CMC - AGM Information 2021 | FinancialReports.eu

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Stock code：2204

China Motor Corporation

2021 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 .......................................................................................................... 2 Acknowledgements ....................................................................................................... 6 Discussions .................................................................................................................. 31 Motions ........................................................................................................................ 35

Attachments

I. Comparison Table for the “Rules for Election of Directors” Before and After Revision ................................................................................................. 36

Appendix	Appendix
I.	Rules and Procedures of Shareholders’ Meeting ............................................... 38
II.	Current Shareholdings of Directors ................................................................... 40
III.	Impact of Stock Dividend Distribution on Operating Results and
	Earnings Per Share ............................................................................................ 41
IV.	Articles of Incorporation .................................................................................... 42

China Motor Corporation 2021 Annual Shareholders’ Meeting Agenda

Time: 9:00 AM, June 23th, 2021

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
2020 Business Report.
2020 Audit Committee's Report.
The Company’s Endorsements/Guarantees Report.
The 2020 Distribution of Employee Bonus and Director Compensation.
IV. Acknowledgements
The Company’s 2020 Annual Report.
The Company’s 2020 Statement of Earnings Distribution.
V. Discussions
Amendments to the Company’s “Rules for Election of Directors ”.
Releases the company's directors from non-competition restrictions.
VI. Motions
VII. Adjournment

Reporting matters

I. 2020 Business Report

CMC Business Report

(1) For Taiwan car market and exportation business

Taiwan's auto market saw overall sales of 457,453 vehicles last year (2020), while domestic sales of the Company’s cars totaled 49,461 units (including OEM and imported cars). The Company’s operating income was NT$26.962 billion, with operating net profit of NT$1.622 billion and after-tax net profit of NT$3.277 billion, translating to an after-tax EPS of NT$6.01. Consolidated operating income was NT$30.875 billion and consolidated operating net profit was NT$1.777 billion. Consolidated net profit after tax was NT$3.541 billion.

In terms of the Taiwanese auto market, the Company launched a new Zinger pickup car in the third quarter of last year (2020). In addition to an independently developed SCC Intelligent Protection System, the product comes equipped with more than ten safety features, such as the ASC (Automatic Stability Control) and TCL (Traction Control System). It also broke away from the traditional image of commercial vehicles with its high-quality appearance and distinctive color options such as "Pine Green". The Company also launched an upgraded Super Veryca with payload capacity of 950KG in response to overwhelming market demand for high-load capacity commercial vehicles.

In 2021, the Company launched the 2021 Eclipse Cross in January, the Outlander PHEV in April, and is gearing up for the anticipated launch of the five-seat e-Veryca electric car in May. For existing product lineups, the Company has continued to bring competitive models to market, such as the launch of the new version of the Lancer and Outlander models in the second half of the year to meet the diversified needs of consumers. The Company's domestic sales of cars for the whole year are estimated to reach 50,000 units (including OEM and imported cars).

For export markets, the Company introduced the Veryca (1.5L) and Zinger models to the Middle Eastern and Central American market last year (2020). Total overseas car sales amounted to 746 vehicles. In addition to continuing to promote the export of existing models this year (2021), the Company also launched the new Delica model (2.4L) for export to the Middle East and Central American markets. It is estimated that 1,800 vehicles will be exported throughout the year.

(2) Mainland China Auto Market

The annual GDP growth rate of China in 2020 was 2.3%, which exhibited the lowest economic growth rate in China over the past 30 years. Due to the severe impact of the COVID-19 pandemic in 2020, overall car sales in the Chinese market dipped to 25.31 million units, which indicate a year-on-year decline of 1.9% compared to 2019, and was the third consecutive year of decrease in car sales. In 2021, because of the general slowdown of the COVID-19 pandemic, the economy of

China has steadily recovered, with an estimated GDP growth rate of more than 6%. Overall car sales in China in 2021 is estimated to rebound to 26.3 million units.

Competition among mainland China's automakers tends to be bigger than ever, with luxury brands, mainstream joint venture brands and larger independent brands showing stronger overall momentum, thus causing small and medium-sized independent brands to continue to be squeezed. At present, in addition to conventional gasoline-powered vehicles, South East (Fujian) Motor, of which the Company is a shareholder, is also actively engaging with new energy vehicle (NEV) industry players to explore collaborative opportunities in response to Fujian Province’s "NEV Fujian" development strategy, thus gradually shifting into the production and sale of NEVs.

Fujian Benz Automotive, of which the Company is a shareholder, sold a total of 29,920 vehicles in 2020. Despite the negative impacts brought forth by the COVID-19 pandemic in 2020, overall sales performed well and exceeded original targets. In 2021, Fujian Benz has started to eliminate weak partners in its distribution channels, and is looking to expand to cities with high purchasing potential. Car interiors are also planned to be updated to attract more consumer interest. Total sales for the year are expected to exceed 35,000 units.

(3) Development of new business lines

In July 2020, the super value model of the iE125 e-scooter was launched. Also, in line with the government's economic stimulus plan, the Company’s e-bikes were offered at a steep discount (conversion of the Triple Stimulus Voucher into a tenfold value), which was positively received by the market. A total of 5,976 electric two-wheelers were sold throughout the year (2020). In terms of the Company’s business outlook for 2021, more focus will be placed on diversifying into alternative energy platforms as our main trajectory for development. In the first half of the year, the Company will launch electric bicycles and update the iE125 e-scooter. The Company is also expected to launch new battery swap models in the third quarter to meet consumers' various use environments. Estimated annual sales is expected to grow as compared to last year.

