CMC - Interim / Quarterly Report 2019

China Motor Corporation and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 2019 and 2018 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, 2019 and 2018, the related consolidated statements of comprehensive income, the consolidated statements of 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, 2019 and 2018, the combined total assets of these non-significant subsidiaries were NT$13,005,878 thousand and NT$12,677,191 thousand, respectively, both representing 20% of the consolidated total assets, and the combined total liabilities of these non-significant subsidiaries were NT$3,746,168 thousand and NT$3,080,250 thousand, respectively, representing 45% and 38%, respectively, of the consolidated total liabilities; for the three months ended March 31, 2019 and 2018, the amounts of combined net comprehensive income (loss) of these non-significant subsidiaries were NT$(62,310) thousand and NT$174,821 thousand, respectively, representing (5%) and 11%, respectively, of the consolidated total comprehensive income. As disclosed in Note 16 to the consolidated financial statements, as of March 31, 2019 and 2018, some investments accounted for using the equity method were NT$17,960,969 thousand and NT$17,123,454 thousand, respectively, and for the three months ended March 31, 2019 and 2018, net comprehensive income of these equity-method investments were NT$621,653 thousand and NT$628,520 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, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2019 and 2018 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.

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 13, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to 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 (Note 6) Financial assets at fair value through profit or loss (Note 7) Financial assets at amortized cost (Notes 9 and 10) Financial assets for hedging (Note 11) Notes receivable, net (Note 12) Accounts receivable, net (Note 12) Trade receivables from related parties (Note 30) Other receivables Inventories (Note 13) Prepayments (Note 30) Non-current assets held for sale (Note 15) Other current assets (Note 31) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Financial assets at amortized cost (Notes 9 and 10) Investments accounted for using the equity method (Note 16) Property, plant and equipment (Notes 17 and 31) Right-of-use assets (Notes 4 and 18) Investment properties (Notes 19 and 31) Intangible assets under development Deferred tax assets (Note 26) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 20 and 31) Short-term bills payable Notes and accounts payable Trade payables to related parties (Note 30) Other payables (Note 21) Current tax liabilities (Notes 4 and 26) Lease liabilities (Notes 4 and 18) Other current liabilities (Notes 7 and 30) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Note 26) Lease liabilities (Notes 4 and 18) Net defined benefit liabilities (Notes 4 and 22) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 23) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain on investments in financial assets at fair value through other comprehensive income Gain on the hedging instruments (Note 11) Equity directly associated with non-current assets held for sale (Note 15) Total other equity Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS (Note 14) Total equity TOTAL		March 31, 2019 (Reviewed) Amount % $ 14,609,946 22 622,875 1 122,023 - 583,674 1 12,022 - 1,132,475 2 1,939,618 3 102,121 - 3,723,730 6 1,261,275 2 148,023 - 561,240 1 24,819,022 38 739,051 1 234,375 - 835,954 1 29,628,884 45 6,529,775 10 529,419 1 1,376,380 2 301,220 1 296,127 1 160,982 - 40,632,167 62 $ 65,451,189 100 $ 640,000 1 116,982 - 2,507,751 4 762,235 1 2,154,626 3 217,264 1 97,440 - 399,761 1 6,896,059 11 334,358 - 434,519 1 734,372 1 17,694 - 1,520,943 2 8,417,002 13 13,840,508 21 6,400,831 10 8,897,857 13 1,046,596 2 23,250,082 35 33,194,535 50 (371,950) - 243,024 - 4,752 - (7,538) - (131,712) - 53,304,162 81 3,730,025 6 57,034,187 87 $ 65,451,189 100		December 31, 2018 (Audited) Amount % $ 14,429,460 23 567,643 1 104,359 - 743,303 1 16,663 - 1,160,791 2 1,952,469 3 98,749 - 4,070,264 6 1,134,247 2 148,023 - 596,590 1 25,022,561 39 734,341 1 227,396 - 824,705 1 29,106,774 45 6,388,147 10 - - 1,380,002 2 304,163 1 336,711 1 179,616 - 39,481,855 61 $ 64,504,416 100 $ 645,000 1 93,972 - 2,705,317 4 944,954 2 2,717,065 4 117,081 - - - 297,523 1 7,520,912 12 268,161 1 - - 910,328 1 30,926 - 1,209,415 2 8,730,327 14 13,840,508 22 6,403,633 10 8,897,857 14 1,046,967 1 22,486,952 35 32,431,776 50 (646,278) (1) 117,177 - 20,997 - (7,538) - (515,642) (1) 52,160,275 81 3,613,814 5 55,774,089 86 $ 64,504,416 100		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

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

(With Deloitte & Touche review report dated May 13, 2019)

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 24 and 30) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 13, 22, 25 and 30) Cost of goods sold Other operating cost Total operating costs GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 22, 25 and 30) 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 (Note 16) Interest income Other income Net foreign exchange gain Net gain on financial instruments at fair value through profit or loss Interest expense Other expense Impairment loss (Note 17) Total non-operating income and expenses		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 Amount % $ 8,287,852 95 438,607 5 8,726,459 100 7,070,129 81 33,897 1 7,104,026 82 1,622,433 18 (28,345) - 1,594,088 18 415,252 5 248,171 3 368,613 4 1,032,036 12 562,052 6 367,823 4 39,198 1 10,332 - 33,548 - 11,086 - (6,344) - (4,614) - - - 451,029 5		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) - (10,346) - 802,373 7 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT FOR THE PERIOD OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Unrealized gain on investment equity instruments designated as fair value through other comprehensive income (Note 23) Gain on hedging instruments (Notes 11 and 23) Share of other comprehensive income (loss) of associates accounted for using the equity method (Notes 16 and 23) Income tax relating to items that will not be reclassified subsequently to profit or loss (Notes 4 and 26) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (Note 23) Share of the other comprehensive income of associates and joint ventures accounted for using the equity method (Notes 16 and 23) Other comprehensive income for the period, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE PERIOD NET PROFIT ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 Amount % $ 1,013,081 11 189,705 2 823,376 9 5,991 - 288 - 144,894 2 194 - 22,550 - 303,243 4 477,160 6 $ 1,300,536 15 $ 760,519 8 62,857 1 $ 823,376 9		2018
				Amount % $ 1,605,402 15 218,124 2 1,387,278 13 3,543 - 19,908 - (5,562) - 2,256 - 18,028 - 154,851 2 193,024 2 $ 1,580,302 15 $ 1,317,903 12 69,375 1 $ 1,387,278 13

(Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (Note 27) Basic Diluted		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 Amount % $ 1,184,325 14 116,211 1 $ 1,300,536 15 $ 0.56 $ 0.56		2018
				Amount % $ 1,475,743 14 104,559 1 $ 1,580,302 15 $ 0.97 $ 0.97
		$		$

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

(With Deloitte & Touche review report dated May 13, 2019)

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

		Equity Attribu	table to Owners of the Corporation
Ordinary S	hares Amounts Capital Surplus $ 13,840,508 $ 6,407,340 - - 13,840,508 6,407,340 - 628 - - - - - - $ 13,840,508 $ 6,407,968 $ 13,840,508 $ 6,403,633 - - 13,840,508 6,403,633 - - - (2,802 ) - - - - - - - - - - - - $ 13,840,508 $ 6,400,831	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 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 $ 8,897,857 $ 1,046,967 $ 22,486,952 - - (19,503) 8,897,857 1,046,967 22,467,449 - (371 ) 371 - - (1,406 ) - - 760,519 - - 1,648 - - 762,167 - - 21,484 - - 17 - - - $ 8,897,857 $ 1,046,596 $ 23,250,082		Other Equity		Equity Directly Associated With Gain on the Non-current Hedging Instruments Assets Held For Sale $ - $ - (12,253) - (12,253 ) - - - - - 17,073 - 17,073 - $ 4,820 $ - $ 20,997 $ (7,538 ) - - 20,997 (7,538 ) - - - - - - 482 - 482 - - - - - (16,727) - $ 4,752 $ (7,538)
			Exchange Differences on Translating the Financial Unrealized Gain on Investments in Financial Assets at Fair Value U Statements of Through Other Foreign Operations Comprehensive Income A F $ (485,118 ) $ - - 273,866 (485,118 ) 273,866 - - - - 137,695 (2,809) 137,695 (2,809) $ (347,423) $ 271,057 $ (646,278 ) $ 117,177 - - (646,278 ) 117,177 - - - - - - 274,328 147,348 274,328 147,348 - (21,484 ) - (17 ) - - $ (371,950) $ 243,024	nrealized Gain (Loss) on vailable-for-sale inancial Assets $ 765,456 (765,456) - - - - - $ - $ - - - - - - - - - - - $ -	Gain (Loss) on Effective Portion of Cash Flow Hedges $ (12,253 ) 12,253 - - - - - $ - $ - - - - - - - - - - - $ -
Shares (In Thousands) 1,384,051 - 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 13, 2019)

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 Adjustments for: Depreciation expenses Amortization expenses Expected credit losses Net gain on fair value change of financial instruments at fair value through profit or loss Interest expenses Interest income Share of profit of associates and joint ventures Loss on disposal of property, plant and equipment Loss on disposal of investments Impairment loss of non-financial assets Unrealized gain on transactions with associates Net unrealized gain on foreign currency exchange Changes in operating assets and liabilities 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 CASH FLOWS FROM INVESTING ACTIVITIES Disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost		For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 1,013,081 292,050 28,342 1,806 (11,086) 6,344 (39,198) (367,823) 513 540 - 28,345 (31,283) (48,935) 4,802 28,144 14,290 27,034 349,576 (101,913) 39,544 (197,687) (181,718) (569,275) 101,863 (175,956) 211,400 (6,875) 204,525 17 (170,421)	2018 $ 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 - (135,779) (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

Proceeds from repayment of principal of financial assets at amortized cost Proceeds from disposal of investments accounted for using the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease 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 Repayment of the principal portion of lease liabilities 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		For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 153,246 209,299 (402,808) 7,379 (9,360) 4,434 41,442 (166,772) (5,000) 23,010 (26,979) (13,569) (2,932) (25,470) 8,574 20,857 15,172,763	2018 $ 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

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 15,193,620 $ 14,453,184

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets at March 31, 2019 and 2018:

Cash and cash equivalents in the consolidated balance sheets Cash and cash equivalents included in financial assets for hedging Cash and cash equivalents in the consolidated statements of cash flows		March	31
		2019 $ 14,609,946 583,674 $ 15,193,620	2018 $ 14,281,792 171,392 $ 14,453,184

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

(With Deloitte & Touche review report dated May 13, 2019)

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018 (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 13, 2019.

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), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, 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:

 IFRS 16 “Leases”

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Group elects to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

The Group as lessee

The Group recognizes right-of-use assets, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities and cash payment for the interest portion are classified within financing activities. Prior to the application of IFRS 16, payments under operating lease contracts, were recognized as

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expenses on a straight-line basis. Cash flow for operating lease were classified within operating activities on the consolidated statements of cash flow.

The Group elects to apply IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized in retained earnings on January 1, 2019. Comparative information is not restated.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at the Group applies IAS 36 to all right-of-use assets.

The Group also applies the following practical expedients:

1) The Group applies a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.
2) The Group accounts for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.
3) The Group excludes initial direct costs from the measurement of right-of-use assets on January 1, 2019.
4) The Group uses hindsight, such as in determining lease terms, to measure lease liabilities.

