CMC - AGM Information 2019 | FinancialReports.eu

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Stock code：2204

China Motor Corporation

2019 Annual Shareholders’ Meeting

MEETING AGENDA

(Translation)

Notice to Readers

The Meeting Agenda has been translated into English from the original Chinese version. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese version shall prevail.

Meeting Agenda ............................................................................................................. 1 Reporting matters .......................................................................................................... 3 Acknowledgements ....................................................................................................... 7 Discussions .................................................................................................................. 33 Elections ...................................................................................................................... 39 Other matters ............................................................................................................... 42 Motions ........................................................................................................................ 43

Attachments

I. Comparison Table for the “Procedures for Loaning of Funds” Before and After Revision ................................................................................................ 44 II. Comparison Table for the “Procedures for Endorsements/Guarantees” Before and After Revision .................................................................................... 46 III. Comparison Table for the “Procedures for Acquisition or Disposal of Assets” Before and After Revision ....................................................................... 48 IV. Comparison Table for the “Procedures for Derivatives Trading” Before and After Revision ................................................................................................ 62

Appendix

I.	Rules and Procedures of Shareholders’ Meeting ............................................... 63
II.	Current Shareholdings of Directors ................................................................... 66
III.	Impact of Stock Dividend Distribution on Operating Results and
	Earnings Per Share ............................................................................................ 67
IV.	Articles of Incorporation .................................................................................... 68
V.	Regulations Governing Election of Directors .................................................... 76

China Motor Corporation 2019 Annual Shareholders’ Meeting Agenda

Time: 9:00 AM, June 26th, 2019

Place: 1F, No. 3, Sec. 3, Chung Hsing Road, Xindian District, New Taipei City (the Dome Theater)

Meeting Agenda:

I. Call the Meeting to Order
II. Chairman’s Address
III. Reporting matters
2018 Business Report.
2018 Audit Committee's Report.
The Company’s Endorsements/Guarantees Report.
The 2018 Distribution of Employee Bonus and Director Compensation.
IV. Acknowledgements
The Company’s 2018 Annual Report.
The Company’s 2018 Earnings Distribution.
V. Discussions
Proposal of Capital Reduction.
Amendments to the Company’s “Procedures for Loaning of Funds”.
Amendments to the Company’s “Procedures for Endorsements/Guarantees”.
Amendments to the Company’s “Procedures for Acquisition or Disposal of Assets”.
Amendments to the Company’s “Procedures for Derivatives Trading”.
VI. Elections
Election of the Company’s 20[th] term Directors.

VII. Other matters

Release of restrictions on competitive activities on the 19[th] term and 20[th] of Directors.
VIII. Motions
IX. Adjournment

Reporting matters

I. 2018 Business Report

CMC Business Report

(1) For Taiwan car market and exportation business

Car sales totaled 435,131 units in Taiwan in the previous year (2018), of which 48,335 units were sold by the Company. The Company delivered NT$26.59 billion in operating revenues, NT$1.808 billion in operating profits, NT$3.593 billion in after-tax profits, NT$2.64 EPS. Furthermore, the Company delivered NT$34.87 billion in consolidated operating revenues, NT$1.898 billion in consolidated operating profits, and NT$3.892 billion in consolidated after-tax profits.

We unveiled the modified Outlander in 2018 Q4 to the automobile market of Taiwan. In addition to the interior design, the entire car comes standard with seven airbags and equipped with e-Assist intelligent safety system to enhance safety equipment. This model was echoed with the launch of the new generation crossover, the Eclipse Cross, at the end of 2017, which effectively helped to upgrade the brand image of Mitsubishi and product power. In addition, an overall remodeling of the CMC Veryca series was the first of its kind equipped with automatic transmission on the market. The SCC smart protection system was also introduced, including the TCL control system and ASC stability control system, as well as other safety options. This series is highly appealing to consumers and emerged as the new model of commercial vehicles.

The Company will continue to launch special editions in 2019 on the basis of the models on hand, and has planned a brand new Delica in Q3 with overall remodeling. A remodeled Zinger will also be launched in Q4 with a full-range of safety options and higher quality interior design to satisfy the diversified needs of consumers. Under the input of the trade-in allowance policy, domestic sales of vehicles is expected at 49,624 units, or growth of 2.7% from the same period of 2018.

The export market seems to be hampered by the strict rules and regulations of the Gulf Cooperative Council (six countries in the Gulf Area) effective January of last year. The accumulated sales last year were 443 units, a significant decline from the same period of 2017. The export of CKD parts was 1,320 sets. Export sales of vehicles to the Middle East is expected to rise by 20% in 2019 as compared with the previous year, as the safety specifications of Veryca and Zinger could meet the safety rules and regulations of the GCC.

(2) Mainland China Auto Market

Mainland China enjoyed GDP growth of 6.6% in 2018. Clouded by the China-USA trade dispute, consumer confidence declined. Likewise, consumption of automobiles began to weaken in Q3 of last year. In 2018, the total sale of motor vehicles was just 28.08 million units, a decline of 2.8% from the same period of 2017,

and was the first decline in sales since 1990. GDP growth in 2019 is expected to achieve 6.0% ～ 6.5% in Mainland China. The projected sales of motor vehicles are about the same as last year, at about 28.1 million units.

Southeast Motor Corp., an investee company of the Company in China, achieved 10% growth in 2018 Q1. However, overall sales were severely challenged by the downturn of the macroeconomic environment and the intensification of competition in the market. In 2018, the total sale of motor vehicles by this Company was about 90,539 units, or a decline of 41.5% from the same period of 2017.

Further to boosting the sale of DX7 and DX3, a brand-new SUV model, the DX5, will be launched to the market in the latter half of the year in 2019. A new model of the DX3, the DX3 EV500, was lauched in the end of the year, and is modified with improved range powered by electricity only. It is expected that its sales could be as many as 102,200 units in the year.

Another investee of the Company in Mainland China, Fujian Benz, sold 28,616 cars in 2018 under the continued popularity of the V-class and New Vito. It was an increase in sales of 27.3% from the same period of 2017. The VAT cut by the Chinese Government in 2019 is expected to help to boost sales by 7.6% or 30,800 units from the same period of 2018.

(3) Development of new business lines

Electric two-wheeler sales in 2018 were 10,093 units, or growth of 7.7% from the same period of 2017. It is expected that two high performance models will be launched to the mainstream market (115c.c.-125c.c.). In addition, the Company has also planned to engage in a joint venture with China Petroleum Corporation and the government to establish more charging stations to create a charging circle. Electric-powered two wheelers will still be popular on the market, and sales in 2019 are expected to grow at a significant level.

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Chairman: Li-lien Chen Yen

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Manager: Chao-Wen Chen

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Accounting Supervisor: Mei-Chu Tai

II. 2018 Audit Committee's Report

China Motor Corporation

Audit Committee's Review Report on the 2018 Financial Statements

The Company’s 2018 Financial Statements and the Consolidated Financial Report which were audited by Chih-Ming Shao and Ya-Ling Wong of Deloitte & Touche. The Annual Report and Earnings Distribution proposal have been reviewed by the Audit Committee members of the Company and determined to be correct and accurate. This is hereby reported in accordance with Article14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

Please verify the audit and review results.

To The 2019 Annual Shareholders’ Meeting

China Motor Corporation

Chairman of the Audit Committee：Chen-Chi Hsiao

Date: March 27th, 2019

III. The Company’s Endorsements/Guarantees Report

The total amount of endorsements and guarantees is NT$ 6,920,254 thousand. The status of endorsement and guarantee is NT$ 0 up to March 31st, 2019.

IV. The 2018 Distribution of Employee Bonus and Director Compensation

(1) Pursuant to Article 27 of the Articles of Incorporation, current year profits are subject to employee remuneration of no lesser than 0.1% and directors’ remuneration of no higher than 0.5%.
(2) The Company’s 2018 pre-tax profit before employee and directors’ remuneration amounted to NT$3,949,256 thousand. Based on this figure, a cash payment for employee remuneration totaling NT$33,511 thousand and directors’ remuneration totaling NT$19,746 thousand has been proposed.
(3) In addition to said employees’ remuneration, the Company will also grant incentive bonuses such as three major festivals’ bonus, yearly bonus, and performance bonus for management team’s growth to encourage employees to create better performance for the Company and its shareholders.
(4) The Company’s 2018 employee/director remuneration had been approved by the Remuneration Committee and Board of Directors in March 2019.

Acknowledgements

Proposal 1

Proposed by the Board of Directors

Subject: The Company’s 2018 Annual Report

Explanation:

The Company’s 2018 Financial Statements were audited by Chih-Ming Shao and Ya-Ling Wong of Deloitte & Touche. The above-mentioned Financial Statements along with the Business Report have been reviewed by the Audit Committee members of the Company and determined to be correct and accurate and the review report has been presented.
The 2018 Business Report (please refer to page 3-4) and Financial Statements (please refer to page 8-30) are attached.
Please proceed with the acknowledgement.

Resolution:

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders China Motor Corporation

Opinion

We have audited the accompanying consolidated financial statements of China Motor Corporation and its subsidiaries (the Group), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to Other Matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the consolidated financial statements of the Group for the year ended December 31, 2018 are stated as follows:

Evaluation of Write-down of Inventory

Inventories of the Group are stated at the lower of cost or net realizable value. The estimation of the net realizable value is based on current market conditions and historical experience with product sales of a similar nature. Since rapid changes in market conditions may have a material impact on the result of such evaluation which could thus lead to the risk of inventory being inactive or obsolete, the evaluation of the write-off of inventory has been identified as a key audit matter.

Our audit procedures in respect of the evaluation of the impairment of inventory included:

Discussing with management whether the accounting methods and calculations of the evaluation of inventory had any significant changes;
Taking stock and verifying the authenticity of documentary evidence of the net realizable value of inventory, such as sales invoices, in order to verify the accuracy of the calculation of the net realizable value of inventory.

Revenue Recognition

Domestic sales of vehicles is material to the Group’s consolidated financial statements. Since the sales of vehicles is subject to the market situation and might lead to recognizing revenue in advance of the appropriate point of recognition, revenue recognition has been identified as a key audit matter.

Our audit procedures in respect of revenue recognition included:

Discussing with management whether the accounting methods for revenue recognition were appropriate and consistently applied;
Testing the design of the revenue recognition internal controls and the operating effectiveness of such controls as well as verifying the authenticity of sales transaction-related documentary evidence;
Performing cut-off tests, including examining transaction terms in sales contracts and vehicle delivery receipts, in order to verify whether the risks and rewards of the merchandise were truly transferred and whether the timing of revenue recognition was accurate.

Other Matter

We did not audit the financial statements as of and for the years ended December 31, 2018 and 2017 of Daimler Vans Hong Kong Ltd., Guangzhou NTN-Yulon Drivertrain Co., Ltd., Xiangyang NTN-Yulon Drivertrain Co., Ltd., Shung Ye Motors Corporation, Uni Auto Parts Manufacture Co., Ltd. and Southeast-Motor Co., Ltd. in which the Group had equity-method investments, but such financial statements were audited by other auditors whose reports have been furnished to us. Our opinion, insofar as it relates to the amounts included for these investees in the Group’s consolidated financial statements, is based solely on the reports of the other auditors. The aforementioned equity-method investments were 12.1% (NT$7,814,960 thousand) and 10.5% (NT$6,656,901 thousand) of the Group’s total assets as of December 31, 2018 and 2017, respectively. The Group’s share of equity of the aforementioned equity-method investments amounted to NT$1,282,377 thousand in comprehensive income and NT$1,216,697 thousand in comprehensive income for the years ended December 31, 2018 and 2017, respectively, which amounted to 36.4% and 29.3% of the Group’s consolidated total comprehensive income, respectively.

We have also audited the parent company only financial statements of China Motor Corporation as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion with other matter section.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
10 -
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Chih-Ming Shao and Ya-Ling Wong.

