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Y.C.C. Interim / Quarterly Report 2021

Nov 15, 2021

51783_rns_2021-11-15_d57e9362-f2df-4a4e-b836-e3e775b9e0cd.pdf

Interim / Quarterly Report

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

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REVIEW REPORT MARCH 31, 2021 AND 2020

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.

~1~

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 sheets of Y.C.C. Parts Mfg. Co., Ltd. and subsidiaries (the “Group”) as at March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of review

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

Basis for qualified conclusion

As explained in Note 4(3), the financial statements of insignificant consolidated subsidiaries were not reviewed by independent auditors. Total assets of these subsidiaries amounted to NT$743,749 thousand and NT$487,750 thousand, constituting 13.95% and 9.44% of the consolidated total assets as at March 31, 2021 and 2020, respectively, total liabilities amounted to NT$251,237 thousand and NT$71,185 thousand, constituting 14.92% and 4.66% of the consolidated total liabilities as at March 31, 2021 and

~2~

2020, respectively, and the total comprehensive loss amounted to NT$4,930 thousand and NT$5,873 thousand, constituting 8.16% and 14.95% of the consolidated total comprehensive income (loss) for the three 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 as described in the Basis for qualified conclusion section above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the “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.

Wang, Yu-Chuan Liu, Mei-Lan For and on behalf of PricewaterhouseCoopers, Taiwan May 13, 2021

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.

~3~

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

MARCH 31, 2021, DECEMBER 31, 2020 AND MARCH 31, 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (The balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

Assets Notes March 31, 2021
AMOUNT
%
$
785,069
15
37,035
1
261,718
5
50,828
1
566,032
10
5,249
-
307,313
6
75,726
1
2,088,970
39
59,679
1
300
-
2,769,683
52
144,771
3
16,218
-
7,379
-
108,481
2
134,483
3
3,240,994
61
$
5,329,964
100		 December 31, 2020
AMOUNT
%
$
742,410
14
18,301
-
261,058
5
29,553
-
591,658
11
3,579
-
302,754
6
86,426
2
2,035,739
38
52,241
1
300
-
2,767,101
52
146,668
3
16,506
1
8,203
-
115,287
2
156,356
3
3,262,662
62
$
5,298,401
100		 March 31, 2020 March 31, 2020
AMOUNT
$
785,069
37,035
261,718
50,828
566,032
5,249
307,313
75,726
2,088,970
59,679
300
2,769,683
144,771
16,218
7,379
108,481
134,483
3,240,994
$
5,329,964		 AMOUNT
$
742,410
18,301
261,058
29,553
591,658
3,579
302,754
86,426
2,035,739
52,241
300
2,767,101
146,668
16,506
8,203
115,287
156,356
3,262,662
$
5,298,401		 AMOUNT
$
775,887
28,223
69,746
45,266
563,589
8,139
259,056
50,051
1,799,957
37,492
90,975
2,687,250
110,348
16,774
93,529
105,762
223,561
3,365,691
$
5,165,648		 %
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
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
1535
Financial assets at amortised cost -
non-current
1600
Property, plant and equipment
1755
Right-of-use assets
1760
Investment property, net
1780
Intangible assets
1840
Deferred income tax assets
1900
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets		 6(1)
6(2)
6(4)
6(5)
6(5)
6(6)
6(7) and 8
6(3)
6(4) and 8
6(8) and 8
6(9) and 8
6(10) and 8
6(11)
6(12)		 15
1
1
1
11
-
5
1
35
1
2
52
2
-
2
2
4
65
100

(Continued)

~4~

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

MARCH 31, 2021, DECEMBER 31, 2020 AND MARCH 31, 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (The balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

March 31, 2021 December 31, 2020 December 31, 2020 March 31, 2020
Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT %
Current liabilities
2100 Short-term borrowings 6(13) $ 425,648 8 $ 333,396 6 $ 148,173 3
2120 Financial liabilities at fair value 6(2)
through profit or loss - current - - 27,305 1 - -
2130 Contract liabilities - current 6(21) 19,810 1 20,177 - 19,631 1
2150 Notes payable 107,027 2 118,492 2 135,834 3
2170 Accounts payable 210,256 4 251,103 5 163,857 3
2200 Other payables 6(14) 118,472 2 134,314 3 116,639 2
2230 Income tax liabilities 6(28) 88,178 2 78,868 1 66,777 1
2320 Long-term liabilities, current 6(15)
portion 123,842 2 137,261 3 209,530 4
2399 Other current liabilities - others 9,609 - 1,507 - 686 -
21XX Current liabilities 1,102,842 21 1,102,423 21 861,127 17
Non-current liabilities
2540 Long-term borrowings 6(15) 547,548 10 575,299 11 659,305 13
2560 Income tax liabilities - non-current 6(28) 16,203 1 20,630 - - -
2570 Deferred income tax liabilities 3,228 - - - - -
2600 Other non-current liabilities 6(16) 14,083 - 14,388 - 8,039 -
25XX Total non-current liabilities 581,062 11 610,317 11 667,344 13
2XXX Total liabilities 1,683,904 32 1,712,740 32 1,528,471 30
Equity attributable to owners of
parent
Share capital 6(18)
3110 Share capital - common stock 741,389 14 741,389 14 741,389 14
Capital surplus 6(19)
3200 Capital surplus 1,193,259 22 1,193,259 23 1,193,024 23
Retained earnings 6(20)
3310 Legal reserve 317,795 6 317,795 6 280,161 5
3320 Special reserve 119,480 2 119,480 2 88,059 2
3350 Unappropriated retained earnings 1,261,659 24 1,203,831 23 1,373,185 27
Other equity interest
3400 Other equity interest ( 99,316 ) ( 2) ( 105,211 ) ( 2) ( 145,674) ( 3)
3500 Treasury shares 6(18) ( 526 ) - ( 526 ) - ( 526) -
31XX Equity attributable to owners
of the parent 3,533,740 66 3,470,017 66 3,529,618 68
36XX Non-controlling interests 112,320 2 115,644 2 107,559 2
3XXX Total equity 3,646,060 68 3,585,661 68 3,637,177 70
Significant contingent liabilities and 9
unrecognised contract commitments
3X2X Total liabilities and equity $ 5,329,964 100 $ 5,298,401 100 $ 5,165,648 100

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

~5~

Y.C.C. PARTS MFG.CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

Items Three months ended March 31
2021
2020
Notes
AMOUNT
%
AMOUNT
%
6(21)
$
516,642
100
$
500,112
100
6(6)(26)(27)
(
387,865) (
75) (
342,320) (
69)
128,777
25
157,792
31
6(26)(27)
(
35,046) (
7) (
35,297) (
7)
(
32,904) (
6) (
28,945) (
6)
(
5,900) (
1) (
8,647) (
2)
12(2)
(
8,528) (
2)
2,270
1
(
82,378) (
16) (
70,619) (
14)
46,399
9
87,173
17
6(22)
855
-
3,465
1
6(23)
4,033
1
4,263
1
6(24)
27,435
6 (
2,607) (
1)
6(25)
(
4,635) (
1) (
4,699) (
1)
27,688
6
422
-
74,087
15
87,595
17
6(28)
(
19,341) (
4) (
21,222) (
4)
$
54,746
11
$
66,373
13
4000
Sales revenue
5000
Operating costs
5900
Gross profit
Operating expenses
6100
Selling expenses
6200
General and administrative
expenses
6300
Research and development
expenses
6450
Expected credit impairment
(loss) gain
6000
Total operating expenses
6900
Operating profit
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7000
Total non-operating income
and expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the period

(Continued)

~6~

Y.C.C. PARTS MFG.CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

Items Three months ended March 31
2021
2020
Notes
AMOUNT
%
AMOUNT
%
6(3)
$
7,439
1 ($
20,050) (
4)
7,439
1 (
20,050) (
4)
(
1,786)
- (
7,035) (
1)

(
1,786)
- (
7,035) (
1)
$
5,653
1 ($
27,085) (
5)
$
60,399
12
$
39,288
8
$
57,828
11
$
69,845
14
(
3,082)
- (
3,472) (
1)
$
54,746
11
$
66,373
13
$
63,723
13
$
43,652
9
(
3,324) (
1) (
4,364) (
1)
$
60,399
12
$
39,288
8
6(29)
$
0.78
$
0.94
$
0.78
$
0.94
Other comprehensive income
(loss)
Components of other
comprehensive income (loss) that
will not be reclassified to profit
or loss
8316
Unrealised gains (losses) on
valuation of equity instrument at
fair value through profit or loss
8310
Components of other
comprehensive income (loss)
that will not be reclassified to
profit or loss
Components of other
comprehensive income (loss) that
will be reclassified to profit or
loss
8361
Financial statements translation
differences of foreign operations
8360
Components of other
comprehensive loss that will be
reclassified to profit or loss
8300
Total other comprehensive
income (loss) for the period
8500
Total comprehensive income for
the period
Profit (loss), attributable to:
8610
Owners of parent
8620
Non-controlling interests
Total
Comprehensive income attributable
to:
8710
Owners of parent
8720
Non-controlling interests
Total
Basic earnings per share
9750
Basic earnings per share
9850
Diluted earnings per share