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Chairman: Li-lien Chen Yen

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Manager: Chao-Wen Chen

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Accounting Supervisor: Chun-Ching Liao

II. 2020 Audit Committee's Report

China Motor Corporation

Audit Committee's Review Report on the 2020 Financial Statements

The Company’s 2020 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 2021 Annual Shareholders’ Meeting

China Motor Corporation

Chairman of the Audit Committee：Chi-Ching Chen

Date: March 23th, 2021

III. The Company’s Endorsements/Guarantees Report

The total amount of endorsements and guarantees is NT$ 2,768,102 thousand. The status of endorsement and guarantee is NT$ 0 up to March 31st, 2021.

IV. The 2020 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 2020 pre-tax profit before employee and directors’ remuneration amounted to NT$3,427,373 thousand. Based on this figure, a cash payment for employee remuneration totaling NT$31,923 thousand and directors’ remuneration totaling NT$17,130 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 2020 employee/director remuneration had been approved by the Remuneration Committee and Board of Directors in March 2021.

Acknowledgements

Proposal 1

Proposed by the Board of Directors

Subject: The Company’s 2020 Annual Report

Explanation:

The Company’s 2020 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 2020 Business Report (please refer to page 2-3) and Financial Statements (please refer to page 7-28) 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, 2020 and 2019, 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 the 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, 2020 and 2019, 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, 2020. 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.

The key audit matter of the Group’s consolidated financial statements for the year ended December 31, 2020 is described as follows:

Revenue Recognition of domestic sales of four-wheel vehicles

Domestic sales of four-wheel vehicles is material to the Group’s consolidated financial statements. Since the sale of four-wheel vehicles is strongly affected by the economy, revenue recognition has been identified as a key audit matter.

Our audit procedures performed in respect of revenue recognition included the followings:

We discussed with management to find out whether the accounting methods for revenue recognition of domestic sales of four-wheel vehicles were appropriate and consistently applied;
We understood the internal controls on revenue recognition of domestic sales of four-wheel vehicles, evaluated the design of the controls and tested the operating effectiveness of such controls; and also verified the authenticity of sales transaction-related documentary evidence;
We selected samples of and checked the relevant receipts to ensure that revenue from the domestic sale of four-wheel vehicles was recognized when the customer has obtained control of the goods and the performance obligations have been satisfied.

Other Matter

We did not audit the financial statements as of and for the years ended December 31, 2020 and 2019 of some of the Group’s investees accounted for using the equity method, namely Daimler Vans Hong Kong Ltd., Xiangyang NTN-Yulon Drivertrain Co., Ltd., Shung Ye Motors Corporation, Uni Auto Parts Manufacture Co., Ltd., Southeast-Motor Co., Ltd. and the financial statements as of and for the year ended December 31, 2019 of Guangzhou NTN-Yulon Drivertrain Co., Ltd., 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 investments accounted for using the equity method constituted 9.8% (NT$5,349,384 thousand) and 14.8% (NT$7,614,490 thousand) of the Group’s total assets as of December 31, 2020 and 2019, respectively. The Group’s share of comprehensive income of the aforementioned investments accounted for using the equity-method amounted to NT$247,158 thousand and NT$637,861 thousand for the years ended December 31, 2020 and 2019, respectively, which accounted for 6.7% and 24.5% 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, 2020 and 2019 on which we have issued an unmodified opinion with an 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.
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.
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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, 2020 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 audits resulting in this independent auditors’ report are Chih-Ming Shao and Ya-Ling Wong.

