LTD. approved by the Board of Directors amounted to US$500 thousand. Note 6: Endorsements and guarantees to CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. approved by the Board of Directors amounted to US$3,900 thousand.

Table 2, Page 1

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

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

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2020

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2020	As of December 31,2020		Footnote
				Number of shares	Book value	Ownership (%)	Fair value
Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD.	HIROCA HOLDINGS LTD. HIROCA HOLDINGS LTD. NUUO INC. DA-LI DEVELOPMENT CO., LTD.	N N N N	Non-current financial assets at fair value through other comprehensive income - non current Valuation adjustment Current financial assets at fair value through profit or loss - current Current financial assets at fair value through profit or loss - current Current financial assets at fair value through profit or loss - current Valuation adjustment	855,000 298,000 5,071 457	81,856 $ 29,615) ( 52,241 $ 19,925 $ 277 11 1,912) ( 18,301 $	1.02% 0.36% 0.04% 0.00%	52,241 $ 18,208 80 13 18,301 $

Table 3, Page 1

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

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2020

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2020 (Note 1)	Turnover rate (Note 4)	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date (Note5)	Allowance for doubtful accounts	Footnote
					Amount	Action taken
Y.C.C. PARTS MFG. CO., LTD.	RISE BRIGHT HOLDINGS LTD.	Subsidiary	202,529 $	4.09%	- $	-	- $	- $	Notes 2

Note 1: The transactions were eliminated when preparing the consolidated financial statements.

Note 2: It pertains to principal and interest aggregating to $192,404 from loans to the subsidiary shown as other receivables and sales of equipment amounting to $2,023 shown as other receivables and revenue from sales of processing machine amounting to $8,102 thousand shown as accounts receivable. Note 3: Only accounts receivable was used for the calculation of turnover rate. Note 4: Subsequent collection is the amount collected as of March 10, 2021.

Table 4, Page 1

Table 5

Expressed in thousands of NTD

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

Significant inter-company transactions during the reporting periods

Year ended December 31, 2020

(Except as otherwise indicated)

Transaction

						Transaction
Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note3)
0 0 0 0 0 0 1 1 1 1	Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.	RISE BRIGHT HOLDINGS LTD. RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. LIAONING HETAI AUTOMOTIVE PARTS CO., LTD LIAONING HETAI AUTOMOTIVE PARTS CO., LTD CHANG JIE TECHNOLOGY CO., LTD CHANGSHU XINXIANG AUTOMOBILE PARTS CO., LTD. LIAONING HETAI AUTOMOTIVE PARTS CO., LTD LIAONING HETAI AUTOMOTIVE PARTS CO., LTD	1 1 1 1 1 1 3 3 3 3	Other receivables Sales revenue Other receivables Other income Sales revenue Other receivables Sales revenue Other payables Accounts receivable Sales revenue	194,427 $ 47,216 13,670 11,347 10,105 96,869 27,071 13,686 36,824 33,540	Principal and interest are repayable at the maturity date 90 days after monthly billings Interest is repayable quarterly Interest is repayable quarterly 90 days after monthly billings Interest is repayable quarterly 90 days after monthly billings 30 days after monthly billings 60 days after monthly billings 60 days after monthly billings	3.67% 2.23% 0.26% 0.54% 0.48% 1.83% 1.28% 0.26% 0.70% 1.58%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, and subsidiaries or between subsidiaries refer to it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

(1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: Transaction amount that did not reach $10 million or more will not be disclosed.

Note 5: The transactions were eliminated when preparing the consolidated financial statements.

Table 5, Page 1

Table 6

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

Information on investees Year ended December 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2020	Shares held as at December 31,2020	Shares held as at December 31,2020	Net profit (loss) of the investee for the year ended December 31,2020	Investment income (loss) recognised by the Company for year ended December 31,2020	Footnote
				Balance as at December 31,2020	Balance as at December 31,2019	Number of shares	Ownership (%)	Book value
Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. RISE BRIGHT HOLDINGS LTD.	UNITED SKILLS CO., LTD. RISE BRIGHT HOLDINGS LTD. CHINA FIRST HOLDINGS LTD.	Taiwan Samoa Samoa	Manufacturing vehicles and their parts Holding company Holding company	50,000 $ 1,077,179 1,158,673	50,000 $ 1,019,819 1,158,673	5,000 - -	100.00% 100.00% 89.44%	50,279 $ 534,765 594,359	605) ($ 90,475) ( 4,955) (	605) ($ 90,475) ( 4,432) (	Subsidiary Subsidiary (Note) Subsidiary (Note)

Note: The company does not hold any share in the investee because the investee is a limited company.