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

~7~

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

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

Three months ended March 31,
2020
Balance at January 1, 2020
Profit (loss) for the period
Other comprehensive loss for the
period
Total comprehensive income
(loss) for the period
Balance at March 31, 2020
Three months ended March 31,
2021
Balance at January 1, 2021
Profit (loss) for the period
Other comprehensive income
(loss) for the period
Total comprehensive income
(loss) for the period
Balance at March 31, 2021		 Notes Equity attributable to owners of the parent Equity attributable to owners of the parent Equity attributable to owners of the parent Equity attributable to owners of the parent Equity attributable to owners of the parent Equity attributable to owners of the parent Non-controlling
interests		 Total equity
Share capital -
common stock		 Capital surplus,
additional paid-
in capital		 Retained earnings Other equity interest
Treasury shares		 Total
Legal reserve Special reserve Unappropriated
retained
earnings		 Financial
statements
translation
differences of
foreign
operations		 Unrealised
gains (losses)
from financial
assets measured
at fair value
through other
comprehensive
income
6(3)
6(3)		 $ 741,389
-
-
-
$ 741,389
$ 741,389
-
-
-
$ 741,389		 $ 1,193,024
-
-
-
$ 1,193,024
$ 1,193,259
-
-
-
$ 1,193,259


$ 280,161
-
-
-
$ 280,161
$ 317,795
-
-
-
$ 317,795		 $
88,059
-
-
-
$
88,059
$ 119,480
-
-
-
$ 119,480		 $ 1,303,340
69,845
-
69,845
$ 1,373,185
$ 1,203,831
57,828
-
57,828
$ 1,261,659		 ($
95,167 )
-
(
6,143 )
(
6,143 )
($ 101,310 )
($
75,596 )
-
(
1,544 )
(
1,544 )
($
77,140 )		 ($
24,314 )
-
(
20,050 )
(
20,050 )
($
44,364 )
($
29,615 )
-

7,439

7,439
($
22,176 )		 ($
526 )
-
-
-
($
526 )
($
526 )
-
-
-
($
526 )		 $ 3,485,966
69,845
(
26,193 )
43,652
$ 3,529,618
$ 3,470,017
57,828
5,895
63,723
$ 3,533,740		 $ 111,923
(
3,472 )
(
892 )
(
4,364 )
$ 107,559
$ 115,644
(
3,082 )
(
242 )
(
3,324 )
$ 112,320		 $ 3,597,889
66,373
(
27,085 )
39,288
$ 3,637,177
$ 3,585,661
54,746
5,653
60,399
$ 3,646,060

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

~8~

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

THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (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 (gain) loss on financial assets or liabilities at
fair value through profit or loss

Interest expense

Interest income

Government grant

Unrealised foreign exchange gain
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
Interest paid
Income taxes paid
Net cash flows from operating activities		 Three months ended March 31
Notes
2021
2020
$
74,087 $
87,595
6(26)
78,799
74,481
6(26)
1,411
1,041
6(26)
1,951
1,769
12(2)
8,528 (
2,270 )
6(24)
(
47,822 )
6,850
6(25)
4,635
4,699
6(22)
(
855 ) (
3,465 )
6(16)
(
154 )
-
(
7,605 ) (
14,759 )
(
21,278 ) (
22,397 )
19,556
196,481
(
1,493 ) (
1,738 )
(
4,559 )
4,831
10,614
7,991
-
1,233
(
367 )
5,305
(
11,465 )
22,405
(
40,847 ) (
83,919 )
2,127 (
41,595 )
102
38
65,365
244,576
678
3,611
(
4,003 ) (
4,985 )
(
4,472 ) (
302 )
57,568
242,900

(Continued)

~9~

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

THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (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
Decrease in financial assets at amortised cost
Acquisition of property, plant and equipment

Payment for capitalized interest

Decrease in other current assets
Increase in other non-current assets
(Increase) decrease in refundable deposits
Increase in other current liabilities
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Decrease in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayment of principal portion of lease liabilities

Increase in guarantee deposits received

Net cash flows from (used in) financing
activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period		 Three months ended March 31
Notes
2021
2020
($
4,977 ) ($
479 )
6,760
392
3,367
15,610
6(30)
(
36,620 ) (
23,232 )
6(8)
(
672 )
-
86
3,833
(
43,295 ) (
41,337 )
(
16 )
82
8,000
-
(
67,367 ) (
45,131 )
182,734
20,000
(
90,109 ) (
128,348 )
-
95,600
(
42,088 ) (
115,072 )
6(31)
(
148 )
-
6(31)
-
535
50,389 (
127,285 )
2,069
4,773
42,659
75,257
742,410
700,630
$
785,069 $
775,887

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 THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

(UNAUDITED)

1. History and Organisation

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

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

These consolidated financial statements were reported to the Board of Directors on May 13, 2021.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting

Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

ollows:
Effective date by
International Accounting
New Standards,Interpretations andAmendments StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption
from applying IFRS 9’		 January 1, 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘
Interest Rate Benchmark Reform— Phase 2’		 January 1, 2021
Amendment to IFRS 16, ‘Covid-19-related rent concessions
beyond 30 June 2021’		 April 1, 2021(Note)

Note: Earlier application from January 1, 2021 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

None.

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

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

~11~

==> picture [477 x 49] intentionally omitted <==

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

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

New Standards,Interpretations and Amendments Effective date by
International Accounting
Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’ January 1, 2022
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of
assets between an investor and its associate or joint venture’		 To be determined by
International Accounting
Standard Board
IFRS 17, ‘Insurance contracts’ January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’ January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current
or non-current’		 January 1, 2023
Amendments to IAS 1, ‘Disclosure of accounting policies’ January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’ January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and
liabilities arising from a single transaction’		 January 1, 2023
Amendments to IAS 16, ‘Property, plant and equipment:
proceeds before intended use’		 January 1, 2022
Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling
a contract’		 January 1, 2022
Annual improvements to IFRS Standards 2018-2020 January 1, 2022

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

4. Summary of Significant Accounting Policies

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2020, except for the compliance statement, basis of preparation, basis of consolidation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

  • A. 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.

  • B. The consolidated financial statements should be read together with the consolidated financial statements for the year ended December 31, 2020.

  • (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

~12~

present value of defined benefit obligation.

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

(3) Basis of consolidation

  • A. Basis for preparation of consolidated financial statements:

Basis for preparation of these consolidated financial statements are the same as that for the preparation of the consolidated financial statements as of and for the year ended December 31, 2020.

  • B. Subsidiaries included in the consolidated financial statements:
Name of
Investor		 Name of
Subsidiary		 Main Business
Activities		 Ownership(%) March 31,
2020

100.00%
100.00%
89.44%
99.60%
100.00%
82.61%
100.00%		 Description
Note 1
Note 2
Note 1
Note 2
Note 2
Note 2
March 31,
2021		 December 31,
2020
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)
LIAONING HETAI
AUTOMOTIVE PARTS
CO.,LTD. (LIAONING
HETAI)
CHANGSHU XINXIANG
AUTOMOBILE PARTS CO.,
LTD. (CHANGSHU
XINXIANG)		 Holding company
Manufacturing
automobiles and
their parts
Holding company
Producing and
selling interior and
exterior accessories
of automobiles
Producing and
selling interior and
exterior accessories
of automobiles
Producing and
selling interior and
exterior accessories
of automobiles
Producing and
selling interior and
exterior accessories
of automobiles		 100.00%
100.00%
89.44%
99.78%
100.00%
82.61%
100.00%		 100.00%
100.00%
89.44%
99.78%
100.00%
82.61%
100.00%

~13~

  • Note 1: The Board of Directors resolved to increase its capital in the subsidiary, Rise Bright Holdings Ltd., in the amount of US$2 million (NT$57,360 thousand) on August 11, 2020, and then reinvested in Chang Jie Technology Co., Ltd.. The capital was remitted in October 2020. Due to the original shareholders of Chang Jie Technology Co., Ltd. not subscribing proportionately, Rise Bright Holdings Ltd.’s shareholding ratio increased to 99.78%.

  • Note 2: The financial statements of the entity as of and for the three months ended March 31, 2021 and 2020 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) Employee benefits

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.

(5) Income tax

  • A. 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.

  • B. 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.

  • Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

There have been no significant changes as of March 31, 2021. Please refer to Note 5 in the consolidated financial statements for the year ended December 31, 2020.

~14~

6. Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts
Cash and cash equivalents
Cash on hand
Time deposits
Checking accounts and demand deposits
Short-term notes and bills - Re-Purchase
Interest rate range
Time deposits		 March 31, 2021
385
$ 276,397

264,530

243,757

785,069
$ 0.16%~0.96%		 December 31, 2020
374
$ 319,581

207,863

214,592
742,410
$ 0.1%~0.41%		 March 31, 2020
288
$ 389,741
189,396
196,462
775,887
$
0.60%~2.55%

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

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

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

Items
Financial assets mandatorily measured
at fair value through profit or loss
Listed stocks
Valuation adjustment
Total
Financial assets (liabilities) held for
trading
Foreign exchange swap contracts		 March 31,2021
December 31,2020
March 31, 2020
20,213
$ 20,213
$ 45,253
$ 684
1,912)
(
18,330)
(
20,897
$ 18,301
$ 26,923
$ 16,138
$ 27,305)
($ 1,300
$

  • A. The Group recognised financial assets and liabilities at fair value through profit or loss of $47,822, and ($6,850) for the three months ended March 31, 2021 and 2020, 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)
Foreign exchange swap contracts
Derivative financial assets (liabilities)
Foreign exchange swap contracts		 March31,2021 March31,2021
Contract amount
(Notionalprincipal)		 Contractperiod
Contract amount
(Notionalprincipal)		 Contract period
USD 47,460 thousand 2020.10.05 ~ 2021.01.25

~15~

March 31, 2020

Derivative financial assets (liabilities) Contract amount (Notional principal) Contract period Foreign exchange swap contracts USD 19,860 thousand 2020.03.03 ~ 2020.04.27

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

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

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

Items March 31,2021 December 31, 2020 March 31, 2020
Non-current items:
Equity instruments
Listed stocks $ 81,855
 $ 81,856
 $ 81,856
Valuation adjustment ( 22,176)
 ( 29,615)
 ( 44,364)
$ 59,679
 $ 52,241
 $ 37,492

  • 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 $59,679, $52,241 and $37,492 as at March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

  • B. 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:

Three months ended March 31, 2021 2020

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income (loss) $ 7,439 ($ 20,050) Cumulative gains reclassified to retained - - earnings due to derecognition $ $ Dividend income recognised in profit or loss - - Held at end of period $ $

  • C. As at March 31, 2021, December 31, 2020 and March 31, 2020, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group were $59,679, $52,241 and $37,492, respectively.

