CMC - Interim / Quarterly Report 2018

China Motor Corporation and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 2018 and 2017 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders China Motor Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of China Motor Corporation and its subsidiaries (collectively, the “Group”) as of March 31, 2018 and 2017, the consolidated statements of comprehensive income, changes in equity and cash flows for the three months then ended and the related notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as 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 Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

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

Basis for Qualified Conclusion

The financial statements of some non-significant subsidiaries included in the consolidated financial statements were not reviewed. As of March 31, 2018 and 2017, the combined total assets of these non-significant subsidiaries were NT$12,677,191 thousand and NT$11,808,875 thousand, respectively, representing 20% and 19%, respectively, of the consolidated total assets, and the combined total liabilities of these non-significant subsidiaries were NT$3,080,250 thousand NT$2,647,896 thousand, respectively, representing 38% and 32%, respectively, of the consolidated total liabilities; for the three months ended March 31, 2018 and 2017, the amounts of combined net comprehensive income of these non-significant subsidiaries were NT$174,821 thousand and NT$78,306 thousand, respectively, representing 11% and 10%, respectively, of the consolidated total comprehensive income. As disclosed in Note 18 to the consolidated financial statements, as of March 31, 2018 and 2017, some investments accounted for using the equity method were NT$17,123,454 thousand and NT$15,595,915 thousand, respectively, and for the three months ended March 31, 2018 and 2017, net comprehensive income of these equity-method investments were NT$628,520 thousand and NT$194,546 thousand, respectively, which were calculated on the basis of financial statements that have not been reviewed.

Qualified Conclusion

Based on our reviews, except for the adjustments, if any, as might have been determined to be necessary had the financial statements of the aforementioned non-significant subsidiaries, the investments accounted for using the equity method and the relevant information disclosed been reviewed, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2018 and 2017, its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting”.

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

Deloitte & Touche Taipei, Taiwan Republic of China May 11, 2018

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 review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ review 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’ review report and consolidated financial statements shall prevail.

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(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) Available-for-sale financial assets (Notes 4 and 12) Financial assets at amortized cost (Notes 4, 9 and 10) Financial assets for hedging (Notes 4 and 11) Debt investments with no active market (Notes 4 and 17) Notes receivable, net (Notes 4 and 13) Accounts receivable, net (Notes 4 and 13) Trade receivables from related parties (Notes 4 and 31) Other receivables (Note 4) Inventories (Note 15) Prepayments (Note 31) Other current assets (Notes 4, 11 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) Available-for-sale financial assets (Notes 4 and 12) Financial assets at amortized cost (Notes 4, 9 and 10) Financial assets measured at cost (Notes 4 and 16) Debt investments with no active market (Notes 4 and 17) Investments accounted for using the equity method (Note 18) Property, plant and equipment (Notes 19 and 32) Investment properties (Notes 20, 25 and 32) Intangible assets under development Deferred tax assets (Note 26) Other non-current assets (Note 4) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 21 and 32) Short-term bills payable Notes and accounts payable Trade payables to related parties (Note 31) Other payables (Note 22) Current tax liabilities (Notes 4 and 26) Other current liabilities (Notes 7, 11 and 31) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Note 26) Net defined benefit liabilities (Notes 4 and 23) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 24) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unrealized gain on investments in financial assets at fair value through other comprehensive income Unrealized gain on available-for-sale financial assets Gain (loss) on effective portion of cash flow hedges (Notes 6 and 11) Gain on the hedging instruments (Note 11) Total other equity Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS (Notes 14 and 27) Total equity TOTAL		March 31, 2018 (Reviewed) Amount % $ 14,281,792 22 1,051,652 2 - - 873,070 1 174,748 - - - 25,308 - 1,022,564 1 1,752,081 3 178,296 - 3,736,090 6 1,135,319 2 507,853 1 24,738,773 38 777,273 1 320,825 1 - - 1,408,829 2 - - - - 28,789,957 45 6,461,217 10 1,391,572 2 194,682 - 315,731 1 256,787 - 39,916,873 62 $ 64,655,646 100 $ 735,000 1 89,863 - 2,410,243 4 795,601 1 2,380,853 4 418,711 1 327,102 - 7,157,373 11 134,941 - 874,183 2 11,836 - 1,020,960 2 8,178,333 13 13,840,508 21 6,407,968 10 8,487,293 13 1,051,658 2 23,106,101 36 32,645,052 51 (347,423) - 271,057 - - - - - 4,820 - (71,546) - 52,821,982 82 3,655,331 5 56,477,313 87 $ 64,655,646 100		December 31, 2017 (Audited) Amount % $ 13,816,041 22 529,496 1 - - - - - - 744,052 1 23,799 - 1,161,493 2 1,703,903 3 105,184 - 4,464,469 7 1,506,007 2 517,473 1 24,571,917 39 - - - - 726,472 1 - - 194,860 - 1,534,751 2 27,700,662 44 6,543,043 10 1,395,488 2 154,628 - 417,001 1 290,104 1 38,957,009 61 $ 63,528,926 100 $ 745,000 1 109,933 - 2,555,888 4 886,390 1 2,871,988 5 328,393 1 289,470 - 7,787,062 12 114,554 - 1,140,697 2 29,651 - 1,284,902 2 9,071,964 14 13,840,508 22 6,407,340 10 8,487,293 13 1,051,658 2 20,895,137 33 30,434,088 48 (485,118) (1) - - 765,456 1 (12,253) - - - 268,085 - 50,950,021 80 3,506,941 6 54,456,962 86 $ 63,528,926 100		March 31, 2017 (Reviewed)
						Amount % $ 14,850,483 24 1,272 - 726,685 1 - - - - 150,329 - 22,497 - 1,222,220 2 1,733,990 3 209,725 - 4,068,785 6 372,867 1 418,844 1 23,777,697 38 - - - - 827,280 1 - - 214,802 - 1,671,218 3 26,825,720 44 6,403,216 10 1,407,098 2 133,119 - 345,753 1 255,055 1 38,083,261 62 $ 61,860,958 100 $ 745,000 1 91,970 - 2,377,202 4 673,695 1 2,467,745 4 308,539 - 423,437 1 7,087,588 11 150,024 - 1,095,172 2 11,917 - 1,257,113 2 8,344,701 13 13,840,508 22 6,407,279 10 8,168,383 13 1,051,658 2 20,441,271 33 29,661,312 48 (553,661) (1) - - 864,774 2 (12,993) - - - 298,120 1 50,207,219 81 3,309,038 6 53,516,257 87 $ 61,860,958 100

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

(With Deloitte & Touche review report dated May 11, 2018)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

OPERATING REVENUE (Notes 4 and 31) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 11, 15, 23, 25 and 31) Cost of goods sold Other operating cost Total operating costs GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 23, 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 of associates and joint ventures accounted for using the equity method (Note 18) Interest income Other income Gain on disposal of investments (Note 16) Foreign exchange gain Gain on financial assets at fair value through profit or loss Interest expense Other expenses Loss on foreign currency exchange		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 Amount % $ 9,955,159 96 456,774 4 10,411,933 100 8,267,416 80 39,914 - 8,307,330 80 2,104,603 20 (40,490) - 2,064,113 20 521,982 5 321,676 3 417,426 4 1,261,084 12 803,029 8 734,625 7 47,042 - 18,840 - - - 18,933 - 725 - (2,603) - (4,843) - - -		2017
				Amount % $ 10,409,733 96 447,152 4 10,856,885 100 8,828,167 81 65,820 1 8,893,987 82 1,962,898 18 (19,229) - 1,943,669 18 414,044 4 270,886 3 429,442 4 1,114,372 11 829,297 7 499,415 5 43,342 - 6,806 - 57,650 - - - - - (3,103) - (3,033) - (156,752) (1) (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

Loss on fair value change of financial assets at fair value through profit or loss Impairment loss (Note 19) Total non-operating income INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT FROM CONTINUING OPERATIONS NET PROFIT FROM DISCONTINUED OPERATIONS (Note 27) NET INCOME FOR THE PERIOD OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Unrealized gain on investments in equity instruments designated as at fair value through other comprehensive income (Note 24) Share of other comprehensive loss of associates accounted for using the equity method (Note 18) Income tax relating to items that will not be reclassified subsequently to profit or loss (Notes 4 and 26) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (Note 24) Unrealized loss on available-for-sale financial assets (Note 24) Gain on effective portion of cash flow hedges (Note 24) Gain on the hedging instruments (Notes 11 and 24)		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 Amount % $ - - (10,346) - 802,373 7 1,605,402 15 218,124 2 1,387,278 13 - - 1,387,278 13 3,543 - (5,562) - 5,091 - 18,028 - - - - - 19,908 -		2017
				Amount % $ (6,231) - - - 438,094 4 1,267,391 11 125,644 1 1,141,747 10 1,013 - 1,142,760 10 - - (327) - - - (35,836) - (17,050) - 18,846 - - - (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

Share of other comprehensive gain (loss) of associates and joint ventures accounted for using the equity method (Notes 18 and 24) Income tax relating to items that may be reclassified subsequently to profit or loss (Notes 4 and 26) Other comprehensive loss for the period, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE PERIOD NET INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (Note 28) From continuing and discontinued operations Basic Diluted From continuing operations Basic Diluted		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 Amount % $ 154,851 2 (2,835) - 193,024 2 $ 1,580,302 15 $ 1,317,903 12 69,375 1 $ 1,387,278 13 $ 1,475,743 14 104,559 1 $ 1,580,302 15 $ 0.97 $ 0.97 $ 0.97 $ 0.97		2017
				Amount % $ (310,234) (3) (3,204) - (347,805) (3) $ 794,955 7 $ 1,042,122 10 100,638 1 $ 1,142,760 11 $ 785,624 7 9,331 - $ 794,955 7 $ 0.76 $ 0.76 $ 0.76 $ 0.76

		$		$
		$		$
		$		$
		$		$
		$		$

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

(With Deloitte & Touche review report dated May 11, 2018)

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

	Equity Attributable toOwners of theCorporation	Equity Attributable toOwners of theCorporation
Ordinary Shares Shares (In Thousands) Amount Capital Surplus 1,384,051 $ 13,840,508 $ 6,407,220 - - 59 - - - - - - - - - 1,384,051 $ 13,840,508 $ 6,407,279 1,384,051 $ 13,840,508 $ 6,407,340 - - - 1,384,051 13,840,508 6,407,340 - - 628 - - - - - - - - - 1,384,051 $ 13,840,508 $ 6,407,968	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 8,168,383 $ 1,051,658 $ 19,399,595 - - (119 ) - - 1,042,122 - - (327) - - 1,041,795 $ 8,168,383 $ 1,051,658 $ 20,441,271 $ 8,487,293 $ 1,051,658 $ 20,895,137 - - 888,982 8,487,293 1,051,658 21,784,119 - - (1,802 ) - - 1,317,903 - - 5,881 - - 1,323,784 $ 8,487,293 $ 1,051,658 $ 23,106,101	Other Equity	Gain on the Hedging Instruments $ - - - - - $ - $ - (12,253) (12,253 ) - - 17,073 17,073 $ 4,820
		Exchange Differences on Translating Unrealized Gain on Investments in Financial Assets at Fair Value Through Other Unrealized Gain on Available-for- Gains (Losses) on Effective Foreign Operations Comprehensive Income sale Financial Assets Portion of Cash Flow Hedges $ (268,058 ) $ - $ 850,984 $ (28,635 ) - - - - - - - - (285,603) - 13,790 15,642 (285,603) - 13,790 15,642 $ (553,661) $ - $ 864,774 $ (12,993) $ (485,118 ) $ - $ 765,456 $ (12,253 ) - 273,866 (765,456) 12,253 (485,118 ) 273,866 - - - - - - - - - - 137,695 (2,809) - - 137,695 (2,809) - - $ (347,423) $ 271,057 $ - $ -
Shares (In Thousands) 1,384,051 - - - - 1,384,051 1,384,051 - 1,384,051 - - - - 1,384,051

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

(With Deloitte & Touche review report dated May 11, 2018)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax from continuing operations Income before income tax from discontinued operations Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss Net loss (gain) on fair value change of financial instruments at fair value through profit or loss Interest expense Interest income Share of 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 investments Impairment loss of non-financial assets Unrealized gain on transactions with associates Unrealized loss (gain) on foreign currency exchange Changes in operating assets and liabilities Financial assets held for trading Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Accounts receivable Trade receivables from related parties Other receivables Inventories Prepayments Other current assets Notes and accounts payable Trade payables to related parties Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 1,605,402 - 1,605,402 229,808 28,336 1,046 (725) 2,603 (47,042) (734,625) 915 - 10,346 40,490 (26,405) - (533,897) (1,202) 139,170 (48,107) (26,886) 734,891 376,633 9,620 (147,185) (96,733) (498,663) 51,937 (266,514) 803,213 (7,030) 796,183	2017 $ 1,267,391 53 1,267,444 213,466 29,949 - 6,231 3,103 (43,462) (499,415) 997 (36,947) - 19,229 98,144 8,350 - 81,576 (61,751) (158,523) (80,373) 980,304 233,949 (80,771) (94,433) (142,173) (657,734) 33,228 (276,754) 843,634 (3,739) 839,895 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortized cost Proceeds from disposal of financial assets at amortized cost Decrease in available-for-sale financial assets Acquisition of debt investments with no active market Proceeds from repayments of principal of debt investments with no active market Proceeds from disposal of financial assets measured at cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease (increase) in other non-current assets Interest received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Increase (decrease) in short-term bills payable Decrease in other non-current liabilities Interest paid Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ (135,779) 154,671 - - - - (157,664) 9,653 (49,298) 15,833 40,576 (122,008) (10,000) (20,070) (17,815) (2,668) (50,553) 13,521 637,143 13,816,041 $ 14,453,184	2017 $ - - 4,932 (90,990) 117,864 8,231 (216,290) 14,375 - (15,662) 31,938 (145,602) (23,000) 1,993 (14,651) (3,022) (38,680) (36,889) 618,724 14,231,759 $ 14,850,483 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

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

Cash and cash equivalents in consolidated balance sheets Other items that meet the requirement of IAS 7 cash and cash equivalents definitions Cash and cash equivalents in consolidated statements of cash flows		March	31
		2018 $ 14,281,792 171,392 $ 14,453,184	2017 $ 14,850,483 - $ 14,850,483

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

(With Deloitte & Touche review report dated May 11, 2018) (Concluded)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

China Motor Corporation (the Corporation) manufactures and sells cars and related parts. Its stock is listed on the Taiwan Stock Exchange.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements of the Corporation and its subsidiaries (collectively referred to as the “Group”) were approved by the Corporation’s board of directors on May 11, 2018.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, whenever applied, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC would not have any material impact on the Group’s accounting policies:

1) IFRS 9 “Financial Instruments” and related amendment

IFRS 9 supersedes IAS 39 “Financial Instruments: Recognition and Measurement”, with consequential amendments to IFRS 7 “Financial Instruments: Disclosures” and other standards. IFRS 9 sets out the requirements for classification, measurement and impairment of financial assets and hedge accounting. Refer to Note 4 for information relating to the relevant accounting policies.

The requirements for classification, measurement and impairment of financial assets have been applied retrospectively from January 1, 2018, and the requirements for hedge accounting have been applied prospectively. IFRS 9 is not applicable to items that have already been derecognized at December 31, 2017.

Classification, measurement and impairment of financial assets

On the basis of the facts and circumstances that existed as at January 1, 2018, the Group has performed an assessment of the classification of recognized financial assets and has elected not to restate prior reporting periods.

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The following table shows the original measurement categories and carrying amount under IAS 39 and the new measurement categories and carrying amount under IFRS 9 for each class of the Group’s financial assets and financial liabilities as at January 1, 2018.