Deloitte & Touche Taipei, Taiwan Republic of China

March 30, 2021

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, 2020 AND 2019 (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) Notes and accounts receivable, net (Notes 4 and 12) Trade receivables from related parties (Notes 4 and 31) Other receivables Inventories (Notes 4 and 13) Prepayments (Note 31) Non-current assets held for sale (Notes 4 and 15) Other current assets (Notes 4, 26 and 32) 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) Financial assets at amortized cost (Notes 4, 9 and 10) Investments accounted for using the equity method (Notes 4 and 16) Property, plant and equipment (Notes 4, 17, 25, 31 and 32) Right-of-use assets (Notes 4 and 18) Investment properties (Notes 4, 19 and 32) Intangible assets under development (Notes 4 and 25) Deferred tax assets (Notes 4 and 26) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 20 and 32) Short-term bills payable Notes and accounts payable Trade payables to related parties (Note 31) Other payables (Notes 4 and 21) Current tax liabilities (Notes 4 and 26) Lease liabilities (Notes 4 and 18) Current portion of long-term borrowings (Note 20) Other current liabilities (Notes 4, 7, 11 and 31) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 20) Deferred tax liabilities (Notes 4 and 26) Lease liabilities (Notes 4 and 18) Net defined benefit liabilities (Notes 4 and 22) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Notes 4 and 23) 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 Gain (loss) on the hedging instruments (Note 11) Equity directly associated with non-current assets held for sale (Note 15) Total other equity Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS (Note 14) Total equity TOTAL		2020 Amount % $ 10,403,769 19 1,059,429 2 185,970 - 120,266 - 914,273 2 1,267,478 2 46,490 - 3,809,653 7 1,728,436 3 - - 843,100 2 20,378,864 37 672,914 1 178,873 - 540,716 1 23,632,945 43 6,527,229 12 356,732 1 1,355,015 2 373,697 1 307,145 1 273,563 1 34,218,829 63 $ 54,597,693 100 $ 215,000 - 149,963 - 2,586,431 5 907,237 2 2,641,821 5 284,692 - 87,196 - 37,500 - 362,403 1 7,272,243 13 56,250 - 578,310 1 277,908 1 651,430 1 54,908 - 1,618,806 3 8,891,049 16 5,536,203 10 6,411,778 12 9,257,157 17 1,028,359 2 20,544,970 37 30,830,486 56 (926,661) (2) 264,666 1 6,918 - - - (655,077) (1) 42,123,390 77 3,583,254 7 45,706,644 84 $ 54,597,693 100		2019
				Amount % $ 5,742,588 11 339,731 1 8,556 - 1,138,342 2 1,190,463 2 1,457,139 3 326,784 1 4,617,661 9 1,543,144 3 148,023 - 849,643 2 17,362,074 34 686,413 1 207,342 - 776,473 2 23,348,925 45 6,419,254 12 442,921 1 1,366,049 3 484,360 1 253,394 1 119,263 - 34,104,394 66 $ 51,466,468 100 $ 615,000 1 183,939 - 2,702,267 5 983,750 2 2,426,690 5 312,774 1 88,697 - 6,250 - 340,684 1 7,660,051 15 43,750 - 480,280 1 359,836 1 735,400 1 22,212 - 1,641,478 3 9,301,529 18 5,536,203 11 6,414,118 12 9,257,157 18 1,029,654 2 17,306,526 34 27,593,337 54 (990,653) (2) 216,562 - (19,968) - (7,538) - (801,597) (2) 38,742,061 75 3,422,878 7 42,164,939 82 $ 51,466,468 100

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

(With Deloitte & Touche auditors’ report dated March 30, 2021)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

OPERATING REVENUE (Notes 4, 24 and 31) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 13, 25 and 31) Cost of goods sold Other operating costs Total operating costs GROSS PROFIT REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 25 and 31) 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 (loss) of associates and joint ventures accounted for using the equity method (Notes 4 and 16) Interest income Dividend income (Note 8) Other income (Note 31) Gain on disposal of investments (Notes 4, 15, 16 and 28) Net foreign exchange gain (loss) Gain (loss) on financial instruments at fair value through profit or loss Interest expense Other expense Impairment loss (Notes 4, 17 and 25)		2020 Amount % $ 29,568,987 96 1,305,613 4 30,874,600 100 25,187,401 82 781,552 2 25,968,953 84 4,905,647 16 1,432 - 4,907,079 16 636,315 2 833,810 3 1,660,284 5 3,130,409 10 1,776,670 6 1,719,635 5 95,493 - 15,240 - 117,571 - 215,365 1 25,233 - 4,359 - (16,811) - (44,358) - (101,725) -		2019
				Amount % $ 30,671,399 96 1,396,573 4 32,067,972 100 26,072,063 81 745,100 2 26,817,163 83 5,250,809 17 47,583 - 5,298,392 17 696,315 2 1,066,963 3 1,715,206 6 3,478,484 11 1,819,908 6 (3,690,617) (11) 152,023 - 20,171 - 142,754 - 91,702 - (40,154) - (55,407) - (21,257) - (18,552) - (51,830) - (Continued)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

Expected credit loss (Notes 10 and 15) Total non-operating income and expenses PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT (LOSS) 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 22) Unrealized loss on investments in equity instruments designated as fair value through other comprehensive income (Note 23) Gain on hedging instruments (Notes 11 and 23) Share of other comprehensive income (loss) of associates accounted for using the equity method (Notes 16 and 23) Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 26) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (Note 23) Share of the other comprehensive loss of associates and joint ventures accounted for using the equity method (Notes 16 and 23) Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests		2020 Amount % (54,206) - 1,975,796 6 3,752,466 12 (211,918) - 3,540,548 12 (17,775) - (28,297) - 19,378 - 45,318 - (321) - 35,426 - 75,320 - 129,049 - $ 3,669,597 12 $ 3,277,320 11 263,228 1		2019
				Amount % (29,004) - (3,500,171) (11) (1,680,263) (5) (628,110) (2) (2,308,373) (7) (11,146) - (18,391) - 1,898 - 168,584 - 1,849 - (27,518) - (411,450) (1) (296,174) (1) $ (2,604,547) (8) $ (2,465,573) (8) 157,200 1

(Continued)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS (LOSS) PER SHARE (Note 27) Basic Diluted		2020 Amount % $ 3,540,548 12 $ 3,382,531 11 287,066 1 $ 3,669,597 12 $ 6.01 $ 6.00		2019
				Amount % $ (2,308,373) (7) $ (2,674,645) (8) 70,098 - $ (2,604,547) (8) $ (2.38) $ (2.38)

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

(With Deloitte & Touche auditors’ report dated March 30, 2021) (Concluded)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