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

~16~

(4) Financial assets at amortised cost

==> picture [473 x 93] intentionally omitted <==

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

Items March 31, 2021 December 31, 2020 March 31, 2020
Current items:
Time deposits maturing over
three months $ 261,718 $ 261,058 $ 69,746
Non-current items
Restricted time deposits $ 300 $ 300 $ 90,975
----- End of picture text -----

  • A. As at March 31, 2021, December 31, 2020 and March 31, 2020, 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 $262,018, $261,358 and $160,721, respectively.

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

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

(5) Notes and accounts receivable, net

March 31,2021 December December 31,2020 March 31,2020
Notes receivable $ 50,911
 $ 29,632
 $ 45,345
Less: Allowance for uncollectible
accounts ( 83)
 ( 79) ( 79)
$ 50,828 $ 29,553 $ 45,266
March 31,2021 December 31,2020 March 31,2020
Accounts receivable $ 618,218
 $ 635,490
 $ 603,867
Less: Allowance for uncollectible
accounts ( 52,186) ( 43,832) ( 40,278)
$ 566,032 $ 591,658 $ 563,589
  • A. The aging analysis of notes receivable and accounts receivable are as follows:
Not past due
0~60 days
61~120 days
121~180 days
181-240 days
Over 241 days		 March31,2021 March31,2021
Notesreceivable
50,911
$ -
-
-
-
-
50,911
$		 Accountsreceivable
519,514
$ 71,052
7,214
10,465
235
9,738
618,218
$

~17~

Not past due
0~60 days
61~120 days
121~180 days
181-240 days
Over 241 days
Not past due
0~60 days
61~120 days
121~180 days
181-240 days
Over 241 days		 Notesreceivable
Accountsreceivable
29,632
$ 562,115
$ -
61,842

-
996

-
1,701

-
2,398

-
6,438

29,632
$ 635,490
$
Notesreceivable
Accountsreceivable
45,345
$ 471,831
$ -
104,218
-
8,899
-
9,950

-
1,257

-
7,712
45,345
$
603,867
$ December31,2020
March31,2020		 Accountsreceivable
31,2020
471,831
$ 104,218
8,899
9,950

1,257

7,712
603,867
$

As of March 31, 2021, December 31, 2020 and March 31, 2020, the ageing analysis was based on past due date.

  • B. As of March 31, 2021, December 31, 2020 and March 31, 2020, the balances of accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2020, the balances of accounts receivable and notes receivable from contracts with customers amounted to $800,271 and $22,948, respectively.

  • C. As at March 31, 2021, December 31, 2020 and March 31, 2020, 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 $50,828, $29,553 and $45,266 as well as $566,032, $591,658 and $563,589, respectively.

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

~18~

(6) Inventories

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
Materials and supplies
Work in progress
Semi-finished goods
Finished goods
Merchandise
Total		 Cost
95,877
$ 78,695
12,650
177,785
23,297
388,304
$ Cost
89,696
$ 62,902
11,255
187,057
22,100
373,010
$ Cost
93,523
$ 38,384
8,007
154,220
30,684
324,818
$		 Allowance for
valuation loss
28,993)
($ 11,653)
(
7,203)
(
33,142)
(
-

80,991)
($ Allowance for
valuation loss
27,408)
($ 6,192)
(
7,220)
(
29,436)
(
-
70,256)
($ Allowance for
valuation loss
23,454)
($ 8,611)
(
4,563)
(
29,134)
(
-
65,762)
($ December 31,2020
March 31,2021
March 31,2020		 Book value
66,884
$ 67,042
5,447
144,643
23,297
307,313
$
Book value
62,288
$ 56,710

4,035

157,621
22,100
302,754
$
Book value
70,069
$ 29,773
3,444
125,086
30,684
259,056
$

The cost of inventories recognised as expense for the period:

Three months ended March 31, Three months ended March 31,
2021 2020
Cost of goods sold $ 345,318
 $ 316,318
Unallocated fixed overheads 33,061 21,646
Loss on scrapping inventory 174 154
Loss on market value decline and obsolete
and slow-moving inventories		 10,956 4,157
(Gain) loss on physical inventory ( 1,644) 45
$ 387,865 $ 342,320

~19~

(7) Other current assets

Other current assets
Prepayments
Other financial assets
Other current assets - others		 March31,2021
December31,2020
49,170
$ 58,982
$ 26,127
26,213

429
1,231

75,726
$ 86,426
$		 March31,2020
18,912
$ 29,811

1,328
50,051
$

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

(Remainder of page intentionally left blank)

~20~

(8) Property, plant and equipment

Property, plant and equipment
Three months ended March 31,2021
Beginningbalance Additions Decreases Transfers Net exchange differences Endingbalance
Cost
Land $ 956,365
 $ -
 $ -
 $ -
 $ -
 $ 956,365
Buildings and structures 1,548,691 2,309 ( 3,785)
 - ( 1,224)
 1,545,991
Machinery and equipment 1,207,914 3,740 ( 292)
 3,409 ( 1,173)
 1,213,598
Molding equipment 1,678,794 7,711 ( 412)
 66,133 ( 72)
 1,752,154
Transportation equipment 32,456 - - - ( 6)
 32,450
Furniture equipment 3,195 48 ( 132)
 - ( 3)
 3,108
Other equipment 181,056 442 ( 2,374)
 - ( 124)
 179,000
Unfinished construction and
equipment under acceptance 259,837 4,441 - ( 5,486) ( 323) 258,469
$ 5,868,308 $ 18,691 ($ 6,995) $ 64,056 ($ 2,925) $ 5,941,135
Accumulated Depreciation
Buildings and structures ($ 767,777)
 ($ 17,943)
 $ 3,785
 $ -
 $ 685
 ($ 781,250)
Machinery and equipment ( 779,366)
 ( 23,962)
 292 - 544 ( 802,492)
Molding equipment ( 1,402,903)
 ( 30,980)
 412 - 37 ( 1,433,434)
Transportation equipment ( 25,534)
 ( 587)
 - - 3 ( 26,118)
Furniture equipment ( 2,449)
 ( 69)
 132 - 1 ( 2,385)
Other equipment ( 123,178)
 ( 5,027) 2,374 - 58 ( 125,773)
( 3,101,207)
 ($ 78,568) $ 6,995 $ - $ 1,328 ($ 3,171,452)
Total $ 2,767,101 $ 2,769,683

~21~

Three months ended March Three months ended March Three months ended March Three months ended March 31, 2020
Beginningbalance Additions Decreases Transfers Net exchange differences Endingbalance
Cost
Land $ 956,365
 $ -
 $ -
 $ -
 $ -
 $ 956,365
Buildings and structures 1,519,897 - ( 2,655)
 - ( 2,989)
 1,514,253
Machinery and equipment 1,170,965 2,684 ( 36)
 42,490 ( 3,313)
 1,212,790
Molding equipment 1,615,001 3,168 ( 6,392)
 14,918 ( 244)
 1,626,451
Transportation equipment 29,976 - - - ( 14)
 29,962
Furniture equipment 4,438 26 ( 192)
 - ( 17)
 4,255
Other equipment 168,298 3,100 ( 2,174)
 1,463 ( 399)
 170,288
Unfinished construction and
equipment under acceptance 73,826 4,633 - 76,801 ( 564) 154,696
$ 5,538,766 $ 13,611 ($ 11,449) $ 135,672 ($ 7,540) $ 5,669,060
Accumulated Depreciation
Buildings and structures ($ 705,279)
 ($ 17,349)
 $ 2,655
 $ -
 $ 604
 ($ 719,369)
Machinery and equipment ( 749,234)
 ( 25,014)
 36 - 1,849 ( 772,363)
Molding equipment ( 1,314,590)
 ( 26,458)
 6,392 - 127 ( 1,334,529)
Transportation equipment ( 24,654)
 ( 552)
 - - 11 ( 25,195)
Furniture equipment ( 3,884)
 ( 116)
 192 - 13 ( 3,795)
Other equipment ( 124,220)
 ( 4,761) 2,174 - 248 ( 126,559)
($ 2,921,861) ($ 74,250) $ 11,449 $ - $ 2,852 ($ 2,981,810)
$ 2,616,905 $ 2,687,250

A. Transfers for the period were from prepayments for business facilities and unfinished construction and equipment under acceptance. B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

~22~

  • A. Amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates for such capitalisation are as follows:
Amount capitalised
Range of the interest rates
for capitalisation		 March 31, 2021
December 31, 2020
March31,2020
672
$ 3,333
$ 952
$
1.03%
0.95%
1.15%

  • B. 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 give priority rights to renew the lease or purchase the property.