Financial Assets Cash and cash equivalents Derivatives Equity securities Mutual funds Debt securities Notes receivable, accounts receivable (related parties included) and other receivables Other financial assets (included in other current assets) and guarantee deposits (included in other non-current assets)	MeasurementCategory IAS 39 IFRS 9 Loans and receivables Amortized cost Loans and receivables Hedging instruments Held`‑`for`‑`trading Mandatorily at fair value through profit or loss (i.e. FVTPL) Available`‑`for`‑`sale Mandatorily at FVTPL Available`‑`for`‑`sale Fair value through other comprehensive income (i.e. FVTOCI) - equity instruments Available-for-sale (Financial assets measured at cost) Mandatorily at FVTPL Available-for-sale (Financial assets measured at cost) FVTOCI - equity instruments Held`‑`for`‑`trading Mandatorily at FVTPL Loans and receivables (Debt investment with no active market) Amortized cost Loans and receivables Amortized cost Loans and receivables Amortized cost	Carrying Amount IAS 39 IFRS 9 Remark $ 13,816,041 $ 13,348,114 - 467,927 2,954 2,954 703,983 703,983 a) 22,489 22,489 b) 21,531 63,778 c) 173,329 293,111 d) 529,496 529,496 2,278,803 2,269,299 e) 2,994,379 2,994,379 556,367 556,367

Financial Assets IAS 39 Carrying Amount as of January 1, 2018 Amortized cost $ - Add: Reclassification from loans and receivables (IAS 39) - Less: Reclassification to hedging instruments (IFRS 9) - - Hedging instruments - Add: Reclassification from loans and receivables (IAS 39) - - FVTPL 529,496 Add: Reclassification from available-for-sale (IAS 39) Required reclassification - Add: Reclassification from available-for-sale (financial assets measured at cost) (IAS 39) - 529,496 FVTOCI - Equity instruments Add: Reclassification from available-for-sale (financial assets measured at cost) (IAS 39) - Add: Reclassification from available-for-sale (IAS 39) - - $ 529,496	Reclassifications $ - 19,645,590 (467,927) 19,177,663 - 467,927 467,927 - 703,983 21,531 725,514 - 173,329 22,489 195,818 $ 20,566,922	Remea- surements IFRS 9 Carrying Amount as of January 1, 2018 Retained Earnings Effect on January 1, 2018 Other Equity Effect on January 1, 2018 Remark $ - $ - $ - $ - (9,504 ) 19,636,086 (9,504 ) - e) - (467,927) - - (9,504) 19,168,159 (9,504) - - - - - - 467,927 - - - 467,927 - - - 529,496 - - - 703,983 672,983 (672,983 ) a) 42,247 63,778 42,247 - c) 42,247 1,297,257 715,230 (672,983) - - - - 119,782 293,111 23,820 52,131 d) - 22,489 - - b) 119,782 315,600 23,820 52,131 $ 152,525 $ 21,248,943 $ 729,546 $ (620,852)

a) The Group elected to classify its investments in equity securities previously classified as available-for-sale under IAS 39 as at FVTPL under IFRS 9. As a result, the related other equity - unrealized gain on available-for-sale financial assets of $672,983 thousand was reclassified to retained earnings.
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b) The Group elected to designated its investments in equity securities previously classified as available-for-sale under IAS 39 as at FVTOCI under IFRS 9, because these investments are not held for trading. As a result, the related other equity - unrealized gain on available-for-sale financial assets was reclassified to other equity - unrealized gain on financial assets at FVTOCI.
c) Investments in unlisted shares previously measured at cost under IAS 39 have been classified at FVTPL under IFRS 9 and were remeasured at fair value. Consequently, an increase of $63,778 thousand and $42,247 thousand was recognized in financial assets at FVTPL and retained earnings separately on January 1, 2018.
d) Investments in unlisted shares previously measured at cost under IAS 39 have been designated as at FVTOCI under IFRS 9 and were remeasured at fair value. Consequently, an increase in financial assets at FVTOCI of $293,111 thousand, an increase in other equity - unrealized gain on financial assets at FVTOCI of $75,951 thousand and an increase in non-controlling interests at $43,831 thousand on January 1, 2018.

The Group recognized under IAS 39 impairment loss on certain investments in equity securities previously measured at cost and the loss was accumulated in retained earnings. Since those investments were designated as at FVTOCI under IFRS 9 and no impairment assessment is required, an adjustment was made that resulted in a decrease of $23,820 thousand in other equity - unrealized gain on financial assets at FVTOCI and an increase of $23,820 thousand in retained earnings on January 1, 2018.

e) Debt investments previously classified as debt investments with no active market and measured at amortized cost under IAS 39 were classified as measured at amortized cost with an assessment of expected credit losses under IFRS 9, because on January 1, 2018, the contractual cash flows were solely payments of principal and interest on the principal outstanding and these investments were held within a business model whose objective is to collect contractual cash flows. As a result of retrospective application, the related adjustments comprised an increase in the loss allowance of $9,504 thousand and a decrease in retained earnings of 9,504 thousand on January 1, 2018.

Hedge accounting

On adoption of IFRS 9, the Group elected not to apply the treatment of hedging cost for forward contracts retrospectively. Furthermore, due to the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, all derivative and non-derivative financial assets and financial liabilities which are designated as hedging instruments are presented as financial assets and financial liabilities for hedging from January 1, 2018.

2) IFRIC 22“Foreign Currency Transactions and Advance Consideration”

IAS 21 stipulated that a foreign currency transaction shall be recorded on initial recognition in the functional currency by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. IFRIC 22 further explains that the date of the transaction is the date on which an entity recognizes a non-monetary asset or non-monetary liability from payment or receipt of advance consideration. If there are multiple payments or receipts in advance, the entity shall determine the date of the transaction for each payment or receipt of advance consideration.

The Group applied IFRIC 22 prospectively to all assets, expenses and income recognized on or after January 1, 2018 within the scope of the Interpretation.

13 -
b. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New Revised or Amended Standards and Interpretations (the“New IFRSs”) Annual Improvements to IFRSs 2015-2017 Cycle Amendments to IFRS 9 “Prepayment Features with Negative Compensation” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 16 “Leases” IFRS 17 “Insurance Contracts” Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement” Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures” IFRIC 23 “Uncertainty Over Income Tax Treatments”	Effective Date Announced by IASB (Note 1)
	January 1, 2019 January 1, 2019 (Note 2) To be determined by IASB January 1, 2019 (Note 3) January 1, 2021 January 1, 2019 January 1, 2019 January 1, 2019

New Revised or Amended Standards and Interpretations
(the“New IFRSs”)
Annual Improvements to IFRSs 2015-2017 Cycle

Amendments to IFRS 9 “Prepayment Features with Negative
Compensation”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between An Investor and Its Associate or Joint Venture”

IFRS 16 “Leases”

IFRS 17 “Insurance Contracts”

Amendments to IAS 19 “Plan Amendment, Curtailment or
Settlement”

Amendments to IAS 28 “Long-term Interests in Associates and Joint
Ventures”

IFRIC 23 “Uncertainty Over Income Tax Treatments”

Effective Date
Announced by IASB (Note 1)

January 1, 2019
January 1, 2019 (Note 2)
To be determined by IASB
January 1, 2019 (Note 3)
January 1, 2021
January 1, 2019
January 1, 2019
January 1, 2019

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.
Note 2: The FSC permits the election for early adoption of the amendments starting from January 1, 2018.
Note 3: On December 19, 2017, the FSC announced that IFRS 16 will take effect starting from January 1, 2019.

The initial application of the above New IFRSs, whenever applied, would not have any material impact on the Group’s accounting policies, except for the following:

IFRS 16 “Leases”

IFRS 16 sets out the accounting standards for leases that will supersede IAS 17 and a number of related interpretations.

Under IFRS 16, if the Group is a lessee, it shall recognize right-of-use assets and lease liabilities for all leases on the consolidated balance sheets except for low-value and short-term leases. The Group may elect to apply the accounting method similar to the accounting for operating leases under IAS 17 to low-value and short-term leases. On the consolidated statements of comprehensive income, the Group should present the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed by using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within financing activities.

The application of IFRS 16 is not expected to have a material impact on the accounting of the Group as lessor.

When IFRS 16 becomes effective, the Group may elect to apply this standard either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the initial application of this standard recognized at the date of initial application.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

14 -

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included these interim consolidated financial statements is less than the disclosure information those required in a complete set of annual financial statements.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for the financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Basis of consolidation
1) Principles for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Corporation and the entities controlled by the Corporation (i.e. its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition up to the effective date of disposal, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Corporation.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

Total comprehensive income of subsidiaries is attributed to the owners of the Corporation and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the Non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Corporation.

15 -

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

2) Entities included in consolidated financial statements

Investor
Investee
Main Business
China-Motor Corporation
(parent)
Kian Shen Corporation (“Kian Shen”)
Production of frame of heavy duty
car and mold
Hwa Wei Holdings Corporation Ltd.
(“Hwa Wei”)
Overseas investment of production
and service industries
China Engine Corporation (“China
Engine”)
Manufacture of automobile engine
and parts
Sino Diamond Motors Corporation (“Sino
Diamond Motors”)
Sales and providing after sales
service of vehicle
Hwa Hann Corporation (“Hwa Hann”)
Sales of automobile parts
Alliance Investment & Management Co.,
Ltd. (“Alliance Investment &
Management”)
Investment
Gatetech Technology Inc. (“Gatetech
Technology”)
Aluminum-magnesium alloy casting
industry
China Motor Investment Co., Ltd. (CMI)
Investment
Hwa Chung Motors Corporation (“Hwa
Chung Motors”)
Sales of vehicle and parts
COC Tooling & Stamping Co., Ltd. (COC) Production of mold, fixture and
gauge of vehicle
Kian Shen
Kian Shen Investment Co., Ltd. (“Kian
Shen Investment”)
Overseas investment of production
and service industries
China Engine
Advance Power Machinery Co., Ltd.
(“Advance Power Machinery”)
Manufacture of automobile engine
and parts
Advance Power Investment Co., Ltd.
(“Advance Power Investment”)
Investment and sales
Sino Diamond Motors
Hwa-Yu Corporation Ltd. (“Hwa-Yu”)
Overseas investment of production
and service industries
Brilliant Insight International Consultancy
Service Co., Ltd. (“Brilliant Insight
International”)
Consulting and service
Gatetech Technology
Gatetech Holding Co., Ltd. (GH)
Investment
Alliance Investment &
Management
Greentrans Investment Co., Ltd.
(“Greentrans Investment”)
Investment
Hwa Chung Motors
Greentrans Corporation (“Greentrans”)
Sales of motorcycle, bicycle and
parts
Ling Wei Motor Co., Ltd. (“Ling Wei”)
Sales of second-hand vehicle
COC
Y. M. Hi-Tech Industry Ltd. (“Y. M.
Hi-Tech”)
Steel cutting
Shye Shinn Corporation (“Shye Shinn”)
Investment
Kian Shen Investment
Kian Shen Investment Hong Kong Co.,
Limited (KSIHK)
Investment
Hwa-Yu
Hwa-Lin Investments Ltd. (“Hwa-Lin”)
Overseas investment of production
and service industries
Fujian Rui Hua Consulting Co., Ltd.
(“Fujian Rui Hua”)
Consulting and services
GH
Gatetech International Co., Ltd. (GI)
Investment
Greentrans Investment
Jiangsu Greentrans Automotive Parts Co.,
Ltd. (“Jiangsu Greentrans”)
Production and sales of parts of
electronic motorcycle
Shye Shinn
Zhengzhou Tooling & Stamping Co., Ltd.
(“Zhengzhou Tooling & Stamping”)
Design, production, sales and
technical service of mold, fixture
and gauge of vehicle
GI
Gatetech (Suchou) Technology Co., Ltd
(“Gatetech Suchou Technology”)
Aluminum-magnesium alloy casting
industry
Hwa-Lin
Dongguan Huayi Motor Maintenance Co.,
Ltd. (“Dongguan Huayi”)
Sales and maintenance of vehicle
and parts
Tianjin Hwarui Maintenance Co., Ltd.
(“Tianjin Hwarui”)
Sales and maintenance of vehicle
and parts
Sichuan Huafeng Hanwei Cars Service and
Maintenance Co., Ltd. (“Sichuan
Huafeng Hanwei”)
Sales and maintenance of vehicle
and parts
Guangzhou Huayou Motor Maintenance
Co., Ltd. (“Guangzhou Huayou Motor
Maintenance”)
Sales and maintenance of vehicle
and parts
Dongguan Huayi
Dongguan Huashun Motor Sales Co., Ltd.
(“Dongguan Huashun”)
Sales and maintenance of vehicle
and parts
Tianjin Hwarui
Tianjin Hwahong Sales Co., Ltd. (“Tianjin
Hwahong”)
Sales of vehicle and parts
Sichuan Huafeng Hanwei Sichuan Houwei Cars Service and
Maintenance Co., Ltd. (“Sichuan
Houwei”)
Sales of vehicle and parts
Sichuan Lingwei Cars Service and
Maintenance Co., Ltd. (“Sichuan
Lingwei”)
Sales of vehicle and parts
Guangzhou Huayou
Motor Maintenance
Guangzhou Huayou Motor Sales Co., Ltd.
(“Guangzhou Huayou Motor Sales”)
Sales of vehicle and parts

Combined Shareholding Ratio
March 31,
2018
December 31,
2017
March 31,
2017
Note
43.87
43.87
43.87
a)
100.00
100.00
100.00
52.11
52.11
52.11
100.00
100.00
100.00
99.99
99.99
99.99
c)
100.00
100.00
100.00
72.81
72.81
72.81
100.00
100.00
100.00
100.00
100.00
100.00
49.76
49.76
49.76
b)
43.87
43.87
43.87
a)
52.11
52.11
52.11
52.11
52.11
52.11
100.00
100.00
100.00
100.00
100.00
100.00
72.81
72.81
72.81
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
42.30
42.30
42.30
b)
49.76
49.76
49.76
b)
43.87
43.87
43.87
a)
100.00
100.00
100.00
100.00
100.00
100.00
72.81
72.81
72.81
100.00
100.00
100.00
-
-
29.86
b) and d)
72.81
72.81
72.81
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
e)
100.00
100.00
100.00
100.00
100.00
100.00

16 -
a) The Group’s equity in Kian Shen was 43.87%. Kian Shen is a listed company, and 56.13% of Kian Shen’s shares were held by numerous shareholders unrelated to the Group. Considering the Group’s substantial influence on Kian Shen, having an absolute number of voting rights and the relative size of the other shareholdings, Kian Shen was deemed a subsidiary.
b) The Group’s equity in COC was 49.76%. However, the Corporation controls more than half of the members of the board and holds relatively major shares of COC; thus, COC was considered a subsidiary.
c) In April 2009, the board of Hwa Hann resolved to dissolve the company; as of March 31, 2018, the liquidation had not been completed.
d) All of the interest of Zhengzhou Tooling & Stamping has been disposed on September 15, 2017, refer to Note 27.
e) In October 2017, Sichuan Houwei has proceeded to annul its registration. As of March 31, 2018, the annulment was not completed.

For the relationship between the Corporation and its controlled entities as of March 31, 2018, please refer to Table 9.

d. Other significant accounting policies

Except for the following, the accounting policies applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2017. For the summary of other significant accounting policies, please refer to the consolidated financial statements for the year ended December 31, 2017.

1) Financial instruments

Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

a) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

i. Measurement category

2018

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

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i) Financial asset at FVTPL

Financial asset is classified as at FVTPL when the financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. Fair value is determined in the manner described in Note 30.

ii) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, financial assets at amortized cost, notes receivable, accounts receivable (including related parties), other receivables, other financial assets (included in other current assets) and guarantee deposits paid (included in other non-current assets), are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for:

Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of the financial asset; and
Financial asset that has subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.

iii) Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

18 -

2017

Financial assets are classified into the following categories: Financial assets at fair value through profit or loss, available-for-sale financial assets, and loans and receivables.

i) Financial assets at fair value through profit or loss

Financial assets are classified as at fair value through profit or loss when such financial assets are financial assets held for trading.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. Fair value is determined in the manner described in Note 30.

ii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

Available-for-sale financial assets are measured at fair value. Dividends on available-for-sale equity investments are recognized in profit or loss. Other changes in the carrying amount of available-for-sale financial assets are recognized in other comprehensive income and will be reclassified to profit or loss when such investments are disposed of or are determined to be impaired.

Dividends on available-for-sale equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established.

Available-for-sale equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment loss at the end of each reporting period and presented in a separate line item as financial assets measured at cost. If, in a subsequent period, the fair value of the financial assets can be reliably measured, the financial assets are remeasured at fair value. The difference between the carrying amount and the fair value is recognized in other comprehensive income on financial assets. Any impairment losses are recognized in profit and loss.

iii) Loans and receivables

Loans and receivables (including cash and cash equivalents, debt investments with no active market, notes receivable, accounts receivable (including related parties), other receivables, other financial assets (included in other current assets) and guarantee deposits paid (included in other non-current assets) are measured using the effective interest method at amortized cost less any impairment, except for short-term receivables when the effect of discounting is immaterial.

19 -

ii. Impairment of financial assets

2018

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable).

The Group always recognizes lifetime Expected Credit Loss (i.e. ECL) for accounts receivable. For all other financial instruments, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

2017

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence, as a result of one or more events that occurred after the initial recognition of the financial assets, that the estimated future cash flows of the investment have been affected.

For financial assets carried at amortized cost, such as accounts receivable, such assets are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, as well as observable changes in national or local economic conditions that correlate with defaults on receivables.

For a financial asset carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment (at the date the impairment is reversed) does not exceed what the amortized cost would have been had the impairment not been recognized.

For any available-for-sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

20 -

For all other financial assets, objective evidence of impairment could include significant financial difficulty of the issuer or counterparty, breach of contract, it becoming probable that the borrower will enter bankruptcy or financial re-organization, or the disappearance of an active market for those financial assets because of financial difficulties.