Deloitte & Touche Taipei, Taiwan Republic of China

March 27, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets at amortized cost (Notes 4, 9 and 10) Financial assets for hedging (Notes 4 and 11) Debt investments with no active market (Notes 4 and 18) Notes receivable, net (Notes 4 and 13) Accounts receivable, net (Notes 4 and 13) Trade receivables from related parties (Notes 4 and 33) Other receivables (Note 4) Inventories(Notes 4, 5 and 15) Prepayments (Note 33) Non-current assets held for sale (Notes 4 and 16) Other current assets (Notes 4, 28 and 34) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets at fair value through other comprehensive income (Notes 4 and 8) Available-for-sale financial assets (Notes 4 and 12) Financial assets at amortized cost (Notes 4, 9 and 10) Financial assets measured at cost (Notes 4 and 17) Debt investments with no active market (Notes 4, 18 and 33) Investments accounted for using the equity method (Notes 4 and 19) Property, plant and equipment (Notes 4, 20, 33 and 34) Investment properties (Notes 4, 21 and 34) Intangible assets under development (Note 4) Deferred tax assets (Notes 4 and 28) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 22 and 34) Short-term bills payable Notes and accounts payables Trade payables to related parties (Note 33) Other payables (Note 23) Current tax liabilities (Notes 4 and 28) Other current liabilities (Notes 4, 7, 11 and 33) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 28) Net defined benefit liabilities (Notes 4 and 24) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Notes 4, 8and 25) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain on investments in financial assets at fair value through other comprehensive income Unrealized gain on available-for-sale financial assets Loss on effective portion of cash flow hedges (Notes 6 and 11) Gain on the hedging instruments (Note 11) Equity directly associated with non-current assets held for sale (Note 16) Total other equity Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS (Note 14) Total equity TOTAL		2018 Amount % $ 14,429,460 23 567,643 1 104,359 - 743,303 1 - - 16,663 - 1,160,791 2 1,952,469 3 98,749 - 4,070,264 6 1,134,247 2 148,023 - 596,590 1 25,022,561 39 734,341 1 227,396 - - - 824,705 1 - - - - 29,106,774 45 6,388,147 10 1,380,002 2 304,163 1 336,711 1 179,616 - 39,481,855 61 $ 64,504,416 100 $ 645,000 1 93,972 - 2,705,317 4 944,954 2 2,717,065 4 117,081 - 297,523 1 7,520,912 12 268,161 1 910,328 1 30,926 - 1,209,415 2 8,730,327 14 13,840,508 22 6,403,633 10 8,897,857 14 1,046,967 1 22,486,952 35 32,431,776 50 (646,278) (1) 117,177 - - - - - 20,997 - (7,538) - (515,642) (1) 52,160,275 81 3,613,814 5 55,774,089 86 $ 64,504,416 100		2017
				Amount % $ 13,816,041 22 529,496 1 - - - - 744,052 1 23,799 - 1,161,493 2 1,703,903 3 105,184 - 4,464,469 7 1,436,696 2 - - 586,784 1 24,571,917 39 - - - - 726,472 1 - - 194,860 - 1,534,751 2 27,700,662 44 6,543,043 10 1,395,488 2 154,628 - 417,001 1 290,104 1 38,957,009 61 $ 63,528,926 100 $ 745,000 1 109,933 - 2,555,888 4 886,390 1 2,871,988 5 328,393 1 289,470 - 7,787,062 12 114,554 - 1,140,697 2 29,651 - 1,284,902 2 9,071,964 14 13,840,508 22 6,407,340 10 8,487,293 13 1,051,658 2 20,895,137 33 30,434,088 48 (485,118) (1) - - 765,456 1 (12,253) - - - - - 268,085 - 50,950,021 80 3,506,941 6 54,456,962 86 $ 63,528,926 100

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

(With Deloitte & Touche audit report dated March 27, 2019)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 26 and 33) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 11, 15, 24, 27 and 33) Cost of goods sold Other operating cost Total operating costs GROSS PROFIT REALIZED (UNREALIZED) GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 24, 27 and 33) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME Share of profit of associates and joint ventures accounted for using the equity method (Notes 4 and 19) Interest income (Note 4) Dividend income (Notes 4 and 8) Other income Gain on disposal of investments (Notes 4, 17 and 30) Foreign exchange gain (loss) Interest expense Other expense Loss on financial instruments at fair value through profit or loss Impairment loss (Notes 4, 17 and 20)		2018 Amount % $ 33,490,420 96 1,379,094 4 34,869,514 100 27,789,296 80 887,608 2 28,676,904 82 6,192,610 18 (2,053) - 6,190,557 18 914,786 3 1,284,988 4 2,092,742 6 4,292,516 13 1,898,041 5 2,407,876 7 195,251 1 29,755 - 112,747 - - - 12,498 - (14,639) - (53,721) - (49,059) - (228,036) (1)		2017
				Amount % $ 37,419,056 96 1,489,037 4 38,908,093 100 31,358,370 80 1,038,443 3 32,396,813 83 6,511,280 17 9,933 - 6,521,213 17 904,794 3 1,154,064 3 2,027,795 5 4,086,653 11 2,434,560 6 2,133,611 5 198,151 1 40,525 - 101,934 - 194,162 1 (108,800) - (13,329) - (14,766) - (6,109) - (83,932) -

(Continued)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 28) NET PROFIT FROM CONTINUING OPERATIONS NET PROFIT FROM DISCONTINUED OPERATIONS (Note 16) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Note 4) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 24) Unrealized loss on investment equity instruments designated as fair value through other comprehensive income (Note 25) Gain on hedging instruments (Notes 11 and 25) Share of other comprehensive loss of associates accounted for using the equity method (Notes 19 and 25) Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 28) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (Note 25) Unrealized loss on available-for-sale financial assets (Note 25) Total gain on effective portion of cash flow hedges (Note 25) Share of the other comprehensive loss of associates and joint ventures accounted for using the equity method (Notes 19 and 25) Income tax relating to items that may be reclassified subsequently to profit or loss (Note 28)		2018 Amount % 2,412,672 7 4,310,713 12 418,671 1 3,892,042 11 - - 3,892,042 11 3,913 - (74,082) - 40,663 - (120,566) - (1,168) - (38,618) - - - - - (177,764) (1) - -		2017
				Amount % 2,441,447 7 4,876,007 13 338,656 1 4,537,351 12 2,839 - 4,540,190 12 (31,460) - - - - - (52,796) - 5,348 - (25,165) - (120,588) - 20,084 - (181,113) (1) (3,702) - (Continued)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (Note 29) From continuing and discontinued operations Basic Diluted From continuing operations Basic Diluted		2018 Amount % (367,622) (1) $ 3,524,420 10 $ 3,592,999 10 299,043 1 $ 3,892,042 11 $ 3,298,141 9 226,279 1 $ 3,524,420 10 $ 2.64 $ 2.63 $ 2.64 $ 2.63		2017
				Amount % (389,392) (1) $ 4,150,798 11 $ 4,105,643 11 434,547 1 $ 4,540,190 12 $ 3,743,553 10 407,245 1 $ 4,150,798 11 $ 3.01 $ 3.01 $ 3.01 $ 3.01

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

(With Deloitte & Touche audit report dated March 27, 2019)

(Concluded)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

		Equity Attribu	le to Owners of the Corporation
Ordinary S	hares Amounts Capital Surplus $ 13,840,508 $ 6,407,220 - - - - - 120 - - - - - - - - - - 13,840,508 6,407,340 - - 13,840,508 6,407,340 - - - - - - - (3,707 ) - - - - - - - - - - - - - - $ 13,840,508 $ 6,403,633	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 8,168,383 $ 1,051,658 $ 19,399,595 318,910 - (318,910 ) - - (2,214,481 ) - - (826 ) - - - - - - - - 4,105,643 - - (75,884) - - 4,029,759 8,487,293 1,051,658 20,895,137 - - 888,982 8,487,293 1,051,658 21,784,119 410,564 - (410,564 ) - - (2,491,292 ) - (4,691 ) 4,691 - - 9,720 - - - - - 3,592,999 - - 2,244 - - 3,595,243 - - - - - (5,111 ) - - 146 $ 8,897,857 $ 1,046,967 $ 22,486,952		Other Equity		Equity Directly Associated With Loss on the Non-current Hedging Instruments Assets Held For Sale $ - $ - - - - - - - - - - - - - - - - - - - (12,253) - (12,253 ) - - - - - - - - - - - - - 33,250 - 33,250 - - (7,538 ) - - - - $ 20,997 $ (7,538)
			Exchange Differences on Unrealized Gain on Investments in Financial Assets at Fair Value U Translating Through Other Foreign Operations Comprehensive Income A F $ (268,058 ) $ - - - - - - - - - - - - - (217,060) - (217,060) - (485,118 ) - - 273,866 (485,118 ) 273,866 - - - - - - - - - - - - (168,698) (161,654) (168,698) (161,654) 7,538 - - 5,111 - (146) $ (646,278) $ 117,177	nrealized Gain (Loss) on vailable-for-sale inancial Assets P $ 850,984 - - - - - - (85,528) (85,528) 765,456 (765,456) - - - - - - - - - - - - $ -	Gain (Loss) on Effective ortion of Cash Flow Hedges $ (28,635 ) - - - - - - 16,382 16,382 (12,253 ) 12,253 - - - - - - - - - - - - $ -
Shares (In Thousands) 1,384,051 - - - - - - - - 1,384,051 - 1,384,051 - - - - - - - - - - - 1,384,051

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

(With Deloitte & Touche audit report dated March 27, 2019)

16 -

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax from continuing operations Income before income tax from discontinued operations Income before income tax Adjustments for: Depreciation expenses Amortization expenses Impairment loss reversed on trade receivables Expected credit loss Net loss on fair value change of financial instruments at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates and joint ventures accounted for using the equity method Net loss on disposal of property, plant and equipment Loss (gain) on disposal of investments Impairment loss of financial assets Impairment loss of non-financial assets Unrealized (realized) gain on transactions with associates Unrealized loss (gain) on foreign currency exchange Loss on disposal of subsidiaries Changes in operating assets and liabilities Financial assets held for trading Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Accounts receivable Trade receivables from related parties Other receivables Inventories Prepayments Other current assets Notes and accounts payable Trade payables to related parties Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities	2018 $ 4,310,713 - 4,310,713 978,026 120,447 - 9,413 49,059 14,639 (195,251) (29,755) (2,407,876) 8,922 610 - 228,036 2,053 (4,321) - - (56,661) 7,019 (16,177) (249,747) (29,949) 389,744 301,025 55,243 150,343 56,858 (148,332) 23,759 (226,456) 3,341,384 (465,503) 2,875,881	2017 $ 4,876,007 2,662 4,878,669 940,169 119,118 (3,017) - 6,109 13,329 (198,363) (40,525) (2,133,611) 826 (115,954) 21,616 62,316 (9,933) 27,423 2,179 (516,798) - 81,385 (42,996) (127,448) 25,325 582,031 (907,645) (182,046) 78,841 66,991 (237,478) (99,085) (262,689) 2,028,739 (293,946) 1,734,793

(Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Proceeds from repayment of principal of financial assets at amortized cost Decrease in available-for-sale financial assets Acquisition of debt investments with no active market Proceeds from repayments of principal of debt investments with no active market Purchase of financial assets measured at cost Proceeds from disposal of financial assets measured at cost Acquisition of investments accounted for using the equity method Disposal of investments accounted for using the equity method Disposal of subsidiaries Proceeds from capital reduction of investments accounted for using the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other non-current assets Interest received Dividends received Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Increase (decrease) in short-term bills payable Increase in other non-current liabilities Cash dividends paid Interest paid Decrease in non-controlling interests Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	2018 12,603 (1,210,257) 2,588,643 - - - - - (553,113) - - 127,737 (1,020,468) 47,714 (190,126) (50,683) 231,426 1,295,659 1,279,135 (100,000) (15,961) 1,593 (2,491,292) (14,601) (163,237) (2,783,498) (14,796) 1,356,722	2017 - - - 728,887 (1,843,867) 1,477,280 (1,137) 86,832 (22,298) 91,116 6,328 - (1,149,990) 45,579 (49,865) (108,329) 173,687 831,420 265,643 (23,000) 20,580 3,083 (2,214,481) (12,784) (174,259) (2,400,861) (15,293) (415,718)

(Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets at December 31, 2018 and 2017:

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR Cash and cash equivalents in consolidated balance sheets Other items that meet the requirement of IAS 7 cash and cash equivalents definitions Cash and cash equivalents in consolidated statements of cash flows		December 31	December 31
		2018 13,816,041 $ 15,172,763 $ 14,429,460 743,303 $ 15,172,763	2017 14,231,759 $ 13,816,041 $ 13,816,041 - $ 13,816,041

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

(With Deloitte & Touche audit report dated March 27, 2019) (Concluded)

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders China Motor Corporation

Opinion

We have audited the accompanying financial statements of China Motor Corporation (the Corporation), which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to Other Matter section), the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the financial statements of the Corporation for the year ended December 31, 2018 are stated as follows:

Evaluation of Write-down of Inventory

Inventories of the Corporation are stated at the lower of cost or net realizable value. The estimation of the net realizable value is based on current market conditions and historical experience with product sales of a similar nature. Since rapid changes in market conditions may have a material impact on the result of such evaluation which could lead to the risk of inventory being inactive or obsolete, the evaluation of the write-off of inventory has been identified as a key audit matter.