Table 6, Page 1

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

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

Information on investments in Mainland China

Year ended December 31, 2020

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2020	Accumulated amount of remittance from Taiwan of Mainland China as of December 31,2020	Net income of December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2020(Note 2)	Book value of investments in Mainland China as of December 31,2020	Accumulated amount of investment income remitted back to Taiwan as of December 31,2020	Footnte
					Remitted to Mainland China	Remitted back to Taiwan
CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. LIAONING HETAI AUTOMOTIVE PARTS CO., LTD. CHANGSHU XINXIANG AUTOMOBILE PARTS CO., LTD. CHANG JIE TECHNOLOGY CO., LTD.	Injecting and surface coating air bag covers of automobiles,producing and selling various accessories of automobiles and electronic plastic parts Injecting and surface coating parts of air bags with inflation system,covers, interior and exterior accessories of air bag and electronic equipment systems Manufacturing and selling parts, interior and exterior accessories and electronic system parts of automobiles and molds, gauges, clamps and jigs for injection Injecting and surface coating air bag covers of automobiles,producing and selling various accessories of automobiles and automatic production equipments for spraying	423,150 $ 347,588 60,450 133,225	2 2 2 2	827,609 $ 268,009 63,055 77,061	- - - 57,360	- - - -	827,609 $ 268,009 63,055 134,421	19,587) ($ 14,240 1,103) ( 4,342) (	89.44% 73.89% 89.44% 99.78%	17,519) ($ 10,521 987) ( 4,324) (	332,282 $ 191,947 51,528 130,923	- $ - - -	Note 5 Note 7 Note 6 Note 4 Note 3

• Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

• (1) Directly invest in a company in Mainland China.

• (2) Through investing in existing companies in the third area, RISE BRIGHT HOLDINGS LTD. and CHINA FIRST HOLDINGS LTD. , which then invested in the investee in Mainland China.

Note 2: The amounts listed in the table denominated in foreign currencies are translated into New Taiwan dollars at the exchange rates at the balance sheet date. Note 3: Paid-in capital is US$4,510 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$4,500 thousand. Note 4: Paid-in capital is US$2,000 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$2,000 thousand. Note 5: Paid-in capital is US$14,000 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$26,300 thousand. Note 6: Paid-in capital is US$11,500 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$8,591 thousand. Note 7: ‘Investment income (loss) recognised by the Company for the nine months ended December 31, 2020 was based on the financial statements that were reviewed by parent company’s CPA.

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Y.C.C. PARTS MFG. CO., LTD.	$ 1,293,094	$ 1,315,224	$ 2,082,010

Note 1: The amounts listed in the table denominated in foreign currencies are translated into New Taiwan dollars at the exchange rates at the balance sheet date. Note 2: Calculation for ceiling on investments in Mainland China (60% of net assets) is based on MOEA “Regulations Governing the Permission of Investment or Technical Cooperation in Mainland Area”. Note 3: At the end of this period, the investment amount transmitted from Taiwan to mainland China was US$40,098 thousand. The investment amount permitted by the Investment Commission of Ministry of Economic Affairs(MOEA) was US$42,098 thousand.

Table 7, Page 1

Table 8

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

Major shareholders information

December 31, 2020

Name of major shareholders	Shares	Shares
	Number of shares held	Ownership (%)
HAO QUN INVESTMENT & DEVELOPMENT CO.,LTD SONG QUN INVESTMENT & DEVELOPMENT CO.,LTD HE HAN INVESTMENT CO.,LTD RU HAN INVESTMENT CO.,LTD HUANG KAI INVESTMENT CO.,LTD	11,791,000 10,731,000 7,586,503 5,964,420 5,791,500	15.90% 14.47% 10.23% 8.04% 7.81%

Description: If the company applies Taiwan Depository & Clearing Corporation for the information of the table, the followings can be explained in the notes of the table.

(1) The major shareholders information was from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by the shareholders above 5% on the last operating date of each quarter and was calculated by the Taiwan Depository & Clearing Corporation.

The share capital which was recorded on the financial statements may be different from the actual number of shares in dematerialised form because of a different calculation basis.

(2) If the aforementioned data contains shares which were kept in trust by the shareholders, the data that was disclosed was the settlor's separate account for the fund set by the trustee.

