Y.C.C. — Interim / Quarterly Report 2020

Nov 14, 2020

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

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

MARCH 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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REPORT ON REVIEW OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

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

Introduction

We have reviewed the accompanying consolidated balance sheets of Y.C.C. Parts Mfg. Co., Ltd. and subsidiaries (the “Group”) as at March 31, 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As explained in Note 4(3), the financial statements of insignificant consolidated subsidiaries were not reviewed by independent accountants. Those statements reflect total assets of NT$487,750 thousand, constituting 9.44% of the consolidated total assets, and total liabilities of NT$71,185 thousand, constituting 4.66% of the consolidated total liabilities as at March 31, 2020, and total comprehensive loss of NT$5,873 thousand, constituting 14.95% of the consolidated total comprehensive income (loss) for the three months then ended.

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of consolidated subsidiaries been reviewed by independent accountants, that we might have become aware of had it not been for the situation described above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2020, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Other matter

The consolidated financial statements for the three months ended March 31, 2019 were reviewed by other independent accountants whose report dated May 10, 2019 expressed a qualified conclusion on those statements.

Wang, Yu-Chuan Liu, Mei-Lan

For and on behalf of PricewaterhouseCoopers, Taiwan May 12, 2020

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

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

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Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2020, DECEMBER 31, 2019 AND MARCH 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (THE BALANCE SHEETS AS OF MARCH 31, 2020 AND 2019 ARE REVIEWED, NOT AUDITED)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 6(5) 7(2) 7(2) 6(6) 6(7) and 8 6(3) 6(4) and 8 6(8) and 8 6(9) 6(10) 6(11) 6(12) and 8	March 31, 2020 AMOUNT % $ 775,887 15 28,223 1 69,746 1 45,266 1 563,589 11 - - 8,139 - - - 259,056 5 18,912 - 31,139 1 1,799,957 35 37,492 1 90,675 2 2,687,250 52 110,348 2 16,774 - 93,529 2 105,762 2 223,861 4 3,365,691 65 $ 5,165,648 100	December 31, 2019 AMOUNT % $ 700,630 13 42,045 1 74,950 1 22,880 1 757,449 14 - - 6,547 - - - 263,887 5 - - 61,875 1 1,930,263 36 57,542 1 - - 2,616,905 49 112,324 2 17,152 - 93,602 2 111,310 2 409,451 8 3,418,286 64 $ 5,348,549 100	March 31, 2019	March 31, 2019
		AMOUNT $ 775,887 28,223 69,746 45,266 563,589 - 8,139 - 259,056 18,912 31,139 1,799,957 37,492 90,675 2,687,250 110,348 16,774 93,529 105,762 223,861 3,365,691 $ 5,165,648	AMOUNT $ 700,630 42,045 74,950 22,880 757,449 - 6,547 - 263,887 - 61,875 1,930,263 57,542 - 2,616,905 112,324 17,152 93,602 111,310 409,451 3,418,286 $ 5,348,549	AMOUNT $ 736,450 16,742 536,268 63,099 614,032 345 8,546 4,045 330,990 - 345,163 2,655,680 64,125 - 3,032,351 127,105 - 171,946 87,001 345,091 3,827,619 $ 6,483,299	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortised cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1220 Current income tax assets 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non-current 1535 Financial assets at amortised cost - non-current 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets					12 - 8 1 10 - - - 5 - 5
					41
					1 - 47 2 - 3 1 5
					59
					100

(Continued)

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Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2020, DECEMBER 31, 2019 AND MARCH 31, 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (THE BALANCE SHEETS AS OF MARCH 31, 2020 AND 2019 ARE REVIEWED, NOT AUDITED)

					March 31, 2020				December 31, 2019	December 31, 2019			March 31, 2019
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(13)		$	148,173		3	$	254,868		5	$	684,088	10
2110	Short-term notes and bills payable				-		-		-		-		50,000		1
2120	Financial liabilities at fair value	6(2)
	through profit or loss- current				-		-		6,742		-		-		-
2130	Contract liabilities- current	6(21)			19,631		1		-		-		-		-
2150	Notes payable				135,834		3		113,429		2		123,256		2
2170	Accounts payable	7(2)			163,857		3		247,776		5		265,757		4
2200	Other payables	6(14)			116,639		2		168,141		3		142,671		2
2230	Current income tax liabilities				66,777		1		51,289		1		140,098		2
2300	Other current liabilities	6(15)			210,216		4		263,513		5		505,287		8
21XX	Total current liabilities				861,127	17			1,105,758	21			1,911,157	29
	Non-current liabilities
2540	Long-term borrowings	6(16)			659,305	13			637,386	12			1,004,657	16
2600	Other non-current liabilities				8,039		-		7,516		-		7,894		-
25XX	Total non-current liabilities				667,344	13			644,902	12			1,012,551	16
2XXX	Total liabilities				1,528,471	30			1,750,660	33			2,923,708	45
	Equity attributable to owners of
	parent
	Share capital	6(18)
3110	Common stock				741,389	14			741,389	14			741,389	11
	Capital surplus	6(19)
3200	Capital surplus				1,193,024	23			1,193,024	23			1,188,790	18
	Retained earnings	6(20)
3310	Legal reserve				280,161		5		280,161		5		249,371		4
3320	Special reserve				88,059		2		88,059		2		39,601		1
3350	Unappropriated retained earnings				1,373,185	27			1,303,340	24			1,262,251	20
	Other equity interest
3400	Other equity interest		(		145,674 ) (		3) (		119,481 ) (		3) (		74,237) (		1)
3500	Treasury shares	6(18)	(		526 )		- (		526 )		- (		526)		-
31XX	Equity attributable to owners
	of the parent				3,529,618	68			3,485,966	65			3,406,639	53
36XX	Non-controlling interests				107,559		2		111,923		2		152,952		2
3XXX	Total equity				3,637,177	70			3,597,889	67			3,559,591	55
	Significant contingent liabilities	9
	and unrecognised contract
	commitments
3X2X	Total liabilities and equity			$	5,165,648	100		$	5,348,549	100		$	6,483,299	100

The accompanying notes are an integral part of these consolidated financial statements.

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Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS , EXCEPT FOR EARNINGS PER SHARE) (REVIEWED, NOT AUDITED)

Items

Three months ended March 31 2020 2019 Notes AMOUNT % AMOUNT % 6(21) and 7(2) $ 500,112 100 $ 642,499 100 6(6) and 7(2) ( 342,320) ( 69) ( 480,701) ( 75) 157,792 31 161,798 25 6(25)(26) ( 35,297) ( 7) ( 37,473) ( 6) ( 28,945) ( 6) ( 30,223) ( 5) ( 8,647) ( 2) ( 10,178) ( 1) 2,270 1 1,810 - ( 70,619) ( 14) ( 76,064) ( 12) 87,173 17 85,734 13 6(22) 7,728 2 15,257 2 6(23) ( 2,607) ( 1) 37,595 6 6(24) ( 4,699) ( 1) ( 10,090) ( 1) 422 - 42,762 7 87,595 17 128,496 20 6(27) ( 21,222) ( 4) ( 27,213) ( 4) $ 66,373 13 $ 101,283 16 6(3) ($ 20,050) ( 4) $ 121 - ( 20,050) ( 4) 121 - ( 7,035) ( 1) 16,560 2 ( 7,035) ( 1) 16,560 2 ($ 27,085) ( 5) $ 16,681 2 $ 39,288 8 $ 117,964 18 $ 69,845 14 $ 107,925 17 ( 3,472) ( 1) ( 6,642) ( 1) $ 66,373 13 $ 101,283 16 $ 43,652 9 $ 121,747 19 ( 4,364) ( 1) ( 3,783) ( 1) $ 39,288 8 $ 117,964 18 6(28) $ 0.94 $ 1.46 $ 0.94 $ 1.45

4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the period Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8316 Unrealised gains (losses) on valuation of equity instruments at fair value through profit or loss 8310 Components of other comprehensive (loss) income that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Other comprehensive (loss) income for the period 8500 Total comprehensive income for the period Profit (loss) attributable to: 8610 Owners of the parent 8620 Non-controlling interests Total Comprehensive income (loss) attributable to: 8710 Owners of the parent 8720 Non-controlling interests Total Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

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Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(EXPRESSED IN THOUSNDS OF NEW TAIWAN DOLLARS) (REVIEWED, NOT AUDITED)

Three months ended March 31, 2019 Balance at January 1, 2019 Profit (loss) for the period Other comprehensive income for the period Total comprehensive income (loss) for the period Treasury share transactions Disposal of equity investments at fair value through other comprehensive income Balance at Match 31, 2019 Three months ended March 31, 2020 Balance at January 1, 2020 Profit (loss) for the period Other comprehensive loss for the period Total comprehensive income (loss) for the period Balance at March 31, 2020	Notes							Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent				Non-controlling interests		Total equity
			Share capital - common stock		Capital surplus			Retained earnings			Other equity interest		Treasury shares		Total
							Legal reserve		Special reserve	Unappropriated retained earnings	Financial statements translation differences of foreign operations	Unrealised gains (losses) on financial assets measured at fair value through other comprehensive income
	6(3) 6(18) 6(3) 6(3)		$ 741,389 - - - - - $ 741,389 $ 741,389 - - - $ 741,389		$ 1,188,790 - - - - - $ 1,188,790 $ 1,193,024 - - - $ 1,193,024		$ 249,371 - - - - - $ 249,371 $ 280,161 - - - $ 280,161		$ 39,601 - - - - - $ 39,601 $ 88,059 - - - $ 88,059	$ 1,154,490 107,925 - 107,925 - ( 164 ) $ 1,262,251 $ 1,303,340 69,845 - 69,845 $ 1,373,185	($ 70,208 ) - 13,701 13,701 - - ($ 56,507 ) ($ 95,167 ) - ( 6,143 ) ( 6,143 ) ($ 101,310 )	($ 17,851 ) - 121 121 - - ($ 17,730 ) ($ 24,314 ) - ( 20,050 ) ( 20,050 ) ($ 44,364 )	$ - - - - ( 526 ) - ($ 526 ) ($ 526 ) - - - ($ 526 )	$ 3,285,582 107,925 13,822 121,747 ( 526 ) ( 164 ) $ 3,406,639 $ 3,485,966 69,845 ( 26,193 ) 43,652 $ 3,529,618		$ 156,735 ( 6,642 ) 2,859 ( 3,783 ) - - $ 152,952 $ 111,923 ( 3,472 ) ( 892 ) ( 4,364 ) $ 107,559	$ 3,442,317 101,283 16,681 117,964 ( 526 ) ( 164 ) $ 3,559,591 $ 3,597,889 66,373 ( 27,085 ) 39,288 $ 3,637,177

The accompanying notes are an integral part of these consolidated financial statements.