Our audit procedures in respect of the evaluation of the impairment of inventory included:

Discussing with management whether the accounting methods and calculations of the evaluation of inventory had any significant changes;
Taking stock and verifying the authenticity of documentary evidence of the net realizable value of inventory, such as sales invoices, in order to verify the accuracy of the calculation of the net realizable value of inventory.

Revenue Recognition

Domestic sales of vehicles is material to the Corporation’s financial statements. Since the sales of vehicles is subject to the market situation and might lead to recognizing revenue in advance of the appropriate point of recognition, revenue recognition has been identified as a key audit matter.

Our audit procedures in respect of revenue recognition included:

Discussing with management whether the accounting methods for revenue recognition were appropriate and consistently applied;
Testing the design of the revenue recognition internal controls and the operating effectiveness of such controls as well as verifying the authenticity of sales transaction-related documentary evidence;
Performing cut-off tests, including examining transaction terms in sales contracts and vehicle delivery receipts, in order to verify whether the risks and rewards of the merchandise were truly transferred and whether the timing of revenue recognition was accurate.

Other Matter

We did not audit the financial statements as of and for the years ended December 31, 2018 and 2017 of Daimler Vans Hong Kong Ltd., Shung Ye Motors Corporation, and Uni Auto Parts Manufacture Co., Ltd. in which the Corporation had equity-method investments, but such financial statements were audited by other auditors whose reports have been furnished to us. Our opinion, insofar as it relates to the amounts included for these investees in the Corporation’s accompanying financial statements, is based solely on the reports of the other auditors. The aforementioned equity-method investments were 5.8% (NT$3,326,815 thousand) and 4.3% (NT$2,464,539 thousand) of the Corporation’s total assets as of December 31, 2018 and 2017, respectively. The Corporation’s share of equity of the aforementioned equity-method investments amounted to NT$829,089 thousand and NT$503,989 thousand in comprehensive income for the years ended December 31, 2018 and 2017, respectively, which amounted to 25.1% and 13.5% of the Corporation’s total comprehensive income, respectively.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

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

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Corporation’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Corporation to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Chih-Ming Shao and Ya-Ling Wong.

Deloitte & Touche Taipei, Taiwan Republic of China

March 27, 2019

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent 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. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

CHINA MOTOR CORPORATION

BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets for hedging(Notes 4 and 11) Debt investments with no active market (Notes 4 and 16) Notes receivable, net (Notes 4 and 13) Accounts receivable, net (Notes 4 and 13) Trade receivables from related parties (Notes 4 and 29) Other receivables (Notes 4 and 29) Inventories (Notes 4, 5 and 14) Prepayments (Note 29) Other current assets (Notes 4, 25 and 30) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets at fair value through other comprehensive income (Notes 4 and 8) Available-for-sale financial assets (Notes 4 and 12) Financial assets at amortized cost (Notes 4, 9, 10 and 29) Financial assets measured at cost (Notes 4 and 15) Debt investments with no active market (Notes 4, 16 and 29) Investments accounted for using the equity method (Notes 4 and 17) Property, plant and equipment (Notes 4, 18 and 29) Investment properties (Notes 4 and 19) Intangible assets under development (Note 4) Deferred tax assets (Notes 4 and 25) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable Trade payables to related parties (Note 29) Other payables (Note 20) Current tax liabilities (Notes 4 and 25) Other current liabilities (Notes 4, 7, 11 and 29) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 25) Net defined benefit liabilities (Notes 4 and 21) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Notes 4, 8 and 22) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain on investments in financial assets at fair value through other comprehensive income Unrealized gain on available-for-sale financial assets Total loss on effective portion of cash flow hedges (Notes 6 and 11) Gain on hedging instruments (Note 11) Total other equity Total equity TOTAL		2018 Amount % $ 11,070,825 19 478,809 1 218,956 - - - 452 - 454,692 1 1,241,256 2 768,896 1 3,003,142 5 903,555 2 223,514 1 18,364,097 32 671,565 1 30,991 - - - 968,021 2 - - - - 32,645,568 57 3,610,823 6 803,605 1 304,163 1 230,305 - 77,446 - 39,342,487 68 $ 57,706,584 100 $ 1,945,603 4 760,683 1 1,838,431 3 28,148 - 119,886 - 4,692,751 8 117,938 - 728,314 2 7,306 - 853,558 2 5,546,309 10 13,840,508 24 6,403,633 11 8,897,857 15 1,046,967 2 22,486,952 39 32,431,776 56 (653,816) (1) 117,177 - - - - - 20,997 - (515,642) (1) 52,160,275 90 $ 57,706,584 100		2017
				Amount % $ 10,463,977 18 510,417 1 - - 700,000 1 644 - 405,828 1 1,247,304 2 579,841 1 3,305,140 6 832,957 2 153,150 - 18,199,258 32 - - - - 726,472 1 - - 11,678 - 1,674,851 3 31,227,631 55 3,654,637 6 821,458 2 154,628 - 312,300 1 71,232 - 38,654,887 68 $ 56,854,145 100 $ 1,899,056 3 777,592 2 1,993,148 4 162,209 - 137,533 - 4,969,538 9 - - 926,925 1 7,661 - 934,586 1 5,904,124 10 13,840,508 24 6,407,340 11 8,487,293 15 1,051,658 2 20,895,137 37 30,434,088 54 (485,118) (1) - - 765,456 2 (12,253) - - - 268,085 1 50,950,021 90 $ 56,854,145 100

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche audit report dated March 27, 2019)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 23 and 29) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 11, 14, 21, 24 and 29) Cost of goods sold Other operating costs Total operating costs GROSS PROFIT REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 21, 24 and 29) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Share of profit of subsidiaries, associates and joint ventures (Notes 4 and 17) Interest income (Notes 4 and 29) Other income (Note 29) Gain on disposal of investments (Note 15) Other expenses (Note 29) Foreign exchange losses Loss on financial instruments at fair value through profit or loss (Note 4) Impairment loss (Notes 4 and 18) Total non-operating income PROFIT BEFORE INCOME TAX		2018 Amount % $ 26,126,810 98 459,162 2 26,585,972 100 21,945,077 83 157,826 1 22,102,903 84 4,483,069 16 2,401 - 4,485,470 16 389,580 1 694,368 3 1,593,859 6 2,677,807 10 1,807,663 6 2,099,291 8 150,641 1 48,606 - - - (7,743) - (5,282) - (48,817) - (148,360) (1) 2,088,336 8 3,895,999 14		2017
				Amount % $ 29,760,535 98 474,162 2 30,234,697 100 25,414,411 84 219,050 1 25,633,461 85 4,601,236 15 4,883 - 4,606,119 15 484,373 1 612,604 2 1,444,708 5 2,541,685 8 2,064,434 7 2,074,512 7 153,187 - 62,326 - 103,432 - (1,539) - (48,462) - (6,247) - (62,000) - 2,275,209 7 4,339,643 14 (Continued)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

INCOME TAX EXPENSE (Notes 4 and 25) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Note 4) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 21) Unrealized loss on investment equity instruments designated at fair value through other comprehensive income (Note 22) Gain on the hedging instruments (Notes 11 and 22) Share of other comprehensive loss of subsidiaries and associates (Notes 17 and 22) Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 25) Items that may be reclassified subsequently to profit or loss: Unrealized loss on available-for-sale financial assets (Note 22) Total gains on effective portion of cash flow hedges (Note 22) Share of the other comprehensive loss of subsidiaries, associates and joint ventures accounted for using the equity method (Notes 17 and 22) Income tax relating to items that may be reclassified subsequently to profit or loss (Note 25) Other comprehensive loss for the year (net of income tax) TOTAL COMPREHENSIVE INCOME FOR THE YEAR		2018 Amount % 303,000 1 3,592,999 13 (1,098) - (7,335) - 19,728 - (139,201) - 1,746 - - - - - (168,698) (1) - - (294,858) (1) $ 3,298,141 12		2017
				Amount % 234,000 1 4,105,643 13 (20,130) - - - - - (59,176) - 3,422 - (118,561) - 21,774 - (185,717) (1) (3,702) - (362,090) (1) $ 3,743,553 12 (Continued)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2018 Amount % EARNINGS PER SHARE (IN NEW TAIWAN DOLLARS; Note 26) Basic $ 2.64 Diluted $ 2.63 The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche audit report dated March 27, 2019)	2017
	Amount % $ 3.01 $ 3.01 (Concluded)

CHINA MOTOR CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)
BALANCE AT JANUARY 1, 2017 Appropriation of the 2016 earnings Legal reserve Cash dividends distributed by the Corporation Change in capital surplus from investments in associates and joint ventures accounted for using the equity method Net profit for the year ended December 31, 2017 Other comprehensive income (loss) for the year ended December 31, 2017, net of income tax Total comprehensive income (loss) for the year ended December 31, 2017 BALANCE AT DECEMBER 31, 2017 Effect of retrospective application BALANCE AT JANUARY 1, 2018 AS ADJUSTED Appropriation of the 2017 earnings Legal reserve Cash dividends distributed by the Corporation Reversal of special reserve Change in capital surplus from investments in associates and joint ventures accounted for using the equity method Net profit for the year ended December 31, 2018 Other comprehensive income (loss) for the year ended December 31, 2018, net of income tax Total comprehensive income (loss) for the year ended December 31, 2018 Subsidiaries and associates disposed the investments in equity instruments designated as at fair value through other comprehensive income Disposals of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2018	Ordinary Shares Shares (In Thousands) Amount Capital Surplus 1,384,051 $ 13,840,508 $ 6,407,220 - - - - - - - - 120 - - - - - - - - - 1,384,051 13,840,508 6,407,340 - - - 1,384,051 13,840,508 6,407,340 - - - - - - - - - - - (3,707) - - - - - - - - - - - - - - - 1,384,051 $ 13,840,508 $ 6,403,633	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 8,168,383 $ 1,051,658 $ 19,399,595 318,910 - (318,910) - - (2,214,481) - - (826) - - 4,105,643 - - (75,884) - - 4,029,759 8,487,293 1,051,658 20,895,137 - - 888,982 8,487,293 1,051,658 21,784,119 410,564 - (410,564) - - (2,491,292) - (4,691) 4,691 - - 9,720 - - 3,592,999 - - 2,244 - - 3,595,243 - - (5,472) - - 507 $ 8,897,857 $ 1,046,967 $ 22,486,952	Other Equity	Gain on the Hedging Instruments $ - - - - - - - - (12,253) (12,253) - - - - - 33,250 33,250 - - $ 20,997	Total Equity $ 49,421,655 - (2,214,481) (706) 4,105,643 (362,090) 3,743,553 50,950,021 397,392 51,347,413 - (2,491,292) - 6,013 3,592,999 (294,858) 3,298,141 - - $ 52,160,275
			Exchange Differences on Translating Unrealized Gain on Investments in Financial Assets at Fair Value Through Other Unrealized Gain (Loss) on Available-for Gain (Loss) on Effective Portion Foreign Operations Comprehensive Income -sale Financial Assets of Cash Flow Hedges $ (268,058) $ - $ 850,984 $ (28,635) - - - - - - - - - - - - - - - - (217,060) - (85,528) 16,382 (217,060) - (85,528) 16,382 (485,118) - 765,456 (12,253) - 273,866 (765,456) 12,253 (485,118) 273,866 - - - - - - - - - - - - - - - - - - - - - - (168,698) (161,654) - - (168,698) (161,654) - - - 5,472 - - - (507) - - $ (653,816) $ 117,177 $ - $ -
	Shares (In Thousands) 1,384,051 - - - - - - 1,384,051 - 1,384,051 - - - - - - - - - 1,384,051

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche audit report dated March 27, 2019)

CHINA MOTOR CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expenses
Amortization expenses
Expected credit loss
Impairment loss reversed on trade receivables
Net loss on fair value change of financial instruments at fair
value through profit or loss
Interest expense
Interest income
Dividend income
Share of profit of subsidiaries, associates and joint ventures

Loss (gain) on disposal of property, plant and equipment
Loss (gain) on disposal of investments
Impairment loss of non-financial assets
Realized gain on the transactions with associates
Unrealized loss (gain) on foreign currency exchange, net
Changes in operating assets and liabilities
Financial assets held for trading
Financial assets mandatorily classified as at fair value through
profit or loss
Notes receivable
Accounts receivable
Trade receivables from related parties
Other receivables
Inventories
Prepayments
Other current assets
Accounts payables
Payables to related parties
Other payables
Other current liabilities
Net defined benefit liabilities