As for the shareholder who reports share equity as an insider whose shareholding ratio is greater than 10% in accordance with Securities and Exchange Act, the shareholding ratio includes the self-owned shares and trusted shares, at the same time, persons who have power to decide how to allocate the trust assets. For the information of reported share equity of insider, please refer to the Market Observation Post System.

Table 8, Page 1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 1

Statement 1
Item	Description		Amount
Cash on hand and petty cash Cash in banks: Checking accounts and NTD demand deposits Foreign currency demand deposits Time deposits Short-term notes and bills - Re- Purchase	USD 315 at exchange rate approximately 28.48 GBP 16 at exchange rate approximately 38.9 EUR 1 at exchange rate approximately 35.02 USD 8,500 at exchange rate approximately 28.48 RMB 1,684 at exchange rate approximately 4.377 USD 13,551 at exchange rate approximately 28.48		141 $ 63,272 8,971 604 21 242,080 7,372 57,458 379,919 $

(Remainder of page intentionally left blank)

Statement 1, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF CURRENT FINANCIAL ASSETS MEASURED AT AMORTISED COST DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 2

Statement 2
Item Description Time deposits maturing over three months USD 3,000 at exchange rate approximately 28.48 Short-term notes and bills - Re- Purchase USD 11,534 at exchange rate approximately 28.48	Amount
	85,440 $ 328,478 413,918 $

(Remainder of page intentionally left blank)

Statement 2, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 3

Statement 3
Client Name	Description		Amount	Note
Related parties:		$	11,201
Non-related parties:
A client		$	55,102
B client			18,089
C client			9,609
				None of the balance of
				each remaining client is
				greater than 5% of this
Others			99,222	account balance
			182,022
Less: Allowance for uncollectible accounts		(	3,011)
		$	179,011

(Remainder of page intentionally left blank)

Statement 3, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF INVENTORIES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 4

Statement 4
Item	Cost Market Value 38,000 $ 33,542 $ 8,352 18,336 3,845 2,689 129,764 203,843 1,638 2,047 181,599 260,457 $ 16,279) ( 165,320 $ Description Amount			Note
				Method for determining market price
Raw materials Work in progress Semi-finished goods Finished goods Merchandises Less: Allowance for inventory valuation losses and loss for obsolete and slow- moving inventories			33,542 $ 18,336 2,689 203,843 2,047 260,457 $	Replacement cost method Net Realisable Value Net Realisable Value Net Realisable Value Net Realisable Value

(Remainder of page intentionally left blank)

Statement 4, Page1

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

TATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 5

Statement 5
Name	Shares Amount - 548,074 $ 5,000 50,884 598,958 $ BeginningBalance		Addition			Shares Amount Shares Percentage of Ownership Amount - 90,475) ($ - 100% 534,765 $ - 605) ( 5,000 100% 50,279 91,080) ($ 585,044 $ Decrease EndingBalance				Market Value or Net Assets Value			Collateral	Note
			Shares		Amount	Shares				Unit Price		Total Amount
RISE BRIGHT HOLDINGS UNITED SKILLS CO., LTD.		548,074 $ 50,884 598,958 $	- -		77,166 $ - 77,166 $	- -	100% 100%		534,765 $ 50,279 585,044 $	- 10		534,765 $ 50,279 585,044 $	None None	Notes 1 and 2

Note 1: The investee is a limited company without shares. The shareholding ratio is calculated proportionately to the contributed amount.

Note 2: Addition for the year is capital increase of USD 2 million which was translated to $57,360 at exchange rate when the increase took place, capital surplus amounting to $235 and adjustments of accumulated translation differences of foreign operations amounting to $19,571.

Note 3: The amounts of shares are expressed in thousands of New Taiwan dollars.

Statement 5, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 6

Item Beginning Balance

Addition Decrease Ending Balance

Collateral Note

Information on change in property, plant and equipment for the year is provided in Note 6(8).