		Equity Attributable to Owners of the	Corporation
Ordinary Sh	ares Amount Capital Surplus $ 13,840,508 $ 6,403,633 - - 13,840,508 6,403,633 - - - - - - - 10,485 - - - - - - - - (8,304,305 ) - - - - - - - - - 5,536,203 6,414,118 - - - (2,340 ) - - - - - - - - - - - - $ 5,536,203 $ 6,411,778	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 8,897,857 $ 1,046,967 $ 22,486,952 - - (19,503) 8,897,857 1,046,967 22,467,449 359,300 - (359,300 ) - - (2,352,886 ) - (17,313 ) 17,313 - - (35,639 ) - - - - - (2,465,573 ) - - (46,865) - - (2,512,438) - - - - - - - - 82,010 - - 17 - - - 9,257,157 1,029,654 17,306,526 - (1,295 ) 1,295 - - (7,532 ) - - - - - 3,277,320 - - (27,221) - - 3,250,099 - - (5,418 ) - - - $ 9,257,157 $ 1,028,359 $ 20,544,970	Other Equity Exchange Differences on Translating the Financial Unrealized Valuation Gain on Financial Assets at Fair Value Equity Directly Associated With Statements of Through Other Gain (Loss) on Non-current Foreign Operations Comprehensive Income Hedging Instruments Assets Held for Sale $ (646,278 ) $ 117,177 $ 20,997 $ (7,538 ) - - - - (646,278 ) 117,177 20,997 (7,538 ) - - - - - - - - - - - - - - - - - - - - - - - - (344,375) 181,412 756 - (344,375) 181,412 756 - - - - - - - - - - (82,010 ) - - - (17 ) - - - - (41,721) - (990,653 ) 216,562 (19,968 ) (7,538 ) - - - - - - - - - - - - - - - 63,992 42,686 18,216 7,538 63,992 42,686 18,216 7,538 - 5,418 - - - - 8,670 - $ (926,661) $ 264,666 $ 6,918 $ -
			Exchange Differences on Translating the Financial Unrealized Valuation Gain on Financial Assets at Fair Value Statements of Through Other Foreign Operations Comprehensive Income $ (646,278 ) $ 117,177 - - (646,278 ) 117,177 - - - - - - - - - - - - (344,375) 181,412 (344,375) 181,412 - - - - - (82,010 ) - (17 ) - - (990,653 ) 216,562 - - - - - - - 63,992 42,686 63,992 42,686 - 5,418 - - $ (926,661) $ 264,666
Number of Shares (In Thousands) 1,384,051 - 1,384,051 - - - - - - - - (830,431 ) - - - - 553,620 - - - - - - - - 553,620

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

(With Deloitte & Touche auditors’ report dated March 30, 2021)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit losses recognized Net loss (gain) on fair value change of financial instruments at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of associates and joint ventures accounted for using the equity method Net loss on disposal of property, plant and equipment Gain on disposal of investment Impairment loss of non-financial assets Realized gain on transactions with associates Unrealized gain on foreign currency exchange Gain on lease modifications Changes in operating assets and liabilities Financial instruments at fair value through profit or loss Notes and 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 CASH FLOWS FROM INVESTING ACTIVITIES Disposal of financial assets at fair value through other comprehensive income Proceeds from refund of shares 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	2020 $ 3,752,466 905,853 122,164 46,238 (4,359) 16,811 (95,493) (15,240) (1,719,635) 2,095 (215,365) 146,823 (1,432) (36,955) (1,835) (810,374) 284,551 178,912 113,103 774,328 (135,040) 10,260 (116,743) (78,166) 85,362 135,073 (101,745) 3,241,657 (249,305) 2,992,352 - 404 (1,571,165) 1,707,707	2019 $ (1,680,263) 1,037,274 114,837 25,877 55,407 21,257 (152,023) (20,171) 3,690,617 5,837 (91,702) 85,506 (47,583) (1,323) (63) 222,837 (237,888) 494,600 53,523 (763,480) (426,294) (239,050) 78,551 43,779 (233,925) 36,321 (175,186) 1,897,272 (193,869) 1,703,403 17 - (2,349,473) 2,620,640 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Acquisition of investments accounted for using the equity method Disposal of investments accounted for using the equity method Disposal of subsidiaries 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 Increase (decrease) in short-term borrowings Increase (decrease) in short-term bills payable Proceeds from long-term borrowings Repayment of the principal portion of lease liabilities Increase (decrease) in other non-current liabilities Cash dividends paid Capital reduction by cash 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 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 (7,136) - (2,196) (795,507) 23,822 (58,887) (24,328) 98,039 1,852,911 1,223,664 (400,000) (33,976) 43,750 (93,450) 32,565 - - (17,034) (126,690) (594,835) 17,939 3,639,120 6,880,490 $ 10,519,610	2019 - 227,159 231,759 (1,489,310) 27,875 (237,959) (17,963) 172,940 1,313,058 498,743 300,000 89,967 50,000 (97,564) (8,440) (2,352,886) (8,304,305) (24,029) (112,397) (10,459,654) (34,765) (8,292,273) 15,172,763 $ 6,880,490 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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, 2020 and 2019:

Cash and cash equivalents in the consolidated balance sheets Cash and cash equivalents included in financial assets for hedging Cash and cash equivalents in the consolidated statements of cash flows		December 31	December 31
		2020 $ 10,403,769 115,841 $ 10,519,610	2019 $ 5,742,588 1,137,902 $ 6,880,490

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

(With Deloitte & Touche auditors’ report dated March 30, 2021) (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, 2020 and 2019, 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 the Other Matter section), the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2020 and 2019, 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, 2020. 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.

The key audit matter of the Corporation’s financial statements for the year ended December 31, 2020 is stated as follows:

Revenue Recognition of domestic sales of four-wheel vehicles

Domestic sales of four-wheel vehicles is material to the Corporation’s financial statements. Since the sale of four-wheel vehicles is strongly affected by the economy, revenue recognition has been identified as a key audit matter.

