CMC - Interim / Quarterly Report 2019

China Motor Corporation and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 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 June 30, 2019 and 2018, the related consolidated statements of comprehensive income for the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018, the consolidated statements of changes in equity and cash flows for the six 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 June 30, 2019 and 2018, the combined total assets of these non-significant subsidiaries were NT$12,489,517 thousand and NT$12,679,589 thousand, respectively, both representing 19% of the consolidated total assets, and the combined total liabilities of these non-significant subsidiaries were NT$4,023,099 thousand and NT$3,222,352 thousand, respectively, representing 37% and 28%, respectively, of the consolidated total liabilities; for the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018, the amounts of combined comprehensive income (loss) of these non-significant subsidiaries were NT$(704,648) thousand and NT$(12,833) thousand, NT$(766,958) thousand and NT$86,996 thousand, respectively, representing 88% and 2%, 154% and 4%, respectively, of the consolidated total comprehensive income. As disclosed in Note 16 to the consolidated financial statements, as of June 30, 2019 and 2018, some investments accounted for using the equity method were NT$11,525,403 thousand and NT$13,654,118 thousand, respectively, and for the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018, total

comprehensive income (loss) of these equity-method investments were NT$(1,018,815) thousand and NT$264,467 thousand, NT$(531,596) thousand and NT$769,160 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 June 30, 2019 and 2018, its consolidated financial performance for the three months ended June 30, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the six months ended June 30, 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 August 8, 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 and 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, 30 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) Dividends payable Other payables (Note 21) Current tax liabilities (Notes 4 and 26) Lease liabilities (Notes 4 and 18) Other current liabilities (Notes 7, 11 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		June 30, 2019 (Reviewed) Amount % $ 15,298,026 24 579,644 1 68,030 - 733,205 1 991,469 2 2,104,799 3 1,418,728 2 3,500,966 6 1,410,527 2 148,023 - 599,136 1 26,852,553 42 711,829 1 213,687 - 671,390 1 26,984,132 42 6,566,292 10 502,974 1 1,372,594 2 303,727 1 286,115 - 144,981 - 37,757,721 58 $ 64,610,274 100 $ 630,000 1 59,994 - 2,298,755 4 712,121 1 2,479,292 4 2,406,573 4 340,230 - 93,706 - 342,453 1 9,363,124 15 351,286 - 411,752 1 727,229 1 17,700 - 1,507,967 2 10,871,091 17 13,840,508 21 6,392,892 10 9,257,157 14 1,046,585 2 19,858,392 31 30,162,134 47 (476,107) (1) 193,014 - 23,867 - (7,538) - (266,764) (1) 50,128,770 77 3,610,413 6 53,739,183 83 $ 64,610,274 100		December 31, 2018 (Audited) Amount % $ 14,429,460 23 567,643 1 104,359 - 743,303 1 1,177,454 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 14,093 - 2,717,065 4 117,081 - - - 283,430 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		June 30, 2018 (Reviewed)
						Amount % $ 15,450,398 23 820,579 1 87,437 - 321,226 1 1,137,783 2 2,128,149 3 566,733 1 4,194,853 6 953,270 2 - - 476,732 1 26,137,160 40 739,392 1 298,463 - 1,239,936 2 29,122,912 44 6,338,657 10 - - 1,387,655 2 262,356 - 320,446 1 248,247 - 39,958,064 60 $ 66,095,224 100 $ 650,000 1 89,945 - 2,602,131 4 1,238,610 2 2,667,364 4 2,623,953 4 279,517 - - - 360,896 1 10,512,416 16 144,921 - - - 870,388 1 11,954 - 1,027,263 1 11,539,679 17 13,840,508 21 6,408,671 9 8,897,857 13 1,051,658 2 20,967,613 32 30,917,128 47 (413,334) (1) 254,257 1 7,182 - - - (151,895) - 51,014,412 77 3,541,133 6 54,555,545 83 $ 66,095,224 100

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

(With Deloitte & Touche review report dated August 8, 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 Share of profit (loss) of associates and joint ventures (Note 16) Interest income Other income Net foreign exchange gain (loss) Net loss on financial instruments at fair value through profit or loss Interest expense Other expense Impairment loss (Note 17) Total non-operating income and expenses PROFIT (LOSS) BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT (LOSS) FOR THE PERIOD		For the Three Months EndedJune 30	For the Three Months EndedJune 30	For the Three Months EndedJune 30		For theSix Months	For theSix Months	EndedJune 30
		2019		2018		2019		2018
		Amount % $ 7,844,904 95 437,311 5 8,282,215 100 6,629,844 80 44,285 1 6,674,129 81 1,608,086 19 (7,078) - 1,601,008 19 389,915 5 278,627 3 406,414 5 1,074,956 13 526,052 6 (1,035,626 ) (13 ) 44,906 1 32,325 - (8,217 ) - (41,428 ) (1 ) (4,998 ) - (5,344 ) - (36,637) - (1,055,019) (13) (528,967 ) (7 ) 196,384 2 (725,351) (9)		Amount % $ 8,203,201 96 337,141 4 8,540,342 100 6,745,621 79 50,921 1 6,796,542 80 1,743,800 20 (23,863) - 1,719,937 20 383,212 4 309,594 4 567,496 7 1,260,302 15 459,635 5 444,682 5 49,346 1 17,290 - 23,211 - (40,548 ) - (2,840 ) - (3,806 ) - - - 487,335 6 946,970 11 122,656 2 824,314 9		Amount % $ 16,132,756 95 875,918 5 17,008,674 100 13,699,973 81 78,182 - 13,778,155 81 3,230,519 19 (35,423) - 3,195,096 19 805,167 5 526,798 3 775,027 5 2,106,992 13 1,088,104 6 (667,803 ) (4 ) 84,104 1 42,657 - 25,331 - (30,342 ) - (11,342 ) - (9,958 ) - (36,637) - (603,990) (3) 484,114 3 386,089 2 98,025 1		Amount % $ 18,158,360 96 793,915 4 18,952,275 100 15,013,037 79 90,835 1 15,103,872 80 3,848,403 20 (64,353) - 3,784,050 20 905,194 5 631,270 3 984,922 5 2,521,386 13 1,262,664 7 1,179,307 6 96,388 1 36,130 - 42,144 - (39,823 ) - (5,443 ) - (8,649 ) - (10,346) - 1,289,708 7 2,552,372 14 340,780 2 2,211,592 12 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Unrealized loss 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 (loss) for the period, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests		For the Three Months EndedJune 30	For the Three Months EndedJune 30	For the Three Months EndedJune 30		For theSix Months	For theSix Months	EndedJune 30
		2019		2018		2019		2018
		Amount % $ (20,169 ) - 40,309 1 39,698 - (4,117 ) - (15,186 ) - (117,841) (2) (77,306) (1) $ (802,657) (10) $ (751,153 ) (9 ) 25,802 - $ (725,351) (9) $ (795,442 ) (10 ) (7,215) - $ (802,657) (10)		Amount % $ (20,803 ) - 3,120 - 1,562 - (758 ) - (14,299 ) - (76,136) (1) (107,314) (1) $ 717,000 8 $ 742,102 8 82,212 1 $ 824,314 9 $ 667,961 8 49,039 - $ 717,000 8		Amount % $ (14,178 ) - 40,597 - 184,592 1 (3,923 ) - 7,364 - 185,402 1 399,854 2 $ 497,879 3 $ 9,366 - 88,659 1 $ 98,025 1 $ 388,883 2 108,996 1 $ 497,879 3		Amount % $ (17,260 ) - 23,028 - (4,000 ) - 1,498 - 3,729 - 78,715 - 85,710 - $ 2,297,302 12 $ 2,060,005 11 151,587 1 $ 2,211,592 12 $ 2,143,704 11 153,598 1 $ 2,297,302 12 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

EARNINGS (LOSS) PER SHARE (Note 27) Basic Diluted	For the Three Months EndedJune 30	For the Three Months EndedJune 30	For theSix Months EndedJune 30	For theSix Months EndedJune 30
	2019	2018	2019	2018
	Amount % $(0.55) $(0.55)	Amount % $ 0.54 $ 0.54	Amount % $ 0.01 $ 0.01	Amount % $ 1.51 $ 1.51

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

(With Deloitte & Touche review report dated August 8, 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 - - - - - 1,331 - - - - - - - - - - - - $ 13,840,508 $ 6,408,671 $ 13,840,508 $ 6,403,633 - - 13,840,508 6,403,633 - - - - - - - (10,741 ) - - - - - - - - - - - - - - $ 13,840,508 $ 6,392,892	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 21,784,119 410,564 - (410,564 ) - - (2,491,292 ) - - 13,256 - - - - - 2,060,005 - - 16,668 - - 2,076,673 - - (5,086 ) - - 507 $ 8,897,857 $ 1,051,658 $ 20,967,613 $ 8,897,857 $ 1,046,967 $ 22,486,952 - - (19,503) 8,897,857 1,046,967 22,467,449 359,300 - (359,300 ) - - (2,352,886 ) - (382 ) 382 - - (2,763 ) - - - - - 9,366 - - 11,010 - - 20,376 - - 85,117 - - 17 - - - $ 9,257,157 $ 1,046,585 $ 19,858,392		Other Equity		Equity Directly Associated With Gain on the Non-current Hedging Instruments Assets Held For Sale $ - $ - (12,253) - (12,253 ) - - - - - - - - - - - 19,435 - 19,435 - - - - - $ 7,182 $ - $ 20,997 $ (7,538 ) - - 20,997 (7,538 ) - - - - - - - - - - - - 37,365 - 37,365 - - - - - (34,495) - $ 23,867 $ (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 - - - - - - - - - - 71,784 (24,188) 71,784 (24,188) - 5,086 - (507) $ (413,334) $ 254,257 $ (646,278 ) $ 117,177 - - (646,278 ) 117,177 - - - - - - - - - - - - 170,171 160,971 170,171 160,971 - (85,117 ) - (17 ) - - $ (476,107) $ 193,014	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 August 8, 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 (reversal of expected credit losses) Net loss on fair value change of financial instruments at fair value through profit or loss Interest expenses Interest income Share of loss (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 Gain on lease modification Changes in operating assets and liabilities Financial instruments at fair value through profit or loss Notes and accounts receivable Trade receivables from related parties Other receivables Inventories Prepayments Other current assets Notes and accounts payable Trade payables to related parties Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Proceeds from repayment of principal of financial assets at amortized cost Acquisition of investments accounted for using the equity method		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 484,114 556,380 55,613 (5,157) 30,342 11,342 (84,104) 667,803 1,566 1,640 36,637 35,423 (26,156) (56) (2,674) 191,156 (154,335) (31,992) 571,198 (205,181) (542) (406,588) (235,157) (313,790) 41,491 (183,099) 1,035,874 (56,426) 979,448 17 (316,167) 528,905 -	2018 $ 2,552,372 495,277 55,050 3,448 39,823 5,443 (96,388) (1,179,307) 2,181 - 10,346 64,353 (21,811) - (292,669) 43,509 (423,940) 8,804 271,487 485,810 110,052 45,020 (58,890) (251,559) 86,554 (270,309) 1,684,656 (263,202) 1,421,454 - (326,657) 1,300,645 (144,474) (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