Cash generated from operations
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at amortized cost

Proceeds from repayment of principal of financial assets at
amortized cost
Decrease in available-for-sale financial assets

2018
2017
$ 3,895,999 $ 4,339,643
789,185
737,307
80,283
82,374
6,308
-
-
(2,642)
48,817
6,247
45
45
(150,641)
(153,187)
(18,762)
(24,276)
(2,099,291) (2,074,512)
3,610
(2,781)
333
(31,923)
148,360
62,000
(2,401)
(4,883)
(23,736)
29,723
-
(512,898)
12,334
-
194
78,651
(58,659)
185,615
6,225
(164,187)
(28,333)
(3,318)
301,998
711,323
(70,598)
(632,031)
(1,853)
52,741
46,064
127,533
(19,099)
(5,112)
(154,712)
(138,394)
(2,410)
(67,871)
(199,709)

(222,387)
2,509,551
2,372,800
(303,893)

(177,636)

2,205,658

2,195,164

(1,203,382)
-
2,641,210
-
-
573,093
(Continued)

CHINA MOTOR CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Acquisition of debt investments with no active market Proceeds from the repayments of principal of debt investments with no active market Acquisition of investments accounted for using the equity method Disposal of investments accounted for using the equity method Proceeds from capital return of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Other receivables of related parties Acquisition of intangible assets Increase in other non-current assets Interest received Dividends received Net cash (used in) generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in other non-current liabilities Cash dividends paid Interest paid Net cash used in financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2018 - - (553,113) - 127,737 (910,902) 31,414 (200,000) (190,126) (45,906) 190,701 1,224,205 1,111,838 (355) (2,491,292) (45) (2,491,692) 825,804 10,463,977 $ 11,289,781	2017 (1,796,144) 1,443,145 (22,298) 91,116 - (1,003,914) 43,122 (500,000) (49,865) (34,674) 127,528 761,902 (366,989) (162) (2,214,481) (45) (2,214,688) (386,513) 10,850,490 $ 10,463,977

Reconciliation of the amounts in the tatements of cash flows with the equivalent items reported in the balance sheets at December 31, 2018 and 2017:

Cash and cash equivalents in balance sheets Other items that meet the requirement of IAS 7 cash and cash equivalents definitions Cash and cash equivalents in statements of cash flows		December 31	December 31
		2018 $ 11,070,825 218,956 $ 11,289,781	2017 $ 10,463,977 - $ 10,463,977

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche audit report dated March 27, 2019)

Proposal 2

Proposed by the Board of Directors

Subject: The Company’s 2018 Earnings Distribution

Explanation:

In accordance with the 2018 Financial Statements and the Article 27 of the Articles of Incorporation, the 2018 Earnings Distribution Statement is presented. Please refer to page 32.
It is intended that the distribution of the 2018 Earnings will come from the 2018 undistributed Earnings with priority with the following distribution items:
(1) In accordance with Article 237 of the Company Act, 10% of the profit, NT$ 359,300 thousand is set aside as the legal reserve.
(2) It is intended that a cash dividend of NT$ 1.7 dollars per share will be set aside with a total of NT$ 2,352,886 thousand being distributed. The cash stock dividend distribution base day is July 26th, 2019.
For this profit distribution, in the event that the Company buys back its shares or transfers to the treasury stocks to the employees, which affects the number of shares outstanding on the distribution base day, it is intended that the shareholders’ meeting authorizes the Board of Directors to adjusts the shareholders’ dividends distribution rate based on the cash dividend amounts determined in this earnings distribution proposal.
Please proceed with the acknowledgement.

Resolution:

2018 Earnings Distribution Statement (Proposal)

(Proposal)
	(Unit: NT$)
Item	Amount
Priorperiod undistributed earnings	$17,993,280,666
Add: Adoption of IFRS adjustment number	888,982,654
Beginningretained earnings after adjustment	$18,882,263,320
Add: Adjustment arising from investments accounted for using the equity method Re-measurement of defined benefit plans recognized in retained earnings First-time adoption of IFRS for appropriation as special reserve reversal Disposals of investments in equity instruments designated as at fair value through other comprehensive income Netprofit after tax	2,279,228 4,212,217 4,691,003 507,189 3,592,998,978
Distributable earnings	$22,486,951,935
Distribution items Appropriation of legal earnings reserve Shareholder cash dividends (1.7 per share) End-of-period undistribution earnings	359,299,898 2,352,886,452 19,774,765,585
Sum	$ 22,486,951,935

Note : Distributed to whole dollar amount, and decimals were rounded off. Fractional numbers less than one dollar are placed into the Company’s other revenue.

==> picture [43 x 44] intentionally omitted <==

Chairman: Li-lien Chen Yen

==> picture [36 x 36] intentionally omitted <==

Manager: Chao-Wen Chen

==> picture [37 x 36] intentionally omitted <==

Accounting Supervisor: Mei-Chu Tai

Discussions

Proposal 1

Proposed by the Board of Directors

Subject: Proposal of Capital Reduction.

Explanation:

To improve this company's capital structure and increase returns on shareholders equity, this company is proposing a capital reduction to refund the shareholders money.
Our company's actual capital amounts are NT$13,840,508,540. Overall 1,384,050,854 shares were issued. The amount capital reduction for this time is set at NT$8,304,305,120 and 830,430,512 shares will be eliminated. The capital reduction percentage is 60%. The actual paid-up capital after this capital reduction will be NT$ 5,536,203,420 and the number of outstanding shares will be 553,620,342 shares.
Calculated based on the shares held by each shareholder on Shareholders List at the capital reduction stock issuing date, 400 shares will be reissued for 1000 shares (a reduction of 600 shares per 1000 shares). Shareholders shall have this company's agent for stock affairs consolidate fractional shares after the capital reduction into whole shares (consolidation period is from five days before the share stop-transfer date to the day before the share stop-transfer date) and register the whole shares. Cash shall be exchanged (based on the last transaction day closing prices of the stock exchange market prior to the capital reduction and share swap date) according to proportion for fractional shares that still cannot be consolidated into a whole share after the fractional share consolidation. The cash payment shall be calculated to the dollar (amount less than a dollar shall be forfeited). The chairman is authorized to designate a person to make the purchase at the closing price.
4 Physical stock papers will not be issued for new shares in this capital reduction and reissuing. The rights and obligations of the new shares is the same as for the

originally issued shares. After the shareholders meeting passes the resolution and the approval of the competent authority, the board of directors is authorized to set the capital reduction date and the capital reduction stock issuing date.

If regulations changes, competent authority adjustments or other factors affects the amount of outstanding shares, the proportion of shareholders capital reduction, and the amount of return for each share in the future, the shareholders meeting shall authorize the chairman to handle the matter according to the Company Act and other related laws and regulations.
Please proceed with the discussion.

Resolution:

Proposal 2

Proposed by the Board of Directors

Subject: Amendments to the Company’s “Procedures for Loaning of Funds”.

Explanation:

In accordance with part of the provisions of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” revised on March 7th, 2019; corresponding changes were made to Articles 5, 14 and 20 of the Company’s “Procedures for Loaning of Funds.”
Please refer to Attachment I (Please refer to page 44-45) for comparison table for the provisions before and after the revisions.
Please proceed with the discussion.

Resolution:

Proposal 3

Proposed by the Board of Directors

Subject: Amendments to the Company’s “Procedures for Endorsements/Guarantees”

Explanation:

In accordance with part of the provisions of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” revised on March 7th, 2019; corresponding changes were made to Articles 14 and 20 of the Company’s “Procedures for Endorsements/Guarantees.”
Please refer to Attachment II (Please refer to page 46-47) for comparison table for the provisions before and after the revisions.
Please proceed with the discussion.

Resolution:

Proposal 4

Proposed by the Board of Directors

Subject: Amendments to the Company’s “Procedures for Acquisition or Disposal of Assets”

Explanation:

In accordance with part of the provisions of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” revised on November 26th, 2018; corresponding changes were made to Articles 2, 3, 12, 13, 15 to 21, 30 and 30-1 of the Company’s “Procedures for Acquisition or Disposal of Assets.”
Please refer to Attachment III (Please refer to page 48-61) for comparison table for the provisions before and after the revisions.
Please proceed with the discussion.

Resolution:

Proposal 5

Proposed by the Board of Directors

Subject: Amendments to the Company’s “Procedures for Derivatives Trading”

Explanation:

In accordance with part of the provisions of the “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” revised on November 26th, 2018; corresponding changes were made to Articles 2 and 11 of the Company’s “Procedures for Derivatives Trading.”
Please refer to Attachment IV (Please refer to page 62) for comparison table for the provisions before and after the revisions.
Please proceed with the discussion.

Resolution:

Elections

Proposal 1

Proposed by the Board of Directors

Subject: Election of the Company’s 20[th] term Directors.

Explanation:

The Company's 19th board of directors is due for re-election on June 30, 2019. To comply with the rules of the securities authority, 8 directors and 3 independent directors will be elected for the 20th board to serve a term from July 1, 2019 to June 30, 2022.
According to Article 13 of the Articles of Incorporation, directors and independent directors are elected using a nomination system. All nominated candidates had been reviewed and approved by the Board of Directors on May 13, 2019. Refer to pages 40-41 for detailed education and career backgrounds.
Re-election of directors and independent directors is now in session.

Resolution:

List of Director and Independent Director Candidates (1) Director candidates

Shareholder No. or ID card No.	Name of corporate entity and number of shares held	Name of representative and No. of shares held	Representative’s education/career background
000000007	Yulon Motor Co., Ltd. Shares held: 111,480,444 shares	Li-lien Chen Yen Shares held: 0 shares	Department of Physical Education, Chinese Culture University Chairman of Yulon Motor Co., Ltd. Chairman of China Motor Corporation
		Tai-Ming Chen Shares held: 0 shares	LLM, Boston University Partner, Jones Day Taipei Office Director of China Motor Corporation
000000003	Tai Yuen Textile Co., Ltd. Shares held: 348,589,538 shares	Hsin-I Lin Shares held: 0 shares	Department of Mechanical Engineering, National Cheng Kung University Vice Premier of Executive Yuan; Minister, Council for Economic Planning and Development Minister, Ministry of Economic Affairs Vice chairman of China Motor Corporation General Manager of China Motor Corporation
		Kuo-Rong Chen Shares held: 0 shares	MBA, National Chiao Tung University Vice Chairman of Yulon Motor Co., Ltd. Director of China Motor Corporation
		Chao-Wen Chen Shares held: 0 shares	Executives program, Graduate School of Business Administration, National Chengchi University Department of Chemical Engineering, Chung Yuan Christian University Director and General Manager of China Motor Corporation
000000008	Mitsubishi Motors Corporation Shares held: 193,768,273 shares	Eiichi Takasawa Shares held: 0 shares	Science and Engineering Department, Aoyama Gakuin University General Manager of North Asia B Department, North Asia Division, Mitsubishi Motors Corporation Director of China Motor Corporation
000000009	Mitsubishi Corporation Shares held: 66,404,796 shares	Takayasu Yonekura Shares held: 0 shares	Policy Management Dept. Keio University Taiwan & Korea Team Leader, North Asia Automotive Dept. Automotive Business Division. Mitsubishi Corporation Director of China Motor Corporation
000000012	Ler Vian Enterprise Co., Ltd. Shares held: 5,539,400 shares	Hsin-Cheng Tseng Shares held: 0 shares	MBA, National Chengchi University Department of Nuclear Engineering and Science, National Tsing Hua University Director and Vice President of China Motor Corporation Substitute President, South East (Fujian) Motor Co., Ltd.

(2) Independent Director Candidates

Shareholder No. or ID card No.	Name and No. of shares held	Education/career background
H20122****	Wei-ching Lue Shares held: 0 shares	Master’s Degree, Department of Land Economics, National Chengchi University Deputy Mayor, New Taipei City Government Director-General, Finance Department, New Taipei City Government Deputy Director, National Treasury Administration, Ministry of Finance Counsellor,Ministryof Finance
F12041****	Chi-Ching Chen Shares held: 0 shares	MBA, Massachusetts Institute of Technology Sloan School of Management EMBA, Global Business Program, College of Commerce, National Chengchi University Director of GigaMedia Limited Co. Director of Financial One Corp. Director of Hao-Feng Asset Management Co., Ltd. Independent Director of Taiwan Acceptance Corporation Independent Director of China Motors Corporation
F12184****	Yun-Hua Yang Shares held: 0 shares	Ph.D in Law, University of Tuebingen Master of Law, National Taiwan University Professor of Law, National Chengchi University Associate Professor of Law, National Chengchi University Seminar at the Academy for the Judiciary, Ministry of Justice, Executive Yuan Independent Director, Yulon Nissan Motor Co., Ltd. Independent Director,China Motors Corporation

Other matters

Proposal 1

Proposed by the Board of Directors

Subject: Release of restrictions on competitive activities on the 19[th] and 20[th] term of Directors.