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

Land
Transportation equipment
(Business vehicles)
Land
Transportation equipment
(Business vehicles)		 March 31,2021
December 31, 2020
March 31,2020
Carrying amount
Carryingamount
Carrying amount
139,600
$ 141,079
$ 106,890
$ 5,171
5,589
3,458
144,771
$ 146,668
$
110,348
$ 2021
2020
Depreciation charge
Depreciation charge
993
$ 775
$ 418
266
1,411
$ 1,041
$ Three months ended March 31,		 March 31,2021
December 31, 2020
March 31,2020
Carrying amount
Carryingamount
Carrying amount
139,600
$ 141,079
$ 106,890
$ 5,171
5,589
3,458
144,771
$ 146,668
$
110,348
$ 2021
2020
Depreciation charge
Depreciation charge
993
$ 775
$ 418
266
1,411
$ 1,041
$ Three months ended March 31,		 December 31, 2020
March 31,2020
Carryingamount
Carrying amount
141,079
$ 106,890
$ 5,589
3,458
146,668
$
110,348
$ Three months ended March 31,		 December 31, 2020
March 31,2020
Carryingamount
Carrying amount
141,079
$ 106,890
$ 5,589
3,458
146,668
$
110,348
$ Three months ended March 31,		 March 31,2020
Carrying amount
106,890
$ 3,458
110,348
$
2020
Depreciation charge
775
$ 266
1,041
$

  • C. For the three months ended March 31, 2021 and 2020, there were no additions to right-of-use assets.

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

Items affecting profit or loss
Interest expense on lease liabilities
Expense on short-term lease contracts
Expense on leases of low-value assets		 Three months ended March31, Three months ended March31,
2021
8
$ 205
$ 172
$		 2020
-
$
205
$
181
$

~23~

  • E. As of March 31, 2021, December 31, 2020 and March 31, 2020, the balances of lease liabilities - current and lease liabilities - non-current are as follows:
current and lease liabilities - non-current are as follows:
March 31, 2021
December 31,2020
Lease liabilities - current
596
$ 594
$ Lease liabilities - non-current
2,187
$ 2,337
$		 March 31, 2020
-
$
-
$

  • F. For the three months ended March 31, 2021 and 2020, the Group’s total cash outflow for leases were $533 and $386, respectively.

  • G. Information about the right-of-use assets that were pledged to others as collateral is provided in Note 8.

(10) Investment property

Three Three months ended March 31,2021 31,2021 31,2021
Beginning Net exchange Ending
balance Additions Decreases Transfers differences balance
Cost
Land use right $ 4,580
 $ -
 $ -
 $ -
 ($ 15)
 $ 4,565
Buildings and
structures 16,218 - - - ( 54) 16,164
$ 20,798 $ - $ - $ - ($ 69) $ 20,729
Accumulated
depreciation
Land use right ($ 575)
 ($ 31)
 $ -
 $ -
 $ 2
 ($ 604)
Buildings and
structures ( 3,717)
 ( 200) - - 10 ( 3,907)
( 4,292)
 ($ 231) $ - $ - $ 12 ( 4,511)
$ 16,506 $ 16,218
Three months ended March 31,2020
Beginning Net exchange Ending
balance Additions Decreases Transfers differences balance
Cost
Land use right $ 4,185
 $ -
 $ -
 $ -
 $ 279
 $ 4,464
Buildings and
structures 15,947 - - - ( 138) 15,809
$ 20,132 $ - $ - $ - $ 141 $ 20,273
Accumulated
depreciation
Land use right ($ 123)
 ($ 31)
 $ -
 $ -
 ($ 315)
 ($ 469)
Buildings and
structures ( 2,857)
 ( 200) - - 27 ( 3,030)
( 2,980)
 ($ 231) $ - $ - ($ 288) ( 3,499)
$ 17,152 $ 16,774

~24~

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

Three months ended March 31, 2021 2020 Rental income from investment property $ 827 $ 802 Direct operating expenses arising from the investment property that generated rental income during the period $ 231 $ 231 Direct operating expenses arising from the investment property that did not generate - - rental income during the period $ $

  • B. The fair value of the investment property held by the Group, which is the land use right and buildings and structures, as at March 31, 2021, December 31, 2020 and March 31, 2020 was $21,777, $19,757 and $21,170, respectively. 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%, 4.15% and 4.35%, respectively, after taking into consideration of future economic growth and results of inflation. The fair value is classified as a level 3 fair value.

  • C. 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 term is 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 exercises its rights to the pledged collateral and disposes it.

  • D. 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		 March 31,2021
3,350
$ 2,606
5,956
$		 December 31,2020
3,284
$ 3,448
6,732
$		 March 31,2020
3,223
$ 5,871
9,094
$
  • E. Information about the investment property that was pledged to others as collateral is provided in Note 8.

~25~

(11) Intangible assets

Three months ended March 31, 2021

Net
Beginning Impairment exchange Ending
balance Additions Decreases loss differences balance
Cost
Goodwill 300,631
$		 $ -
 $ -
 $ -
 $ -
 $ 300,631
Computer software 17,976 - - - ( 3) 17,973
318,607
$		 $ - $ - $ - ($ 3) $ 318,604
Accumulated
amortisation 9,773)
($		 ($ 823) $ - $ - $ 2 ($ 10,594)
Accumulated impairment
Goodwill 300,631)
($		 $ - $ - $ - $ - ($ 300,631)
Book value 8,203
$		 $ 7,379
Three months ended March 31, 2020
Net
Beginning Impairment exchange Ending
balance Additions Decreases loss differences balance
Cost
Goodwill 316,465
$		 $ -
 $ -
 $ -
 $ 2,586
 $ 319,051
Computer software 14,201 - ( 242) - ( 6) 13,953
330,666
$		 $ - ($ 242) $ - $ 2,580 333,004
Accumulated
amortisation 6,629)
($		 ($ 670) $ 242 $ - ($ 101) ($ 7,158)
Accumulated impairment
Goodwill 230,435)
($		 $ - $ - $ - ($ 1,882) ($ 232,317)
Book value 93,602
$		 $ 93,529

  • 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 of the auto parts market in Mainland China. However, the actual operation in CHANGSHU FUTE was not as expected as the auto part market in Mainland China was impacted by the continuous weak economic environment. The Group recognised impairment losses for the goodwill of $0 for the three months ended March 31, 2020.

  • 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 9.74% per annum in 2020, respectively. 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. The Group provided accumulated impairment amounting to $300,631 for goodwill in full as of December 31, 2020.

~26~

(12) Other non-current assets

==> picture [490 x 347] intentionally omitted <==

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

March 31, 2021 December 31, 2020 March 31, 2020
Prepayments for business facilities
$ 127,649 $ 148,897 $ 216,399
and construction
Guarantee deposits paid 2,294 2,278 1,063
Others 4,540 5,181 6,099
$ 134,483 $ 156,356 $ 223,561
(13) Short-term borrowings
Type of borrowings March 31, 2021 December 31, 2020 March 31, 2020
Unsecured borrowings $ 64,382 $ 71,266 $ 148,173
-
Secured borrowings 361,266 262,130
$ 425,648 $ 333,396 $ 148,173
Interest rate range 0.95%~4.15% 2.01%~4.15% 1.08%~3.65%
(14) Other payables
March 31, 2021 December 31, 2020 March 31, 2020
Salaries and bonus payable $ 29,113 $ 34,920 $ 29,988
Machinery and equipment payable 16,618 34,547 20,400
Transportation fee payable 9,055 8,129 9,917
Employees’ compensation payable 6,924 5,309 7,412
Directors’ remuneration payable 5,624 4,010 5,702
Others 51,138 47,399 43,220
$ 118,472 $ 134,314 $ 116,639
----- End of picture text -----

~27~

- (15) Long term borrowings

Long-term borrowings
Type of borrowings Borrowing period Repayment term March31,2021
Long-term bank
borrowings
Unsecured borrowings From November The loan is fully disbursed once $ 101,333
26, 2018 to the contract is signed; interest is
November 26, repayable monthly; principal is
2023 repayable monthly in 48
installments with 1-year grace
period on principal only
Unsecured borrowings From August 31, Starting from August 15, 2019, 53,331
2016 to February principal is repayable quarterly;
15, 2023 interest is repayable monthly
Unsecured borrowings From April 12, Repayment date is two years 10,874
2016 to April 14, after the borrowing date; interest
2021 is repayable quarterly
Unsecured borrowings From September Starting from October 14, 2018, 10,700
14, 2017 to principal and interest are
September 14, repayable monthly in 48
2022 installments
Unsecured borrowings From December The loan is disbursed within three 18,300
26, 2019 to years after contract is signed;
December 26, interest is repayable monthly;
2026 principal is repayable monthly in
48 installments with a 3-year
grace period on principal only
Secured borrowings From January 6, Principal and interest are 286,806
2016 to January 6, repayable monthly after a 3-year
2031 grace period
Secured borrowings From December The loan is disbursed within three
26, 2019 to years after contract signed;
December 26, interest is repayable monthly;
2026 principal is repayable monthly in
48 installments with a 3-year
grace period on principal only 193,300
$ 674,644
Less: Current portion ( 123,842)
Less: Discount on
government grants		 ( 3,254)
$ 547,548
Interest rate range 0.75%~1.97%