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Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2020 AND 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (REVIEWED, NOT AUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax for the period Adjustments Adjustments to reconcile profit (loss) Depreciation expense (including investment property) Depreciation expense - right-of-use assets Amortisation expense Expected credit impairment gain Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Impairment loss on non-financial assets Unrealised foreign exchange (gain) loss Changes in operating assets and liabilities Changes in operating assets Notes receivable, net Accounts receivable, net Accounts receivable - related parties Other receivables Inventories Prepayments Other current assets Other non-current assets Changes in operating liabilities Contract liabilities-current Notes payable Accounts payable Other payables Other current liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities

Three months ended March 31 Notes 2020 2019 $ 87,595 $ 128,496 6(25) 74,481 79,642 6(25) 1,041 1,119 6(25) 1,769 3,714 12(2) ( 2,270 ) ( 1,810 ) 6(23) 6,850 ( 10,981 ) 6(24) 4,699 10,090 6(22) ( 3,465 ) ( 7,683 ) - 26,718 ( 3,618 ) 2,696 ( 22,397 ) ( 14,666 ) 196,481 101,363 - 761 ( 1,738 ) 166 4,831 20,298 ( 2,334 ) - 10,325 4,197 1,233 - 5,305 - 22,405 ( 17,154 ) ( 83,919 ) ( 60,911 ) ( 41,595 ) ( 19,747 ) 38 63,287 255,717 309,595 3,611 6,250 ( 4,985 ) ( 10,262 ) ( 302 ) ( 702 ) 254,041 304,881

(Continued)

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Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2020 AND 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (REVIEWED, NOT AUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Decrease (increase) in financial assets at amortised cost Acquisition of property, plant and equipment Decrease in other current assets Increase in other non-current assets Decrease (increase) in guarantee deposits paid Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Repayments of long-term borrowings Proceeds from long-term borrowings Increase in guarantee deposits received Payments to acquire treasury shares Net cash flows (used in) from financing activities Effect of exchange rate changes Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Three months ended March 31 Notes 2020 2019 ($ 479 ) ($ 5,703 ) 392 9,870 4,469 ( 536,268 ) 6(30) ( 23,232 ) ( 15,728 ) 3,833 25,926 ( 41,337 ) ( 54,821 ) 82 ( 23 ) ( 56,272 ) ( 576,747 ) 20,000 530,000 ( 128,348 ) ( 440,000 ) 6(31) - 50,000 ( 115,072 ) ( 94,183 ) 95,600 - 6(31) 535 11 6(31) - ( 526 ) ( 127,285 ) 45,302 4,773 4,020 75,257 ( 222,544 ) 700,630 958,994 $ 775,887 $ 736,450

The accompanying notes are an integral part of these consolidated financial statements.

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Y.C.C. PARTS MFG. CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED) (UNAUDITED)

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 and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in manufacturing and trading automobiles 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 consolidated financial statements were reported to the Board of Directors on May 12, 2020.

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:

ollows:
	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	StandardsBoard
Amendment to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’	January 1, 2020
Amendments to IFRS 3, ‘Definition of a business’	January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS7 ,‘Interest rate benchmark
reform’	January 1, 2020

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

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

the Group

None.

(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:

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Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an To be determined by investor and its associate or joint venture’ International Accounting Standards Board IFRS 17, ‘Insurance contracts’ January 1, 2021 Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ January 1, 2022

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

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.

(2) Basis of preparation

• A. Except for the following items, the consolidated 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.

• 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 Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to

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affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

• (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. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

• (e) When the Group loses control of a subsidiary, the Group 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. All 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 related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

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B. Subsidiaries included in the consolidated financial statements:

==> picture [493 x 49] intentionally omitted <==

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

Ownership(%)
Name of Name of Business March 31, December March 31,
Investor Subsidiary Activities 2020 31, 2019 2019 Description
----- End of picture text -----

Investor	Subsidiary	Activities	2020	31,2019	2019	Description
The	RISE BRIGHT	Holding	100.00%	100.00%	100.00%	Note 1
Company	HOLDINGS LTD. (RISE	company				Note 4
	BRIGHT)
The	UNITED SKILLS CO.,	Manufacturing	100.00%	100.00%	80.00%	Note 2
Company	LTD. (UNITED SKILLS)	automobiles				Note 3
		and their parts				Note 5
RISE	CHINA FIRST	Holding	89.44%	89.44%	88.13%	Note 1
BRIGHT	HOLDINGS LTD.	company
	(CHINA FIRST)
RISE	CHANG JIE	Producing and	99.60%	99.60%	-	Note 4
BRIGHT	TECHNOLOGY CO.,	selling interior				Note 5
	LTD. (CHANG JIE)	and exterior
		accessories of
		automobiles
CHINA	CHANGSHU FUTE	Producing and	100.00%	100.00%	100.00%
FIRST	AUTOMOTIVE TRIM	selling interior
	CO., LTD. (CHANGSHU	and exterior
	FUTE, formerly named	accessories of
	CHANGSHU GUANLIN	automobiles
	AUTOMOTIVE TRIM
	CO.,LTD.)
CHINA	LIAONING HETAI	Producing and	82.61%	82.61%	82.61%	Note 5
FIRST	AUTOMOTIVE PARTS	selling interior
	CO.,LTD. (LIAONING	and exterior
	HETAI)	accessories of
		automobiles
CHINA	CHANGSHU XINXIANG	Producing and	100.00%	100.00%	-	Note 1
FIRST	AUTOMOBILE PARTS	selling interior				Note 5
	CO., LTD. (CHANGSHU	and exterior
	XINXIANG)	accessories of
		automobiles

Note 1: In November 2018, the Group’s Board of Directors approved to increase its capital in RISE BRIGHT and reinvest in CHINA FIRST in the amount of US$ 2,000 thousand then establish CHANGSHU XINXIANG through CHINA FIRST. CHINA FIRST increased its capital and the original shareholder did not acquire shares proportionally to its interest. As a result, RISE BRIGHT increased its share interest to 89.44%.

Note 2: In May 2019, the Group acquired a 20% equity interest in UNITED SKILLS from LOFTY SUCCESS GROUP LIMITED (LOFTY SUCCESS) in the amount of $32,863. As a result,

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the Company’s shareholding ratio to UNITED SKILLS increased to 100%. Please refer to Note 6(28) for information on equity transactions with non-controlling interest.

• Note 3: In August 2019, the Group’s Board of Directors approved to decrease its capital in UNITED SKILLS in the amount of $150,000. UNITED SKILLS’s paid-in capital was $50,000 after the capital reduction. The capital reduction was effective from September 16, 2019, and the registration for the capital reduction was completed on October 5, 2019.

• Note 4: In May 2018, the Group’s Board of Directors approved to increase its capital in RISE BRIGHT in the amount of US$ 2,500 thousand and reinvest in CHANG JIE through RISE BRIGHT. The establishment was completed on November 19, 2019.

• Note 5: The financial statements of the entity as of and for the three months ended March 31, 2020 and 2019 were not reviewed by independent accountants as the entity did not meet the definition of significant subsidiaries.

• C. Subsidiaries not included in the consolidated financial statements

• None.

• D. Adjustments for subsidiaries with different balance sheet dates

• None.

• E. Significant restrictions

• None.

• F. Subsidiaries that have non-controlling interests that are material to the Group None.

(4) Foreign currency translation

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

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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 group 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

    • 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 Group 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.

• (5) 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;

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• (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.

(6) 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.

(7) 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 recognised and derecognised using trade date accounting.

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

• D. The Group recognises the dividend income 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 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 Group 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 Group’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 Group measures the financial assets at fair value plus transaction costs. The Group 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.

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(9) 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 Group’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 Group’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.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group 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 at initial invoice amount as the effect of discounting is immaterial.

• (11) Impairment of financial assets

For financial assets at amortised cost, at each reporting date, the Group 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 Group recognises the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

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

－ (13) 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.

(14) 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.

(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,

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as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group 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:

Buildings and structures Machinery and equipment Molding equipment Transportation equipment Furniture equipment Other equipment

10 ~ 20 years 2 ~ 15 years 2 ~ 12 years 3 ~ 10 years 2 ~ 6 years 2 ~ 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 Group. For short-term leases or leases of lowvalue 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 Group 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.

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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) Investment property

• A. An investment property is stated initially at its cost and measured subsequently using the cost model. Land use right is depreciated on a straight-line basis over its contract of 50 years signed with the government of Changshu City, Jiangsu Province, China; buildings and structures are depreciated on a straight-line basis over its estimated useful life of 20 years.