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 Dividends received Net cash (used in) generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Decrease in short-term bills payable Repayment of the principal portion of lease liabilities Decrease in other non-current liabilities Interest paid Non-controlling interest 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 Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 227,159 (726,907) 17,768 (24,274) 4,820 92,713 195,370 (596) (15,000) (33,978) (49,369) (13,547) (11,267) - (123,161) 2,777 858,468 15,172,763	2018 $ - (325,042) 31,791 (126,216) 6,092 109,431 141,479 667,049 (95,000) (19,988) - (17,697) (5,461) (614) (138,760) 1,616 1,951,359 13,816,041

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 16,031,231 $ 15,767,400

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets at June 30, 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		June 30	June 30
		2019 $ 15,298,026 733,205 $ 16,031,231	2018 $ 15,450,398 317,002 $ 15,767,400

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

(With Deloitte & Touche review report dated August 8, 2019)

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 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 August 7, 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

10 -

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. The IFRSs endorsed by the FSC for application starting from 2020

Effective Date New IFRSs Announced by IASB Amendments to IFRS 3 “Definition of a Business” January 1, 2020 (Note 1) Amendments to IAS 1 and IAS 8 “Definition of Material” January 1, 2020 (Note 2)

Note 1: 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 2: 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.

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

New IFRSs 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”	Effective Date Announced by IASB (Note)
	To be determined by IASB January 1, 2021

Note: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.

12 -

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.

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.

13 -

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.

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

Combined Shareholding Ratio
June 30,
2019
December 31,
2018
June 30,
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

(Continued)

14 -

Investor
Investee
Main Business
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
June 30,
2019
December 31,
2018
June 30,
2018
Note
-
-
100.00
d)
100.00
100.00
100.00
e)
100.00
100.00
100.00
e)

(Concluded)

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 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.
d) In October 2017, Sichuan Houwei has 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 June 30, 2019, the liquidation had not been completed. As of July 2019, the annulment of Sichuan Lingwei had been completed.

For the relationship between the Corporation and its controlled entities as of June 30, 2019, refer to Table 9.

All the subsidiaries listed above are non-significant subsidiaries. Except for Kian Shen, their financial statements have not been reviewed.

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.

15 -

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.

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.

16 -

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.

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.

17 -

6. CASH AND CASH EQUIVALENTS

7.	Cash Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits Repurchase agreements collateralized by bonds FINANCIAL INSTRUMENTS AT FAIR VALUE 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 instruments (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	June 30, 2019 December 31, 2018 $ 3,606 $ 4,439 2,225,287 1,870,223 2,228,893 1,874,662 10,343,999 11,104,232 2,725,134 1,450,566 13,069,133 12,554,798 $ 15,298,026 $ 14,429,460 THROUGH PROFIT OR LOSS June 30, 2019 December 31, 2018 $ 579,644 $ 567,620 - 23 $ 579,644 $ 567,643 $ 17,237 $ 79 $ 711,829 $ 734,341	June 30, 2018 $ 4,814 3,881,571 3,886,385 10,233,472 1,330,541 11,564,013 $ 15,450,398 June 30, 2018 $ 809,974 10,605 $ 820,579 $ 12,822 $ 739,392

18 -

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

June 30, 2019

			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2019.07.05-2019.08.23	USD10,000/NTD313,977
Buy	RMB/EUR	2019.07.02	RMB89,745/EUR11,842
December 31, 2018
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2019.01.04-2019.01.22	USD5,000/NTD153,480
June 30, 2018
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2018.08.31	USD13,800/NTD408,756
Sale	RMB/USD	2018.08.31	RMB88,860/USD13,800

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

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	June 30, 2019 December 31, 2018 $ 24,391 $ 18,673 24,047 24,045 48,438 42,718 165,249 184,678 $ 213,687 $ 227,396	June 30, 2018 $ 24,813 37,268 62,081 236,382 $ 298,463

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.

19 -

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Principal guaranteed notes Less: Allowance for impairment loss Non-current Bonds Preference shares Principal guaranteed notes Less: Allowance for impairment loss	June 30, 2019 December 31, 2018 $ 68,456 $ 105,015 (426) (656) $ 68,030 $ 104,359 $ 666,582 $ 820,015 9,900 9,900 - - 676,482 829,915 (5,092) (5,210) $ 671,390 $ 824,705	June 30, 2018 $ 87,985 (548) $ 87,437 $ 870,846 9,900 367,440 1,248,186 (8,250) $ 1,239,936

a. The coupon rates of principal guaranteed notes were ranging from 2.98%-3.03%, 3.03%-3.07% and 2.05%-3.90% per annum as of June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
b. The coupon rates of bonds were ranging from 0.86%-4.34%, 0.86%-4.80% and 1.02%-4.80% per annum as of June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
c. The coupon rate of preference shares was 1.50% per annum as of June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
d. 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	June 30, 2019 December 31, 2018 $ 744,938 $ 934,930 (5,518) (5,866) $ 739,420 $ 929,064	June 30, 2018 $ 1,336,171 (8,798) $ 1,327,373

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.

20 -

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:

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

June 30, 2019

Category Expected Loss Rate Performing 0.0769%-0.6221% No rating 32.4908% December 31, 2018 Category Expected Loss Rate Performing 0.0769%-0.6221% No rating 32.4908% June 30, 2018 Category Expected Loss Rate Performing 0.0769%-0.6221% No rating 39.7172%	Gross Carrying Amount
	At Amortized Cost $ 735,038 9,900 Gross Carrying Amount
	At Amortized Cost $ 925,030 9,900 Gross Carrying Amount
	At Amortized Cost $ 1,326,271 9,900

21 -

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 at June 30, 2019 Balance at January 1, 2018 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance at June 30, 2018	Credit Rating
	Performing (12-month ECLs) No rating (Lifetime ECLs - Not Credit- impaired) $ 2,650 $ 3,216 1,967 - (2,334) - 19 - $ 2,302 $ 3,216 $ 5,572 $ 3,932 2,032 - (2,841) - 103 - $ 4,866 $ 3,932

a. During the six months ended June 30, 2019 and 2018, the Group purchased principal guaranteed notes of $316,167 thousand and $326,657 thousand, respectively, and correspondingly increased the loss allowance for investments rated as performing of $1,967 thousand and $2,032 thousand, respectively.
b. Investments in principle guaranteed notes of $353,446 thousand and bonds of $175,459 thousand were redeemed during the six months ended June 30, 2019 and investments in negotiable certificates of deposit of $700,000 thousand, principle guaranteed notes of $436,412 thousand and bonds of $164,233 thousand were redeemed during the six months ended June 30, 2018, respectively, with a consequential reduction in the loss allowance for investments rated as performing of $2,334 thousand and $2,841 thousand, respectively.

11. HEDGING INSTRUMENTS

Financial assets Cash flow hedge - spot rate Cash flow hedge - foreign exchange forward contracts Financial liabilities (included in other current liabilities) Cash flow hedge - foreign exchange forward contracts	June 30, 2019 December 31, 2018 $ 733,205 $ 743,303 - - $ 733,205 $ 743,303 $ - $ -	June 30, 2018 $ 317,002 4,224 $ 321,226 $ 409

22 -

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 six months ended June 30, 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.

June 30, 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 rate	JPY/NTD	JPY2,540,559/	2019.7.11-	0.2754-0.2780	Financial assets	$	733,205 $ 23,176
		NTD703,088	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					$ (23,176)		$ 23,176
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

23 -

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 $ (20,997) $ 20,997

June 30, 2018

Notional Amount Forward Rate Line Item in Hedging Instruments Currency (In Thousands) Maturity (Note) Balance Sheet Cash flow hedge Forecast purchases - foreign exchange forward contracts JPY/NTD JPY700,000/ NTD188,910 2018.7.31- 2018.10.16 0.2689-0.2706 Financial assets for hedging USD/NTD USD2,300/NTD70,219 2018.9.21 NTD30.53:USD1 Other current liabilities RMB/USD RMB15,327/USD2,300 2018.9.21 RMB6.664:USD1 Financial assets for hedging Forecast purchases - spot rate JPY/NTD JPY1,151,060/ NTD312,205 2018.7.8- 2018.9.30 0.2686-0.2734 Financial assets for hedging		Carrying A	mount V Liability I $ - (409 ) - - $ (409)	Change in alue Used for Calculating Hedge neffectiveness $ 3,243 (327 ) 136 4,130 $ 7,182
		Asset $ 4,054 - 170 317,002 $ 321,226

Note: NTD/JPY, unless stated otherwise.

Hedged Items Cash flow hedge Forecast purchases Comprehensive Income Cash flow hedge Forecast purchases	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ (7,182) $ 7,182 Hedging Gains Recognized inOCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ (7,182) $ 7,182 Hedging Gains Recognized inOCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ (7,182) $ 7,182 Hedging Gains Recognized inOCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ (7,182) $ 7,182 Hedging Gains Recognized inOCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ (7,182) $ 7,182 Hedging Gains Recognized inOCI
	For the Three Months Ended June 30 2019 2018 $ 40,309 $ 3,120			For the Six Months Ended June 30
		2019 $ 40,309		2019 $ 40,597	2018 $ 23,028

The Group had signed component purchasing contracts with the suppliers in Japan and China, 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.