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Our audit procedures performed in respect of revenue recognition included the followings:

We discussed with management to find out whether the accounting methods for revenue recognition of domestic sales of four-wheel vehicles were appropriate and consistently applied;
We understood the internal controls on revenue recognition of domestic sales of four-wheel vehicles, evaluated the design of the controls and tested the operating effectiveness of such controls; and also verified the authenticity of sales transaction-related documentary evidence;
We selected samples of and checked the relevant receipts to ensure that revenue from the domestic sale of four-wheel vehicles was recognized when the customer has obtained control of the goods and the performance obligations have been satisfied.

Other Matter

We did not audit the financial statements as of and for the years ended December 31, 2020 and 2019 of some of the Corporation’s investees accounted for using the equity method, namely Daimler Vans Hong Kong Ltd., Shung Ye Motors Corporation, and Uni Auto Parts Manufacture Co., Ltd., 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 investments accounted for using the equity method constituted 7.8% (NT$3,782,477 thousand) and 8.0% (NT$3,601,010 thousand) of the Corporation’s total assets as of December 31, 2020 and 2019, respectively. The Corporation’s share of comprehensive income of the aforementioned investments accounted for using the equity method amounted to NT$802,862 thousand and NT$733,891 thousand for the years ended December 31, 2020 and 2019, respectively, which accounted for 23.7% and 27.4% of the Corporation’s total comprehensive income (loss), 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, 2020 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 audits resulting in this independent auditors’ report are Chih-Ming Shao and Ya-Ling Wong.

Deloitte & Touche Taipei, Taiwan Republic of China

March 30, 2021

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, 2020 AND 2019 (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) Current financial assets at amortized cost (Notes 4, 9 and 10) Financial assets for hedging (Notes 4 and 11) Notes and accounts receivable, net (Notes 4 and 12) Trade receivables from related parties (Notes 4 and 27) Other receivables (Notes 4 and 27) Inventories (Notes 4 and 13) Prepayments (Note 27) Other current assets (Notes 4, 22 and 28) 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) Financial assets at amortized cost (Notes 4, 9 and 10) Investments accounted for using the equity method (Notes 4 and 14) Property, plant and equipment (Notes 4, 15, 21 and 27) Investment properties (Notes 4 and 16) Intangible assets under development (Notes 4 and 21) Deferred tax assets (Notes 4 and 22) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable Trade payables to related parties (Note 27) Other payables (Note 17) Current tax liabilities (Notes 4 and 22) Other current liabilities (Notes 4, 7, 11 and 27) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 22) Net defined benefit liabilities (Notes 4 and 18) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Notes 4, 11 and 19) 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 Gain (loss) on hedging instruments Total other equity Total equity TOTAL		2020 Amount % $ 6,706,144 14 1,026,314 2 43,582 - 118,796 - 456,134 1 1,140,590 3 717,256 2 3,010,241 6 1,619,763 3 479,641 1 15,318,461 32 603,040 1 43,540 - 534,771 1 26,211,018 54 4,206,695 9 886,585 2 373,697 1 271,592 - 63,712 - 33,194,650 68 $ 48,513,111 100 $ 2,093,990 4 919,112 2 2,030,739 4 238,526 - 251,223 1 5,533,590 11 262,011 1 553,119 1 41,001 - 856,131 2 6,389,721 13 5,536,203 11 6,411,778 13 9,257,157 19 1,028,359 2 20,544,970 43 30,830,486 64 (926,661) (2) 264,666 1 6,918 - (655,077) (1) 42,123,390 87 $ 48,513,111 100		2019
				Amount % $ 3,361,954 7 320,671 1 - - 398,864 1 719,498 2 1,267,862 3 611,320 1 3,702,237 8 1,287,677 3 450,341 1 12,120,424 27 617,612 1 42,668 - 768,613 2 25,688,517 57 4,013,461 9 896,305 2 484,360 1 205,882 1 55,937 - 32,773,355 73 $ 44,893,779 100 $ 2,212,254 5 887,140 2 1,822,369 4 245,152 1 143,681 - 5,310,596 12 205,642 1 626,668 1 8,812 - 841,122 2 6,151,718 14 5,536,203 12 6,414,118 14 9,257,157 21 1,029,654 2 17,306,526 39 27,593,337 62 (998,191) (2) 216,562 - (19,968) - (801,597) (2) 38,742,061 86 $ 44,893,779 100

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

(With Deloitte & Touche auditors’ report dated March 30, 2021)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

OPERATING REVENUE (Notes 4, 20 and 27) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 13, 21 and 27) 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 and 27) 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 (loss) of subsidiaries, associates and joint ventures (Notes 4 and 14) Interest income (Notes 4 and 27) Other income (Note 27) Net foreign exchange gain (loss) Gain (loss) on financial instruments at fair value through profit or loss (Note 4) Expected credit gain (loss) (Notes 4 and 10) Other expenses (Note 27) Gain (loss) on disposal of investments (Notes 4 and 14) Impairment loss (Notes 4, 15 and 21) Total non-operating income and expenses		2020 Amount % $ 26,525,771 98 436,277 2 26,962,048 100 22,739,321 84 134,356 1 22,873,677 85 4,088,371 15 376 - 4,088,747 15 311,961 1 603,402 2 1,551,518 6 2,466,881 9 1,621,866 6 1,693,020 6 51,608 - 48,943 - 33,389 - 3,189 - 32,518 - (4,387) - (1,393) - (100,433) - 1,756,454 6		2019
				Amount % $ 25,879,396 98 485,628 2 26,365,024 100 22,077,293 84 108,512 - 22,185,805 84 4,179,219 16 7,120 - 4,186,339 16 294,279 1 616,843 2 1,460,284 6 2,371,406 9 1,814,933 7 (3,890,853) (15) 103,353 1 68,072 - (12,381) - (61,969) - (30,782) - (7,271) - 69,699 - (45,374) - (3,807,506) (14) (Continued)