• B. From 2019, an investment property acquired from lease is initially measured at cost (including the amount of the initial measurement of lease liability, lease payments made before the commencement date, initial direct costs and estimated costs of restoring the underlying asset net of lease incentives receivable) and subsequently measured at cost, net of accumulated depreciation and impairment, thereby adjusting remeasurements of lease liabilities.

• (18) Intangible assets

• A. Computer software

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

• B. Goodwill

  • Goodwill arises in a business combination accounted for by applying the acquisition method. Acquisition prices in the business combination are calculated based on the acquisition price. The excess of the acquisition price over the fair value of the identifiable assets acquired is recorded as goodwill.

(19) Impairment of non-financial assets

• A. The Group 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 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.

• B. The recoverable amounts of goodwill are evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the

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following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the eqtity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(20) 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.

• (21) 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.

(22) 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 Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

(23) Derecognition of financial liabilities

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

(24) 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.

(25) 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

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  - (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 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.

     - iv.Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.

• 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 Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

• (26) 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

~21~

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 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.

• E. The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

• F. The accounting policy of effect of changes in tax rate from tax regulation amendments for the interim period and the transactions with tax consequences are consistent. The effect is recognised in profit or loss, other comprehensive income or equity immediately in the interim period in which the change occurs.

• (27) 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.

(28) 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.

(29) Revenue recognition

Sales of goods

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• A. The Group manufactures and sells automobiles parts products. 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 Group has objective evidence that all criteria for acceptance have been satisfied.

• B. Revenue from sales is recognised based on the price specified in the contract, net of the estimated sales discounts and allowances. 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 Group 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 consideration is unconditional because only the passage of time is required before the payment is due.

• (30) Business combinations

• A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

• B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

(31) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group’s chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

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

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’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 Group’s accounting policies

• None.

(2) Critical accounting estimates and assumptions

• A. Impairment assessment of goodwill

The impairment assessment of goodwill relies on the Group’s subjective judgement. When determining whether goodwill is impaired, value in use of the cash-generating units which is allocated to goodwill shall be estimated. In order to calculate value in use, management shall estimate future cash flows that might be generated from cash-generating unit and determine the appropriate discount rate which is used to calculate the present value. If the actual cash flows are lower than expected, significant impairment loss may occur. Please refer to Note 6(11) for the information of goodwill impairment.

As of March 31, 2020, the Group recognised goodwill, net of impairment loss, amounting to $86,734.

• B. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group 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 March 31, 2020, the carrying amount of inventories was $259,056.

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		March31,2020	December31,2019			March31,2019
		288 $ 189,396 389,741 196,462 775,887 $ 0.60%~2.55%		342 $ 112,664 557,516 30,108 700,630 $ 0.01%~2.55%		425 $ 234,757 488,857 12,411 736,450 $ 0.01%~2.95%

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• A. The Group 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

==> picture [471 x 163] intentionally omitted <==

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

Items March 31, 2020 December 31, 2019 March 31, 2019
Financial assets mandatorily
measured at fair value through profit or loss
Listed stocks $ 45,253 $ 45,693 $ 14,186
Valuation adjustment ( 18,330) ( 3,648) 1,286
26,923 42,045 15,472
Forward foreign exchange contracts 1,300 - 1,270
$ 28,223 $ 42,045 $ 16,742
Financial liabilities held for trading
Forward foreign exchange contracts $ - $ 6,742 $ -
----- End of picture text -----

• A. The Group recognised financial assets and liabilities at fair value through profit or loss of ($ 6,850) and $10,981 for the three months ended March 31, 2020 and 2019, respectively.

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

and liabilities that the Group does not	adopt hedge accounting are as follows:	adopt hedge accounting are as follows:
Derivative financial assets Forward foreign exchange contracts Derivative financial assets (liabilities) Forward foreign exchange contracts Derivative financial assets Forward foreign exchange contracts	March31,2020
	Contract amount (Notionalprincipal)	Contract period
	Contract amount (Notionalprincipal)	Maturity period
	USD 64,270 thousand	2019.04.08 ~ 2019.04.25

The Group entered into forward foreign exchange contracts to sell USD to hedge exchange rate risk of export proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• C. The Group 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

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loss is provided in Note 12(2).

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

Items March31,2020 December31,2019 Non-current items: Equity instruments Listed stocks 81,856 $ 81,856 $ Valuation adjustment 44,364) ( 24,314) ( 37,492 $ 57,542 $	March31,2019
	81,856 $ 17,731) ( 64,125 $

• A. The Group 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 $37,492, $57,542 and $64,125 as at March 31, 2020, December 31, 2019 and March 31, 2019, respectively.

• B. Due to the change of investment strategy, the Group sold $792 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:

==> picture [458 x 123] intentionally omitted <==

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

Three months ended March 31,
2020 2019
Equity instruments at fair value through
other comprehensive income
Fair value change recognised in other
comprehensive (loss) income ($ 20,050) $ 121
Cumulative gains reclassified to
retained earnings due to derecognition $ - $ 164
----- End of picture text -----

• D. As at March 31, 2020, December 31, 2019 and March 31, 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 Group were $37,492, $57,542 and $64,125, respectively.

• E. The Group 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).

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(4) Financial assets at amortised cost

==> picture [494 x 97] intentionally omitted <==

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

Items March 31, 2020 December 31, 2019 March 31, 2019
Current items:
Time deposits maturing over
$ 69,746 $ 74,950 $ 536,268
three months
Non-current items
Restricted time deposits $ 90,675 $ - $ -
----- End of picture text -----

• A. As at March 31, 2020, December 31, 2019 and March 31, 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 Group were $160,421, $74,950 and $536,268, respectively.

• B. As at December 31, 2019 and March 31, 2019, restricted time deposits amounted to $93,807 and

  • $316,256, respectively, shown as other current assets and other non-current assets.

• C. Information about the financial assets at amortised cost that were pledged to others as collaterals is provided in Note 8.

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

• (5) Notes and accounts receivable, net

			March31,2020	December	December	31,2019			March31,2019
Notes receivable		$	45,345		$	22,948		$	63,217
Less: Allowance for
uncollectible accounts	(		79)	(		68)	(		118)
		$	45,266		$	22,880		$	63,099
			March31,2020	December		31,2019			March31,2019
Accounts receivable		$	603,867		$	800,271		$	652,654
Less: Allowance for
uncollectible accounts	(		40,278)	(		42,822)	(		38,277)
		$	563,589		$	757,449		$	614,377

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

0 to 120 days 121 to 180 days 181 to 240 days 241 to 360 days Over 360 days		Notes receivable Accounts receivable 45,345 $ 522,288 $ - 39,009 - 8,114 - 15,893 - 18,563 45,345 $ 603,867 $ March31,2020	Notes receivable Accounts receivable 45,345 $ 522,288 $ - 39,009 - 8,114 - 15,893 - 18,563 45,345 $ 603,867 $ March31,2020	Notes receivable Accounts receivable 45,345 $ 522,288 $ - 39,009 - 8,114 - 15,893 - 18,563 45,345 $ 603,867 $ March31,2020		December	December	Accounts receivable 31,2019		Notes receivable Accounts receivable 63,217 $ 571,289 $ - 37,021 - 10,872 - 11,599 - 21,873 63,217 $ 652,654 $ March31,2019	Notes receivable Accounts receivable 63,217 $ 571,289 $ - 37,021 - 10,872 - 11,599 - 21,873 63,217 $ 652,654 $ March31,2019	Notes receivable Accounts receivable 63,217 $ 571,289 $ - 37,021 - 10,872 - 11,599 - 21,873 63,217 $ 652,654 $ March31,2019
		Notes receivable				Notes receivable				Notes receivable
		45,345 $ - - - - 45,345 $		522,288 $ 39,009 8,114 15,893 18,563 603,867 $		22,948 $ - - - - 22,948 $		688,718 $ 61,422 20,781 10,092 19,258 800,271 $		63,217 $ - - - - 63,217 $		571,289 $ 37,021 10,872 11,599 21,873 652,654 $

The above ageing analysis was based on invoice date.

~27~

• B. As at March 31, 2020, December 31, 2019 and March 31, 2019, the balances of accounts receivable and notes receivable were all from contracts with customers. As at January 1, 2019, the balances of accounts receivable and notes receivable from contracts with customers amounted to $751,948 and $48,436, respectively.

• C. As at March 31, 2020, December 31, 2019 and March 31, 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 Group’s notes receivable and accounts receivable were $45,266, $22,880 and $63,099 as well as $563,589, $757,449 and $614,377, respectively.

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

• E. The balance of accounts receivable as at March 31, 2019 included accounts receivable - related parties.

(6) Inventories

parties. ventories
Materials and supplies Work in progress Semi-finished goods Finished goods Merchandise Materials and supplies Work in progress Semi-finished goods Finished goods Merchandise Materials and supplies Work in progress Semi-finished goods Finished goods Merchandise		March31,2020
	Cost 93,523 $ 38,384 8,007 154,220 30,684 324,818 $	Allowance for valuation loss 23,454) ($ 8,611) ( 4,563) ( 29,134) ( - 65,762) ($ December31,2019	Bookvalue
			70,069 $ 29,773 3,444 125,086 30,684
			259,056 $
	Cost 84,790 $ 44,781 6,727 158,831 30,850 325,979 $		Bookvalue
			61,208 $ 38,922 4,041 128,866 30,850
			263,887 $
	Cost 90,504 $ 58,984 3,957 195,493 71,664 420,602 $		Bookvalue
			62,133 $ 33,707 1,540 161,946 71,664
			330,990 $

~28~

The cost of inventories recognised as expense for the period:

The cost of inventories recognised as expense for the period:
Cost of goods sold Unallocated fixed overheads Loss on market value decline and obsolete and slow-moving inventories Loss on physical inventory Loss on scrapping inventory		Three months ended March31,2020
		316,318 $ 21,646 4,157 45 154 342,320 $

For the three months ended March 31, 2019, the operating cost related to inventory amounted to $480,701, including loss on market value decline and obsolete and slow-moving inventories of $26,718.