24 -

12. NOTES AND ACCOUNTS RECEIVABLE, NET

At amortized cost Notes and accounts receivable Less: Allowance for impairment loss	June 30, 2019 December 31, 2018 $ 1,006,453 $ 1,197,225 (14,984) (19,771) $ 991,469 $ 1,177,454	June 30, 2018 $ 1,148,694 (10,911) $ 1,137,783

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:

June 30, 2018

Not past due Less than 60 days 61-90 days Over 91 days Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	June 30, 2019 December 31, 2018 $ 944,257 $ 1,146,617 24,396 29,254 519 11,971 37,281 9,383 1,006,453 1,197,225 (14,984) (19,771) $ 991,469 $ 1,177,454	June 30, 2018 $ 1,097,326 30,551 1,472 19,345 1,148,694 (10,911) $ 1,137,783

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

Balance at January 1 Add: Net remeasurement of loss allowance Less: Net reversal of loss allowance Foreign exchange gains and losses Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 19,771 - (4,809) 22 $ 14,984	2018 $ 6,788 4,154 - (31) $ 10,911

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13. INVENTORIES

Merchandise Finished goods Work in progress Raw materials Materials in transit	June 30, 2019 December 31, 2018 $ 310,820 $ 196,059 747,360 1,453,757 499,650 374,472 1,648,071 1,759,515 295,065 286,461 $ 3,500,966 $ 4,070,264	June 30, 2018 $ 712,289 749,494 580,652 1,923,286 229,132 $ 4,194,853

The costs of inventories recognized as cost of goods sold for the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018 were $6,629,844 thousand, $6,745,621 thousand, $13,699,973 thousand and $15,013,037 thousand, respectively.

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

The Group had a 43.87% interest in Kian Shen as of June 30, 2019, December 31, 2018 and June 30, 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	June 30, 2019 December 31, 2018 $ 1,192,814 $ 836,938 3,958,056 4,140,669 (749,131) (685,896) (263,948) (178,573) $ 4,137,791 $ 4,113,138 $ 1,815,249 $ 1,804,434 2,322,542 2,308,704 $ 4,137,791 $ 4,113,138	June 30, 2018 $ 848,658 4,165,103 (841,362) (178,001) $ 3,994,398 $ 1,752,342 2,242,056 $ 3,994,398

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Revenue Profit for the period Other comprehensive income (loss) for the period Total comprehensive income (loss) for the period Profit attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Total comprehensive income (loss) attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Net cash outflow from: Operating activities Investing activities Financing activities Foreign exchange adjustments Net cash outflow	For the Three Months Ended June 30 2019 2018 $ 331,612 $ 349,725 $ 15,589 $ 97,072 (58,821) (59,101) $ (43,232) $ 37,971 $ 6,839 $ 42,585 8,750 54,487 $ 15,589 $ 97,072 $ (18,966) $ 16,658 (24,266) 21,313 $ (43,232) $ 37,971	For the Three Months Ended June 30 2019 2018 $ 331,612 $ 349,725 $ 15,589 $ 97,072 (58,821) (59,101) $ (43,232) $ 37,971 $ 6,839 $ 42,585 8,750 54,487 $ 15,589 $ 97,072 $ (18,966) $ 16,658 (24,266) 21,313 $ (43,232) $ 37,971		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 331,612 $ 15,589 (58,821) $ (43,232) $ 6,839 8,750 $ 15,589 $ (18,966) (24,266) $ (43,232)		2019 $ 683,939 $ 120,540 36,233 $ 156,773 $ 52,881 67,659 $ 120,540 $ 68,776 87,997 $ 156,773 $ (118,930) 59,014 (34,236) 11 $ (94,141)	2018 $ 628,151 $ 201,798 3,583 $ 205,381 $ 88,529 113,269 $ 201,798 $ 90,101 115,280 $ 205,381 $ (99,393) 103,848 (70,000) (6,383) $ (71,928)

As of June 30, 2019 and 2018, Kian Shen had declared dividends amounting to $132,120 thousand and $176,160 thousand, respectively. As of the issuance date of the Group’s consolidated financial statements, the Corporation and non-controlling interests of Kian Shen have not received the dividends.

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	June 30, 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.

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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	June 30, 2019 $ 19,397,005 7,587,127 $ 26,984,132 June 30, 2019 $ 11,266,929 8,130,076 $ 19,397,005	December 31, 2018 $ 20,979,597 8,127,177 $ 29,106,774 December 31, 2018 $ 11,479,604 9,499,993 $ 20,979,597	June 30, 2018 $ 21,172,368 7,950,544
			$ 29,122,912
			June 30, 2018 $ 11,509,911 9,662,457
			$ 21,172,368

1) Material associates

The Group held 16.80% interest in Yulon on June 30, 2019, December 31, 2018 and June 30, 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	June 30, 2019 December 31, 2018 $ 5,978,802 $ 4,772,553	June 30, 2018 $ 5,533,014

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.

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Yulon

June 30, 2019 Current assets $ 234,451,996 Non-current assets 89,498,128 Current liabilities (209,708,180) Non-current liabilities (32,789,631) Equity 81,452,313 Non-controlling interests (11,024,272) $ 70,428,041 Proportion of the Group’s ownership 16.80% Equity attributable to the Group $ 11,831,911 Cross shareholdings (568,267) Unrealized gain on sidestream transactions 3,285 Carrying amount $ 11,266,929 For the Three Months Ended June 30 2019 2018 Operating revenue $ 21,021,878 $ 21,802,887 Net profit (loss) for the period $ (757,141) $ 532,324 Other comprehensive income (loss) (76,237) (153,189) Total comprehensive income (loss) for the period $ (833,378) $ 379,135	June 30, 2019 Current assets $ 234,451,996 Non-current assets 89,498,128 Current liabilities (209,708,180) Non-current liabilities (32,789,631) Equity 81,452,313 Non-controlling interests (11,024,272) $ 70,428,041 Proportion of the Group’s ownership 16.80% Equity attributable to the Group $ 11,831,911 Cross shareholdings (568,267) Unrealized gain on sidestream transactions 3,285 Carrying amount $ 11,266,929 For the Three Months Ended June 30 2019 2018 Operating revenue $ 21,021,878 $ 21,802,887 Net profit (loss) for the period $ (757,141) $ 532,324 Other comprehensive income (loss) (76,237) (153,189) Total comprehensive income (loss) for the period $ (833,378) $ 379,135	December 31, 2018 June 30, 2018 $ 209,300,378 $ 189,340,786 96,372,715 87,812,869 (195,992,191) (176,053,295) (26,620,612) (21,009,288) 83,060,290 80,091,072 (11,323,162) (8,233,513) $ 71,737,128 $ 71,857,559 16.80% 16.80% $ 12,051,837 $ 12,072,070 (575,518) (565,444) 3,285 3,285 $ 11,479,604 $ 11,509,911 For the Six Months Ended June 30 2019 2018 $ 41,258,765 $ 45,434,936 $ (15,486) $ 2,311,528 801,109 176,400 $ 785,623 $ 2,487,928	December 31, 2018 June 30, 2018 $ 209,300,378 $ 189,340,786 96,372,715 87,812,869 (195,992,191) (176,053,295) (26,620,612) (21,009,288) 83,060,290 80,091,072 (11,323,162) (8,233,513) $ 71,737,128 $ 71,857,559 16.80% 16.80% $ 12,051,837 $ 12,072,070 (575,518) (565,444) 3,285 3,285 $ 11,479,604 $ 11,509,911 For the Six Months Ended June 30 2019 2018 $ 41,258,765 $ 45,434,936 $ (15,486) $ 2,311,528 801,109 176,400 $ 785,623 $ 2,487,928	December 31, 2018 June 30, 2018 $ 209,300,378 $ 189,340,786 96,372,715 87,812,869 (195,992,191) (176,053,295) (26,620,612) (21,009,288) 83,060,290 80,091,072 (11,323,162) (8,233,513) $ 71,737,128 $ 71,857,559 16.80% 16.80% $ 12,051,837 $ 12,072,070 (575,518) (565,444) 3,285 3,285 $ 11,479,604 $ 11,509,911 For the Six Months Ended June 30 2019 2018 $ 41,258,765 $ 45,434,936 $ (15,486) $ 2,311,528 801,109 176,400 $ 785,623 $ 2,487,928

		$
		$
		$

2019 $ 21,021,878 $ (757,141) (76,237) $ (833,378)	2018 $ 21,802,887 $ 532,324 (153,189) $ 379,135		2019 $ 41,258,765 $ (15,486) 801,109 $ 785,623	2018 $ 45,434,936 $ 2,311,528 176,400 $ 2,487,928

As of June 30, 2019 and 2018, Yulon had declared dividends amounting to $1,053,857 thousand and $912,294 thousand, respectively, which remain unpaid as of the issuance date of the consolidated financial statements.

2) Aggregate information of associates that are not individually material

The Group’s share of: Net profit (loss) for the period Other comprehensive income Total comprehensive income (loss) for the period	For the Three Months Ended June 30 2019 2018 $ (953,799) $ 71,470 53,785 24,774 $ (900,014) $ 96,244	For the Three Months Ended June 30 2019 2018 $ (953,799) $ 71,470 53,785 24,774 $ (900,014) $ 96,244		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ (953,799) 53,785 $ (900,014)		2019 $ (755,437) 140,273 $ (615,164)	2018 $ 223,158 21,702 $ 244,860

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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%.

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 Yulon 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).

In June 2019, the Group disposed of 43.85% interest in Yulon IT to Yulon and recognized a loss on disposal of investment amounting to $1,100 thousand (the loss of $1,100 thousand consisted of $17,860 thousand of proceeds less the book value of the investment of $18,960 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 and Fortune Motors, 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	June 30, 2019 December 31, 2018 $ 7,587,127 $ 8,127,177	June 30, 2018 $ 7,950,544

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Net profit of the period Other comprehensive income (loss) Total comprehensive income for the period	For the Three Months Ended June 30 2019 2018 $ 106,539 $ 370,888 (104,296) (84,668) $ 2,243 $ 286,220	For the Three Months Ended June 30 2019 2018 $ 106,539 $ 370,888 (104,296) (84,668) $ 2,243 $ 286,220		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 106,539 (104,296) $ 2,243		2019 $ 244,176 94,870 $ 339,046	2018 $ 727,863 38,261 $ 766,124

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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.

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	June 30, 2019 December 31, 2018 $ 2,127,397 $ 2,127,397 13,873 13,618 981,868 1,011,801 1,957,707 2,030,592 407,685 407,735 1,077,762 797,004 $ 6,566,292 $ 6,388,147	June 30, 2018 $ 2,127,397 13,577 1,058,137 2,199,300 418,165 522,081 $ 6,338,657

Except for the depreciation recognized and the cost of acquisition of property, plant and equipment for increasing productivity, which totaled $324,099 thousand, $167,378 thousand, $726,907 thousand and $325,042 thousand for the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 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 $36,637 thousand, $0 thousand, $36,637 thousand and $10,346 thousand for the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018, respectively. 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 4.44% and 6.69% per annum in 2019 and 2018, respectively.