The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognized on January 1, 2019 was 2.58%. The difference between (i) the lease liabilities recognized and (ii) operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:

The future minimum lease payments of non-cancellable operating lease commitments on December 31, 2018 Less: Recognition exemption for short-term leases Less: Recognition exemption for leases of low-value assets Undiscounted amounts on January 1, 2019 Discounted amounts using the incremental borrowing rate and lease liabilities recognized on January 1, 2019	$ 595,598 (3,464) (594) $ 591,540 $ 538,229

The Group as lessor

The Group does not make any adjustments for leases in which it is a lessor, and it accounts for those leases with the application of IFRS 16 starting from January 1, 2019.

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The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

As Originally Stated on January 1, 2019 Right-of-use assets $ - Investments accounted for using the equity method 29,106,774 Total effect on assets $ 29,106,774 Lease liabilities - current $ - Lease liabilities - non-current - Total effect on liabilities $ - Unappropriated earnings $ 22,486,952	Adjustments Arising from Initial Application Restated on January 1, 2019 $ 538,229 $ 538,229 (19,503) 29,087,271 $ 518,726 $ 29,625,500 $ 94,157 $ 94,157 444,072 444,072 $ 538,229 $ 538,229 $ (19,503) $ 22,467,449

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

New IFRSs Amendments to IFRS 3 “Definition of A Business” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IAS 1 and IAS 8 “Definition of Material”	Effective Date Announced by IASB (Note 1)
	January 1, 2020 (Note 2) To be determined by IASB January 1, 2021 January 1, 2020 (Note 3)

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 Group shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.
Note 3: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

As of the date the consolidated financial statements were issued, the Group is continuously assessing the possible impact that the application of aforementioned 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.

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 in these interim consolidated financial statements is less than the disclosure information those required in a complete set of annual financial statements.

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b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for 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 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.

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 had the Group directly disposed of the related assets or liabilities.

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2) Subsidiaries included in the 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
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,
2019
December 31,
2018
March 31,
2018
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
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
72.81
72.81
72.81
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
e)
100.00
100.00
100.00
100.00
100.00
100.00
-
-
100.00
d)
100.00
100.00
100.00
e)
100.00
100.00
100.00
e)

a) The Group held 43.87% equity interest in Kian Shen. Kian Shen is a listed company, and 56.13% of its shares were held by numerous shareholders unrelated to the Group. Considering the Group’s substantial influence on Kian Shen, an absolute number of voting rights and the relative size of other shareholdings, Kian Shen was deemed a subsidiary.
b) The Group held 49.76% equity interest in COC. However, the Corporation controls more than half of the board members and holds relative majority of shares in COC; thus, COC was considered a subsidiary.
c) In April 2009, the board of Hwa Hann resolved to dissolve the company; in August 2018, the liquidation had been completed.
14 -
d) In October 2017, Sichuan Houwei proceeded to annul its registration. As of November 2018, the annulment had been completed.
e) In November 2018, Sichuan Huafeng Hanwei, Sichuan Lingwei, Guangzhou Huayou Motor Maintenance and Guangzhou Huayou Motor Sales resolved to dissolve their companies. As of March 31, 2019, the liquidation had not been completed.

For the relationship between the Corporation and its controlled entities as of March 31, 2019, 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, 2018. For the summary of other significant accounting policies, refer to the consolidated financial statements for the year ended December 31, 2018.

1) Leases

2019

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

a) The Group as lessor

All leases are classified as operating leases.

Lease payments from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

Variable lease payments that do not depend on an index or a rate are recognized as income in the periods in which they are incurred.

When a lease includes both land and building elements, the Group assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the Group. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

b) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

15 -

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

2018

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

a) The Group as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

b) The Group as lessee

Operating lease payments are recognized as expenses on a straight-line basis over the lease term.

c) Leasehold land for own use

If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

16 -

2) 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.

3) 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 consistently with the accounting for the transaction itself which gives rise to the tax consequence, and this is recognized in profit or loss or other comprehensive income in full in the period in which the change in tax rate occurs.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

For the summary of critical accounting judgments and key sources of estimation uncertainty, refer to the consolidated financial statements for the year ended December 31, 2018.

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, 2019 $ 3,892 2,663,372 2,667,264 8,853,675 3,089,007 11,942,682 $ 14,609,946	December 31, 2018 $ 4,439 1,870,223 1,874,662 11,104,232 1,450,566 12,554,798 $ 14,429,460	March 31, 2018 $ 4,558 2,598,131 2,602,689 9,619,494 2,059,609 11,679,103 $ 14,281,792

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7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts Financial liabilities (included in other current liabilities) Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) 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, 2019 December 31, 2018 $ 622,313 $ 567,620 562 23 $ 622,875 $ 567,643 $ - $ 79 $ 739,051 $ 734,341	March 31, 2018 $ 1,051,652 - $ 1,051,652 $ - $ 777,273

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

March 31, 2019

			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2019.04.10-2019.05.20	USD5,000/NTD153,388
December 31, 2018
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2019.01.04-2019.01.22	USD5,000/NTD153,480

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

18 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Non-current Investments in equity instruments at FVTOCI Domestic investments Listed shares Unlisted shares Foreign investments Unlisted shares	March 31, 2019 December 31, 2018 $ 21,669 $ 18,673 23,221 24,045 44,890 42,718 189,485 184,678 $ 234,375 $ 227,396	March 31, 2018 $ 25,235 37,397 62,632 258,193 $ 320,825

These investments in equity instruments 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.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Principal guaranteed notes Negotiable certificates of deposit Less: Allowance for impairment loss Non-current Bonds Preference shares Principal guaranteed notes Less: Allowance for impairment loss	March 31, 2019 December 31, 2018 $ 122,787 $ 105,015 - - 122,787 105,015 (764) (656) $ 122,023 $ 104,359 $ 831,273 $ 820,015 9,900 9,900 - - 841,173 829,915 (5,219) (5,210) $ 835,954 $ 824,705	March 31, 2018 $ 174,430 700,000 874,430 (1,360) $ 873,070 $ 892,302 9,900 515,817 1,418,019 (9,190) $ 1,408,829

a. The coupon rates of principal guaranteed notes were ranging from 3.03%-3.05%, 3.03%-3.07% and 2.05%-4.32% per annum as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively.
b. The coupon rate of negotiable certificates of deposit was 0.83% per annum as of March 31, 2018.
c. The coupon rates of bonds were ranging from 0.86%-4.80%, 0.86%-4.80% and 1.02%-4.80% per annum as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively.
19 -
d. The coupon rate of preference shares was 1.50% per annum as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively.
e. Refer to Note 10 for information relating to the credit risk management and impairment of investments in financial assets at amortized cost.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

Investments in debt instruments were classified as at amortized cost:

Gross carrying amount Less: Allowance for impairment loss Amortized cost	March 31, 2019 December 31, 2018 $ 963,960 $ 934,930 (5,983) (5,866) $ 957,977 $ 929,064	March 31, 2018 $ 2,292,449 (10,550) $ 2,281,899

The Group invests only in debt instruments that have higher 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:

Basis for Recognizing Expected Category Description Credit Losses (ECLs) Performing The counterparty has a low risk of default and a 12-month ECLs strong capacity to meet contractual cash flows No rating The preference shares do not have credit rating Lifetime ECLs - not credit-impaired

The gross carrying amounts of debt instrument investments by credit category and the corresponding expected loss rates were as follows:

March 31, 2019

Category Expected Loss Rate Performing 0.0769%-0.6221% No rating 32.4908% December 31, 2018	Gross Carrying Amount
	At Amortized Cost $ 954,060 9,900

Category Performing No rating

Expected Loss Rate 0.0769%-0.6221% 32.4908%	Gross Carrying Amount
	At Amortized Cost $ 925,030 9,900

20 -

March 31, 2018

Category Expected Loss Rate Performing 0.00%-0.6221% No rating 39.7172%	Gross Carrying Amount
	At Amortized Cost $ 2,282,549 9,900

The movements of the allowance for impairment loss of investments in debt instruments at amortized cost were as follows:

Balance at January 1, 2019 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance atMarch31, 2019 Balance at January 1, 2018 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance at March 31, 2018	Credit Rating
	Performing (12-month ECLs) No rating (Lifetime ECLs - Not Credit- impaired) $ 2,650 $ 3,216 1,060 - (953) - 10 - $ 2,767 $ 3,216 $ 5,572 $ 3,932 845 - (148) - 349 - $ 6,618 $ 3,932

a. During the three months ended March 31, 2019 and 2018, the Group purchased principal guaranteed notes of $170,421 thousand and $135,779 thousand, respectively, and correspondingly increased the loss allowance for investments rated as performing of $1,060 thousand and $845 thousand, respectively.
b. Investments in principle guaranteed notes of $153,246 thousand and bonds of $154,671 thousand were redeemed during the three months ended March 31, 2019 and 2018, respectively, with a consequential reduction in the loss allowance for investments rated as performing of $953 thousand and $148 thousand, respectively.

11. HEDGING INSTRUMENTS

Financial assets Cash flow hedge - spot rate Cash flow hedge - foreign exchange forward contracts	March 31, 2019 December 31, 2018 $ 583,674 $ 743,303 - - $ 583,674 $ 743,303	March 31, 2018 $ 171,392 3,356 $ 174,748

21 -

The Group’s hedging strategy is to enter into foreign exchange forward contracts and to buy foreign currency banknote at the spot rate to avoid exchange rate exposure from its foreign currency receipts and payments and to manage exchange rate exposure of its forecasted foreign currency purchases. 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 source of hedge ineffectiveness in these hedging relationships is the effect of the counterparty and the Group’s own credit risk on the fair value of the foreign exchange forward contracts and foreign currency banknote, which is not reflected in the fair value of the hedged item attributable to changes in foreign exchange rates. No other sources of ineffectiveness is expected to emerge from these hedging relationships.

During the three months ended March 31, 2019 and 2018, hedging instruments at fair value and transferred to initial carrying amount of hedged items, are detailed in Note 23(e).

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

March 31, 2019

							Change in
							Value Used for
						Carrying Calculating
		Notional Amount		Forward Rate	Line Item in	Amount Hedge
Hedging Instruments	Currency	(In Thousands)	Maturity	(NTD/JPY)	Balance Sheet		Asset Ineffectiveness
Cash flow hedge
Forecast purchases - spot	JPY/NTD	JPY2,097,283/NTD575,097	2019.5.13-	0.2680-0.2806	Financial assets	$	583,674 $ 4,752
rate			2020.1.14		for hedging
							Accumulated
							Gains or Losses
					Change in		on Hedging
					Value Used for		Instruments in
					Calculating		Other Equity
					Hedge		Continuing
Hedged Items					Ineffectiveness		Hedges
Cash flow hedge
Forecast purchases					$ (4,752)		$ 4,752
December 31, 2018

Notional Amount Forward Rate Line Item in Hedging Instruments Currency (In Thousands) Maturity (NTD/JPY) Balance Sheet Cash flow hedge Forecast purchases - spot rate JPY/NTD JPY2,671,828/NTD717,056 2019.1.15- 2019.6.30 0.2679-0.2706 Financial assets for hedging	Carrying Amount V Asset I $ 743,303	Change in alue Used for Calculating Hedge neffectiveness $ 20,997

22 -

Change in Value Used for Calculating Hedged Items Hedge Ineffectiveness Cash flow hedge Forecast purchases $ (20,997)	Accumulated Gains or Losses on Hedging Instruments in Other Equity
	Continuing Hedges $ 20,997

March 31, 2018

								Change in
								Value Used for
						Carrying		Calculating
		Notional Amount		Forward Rate	Line Item in	Amount		Hedge
Hedging Instruments	Currency	(In Thousands)	Maturity	(NTD 1`：`JPY)	Balance Sheet		Asset	Ineffectiveness
Cash flow hedge
Forecast purchases -	JPY/NTD	JPY837,867/$225,236	2018.5.31-	0.2686-0.2690	Financial assets	$	3,356	$ 2,683
foreign exchange			2018.7.31		for hedging
forward contracts
Forecast purchases - spot	JPY/NTD	JPY625,745/$169,255	2018.4.30-	0.2644-0.2739	Financial assets		171,392	2,137
rate			2018.5.31		for hedging
						$	174,748	$ 4,820
							Accumulated
							Gains or Losses
					Change in		on	Hedging
					Value Used for		Instruments in
					Calculating		Other Equity
					Hedge		Continuing
Hedged Items					Ineffectiveness		Hedges
Cash flow hedge
Forecast purchases					$ (4,820)		$	4,820
For the three months ended		March 31, 2019
							Hedging Gains
							Recognized in
Comprehensive Income								OCI
Cash flow hedge
Forecast purchases							$	288
For the three months ended		March 31, 2018
							Hedging Gains
							Recognized in
Comprehensive Income								OCI
Cash flow hedge
Forecast purchases							$	19,908

23 -

The Group had signed component purchasing contracts with the suppliers in Japan, and also signed foreign exchange forward contracts with the banks and purchased foreign currency banknotes at the spot rate to avoid exchange rate risk associated with its forecasted purchases. When the forecasted purchases take place, the amount originally deferred and recognized in equity will be reclassified to the carrying amount of the materials purchased.

12. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE

Notes receivable Notes receivable - operating Less: Allowance for impairment loss Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss	March 31, 2019 December 31, 2018 $ 12,022 $ 16,668 - (5) $ 12,022 $ 16,663 $ 1,154,026 $ 1,180,557 (21,551) (19,766) $ 1,132,475 $ 1,160,791	March 31, 2018 $ 25,308 - $ 25,308 $ 1,030,679 (8,115) $ 1,022,564

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated by reference to the 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

Not past due Less than 60 days 61 to 90 days Over 91 days Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	March 31, 2019 December 31, 2018 $ 1,034,057 $ 1,146,617 39,408 29,254 50,598 11,971 41,985 9,383 1,166,048 1,197,225 (21,551) (19,771) $ 1,144,497 $ 1,177,454	March 31, 2018 $ 1,009,058 26,313 2,863 17,753 1,055,987 (8,115) $ 1,047,872

24 -

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

Balance at January 1 Add: Net remeasurement of loss allowance Foreign exchange gains and losses 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
		2019 $ 19,771 1,689 91 $ 21,551	2018 $ 6,788 1,322 5 $ 8,115

13. INVENTORIES

Merchandise Finished goods Work in progress Raw materials Materials in transit	March 31, 2019 December 31, 2018 $ 238,094 $ 196,059 881,098 1,453,757 460,449 374,472 1,700,846 1,759,515 443,243 286,461 $ 3,723,730 $ 4,070,264	March 31, 2018 $ 389,643 706,266 469,399 1,893,846 276,936 $ 3,736,090

The costs of inventories recognized as cost of goods sold for the three months ended March 31, 2019 and 2018 were $7,070,129 thousand and $8,267,416 thousand, respectively.

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

The Group had a 43.87% interest in Kian Shen as of March 31, 2019, December 31, 2018 and March 31, 2018. The remaining 56.13% interest in Kian Shen is dispersed and held by shareholders unrelated to the Group.

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

The summarized financial information below represents amounts before intragroup eliminations of 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	March 31, 2019 December 31, 2018 $ 931,862 $ 836,938 4,299,332 4,140,669 (720,240) (685,896) (197,811) (178,573) $ 4,313,143 $ 4,113,138 $ 1,892,176 $ 1,804,434 2,420,967 2,308,704 $ 4,313,143 $ 4,113,138	March 31, 2018 $ 895,296 4,109,857 (703,714) (168,852) $ 4,132,587 $ 1,812,966 2,319,621 $ 4,132,587

25 -

Revenue Profit for the period Other comprehensive income for the period Total comprehensive income for the period Profit attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Total comprehensive income attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Net cash inflow (outflow) from: Operating activities Investing activities Financing activities Foreign exchange adjustments Net cash inflow (outflow)	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 352,327 $ 104,951 95,054 $ 200,005 $ 46,042 58,909 $ 104,951 $ 87,742 112,263 $ 200,005 $ (100,346) 108,091 23,000 148 $ 30,893	2018 $ 278,426 $ 104,726 62,684 $ 167,410 $ 45,943 58,783 $ 104,726 $ 73,443 93,967 $ 167,410 $ (70,721) 18,948 (20,000) (4,881) $ (76,654)

15. NON-CURRENT ASSETS HELD FOR SALE

Investments accounted for using the equity method classified as held for sale Equity directly associated with non-current assets classified as held for sale	March 31, 2019 December 31, 2018 $ 148,023 $ 148,023 $ (7,538) $ (7,538)

In August 2018, the Group approved to dispose of its joint venture, Zhejiang Kanda, and entered into a transfer contract with Zhejiang Kangqiao Motor Industry and Trading. The transfer of shareholding rights was intended to be completed in 2019; therefore, the investments accounted for using the equity method were reclassified as held for sale.

26 -

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates Investments in joint ventures a. Investments in associates Material associates Yulon Associates that are not individually material	March 31, 2019 $ 21,196,858 8,432,026 $ 29,628,884 March 31, 2019 $ 11,667,915 9,528,943 $ 21,196,858	December 31, 2018 $ 20,979,597 8,127,177 $ 29,106,774 December 31, 2018 $ 11,479,604 9,499,993 $ 20,979,597	March 31, 2018 $ 21,114,011 7,675,946
			$ 28,789,957
			March 31, 2018 $ 11,666,503 9,447,508
			$ 21,114,011

1) Material associates

The Group held 16.80% interest in Yulon on March 31, 2019, December 31, 2018 and March 31, 2018, 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 businesses 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, 2019 December 31, 2018 $ 5,100,338 $ 4,772,553	March 31, 2018 $ 5,926,357

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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 Operating revenue Net profit for the period Other comprehensive income Total comprehensive income for the period	March 31, 2019 $ 213,054,651 101,161,333 (200,013,117) (29,847,104) 84,355,763 (11,608,327) $ 72,747,436 16.80% $ 12,221,569 (556,939) 3,285 $ 11,667,915		December 31, 2018 March 31, 2018 $ 209,300,378 $ 177,551,834 96,372,715 88,815,163 (195,992,191) (163,763,143) (26,620,612) (20,817,872) 83,060,290 81,785,982 (11,323,162) (9,009,178) $ 71,737,128 $ 72,776,804 16.80% 16.80% $ 12,051,837 $ 12,226,503 (575,518) (563,285) 3,285 3,285 $ 11,479,604 $ 11,666,503 For the Three Months Ended March 31	December 31, 2018 March 31, 2018 $ 209,300,378 $ 177,551,834 96,372,715 88,815,163 (195,992,191) (163,763,143) (26,620,612) (20,817,872) 83,060,290 81,785,982 (11,323,162) (9,009,178) $ 71,737,128 $ 72,776,804 16.80% 16.80% $ 12,051,837 $ 12,226,503 (575,518) (563,285) 3,285 3,285 $ 11,479,604 $ 11,666,503 For the Three Months Ended March 31
			2019 $ 20,236,887 $ 741,655 877,346 $ 1,619,001	2018 $ 23,632,049 $ 1,779,204 329,589 $ 2,108,793

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
		2019 $ 198,362 86,488 $ 284,850	2018 $ 151,688 (3,072) $ 148,616

Above associates are accounted for using the equity method.

In June 2018, the Group increased its investment by $35,178 thousand and acquired 8% interest of Uni-Calsonic Corporation, which led to an increase in its holding from 23.2% to 31.2%.

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In June 2018, the Group acquired 29% of interests in Fujian Spicer and Tai-Ya Investment in the amounts of $329,134 thousand (RMB71,660 thousand) and $79,505 thousand (RMB17,310 thousand) from Taiguang Investment and ROC-Spicer Investment, which were the subsidiaries of ROC-Spicer, and thus the Group exercised significant influence over Fujian Spicer and Tai-Ya Investment.

In January 2019, the Group disposed of 20.01% interest in Sin Jang to Sin Gan and recognized a gain on disposal of investment amounting to $1,322 thousand (the gain of $1,322 thousand consisted of $103,475 thousand of proceeds less the book value of the investment of $102,206 thousand and exchange differences on translating the financial statements of foreign operations of $53 thousand).

In March 2019, the Group disposed of 24.67% interest in Sin Gan to Taiwan Acceptance and recognized a loss on disposal of investment amounting to $1,862 thousand (the loss of $1,862 thousand consisted of $105,824 thousand of proceeds less the book value of the investment of $105,860 thousand and exchange difference on translating the financial statements of foreign operations of ($1,826) thousand).

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

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

b. Investments in joint ventures

Joint ventures that are not individually material	March 31, 2019 December 31, 2018 $ 8,432,026 $ 8,127,177	March 31, 2018 $ 7,675,946

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Net profit of the period Other comprehensive income 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
		2019 $ 137,637 199,166 $ 336,803	2018 $ 356,975 122,929 $ 479,904

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

The operation of Hangzhou King-Long Kian-Shen Co., Ltd., which was the subsidiary of the Group’s joint venture, Xiamen King-Long Kian-Shen Frame, had already been discontinued before June 30, 2018, and was approved by its board of directors on May 22, 2018. The future operational transformation is under discussion. The board of directors of Hangzhou King-Long Kian-Shen Co., Ltd. approved to rent its plant and equipment to Xiamen King-Long Kian-Shen Frame on September 11, 2018.

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

17. PROPERTY, PLANT AND EQUIPMENT

Assets used by the Group Land Land improvement Buildings Machinery Other equipment Construction in progress	March 31, 2019 December 31, 2018 $ 2,127,397 $ 2,127,397 14,449 13,618 1,002,397 1,011,801 1,979,329 2,030,592 414,283 407,735 991,920 797,004 $ 6,529,775 $ 6,388,147	March 31, 2018 $ 2,127,397 11,986 1,092,917 2,276,033 407,552 545,332 $ 6,461,217

Except for the depreciation recognized and the cost of acquisition of property, plant and equipment for increasing productivity, which totaled $402,808 thousand and $157,664 thousand during the three months ended March 31, 2019 and 2018, respectively, the Group had no other significant disposal of property, plant and equipment.

As a result of the declining sales in the market for several types of vehicles, the estimated future cash flows expected to arise from related equipment had decreased. Thus, the Group recognized impairment losses of $10,346 thousand for the three months ended March 31, 2018. The Group determined the recoverable amount of the relevant assets on the basis of their value in use. The discount rates used in measuring value in use were 6.69% per annum.

Except for tooling (included in machinery), which is depreciated on an expected production quantity basis, the above items of property, plant and equipment are 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 31.

