CMC - Interim / Quarterly Report 2019

China Motor Corporation and Subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 30, 2019 and 2018 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and the 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 September 30, 2019 and 2018, the related consolidated statements of comprehensive income for the three months ended September 30, 2019 and 2018 and for the nine months ended September 30, 2019 and 2018, the consolidated statements of changes in equity and cash flows for the nine 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 September 30, 2019 and 2018, the combined total assets of these non-significant subsidiaries were NT$11,980,280 thousand and NT$12,621,724 thousand, respectively, both representing 19% and 20% of the consolidated total assets, and the combined total liabilities of these non-significant subsidiaries were NT$3,828,737 thousand and NT$3,115,382 thousand, respectively, representing 23% and 39%, respectively, of the consolidated total liabilities; for the three months ended September 30, 2019 and 2018 and for the nine months ended September 30, 2019 and 2018, the amounts of combined comprehensive income (loss) of these non-significant subsidiaries were NT$(212,566) thousand and NT$49,106 thousand, NT$(433,944) thousand and NT$136,102 thousand, respectively, representing 240% and 11%, 106% and 5%, respectively, of the consolidated total comprehensive income. As disclosed in Note 16 to the consolidated financial statements, as of September 30, 2019 and 2018, some investments accounted for using the equity method were NT$15,899,464 thousand and NT$17,510,280 thousand, respectively, and for the three months ended September 30, 2019 and 2018 and for the

nine months ended September 30, 2019 and 2018, total comprehensive income of these equity-method investments were NT$174,804 thousand and NT$45,825 thousand, NT$1,021,230 thousand and NT$1,056,810 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 September 30, 2019 and 2018, its consolidated financial performance for the three months ended September 30, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the nine months ended September 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

November 13, 2019

Notice to Readers

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

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss (Note 7) Financial assets at amortized cost (Notes 9 and 10) Financial assets for hedging (Note 11) Notes 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) 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 Long-term borrowings (Note 20) 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 (loss) on the hedging instruments (Note 11) Equity directly associated with non-current assets held for sale (Note 15) Total other equity Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS (Note 14) Total equity TOTAL		September 30, 2019 (Reviewed) Amount % $ 13,612,051 22 654,069 1 367,305 1 279,314 - 1,077,258 2 1,922,514 3 420,679 1 3,486,489 6 1,371,688 2 148,023 - 689,136 1 24,028,526 39 695,808 1 205,398 - 659,391 1 26,766,817 43 6,714,146 11 474,695 1 1,368,807 2 345,682 1 276,125 1 136,024 - 37,642,893 61 $ 61,671,419 100 $ 630,000 1 59,963 - 1,979,534 3 545,158 1 10,826,735 18 317,708 - 95,425 - 370,482 1 14,825,005 24 20,000 - 407,785 1 384,038 1 694,471 1 24,167 - 1,530,461 3 16,355,466 27 5,536,203 9 6,391,520 10 9,257,157 15 1,046,585 1 20,191,241 33 30,494,983 49 (831,511) (1) 174,864 - (2,362) - (7,538) - (666,547) (1) 41,756,159 67 3,559,794 6 45,315,953 73 $ 61,671,419 100		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 2,717,065 4 117,081 - - - 297,523 1 7,520,912 12 - - 268,161 1 - - 910,328 1 30,926 - 1,209,415 2 8,730,327 14 13,840,508 22 6,403,633 10 8,897,857 14 1,046,967 1 22,486,952 35 32,431,776 50 (646,278) (1) 117,177 - 20,997 - (7,538) - (515,642) (1) 52,160,275 81 3,613,814 5 55,774,089 86 $ 64,504,416 100		September 30, 2018 (Reviewed)
						Amount % $ 13,549,632 21 692,748 1 301,467 - 432,681 1 1,295,062 2 1,763,067 3 525,593 1 3,592,668 6 1,029,649 2 - - 396,488 - 23,579,055 37 724,592 1 252,699 - 875,430 1 28,938,721 46 6,337,148 10 - - 1,383,783 2 282,402 1 317,591 1 263,889 1 39,376,255 63 $ 62,955,310 100 $ 640,000 1 167,887 - 2,135,317 3 640,463 1 2,786,881 5 156,406 - - - 382,032 1 6,908,986 11 - - 149,386 - - - 875,369 2 11,968 - 1,036,723 2 7,945,709 13 13,840,508 22 6,413,249 10 8,897,857 14 1,046,967 2 21,830,835 35 31,775,659 51 (763,746) (1) 231,045 - (4,892) - - - (537,593) (1) 51,491,823 82 3,517,778 5 55,009,601 87 $ 62,955,310 100

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

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

OPERATING REVENUE (Notes 24 and 30) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 13, 22, 25 and 30) Cost of goods sold Other operating cost Total operating costs GROSS PROFIT REALIZED (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 Interest expense Other expense Net foreign exchange loss Net loss on financial instruments at fair value through profit or loss Impairment loss (Note 17) Total non-operating income and expenses		For the Three Months EndedSeptember 30	For the Three Months EndedSeptember 30	For the Three Months EndedSeptember 30		For the Nine Months	EndedSeptember 30	EndedSeptember 30
		2019		2018		2019		2018
		Amount % $ 7,073,206 96 317,263 4 7,390,469 100 6,096,812 83 31,102 - 6,127,914 83 1,262,555 17 16,727 - 1,279,282 17 304,592 4 255,921 4 401,616 5 962,129 13 317,153 4 157,872 2 40,218 1 39,486 1 (5,276 ) - (6,101 ) - (37,634 ) (1 ) (11,607 ) - - - 176,958 3		Amount % $ 7,843,634 96 325,203 4 8,168,837 100 6,592,400 81 57,263 - 6,649,663 81 1,519,174 19 16,217 - 1,535,391 19 453,944 6 320,582 4 437,184 5 1,211,710 15 323,681 4 354,630 4 52,828 1 326,975 4 (4,532 ) - (1,024 ) - (49,977 ) (1 ) (20,193 ) - (11,578) - 647,129 8		Amount % $ 23,205,962 95 1,193,181 5 24,399,143 100 19,796,785 81 109,284 1 19,906,069 82 4,493,074 18 (18,696) - 4,474,378 18 1,109,759 4 782,719 3 1,176,643 5 3,069,121 12 1,405,257 6 (509,931 ) (2 ) 124,322 - 82,143 - (16,618 ) - (16,059 ) - (12,303 ) - (41,949 ) - (36,637) - (427,032) (2)		Amount % $ 26,001,994 96 1,119,118 4 27,121,112 100 21,605,437 80 148,098 - 21,753,535 80 5,367,577 20 (48,136) - 5,319,441 20 1,359,138 5 951,852 4 1,422,106 5 3,733,096 14 1,586,345 6 1,533,937 6 149,216 - 363,105 1 (9,975 ) - (9,673 ) - (7,833 ) - (60,016 ) - (21,924) - 1,936,837 7

(Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT FOR THE PERIOD OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Unrealized loss on investment in equity instruments designated as at 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 loss for the period, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD		For the Three Months EndedSeptember 30	For the Three Months EndedSeptember 30	For the Three Months EndedSeptember 30		For the Nine Months	EndedSeptember 30	EndedSeptember 30
		2019		2018		2019		2018
		Amount % $ 494,111 7 121,154 2 372,957 5 (6,924 ) - (841 ) - (13,112 ) - 139 - (46,958 ) (1 ) (393,840) (5) (461,536) (6) $ (88,579) (1)		Amount % $ 970,810 12 51,797 1 919,013 11 (31,283 ) - (14,727 ) - (4,257 ) - 2,653 - (31,326 ) - (389,969) (5) (468,909) (5) $ 450,104 6		Amount % $ 978,225 4 507,243 2 470,982 2 (21,102 ) - 39,756 - 171,480 1 (3,784 ) - (39,594 ) - (208,438) (1) (61,682) - $ 409,300 2		Amount % $ 3,523,182 13 392,577 2 3,130,605 11 (48,543 ) - 8,301 - (8,257 ) - 4,151 - (27,597 ) - (311,254) (1) (383,199) (1) $ 2,747,406 10 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

For the Three Months EndedSeptember 30	For the Three Months EndedSeptember 30	For the Nine Months	EndedSeptember 30
2019	2018	2019	2018
Amount % $ 336,826 5 36,131 - $ 372,957 5 $ (37,960 ) - (50,619) (1) $ (88,579) (1) $ 0.38 $ 0.38	Amount % $ 859,701 10 59,312 1 $ 919,013 11 $ 473,459 6 (23,355) - $ 450,104 6 $ 0.63 $ 0.63	Amount % $ 346,192 1 124,790 1 $ 470,982 2 $ 350,923 2 58,377 - $ 409,300 2 $ 0.29 $ 0.29	Amount % $ 2,919,706 10 210,899 1 $ 3,130,605 11 $ 2,617,163 10 130,243 - $ 2,747,406 10 $ 2.14 $ 2.14
$	$	$	$
$	$	$	$
$	$	$	$

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

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

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

		Equity Attrib	utable to Owners of the Corporation
Ordinary Sh	ares Amounts Capital Surplus $ 13,840,508 $ 6,407,340 - - 13,840,508 6,407,340 - - - - - - - 5,909 - - - - - - - - - - - - $ 13,840,508 $ 6,413,249 $ 13,840,508 $ 6,403,633 - - 13,840,508 6,403,633 - - - - - - - (12,113 ) - - - - - - - - (8,304,305 ) - - - - - - - $ 5,536,203 $ 6,391,520	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 ) - (4,691 ) 4,691 - - 12,630 - - - - - 2,919,706 - - 16,713 - - 2,936,419 - - (5,696 ) - - 528 $ 8,897,857 $ 1,046,967 $ 21,830,835 $ 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 - - (6,975 ) - - - - - 346,192 - - 10,907 - - 357,099 - - - - - 85,455 - - 17 - - - $ 9,257,157 $ 1,046,585 $ 20,191,241		Other Equity		Equity Directly Gain on the Associated with Hedging Instruments Non-current Assets Held for Sale $ - $ - (12,253) - (12,253 ) - - - - - - - - - - - - - 7,361 - 7,361 - - - - - $ (4,892) $ - $ 20,997 $ (7,538 ) - - 20,997 (7,538 ) - - - - - - - - - - - - 35,898 - 35,898 - - - - - - - (59,257) - $ (2,362) $ (7,538)
			Exchange Differences on Translating the Unrealized Gain on Investments in Financial Assets at Fair Value Financial Through Other Statements of Foreign Operations Comprehensive Income A $ (485,118 ) $ - - 273,866 (485,118 ) 273,866 - - - - - - - - - - - - (278,628) (47,989) (278,628) (47,989) - 5,696 - (528) $ (763,746) $ 231,045 $ (646,278 ) $ 117,177 - - (646,278 ) 117,177 - - - - - - - - - - - - (185,233) 143,159 (185,233) 143,159 - - - (85,455 ) - (17 ) - - $ (831,511) $ 174,864	Unrealized Gain (Loss) on vailable-for-sale Financial 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 - - - - - - - - (830,431 ) - - - 553,620

