CMC - Interim / Quarterly Report 2020

China Motor Corporation and Subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 30, 2020 and 2019 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders China Motor Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of China Motor Corporation and its subsidiaries (collectively, the “Group”) as of September 30, 2020 and 2019, the related consolidated statements of comprehensive income for the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, 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, 2020 and 2019, the combined total assets of these non-significant subsidiaries were NT$8,657,759 thousand and NT$11,980,280 thousand, respectively, representing 17% and 19%, respectively, of the consolidated total assets, and the combined total liabilities of these non-significant subsidiaries were NT$2,612,824 thousand and NT$3,828,737 thousand, respectively, representing 33% and 23%, respectively, of the consolidated total liabilities; for the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, the amounts of combined comprehensive loss of these non-significant subsidiaries were NT$39,211 thousand, NT$212,566 thousand, NT$130,376 thousand and NT$433,944 thousand, respectively, representing 3%, 240%, 5% and 106%, respectively, of the consolidated total comprehensive income (loss). As disclosed in Note 16 to the consolidated financial statements, as of September 30, 2020 and 2019, the amounts of investments accounted for using the equity method were NT$13,888,901 thousand and NT$15,899,464 thousand, respectively, and for the three months ended September 30, 2020 and 2019 and for the

nine months ended September 30, 2020 and 2019, the amounts of the share in comprehensive income of these equity-method investments were NT$395,285 thousand, NT$174,804 thousand, NT$698,279 thousand and NT$1,021,230 thousand, respectively, which were calculated on the basis of financial statements that have not been reviewed.

Qualified Conclusion

Based on our reviews, except for adjustments, if any, as might have been determined to be necessary had the financial statements of the aforementioned non-significant subsidiaries and associates accounted for using the equity method and the relevant disclosure 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, 2020 and 2019, its consolidated financial performance for the three months ended September 30, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the nine months ended September 30, 2020 and 2019 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 12, 2020

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 31) Other receivables Inventories (Note 13) Prepayments (Note 31) Non-current assets held for sale (Note 15) Other current assets (Note 32) 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, 31 and 32) Right-of-use assets (Note 18) Investment properties (Notes 19 and 32) Intangible assets under development Deferred tax assets Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 20 and 32) Short-term bills payable Notes and accounts payable Trade payables to related parties (Note 31) Other payables (Note 21) Current tax liabilities (Note 4) Lease liabilities (Notes 4 and 18) Current portion of long-term borrowings (Note 20) Other current liabilities (Notes 7, 11 and 31) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 20) Deferred tax liabilities Lease liabilities (Notes 4 and 18) Net defined benefit liabilities (Note 4) 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 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 (Notes 14 and 23) Total equity TOTAL		September 30, 2020 (Reviewed) Amount % $ 8,580,890 17 1,290,067 3 150,808 - 83,477 - 1,046,745 2 1,690,885 3 120,077 - 3,312,940 6 1,443,920 3 - - 948,297 2 18,668,106 36 661,001 1 204,356 - 665,732 1 23,131,725 44 6,499,877 12 376,178 1 1,357,774 3 346,708 1 280,884 1 262,881 - 33,787,116 64 $ 52,455,222 100 $ 245,000 - 189,930 - 2,203,369 4 733,994 1 2,369,200 5 300,927 1 87,773 - 31,250 - 280,925 1 6,442,368 12 68,750 - 464,433 1 296,768 1 621,961 1 51,521 - 1,503,433 3 7,945,801 15 5,536,203 11 6,411,869 12 9,257,157 17 1,028,359 2 19,766,913 38 30,052,429 57 (1,101,344) (2) 160,876 - 4,287 - - - (936,181) (2) 41,064,320 78 3,445,101 7 44,509,421 85 $ 52,455,222 100		December 31, 2019 (Audited) Amount % $ 5,742,588 11 339,731 1 8,556 - 1,138,342 2 1,190,463 2 1,457,139 3 326,784 1 4,617,661 9 1,543,144 3 148,023 - 849,643 2 17,362,074 34 686,413 1 207,342 - 776,473 2 23,348,925 45 6,419,254 12 442,921 1 1,366,049 3 484,360 1 253,394 1 119,263 - 34,104,394 66 $ 51,466,468 100 $ 615,000 1 183,939 - 2,702,267 5 983,750 2 2,426,690 5 312,774 1 88,697 - 6,250 - 340,684 1 7,660,051 15 43,750 - 480,280 1 359,836 1 735,400 1 22,212 - 1,641,478 3 9,301,529 18 5,536,203 11 6,414,118 12 9,257,157 18 1,029,654 2 17,306,526 34 27,593,337 54 (990,653) (2) 216,562 - (19,968) - (7,538) - (801,597) (2) 38,742,061 75 3,422,878 7 42,164,939 82 $ 51,466,468 100		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