~28~

Type ofborrowings Borrowing period Repayment term December31,2020 December31,2020
Long-term bank
borrowings
Unsecured borrowings From November The loan is fully disbursed once $ 113,833
26, 2018 to the contract is signed; interest is
November 26, repayable monthly; principal is
2023 repayable monthly in 48
installments with 1-year grace
period on principal only
Unsecured borrowings From August 31, Starting from August 15, 2019, 59,998
2016 to February principal is repayable quarterly;
15, 2023 interest is repayable monthly
Unsecured borrowings From April 12, Repayment date is two years 21,807
2016 to April 14, after the borrowing date; interest
2021 is repayable quarterly
Unsecured borrowings From September Starting from October 14, 2018, 12,460
14, 2017 to principal and interest are
September 14, repayable monthly in 48
2022 installments
Unsecured borrowings From December The loan is disbursed within three 18,300
26, 2019 to years after contract is signed;
December 26, interest is repayable monthly;
2026 principal is repayable monthly in
48 installments with a 3-year
grace period on principal only
Secured borrowings From January 6, Principal and interest are 294,097
2016 to January 6, repayable monthly after a 3-year
2031 grace period
Secured borrowings From December The loan is disbursed within three 193,300
26, 2019 to years after contract signed;
December 26, interest is repayable monthly;
2026 principal is repayable monthly in
48 installments with a 3-year
grace period on principal only
Secured borrowings From January 6, Starting from February 6, 2016,
2016 to January 6, principal and interest are
2021 repayable monthly 2,500
$ 716,295
Less: Current portion ( 137,261)
Less: Discount on
government grants ( 3,735)
$ 575,299
Interest rate range 0.75%~1.87%

~29~

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

~30~

Type ofborrowings Borrowing period Repayment term March31,2020 March31,2020
Unsecured borrowings From April 30, Starting from May 30, 2015, 3,333
2015 to April 30, principal and interest are
2020 repayable monthly
Secured borrowings From January 6, Principal and interest are 315,972
2016 to January 6, repayable monthly after a 3-year
2031 grace period
Secured borrowings From December The loan is disbursed within 95,600
26, 2019 to three years after contract signed;
December 26, interest is repayable monthly;
2026 principal is repayable monthly in
48 installments with a 3-year
grace period on principal only
Secured borrowings From January 6, Starting from February 6, 2016,
2016 to January principal and interest are
6,2021 repayable monthly 25,000
$ 868,835
Less: Current portion ( 209,530)
$ 659,305
Interest rate range 0.75%~3.65%

Interest rate range

  • (16) Government grants

As of March 31, 2021, the Group obtained government concessional loans under the "Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan” from the Bank of Taiwan in the amounts of $193,300 thousand and $18,300 thousand, respectively, for supporting capital expenditure and working capital. Such loans will mature in December 2026. The fair values for the loans were $188,842 thousand and $17,871 thousand, respectively which were calculated at a market rate of 1.25%. The differences between the amount obtained and the fair value were $4,458 thousand and $429 thousand, respectively, which were deemed as a low interest loan subsidy from government and recognised in deferred revenue (shown as other non-current liabilities). The deferred revenue is reclassified to other income on a straight-line basis over their estimated useful life during the period of paying interest. The realised deferred government grants revenue was $154 for the three months ended March 31, 2021.

  • (17) Pensions

  • A. (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the

~31~

account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March. 

  - (b) For the aforementioned pension plan, the Group recognised pension costs of $56 and $56 for the three months ended March 31, 2021 and 2020, respectively.

  - (c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2021 amount to $237.

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

    • (b) The Company’s mainland China subsidiaries, have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage for the three months ended March 31, 2021 and 2020 were 16% and 8%, respectively. Other than the monthly contributions, the Group has no further obligations.

    • (c) The notices of People's Republic of China, No. 11 2020, Ministry of Human Resources and Social Security and No. 49 2020 of the Ministry of Human Resources and Social Security provide for the temporary reduction and exemption of enterprises’ contributions to basic pension insurance, unemployment insurance, and work-related injury insurance schemes (hereinafter referred to as “three social insurance schemes”) from February 2020 to December 2020, reduced the burdens of enterprises, and provided strong support for enterprises' resumption of work and production.

    • (d) The pension costs under the defined contribution pension plan of the Group for the three months ended March 31, 2021 and 2020 were $3,882 and $2,208, respectively.

  • (18) Share capital

  • A. As of March 31, 2021, 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:
Number of shares as of beginning and
end of the period		 Expressed in thousand shares
Three months ended March 31,		 Expressed in thousand shares
Three months ended March 31,
2021
74,124		 2020
74,124

  • B. Treasury shares

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

~32~

Name of
company
holding the
shares
Reason for
reacquisition
The Company
To be reissued
to employees		 Number
of
thousand
shares
Carrying
amount
15

526
$ March 31,2021		 Number
of
thousand
shares
Carrying
amount
15

526
$ March 31,2021		 Number
of
thousand
shares

15
December		 Carrying
amount
526
$ 31,2020		 Number
of
thousand
shares
Carrying
amount
15
526
$
March 31,2020		 Number
of
thousand
shares
Carrying
amount
15
526
$
March 31,2020		 Number
of
thousand
shares
Carrying
amount
15
526
$
March 31,2020
526
$		 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).

  • (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.

unless the legal reserve is insufficient.
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
Difference between consideration
and carrying amount of subsidiaries
acquired
Used to offset accumulated deficits
only (Note 2)
Changes in ownership interests
in subsidiaries
Not for any other purposes
Employee stock options		 March 31,2021
1,163,298
$ 2,035
$ 27,926
$ -
$		 December 31,2020
1,163,298
$ 2,035
$ 27,926
$ -
$		 March 31,2020
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

~33~

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.

  • (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 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 2020 earnings as approved by the Board of Directors on March 16, 2021 and the appropriation of 2019 earnings had been approved by the shareholders during their meeting on May 29, 2020. Details are summarised below:

Legal reserve appropriated
(Reversal of) special reserve
Cash dividend		 Years ended December 31, Years ended December 31, Years ended December 31,
2020 2019
Amount Dividend per
share(in dollars)		 Amount Dividend per
share(in dollars)
11,779
$ 14,269)
(
148,248		 2.00
$		 37,634
$ 31,421
148,248		 2.00
$

As at May 13, 2021, the above mentioned of 2020 earnings appropriation has not yet been approved by the shareholders.

  • F. Refer to Note 6 (27) for further information relating to employees’ compensation and directors’ and supervisors’ remuneration.

~34~

(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

 Domestic operations
Overseas operations
Total
$ 282,180 $ 215,173
497,353
$ 10,538
8,751
19,289
$ 292,718
$ 223,924
516,642
$ Domestic operations
Overseas operations
Total
$ 340,217 $ 153,953
494,170
$ 5,525
417
5,942
$345,742
$154,370
500,112
$ Three months ended March 31,2021
Three months ended March 31,2020
494,170
$ 5,942
500,112
$

B. Contract liabilities

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

Contract liabilities:
Contract liabilities - advance
sales receipts		 March 31,2021
19,810
$		 December 31,2020
20,177
$		 March 31,2020
19,631
$

For the three months ended March 31, 2021 and 2020, revenue recognised that were included in the contract liability balance at the beginning of the period amounted to $2,196 and $3,554, respectively.

(22) Interest income

(22) respectively.
Interest income
(23)
(24)		 Other income
Other gains and losses
Interest income from bank deposits
Rent income
Other income - others
Foreign exchange (losses) gains
(Gains) losses on financial assets and liabilities
at fair value through profit or loss
Other losses		 Three months ended March 31,
2021
2020
855
$
3,465
$ 2021
2020
1,354
$ 1,263
$ 2,679
3,000
4,033
$ 4,263
$ Three months ended March 31,
2021
2020
19,779)
($ 4,610
$ 47,822
6,850)
(
608)
(
367)
(
27,435
$ 2,607)
($ Three months ended March 31,		 2020
3,465
$

~35~

(25) Finance costs

(26) Expenses by nature
2021
2020
Interest expense
5,307
$ 5,651
$ Less: Capitalization of qualifying assets
672)
(
952)
(
4,635
$ 4,699
$ Three months ended March31,
2021
2020
Employee benefit expense
87,387
$ 87,849
$ Depreciation charges on property,
plant and equipment
78,568
74,250
Depreciation charges on right-of-use assets
1,411
1,041
Depreciation charges on investment property
231

231
Amortisation
1,951
1,769

169,548
$ 165,140
$ Three months ended March 31,

(27) Employee benefit expense

Employee benefit expense
Depreciation charges on right-of-use assets
Depreciation charges on investment property
Amortisation		 1,411
1,041
231

231
1,951
1,769

169,548
$ 165,140
$		 1,411
1,041
231

231
1,951
1,769

169,548
$ 165,140
$
Wages and salaries
Labour and health insurance fees
Pension costs
Other personnel expenses		 Three months ended March 31,
2021
71,955
$ 5,500
3,938
5,994
87,387
$		 2020
75,264
$ 5,168
2,264
5,153
87,849
$

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

  • B. For the three months ended March 31, 2021 and 2020, the accrued employees’ compensation and directors’ remuneration were as follows:

on the abovementioned ratios.
For the three months ended March 31, 2021
directors’ remuneration were as follows:		 and 2020, the accrued employees’ compensation and and 2020, the accrued employees’ compensation and
Employees’ compensation
Directors’ remuneration		 Three months ended March 31,
2021
1,615
$ 1,759
3,374
$		 2020
1,215
$ 935
2,150
$

For the three months ended March 31, 2021 and 2020, the employees’ compensation and directors’ remuneration were estimated and accrued based on 2% 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 2020 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2020 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

~36~

System” at the website of the Taiwan Stock Exchange.