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

June 30, 2019

Carrying amounts
Land			$	97,236
Buildings				395,923
Other equipment				9,815
			$	502,974
	For the Three		For the Six
	Months Ended		Months Ended
	June 30, 2019		June 30, 2019
Additions to right-of-use assets			$	17,311
Depreciation charge for right-of-use assets
Land	$	7,462	$	14,930
Buildings		16,646		33,723
Other equipment		1,686		3,267
	$	25,794	$	51,920
Lease liabilities - 2019
			June 30, 2019
Carrying amounts
Current			$	93,706
Non-current			$	411,752
Range of discount rate for lease liabilities was as follows:
			June 30, 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	For the Six
	Months Ended	Months Ended
	June 30, 2019	June 30, 2019
Expenses relating to short-term leases	$ 6,016	$ 12,042
Expenses relating to low-value asset leases	$ 825	$ 1,410
Total cash outflow for leases		$ 69,430

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	June 30, 2018 $ 111,291 326,273 170,974 $ 608,538

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

19. INVESTMENT PROPERTIES

Investment properties	June 30, 2019 December 31, 2018 $ 1,372,594 $ 1,380,002	June 30, 2018 $ 1,387,655

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 for the three months ended 2019 and 2018 and for the six months ended June 30, 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 June 30, 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 June 30, 2019 was as follows:

		June	30, 2019
Year	1	$	53,453
Year	2		44,940
Year	3		30,493
Year	4		21,797
Year	5		2,065
		$ 152,748

The future minimum lease payments of non-cancellable operating lease commitments as of December 31 and June 30, 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	June 30, 2018 $ 55,237 118,690 4,130 $ 178,057

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	June 30, 2019 December 31, 2018 $ 340,000 $ 340,000 290,000 305,000 $ 630,000 $ 645,000	June 30, 2018 $ 330,000 320,000 $ 650,000

a. The interest rates on credit borrowings were ranging from 0.95%-0.98%, 0.95%-0.98% and 0.95%-1.25% per annum as of June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
b. The interest rates on bank loans were 1.18%, 1.18% and 1.18% per annum as of June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
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21. OTHER PAYABLES

Payable for salaries or bonus Payable for advertisement Payable for taxes Payable for warranties Provisions for employee benefits Others	June 30, 2019 December 31, 2018 $ 639,331 $ 1,149,478 350,634 197,919 292,231 191,369 247,604 263,952 98,675 153,296 778,098 761,051 $ 2,406,573 $ 2,717,065	June 30, 2018 $ 716,582 302,339 323,282 296,437 108,657 876,656 $ 2,623,953

22. RETIREMENT BENEFIT PLANS

For the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018, the pension expenses of defined benefit plans were $14,256 thousand, $16,781 thousand, $28,683 thousand and $33,430 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	June 30, 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	June 30, 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 capital reduction through cash returned to shareholders was proposed by the Corporation’s board of directors on March 27, 2019 and approved in the shareholders’ meeting in June 2019. The 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. The capital reduction was approved by the FSC on July 23, 2019. In addition, the record date of capital reduction on August 8, 2019 was approved by the board of directors in August 2019.

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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	June 30, 2019 December 31, 2018 $ 5,183,923 $ 5,183,923 1,184,920 1,184,920 4,666 4,666 2,225 2,225 17,158 27,899 $ 6,392,892 $ 6,403,633	June 30, 2018 $ 5,183,923 1,184,920 4,666 2,225 32,937 $ 6,408,671

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.

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.

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The appropriations of earnings for 2018 and 2017 that were approved in the shareholders’ meetings in June 2019 and 2018, respectively, were as follows:

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

Information on the appropriation of earnings 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 June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 1,046,967 (377) (5) $ 1,046,585	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 Reclassification adjustments Disposal of associates accounted for using the equity method Other comprehensive income recognized for the period Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ (646,278) 8,596 159,802 1,773 170,171 $ (476,107)	2018 $ (485,118) 4,659 67,125 - 71,784 $ (413,334)

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2) Unrealized gain on financial assets at FVTOCI

Balance at January 1 Recognized for the period Unrealized loss - equity instruments Share from associates accounted for using the equity method Other comprehensive gain (loss) recognized for the period Cumulative unrealized loss (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 June 30 3) Gain on the hedging instruments 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 Share from joint ventures accounted for using the equity method Other comprehensive income recognized for the period Transferred to initial carrying amount of hedged items Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 2018 $ 117,177 $ 273,866 (11,920) (8,611) 172,891 (15,577) 160,971 (24,188) (85,117) 5,086 (17) (507) $ 193,014 $ 254,257 For the Six Months Ended June 30
		2019 $ 20,997 - 36,674 - 691 37,365 (34,495) $ 23,867	2018 $ (12,253) 382 6,112 12,941 - 19,435 - $ 7,182

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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 loss 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 Cash dividend distributed by subsidiaries Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 3,613,814 88,659 (2,258) (1,232) 23,827 20,337 (112,397) $ 3,610,413	2018 $ 3,550,772 151,587 (8,649) (930) 11,590 2,011 (163,237) $ 3,541,133

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 June 30 2019 2018 $ 6,227,957 $ 6,516,460 1,616,947 1,686,741 7,844,904 8,203,201 402,335 299,587 15,241 13,718 19,735 23,836 $ 8,282,215 $ 8,540,342		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 6,227,957 1,616,947 7,844,904 402,335 15,241 19,735 $ 8,282,215		2019 $ 13,086,213 3,046,543 16,132,756 807,864 32,077 35,977 $ 17,008,674	2018 $ 14,874,383 3,283,977 18,158,360 720,593 29,939 43,383 $ 18,952,275

39 -

25. NET PROFIT (LOSS)

Net profit (loss) concludes as follow:

a. Depreciation and amortization

An analysis of depreciation by function Operating costs Operating expenses 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 June 30 2019 2018 $ 202,533 $ 226,598 61,797 38,871 $ 264,330 $ 265,469 $ 2,136 $ 2,186 12,729 15,284 $ 14,865 $ 17,470 $ 12,406 $ 9,244	For the Three Months Ended June 30 2019 2018 $ 202,533 $ 226,598 61,797 38,871 $ 264,330 $ 265,469 $ 2,136 $ 2,186 12,729 15,284 $ 14,865 $ 17,470 $ 12,406 $ 9,244		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 202,533 61,797 $ 264,330 $ 2,136 12,729 $ 14,865 $ 12,406		2019 $ 433,364 123,016 $ 556,380 $ 4,089 26,815 $ 30,904 $ 24,709	2018 $ 419,835 75,442 $ 495,277 $ 4,319 32,243 $ 36,562 $ 18,488

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

Rental income from investment properties Direct operating expenses from investment properties that generated rental income	For the Three Months Ended June 30 2019 2018 $ 16,648 $ 16,054 $ 5,772 $ 6,163	For the Three Months Ended June 30 2019 2018 $ 16,648 $ 16,054 $ 5,772 $ 6,163		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 16,648 $ 5,772		2019 $ 33,159 $ 10,714	2018 $ 32,037 $ 11,409

c. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans Short-term benefits		For the Three Months Ended June 30 2019 2018 $ 21,663 $ 19,650 14,256 16,781 35,919 36,431 843,160 938,729 $ 879,079 $ 975,160		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 21,663 14,256 35,919 843,160 $ 879,079		2019 $ 43,720 28,683 72,403 1,751,779 $ 1,824,182	2018 $ 39,323 33,430 72,753 1,956,785 $ 2,029,538 (Continued)

40 -

An analysis of employee benefits expenses by function Operating costs Operating expenses		For the Three Months Ended June 30 2019 2018 $ 485,250 $ 533,744 393,829 441,416 $ 879,079 $ 975,160		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 485,250 393,829 $ 879,079		2019 $ 992,032 832,150 $ 1,824,182	2018 $ 1,069,783 959,755 $ 2,029,538 (Concluded)

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 June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018, the employees’ compensation and remuneration of directors were as follows:

Amount

Employees’ compensation Remuneration of directors	For the Three Months Ended June 30 2019 2018 $ (4,815) $ 1,525 $ (4,717) $ 3,942	For the Three Months Ended June 30 2019 2018 $ (4,815) $ 1,525 $ (4,717) $ 3,942		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ (4,815) $ (4,717)		2019 $ 294 $ -	2018 $ 19,328 $ 11,598

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 Year Ended December 31	For the Year 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.

41 -

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 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 June 30 2019 2018 $ 192,579 $ 124,892 (20,933) (9,032) 171,646 115,860 (19,637) 8,227 - - 44,375 (1,431) 24,738 6,796 $ 196,384 $ 122,656	For the Three Months Ended June 30 2019 2018 $ 192,579 $ 124,892 (20,933) (9,032) 171,646 115,860 (19,637) 8,227 - - 44,375 (1,431) 24,738 6,796 $ 196,384 $ 122,656		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 192,579 (20,933) 171,646 (19,637) - 44,375 24,738 $ 196,384		2019 $ 295,966 (22,626) 273,340 68,374 - 44,375 112,749 $ 386,089	2018 $ 221,566 (8,881) 212,685 171,727 (44,585) 953 128,095 $ 340,780

The Income Tax Act in the Republic of China (“ROC”) 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%.

In July 2019, the President of the ROC approved the announcement of the amendments to the Statute of Industrial Innovation, which stipulated that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in certain assets or technologies above a specific amount are allowed as deduction when computing the income tax on unappropriated earnings. However, the related implementation rules are yet to be issued by the Ministry of Finance; thus, the Corporation could not estimate the effect on the current income tax.