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

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit losses (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 Dividend income Share of loss (profit) of associates and joint ventures Loss on disposal of property, plant and equipment Loss (gain) 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		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 978,225 782,822 82,767 (319) 41,949 16,618 (124,322) (20,171) 509,931 2,060 1,640 36,637 18,696 (32,742) (56) (89,255) 100,801 30,674 5,837 582,578 (153,553) (98,301) (725,216) (399,280) (190,555) 73,400 (215,857) 1,215,008 (187,378) 1,027,630	2018 $ 3,523,182 726,364 87,619 2,915 60,016 9,975 (149,216) (28,862) (1,533,937) 3,508 (292,693) 21,924 48,136 (20,424) - (182,250) (122,267) (58,511) (40,779) 863,512 425,317 190,243 (418,373) (246,543) (68,354) 107,563 (265,328) 2,642,737 (445,592) 2,197,145 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CASH FLOWS FROM INVESTING ACTIVITIES 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 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 Increase in other non-current assets Interest received Dividends received Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Increase (decrease) in short-term bills payable Proceeds from long-term borrowings Repayment of the principal portion of lease liabilities Decrease in other non-current liabilities Cash dividends paid Interest paid Non-controlling interest Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 17 (1,673,882) 1,582,376 - 227,159 (1,088,790) 20,524 (79,421) (2,602) 138,228 1,170,668 294,277 (15,000) (34,009) 20,000 (72,723) (6,734) (2,352,886) (16,677) (112,397) (2,590,426) (12,879) (1,281,398) 15,172,763 $ 13,891,365	2018 $ 12,358 (630,254) 1,741,426 (553,113) 27,077 (580,968) 35,162 (156,394) (34,686) 190,722 662,489 713,819 (105,000) 57,954 - - (17,683) (2,491,292) (9,962) (163,237) (2,729,220) (15,539) 166,205 13,816,041 $ 13,982,246

(Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets at September 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		September 30	September 30
		2019 $ 13,612,051 279,314 $ 13,891,365	2018 $ 13,549,632 432,614 $ 13,982,246

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

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

10 -

CHINA MOTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 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 November 13, 2019.

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

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

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

 IFRS 16 “Leases”

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

Definition of a lease

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

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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 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 an amount equal to the lease liabilities. 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 lessee’s weighted average 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 The Group as lessor	$ 595,598 (3,464) (594) $ 591,540 $ 538,229

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 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform” 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)
	January 1, 2020 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.

13 -

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 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 the 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.

14 -

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
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
September 30,
2019
December 31,
2018
September 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
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
d)
100.00
100.00
100.00
d)
100.00
100.00
100.00
100.00
100.00
100.00
(Continued)

15 -

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
September 30,
2019
December 31,
2018
September 30,
2018
Note
-
-
100.00
c)
-
100.00
100.00
d)
100.00
100.00
100.00
d)

(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. Owing to 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, since the Corporation controls more than half of the board members and holds relative majority of shares, COC was considered a subsidiary.
c) In October 2017, Sichuan Houwei annulled its registration. As of November 2018, the annulment had been completed.
d) In November 2018, Sichuan Huafeng Hanwei, Sichuan Lingwei, Guangzhou Huayou Motor Maintenance and Guangzhou Huayou Motor Sales resolved to dissolve their respective companies. As of September 30, 2019, the liquidation has not yet been completed, while the annulment of Sichuan Lingwei was completed in July 2019.

For the relationship between the Corporation and its controlled entities as of September 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.

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.

16 -

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.

17 -

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.

18 -

6. CASH AND CASH EQUIVALENTS

September 30,
2019
December 31,
2018
September 30,
2018
Cash
Cash on hand
$ 3,772 $ 4,439 $ 4,348
Checking accounts and demand deposits

1,750,894

1,870,223

2,151,006

1,754,666

1,874,662

2,155,354
Cash equivalents
Time deposits
10,187,862
11,104,232
10,082,592
Repurchase agreements collateralized by bonds
1,669,523

1,450,566

1,311,686

11,857,385

12,554,798

11,394,278
$ 13,612,051
$ 14,429,460
$ 13,549,632
FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
September 30,
2019
December 31,
2018
September 30,
2018
Financial assets-current
Financial assets mandatorily classified as at
FVTPL
Non-derivative financial assets
Mutual funds
$ 653,762
$ 567,620
$ 692,748
Derivative financial assets (not under hedge
accounting)
Foreign exchange forward contracts

307

23

-
$ 654,069
$ 567,643
$ 692,748
Financial liabilities (included in other current
liabilities)
Financial liabilities held for trading
Derivative financial instruments (not under
hedge accounting)
Foreign exchange forward contracts
$ 666
$ 79
$ 803
Financial assets-non-current
Financial assets mandatorily classified as at
FVTPL
Non-derivative financial assets
Domestic unlisted common shares
$ 695,808
$ 734,341
$ 724,592

19 -

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

September 30, 2019

			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2019.10.21	USD2,200/NTD67,859
Sale	RMB/USD	2019.10.21	RMB15,564/USD2,200
December 31, 2018
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2019.01.04-2019.01.22	USD5,000/NTD153,480
September 30, 2018
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2018.10.15-2018.11.20	USD7,000/NTD213,895

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

FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
September 30,
2019
December 31,
2018
September 30,
2018
Non-current
Investments in equity instruments at FVTOCI
Domestic investments
Listed shares
$ 25,970
$ 18,673
$ 25,902
Unlisted shares

23,145

24,045

23,882
49,115
42,718
49,784
Foreign investments
Unlisted shares

156,283

184,678

202,915
$ 205,398
$ 227,396
$ 252,699

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.

Dividends of $675 thousand, $743 thousand, $675 thousand and $743 thousand were recognized during the three months and the nine months ended September 30, 2019 and 2018, respectively. Those dividends are all related to investments held at the end of the reporting period.

20 -

9. FINANCIAL ASSETS AT AMORTIZED COST

	September 30,	December 31,	September 30,
	2019	2018	2018
Current
Principal guaranteed notes	$ 369,604	$ 105,015	$ 303,354
Less: Allowance for impairment loss	(2,299)	(656)	(1,887)
	$ 367,305	$ 104,359	$ 301,467
Non-current
Bonds	$ 654,574	$ 820,015	$ 849,436
Preference shares	9,900	9,900	9,900
Principal guaranteed notes	-	-	22,180
	664,474	829,915	881,516
Less: Allowance for impairment loss	(5,083)	(5,210)	(6,086)
	$ 659,391	$ 824,705	$ 875,430

a. The coupon rates of principal guaranteed notes were ranging from 2.55%-3.00%, 3.03%-3.07% and 3.03%-4.50% per annum as of September 30, 2019, December 31, 2018 and September 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 September 30, 2019, December 31, 2018 and September 30, 2018, respectively.
c. The coupon rate of preference shares was 1.50% per annum as of September 30, 2019, December 31, 2018 and September 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:

	September 30,	December 31,	December 31,	September 30,
	2019		2018	2018
Gross carrying amount	$ 1,034,078	$	934,930	$ 1,184,870
Less: Allowance for impairment loss	(7,382)		(5,866)	(7,973)
Amortized cost	$ 1,026,696	$	929,064	$ 1,176,897

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.

21 -

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:

September 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% September 30, 2018 Category Expected Loss Rate Performing 0.0769%-0.6221% No rating 39.7172%	Gross Carrying Amount
	At Amortized Cost $ 1,024,178 9,900 Gross Carrying Amount
	At Amortized Cost $ 925,030 9,900 Gross Carrying Amount
	At Amortized Cost $ 1,174,970 9,900

22 -

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 September 30, 2019 Balance at January 1, 2018 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance at September 30, 2018	Credit Rating
	Performing (12-month ECLs) No rating (Lifetime ECLs - Not Credit- impaired) $ 2,650 $ 3,216 10,413 - (8,887) - (10) - $ 4,166 $ 3,216 $ 5,572 $ 3,932 3,921 - (5,583) - 131 - $ 4,041 $ 3,932

a. During the nine months ended September 30, 2019 and 2018, the Group purchased principal guaranteed notes of $1,673,882 thousand and $630,254 thousand, respectively, and correspondingly increased the loss allowance for investments rated as performing of $10,413 thousand and $3,921 thousand, respectively.
b. Investments in principal guaranteed notes of $1,406,917 thousand and bonds of $175,459 thousand were redeemed during the nine months ended September 30, 2019, with a consequential reduction in the loss allowance for investments rated as performing of $8,887 thousand; and investments in negotiable certificates of deposit of $700,000 thousand, principal guaranteed notes of $877,193 thousand and bonds of $164,233 thousand were redeemed during the nine months ended September 30, 2018, with a consequential reduction in the loss allowance for investments rated as performing of $5,583 thousand.

11. HEDGING INSTRUMENTS

	September	September	30,	December	December	31,	September 30,	September 30,
		2019			2018			2018
Financial assets
Cash flow hedge - spot rate	$	279,314		$	743,303		$	432,614
Cash flow hedge - foreign exchange forward
contracts			-			-		67
	$	279,314		$	743,303		$	432,681
Financial liabilities (included in
other current liabilities)
Cash flow hedge - foreign exchange forward
contracts	$		-	$		-	$	388

23 -

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 nine months ended September 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.

