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

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

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT SEPTEMBER 30, 2020 AND 2019

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

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INDEPENDENT AUDITORS' REVIEW REPORT 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 sheet of Y.C.C. Parts Mfg. Co., Ltd. and subsidiaries (the “Group”) as at September 30, 2020, and the related consolidated statements of comprehensive income for the three months and nine months then ended, as well as the related statements of changes in equity and of cash flows for the nine 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 review 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 auditors. Those statements reflect total assets of NT$571,460 thousand, constituting 10.70% of the consolidated total assets, and total liabilities of NT$143,351 thousand, constituting 7.91% of the consolidated total liabilities as at September 30, 2020, and total comprehensive loss of NT$11,490 thousand and NT$4,584 thousand, constituting 19.51% and 5.97% of the consolidated total comprehensive income (loss) for the three months and nine months then ended, respectively.

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 auditors, 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 September 30, 2020, and of its consolidated financial performance for the three months and nine months then ended and its consolidated cash flows for the nine 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 nine months ended September 30, 2019 were reviewed by other independent auditors whose report thereon dated November 11, 2019 expressed a qualified conclusion on those statements.

Wang, Yu-Chuan Liu, Mei-Lan

For and on behalf of PricewaterhouseCoopers, Taiwan November 13, 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 independent auditors’ review report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

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

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Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2020, DECEMBER 31, 2019 AND SEPTEMBER 30, 2019

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30, 2020 and 2019 are reviewed, not audited)

Assets	September 30, 2020 AMOUNT % `$` `657,399` `12` `38,684` `1` `423,530` `8` `55,695` `1` `555,340` `10` `6,028` `-` `-` `-` `302,728` `6` `41,022` `1` `2,080,426` `39` `47,281` `1` `2,631,976` `49` `141,871` `3` `16,369` `-` `37,428` `1` `110,483` `2` `273,283` `5` `3,258,691` `61` `$` `5,339,117` `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`	September 30, 2019	September 30, 2019
	AMOUNT `$` `657,399` `38,684` `423,530` `55,695` `555,340` `6,028` `-` `302,728` `41,022` `2,080,426` `47,281` `2,631,976` `141,871` `16,369` `37,428` `110,483` `273,283` `3,258,691` `$` `5,339,117`	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 `$` `670,071` `42,958` `284,387` `54,493` `635,001` `20,538` `58` `306,018` `172,774` `2,186,298` `55,661` `2,545,386` `119,908` `-` `171,847` `89,823` `347,450` `3,330,075` `$` `5,516,373`	%
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 1200 Other receivables 1220 Current income tax assets 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income-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` `1` `5` `1` `11` `-` `-` `6` `4`
				`40`
				`1` `46` `2` `-` `3` `2` `6`
				`60`
				`100`

(Continued)

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Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2020, DECEMBER 31, 2019 AND SEPTEMBER 30, 2019

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30, 2020 and 2019 are reviewed, not audited)

					September 30, 2020	September 30, 2020			December 31, 2019	December 31, 2019			September 30, 2019	September 30, 2019
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(13)		`$`	`436,316`		`8`	`$`	`254,868`		`5`	`$`	`307,456`		`6`
2110	Short-term notes and bills payable				`-`		`-`		`-`		`-`		`50,000`		`1`
2120	Financial liabilities at fair value	6(2)
	through profit or loss - current				`10,214`		`-`		`6,742`		`-`		`1,792`		`-`
2130	Contract liabilities-current	6(21)			`21,177`		`-`		`-`		`-`		`-`		`-`
2150	Notes payable				`109,758`		`2`		`113,429`		`2`		`169,041`		`3`
2170	Accounts payable				`246,520`		`5`		`247,776`		`5`		`240,337`		`4`
2200	Other payables	6(14)			`122,584`		`2`		`168,141`		`3`		`149,304`		`3`
2230	Current income tax liabilities				`93,654`		`2`		`51,289`		`1`		`22,482`		`-`
2300	Other current liabilities	6(15)			`157,208`		`3`		`263,513`		`5`		`292,674`		`5`
21XX	Total current liabilities				`1,197,431`	`22`			`1,105,758`	`21`			`1,233,086`	`22`
	Total non-current liabilities
2540	Long-term borrowings	6(16)			`607,427`	`12`			`637,386`	`12`			`690,650`	`13`
2600	Other non-current liabilities				`7,787`		`-`		`7,516`		`-`		`7,870`		`-`
25XX	Total non-current liabilities				`615,214`	`12`			`644,902`	`12`			`698,520`	`13`
2XXX	Total Liabilities				`1,812,645`	`34`			`1,750,660`	`33`			`1,931,606`	`35`
	Equity attributable to owners of
	parent
	Share capital	6(18)
3110	Share capital - common stock				`741,389`	`14`			`741,389`	`14`			`741,389`	`13`
	Capital surplus	6(19)
3200	Capital surplus				`1,193,024`	`23`			`1,193,024`	`23`			`1,193,024`	`22`
	Retained earnings	6(20)
3310	Legal reserve				`317,795`		`6`		`280,161`		`5`		`280,161`		`5`
3320	Special reserve				`119,480`		`2`		`88,059`		`2`		`88,059`		`2`
3350	Unappropriated retained earnings				`1,174,236`	`22`			`1,303,340`	`24`			`1,278,849`	`23`
	Other equity interest
3400	Other equity interest		`(`		`129,224 ) (`		`3) (`		`119,481 ) (`		`3) (`		`110,095) (`		`2)`
3500	Treasury shares	6(18)	`(`		`526 )`		`- (`		`526 )`		`- (`		`526)`		`-`
31XX	Equity attributable to owners
	of the parent				`3,416,174`	`64`			`3,485,966`	`65`			`3,470,861`	`63`
36XX	Non-controlling interests				`110,298`		`2`		`111,923`		`2`		`113,906`		`2`
3XXX	Total equity				`3,526,472`	`66`			`3,597,889`	`67`			`3,584,767`	`65`
	Significant contingent liabilities and	9
	unrecognised contract commitments
3X2X	Total liabilities and equity			`$`	`5,339,117`	`100`		`$`	`5,348,549`	`100`		`$`	`5,516,373`	`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 NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

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

(UNAUDITED)

					Three months ended	Three months ended	Three months ended	September 30			Nine months ended	Nine months ended	Nine months ended	September 30
					2020			2019			2020			2019
	Items	Notes			AMOUNT	%		AMOUNT	%		AMOUNT	%		AMOUNT	%
4000	Sales revenue	6(21) and 7(2)		`$`	`607,721`	`100`	`$`	`633,722`	`100`	`$`	`1,529,939`	`100`	`$`	`1,931,099`	`100`
5000	Operating costs	6(6)(26)(27)	`(`		`425,349 ) (`	`70) (`		`441,999 ) (`	`70) (`		`1,076,188 ) (`	`71) (`		`1,365,675) (`	`71 )`
5900	Gross Profit				`182,372`	`30`		`191,723`	`30`		`453,751`	`29`		`565,424`	`29`
	Operating expenses	6(26)(27)
6100	Selling expenses		`(`		`31,915 ) (`	`5) (`		`36,975 ) (`	`6) (`		`92,559 ) (`	`6) (`		`112,710) (`	`6 )`
6200	General and administrative
	expenses		`(`		`39,289 ) (`	`7) (`		`38,251 ) (`	`6) (`		`98,317 ) (`	`6) (`		`104,929) (`	`5 )`
6300	Research and development
	expenses		`(`		`7,744 ) (`	`1) (`		`7,848 ) (`	`1) (`		`23,655 ) (`	`2) (`		`26,508) (`	`1 )`
6450	Expected credit impairment	12(2)
	gain (loss)				`1,883`	`- (`		`743 )`	`- (`		`1,468 )`	`-`		`533`	`-`
6000	Total operating expenses		`(`		`77,065 ) (`	`13) (`		`83,817 ) (`	`13) (`		`215,999 ) (`	`14) (`		`243,614) (`	`12 )`
6900	Operating profit				`105,307`	`17`		`107,906`	`17`		`237,752`	`15`		`321,810`	`17`
	Non-operating income and
	expenses
7100	Interest income	6(22)			`1,398`	`-`		`5,042`	`1`		`7,658`	`1`		`19,547`	`1`
7010	Other income	6(8)(23)			`8,704`	`1`		`6,840`	`1`		`15,530`	`1`		`62,737`	`3`
7020	Other gains and losses	6(24)	`(`		`50,517 ) (`	`8) (`		`15,521 ) (`	`3) (`		`110,231 ) (`	`7)`		`50,878`	`2`
7050	Finance costs	6(25)	`(`		`2,518 )`	`- (`		`6,761 ) (`	`1) (`		`10,951 ) (`	`1) (`		`23,936) (`	`1 )`
7000	Total non-operating income
	and expenses		`(`		`42,933 ) (`	`7) (`		`10,400 ) (`	`2) (`		`97,994 ) (`	`6)`		`109,226`	`5`
7900	Profit before income tax				`62,374`	`10`		`97,506`	`15`		`139,758`	`9`		`431,036`	`22`
7950	Income tax expense	6(28)	`(`		`20,486 ) (`	`3) (`		`18,963 ) (`	`3) (`		`52,497 ) (`	`3) (`		`82,773) (`	`4 )`
8200	Profit for the period			`$`	`41,888`	`7`	`$`	`78,543`	`12`	`$`	`87,261`	`6`	`$`	`348,263`	`18`

(Continued)

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Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

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

(UNAUDITED)