(7) Other current assets

$26,718. Other current assets
Other financial assets Other current assets - others	March 31, 2020 29,811 $ 1,328 31,139 $	December31,2019 33,940 $ 27,935 61,875 $	March 31, 2019
			328,468 $ 16,695
			345,163 $

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

(Remainder of page intentionally left blank)

~29~

(8) Property, plant and equipment

Property, plant and equipment
Cost Land Buildings and structures Machinery and equipment Molding equipment Transportation equipment Furniture equipment Other equipment Unfinished construction and equipment under acceptance Accumulated Depreciation Buildings and structures Machinery and equipment Molding equipment Transportation equipment Furniture equipment Other equipment Total				Three months ended March31,2020
	Beginningbalance Additions Decreases 956,365 $ - $ - $ 1,519,897 - 2,655) ( 1,170,965 2,684 36) ( 1,615,001 3,168 6,392) ( 29,976 - - 4,438 26 192) ( 168,298 3,100 2,174) ( 73,826 4,633 - 5,538,766 $ 13,611 $ 11,449) ($ 705,279) ($ 17,349) ($ 2,655 $ 749,234) ( 25,014) ( 36 1,314,590) ( 26,458) ( 6,392 24,654) ( 552) ( - 3,884) ( 116) ( 192 124,220) ( 4,761) ( 2,174 2,921,861) ($ 74,250) ($ 11,449 $ 2,616,905 $				Transfers Net exchange differences Endingbalance - $ - $ 956,365 $ - 2,989) ( 1,514,253 42,490 3,313) ( 1,212,790 14,918 244) ( 1,626,451 - 14) ( 29,962 - 17) ( 4,255 1,463 399) ( 170,288 76,801 564) ( 154,696 135,672 $ 7,540) ($ 5,669,060 $ - $ 604 $ 719,369) ($ - 1,849 772,363) ( - 127 1,334,529) ( - 11 25,195) ( - 13 3,795) ( - 248 126,559) ( - $ 2,852 $ 2,981,810) ($ 2,687,250 $

~30~

Cost Land Buildings and structures Machinery and equipment Molding equipment Transportation equipment Furniture equipment Other equipment Unfinished construction and equipment under acceptance Accumulated Depreciation Buildings and structures Machinery and equipment Molding equipment Transportation equipment Furniture equipment Other equipment				Three months ended March31,2019	Three months ended March31,2019
	Beginningbalance Additions Decreases 1,370,550 $ - $ - $ 1,563,686 1,350 4,169) ( 1,085,683 2,337 1,069) ( 1,536,947 5,125 9,299) ( 31,955 650 - 5,700 161 178) ( 161,119 1,008 680) ( 6,089 265 - 5,761,729 $ 10,896 $ 15,395) ($ 657,441) ($ 18,705) ($ 4,169 $ 671,366) ( 22,955) ( 1,069 1,237,237) ( 32,402) ( 9,299 26,261) ( 694) ( - 4,542) ( 226) ( 178 110,096) ( 4,660) ( 680 2,706,943) ($ 79,642) ($ 15,395 $ 3,054,786 $				Transfers Net exchange differences Endingbalance - $ - $ 1,370,550 $ 1,202 9,232 1,571,301 5,224 9,088 1,101,263 27,412 1,455 1,561,640 - 76 32,681 - 84 5,767 - 1,100 162,547 1,202) ( 141 5,293 32,636 $ 21,176 $ 5,811,042 $ - $ 1,608) ($ 673,585) ($ - 4,208) ( 697,460) ( - 1,036) ( 1,261,376) ( - 55) ( 27,010) ( - 57) ( 4,647) ( - 537) ( 114,613) ( - $ 7,501) ($ 2,778,691) ($ 3,032,351 $

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 collaterals is provided in Note 8.

~31~

• A. On September 14, 2015, UNITED SKILLS acquired 3.7 hectares of located at Dounan Township, Yunlin County for a consideration of $412,000 from the landowner but afterwards Environmental Protection Bureau of Yunlin County found that the land was buried with incineration bottom ash and waste. Therefore, UNITED SKILLS filed a lawsuit with the Yunlin District Court of Taiwan to appeal for the return of consideration and damage compensation on February 6, 2015. On January 18, 2019, UNITED SKILLS conducted a settlement with the original landowner and agreed to cancel the registration of ownership transfer of the land and return it to the original landowner. In April 2019, the original landowner returned $414,185, including the payment for cancellation of the line of credit mortgage and general superficies of the land, and paid an additional amount of $43,815 to UNITED SKILLS.

• B. 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:

Amount capitalised Range of the interest rates for capitalisation	March 31, 2020 December 31, 2019 952 $ 3,749 $ 1.15% 1.16%	March 31, 2019
		971 $ 1.22%

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

(9) Lease transactions – lessee

• A. The Group leases various assets including land and business vehicles. Rental contracts are typically made for periods of 5 to 50 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 priority the right to renew the lease or purchase the property.

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

Land Transportation equipment (Business vehicles)		March31,2020 Carrying amount 106,890 $ 3,458 110,348 $	December31,2019		March31,2019
			Carrying amount		Carrying amount
			108,600 $ 3,724 112,324 $		122,583 $ 4,522 127,105 $

~32~

		Three months ended	Three months ended	March 31
		2020		2019
		Depreciation charge		Depreciation charge
Land	$	775	$	853
Transportation equipment
(Business vehicles)		266		266
	$	1,041	$	1,119

• C. For the three months ended March 31, 2020 and 2019, there were no additions to right-of-use assets.

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

	Three months	ended March 31
	2020	2019
Items affecting profit or loss
Expense on short-term lease contracts	205 $	286 $
Expense on leases of low-value assets	181 $	- $

• E. For the three months ended March 31, 2020 and 2019, the Group’s total cash outflow for leases were $386 and $286, respectively.

(10) Investment property

were $386 and $286, respectively. vestment property	espectively.
Beginning balance Cost Land use right 4,504 $ Buildings and structure 15,947 20,451 $ Accumulated depreciation Land use right 442) ($ Buildings and structure 2,857) ( 3,299) ( 17,152 $			Three months ended March 31,2020
	Beginning balance		Additions		Decreases	Transfers		Net exchange differences		Ending balance
		- $ - - $ 31) ($ 200) ( 231) ($			- $ - - $ - $ - - $		- $ - - $ - $ - - $	40) ($ 138) ( 178) ($ 4 $ 27 31 $	4,464 $ 15,809 20,273 $ 469) ($ 3,030) ( 3,499) ( 16,774 $

Three months ended March 31, 2019: None.

~33~

• A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period Direct operating expenses arising from the investment property that did not generate rental income during the period	Three months ended March 31, 2020
	802 $ 231 $ - $

• B. The Group has no investment property pledged to others.

• C. The fair value of the investment property held by the Group, which is the land-use right and buildings and structures, as at March 31, 2020 was $21,170. The valuations were made using the carrying amount of land use rights upon the expiry of the lease and the discounted inflow of future rental income for 3 years, using the borrowing interest rate of 4.35%, after taking into consideration of future economic growth and results of inflation. The fair value is classified as a level 3 fair value.

• D. The fair value of the investment property as at December 31, 2019 was $21,547, which was valued by the Group’s management, not by independent valuers, using the valuation model widely accepted by market participants with level 3 inputs. Valuations were made using the discounted cash flow method and significant unobservable inputs used included discounted rates.

• E. CHANGSHU FUTE subleases its 36.5-year land-use right in Changshu city, Jiangsu Province, China to DAQIAOJIXIE JIANGSU YOUXIANGONGSI under non-cancellable operating lease agreements. The lease terms are 3 years, and rental is adjusted to reflect market rental rates when the lessee exercises extension options. The lessee is not granted the right of priority buy the investment property when the lease expires.

• F. The future aggregate minimum lease payments receivable are as follows:

Not later than one year Later than one year but not later than five years	March31,2020
	3,223 $ 5,871
	9,094 $

~34~

(11) Intangible assets

Intangible assets
Cost Goodwill Computer software Accumulated amortisation Computer software Accumulated impairment Goodwill Book value Cost Goodwill Computer software Accumulated amortisation Computer software Accumulated impairment Goodwill Book value		Beginning balance						Net exchange differences 31,2020		Ending balance
		316,465 $ 14,201 330,666 (6,629) (230,435) 93,602 $						2,586 $ 6) ( 2,580 $ 101) ($ 1,882) ($ 31, 2019		319,051 $ 13,953 333,004 (7,158) (232,317) 93,529 $
		Beginning balance		Additions	Decreases	Impairment loss		Net exchange differences		Ending balance
	324,223 $ 14,025 338,248 5,592) ( 160,555) ( 172,101 $		- $ - - $ 731) ($ - $		- $ 803) ( 803) ($ 803 $ - $		- $ - - $ - $ - $	1,109 $ 68 1,177 $ 51) ($ 550) ($	325,332 $ 13,290 338,622 5,571) ( 161,105) ( 171,946 $

• A. The above amortisation expenses were recognised under overheads, administrative expenses and research and development expenses in the statements of comprehensive income.