42 -

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 June 30 2019 2018 $ (3,116) $ (758) - - (1,001) - $ (4,117) $ (758)	For the Three Months Ended June 30 2019 2018 $ (3,116) $ (758) - - (1,001) - $ (4,117) $ (758)		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ (3,116) - (1,001) $ (4,117)		2019 $ (1,692) - (2,231) $ (3,923)	2018 $ (3,975) 5,473 - $ 1,498

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 (losses) per share Diluted earnings (losses) per share	For the Three Months Ended June 30 2019 2018 $ (0.55) $ 0.54 $ (0.55) $ 0.54	For the Three Months Ended June 30 2019 2018 $ (0.55) $ 0.54 $ (0.55) $ 0.54		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ (0.55) $ (0.55)		2019 $ 0.01 $ 0.01	2018 $ 1.51 $ 1.51

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

Net Profit (Loss) for the Period

Earnings (losses) used in the computation of basic earnings per share		For the Three Months Ended June 30 2019 2018 $ (751,153) $ 742,102		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ (751,153)		2019 $ 9,366	2018 $ 2,060,005

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Weighted Average Number of Ordinary Shares Outstanding (In Thousands of Shares)

Weighted average number of ordinary shares used in the computation of basic earnings per share Weighted average number of ordinary shares Adjustment for associates holding shares Effect of potentially dilutive ordinary shares Employees’ compensation Weight average number of ordinary shares used in the computation of diluted earnings per share	For the Three Months Ended June 30 2019 2018 1,384,051 1,384,051 (20,599) (20,599) 1,363,452 1,363,452 11 682 1,363,463 1,364,134	For the Three Months Ended June 30 2019 2018 1,384,051 1,384,051 (20,599) (20,599) 1,363,452 1,363,452 11 682 1,363,463 1,364,134		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 1,384,051 (20,599) 1,363,452 11 1,363,463		2019 1,384,051 (20,599) 1,363,452 703 1,364,155	2018 1,384,051 (20,599) 1,363,452 1,526 1,364,978

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

June 30, 2019 Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Overseas unlisted shares Financial assets for hedging Non-derivative financial instruments Financial liabilities Financial liabilities at FVTPL Derivative financial instruments (included in other current liabilities) December 31, 2018 Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments	Level 1 $ 579,644 - $ 579,644 $ 24,391 - - $ 24,391 $ 733,205 $ - Level 1 $ 567,620 - - $ 567,620	Level 2 $ - - $ - $ - - - $ - $ - $ - Level 2 $ - - - $ -	Level 3 $ - 711,829 $ 711,829 $ - 24,047 165,249 $ 189,296 $ - $ 17,237 Level 3 $ - 734,341 23 $ 734,364	Total $ 579,644 711,829 $ 1,291,473 $ 24,391 24,047 165,249 $ 213,687 $ 733,205 $ 17,237 Total $ 567,620 734,341 23 $ 1,301,984 (Continued)

45 -

Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Overseas unlisted shares Financial assets for hedging Non-derivative financial instruments Financial liabilities Financial liabilities at FVTPL Derivative financial instruments (included in other current liabilities) June 30, 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 Derivative financial instruments	Level 1 $ 18,673 - - $ 18,673 $ 743,303 $ - Level 1 $ 809,974 - - $ 809,974 $ 24,813 - - $ 24,813 $ 317,002 - $ 317,002	Level 2 $ - - - $ - $ - $ - Level 2 $ - - - $ - $ - - - $ - $ - - $ -	Level 3 $ - 24,045 184,678 $ 208,723 $ - $ 79 Level 3 $ - 739,392 10,605 $ 749,997 $ - 37,268 236,382 $ 273,650 $ - 4,224 $ 4,224	Total $ 18,673 24,045 184,678 $ 227,396 $ 743,303 $ 79 (Concluded) Total $ 809,974 739,392 10,605 $ 1,559,971 $ 24,813 37,268 236,382 $ 298,463 $ 317,002 4,224 $ 321,226 (Continued)

46 -

Financial liabilities Financial liabilities at FVTPL Derivative financial instruments (included in other current liabilities) Financial liabilities for hedging Derivative financial instruments (included in other current liabilities)	Level 1 $ - $ -	Level 2 $ - $ -	Level 3 $ 12,822 $ 409	Total $ 12,822 $ 409 (Concluded)

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

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

For the three months ended June 30, 2019

				Derivative	Derivative
	Equity	Equity		Financial
	Instruments at	Instruments at		Instruments at
Financial Assets	FVTPL	FVTOCI			FVTPL		Total
Balance at April 1	$ 739,051	$ 212,706		$	562	$	952,319
Recognized in loss	(27,222)		-		(562)		(27,784)
Recognized in other
comprehensive loss	-	(23,410)			-		(23,410)
Balance at June 30	$ 711,829	$ 189,296		$	-	$	901,125
						Derivative
						Financial
						Instruments at
Financial Liabilities						FVTPL
Balance at April 1						$	-
Recognized in loss							17,237
Balance at June 30						$	17,237

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For the six months ended June 30, 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 loss	(22,512)		-		(23)		(22,535)
Recognized in other
comprehensive loss	-	(19,410)			-		(19,410)
Sales	-	(17)			-		(17)
Balance at June 30	$ 711,829	$ 189,296		$	-	$	901,125
						Derivative
						Financial
						Instruments at
Financial Liabilities						FVTPL
Balance at January 1						$	79
Recognized in loss							17,158
Balance at June 30						$	17,237

For the three months ended June 30, 2018

Financial Assets Equity Instruments at FVTPL Balance at April 1 $ 777,273 Recognized in profit or loss (37,881) Recognized in other comprehensive income (loss) - Sales - Balance at June 30 $ 739,392 Financial Liabilities Balance at April 1 Recognized in loss Recognized in other comprehensive loss Balance at June 30	Derivatives Financial Instruments at FVTPL Equity Instruments at FVTOCI Derivative Financial Instruments for Hedging $ - $ 295,590 $ 3,356 10,605 - (3,356) - (21,333) 4,224 - (607) - $ 10,605 $ 273,650 $ 4,224 Derivatives Financial Instruments at FVTPL Derivative Financial Instruments for Hedging $ - $ - 12,822 - - 409 $ 12,822 $ 409	Total $ 1,076,219 (30,632) (17,109) (607) $ 1,027,871 Total $ - 12,822 409 $ 13,231

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For the six months ended June 30, 2018

Financial Assets Equity Instruments at FVTPL Balance at January 1 $ 767,761 Recognized in profit or loss (28,369) Recognized in other comprehensive income (loss) - Sales - Balance at June 30 $ 739,392 Financial Liabilities Balance at January 1 Recognized in profit or loss Recognized in other comprehensive loss Balance at June 30	Derivatives Financial Instruments at FVTPL Equity Instruments at FVTOCI Derivative Financial Instruments for Hedging $ - $ 293,111 $ - 10,605 - - - (18,854) 4,224 - (607) - $ 10,605 $ 273,650 $ 4,224 Derivatives Financial Instruments at FVTPL Derivative Financial Instruments for Hedging $ - $ 12,362 12,822 (12,362) - 409 $ 12,822 $ 409	Total $ 1,060,872 (17,764) (14,630) (607) $ 1,027,871 Total $ 12,362 460 409 $ 13,231

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:

	June 30,	December 31,	June 30,
	2019	2018	2018
Operating income ratio	0.14-5.68 times	0.14-5.68 times	0.15-4.47 times
Gross profit ratio	0.32-13.64 times	0.32-14.44 times	0.73-13.47 times
EBIT ratio	2.44-23.21 times	2.44-23.21 times	7.07-23.60 times
EBITDA ratio	8.52-11.84 times	-	0.75-17.54 times
Post-tax profit ratio	11.99-85.49 times	11.99-85.49 times	10.37-156.02 times
P/B ratio	0.82-4.94 times	0.82-5.09 times	0.19-8.37 times
Discount rate for lack of	11.58%-32.28%	11.58%-32.28%	11.36%-32.28%
marketability

49 -

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:

c.	Operating income ratio 0.1 time increase 0.1 time decrease Gross profit ratio 1 time increase 1 time decrease EBIT ratio 1 time increase 1 time decrease EBITDA ratio 1 time increase 1 time decrease Post-tax profit ratio 1 time increase 1 time decrease P/B ratio 0.1 time increase 0.1 time decrease Categories of financial instruments Financial assets FVTPL Mandatorily at FVTPL $ Financial assets for hedging Financial assets at amortized cost (Note 1) Financial assets at FVTOCI Financial liabilities Amortized cost (Note 2) FVTPL (included in other current liabilities) Held for trading Financial liabilities for hedging (included in other current liabilities)	June 30, 2019 December 31, 2018 $ 58,178 $ 36,301 $ (58,178) $ (36,301) $ 65,697 $ 65,961 $ (65,697) $ (65,961) $ 18,188 $ 18,188 $ (18,188) $ (18,188) $ 8 $ - $ (8) $ - $ 11,020 $ 11,020 $ (11,020) $ (11,020) $ 85,874 $ 88,737 $ (85,874) $ (88,737) June 30, 2019 December 31, 2018 1,291,473 $ 1,301,984 $ 733,205 743,303 20,970,778 19,052,314 213,687 227,396 6,119,188 7,132,785 17,237 79 - -	June 30, 2018 $ 85,000 $ (85,000) $ 62,617 $ (62,617) $ 5,271 $ (5,271) $ 74,798 $ (74,798) $ 43,658 $ (43,658) $ 90,663 $ (90,663) June 30, 2018 1,559,971 321,226 21,044,469 298,463 7,214,952 12,822 409

Note 1: The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, debt investments, notes and 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 and accounts payable (related parties included), other payables and deposits received (included in other non-current liabilities).
50 -

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), Euro (EUR), Japanese yen (JPY) and Renminbi (RMB).

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.

Loss Loss (gain) Gain (loss) Equity		USD to NTD	USD to NTD
		For the Six Months Ended June 30
		2019 2018 $ (9,637) $ (6,244) EUR to NTD
		For the Six Months Ended June 30
		2019 2018 $ (4,043) $ 74 JPYto NTD
		For the Six Months Ended June 30
		2019 $ 1,376 $ (7,332)	2018 $ (383) $ (5,098)

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Loss		RMBto NTD	RMBto NTD
		For the Six Months Ended June 30
		2019 $ (9,354)	2018 $ (13,650)

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:

	June 30,	December	31,	June 30,
	2019	2018		2018
Cash flow interest rate risk
Financial assets	$ 16,253,047	$ 15,330,348		$ 15,925,887
Financial liabilities	689,994	738,972		739,945
Fair value interest rate risk
Lease liabilities	505,458		-	-

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 six months ended June 30, 2019 and 2018 would increase/decrease by $19,454 thousand and $18,982 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 six months ended June 30, 2019 and 2018 would have increased/decreased by $28,982 thousand and $40,499 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 six months ended June 30, 2019 and 2018 would have increased/decreased by $1,220 thousand and $1,241 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

52 -

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.