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18. LEASE ARRANGEMENTS

a. Right-of-use assets - 2019

	March 31, 2019	March 31, 2019
Carrying amounts
Land	$	100,779
Buildings		418,079
Other equipment		10,561
	$	529,419
	For	the Three
	Months Ended
	March 31, 2019
Additions to right-of-use assets	$	12,512
Depreciation charge for right-of-use assets
Land	$	7,468
Buildings		17,077
Other equipment		1,581
	$	26,126
Lease liabilities - 2019
	March 31, 2019
Carrying amounts
Current	$	97,440
Non-current	$	434,519
Range of discount rate for lease liabilities was as follows:
	March 31, 2019
Land	1.2%-1.94%
Buildings	1.2%-4.35%
Other equipment	0.98%-1.37%

b. Lease liabilities - 2019
c. Material lease-in activities and terms

The Group leases land and buildings for the use of plants, and offices with lease terms of 2 to 10 years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

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d. Other lease information

2019

	For the Three
	Months Ended
	March 31, 2019
Expenses relating to short-term leases	$ 6,026
Expenses relating to low-value asset leases	$ 585
Total cash outflow for leases	$ 33,590

The Group leases certain equipment which qualify as short-term leases and low-value asset leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

2018

The future minimum lease payments of non-cancellable operating lease commitments were as follows:

December 31, 2018 Not later than 1 year $ 110,157 Later than 1 year and not later than 5 years 330,544 Later than 5 years 154,897 $ 595,598	March 31, 2018 $ 110,845 343,460 198,918 $ 653,223

Lease arrangements under operating lease for the leasing out of investment properties are set out in Note 19.

19. INVESTMENT PROPERTIES

Investment properties	March 31, 2019 December 31, 2018 $ 1,376,380 $ 1,380,002	March 31, 2018 $ 1,391,572

The investment properties were leased out for 2 to 10 years, with an option to extend. The lease contracts contain market review clauses in the event that the lessees exercise their options to extend. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.

Except for depreciation recognized, the Group did not have significant addition, disposal, or impairment of investment properties during the three months ended March 31, 2019 and 2018.

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

The fair values of investment properties of the Group were $2,414,732 thousand and $2,312,470 thousand as of December 31, 2018 and 2017, respectively. The management of the Group had assessed and determined that there were no significant changes in the fair values as of March 31, 2019 and 2018, as compared to that as of December 31, 2018 and 2017.

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The maturity analysis of lease payments receivable under operating leases of investment properties as of March 31, 2019 was as follows:

		March 31, 2019	March 31, 2019
Year	1	$	59,043
Year	2		46,116
Year	3		34,719
Year	4		25,028
Year	5		5,315
		$	170,221

The future minimum lease payments of non-cancellable operating lease commitments as of December 31 and March 31, 2018 were as follows:

December 31, 2018 Not later than 1 year $ 62,568 Later than 1 year and not later than 5 years 125,360 Later than 5 years - $ 187,928	March 31, 2018 $ 56,133 126,662 6,195 $ 188,990

The Group has freehold interests in all of its investment properties. The investment properties pledged as deposits for certain projects are set out in Note 31.

20. SHORT-TERM BORROWINGS

Line of credit borrowings Bank loans	March 31, 2019 December 31, 2018 $ 340,000 $ 340,000 300,000 305,000 $ 640,000 $ 645,000	March 31, 2018 $ 405,000 330,000 $ 735,000

a. The interest rates on credit borrowings were ranging from 0.95%-0.98%, 0.95%-0.98% and 0.95%-1.53% per annum as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively.
b. The interest rates on bank loans were 1.18%, 1.18% and 1.25% per annum as of March 31, 2019, December 31, 2018 and March 31, 2018, respectively.
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21. OTHER PAYABLES

Payable for salaries or bonus Payable for taxes Payable for warranties Payable for advertisement Provisions for employee benefits Others	March 31, 2019 December 31, 2018 $ 597,167 $ 1,149,478 319,870 191,369 246,098 263,952 207,780 197,919 94,662 153,296 689,049 761,051 $ 2,154,626 $ 2,717,065	March 31, 2018 $ 659,819 280,883 276,335 91,862 98,676 973,278 $ 2,380,853

22. RETIREMENT BENEFIT PLANS

For the three months ended March 31, 2019 and 2018, the pension expenses of defined benefit plans were $14,427 thousand and $16,649 thousand, respectively, and these were calculated based on the pension cost rate determined by the actuarial calculation on December 31, 2018 and 2017, respectively.

23. EQUITY

a. Share capital

1) Ordinary shares

Numbers of shares authorized (in thousands) Amount of shares authorized Number of shares issued and fully paid (in thousands) Shares issued and fully paid	March 31, 2019 1,800,000 $ 18,000,000 1,384,051 $ 13,840,508	December 31, 2018 1,800,000 $ 18,000,000 1,384,051 $ 13,840,508	March 31, 2018 1,800,000
			$ 18,000,000
			1,384,051
			$ 13,840,508

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and a right to dividends.

2) Capital reduction

For the purpose of adjusting the capital structure and enhancing the return on equity, the Corporation’s board of directors had proposed the capital reduction through cash returned to shareholders on March 27, 2019, which was still waiting for approval at the shareholders’ meeting to be held in June 2019. The estimated total capital reduction amounted to $8,304,305 thousand, which represented the cancellation of 830,431 thousand shares (60% of ordinary shares). After the capital reduction, the amount of paid-in capital will be $5,536,203 thousand.

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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, 2019 December 31, 2018 $ 5,183,923 $ 5,183,923 1,184,920 1,184,920 4,666 4,666 2,225 2,225 25,097 27,899 $ 6,400,831 $ 6,403,633	March 31, 2018 $ 5,183,923 1,184,920 4,666 2,225 32,234 $ 6,407,968

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 resulting from equity transactions other than actual disposal or acquisition, or from changes in capital surplus subsidiaries accounted for using the equity method.

c. Retained earnings and dividend policy

Under the dividend policy as set forth in the 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, refer to Note 25.

The operating environment 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 while realizing the Corporation’s long-term financial plan. Dividends are distributed at no less than 40% of profits after tax, but dividends cannot be distributed if the Corporation has deficit. Dividends are paid in the form of cash or stock. The Corporation’s policy is that cash dividends should be at least 20% of total dividends.

An appropriation of earnings to a 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.

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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 2018 and 2017 had been proposed by the Corporation’s board of directors in March 2019 and approved in the shareholders’ meetings in June 2018, respectively. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends	Appropriation of Earnings For the Years Ended December 31 2018 2017 $ 359,300 $ 410,564 2,352,886 2,491,292	Dividends Per Share (NT$)	Dividends Per Share (NT$)	Dividends Per Share (NT$)
		For the Years Ended December 31
			2018 $ 1.7	2017 $ 1.8

The appropriations of earnings for 2018 are subject to the resolution in the shareholders’ meeting to be held in June 2019.

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. Special reserves

Beginning at January 1 Reversals Disposal of associates Disposal of property, plant and equipment Balance at March 31		For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 1,046,967 (366) (5) $ 1,046,596	2018 $ 1,051,658 - - $ 1,051,658

e. Other equity items

1) Exchange differences on translating the financial statements of 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	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ (646,278) 20,145 252,410	2018 $ (485,118) 17,172 120,523 (Continued)

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Reclassification adjustments Disposal of associates accounted for using the equity method Other comprehensive income recognized for the period Balance at March 31 2) Unrealized gain on financial assets at FVTOCI	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 1,773 274,328 $ (371,950)	2018 $ - 137,695 $ (347,423) (Concluded)

Balance at January 1 Recognized for the period Unrealized gain - equity instruments Share from associates accounted for using the equity method Other comprehensive gain (loss) recognized for the period Cumulative unrealized gain of equity instruments transferred to retained earnings due to disposal by associates Cumulative unrealized gain of equity instruments transferred to retained earnings due to disposal Balance at March 31 3) Gain on the hedging instruments	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 117,177 4,102 143,246 147,348 (21,484) (17) $ 243,024	2018 $ 273,866 3,543 (6,352) (2,809) - - $ 271,057

Balance at January 1 Effect of change in tax rate Recognized for the period Gain on changes in the fair value of hedging instruments Foreign currency risk - spot rate Foreign currency risk - foreign exchange forward contracts Other comprehensive income recognized for the period Transferred to initial carrying amount of hedged items 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
		2019 $ 20,997 - 482 - 482 (16,727) $ 4,752	2018 $ (12,253) 382 4,116 12,575 17,073 - $ 4,820

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f. Non-controlling interests

Balance at January 1 Attributable to non-controlling interests: Share of profit for the period Other comprehensive income recognized for the period Unrealized gain on financial assets at FVTOCI Exchange differences on translating the financial statements of foreign operations Share from associates and joint ventures accounted for using the equity method Other comprehensive income recognized for the period Balance at March 31		For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 3,613,814 62,857 1,889 2,405 49,060 53,354 $ 3,730,025	2018 $ 3,550,772 69,375 - 856 34,328 35,184 $ 3,655,331

24. REVENUE

Revenue from contracts with customers Revenue from the sale of goods Revenue from sale of vehicles Revenue from sale of components Service revenue Rental income Other revenue		For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 6,858,256 1,429,596 8,287,852 405,529 16,836 16,242 $ 8,726,459	2018 $ 8,357,923 1,597,236 9,955,159 421,006 16,221 19,547 $ 10,411,933

25. NET PROFIT

Net profit concludes as follow:

a. Depreciation and amortization

An analysis of depreciation by function Operating costs Operating expenses	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 230,831 61,219 $ 292,050	2018 $ 193,237 36,571 $ 229,808

(Continued)

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An analysis of amortization by function Operating costs Operating expenses An analysis of amortization in intangible assets by function Research and development expenses	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 1,953 14,086 $ 16,039 $ 12,303	2018 $ 2,133 16,959 $ 19,092 $ 9,244

(Concluded)

b. Rental income and operating expenses directly related to investment properties For the Three Months Ended March 31 2019 2018 Rental income from investment properties $ 16,511 $ 15,983 Direct operating expenses from investment properties that generated rental income $ 4,942 $ 5,246 c. Employee benefits expense For the Three Months Ended March 31 2019 2018 Post-employment benefits Defined contribution plans $ 22,057 $ 19,673 Defined benefit plans 14,427 16,649 36,484 36,322 Short-term benefits 908,619 1,019,286 $ 945,103 $ 1,055,608 An analysis of employee benefits expenses by function Operating costs $ 506,782 $ 536,039 Operating expenses 438,321 519,569 $ 945,103 $ 1,055,608	b. Rental income and operating expenses directly related to investment properties For the Three Months Ended March 31 2019 2018 Rental income from investment properties $ 16,511 $ 15,983 Direct operating expenses from investment properties that generated rental income $ 4,942 $ 5,246 c. Employee benefits expense For the Three Months Ended March 31 2019 2018 Post-employment benefits Defined contribution plans $ 22,057 $ 19,673 Defined benefit plans 14,427 16,649 36,484 36,322 Short-term benefits 908,619 1,019,286 $ 945,103 $ 1,055,608 An analysis of employee benefits expenses by function Operating costs $ 506,782 $ 536,039 Operating expenses 438,321 519,569 $ 945,103 $ 1,055,608	b. Rental income and operating expenses directly related to investment properties For the Three Months Ended March 31 2019 2018 Rental income from investment properties $ 16,511 $ 15,983 Direct operating expenses from investment properties that generated rental income $ 4,942 $ 5,246 c. Employee benefits expense For the Three Months Ended March 31 2019 2018 Post-employment benefits Defined contribution plans $ 22,057 $ 19,673 Defined benefit plans 14,427 16,649 36,484 36,322 Short-term benefits 908,619 1,019,286 $ 945,103 $ 1,055,608 An analysis of employee benefits expenses by function Operating costs $ 506,782 $ 536,039 Operating expenses 438,321 519,569 $ 945,103 $ 1,055,608	b. Rental income and operating expenses directly related to investment properties For the Three Months Ended March 31 2019 2018 Rental income from investment properties $ 16,511 $ 15,983 Direct operating expenses from investment properties that generated rental income $ 4,942 $ 5,246 c. Employee benefits expense For the Three Months Ended March 31 2019 2018 Post-employment benefits Defined contribution plans $ 22,057 $ 19,673 Defined benefit plans 14,427 16,649 36,484 36,322 Short-term benefits 908,619 1,019,286 $ 945,103 $ 1,055,608 An analysis of employee benefits expenses by function Operating costs $ 506,782 $ 536,039 Operating expenses 438,321 519,569 $ 945,103 $ 1,055,608
		2019 2018 $ 16,511 $ 15,983 $ 4,942 $ 5,246 For the Three Months Ended March 31
		2019 $ 22,057 14,427 36,484 908,619 $ 945,103 $ 506,782 438,321 $ 945,103	2018 $ 19,673 16,649 36,322 1,019,286 $ 1,055,608 $ 536,039 519,569 $ 1,055,608

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d. Employees’ compensation and remuneration of directors

According to the Corporation’s Articles, the Corporation accrued employees’ compensation and remuneration of directors 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, 2019 and 2018, the employees’ compensation and remuneration of directors 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
		2019 $ 5,109 $ 4,717	2018 $ 17,803 $ 7,656

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

The appropriations of employees’ compensation and remuneration of directors for 2018 and 2017 that were resolved by the board of directors in March 2019 and 2018, respectively, are as shown below:

Employees’ compensation Remuneration of directors	For the Years Ended December 31	For the Years Ended December 31
	2019 Cash $ 33,511 19,746	2018
		Cash $ 45,459 22,036

There was no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2018 and 2017.