Explanation:

Pursuant to Paragraph 1, Article 209 of the Company Act, "A director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval."
Some of the Company’s directors are concurrently serving as directors or managers in other companies that CMC has invested in, allied or cooperated with. For this reason, a proposal is made to remove restrictions of the 19[th] and 20[th] board of directors for involving in competing businesses.
Please proceed with the discussion.

Resolution:

While the agenda is being discussed during the annual shareholder’s meeting, details regarding directors’ concurrent positions shall be explained in details with a projection in the background.

Motions

Adjournment

Attachment I

Comparison Table for the “Procedures for Loaning of Funds” Before and After Revision

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
5	(The first to third paragraphs is skipped) The restriction in the preceding three paragraphs and Article 6 shall not apply to inter-company loans of funds between overseas companies in which the company holds, directly or indirectly, 100% of the voting shares; the same when funds are loaned by the above overseas companies to the company. Where the company loans funds to a single company or a firm business provided that such financing amount shall not exceed 3 percent of the lender's net worth, and the aggregate amount of loans shall not exceed 20 percent of the lender's net worth, with duration of loans not exceed 10 years.	(The first to third paragraphs is skipped) The restriction in the preceding three paragraphs and Article 6 shall not apply to inter-company loans of funds between overseas companies in which the company holds, directly or indirectly, 100% of the voting shares. Where the company loans funds to a single company or a firm business provided that such financing amount shall not exceed 3 percent of the lender's net worth, and the aggregate amount of loans shall not exceed 20 percent of the lender's net worth, with duration of loans not exceed 10 years.	Changes were made to accommodate regulations that release restriction on net worth and duration when funds are loaned by the above overseas companies to the company.
14	(The first and second paragraph is skipped) “Date of occurrence” in these Regulations means the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of theloaning of funds, whichever date is earlier.	(The first and second paragraph is skipped) “Date of occurrence” in these Regulations means the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of thetransaction, whichever date is earlier.	Considers the loaning of funds are not transaction, thus changes the words.
20	The procedures are adopted shall be approved by one-half or more of all audit committee members and submitted to the board of directors for a resolution, and then to a shareholders' meeting for approval.Any matter under a subparagraph of the preceding	The procedures are adopted shall be approved by one-half or more of all audit committee members and submitted to the board of directors for a resolution, and then to a shareholders' meeting for approval. If any director expresses dissent and it is	Add the procedure undertaken upon the consent of two-thirds or more of all directors. When it has not been approved with the

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	paragraph that has not been approved with the consent of one-half or more of all audit committee members may be undertaken upon the consent of	contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to a shareholders' meeting; the same applies when the procedures are amended. (The following is skipped)	consent of one-half or more of all audit committee members.
	two-thirds or more of all directors, and the resolution of the audit committee shall be recorded in the minutes of the directors meeting.If any director expresses dissent and it is contained in the minutes or a written statement, the company shall submit the director's dissenting opinion to a shareholders' meeting; the same applies when the procedures are amended. (The followingis skipped)

Attachment II

Comparison Table for the “Procedures for Endorsements/Guarantees” Before and After Revision

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
14	(The first paragraph is skipped) The company’s balance of endorsements/guarantees reaches one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence: … 3. The balance of endorsements/guarantees by the company and its subsidiaries for a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for, book value of equity-method investment, and balance of loans to, such enterprise reaches 30 percent or more of the company's net worth as stated in its latest financial statement. … “Date of occurrence” in these Regulations means the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount ofmaking endorsements/guarantees, whichever date is earlier.	(The first paragraph is skipped) The company’s balance of endorsements/guarantees reaches one of the following levels shall announce and report such event within two days commencing immediately from the date of occurrence: … 3. The balance of endorsements/guarantees by the company and its subsidiaries for a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for, investment of a long-term nature in,and balance of loans to, such enterprise reaches 30 percent or more of the company's net worth as stated in its latest financial statement. … “Date of occurrence” in these Regulations means the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of thetransaction, whichever date is earlier.	Changes were made to accommodate “Regulations Governing the Preparation of Financial Reports by Securities Issuers” Subparagraph 1, paragraph 4, Article 9; that change the basis to calculate long-term investments. Considers making endorsements/ guarantees are not transaction, thus changes the words.
20	This policy shall be implemented with the consent of one-half or more of Audit Committee Members, the board’s resolution and shareholders’ approval in a shareholder meeting.Any matter under a subparagraph of	This policy shall be implemented with the consent of one-half or more of Audit Committee Members, the board’s resolution and shareholders’ approval in a shareholder meeting. Where directors have expressed objections on record or in writing,these objections must	Add the procedure undertaken upon the consent of two-thirds or more of all directors. When it has not been approved with the consent of
	the preceding paragraph that has not been approved with the

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	consent of one-half or more of all audit committee members may be undertaken upon the consent of two-thirds or more of all directors, and the resolution of the audit committee shall be recorded in the minutes of the directors meeting. Where directors have expressed objections on record or in writing, these objections must also be escalated for discussion in shareholder meeting. The same applies to all subsequent amendments. Paragraphs 2~3, Article 7 shall apply to the circumstances described in Paragraph 1. Amendments made on June 24, 2016 shall be effected on July 1,2016.	also be escalated for discussion in shareholder meeting. The same applies to all subsequent amendments. Paragraphs 2~3, Article 7 shall apply to the circumstances described in Paragraph 1. Amendments made on June 24, 2016 shall be effected on July 1,2016.	one-half or more of all audit committee members.

Attachment III

Comparison Table for the “Procedures for Acquisition or Disposal of Assets” Before and After Revision

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
2	The term "assets" as used in these procedures includes the following: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, investment property, and construction enterprise inventory) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5.Right-of-use assets. 6.Derivatives. 7. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. 8.Other major assets. “Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law” indicated in subparagraph7, refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of shares")under Article 156-3of	The term "assets" as used in these procedures includes the following: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, investment property, and construction enterprise inventory, land use rights) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5.Derivatives. 6. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. 7.Other major assets. “Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law” indicated in subparagraph6, refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "transfer of	1. Changes were made to accommodate the IFRS 16, thus add paragraph 5 for right-of-use assets, and combine the present wording about land use rights into paragraph 5. 2. Changes were made to accommodate Article 156-3 of the Company Act amended at November 1, 2018.

Article No.	AFTER THE REVISION	BEFORE THE REVISION	BEFORE THE REVISION	Description
	the Company Act.	shares") under Article the CompanyAct.	156.8 of
3	The procedures for acquisition or disposal of assets by this Company and the limitation of amounts thereof should be as follows: 1. When the transaction value of acquisition or disposal of real propertyor itsright-of-use assets from the related party or other assetsor its right-of-use assetsacquired or disposed with the related party reaches NT$ 300 million or more. Provided, this shall not apply to trading ofdomesticgovernment bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger, split, acquisition or shares transfer. 3. The when the loss of trading of derivatives reaches the upper limit of the total or individual contracts as provided in the “Procedures for Derivatives Trading” of the Company. 4. When the assets acquired or disposed belong to the equipmentor right-of-use usedin operation, and the trading principal is not a related party, and the trading amount reachesNT$ 500 millionor more. 5. When the real property acquired through contracted construction on self-owned land, contracted construction on leased land, housing division for joint construction, profit division for joint construction and separate sales forjoint	The procedures for acquisition or disposal of assets by this Company and the limitation of amounts thereof should be as follows: 1. When the transaction value of acquisition or disposal of real property from the related party or other assets acquired or disposed with the related party reaches NT$ 300 million or more. Provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger, split, acquisition or shares transfer. 3. The when the loss of trading of derivatives reaches the upper limit of the total or individual contracts as provided in the “Procedures for Derivatives Trading” of the Company. 4. When the assets acquired or disposed belong to the equipment used in operation, and the trading principal is not a related party, and the trading amount reachesNT$1 billionor more. 5. When the real property acquired through contracted construction on self-owned land, contracted construction on leased land, housing division for joint construction, profit division for joint construction and separate sales for joint		1. Changes were made to accommodate the regulations which not limited to domestic government bonds. 2. Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures. 3. Changes were made to cooperate with practice adjustment. 4. Transaction with the related party were defined in paragraph 1, thus changes were made to defined transaction with

Article No.		AFTER THE REVISION	BEFORE THE REVISION	Description
	construction and the trading amount,and furthermore the transaction counterparty is not a related party;expected by the Company reaches NT$ 500 million. 6.In addition to the asset trading mentioned in the 5 paragraphs or the investment in mainland China with a trading value of over NT$ 300 million. This, however, does not apply to the following conditions: (1) Trading of domestic government bonds. … The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year. 3. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use assetsthereof within the same development project within the preceding year. (The followingis skipped)		construction and the trading amount expected by the Company reaches NT$ 500 million. 6.In addition to the asset trading mentioned in the 5 paragraphs or the investment in mainland China with a trading value of over NT$ 300 million. This, however, does not apply to the following conditions: (1) Trading of government bonds. … The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same transaction counterparty within the preceding year. 3. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of real property or right-of-use assetsthereof within the same development project within the preceding year. (The followingis skipped)	not the related party in paragraph 5.
12	In acquiring or disposing of real property,equipmentor right-of-use assetswhere the transaction amount reaches NT$300 million or more, the company, unless transacting with adomesticgovernment agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business useor right-of-use assets, shall obtain		In acquiring or disposing of real property or equipment where the transaction amount reaches NT$300 million or more, the company, unless transacting with a government agency, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from	1. Changes were made to accommodate the regulations which not limited to domestic government. 2. Changes were made to accommodate the IFRS 16, which

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors; the same procedure shall also be followed whenever there is any subsequent change to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results…: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or moreof the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the sameperiod is used and	a professional appraiser and shall further comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors; the same procedure shall also be followed whenever there is any subsequent change to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.And the different professional appraisers or appraisal officers may not be related parties of each other. 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results…: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the sameperiod is used and	incorporate right-of-use assets into the procedures. 3. Amended the wording in the provision. 4. Changes were made to accommodate the regulations which clearly defined the negative qualifications about different professional appraisers. And change the existing paragraph 1.2 and paragraph 2 to paragraph 3.

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser. Professional appraiser in last paragraph refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment. Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide public companies with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shallmeet the following requirements: 1. May not have previously received a final and unappeasable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received. 2. May not be a related party or de facto related party of any party to the transaction. 3. If the company is required to obtain appraisal reports from two or more professional	not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser. Professional appraiser in last paragraph refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.And professional appraiser had no criminal sentence determination or sentence judgment. Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide public companies with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shallmay not be a related party of any party to the transaction.