					Three months ended	Three months ended	Three months ended	September 30			Nine months ended	Nine months ended	Nine months ended	September 30
					2020			2019			2020			2019
	Items	Notes			AMOUNT	%		AMOUNT	%		AMOUNT	%		AMOUNT	%
	Other comprehensive income
	(loss)(net)
	Components of other
	comprehensive income (loss)
	that will not be reclassified to
	profit or loss
8316	Unrealised (losses) on	6(3)
	valuation of equity instruments
	at fair value through profit or
	loss		`($`		`258)`	`- ($`		`1,454)`	`- ($`		`10,261) (`	`1) ($`		`8,508)`	`-`
8310	Components of other
	comprehensive income that
	will not be reclassified to
	profit or loss		`(`		`258)`	`- (`		`1,454)`	`- (`		`10,261) (`	`1) (`		`8,508)`	`-`
	Components of other
	comprehensive income (loss)
	that will be reclassified to profit
	or loss
8361	Financial statements
	translation differences of
	foreign operations				`17,275`	`3 (`		`21,053) (`	`3) (`		`169)`	`- (`		`15,668) (`	`1)`
8360	Components of other
	comprehensive income
	(loss) that will be
	reclassified to profit or loss				`17,275`	`3 (`		`21,053) (`	`3) (`		`169)`	`- (`		`15,668) (`	`1)`
8300	Total other comprehensive
	income (loss) for the period			`$`	`17,017`	`3 ($`		`22,507) (`	`3) ($`		`10,430) (`	`1) ($`		`24,176) (`	`1)`
8500	Total comprehensive income for
	the period			`$`	`58,905`	`10`	`$`	`56,036`	`9`	`$`	`76,831`	`5`	`$`	`324,087`	`17`
	Profit (loss), attributable to:
8610	Owners of parent			`$`	`38,635`	`6`	`$`	`78,864`	`12`	`$`	`88,199`	`6`	`$`	`352,019`	`18`
8620	Non-controlling interests				`3,253`	`1 (`		`321)`	`- (`		`938)`	`- (`		`3,756)`	`-`
	Total			`$`	`41,888`	`7`	`$`	`78,543`	`12`	`$`	`87,261`	`6`	`$`	`348,263`	`18`
	Comprehensive income (loss)
	attributable to:
8710	Owners of parent			`$`	`53,592`	`9`	`$`	`59,719`	`10`	`$`	`78,456`	`5`	`$`	`329,819`	`17`
8720	Non-controlling interests				`5,313`	`1 (`		`3,683) (`	`1) (`		`1,625)`	`- (`		`5,732)`	`-`
	Total			`$`	`58,905`	`10`	`$`	`56,036`	`9`	`$`	`76,831`	`5`	`$`	`324,087`	`17`
	Basic earnings per share	6(29)
9750	Basic earnings per share			`$`		`0.52`	`$`		`1.06`	`$`		`1.19`	`$`		`4.75`
9850	Diluted earnings per share			`$`		`0.52`	`$`		`1.06`	`$`		`1.19`	`$`		`4.74`

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 NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

			Equityat	tributable to owners of t	tributable to owners of t	h	eparent	eparent			Non-controlling interests	Total equity
Share capital - common stock	Capital surplus, additional paid-in capital		Retained Earnings				Other equityinterest		Treasuryshares	Total
		Legal reserve	Special reserve	Total unappropriated retained earnings (accumulated deficit)		d	Financial statements translation ifferences of foreign operations	Total Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
`$` `741,389` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `741,389` `$` `741,389` `-` `-` `-` `-` `-` `-` `$` `741,389`	`$` `1,188,790` `-` `-` `-` `-` `-` `-` `-` `2,035` `2,199` `-` `-` `$` `1,193,024` `$` `1,193,024` `-` `-` `-` `-` `-` `-` `$` `1,193,024`	`$` `249,371` `-` `-` `-` `30,790` `-` `-` `-` `-` `-` `-` `-` `$` `280,161` `$` `280,161` `-` `-` `-` `37,634` `-` `-` `$` `317,795`	`$` `39,601` `-` `-` `-` `-` `48,458` `-` `-` `-` `-` `-` `-` `$` `88,059` `$` `88,059` `-` `-` `-` `-` `31,421` `-` `$` `119,480`		`$` `1,154,490` `352,019` `-` `352,019` `(` `30,790` `)` `(` `48,458` `)` `(` `148,248` `)` `-` `-` `-` `-` `(` `164` `)` `$` `1,278,849` `$` `1,303,340` `88,199` `-` `88,199` `(` `37,634` `)` `(` `31,421` `)` `(` `148,248` `)` `$` `1,174,236`		`($` `70,208 )` `-` `(` `13,692 )` `(` `13,692 )` `-` `-` `-` `-` `-` `-` `-` `-` `($` `83,900 )` `($` `95,167 )` `-` `518` `518` `-` `-` `-` `($` `94,649 )`	`($` `17,851 )` `-` `(` `8,508 )` `(` `8,508 )` `-` `-` `-` `-` `-` `-` `-` `164` `($` `26,195 )` `($` `24,314 )` `-` `(` `10,261 )` `(` `10,261 )` `-` `-` `-` `($` `34,575 )`	`$` `-` `-` `-` `-` `-` `-` `-` `(` `526` `)` `-` `-` `-` `-` `($` `526` `)` `($` `526` `)` `-` `-` `-` `-` `-` `-` `($` `526` `)`	`$` `3,285,582` `352,019` `(` `22,200 )` `329,819` `-` `-` `(` `148,248 )` `(` `526 )` `2,035` `2,199` `-` `-` `$` `3,470,861` `$` `3,485,966` `88,199` `(` `9,743 )` `78,456` `-` `-` `(` `148,248 )` `$` `3,416,174`	`$` `156,735` `(` `3,756 )` `(` `1,976 )` `(` `5,732 )` `-` `-` `-` `-` `-` `-` `(` `37,097 )` `-` `$` `113,906` `$` `111,923` `(` `938 )` `(` `687 )` `(` `1,625 )` `-` `-` `-` `$` `110,298`	`$` `3,442,317` `348,263` `(` `24,176` `)` `324,087` `-` `-` `(` `148,248` `)` `(` `526` `)` `2,035` `2,199` `(` `37,097` `)` `-` `$` `3,584,767` `$` `3,597,889` `87,261` `(` `10,430` `)` `76,831` `-` `-` `(` `148,248` `)` `$` `3,526,472`

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

NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense (including investment
property)

Depreciation expense - right-of-use assets

Amortisation expense

Expected credit impairment loss (gain)

Net loss (gain) on financial assets or liabilities
at fair value through profit or loss

Interest expense

Interest income

Dividend income

Gain on disposal of property, plant and
equipment

Impairment loss

Loss on market value decline and obsolescence
Unrealised foreign exchange loss
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable, net
Accounts receivable, net
Other receivables
Inventories
Other current assets
Other non-current assets
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Other current liabilities
Cash inflow generated from operations
Interest received
Dividend received
Interest paid
Income taxes paid
Net cash flows from operating activities Nine months ended September 30
Notes
2020
2019
$
139,758 $
431,036
6(26)
223,614
237,544
6(26)
3,393
-
6(26)
5,602
9,517
12(2)
1,468 (
533 )
6(24)
2,609 (
4,089 )
6(25)
10,951
23,936
6(22)
(
7,658 ) (
19,547 )
6(23)
(
4,036 ) (
4,797 )
6(24)
(
275 ) (
29 )
6(24)
56,522
-

-
5,402
15,372
4,085
(
32,815 ) (
5,800 )
200,416
83,568
(
1,169 ) (
14,457 )
(
38,841 )
60,802
(
13,087 ) (
10,828 )
4,405
-
6,851
-
(
3,671 )
28,428
(
1,256 ) (
88,517 )
(
39,889 )
8,743
121 (
2,891 )
528,385
741,573
9,344
20,758
4,036
-
(
11,299 ) (
24,254 )
(
8,590 ) (
110,602 )
521,876
627,475

(Continued)

~9~

Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through
profit or loss
Proceeds from disposal of financial assets at fair
value through profit or loss
Increase in financial assets at amortised cost
Acquisition of property, plant and equipment

Gain on disposal of property, plant and equipment
Acquisition of intangible assets

Acquisition of use-of-right assets

Decrease in refundable deposits
Decrease in other current assets
Increase in other non-current assets
Dividends received
Net cash flows (used in) from investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Decrease in short-term borrowings
Increase in short-term notes and bills payable

Proceeds from long-term borrowings
Repayments of long-term borrowings
Increase (decrease) in guarantee deposits received

Cash dividends paid

Change in non-controlling interests

Payments to acquire treasury shares

Net cash flows used in financing activities
Effect of exchange rate changes
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period Nine months ended September 30
Notes
2020
2019
($
15,379 ) ($
41,945 )
19,286
14,795
(
268,102 ) (
284,387 )
6(31)
(
81,866 ) (
60,971 )
275
414,213
6(11)
(
4,000 )
-
6(9)
(
32,819 )
-
12
58
33,940
219,084
(
119,687 ) (
124,086 )
-
4,797
(
468,340 )
141,558
355,651
690,000
(
170,513 ) (
977,679 )
6(32)
-
50,000
200,100
93,767
(
317,486 ) (
649,157 )
6(32)
273 (
16 )
6(32)
(
148,248 ) (
148,248 )
6(30)
- (
32,863 )
6(18)
- (
526 )
(
80,223 ) (
974,722 )
(
16,544 ) (
83,234 )
(
43,231 ) (
288,923 )
700,630
958,994
$
657,399 $
670,071

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

~10~

Y.C.C. PARTS MFG.CO.,LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 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.

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 November 13, 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:

==> picture [470 x 47] intentionally omitted <==

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

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

follows: New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 1 and IAS 8, ‘Disclosure initiative-definition of material’	January 1, 2020
Amendments to IFRS 3, ‘Definition of business’	January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’	January 1, 2020
Amendments to IFRS 16, ‘Covid-19-related rent concessions’	June 1, 2020 (Note)
Note: Earlier application from January 1, 2020 is allowed by FSC.

The above standards and interpretations have no significant impact to the 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

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

New Standards,Interpretations andAmendments	International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’	January 1, 2021

The above standards and interpretations have no significant impact to the Group’s financial condition

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and financial performance based on the Group’s assessment.