• B. Goodwill arising from acquisition of CHINA FIRST and CHANGSHU FUTE in April 2015 amounted to $325,754 and it arose mainly from the anticipation of CHANGSHU FUTE that operating revenue will benefit from the growth in auto parts market in China. However, the actual operation in CHANGSHU FUTE was not as expected as the auto part market in China was impacted by the continuous weak economic environment. The Group did not recognise impairment losses for the goodwill for the three months ended March 31, 2020 and 2019.

• C. 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 and a discount rate of 11.30% per annum in 2019. Other key assumptions include expected operating revenue and gross profit. These assumptions are based on the cash-generating units’ past operating performance and management’s expectation of the market development.

~35~

(12) Other non-current assets

Other non-current assets
Prepayments for business facilities Guarantee deposits paid Other financial assets - non-current Other non-current assets	March31,2020 216,399 $ 1,363 - 6,099 223,861 $	December31,2019 310,734 $ 1,445 89,940 7,332 409,451 $	March31,2019
			328,792 $ 2,429 - 13,870
			345,091 $

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

(13) Short-term borrowings

in Note 8. Short-term borrowings
Type of borrowings Unsecured borrowings Secured borrowings Interest rate range	March31,2020 December 31, 2019 148,173 $ 254,868 $ - - 148,173 $ 254,868 $ 1.08%~3.65% 1.08%~4.29%	March31,2019
		544,088 $ 140,000
		684,088 $
		1.08%~3.97%

(14) Other payables

Salaries and bonus payable Machinery and equipment payable Transportation fee payable Repairs and maintenance expense payable Employees’ compensation payable Directors’ remuneration payable Others	March31,2020 December31,2019 29,988 $ 43,562 $ 20,400 30,021 9,917 14,426 5,374 8,167 7,412 6,197 5,702 4,767 37,846 61,001 116,639 $ 168,141 $	March31,2019
		32,034 $ 25,988 13,043 - 7,062 5,432 59,112
		142,671 $

(15) Other current liabilities

Other current liabilities
Long-term borrowings (including current portion) Advance receipts Advance sales receipts Others	March31,2020 December31,2019 209,530 $ 248,665 $ - 12,351 - 1,975 686 522 210,216 $ 263,513 $	March31,2019
		412,719 $ 87,302 4,744 522
		505,287 $

The advance receipts and advance sales receipts on March 31,2020 are classified as contract liabilities. Please refer to Note 6(21).

~36~

- (16) Long term borrowings

Type ofborrowings Long-term bank borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings	Borrowing period	Repayment term The loan is fully disbursed once the contract signed; interest is repayable monthly; principal is repayable monthly in 48 installments with a year grace period on principal only Starting from September 5, 2019, principal is repayable at maturity; interest is repayable monthly Starting from August 15, 2019, principal is repayable quarterly; interest is repayable monthly Repayment date is two years after the borrowing date; interest is repayable Starting from October 14, 2018, principal and interest are repayable monthly in 48 installments Starting from October 3, 2016, principal and interest are repayable monthly The loan is disbursed within three years after contract is signed; interest is repayable monthly; principal is repayable monthly in 48 installments with a 3-year grace period on principal only The 1stinstallment is 27 months after the date of initial drawdown with total 12 quarterly installments; US$120,650 is repayable in the 1st~11thinstallments and US$120,580 is repayable in the 12th installment Starting from May 30, 2015, principal and interest are repayable monthly	March31,2020
	From November 26, 2018 to November 26, 2023 From July 8, 2019 to August 5, 2022 From August 31, 2016 to February 15, 2023 From April 12, 2016 to April 14, 2021 From September 14, 2017 to September 14, 2022 From September 3, 2015 to September 3, 2020 From December 26, 2019 to December 26, 2026 From September 3, 2015 to September 3, 2020 From April 30, 2015 to April 30, 2020		151,333 $ 88,006 79,999 57,933 18,890 13,978 11,500 7,291 3,333

~37~

==> picture [507 x 244] intentionally omitted <==

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

Type of borrowings Borrowing period Repayment term March 31, 2020
Secured borrowings From January 6, 2016 to January 6, Principal and interest are repayable 315,972
2031 monthly after a 3-year grace period
Secured borrowings From December 26, 2019 to December The loan is disbursed within three years 95,600
26, 2026 after contract signed; interest is
repayable monthly; principal is
repayable monthly in 48 installments
with a 3-year grace period on principal
only
Secured borrowings From January 6, 2016 to January Starting from February 6, 2016,
6,2021 principal and interest are repayable
monthly 25,000
$ 868,835
Less: Current portion ( 209,530)
$ 659,305
Interest rate range 0.75%~3.65%
(Remainder of page intentionally left blank)
----- End of picture text -----

~38~

Type of borrowings	Repayment term	December31,2019	December31,2019
Long-term bank borrowings
Unsecured borrowings	Starting from December 2019, principal is repayable monthly	$	195,833
	in 48 installments; interest is repayable monthly
Unsecured borrowings	Starting from September 2019, principal is repayable at		87,415
	maturity;interest is repayable quarterly
Unsecured borrowings	Starting from August 2019, principal is repayable quarterly in		86,666
	15 installments; interest is repayable monthly
Unsecured borrowings	Starting from April 2018, principal is repayable quarterly in 13		69,082
	installments; interest is repayable quarterly
Unsecured borrowings	Starting from October 2016, principal is repayable monthly in		20,798
	48 installments; interest is repayable monthly
Unsecured borrowings	Starting from October 2018, principal is repayable monthly in		20,611
	48 installments; interest is repayable monthly
Unsecured borrowings	Starting from August 2018, principal is repayable quarterly in		14,200
	7 installments; interest is repayable monthly
Unsecured borrowings	Starting from May 2015, principal is repayable monthly in 60		13,333
	installments; interest is repayable monthly
Unsecured borrowings	Starting from December 2022, principal is repayable monthly		11,500
	in 48 installments; interest is repayable monthly
Unsecured borrowings	Starting from September 2017, principal is repayable quarterly		10,849
	in 12 installments; interest is repayable quarterly
Secured borrowings	Starting from January 2019, principal is repayable monthly in		323,264
	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
		$	886,051
Less: Current portion		(	248,665)
		$	637,386
Interest rate range			0.75%~4.59%

~39~

Type ofborrowings Long-term bank borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Secured borrowings Secured borrowings Secured borrowings Less: Current portion Interest rate range

Repayment term March31,2019 Starting from December 2019, principal is repayable monthly in 48 installments; interest is repayable monthly 200,000 $ Starting from April 2018, principal is repayable quarterly in 13 installments; interest is repayable quarterly 106,629 Starting from August 2019, principal is repayable quarterly in 15 installments; interest is repayable monthly 100,000 Starting from May 2018, principal is repayable quarterly in 8 installments; interest is repayable monthly 59,000 Starting from August 2018, principal is repayable quarterly in 7 installments; interest is repayable monthly 57,100 Starting from May 2015, principal is repayable monthly in 60 installments; interest is repayable monthly 46,667 Starting from October 2016, principal is repayable monthly in 48 installments; interest is repayable monthly 42,762 Starting from December 2018, principal is repayable monthly in 48 installments; interest is repayable monthly 38,300 Starting from October 2018, principal is repayable monthly in 48 installments; interest is repayable monthly 26,967 Starting from June 2018, principal is repayable quarterly in 8 installments; interest is repayable monthly 26,000 Starting from December 2017, principal is repayable quarterly in 12 installments; interest is repayable quarterly 22,308 Starting from March 2018, principal is repayable quarterly in 8 installments; interest is repayable monthly 11,250 Starting from January 2019, principal is repayable monthly in 144 installments; interest is repayable monthly 345,139 Starting from December 2018, principal is repayable monthly in 144 installments; interest is repayable monthly 280,254 Starting from February 2016, principal is repayable monthly in 60 installments; interest is repayable monthly 55,000 1,417,376 $ 412,719) ( 1,004,657 $ 1.14%~4.59%

~40~

(17) Pensions

• A. (a) The Company and its domestic subsidiaries have 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 prior to retirement. The Company and its domestic subsidiaries contribute 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) For the aforementioned pension plan, the Group recognised pension costs of $56 and $53 for the three months ended March 31, 2020 and 2019, respectively.

  • (c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2020 amount to $240.

• 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 Company’s mainland China subsidiaries, have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage for the three months ended March 31, 2020 and 2019 both were 8%. Other than the monthly contributions, the Group has no further obligations.

  • (c) The pension costs under the defined contribution pension plan of the Group for the three months ended March 31, 2020 and 2019 were $2,208 and $6,392, respectively.

• (18) Share capital

• A. As of March 31, 2020, the Company’s authorised capital was $800,000, constituting 80,000 thousand shares and the paid-in capital was $741,389 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

~41~

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

Expressed in thousand shares Three months ended March 31, 2020

Number of shares as of beginning and end of the period 74,124

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

Expressed in thousand shares Three months ended March 31, 2019 Number of shares as of beginning and end of the period 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 95] intentionally omitted <==

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

March 31, 2020 March 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 15 $ 526 15 $ 526
to employees
----- 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).

~42~

(19) 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.

March 31, 2020 December 31, 2019March 31, 2019

Used to offset deficits, distributed as cash dividends or transferred to share capital Additional paid-in capital in excess of parordinary share

==> picture [494 x 122] intentionally omitted <==

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

ordinary share $ 1,158,876 $ 1,158,876 $ 1,158,876
Difference between consideration and carrying
amount of subsidiaries acquired $ 2,035 $ 2,035 $ -
Used to offset accumulated deficits only
Changes in ownership interests in subsidiaries $ 27,691 $ 27,691 $ 25,492
Not for any other purposes
Employee stock options $ 4,422 $ 4,422 $ 4,422
----- End of picture text -----

• A. 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.

• B. 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.

(20) 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 by the shareholders’ meeting.