When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.

In respect of available-for-sale equity securities, impairment loss previously recognized in profit or loss is not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of available-for-sale debt securities, impairment loss is subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

For financial assets that are measured at cost, the amount of the impairment loss is measured as the difference between such an asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of a financial asset is reduced by the impairment loss directly for all financial assets, with the exception of accounts receivable, where the carrying amount is reduced through the use of an allowance account. When accounts receivable are considered uncollectible, they are written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss except for uncollectible accounts receivable that are written off against the allowance account.

iii. Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

Before 2018, on derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. From 2018, on derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

21 -

b) Financial liabilities

i. Subsequent measurement

Except for financial liabilities at FVTPL, all financial liabilities are measured at amortized cost using the effective interest method.

Financial liabilities are classified as at FVTPL when the financial liability is held for trading. Financial liabilities held for trading are stated at fair value, the net gain or loss is recognized in profit or loss.

Fair value is determined in the manner described in Note 30.

ii. Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

c) Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts and convertible preference shares.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of derivative financial instruments is negative, the derivative is recognized as a financial liability.

Before 2018, derivatives embedded in non-derivative host contracts were treated as separate derivatives when they met the definition of a derivative; their risks and characteristics were not closely related to those of the host contracts; and the contracts were not measured at FVTPL. From 2018, derivatives embedded in hybrid contracts that contain financial asset hosts within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at FVTPL.

2) Hedge accounting

The Group designates certain hedging instruments, as cash flow hedges.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

22 -

The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and included in the initial cost of the non-financial asset or non-financial liability.

Before 2018, hedge accounting was discontinued prospectively when the Group revoked the designated hedging relationship; when the hedging instrument expired or was sold, terminated, or exercised; or when the hedging instrument no longer met the criteria for hedge accounting. From 2018, the Group discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised. The cumulative gain or loss on the hedging instrument that has been previously recognized in other comprehensive income from the period when the hedge was effective remains separately in equity until the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.

3) Revenue recognition

2018

The Group identifies the contract with the customers, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

For contract where the period between the date the Group transfers a promised good or service to a customer and the date the customer pays for that good or service is one year or less, the Group does not adjust the promised amount of consideration for the effects of a significant financing component.

a) Revenue from sale of goods

Revenue from sale of goods is recognized when receiving control; that is to say, when the goods are delivered to the customer’s specific location and satisfies its performance, revenue and accounts receivable can be recognized.

b) Revenue from rendering of services

Revenue from rendering of services is recognized when services are rendered.

2017

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Allowances for sales returns and liabilities for returns are recognized at the time of sale based on the seller’s reliable estimate of future returns and based on past experience and other relevant factors.

a) Sale of goods

Revenue from the sale of goods is recognized when all the following conditions are satisfied:

i. The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
ii. The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
23 -
iii. The amount of revenue can be measured reliably;
iv. It is probable that the economic benefits associated with the transaction will flow to the Group; and
v. The costs incurred or to be incurred in respect of the transaction can be measured reliably.

b) Rendering of services

Service income including that from operating services provided under service concession arrangements is recognized when services are provided.

c) Royalties

Royalty revenue is recognized on an accrual basis in accordance with the substance of the relevant agreement and provided that it is probable that the economic benefits will flow to the Group and that the amount of revenue can be measured reliably. Royalties determined on a time basis are recognized on a straight-line basis over the period of the agreement. Royalty arrangements that are based on production, sales and other measures are recognized by reference to the underlying arrangement.

d) Dividend and interest income

Dividend income from investments is recognized when a shareholder’s right to receive payment has been established and provided that it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate.

4) Employee benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant plan amendments, settlements, or other significant one-off events.

5) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period's pre-tax income the tax rate that would be applicable to expected total annual earnings. The effect of a change in tax rate resulting from a change in tax law is recognized consistent with the accounting for the transaction itself which gives rise to the tax consequence, and is recognized in profit or loss, other comprehensive income or directly in equity in full in the period in which the change in tax rate occurs.

24 -

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

For the summary of critical accounting judgments and key sources of estimation uncertainty, please refer to the consolidated financial statements for the year ended December 31, 2017.

6. CASH AND CASH EQUIVALENTS

Cash Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits Repurchase agreements collateralized by bonds	March 31, 2018 $ 4,558 2,598,131 2,602,689 9,619,494 2,059,609 11,679,103 $ 14,281,792	December 31, 2017 $ 5,272 2,781,356 2,786,628 10,056,737 972,676 11,029,413 $ 13,816,041	March 31, 2017 $ 6,549 2,738,830 2,745,379 11,168,166 936,938 12,105,104 $ 14,850,483

The Group’s hedging strategy is to buy Japanese yen (JPY) at the spot rate on March 31 and December 31, 2017 so as to avoid foreign currency exposure in relation to Japanese yen (JPY) forecasted purchases. When the forecasted purchases actually take place, the carrying amounts of the non-financial hedged items will be adjusted accordingly.

At the end of the reporting period, Japanese yen (JPY) bought at spot rate, which was not offset, was as follow:

December 31, 2017

Notional Amount Currency Due Date (In Thousands) JPY/NTD 2018.1.18-2018.3.31 JPY1,771,108/NTD467,927 March 31, 2017 Notional Amount Currency Due Date (In Thousands) JPY/NTD 2017.6.2-2017.6.10 JPY500,000/NTD135,650

25 -

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets-current Financial assets held for trading Non-derivative financial assets Mutual funds Derivative financial assets Foreign exchange forward contracts Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds Financial liabilities (included in other current liabilities) Financial liabilities held for trading Derivative financial liabilities Foreign exchange forward contracts Financial assets-non-current Financial assets mandatorily classified as at FVTPL Non - derivative financial assets Domestic unlisted common shares	March 31, 2018 December 31, 2017 $ - $ 529,496 - - - 529,496 1,051,652 - $ 1,051,652 $ 529,496 $ - $ 2,954 $ 777,273 $ -	March 31, 2017 $ 1,045 227 1,272 - $ 1,272 $ - $ -

At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

December 31, 2017

			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2018.1.31-2018.3.29	USD14,000/NTD416,839
March 31, 2017
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2017.9.29-2017.12.29	USD4,000/NTD120,290

The Group entered into foreign exchange forward contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities.

26 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - 2018

	March 31, 2018	March 31, 2018
Non-current
Investments in equity instruments at FVTOCI
Domestic investments
Unlisted shares	$	37,397
Listed shares		25,235
		62,632
Foreign investments
Unlisted shares		258,193
	$	320,825

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes. These investments in equity instruments were classified as available-for-sale and financial assets measured at cost under IAS 39. Refer to Note 3, Note 12 and Note 16 for information relating to their reclassification and comparative information for 2017.

9. FINANCIAL ASSETS AT AMORTIZED COST - 2018

	March 31, 2018	March 31, 2018
Current
Negotiable certificates of deposit	$	700,000
Principal guaranteed notes		174,430
		874,430
Less: Allowance for impairment loss		(1,360)
	$	873,070
Non-current
Bonds	$	892,302
Principal guaranteed notes		515,817
Preference shares		9,900
		1,418,019
Less: Allowance for impairment loss		(9,190)
	$	1,408,829

a. The negotiable certificates of deposit, principal guaranteed notes, preference shares and bonds were classified as debt investments with no active market under IAS 39. Refer to Note 3 and Note 17 for information relating to their reclassification and comparative information for 2017.
b. The coupon rate of negotiable certificates of deposit was 0.83% per annum as of March 31, 2018.
27 -
c. The range of coupon rates of principal guaranteed notes was 2.05%-4.32% per annum as of March 31, 2018.
d. The range of coupon rates of bonds was 1.02%-4.80% per annum as of March 31, 2018.
e. The coupon rate of the preference shares was 1.50% per annum as of March 31, 2018.
f. Refer to Note 10 for information relating to their credit risk management and impairment.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS - 2018

Investments in debt instruments were classified as at amortized cost.

March 31, 2018

	At Amortized
	Cost
Gross carrying amount	$ 2,292,449
Less: Allowance for impairment loss	(10,550)
Amortized cost	$ 2,281,899

The Group only invests in debt instruments that have better credit ratings and low credit risk after impairment assessment. The credit ratings are provided by independent rating agencies. The Group's exposure and the external credit ratings are continuously monitored. The Group reviews changes in bond yields and other public information of debtors to evaluate whether there is a significant increase in the credit risk since the initial recognition.

The Group considers the historical default rates of each credit rating supplied by external rating agencies, the current financial condition of debtors, and industry forecast to estimate 12-month or lifetime expected credit losses. The Group’s current credit risk grading framework comprises the following categories:

				Gross
		Basis for		Carrying
		Recognizing		Amount at
		Expected Credit	Expected	March 31,
Category	Description	Losses	Loss Rate	2018
Performing	The counterparty has a low risk	12-month ECL	0.00%-	$ 2,282,549
	of default and a strong capacity		0.6221%
	to meet contractual cash flows
No rating	The preference shares do not	Lifetime ECL - not	14.9383%-	9,900
	have credit rating	credit-impaired	20.6080%

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The allowance for impairment loss of investments in debt instruments at amortized cost as at January 1, 2018 and March 31, 2018 grouped by credit rating is reconciled as follows:

Allowance for Impairment Loss Balance at January 1, 2018 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1, 2018 per IFRS 9 New financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance at March 31, 2018	Credit Rating
	Performing (12-month ECL) No rating (Lifetime ECL - Not Credit- impaired) $ - $ - 5,572 3,932 5,572 3,932 845 - (148) - 349 - $ 6,618 $ 3,932

a. The increase in the loss allowance for performing of $845 thousand is due to new investments in principal guaranteed notes of $135,779 thousand during the period.
b. Investments in bonds of $154,671 thousand were sold during the period, with consequential decrease in the loss allowance for performing of $148 thousand.

11. HEDGING FINANCIAL INSTRUMENTS

2018

	March 31, 2018
Financial assets
Cash flow hedge - cash	$ 171,392
Cash flow hedge - foreign exchange forward contracts	3,356
	$ 174,748

The Group’s hedging strategy is to enter into foreign exchange forward contracts and exchange currency in cash to 100% avoid the exposure of exchange rate of specific foreign currency receipts and payments and to 100% manage the exposure of exchange rate of its forecasted purchases in foreign currency. Those transactions are designated as cash flow hedges. The hedging effects are adjusted to the carrying amounts of non-financial hedging items when the forecasted purchases take place.

For the hedges of highly probable forecasted purchases, the critical terms (i.e. notional amount, duration and underlying) of the foreign exchange forward contracts are corresponded to their hedged items. The Group performs a qualitative assessment and expects that the value of the foreign exchange forward contracts and the corresponding hedged items will be systematically changed in the opposite direction when the underlying exchange rate changes.

The ineffectiveness of the hedges mainly comes from the effects of the counterparty and the Group’s credit risk to the fair value of the foreign exchange forward contracts. The credit risk will not affect the fair value of the hedged item that is attributable to the changes in foreign exchange rates, nor affect the changes in the expected transaction date of the hedged item. No other sources of ineffectiveness is expected during the hedging periods.

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The following tables summarize the information relating to the hedges of foreign currency risk.

Notional Amount
Forward
Hedging Instruments
Currency
(In Thousands)
Maturity
Rate
Cash flow hedge
Forecast purchases - foreign exchange
forward contracts
JPY/NTD
JPY237,867/NTD63,986
2018.5.31
0.2690
Forecast purchases - foreign exchange
forward contracts
JPY/NTD
JPY300,000/NTD80,580
2018.6.29
0.2686
Forecast purchases - foreign exchange
forward contracts
JPY/NTD
JPY300,000/NTD80,670
2018.7.31
0.2689
Forecast purchases - cash
JPY
JPY225,745/NTD59,695
2018.4.30
0.2644
Forecast purchases - cash
JPY
JPY400,000/NTD109,560
2018.5.31
0.2739

Carrying Amount
Change in Value
Used for
Calculating
Hedge
Asset
Ineffectiveness
$ 963
$ 770
1,279
1,022
1,114
891
61,832
2,137

109,560

-
$ 174,748
$ 4,820

Change in Value Used for Calculating Hedged Items Hedge Ineffectiveness Cash flow hedge Forecast purchases $ (4,820) For the three months ended March 31, 2018 Comprehensive Income Cash flow hedge Forecast purchases	Balance in Other Equity
	Continuing Hedges $ 4,820 Hedging Gains Recognized in OCI $ 19,908

Gains and losses of hedging instruments reclassified from equity to cost of goods sold were $3,716 thousand for the three months ended March 31, 2018.

The Group has signed component purchasing contracts with the suppliers in Japan, and signed foreign exchange forward contracts with the banks and purchased Japanese yen to avoid exchange rate risk of its forecasted purchases. When the forecasted purchases take place, the amount originally deferred and recognized in equity will be reclassified to cost of goods sold.

2017

The hedging policy for foreign currency risk is the same in 2018 and 2017 which used the following hedging instruments.

	December	December	31,	March 31,	March 31,
		2017			2017
Derivative financial assets under hedge accounting
(included in other current assets)
Cash flow hedges - foreign exchange forward contracts	$		-	$	2,634
Derivative financial liabilities under hedge accounting
(included in other current liabilities)
Cash flow hedges - foreign exchange forward contracts	$	12,362		$	19,079

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The Group’s hedging strategy is to enter into foreign exchange forward contracts to avoid exchange rate exposure in relation to Japanese yen (JPY) forecasted purchases. When the forecasted purchases actually take place, the carrying amounts of the non-financial hedged items will be adjusted accordingly.

The Group’s outstanding foreign exchange forward contracts at the end of the reporting period were as follows:

December 31, 2017

					Notional Amount
			Currency	Maturity Date	(In Thousands)
Buy			JPY/NTD	2018.01.31-2018.07.31	JPY2,002,019/NTD538,393
March	31,	2017
					Notional Amount
			Currency	Maturity Date	(In Thousands)
Buy			JPY/NTD	2017.05.12-2017.08.31	JPY2,392,249/NTD665,384

Gains and losses of hedging instruments reclassified from equity to cost of goods sold were $26,314 thousand for the three months ended March 31, 2017.

12. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017

December 31, 2017 Current Domestic investments Mutual funds $ - Non-current Domestic investments Unlisted shares $ 703,983 Listed shares 22,489 $ 726,472	March 31, 2017 $ 726,685
	$ 743,734 83,546
	$ 827,280

13. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE

Notes receivable Notes receivable - operating Less: Allowance for impairment loss	March 31, 2018 December 31, 2017 $ 25,308 $ 23,886 - (87) $ 25,308 $ 23,799	March 31, 2017 $ 22,577 (80) $ 22,497

(Continued)

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Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss	March 31, 2018 December 31, 2017 $ 1,030,679 $ 1,168,194 (8,115) (6,701) $ 1,022,564 $ 1,161,493	March 31, 2017 $ 1,231,920 (9,700) $ 1,222,220 (Concluded)

For the three months ended March 31, 2018

The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated by reference to past default experience of the debtor and an analysis of the debtor’s current financial position. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The aging of receivables was as follows:

March 31, 2018

0 days 1-60 days 61-90 days More than 90 days Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	March 31, 2018 $ 1,009,058 26,313 2,863 17,753 1,055,987 (8,115) $ 1,047,872

The movements of the loss allowance of notes and accounts receivables were as follows:

Balance at January 1, 2018 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1, 2018 per IFRS 9 Add: Net remeasurement of loss allowance Foreign exchange gains and losses Balance at March 31, 2018	2018 $ 6,788 - 6,788 1,322 5 $ 8,115

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For the three months ended March 31, 2017

The Group applied the same credit policy in 2018 and 2017. Due to insignificant risks on the recoverability of the Group’s notes receivable and accounts receivable historically, allowance for impairment loss was recognized based on the estimated irrecoverable amounts determined by reference to past default experience of the counterparties and an analysis of their current financial position.

For sometrade receivables balances that were past due at the end of the reporting period, the Group did not recognize an allowance for impairment loss because there was no significant change in credit quality and the amounts were still considered recoverable. The Group did not hold any collateral or other credit enhancements for these balances.

The aging of receivables was as follows:

December 31, 2017 0 days $ 1,146,395 1-60 days 37,367 61-90 days 6,405 More than 90 days 1,913 $ 1,192,080	March 31, 2017 $ 1,202,507 26,077 18,079 7,834 $ 1,254,497

The above aging schedule was based on the number of past due days from the end of the credit term.

The aging of receivables that were past due but not impaired was as follows:

	December 31,	December 31,	March 31,	March 31,
		2017		2017
Up to 60 days	$	1,295	$	9,362
61-90 days		404		3,946
More than 90 days		8		8
	$	1,707	$	13,316

The above aging schedule was based on the number of past due days from the end of the credit term.