Article No.		AFTER THE REVISION	BEFORE THE REVISION	Description
		appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.
13	(The first paragraph is skipped) Where a public company acquires or disposes of intangible assets or right-of-use assets thereof or memberships and the transaction amount reaches NT$300 million or more, except in transactions with adomesticgovernment agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. (The followingis skipped)		(The first paragraph is skipped) Where a public company acquires or disposes of memberships or intangible assets	1. Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures. 2. Changes were made to accommodate the regulations which not limited to domestic government.
			and the transaction amount reaches NT$300 million or more, except in transactions with a government agency, the company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. (The followingis skipped)
15	For the Company’s acquisition or disposal of assets set forth in Article 3, except for the situations indicated in Article 18and the merger, spinoff, acquisition and shares transfer, which shall be approved by the resolution of the Board for execution, the rest may only be executed after the presentation of the report and collection of information set forth in Articles 12 and 13 by the related department, which are approved by the Chairman. The report and information shall be presented to the Board later for recognition. If the amount of the asset acquired or disposed does not reach the standard of Article 3, the amount or scope of authorization set forth in the “Measures for Delegation of Authority and Responsibilities” of the Company shall be followed.		For the Company’s acquisition or disposal of assets set forth in Article 3, except for the acquisition or disposal of the real	1. Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures. 2. Changes were made to simply words and combine the procedure that submitted for discussion of related party to Article 18.
			property of the related party, or acquisition or disposal of the assets other than the real property with the related party and the trading amount exceeds NT$ 300 million, not including the equipment acquired or disposed between the Company and its subsidiary,and the merger, spinoff, acquisition and shares transfer, which shall be approved by the resolution of the Board for execution, the rest may only be executed after the presentation of the report and collection of information set forth in Articles 12 and 13 by the related department, which are approved by the Chairman. The report and information shall be presented to the Board later for recognition. If the amount of the asset acquired or disposed does

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
		not reach the standard of Article 3, the amount or scope of authorization set forth in the “Measures for Delegation of Authority and Responsibilities” of the Company shall be followed.
16	The amount limits for the real property,right-of-use assets and securities invested by the Company and its subsidiary are as follows: 1. Foracquisitionof the total amount of the real property for non-business useand right-of-use assets, the limit is 50 percent of the paid-in capital. For a non-public subsidiary, the limit is the equity. For a public subsidiary, the limit is 50 percent of the equity. (The followingis skipped)	The amount limits for the real property and securities invested by the Company and its subsidiary are as follows: 1. Forpurchaseof the total amount of the real property for non-business use, the limit is 50 percent of the paid-in capital. For a non-public subsidiary, the limit is the equity. For a public subsidiary, the limit is 50 percent of the equity. (The followingis skipped)	Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures.
17	Principally, the Company acquires or disposes the real property or its right-of-use assets and equipment or its right-of-use assetsby open bid and it may do so by price comparison or negotiation when necessary.	Principally, the Company acquires or disposes the real propertyorequipment by open bid and it may do so by price comparison or negotiation when necessary.	Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures.
18	When the company intends to acquire or dispose of real propertyor right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real propertyor right-of-use assetsthereof from or to a related party and the transaction amount reaches NT$300 million or more, exceptthe following situations, the company may not proceed to enter into a transaction contract or make a payment until theevaluationmatters have been approved by more than one half of Audit Committee members and approved bythe Board of	When the company intends to acquire or dispose of real property thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property thereof from or to a related party and the transaction amount reaches NT$300 million or more, exceptin trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises,the company may not proceed to enter into a transaction contract or make a payment until thefollowing	1. Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures. 2. Changes were made to accommodate the procedure to delegate the board chairman to decide such matters when the transaction is within a certain amount

AFTER THE REVISION	AFTER THE REVISION	BEFORE THE REVISION	Description
Directors: 1. With respect to the types of transactions about acquisition or disposal of equipment or right-of-use assets thereof held for business use and real property right-of-use assets held for business use, when to be conducted between the company and its parent or subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital. 2. Trading with related party of		matters have been approved by more than one-half of Audit Committee members and approved by the Board of Directors: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as transaction counterparty. 3. With respect to the acquisition of real property thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 19 and Article 20. … The foregoing “related party” shall mean the one as defined in IAS 24; when judging the trading counterparty is a related party, in addition to the legal form, the actual relationship	and have the decisions subsequently submitted to and ratified by the next board of directors meeting.
domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. Evaluation matters indicated in	domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of
last paragraph are: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as transaction counterparty. 3. With respect to the acquisition of real property or right-of-use assetsthereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 19 and Article 20. … The foregoing “related party” shall mean the one as defined in IAS 24; when judging the trading counterparty is a related party, in addition to the legal

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	form, the actual relationship must be considered. (The followingis skipped)	must be considered. (The following is skipped)
19	When acquiring real propertyor right-of-use assetsfrom a related party, the Company shall evaluate the reasonableness of the transaction costs by the following means: … Where land and structures thereupon are combined as a single property purchasedor leasedin one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. The company that acquires real propertyor right-of-use assets thereof from a related party and appraises the cost of the real propertyor right-of-use assets thereof in accordance with Paragraph 1 and 2 shall also engage a CPA to check the appraisal and render a specific opinion. When the Company acquires real propertyorright-of-use assetsfrom a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with the provisions of Article 18 and the provisions of the foregoing three paragraphs shall not apply: 1. The related party acquired the real propertyorright-of-use assets through inheritance or as a gift. 2. More than 5 years have elapsed between the time the related party signed the contract to obtain the real propertyorright-of-use assets to the signing date for the current transaction. 3. The realpropertyis acquired	When acquiring real property from a related party, the Company shall evaluate the reasonableness of the transaction costs by the following means: … Where land and structures thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. The company that acquires real property or right-of-use assets thereof from a related party and appraises the cost of the real property or right-of-use assets thereof in accordance with Paragraph 1 and 2 shall also engage a CPA to check the appraisal and render a specific opinion. When the Company acquires real property from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with the provisions of Article 18 and the provisions of the foregoing three paragraphs shall not apply: 1. The related party acquired the real property through inheritance or as a gift. 2. More than 5 years have elapsed between the time the related party signed the contract to obtain the real property to the signing date for the current transaction. 3. The real property is acquired through signing of a joint	1. Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures. 2. Changes were made to accommodate the procedure to add paragraph 4.4 and exclude the compliance of Article 18 and Article 21.

Article No.		AFTER THE REVISION	BEFORE THE REVISION	Description
	4.	through signing of a joint development contract with the related party or commissioning the related party to construct the real property through commissioned construction on self-owned land or commissioned construction on leased land. With respect to the types of transactions about acquisition of real property right-of-use assets held for business use, when to be conducted between	development contract with the related party or commissioning the related party to construct the real property through commissioned construction on self-owned land or commissioned construction on leased land.
		the company and its subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100
		percent of the issued shares or
		authorized capital.
20	When the results of the company's appraisal conducted in accordance with paragraph 1 and paragraph 2 of the preceding Article are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 18. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply: 1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: … (2)Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land,where the land area and		When the results of the company's appraisal conducted in accordance with paragraph 1 and paragraph 2 of the preceding Article are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 18. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply: 1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: … (2)Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land,where the land area and	1. Changes were made to accommodate the procedure that release restrictions when the

Article No.	AFTER THE REVISION		BEFORE THE REVISION	Description
	transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property marketsale or leasing practices. 2. Where a public company acquiring real property,or obtaining real property right-of-use assets through leasing,from a related party provides evidence that the terms of the transaction are similar to the terms of completed transactions involvingneighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Completed transactions involvingneighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions involvingsimilarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the yearprecedingthe date of	transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices. (3)Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices. 2. Where a public company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms oftransactions completed for the acquisition ofneighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Completed transactionsfor neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value;transaction forsimilarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of		company acquires right-of-use assets. 2. Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures. 3. Amended the wording in the provision.

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	occurrence of the acquisition of the real propertyor obtainment of the right-of-use assets thereof.	the real property.
21	Acquisition of real propertyor itsright-of-use assetsfrom a related party will be subject to the following treatments if the value derived from Articles 19 and 20 is less than the transaction price: 1. The Company shall provide special reserves equal to the difference between the transaction price of real propertyor itsright-of-use assetsand the derived value in the same manner as described in Paragraph 1, Article 41 of the Securities and Exchange Act. This special reserve cannot be distributed as dividends or capitalized into share capital. Any public listed company that recognizes the Company as an equity-accounted investment will also be required to provide special reserves proportionally based on shareholding percentage, as required in Paragraph 1, Article 41 of the Securities and Exchange Act. 2. The Audit Committee shall proceed according to Article 218 of the Company Act. 3. Progress of Subparagraphs 1 and 2 shall be reported during shareholder meeting, whereas transaction details are to be disclosed in annual reports and the prospectus. A public company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchasedor leased at a premium, or they have been disposed of, or the leasing	Acquisition of real property from a related party will be subject to the following treatments if the value derived from Articles 19 and 20 is less than the transaction price: 1. The Company shall provide special reserves equal to the difference between the transaction price of real property and the derived value in the same manner as described in Paragraph 1, Article 41 of the Securities and Exchange Act. This special reserve cannot be distributed as dividends or capitalized into share capital. Any public listed company that recognizes the Company as an equity-accounted investment will also be required to provide special reserves proportionally based on shareholding percentage, as required in Paragraph 1, Article 41 of the Securities and Exchange Act. 2. The Audit Committee shall proceed according to Article 218 of the Company Act. 3. Progress of Subparagraphs 1 and 2 shall be reported during shareholder meeting, whereas transaction details are to be disclosed in annual reports and the prospectus. A public company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of,or adequate	Changes were made to accommodate the IFRS 16, which incorporate right-of-use assets into the procedures.

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	contract has been terminated, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent. When a public company obtains real propertyor right-of-use assetsthereof from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arms length transaction.	compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent. When a public company obtains real property thereof from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arms length transaction.
30	This procedure is subject to the consent of more than one-half of Audit Committee Members, and shall be resolved by the Board of Directors and proposed for shareholders’ approval in a shareholder meeting. The same applies to all subsequent amendments. When these Procedures are submitted to the Board of Directors for deliberation, the opinions of each independent director shall be given full consideration and their dissenting or reserving opinions shall be entered into the meeting minutes. Paragraphs4 and 5,Article 18 shall apply to the circumstances described in Paragraph 1. Amendments made on June 24, 2016 shall be effected on July 1,2016.	This procedure is subject to the consent of more than one-half of Audit Committee Members, and shall be resolved by the Board of Directors and proposed for shareholders’ approval in a shareholder meeting. The same applies to all subsequent amendments. When these Procedures are submitted to the Board of Directors for deliberation, the opinions of each independent director shall be given full consideration and their dissenting or reserving opinions shall be entered into the meeting minutes. Paragraphs3 and 4,Article 18 shall apply to the circumstances described in Paragraph 1. Amendments made on June 24, 2016 shall be effected on July 1,2016.	Changes were made to accommodate the amendment of Article 18.
30-1	Any matters concerning asset acquisition or disposal that are subject to Board of Directors’ approval, as mentioned in this procedure or in other laws, must be consented by more than one-half of Audit Committee members and proposed for the board’s	Any matters concerning asset acquisition or disposal that are subject to Board of Directors’ approval, as mentioned in this procedure or in other laws, must be consented by more than one-half of Audit Committee members and proposed for the board’s

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	resolution. When submitting the foregoing report for acquisition or disposal of the assets to the Board for discussion, the opinions of each independent director shall be fully considered. The opposing or reserving opinions of the independent directors shall be set forth in the meeting minutes of the Board. Paragraphs4 and 5,Article 18 shall apply to the circumstances described in Paragraph 1.	resolution. When submitting the foregoing report for acquisition or disposal of the assets to the Board for discussion, the opinions of each independent director shall be fully considered. The opposing or reserving opinions of the independent directors shall be set forth in the meeting minutes of the Board. Paragraphs3 and 4,Article 18 shall apply to the circumstances described in Paragraph 1.	Changes were made to accommodate the amendment of Article 18.

Attachment IV

Comparison Table for the “Procedures for Derivatives Trading” Before and After Revision

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
2	Derivatives indicated in the Procedures are Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial	Derivatives indicated in the Procedures are Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a assets, interest rate,foreign exchange rate, indexor other interest;orhybrid contracts combining the above instruments.The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts.	Changes were made to accommodate the definitions of financial instruments in IFRS 9.
	instrument price, commodity price,foreign exchange rate, index ofprices or rates, credit rating or credit index, or other variable;orhybrid contracts combining the above contracts;
	or hybrid contracts or structured products containing embedded derivatives.The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts.
11	Accountings for derivative transaction are subject to accounting standards and related regulations specified by	Accountings for derivative transaction are subject to IAS 32 and IAS 39.	Changes were made to prevent frequently future revisions thus can maintain the stability of the procedure.
	“Regulations Governing the Preparation of Financial Reports by Securities Issuers.”

Appendix I

China Motor Corporation

Rules and Procedures of Shareholders’ Meeting

Article 1 : Shareholders' Meeting of the Company (the "Meeting") shall be conducted in accordance with these Rules and Procedures.
Article 2 : Shareholders attending the Meeting shall submit the attendance card for the purpose of signing in. The number of shares represented by shareholders attending the Meeting shall be calculated in accordance with the attendance cards submitted by the shareholders.
The attendance and voting of the Meeting are calculated based on the shares.
The number of shares present are calculated based on the attendance cards and the number of shares of voting rights are calculated electronically.
Article 3 : The Company may appoint designated counsel, CPA or other related persons to attend the Meeting.
Article 4 : Chairman shall call the Meeting to order at the time scheduled for the Meeting. If the number of shares represented by the shareholders present at the Meeting has not yet constituted the quorum at the time scheduled for the Meeting, the Chairman may postpone the time for the Meeting.
The postponements shall be limited to two times at the most and Meeting shall not be postponed for longer than one hour in the aggregate. If after two postponements no quorum can yet be constituted but the shareholders present at the Meeting represent more than one - third of the total outstanding shares, tentative resolutions may be made in accordance with Article 175 of the Company Act.
The aforesaid tentative resolutions shall be executed in accordance with relevant provisions of the Company Act of the Republic of China. If during the process of the Meeting the number of shares represented by the shareholders present reaches the majority of the outstanding shares, the Chairman may submit the tentative resolutions to the Meeting for approval in accordance with Article 174 of the Company Act.
Article 5 : The agenda of the Meeting shall be set by the Board of Directors if the Meeting is convened by the Board of Directors. Meeting shall proceed in accordance with the agenda and unless otherwise resolved at the Meeting, the agenda shall not be changed. Unless otherwise resolved at the Meeting, the Chairman cannot announce adjournment of the Meeting before all the discussion items (including motions) listed in the agenda are resolved.
The shareholders may not designate any other person as Chairman and continue the Meeting in the same or other place after the Meeting is adjourned.
However, in the event that the Chairman adjourns the Meeting in violation of these Rules and Procedures, the shareholders may designate, by a majority of votes represented by shareholders attending the Meeting, one person as Chairman to continue the Meeting.
Article 6 : When a shareholder present at the Meeting wishes to speak, a Speech Note should be filled out with summary of the speech, the shareholder's number (or the number of Attendance Card) and the name of the shareholder. The sequence of speeches by shareholders should be decided by the Chairman.