• 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

~43~

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 Board of Directors on March 6, 2020 and the appropriation of 2018 earnings had been approved by the shareholders during their meeting on May 29, 2019.Details summarised below:

Legal reserve appropriated Special reserve appropriated Cash dividend	Amount Dividend per share (in dollars) Amount Dividend per share(in dollars) 37,634 $ 30,790 $ 31,421 48,458 148,248 2.00 $ 148,248 2.00 $ 2018 2019 Years endedDecember31,	Amount Dividend per share (in dollars) Amount Dividend per share(in dollars) 37,634 $ 30,790 $ 31,421 48,458 148,248 2.00 $ 148,248 2.00 $ 2018 2019 Years endedDecember31,	Amount Dividend per share (in dollars) Amount Dividend per share(in dollars) 37,634 $ 30,790 $ 31,421 48,458 148,248 2.00 $ 148,248 2.00 $ 2018 2019 Years endedDecember31,
	Amount Dividend per share (in dollars) 37,634 $ 31,421 148,248 2.00 $	Amount	Dividend per share(in dollars)
		30,790 $ 48,458 148,248	2.00 $

As at May 12, 2020, the abovementioned 2019 earnings appropriation has not yet been approved by the shareholders.

(21) Operating revenue

• A. Disaggregation of revenue from contracts with customers

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

products:
Auto parts Others		Three months ended March 31,
		2020 494,170 $ 5,942 500,112 $	2019 640,939 $ 1,560 642,499 $

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B. Contract liabilities

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

March 31, 2020

Contract liabilities: Contract liabilities - advance sales receipts $ 19,631

• (a) As at December 31, 2019, March 31, 2019 and January 1, 2019, the contractual liabilities were $14,326, $92,046 and $28,641, respectively, shown as ‘other current liabilities’, refer to Note 6(15) for details.

• (b) For the three months ended March 31, 2020, revenue recognised that was included in the contract liability balance at the beginning of the period amounted to $3,554.

(22) Other income

Other income
Interest income Rent income Other income - others	2020 2019 3,465 $ 7,683 $ 1,263 - 3,000 7,574 7,728 $ 15,257 $ Three months ended March 31,
	3,465 $ 1,263 3,000 7,728 $	7,683 $ - 7,574 15,257 $

(23) Other gains and losses

Other gains and losses
Foreign exchange gains Net (losses) gains on financial assets and liabilities at fair value through profit or loss Other losses	Three months ended March 31,
	2020	2019
	4,610 $ 6,850) ( 367) ( 2,607) ($	32,492 $ 10,981 5,878) ( 37,595 $

(24) Finance costs

Interest expense

Three months ended March 31,	Three months ended March 31,
2020	2019
4,699 $	10,090 $

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(25) Expenses by nature

Expenses by nature
		Three months	ended	March 31,
		2020		2019
Employee benefit expense	$	87,849	$	91,397
Depreciation charges on property,
plant and equipment		74,250		79,642
Depreciation charges on right-of-use assets		1,041		1,119
Depreciation charges on investment property		231		-
Amortisation		1,769		3,714
	$	165,140	$	175,872

(26) Employee benefit expense

Employee benefit expense
Wages and salaries Labour and health insurance fees Pension costs Other personnel expenses Short-term employee benefits Pension costs Other employee benefits		Threemonths endedMarch31,2020 75,264 $ 5,168 2,264 5,153 87,849 $ Threemonths endedMarch31,2019
		77,130 $ 6,445 7,822 91,397 $

• 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 three months ended March 31, 2020 and 2019, the accrued employees’ compensation and directors’ remuneration were as follows:

directors’ remuneration were as follows:
Employees’ compensation Directors’ remuneration		Three months ended March 31,
		2020		2019
		1,215 $ 935 2,150 $		1,799 $ 1,383
				3,182 $

For the three months ended March 31, 2020 and 2019, the employees’ compensation and directors’ remuneration were estimated and accrued based on 1.3% and 1% 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

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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.

(27) Income tax

A. Income tax expense

(a) Components of income tax expense:

System” at the website of the Taiwan Stock Exchange. Income tax A. Income tax expense (a) Components of income tax expense:	System” at the website of the Taiwan Stock Exchange. Income tax A. Income tax expense (a) Components of income tax expense:	System” at the website of the Taiwan Stock Exchange. Income tax A. Income tax expense (a) Components of income tax expense:
B. The Company’s and domestic subsidiaries’ income tax returns through 2018 have been assess and approved by the Tax Authority. Earnings per share Earnings per share of ordinary shares: 2020 2019 Current tax: Current tax on profits for the period 15,674 $ 32,220 $ Deferred tax: Origination and reversal of temporary differences 5,548 5,007) ( Income tax expense 21,222 $ 27,213 $ Three months ended March 31, Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (share in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent 69,845 $ 74,124 0.94 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 69,845 74,124 Assumed conversion of all dilutive potential ordinary shares -Employees’ compensation - 129 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 69,845 $ 74,253 0.94 $ Three months ended March31,2020
	Weighted average number of ordinary shares outstanding Amount after tax (share in thousands) 69,845 $ 74,124 69,845 74,124 - 129 69,845 $ 74,253	Earnings per share (in dollars) 0.94 $ 0.94 $

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

(28) Earnings per share

Earnings per share of ordinary shares:

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		Three months ended March31,	Three months ended March31,	2019	2019
			Weighted average
			number of ordinary	Earnings per
			shares outstanding		share
	Amount	after tax	(share in thousands)		(in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent	$	107,925	74,125		1.46
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent		107,925	74,125
Assumed conversion of all dilutive
potential ordinary shares
-Employees’ compensation		-	201
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares	$	107,925	74,326	$	1.45

(29) Transactions with non-controlling interest

In May 2019, the Group acquired an additional 20% of shares of its subsidiary - UNITED SKILLS for a total cash consideration of $32,863. The carrying amount of non-controlling interest in UNITED SKILLS was $34,898 at the acquisition date. The shareholding ratio of the Group in UNITED SKILLS increased from 80% to 100% from that date. This transaction that did not result in a change in the Group’s control over UNITED SKILLS is accounted for as equity transaction. The effect on the equity attributable to owners of the parent is shown below:

Carrying amount of non-controlling interest acquired Consideration paid to non-controlling interest Capital surplus - difference between proceeds on actual acquisition of or disposal of equity interest in a subsidiary and its carrying amount	Year ended December 31, 2019
	34,898 $ 32,863) ( 2,035 $

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(30) Supplemental cash flow information

Investing activities with partial cash payments:

Supplemental cash flow information Investing activities with partial cash payments:
Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the period	Three months ended March 31, 2020
	13,611 $ 30,021 20,400) ( 23,232 $

(31) Changes in liabilities from financing activities

At January 1, 2020 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At March 31, 2020	Short-term borrowings		Long-term borrowings Guarantee deposits received Liabilities from financing activities-gross 886,051 $ 521 $ 1,141,440 $ 19,472) ( 535 127,285) ( 1,071 13) ( 1,670 1,185 - 2,226 868,835 $ 1,043 $ 1,018,051 $ 2020
	254,868 $ 108,348) ( 612 1,041 148,173 $

At January 1, 2019 Changes in cash flow from financing Impact of changes in foreign exchange rate At March 31, 2019					2019	2019	2019
		Short-term borrowings		Short-term notes and bills payable	Long-term borrowings	Guarantee deposits received		Treasury shares		Liabilities from financing activities-gross
		593,465 $ 90,000 623 684,088 $		- $ 50,000 - 50,000 $	1,510,660 $ 94,183) ( 899 1,417,376 $		541 $ 11 3 555 $	- $ 526) ( - 526) ($		2,104,666 $ 45,302 1,525 2,151,493 $

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7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties Relationship with the Company YU, CHE-MING Other related party (Note) DONGGUAN HIROSAWA AUTOMOTIVE TRIM Other related party (Note) CO., LTD. LOFTY SUCCESS GROUP LIMITED Other related party (Note)

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

(2) Significant related party transactions

A. Operating revenue

Three months ended Three months ended March 31, 2020 March 31, 2019 Sales of goods: - Other related parties $ - $ 310

Goods are sold based on the price that would be available to general customers. The credit terms to related parties and general customers are 30~90 days and 60~180 days after the monthly billings, respectively.

B. Receivables from related parties

Payables to related parties: Accounts receivable: Other related parties Other receivables: Other related parties Accounts payable: Other related parties	March31,2020 - $ - - $ March31,2020 - $	March31,2020 - $ - - $ March31,2020 - $	December31,2019 - $ - - $ December31,2019 - $	March31,2019	March31,2019
	$			345 $ 55
	$			400 $
					March31,2019
		- $			180 $

C. Payables to related parties:

The payables to related parties arise mainly from purchase transactions and are due two months after the date of purchase. The payables bear no interest.

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(3) Key management compensation

(3)Key management compensation	(3)Key management compensation	(3)Key management compensation
Pledged Assets The Group’s assets pledged as collateral are Salaries and other short-term employee benefits Post-employment benefits Pledged asset March31,2020 Financial assets at amortised cost -non-current 90,675 $ Property, plant and equipment 810,123 Other current assets 29,811 Other non-current assets - Guarantee deposits paid (shown as other assets - non-current ) 300 930,909 $			as follows: 2020 2019 4,378 $ 4,404 $ 9 13 4,387 $ 4,417 $ Threemonths endedMarch31, December31,2019 March31,2019 Purpose - $ - $ Long-term borrowings 700,097 1,126,279 Long-term borrowings 33,940 328,468 Guarantee for acceptance bill, short- term borrowings and provisional seizure 89,940 - Long-term borrowings 300 300 Natural gas for manufacturing 824,277 $ 1,455,047 $ Bookvalue
			as follows: $ Bookvalue
		March31,2020 90,675 $ 810,123 29,811 - 300 930,909 $	December31,2019	March31,2019
			- $ 700,097 33,940 89,940 300 824,277 $	- $ 1,126,279 328,468 - 300 1,455,047 $	Long-term borrowings Long-term borrowings Guarantee for acceptance bill, short- term borrowings and provisional seizure Long-term borrowings Natural gas for manufacturing

8. Pledged Assets

The Group’s assets pledged as collateral are as follows:

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

None.