Individually Assessed for Impairment Collectively Assessed for Impairment Balance at January 1, 2017 $ 2,528 $ 7,288 Add: Impairment losses recognized on receivables - 780 Less: Impairment losses reversed - (793) Foreign exchange translation gains and losses - (23) Balance at March 31, 2017 $ 2,528 $ 7,252	Total $ 9,816 780 (793) (23) $ 9,780

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14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

The Group had a 43.87% interest in Kian Shen as of March 31, 2018, December 31, 2017 and March 31, 2017. The remaining 56.13% interest in Kian Shen is dispersed and held by shareholders unrelated to the Group.

See Table 6 for the information on place of incorporation and principal place of business.

The summarized financial information below represents amounts before intragroup eliminations.

Kian Shen and Kian Shen’s subsidiaries:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Equity attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Revenue Profit for the period Other comprehensive income (loss) for the period Total comprehensive income (loss) for the period Profit attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Total comprehensive income (loss) attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen	March 31, 2018 $ 895,296 4,109,857 (703,714) (168,852) $ 4,132,587 $ 1,812,966 2,319,621 $ 4,132,587	December 31, 2017 March 31, 2017 $ 893,851 $ 847,820 3,904,197 3,534,934 (746,612) (656,803) (164,347) (200,120) $ 3,887,089 $ 3,525,831 $ 1,705,266 $ 1,546,782 2,181,823 1,979,049 $ 3,887,089 $ 3,525,831 For the Three Months Ended March 31	December 31, 2017 March 31, 2017 $ 893,851 $ 847,820 3,904,197 3,534,934 (746,612) (656,803) (164,347) (200,120) $ 3,887,089 $ 3,525,831 $ 1,705,266 $ 1,546,782 2,181,823 1,979,049 $ 3,887,089 $ 3,525,831 For the Three Months Ended March 31	December 31, 2017 March 31, 2017 $ 893,851 $ 847,820 3,904,197 3,534,934 (746,612) (656,803) (164,347) (200,120) $ 3,887,089 $ 3,525,831 $ 1,705,266 $ 1,546,782 2,181,823 1,979,049 $ 3,887,089 $ 3,525,831 For the Three Months Ended March 31	December 31, 2017 March 31, 2017 $ 893,851 $ 847,820 3,904,197 3,534,934 (746,612) (656,803) (164,347) (200,120) $ 3,887,089 $ 3,525,831 $ 1,705,266 $ 1,546,782 2,181,823 1,979,049 $ 3,887,089 $ 3,525,831 For the Three Months Ended March 31
				2018 $ 278,426 $ 104,726 62,684 $ 167,410 $ 45,943 58,783 $ 104,726 $ 73,443 93,967 $ 167,410	2017 $ 266,807 $ 133,258 (159,617) $ (26,359) $ 58,460 74,798 $ 133,258 $ (11,564) (14,795) $ (26,359)

(Continued)

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Net cash inflow (outflow) from: Operating activities Investing activities Financing activities Foreign exchange adjustments Net cash outflow	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ (70,721) 18,948 (20,000) (4,881) $ (76,654)	2017 $ (41,268) (96,739) 62,000 (9,594) $ (85,601) (Concluded)

15. INVENTORIES

Merchandise Finished goods Work in progress Raw materials Materials in transit	March 31, 2018 December 31, 2017 $ 389,643 $ 350,679 706,266 1,821,266 469,399 331,154 1,893,846 1,785,137 276,936 176,233 $ 3,736,090 $ 4,464,469	March 31, 2017 $ 240,811 1,003,749 349,806 2,202,014 272,405 $ 4,068,785

The cost of inventories recognized as cost of goods sold for the three months ended March 31, 2018 and 2017 were $8,267,416 thousand and $8,828,167 thousand, respectively.

16. FINANCIAL ASSETS MEASURED AT COST - 2017

December 31, 2017 Overseas unlisted ordinary shares $ 146,734 Domestic unlisted ordinary shares 48,126 $ 194,860 Classified according to financial asset measurement categories Available-for-sale financial assets $ 194,860	March 31, 2017 $ 166,420 48,382 $ 214,802 $ 214,802

Management believed that the above unlisted equity investments held by the Group had fair values which could not be reliably measured because the range of reasonable fair value estimates was so significant. Therefore, they were measured at cost less impairment at the end of the reporting period.

The Group disposed of certain financial assets measured at cost with carrying amount of $2,801 thousand for the three months ended March 31, 2017, recognizing a disposal benefit of $5,430 thousand (included in gain on disposal of investments).

35 -

The Group acquired 5% interests of Uni-Calsonic Corporation in March 2017 and increased its shareholding from 18.2% to 23.2%. Thus, at the day the Group gained significant influence over Uni-Calsonic Corporation, it is deemed that the Group disposed of the financial asset measured at cost and recognized an investment accounted for using the equity method by its market value. The Group recognized a gain on disposal of investments of $31,517 thousand for the three months ended March 31, 2017 in accordance with the market value of the day the Group gained significant influence.

17. DEBT INVESTMENT WITH NO ACTIVE MARKET - 2017

December 31, 2017 Current Negotiable certificates of deposit $ 700,000 Principal guaranteed notes 44,052 Bonds - $ 744,052 Non-current Bonds $ 1,018,136 Principal guaranteed notes 506,715 Preferred shares 9,900 $ 1,534,751	March 31, 2017 $ - 119,486 30,843 $ 150,329 $ 874,368 489,177 307,673 $ 1,671,218

a. The coupon rates of negotiable certificates of deposit was 0.83% per annum as of December 31, 2017.
b. The range of coupon rates of principal guaranteed notes was 2.05%-3.85% and 1.45%-3.85% per annum as of December 31, 2017 and March 31, 2017, respectively.
c. The range of coupon rates of bonds was 1.02%-4.80% and 3.50%-4.80% per annum as of December 31, 2017 and March 31, 2017, respectively.
d. The coupon rate and range of coupon rate for the Group’s preference shares was 1.50% and 1.50%-3.70% per annum as of December 31, 2017 and March 31, 2017, respectively.

18. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates Investments in joint ventures	March 31, 2018 $ 21,114,011 7,675,946 $ 28,789,957	December 31, 2017 $ 20,465,081 7,235,581 $ 27,700,662	March 31, 2017 $ 20,600,666 6,225,054
			$ 26,825,720

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a. Investments in associates

Associate Material associates Yulon Associates that are not individually material	March 31, 2018 $ 11,666,503 9,447,508 $ 21,114,011	December 31, 2017 $ 11,283,338 9,181,743 $ 20,465,081	March 31, 2017 $ 11,229,805 9,370,861
			$ 20,600,666

1) Material associates

The Group holds 16.80% interest in Yulon on March 31, 2018, December 31, 2017 and March 31, 2017, respectively.

The Group exercises significant influence over Yulon and applies the equity method of accounting because the Group and Yulon share the same president of the board even though the Group holds less than 20% of interest in Yulon.

Refer to Table 6 for the nature of activities, principal place of business and countries of incorporation of the associates.

Fair values (Level 1) of investments in associates with available published price quotation are summarized as follows:

Name of Associate Yulon	March 31, 2018 December 31, 2017 $ 5,926,357 $ 6,332,810	March 31, 2017 $ 7,407,946

The summarized financial information below represents amounts shown in the associates’ consolidated financial statements, prepared in accordance with IFRSs adjusted by the Group for equity accounting purposes.

Yulon

Current assets Non-current assets Current liabilities Non-current liabilities Equity Non-controlling interests Proportion of the Group’s ownership Equity attributable to the Group Cross shareholdings Unrealized gain on sidestream transactions Carrying amount	March 31, 2018 $ 177,551,834 88,815,163 (163,763,143) (20,817,872) 81,785,982 (9,009,178) $ 72,776,804 16.80% $ 12,226,503 (563,285) 3,285 $ 11,666,503	December 31, 2017 $ 169,428,441 88,988,066 (158,832,963) (20,462,405) 79,121,139 (8,688,986) $ 70,432,153 16.80% $ 11,832,602 (552,549) 3,285 $ 11,283,338	March 31, 2017 $ 135,638,908 88,355,036 (135,576,870) (9,152,945) 79,264,129 (9,563,813) $ 69,700,316 16.80% $ 11,709,653 (483,133) 3,285 $ 11,229,805

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Operating revenue Net profit for the period Other comprehensive income (loss) Total comprehensive income for the period		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 23,632,049 $ 1,779,204 329,589 $ 2,108,793	2017 $ 24,792,463 $ 1,247,614 (998,447) $ 249,167

2) Aggregate information of associates that are not individually material

The Group’s share of: Net profit for the period Other comprehensive income (loss) Total comprehensive income for the period	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 151,688 (3,072) $ 148,616	2017 $ 91,222 20,001 $ 111,223

Above associates are accounted for using the equity method.

Investments in associates that are not individually material were accounted for using the equity method although the Group had less than 20% interest because the Group exercised significant influence on their major transactions or had the same president of the board.

Except for Yulon, investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments was based on the associates’ financial statements that have not been reviewed.

b. Investments in joint ventures

Joint ventures that are not individually material	March 31, 2018 December 31, 2017 $ 7,675,946 $ 7,235,581	March 31, 2017 $ 6,225,054

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Net profit of the period Other comprehensive income (loss) Total comprehensive income for the period	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 356,975 122,929 $ 479,904	2017 $ 294,548 (211,225) $ 83,323

All the joint ventures are accounted for using the equity method.

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Investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments was based on the joint ventures’ financial statements that have not been reviewed.

19. PROPERTY, PLANT AND EQUIPMENT

Land Land improvement Buildings Machinery Other equipment Construction in progress	March 31, 2018 December 31, 2017 $ 2,127,397 $ 2,127,397 11,986 12,681 1,092,917 1,110,239 2,276,033 2,312,348 407,552 400,718 545,332 579,660 $ 6,461,217 $ 6,543,043	March 31, 2017 $ 2,127,397 14,531 1,159,090 2,324,439 370,204 407,555 $ 6,403,216

Except for the depreciation recognized and the cost of acquisition of property, plant and equipment for increasing productivity, which totaled $157,664 thousand and $216,290 thousand during the three months ended March 31, 2018 and 2017, respectively, the Group had no other significant disposal of property, plant and equipment.

Because the sales volume of certain car models is lower than the Group expected, the estimated future cash flows arised from the related machinery were expected to be decreased, which led to the carrying amount exceeding the recoverable amount. Therefore, the Group recognized an impairment loss of $10,346 thousand for the three months ended March 31, 2018. The Group determined the recoverable amount of the related machinery on the basis of its value in use. The discount rate used in measuring the value in use was 6.69%.

Except for tooling (included in machinery), which is depreciated on an expected production quantity basis, the above items of property, plant and equipment were depreciated on a straight-line basis over their estimated useful lives as follows:

Category Land improvements Buildings Machinery Other equipment	Year
	3-20 years 2-60 years 2-24 years 2-20 years

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 32.

20. INVESTMENT PROPERTIES

Except for depreciation recognized, the Group did not have significant addition, disposal, or impairment of investment properties during the three months ended March 31, 2018 and 2017.

The investment properties held by the Group were depreciated over their estimated 10 to 60 years useful lives, using the straight-line method.

39 -

The fair value of investment properties of the Group were $2,312,470 thousand and $2,288,404 thousand as of December 31, 2017 and 2016, respectively. The management of the Group had assessed and determined that there were no significant changes in the fair values as of March 31, 2018 and 2017, as compared to that as of December 31, 2017 and 2016.

For the amount of investment properties pledged as deposits for certain projects, refer to Note 32.

21. SHORT-TERM BORROWINGS

Line of credit borrowings Bank loans	March 31, 2018 December 31, 2017 $ 405,000 $ 415,000 330,000 330,000 $ 735,000 $ 745,000	March 31, 2017 $ 415,000 330,000 $ 745,000

a. The range of interest rate on credit borrowings was 0.95%-1.53%, 0.95%-1.54% and 0.95%-1.54% per annum as of March 31, 2018, December 31, 2017 and March 31, 2017, respectively.
b. The interest rate on bank loans were 1.25%, 1.25% and 1.42% per annum as of March 31, 2018, December 31, 2017 and March 31, 2017, respectively.

22. OTHER PAYABLES

Payable for salaries or bonus Payable for taxes Payable for warranties Provisions for employee benefits Payable for advertisement Others	March 31, 2018 December 31, 2017 $ 659,819 $ 1,265,640 280,883 151,991 276,335 269,322 98,676 115,788 91,862 233,386 973,278 835,861 $ 2,380,853 $ 2,871,988	March 31, 2017 $ 747,281 232,989 225,718 92,947 22,655 1,146,155 $ 2,467,745

23. RETIREMENT BENEFIT PLANS

Employee benefit expenses in respect of the Group’s defined benefit retirement plans were $16,649 thousand and $18,034 thousand for the three months ended March 31, 2018 and 2017, respectively, and were calculated using the actuarially determined pension cost discount rate as of December 31, 2017 and 2016.

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24. EQUITY

a. Ordinary shares

	March 31,	December 31,	March 31,
	2018	2017	2017
Numbers of shares authorized (in thousands)	1,800,000	1,800,000	1,800,000
Amount of shares authorized	$ 18,000,000	$ 18,000,000	$ 18,000,000
Number of shares issued and fully paid (in
thousands)	1,384,051	1,384,051	1,384,051
Shares issued	$ 13,840,508	$ 13,840,508	$ 13,840,508
Fully paid ordinary shares, which have a par	value of $10, carry	one vote per share and carry a right to
dividends.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note 1) Conversion of bonds Issuance of ordinary shares Others May be used to offset a deficit only Changes in percentage of ownership interest in subsidiaries (Note 2) Share of changes in capital surplus of associates	March 31, 2018 December 31, 2017 $ 5,183,923 $ 5,183,923 1,184,920 1,184,920 4,666 4,666 2,225 2,225 32,234 31,606 $ 6,407,968 $ 6,407,340	March 31, 2017 $ 5,183,923 1,184,920 4,666 2,225 31,545 $ 6,407,279

Note 1: Such capital surplus may be used to offset a deficit; in addition, when the Corporation has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Corporation’s capital surplus and once a year).
Note 2: Such capital surplus arises from the effect of changes in ownership interest in a subsidiary resulted from equity transactions other than actual disposal or acquisition, or from changes in capital surplus subsidiaries accounted for using equity method.
c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, where the Corporation made profit in a fiscal year, the profit shall be first utilized for offsetting losses of previous years and paying taxes, then for setting aside as legal reserve 10% of the remaining profit. If there is remaining profit, the profit shall be utilized for setting aside a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Corporation’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution. For the policies on distribution of employees’ compensation and remuneration of directors after amendment, refer to Note 25.

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The operating of the Corporation is considered as a mature and steady industry. In determining dividend amounts, the Corporation takes its future capital expenditures and related factors into account and also seeks to uphold the shareholders’ interests and realize the Corporation’s long-term financial plan. Dividends are distributed no less than 40% of profits after tax, yet dividends cannot be distributed if the Corporation has deficit. Dividends are in the form of cash or stock. The Corporation’s policy is that cash dividends should be at least 20% of total dividends.

Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Corporation’s paid-in capital. The legal reserve may be used to offset deficits. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reserved from a special reserve by the Corporation.

The appropriations of earnings for 2017 and 2016 had been proposed by the Corporation’s board of directors in March 2018 and approved in the shareholders’ meetings in June 2017, respectively. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends	Appropriation of Earnings For For Year 2017 Year 2016 $ 410,564 $ 318,910 2,491,292 2,214,481	Dividends Per Share (NT$)
		For For Year 2017 Year 2016 $ 1.80 $ 1.60

The appropriation of earnings for 2017 are subject to the resolution in the shareholders’ meeting to be held in June 2018.