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CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 22) NET PROFIT (LOSS) 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 18) Unrealized gain on investments in equity instruments designated at fair value through other comprehensive income (Note 19) Gain on the hedging instruments (Notes 11 and 19) Share of other comprehensive income of subsidiaries and associates (Notes 14 and 19) Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 22) Items that may be reclassified subsequently to profit or loss: Share of the other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using the equity method (Notes 14 and 19) Other comprehensive income (loss) for the year (net of income tax) TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE YEAR EARNINGS (LOSS) PER SHARE (IN NEW TAIWAN DOLLARS; Note 23) Basic Diluted		2020 Amount % 3,378,320 12 (101,000) - 3,277,320 12 (22,010) - 872 - 9,919 - 42,482 - 2,418 - 71,530 1 105,211 1 $ 3,382,531 13 $ 6.01 $ 6.00		2019
				Amount % (1,992,573) (7) (473,000) (2) (2,465,573) (9) (41,510) - 12,081 - 503 - 156,028 - 8,201 - (344,375) (1) (209,072) (1) $ (2,674,645) (10) $ (2.38) $ (2.38)

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

(With Deloitte & Touche auditors’ report dated March 30, 2021)

(Concluded)

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CHINA MOTOR CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019 Effect of retrospective application BALANCE AT JANUARY 1, 2019 AS ADJUSTED Appropriation of the 2018 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 loss for the year ended December 31, 2019 Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax Total comprehensive income (loss) for the year ended December 31, 2019 Capital reduction by cash Subsidiaries and associates disposed the investments in equity instruments designated as at fair value through other comprehensive income Basic adjustment for gain on hedging instruments BALANCE AT DECEMBER 31, 2019 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, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income for the year ended December 31, 2020 Associates disposal of the investments in equity instruments designated as at fair value through other comprehensive income by associates Basic adjustment for gain on hedging instruments BALANCE AT DECEMBER 31, 2020		ShareCapitalOrdinary Shares Shares (In Thousands) Amount Capital Surplus 1,384,051 $ 13,840,508 $ 6,403,633 - - - 1,384,051 13,840,508 6,403,633 - - - - - - - - - - - 10,485 - - - - - - - - - (830,431 ) (8,304,305 ) - - - - - - - 553,620 5,536,203 6,414,118 - - - - - (2,340 ) - - - - - - - - - - - - - - - 553,620 $ 5,536,203 $ 6,411,778		Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 8,897,857 $ 1,046,967 $ 22,486,952 - - (19,503) 8,897,857 1,046,967 22,467,449 359,300 - (359,300 ) - - (2,352,886 ) - (17,313 ) 17,313 - - (35,639 ) - - (2,465,573 ) - - (46,865) - - (2,512,438) - - - - - 82,027 - - - 9,257,157 1,029,654 17,306,526 - (1,295 ) 1,295 - - (7,532 ) - - 3,277,320 - - (27,221) - - 3,250,099 - - (5,418 ) - - - $ 9,257,157 $ 1,028,359 $ 20,544,970	Other Equity Exchange Differences Unrealized Gain on Investments in Financial Assets at Fair Value Through on Translating Foreign Operations Other Comprehensive Income Gain (Loss) on the Hedging Instruments $ (653,816 ) $ 117,177 $ 20,997 - - - (653,816 ) 117,177 20,997 - - - - - - - - - - - - - - - (344,375) 181,412 756 (344,375) 181,412 756 - - - - (82,027 ) - - - (41,721) (998,191 ) 216,562 (19,968 ) - - - - - - - - - 71,530 42,686 18,216 71,530 42,686 18,216 - 5,418 - - - 8,670 $ (926,661) $ 264,666 $ 6,918	Total Equity $ 52,160,275 (19,503) 52,140,772 - (2,352,886 ) - (25,154 ) (2,465,573 ) (209,072) (2,674,645) (8,304,305 ) - (41,721) 38,742,061 - (9,872 ) 3,277,320 105,211 3,382,531 - 8,670 $ 42,123,390
		Shares (In Thousands) 1,384,051 - 1,384,051 - - - - - - - (830,431 ) - - 553,620 - - - - - - - 553,620

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

(With Deloitte & Touche auditors’ report dated March 30, 2021)