September 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	JPY970,515/	2019.11.29	0.2763-0.2945	Financial assets	$	279,314	$ (2,288)
		NTD277,100	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					$ 2,288			$ (2,288)
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

24 -

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

September 30, 2018

Notional Amount Forward Rate Hedging Instruments Currency (In Thousands) Maturity (Note) Line Item Cash flow hedge Forecast purchases - foreign exchange forward contracts JPY/NTD JPY400,000/NTD108,020 2018.10.16- 2019.1.4 0.2695- 0.2706 Other current liabilities Forecast purchases - foreign exchange forward contracts JPY/NTD JPY500,000/NTD134,500 2019.1.4 0.2690 Financial assets for hedging Forecast purchases - spot rate JPY/NTD JPY1,406,655/NTD382,699 2018.12.13- 2018.12.27 0.2695- 0.2750 Financial assets for hedging Forecast purchases - spot rate RMB/NTD RMB12,160/NTD55,170 2018.12.20 NTD4.5813: RMB1 Financial assets for hedging		Carrying Am	ount Change in Value Used for Calculating Hedge Liability Ineffectiveness $ (388 ) $ (310 ) - 54 - (3,222 ) - (1,414 ) $ (388) $ (4,892)
		Asset $ - 67 378,671 53,943 $ 432,681

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 $ 4,892 $ (4,892) Hedging Gains (Losses) Recognized inOCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 4,892 $ (4,892) Hedging Gains (Losses) Recognized inOCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 4,892 $ (4,892) Hedging Gains (Losses) Recognized inOCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 4,892 $ (4,892) Hedging Gains (Losses) Recognized inOCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 4,892 $ (4,892) Hedging Gains (Losses) Recognized inOCI
	For the Three Months Ended September 30 2019 2018 $ (841) $ (14,727)		For the Nine Months Ended September 30
		2019 $ (841)		2019 $ 39,756	2018 $ 8,301

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

25 -

12. NOTES AND ACCOUNTS RECEIVABLE, NET

	September 30,	December 31,	September 30,
	2019	2018	2018
At amortized cost
Notes and accounts receivable	$ 1,094,900	$ 1,197,225	$ 1,306,164
Less: Allowance for impairment loss	(17,642)	(19,771)	(11,102)
	$ 1,077,258	$ 1,177,454	$ 1,295,062

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:

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2019		2018		2018
Not past due	$ 1,036,420		$ 1,146,617		$ 1,272,157
1-60 days		23,067		29,254		15,931
61-90 days		749		11,971		4,278
Over 91 days		34,664		9,383		13,798
Gross carrying amount		1,094,900		1,197,225		1,306,164
Loss allowance (lifetime ECLs)		(17,642)		(19,771)		(11,102)
Amortized cost	$ 1,077,258		$ 1,177,454		$ 1,295,062

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 September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 19,771 - (1,835) (294) $ 17,642	2018 $ 6,788 4,446 - (132) $ 11,102

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13. INVENTORIES

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2019		2018		2018
Merchandise	$	271,430	$	196,059	$	704,324
Finished goods		456,250		1,453,757		413,000
Work in progress		564,532		374,472		429,415
Raw materials		2,094,503		1,759,515		1,885,437
Materials in transit		99,774		286,461		160,492
	$	3,486,489	$	4,070,264	$	3,592,668

The costs of inventories recognized as cost of goods sold for the three months ended September 30, 2019 and 2018 and for the nine months ended September 30, 2019 and 2018 were $6,096,812 thousand, $6,592,400 thousand, $19,796,785 thousand and $21,605,437 thousand, respectively.

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

The Group had a 43.87% interest in Kian Shen as of September 30, 2019, December 31, 2018 and September 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:

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2019		2018		2018
Current assets	$	981,447	$	836,938	$	700,740
Non-current assets		3,925,524		4,140,669		4,124,222
Current liabilities		(550,124)		(685,896)		(700,801)
Non-current liabilities		(295,643)		(178,573)		(181,494)
Equity	$	4,061,204	$	4,113,138	$	3,942,667
Equity attributable to:
Owners of Kian Shen	$	1,781,650	$	1,804,434	$	1,729,648
Non-controlling interests of Kian Shen		2,279,554		2,308,704		2,213,019
	$	4,061,204	$	4,113,138	$	3,942,667

27 -

For the Three Months Ended September 30 2019 2018 Revenue $ 224,789 $ 302,450 Profit for the period $ 77,967 $ 95,546 Other comprehensive loss for the period (154,554) (147,277) Total comprehensive income (loss) for the period $ (76,587) $ (51,731) Profit attributable to: Owners of Kian Shen $ 34,204 $ 41,916 Non-controlling interests of Kian Shen 43,763 53,630 $ 77,967 $ 95,546 Total comprehensive income (loss) attributable to: Owners of Kian Shen $ (33,598) $ (22,695) Non-controlling interests of Kian Shen (42,989) (29,036) $ (76,587) $ (51,731) Net cash outflow from: Operating activities Investing activities Financing activities Foreign exchange adjustments Net cash outflow Dividends paid to non-controlling interest	For the Three Months Ended September 30	For the Three Months Ended September 30			For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2018 $ 302,450 $ 95,546 (147,277) $ (51,731) $ 41,916 53,630 $ 95,546 $ (22,695) (29,036) $ (51,731)			2019 2018 $ 908,728 $ 930,601 $ 198,507 $ 297,344 (118,321) (143,694) $ 80,186 $ 153,650 $ 87,085 $ 130,445 111,422 166,899 $ 198,507 $ 297,344 $ 35,178 $ 67,406 45,008 86,244 $ 80,186 $ 153,650 For the Nine Months Ended September 30
					2019 $ (57,416) 50,269 (146,650) (62) $ (153,859) $ 74,158	2018 $ (85,551) 255,872 (168,160) (4,164) $ (2,003) $ 98,877

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15. NON-CURRENT ASSETS HELD FOR SALE

	September 30,	September 30,	December 31,	December 31,
		2019		2018
Investments accounted for using the equity method classified as held
for sale	$	148,023	$	148,023
Equity directly associated with non-current assets classified as held
for sale	$	(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.

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

September 30, 2019 Investments in associates $ 19,218,925 Investments in joint ventures 7,547,892 $ 26,766,817 a. Investments in associates September 30, 2019 Material associates Yulon $ 10,867,353 Associates that are not individually material 8,351,572 $ 19,218,925	December 31, 2018 September 30, 2018 $ 20,979,597 $ 21,120,901 8,127,177 7,817,820 $ 29,106,774 $ 28,938,721 December 31, 2018 September 30, 2018 $ 11,479,604 $ 11,428,441 9,499,993 9,692,460 $ 20,979,597 $ 21,120,901

1) Material associates

The Group held 16.80% interest in Yulon on September 30, 2019, December 31, 2018 and September 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:

	September 30,	December 31,	September 30,
Name of Associate	2019	2018	2018
Yulon	$ 5,152,783	$ 4,772,553	$ 5,690,351

29 -

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

Yulon

September 30, 2019 Current assets $ 239,614,594 Non-current assets 86,851,053 Current liabilities (213,561,596) Non-current liabilities (33,514,393) Equity 79,389,658 Non-controlling interests (11,307,323) $ 68,082,335 Proportion of the Group’s ownership 16.80% Equity attributable to the Group $ 11,437,832 Cross shareholdings (573,764) Unrealized gain on sidestream transactions 3,285 Carrying amount $ 10,867,353 For the Three Months Ended September 30 2019 2018 Operating revenue $ 21,575,214 $ 20,223,757 Net profit (loss) for the period $ (1,106,923) $ 635,524 Other comprehensive income (loss) (714,279) (717,466) Total comprehensive income (loss) for the period $ (1,821,202) $ (81,942) Dividends received from Yulon	September 30, 2019 Current assets $ 239,614,594 Non-current assets 86,851,053 Current liabilities (213,561,596) Non-current liabilities (33,514,393) Equity 79,389,658 Non-controlling interests (11,307,323) $ 68,082,335 Proportion of the Group’s ownership 16.80% Equity attributable to the Group $ 11,437,832 Cross shareholdings (573,764) Unrealized gain on sidestream transactions 3,285 Carrying amount $ 10,867,353 For the Three Months Ended September 30 2019 2018 Operating revenue $ 21,575,214 $ 20,223,757 Net profit (loss) for the period $ (1,106,923) $ 635,524 Other comprehensive income (loss) (714,279) (717,466) Total comprehensive income (loss) for the period $ (1,821,202) $ (81,942) Dividends received from Yulon	December 31, 2018 September 30, 2018 $ 209,300,378 $ 194,931,036 96,372,715 88,440,927 (195,992,191) (181,814,815) (26,620,612) (21,535,091) 83,060,290 80,022,057 (11,323,162) (8,555,759) $ 71,737,128 $ 71,466,298 16.80% 16.80% $ 12,051,837 $ 12,006,338 (575,518) (581,182) 3,285 3,285 $ 11,479,604 $ 11,428,441 For the Nine Months Ended September 30 2019 2018 $ 62,833,980 $ 65,658,693 $ (1,122,409) $ 2,947,052 86,830 (541,066) $ (1,035,579) $ 2,405,986 $ 175,693 $ 152,092	December 31, 2018 September 30, 2018 $ 209,300,378 $ 194,931,036 96,372,715 88,440,927 (195,992,191) (181,814,815) (26,620,612) (21,535,091) 83,060,290 80,022,057 (11,323,162) (8,555,759) $ 71,737,128 $ 71,466,298 16.80% 16.80% $ 12,051,837 $ 12,006,338 (575,518) (581,182) 3,285 3,285 $ 11,479,604 $ 11,428,441 For the Nine Months Ended September 30 2019 2018 $ 62,833,980 $ 65,658,693 $ (1,122,409) $ 2,947,052 86,830 (541,066) $ (1,035,579) $ 2,405,986 $ 175,693 $ 152,092	December 31, 2018 September 30, 2018 $ 209,300,378 $ 194,931,036 96,372,715 88,440,927 (195,992,191) (181,814,815) (26,620,612) (21,535,091) 83,060,290 80,022,057 (11,323,162) (8,555,759) $ 71,737,128 $ 71,466,298 16.80% 16.80% $ 12,051,837 $ 12,006,338 (575,518) (581,182) 3,285 3,285 $ 11,479,604 $ 11,428,441 For the Nine Months Ended September 30 2019 2018 $ 62,833,980 $ 65,658,693 $ (1,122,409) $ 2,947,052 86,830 (541,066) $ (1,035,579) $ 2,405,986 $ 175,693 $ 152,092

		$
		$
		$

2019 $ 21,575,214 $ (1,106,923) (714,279) $ (1,821,202)	2018 $ 20,223,757 $ 635,524 (717,466) $ (81,942)		2019 $ 62,833,980 $ (1,122,409) 86,830 $ (1,035,579) $ 175,693	2018 $ 65,658,693 $ 2,947,052 (541,066) $ 2,405,986 $ 152,092

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2) Aggregate information of associates that are not individually material

The Group’s share of: Net profit (loss) for the period Other comprehensive income (loss) Total comprehensive income (loss) for the period	For the Three Months Ended September 30 2019 2018 $ 196,190 $ 54,527 (19,121) (31,143) $ 177,069 $ 23,384	For the Three Months Ended September 30 2019 2018 $ 196,190 $ 54,527 (19,121) (31,143) $ 177,069 $ 23,384	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 196,190 (19,121) $ 177,069		2019 $ (559,247) 121,152 $ (438,095)	2018 $ 277,685 (9,441) $ 268,244

The 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 shareholding from 23.2% to 31.2%.