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

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

endorsed by the FSC are as follows:

New Standards,Interpretations andAmendments International Accounting
StandardsBoard

Amendments to IFRS 3, ‘Reference to the conceptual framework’
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of
assets between an investor and its associate or joint venture’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendments to IAS 1, ‘Classification of liabilities as current
or non-current’
Amendments to IAS 16, ‘Property, plant and equipment:
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling
a contract’
Annual improvements to IFRS Standards 2018-2020
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,
‘Interest Rate Benchmark Reform - Phase 2’ January 1, 2022
To be determined by
International Accounting
Standard Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022
January 1, 2022
January 1, 2022
January 1, 2021

endorsed by the FSC are as follows:
New Standards,Interpretations andAmendments	International Accounting StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts`-`cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018`-`2020 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform - Phase 2’	January 1, 2022 To be determined by International Accounting Standard Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2021

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

~12~

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 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.

~13~

B. Subsidiaries included in the consolidated financial statements:

Name of Investor	Name of Subsidiary	Business Activities September 30,2020 December 31,2019 September 30,2019 Holding company 100.00% 100.00% 100.00% Manufacturing automobiles and their parts 100.00% 100.00% 100.00% Holding company 89.44% 89.44% 89.44% Producing and selling interior and exterior accessories of automobiles 99.60% 99.60% - Producing and selling interior and exterior accessories of automobiles 100.00% 100.00% 100.00% Producing and selling interior and exterior accessories of automobiles 82.61% 82.61% 82.61% Producing and selling interior and exterior accessories of automobiles 100.00% 100.00% 100.00% Ownership(%)	Description Note 4 Note 2 Note 3 Note 5 Note 1 Note 4 Note 5 Note 5 Note 1 Note 5
The Company The Company RISE BRIGHT RISE BRIGHT CHINA FIRST CHINA FIRST CHINA FIRST	RISE BRIGHT HOLDINGS LTD. (RISE BRIGHT) UNITED SKILLS CO., LTD. (UNITED SKILLS) CHINA FIRST HOLDINGS LTD. (CHINA FIRST) CHANG JIE TECHNOLOGY CO., LTD. (CHANG JIE) CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. (CHANGSHU FUTE, formerly named CHANGSHU GUANLIN AUTOMOTIVE TRIM CO.,LTD.) LIAONING HETAI AUTOMOTIVE PARTS CO.,LTD. (LIAONING HETAI) CHANGSHU XINXIANG AUTOMOBILE PARTS CO., LTD. (CHANGSHU XINXIANG)

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, the Company’s shareholding ratio to UNITED SKILLS increased to 100%. Please refer to Note 6(30) 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

~14~

$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 2019, 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 nine months ended September 30, 2020 and 2019 were not reviewed by independent auditors 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 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

~15~

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;
- (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.

~16~

(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.
(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

~17~

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, 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

~18~

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.
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

~19~

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. Starting 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 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

~20~

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
(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.

~21~

  - (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 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.

~22~

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

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

~23~

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.
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

~24~

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 September 30, 2020, the Group recognised goodwill, net of impairment loss, amounting to $28,342.
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 September 30, 2020, the carrying amount of inventories was $302,728.

6. Details of Significant Accounts

(1) 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	September30,2020 December31,2019 434 $ 342 $ 76,568 112,664 560,022 557,516 20,375 30,108 657,399 $ 700,630 $ 0.13%~1.52% 0.01%~2.55%	September30,2019 252 $ 340,817 297,962 31,040 670,071 $ 0.01%~2.76%

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

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amortised cost’. Refer to Note 6(4) for details.

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

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

September30,2020
44,918
$ 6,234)
(
38,684
$ 10,214)
($ December31,2019
September30,2019
42,045
$ 42,958
$ 6,742)
($ 1,792)
($

A. The Group recognised financial assets and liabilities at fair value through profit or loss of $5,060 , ($3,083), ($2,609) and $4,089 for the three months and nine months ended September 30, 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:

Derivative financial assets (liabilities) Forward foreign exchange contracts Derivative financial assets (liabilities) Forward foreign exchange contracts Derivative financial assets (liabilities) Forward foreign exchange contracts	September30,2020	September30,2020
	Contract amount (Notionalprincipal)	Contract period
	Contract amount (Notionalprincipal)	Maturity period
	USD 10,450 thousand	2019.10.03 ~ 2019.10.23

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.

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

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

==> picture [475 x 139] intentionally omitted <==

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

Items September 30, 2020
Non-current items:
Equity instruments
Listed stocks $ 81,856
Valuation adjustment ( 34,575)
$ 47,281
Items December 31, 2019 September 30, 2019
Equity instruments - domestic listed stocks $ 57,542 $ 55,661
----- End of picture text -----

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 $47,281, $57,542 and $55,661 as at September 30, 2020, December 31, 2019 and September 30, 2019, respectively.
B. Due to the change of investment strategy, the Group sold $793 of equity instruments and resulted in cumulative losses on disposal amounting to $164 in February 2019, and it was transferred from other equity to unappropriated retained earnings.
C. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		Threemonths ended September30,	Threemonths ended September30,
		2020	2019
Equity instruments at fair value through
other comprehensive income
Fair value change recognised in other
comprehensive loss	($	258)	($	1,454)
Cumulative gains reclassified to retained
earnings due to derecognition	$	-	$	-
		Ninemonths ended September30,
		2020	2019
Equity instruments at fair value through
other comprehensive income
Fair value change recognised in other
comprehensive loss	($	10,261)	($	8,508)
Cumulative gains reclassified to retained
earnings due to derecognition	$	-	$	164

D. As at September 30, 2020, December 31, 2019 and September 30, 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk

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in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group were $47,281, $57,542 and $55,661 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).

(4) Financial assets at amortised cost

==> picture [477 x 60] intentionally omitted <==

A. As at September 30, 2020, December 31, 2019 and September 30, 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 $423,530, $74,950 and $284,387, respectively.
B. As of December 31, 2019 and September 30, 2019, restricted time deposits amounted to $93,807 and $93,120, 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 collateral 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

	September	September	30,2020	December	December	31,2019	September	September	30,2019
Notes receivable		$	55,863		$	22,948		$	54,600
Less: Allowance for
uncollectible accounts	(		168)	(		68)	(		107)
		$	55,695		$	22,880		$	54,493
	September		30,2020	December		31,2019	September		30,2019
Accounts receivable		$	599,367		$	800,271		$	673,385
Less: Allowance for
uncollectible accounts	(		44,027)	(		42,822)	(		38,384)
		$	555,340		$	757,449		$	635,001

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

==> picture [455 x 141] intentionally omitted <==

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

September 30, 2020 December 31, 2019 September 30, 2019
Notes Accounts Notes Accounts Notes Accounts
receivable receivable receivable receivable receivable receivable
0 to 120 days $ 55,863 $ 513,510 $ 22,948 $ 688,718 $ 54,600 $ 602,955
121 to 180 days - 40,605 - 61,422 - 33,353
181 to 240 days - 9,366 - 20,781 - 10,234
241 to 360 days - 13,528 - 10,092 - 7,832
Over 360 days - 22,358 - 19,258 - 19,011
$ 55,863 $ 599,367 $ 22,948 $ 800,271 $ 54,600 $ 673,385
----- End of picture text -----

The above ageing analysis was based on invoice date.

B. As of September 30, 2020, December 31, 2019 and September 30, 2019, the balances of accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2019, the balances of accounts receivable and notes receivable from contracts with customers amounted to $751,948 and $48,436, respectively.
C. As at September 30, 2020, December 31, 2019 and September 30, 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 $55,695, $22,880 and $54,493 as well as $555,340, $757,449 and $635,001, respectively.
D. Information relating to credit risk of notes receivable and accounts receivable is provided in Note 12(2).

(6) Inventories

12(2). nventories
Materials and supplies Work in progress Semi-finished goods Finished goods Merchandise Total Materials and supplies Work in progress Semi-finished goods Finished goods Merchandise Total		September30,2020
	Cost 107,959 $ 40,308 13,585 192,473 23,480 377,805 $	Allowance for valuation loss 28,283) ($ 7,075) ( 5,125) ( 34,594) ( - 75,077) ($ December31,2019 Bookvalue 61,208 $ 38,922 4,041 128,866 30,850 263,887 $	Bookvalue
			79,676 $ 33,233 8,460 157,879 23,480
			302,728 $
			September30,2019
			Bookvalue
			69,712 $ 33,774 2,722 160,161 39,649
			306,018 $

~29~

The cost of inventories recognised as expense for the period:

	Three months ended	Three months ended		Nine months ended
	September 30, 2020		September 30, 2020
Cost of goods sold	$	405,346	$	994,505
Unallocated fixed overheads		17,860		73,632
Loss on market value decline and obsolete and slow-moving inventories		4,330		13,256
Loss on physical inventory	(	2,566)	(	8,230)
Loss on scrapping inventory		379		3,025
	$	425,349	$	1,076,188

For the three months and nine months ended September 30, 2019, the operating cost related to inventory amounted to $441,999 and $1,365,675, respectively, including gain on reversal of decline in market value of $29 and loss on market value decline and obsolete and slow-moving inventories of $5,402. The Group reversed from a previous inventory write-down because of the increase of selling prices of inventories in certain markets.