Information on the employees’ compensation and remuneration of directors resolved by the Corporation’s board of directors in 2019 and 2018 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

26. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of tax expense are as follows:

Current tax In respect of the current period Adjustments for the prior periods	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 103,387 (1,693) 101,694	2018 $ 96,674 151 96,825 (Continued)

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Deferred tax In respect of the current period Adjustments to deferred tax attributable to changes in tax rates and laws 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
		2019 $ 88,011 - - 88,011 $ 189,705	2018 $ 163,500 (44,585) 2,384 121,299 $ 218,124 (Concluded)

The Income Tax Act in the Republic of China was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%. The effect of the change in tax rate on deferred tax income to be recognized in profit or loss is recognized in full in the period in which the change in tax rate occurs. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings had been reduced from 10% to 5%.

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current period Cash flow hedges Effect of change in tax rate Arising from losses of hedging instruments in cash flow hedges transferred to the initial carrying amounts of hedged items Cash flow hedges	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 1,424 - (1,230) $ 194	2018 $ (3,217) 5,473 - $ 2,256

c. Income tax assessments

The tax returns of the Corporation through 2017 have been assessed by the tax authorities.

27. EARNINGS PER SHARE

Basic earnings per share 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
		2019 $ 0.56 $ 0.56	2018 $ 0.97 $ 0.97

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

Net Profit for the Period

For the Three Months Ended March 31 2019 2018 Earnings used in the computation of basic earnings per share $ 760,519 $ 1,317,903 Weighted Average Number of Ordinary Shares Outstanding (In Thousands of Shares) For the Three Months Ended March 31 2019 2018 Weighted average number of ordinary shares used in the 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 1,564 1,815 Weight average number of ordinary shares used in the computation of diluted earnings per share 1,365,016 1,365,267		For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
			2019 1,384,051 (20,599) 1,363,452 1,564 1,365,016	2018 1,384,051 (20,599) 1,363,452 1,815 1,365,267

When calculating earnings per share (EPS), the Group considers the shares held by associates as treasury shares to reduce the number of shares outstanding.

If the Group offered to settle compensation paid to employees in cash or shares, the Group assumed that 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 is 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.

28. 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.

29. 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 that are not measured at fair value recognized in the consolidated financial statements approximate their fair values or their fair values cannot be reliably measured.

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

March 31, 2019 Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Overseas unlisted shares Financial assets for hedging Non-derivative financial instruments December 31, 2018 Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Overseas unlisted shares Financial assets for hedging Non-derivative financial instruments	Level 1 $ 622,313 - - $ 622,313 $ 21,669 - - $ 21,669 $ 583,674 Level 1 $ 567,620 - - $ 567,620 $ 18,673 - - $ 18,673 $ 743,303	Level 2 $ - - - $ - $ - - - $ - $ - Level 2 $ - - - $ - $ - - - $ - $ -	Level 3 $ - 739,051 562 $ 739,613 $ - 23,221 189,485 $ 212,706 $ - Level 3 $ - 734,341 23 $ 734,364 $ - 24,045 184,678 $ 208,723 $ -	Total $ 622,313 739,051 562 $ 1,361,926 $ 21,669 23,221 189,485 $ 234,375 $ 583,674 Total $ 567,620 734,341 23 $ 1,301,984 $ 18,673 24,045 184,678 $ 227,396 $ 743,303 (Continued)

43 -

Financial liabilities Financial liabilities at FVTPL Derivative financial instruments (included in other current liabilities) March 31, 2018 Financial assets Financial assets at FVTPL Mutual funds Unlisted shares Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Overseas unlisted shares Financial assets for hedging Non-derivative financial instruments Derivative financial instruments	Level 1 $ - Level 1 $ 1,051,652 - $ 1,051,652 $ 25,235 - - $ 25,235 $ 171,392 - $ 171,392	Level 2 $ - Level 2 $ - - $ - $ - - - $ - $ - - $ -	Level 3 $ 79 Level 3 $ - 777,273 $ 777,273 $ - 37,397 258,193 $ 295,590 $ - 3,356 $ 3,356	Total $ 79 (Concluded) Total $ 1,051,652 777,273 $ 1,828,925 $ 25,235 37,397 258,193 $ 320,825 $ 171,392 3,356 $ 174,748

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

44 -
2) Reconciliation of Level 3 fair value measurements of financial instruments

For the three months ended March 31, 2019

						Derivative	Derivative
		Equity		Equity			Financial
	Instruments at		Instruments		at	Instruments at
Financial Assets		FVTPL		FVTOCI			FVTPL			Total
Balance at January 1	$	734,341	$	208,723		$	23	$		943,087
Recognized in profit		4,710			-		539			5,249
Recognized in other
comprehensive income		-		4,000			-			4,000
Sales		-		(17)			-			(17)
Balance at March 31	$	739,051	$	212,706		$	562	$		952,319
								Derivative
								Financial
								Instruments at
Financial Liabilities									FVTPL
Balance at January 1								$		79
Recognized in loss										(79)
Balance at March 31								$		-

For the three months ended March 31, 2018

Financial Assets Equity Instruments at FVTPL Equity Instruments at FVTOCI Balance at January 1 $ 767,761 $ 293,111 Recognized in profit 9,512 - Recognized in other comprehensive income - 2,479 Balance at March 31 $ 777,273 $ 295,590 Financial Liabilities Balance at January 1 Recognized in loss Balance at March 31	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) $ -

45 -
3) Valuation techniques and inputs applied for Level 3 fair value measurement
a) 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.
b) Domestic unlisted securities to which the market approach was applied: The fair values of domestic unlisted shares 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,	March 31,
	2019	2018	2018
Operating income ratio	0.14-5.68 times	0.14-5.68 times	0.21-5.58 times
Gross profit ratio	0.32-13.64 times	0.32-14.44 times	1.65-16.51 times
EBIT ratio	2.44-23.21 times	2.44-23.21 times	5.18-29.94 times
EBITDA ratio	-	-	3.51-35.19 times
Post-tax profit ratio	11.99-85.49 times	11.99-85.49 times	5.63-43.03 times
P/B ratio	0.82-4.94 times	0.82-5.09 times	0.99-6.19 times
Discount rate for lack of	11.58%-32.28%	11.58%-32.28%	13.13%-32.28%
marketability

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,	March 31,	December 31,	December 31,	March 31,
		2019		2018	2018
Operating income ratio
0.1 time increase	$	54,965	$	36,301	$ 70,555
0.1 time decrease	$	(54,965)	$	(36,301)	$ (70,555)
Gross profit ratio
1 time increase	$	65,697	$	65,961	$ 52,573
1 time decrease	$	(65,697)	$	(65,961)	$ (52,573)
EBIT ratio
1 time increase	$	18,188	$	18,188	$ 46,684
1 time decrease	$	(18,188)	$	(18,188)	$ (46,684)
EBITDA ratio
1 time increase	$	-	$	-	$ 65,862
1 time decrease	$	-	$	-	$ (65,862)
Post-tax profit ratio
1 time increase	$	11,020	$	11,020	$ 37,151
1 time decrease	$	(11,020)	$	(11,020)	$ (37,151)
P/B ratio
0.1 time increase	$	88,909	$	88,737	$ 94,251
0.1 time decrease	$	(88,909)	$	(88,737)	$ (94,251)

46 -

c. Categories of financial instruments

		March 31,	December 31,	December 31,	March 31,
		2019		2018	2018
Financial assets
FVTPL
Mandatorily at FVTPL	$	1,361,926	$	1,301,984 $	1,828,925
Financial assets for hedging		583,674		743,303	174,748
Financial assets at amortized cost (Note 1)		19,091,969		19,052,314	20,062,676
Financial assets at FVTOCI		234,375		227,396	320,825
Financial liabilities
Amortized cost (Note 2)		6,193,334		7,132,785	6,421,773
FVTPL (included in other current liabilities)
Held for trading		-		79	-

Note 1: The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, debt investments, 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 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 payable, borrowings and lease liabilities. 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 changes in foreign currency rate. The Group avoids cash flow risk resulting from the changes in adverse foreign currency rate by using derivative contracts.

Sensitivity analysis

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

47 -

The following table details the Group’s sensitivity to a 1% increase and decrease in the New Taiwan dollar 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. A positive number below indicates an increase (a decrease) in pre-tax profit and equity associated with a 1% strengthening of the New Taiwan dollar 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
	2019 2018 $ (8,436) $ (6,759) JPY to NTD
For the Three Months Ended March 31
	2019 2018 $ 1,349 $ (1,308) $ (5,837) $ (4,009) RMB to NTD
For the Three Months Ended March 31
	2019 $ (9,989)	2018 $ (21,541)

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,
	2019	2018		2018
Cash flow interest rate risk
Financial assets	$ 15,353,394	$ 15,330,348		$ 14,611,234
Financial liabilities	756,982	738,972		824,863
Fair value interest rate risk
Lease liabilities	531,959		-	-

48 -

Sensitivity analysis

The sensitivity analysis below were determined based on the Group’s exposure to 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, 2019 and 2018 would increase/decrease by $9,123 thousand and $8,616 thousand, respectively.

The Group’s sensitivity to interest rates increased 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, 2019 and 2018 would have increased/decreased by $31,116 thousand and $52,583 thousand, respectively, 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, 2019 and 2018 would have increased/decreased by $1,083 thousand and $1,262 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

The amounts of financial assets will be potentially impacted if the counter-parties of the Corporation or third parties fail to perform their obligations in financial instrument contracts. The impact 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 are creditworthy banks, brokers and dealers.

3) Liquidity risk

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

49 -

30. 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. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed below.

a. Names and categories of related parties

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

Mitsubishi Corporation (Mitsubishi Corp.)

Tai Yuen Textile Co., Ltd.

Le Wen Investment Co., Ltd.

Yulon Management Company Ltd. (Yulon Management)

Mitsubishi Corporation (Taiwan) Ltd.