  • (28) Income tax

  • A. Income tax expense

Components of income tax expense

e tax
ome tax expense
mponents of income tax expense
Three months ended March 31,
2021 2020
Current tax:
Current tax on profits for the period $ 9,307
 $ 15,674
Deferred tax:
Origination and reversal of
temporary differences 10,034
 5,548
Income tax expense $ 19,341
 $ 21,222

  • 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. As of March 31, 2021 and December 31, 2020, the unpaid instalment payments of $31,558 and $35,985 were recognised as income tax liabilities - current and income tax liabilities -non-current.

(29) 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		 Three months ended March31,2021 Three months ended March31,2021
Weighted average
number of ordinary
shares outstanding
Amount aftertax
(shareinthousands)
57,828
$ 74,124
57,828
74,124
-
150
57,828
$ 74,274		 Earnings per
share
(indollars)
0.78
$
0.78
$

~37~

(30) Supplemental cash flow information
Investing activities with partial cash payments:
Weighted average
number of ordinary
shares outstanding
Earnings per
share
Amount aftertax
(shareinthousands)
(indollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent
69,845
$
74,124

0.94
$ Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
69,845
74,124
Assumed conversion of all
dilutive potential ordinary shares
-Employees’ compensation
-
129
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all dilutive
potential ordinary shares
69,845
$ 74,253

0.94
$ Threemonths endedMarch31,2020
2021
2020
Purchase of property, plant and equipment
18,691
$ 13,611
$ Add: Opening balance of payable on equipment
and construction
34,547

30,021
Less: Ending balance of payable on equipment
and construction
16,618)
(
20,400)
(
Cash paid during the period
36,620
$ 23,232
$ Three months ended March 31,

~38~

(31) Changes in liabilities from financing activities

7. Related Party Transactions
Key management compensation
Short-term
borrowings
Long-term
borrowings
(including current
portion)
Guarantee
deposits
received
Lease
liabilities
(including
non-current)
Liabilities
from financing
activities-gross
At January 1, 2021
333,396
$ 716,295
$ 935
$ 2,931
$ 1,053,557
$ Changes in cash flow from
financing activities
92,625
42,088)
(
-
148)
(
50,389

Impact of changes in foreign
exchange rate
726)
(
495)
(
3)
(
-
1,224)
(
Changes in other non-cash
items
353
932
-
-
1,285
At March 31, 2021
425,648
$
674,644
$ 932
$ 2,783
$ 1,104,007
$ Short-term
borrowings
Long-term
borrowings
(including
current portion)
Guarantee
deposits
received
Liabilities from
financing
activities-gross
At January 1, 2020
254,868
$ 886,051
$ 521
$ 1,141,440
$ Changes in cash flow
from financing activities
108,348)
(
19,472)
(
535
127,285)
(
Impact of changes in foreign
exchange rate
612

1,071
13)
(
1,670
Changes in other non-cash
items
1,041
1,185
-
2,226
At March 31, 2020
148,173
$ 868,835
$ 1,043
$ 1,018,051
$ 2021
2020
Salaries and other short-term employee benefits
5,890
$ 4,378
$ Post-employment benefits
5
9
5,895
$ 4,387
$ Three months ended March 31,		 Liabilities
from financing
activities-gross

~39~

8. Pledged Assets

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

==> picture [507 x 164] intentionally omitted <==

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

Book value
Pledged asset March 31, 2021 December 31, 2020 March 31, 2020 Purpose
Other financial assets (shown as other $ 26,127 $ 26,213 $ 29,811 Guarantee for acceptance
current assets) bill
300 300 90,975 Long-term borrowings
Financial assets at amortised cost -
and natural gas for
non-current
manufacturing
Property, plant and equipment 1,099,971 1,119,594 810,123 Short-term borrowings
and long-term borrowings
-
Right-of-use assets 81,445 82,359 Short-term borrowings
Investment property 16,218 16,506 - Short-term borrowings
Total $ 1,224,061 $ 1,244,972 $ 930,909
----- End of picture text -----

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

None.

(2) Commitments

As at March 31, 2021, December 31, 2020 and March 31, 2020, the Group’s capital expenditure contracted but not yet incurred in respect of machinery and equipment as well as construction of plants were $330,301, $283,771 and $244,945, 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.

~40~

(2) Financial instruments

A. Financial instruments by category

March 31, 2021 December 31, 2020 March 31, 2020

)Financial instruments
A. Financial instruments by category		 March31,2021
December31,2020
March31,2020		 March31,2020
Financial assets
Financial assets at fair value through profit
or loss
Financial assets mandatorily measured
at fair value through profit or loss
Financial assets at fair value through other
comprehensive income
Designation of equity instruments
Financial assets at amortised cost
Cash and cash equivalents
Financial assets at amortised cost
Notes receivable
Accounts receivable
Other receivables
Other financial assets - current
Guarantee deposits paid
Financial liabilities
Financial liabilities at fair value
through profit or loss
Financial liabilities held for trading
Financial liabilities at amortised cost
Short-term borrowings
Notes payable
Accounts payable
Other payables
Long-term borrowings (including
current portion)
Guarantee deposits received
Lease liabilities (including current portion)		 37,035
$ 18,301
$ 28,223
$ 59,679
$ 52,241
$ 37,492
$ 785,069
$ 742,410
$ 775,887
$ 262,018
261,358
160,721
50,828
29,553
45,266
566,032
591,658
563,589
5,249
3,579
8,139
26,127
26,213
29,811
2,294
2,278
1,063
1,697,617
$ 1,657,049
$ 1,584,476
$ March 31, 2021
December31,2020
March31,2020
-
$ 27,305
$ -
$ 425,648
$ 333,396
$ 148,173
$ 107,027
118,492
135,834
210,256
251,103
163,857
118,472
134,314
116,639
674,644
716,295
868,835

932
935
1,043
1,536,979
$ 1,554,535
$ 1,434,381
$ 2,783
$ 2,931
$ -
$		 28,223
$
37,492
$
775,887
$ 160,721
45,266
563,589
8,139
29,811
1,063
1,584,476
$
-
$
148,173
$ 135,834
163,857
116,639
868,835

1,043
1,434,381
$
-
$

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.

~41~

  • (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 Renminbi. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.

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

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

(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD
RMB : NTD
USD : RMB
Financial liabilities
Monetary items
USD : RMB		 March31,2021 Book value
(NTD)
Foreign
currency
amount
(In thousands)		 Exchange rate
33,362
$ 1,830
476
3,207
$		 28.535
4.344
6.5552
6.5552		 951,985
$ 7,950
3,120
21,023
$

~42~

December31,2020 December31,2020 December31,2020
Foreign
currency
amount Book value
(Inthousands) Exchangerate (NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD $ 31,959
 28.48 $ 910,192
RMB : NTD 1,684 4.377 7,371
USD : RMB 916
 6.52 5,972
Financial liabilities
Monetary items
USD : RMB $ 3,265
 6.52 $ 21,288
March31,2020
Foreign
currency
amount Book value
(Inthousands) Exchange rate (NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD $ 31,914
 30.225 $ 964,601
Financial liabilities
Monetary items
USD : NTD $ 9,331
 30.225 $ 282,029
iv. 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
ended March 31, 2021 and 2020, amounted to ($19,779) and $4,610, respectively.
  • v. Analysis of foreign currency market risk arising from significant foreign exchange variation:

~43~

==> picture [436 x 439] intentionally omitted <==

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

Three months ended March 31, 2021
Sensitivity analysis
Effect on other
Degree of comprehensive
variation Effect on profit or loss income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD 1% $ 9,520 $ -
RMB : NTD 1% 79 -
USD : RMB 1% 31 -
Financial liabilities
Monetary items
USD : RMB 1% $ 210 $ -
Three months ended March 31, 2020
Sensitivity analysis
Effect on other
Degree of comprehensive
variation Effect on profit or loss income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD 1% $ 9,646 $ -
Financial liabilities
Monetary items
USD : NTD 1% $ 2,820 $ -
----- End of picture text -----

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 ended March 31, 2021 and 2020 would have decreased/increased by $370 and $282 , 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 $597 and $375, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

  • Cash flow and fair value interest rate risk

  • i. The Group’s main interest rate risk arises from short-term and long-term borrowings with

~44~

variable rates, which expose the Group to cash flow interest rate risk. During three months ended March 31, 2021 and 2020, 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 0.1% with all other variables held constant, profit before tax for the three months ended March 31, 2021 and 2020 would have increased/decreased by $275 and $254, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

  • (b) Credit risk

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

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

  • iii.The Group adopts credit risk management procedure to assess whether there has been a significant increase in credit risk on that instrument since initial recognition. If the contract payments were past due over 3 months based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

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

  • v. Impairment loss is assessed and recognized when there is objective evidence that individual receivables cannot be recovered. The Group used historical and timely information to establish loss rate of remaining receivables and used the forecastability to assess the default possibility of accounts receivable. As of March 31, 2021, December 31, 2020 and March 31, 2020, accumulated loss allowance provided for individually assessed receivables amounted to $22,549, $8,681 and $0, respectively. The Group used the forecastability to adjust historical and timely information to assess the default possibility of remaining receivables (including notes receivables). On March 31, 2021, December 31, 2020 and March 31, 2020, the provision matrix is as follows:

~45~

March 31, 2021
Expected loss rate
Total book value
Loss allowance

December 31, 2020
Expected loss rate
Total book value
Loss allowance

March 31, 2020
Expected loss rate
Total book value
Loss allowance
 Not past
due
0%-1%
547,876
$ 4,393)
(

$543,483
Not past
due
0%~3%
591,747
$ 17,007)
(

$574,740
Not past
due
0%-2%
471,831
$ 6,869)
(

$464,962		 0 to 60
days		 61 to 120
days
35%-45%
7,214
$ 3,006)
(
$4,208
61 to 120
days
30%~35%
996
$ 329)
(
$667
61 to 120
days
60%-70%
8,899
$ 5,904)
(
$2,995		 121 to 180
days		 181 to 240
days		 Over 241
days
100%
9,738
$ 9,738)
(
$-
Over 241
days
100%
6,438
$ 6,438)
(
$-
Over 241
days
100%
7,712
$ 7,712)
(
$-		 Total
2%-5%
71,052
$ 2,001)
(
$69,051
0 to 60
days		 90%-99%
10,465
$ 10,347)
(
$118
121 to 180
days		 100%
235
$ 235)
(
$-		 646,580
$ 29,720)
(
$616,860
Total
181 to 240
days
10%~13%
61,842
$ 7,427)
(
$54,415
0 to 60
days		 90%~97%
1,701
$ 1,631)
(
$70
121 to 180
days		 100%
2,398
$ 2,398)
(
$-		 665,122
$ 35,230)
(
$629,892
Total
181 to 240
days
7%-10%
104,218
$ 8,905)
(
$ 95,313		 90%-97%
9,950
$ 9,631)
(
$319		 100%
1,257
$ 1,257)
(
$-		 603,867
$ 40,278)
(
$563,589

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

2021

2021

At January 1
Provision for impairment
Effect of foreign exchange
At March 31

At January 1

Provision for impairment

Reversal of impairment

Effect of foreign exchange
At March 31		 Notes receivable
Accounts receivable
79
$ 43,832
$ 4
8,524
-
170)
(
83
$ 52,186
$ 2020		 Total
43,911
$ 8,528
170)
(
52,269
$ Total
42,890
11
2,281)
(
263)
(
40,357
$
Notesreceivable
Accountsreceivable
$ 68
42,822
$ 11
-
-
2,281)
(
-
263)
(
79
$ 40,278
$

(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

~46~

borrowing facilities.

ii. The Group has the following undrawn borrowing facilities:

orrowing facilities.
The Group has the following undrawn borrowing facilities:
March 31, 2021
December 31, 2020
Fixed rate:
Expiring within one year
200,000
$ 300,000
$ Expiring beyond one year
268,400
268,400

468,400
$ 568,400
$		 March 31,2020
630,000
$ 372,900

1,002,900
$

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:

Non-derivative financial liabilities: abilities:
March 31, 2021
Less than
1year
Short-term borrowings
436,980
$ Notes payable
107,027
Accounts payable
210,256
Other payables
118,472
Lease liability
622
Long-term borrowings
129,437
Non-derivative financial liabilities:
December 31, 2020
Less than
1year
Short-term borrowings
342,076
$ Notes payable
118,492
Accounts payable
251,103
Other payables
134,314
Lease liability
622
Long-term borrowings
143,050
Derivative financial liabilities:
December 31, 2020
Less than
1year
Foreign exchange swap
contracts
27,305
$		 Less than
1year		 1 and 2
years		 2 and 3
years		 3 and 5
years		 Over 5
years		 Total
$ -
-
-
-
622
121,873
1 and 2
years		 $ -
-
-
-
622
72,580
2 and 3
years		 $ -
-
-
-
985
169,276
3 and 5
years		 $ -
-
-
-
-
204,002
Over 5
years		 436,980
$ 107,027
210,256
118,472
2,851
697,168
Total
-
$ -
-
-
622
115,677
Between
1 and 2
years		 -
$ -
-
-
622
86,515
Between
2 and 3
years		 -
$ -
-
-
1,141
169,295
Between
3 and 5
years		 -
$ -
-
-
-
224,663
Over 5
years		 342,076
$ 118,492
251,103
134,314
3,007
739,200
Total
December 31, 2020
Foreign exchange swap
contracts
27,305
$		 -
$		 -
$		 -
$		 -
$		 27,305
$

~47~

Non-derivative financial liabilities:

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

163,857

116,639
907,170

  • (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 foreign exchange swap 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, notes payable, accounts payable (including related parties), other payables, long-term borrowings (including current portion) and guarantee deposits received.

  • D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at March 31, 2021, December 31, 2020 and March 31, 2020 are as follows:

    • (a) The related information of natures of the assets and liabilities is as follows:
March 31, 2021
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		 Level 1
20,897
$ 59,679
$		 Level 2
16,138
$ $-		 Level3
-
$ -
$		 Total
37,035
$
59,679
$

~48~

December 31, 2020
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Financial assets at fair value through
other comprehensive income
- Equity securities
Liabilities
Recurring fair value measurements
Financial liabilities at fair value through
profit or loss
March 31, 2020
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Financial assets at fair value through
other comprehensive income
- Equity securities		 Level 1
18,301
$ 52,241
$ -
$ Level 1
26,923
$ 37,492
$		 Level 2
-
$ -
$ 27,305
$ Level 2
1,300
$ -
$		 Level3
-
$ -
$ -
$ Level 3
-
$ -
$		 Total
18,301
$
52,241
$
27,305
$
Total
28,223
$
37,492
$

  • (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 Closing price

  • Market quoted price Closing price

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

  • E. For the three months ended March 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.

  • F. For the three months ended March 31, 2021 and 2020, 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 paid-

~49~

in capital or more: None.

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

  • I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 6(2) and 12(2).

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

  • (2) Information on investees

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

  • (3) Information on investments in Mainland China

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

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

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

14. Segment Information

  • (1) General information

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

Domestic operation area - domestic consolidated entities.

Foreign operation area - foreign consolidated entities.

(2) Measurement of segment information

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

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

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

~50~

Domestic operations
Foreign operations
Others
Inter-segment eliminations
Total amount from continuing
operations
Interest income
Rent income
Other income - others
Foreign exchange (losses) gains
Gain (loss) on financial assets
and liabilities at fair value
through profit or loss
Other losses
Finance costs
Profit before income tax		 Three months
ended March
31,2021
Three months
ended March
31,2020
288,747
$ 343,785
$ 237,845
162,847
19,289
5,942
29,239)
(
12,462)
(
516,642
$ 500,112
$ Segment revenue		 Three months
ended March
31,2021
Three months
ended March
31,2020
288,747
$ 343,785
$ 237,845
162,847
19,289
5,942
29,239)
(
12,462)
(
516,642
$ 500,112
$ Segment revenue
288,747
$ 237,845
19,289
29,239)
(
516,642
$		 343,785
$ 162,847
5,942
12,462)
(
500,112
$

~51~

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

Loans to others

Three months ended March 31, 2021

(Note1)
Table 1		 Creditor Borrower General ledger
account		 Is a
related
party		 Maximum outstanding
balance during the three
months ended March
31,2021(Note 5)		 Balance at March 31,
2021
(Note 6,7and 8)		 Actual amount
drawn down
(Note2)		 Interestrate Nature of
loan
(Note4)		 Amount of
transactions
with the
borrower		 Reason for
short-term
financing		 Allowance for
doubtfulaccounts		 Collateral Collateral Limit on loans
granted to a
single
party (Note 3)		 Ceiling on total loans
granted (Note 3)
Footnote
Expressed in thousands of NTD
(Except as otherwise indicated)		 Ceiling on total loans
granted (Note 3)
Footnote
Expressed in thousands of NTD
(Except as otherwise indicated)
Item Value
0
0
0		 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.
LIAONING HETAI
AUTOMOTIVE PARTS
CO.,LTD		 Other
receivables
Other
receivables
Other
receivables		 Y
Y
Y		 390,930
$ 200,721
91,224		 390,930
$ 200,721
91,224		 191,185
$ -
89,287		 1.40%
-
4.35%		 2
2
2		 -
$ -
-		 Operating
capital
Operating
capital
Operating
capital		 -
$ -
-		 N
N
N		 -
$ -
-		 353,374
$ 353,374
353,374		 1,413,496
$ 1,413,496
1,413,496

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

  • (1)The Company is ‘0’.

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

Note 2: Balance at March 31, 2021 and actual amount drawn down were calculated at the USD and RMB buying and selling spot exchange rate of 28.535 and 4.344 on March 31, 2021.

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 March 31, 2021 amounted to NT$390,930 exceed limit on loans

granted to a single party. This is because the amount of $390,930 includes $191,185 that was used to repay loans which will be matured in May 2021.Limit on loans maintains $199,745 after repaying from other loans. As of March 31, 2021, the amount that has been used was $191,185.

Note 6: Loans granted to CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. approved by the Board of Directors amounted to US$3,000 thousand and RMB 26,500 thousand.

Note 7: Loans granted to RISE BRIGHT approved by the Board of Directors amounted to US$6,700 thousand.