Information on the appropriation of earnings proposed by the Corporation’s board of directors and approved in the shareholders’ meetings is available on the Market Observation Post System website of the Taiwan Stock Exchange.

d. Other equity items

1) Exchange differences on translating foreign operations

Balance at January 1 Recognized during the period Exchange differences on translating the financial statements of foreign operations Share from associates and join ventures accounted for using the equity method Other comprehensive income recognized in the period Balance at March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ (485,118) (17,156) 154,851 137,695 $ (347,423)	2017 $ (268,058) 55,471 (341,074) (285,603) $ (553,661)

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2) Unrealized gain on available-for-sale financial assets

Balance at January 1 Recognized during the period Unrealized gain on revaluation of available-for-sale financial assets Share from associates accounted for using the equity method Other comprehensive income recognized in the period Balance at March 31 Balance at January 1, 2018 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1, 2018 per IFRS 9	$ 850,984 (17,050) 30,840 13,790 $ 864,774 $ 756,456 (756,456) $ -

3) Unrealized gain on financial assets at FVTOCI

	For	the Three
	Months Ended
	March 31, 2018
Balance at January 1 per IAS 39	$	-
Adjustment on initial application of IFRS 9		273,866
Balance at January 1 per IFRS 9		273,866
Effect of change in tax rate
Recognized during the period
Unrealized gain - equity instruments		3,543
Share from associates accounted for using the equity method		(6,352)
Other comprehensive loss recognized in the period		(2,809)
Balance at March 31	$	271,057

4) Cash flow hedges

Balance at January 1 Effect of change in tax rate Recognized during the period Gain on changes in the fair value of hedging instruments Foreign currency risk - foreign exchange forward contracts Foreign currency risk - foreign cash Other comprehensive income recognized in the period Balance at March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ (12,253) 382 12,575 4,116 17,073 $ 4,820	2017 $ (28,635) - (1,054) 16,696 15,642 $ (12,993)

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e. Non-controlling interests

Balance at January 1 per IAS 39 Adjustment on initial application of IFRS 9 Balance at January 1 per IFRS 9 Attributable to non-controlling interests: Share of profit for the year Other comprehensive income recognized in the period Exchange difference on translation of foreign operations Balance at March 31		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 3,506,941 43,831 3,550,772 69,375 35,184 $ 3,655,331	2017 $ 3,299,707 - 3,299,707 100,638 (91,307) $ 3,309,038

25. NET PROFIT FROM CONTINUING OPERATIONS

Net profit from continuing operations concludes as follow:

a. Depreciation and amortization

For the Three Months Ended March 31 2018 2017 An analysis of depreciation by function Operating costs $ 193,237 $ 179,545 Operating expenses 36,571 33,876 $ 229,808 $ 213,421 An analysis of amortization by function Operating costs $ 2,133 $ 2,169 Operating expenses 16,959 18,326 $ 19,092 $ 20,495 An analysis of amortization in intangible assets by function Research and development expenses $ 9,244 $ 9,452 Rental income and operating expenses directly related to investment properties For the Three Months Ended March 31 2018 2017 Rental income from investment properties $ 15,983 $ 15,985 Direct operating expenses from investment properties that generated rental income $ 5,246 $ 5,080	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 15,983 $ 5,246	2017 $ 15,985 $ 5,080

b. Rental income and operating expenses directly related to investment properties

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c. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans Short-term benefits An analysis of employee benefits expenses by function Operating costs Operating expenses		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 19,673 16,649 36,322 1,019,286 $ 1,055,608 $ 536,039 519,569 $ 1,055,608	2017 $ 22,290 18,034 40,324 962,499 $ 1,002,823 $ 522,541 480,282 $ 1,002,823

d. Employees’ compensation and remuneration of directors and supervisors

According to the Articles of Incorporation of the Corporation approved by the shareholders at the rates of no less than 0.1% and no higher than 0.5%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors. For the three months ended March 31, 2018 and 2017, the employees’ compensation and remuneration of directors and supervisors were as follows:

Amount

Employees’ compensation Remuneration of directors	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 17,803 $ 7,656	2017 $ 5,567 $ 5,757

If there is a change in the amounts after the annual consolidated financial statements were authorized for issue, the differences are records as a change in the accounting estimate.

The appropriations of employees’ compensation and remuneration of directors and supervisors for 2017 and 2016 having been resolved by the board of directors in March 2018 and 2017, respectively, were as below:

Employees’ compensation Remuneration of directors and supervisors	For the Three Months Ended March 31	For the Three Months Ended March 31
	2018 Cash $ 45,459 22,036	2017
		Cash $ 18,426 17,822

There was no difference between the actual amounts of employees’ compensation and remuneration of directors and supervisors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2017 and 2016.

45 -

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Corporation’s board of directors in 2018 and 2017 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

26. INCOME TAXES FROM CONTINUING OPERATIONS

a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

Current tax In respect of the current period Adjustments for the prior periods Deferred tax Adjustments to deferred tax attributable to changes in tax rates and laws In respect of the current period Adjustments for the prior periods Income tax expense recognized in profit or loss	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 96,674 151 96,825 (44,585) 163,500 2,384 121,299 $ 218,124	2017 $ 106,933 (8) 106,925 - 18,719 - 18,719 $ 125,644

The Income Tax Act in the ROC was amended in 2018 and the corporate income tax rate was adjusted from 17% to 20% effective in 2018. The effect of the change in tax rate on deferred tax income will be recognized in profit or loss. In addition, the rate of the corporate surtax applicable to 2018 unappropriated earnings will be reduced from 10% to 5%.

b. Income tax recognized in other comprehensive income

Deferred tax Effect of change in tax rate In respect of the current period Total gain on effective portion of cash flow hedges	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 5,473 (3,217) $ 2,256	2017 $ - (3,204) $ (3,204)

c. Income tax assessments

The tax returns of the Corporation through 2015 have been assessed by the tax authorities.

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27. DISCONTINUED OPERATIONS

On October 14, 2016, the Group’s board of directors approved to dispose of a subsidiary, Zhengzhou Tooling & Stamping Co., Ltd., and entered into a memorandum with Zhengzhou Nissan Automobile Co., Ltd. The base date for the measurement of the disposal price was on May 31, 2017, and the transaction was completed on September 15, 2017. Therefore, income and expenses related to the subsidiary were classified as discontinued operations.

The transaction was completed on September 15, 2017. Therefore, income and expenses related to the subsidiary were classified as discontinued operations.

The details of the profit (loss) from discontinued operations and the related cash flow information were as follows:

	For	the Three
	Months Ended
	March 31, 2017
Operating revenue	$	14,728
Operating costs		(11,891)
Gross profit		2,837
Operating expenses		(2,898)
Profit from operations		(61)
Non-operating income and expenses		114
Profit before tax		53
Income tax benefit (expenses)		960
Net profit for the period	$	1,013
Profit from discontinued operations attributable to:
Owners of Zhengzhou Tooling & Stamping	$	302
Non-controlling interests		711
	$	1,013
Net cash generated used in operating activities	$	(13,330)
Foreign exchange adjustments		(2,321)
Net cash outflow	$	(15,651)

28. EARNINGS PER SHARE

Basic earnings per share From continuing operations From discontinued operations Total basic earnings per share	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 0.97 - $ 0.97	2017 $ 0.76 - $ 0.76 (Continued)

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Diluted earnings per share From continuing operations From discontinued operations Total diluted earnings per share	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 0.97 - $ 0.97	2017 $ 0.76 - $ 0.76 (Concluded)

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net Profit for the Year

For the Three Months Ended March 31 2018 2017 Earnings used in the computation of basic earnings per share $ 1,317,903 $ 1,042,122 Less: Profit for the period from discontinued operations used in the computation of basic earnings per share from discontinued operations - 1,013 Earnings used in the computation of basic earnings per share from continuing operations $ 1,317,903 $ 1,041,109 Weighted Average Number of Ordinary Shares Outstanding (In Thousand Shares) For the Three Months Ended March 31 2018 2017 Weighted average number of ordinary shares in computation of basic earnings per share Weighted average number of ordinary shares 1,384,051 1,384,051 Adjustment for associates holding shares (20,599) (20,599) 1,363,452 1,363,452 Effect of potentially dilutive ordinary shares Employees’ compensation 1,815 853 Weight average number of ordinary shares used in the computation of diluted earnings per share 1,365,267 1,364,305		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
			2018 1,384,051 (20,599) 1,363,452 1,815 1,365,267	2017 1,384,051 (20,599) 1,363,452 853 1,364,305

When calculating EPS, the Group considers the shares which associates hold as the treasury shares to reduce the outstanding shares.

If the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation will be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

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29. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Group’s overall strategy remains unchanged in the future.

30. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

The Group’s management believes the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values or their fair values cannot be reliably measured.

b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy

March 31, 2018

Financial assets Financial assets at FVTPL Unlisted share Mutual funds Financial assets at FVTOCI Listed shares - ROC Unlisted shares - ROC Overseas unlisted shares Financial assets for hedging Derivative financial instruments Non-derivative financial instruments	Level 1 $ - 1,051,652 $ 1,051,652 $ 25,235 - - $ 25,235 $ - 171,392 $ 171,392	Level 2 $ - - $ - $ - - - $ - $ - - $ -	Level 3 $ 777,273 - $ 777,273 $ - 37,397 258,193 $ 295,590 $ 3,356 - $ 3,356	Total $ 777,273 1,051,652 $ 1,828,925 $ 25,235 37,397 258,193 $ 320,825 $ 3,356 171,392 $ 174,748

49 -

December 31, 2017 Financial assets Financial assets at FVTPL Mutual funds Available-for-sale financial assets Listed securities - ROC Unlisted securities - ROC Financial liabilities Financial liabilities at FVTPL Derivative financial instruments (included in other current liabilities) Derivative financial liabilities for hedging Derivative financial instruments (included in other current liabilities) March 31, 2017 Financial assets Financial assets at FVTPL Derivative financial instruments Non-derivative financial assets held for trading Available-for-sale financial assets Listed securities - ROC Unlisted securities - ROC Mutual funds	Level 1 $ 529,496 $ 22,489 - $ 22,489 $ - $ - Level 1 $ - 1,045 $ 1,045 $ 83,546 - 726,685 $ 810,231	Level 2 $ - $ - - $ - $ - $ - Level 2 $ - - $ - $ - - - $ -	Level 3 $ - $ - 703,983 $ 703,983 $ 2,954 $ 12,362 Level 3 $ 227 - $ 227 $ - 743,734 - $ 743,734	Total $ 529,496 $ 22,489 703,983 $ 726,472 $ 2,954 $ 12,362 Total $ 227 1,045 $ 1,272 $ 83,546 743,734 726,685 $ 1,553,965 (Continued)

50 -

Derivative financial assets for hedging Derivative financial instruments (included in other current assets) Financial liabilities Derivative financial liabilities for hedging Derivative financial instruments (included in other current liabilities)	Level 1 $ - $ -	Level 2 $ - $ -	Level 3 $ 2,634 $ 19,079	Total $ 2,634 $ 19,079 (Concluded)

There were no transfers between Levels 1 and 2 in the current and prior periods.

2) Reconciliation of Level 3 fair value measurements of financial instruments

For the three months ended March 31, 2018

Financial Assets Equity Instruments at FVTPL Balance at January 1 $ 767,761 Recognized in loss 9,512 Recognized in other comprehensive income - Balance at March 31 $ 777,273 Financial Liabilities Balance at January 1 Recognized in loss Balance at March 31	Financial Assets at FVTOCI $ 293,111 - 2,479 $ 295,590	Derivative Financial Instruments for Hedging Total $ - $ 1,060,872 - 9,512 3,356 5,835 $ 3,356 $ 1,076,219 Derivative Financial Instruments for Hedging $ 12,362 (12,362) $ -

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For the three months ended March 31, 2017

Financial Assets
Financial
Instruments at
Fair Value
Through
Profit or Loss
Derivatives
Available-for-
sale
Financial
Assets
Balance at January 1
$ 812 $ 732,680
Recognized in loss
(585)
-
Recognized in other
comprehensive income
-

11,054

Balance at March 31
$ 227
$ 743,734

Financial Liabilities
Balance at January 1
Recognized in loss
Recognized in other comprehensive income
Balance at March 31

Derivative
Financial
Instruments
for Hedging
Total
$ 1,371 $ 734,863

(1,371)
(1,956)

2,634

13,688
$ 2,634
$ 746,595
Derivative
Financial
Instruments for
Hedging
$ 16,546
(16,546)

19,079
$ 19,079

3) Valuation techniques and inputs applied for the purpose of measuring Level 3 fair value measurement
a) Derivative financial instruments: The fair values of warrants are determined using option pricing models where the significant unobservable inputs are historical volatility. An increase in the historical volatility used in isolation would result in an increase in the fair value.
b) Derivative financial instruments: The fair values of foreign exchange forward contracts of future cash flows are estimated based on observable forward exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.
c) Domestic unlisted securities to which the market approach was applied: The fair values of domestic unlisted shares were referred to stock prices of listed companies with operating activities that were similar to those of the Corporation. The material unobservable inputs were as follows:

	March 31,	December 31,
	2018	2017
Operating income ratio	0.21-5.58 times	-
Gross profit ratio	1.65-16.51 times	-
EBIT ratio	5.18-29.94 times	8.96 times
EBITDA ratio	3.51-35.19 times	7.23-31.73 times
Post-tax profit ratio	5.63-43.03 times	-
P/B ratio	0.99-6.19 times	1.66-3.11 times
Discount rate for lack of marketability	13.13%-32.28%	32.28%

52 -

	March 31, 2017
P/E ratio	11.96-17.36 times
P/B ratio	1.66-2.54 times
Discount rate for lack of marketability	20%

If the inputs to the valuation model were changed to reflect reasonably possible alternative assumptions while all the other variables were held constant, the fair values of the shares would have increased (decreased) as follows:

				March 31,	December 31,	December 31,
				2018		2017
Operating income ratio
0.1 time increase				$ 70,555	$	-
0.1 time decrease				$ (70,555)	$	-
Gross profit ratio
1 time increase				$ 52,573	$	-
1 time decrease				$ (52,573)	$	-
EBIT ratio
1 time increase				$ 46,684	$	63,057
1 time decrease				$ (46,684)	$	(63,057)
EBITDA ratio
1 time increase				$ 65,862	$	75,149
1 time decrease				$ (65,862)	$	(75,149)
Post-tax profit ratio
1 time increase				$ 37,151	$	-
1 time decrease				$ (37,151)	$	-
P/B ratio
0.1 time increase				$ 94,251	$	70,398
0.1 time decrease				$ (94,251)	$	(70,398)
					March 31, 2017
P/E ratio
1 time increase					$	66,325
1 time decrease					$	(66,325)
P/B ratio
0.1 time increase					$	79,900
0.1 time decrease					$	(79,900)
Categories of financial instruments
		March 31,	December 31,		March 31,
		2018		2017		2017
Financial assets
FVTPL
Held for trading	$	-	$	529,496	$	1,272
Mandatorily at FVTPL		1,828,925		-		-
Financial assets for hedging		174,748		-		-
						(Continued)

c. Categories of financial instruments

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		March 31,	December	31,	March 31,
		2018	2017		2017
Derivative instruments in designated hedge
accounting relationships (included in other
current assets)	$	-	$	- $	2,634
Loans and receivables (Note 1)		-	19,645,590		20,279,985
Available-for-sale financial assets (Note 2)		-	921,332		1,768,767
Financial assets at amortized cost (Note 3)		20,062,676		-	-
Financial assets at FVTOCI		320,825		-	-
Financial liabilities
Amortized cost (Note 4)		6,421,773	7,197,353		6,365,795
FVTPL (included in other current liabilities)
Held for trading		-	2,954		-
Derivative instruments in designated hedge
accounting relationships (included in other
current liabilities)		-	12,362		19,079
					(Concluded)

Note 1: The balances included cash and cash equivalents, debt investments with no active market, notes receivable, accounts receivable (related parties included), other receivables, other financial assets (included in other current assets) and guarantee deposits (included in other non-current assets).
Note 2: The balances included the carrying amounts of available-for-sale financial assets and available-for-sale financial assets measured at cost.
Note 3: The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, debt investments with no active market, notes receivable, accounts receivable (related parties included), other receivables, other financial assets (included in other current assets) and guarantee deposits (included in other non-current assets).
Note 4: The balances included financial liabilities measured at amortized cost which comprise short-term borrowings, short-term bills payable, notes payable, accounts payable (related parties included), other payables and deposits received (included in other non-current liabilities).

d. Financial risk management objectives and policies

The Group’s major financial instruments include equity and debt investments, accounts receivable, accounts payables and borrowings. Financial risks include market risk, credit risk, and liquidity risk.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and price.

a) Foreign currency risk

Holding foreign currency-denominated assets and liabilities exposes the Group to adverse fluctuations of cash flows and the reduction of foreign currency assets due to the foreign currency rate changes. The Group avoids cash flow risk resulting from the adverse foreign currency rate changes by using derivative contracts.

54 -

Sensitivity analysis

The Group is mainly exposed to the U.S. dollar (USD), Japanese yen (JPY) and Renminbi (RMB).

The following table details the Group’s sensitivity to a 1% increase and decrease in New Taiwan dollars against the relevant foreign currencies. The sensitivity rate used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible change in foreign exchange rates is 1%. The sensitivity analysis included outstanding foreign currency denominated monetary items and their translation at the end of the reporting period is adjusted for a 1% change in foreign currency rates. The following table indicates an increase (a decrease) in pre-tax profit and equity due to a 1% strengthening of the functional currency against the relevant currency. For a 1% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on pre-tax profit and equity and the balances below would be negative.