(7) Other current assets

Other current assets
Prepayments Other financial assets Other current assets - others	September30,2020 39,344 $ - 1,677 41,021 $	December31,2019 16,578 $ 33,940 11,357 61,875 $	September 30, 2019
			18,699 $ 140,961 13,114
			172,774 $

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

(Remainder of page intentionally left blank)

~30~

(8) Property, plant and equipment

Property, plant and equipment
						Ninemonths ended			September	30,2020
		Beginning balance			Additions		Decreases		Transfers	Net exchange	differences		Ending balance
Cost
Land		$	956,365	$	-	$	-	$	-	$	-		$	956,365
Buildings and structures			1,519,897		5,770	(	9,094)		23,258	(	1,911)			1,537,920
Machinery and equipment			1,170,965		16,724	(	6,556)		43,193	(	2,088)			1,222,238
Molding equipment			1,615,001		18,111	(	14,524)		59,061	(	231)			1,677,418
Transportation equipment			29,976		905	(	1,181)		-	(	9)			29,691
Furniture equipment			4,438		116	(	881)		-	(	15)			3,658
Other equipment			168,298		15,914	(	14,269)		2,738	(	290)			172,391
Unfinished construction and
equipment under acceptance			73,826		19,006		-		36,366	(	499)			128,699
		$	5,538,766	$	76,546	($	46,505)	$	164,616	($	5,043)		$	5,728,380
Accumulated Depreciation
Buildings and structures	($		705,279)	($	52,921)	$	9,094	$	-	$	443	($		748,663)
Machinery and equipment	(		749,234)	(	72,612)		6,556		-		1,084	(		814,206)
Molding equipment	(		1,314,590)	(	81,347)		14,524		-		150	(		1,381,263)
Transportation equipment	(		24,654)	(	1,512)		1,181		-		8	(		24,977)
Furniture equipment	(		3,884)	(	312)		881		-		13	(		3,302)
Other equipment	(		124,220)	(	14,224)		14,269		-		182	(		123,993)
	($		2,921,861)	($	222,928)	$	46,505	$	-	$	1,880	($		3,096,404)
Total		$	2,616,905										$	2,631,976

~31~

					Ninemonths ended	Ninemonths ended	Ninemonths ended	September30,2019	September30,2019
	Beginning balance			Additions		Decreases		Transfers	Net exchange	differences		Ending balance
Cost
Land	$	1,370,550	$	-	($	414,185)	$	-	$	-		$	956,365
Buildings and structures		1,563,686		2,329	(	14,823)		1,401	(	6,940)			1,545,653
Machinery and equipment		1,085,683		11,438	(	5,832)		38,592	(	7,460)			1,122,421
Molding equipment		1,536,947		23,095	(	27,838)		53,790	(	645)			1,585,349
Transportation equipment		31,955		2,280	(	3,695)		-	(	26)			30,514
Furniture equipment		5,700		179	(	707)		-	(	46)			5,126
Other equipment		161,119		7,432	(	2,316)		2,847	(	959)			168,123
Unfinished construction and
equipment under acceptance		6,089		6,543		-	(	1,270)	(	76)			11,286
	$	5,761,729	$	53,296	($	469,396)	$	95,360	($	16,152)		$	5,424,837
Accumulated Depreciation
Buildings and structures	($	657,441)	($	55,287)	$	14,823	$	-	$	1,377	($		696,528)
Machinery and equipment	(	671,366)	(	70,387)		5,832		-		4,083	(		731,838)
Molding equipment	(	1,237,237)	(	91,781)		27,838		36		342	(		1,300,802)
Transportation equipment	(	26,261)	(	2,060)		3,695		-		19	(		24,607)
Furniture equipment	(	4,542)	(	640)		707		-		44	(		4,431)
Other equipment	(	110,096)	(	14,053)		2,316		-		588	(		121,245)
	($	2,706,943)	($	234,208)	$	55,211	$	36	$	6,453	($		2,879,451)
	$	3,054,786										$	2,545,386

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

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

~32~

A. On September 14, 2015, UNITED SKILLS acquired 3.7 hectares of land 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, 2017. 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	September 30, 2020 2,330 $ 0.97%	December31,2019 3,749 $ 1.16%	September30,2019 2,809 $
			1.16%

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) Land Transportation equipment (Business vehicles)	September30,2020 December31,2019 September30,2019 Carrying amount Carrying amount Carrying amount 138,945 $ 108,600 $ 115,918 $ 2,926 3,724 3,990 141,871 $ 112,324 $ 119,908 $ 2020 2019 Depreciation charge Depreciation charge 905 $ 832 $ 266 266 1,171 $ 1,098 $ Threemonths ended September30,	September30,2020 December31,2019 September30,2019 Carrying amount Carrying amount Carrying amount 138,945 $ 108,600 $ 115,918 $ 2,926 3,724 3,990 141,871 $ 112,324 $ 119,908 $ 2020 2019 Depreciation charge Depreciation charge 905 $ 832 $ 266 266 1,171 $ 1,098 $ Threemonths ended September30,	September30,2019
			Carrying amount
			115,918 $ 3,990
			119,908 $

		2020 Depreciation charge 905 $ 266 1,171 $

~33~

		Ninemonths ended September30,	Ninemonths ended September30,	Ninemonths ended September30,
		2020		2019
		Depreciation charge		Depreciation charge
Land	$	2,595	$	2,538
Transportation equipment
(Business vehicles)		798		798
	$	3,393	$	3,336

C. For the three months and nine months ended September 30, 2020 and 2019, the costs of additions to right-of-use assets were $0, $0, $32,819 and $0, respectively. Net exchange differences were $821 and $0 as of September 30, 2020 and 2019, respectively.
D. Information on profit or loss in relation to lease contracts are as follows:

Three months ended September 30,

	Three months ended September 30,	d September 30,
Items affecting profit or loss Expense on short-term lease contracts Expense on leases of low-value assets Items affecting profit or loss Expense on short-term lease contracts Expense on leases of low-value assets	2020 2019 332 $ 343 $ 167 $ - $ Ninemonths ended September30,	2019
		343 $
		- $
	2020 807 $ 513 $	2019
		1,032 $
		-

E. For the three months and nine months ended September 30, 2020 and 2019, the Group’s total cash outflow for leases were $371, $343, $1,192 and $1,032, respectively.
F. Information about the right-of-use assets that were pledged to others as collateral is provided in Note 8.

(10) Investment property

nvestment property
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 $		Ninemonths ended September30,2020
		Additions - $ - - $ 93) ($ 593) ( 686) ($

Nine months ended September 30, 2019: None.

~34~

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 Nine months ended September 30, 2020 September 30, 2020 792 $ 2,378 $ 228 $ 686 $ - $ - $

B. The fair value of the investment property held by the Group, which is the land use right and buildings and structures, as at September 30, 2020 was $20,153. 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 4.15%, after taking into consideration of future economic growth and results of inflation. The fair value is classified as a level 3 fair value.
C. 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.
D. CHANGSHU FUTE subleases its 36.5-year land use right in Changshu city, Jiangsu Province, China to DAQIAOJIXIE JIANGSU YOUXIANGONGSI (DAQIAOJIXIE) under noncancellable 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 to buy the investment property when the lease expires. On July 1, 2020, CHANGSHU FUTE re-signed the lease agreement with DAQIAOJIXIE and JIANGSU JIASHENGYU INTELLIGENT TECHNOLOGY., LTD (JIANGSU JIASHENGYU) and the lease term under this agreement is 2.5 years. As CHANGSHU FUTE pledged the buildings and structures as collateral to the Shanghai Pudong Development Bank for loans, it will terminate the agreement early with the DAQIAOJIXIE and JIANGSU JIASHENGYU and pay the relavant compensation if the bank exersies its rights to the pledged collateral and disposes it.
E. 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		September30,2020
		3,204 $ 4,182 7,386 $

F. Information about the investment property that was pledged to others as collateral is provided in Note 8.

~35~

(11) Intangible assets

Intangible assets
				Nine	months ended			September30,2020
	Beginning						Impairment		Net exchange			Ending
		balance	Additions		Decreases			loss		differences		balance
Cost
Goodwill	316,465 $		$	-	$	-	$	-	($	9,290)	$	307,175
Computer software		14,201		4,000	(	239)		-	(	7)		17,955
		330,666	$	4,000	($	239)	$	-	($	9,297)	$	325,130
Accumulated amortisation
Computer software	($	6,629)	($	2,484)	$	239	$	-	$	5	($	8,869)
Accumulated impairment
Goodwill	230,435) ($		$	-	$	-	($	56,522)	$	8,124	($	278,833)
Book value	$	93,602									$	37,428
				Nine	months ended			September 30, 2019
	Beginning						Impairment		Net exchange			Ending
		balance	Additions		Decreases			loss		differences		balance
Cost
Goodwill	324,223 $		$	-	$	-	$	-	$	3,431	$	327,654
Computer software		14,025		-	(	1,783)		-		97		12,339
		338,248	$	-	($	1,783)	$	-	$	3,528		339,993
Accumulated amortisation
Computer software	($	5,592)	($	2,075)	$	1,783	$	-	($	8)	($	5,892)
Accumulated impairment
Goodwill	160,555) ($		$	-	$	-	$	-	($	1,699)	($	162,254)
Book value	172,101 $										$	171,847

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 US$10,556 thousand and it arose mainly from anticipation of CHANGSHU FUTE that operating revenue will benefit from the growth in auto parts market in Mainland China. However, the actual operation in CHANGSHU FUTE is not as expected as the auto part market in Mainland China is impacted by the continuous weak economic environment. The Group recognised impairment losses for the goodwill of $56,522 and $0 for the nine months ended September 30, 2020 and 2019, respectively.
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.