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

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

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

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 Hua-Chung Automobile Information Technical Center, 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.

31 -

b. Investments in joint ventures

	September 30,	December 31,	September 30,
	2019	2018	2018
Joint ventures that are not individually
material	$ 7,547,892	$ 8,127,177	$ 7,817,820

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Net profit of the period Other comprehensive loss Total comprehensive income (loss) for the period	For the Three Months Ended September 30 2019 2018 $ 241,841 $ 269,759 (284,798) (247,318) $ (42,957) $ 22,441	For the Three Months Ended September 30 2019 2018 $ 241,841 $ 269,759 (284,798) (247,318) $ (42,957) $ 22,441	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 241,841 (284,798) $ (42,957)		2019 $ 486,017 (189,928) $ 296,089	2018 $ 997,622 (209,057) $ 788,565

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 September 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

	September 30,	December 31,	September 30,
	2019	2018	2018
Assets used by the Group
Land	$ 2,127,397	$ 2,127,397	$ 2,127,397
Land improvement	13,308	13,618	14,374
Buildings	1,054,612	1,011,801	1,022,420
Machinery	2,187,208	2,030,592	2,117,099
Other equipment	399,940	407,735	404,120
Construction in progress	931,681	797,004	651,738
	$ 6,714,146	$ 6,388,147	$ 6,337,148

The Group had no other significant disposal of property, plant and equipment except for the depreciation recognized and the cost of acquisition of property, plant and equipment for increasing productivity, which totaled $361,883 thousand, $255,926 thousand, $1,088,790 thousand and $580,968 thousand for the three months ended September 30, 2019 and 2018 and for the nine months ended September 30, 2019 and 2018, respectively.

32 -

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 $0 thousand, $11,578 thousand, $36,637 thousand and $21,924 thousand for the three months ended September 30, 2019 and 2018 and for the nine months ended September 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.

18. LEASE ARRANGEMENTS

a. Right-of-use assets - 2019

			September 30,	September 30,
				2019
Carrying amounts
Land			$	89,774
Buildings				375,366
Other equipment				9,555
			$	474,695
	For	the Three	For	the Nine
	Months Ended		Months Ended
	September 30,		September 30,
		2019		2019
Additions to right-of-use assets			$	22,159
Depreciation charge for right-of-use assets
Land	$	7,461	$	22,391
Buildings		16,739		50,462
Other equipment		1,549		4,816
	$	25,749	$	77,669

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b. Lease liabilities - 2019

	September 30,
	2019
Carrying amounts
Current	$ 95,425
Non-current	$ 384,038
Range of discount rate for lease liabilities was as follows:
	September 30,
	2019
Land	1.2%-1.94%
Buildings	1.2%-4.35%
Other equipment	0.98%-1.37%

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.

d. Other lease information

2019

	For	the Three	For	the Nine
	Months Ended		Months Ended
	September 30,		September 30,
		2019		2019
Expenses relating to short-term leases	$	6,604	$	18,646
Expenses relating to low-value asset leases	$	413	$	1,823
Total cash outflow for leases			$	102,860

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 are as follows:

	December 31,	September 30,
	2018	2018
Not later than 1 year	$ 110,157	$ 114,027
Later than 1 year and not later than 5 years	330,544	340,302
Later than 5 years	154,897	165,231
	$ 595,598	$ 619,560

34 -

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

19. INVESTMENT PROPERTIES

	September 30,	December 31,	September 30,
	2019	2018	2018
Investment properties	$ 1,368,807	$ 1,380,002	$ 1,383,783

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 nine months ended September 30, 2019 and 2018.

The investment properties held by the Group were depreciated over their estimated 10 to 60 years useful lives by 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 September 30, 2019 and 2018, as compared to that of December 31, 2018 and 2017.

The maturity analysis of lease payments receivable under operating leases of investment properties as of September 30, 2019 was as follows:

		September 30,	September 30,
			2019
Year	1	$	51,859
Year	2		40,615
Year	3		29,147
Year	4		12,471
		$	134,092

The future minimum lease payments of non-cancellable operating lease commitments as of December 31 and September 30, 2018 are as follows:

	December 31,	December 31,	September 30,	September 30,
		2018		2018
Not later than 1 year	$	62,568	$	58,758
Later than 1 year and not later than 5 years		125,360		123,675
Later than 5 years		-		4,130
	$	187,928	$	186,563

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.

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20. BORROWINGS

a. Short-term borrowings

	September 30,	December 31,	September 30,
	2019	2018	2018
Line of credit borrowings	$ 360,000	$ 340,000	$ 320,000
Bank loans	270,000	305,000	320,000
	$ 630,000	$ 645,000	$ 640,000

1) The interest rates on credit borrowings were ranging from 0.95%-1.1%, 0.95%-0.98% and 0.95%-1.25% per annum as of September 30, 2019, December 31, 2018 and September 30, 2018, respectively.
2) The interest rates on bank loans were 0.98%, 1.18% and 1.18% per annum as of September 30, 2019, December 31, 2018 and September 30, 2018, respectively.
b. Long-term borrowings

	September	September	30,
		2019
Unsecured borrowings
Line of credit borrowings	$	20,000
Less: Current portions			-
Long-term borrowings	$	20,000

Long-term borrowings is unsecreced loans which are repayable in installments at varing amounts from October 15, 2020 to July 15, 2022. The Group has signed medium-term no revolving credit facilities with banks. As of September 30, 2019, interest rate were 0.975%. The expiry date of the repayments is in July 31, 2022.

21. OTHER PAYABLES

September 30, 2019 Payable due to capital reduction $ 8,304,305 Payable for salaries or bonus 772,339 Payable for advertisement 404,623 Payable for taxes 296,904 Payable for warranties 234,693 Provisions for employee benefits 95,163 Others 718,708 $ 10,826,735	December 31, 2018 September 30, 2018 $ - $ - 1,149,478 884,961 197,919 398,437 191,369 214,294 263,952 273,110 153,296 114,898 761,051 901,181 $ 2,717,065 $ 2,786,881

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22. RETIREMENT BENEFIT PLANS

For the three months ended September 30, 2019 and 2018 and for the nine months ended September 30, 2019 and 2018, the pension expenses of defined benefit plans were $14,217 thousand, $16,661 thousand, $42,900 thousand and $50,091 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

September 30, 2019 Numbers of shares authorized (in thousands) 1,800,000 Amount of shares authorized $ 18,000,000 Number of shares issued and fully paid (in thousands) 553,620 Shares issued and fully paid $ 5,536,203	December 31, 2018 September 30, 2018 1,800,000 1,800,000 $ 18,000,000 $ 18,000,000 1,384,051 1,384,051 $ 13,840,508 $ 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 was $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 had been approved by the board of directors and the registration was completed on August 19, 2019.

b. Capital surplus

	September 30,	December 31,	September 30,
	2019	2018	2018
May be used to offset a deficit, distributed as
cash dividends, or transferred to share
capital (Note 1)
Conversion of bonds	$ 5,183,923	$ 5,183,923	$ 5,183,923
Issuance of ordinary shares	1,184,920	1,184,920	1,184,920
Others	4,666	4,666	4,666
			(Continued)

37 -

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2019		2018		2018
May be used to offset a deficit only
Changes in percentage of ownership interest
in subsidiaries (Note 2)	$	2,225	$	2,225	$	2,225
Share of changes in capital surplus of
associates		15,786		27,899		37,515
	$	6,391,520	$	6,403,633	$	6,413,249
						(Concluded)

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 Years Ended December 31 2018 2017 $ 359,300 $ 410,564 2,352,886 2,491,292	Dividends Per Share (NT$)	Dividends Per Share (NT$)	Dividends Per Share (NT$)
		For the Years Ended December 31
			2018 $ 1.7	2017 $ 1.8

Information on the appropriation of earnings in the shareholders’ meetings is available at the Market Observation Post System website of the Taiwan Stock Exchange.

d. Special reserves

Beginning at January 1 Reversals Disposal of subsidiaries and associates Disposal of property, plant and equipment Balance at September 30		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 1,046,967 (377) (5) $ 1,046,585	2018 $ 1,051,658 (4,691) - $ 1,046,967

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 loss recognized for the period Balance at September 30		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ (646,278) (28,447) (158,559) 1,773 (185,233) $ (831,511)	2018 $ (485,118) (25,522) (260,644) 7,538 (278,628) $ (763,746)

39 -

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 September 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 September 30		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 2018 $ 117,177 $ 273,866 (17,488) (28,110) 160,647 (19,879) 143,159 (47,989) (85,455) 5,696 (17) (528) $ 174,864 $ 231,045 For the Nine Months Ended September 30
		2019 $ 20,997 - 35,972 - (74) 35,898 (59,257) $ (2,362)	2018 $ (12,253) 382 (2,654) 9,633 - 7,361 - $ (4,892)

40 -

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 loss recognized for the period Cash dividend distributed by subsidiaries Balance at September 30		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 3,613,814 124,790 (3,614) (11,147) (51,652) (66,413) (112,397) $ 3,559,794	2018 $ 3,550,772 210,899 (20,433) (2,075) (58,148) (80,656) (163,237) $ 3,517,778

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 September 30 2019 2018 $ 5,584,445 $ 5,893,101 1,488,761 1,950,533 7,073,206 7,843,634 276,570 275,603 17,003 18,107 23,690 31,493 $ 7,390,469 $ 8,168,837		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 5,584,445 1,488,761 7,073,206 276,570 17,003 23,690 $ 7,390,469		2019 $ 18,670,658 4,535,304 23,205,962 1,084,434 49,080 59,667 $ 24,399,143	2018 $ 20,767,484 5,234,510 26,001,994 996,196 48,046 74,876 $ 27,121,112

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25. NET PROFIT

Net profit concludes as follows:

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 September 30 2019 2018 $ 165,037 $ 192,304 61,405 38,783 $ 226,442 $ 231,087 $ 1,711 $ 2,070 12,250 20,367 $ 13,961 $ 22,437 $ 13,193 $ 10,132	For the Three Months Ended September 30 2019 2018 $ 165,037 $ 192,304 61,405 38,783 $ 226,442 $ 231,087 $ 1,711 $ 2,070 12,250 20,367 $ 13,961 $ 22,437 $ 13,193 $ 10,132	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 165,037 61,405 $ 226,442 $ 1,711 12,250 $ 13,961 $ 13,193		2019 $ 598,401 184,421 $ 782,822 $ 5,800 39,065 $ 44,865 $ 37,902	2018 $ 612,139 114,225 $ 726,364 $ 6,389 52,610 $ 58,999 $ 28,620