USD to NTD	USD to NTD	USD to NTD
For the Three Months Ended March 31
	2018 2017 $ (6,759) $ (11,041) JPY to NTD
For the Three Months Ended March 31
	2018 2017 $ (1,308) $ 903 $ (4,009) $ (7,848) RMB to NTD
For the Three Months Ended March 31
	2018 $ (21,541)	2017 $ (21,167)

b) Interest rate risk

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rate risk at the end of the reporting period were as follows:

	March 31,	December 31,	March 31,
	2018	2017	2017
Cash flow interest rate risk
Financial assets	$ 14,611,234	$ 13,974,008	$ 14,967,900
Financial liabilities	824,863	854,933	836,970

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Sensitivity analysis

The following sensitivity analysis was based on the Group’s exposure to changes in interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. The sensitivity rate of 0.25% is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 0.25% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the three months ended March 31, 2018 and 2017 would increase/decrease by $8,616 thousand and $8,832 thousand.

The Group’s sensitivity to interest rates decreased during the current period was mainly due to the increase in variable rate asset instruments.

c) Other price risk

The Group was exposed to equity price risk on its investments in listed securities and mutual funds.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% higher/lower, pre-tax profit for the three months ended March 31, 2018 would have decreased by $52,583 thousand, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the three months ended March 31, 2018 would have decreased by $1,262 thousand, as a result of the changes in fair value of financial assets at FVTOCI.

If equity prices had been 5% lower, pre-tax profit for the three months ended March 31, 2017 would have decreased by $52 thousand, as a result of the changes in fair value of held-for-trading investments, and the pre-tax other comprehensive income for the three months ended March 31, 2017 would decrease by $40,512 thousand, as a result of the changes in fair value of available-for-sale shares.

2) Credit risk

The amounts of financial assets were potentially affected by the Group if the counter-parties or third parties breach financial instrument contracts. The affection includes the concentrated degrees, composition parts and contracts amounts of the financial instruments and other receivables. The Group believes the risk is low because the trading parties were creditworthy banks, brokers and dealers.

3) Liquidity risk

The Group has sufficient operating capital to meet cash requirements for settling derivative transactions. Thus, liquidity risk is low.

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31. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Corporation and its subsidiaries, which are related parties of the Corporation, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

a. Names and categories of related parties

Name
Mitsubishi Motors Corporation (Mitsubishi Motors Corp.)
Mitsubishi Corporation (Mitsubishi Corp.)

Tai Yuen Textile Co., Ltd. (Tai Yuen Textile)

Le Wen Investment Co., Ltd.

Yulon Management Company Ltd. (Yulon Management)

Mitsubishi Corporation (Taiwan) Ltd.

Mitsubishi Corporation LT Taiwan Co., Ltd.

Mitsubishi Motors Philippines Corporation

Mitsubishi Motors Thailand

Mitsubishi Corporation Technos

Shye Shyang Mechanical Industrial Co., Ltd.

Uni-Calsonic Corp.

Yulon Motor Co., Ltd. (Yulon)

Fortune Motors Co., Ltd. (Fortune Motors)

ROC Spicer Ltd. (ROC-Spicer)

Uni Auto Parts Manufacture Co., Ltd.

Shung Ye Motor Co., Ltd. (Shung Ye Motor)

Hua-Chuang Automobile Information Technical Center
Co., Ltd. (Hua-Chuang Automobile Information
Technical Center)

Yulon IT Solutions Inc.

Sinjang Co., Ltd. (Sin Jang Enterprises)

Tokio Marine Newa Insurance Co., Ltd.

South East (Fujian) Motor Corporation Ltd. (South East
(Fujian) Motor)

Fujian Benz Automotive Co., Ltd.

Fuzhou Fushiang Motor Industrial Co., Ltd.

Xiamen King-Long Kian-Shen Frame

Hangzhou King-Long Kian-Shen Co., Ltd.

Hong Shuo Cultural Enterprises, Co., Ltd.

Hsiang Shuo Enterprises

Sinqual Technology Co., Ltd.

Taiwan Acceptance Corporation

Related-party Categories

Investors that have significant influence
over the Group
Investors that have significant influence
over the Group
Investors that have significant influence
over the Group
Investors that have significant influence
over the Group
Subsidiary of investor that have
significant influence over the Group
Subsidiary of investor that have
significant influence over the Group
Subsidiary of investor that have
significant influence over the Group
Subsidiary of investor that have
significant influence over the Group
Subsidiary of investor that have
significant influence over the Group
Subsidiary of investor that have
significant influence over the Group
The Group is its major management
authority
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate

(Continued)

57 -

Name
Yue Sheng Industrial Co., Ltd.

Luxgen Motor Co., Ltd. (Luxgen)

Yulon Nissan Motor Co., Ltd.

Y-Teks Co., Ltd.

Yulon Energy Service Co., Ltd.

Yuchia Motor Co., Ltd.

Yue Ki Industrial Co., Ltd.

Carplus Auto Leasing Corporation

eCBO Information Services Co., Ltd.

China Engine (Fujian)

Hsieh-Shin Motors Co., Ltd.

Yu Rich Financial Services Company

Visionary International Consulting Co., Ltd.

Zhejiang Kangda Motor Industry and Trade Co., Ltd.

Automotive Research & Testing Center

China Motor Indigenous Foundation

Related-party Categories

Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Substantive related party
Substantive related party
(Concluded)

b. Operating transactions 1) Sales of goods

Line Items Related Party Categories/Name Sales Associates Fortune Motors Shung Ye Motor Others Investors and subsidiaries of the investors that have significant influence over the Group Others The Group is its major management Others		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 $ 5,422,151 2,475,993 297,416 8,195,560 33,141 - $ 8,228,701	2017 $ 5,326,298 1,307,484 329,487 6,963,269 303,736 1,320 $ 7,268,325

58 -

2) Purchases of goods

Line Items Related Party Categories/Name Purchases Associates South East (Fujian) Motor Others Investors and subsidiaries of the investors that have significant influence over the Group Mitsubishi Corp. Others The Group is its major management Others 3) Technical services expense Line Items Related Party Categories/Name Cost of goods sold and selling and Investors that have significant influence over the Group marketing expenses Others 4) Development expense Line Items Related Party Categories/Name Research and development Investors that have significant influence over the Group expense Others Associates Others Substantive related parties Others		For the Three Months Ended March 31	For the Three Months Ended March 31
		2018 2017 $ 520,261 $ 790,710 471,977 480,426 992,238 1,271,136 $ 995,347 $ 613,785 31,909 15,535 1,027,256 629,320 82,053 83,484 $ 2,101,547 $ 1,983,940 For the Three Months Ended March 31
		2018 2017 $ 47,064 $ 44,473 For the Three Months Ended March 31
		2018 $ 13,858 - 171 $ 14,029	2017 $ 17,097 32 - $ 17,129

59 -

5) Other expense

Line Items Related Party Categories/Name Selling and marketing expenses Investors and subsidiaries of the investors that have significant influence over the Group Others Associates Others Receivables from related parties Line Items Related Party Categories/Name March 31, 2018 Trade receivables Associates from related Fortune Motors $ 1,151,680 parties, net Shung Ye Motor 316,928 Yulon 105,147 Hua-Chuang Automobile Information Technical Center 78,540 Others 79,867 1,732,162 Investors and subsidiaries of the investors that have significant influence over the Group Others 19,912 The Group is its major management Others 7 $ 1,752,081	For the Three Months Ended March 31	For the Three Months Ended March 31
	2018 $ 25,813 90 $ 25,903 December 31, 2017 $ 944,038 238,467 203,263 189,314 112,615 1,687,697 16,206 - $ 1,703,903	2017 $ 17,955 84 $ 18,039 March 31, 2017 $ 1,067,050 234,207 126,064 106,472 93,394 1,627,187 105,417 1,386 $ 1,733,990
1,732,162 19,912 7
$ 1,752,081

6) Receivables from related parties

60 -

7) Prepayments

Line Items Related Party Categories/Name Prepayments Investors that have significant influence over the Group Mitsubishi Corp. Others Associates South East (Fujian) Others Payables to related parties Line Items Related Party Categories/Name Trade payables to Associates related parties Fortune Motors ROC-Spicer Others Investors and subsidiaries of the investors that have significant influence over the Group Mitsubishi Motors Corp. Yulon Management Others The Group is its major management Others Substantive related parties Others	March 31, 2018 December 31, 2017 $ 13,846 $ 416,905 8,750 28,155 22,596 445,060 101,219 91,367 151 232 101,370 91,599 $ 123,966 $ 536,659 March 31, 2018 December 31, 2017 $ 111,256 $ 64,454 78,850 93,771 395,288 395,816 585,394 554,041 77,535 114,418 22,755 92,216 51,763 51,066 152,053 257,700 55,795 63,643 2,359 11,006 $ 795,601 $ 886,390	March 31, 2017 $ 7,721 1,661 9,382 157,390 106 157,496 $ 166,878 March 31, 2017 $ 45,796 85,576 332,039 463,411 74,999 18,967 50,136 144,102 62,012 4,170 $ 673,695

8) Payables to related parties

61 -

9) Deposit in advance

Line Items Related Party Categories/Name Other current Associates liabilities Luxgen Sin Jang Enterprises Others Investors that have significant influence over the Group Others	March 31, 2018 December 31, 2017 $ 2,156 $ - - 20,492 1,499 3,897 3,655 24,389 - - $ 3,655 $ 24,389	March 31, 2017 $ 36,520 - 7,642
		44,162 4,681
		$ 48,843

The outstanding payables to related parties had no guarantees and would be paid in cash. The Group receives guarantees of the receivables from part of the related parties. In addition, the Group did not recognize allowance for doubtful accounts during the three months ended March 31, 2018 and 2017.

Transactions with related parties have the same terms for pricing, receipts and payments as of those for the third parties. Lease contracts with related parties are based on market conditions, and the terms of receipts or payments were the same as those for the third parties.

The Group signed contract with Mitsubishi Motors Corporation. Refer to Note 33.

c. Compensation of key management personnel

The remuneration of directors and key executives during the three months ended March 31, 2018 and 2017 were as follows:

2017 were as follows:
Short-term employee benefits Post-employment benefits	For the Three Months Ended March 31
		2018 $ 34,878 $ 642	2017 $ 39,146 $ 640

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

32. ASSETS PLEDGED AS COLLATERAL

The following assets were provided as collateral for bank borrowings, the tariff of importing vehicle parts and materials, escrows, government tenders and the deposit of project:

Property, plant and equipment Pledge deposits (included in other current assets) Investment properties	March 31, 2018 December 31, 2017 $ 788,507 $ 786,435 158,050 157,967 52,323 52,323 $ 998,880 $ 996,725	March 31, 2017 $ 789,586 117,417 52,323 $ 959,326

62 -

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant commitments and contingencies of the Group as of March 31, 2018 were as follows:

a. Guarantee notes amounted to $5,929,038 thousand, which had been issued to financial institutions as collaterals for loans; unused letters of credit amounted to $7,712 thousand.
b. The Group entered into an agreement with Mitsubishi Motors Corporation as stated below:

Project Technical royalty Technical royalty	Content Technical cooperation and manufacture of Delica and other car models Technical cooperation and manufacture of Outlander and other car models	Date of Agreement/ Expiry Date 2006.3.1-2025.4.8 2005.7.1-2025.9.7	Agreement Price Royalty was agreed to be the basis of the FOB price of automobiles sold and manufactured parts repaired Royalty was agreed to be the fixed amount of automobiles sold per unit and the basis of the FOB price of manufactured parts repaired	Payment
				Paid every 6 months within 90 days Paid every 6 months within 90 days

c. The status of endorsements/guarantees was listed in Table 2.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group’s group entities’ significant financial assets and liabilities denominated in foreign currencies aggregated by foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

March 31, 2018

		Foreign			Carrying
	Currencies		Exchange Rate		Amount
Foreign currency assets
Monetary items
USD	$	25,402	29.1050	$	739,323
RMB		468,171	4.6470		2,175,590
JPY		1,513,855	0.2739		414,645
Non-monetary items
Joint ventures accounted for using the equity
method
RMB		1,221,300	4.6470		5,675,383
EUR		55,773	35.8700		2,000,563
Foreign currency liabilities
Monetary items
JPY		410,566	0.2739		112,454

63 -

December 31, 2017

		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	485,634	4.5650	$ 2,216,921
USD		39,835	29.7600	1,185,494
JPY		2,643,053	0.2642	698,295
Non-monetary items
Joint ventures accounted for using the equity
method
RMB		1,199,135	4.5650	5,474,050
EUR		49,523	35.5700	1,761,531
Foreign currency liabilities
Monetary items
JPY		608,986	0.2642	160,894
March 31, 2017
		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Foreign currency assets
Monetary items
USD	$	38,823	30.3300	$ 1,177,504
RMB		484,871	4.4070	2,136,825
JPY		610,984	0.2713	165,760
Non-monetary items
Joint ventures accounted for using the equity
method
RMB		1,117,060	4.4070	4,922,884
EUR		40,153	32.4300	1,302,170
Financial liabilities
Monetary items
JPY		443,905	0.2713	120,431

For the three months ended March 31, 2018 and 2017, net foreign exchange gain (losses) were $18,933 thousand and $(156,752) thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions.

35. SEPARATELY DISCLOSED ITEMS

Excluded in Notes 7, 11 and 30 and Tables 1 to 9, there were no other separately disclosed items.

64 -

36. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Group’s reportable segments were vehicle manufacturing, channel and others.

The following was an analysis of the Group’s revenue and results by reportable segment.

For the three months ended March 31, 2018
Vehicle manufacturing

Channel
Others
Adjustment and eliminations

Administration cost and remunerations to directors and supervisors
Other non-operating income and expenses, net
Profit before income tax
For the three months ended March 31, 2017
Vehicle manufacturing

Channel
Others
Adjustment and eliminations

Administration cost and remunerations to directors and supervisors
Other non-operating income and expenses, net
Profit before income tax

Segment
Revenues
Segment
Income or Loss
$ 8,500,437 $ 1,620,694
1,953,093
25,354
14,893
(4,349)

(56,490)

-
$ 10,411,933
1,641,699
(104,045)

67,748
$ 1,605,402
$ 9,596,471 $ 1,366,811
1,296,933
45,257
13,868
(5,883)

(50,387)

-
$ 10,856,885
1,406,185
(77,587)

(61,207)
$ 1,267,391

Intersegment transactions were accounted for according to market prices.

Segment profit represented the profit before tax earned by each segment without allocation of central administration costs and remunerations to directors, interest income, other income, gain on disposal of investments, net foreign exchange gain (loss), interest expense, other expense, gains (losses) on financial instruments at fair value through profit or loss, impairment loss and income tax expense. This was the measure reported to the chief operating decision maker for resource allocation and assessment of segment performance.