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(12) Other non-current assets

Other non-current assets
Prepayments for business facilities Guarantee deposits paid Other financial assets - non-current Others	September30,2020 December31,2019 265,805 $ 310,734 $ 1,433 1,445 - 89,940 6,045 7,332 273,283 $ 409,451 $	September30,2019 335,771 $ 2,356 - 9,323
		347,450 $

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

(13) Short-term borrowings

(13)	in Note 8. Short-term borrowings
(14) (15)	Other payables Other current liabilities Type of borrowings Unsecured borrowings Secured borrowings Interest rate range Salaries and bonus payable Machinery and equipment payable Employees’ compensation payable Directors’ remuneration payable Others Long-term borrowings (including current portion) Advance receipts Advance sales receipts Others	September30,2020 79,584 $ 356,732 436,316 $ 0.97%~4.15% September30,2020 33,990 $ 24,701 6,551 2,967 54,375 122,584 $ September30,2020 156,565 $ - - 643 157,208 $	December 31, 2019 September30,2019 254,868 $ 307,456 $ - - 254,868 $ 307,456 $ 1.08%~4.29% 1.08%~4.29% December 31, 2019 September 30, 2019 43,562 $ 44,638 $ 30,021 22,791 6,197 7,634 4,767 4,450 83,594 69,791 168,141 $ 149,304 $ December31,2019 September 30, 2019 248,665 $ 266,091 $ 12,351 25,510 1,975 607 522 466 263,513 $ 292,674 $	September30,2019
				307,456 $ -
				307,456 $
				1.08%~4.29%
				266,091 $ 25,510 607 466
				292,674 $

The advance receipts and advance sales receipts on September 30, 2020 are classified as contract liabilities. Please refer to Note 6(21) for details.

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- (16) Long term borrowings

Type ofborrowings Long-term bank borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Unsecured borrowings Secured borrowings Secured borrowings Secured borrowings Less: Current portion Interest rate range	Borrowing period From November 26, 2018 to November 26, 2023 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 December 26, 2019 to December 26, 2026 From January 6, 2016 to January 6, 2031 From December 26, 2019 to December 26, 2026 From January 6, 2016 to January 6, 2021	Repayment term September30,2020 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 126,333 $ Starting from August 15, 2019, principal is repayable quarterly; interest is repayable monthly 66,665 Repayment date is two years after the borrowing date; interest is repayable quarterly 33,456 Starting from October 14, 2018, principal and interest are repayable monthly in 48 installments 14,549 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 18,300 Principal and interest are repayable monthly after a 3-year grace period 301,389 The loan is disbursed within three years after contract signed; interest is repayable monthly; principal is repayable monthly in 48 installments with a 3-year grace period on principal only 193,300 Starting from February 6, 2016, principal and interest are repayable monthly 10,000 763,992 $ 156,565) ( 607,427 $ 0.75%~3.65%

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Type of borrowings	Repayment term		December31,2019	December31,2019
Long-term bank
Unsecured borrowings	Starting from December 2019, principal is repayable		$	195,833
	monthly 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			86,666
	quarterly in 15 installments; interest is repayable monthly
Unsecured borrowings	Starting from April 2018, principal is repayable quarterly			69,082
	in 13 installments; interest is repayable quarterly
Unsecured borrowings	Starting from October 2016, principal is repayable			20,798
	monthly in 48 installments; interest is repayable monthly
Unsecured borrowings	Starting from October 2018, principal is repayable			20,611
	monthly in 48 installments; interest is repayable monthly
Unsecured borrowings	Starting from August 2018, principal is repayable			14,200
	quarterly in 7 installments; interest is repayable monthly
Unsecured borrowings	Starting from May 2015, principal is repayable monthly	in		13,333
	60 installments; interest is repayable monthly
Unsecured borrowings	Starting from December 2022, principal is repayable			11,500
	monthly in 48 installments; interest is repayable monthly
Unsecured borrowings	Starting from September 2017, principal is repayable			10,849
	quarterly in 12 installments; interest is repayable quarterly
Secured borrowings	Starting from January 2019, principal is repayable			323,264
	monthly in 144 installments; interest is repayable monthly
Secured borrowings	Starting from February 2016, Principal is repayable
	monthly in 60 installments; interest is repayable monthly			32,500
			$	886,051
Less: Current portion			(	248,665)
			$	637,386
Interest rate range			0.75%~4.59%
Type ofborrowings	September			30,2019
Long-term bank borrowings
Unsecured borrowings		$		495,642
Secured borrowings				461,099
		$		956,741
Less: Current portion	(			266,091)
		$		690,650
Interest rate range			1.14%~4.59%

(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

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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 $57, $54, $171 and $166 for the three months and nine months ended September 30, 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 nine months ended September 30, 2020 and 2019 both were 20%. 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 and nine months ended September 30, 2020 and 2019 were $1,655, $5,463, $5,708 and $17,111, respectively.
(18) Share capital
A. As of September 30, 2020, the Company’s authorised capital was $1,000,000, constituting 100,000 thousand shares and the paid-in capital was $741,389 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.
- (a) Movements in the number of the Company’s ordinary shares outstanding are as follows:

Expressed in thousand shares Nine months ended September 30, 2020

Number of shares as of beginning and end of the

period 74,124

(b) On September 30, 2019, the number of outstanding shares was as follows:

Expressed in thousand shares Nine months ended September 30, 2019

Number of shares as of beginning and end of the period

74,139

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

shares are as follows:
Name of company holding the shares Reason for reacquisition Number of thousand shares The Company To be reissued to employees 15 September	Carrying amount 526 $ 30, 2020	September 30, 2019
		Number of thousand shares Carrying amount 15 526 $

(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).

(Remainder of page intentionally left blank)

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(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.

September 30, 2020 December 31, 2019 September 30, 2019

September 30, 2020	December 31, 2019	September 30, 2019
Used to offset deficits, distributed as cash dividends or transferred to share capital (Note 1) Additional paid-in capital in excess of par-ordinary share 1,163,298 $ Difference between consideration and carrying amount of subsidiaries acquired 2,035 $ Used to offset accumulated deficits only (Note 2) Changes in ownership interests in subsidiaries 27,691 $ Not for any other purposes Employee stock options - $	1,158,876 $ 2,035 $ 27,691 $ 4,422 $	1,158,876 $
		2,035 $
		27,691 $
		4,422 $

Note 1: Such capital surplus can be used in offsetting deficit and distributed as cash dividends or transferred to capital provided that the Company has no deficit. However, the amount that can be transferred to capital is limited to a certain percentage of paid-in capital every year.
Note 2: Such capital surplus arises from the effect of changes in ownership interests in subsidiaries under equity transactions when there is no actual acquisition or disposal of subsidiaries by the Company, or from changes in capital surplus of subsidiaries accounted for using equity method.

(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 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

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in excess of 25% of the Company’s paid-in capital.

D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) The amounts previously set aside by the Company as special reserve in accordance with Order No. Financial-Supervisory-Securities-Corporate-1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.
E. The appropriation of 2019 earnings as approved by the stockholders resolved on May 29, 2020 and the appropriation of 2018 earnings had been approved by the shareholders during their meeting on May 29, 2019. Details summarised below:

Years ended December 31,

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

(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 Auto parts Others	Threemonths ended September30,
	2020 2019 587,286 $ 633,633 $ 20,435 89 607,721 $ 633,722 $ Ninemonths ended September30,	2019
		633,633 $ 89
		633,722 $
	2020 1,492,638 $ 37,301 1,529,939 $	2019
		1,920,795 $ 10,304
		1,931,099 $

B. Contract liabilities

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

September 30, 2020 Contract liabilities: Contract liabilities - advance sales receipts $ 21,177

(a) As of December 31, 2019, September 30, 2019 and January 1, 2019, the contractual liabilities were $14,326, $26,117 and $28,641, respectively, shown as ‘other current liabilities’, refer to Note 6(15) for details.
(b) For the three months and nine months ended September 30, 2020, revenue recognised that

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was included in the contract liability balance at the beginning of the period amounted to $2,274 and $6,534, respectively.

(22) Interest income

$2,274 and $6,534, respectively. Interest income
Other income Interest income from bank deposits Interest income from bank deposits Rent income Dividend income Other income - others Rent income Dividend income Other income - others	2020 2019 1,398 $ 5,042 $ 2020 2019 7,658 $ 19,547 $ Three months ended September 30, Nine months ended September 30, 2020 2019 1,337 $ 461 $ 4,036 4,797 3,331 1,582 8,704 $ 6,840 $ 2020 2019 4,381 $ 1,382 $ 4,036 4,797 7,113 56,558 15,530 $ 62,737 $ Threemonths ended September30, Ninemonths ended September30,
		62,737 $

(23) Other income

(24) Other gains and losses

Three months ended September 30,


Gains on disposal of property, plant and equipment		$	217		$	-
Foreign exchange losses	(		26,826)	(		12,269)
Gains (losses) on financial assets and liabilities at fair value through profit or loss			5,060	(		3,083)
Impairment loss	(		28,826)			-
Other losses	(		142)	(		169)
	($		50,517)	($		15,521)

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Nine months ended September 30,

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

==> picture [225 x 136] intentionally omitted <==

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

2020 2019
$ 275 $ 29
( 50,421) 52,867
( 2,609) 4,089
-
( 56,522)
( 954) ( 6,107)
($ 110,231) $ 50,878
----- End of picture text -----

(25) Finance costs

Finance costs (osses) gans on nanca asses an aes at fair value through profit or loss Impairment loss Other losses	2,609) ( 4,089 56,522) ( - 954) ( 6,107) ( 110,231) ($ 50,878 $	2,609) ( 4,089 56,522) ( - 954) ( 6,107) ( 110,231) ($ 50,878 $
Expenses by nature Interest expense Less: Capitalization of qualifying assets Interest expense Less: Capitalization of qualifying assets Employee benefit expense Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property Amortisation Employee benefit expense Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property Amortisation	2020 2019 4,848 $ 7,675 $ 2,330) ( 914) ( 2,518 $ 6,761 $ 2020 2019 13,281 $ 26,745 $ 2,330) ( 2,809) ( 10,951 $ 23,936 $ Threemonths ended September30, Nine months ended September 30, Three months endedSeptember30,
		2019
		91,351 $ 75,920 1,098 - 2,744
		171,113 $
	2020 239,056 $ 222,928 3,393 686 5,602 471,665 $	2019
		276,869 $ 234,208 3,336 - 9,517
		523,930 $

(26) Expenses by nature

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(27) Employee benefit expense

Employee benefit expense
		Three months ended		Nine months ended
		September30,2020		September30,2020
Wages and salaries	$	72,324	$	201,850
Labour and health insurance fees		5,161		14,491
Pension costs		1,712		5,879
Other personnel expenses		7,630		16,836
	$	86,827	$	239,056
		Three months ended		Nine months ended
		September 30, 2019		September 30, 2019
Short-term employee benefits	$	78,123	$	236,376
Pension costs		5,517		17,277
Other employee benefits		7,711		23,216
	$	91,351	$	276,869

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 and nine months ended September 30, 2020 and 2019, the accrued employees’ compensation and directors’ remuneration were as follows:

Three months ended September 30,

	Three months ended September 30,	d September 30,
Employees’ compensation Directors’ remuneration Employees’ compensation Directors’ remuneration	2020 2019 2,242 $ 1,301 $ 1,839 1,001 4,081 $ 2,302 $ Ninemonths ended September30,	2019
		1,301 $ 1,001
		2,302 $
	2020 3,708 $ 2,967 6,675 $	2019
		5,785 $ 4,450
		10,235 $

For the nine months ended September 30, 2020 and 2019, the employees’ compensation and directors’ remuneration were estimated and accrued based on 2.5% and 1.3% as well as 2% and 1%, respectively, of distributable profit of current year as of the end of reporting period.