(2) Commitments

As at March 31, 2020, December 31, 2019 and March 31, 2019, the Group’s capital expenditure contracted but not yet incurred in respect of machinery and equipment as well as construction of plants were $244,945, $213,559 and $239,069, respectively.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

None.

12. Others

(1) Capital management

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

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• B. The Group’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 Group has no obligation to comply with any external capital requirements.

• D. The key management of the Group monitors the capital structure every year, including capital costs and related risks, and the Group 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

ancial 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 instrument 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 - current Other financial assets - non-current Guarantee deposits paid		March31,2020	December31,2019			March31,2019
		28,223 $ 37,492 $ 775,887 $ 160,421 45,266 563,589 8,139 - - 1,363 1,554,665 $		42,045 $ 57,542 $ 700,630 $ 74,950 22,880 757,449 6,547 33,940 89,940 1,445 1,687,781 $		16,742 $ 64,125 $ 736,450 $ 536,268 63,099 614,377 8,546 328,468 - 2,429 2,289,637 $

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March 31, 2020 December 31, 2019 March 31, 2019

==> picture [448 x 246] intentionally omitted <==

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

Financial liabilities
Financial liabilities at fair value
through profit or loss
Financial liabilities held for trading $ - $ 6,742 $ -
Financial liabilities at amortised cost
Short-term borrowings $ 148,173 $ 254,868 $ 684,088
Short-term notes and bills
- - 50,000
payable
Notes payable 135,834 113,429 123,256
Accounts payable (including
163,857 247,776 265,757
related parties)
Other payables 116,639 168,141 142,671
Long-term borrowings
868,835 886,051 1,417,376
(including current portion)
Guarantee deposits received 1,043 521 555
$ 1,434,381 $ 1,670,786 $ 2,683,703
----- End of picture text -----

• B. Financial risk management policies

• (a) The Group’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 Group, 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 Group’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 Group 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

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

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

• iii.The Group 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.In credit risk management procedure, the default occurs when the contract payments are past due over 180 days.

• v.The Group’s businesses involve some non-functional currency operations (the Company’s functional currency: New Taiwan Dollars; certain subsidiaries’ functional currency: United States Dollar and Chinese Renminbi). 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:

==> picture [491 x 15] intentionally omitted <==

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

March 31, 2020
----- End of picture text -----

(Foreign currency: functional currency) Financial assets Monetary items USD : NTD Financial liabilities Monetary items USD : NTD	Foreign currency amount (Inthousands)	Exchange rate	Book value (NTD)	Sensitivityanalysis	Sensitivityanalysis	Sensitivityanalysis
				Degree of variation	Effect on profit or loss	Effect on other comprehensive income
	31,914 $ 9,331 $	30.225 $ 30.225 $	964,601 $ 282,029 $	1% 1%	9,646 $ 2,820 $	- $ - $

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December 31, 2019

vi.The total exchange gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the three months ended March 31, 2020 and 2019 amounted to $4,610 and $32,492, respectively. Foreign currency amount (Inthousands) Exchange rate Book value (NTD) Degree of variation Effect on profit or loss Effect on other comprehensive income (Foreign currency: functional currency) Financial assets Monetary items USD : NTD 40,986 $ 29.98 $ 1,228,760 $ 1% 12,288 $ - $ Financial liabilities Monetary items USD : NTD 10,211 $ 29.98 $ 306,126 $ 1% 3,061 $ - $ Foreign currency amount (Inthousands) Exchange rate Book value (NTD) Degree of variation Effect on profit or loss Effect on other comprehensive income (Foreign currency: functional currency) Financial assets Monetary items USD : NTD 46,535 $ 30.82 $ 1,434,209 $ 1% 14,342 $ - $ Financial liabilities Monetary items USD : NTD 8,708 $ 30.82 $ 268,381 $ 1% 2,684 $ - $ Sensitivityanalysis Sensitivityanalysis March 31, 2019	Sensitivityanalysis	Sensitivityanalysis	Sensitivityanalysis
	Degree of variation	Effect on profit or loss	Effect on other comprehensive income

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets 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 Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’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

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value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the three months ended March 31, 2020 and 2019 would have decreased/increased by $226 and $134 , 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 $300 and $513, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Group’s main interest rate risk arises from short-term and long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. During three months ended March 31, 2020 and 2019, the Group’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 three months ended March 31, 2020 and 2019 would have increased/decreased by $2,543 and $5,254, 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 Group 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 Group’s credit policy, each local entity in the Group 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 Group 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 Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. As at March 31, 2020, December 31, 2019 and March 31, 2019, the provision matrix is as follows:

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vi.Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows: Not past due 0 to 60 days 60 to 120 days 120 to 180 days 180 to 240 days Over 240 days Total March 31, 2020 Expected loss rate 0%-2% 7%~10% 60%~70% 90%~97% 100% 100% Total book value 471,831 $ 104,218 $ 8,899 $ 9,950 $ 1,257 $ 7,712 $ 603,867 $ Loss allowance 6,869) ( 8,905) ( 5,904) ( 9,631) ( 1,257) ( 7,712) ( 40,278) ( 0 to 120 days 121 to 180 days 181 to 240 days 241 to 360 days Over 360 days Total December 31, 2019 Expected loss rate 0%-1% 1%-10% 10%-50% 50%-100% 100% Total book value 711,666 $ 61,422 $ 20,781 $ 10,092 $ 19,258 $ 823,219 $ Loss allowance 3,814) ( 5,308) ( 6,943) ( 7,567) ( 19,258) ( 42,890) ( 0 to 120 days 121 to 180 days 181 to 240 days 241 to 360 days Over 360 days Total March 31, 2019 Expected loss rate 0%-1% 1%-10% 10%-50% 50%-100% 100% Total book value 634,506 $ 37,021 $ 10,872 $ 11,599 $ 21,873 $ 715,871 $ Loss allowance 3,243) ( 2,800) ( 2,127) ( 8,352) ( 21,873) ( 38,395) ( Accounts receivable Notes receivable At January 1 $ 42,822 68 $ Provision for impairment - 11 Reversal of impairment loss ( 2,281) - Effect of foreign exchange ( 263) - At March 31 $40,278 79 $ Accountsreceivable Notesreceivable At January 1 $ 39,410 137 $ Reversal of impairment loss ( 1,791) 19) ( Effect of foreign exchange 658 - At March 31 $ 38,277 118 $ March31,2020 March31,2019	180 to 240 days	Over 240 days	Over 240 days	Total 603,867 $ 40,278) ( Total
				823,219 $ 42,890) ( Total

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’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

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Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

ii. The Group has the following undrawn borrowing facilities:

Fixed rate: Expiring within one year Expiring beyond one year Undrawn borrowing facilities	March31,2020 630,000 $ 372,900 1,002,900 $ December31,2019 March31,2019 1,398,500 $ 170,000 $

iii.The table below analyses the Group’s non-derivative financial liabilities and net-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 nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

(Remainder of page intentionally left blank)

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Non-derivative financial liabilities:

March 31, 2020 Short-term borrowings Notes payable Accounts payable Other payables Long-term borrowings	Less than 1 year	Between 1 and 2 years	Between 2 and 3 years	Between 3 and 5 years	Over 5 years	Total
	149,753 $ 135,834 163,857 116,639 220,358	- $ - - - 134,404	- $ - - - 209,950	- $ - - - 119,129	- $ - - - 223,329	149,753 $ 135,834 163,857 116,639 907,170

Non-derivative financial liabilities:

Non-derivative financial liabilities:	ies:
December 31, 2019 Less than 1 year Short-term borrowings 258,470 $ Notes payable 113,429 Accounts payable 247,776 Other payables 168,141 Long-term borrowings 260,813 Derivative financial liabilities: December 31, 2019 Less than 1 year Forward foreign exchange contracts 6,742 $ Non-derivative financial liabilities: March 31, 2019 Less than 1 year Short-term borrowings 689,491 $ Short-term notes and bills payable 50,000 Notes payable 123,256 Accounts payable 265,757 Other payables 142,671 Long-term borrowings 439,901	Less than 1 year	Between 1 and 2 years	Between 2 and 3 years	Between 3 and 5 years	Over 5 years	Total
	258,470 $ 113,429 247,776 168,141 260,813 Less than 1 year	- $ - - - 149,085 Between 1 and 2 years	- $ - - - 205,789 Between 2 and 3 years	- $ - - - 170,799 Between 3 and 5 years	- $ - - - 237,934 Over 5 years	258,470 $ 113,429 247,776 168,141 1,024,420 Total
		- $ Between 1 and 2 years	- $ Between 2 and 3 years	- $ Between 3 and 5 years	- $ Over 5 years	$ 6,742 Total
March 31, 2019 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Long-term borrowings
	689,491 $ 50,000 123,256 265,757 142,671 439,901	- $ - - - - 257,214	- $ - - - - 167,987	- $ - - - - 242,459	- $ - - - - 376,818	689,491 $ 50,000 123,256 265,757 142,671 1,484,379

(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 Group’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 Group’s investment in forward foreign exchange contracts is included in Level 2.