65 -

TABLE 1

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE THREE MONTHS ENDED MARCH 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period (Note 1)	Ending Balance (Note 1)	Actual Borrowing Amount (Notes 1 and 4)	Interest Rate	Nature of Financing	Business Transaction Amount	Reason for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 2)	Aggregate Financing Limit (Note 3)
													Item	Value
0	China Motor Corporation	Sino Diamond Motors	Other receivables	Yes	$ 500,000	$ 500,000	$ 500,000	1.1	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,584,659	$ 10,564,396
1	Hwa-Lin	Sichuan Huafeng Hanwei Guangzhou Huayou Motor Maintenance Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes	67,455 (US$ 1,200 thousand and RMB 7,000 thousand) 89,575 (US$ 1,960 thousand and RMB 7,000 thousand) 103,905 (US$ 3,570 thousand) 32,529 (RMB 7,000 thousand)	67,455 (US$ 1,200 thousand and RMB 7,000 thousand) 89,575 (US$ 1,960 thousand and RMB 7,000 thousand) 103,905 (US$ 3,570 thousand) 32,529 (RMB 7,000 thousand)	34,926 (US$ 1,200 thousand) 57,046 (US$ 1,960 thousand) 102,304 (US$ 3,515 thousand) -	2 2 2 -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,584,659 1,584,659 1,584,659 1,584,659	10,564,396 10,564,396 10,564,396 10,564,396
2	Guangzhou Huayou Motor Maintenance	Guangzhou Huayou Motor Sales Tianjin Hwahong Sichuan Huafeng Hanwei Dongguan Huashun Dongguan Huayi	Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes	464,700 (RMB 100,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand)	464,700 (RMB 100,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand)	- - - - -	- - - - -	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - -	Working capital Working capital Working capital Working capital Working capital	- - - - -	- - - - -	- - - - -	1,584,659 1,584,659 1,584,659 1,584,659 1,584,659	10,564,396 10,564,396 10,564,396 10,564,396 10,564,396
3	Sichuan Huafeng Hanwei	Sichuan Lingwei Sichuan Hauwei Tianjin Hwahong	Other receivables Other receivables Other receivables	Yes Yes Yes	46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand)	46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand)	7,017 (RMB 1,510 thousand) - -	5.4 - -	Short-term financing Short-term financing Short-term financing	- - -	Working capital Working capital Working capital	- - -	- - -	- - -	1,584,659 1,584,659 1,584,659	10,564,396 10,564,396 10,564,396

(Continued)

66 -

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period (Note 1)	Ending Balance (Note 1)	Actual Borrowing Amount (Notes 1 and 4)	Interest Rate	Nature of Financing	Business Transaction Amount	Reason for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 2)	Aggregate Financing Limit (Note 3)
													Item	Value
		Guangzhou Huayou Motor Maintenance Dongguan Huashun Dongguan Huayi	Other receivables Other receivables Other receivables	Yes Yes Yes	$ 46,470 (RMB 10,000 thousand) 139,410 (RMB 30,000 thousand) 139,410 (RMB 30,000 thousand)	$ 46,470 (RMB 10,000 thousand) 139,410 (RMB 30,000 thousand) 139,410 (RMB 30,000 thousand)	$ - - -	- - -	Short-term financing Short-term financing Short-term financing	$ - - -	Working capital Working capital Working capital	$ - - -	- - -	$ - - -	$ 1,584,659 1,584,659 1,584,659	$ 10,564,396 10,564,396 10,564,396
4	Tianjin Hwarui	Tianjin Hwahong Guangzhou Huayou Motor Maintenance Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes	46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 139,410 (RMB 30,000 thousand) 139,410 (RMB 30,000 thousand)	46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 139,410 (RMB 30,000 thousand) 139,410 (RMB 30,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,584,659 1,584,659 1,584,659 1,584,659	10,564,396 10,564,396 10,564,396 10,564,396
5	Tianjin Hwahong	Tianjin Hwarui Sichuan Huafeng Hanwei Dongguan Huayi Dongguan Huashun Guangzhou Huayou Motor Maintenance	Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes	232,350 (RMB 50,000 thousand) 92,940 (RMB 20,000 thousand) 69,705 (RMB 15,000 thousand) 69,705 (RMB 15,000 thousand) 139,410 (RMB 30,000 thousand)	232,350 (RMB 50,000 thousand) 92,940 (RMB 20,000 thousand) 69,705 (RMB 15,000 thousand) 69,705 (RMB 15,000 thousand) 139,410 (RMB 30,000 thousand)	83,646 (RMB 18,000 thousand) - - - -	5.4 - - - -	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - -	Working capital Working capital Working capital Working capital Working capital	- - - - -	- - - - -	- - - - -	1,584,659 1,584,659 1,584,659 1,584,659 1,584,659	10,564,396 10,564,396 10,564,396 10,564,396 10,564,396
6	Dongguan Huayi	Dongguan Huashun	Other receivables	Yes	232,350 (RMB 50,000 thousand)	232,350 (RMB 50,000 thousand)	99,911 (RMB 21,500 thousand)	5.04	Short-term financing	-	Working capital	-	-	-	1,584,659	10,564,396
7	Dongguan Huashun	Dongguan Huayi Sichuan Huafeng Hanwei Tianjin Hwahong Guangzhou Huayou Motor Maintenance	Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes	46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand)	46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand) 46,470 (RMB 10,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,584,659 1,584,659 1,584,659 1,584,659	10,564,396 10,564,396 10,564,396 10,564,396

(Continued)

67 -

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period (Note 1)	Ending Balance (Note 1)	Actual Borrowing Amount (Notes 1 and 4)	Interest Rate	Nature of Financing	Business Transaction Amount	Reason for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 2)	Aggregate Financing Limit (Note 3)
													Item	Value
8	Gatech Holding LTD.	Gatech Suzhou	Other receivables	Yes	$ 43,658 (US$ 1,500 thousand)	$ 43,658 (US$ 1,500 thousand)	$ -	-	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,584,659	$ 10,564,396

Note 1: At exchange rate on March 31, 2018, US$1=NT$29.105, RMB1=NT$4.647.

Note 2: The amount is 3% of the total shareholders’ equity of the latest financial statement of China Motor Corporation.

Note 3: The amount is 20% of the total shareholders’ equity of the latest financial statement of China Motor Corporation.

Note 4: Eliminated.

(Concluded)

68 -

TABLE 2

CHINA MOTOR CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE THREE MONTHS ENDED MARCH 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/Guarantor	Endorsee/Guarantee Receiver	Endorsee/Guarantee Receiver	Limit on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Amount Endorsed/ Guaranteed During the Period (Note)	Outstanding Endorsement/ Guarantee at the End of the Period (Note)	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiary	Endorsement/ Guarantee Given by Subsidiary on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Company in Mainland China
		Name	Relationship
1	Sino Diamond Motors	Guangzhou Huayou Motor Maintenance Tianjin Hwarui Sichuan Huafeng Hanwei Dongguan Huayi	Subsidiary Subsidiary Subsidiary Subsidiary	20% of the Corporation’s issued capital, $2,768,102 thousand 20% of the Corporation’s issued capital, $2,768,102 thousand 20% of the Corporation’s issued capital, $2,768,102 thousand 20% of the Corporation’s issued capital, $2,768,102 thousand	$ 232,350 (RMB 50,000 thousand) 232,350 (RMB 50,000 thousand) 232,350 (RMB 50,000 thousand) 232,350 (RMB 50,000 thousand)	$ 232,350 (RMB 50,000 thousand) 232,350 (RMB 50,000 thousand) 232,350 (RMB 50,000 thousand) 232,350 (RMB 50,000 thousand)	$ - - - -	$ - - - -	0.44 0.44 0.44 0.44	50% of the Corporation’s issued capital, $6,920,254 thousand 50% of the Corporation’s issued capital, $6,920,254 thousand 50% of the Corporation’s issued capital, $6,920,254 thousand 50% of the Corporation’s issued capital, $6,920,254 thousand	No No No No	No No No No	Yes Yes Yes Yes

Note: At exchange rate on March 31, 2018, RMB1=NT$4.647.

69 -

TABLE 3

CHINA MOTOR CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD MARCH 31, 2018

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		March 31, 2018	March 31, 2018		Note
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership	Fair Value
China Motor Corporation	Beneficiary certificates Fidelity (Taiwan) Asian Total Return Bond Fund Allianz Global Investors All Seasons Harvest Fund of Bond Funds Franklin Templeton SinoAm Money Market Fubon Chi Hsiang Money Market Fund The RSIT Enchanced Money Market Fubon China Policy Bank Bond ETF CTBC Hua Win Money Market Fund UPAMC James Bond Money Market Fund Sinopac Money Market Fund Hua Nan Phoenix Money Market Fund Cathay Taiwan Money Market Fund Paradigm Pion Money Market Prudential Financial Money Market Fund Nomura Global Short Duration Bond Fund Accumulate Nomura Asia Pacific High Yield Bond Fund PineBridge Global Multi-Strategy High Yield Bond Fund	- - - - - - - - - - - - - - - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	6,001 4,785 4,867 3,205 4,201 1,500 2,738 1,806 2,167 1,856 2,423 2,610 1,906 2,844 2,186 2,192	$ 59,101 58,614 50,059 50,053 50,053 30,375 30,033 30,032 30,031 30,030 30,026 30,021 30,006 29,586 29,497 29,024	- - - - - - - - - - - - - - - -	$ 59,101 58,614 50,059 50,053 50,053 30,375 30,033 30,032 30,031 30,030 30,026 30,021 30,006 29,586 29,497 29,024

(Continued)

70 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		March 31, 2018	March 31, 2018		Note
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership	Fair Value
Kian Shen KSIHK	Shares Shye Shyang Mechanical Industrial Myson Century, Inc. Carnival Taiwan Aerospace Com2B (Cayman) Corp. NORM Pacific Automation Corp. YueKi Industrial Co., Ltd. Corporate bonds Taiwan Acceptance Corp. Gatetech Technology Value Success International Morgan Stanley Deutsche Bank Aktiengesellschaft, Singapore Branch Crédit Agricole Corporate and Investment Bank SA Société Générale Fonterra Co-operative Group Ltd. Sinostrong International Ltd. Negotiable certificates of deposit O-Bank Principle guaranteed notes President Securities 100% Principle Guaranteed Note President Securities 100% Principle Guaranteed Note Beneficiary certificates Yuanta Wan Tai Money Market Fund Shares Beijing NTN-SEOHAN Driveshaft	Corporate director Corporate director - - - - - Associate Subsidiary - - - - - - - - - - -	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - current Financial assets at amortized cost - non-current Financial assets at amortized cost - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current	9,009 4,705 190 811 2,000 128 16 - - - - - - - - - - - - 2,720 -	$ 712,031 24,370 865 10,555 3,426 1,566 581 248,485 150,000 139,548 139,433 139,303 92,869 70,105 46,563 13,947 700,000 512,608 124,689 41,004 95,302 (RMB 20,508 thousand)	10.00 7.84 0.05 0.60 4.44 0.45 0.08 - - - - - - - - - - - - - 9.00	$ 712,031 24,370 865 10,555 3,426 1,566 581 - - - - - - - - - - - - 41,004 95,302	Note 1

(Continued)

71 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		March 31, 2018	March 31, 2018		Note
				Shares (In Thousands)	Carrying Amount	Percentage of Ownership	Fair Value
Alliance Investment & Management Sino Diamond Motors Hwa Lin Brilliant Insight International	Beneficiary certificates Capital Money Market Fund Shares Samuel (Cayman) Co., Ltd. CARPLUS Auto Leasing Corporation T-Car Inc. United Oriental Glass Ind. Co., Ltd. Solidlite Corporation Site information service Phalanx Biotech Group Jouge Technology Co., Ltd. Preference shares Rock Financial Risk Service Co., Ltd. Beneficiary certificates CTBC Hwa-win Money Market Fund Taishin Ta-Chong Money Market Principle guaranteed notes President Securities 100% Principle Guaranteed Note Beneficiary certificates Taishin Ta-Chong Money Market	- - - - The investor is the member of the board of directors - - - - - - - - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at amortized cost - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at amortized cost - current Financial assets at fair value through profit or loss - current	740 6,327 2,590 1,275 648 789 65 696 123 - 27,456 7,078 - 74	$ 11,885 119,364 65,242 40,101 12,934 5,627 4,201 1,711 222 5,968 301,113 100,062 48,381 1,047	- 15.07 3.45 4.05 1.62 3.60 0.54 1.32 0.76 - - - - -	$ 11,885 119,364 65,242 40,101 12,934 5,627 4,201 1,711 222 - 301,113 100,062 - 1,047

Note 1: Eliminated.

Note 2: See Tables 6 and 7 for the information of investments in subsidiaries and associates.

(Concluded)

72 -

TABLE 4

CHINA MOTOR CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE THREE MONTHS ENDED MARCH 31, 2018

(In Thousands of New Taiwan Dollars)

Seller/Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total (Note 2)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total (Note 2)
China Motor Corporation (“CMC”) Sino Diamond Motors Kian Shen Sichuan Hwafeng Hanwei Tianjin Huahong Donggun Huashun	Fortune Motors Shung Ye Motor Mitsubishi Corp. Kian Shen (Note 1) Uni Auto Parts Manufacture ROC-Spicer Shung Ye Motor Fortune Motors Mitsubishi Corp. China Motor Corporation (Note 1) South East (Fujian) Motor South East (Fujian) Motor South East (Fujian) Motor	Equity-method investee Equity-method investee Director of CMC Subsidiary Equity-method investee Equity-method investee Equity-method investee Equity-method investee Director of CMC Parent company Equity-method investee Equity-method investee Equity-method investee	Sale Sale Purchase Purchase Purchase Purchase Sale Sale Purchase Sale Purchase Purchase Purchase	$ (5,210,577) (1,432,340) 480,734 142,374 139,236 121,412 (1,042,143) (211,574) 514,613 (142,374) 151,348 105,270 166,306	(66) (18) 12 4 3 3 (80) (16) 57 (51) 100 98 99	Collect after 16-60 days of delivery Collect after 16-60 days of delivery Pay after 7 days of cargo ship out Pay after 15 days of the month of delivery Pay after 15 days of the month of delivery Pay after 45 days of the month of delivery Collect after 7-45 days of delivery Collect after 16-45 days of delivery Pay before 10 days of cargo ship out Collect after 15 days of the month of delivery Cash before delivery Cash before delivery Cash before delivery	$ - - - - - - - - - - - - -	- - - - - - - - - - - - -	$ 1,147,285 298,642 (41,560) (64,398) (58,151) (78,850) 17,172 4,395 (141) 64,398 - (232) (289)	57 15 (2) (3) (2) (3) 38 10 - 39 - - (1)

Note 1: Eliminated.

Note 2: The proportion of the individual company’s total purchase (sale) or total receivable (payable).

73 -

TABLE 5

CHINA MOTOR CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL MARCH 31, 2018

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
China Motor Corporation	Fortune Motors Shung Ye Motor	Equity-method investee Equity-method investee	$ 1,147,285 298,642	20.70 21.98	$ - -	- -	$ 1,147,285 298,637	$ - -

74 -

TABLE 6

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE THREE MONTHS ENDED MARCH 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of March 31, 2018	As of March 31, 2018	As of March 31, 2018	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				March 31, 2018	December 31, 2017	Shares (In Thousands)	%	Carrying Amount
China Motor Corporation Kian Shen Kian Shen Investment Alliance Investment & Management Sino Diamond Motors	Yulon (Note 6) Kian Shen (Note 1) Fortune Motors Sino Diamond Motors (Note 1) Tokio Marine Newa Insurance (Note 2) Alliance Investment & Management (Note 1) Daimler Vans Hong Kong Ltd. ROC-Spicer CMI (Note 1) COC (Note 1) Hwa Wei (Note 1) Hua-Chuang Automobile Information Technical Center (Note 4) Uni Auto Parts Manufacture Shung Ye Motor (Notes 3 and 7) Gatetech Technology (Note 1) China Engine (Note 1) Sin Gan Uni-Calsonic Sin Jang Enterprises Hwa Chung Motors (Note 1) Yulon IT Solutions Hwa Hann (Note 1) Kian Shen Investment (Note 1) KSIHK (Note 1) Hua-Chuang Automobile Information Technical Center Greentrans Investment (Note 1) Gatetech Technology (Note 1) Hua-Yu (Note 1) Hua-Chuang Automobile Information Technical Center China Engine (Note 1) Gatetech Technology (Note 1) Brilliant Insight International (Note 1) Hwa Hann (Note 1) Shung Ye Motor (Note 5) Fortune Motors	Miaoli, Taiwan Taoyuan, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Hong Kong Taoyuan, Taiwan Samoa Taoyuan, Taiwan British Virgin Islands Taipei, Taiwan Miaoli, Taiwan Taipei, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Taipei, Taiwan Miaoli, Taiwan Taipei, Taiwan Taoyuan, Taiwan Taipei, Taiwan Philippines British Virgin Islands Hong Kong Taipei, Taiwan Samoa Taoyuan, Taiwan Samoa Taipei, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Philippines Taipei, Taiwan Taipei, Taiwan	Manufacture and sale of vehicles The production of frame of heavy duty car and mold Sales and providing after sales service of vehicle Sales and providing after sales service of vehicle Property insurance Investment Investment Manufacture and sales of automobile parts Investment The production of mold, fixture and gauge of vehicle Overseas investment on production and service industries Product design The production of mold, fixture and gauge of vehicle Sales and providing after sales service of vehicle Aluminum-magnesium alloy casting industry Manufacture of automobile engine and parts Wholesale, repair and other service of vehicles Manufacture and sale of automobile parts Retail and wholesale of second-hand vehicle Manufacture and sale of vehicles Information software wholesale services Buy and sell of automobile parts Investment Investment Product design Investment Aluminum-magnesium alloy casting industry Overseas investment on production and service industries Product design Manufacture of automobile engine and parts Aluminum-magnesium alloy casting industry Consulting and service Buy and sell of automobile parts Sales and providing after sales service of vehicle Sales and providing after sales service of vehicle	$ 3,835,585 344,800 2,132,826 3,463,724 955,941 1,200,030 2,011,363 803,633 1,402 412,125 1,202 1,028,013 109,813 391,142 474,941 320,000 71,316 70,628 85,893 328,900 83,320 - 328,888 US$ 25,907 thousand 473,760 344,369 145,123 1,758,773 473,760 616,000 149,369 22,000 - 180 24	$ 3,835,585 344,800 2,132,826 3,463,724 955,941 1,200,030 2,011,363 803,633 1,402 412,125 1,202 1,028,013 109,813 391,142 474,941 320,000 71,316 70,628 85,893 328,900 83,320 - 328,888 US$ 25,907 thousand 473,760 344,369 145,123 1,758,773 473,760 616,000 149,369 22,000 - 180 24	262,228 32,201 132,117 325,786 61,511 183,000 46,566 1,422 40 33,565 40 100,000 13,032 27,349 24,725 32,000 7,074 4,524 8,568 8,790 8,332 521 10,296 25,907 47,200 11,200 3,172 45,643 47,200 56,000 3,946 2,200 542 11 1	16.80 43.87 41.93 100.00 20.57 100.00 32.45 29.00 100.00 49.76 40.00 20.00 15.00 39.98 56.53 18.95 24.67 23.20 20.01 100.00 43.85 48.99 100.00 100.00 9.44 100.00 7.26 100.00 9.44 33.16 9.02 100.00 51.00 0.02 -	$ 11,663,218 2,057,228 4,136,440 2,867,936 1,770,608 1,669,423 2,000,563 1,287,975 1,211,025 779,369 806,010 571,970 382,204 373,653 287,444 153,946 109,350 102,982 99,188 66,643 21,310 - 3,642,525 RMB 777,511 thousand 345,054 294,095 36,931 1,104,639 345,054 333,757 45,927 19,061 - 207 15	$ 1,292,296 104,726 285,813 12,965 107,137 (18,329) 646,936 182,173 14,766 19,184 24,671 (163,342) 35,726 17,456 7,507 (2,773) 10,886 5,397 10,397 419 (276) - 106,548 RMB 23,108 thousand (163,342) (6,234) 7,507 16,231 (163,342) (2,773) 7,507 (2,445) - 17,456 285,813	$ 225,961 45,867 119,841 3,465 22,038 (18,329) 209,931 52,696 14,766 9,757 9,868 (30,292) 5,387 6,979 4,222 582 2,686 1,228 2,080 419 (121) - - - - - - - - - - - - - -	Equity-method investees Subsidiary Equity-method investees Subsidiary Equity-method investees Subsidiary Equity-method investees Equity-method investees Subsidiary Subsidiary Subsidiary Equity-method investees Equity-method investees Equity-method investees Subsidiary Subsidiary Equity-method investees Equity-method investees Equity-method investees Subsidiary Equity-method investees Subsidiary (under liquidation) Subsidiary Subsidiary Equity-method investees Subsidiary Subsidiary Subsidiary Equity-method investees Subsidiary Subsidiary Subsidiary Subsidiary (under liquidation) Equity-method investees Equity-method investees
											(Continued)