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 Employee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans Short-term benefits		For the Three Months Ended September 30 2019 2018 $ 16,594 $ 16,837 $ 5,210 $ 5,424 For the Three Months Ended September 30 2019 2018 $ 19,402 $ 19,586 14,217 16,661 33,619 36,247 811,522 897,900 $ 845,141 $ 934,147		For the Nine Months Ended September 30	For the Nine Months Ended September 30
				2019 2018 $ 49,753 $ 48,874 $ 15,924 $ 16,833 For the Nine Months Ended September 30
		2019 $ 19,402 14,217 33,619 811,522 $ 845,141		2019 $ 63,122 42,900 106,022 2,563,301 $ 2,669,323	2018 $ 58,909 50,091 109,000 2,854,685 $ 2,963,685 (Continued)

c. Employee benefits expense

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An analysis of employee benefits expenses by function Operating costs Operating expenses		For the Three Months Ended September 30 2019 2018 $ 451,631 $ 480,519 393,510 453,628 $ 845,141 $ 934,147		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 451,631 393,510 $ 845,141		2019 $ 1,443,663 1,225,660 $ 2,669,323	2018 $ 1,550,302 1,413,383 $ 2,963,685 (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 September 30, 2019 and 2018 and for the nine months ended September 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 September 30 2019 2018 $ 499 $ 8,043 $ 3,660 $ 4,725	For the Three Months Ended September 30 2019 2018 $ 499 $ 8,043 $ 3,660 $ 4,725	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 499 $ 3,660		2019 $ 793 $ 3,660	2018 $ 27,371 $ 16,323

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

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

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

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

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

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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 for the prior periods Adjustments to deferred tax attributable to changes in tax rates and laws Income tax expense recognized in profit or loss	For the Three Months Ended September 30 2019 2018 $ 49,501 $ 49,861 (2) (13,010) 49,499 36,851 72,044 16,639 (389) (1,693) - - 71,655 14,946 $ 121,154 $ 51,797	For the Three Months Ended September 30 2019 2018 $ 49,501 $ 49,861 (2) (13,010) 49,499 36,851 72,044 16,639 (389) (1,693) - - 71,655 14,946 $ 121,154 $ 51,797	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 49,501 (2) 49,499 72,044 (389) - 71,655 $ 121,154		2019 $ 345,467 (22,628) 322,839 140,418 43,986 - 184,404 $ 507,243	2018 $ 271,427 (21,891) 249,536 188,366 (740) (44,585) 143,041 $ 392,577

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.

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b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current period Cash flow hedges Arising from losses of hedging instruments in cash flow hedges transferred to the initial carrying amounts of hedged items Cash flow hedges Effect of change in tax rate	For the Three Months Ended September 30 2019 2018 $ 2,438 $ 2,653 (2,299) - - - $ 139 $ 2,653	For the Three Months Ended September 30 2019 2018 $ 2,438 $ 2,653 (2,299) - - - $ 139 $ 2,653	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 2,438 (2,299) - $ 139		2019 $ 746 (4,530) - $ (3,784)	2018 $ (1,322) - 5,473 $ 4,151

c. Income tax assessments

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

27. EARNINGS PER SHARE

Basic earnings per share Diluted earnings per share	For the Three Months Ended September 30 2019 2018 $ 0.38 $ 0.63 $ 0.38 $ 0.63	For the Three Months Ended September 30 2019 2018 $ 0.38 $ 0.63 $ 0.38 $ 0.63	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 0.38 $ 0.38		2019 $ 0.29 $ 0.29	2018 $ 2.14 $ 2.14

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

Net Profit for the Period

Earnings used in the computation of basic earnings per share		For the Three Months Ended September 30 2019 2018 $ 336,826 $ 859,701		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 336,826		2019 $ 346,192	2018 $ 2,919,706

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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 September 30 2019 2018 896,624 1,384,051 (13,344) (20,599) 883,280 1,363,452 32 1,067 883,312 1,364,519	For the Three Months Ended September 30 2019 2018 896,624 1,384,051 (13,344) (20,599) 883,280 1,363,452 32 1,067 883,312 1,364,519	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 896,624 (13,344) 883,280 32 883,312		2019 1,219,790 (18,154) 1,201,636 494 1,202,130	2018 1,384,051 (20,599) 1,363,452 1,630 1,365,082

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.

46 -
b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy

September 30, 2019 Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Overseas unlisted shares Financial assets for hedging Non-derivative financial instruments 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 $ 653,762 - - $ 653,762 $ 25,970 - - $ 25,970 $ 279,314 $ - Level 1 $ 567,620 - - $ 567,620	Level 2 $ - - - $ - $ - - - $ - $ - $ - Level 2 $ - - - $ -	Level 3 $ - 695,808 307 $ 696,115 $ - 23,145 156,283 $ 179,428 $ - $ 666 Level 3 $ - 734,341 23 $ 734,364	Total $ 653,762 695,808 307 $ 1,349,877 $ 25,970 23,145 156,283 $ 205,398 $ 279,314 $ 666 Total $ 567,620 734,341 23 $ 1,301,984 (Continued)

47 -

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) September 30, 2018 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 Derivative financial instruments	Level 1 $ 18,673 - - $ 18,673 $ 743,303 $ - Level 1 $ 692,748 - $ 692,748 $ 25,902 - - $ 25,902 $ 432,614 - $ 432,614	Level 2 $ - - - $ - $ - $ - Level 2 $ - - $ - $ - - - $ - $ - - $ -	Level 3 $ - 24,045 184,678 $ 208,723 $ - $ 79 Level 3 $ - 724,592 $ 724,592 $ - 23,882 202,915 $ 226,797 $ - 67 $ 67	Total $ 18,673 24,045 184,678 $ 227,396 $ 743,303 $ 79 (Concluded) Total $ 692,748 724,592 $ 1,417,340 $ 25,902 23,882 202,915 $ 252,699 $ 432,614 67 $ 432,681 (Continued)

48 -

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 $ 803 $ 388	Total $ 803 $ 388 (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 September 30, 2019

				Derivative	Derivative
	Equity	Equity		Financial
	Instruments at	Instruments at		Instruments at
Financial Assets	FVTPL	FVTOCI			FVTPL		Total
Balance at July 1	$ 711,829	$ 189,296		$	-	$	901,125
Recognized in profit or loss	(16,021)		-		307		(15,714)
Recognized in other
comprehensive loss	-	(9,868)			-		(9,868)
Balance at September 30	$ 695,808	$ 179,428		$	307	$	875,543
						Derivative
						Financial
						Instruments at
Financial Liabilities						FVTPL
Balance at July 1						$	17,237
Recognized in loss							(16,571)
Balance at September 30						$	666

49 -

For the nine months ended September 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 profit or loss	(38,533)		-		284		(38,249)
Recognized in other
comprehensive loss	-	(29,278)			-		(29,278)
Sales	-	(17)			-		(17)
Balance at September 30	$ 695,808	$ 179,428		$	307	$	875,543
						Derivative
						Financial
						Instruments at
Financial Liabilities						FVTPL
Balance at January 1						$	79
Recognized in loss							587
Balance at September 30						$	666

For the three months ended September 30, 2018

Financial Assets Equity Instruments at FVTPL Balance at July 1 $ 739,392 Recognized in profit or loss (14,800) Recognized in other comprehensive loss - Sales - Balance at September 30 $ 724,592 Financial Liabilities Balance at July 1 Recognized in profit or loss Recognized in other comprehensive loss Balance at September 30	Derivatives Financial Instruments at FVTPL Equity Instruments at FVTOCI Derivative Financial Instruments for Hedging $ 10,605 $ 273,650 $ 4,224 (10,605) - (4,224) - (34,495) 67 - (12,358) - $ - $ 226,797 $ 67 Derivatives Financial Instruments at FVTPL Derivative Financial Instruments for Hedging $ 12,822 $ 409 (12,019) (409) - 388 $ 803 $ 388	Total $ 1,027,871 (29,629) (34,428) (12,358) $ 951,456 Total $ 13,231 (12,428) 388 $ 1,191

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For the nine months ended September 30, 2018

Financial Assets Balance at January 1 Recognized in profit or loss Recognized in other comprehensive loss Sales Balance at September 30 Financial Liabilities Balance at January 1 Recognized in profit or loss Recognized in other comprehensive loss Balance at September 30	Equity Instruments at FVTPL Equity Instruments at FVTOCI Derivative Financial Instruments for Hedging $ 767,761 $ 293,111 $ - (43,169) - - - (53,349) 67 - (12,965) - $ 724,592 $ 226,797 $ 67 Derivatives Financial Instruments at FVTPL Derivative Financial Instruments for Hedging $ - $ 12,362 803 (12,362) - 388 $ 803 $ 388	Total $ 1,060,872 (43,169) (53,282) (12,965) $ 951,456 Total $ 12,362 (11,559) 388 $ 1,191

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:

	September 30,	December 31,	September 30,
	2019	2018	2018
Operating income ratio	0.14-5.68 times	0.14-5.68 times	0.15-5.28 times
Gross profit ratio	0.32-13.64 times	0.32-14.44 times	0.71-16.52 times
EBIT ratio	2.44-23.21 times	2.44-23.21 times	8.25-16.85 times
EBITDA ratio	8.51-10.82 times	-	0.76-25.47 times
Post-tax profit ratio	11.99-85.49 times	11.99-85.49 times	1.70-72.94 times
P/B ratio	0.79-4.94 times	0.82-5.09 times	0.91-6.92 times
Discount rate for lack of	32.28%	32.28%	32.28%
marketability

51 -

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:

September 30,
2019
December 31,
2018
September 30,
2018
Operating income ratio
0.1 time increase
$ 58,962
$ 36,301
$ 25,483
0.1 time decrease
$ (58,962)
$ (36,301)
$ (25,483)
Gross profit ratio
1 time increase
$ 65,697
$ 65,961
$ 23,017
1 time decrease
$ (65,697)
$ (65,961)
$ (23,017)
EBIT ratio
1 time increase
$ 18,188
$ 18,188
$ 21,581
1 time decrease
$ (18,188)
$ (18,188)
$ (21,581)
EBITDA ratio
1 time increase
$ 189
$ -
$ 69,565
1 time decrease
$ (189)
$ -
$ (69,565)
Post-tax profit ratio
1 time increase
$ 11,020
$ 11,020
$ 19,283
1 time decrease
$ (11,020)
$ (11,020)
$ (19,283)
P/B ratio
0.1 time increase
$ 84,544
$ 88,737
$ 76,072
0.1 time decrease
$ (84,544)
$ (88,737)
$ (76,072)
Categories of financial instruments
September 30,
2019
December 31,
2018
September 30,
2018
Financial assets
FVTPL
Mandatorily at FVTPL
$ 1,349,877 $ 1,301,984
1,417,340
Financial assets for hedging
279,314
743,303
432,681
Financial assets at amortized cost (Note 1)
18,454,513
19,052,314
18,624,396
Financial assets at FVTOCI
205,398
227,396
252,699
Financial liabilities
Amortized cost (Note 2)
14,080,494
7,132,785
6,380,861
FVTPL (included in other current liabilities)
Held for trading
666
79
803
Financial liabilities for hedging (included in
other current liabilities)
-
-
388