Mitsubishi Motors Philippines Corporation

Mitsubishi Motors Thailand

Mitsubishi Motors North America., Inc.

Mitsubishi Motors Europe B.V.

Mitsubishi Corporation Technos

Shye Shyang Mechanical Industrial Co., Ltd.

Fuzhou Samnel Mechancial and Electrical 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)

Sin Gan Co., Ltd. (Sin Gan)

Tokio Marine Newa Insurance Co., Ltd.

Hong Shuo Cultural Enterprises, Co., Ltd.

Hsiang Shuo Enterprises

Sinqual Technology Co., Ltd.

Related Party Category

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 investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
The Group is its major management
authority
The Group is its major management
authority
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
(Continued)

50 -

Related Party Name
Taiwan Acceptance Corporation (Taiwan Acceptance)

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. (Yue Ki Industrial)

Carplus Auto Leasing Corporation

eCBO Information Services Co., Ltd.

Hsieh-Shin Motors Co., Ltd.

Yu Rich Financial Services Company

ROC-Keeper Industrial Ltd.

Taiguang Investment (HK) Co., Ltd. (Taiguang Investment)
ROC-Spicer Investment Co., Ltd. (BVI) (ROC-Spicer
Investment)

Tai-Ya Investment (HK) Co., Ltd. (Tai-Ya Investment)

Fujian Spicer Drivetrain System Co., Ltd. (Fujian Spicer)

Shanghai Hopeful Wheel Automobile Maintenance 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.

China Engine (Fujian)

Zhejiang Kangda Motor Industry and Trade Co., Ltd.
(Zhejiang Kangda)

Automotive Research & Testing Center

Related Party Category

Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Joint Venture
Joint Venture
Joint Venture
Joint Venture
Joint Venture
Joint Venture
Joint Venture (Note)
Substantive related party (Note)
(Concluded)

Note: The relationship ended in August 2018.

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 Joint ventures		For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 5,138,117 1,615,761 190,241 6,944,119 48,392 9,539 $ 7,002,050	2018 $ 5,422,151 2,475,993 279,544 8,177,688 33,141 17,872 $ 8,228,701

51 -

2) Purchases of goods

Line Items Related Party Categories/Name Purchases Investors and subsidiaries of the investors that have significant influence over the Group Mitsubishi Corp. Others Associates The Group is its major management Joint ventures South East (Fujian) Motor Others 3) Technical services expense Line Items Related Party Categories/Name Cost of goods sold and selling and marketing expenses Investors that have significant influence over the Group		For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 2018 $ 806,465 $ 995,347 30,380 31,909 836,845 1,027,256 575,559 470,454 82,716 82,053 46,416 520,261 - 1,523 46,416 521,784 $ 1,541,536 $ 2,101,547 For the Three Months Ended March 31
		2019 $ 62,623	2018 $ 47,064

4) Development expense

Line Items Related Party Categories/Name Research and development expense Investors that have significant influence over the Group Others		For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 12,361 3 $ 12,364	2018 $ 13,858 171 $ 14,029

52 -

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 6) Receivables from related parties Line Items Related Party Categories/Name March 31, 2019 Trade receivables Associates from related Fortune Motors $ 1,237,193 parties Shung Ye Motor 309,974 Hua-Chuang Automobile Information Technical Center 44,638 Others 267,922 1,859,727 Joint ventures 63,923 Investors and subsidiaries of the investors that have significant influence over the Group 15,966 Others 2 $ 1,939,618 7) Prepayments Line Items Related Party Categories/Name March 31, 2019 Prepayments Investors and subsidiaries of investors that have significant influence over the Group Mitsubishi Corp. $ 94,821 Others 4,610 99,431 Joint ventures South East (Fujian) Motor 7,532 Others 114 $ 107,077	Line Items Related Party Categories/Name Selling and marketing expenses Investors and subsidiaries of the investors that have significant influence over the Group Others 6) Receivables from related parties Line Items Related Party Categories/Name March 31, 2019 Trade receivables Associates from related Fortune Motors $ 1,237,193 parties Shung Ye Motor 309,974 Hua-Chuang Automobile Information Technical Center 44,638 Others 267,922 1,859,727 Joint ventures 63,923 Investors and subsidiaries of the investors that have significant influence over the Group 15,966 Others 2 $ 1,939,618 7) Prepayments Line Items Related Party Categories/Name March 31, 2019 Prepayments Investors and subsidiaries of investors that have significant influence over the Group Mitsubishi Corp. $ 94,821 Others 4,610 99,431 Joint ventures South East (Fujian) Motor 7,532 Others 114 $ 107,077	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 30,776 89 $ 30,865 December 31, 2018 $ 870,216 536,279 199,992 285,034 1,891,521 44,905 16,043 - $ 1,952,469 December 31, 2018 $ 117,943 6,883 124,826 13,162 91 $ 138,079	2018 $ 25,813 90 $ 25,903 March 31, 2018 $ 1,151,680 316,928 78,540 121,090 1,668,238 63,924 19,912 7 $ 1,752,081 March 31, 2018 $ 13,846 8,750 22,596 101,219 151 $ 123,966
1,859,727 63,923 15,966 2
$ 1,939,618
	March 31, 2019 $ 94,821 4,610 99,431 7,532 114 $ 107,077

53 -

8) Payables to related parties

Line Items Related Party Categories/Name Trade payables to Associates related parties Yulon Yue Ki Industrial ROC-Spicer Fortune Motors Others Investors and subsidiaries of the investors that have significant influence over the Group Mitsubishi Corp. Mitsubishi Motors Corp. Yulon Management Others The Group is its major management Joint ventures Others Contract liabilities Line Items Related Party Categories/Name Other current Associates liabilities Luxgen Others Others	March 31, 2019 December 31, 2018 $ 105,478 $ 94,762 85,321 92,017 79,331 87,219 29,181 60,483 215,165 281,865 514,476 616,346 86,216 64,535 65,607 92,182 23,577 95,013 9,008 7,180 184,408 258,910 54,516 60,301 8,835 9,397 - - $ 762,235 $ 944,954 March 31, 2019 December 31, 2018 $ 48,041 $ 45,514 4,243 1,191 52,284 46,705 273 273 $ 52,557 $ 46,978	March 31, 2018 $ 68,980 72,242 78,850 111,256 236,830 568,158 41,702 77,535 22,755 10,061 152,053 55,795 17,236 2,359 $ 795,601 March 31, 2018 $ 2,156 798 2,954 701 $ 3,655

9) Contract liabilities

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, 2019 and 2018.

Transactions with related parties have the same terms for pricing, receipts and payments as 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 contracts with Mitsubishi Motors Corporation. Refer to Note 32.

54 -

c. Compensation of key management personnel

The remunerations of directors and key executives during the three months ended March 31, 2019 and 2018 were as follows:

Short-term employee benefits Post-employment benefits	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2019 $ 30,051 592 $ 30,643	2018 $ 34,878 642 $ 35,520

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

31. 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, 2019 December 31, 2018 $ 742,770 $ 778,643 159,774 157,585 52,323 52,323 $ 954,867 $ 988,551	March 31, 2018 $ 788,507 158,050 52,323 $ 998,880

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant commitments and contingencies of the Group as of March 31, 2019 were as follows:

a. Guarantee notes amounted to $5,020,938 thousand, which had been issued to financial institutions as collaterals for loans; unused letters of credit amounted to $21,761 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 60-90 days

c. The status of endorsements/guarantees was listed in Table 2.
55 -

33. 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, 2019

		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	233,556	4.5800	$ 1,069,688
USD		22,897	30.8200	705,686
JPY		2,202,595	0.2783	612,982
Non-monetary items
Investments accounted for using the equity
method
RMB		1,313,836	4.5800	6,017,370
EUR		80,800	34.6100	2,796,489
Foreign currency liabilities
Monetary items
JPY		589,906	0.2783	164,171
December 31, 2018
		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	289,576	4.4720	$ 1,294,982
USD		29,859	30.7150	917,123
JPY		2,765,664	0.2782	769,408
Non-monetary items
Investments accounted for using the equity
method
RMB		1,326,111	4.4720	5,930,370
EUR		72,973	35.2000	2,568,646
Foreign currency liabilities
Monetary items
JPY		556,293	0.2782	154,761

56 -

March 31, 2018

		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	468,171	4.6470	$ 2,175,590
USD		25,402	29.1050	739,323
JPY		1,513,855	0.2739	414,645
Non-monetary items
Investments 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

For the three months ended March 31, 2019 and 2018, net foreign exchange gain were $33,548 thousand and $18,933 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.

34. SEPARATELY DISCLOSED ITEMS

Except for those listed in Notes 7, 11 and 29 and Tables 1 to 9, there were no other separately disclosed items.

35. 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.

57 -

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

For the three months ended March 31, 2019
Vehicle manufacturing

Channel
Others
Adjustment and eliminations

Administration cost and remunerations to directors
Other non-operating income and expenses, net
Profit before income tax
For the three months ended March 31, 2018
Vehicle manufacturing

Channel
Others
Adjustment and eliminations

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

Segment
Revenues
Segment
Income or Loss
$ 7,890,024 $ 1,013,636
900,286
1,662
11,385
(6,813)

(75,236)

(210)
$ 8,726,459
1,008,275
(78,400)

83,206
$ 1,013,081
$ 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

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, net foreign exchange gain, gains on financial instruments at fair value through profit or loss, interest expense, other expense, 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.

58 -

TABLE 1

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE THREE MONTHS ENDED MARCH 31, 2019 (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	$ 700,000	$ 700,000	$ 700,000	1.1	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,599,125	$ 10,660,832
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	69,044 (US$ 1,200 thousand and RMB 7,000 thousand) 92,467 (US$ 1,960 thousand and RMB 7,000 thousand) 110,027 (US$ 3,570 thousand) 32,060 (RMB 7,000 thousand)	69,044 (US$ 1,200 thousand and RMB 7,000 thousand) 92,467 (US$ 1,960 thousand and RMB 7,000 thousand) 110,027 (US$ 3,570 thousand) 32,060 (RMB 7,000 thousand)	- - 108,332 (US$ 3,515 thousand) -	- - 2 -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,599,125 1,599,125 1,599,125 1,599,125	10,660,832 10,660,832 10,660,832 10,660,832
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	458,000 (RMB 100,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand)	458,000 (RMB 100,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (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	- - - - -	- - - - -	- - - - -	1,599,125 1,599,125 1,599,125 1,599,125 1,599,125	10,660,832 10,660,832 10,660,832 10,660,832 10,660,832
3	Sichuan Huafeng Hanwei	Sichuan Lingwei Tianjin Hwahong Guangzhou Huayou Motor Maintenance Dongguan Huashun	Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes	45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 137,400 (RMB 30,000 thousand)	45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 137,400 (RMB 30,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,599,125 1,599,125 1,599,125 1,599,125	10,660,832 10,660,832 10,660,832 10,660,832

(Continued)

59 -

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
		Dongguan Huayi	Other receivables	Yes	$ 137,400 (RMB 30,000 thousand)	$ 137,400 (RMB 30,000 thousand)	$ -	-	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,599,125	$ 10,660,832
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	45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 137,400 (RMB 30,000 thousand) 137,400 (RMB 30,000 thousand)	45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 137,400 (RMB 30,000 thousand) 137,400 (RMB 30,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,599,125 1,599,125 1,599,125 1,599,125	10,660,832 10,660,832 10,660,832 10,660,832
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	229,000 (RMB 50,000 thousand) 91,600 (RMB 20,000 thousand) 68,700 (RMB 15,000 thousand) 68,700 (RMB 15,000 thousand) 137,400 (RMB 30,000 thousand)	229,000 (RMB 50,000 thousand) 91,600 (RMB 20,000 thousand) 68,700 (RMB 15,000 thousand) 68,700 (RMB 15,000 thousand) 137,400 (RMB 30,000 thousand)	75,570 (RMB 16,500 thousand) - - - -	4.35 ~~-~~ - ~~-~~ -	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	- - - - -	- - - - -	- - - - -	1,599,125 1,599,125 1,599,125 1,599,125 1,599,125	10,660,832 10,660,832 10,660,832 10,660,832 10,660,832
6	Dongguan Huayi	Dongguan Huashun	Other receivables	Yes	229,000 (RMB 50,000 thousand)	229,000 (RMB 50,000 thousand)	32,060 (RMB 7,000 thousand)	4.35	Short-term financing	-	Working capital	-	-	-	1,599,125	10,660,832
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	45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand)	45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand) 45,800 (RMB 10,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,599,125 1,599,125 1,599,125 1,599,125	10,660,832 10,660,832 10,660,832 10,660,832
8	Gatech Holding LTD.	Gatech Suzhou	Other receivables	Yes	46,230 (US$ 1,500 thousand)	46,230 (US$ 1,500 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,599,125	10,660,832

Note 1: At spot exchange rates on March 31, 2019; US$1=NT$30.82, RMB1=NT$4.58.
Note 2: The amount is 3% of the total shareholders’ equity of the latest financial statements of China Motor Corporation.
Note 3: The amount is 20% of the total shareholders’ equity of the latest financial statements of China Motor Corporation. Note 4: Eliminated.