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

• B. Fair value information of investment property at cost is provided in Note 6(10).

• C. 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, short-term notes and bills payable, notes payable, accounts payable (including related parties), other payables, long-term borrowings (including current portion) and guarantee deposits received.

• D. 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 as at March 31, 2020, December 31, 2019 and March 31, 2019 are as follows:

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

Level 1 March 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss 26,923 $ Financial assets at fair value through other comprehensive income - Equity securities 37,492 $ Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss - $		Level 1		Level 2		Level3 - $ - $ - $	Total
				1,300 $ - $ - $			28,223 $
							37,492 $
							- $

~60~

Level 1 December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss 42,045 $ Financial assets at fair value through other comprehensive income - Equity securities 57,542 $ Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss - $ Level 1 March 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss 15,472 $ Financial assets at fair value through other comprehensive income - Equity securities 64,125 $		Level 1		Level 2		Level3		Total 42,045 $ 57,542 $ 6,742 $ Total
				- $ - $ 6,742 $ Level 2		- $ - $ - $ Level3
		15,472 $ 64,125 $		1,270 $ - $		- $ - $		16,742 $ 64,125 $

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

• i. The instruments the Group 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. Forward exchange contracts are usually valued based on the current forward exchange rate.

• E. For the three months ended March 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

• F. For the three months ended March 31, 2020 and 2019, there was no transfer into or out from Level 3.

13. Supplementary Disclosures

(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.

~61~

• 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 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

(1) General information

The information provided to the Chief Operating Decision-Maker to allocate resources and evaluate segment performance focuses on area of operations. The Group is primarily engaged in manufacture of parts for the interior and exterior of automobiles and manages the business from a geographic perspective due to the difference characteristics in culture, environment and economic although the manufacture process and marketing strategy are the same throughout the operations. The reportable segments are as follows:

Domestic operation area - domestic consolidated entities.

Foreign operation area - foreign consolidated entities.

(2) Measurement of segment information

The Chief Operating Decision-Maker evaluates the performance of the operating segments based on a measure of adjusted profit from operations. This measurement basis excludes the effects of nonrecurring expenditure from the operating segments.

(3) Information about segment profit or loss, assets and liabilities

The segment information provided to the Chief Operating Decision-Maker for the reportable segments are as follows:

~62~

		Segment	Segment	revenue	revenue			Segment income	Segment income	(loss)
	Threemonths ended				March31		Threemonths ended			March31
		2020			2019			2020		2019
Domestic operations	$	349,310		$	375,488		$	101,677	$	125,731
Foreign operations		163,264			276,425	(		19,759)	(	45,067)
Inter-segment eliminations	(	12,462)		(	10,974)			5,255		4,810
Others			-		1,560			-		260
Total amount from
continuing operations	$	500,112		$	642,499			87,173		85,734
Foreign exchange gains								4,610		32,492
(Loss) gain on financial
assets and liabilities at
fair value through profit
or loss						(		6,850)		10,981
Other losses						(		367)	(	5,878)
Interest income								3,465		7,683
Rent income								1,263		-
Other income - others								3,000		7,574
Finance costs						(		4,699)	(	10,090)
Profit before income tax							$	87,595	$	128,496

~63~

Table 1

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

Loans to others

Three months ended March 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

(Note 1)	Creditor	Borrower	General ledger Is a related account party	Maximum outstanding balance during the three months ended March 31,2020	Balance at March 31,2020(Note 2)	Actual amount drawn down (Note 2)	Interest rate	Nature of loan (Note 4)	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Coll	ateral	Limit on loans granted to a single party (Note 3)	Ceiling on total loans granted(Note 3)	Footnote
												Item	Value
0 0 0	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.	Other receivables Y Other receivables Y Other receivables Y	77,000 $ 379,324 339,445	- $ 379,324 339,445	- $ 176,816 132,587	- 1.40% 3.35%~4.35%	2 2 2	- $ - -	Operating capital Operating capital Operating capital	- $ - -	N N N	- $ - -	352,961 $ 352,961 352,961	1,411,847 $ 1,411,847 1,411,847	Note 5 Note 7 Note 6 Note 8

• 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 March 31, 2020 and actual amount drawn down were calculated at the USD and RMB buying and selling spot exchange rate of 30.225 and 4.255 on March 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 by Y.C.C whose maximum outstanding balance and balance at March 31, 2020 amounted to NT$379,324 exceed limit on loans granted to a single party.

This is because the amount include NT$176,816 that was use to repay loans which will be matured in June 2020 and December 2021. Limit on loans maintains NT$202,508 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$7,500 thousand and RMB 26,500 thousand. Note 7: Loans granted to RISE BRIGHT approved by the Board of Directors amounted to US$12,550 thousand. Note 8: Its borrowing interest rate is 1.45%+6M libor~4.35%.

Table 1, Page 1

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

Provision of endorsements and guarantees to others Three months ended March 31, 2020

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Endorser/guarantor	Partybeingen	dorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of March 31,2020	Outstanding endorsement/ guarantee amount at March 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/ 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	705,923 $ 705,923	49,725 $ 395,544	40,160 $ 395,544	40,160 $ 274,644	- $ 90,675	1.14% 11.21%	1,411,847 $ 1,411,847	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 March 31, 2020 and actual amount drawn down were calculated at the USD buying and selling spot exchange rate of 30.225 on March 31, 2020.

• Note 5: Endorsements and guarantees to RISE BRIGHT HOLDINGS LTD. approved by the Board of Directors amounted to US$1,329 thousand.

• Note 6: Endorsements and guarantees to CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. approved by the Board of Directors amounted to US$13,087 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)

March 31, 2020

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of Marc	h 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. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD.	HIROCA HOLDINGS LTD. HIROCA HOLDINGS LTD. LASTER TECH CO., LTD. SHUN ON ELECTRONIC CO., LTD. NUUO INC. DA-LI DEVELOPMENT CO., LTD.	N N N N N N	Non-current financial assets at fair value through other comprehensive income Valuation adjustment Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Valuation adjustment	855,000 303,000 515,000 200,000 5,071 416	81,856 $ 44,364) (	1.02% 0.36% 0.68% 0.14% 0.04% 0.00%	37,492 $ 13,287 10,635 2,930 60 11
					37,492 $
					20,260 $ 17,641 7,064 277 11 18,330) (
					26,923 $

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

March 31, 2020

Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as at March 31, 2020 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts Footnote Expressed in thousands of NTD (Except as otherwise indicated)	Allowance for doubtful accounts Footnote Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD.	RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.	Subsidiary Subsidiary	178,668 132,709	- -	- -	- -	- -	- -	Notes 1 and 2 Notes 1 and 2

Note 1: The transactions were eliminated when preparing the consolidated financial statements. Note 2: Principal of loans plus interest and shown as other receivables.

Table 4, Page 1

Table 5

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

Significant inter-company transactions during the reporting periods

Three months ended March 31, 2020

Expressed in thousands of NTD

(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 1 1	Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.	RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. CHANGSHU XINXIANG AUTOMOBILE PARTS CO., LTD. CHANGSHU XINXIANG AUTOMOBILE PARTS CO., LTD.	1 1 3 3	Other receivables Other receivables Other accrued expenses Other receivables	178,668 $ 132,709 22,115 11,134	Principal and interest are repayable at the maturity date Interest is repayable quarterly 30 days after monthly billings 60 days after monthly billings	3.45% 2.57% 0.43% 0.22%

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 disclose.

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

Three months ended March 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial inves	tment amount	Shares h	eld as at March 31,2020	eld as at March 31,2020	Net profit (loss) of the investee for the three months ended March 31,2020	Investment income (loss) recognised by the Company for the three months ended March 31,2020	Footnote
				Balance as at March 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	42,863 $ 1,019,819 1,158,673	42,863 $ 1,019,819 1,158,673	5,000 - -	100.00% 100.00% 89.44%	50,786 $ 517,701 649,390	99) ($ 24,228) ( 25,697) (	99) ($ 24,228) ( 22,984) (	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

Three months ended March 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 Mainland China/ back to Taiwa months ended	from Taiwan to Amount remitted n for the three March 31,2020	Accumulated amount of remittance from Taiwan of Mainland China as of March 31,2020	Net income of investee as of March 31,2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended March 31,2020(Note 2)	Book value of investments in Mainland China as of March 31,2020	Accumulated amount of investment income remitted back to Taiwan as of March 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 75,865	2 2 2 2	827,609 $ 268,009 63,055 77,061	- - - -	- - - -	827,609 $ 268,009 63,055 77,061	24,401) ($ 4,757) ( 1,038) ( 21	89.44% 73.89% 89.44% 99.60%	21,824) ($ 3,515) ( 928) ( 21	319,783 $ 173,173 50,295 74,879	- $ - - -	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$2,510 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$2,500 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 three months ended March 31, 2020 was based on the financial statements that were reviewed by parent company’s CPA.

Ceiling on investments Investment amount approved by in Mainland China Accumulated amount of remittance from the Investment Commission of imposed by the Taiwan to Mainland China as of March the Ministry of Economic Affairs Investment Company name 31, 2020 (MOEA) Commission of MOEA Y.C.C. PARTS MFG. CO., $ 1,235,734 $ 1,235,289 $ 2,117,770 LTD.

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$39,391 thousand. The investment amount permitted by the Investment Commission of Ministry of Economic Affairs(MOEA) was US$39,391 thousand.

Table 7, Page 1

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

Major shareholders information

March 31, 2020

Table 8

Name of majorshareholders	Shares	Shares
	Numberofsharesheld	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 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 claculated by Taiwan Depository & Clearing Corporation.

The share capital which was recorded on the financial statements may 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 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 Market Observation Post System.

Table 8, Page 1