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CHINA MOTOR CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss (gain) Net loss (gain) on fair value change of financial instruments at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of subsidiaries, associates and joint ventures Loss 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 gain on foreign currency exchange, net Changes in operating assets and liabilities Financial instruments at fair value through profit or loss Notes and accounts receivable Trade receivables from related parties Other receivables Inventories Prepayments Other current assets 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 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortized cost Proceeds from repayment of principal of financial assets at amortized cost 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 the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Continued)	2020 $ 3,378,320 684,760 106,641 (35,180) (3,189) 110 (51,608) (9,653) (1,693,020) 1,741 1,393 137,832 (376) (45,917) (796,416) 266,191 127,302 258 663,052 (332,086) (26,123) (119,025) 30,332 67,988 115,836 (95,559) 2,373,604 (119,417) 2,254,187 (1,311,075) 1,582,688 (7,136) - - (751,525) 17,752	2019 $ (1,992,573) 770,843 95,100 25,550 61,969 86 (103,353) (14,188) 3,890,853 1,006 (69,699) 57,763 (7,120) (3,416) 152,526 (259,512) (26,640) 35,656 (732,545) (384,122) (233,193) 267,102 129,332 (15,621) 13,468 (143,156) 1,516,116 (125,089) 1,391,027 (1,930,041) 2,105,501 - 642,256 965,022 (1,329,882) 18,271

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CHINA MOTOR CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Decrease in other receivables of related parties 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 Payment of the principal portions of lease liabilities Increase in other non-current liabilities Cash dividends paid Capital reduction payments to shareholders Interest paid Net cash generated from (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	2020 - (58,887) (37,485) 51,551 1,292,337 778,220 (2,100) 31,410 - - (110) 29,200 3,061,607 3,760,378 $ 6,821,985	2019 100,000 (237,959) (14,211) 125,863 1,292,050 1,736,870 (940) 917 (2,352,886) (8,304,305) (86) (10,657,300) (7,529,403) 11,289,781 $ 3,760,378

Reconciliation of the amounts in the statements of cash flows with the equivalent items reported in the balance sheets at December 31, 2020 and 2019:

Cash and cash equivalents in the balance sheets Cash and cash equivalents included in financial assets for hedging Cash and cash equivalents in the statements of cash flows		December 31	December 31
		2020 $ 6,706,144 115,841 $ 6,821,985	2019 $ 3,361,954 398,424 $ 3,760,378

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

(With Deloitte & Touche auditors’ report dated March 30, 2021)

(Concluded)

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Proposal 2

Proposed by the Board of Directors

Subject: The Company’s 2020 Statement of Earnings Distribution

Explanation:

In accordance with the 2020 Financial Statements and the Article 27 of the Articles of Incorporation, the 2020 Earnings Distribution Statement is presented. Please refer to page 30.
It is intended that the distribution of the 2020 Earnings will come from the 2020 undistributed Earnings with priority with the following distribution items:
(1) In accordance with Article 237 of the Company Act, 10% of the profit, NT$ 323,844 thousand is set aside as the legal reserve.
(2) It is intended that a cash dividend of NT$ 7 dollars per share will be set aside with a total of NT$ 3,875,342 thousand being distributed. The cash stock dividend distribution base day is July 30th, 2021.
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 adjust the shareholders’ dividends distribution rate based on the cash dividend amounts determined in this earnings distribution proposal.
Please proceed with the acknowledgement.

Resolution:

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2020 Earnings Distribution Statement (Proposal)

(Unit: NT$)

Item	Amount
Priorperiod undistributed earnings	$17,306,525,712
Less: Adjustment arising from investments accounted for using the equity method Re-measurement of defined benefit plans recognized in retained earnings Add: First-time adoption of IFRS for appropriation as special reserve reversal Netprofit after tax	( 22,563,478) ( 17,607,838) 1,295,591 3,277,320,376
Distributable earnings	$20,544,970,363
Distribution items Appropriation of legal earnings reserve Shareholder cash dividends (7 per share) End-of-period undistribution earnings	$ 323,844,465 3,875,342,394 16,345,783,504
Sum	$ 20,544,970,363

Note:

When calculating the undistributed surplus earnings under Article 66-9 of the Income Tax Law "profit-seeking income tax shall be levied at the rate of 5 percent on undistributed surplus earnings", the surplus of the most recent year shall be allocated first.
Distributed to whole dollar amount, and decimals were rounded off. Fractional numbers less than one dollar are placed into the Company’s other revenue.

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Chairman: Li-lien Chen Yen

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Manager: Chao-Wen Chen

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Accounting Supervisor: Chun-Ching Liao

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Discussions

Proposal 1

Proposed by the Board of Directors

Subject: Amendments to the Company’s “Rules for Election of Directors ”.

Explanation:

In accordance with the current laws and regulations and with reference to the latest sample template revised by the Taiwan Stock Exchange Corporation on June 3, 2020, Article 7 of the Company’s "Rules for Election of Directors" was amended and Article 6 was deleted.
Please refer to Attachment I (Please refer to page 36-37) for comparison table for the provisions before and after the revisions.
Please proceed with the discussion.

Resolution:

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Proposal 2

Proposed by the Board of Directors

Subject: Releases the company's directors from non-competition restrictions.

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."
For the details about posts held by Zhen-Xiang Yao, the representative of the Company’s corporate director, Chao-Wen Chen and Hsin-Cheng Tseng, the Company’s current directors, please see the Statement of Scheduled Termination of Non-Competition Restrictions Imposed on Directors on Page 33-34 hereof.
Please proceed with the discussion.