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)

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
(Continued)

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Related Party Category

Related Party Name

ROC Spicer Ltd. (ROC-Spicer)	Associate
Uni Auto Parts Manufacture Co., Ltd.	Associate
Shung Ye Motor Co., Ltd. (Shung Ye Motor)	Associate
Hua-Chuang Automobile Information Technical Center Co.,	Associate
Ltd. (Hua-Chuang Automobile Information Technical
Center)
Yulon IT Solutions Inc. (Yulon IT)	Associate
Sinjang Co., Ltd. (Sin Jang)	Associate
Sin Gan Co., Ltd. (Sin Gan)	Associate
Tokio Marine Newa Insurance Co., Ltd.	Associate
Hong Shuo Cultural Enterprises, Co., Ltd.	Associate
Hsiang Shuo Enterprises	Associate
Sinqual Technology Co., Ltd.	Associate
Taiwan Acceptance Corporation (Taiwan Acceptance)	Associate
Yue Sheng Industrial Co., Ltd.	Associate
Luxgen Motor Co., Ltd. (Luxgen)	Associate
Yulon Nissan Motor Co., Ltd.	Associate
Y-Teks Co., Ltd.	Associate
Yulon Energy Service Co., Ltd.	Associate
Yuchia Motor Co., Ltd.	Associate
Yue Ki Industrial Co., Ltd. (Yue Ki Industrial)	Associate
Carplus Auto Leasing Corporation	Associate
eCBO Information Services Co., Ltd.	Associate
Hsieh-Shin Motors Co., Ltd.	Associate
Yu Rich Financial Services Company	Associate
Visionary International Consulting Co., Ltd.	Associate
ROC-Keeper Industrial Ltd.	Associate
Taiguang Investment (HK) Co., Ltd. (Taiguang Investment)	Associate
ROC-Spicer Investment Co., Ltd. (BVI) (ROC-Spicer	Associate
Investment)
Tai-Ya Investment (HK) Co., Ltd. (Tai-Ya Investment)	Associate
Fujian Spicer Drivetrain System Co., Ltd. (Fujian Spicer)	Associate
Shanghai Hopeful Wheel Automobile Maintenance Co., Ltd.	Associate
South East (Fujian) Motor Corporation Ltd. (South East	Joint Venture
(Fujian) Motor)
Fujian Benz Automotive Co., Ltd.	Joint Venture
Fuzhou Fushiang Motor Industrial Co., Ltd.	Joint Venture
Xiamen King-Long Kian-Shen Frame	Joint Venture
Hangzhou King-Long Kian-Shen Co., Ltd.	Joint Venture
China Engine (Fujian)	Joint Venture
Zhejiang Kangda Motor Industry and Trade Co., Ltd.	Joint Venture (Note)
(Zhejiang Kangda)
Yuanchuang Industrial Investment Consulting Co., Ltd.	Substantive related party
Automotive Research & Testing Center	Substantive related party (Note)
	(Concluded)

Note: The relationship ended in August 2018.

54 -

b. Operating transactions

1) Sales of goods

Related Party Line Items 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 Purchases of goods Related Party Line Items 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		For the Three Months Ended June 30 2019 2018 $ 4,805,079 $ 4,778,636 1,504,466 1,488,927 259,252 295,068 6,568,797 6,562,631 16,407 26,562 4,498 13,958 $ 6,589,702 $ 6,603,151 For the Three Months Ended June 30 2019 2018 $ 545,484 $ 892,570 45,966 42,324 591,450 934,894 515,650 545,229 84,361 91,550 52,348 320,405 - 907 52,348 321,312 $ 1,243,809 $ 1,892,985		For the Six Months Ended June 30	For the Six Months Ended June 30
				2019 2018 $ 9,943,196 $ 10,200,787 3,120,227 3,964,920 449,493 574,612 13,512,916 14,740,319 64,799 59,703 14,037 31,830 $ 13,591,752 $ 14,831,852 For the Six Months Ended June 30
		2019 $ 545,484 45,966 591,450 515,650 84,361 52,348 - 52,348 $ 1,243,809		2019 $ 1,351,949 76,346 1,428,295 1,091,209 167,077 98,764 - 98,764 $ 2,785,345	2018 $ 1,887,917 74,233 1,962,150 1,015,683 173,603 840,666 2,430 843,096 $ 3,994,532

2) Purchases of goods

3) Technical services expense

Related Party Line Items Categories/Name Cost of goods sold and selling and marketing expenses Investors that have significant influence over the Group		For the Three Months Ended June 30 2019 2018 $ 57,625 $ 53,888		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 57,625		2019 $ 120,248	2018 $ 100,952

55 -

4) Development expense

Related Party Line Items Categories/Name Research and development expense Investors that have significant influence over the Group Others 5) Other expense		For the Three Months Ended June 30 2019 2018 $ 12,556 $ 12,994 - - $ 12,556 $ 12,994		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 12,556 - $ 12,556		2019 $ 24,917 3 $ 24,920	2018 $ 26,852 171 $ 27,023

Related Party For the Three Months Ended June 30 For the Six Months Ended June 30 Line Items Categories/Name 2019 2018 2019 2018 Selling and marketing expenses and general and administrative Investors and subsidiaries of the investors that have significant influence over the Group $ 23,727 $ 21,724 $ 54,653 $ 47,840 expenses Others 2,157 3,354 6,364 6,043 $ 25,884 $ 25,078 $ 61,017 $ 53,883 Research and development Substantive related parties $ - $ 44,416 $ - $ 46,907 expenses Others - 214 72 451 $ - $ 44,630 $ 72 $ 47,358 6) Receivables from related parties Line Items Related Party Categories/Name June 30, 2019 December 31, 2018 June 30, 2018 Trade receivables Associates from related Fortune Motors $ 1,436,947 $ 870,216 $ 1,457,730 parties Shung Ye Motor 310,870 536,279 340,333 Hua-Chuang Automobile Information Technical Center 74,735 199,992 136,572 Others 236,240 285,034 125,619 2,058,792 1,891,521 2,060,254 Joint ventures 43,886 44,905 59,383 Investors and subsidiaries of the investors that have significant influence over the Group 2,121 16,043 8,512 $ 2,104,799 $ 1,952,469 $ 2,128,149		For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
			$	2018 $ 47,840 6,043 $ 53,883 $ 46,907 451 $ 47,358 June 30, 2018 1,457,730 340,333 136,572 125,619 2,060,254 59,383 8,512 2,128,149

			$

56 -

7) Prepayments

	Related Party			December 31,	December 31,
Line Items	Categories/Name	June	30, 2019		2018	June	30, 2018
Prepayments	Investors and
	subsidiaries of
	investors that have
	significant influence
	over the Group
	Mitsubishi Corp.	$	5,488	$	117,943	$	150,246
	Others		5,763		6,883		10,217
			11,251		124,826		160,463
	Joint ventures		17,758		13,162		43,978
	Others		142		91		340
		$	29,151	$	138,079	$	204,781

8) Acquisition of property, plant and equipment

Related Party For the Three Months Ended June 30 For the Six Months Ended June 30 Line Items Categories/Name 2019 2018 2019 2018 Acquisition of Associates $ 20,852 $ 996 $ 37,348 $ 23,781 property, plant and equipment Others - 7,349 - 7,349 $ 20,852 $ 8,345 $ 37,348 $ 31,130 Payables to related parties Line Items Related Party Categories/Name June 30, 2019 December 31, 2018 June 30, 2018 Trade payables to Associates related parties ROC-Spicer $ 90,347 $ 87,219 $ 92,202 Yue Ki Industrial 89,094 92,017 88,047 Yulon 77,116 94,762 68,943 Taiguang Investment - - 329,134 Others 196,791 342,348 345,104 453,348 616,346 923,430 Investors and subsidiaries of the investors that have significant influence over the Group Mitsubishi Motors Corp. 124,521 92,182 121,799 Yulon Management 47,155 95,013 44,055 Others 17,833 71,715 60,321 189,509 258,910 226,175 The Group is its major management 59,567 60,301 67,854 Joint ventures 9,697 9,397 14,101 Others - - 7,050 $ 712,121 $ 944,954 $ 1,238,610		For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
			$	2018 $ 23,781 7,349 $ 31,130 June 30, 2018 92,202 88,047 68,943 329,134 345,104 923,430 121,799 44,055 60,321 226,175 67,854 14,101 7,050 1,238,610




			$

9) Payables to related parties

57 -

10) Contract liabilities

	Related Party			December 31,	December 31,
Line Items	Categories/Name	June	30, 2019		2018	June	30, 2018
Other current	Associates
liabilities	Luxgen	$	19,356	$	45,514	$	20,756
	Others		5,708		1,191		23,063
			25,064		46,705		43,819
	Investors and		548		-		10,078
	subsidiaries of the
	investors that have
	significant influence
	over the Group
	Others		273		273		701
		$	25,885	$	46,978	$	54,598

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 six months ended June 30, 2019 and 2018.

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

The Group signed contract with Mitsubishi Motors Corporation. Refer to Note 32.

c. Compensation of key management personnel

The remunerations of directors and key executives for the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018, respectively, were as follows:

Short-term employee benefits Post-employment benefits	For the Three Months Ended June 30 2019 2018 $ 19,912 $ 22,073 $ 594 $ 647	For the Three Months Ended June 30 2019 2018 $ 19,912 $ 22,073 $ 594 $ 647		For the Six Months Ended June 30	For the Six Months Ended June 30
		2019 $ 19,912 $ 594		2019 $ 49,963 $ 1,186	2018 $ 56,951 $ 1,289

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

58 -

31. ASSETS PLEDGED AS COLLATERAL

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

Property, plant and equipment Pledge deposits (included in other current assets) Investment properties	June 30, 2019 December 31, 2018 $ 741,741 $ 778,643 221,816 157,585 52,323 52,323 $ 1,015,880 $ 988,551	June 30, 2018 $ 784,814 158,487 52,323 $ 995,624

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant commitments and contingencies of the Group as of June 30, 2019 were as follows:

a. Guarantee notes amounted to $5,035,462 thousand, which had been issued to financial institutions as collaterals for loans; unused letters of credit amounted to $34,474 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.