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

(With Deloitte & Touche review report dated November 12, 2020)

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 31) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 13, 22, 25 and 31) Cost of goods sold Other operating costs Total operating costs GROSS PROFIT REALIZED (UNREALIZED) GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 22, 25 and 31) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Expected credit loss (Notes 10 and 15) Share of profit (loss) of associates and joint ventures (Note 16) Interest income Other income Gain (loss) on disposal of investments (Notes 15, 16 and 28) Net foreign exchange gain (loss) Interest expense Other expense 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
		2020		2019		2020		2019
		Amount % $ 7,702,722 95 386,233 5 8,088,955 100 6,566,074 81 42,239 1 6,608,313 82 1,480,642 18 13,920 - 1,494,562 18 405,299 5 209,925 2 377,235 5 992,459 12 502,103 6 (1,772 ) - 476,028 6 21,864 - 34,936 1 (82 ) - 20,695 - (3,675 ) - (1,610 ) - (2,197 ) - - - 544,187 7		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 (1,864 ) - 157,872 2 40,218 1 39,834 1 - - (37,634 ) (1 ) (5,276 ) - (4,585 ) - (11,607 ) - - - 176,958 3		Amount % $ 21,834,169 95 1,032,839 5 22,867,008 100 18,624,652 81 108,920 1 18,733,572 82 4,133,436 18 (16,728) - 4,116,708 18 976,986 4 613,723 3 1,130,358 5 2,721,067 12 1,395,641 6 (63,394 ) - 1,195,583 5 65,270 - 92,615 - 224,539 1 (17,843 ) - (13,267 ) - (8,133 ) - (21,410 ) - (94,529) - 1,359,431 6		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 (1,516 ) - (509,931 ) (2 ) 124,322 - 82,143 - (1,640 ) - (12,303 ) - (16,618 ) - (12,903 ) - (41,949 ) - (36,637) - (427,032) (2) (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT FOR THE PERIOD OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Unrealized gain (loss) on investment equity instruments designated as fair value through other comprehensive income (Note 23) Gain (loss) 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 (loss) of associates and joint ventures accounted for using the equity method (Notes 16 and 23) Other comprehensive income (loss) for the period, net of income tax TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD		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
		2020		2019		2020		2019
		Amount % $ 1,046,290 13 12,358 - 1,033,932 13 2,525 - 6,198 - 7,501 - (707 ) - 17,793 - 158,543 2 191,853 2 $ 1,225,785 15		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 % $ 2,755,072 12 122,460 - 2,632,612 12 (2,716 ) - 11,483 - (48,171 ) - (683 ) - 4,522 - (125,543) (1) (161,108) (1) $ 2,471,504 11		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 (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
2020	2019	2020	2019
Amount % $ 943,229 12 90,703 1 $ 1,033,932 13 $ 1,094,595 13 131,190 2 $ 1,225,785 15 $ 1.73 $ 1.73	Amount % $ 336,826 5 36,131 - $ 372,957 5 $ (37,960 ) - (50,619) (1) $ (88,579) (1) $ 0.38 $ 0.38	Amount % $ 2,465,401 11 167,211 1 $ 2,632,612 12 $ 2,322,591 10 148,913 1 $ 2,471,504 11 $ 4.52 $ 4.52	Amount % $ 346,192 1 124,790 1 $ 470,982 2 $ 350,923 2 58,377 - $ 409,300 2 $ 0.29 $ 0.29
$	$	$	$
$	$	$	$
$	$	$	$

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

(With Deloitte & Touche review report dated November 12, 2020)