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, long-term bills payable and deposits received (included in other non-current liabilities).
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d. Financial risk management objectives and policies

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

1) Market risk

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

a) Foreign currency risk

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

Sensitivity analysis

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

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

USD to NTD	USD to NTD	USD to NTD
For the Nine Months Ended September 30
	2019 2018 $ (7,397) $ (8,428) USD to RMB
For the Nine Months Ended September 30
	2019 $ (803)	2018 $ 1,094

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JPYto NTD	JPYto NTD	JPYto NTD
For the Nine Months Ended September 30
	2019 2018 $ 659 $ (67) $ (2,793) $ (6,210) RMB to NTD
For the Nine Months Ended September 30
	2019 $ (11,118) $ -	2018 $ (19,816) $ (539)

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:

	September 30,	December 31,	December 31,	September 30,
	2019		2018	2018
Cash flow interest rate risk
Financial assets	$ 14,071,304	$	15,330,348	$ 14,140,752
Financial liabilities	539,963		554,972	579,887
Fair value interest rate risk
Lease liabilities	479,463		-	-
Financial liabilities	170,000		184,000	228,000

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 nine months ended September 30, 2019 and 2018 would increase/decrease by $25,371 thousand and $25,427 thousand, respectively.

The Group’s sensitivity to interest rates decreased during the current period was mainly due to the decrease 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.

54 -

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 nine months ended September 30, 2019 and 2018 would have increased/decreased by $32,688 thousand and $34,637 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 nine months ended September 30, 2019 and 2018 would have increased/decreased by $1,299 thousand and $1,295 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

The amounts of financial assets will be potentially impacted if the counter-parties of the Corporation or third parties fail to perform their obligations in financial instrument contracts. The impact includes the concentrated degrees, composition parts and contracts amounts of the financial instruments and other receivables. The Group believes the risk is low because the trading parties are creditworthy banks, brokers and dealers.

3) Liquidity risk

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

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

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
(Continued)

55 -

Related Party Category

Related Party Name

Mitsubishi Motors North America., Inc.	Subsidiary of investors that have
	significant influence over the Group
Mitsubishi Motors Europe B.V.	Subsidiary of investors that have
	significant influence over the Group
Mitsubishi Corporation Technos	Subsidiary of investors that have
	significant influence over the Group
Shye Shyang Mechanical Industrial Co., Ltd.	The Group is its major management
	authority
Fuzhou Samnel Mechancial and Electrical Co., Ltd.	The Group is its major management
	authority
Uni-Calsonic Corp.	Associate
Yulon Motor Co., Ltd. (Yulon)	Associate
Fortune Motors Co., Ltd. (Fortune Motors)	Associate
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
Yufong Property Management 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
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
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 Chiashun Motor Sales Co., Ltd.	Associate
Shanghai Hopeful Wheel Automobile Maintenance Co., Ltd.	Associate
Fuzhou Lianhong Motor Parts Co., Ltd.	Associate
South East (Fujian) Motor Corporation Ltd. (South East	Joint Venture
(Fujian) Motor)

(Continued)

56 -

Related Party Name Fujian Benz Automotive Co., Ltd. Fuzhou Fushiang Motor Industrial Co., Ltd. Xiamen King-Long Kian-Shen Frame Hangzhou King-Long Kian-Shen Co., Ltd. China Engine (Fujian) Zhejiang Kangda Motor Industry and Trade Co., Ltd. (Zhejiang Kangda) Yuanchuang Industrial Investment Consulting Co., Ltd. Automotive Research & Testing Center	Related Party Category
	Joint Venture Joint Venture Joint Venture Joint Venture Joint Venture Joint Venture (Note) Substantive related party Substantive related party (Note) (Concluded)

Note: The relationship ended in August 2018.

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 September 30 2019 2018 $ 4,264,007 $ 4,240,952 1,426,718 1,435,062 227,146 298,974 5,917,871 5,974,988 14,998 32,621 9,076 13,750 $ 5,941,945 $ 6,021,359 For the Three Months Ended September 30 2019 2018 $ 467,095 $ 638,789 21,002 21,166 488,097 659,955 430,563 412,154 63,586 68,883 62,811 205,354 - 1,062 62,811 206,416 $ 1,045,057 $ 1,347,408		For the Nine Months Ended September 30	For the Nine Months Ended September 30
				2019 2018 $ 14,207,203 $ 14,441,739 4,546,945 5,399,982 676,639 873,586 19,430,787 20,715,307 79,797 92,324 23,113 45,580 $ 19,533,697 $ 20,853,211 For the Nine Months Ended September 30
		2019 $ 467,095 21,002 488,097 430,563 63,586 62,811 - 62,811 $ 1,045,057		2019 $ 1,819,044 97,348 1,916,392 1,521,772 230,663 161,575 - 161,575 $ 3,830,402	2018 $ 2,526,706 95,399 2,622,105 1,427,837 242,486 1,046,020 3,492 1,049,512 $ 5,341,940

2) Purchases of goods

57 -

3) Technical services expense

Related Party Line Items Categories / Name Cost of goods sold Investors that have and selling and significant influence marketing over the Group expenses

	For the Three Months Ended September 30 2019 2018 $ 50,713 $ 46,237		For the Nine Months Ended September 30	For the Nine Months Ended September 30
	2019 $ 50,713		2019 $ 170,961	2018 $ 147,189

4) Development expense

Related Party Line Items Categories / Name Research and Investors that have development significant influence expense over the Group Others

	For the Three Months Ended September 30 2019 2018 $ 12,436 $ 14,202 - 14 $ 12,436 $ 14,216		For the Nine Months Ended September 30	For the Nine Months Ended September 30
	2019 $ 12,436 - $ 12,436		2019 $ 37,353 3 $ 37,356	2018 $ 41,054 185 $ 41,239

5) Other expense

Related Party Line Items Categories/Name Selling and marketing expenses and general and administrative Investors and subsidiaries of the investors that have significant influence over the Group expenses Others Research and development Substantive related parties expenses Others		For the Three Months Ended September 30 2019 2018 $ 26,326 $ 22,046 4,597 5,666 $ 30,923 $ 27,712 $ - $ 9,119 549 82 $ 549 $ 9,201		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 26,326 4,597 $ 30,923 $ - 549 $ 549		2019 $ 80,979 10,961 $ 91,940 $ - 621 $ 621	2018 $ 69,886 11,709 $ 81,595 $ 56,026 533 $ 56,559

58 -

6) Receivables from related parties

	Related Party	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
Line Items	Categories/Name		2019		2018		2018
Trade receivables	Associates
from related	Fortune Motors	$	1,279,232	$	870,216	$	1,132,737
parties	Shung Ye Motor		378,450		536,279		302,716
	Hua-Chuang		76,208		199,992		122,559
	Automobile
	Information
	Technical Center
	Others		159,443		285,034		143,505
			1,893,333		1,891,521		1,701,517
	Joint ventures		17,972		44,905		51,483
	Investors and
	subsidiaries of the
	investors that have		11,209		16,043		10,067
	significant influence
	over the Group
		$	1,922,514	$	1,952,469	$	1,763,067
Prepayments
	Related Party	September 30,		December 31,		September 30,
Line Items	Categories/Name		2019		2018		2018
Prepayments	Investors and
	subsidiaries of
	investors that have
	significant influence
	over the Group
	Mitsubishi Corp.	$	95,820	$	117,943	$	122,007
	Others		2,324		6,883		7,550
			98,144		124,826		129,557
	Joint ventures		15,930		13,162		34,122
	Others		238		91		363
		$	114,312	$	138,079	$	164,042

7) Prepayments

8) Acquisition of property, plant and equipment

Related Party Line Items Categories/Name Acquisition of Associates property, plant and equipment The group is its major management authority		For the Three Months Ended September 30 2019 2018 $ 14,435 $ 220 - - $ 14,435 $ 220		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 14,435 - $ 14,435		2019 $ 51,783 - $ 51,783	2018 $ 24,001 7,500 $ 31,501

59 -

9) Payables to related parties

	Related Party	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
Line Items	Categories/Name		2019		2018		2018
Trade payables to	Associates
related parties	Yulon	$	97,834	$	94,762	$	78,564
	Yue Ki Industrial		65,812		92,017		72,481
	ROC-Spicer		26,484		87,219		62,470
	Others		188,236		342,348		248,419
			378,366		616,346		461,934
	Investors and
	subsidiaries of the
	investors that have
	significant influence
	over the Group
	Yulon Management		70,732		95,013		66,169
	Mitsubishi Motors		51,875		92,182		47,756
	Corp.
	Others		1,717		71,715		7,801
			124,324		258,910		121,726
	The Group is its major		33,662		60,301		44,723
	management
	Joint ventures		8,806		9,397		12,080
		$	545,158	$	944,954	$	640,463
10) Contract liabilities
	Related Party	September 30,		December 31,		September 30,
Line Items	Categories/Name		2019		2018		2018
Other current	Associates
liabilities	Luxgen	$	19,356	$	45,514	$	41,135
	Sin Jang		16,792		-		11,900
	Others		5,026		1,191		1,913
			41,174		46,705		54,948
	Investors and		881		-		10,487
	subsidiaries of the
	investors that have
	significant influence
	over the Group
	Others		292		273		-
		$	42,347	$	46,978	$	65,435

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 nine months ended September 30, 2019 and 2018.