C. Employees’ compensation and directors’ remuneration of 2019 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2019 financial statements.
D. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(28) Income tax

A. Income tax expense

Components of income tax expense

ome tax Income tax expense Components of income tax expense
		Threemonths ended		September30,
		2020		2019
Current tax:
Current tax on profits for the period	$	15,376	$	21,048
Deferred tax:
Origination and reversal of
temporary differences		5,110	(	2,085)
Income tax expense	$	20,486	$	18,963
		Nine months ended		September 30,
		2020		2019
Current tax:
Current tax on profits for the period	$	45,565	$	87,202
Tax on undistributed surplus earnings		7,952		3,973
Prior year income tax overestimation	(	1,847)		-
Total current tax		51,670		91,175
Deferred tax:
Origination and reversal of
temporary differences		827	(	8,402)
Income tax expense	$	52,497	$	82,773

B. The Company’s and domestic subsidiaries’ income tax returns through 2018 have been assessed and approved by the Tax Authority.
C. The Company incurred an income tax of $48,654 from the 2019 profit-seeking enterprise income tax (including the filing of unappropriated retained earnings of 2018), and applied for the installment payments in accordance with Article 26 of the Tax Collection Act and Decree No.10904533690 issued by the Ministry of Finance, R.O.C. on March 19, 2020.

(Remainder of page intentionally left blank)

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(29) Earnings per share

Earnings per share of ordinary shares:

Earnings per share Earnings per share of ordinary shares:
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares -Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares -Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (share in thousands) (in dollars) 38,635 $ 74,124 0.52 $ 38,635 74,124 - 53 38,635 $ 74,177 0.52 $ Three months endedSeptember30,2020 Three months endedSeptember30,2019
	Weighted average number of ordinary shares outstanding Amount aftertax (shareinthousands) 78,864 $ 74,124 78,864 74,124 - 136 78,864 $ 74,260	Earnings per share (indollars)
		1.06 $
		1.06 $

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Nine months ended September 30, 2020

	Nine months endedSeptember30,2020	30,2020
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares -Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares -Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (share in thousands) (in dollars) 88,199 $ 74,124 1.19 $ 88,199 74,124 - 118 88,199 $ 74,242 1.19 $ Ninemonths ended September30,2019	Earnings per share (in dollars)
		1.19 $
		1.19 $
	Weighted average number of ordinary shares outstanding Amount after tax (share in thousands) 352,019 $ 74,124 352,019 74,124 - 172 352,019 $ 74,296	Earnings per share (in dollars)
		4.75 $
		4.74 $

(30) 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 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

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effect on the equity attributable to owners of the parent is shown below:

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

	Carrying amount of non-controlling interest acquired 34,898 $ Consideration paid to non-controlling interest 32,863) ( Capital surplus - difference between proceeds on actual acquisition of or disposal of equity interest in a subsidiary and its carrying amount 2,035 $	34,898 $ 32,863) ( 2,035 $
(31)	Supplemental cash flow information Investing activities with partial cash payments: Ninemonths ended September30,2020 Purchase of property, plant and equipment 76,546 $ Add: Opening balance of payable on equipment 30,021 Less: Ending balance of payable on equipment 24,701) ( Cash paid during the period 81,866 $	Ninemonths ended September30,2020
		81,866 $

(32) Changes in liabilities from financing activities

(32)Changes in liabilities from financing activities Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment ( Cash paid during the period $		30,021 24,701) 81,866
Short-term borrowings Long-term borrowings (including current portion) Dividends payable At January 1, 2020 254,868 $ 886,051 $ - $ Additions for the period - - 148,248 Changes in cash flow from financing activities 185,138 117,386) ( 148,248) ( Impact of changes in foreign exchange rate 593) ( 220) ( - Changes in other non-cash items 3,097) ( 4,453) ( - At September 30, 2020 436,316 $ 763,992 $ - $ Short- term borrowings Short-term notes and bills payable Long-term borrowings (including current portion) Dividends payable At January 1, 2019 593,465 $ - $ 1,510,660 $ - $ Additions for the period - - - 148,248 Changes in cash flow from financing 287,679) ( 50,000 555,390) ( 148,248) ( Impact of changes in foreign exchange rate 1,670 - 1,471 - At September 30, 2020 307,456 $ 50,000 $ 956,741 $ - $	Guarantee deposits received	Liabilities from financing activities-gross
	521 $ - 273 4) ( - 790 $ Guarantee deposits received 541 $ - 16) ( 6 531 $	1,141,440 $ 148,248 80,223) ( 817) ( 7,550) (
		1,201,098 $ Liabilities from financing activities- gross 2,104,666 $ 148,248 941,333) ( 3,147 1,314,728 $

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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

Operating revenue

Three months ended Three months ended September 30, 2020 September 30, 2019 Sales of goods: - Other related parties $ - $ - Nine months ended Nine months ended September 30, 2020 September 30, 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 customer are 30~90 days and 60~180 days after the monthly billings, respectively.

(3) Key management compensation

respectively. Key management compensation
Salaries and other short-term employee benefits Post-employment benefits Salaries and other short-term employee benefits Post-employment benefits	Threemonths ended September30,
	2020 2019 4,993 $ 5,043 $ 8 13 5,001 $ 5,056 $ Ninemonths ended September30,	2019
		5,043 $ 13
		5,056 $
	2020 14,178 $ 26 14,204 $	2019
		14,991 $ 39
		15,030 $

~51~

8. Pledged Assets

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

Book value

==> picture [507 x 151] intentionally omitted <==

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

Pledged asset September 30, 2020 December 31, 2019 September 30, 2019 Purpose
Property, plant and $ 1,197,752 $ 700,097 $ 704,342 Short-term borrowings
equipment and long-term borrowings
- -
Right-of-use assets 81,162 short-term borrowings
- -
Investment property 16,369 short-term borrowings
Other current assets - 33,940 140,961 Guarantee for acceptance
Other non-current assets - 89,940 - Long-term borrowings
Guarantee deposits paid Natural gas for
(shown as other non- manufacturing
current assets) 327 300 300
$ 1,295,610 $ 824,277 $ 845,603
----- End of picture text -----

Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

None.

(2) Commitments

As at September 30, 2020, December 31, 2019 and September 30, 2019, the Group’s capital expenditure contracted but not yet incurred in respect of machinery and equipment as well as construction of plants were $328,715, $213,559 and $234,341, 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.
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.

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(2) Financial instruments

A. Financial instruments by category

September 30, 2020 December 31, 2019 September 30, 2019

ancial instruments Financial instruments by category September30,2020	ancial instruments Financial instruments by category September30,2020	December31,2019	December31,2019	September30,2019	September30,2019
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss 38,684 $ Financial assets at fair value through other comprehensive income Designation of equity instrument 47,281 $ Financial assets at amortised cost Cash and cash equivalents 657,399 $ Financial assets at amortised cost 423,530 Notes receivable 55,695 Accounts receivable 555,340 Other receivables 6,028 Other financial assets - current - Other financial assets - non-current - Guarantee deposits paid 1,433 1,699,425 $ September 30, 2020 Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trading 10,214 $ Financial liabilities at amortised cost Short-term borrowings 436,316 $ Short-term notes and bills payable - Notes payable 109,758 Accounts payable 246,520 Other payables 122,584 Long-term borrowings (including current portion) 763,992 Guarantee deposits received 790 1,679,960 $		42,045 $ 57,542 $ 700,630 $ 74,950 22,880 757,449 6,547 33,940 89,940 1,445 1,687,781 $ December31,2019		42,958 $ 55,661 $ 670,071 $ 284,387 54,493 635,001 20,538 140,961 - 2,356 1,807,807 $ September30,2019
	10,214 $ 436,316 $ - 109,758 246,520 122,584 763,992 790 1,679,960 $		6,742 $ 254,868 $ - 113,429 247,776 168,141 886,051 521 1,670,786 $		1,792 $ 307,456 $ 50,000 169,041 240,337 149,304 956,741 531 1,873,410 $

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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

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 Ren Min Bi. 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 Ren Min Bi 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 Ren Min Bi). 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:

~54~

		September30,2020	September30,2020	September30,2020
		Foreign
		currency
		amount	Exchange		Book value
	(Inthousands)		rate		(NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD	$	37,885	29.10	$	1,102,454
RMB : NTD		17,325	4.270		73,978
Financial liabilities
Monetary items
USD : RMB	$	3,900	6.81	$	113,490
		December31,2019
		Foreign
		currency
		amount	Exchange		Book value
	(Inthousands)		rate		(NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD	$	40,986	29.98	$	1,228,760
Financial liabilities
Monetary items
USD : NTD	$	10,211	29.98	$	306,126
		September30,2019
		Foreign
		currency
		amount	Exchange		Book value
	(Inthousands)		rate		(NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD	$	27,698	31.04	$	859,738
Financial liabilities
Monetary items
USD : NTD	$	10,559	31.04	$	327,761
vi. The total exchange (loss) gain, including realised and unrealised, arising				from significant
foreign exchange variation on the monetary		items held by	the Group for	the three months

~55~

and nine months ended September 30, 2020 and 2019, amounted to ($26,826), ($12,269), $50,421 and $52,867, respectively.