(Concluded)

60 -

TABLE 2

CHINA MOTOR CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE THREE MONTHS ENDED MARCH 31, 2019 (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	$ 229,000 (RMB 50,000 thousand) 229,000 (RMB 50,000 thousand) 229,000 (RMB 50,000 thousand) 229,000 (RMB 50,000 thousand)	$ 229,000 (RMB 50,000 thousand) 229,000 (RMB 50,000 thousand) 229,000 (RMB 50,000 thousand) 229,000 (RMB 50,000 thousand)	$ - - - -	$ - - - -	0.43 0.43 0.43 0.43	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 spot exchange rate on March 31, 2019; RMB1=NT$4.58.

61 -

TABLE 3

CHINA MOTOR CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD MARCH 31, 2019

(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, 2019	March 31, 2019		Note
				Number of Shares (In Thousands)	Carrying Amount (Note 3)	Percentage of Ownership	Fair Value
China Motor Corporation	Beneficiary certificates 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 Hua Nan Phoenix Money Market Fund UPAMC James Bond Money Market Fund Sinopac Money Market Fund Paradigm Pion Money Market Prudential Financial Money Market Fund Cathay Taiwan Money Market Fund Nomura Global Short Duration Bond Fund Accumulate Shares Shye Shyang Mechanical Industrial Myson Century, Inc. Carnival Taiwan Aerospace	- - - - - - - - - - - - - Corporate director Corporate director - -	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 - 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	4,785 4,867 3,205 4,201 1,500 2,738 1,856 1,806 2,167 2,610 1,906 2,423 2,844 9,009 4,705 190 811	$ 59,928 50,303 50,275 50,270 31,425 30,174 30,171 30,167 30,164 30,155 30,148 30,143 30,010 672,274 20,559 1,110 10,923	- - - - - - - - - - - - - 10.00 7.84 0.05 0.60	$ 59,928 50,303 50,275 50,270 31,425 30,174 30,171 30,167 30,164 30,155 30,148 30,143 30,010 672,274 20,559 1,110 10,923

(Continued)

62 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		March 31, 2019	March 31, 2019		Note
				Number of Shares (In Thousands)	Carrying Amount (Note 3)	Percentage of Ownership	Fair Value
Kian Shen KSIHK Alliance Investment & Management	Com2B (Cayman) Corp. NORM Pacific Automation Corp. Corporate bonds Taiwan Acceptance Corp. Gatetech Technology Morgan Stanley Deutsche Bank Aktiengesellschaft, Singapore Branch Evergreen Marine Corporation Crédit Agricole Corporate and Investment Bank SA Société Générale Fonterra Co-operative Group Ltd. Beneficiary certificates Yuanta Wan Tai Money Market Fund FSITC Money Market Shares Beijing NTN-SEOHAN Driveshaft Beneficiary certificates Capital Money Market Fund Shares Samuel (Cayman) Co., Ltd. CARPLUS Auto Leasing Corporation T-Car Inc. Solidlite Corporation Site information service Phalanx Biotech Group Preference shares Rock Financial Risk Service Co., Ltd.	- - Associate Subsidiary - - - - - - - - - - - - - - - - -	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 fair value through profit or loss - current 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 - 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 amortized cost - non-current	2,000 128 - - - - - - - - 2,311 196 - 94 6,327 2,849 1,275 789 65 696 -	$ - 1,742 248,466 150,000 137,355 137,294 99,922 91,530 68,870 45,833 35,000 35,072 45,503 (RMB 9,935 thousand) 1,514 107,535 66,777 36,448 5,430 3,331 1,794 6,684	4.44 0.45 - - - - - - - - - - 9.00 - 15.07 3.45 4.05 3.60 0.54 1.13 -	$ - 1,742 - - - - - - - - 35,000 35,072 45,503 1,514 107,535 66,777 36,448 5,430 3,331 1,794 -	(Note 1)
							(Continued)

63 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		March 31, 2019	March 31, 2019		Note
				Number of Shares (In Thousands)	Carrying Amount (Note 3)	Percentage of Ownership	Fair Value
Sino Diamond Motors Hwa Lin Brilliant Insight International	Beneficiary certificates CTBC Hwa-win Money Market Fund Principle guaranteed notes President Securities 100% Principle Guaranteed Note Beneficiary certificates Taishin Ta-Chong Money Market	- - -	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	6,021 - 74	$ 66,341 122,023 1,053	- - -	$ 66,341 - 1,053

Note 1: Eliminated.

Note 2: Refer to Tables 6 and 7 for the information on investments in subsidiaries and associates.

Note 3: At spot exchange rate on March 31, 2019; RMB1=NT$4.58.

(Concluded)

64 -

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, 2019

(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	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)	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	Sale Sale Purchase Purchase Purchase Purchase Sale Sale Purchase Sale	$ (4,885,022) (1,177,958) 483,589 157,827 196,642 111,941 (424,599) (252,923) 322,876 (157,827)	(66) (16) 12 4 5 3 (58) (34) 67 (45)	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	$ - - - - - - - - - -	- - - - - - - - - -	$ 1,234,957 265,327 (86,216) (66,813) (71,338) (79,331) 37,195 2,115 - 66,813	56 12 (3) (3) (3) (3) 76 4 - 31

Note 1: Eliminated.

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

65 -

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, 2019

(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 COC	Fortune Motors Shung Ye Motor Luxgen	Equity-method investee Equity-method investee Equity-method investee’s subsidiary	$ 1,234,957 265,327 104,154	19.24 17.14 0.01	$ - - -	- - -	$ 1,234,957 265,322 25,054	$ - - -

66 -

TABLE 6

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE THREE MONTHS ENDED MARCH 31, 2019 (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, 2019	As of March 31, 2019	As of March 31, 2019	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				March 31, 2019	December 31, 2018	Number of Shares (In Thousands)	%	Carrying Amount
China Motor Corporation Kian Shen Kian Shen Investment Alliance Investment & Management Sino Diamond Motors Hua-Yu	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) Uni-Calsonic Yueki Industrial Co., Ltd. Sin Gan Sin Jang Tai-Ya Investment Hwa Chung Motors (Note 1) Yulon IT Solutions 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) Shung Ye Motor (Note 5) Fortune Motors Hwa-Lin (Note 1)	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 Miaoli, Taiwan Hsinchu, Taiwan Taipei, Taiwan Taipei, Taiwan Hong Kong Taoyuan, Taiwan Taipei, Taiwan British Virgin Islands Hong Kong Taipei, Taiwan Samoa Taoyuan, Taiwan Samoa Taipei, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Taipei, Taiwan Taipei, Taiwan British Virgin Islands	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 Manufacture and sale of automobile parts Manufacture and sales of car components Wholesale, repair and other service of vehicles Retail and wholesale of second-hand vehicle Investment Manufacture and sale of vehicles Information software wholesale services 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 Sales and providing after sales service of vehicle Sales and providing after sales service of vehicle Overseas investment on production and service industries	$ 3,835,585 344,800 2,132,826 3,463,724 955,941 1,200,030 2,011,363 675,896 1,402 412,125 1,202 1,028,013 109,813 391,142 474,941 320,000 105,806 109,396 - - 79,505 328,900 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 US$ 45,929 thousand	$ 3,835,585 344,800 2,132,826 3,463,724 955,941 1,200,030 2,011,363 675,896 1,402 412,125 1,202 1,028,013 109,813 391,142 474,941 320,000 105,806 109,396 71,316 85,893 79,505 328,900 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 US$ 45,929 thousand	262,228 32,201 132,117 278,167 61,511 183,000 46,566 145 40 33,565 40 56,600 13,032 28,228 29,278 32,000 6,084 2,936 - - 2,242 8,790 8,332 10,296 25,907 26,715 11,200 3,757 45,643 26,715 56,000 4,672 2,200 12 1 42,093	16.80 43.87 41.93 100.00 20.57 100.00 32.45 29.00 100.00 49.76 40.00 17.25 15.00 39.98 56.53 18.95 31.20 15.08 - - 29.00 100.00 43.85 100.00 100.00 8.14 100.00 7.26 100.00 8.14 33.16 9.02 100.00 0.02 - 100.00	$ 11,664,630 2,136,201 4,355,420 2,770,594 1,890,306 1,641,412 2,796,489 721,494 1,111,057 770,072 739,258 493,017 373,671 388,668 313,076 145,457 139,512 120,739 - - 71,504 66,352 19,170 4,021,919 RMB 867,220 thousand 329,981 265,522 40,220 995,480 329,981 313,512 50,013 15,360 214 16 902,115	$ 253,689 104,951 320,617 (6,622) 232,266 (3,972) 486,245 72,939 (73,369) 17,372 (122,312) (31,380) (629) 11,657 2,156 (11,899) 9,085 (2,132) 17,070 8,263 (25,511) 2,438 (3,887) 97,032 RMB 20,327 thousand (31,380) (7,206) 2,156 (1,620) (31,380) (11,899) 2,156 (5,876) 11,657 320,617 (935)	$ 31,824 46,069 134,435 415 47,777 (3,972) 157,786 21,250 (73,369) 8,475 (48,925) (4,763) (184) 4,661 1,218 (721) 2,843 (323) 4,211 1,653 (7,398) 2,438 (1,704) - - - - - - - - - - - - -	Equity-method investee Subsidiary Equity-method investee Subsidiary Equity-method investee Subsidiary Equity-method investee Equity-method investee Subsidiary Subsidiary Subsidiary Equity-method investee Equity-method investee Equity-method investee Subsidiary Subsidiary Equity-method investee Equity-method investee Equity-method investee Equity-method investee Equity-method investee Subsidiary Equity-method investee Subsidiary Subsidiary Equity-method investee Subsidiary Subsidiary Subsidiary Equity-method investee Subsidiary Subsidiary Subsidiary Equity-method investee Equity-method investee Subsidiary

(Continued)

67 -

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of March 31, 2019	As of March 31, 2019	As of March 31, 2019	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				March 31, 2019	December 31, 2018	Number of Shares (In Thousands)	%	Carrying Amount
Gatetech Technology GH China Engine CMI Hwa Chung Motors COC	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)	Samoa Samoa Mauritius Miaoli, Taiwan British Virgin Island Taipei, Taiwan Taipei, Taiwan Taoyuan, Taiwan British Virgin Islands	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	$ 647,041 US$ 20,268 thousand 59,456 5,000 1,428,503 31,000 10,000 46,250 US$ 968 thousand	$ 647,041 US$ 20,268 thousand 59,456 5,000 1,428,503 31,000 10,000 46,250 US$ 968 thousand	20,130 20,268 3,750 500 60 3,608 1,000 4,250 968	100.00 100.00 100.00 100.00 60.00 100.00 100.00 85.00 100.00	$ 608,479 608,453 97,062 10,261 1,108,886 27,970 10,464 64,687 39,853	$ (1,607) (1,607) - 162 (122,312) 2,437 (25) 2,219 -	$ - - - - - - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Note 1: Eliminated.