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

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

60 -

c. Compensation of key management personnel

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

Short-term employee benefits Post-employment benefits	For the Three Months Ended September 30 2019 2018 $ 28,564 $ 37,464 $ 595 $ 471	For the Three Months Ended September 30 2019 2018 $ 28,564 $ 37,464 $ 595 $ 471	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2019 $ 28,564 $ 595		2019 $ 78,527 $ 1,781	2018 $ 94,415 $ 1,760

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

31. ASSETS PLEDGED AS COLLATERAL

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

	September 30,	December 31,	September 30,
	2019	2018	2018
Property, plant and equipment	$ 741,755	$ 778,643	$ 781,604
Pledge deposits (included in other current assets)	179,939	157,585	158,506
Investment properties	52,323	52,323	52,323
	$ 974,017	$ 988,551	$ 992,433

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

a. Guarantee notes amounted to $5,002,322 thousand, which had been issued to financial institutions as collaterals for loans; unused letters of credit amounted to $48,110 thousand.
b. The Group entered into an agreement with Mitsubishi Motors Corporation as stated below:

Project Technical royalty Technical royalty	Content	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
	Technical cooperation and manufacture of Delica and other car models Technical cooperation and manufacture of Outlander and other car models			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.
61 -

33. SIGNIFICANT EVENTS AFTER REPORTING PERIOD

In order to strengthen the Group’s capital structure and focus on the development of the industry, the board of directors of the Group resolved to dispose 72.81% interest in a subsidiary, Gatetech Technology, to non-related parties on November 13,2019.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The 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:

September 30, 2019

		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	244,830	4.3500	$ 1,065,009
USD		24,527	31.0400	761,310
JPY		1,015,720	0.2878	292,324
Non-monetary items
Investments accounted for using the equity
method
RMB		1,213,465	4.3500	5,278,573
EUR		77,883	33.9500	2,644,113
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 item
JPY		556,293	0.2782	154,761

62 -

September 30, 2018

		Foreign	Exchange Rate	Carrying
	Currencies		(Note)	Amount
Foreign currency assets
Monetary items
RMB	$	462,793	4.4360	$ 2,052,949
USD		21,325	30.5250	650,938
JPY		1,668,554	0.2692	449,175
Non-monetary items
Investments accounted for using the equity
method
RMB		1,311,665	4.4360	5,818,545
EUR		66,518	35.4800	2,360,064
Foreign currency liabilities
Monetary item
USD		6,677	6.8812	203,816
			(USD:RMB)

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

For the three months ended September 30, 2019 and 2018 and for the nine months ended September 30, 2019 and 2018, net foreign exchange losses were $37,634 thousand and $49,977 thousand, $12,303 thousand and $7,833 thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions.

35. SEPARATELY DISCLOSED ITEMS

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

36. SEGMENT INFORMATION

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

63 -

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 Nine Months Ended September 30 2019 2018 $ 21,844,885 $ 23,118,668 2,734,759 4,123,002 51,181 61,683 (231,682) (182,241) $ 24,399,143 $ 27,121,112		Segment Income or Loss	Segment Income or Loss
				For the Nine Months Ended September 30
		2019 $ 21,844,885 2,734,759 51,181 (231,682) $ 24,399,143		2019 $ 1,110,820 7,500 (10,965) (629) 1,106,726 (211,400) 82,899 $ 978,225	2018 $ 3,376,943 16,673 (6,125) - 3,387,491 (267,209) 402,900 $ 3,523,182

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 loss, loss on financial instruments at fair value through 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.

64 -

TABLE 1

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE NINE MONTHS ENDED SEPTEMBER 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	1.1	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,252,685	$ 8,351,232
1	Hwa-Lin	Sichuan Huafeng Hanwei Guangzhou Huayou Motor Maintenance Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes	67,698 (US$ 1,200 thousand and RMB 7,000 thousand) 91,288 (US$ 1,960 thousand and RMB 7,000 thousand) 110,813 (US$ 3,570 thousand) 30,450 (RMB 7,000 thousand)	- - - -	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,252,685 1,252,685 1,252,685 1,252,685	8,351,232 8,351,232 8,351,232 8,351,232
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	435,000 (RMB 100,000 thousand) 43,500 (RMB 10,000 thousand) 43,500 (RMB 10,000 thousand) 43,500 (RMB 10,000 thousand) 43,500 (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	- - - - -	- - - - -	- - - - -	1,252,685 1,252,685 1,252,685 1,252,685 1,252,685	8,351,232 8,351,232 8,351,232 8,351,232 8,351,232
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	43,500 (RMB 10,000 thousand) 43,500 (RMB 10,000 thousand) 43,500 (RMB 10,000 thousand) 130,500 (RMB 30,000 thousand)	- - - -	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,252,685 1,252,685 1,252,685 1,252,685	8,351,232 8,351,232 8,351,232 8,351,232

(Continued)

65 -

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	$ 130,500 (RMB 30,000 thousand)	$ -	$ -	-	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,252,685	$ 8,351,232
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	43,500 (RMB 10,000 thousand) 43,500 (RMB 10,000 thousand) 130,500 (RMB 30,000 thousand) 130,500 (RMB 30,000 thousand)	43,500 (RMB 10,000 thousand) - 87,000 (RMB 20,000 thousand) 87,000 (RMB 20,000 thousand)	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,252,685 1,252,685 1,252,685 1,252,685	8,351,232 8,351,232 8,351,232 8,351,232
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	217,500 (RMB 50,000 thousand) 87,000 (RMB 20,000 thousand) 87,000 (RMB 20,000 thousand) 87,000 (RMB 20,000 thousand) 130,500 (RMB 30,000 thousand)	87,000 (RMB 20,000 thousand) - 87,000 (RMB 20,000 thousand) 87,000 (RMB 20,000 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	- - - - -	- - - - -	- - - - -	1,252,685 1,252,685 1,252,685 1,252,685 1,252,685	8,351,232 8,351,232 8,351,232 8,351,232 8,351,232
6	Dongguan Huayi	Dongguan Huashun	Other receivables	Yes	217,500 (RMB 50,000 thousand)	87,000 (RMB 20,000 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,252,685	8,351,232
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	87,000 (RMB 20,000 thousand) 43,500 (RMB 10,000 thousand) 43,500 (RMB 10,000 thousand) 43,500 (RMB 10,000 thousand)	87,000 (RMB 20,000 thousand) - - -	43,500 (RMB 10,000 thousand) - - -	3.915 - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Working capital Working capital Working capital Working capital	- - - -	- - - -	- - - -	1,252,685 1,252,685 1,252,685 1,252,685	8,351,232 8,351,232 8,351,232 8,351,232
8	Gatech Holding Ltd.	Gatech Suzhou	Other receivables	Yes	46,560 (US$ 1,500 thousand)	46,560 (US$ 1,500 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,252,685	8,351,232

Note 1: At spot exchange rates on September 30, 2019; US$1=NT$31.04, RMB1=NT$4.35.
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)

66 -

TABLE 2

CHINA MOTOR CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE NINE MONTHS ENDED SEPTEMBER 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, $1,107,241 thousand 20% of the Corporation’s issued capital, $1,107,241 thousand 20% of the Corporation’s issued capital, $1,107,241 thousand 20% of the Corporation’s issued capital, $1,107,241 thousand	$ 217,500 (RMB 50,000 thousand) 217,500 (RMB 50,000 thousand) 217,500 (RMB 50,000 thousand) 217,500 (RMB 50,000 thousand)	$ 217,500 (RMB 50,000 thousand) 217,500 (RMB 50,000 thousand) 217,500 (RMB 50,000 thousand) 217,500 (RMB 50,000 thousand)	$ - - - -	$ - - - -	0.52 0.52 0.52 0.52	50% of the Corporation’s issued capital, $2,768,102 thousand 50% of the Corporation’s issued capital, $2,768,102 thousand 50% of the Corporation’s issued capital, $2,768,102 thousand 50% of the Corporation’s issued capital, $2,768,102 thousand	No No No No	No No No No	Yes Yes Yes Yes

Note: At spot exchange rate on September 30, 2019; RMB1=NT$4.35.

67 -

TABLE 3

CHINA MOTOR CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD SEPTEMBER 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		September	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 Enhanced Money Market Fund CTBC Hua Win Money Market Fund UPAMC James Bond Money Market Fund Hua Nan Phoenix Money Market Fund Sinopac Money Market Fund Paradigm Pion Money Market Prudential Financial Money Market Fund Cathay Taiwan Money Market Fund Fubon China Policy Bank Bond ETF 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 2,738 1,806 1,856 2,167 2,610 1,906 2,423 1,500 9,009 4,705 135 811 2,000 128	$ 50,444 50,402 50,399 30,254 30,251 30,252 30,241 30,236 30,232 30,213 29,685 627,795 24,699 1,271 11,746 - 1,663	- - - - - - - - - - - 10.00 7.84 0.05 0.60 4.44 0.45	$ 50,444 50,402 50,399 30,254 30,251 30,252 30,241 30,236 30,232 30,213 29,685 627,795 24,699 1,271 11,746 - 1,663

(Continued)

68 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		September	30, 2019		Note
				Number of Shares (In Thousands)	Carrying Amount (Note 3)	Percentage of Ownership	Fair Value
Sino Diamond Motors 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 Principle guaranteed notes President Securities 100% Principle Guaranteed Note Beneficiary certificates CTBC Hua Win 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 amortized cost - 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	- - - - - - - - 18,104 - 6,327 3,248 1,275 789 65 696 - - 74 3,687	$ 248,456 150,000 130,427 99,922 86,933 43,503 43,466 86,459 200,005 33,815 (RMB 7,774 thousand) 101,481 68,013 20,987 5,806 2,678 1,252 6,684 280,846 1,055 60,093	- - - - - - - - - 9.00 15.07 3.45 4.05 3.60 0.54 1.13 - - - -	$ - - - - - - - - 200,005 33,815 101,481 68,013 20,987 5,806 2,678 1,252 - - 1,055 60,093	(Note 1)

(Continued)

69 -

(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 September 30, 2019; RMB1=NT$4.35.

70 -

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 NINE MONTHS ENDED SEPTEMBER 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	Fortune Motors Shung Ye Motor Mitsubishi Corp. Uni Auto Parts Manufacture Kian Shen (Note 1) ROC-Spicer Shye Shyang Mechanical Industrial COC (Note 1) Uni-Calsonic Corp. Yue Ki Industrial Shung Ye Motor Fortune Motors Mitsubishi Corp. China Motor Corporation (Note 1) Yue Ki Industrial China Motor Corporation (Note 1) Yulon Yulon	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 Equity-method investee Equity-method investee Director of CMC Parent company Equity-method investee Parent company Equity-method investee Equity-method investee	Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Sale Purchase Sale Sale Purchase	$ (13,573,727) (3,092,762) 917,385 487,968 433,978 305,719 228,536 223,762 106,969 105,615 (1,436,295) (633,099) 901,659 (433,978) 117,921 (223,762) (159,638) 128,048	(67) (15) 8 4 4 3 2 2 1 1 (65) (29) 67 (48) 16 (35) (25) 27	Collect after 16-60 days of delivery Collect after 16-60 days of delivery Pay after 7 days of cargo ship out 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 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 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 45 days of the month of delivery Collect after 105 days of the month of sale Collect after 45 days of the month of delivery Collect after 45 days of the month of delivery Collect after 75 days of the month of sale	$ - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - -	$ 1,274,819 308,474 (333) (48,225) (57,490) (26,484) (33,604) (34,766) (17,601) (15,842) 69,957 4,413 (54) 57,490 (49,971) 34,766 23,530 (22,700)	55 13 - (3) (3) (1) (2) (2) (1) (1) 86 5 - 48 (21) 14 10 (13)

(Continued)

71 -

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 Engine	Hua-Chuang Automobile Information Technical Center	Equity-method investee	Sale	$ (148,846)	(61)	Collect after 90 days of the month of sale	$ -	-	$ 72,619	84

Note 1: Eliminated.