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

Nine months ended September 30, 2020 Sensitivity analysis Effect on other Degree of comprehensive variation Effect on profit or loss income (Foreign currency: functional currency) Financial assets Monetary items USD : NTD 1% $ 11,025 $ - RMB : NTD 1% 740 - Financial liabilities Monetary items USD : RMB 1% $ 1,135 $ - Nine months ended September 30, 2019 Sensitivity analysis Effect on other Degree of comprehensive variation Effect on profit or loss income (Foreign currency: functional currency) Financial assets Monetary items USD : NTD 1% $ 8,597 $ - Financial liabilities Monetary items 1% $ 3,278 $ -

Price risk

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets (liabilities) at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the 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 value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, per-tax profit for the three months and nine months ended September 30, 2020 and 2019 would have decreased/increased by $33, $85, $387 and $430 , 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 $2, $100, $473 and $557, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

~56~

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 nine months ended September 30, 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 and nine months ended September 30, 2020 and 2019 would have increased/decreased by $4,287, $3,197, $9,002 and $9,481, 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.

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.	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.	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.	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.	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.	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.	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.	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 (including notes receivable). On September 30, 2020, December 31, 2019 and September 30, 2019, the provision matrix is 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 September 30, 2020 Expected loss rate 0%-3% 6%~10% 60%~70% 90%~97% 100% 100% Total book value 567,576 $ 57,534 $ 12,772 $ 1,870 $ 6,746 $ 8,732 $ 655,230 $ Loss allowance 15,217) ( 3,874) ( 7,855) ( 1,771) ( 6,746) ( 8,732) ( 44,195) (
	0%-3% 567,576 $ 15,217) (	6%~10% 57,534 $ 3,874) (	60%~70% 12,772 $ 7,855) (	90%~97% 1,870 $ 1,771) (	100% 6,746 $ 6,746) (	100% 8,732 $ 8,732) (	655,230 $ 44,195) (

~57~

December 31, 2019 Expected loss rate Total book value Loss allowance September 30, 2019 Expected loss rate Total book value Loss allowance	0 to 120 days	121 to 180 days 1%-10% 61,422 $ 5,308) ( 121 to 180 days	181 to 240 days 241 to 360 days 10%-50% 50%-100% 20,781 $ 10,092 $ 6,943) ( 7,567) ( 181 to 240 days 241 to 360 days 10%-50% 50%-100% 10,234 $ 7,832 $ 3,336) ( 7,278) (	Over 360 days	Total 823,219 $ 42,890) ($ Total
	0%-1% 711,666 $ 3,814) ( 0 to 120 days			100% 19,258 $ 19,258) ( Over 360 days
	0%-1% 657,555 $ 5,531) (	1%-10% 33,353 $ 3,335) (		100% 19,011 $ 19,011) (	727,985 $ 38,491) ($

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

		September30,2020	September30,2020	September30,2020
	Accounts	receivable	Notes receivable				Total
At January 1	$	42,822	$	68		$	42,890
Provision for impairment		1,368		100			1,468
Effect of foreign exchange	(	163)		-	(		163)
At September 30	$	44,027	$	168		$	44,195
		September30,2019
	Accounts	receivable	Notesreceivable				Total
At January 1	$	39,410	$	137			39,547
Reversal of impairment loss	(	503)	(	30)	(		533)
Effect of foreign exchange	(	523)		-	(		523)
At September 30	$	38,384	$	107		$	38,491

(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 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	December31,2019 1,398,500 $	September30,2020
		350,000 $ 268,400
		618,400 $
		September30,2019
		540,000 $

~58~

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.

Non-derivative financial liabilities:

September 30, 2020 Short-term borrowings Notes payable Accounts payable Other payables Long-term borrowings Derivative financial liabilities:	Less than 1year	Between 1 and 2 years	Between 2 and 3 years	Total
	447,787 $ 109,758 246,520 122,584 162,871 Less than 1year	- $ - - - 117,892 Between 1 and 2 years	- $ - - - 92,648 Between 2 and 3 years	447,787 $ 109,758 246,520 122,584 788,717 Total
September 30, 2020 Forward foreign exchange contracts
	10,214 $	- $	- $	10,214 $

Non-derivative financial liabilities:

December 31, 2019 Less than 1 year Non-interest bearing liabilities $ 472,355 Floating interest rate liabilities 248,665 Fixed interest rate liabilities 254,868 975,888 $ December 31, 2019 Less than 1year Gross settled foreign exchange contracts - Inflows $ 553,003 - Outflows ( 559,745) 6,742) ($	Over 1year Total $ - $ 472,355 549,972 798,637 87,414 342,282 637,386 $ 1,613,274 $ Over 1year Total - $ 553,003 $ - 559,745) ( - $ 6,742) ($

~59~

Non-derivative financial liabilities:

September 30, 2019

Less than 1year Non-interest bearing liabilities 558,682 $ Floating interest rate liabilities 573,547 Fixed interest rate liabilities 50,000 1,182,229 $ September 30, 2019 Less than 1year Gross settled foreign exchange contracts - Inflows $ 324,168 - Outflows ( 325,960) 1,792) ($	Over 1year Total - $ 558,682 $ 690,650 1,264,197 - 50,000 690,650 $ 1,872,879 $ Over 1year Total - $ 324,168 $ - 325,960) ( - $ 1,792) ($

(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 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.

~60~

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 at September 30, 2020, December 31, 2019 and September 30, 2019 are as follows:
(a) The related information of natures of the assets and liabilities is as follows:

September 30, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income - Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income - Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss	Level 1 38,684 $ 47,281 $ - $ Level 1 42,045 $ 57,542 $ - $	Level 2 - $ - $ 10,214 $ Level 2 - $ - $ 6,742 $	Level3 - $ - $ - $ Level3 - $ - $ - $	Total
				38,684 $
				47,281 $
				10,214 $
				Total
				42,045 $
				57,542 $
				6,742 $

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==> picture [442 x 223] intentionally omitted <==

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

Level 1 Level 2 Level 3 Total
September 30, 2019
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss $ 42,958 $ - $ - $ 42,958
Financial assets at fair value through
other comprehensive income
- Equity securities $ 55,661 $ - $ - $ 55,661
Liabilities
Recurring fair value measurements
Financial liabilities at fair value through
profit or loss $ - $ 1,792 $ - $ 1,792
----- End of picture text -----

(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:

Listed shares

Market quoted price Closing price

ii. Forward exchange contracts are usually valued based on the current forward exchange rate.
E. For the nine months ended September 30, 2020 and 2019, there was no transfer between Level 1 and Level 2.
F. For the nine months ended September 30, 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.
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.

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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 evaluates the performance of the operating segments based on a measure of adjusted profit from operations. This measurement basis excludes the effects of non-recurring 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:

(Remainder of page intentionally left blank)

~63~

Segments are as follows `：`

Segments are as follows`：`
Domestic operations Foreign operations Inter-segment eliminations Others Total amount from continuing operations Interest income Rent income Dividend income Other income - others Impairment loss Foreign exchange (losses) gains Gain (loss) on financial assets and liabilities at fair value through profit or loss Gains on disposal of property, plant and equipment Other losses Finance costs Profit before income tax	Three months ended September 30,2020 Nine months ended September 30,2020 Nine months ended September 30,2019 362,995 $ 937,463 $ 1,063,800 $ 303,115 673,203 905,273 60,179) ( 89,407) ( 48,278) ( 1,790 8,680 10,304 607,721 $ 1,529,939 $ 1,931,099 $ Segment revenue	Three months ended September 30,2020 Nine months ended September 30,2020 Nine months ended September 30,2019 93,605 $ 246,816 $ 341,620 $ 3,278 28,674) ( 44,431) ( 8,424 19,610 22,873 - - 1,748 105,307 237,752 321,810 1,398 7,658 19,547 1,337 4,381 1,382 4,036 4,036 4,797 3,331 7,113 56,558 28,826) ( 56,522) ( - 26,826) ( 50,421) ( 52,867 5,060 2,609) ( 4,089 217 275 29 142) ( 954) ( 6,107) ( 2,518) ( 10,951) ( 23,936) ( 62,374 $ 139,758 $ 431,036 $ Segment income(loss)
		93,605 $ 3,278 8,424 - 105,307 1,398 1,337 4,036 3,331 28,826) ( 26,826) ( 5,060 217 142) ( 2,518) ( 62,374 $

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Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

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

Loans to others

Nine months ended September 30, 2020

(Note1)	Creditor	Borrower	General ledger Is a related account party	General ledger Is a related account party	Maximum outstanding balance during the nine months ended September 30,2020 (Note 5 and 6)	Balance at September 30, 2020 (Note 7,8 and 9)	Actual amount drawn down (Note2)	Interestrate	Nature of loan (Note4)	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtfulaccounts	Collateral	Collateral	Limit on loans granted to a single party (Note 3)	Ceiling on total loans granted (Note 3)	Footnote
													Item	Value
0 0 0 0	Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD.	UNITED SKILLS CO., LTD. RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. LIAONING HETAI AUTOMOTIVE PARTS CO.,LTD	Other receivables Other receivables Other receivables Other receivables	Y Y Y Y	77,000 $ 365,205 371,758 34,152	- $ 213,885 275,705 34,152	- $ 194,970 - -	- 1.40% 1.86%~4.35% -	2 2 2 2	- $ - - -	Operating capital Operating capital Operating capital Operating capital	- $ - - -	N N N N	- $ - - -	341,617 $ 341,617 341,617 341,617	1,366,469 $ 1,366,469 1,366,469 1,366,469	Note 10

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 September 30, 2020 and actual amount drawn down were calculated at the USD and RMB buying and selling spot exchange rate of 29.10 and 4.269 on September 30, 2020.