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

Table 1, Page 1

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

Provision of endorsements and guarantees to others

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Three months ended March 31, 2021

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 March
31,2021		 Outstanding
endorsement/
guarantee amount at
March 31, 2021
(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		 706,748
$ 706,748		 11,889
$ 160,652		 10,700
$ 160,652		 10,700
$ 75,047		 -
$ -		 0.30%
4.55%		 1,413,496
$ 1,413,496		 Y
Y		 N
N		 N
Y		 Note 5
Note 6

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

(1)The Company is ‘0’.

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

  • (1) Having business relationship.

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

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

Note 3: The Company’s limit on total endorsements/guarantees is 40% of net assets and limit on endorsements/guarantees provided for a single party is 20% of net assets. Note 4: Balance at March 31, 2021 and actual amount drawn down were calculated at the USD buying and selling spot exchange rate of 28.535 on March 31, 2021. Note 5: Endorsements and guarantees to RISE BRIGHT HOLDINGS LTD. approved by the Board of Directors amounted to US$375 thousand. Note 6: Endorsements and guarantees to CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD. approved by the Board of Directors amounted to US$5,630 thousand.

Table 2, Page 1

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

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

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

March 31, 2021

Securities held by Marketable securities Relationship
with the
securities
issuer		 General ledger account As of March 31,2021 As of March 31,2021 Footnote
Number of shares Book value Ownership (%) Fair value
Y.C.C. PARTS MFG. CO., LTD.
Y.C.C. PARTS MFG. CO., LTD.
Y.C.C. PARTS MFG. CO., LTD.
Y.C.C. PARTS MFG. CO., LTD.		 HIROCA HOLDINGS LTD.
HIROCA HOLDINGS LTD.
NUUO INC.
DA-LI DEVELOPMENT CO., LTD.		 N
N
N
N		 Non-current financial assets at fair value through other comprehensive income -
non current
Valuation adjustment
Current financial assets at fair value through profit or loss - current
Current financial assets at fair value through profit or loss - current
Current financial assets at fair value through profit or loss - current
Valuation adjustment		 855,000
298,000
5,071
457		 81,855
$ 22,176)
(
59,679
$ 19,925
$ 277
11
684
20,897
$		 1.02%
0.36%
0.04%
0.00%		 59,679
$ 20,800
$ 83
14
20,897
$

Table 3, Page 1

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

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

March 31, 2021

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor Counterparty Relationship with
the counterparty		 Balance as at March
31, 2021
(Note 1)		 Turnover rate
(Note 4)		 Overdue receivables Overdue receivables Amount collected
subsequent to the
balance sheet date
(Note5)		 Allowance for
doubtful accounts		 Footnote
Amount Action taken
Y.C.C. PARTS MFG. CO., LTD. RISE BRIGHT HOLDINGS LTD. Subsidiary 201,496
$		 1.57% -
$		 - -
$		 -
$		 Notes 2
  • Note 1: The transactions were eliminated when preparing the consolidated financial statements.

Note 2: It pertains to principal and interest aggregating to $193,436 from loans to the subsidiary shown as other receivables and revenue from sales of processing machine amounting to $8,060 thoundsand shown as accounts receivables. Note 3: Only accounts receivable was used for the calculation of turnover rate.

Note 4: Subsequent collection is the amount collected as of May 7, 2021.

Table 4, Page 1

Table 5

Expressed in thousands of NTD

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

Significant inter-company transactions during the reporting periods

Three months ended March 31, 2021

(Except as otherwise indicated)

Transaction

Transaction
Number
(Note 1)		 Companyname Counterparty Relationship (Note 2) General ledger account Amount Transaction terms Percentage of consolidated total operating
revenues or total assets
(Note3)
0
0
0
1
1
1		 Y.C.C. PARTS MFG. CO., LTD.
Y.C.C. PARTS MFG. CO., LTD.
Y.C.C. PARTS MFG. CO., LTD.
CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.
CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.
CHANGSHU FUTE AUTOMOTIVE TRIM CO., LTD.		 RISE BRIGHT HOLDINGS LTD.
CHANGSHU FUTE AUTOMOTIVE TRIM CO.,
LTD.
LIAONING HETAI AUTOMOTIVE PARTS
CO., LTD
CHANGSHU XINXIANG AUTOMOBILE
PARTS CO., LTD.
LIAONING HETAI AUTOMOTIVE PARTS
CO., LTD
LIAONING HETAI AUTOMOTIVE PARTS
CO., LTD		 1
1
1
3
3
3		 Other receivables
Other receivables
Other receivables
Other accrued expenses
Accounts receivable
Sales revenue		 193,436
$ 16,436
92,836
16,741
32,126
13,520		 Principal and interest are repayable
at the maturity date
Interest is repayable quarterly
Interest is repayable quarterly
30 days after monthly billings
60 days after monthly billings
60 days after monthly billings		 3.63%
0.31%
1.74%
0.31%
0.60%
2.62%

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

(1) Parent company is ‘0’.

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

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

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

  • (3) Subsidiary to subsidiary.

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

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

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

Table 5, Page 1

Table 6

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

Information on investees Three months ended March 31, 2021

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 March 31,2021 Shares held as at March 31,2021 Shares held as at March 31,2021 Net profit (loss) of
the investee for the
three months ended
March 31,2021		 Investment income (loss)
recognised by the
Company for three months
ended March 31,2021		 Footnote
Balance as at
March 31,2021		 Balance as at
Decemner 31,2020		 Number of shares Ownership (%) Book value
Y.C.C. PARTS MFG. CO., LTD.
Y.C.C. PARTS MFG. CO., LTD.
RISE BRIGHT HOLDINGS LTD.		 UNITED SKILLS CO., LTD.
RISE BRIGHT HOLDINGS LTD.
CHINA FIRST HOLDINGS LTD.		 Taiwan
Samoa
Samoa		 Manufacturing vehicles
and their parts
Holding company
Holding company		 50,000
$ 1,077,179
1,158,673		 50,000
$ 1,077,179
1,158,673		 5,000
-
-		 100.00%
100.00%
89.44%		 50,094
$ 509,759
572,879		 186)
($ 23,412)
(
23,121)
(		 186)
($ 23,412)
(
20,680)
(		 Subsidiary
Subsidiary
(Note)
Subsidiary
(Note)

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

Table 6, Page 1

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

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

Information on investments in Mainland China Three months ended March 31, 2021

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 January1,2021		 Amount remitted from Taiwan to
Mainland China/Amount remitted
back to Taiwan for the three
months ended March 31,2021		 Amount remitted from Taiwan to
Mainland China/Amount remitted
back to Taiwan for the three
months ended March 31,2021		 Accumulated amount of
remittance from Taiwan
of Mainland China as of
March 31,2021		 Net income of
investee as of
March 31,2021		 Ownership held by
the Company
(direct or indirect)		 Investment income (loss)
recognised by the Company
for the three months ended
March 31,2021(Note 2)		 Book value of
investments in
Mainland China as of
March 31,2021		 Accumulated amount of
investment income remitted
back to Taiwan as of
March 31,2021		 Footnte
Remitted to
Mainland China		 Remitted back
to Taiwan
CHANGSHU FUTE
AUTOMOTIVE TRIM CO.,
LTD.
LIAONING HETAI
AUTOMOTIVE PARTS CO.,
LTD.
CHANGSHU XINXIANG
AUTOMOBILE PARTS CO.,
LTD.
CHANG JIE
TECHNOLOGY CO., LTD.		 Injecting and surface coating air bag
covers of automobiles,producing and
selling various accessories of
automobiles and electronic plastic parts
Injecting and surface coating parts of air
bags with inflation system,covers,
interior and exterior accessories of air
bag and electronic equipment systems
Manufacturing and selling parts, interior
and exterior accessories and
electronic system parts of automobiles
and molds, gauges, clamps and jigs for
injection
Injecting and surface coating air bag
covers of automobiles,producing and
selling various accessories of
automobiles and automatic production
equipments for spraying		 423,150
$ 347,588
60,450
133,225		 2
2
2
2		 827,609
$ 268,009
63,055
134,421		 -
$ -
-
-		 -
$ -
-
-		 827,609
$ 268,009
63,055
134,421		 21,225)
($ 3,660)
(
840
1,924)
(		 89.44%
73.89%
89.44%
99.78%		 18,984)
($ 2,704)
(
751
1,919)
(		 313,298
$ 188,634
52,107
128,585		 -
$ -
-
-		 Note 5
Note 7
Note 6
Note 4
Note 3

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

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

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

Note 2: The amounts listed in the table denominated in foreign currencies are translated into New Taiwan dollars at the exchange rates at the balance sheet date. Note 3: Paid-in capital is US$4,510 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$4,500 thousand. Note 4: Paid-in capital is US$2,000 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$2,000 thousand. Note 5: Paid-in capital is US$14,000 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$26,300 thousand. Note 6: Paid-in capital is US$11,500 thousand and accumulated amount of remittance from Taiwan to Mainland China is US$8,591 thousand. Note 7: ‘Investment income (loss) recognised by the Company for the three months ended March 31, 2021 was based on the financial statements that were reviewed by parent company’s CPA.

Companyname Accumulated amount of remittance from
Taiwan to Mainland China as of
March 31,2021		 Investment amount approved by
the Investment Commission of
the Ministry of Economic
Affairs(MOEA)		 Ceiling on investments
in Mainland China
imposed by the
Investment
Commission of
MOEA
Y.C.C. PARTS MFG. CO.,
LTD.		 $ 1,293,094 $ 1,315,224 $ 2,120,244

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

March 31, 2021

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

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

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

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

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

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

Table 8, Page 1

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