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:

June 30, 2019

		Foreign			Carrying
	Currencies		Exchange Rate		Amount
Foreign currency assets
Monetary items
RMB	$	217,818	4.5210	$	984,757
USD		21,386	31.0600		664,236
JPY		2,613,765	0.2886		754,333
EUR		11,868	35.3800		419,887
					(Continued)

59 -

		Foreign			Carrying
	Currencies		Exchange Rate		Amount
Non-monetary items
Investments accounted for using the equity
method
RMB	$	1,207,526	4.5210	$	5,459,227
EUR		70,901	35.3800		2,508,465
Foreign currency liabilities
Monetary items
JPY		550,127	0.2886		158,767
					(Concluded)
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
June 30, 2018
		Foreign	Exchange Rate		Carrying
	Currencies		(Note)		Amount
Foreign currency assets
Monetary items
USD	$	26,634	30.4600	$	750,367
USD		3,557	6.6318		108,360
			(USD:RMB)
RMB		392,677	4.5930		1,803,565
JPY		1,755,339	0.2754		483,420
					(Continued)

60 -

	Foreign		Carrying
	Currencies	Exchange Rate	Amount
Non-monetary items
Investments accounted for using the equity
method
RMB	$ 1,318,775	4.5930	$ 6,057,133
EUR	62,784	35.4000	2,222,545
USD	2,610	30.4600	79,505
Foreign currency liabilities
Monetary items
JPY	465,266	0.2754	128,134
RMB	95,484	4.5930	438,557
USD	4,200	30.4600	127,923
USD	6,677	6.6318	203,382
		(USD:RMB)
			(Concluded)

Note: Exchange rate represents the number of N.T. dollars for which one foreign currency could be exchanged, unless stated otherwise.

For the three months ended June 30, 2019 and 2018 and for the six months ended June 30, 2019 and 2018, net foreign exchange gains (losses) were $(8,217) thousand and $23,211 thousand, $25,331 thousand and $42,144 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.

61 -

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

Vehicle manufacturing Channel Others Adjustment and eliminations Administration cost and remunerations of directors Other non-operating income and expenses, net Profit before income tax		Segment Revenues For the Six Months Ended June 30 2019 2018 $ 15,272,878 $ 16,004,848 1,871,840 3,022,958 32,687 35,421 (168,731) (110,952) $ 17,008,674 $ 18,952,275		Segment Income or Loss	Segment Income or Loss
				For the Six Months Ended June 30
		2019 $ 15,272,878 1,871,840 32,687 (168,731) $ 17,008,674		2019 $ 563,286 6,691 (8,064) (419) 561,494 (141,193) 63,813 $ 484,114	2018 $ 2,590,092 45,082 (6,846) - 2,628,328 (186,357) 110,401 $ 2,552,372

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 remuneration of directors, interest income, other income, net foreign exchange gain (loss), loss 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.

62 -

TABLE 1

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE SIX MONTHS ENDED JUNE 30, 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	1.10	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,503,863	$ 10,025,754
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	68,919 (US$ 1,200 thousand and RMB 7,000 thousand) 92,525 (US$ 1,960 thousand and RMB 7,000 thousand) 110,884 (US$ 3,570 thousand) 31,647 (RMB 7,000 thousand)	68,919 (US$ 1,200 thousand and RMB 7,000 thousand) 92,525 (US$ 1,960 thousand and RMB 7,000 thousand) 110,884 (US$ 3,570 thousand) 31,647 (RMB 7,000 thousand)	- - 109,176 (US$ 3,515 thousand) -	- - 2.00 -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,503,863 1,503,863 1,503,863 1,503,863	10,025,754 10,025,754 10,025,754 10,025,754
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	452,100 (RMB 100,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand)	452,100 (RMB 100,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (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	- - - - -	- - - - -	- - - - -	1,503,863 1,503,863 1,503,863 1,503,863 1,503,863	10,025,754 10,025,754 10,025,754 10,025,754 10,025,754
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	45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 135,630 (RMB 30,000 thousand)	45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 135,630 (RMB 30,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,503,863 1,503,863 1,503,863 1,503,863	10,025,754 10,025,754 10,025,754 10,025,754

(Continued)

63 -

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	$ 135,630 (RMB 30,000 thousand)	$ 135,630 (RMB 30,000 thousand)	$ -	-	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,503,863	$ 10,025,754
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	45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 135,630 (RMB 30,000 thousand) 135,630 (RMB 30,000 thousand)	45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 135,630 (RMB 30,000 thousand) 135,630 (RMB 30,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,503,863 1,503,863 1,503,863 1,503,863	10,025,754 10,025,754 10,025,754 10,025,754
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	226,050 (RMB 50,000 thousand) 90,420 (RMB 20,000 thousand) 67,815 (RMB 15,000 thousand) 67,815 (RMB 15,000 thousand) 135,630 (RMB 30,000 thousand)	226,050 (RMB 50,000 thousand) 90,420 (RMB 20,000 thousand) 67,815 (RMB 15,000 thousand) 67,815 (RMB 15,000 thousand) 135,630 (RMB 30,000 thousand)	74,597 (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	- - - - -	- - - - -	- - - - -	1,503,863 1,503,863 1,503,863 1,503,863 1,503,863	10,025,754 10,025,754 10,025,754 10,025,754 10,025,754
6	Dongguan Huayi	Dongguan Huashun	Other receivables	Yes	226,050 (RMB 50,000 thousand)	226,050 (RMB 50,000 thousand)	31,647 (RMB 7,000 thousand)	4.35	Short-term financing	-	Working capital	-	-	-	1,503,863	10,025,754
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	45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand)	45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand) 45,210 (RMB 10,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,503,863 1,503,863 1,503,863 1,503,863	10,025,754 10,025,754 10,025,754 10,025,754
8	Gatech Holding LTD.	Gatech Suzhou	Other receivables	Yes	46,590 (US$ 1,500 thousand)	46,590 (US$ 1,500 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,503,863	10,025,754

Note 1: At spot exchange rates on June 30, 2019; US$1=NT$31.06, RMB1=NT$4.521.
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)

64 -

TABLE 2

CHINA MOTOR CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE SIX MONTHS ENDED JUNE 30, 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	$ 226,050 (RMB 50,000 thousand) 226,050 (RMB 50,000 thousand) 226,050 (RMB 50,000 thousand) 226,050 (RMB 50,000 thousand)	$ 226,050 (RMB 50,000 thousand) 226,050 (RMB 50,000 thousand) 226,050 (RMB 50,000 thousand) 226,050 (RMB 50,000 thousand)	$ - - - -	$ - - - -	0.45 0.45 0.45 0.45	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 June 30, 2019; RMB1=NT$4.521.

65 -

TABLE 3

CHINA MOTOR CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD JUNE 30, 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		June 30, 2019	June 30, 2019		Note
				Number of Shares (In Thousands)	Carrying Amount (Note 3)	Percentage of Ownership	Fair Value
China Motor Corporation	Beneficiary certificates Franklin Templeton SinoAm Money Market Fubon Chi Hsiang Money Market Fund The RSIT Enchanced Money Market Fund 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 Shares Shye Shyang Mechanical Industrial Myson Century, Inc. Carnival Taiwan Aerospace Com2B (Cayman) Corp. NORM Pacific Automation Corp.	- - - - - - - - - - - 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 - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	4,867 3,205 4,201 1,500 2,738 1,856 1,806 2,167 2,610 1,906 2,423 9,009 4,705 190 811 2,000 128	$ 50,373 50,338 50,334 31,080 30,214 30,211 30,208 30,202 30,193 30,189 30,178 640,380 23,241 1,150 12,469 - 1,870	- - - - - - - - - - - 10.00 7.84 0.05 0.60 4.44 0.45	$ 50,373 50,338 50,334 31,080 30,214 30,211 30,208 30,202 30,193 30,189 30,178 640,380 23,241 1,150 12,469 - 1,870

(Continued)

66 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		June 30, 2019	June 30, 2019		Note
				Number of Shares (In Thousands)	Carrying Amount (Note 3)	Percentage of Ownership	Fair Value
Kian Shen KSIHK Alliance Investment & Management Hwa Lin Brilliant Insight International China Engine	Corporate bonds Taiwan Acceptance Corp. Gatetech Technology Morgan Stanley Evergreen Marine Corporation Crédit Agricole Corporate and Investment Bank SA Fonterra Co-operative Group Ltd. Deutsche Bank Aktiengesellschaft, Singapore Branch Beneficiary certificates FSITC Money Market Yuanta Wan Tai Money Market Fund Shares Beijing NTN-SEOHAN Driveshaft 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. Principle guaranteed notes President Securities 100% Principle Guaranteed Note Beneficiary certificates Taishin Ta-Chong Money Market Beneficiary certificates Hua Nan Phoenix Money Market Fund	Associate Subsidiary - - - - - - - - - - - - - - - - - -	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 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 Financial assets at amortized cost - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	- - - - - - - 392 2,308 - 6,327 2,849 1,275 789 65 696 - - 74 4,916	$ 248,461 150,000 135,570 99,922 90,350 45,228 45,175 70,052 35,002 37,596 (RMB 8,316 thousand) 105,409 71,449 22,244 5,512 2,678 1,518 6,684 68,030 1,053 80,017	- - - - - - - - - 9.00 15.07 3.45 4.05 3.60 0.54 1.13 - - - -	$ - - - - - - - 70,052 35,002 37,596 105,409 71,449 22,244 5,512 2,678 1,518 - - 1,053 80,017	(Note 1)

(Continued)

67 -

(Concluded)

Note 1: Eliminated.

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

Note 3: At spot exchange rate on June 30, 2019; RMB1=NT$4.521.

68 -

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 SIX MONTHS ENDED JUNE 30, 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 COC China Engine	Fortune Motors Shung Ye Motor Mitsubishi Corp. Uni Auto Parts Manufacture Kian Shen (Note 1) ROC-Spicer Shye Shyang Mechanical Industrial COC (Note 1) Shung Ye Motor Fortune Motors Mitsubishi Corp. China Motor Corporation (Note 1) China Motor Corporation (Note 1) Yulon Hua-Chuang Automobile Information Technical Center	Equity-method investee Equity-method investee Director of CMC Equity-method investee Subsidiary Equity-method investee CMC serves as director Subsidiary Equity-method investee Equity-method investee Director of CMC Parent company Parent company Equity-method investee Equity-method investee	Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Sale Sale Sale Sale	$ (9,458,325) (2,210,588) 731,053 361,534 310,398 234,327 165,799 160,347 (891,774) (484,572) 620,897 (310,398) (160,347) (111,702) (103,361)	(67) (16) 9 4 4 3 2 2 (60) (33) 67 (45) (36) (25) (59)	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 Pay after 45 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 Collect after 45 days of the month of delivery Collect after 45 days of the month of delivery Collect after 90 days of the month of sale	$ - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - -	$ 1,432,793 300,055 (10,184) (52,711) (48,981) (90,347) (59,567) (54,227) 9,465 4,153 (469) 48,981 54,227 28,794 71,242	61 13 - (2) (2) (4) (3) (2) 29 13 (1) 32 17 9 81

Note 1: Eliminated.