If any shareholder present at the Meeting submits a Speech Note but does not speak, no speech should be deemed to have been made by such shareholder. In case the contents of the speech of a shareholder are inconsistent with the contents of the Speech Note, the contents of actual speech shall prevail.

Unless otherwise permitted by the Chairman and the shareholder in speaking, no shareholder shall interrupt the speeches of the other shareholders, otherwise the Chairman shall stop such interruption.

Article 7 : Each shareholder shall not, for each discussion item, speak more than two times (each time not exceeding 5 minutes). In case the speech of any shareholder violates the above provision or exceeds the scope of the discussion item, the Chairman may stop the speech of such shareholder.
Article 8 : If a corporate shareholder is appointed to attend the Meeting, the corporate may only designate one representative to attend the Meeting. If a corporate shareholder designates two or more representatives to attend the Meeting, only one representative can speak for each discussion item.
Article 9 : After the speech of a shareholder, the Chairman may respond himself/herself or appoint an appropriate person to respond.
Article 10 : The Chairman may announce to end the discussion of any resolution and go into voting if the Chairman deems it appropriate.
Article 11 : The person(s) to check and the person(s) to record the ballots during a vote by casting ballots shall be appointed by the Chairman. The person(s) checking the ballots shall be a shareholder(s).
The result of voting shall be announced at the Meeting and placed on record.
Article 12 : Except otherwise specified in the Company Act or the Articles of Incorporation of the Company, a resolution shall be adopted by a majority of the votes represented by the shareholders present at the Meeting. The resolution shall be deemed adopted and shall have the same effect as if it was voted by casting ballots if no objection is voiced after solicitation by the Chairman.
The shareholders have one vote per share.
According to Article 177.2 of the Company Act: “Except for trust enterprises or stock agencies approved by the competent authority, when a person who acts a proxy for two or more shareholders, the number of voting power represented by him/her shall not exceed 3% of total number of voting shares of the Company, otherwise, the portion of excessive voting power shall not be counted”.
Article 13 : During the Meeting, the Chairman may, at his discretion, set time for intermission. If a case cannot be closed in one meeting, the Meeting may be resumed within five days by resolution of the shareholders present at the Meeting without further notice or public announcement.
Article 14 : If there is amendment to or substitute for a discussion item, the Chairman shall decide the sequence of voting for such discussion item, the amendment or the substitute. If any one of them has been adopted, the others shall be deemed vetoed and no further voting is necessary.
Article 15 : The Chairman may conduct the disciplinary officers or the security guard to assist in keeping order of the Meeting place. Such disciplinary officers or security guards shall wear badges marked "Disciplinary Officers" for identification purpose.
Article 16 : The matters not provided in these Rules and Procedures shall be handled in

accordance with the Articles of Incorporation of the Company and related laws and regulations.

Article 17 : These Rules and Procedures shall be effective from the date it is approved by the Shareholders' Meeting. The same applies in case of revision.

Appendix II

China Motor Corporation

Current Shareholdings of Directors

According to Article 26 of the Securities and Exchange Act and the regulations of the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies, the total shares held by all the directors of the Company shall not be less than 2.4%, namely 33,217,220 shares. The total shares held by all the directors of the Company up to March 31st, 2019 are 725,782,451 shares (52.44%), which comply with the regulation. The detailed information of the shareholding numbers of the directors are as follows:

Position	Name	Shareholdingnumber	Shareholdingratio %	Remarks
Chairman	Li-lien Chen Yen	111,480,444	8.05	1
Director	Eiichi Takasawa	193,768,273	14.00	3
Director	Hsin-I Lin	348,589,538	25.19	2
Director	Kuo-RongChen	348,589,538	25.19	2
Director	Takayasu Yonekura	66,404,796	4.80	4
Director	Chao-Wen Chen	5,539,400	0.40	5
Director	Tai-MingChen	111,480,444	8.05	1
Director	Hsin-ChengTseng	348,589,538	25.19	2
Independent Director	Chen-Chi Hsiao	0	0.00	-
Independent Director	Chi-Ching Chen	0	0.00	-
Independent Director	Yun-Hua Yang	0	0.00	-
Total shares held byall directors		725,782,451	52.44

Note 1. Chairman Li-lien Chen Yen and Director Tai-Ming Chen are the representatives from Yulon Motor Co., Ltd.
Directors Hsin-I, Lin, Kuo-Rong Chen and Hsin-Cheng Tseng are representatives from Tai Yuen Textile Co., Ltd.
Director Eiichi Takasawa is the representative from Mitsubishi Motors Corporation.
Director Takayasu Yonekura is the representative from Mitsubishi Corporation.
Director Chao-Wen Chen is the representatives from Ler Vian Enterprise Co., Ltd.
The Company has established an Audit Committee, and therefore, no requirement about the minimum number of shares to be held by supervisors shall apply.

Appendix III

Impact of Stock Dividend Distribution on Operating Results and Earnings Per Share

Not applicable.

Appendix IV

China Motor Corporation Articles of Incorporation

Section 1 : General Principles

Article 1 : The Company is incorporated as a Corporation by shares in accordance with the Company Act and shall have the name of China Motor Corporation (hereinafter the "Company").

Article 2: The Company shall conduct business in the following areas:

CA01090 Aluminum Casting Manufacturing.
CB01010 Machinery and Equipment Manufacturing
CC01010 Power Generation, Transmission and Distribution Machinery Manufacturing
CD01030 Motor Vehicles and Parts Manufacturing.
CD01040 Motorcycles and Parts Manufacturing
CD01050 Bicycles and Parts Manufacturing
CC01090 Batteries Manufacturing.
CD01990 Other Transport Equipment and Parts Manufacturing
CQ01010 Die Manufacturing
E603050 Cybernation Equipments Construction
E603100 Electric Welding Construction
E604010 Machinery Installation Construction
E605010 Computing Equipment Installation Construction
F106030 Wholesale of Die
F112040 Wholesale of Petrochemical Fuel Products
F113010 Wholesale of Machinery
F113110 Wholesale of Batteries
F113020 Wholesale of Household Appliance
F113070 Wholesale of Telecom Instruments
F114010 Wholesale of Automobiles
F114020 Wholesale of Motorcycles
F114030 Wholesale of Motor Vehicle Parts and Supplies
F114040 Wholesale of Bicycles and Parts
F114050 Wholesale of Electronic Materials.
F119010 Wholesale of Tires and Tubes
F206030 Retail Sale of Die
F212050 Retail Sale of Petrochemical Fuel Products
F213010 Retail Sale of Household Appliance
F213060 Retail Sale of Telecom Instruments
F213110 Retail Sale of Batteries

F214010 Retail Sale of Automobiles
F214020 Retail Sale of Motorcycles
F214020 Retail Sale of Motor Vehicle Parts and Supplies
F214040 Retail Sale of Bicycles and Parts
F214050 Retail Sale of Tiers and Tubes
F219010 Retail Sale of Electronic Materials
F401010 International Trade
F401021 Restrained Telecom Radio Frequency Equipments and Materials Import
F501990 Other Eating and Drinking Places
H703100 Real Estate Rental and Leasing
I102010 Investment Consultancy
I103060 Management Consultancy
I301010 Software Design Services
I401010 General Advertising Services
I501010 Product Designing
IE01010 Telecommunications Number Agencies
IZ01010 Copying Services
IZ02010 Typewriting Services
IZ04010 Translation Services
IZ12010 Manpower Services
J901020 Hotels and Motels
J903020 Mountain Climbing Guiding Services
JA01010 Automotive Repair and Maintenance
JA01990 Other Automobile Services
JA02010 Electric Appliance and Audiovisual Electric Products Repair Shops
JA02020 Motorcycle Repair Shops
JA02030 Bicycle Repair Shops
JE01010 Exhibition Services
JE01010 Rental and Leasing Business.
J202010 Industry Innovation and Incubation Services.
F106010 Wholesale of Ironware.
CC01020 Electric wire and cable manufacturing.
CC01030 Electric appliance and audiovisual electric product manufacturing.
CC01080 Electronic parts and components manufacturing.
IZ99990 Other Industry and Commerce Services Not Elsewhere Classified.
ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval

Article 2-1: The Company may act as a guarantor as required by its business operation.

Article 2-2: Total investment by the Company shall not be subject to the ceiling of an amount equivalent to 40 percent of its paid-in capital.
Article 3: The Company has its head-office in Taipei City, the Republic of China. Subject to the

approval of the Board of Directors and government authority, the Company may, if necessary, set up branches or business offices in and out of this country.

Section 2 : Shares

Article 4: The total capital of the Company is eighteen billion New Taiwan Dollars (NT$18,000,000,000) divided into one billion eight hundred million (1,800,000,000) shares, at ten New Taiwan Dollars per share and may be issued in a series of issuance. The un-issued shares may be issued by a resolution of the Board of Directors if the Board deems necessary. Out of the foregoing total shares, one hundred million shares are reserved for issuance of stock/subscription warrants, special shares with subscription rights, or corporate bonds with subscription rights.
Article 5: Shares certificates of the Company shall be in registered form and shall be signed or sealed by the Chairman and two directors and then be affixed with Company’s seal and be legally authenticated before being issued. The Company does not have to print the share certificates, however, shall register the shares with the central securities depositary institution.
Article 6: The stock affairs of the Company, unless otherwise provided by the laws and regulations, shall be handled in accordance with the “Regulations Governing the Administration of Shareholder Services of Public Companies" published by the competent authority.

Section 3 : Shareholders’ Meetings

Article 7: Shareholders’ meetings shall be of two types:

General meetings shall be convened by the Board of Directors once a year, within six months from the end of each fiscal year in accordance with the Company Act.
Special meetings shall be convened as deemed necessary by the Board unless otherwise provided by the laws and regulations.
Article 8: Shareholders shall be informed of the date, place and purposes of the meetings at least thirty (30) days in advance, in case of general meetings; and at least fifteen (15) days in advance, in case of special meetings.
Article 9: Unless otherwise provided by the Company Act, shareholders’ meetings may be held if attended by shareholders in person or proxy representing more than one half of the total issued and outstanding capital stocks of the Company, and resolutions shall be adopted at the meeting with the concurrence of a majority of the votes held by shareholders present at the meeting. The Company’s shareholders may also vote using electronic means. Shareholders who vote using the electronic method are considered to have attended the shareholder meeting in person.
Article 10: If a shareholder is unable to attend a meeting, he/she may present the power of attorney issued by the Company, which contains the scope of authority and appoint a proxy to attend it. In addition to the Company Act, the use of the proxy is provided in the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” published by the competent authority.

Article 11: The shareholders’ meeting shall be convened and presided over by the Chairman of the Board of Directors of the Company. In case the Chairman of the Board of Directors is on leave or cannot exercise his power and authority for any reason, the vice Chairman shall act on behalf of the Chairman. In case the Company has no vice Chairman, or the vice Chairman is also on leave or unable to exercise his and authority for any reason, the Chairman of the Board of Directors shall designate one of the managing directors to act on behalf of the Chairman. If no managing directors are established, the Chairman of the Board of Directors may designate one person as his proxy; if no proxy is designated by the Chairman, the directors shall elect from and among themselves an acting Chairman of the Board of Directors. If the Meeting is convened by the person other than the Board of Directors who is permitted to convene such Meeting, such person shall be the Chairman presiding the Meeting. If there are two or more persons having the right to convene the meeting, they elect from and among themselves a Chairman for presiding the meeting.
Article 12: The shareholders’ meeting shall be recorded in the minutes setting forth the date, place, name of Chairman, number of shareholders present, number of voting rights, matters for resolution and resolution method and such minutes shall be signed by or sealed with the chop of the Chairman of the meeting and kept permanently during the existence of the Company. The attendance list or cards and power of attorney for attendance by proxy shall be kept at the head office of the Corporation for at least one year. The meeting minutes shall be distributed to the shareholders within twenty days after the meeting. The meeting minutes may be distributed in the form of announcement.