75 -

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of March 31, 2018	As of March 31, 2018	As of March 31, 2018	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				March 31, 2018	December 31, 2017	Shares (In Thousands)	%	Carrying Amount
Hua-Yu Gatetech Technology GH China Engine CMI Hwa Chung Motors COC	Hwa-Lin (Note 1) GH (Note 1) GI (Note 1) Advance Power Investment (Note 1) Advance Power Machinery (Note 1) Hwa Wei (Note 1) Ling Wei (Note 1) Greentrans (Note 1) Y. M. Hi-Tech (Note 1) Shye Shinn (Note 1)	British Virgin Islands Samoa Samoa Mauritius Miaoli, Taiwan British Virgin Island Taipei, Taiwan Taipei, Taiwan Taoyuan, Taiwan British Virgin Islands	Overseas investment on production and service industries Investment Investment Reinvestment and sales Manufacture of vehicle and parts Overseas investment on production and service industries Sales of second-hand vehicle Sales of motorcycle and parts Steel cutting Investment	US$ 45,929 thousand 647,041 US$ 20,268 thousand 59,456 5,000 1,428,503 31,000 10,000 46,250 US$ 968 thousand	US$ 45,929 thousand 647,041 US$ 20,268 thousand 59,456 5,000 1,428,503 31,000 10,000 46,250 US$ 968 thousand	42,093 20,130 20,268 3,750 500 60 3,608 1,000 4,250 968	100.00 100.00 100.00 100.00 100.00 60.00 100.00 100.00 85.00 100.00	$ 1,009,504 596,367 596,343 93,888 12,584 1,209,014 27,946 11,649 63,729 37,347	$ 18,020 (232) (232) - 674 24,671 (118) 561 1,606 -	$ - - - - - - - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Note 1: Eliminated.

Note 2: During the preparation of consolidated financial statement, price making $75,455 thousand of intra-group transaction had been eliminated.

Note 3: During the preparation of consolidated financial statement, loss on disposal $22,538 thousand of intra-group transaction had been eliminated.
Note 4: During the preparation of consolidated financial statement, side stream transaction $36,054 thousand had been eliminated.
Note 5: During the preparation of consolidated financial statement, gain on disposal $31 thousand of intra-group transaction had been eliminated.
Note 6: During the preparation of consolidated financial statement, side stream transaction $3,285 thousand had been eliminated.
Note 7: During the preparation of consolidated financial statement, side stream transaction $9,500 thousand had been eliminated.

(Concluded)

76 -

TABLE 7

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE THREE MONTHS ENDED MARCH 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2018 (Note 1)	Net Income (Loss) of the Investee (Notes 2 and 3)	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Notes 2 and 3)	Carrying Amount as of March 31, 2018 (Note 1)	Accumulated Repatriation of Investment Income as of March 31, 2018 (Note 1)
					Outward	Inward
South East (Fujian) Motor (Note 4) China Engine (Fujian) Fujian Benz Automotive Guangzhou NTN-YULON Drivertrain Fuzhou Fushiang Motor Industrial Xiangyang NTN-YULON Drivertrain Xiamen King-Long Kian-Shen Frame Beijing NTN-SEOHAN Driveshaft Jiangsu Greentrans Automotive Parts (Note 5) Fujian Rui Hua (Note 5) Zhejiang Kangda Motor Industry And Trading Guangzhou Huayou Motor Maintenance (Note 5)	Manufacture and sales of industrial automation products Manufacture and sales of engines and engine parts Sales of industrial automation products Sales and manufacture of vehicles’ components Sales and manufacture of vehicles’ components Sales and manufacture of vehicles’ components Sales and manufacture of vehicles’ components The assembling and extra work of transmission shafts and other parts Manufacture and sales of parts of electronic motorcycles Consultation and services Sales of vehicle and parts Sales and maintenance of vehicle and parts	$ 4,016,490 (US$ 138,000 thousand) 436,575 (US$ 15,000 thousand) 10,294,690 (EUR 287,000 thousand) 363,813 (US$ 12,500 thousand) 517,487 (US$ 17,780 thousand) 989,570 (US$ 34,000 thousand) 446,112 (RMB 96,000 thousand) 174,630 (US$ 6,000 thousand) 325,976 (US$ 11,200 thousand) 98,957 (US$ 3,400 thousand) 185,880 (RMB 40,000 thousand) 372,835 (US$ 12,810 thousand)	The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region	$ 1,004,123 (US$ 34,500 thousand) 218,288 (US$ 7,500 thousand) 1,670,322 (EUR 46,566 thousand) 145,525 (US$ 5,000 thousand) 82,513 (US$ 2,835 thousand) - 44,443 (US$ 1,527 thousand) 15,717 (US$ 540 thousand) 325,976 (US$ 11,200 thousand) 98,957 (US$ 3,400 thousand) 35,159 (US$ 1,208 thousand) 325,947 (US$ 11,199 thousand)	$ - - - - - - - - - - - -	$ - - - - - - - - - - - -	$ 1,004,123 (US$ 34,500 thousand) 218,288 (US$ 7,500 thousand) 1,670,322 (EUR 46,566 thousand) 145,525 (US$ 5,000 thousand) 82,513 (US$ 2,835 thousand) - 44,443 (US$ 1,527 thousand) 15,717 (US$ 540 thousand) 325,976 (US$ 11,200 thousand) 98,957 (US$ 3,400 thousand) 35,159 (US$ 1,208 thousand) 325,947 (US$ 11,199 thousand)	$ 140,267 - 1,294,307 (EUR 35,943 thousand) 147,119 (RMB 31,906 thousand) 47,406 (RMB 10,281 thousand) 108,802 (RMB 23,596 thousand) (16,796) (RMB 3,643 thousand) - (6,198) (1,789) 5,776 1,439	25.00 38.03 16.23 17.55 15.35 17.55 21.94 3.95 100.00 100.00 24.50 100.00	$ 35,067 - 210,010 (EUR 5,832 thousand) 58,847 (RMB 12,762 thousand) 16,592 (RMB 3,598 thousand) 43,520 (RMB 9,438 thousand) (8,398) (RMB 1,821 thousand) - (6,198) (1,789) 1,415 1,439	$ 1,849,732 189,865 2,000,649 (EUR 55,775 thousand) 1,886,517 (RMB 405,965 thousand) 671,705 (RMB 144,546 thousand) 659,333 (RMB 141,883 thousand) 288,484 (RMB 62,080 thousand) 95,302 (RMB 20,508 thousand) 294,015 95,097 142,030 113,248	$ 757,399 (US$ 26,023 thousand) - - 522,406 (RMB 112,418 thousand) 165,136 (RMB 35,536 thousand) - - - - - - -
												(Continued)

77 -

Investee Company	Main Businesses and Products	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2018 (Note 1)	Net Income (Loss) of the Investee (Notes 2 and 3)	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Notes 2 and 3)	Carrying Amount as of March 31, 2018 (Note 1)	Accumulated Repatriation of Investment Income as of March 31, 2018 (Note 1)
							Outward	Inward
Sichuan Huafeng Hanwei (Note 5) Tianjin Hwarui (Note 5) Dongguan Huayi (Note 5) Sichuan Hauwei (Notes 5 and 6) Sichuan Lingwei (Note 5) Dongguan Huashun (Note 5) Tianjin Hwahong (Note 5) Guangzhou Huayou Motor Sales (Note 5) Gatech Suzhou (Note 5)	Sales and maintenance of vehicle and parts Sales and maintenance of vehicle and parts Sales and maintenance of vehicle and parts Sales of vehicle and parts Sales of vehicle and parts Sales of vehicle and parts Sales of vehicle and parts Sales of vehicle and parts Aluminum-magnesium alloy casting industry		$ 387,970 (US$ 13,330 thousand) 233,422 (US$ 8,020 thousand) 129,517 (US$ 4,450 thousand) 13,941 (RMB 3,000 thousand) 9,294 (RMB 2,000 thousand) 69,705 (RMB 15,000 thousand) 278,820 (RMB 60,000 thousand) 199,821 (RMB 43,000 thousand) 707,252 (US$ 24,300 thousand)	The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region The Corporation indirectly owns these investees through investment company registered in a third region		$ 387,970 (US$ 13,330 thousand) 225,884 (US$ 7,761 thousand) 122,736 (US$ 4,217 thousand) - - - - - 589,871 (US$ 20,267 thousand)	$ - - - - - - - - -	$ - - - - - - - - -	$ 387,970 (US$ 13,330 thousand) 225,884 (US$ 7,761 thousand) 122,736 (US$ 4,217 thousand) - - - - - 589,871 (US$ 20,267 thousand)	$ 4,915 2,575 9,562 1,111 (RMB 241 thousand) 2,038 (RMB 442 thousand) 10,269 (RMB 2,227 thousand) 2,531 (RMB 549 thousand) (3,117) (RMB 676 thousand) (337)	100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 72.81	$ 4,915 2,575 9,562 1,111 (RMB 241 thousand) 2,038 (RMB 442 thousand) 10,269 (RMB 2,227 thousand) 2,531 (RMB 549 thousand) (3,117) (RMB 676 thousand) (337)	$ 125,693 170,794 142,692 9 (RMB 2 thousand) (460) (RMB 99 thousand) 48,152 (RMB 10,362 thousand) 298,821 (RMB 64,304 thousand) (4,847) (RMB 1,043 thousand) 605,583	$ - - - - - - - - -

Accumulated Outward Remittance for Investment in Mainland China as of March 31, 2018 (Note 1)		Investment Amount Authorized by Investment Commission, MOEA (Note 1)			Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$5,464,508 (US$130,362 thousand and EUR46,566 thousand)		$6,402,058 (US$203,367 thousand and EUR13,467 thousand)			$31,693,189

Note 1: At exchange rate on March 31, 2018, US$1= NT$29.105, RMB1= NT$4.647, EUR1= NT$35.87.

Note 2: At exchange rate of average rate of the three months ended March 31, 2018, US$1= NT$29.30, RMB1= NT$4.611, EUR1= NT$36.01.

Note 3: The carrying amount and related investment income of the equity investment were calculated based on the unreviewed financial statements of the corresponding period.

Note 4: During the preparation of consolidated statements, the unrealized profit of $12,283 thousand had been eliminated.

Note 5: Eliminated.

Note 6: The annulment the registration of Sichuan Houwei are in process.

(Concluded)

78 -

TABLE 8

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE THREE MONTHS ENDED MARCH 31, 2018

(In Thousands of New Taiwan Dollars)

No.	Company Name	Related Party	Relationship			Transaction Details
				Financial Statement Account	Amount	Payment Terms	% to Total Sales or Assets
0	China Motor Corporation	Kian Shen Sino Diamond Motors Gatetech Technology	Subsidiary Subsidiary Subsidiary	Cost of goods sold Other receivables Financial assets at amortized cost - non-current	$ 142,374 500,000 150,000	The prices and payment terms for related-party transactions were based on market price which are not significantly different from those to third parties. The prices and payment terms were based on agreements. The prices and payment terms were based on agreements.	1.37 0.77 0.23
1	Hwa-Lin	Dongguan Huayi	Subsidiary	Other receivables	102,304	The prices and payment terms were based on agreements.	0.16

Note 1: Eliminated.

Note 2: This table includes transactions for amounts over one hundred million.

79 -

TABLE 9

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY INVESTMENT RELATIONSHIPS AND RATE OF SHARE HELD FRAMEWORK MARCH 31, 2018

==> picture [1084 x 504] intentionally omitted <==

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

Parent Corporation
43.87% 18.95% 100.00% 48.99% 100.00% 56.53% 100.00% 100.00% 49.76%
Hwa Hann Alliance Gatetech CMI
Kian Shen China Engine Sino Diamond Hwa Chung COC
Motors (Philippines) Investment & Technology (Samoa) Motors
Management
33.16% 51.00% 7.26%
60.00% 100.00% 100.00% 85.00%
100.00% 9.02% 100.00%
100.00%
100.00% 100.00% 100.00% 100.00%
GH
Kian Shen Investment Advance Power Machinery Advance Power Investment Hua-Yu (Samoa) Brilliant Insight International Investment Greentrans (Samoa) 40.00% Greentrans Ling Wei Y.M.
(British Virgin Hi-Tech
(Mauritius) Consultancy (Samoa)
Islands) Service Co., 100.00%
Ltd. 100.00%
100.00% 100.00% 100.00%
100.00%
(Hong Kong) KSIHK Fujian Rui Hua (British Virgin Hwa-Lin Greentrans Jiangsu (Samoa) GI (British Virgin Hwa Wei (British Virgin Shye Shinn
Islands) Islands) Islands)
100.00%
100.00% 99.75%
100.00% 100.00% Gatech
0.25%
(Suzhou)
Sichuan Huafeng Guangzhou
Dongguan Huayi Tianjin Hwarui Technology
Hanwei Huayou Motor
Maintenance
100.00% 100.00% 100.00%
100.00% 100.00%
Dongguan Tianjin Sichuan Sichuan Guangzhou
Huashun Hwahong Hauwei Lingwei Huayou Motor
Sales
----- End of picture text -----

80 -

AI assistant

CMC — Interim / Quarterly Report 2018

51979_rns_2018-12-27_d0464b59-2b90-4598-8f96-654105147a55.pdf

China Motor Corporation and Subsidiaries

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notice to Readers

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

1) IFRS 9 “Financial Instruments” and related amendment

Hedge accounting

IFRS 16 “Leases”

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2) Entities included in consolidated financial statements

d. Other significant accounting policies

1) Financial instruments

i) Financial assets at fair value through profit or loss

ii) Available-for-sale financial assets

iii) Loans and receivables

ii. Impairment of financial assets

2018

2017

iii. Derecognition of financial assets

b) Financial liabilities

i. Subsequent measurement

2) Hedge accounting

2018

2017

b) Rendering of services

4) Employee benefits

5) Taxation

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

December 31, 2017

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - 2018

9. FINANCIAL ASSETS AT AMORTIZED COST - 2018

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS - 2018

March 31, 2018

11. HEDGING FINANCIAL INSTRUMENTS

2017

December 31, 2017

12. AVAILABLE-FOR-SALE FINANCIAL ASSETS - 2017

13. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE

For the three months ended March 31, 2018

March 31, 2018

For the three months ended March 31, 2017

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

Kian Shen and Kian Shen’s subsidiaries:

15. INVENTORIES

16. FINANCIAL ASSETS MEASURED AT COST - 2017

17. DEBT INVESTMENT WITH NO ACTIVE MARKET - 2017

18. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

a. Investments in associates

1) Material associates

Yulon

19. PROPERTY, PLANT AND EQUIPMENT

20. INVESTMENT PROPERTIES

CMC Interim / Quarterly Report 2018