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

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

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

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

Note 5: Loans granted to RISE BRIGHT HOLDINGS LTD. by Y.C.C whose maximum outstanding balance and balance at September 30, 2020 amounted to NT$365,205 exceed limit on loans granted to a single party. This is because the amount includes NT$170,235 that was used to repay loans which will be matured in June 2020 and February 2021. Limit on loans maintains NT$194,970 after repaying from other loans.

Note 6: Loans granted to CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. by Y.C.C whose maximum outstanding balance and balance at September 30, 2020 amounted to NT$371,758 exceed limit on loans granted to a single party. This is because the amount includes NT$171,329 that was used to repay loans which will be matured in September 2020 and February 2021. Limit on loans maintains NT$200,429 after repaying from other loans.

Note 7: Loans granted to CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. approved by the Board of Directors amounted to US$5,000 thousand and RMB 30,500 thousand.

Note 8: Loans granted to RISE BRIGHT approved by the Board of Directors amounted to US$7,350 thousand.

Note 9: Loans granted to LIAONING HETAI AUTOMOTIVE PARTS CO., LTD approved by the Board of Directors amounted to RMB 8,000 thousand. Note 10: 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

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Nine months ended September 30, 2020

Number (Note 1)	Endorser/guarantor	Partybeingendorsed/guaranteed	Partybeingendorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of September 30,2020	Outstanding endorsement/ guarantee amount at September 30, 2020 (Note 4)	Actual amount drawn down (Note 4)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3)	Provision of endorsements/guar antees by parent company to subsidiary	Provision of endorsements/guarantees by subsidiary to parent company	Provision of endorsements/guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/guarantor(Note 2)
0 0	Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD.	RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.	2 3	683,234 $ 683,234	47,875 $ 380,822	14,550 $ 113,490	14,550 $ 113,490	- $ -	0.42% 3.31%	1,366,469 $ 1,366,469	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 September 30, 2020 and actual amount drawn down were calculated at the USD buying and selling spot exchange rate of 29.1 on September 30, 2020. Note 5: Endorsements and guarantees to RISE BRIGHT HOLDINGS LTD. approved by the Board of Directors amounted to US$500 thousand. Note 6: Endorsements and guarantees to CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. approved by the Board of Directors amounted to US$3,900 thousand.

Table 2, Page 1

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

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

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

September 30, 2020

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of September 30,2020	As of September 30,2020		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 - non current Valuation adjustment Current financial assets at fair value through profit or loss - current Current financial assets at fair value through profit or loss - current Current financial assets at fair value through profit or loss - current Current financial assets at fair value through profit or loss - current Current financial assets at fair value through profit or loss - current Valuation adjustment	855,000 298,000 515,000 200,000 5,071 457	81,856 $ 34,575) ( 47,281 $ 19,925 $ 17,641 7,064 277 11 6,234) ( 38,684 $	1.02% 0.36% 0.68% 0.14% 0.04% 0.00%	47,281 $ 16,480 15,064 7,040 87 13

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

September 30, 2020

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at September 30, 2020 (Note 1)	Turnover rate (Note3)	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date (Note 4)	Allowance for doubtful accounts	Footnote
					Amount	Action taken
Y.C.C. PARTS MFG. CO., LTD.	RISE BRIGHT HOLDINGS LTD.	Subsidiary	220,596 $	2.59%	- $	-	- $	- $	Notes 1

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

Note 2: It pertains to principal and interest aggregating to $195,905 from loans to the subsidiary shown as other receivables and revenue from sales of processing machine amounting to $24,691 shown as accounts receivable.

Note 3: Only accounts receivable was used for the calculation of turnover rate. Note 4: Subsequent collection is the amount collected as of November 9, 2020.

Table 4, Page 1

Table 5

(Except as otherwise indicated)

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

Significant inter-company transactions during the reporting periods

Nine months ended September 30, 2020

Expressed in thousands of NTD

Transaction

						Transaction
Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note3)
0 0 0 0 1 1 1	Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. Y.C.C. PARTS MFG. CO., LTD. RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.	RISE BRIGHT HOLDINGS LTD. RISE BRIGHT HOLDINGS LTD. CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. LIAONING HETAI AUTOMOTIVE PARTS CO., LTD CHANG JIE TECHNOLOGY CO., LTD CHANGSHU XINXIANG AUTOMOBILE PARTS CO., LTD. CHANGSHU XINXIANG AUTOMOBILE PARTS CO., LTD	1 1 1 1 3 3 3	Other receivables Accounts receivable Other receivables Accounts receivable Other receivables Other accrued expenses Other receivables	195,905 $ 24,691 11,174 10,082 28,024 23,129 13,994	Principal and interest are repayable at the maturity date 90 days after monthly billings Interest is repayable quarterly 90 days after monthly billings 90 days after monthly billings 30 days after monthly billings 30 days after monthly billings	3.67% 0.46% 0.21% 0.19% 0.52% 0.43% 0.26%

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

Nine months ended September 30, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at September 30,2020	Shares held as at September 30,2020	Shares held as at September 30,2020	Net profit (loss) of the investee for the nine months ended September 30,2020	Investment income (loss) recognised by the Company for the nine months ended September 30,2020	Footnote
				Balance as at September 30,2020	Balance as at December 31,2019	Number of shares	Ownership (%)	Book value
Y.C.C. PARTS MFG. CO., LTD. UNITED SKILLS CO., LTD. Taiwan Y.C.C. PARTS MFG. CO., LTD. RISE BRIGHT HOLDINGS LTD Samoa RISE BRIGHT HOLDINGS LTDCHINA FIRST HOLDINGS LTD Samoa			Manufacturing vehicles and their parts Holding company Holding company	50,000 $ 1,019,819 1,158,673	50,000 $ 1,019,819 1,158,673	5,000 - -	100.00% 100.00% 89.44%	50,502 $ 468,742 593,538	383) ($ 79,848) ( 23,623) (	383) ($ 79,848) ( 21,128) (	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 Nine months ended September 30, 2020

Investee in Mainland China	Main business activities	Paid-in capital	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine months ended September 30, 2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine months ended September 30, 2020	Accumulated amount of remittance from Taiwan of Mainland China as of September 30,2020	Net income of investee as of September 30, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine months ended September 30,2020(Note 2)	Book value of investments in Mainland China as of September 30,2020	Accumulated amount of investment income remitted back to Taiwan as of September 30,2020	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	33,380) ($ 9,026 889) ( 3,170) (	89.44% 73.89% 89.44% 99.60%	29,855) ($ 6,669 795) ( 3,157) (	312,454 $ 183,876 50,572 71,924	- $ - - -	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 nine months ended September 30, 2020 was based on the financial statements that were reviewed by parent company’s CPA.

Ceiling on investments in Mainland China Investment amount approved by imposed by the Accumulated amount of remittance from the Investment Commission of Investment Taiwan to Mainland China as of the Ministry of Economic Commission of Company name September 30, 2020 Affairs (MOEA) MOEA Y.C.C. PARTS MFG. CO., $ 1,235,734 $ 1,315,224 $ 2,049,704 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$40,098 thousand. The investment amount permitted by the Investment Commission of Ministry of Economic Affairs(MOEA) was US$42,098 thousand.

Table 7, Page 1

Table 8

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

Major shareholders information

September 30, 2020

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

Description: If 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 be different from the actual number of shares in dematerialised form because of a different calculation basis.

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

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

Table 8, Page 1

AI assistant

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

51783_rns_2020-11-14_37917726-3596-4d59-b73c-8dcb9a7429d7.pdf

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

INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Other matter

Wang, Yu-Chuan Liu, Mei-Lan

Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2020, DECEMBER 31, 2019 AND SEPTEMBER 30, 2019

Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2020, DECEMBER 31, 2019 AND SEPTEMBER 30, 2019

Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

Y.C.C. PARTS MFG.CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

Y.C.C. PARTS MFG.CO.,LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

1. History and Organisation

3. Application of New Standards, Amendments and Interpretations

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

4. Summary of Significant Accounting Policies

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

B. Subsidiaries included in the consolidated financial statements:

(4) Foreign currency translation

(6) Cash equivalents

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

(19) Impairment of non-financial assets

(20) Borrowings

(21) Notes and accounts payable

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

(23) Derecognition of financial liabilities

(24) Offsetting financial instruments

(25) Employee benefits

(27) Share capital

(28) Dividends

(29) Revenue recognition

(30) Business combinations

(31) Operating segments

(2) Critical accounting estimates and assumptions

6. Details of Significant Accounts

(1) Cash and cash equivalents

amortised cost’. Refer to Note 6(4) for details.

(4) Financial assets at amortised cost

(5) Notes and accounts receivable, net

(6) Inventories

(8) Property, plant and equipment

(10) Investment property

(11) Intangible assets

(12) Other non-current assets

(13) Short-term borrowings

- (16) Long term borrowings

(17) Pensions

(19) Capital surplus

(20) Retained earnings

B. Contract liabilities

(23) Other income

(24) Other gains and losses

Three months ended September 30,

Nine months ended September 30,

(25) Finance costs

(26) Expenses by nature

(27) Employee benefit expense

(28) Income tax

A. Income tax expense

(29) Earnings per share

(32) Changes in liabilities from financing activities

7. Related Party Transactions

(1) Names of related parties and relationship

(2) Significant related party transactions

(3) Key management compensation

8. Pledged Assets

Book value

Y.C.C. Interim / Quarterly Report 2020

Segments are as follows `：`