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

Note 3: During preparation of the consolidated financial statements, loss on disposal of $22,538 thousand from intra-group transaction had been eliminated.

Note 4: During preparation of the consolidated financial statements, side stream transaction of $33,541 thousand had been eliminated.

Note 5: During preparation of the consolidated financial statements, gain on disposal of $31 thousand from intra-group transaction had been eliminated.

Note 6: During preparation of the consolidated financial statements, side stream transaction of $3,285 thousand had been eliminated.

Note 7: During preparation of the consolidated financial statements, side stream transaction of $95 thousand had been eliminated.

(Concluded)

68 -

TABLE 7

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE THREE MONTHS ENDED MARCH 31, 2019 (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, 2019 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2019 (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, 2019 (Note 1)	Accumulated Repatriation of Investment Income as of March 31, 2019 (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 Spicer Shenyang Spicer	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 Manufacture of vehicles’ key components, drive axle assembly and engine parts series products Manufacture and sale of automobile transmission, shafts, mechanical transmission, shafts and components	$ 4,253,160 (US$ 138,000 thousand) 462,300 (US$ 15,000 thousand) 9,933,070 (EUR 287,000 thousand) 385,250 (US$ 12,500 thousand) 547,980 (US$ 17,780 thousand) 1,047,880 (US$ 34,000 thousand) 439,680 (RMB 96,000 thousand) 184,920 (US$ 6,000 thousand) 345,184 (US$ 11,200 thousand) 938,011 (RMB 204,806 thousand) 393,546 (RMB 85,927 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 Go directly to the mainland China to invest The Corporation indirectly owns these investees through investment company registered in a third region	$ 1,063,290 (US$ 34,500 thousand) 231,150 (US$ 7,500 thousand) 1,611,649 (EUR 46,566 thousand) 154,100 (US$ 5,000 thousand) 87,375 (US$ 2,835 thousand) - 47,062 (US$ 1,527 thousand) 16,643 (US$ 540 thousand) 345,184 (US$ 11,200 thousand) 333,010 (US$ 10,805 thousand) 80,440 (US$ 2,610 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 1,063,290 (US$ 34,500 thousand) 231,150 (US$ 7,500 thousand) 1,611,649 (EUR 46,566 thousand) 154,100 (US$ 5,000 thousand) 87,375 (US$ 2,835 thousand) - 47,062 (US$ 1,527 thousand) 16,643 (US$ 540 thousand) 345,184 (US$ 11,200 thousand) 333,010 (US$ 10,805 thousand) 80,440 (US$ 2,610 thousand)	$ (463,276) - 972,718 (EUR 27,784 thousand) 159,528 (RMB 34,946 thousand) (22,248) (RMB -4,874 thousand) 117,297 (RMB 25,695 thousand) (14,548) (RMB -3,187 thousand) - (7,206) 3,484 (39,991) (US$ -1,297 thousand)	25.00 38.03 16.23 17.55 15.35 17.55 21.94 3.95 100.00 29.00 20.25	$ (115,819) - 157,825 (EUR 4,508 thousand) 63,812 (RMB 13,978 thousand) (7,787) (RMB -1,706 thousand) 46,919 (RMB 10,278 thousand) (7,274) (RMB -1,593 thousand) - (7,206) 1,010 (8,100) (US$ -263 thousand)	$ 1,704,373 193,769 2,796,556 (EUR 80,802 thousand) 2,026,996 (RMB 442,576 thousand) 618,481 (RMB 135,040 thousand) 855,762 (RMB 186,848 thousand) 248,439 (RMB 54,244 thousand) 45,503 (RMB 9,935 thousand) 265,437 381,833 70,099 (US$ 2,274 thousand)	$ 802,029 (US$ 26,023 thousand) - - 514,874 (RMB 112,418 thousand) 162,755 (RMB 35,536 thousand) - - - - - -

(Continued)

69 -

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, 2019 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2019 (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, 2019 (Note 1)	Accumulated Repatriation of Investment Income as of March 31, 2019 (Note 1)
							Outward	Inward
Zhejiang Kangda Motor Industry And Trading (Note 7) Fujian Rui Hua (Note 5) Guangzhou Huayou Motor Maintenance (Notes 5 and 6) Sichuan Huafeng Hanwei (Notes 5 and 6) Tianjin Hwarui (Note 5) Dongguan Huayi (Note 5) Sichuan Lingwei (Notes 5 and 6) Dongguan Huashun (Note 5) Tianjin Hwahong (Note 5) Guangzhou Huayou Motor Sales (Notes 5 and 6) Gatech Suzhou (Note 5)	Sales of vehicle and parts Consultation and services Sales and maintenance of vehicle and parts 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 Aluminum-magnesium alloy casting industry		$ 183,200 (RMB 40,000 thousand) 104,788 (US$ 3,400 thousand) 394,804 (US$ 12,810 thousand) 410,831 (US$ 13,330 thousand) 247,176 (US$ 8,020 thousand) 137,149 (US$ 4,450 thousand) 9,160 (RMB 2,000 thousand) 114,500 (RMB 25,000 thousand) 274,800 (RMB 60,000 thousand) 196,940 (RMB 43,000 thousand) 748,926 (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 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		$ 37,231 (US$ 1,208 thousand) 104,788 (US$ 3,400 thousand) 345,153 (US$ 11,199 thousand) 410,831 (US$ 13,330 thousand) 239,194 (US$ 7,761 thousand) 129,968 (US$ 4,217 thousand) - - - - 624,629 (US$ 20,267 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 37,231 (US$ 1,208 thousand) 104,788 (US$ 3,400 thousand) 345,153 (US$ 11,199 thousand) 410,831 (US$ 13,330 thousand) 239,194 (US$ 7,761 thousand) 129,968 (US$ 4,217 thousand) - - - - 624,629 (US$ 20,267 thousand)	$ - (685) 474 (333) (1,123) (9,276) (55) (RMB -12 thousand) (5,574) (RMB -1,221 thousand) 225 (RMB 49 thousand) 46 (RMB 10 thousand) (1,627)	- 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 72.81	$ - (685) 474 (333) (1,123) (9,276) (55) (RMB -12 thousand) (5,574) (RMB -1,221 thousand) 225 (RMB 49 thousand) 46 (RMB 10 thousand) (1,627)	$ - 93,324 30,583 59,541 215,152 97,476 160 (RMB 35 thousand) 89,356 (RMB 19,510 thousand) 284,684 (RMB 62,158 thousand) 6,096 (RMB 1,331 thousand) 621,738	$ - - - - - - - - - - -

Accumulated Outward Remittance for Investment in Mainland China as of March 31, 2019 (Note 1)		Investment Amount Authorized by Investment Commission, MOEA (Note 1)			Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$6,042,856 (US$143,777 thousand and EUR46,566 thousand)		$7,190,863 (US$218,195 thousand and EUR13,467 thousand)			$31,982,497

(Continued)

70 -

(Concluded)

Note 1: At spot exchange rates on March 31, 2019; US$1= NT$30.82, RMB1= NT$4.58, EUR1= NT$34.61.

Note 2: At the average exchange rates of the three months ended March 31; 2019; US$1= NT$30.829, RMB1= NT$4.565, EUR1= NT$35.01.

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 preparation of the consolidated financial statements, the unrealized profit of $12,283 thousand had been eliminated.

Note 5: Eliminated.

Note 6: In November 2018, Sichuan Huafeng Hanwei, Sichuan Lingwei, Guangzhou Huayou Motor Maintenance and Guangzhou Huayou Motor Sales resolved to dissolve their companies. As of March 31, 2019, the liquidation had not been completed. Note 7: In August 2018, the Group reclassified its joint venture, Zhejiang Kangda, as non-current assets held for sale.

71 -

TABLE 8

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE THREE MONTHS ENDED MARCH 31, 2019

(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	$ 157,827 700,000 150,000	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.	1.81 1.07 0.23
1	Hwa-Lin	Dongguan Huayi	Subsidiary	Other receivables	108,332	The prices and payment terms were based on agreements.	0.17

Note 1: Eliminated.

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

72 -

TABLE 9

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY INVESTMENT RELATIONSHIPS AND PERCENTAGE OF SHARE HELD FRAMEWORK MARCH 31, 2019

==> picture [1073 x 504] intentionally omitted <==

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

Parent Corporation
43.87% 18.95% 100.00% 100.00% 56.53% 100.00% 100.00% 49.76%
Alliance Gatetech CMI
Kian Shen China Engine Sino Diamond Hwa Chung COC
Motors Investment & Technology (Samoa) Motors
Management
33.16% 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 100.00%
100.00% 100.00% Co., Ltd. 100.00% 100.00%
100.00%
(Hong Kong) KSIHK Fujian Rui Hua (British Virgin Hwa-Lin Greentrans Jiangsu (Samoa) GI Hwa Wei Holdings (British Virgin (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%
Dongguan Tianjin Sichuan Guangzhou
Huashun Hwahong Lingwei Huayou Motor
Sales
----- End of picture text -----

73 -

AI assistant

CMC — Interim / Quarterly Report 2019

51979_rns_2019-12-26_8a33fa3c-c1aa-4b39-bdb7-d98f8ae69a24.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

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

 IFRS 16 “Leases”

Definition of a lease

The Group as lessee

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

b. Basis of preparation

2) Subsidiaries included in the consolidated financial statements

2018

a) The Group as lessor

c) Leasehold land for own use

2) Employee benefits

3) Taxation

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

March 31, 2019

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

March 31, 2019

March 31, 2018

11. HEDGING INSTRUMENTS

March 31, 2019

March 31, 2018

12. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE

March 31, 2018

13. INVENTORIES

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

15. NON-CURRENT ASSETS HELD FOR SALE

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Yulon

17. PROPERTY, PLANT AND EQUIPMENT

18. LEASE ARRANGEMENTS

a. Right-of-use assets - 2019

d. Other lease information

2018

19. INVESTMENT PROPERTIES

20. SHORT-TERM BORROWINGS

21. OTHER PAYABLES

22. RETIREMENT BENEFIT PLANS

23. EQUITY

a. Share capital

2) Capital reduction

b. Capital surplus

c. Retained earnings and dividend policy

e. Other equity items

f. Non-controlling interests

24. REVENUE

25. NET PROFIT

Amount

26. INCOME TAXES

a. Income tax recognized in profit or loss

27. EARNINGS PER SHARE

CMC Interim / Quarterly Report 2019