Section 4 : Directors and the Board of Directors

Article 13: The Company shall have 9 to 15 directors who shall be elected by adopting candidate nomination system whereby the shareholders elect from the list of the director candidates. The term of office of all directors is three years and they are eligible for reelection.
There must be at least three independent directors established among the directors of the Company and their number shall not be less than one fifth of the seats of the directors. They shall be elected by adopting candidate nomination system whereby the shareholders elect from the list of the independent director candidates.
The professional qualifications, shareholding, concurrent post limitations, nomination and election of the foregoing independent directors and other rules to be followed shall be subjected to the relevant regulations of the securities competent authority.
Article 14: The total number of inscribed shares held by all the directors shall be subjected to the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies” published by the competent authority.
Article 15: The Board of Directors shall be organized by the directors. At least three managing directors shall be elected by a majority of the directors present at a meeting attended by two thirds of the directors. The number of managing directors shall not exceed one third of the number of directors at most; among the managing directors there shall be at least one independent director and the number of independent directors shall not be less than one fifth of the seats of managing directors who shall elect from and among them one Chairman of the board. They may also from and among them one vice Chairman.

Article 16: The Chairman is the Chairman of the Board of Directors and the board of managing directors and represents the Company. In case the Chairman of the Board of Directors is on leave or cannot exercise his power and authority for any reason, the vice Chairman shall act on behalf of the Chairman. In case there is no vice Chairman elected from and among the directors, or the vice Chairman is also on leave or unable to exercise his and authority for any reason, the Chairman of the Board of Directors shall designate one of the managing directors to act on behalf of the Chairman. If no managing directors are established, the Chairman of the Board of Directors may designate one person as his proxy; if no proxy is designated by the Chairman, the directors shall elect from and among themselves an acting Chairman of the Board of Directors.

Article 17: The functions and responsibilities of the Board of Directors shall be as follows:

Determination of business guidelines.
Approval of organizational by-laws and operation rules.
Review of budget.
Planning of profit distribution.
Direction of business promotion.
Appointment and removal of managers.
Examination and approval of purchase and disposal of important properties and real estates of the Company.
Performance of such other duties and responsibilities prescribed by law or authorized by shareholders' meetings.
Article 18: Principally, the Board of Directors shall hold meetings on a quarterly basis. The Chairman of the board may convene provisional meetings in the case of emergent matters or at the request of the maturity of the directors. The notice of convention of board meetings may be delivered to the directors in writing or by emails or fax. In the event that the director is unable to attend the board meeting, he/she may designate another director to act on his/her behalf. Unless otherwise provided for in the Company Act, resolutions of the Board of Directors shall be adopted by a majority of the directors at a meeting attended by a majority of the directors. The meeting minutes shall be signed or sealed by the Chairman and kept in the Company.

Section 5 : Functional committees

Article 19: The Board of Directors may establish various functional committees. The functional committees shall define their own articles of association and enforce the same upon approval of the Board of Directors.
Article 20: The Company establishes the Audit Committee consisting of the whole independent directors pursuant to the Securities and Exchange Act. The functions and other compliance affairs of the Audit Committee shall be subject to the Securities and Exchange Act and other related laws and regulations.

Article 21: (Deleted)

Article 22: (Deleted)

Section 6 : Management and other officers

Article 23: The Company shall have one general manager whose appointment, removal and remuneration shall be determined by the approval of the majority of the directors.
Article 24: The Company may have several deputy general managers, assistant managers and managers whose appointment, removal and remuneration shall be determined by the approval of the majority of the directors. Other officers are appointed and removed by the managers.
Article 25: The general manager handles all the Company’s business in accordance with the resolutions of the Board of Directors and the board of managing directors as well as the instructions of the Chairman of the Company. He/she is assisted by the deputy general manager or assistant manager.

Section 7 : Accounting

Article 26: The Company's fiscal year shall be from January 1 to December 31 of each calendar year and the settlement period shall be the end of each year. The following forms shall be prepared by the Board of Directors and the presented to the shareholders’ meeting for adoption.
Business report
Financial statement
Proposal for earnings distribution or loss make-up
Article 27: Annual profits concluded by the Company shall be subject to the following remuneration:
Directors’ remuneration of no higher than 0.5%. Remuneration for the 18th board shall include directors and supervisors, prorated according to the duration of active duty in the event of dismissal or resignation.
Employees’ remuneration of no lesser than 0.1%. The Board of Directors may decide to distribute the remuneration in cash or in shares. Remuneration can be distributed to employees of affiliated companies that meet certain criteria, and the Board of Directors is authorized to determine this criteria.
Employee and director remuneration proposals must be reported during shareholder meeting.
However, profits must first be taken to offset against cumulative losses, if any, before the remainder can be distributed as employees’ and directors’ remuneration according to the percentages mentioned in Paragraph 1.
The Company shall, after covering all losses and paying all taxes and dues, set aside 10 percent of its surplus earnings (if any) as legal reserve. The remainder surplus earnings may be retained for business needs or otherwise distributed. The remainder of surplus earnings shall be combined with the undistributed surplus earnings of the previous year and the Board of Directors shall present the proposal of distribution to the shareholders’ meeting for resolution of the distribution.
The Company operates in a matured industry. Dividends are paid based on a number of factors including current profits, capital requirement of future projects, industry trends, shareholders’ interests, and the Company’s long-term financial plans. The amount of dividends shall be no lesser than 40% of current year’s after-tax profit, but no dividend will be paid if the Company concludes losses during the year. Where dividend is distributed in a mixture of cash and shares, the amount of cash dividends paid shall be no lesser than 20% of total dividends provided for the year.

Article 28: The directors of the Company may receive remunerations which are determined by the Board of Directors based on the level of remunerations in the industry.

Section 8 : Supplementary Regulations

Article 29: The Articles of Incorporation and the business handling regulations of the Company shall be set by the Board of Directors based on actual needs.
Article 30: For matters not covered herein, provisions in the Company Act and relevant laws and regulations shall govern.

Article 31: These Articles of Incorporation were enacted on May 10, 1969; The first amendment was made on May 30, 1969; The second amendment was made on May 8, 1970; The third amendment was made on May 10, 1975; The fourth amendment was made on November 22, 1978; The fifth amendment was made on November 29, 1979; The sixth amendment was made on July 27, 1981; The seventh amendment was made on September 29, 1981; The eighth amendment was made on, August 10, 1982; The ninth amendment was made on June 3, 1983; The tenth amendment was made on June 15, 1984; The eleventh amendment was made on June 25, 1986; The twelfth amendment was made on May 18, 1987; The thirteenth amendment was made on May 19, 1989; The fourteenth amendment was made on November 30, 1989; The fifteenth amendment was made on March 26, 1990; The sixteenth amendment was made on July 25, 1990; The seventeenth amendment was made on May 4, 1991; The eighteenth amendment was made on May 30, 1992; The nineteenth amendment was made on May 22, 1993; The twentieth amendment was made on May 14, 1994; The twenty-first amendment on May 27, 1995;

The twenty-second amendment was made on May 11, 1996; The twenty-third amendment was made on June 7, 1997; The twenty-fourth amendment was made on May 16, 1998; The twenty-fifth amendment was made on May 15, 1999; The twenty-sixth amendment was made on May 31, 2000; The twenty-seventh amendment was made on May 23, 2001; The twenty-eighth amendment was made on June 19, 2002; The twenty-ninth amendment was made on June 18, 2003; The thirtieth amendment was made on June 24, 2004; The thirty-first amendment was made on June 16, 2005; The thirty-second amendment was made on June 14, 2006; The thirty-third amendment was made on June 25, 2007; The thirty-fourth amendment was made on June 25, 2008; The thirty-fifth amendment was made on June 23, 2010; The thirty-sixth amendment was made on June 22, 2011;

The thirty-seventh amendment was made on June 19, 2012; The thirty-eighth amendment was made on June 18, 2013. The thirty-ninth amendment was made on June 24, 2014. The forty amendment was made on June 24, 2015 and shall be applicable as of the Board of Directors of 19[th] term; The forty-one amendment was made on June 24, 2016.

Appendix V

China Motor Corporation

Regulations Governing Election of Directors

Article 1 : The Company’s directors shall be elected pursuant to the Regulations.

Article 2: The election of the Company’s directors shall be subject to single roll-call and cumulative voting. Names of the candidates may be replaced by the shareholder’s account number printed on the ballots. The number of votes exercisable in respect of one share shall be the same as the number of directors to be elected, and the total number of votes per share may be consolidated for election of one candidate or may be split for election of two or more candidates.
The ballots shall be prepared by the Board of Directors, and the number of voting rights shall be specified therein, provided that no ballots will be prepared separately, in the case of exercise of voting right in electronic form.
Article 3 : The Company’s directors shall be elected according to the candidate nomination system. Subject to the quota defined in the Articles of Incorporation, a candidate to whom the ballots cast represent a prevailing number of votes shall be deemed a director elected. The independent director and non-independent director candidates shall be nominated separately, and said directors shall be elected by shareholders form the rosters of candidates for the both.
Independent and non-independent directors shall be elected concurrently, and the number of the elected shall be calculated separately.
Where the ballots won by two persons or more represent the same voting rights and the quorum is exceeded, the elected shall be determined after the persons winning the same ballots cast lots. Where the persons are absent, the chairperson shall cast the lot on behalf of them.
Article 4 : During the election, the chairperson shall designate ballot examiners and ballot counters to perform duties relating to the election.
Article 5 : A ballot box will be made available by the Board of Directors, and is subject to open inspection by ballot examiners prior to voting.
Article 6 : For candidates who are shareholders, votes shall be cast by specifying the candidate's name and shareholder number in the "Candidate" field on the ballot. For candidates who are not shareholders, votes shall be cast by specifying the candidate's name and ID card number. Where the candidate is a corporate shareholder, votes can be cast either by specifying the name of the corporate entity, as described in Paragraph 1, Article 27 of the Company Act, or by specifying the name of the corporate entity and the name of its representative, as described in Paragraph 2 of the same Article.
Article 7 : Ballots are considered void in any of the following circumstances:
1. Ballots that are not produced and issued in accordance with Article 2 of this policy.
2. Where the names of two or more candidates are printed on the same ballot,

unless the ballot has been designed to serve more than one purpose.

Writings other than the candidate’s name and shareholder number/ID card number.
Writings that are illegible or have been corrected.
The candidate’s name written in the ballot coincides with another shareholder, but no shareholder number or ID card number is provided for identification.
Where the candidate is a shareholder, the written identity and shareholder number do not match the shareholder registry; where the candidate is a non-shareholder, the written name and ID card number do not match the candidate’s identity proof.
Blank ballots casted into the ballot box.
Article 8 : The ballots shall be counted and announced upon completion of the voting. The ballot counting result shall be overseen by scrutineers and announced by the chairperson.
Article 9 : The Board of Directors will send the notice to each director elected.
Article 10 : The Regulations shall be enforced upon approval of the shareholders’ meeting. The same shall apply where the Regulations are amended.

AI assistant

CMC — AGM Information 2019

51979_rns_2019-07-16_db35cf44-61f8-4f47-82eb-e8d5a5cd7013.pdf

China Motor Corporation

2019 Annual Shareholders’ Meeting

MEETING AGENDA

Notice to Readers

Table of Contents

Attachments

Appendix

China Motor Corporation 2019 Annual Shareholders’ Meeting Agenda

VII. Other matters

Reporting matters

I. 2018 Business Report

CMC Business Report

(1) For Taiwan car market and exportation business

(2) Mainland China Auto Market

(3) Development of new business lines

Chairman: Li-lien Chen Yen

China Motor Corporation

Audit Committee's Review Report on the 2018 Financial Statements

China Motor Corporation

III. The Company’s Endorsements/Guarantees Report

IV. The 2018 Distribution of Employee Bonus and Director Compensation

Acknowledgements

Proposal 1

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Evaluation of Write-down of Inventory

Revenue Recognition

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Evaluation of Write-down of Inventory

Revenue Recognition

Other Matter

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

CHINA MOTOR CORPORATION

BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CHINA MOTOR CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Proposal 2

2018 Earnings Distribution Statement (Proposal)

Discussions

Proposal 1

Resolution:

CMC AGM Information 2019