(Remainder of page intentionally left blank)

Statement 6, Page1

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

STATEMENT OF LONG-TERM BORROWINGS

DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 7

Statement 7
Creditor Description Amount Contract Period O-Bank Medium- and long- term borrowings 59,998.00 $ 2016.08.31-2023.02.15 Bank of Taiwan Medium- and long- term borrowings 113,833 2018.11.26-2023.11.26 Bank of Taiwan Medium- and long- term borrowings 18,300 2019.12.26-2026.12.26 Bank of Taiwan Medium- and long- term borrowings 294,097 2016.01.06-2031.01.06 Bank of Taiwan Medium- and long- term borrowings 2,500 2016.01.06-2021.01.06 Bank of Taiwan Medium- and long- term borrowings 193,300 2019.12.26-2026.12.26 682,028 108,334) ( 3,735) ( 569,959 $ Less: Long-term borrowings, current portion Less: Government grant discounts	Interest Rate	Collateral Note None None None Land Land as well as buildings and structures Machinery and equipment
	0.89% 0.96% 0.75% 0.91% 0.87% 0.75%

Statement 7, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF OPERATING REVENUE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 8

Statement 8
Item	Volume		Amount	Note
Auto parts Others Less: Sales discounts and allowances as well as sales returns Net sales revenue		1,245,614 $ 28,599 1,274,213 9,934) ( 1,264,279 $		None of the balance of each remaining item is greater than 5% of this account balance

(Remainder of page intentionally left blank)

Statement 8, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF OPERATING COSTS YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 9

Statement 9
Item Beginning inventories Add: Purchase for the year Less: Ending inventories Cost of goods purchased and sold Beginning raw materials Add: Purchase for the year Gain on physical inventory for raw materials Transferred from work in progress Less: Ending inventories Transfer to various expenses Raw materials sold Raw materials used Add: Direct labor Manufacturing expense Manufacturing cost Add: Beginning work in progress Purchase for the year Less: Ending work in progress Loss on physical inventory for work in progress Loss on scrapping of work in progress Transferred to various expenses Transferred into raw materials Cost of finished goods Add: Beginning finished goods Gain on physical inventory for finished goods Less: Ending finished goods Transferred to various expenses Loss on scrapping of finished goods Cost of goods manufactured and sold Cost of goods purchased and sold Loss on slow-moving inventories and valuation loss Underapplied overhead Gain on physical inventories Loss on scrapping of inventories Other operating costs Cost adjustments Operating costs	Amount
	5,999 $ 24,186 1,638) ( 28,547 38,255 288,883 2,450 1,401 38,000) ( 700) ( 1) ( 292,288 90,991 303,690 686,969 11,857 784 12,197) ( 113) ( 95) ( 31) ( 1,401) ( 685,773 114,482 36 129,764) ( 1,234) ( 1,018) ( 668,275 28,547 4,948 63,262 2,373) ( 1,113 1 16 763,789 $

Statement 9, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF MANUFACTURING EXPENSE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 10

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Item Description Amount Note
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Depreciation Utilities expense Wages and salaries Other expenses	215,709 $ 48,267 28,411 11,303 None of the balance of each remaining item is greater than 5% of this account balance 303,690 $

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Statement 10, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF OPERATING EXPENSES YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Statement 11

Statement 11
Item Import/export (customs) expense Freight Wages and salaries Depreciation Amortisations Other expenses	Selling expenses 46,457 $ 18,318 8,265 5,609 - 13,583 92,232 $		Administrative expenses	Research and development expenses Note - $ 1,138 5,907 1,365 1,177 12,473 None of the balance of each remaining item is greater than 5% of this account balance 22,060 $
			- $ - 32,651 4,087 1,702 21,656 60,096 $

Statement 11, Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF OTHER GAINS AND LOSSES, NET FOR THE YEAR ENDED DECEMBER 31, 2020

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

Statement 12

Item Description Amount Note

Information on other gains and losses for the year is provided in Note 6(22).

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Statement 12,Page1

Y.C.C. PARTS MFG. CO., LTD. STATEMENT OF FINANCE COST FOR THE YEAR ENDED DECEMBER 31, 2020

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

Statement 13

Item Description Amount Note Information on finance cost for the year is provided in Note 6(23).

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Statement 13,Page1

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

Y.C.C. PARTS MFG. CO., LTD.	Y.C.C. PARTS MFG. CO., LTD.	Y.C.C. PARTS MFG. CO., LTD.
SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTISATION EXPENSES BY FUNCTION YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan dollars) Statement 14 Nature Function Year ended December 31,2020 Year ended December 31,2019 Classified as Operating Costs Classified as Operating Expenses Total Classified as Operating Costs Classified as Operating Expenses Total
Nature Function	Year ended December 31,2020 Classified as Operating Costs Classified as Operating Expenses Total	Year ended December 31,2019 Classified as Operating Costs Classified as Operating Expenses Total

Statement 14

Information on employee benefits, depreciation and amortisation expenses for the year is provided in Notes 6(24) and 6(25).

Statement 14, Page1