Resolution:

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Statement of Scheduled Termination of Non-Competition Restriction Imposed on Directors

Position	Name	Post ConcurrentlyHeld	Post ConcurrentlyHeld
		CompanyName	Position
Director	Zhen-Xiang Yao	Yulon Motor Co., Ltd.	President
		Yulon Motor Co., Ltd.	Director
		Luxgen Motor Co., Ltd.	Chairman
		Uni Auto Parts Manufacture Co., Ltd.	Chairman
		Coc Tooling & Stamping Co., Ltd.	Chairman
		Yulon Construction Co., Ltd.	Chairman
		ESINN Co., Ltd.	Chairman
		Chan Yun Technology Co., Ltd.	Chairman
		Yulon TOBE Motor Co., Ltd.	Chairman
		Sin Chi Co., Ltd.	Chairman
		Yulon Automotive(China) Investment Ltd.	Chairman
		Wen Yang Investment (Samoa) Co., Ltd.	Chairman
		Qing Yi Investment (Samoa) Co., Ltd.	Chairman
		Guangzhou Aeolus Automobile Co.,Ltd.	Vice Chairman
		Yulon Nissan Motor Co., Ltd.	Director
		Foxtron Vehicle Technologies Co., Ltd.	Director
		Taiwan Acceptance Corporation	Director
		Yung Hong Investment Co., Ltd.	Director

(Continued)

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Position	Name	Post ConcurrentlyHeld	Post ConcurrentlyHeld
		CompanyName	Position
Director	Zhen-Xiang Yao	Yulon Business Management Company	Director
		Yulon China Investment (HK) Co., Ltd.	Director
		Yulon Motor Investment (HK) Co., Ltd.	Director
		Yulon Philippine Investment Co., Ltd.	Director
		Dong Feng Yulon Motor Ltd.	Supervisor
Director	Chao-Wen Chen	Fu-Lun Motors Co., Ltd.	Chairman
Director	Hsin-Cheng Tseng	Fu-Lun Motors Co., Ltd.	Director

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Motions

Adjournment

35 -

Attachment I

Comparison Table for the “Rules for Election of Directors” Before and After Revision

Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
6	(Deleted)	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.	1.Content amended in accordance with current laws and regulations and in reference to sample templates. 2.Shareholders elect Directors from a list of nominated candidates. Shareholders can learn the names, academic experience and other information of the Director candidates from the list of candidates before the Shareholders' Meeting. Therefore, the use of shareholders’ account number or ID card number to identify the nominated Director candidates has been deemed as unnecessary. Therefore, this article is deleted.
7	Ballots are considered void in anyof the following	Ballots are considered void in anyof the following	In line with the revision of current

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Article No.	AFTER THE REVISION	BEFORE THE REVISION	Description
	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. 3. Writings other than the candidate’sinformation. 4. Writings that are illegible or have been corrected. 5.The candidate whose name is entered in the ballotdoes not conform to the director candidate list. 6.Blank ballots casted into the ballot box.	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. 3. Writings other than the candidate’sname and shareholder number/ID card number. 4. Writings that are illegible or have been corrected. 5. The candidate’s name written in the ballot coincides with another shareholder, but no shareholder number or ID card number is provided for identification. 6.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 nameand ID card numberdo not matchthe candidate’s identity proof. 7.Blank ballots casted into the ballot box.	laws and regulations and in reference to sample templates, the relevant content was amended, with the third and sixth paragraphs of this article adjusted, and the fifth paragraph deleted.

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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
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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 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.
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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 3.2%, namely 17,715,850 shares. The total shares held by all the directors of the Company up to March 31st, 2021 are 290,312,979 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	44,592,177	8.05	1
Director	Hsin-I Lin	139,435,815	25.19	2
Director	Zhen-XiangYao	139,435,815	25.19	2
Director	Toshinaga Kato	77,507,309	14.00	3
Director	Tai-MingChen	44,592,177	8.05	1
Director	Daisuke Okamoto	26,561,918	4.80	4
Director	Chao-Wen Chen	139,435,815	25.19	2
Director	Hsin-ChengTseng	2,215,760	0.40	5
Independent Director	Chi-Ching Chen	0	0.00	-
Independent Director	Wei-ching Lue	0	0.00	-
Independent Director	Yun-Hua Yang	0	0.00	-
Total shares held byall directors		290,312,979	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, Zhen-Xiang Yao and Chao-Wen Chen are representatives from Tai Yuen Textile Co., Ltd.
Director Toshinaga Kato is the representative from Mitsubishi Motors Corporation.
Director Daisuke Okamoto is the representative from Mitsubishi Corporation.
Director Hsin-Cheng Tseng 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.
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Appendix III

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

Not applicable.

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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
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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.
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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
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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
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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
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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%.
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. 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;
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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. The forty-two amendment was made on June 24, 2020.

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AI assistant

CMC — AGM Information 2021

51979_rns_2021-07-26_af0d8acb-715a-4bc4-84f4-abc193b58c76.pdf

China Motor Corporation

2021 Annual Shareholders’ Meeting

MEETING AGENDA

Notice to Readers

Table of Contents

Attachments

China Motor Corporation 2021 Annual Shareholders’ Meeting Agenda

Reporting matters

I. 2020 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

II. 2020 Audit Committee's Report

China Motor Corporation

Audit Committee's Review Report on the 2020 Financial Statements

China Motor Corporation

III. The Company’s Endorsements/Guarantees Report

IV. The 2020 Distribution of Employee Bonus and Director Compensation

Acknowledgements

Proposal 1

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

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, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

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, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

CHINA MOTOR CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)

CHINA MOTOR CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Proposal 2

Resolution:

2020 Earnings Distribution Statement (Proposal)

Note:

Discussions

Proposal 1

Resolution:

Proposal 2

Resolution:

Statement of Scheduled Termination of Non-Competition Restriction Imposed on Directors

Motions

Adjournment

CMC AGM Information 2021