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

69 -

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 JUNE 30, 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	$ 1,432,793 300,055 106,120	16.97 15.13 0.58	$ - - -	- - -	$ 1,432,625 300,050 7,243	$ - - -

70 -

TABLE 6

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE SIX MONTHS ENDED JUNE 30, 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 June 30, 2019	As of June 30, 2019	As of June 30, 2019	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				June 30, 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 - 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 32,494 32,000 6,084 2,936 - - 2,242 8,790 - 10,296 25,907 26,715 11,200 4,169 45,643 26,715 56,000 5,186 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 - 100.00 100.00 8.14 100.00 7.26 100.00 8.14 33.16 9.02 100.00 0.02 - 100.00	$ 11,263,644 2,059,395 4,191,785 2,503,525 1,924,323 1,361,031 2,508,465 585,924 984,272 743,099 654,715 - 374,046 393,002 316,550 148,312 136,022 118,248 - - 71,448 69,881 - 4,048,509 RMB 876,964 thousand 20,234 259,355 40,667 984,173 20,234 316,926 50,568 13,556 216 16 891,277	$ (937,259) 120,540 540,570 (274,444) 461,701 (263,771) 1,120,502 105,341 (187,845) 37,737 (313,154) (3,351,225) 1,537 23,744 8,311 (1,603) 18,151 (18,667) 17,070 8,263 (22,421) 5,968 (4,366) 182,444 RMB 31,689 thousand (3,351,225) (9,968) 8,311 (7,736) (3,351,225) (1,603) 8,311 (7,680) 23,744 540,570 (7,791)	$ (156,542) 53,031 226,661 (267,423) 94,972 (263,771) 363,603 30,670 (187,845) 18,759 (125,262) (576,861) 199 9,493 4,692 2,135 5,680 (2,814) 4,211 1,653 (6,502) 5,968 (1,915) - - - - - - - - - - - - -	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)

71 -

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of June 30, 2019	As of June 30, 2019	As of June 30, 2019	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				June 30, 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	$ 615,988 615,962 97,818 10,377 982,073 31,410 10,528 62,416 40,446	$ 5,903 5,902 - 279 (313,154) 5,877 39 3,660 281	$ - - - - - - - - -	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, sidestream transaction of $32,927 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, sidestream transaction of $3,285 thousand had been eliminated.
Note 7: During preparation of the consolidated financial statements, sidestream transaction of $113 thousand had been eliminated.

(Concluded)

72 -

TABLE 7

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE SIX MONTHS ENDED JUNE 30, 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 June 30, 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 June 30, 2019 (Note 1)	Accumulated Repatriation of Investment Income as of June 30, 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	$ 4,286,280 (US$ 138,000 thousand) 465,900 (US$ 15,000 thousand) 10,154,060 (EUR 287,000 thousand) 388,250 (US$ 12,500 thousand) 552,247 (US$ 17,780 thousand) 1,056,040 (US$ 34,000 thousand) 434,016 (RMB 96,000 thousand) 186,360 (US$ 6,000 thousand) 347,872 (US$ 11,200 thousand) 925,928 (RMB 204,806 thousand) 388,476 (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	$ 1,071,570 (US$ 34,500 thousand) 232,950 (US$ 7,500 thousand) 1,647,505 (EUR 46,566 thousand) 155,300 (US$ 5,000 thousand) 88,055 (US$ 2,835 thousand) - 47,429 (US$ 1,527 thousand) 16,772 (US$ 540 thousand) 347,872 (US$ 11,200 thousand) 335,603 (US$ 10,805 thousand) 81,067 (US$ 2,610 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 1,071,570 (US$ 34,500 thousand) 232,950 (US$ 7,500 thousand) 1,647,505 (EUR 46,566 thousand) 155,300 (US$ 5,000 thousand) 88,055 (US$ 2,835 thousand) - 47,429 (US$ 1,527 thousand) 16,772 (US$ 540 thousand) 347,872 (US$ 11,200 thousand) 335,603 (US$ 10,805 thousand) 81,067 (US$ 2,610 thousand)	$ (1,196,815) - 2,241,540 (EUR 64,044 thousand) 318,130 (RMB 69,765 thousand) (57,178) (RMB -12,539 thousand) 210,119 (RMB 46,079 thousand) (23,021) (RMB -5,049 thousand) - (9,934) 16,176 (34,415) (US$ -1,111 thousand)	25.00 38.03 16.23 17.55 15.35 17.55 21.94 3.95 100.00 29.00 20.25	$ (299,204) - 363,685 (EUR 10,391 thousand) 127,252 (RMB 27,906 thousand) (20,012) (RMB -4,389 thousand) 84,048 (RMB 18,432 thousand) (11,511) (RMB -2,524 thousand) - (9,934) 4,691 (6,970) (US$ -225 thousand)	$ 1,500,475 194,524 2,506,036 (EUR 70,832 thousand) 1,754,727 (RMB 388,128 thousand) 598,384 (RMB 132,357 thousand) 801,805 (RMB 177,351 thousand) 241,030 (RMB 53,313 thousand) 37,596 (RMB 8,316 thousand) 259,305 380,565 70,308 (US$ 2,264 thousand)	$ 808,274 (US$ 26,023 thousand) - - 508,242 (RMB 112,418 thousand) 160,658 (RMB 35,536 thousand) - - - - - -

(Continued)

73 -

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 June 30, 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 June 30, 2019 (Note 1)	Accumulated Repatriation of Investment Income as of June 30, 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		$ 180,840 (RMB 40,000 thousand) 105,604 (US$ 3,400 thousand) 397,879 (US$ 12,810 thousand) 414,030 (US$ 13,330 thousand) 249,101 (US$ 8,020 thousand) 138,217 (US$ 4,450 thousand) 9,042 (RMB 2,000 thousand) 113,025 (RMB 25,000 thousand) 271,260 (RMB 60,000 thousand) 194,403 (RMB 43,000 thousand) 754,758 (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		$ 37,520 (US$ 1,208 thousand) 105,604 (US$ 3,400 thousand) 347,841 (US$ 11,199 thousand) 414,030 (US$ 13,330 thousand) 241,057 (US$ 7,761 thousand) 130,980 (US$ 4,217 thousand) - - - - 629,493 (US$ 20,267 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 37,520 (US$ 1,208 thousand) 105,604 (US$ 3,400 thousand) 347,841 (US$ 11,199 thousand) 414,030 (US$ 13,330 thousand) 241,057 (US$ 7,761 thousand) 130,980 (US$ 4,217 thousand) - - - - 629,493 (US$ 20,267 thousand)	$ - 55 7,154 (333) (1,080) (16,224) (55) (RMB -12 thousand) (9,840) (RMB -2,158 thousand) 438 (RMB 96 thousand) 46 (RMB 10 thousand) 5,868	- 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 72.81	$ - 55 7,154 (333) (1,080) (16,224) (55) (RMB -12 thousand) (9,840) (RMB -2,158 thousand) 438 (RMB 96 thousand) 46 (RMB 10 thousand) 5,868	$ - 92,855 36,812 58,774 212,422 89,321 158 (RMB 35 thousand) 83,969 (RMB 18,573 thousand) 273,267 (RMB 60,444 thousand) 6,017 (RMB 1,331 thousand) 621,159	$ - - - - - - - - - - -

Accumulated Outward Remittance for Investment in Mainland China as of June 30, 2019 (Note 1)		Investment Amount Authorized by Investment Commission, MOEA (Note 1)			Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$6,113,219 (US$143,777 thousand and EUR46,566 thousand)		$7,253,599 (US$218,195 thousand and EUR13,467 thousand)			$30,077,262

(Continued)

74 -

Note 1: At spot exchange rates on June 30, 2019; US$1= NT$31.06, RMB1= NT$4.521, EUR1= NT$35.38.

Note 2: At the average exchange rates of the six months ended June 30, 2019; US$1= NT$30.983, RMB1= NT$4.56, EUR1= NT$35.

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 June 30, 2019, the liquidation had not been completed. As of July 2019, the annulment of Sichuan Lingwei had been completed.

Note 7: In August 2018, the Group reclassified its joint venture, Zhejiang Kangda, as non-current assets held for sale.

(Concluded)

75 -

TABLE 8

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 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 COC Sino Diamond Motors Gatetech Technology	Subsidiary Subsidiary Subsidiary Subsidiary	Cost of goods sold Cost of goods sold Other receivables Financial assets at amortized cost - non-current	$ 310,398 160,347 700,000 150,000	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 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.	1.82 0.94 1.08 0.23
1	Hwa-Lin	Dongguan Huayi	Subsidiary	Other receivables	109,176	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.

76 -

TABLE 9

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY INVESTMENT RELATIONSHIPS AND PERCENTAGE RATE OF SHARE HELD FRAMEWORK JUNE 30, 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 -----

77 -

AI assistant

CMC — Interim / Quarterly Report 2019

51979_rns_2019-12-26_5b18fa2d-86b9-46b5-b47d-1242a5d60cd5.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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

The Group as lessor

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2) Subsidiaries included in the consolidated financial statements

b) The Group as lessee

a) The Group as lessor

b) The Group as lessee

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

June 30, 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

June 30, 2019

11. HEDGING INSTRUMENTS

June 30, 2019

June 30, 2018

12. NOTES AND ACCOUNTS RECEIVABLE, NET

June 30, 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

1) Material associates

Yulon

2) Aggregate information of associates that are not individually material

17. PROPERTY, PLANT AND EQUIPMENT

18. LEASE ARRANGEMENTS

a. Right-of-use assets - 2019

June 30, 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

2) Unrealized gain on financial assets at FVTOCI

f. Non-controlling interests

24. REVENUE

25. NET PROFIT (LOSS)

a. Depreciation and amortization

Amount

26. INCOME TAXES

CMC Interim / Quarterly Report 2019