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

(Concluded)

72 -

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 SEPTEMBER 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	Fortune Motors Shung Ye Motor	Equity-method investee Equity-method investee	$ 1,274,819 308,474	17.47 13.91	$ - -	- -	$ 1,274,372 306,243	$ - -

73 -

TABLE 6

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE NINE MONTHS ENDED SEPTEMBER 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 September 30, 2019	As of September 30, 2019	As of September 30, 2019	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				September 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 5) 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 Uni Auto Parts Manufacture Shung Ye Motor (Notes 3 and 6) 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 4) 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 1,489,334 473,760 616,000 149,369 22,000 180 24 US$ 37,229 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 29,668 32,494 32,000 6,084 2,936 - - 2,242 8,790 - 10,296 25,907 26,715 11,200 4,169 36,943 26,715 56,000 5,186 2,200 12 1 33,393	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	$ 10,864,068 2,025,794 4,352,779 2,386,580 1,981,781 1,289,716 2,644,113 594,967 893,741 748,379 594,354 - 392,694 384,636 322,027 142,769 137,481 116,404 - - 69,954 72,984 - 3,995,295 RMB 897,125 thousand - 247,686 41,370 680,985 - 305,984 51,441 11,425 213 14 592,008	$ (2,507,501) 198,507 884,112 (355,142) 774,053 (320,138) 1,829,315 136,293 (244,803) 48,336 (408,102) (3,875,872) 24,115 40,891 17,994 (34,601) 22,856 (30,899) 17,070 8,263 (20,167) 9,071 (4,366) 283,783 RMB 52,392 thousand (3,875,872) (11,815) 17,994 (22,005) (3,875,872) (34,601) 17,994 (9,811) 40,891 884,112 (21,638)	$ (436,702) 87,232 370,708 (349,207) 159,223 (320,138) 593,613 39,713 (244,803) 24,039 (163,241) (497,906) 3,598 16,348 10,169 (3,409) 7,139 (4,659) 4,211 1,653 (5,849) 9,071 (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)

74 -

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of September 30, 2019	As of September 30, 2019	As of September 30, 2019	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				September 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	$ 617,899 617,873 97,755 10,370 891,532 34,418 10,452 63,624 40,420	$ 7,813 7,813 - 271 (408,102) 8,884 100 5,081 282	- - - - - - - - -	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, gain on disposal of $31 thousand from intra-group transaction had been eliminated.

Note 5: During preparation of the consolidated financial statements, sidestream transaction of $3,285 thousand had been eliminated.

Note 6: During preparation of the consolidated financial statements, sidestream transaction of $1,197 thousand had been eliminated.

(Concluded)

75 -

TABLE 7

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE NINE MONTHS ENDED SEPTEMBER 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 September 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 September 30, 2019 (Note 1)	Accumulated Repatriation of Investment Income as of September 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	$ 4,283,520 (US$ 138,000 thousand) 465,600 (US$ 15,000 thousand) 9,743,650 (EUR 287,000 thousand) 388,000 (US$ 12,500 thousand) 551,891 (US$ 17,780 thousand) 1,055,360 (US$ 34,000 thousand) 417,600 (RMB 96,000 thousand) 186,240 (US$ 6,000 thousand) 347,648 (US$ 11,200 thousand) 890,906 (RMB 204,806 thousand) 373,782 (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	$ 1,070,880 (US$ 34,500 thousand) 232,800 (US$ 7,500 thousand) 1,580,916 (EUR 46,566 thousand) 155,200 (US$ 5,000 thousand) 87,998 (US$ 2,835 thousand) - 47,398 (US$ 1,527 thousand) 16,762 (US$ 540 thousand) 347,648 (US$ 11,200 thousand) 335,387 (US$ 10,805 thousand) 81,014 (US$ 2,610 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 1,070,880 (US$ 34,500 thousand) 232,800 (US$ 7,500 thousand) 1,580,916 (EUR 46,566 thousand) 155,200 (US$ 5,000 thousand) 87,998 (US$ 2,835 thousand) - 47,398 (US$ 1,527 thousand) 16,762 (US$ 540 thousand) 347,648 (US$ 11,200 thousand) 335,387 (US$ 10,805 thousand) 81,014 (US$ 2,610 thousand)	$ (2,068,486) - 3,659,544 (EUR 104,858 thousand) 513,218 (RMB 113,544 thousand) (87,409) (RMB -19,338 thousand) 308,818 (RMB 68,323 thousand) (36,473) (RMB -8,069 thousand) - (11,780) 46,934 (30,283) (US$ -975 thousand)	25.00 38.03 16.23 17.55 15.35 17.55 21.94 3.95 100.00 29.00 20.25	$ (517,122) - 593,754 (EUR 17,013 thousand) 205,827 (RMB 45,418 thousand) (30,593) (RMB -6,768 thousand) 123,527 (RMB 27,329 thousand) (18,236) (RMB -4,035 thousand) - (11,780) 13,611 (6,133) (US$ -198 thousand)	$ 1,356,144 194,461 2,641,853 (EUR 77,816 thousand) 1,764,532 (RMB 405,639 thousand) 565,400 (RMB 129,977 thousand) 810,182 (RMB 186,249 thousand) 225,343 (RMB 51,803 thousand) 33,815 (RMB 7,774 thousand) 247,636 374,794 69,051 (US$ 2,225 thousand)	$ 807,754 (US$ 26,023 thousand) - 402,070 (EUR 11,843 thousand) 489,018 (RMB 112,418 thousand) 154,582 (RMB 35,536 thousand) - - - - - -

(Continued)

76 -

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 September 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 September 30, 2019 (Note 1)	Accumulated Repatriation of Investment Income as of September 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		$ 174,000 (RMB 40,000 thousand) 105,536 (US$ 3,400 thousand) 397,622 (US$ 12,810 thousand) 413,763 (US$ 13,330 thousand) 248,941 (US$ 8,020 thousand) 138,128 (US$ 4,450 thousand) 8,700 (RMB 2,000 thousand) 108,750 (RMB 25,000 thousand) 130,500 (RMB 30,000 thousand) 187,050 (RMB 43,000 thousand) 754,272 (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		$ 37,496 (US$ 1,208 thousand) 105,536 (US$ 3,400 thousand) 347,617 (US$ 11,199 thousand) 413,763 (US$ 13,330 thousand) 240,901 (US$ 7,761 thousand) 130,896 (US$ 4,217 thousand) - - - - 629,088 (US$ 20,267 thousand)	- - - - - - - - - - -	- - - - - - - - - - -	$ 37,496 (US$ 1,208 thousand) 105,536 (US$ 3,400 thousand) 347,617 (US$ 11,199 thousand) 413,763 (US$ 13,330 thousand) 240,901 (US$ 7,761 thousand) 130,896 (US$ 4,217 thousand) - - - - 629,088 (US$ 20,267 thousand)	$ - (368) 7,092 (330) (2,736) (23,045) (54) (RMB -12 thousand) (14,464) (RMB -3,200 thousand) (1,121) (RMB -248 thousand) 45 (RMB 10 thousand) 7,734	- 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 72.81	$ - (368) 7,092 (330) (2,736) (23,045) (54) (RMB -12 thousand) (14,464) (RMB -3,200 thousand) (1,121) (RMB -248 thousand) 45 (RMB 10 thousand) 7,734	$ - 88,937 35,420 56,551 202,784 79,242 152 (RMB 35 thousand) 76,260 (RMB 17,531 thousand) 130,931 (RMB 30,099 thousand) 5,790 (RMB 1,331 thousand) 599,509	$ - - - - - - - - - - -

Accumulated Outward Remittance for Investment in Mainland China as of September 30, 2019 (Note 1)		Investment Amount Authorized by Investment Commission, MOEA (Note 1)			Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$6,043,754 (US$143,777 thousand and EUR46,566 thousand)		$7,229,977 (US$218,195 thousand and EUR13,467 thousand)			$25,053,695

(Continued)

77 -

Note 1: At spot exchange rates on September 30, 2019; US$1=NT$31.04, RMB1=NT$4.35, EUR1=NT$33.95.

Note 2: At the average exchange rates of the nine months ended September 30, 2019; US$1=NT$31.054, RMB1=NT$4.52, EUR1=NT$34.9.

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 respective companies. As of September 30, 2019, the liquidation has not been completed, while the annulment of Sichuan Lingwei was completed in July 2019.

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

(Concluded)

78 -

TABLE 8

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE NINE MONTHS ENDED SEPTEMBER 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 Other operating revenue Financial operating revenue	$ 433,978 223,762 700,000 114,210 150,000	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 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.	1.78 0.92 1.14 0.47 0.24

Note 1: Eliminated.

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

79 -

TABLE 9

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY INVESTMENT RELATIONSHIPS AND PERCENTAGE RATE OF SHARE HELD FRAMEWORK SEPTEMBER 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%
Dongguan Tianjin Guangzhou
Huashun Hwahong Huayou Motor
Sales
----- End of picture text -----

80 -

AI assistant

CMC — Interim / Quarterly Report 2019

51979_rns_2019-12-26_1e758fc5-dd9f-40e5-ab00-dbb58eb9c74c.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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

 IFRS 16 “Leases”

Definition of a lease

The Group as lessee

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

September 30, 2019

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

September 30, 2019

11. HEDGING INSTRUMENTS

September 30, 2019

September 30, 2018

12. NOTES AND ACCOUNTS RECEIVABLE, NET

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

b. Lease liabilities - 2019

d. Other lease information

2019

2018

19. INVESTMENT PROPERTIES

20. BORROWINGS

21. OTHER PAYABLES

22. RETIREMENT BENEFIT PLANS

23. EQUITY

a. Share capital

1) Ordinary shares

2) Capital reduction

b. Capital surplus

c. Retained earnings and dividend policy

2) Unrealized gain on financial assets at FVTOCI

f. Non-controlling interests

24. REVENUE

25. NET PROFIT

a. Depreciation and amortization

Amount

26. INCOME TAXES

b. Income tax recognized in other comprehensive income

27. EARNINGS PER SHARE

Net Profit for the Period

CMC Interim / Quarterly Report 2019