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

		Equity Attributable to Owners of the	Corporation
Ordinary Sh	ares Amount Capital Surplus $ 13,840,508 $ 6,403,633 - - 13,840,508 6,403,633 - - - - - - - (12,113 ) - - - - - - - - (8,304,305 ) - - - - - - - $ 5,536,203 $ 6,391,520 $ 5,536,203 $ 6,414,118 - - - (2,249 ) - - - - - - - - - - - - $ 5,536,203 $ 6,411,869	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 8,897,857 $ 1,046,967 $ 22,486,952 - - (19,503) 8,897,857 1,046,967 22,467,449 359,300 - (359,300 ) - - (2,352,886 ) - (382 ) 382 - - (6,975 ) - - - - - 346,192 - - 10,907 - - 357,099 - - - - - 85,455 - - 17 - - - $ 9,257,157 $ 1,046,585 $ 20,191,241 $ 9,257,157 $ 1,029,654 $ 17,306,526 - (1,295 ) 1,295 - - (7,532 ) - - - - - 2,465,401 - - 304 - - 2,465,705 - - 919 - - - $ 9,257,157 $ 1,028,359 $ 19,766,913	Other Equity Exchange Differences on Translating the Financial Unrealized Valuation Gain on Financial Assets at Fair Value Equity Directly Associated With Statements of Through Other Gain (Loss) on Non-current Foreign Operations Comprehensive Income Hedging Instruments Assets Held for Sale $ (646,278 ) $ 117,177 $ 20,997 $ (7,538 ) - - - - (646,278 ) 117,177 20,997 (7,538 ) - - - - - - - - - - - - - - - - - - - - - - - - (185,233) 143,159 35,898 - (185,233) 143,159 35,898 - - - - - - (85,455 ) - - - (17 ) - - - - (59,257) - $ (831,511) $ 174,864 $ (2,362) $ (7,538) $ (990,653 ) $ 216,562 $ (19,968 ) $ (7,538 ) - - - - - - - - - - - - - - - - (110,691) (54,767) 14,806 7,538 (110,691) (54,767) 14,806 7,538 - (919 ) - - - - 9,449 - $ (1,101,344) $ 160,876 $ 4,287 $ -
			Exchange Differences on Translating the Financial Unrealized Valuation Gain on Financial Assets at Fair Value Statements of Through Other Foreign Operations Comprehensive Income $ (646,278 ) $ 117,177 - - (646,278 ) 117,177 - - - - - - - - - - - - (185,233) 143,159 (185,233) 143,159 - - - (85,455 ) - (17 ) - - $ (831,511) $ 174,864 $ (990,653 ) $ 216,562 - - - - - - - - (110,691) (54,767) (110,691) (54,767) - (919 ) - - $ (1,101,344) $ 160,876
Number of Shares (In Thousands) 1,384,051 - 1,384,051 - - - - - - - - (830,431 ) - - - 553,620 553,620 - - - - - - - - 553,620

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

(With Deloitte & Touche review report dated November 12, 2020)

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 recognized (reversed) 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 (Gain) loss on disposal of investments Impairment loss of non-financial assets Unrealized gain on transactions with associates Net unrealized gain on foreign currency exchange Gain on lease modifications Changes in operating assets and liabilities Financial instruments at fair value through profit or loss Notes and accounts receivable Trade receivables from related parties Other receivables Inventories Prepayments Other current assets Notes and accounts payable Trade payables to related parties Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Disposal of financial assets at fair value through other comprehensive income Proceeds from refund of shares of financial assets at fair value through other comprehensive income		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 2,755,072 639,797 94,298 59,198 21,410 13,267 (65,270) (15,240) (1,195,583) 2,070 (224,539) 72,961 16,728 (41,086) (1,826) (948,093) 147,789 (244,782) (39,872) 1,337,053 126,215 (100,867) (498,760) (251,106) (41,530) 52,286 (113,439) 1,556,151 (206,597) 1,349,554 - 404	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 17 - (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

Purchase of financial assets at amortized cost Proceeds from repayment of principal of financial assets at amortized cost Proceeds from disposal of investments accounted for using the equity method Loss on disposal of subsidiary Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Payments for 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 Increase (decrease) in other non-current liabilities Cash dividends paid Interest paid Non-controlling interests Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE 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
		2020 $ (1,571,433) 1,618,494 - (2,196) (664,073) 22,116 (17,757) (6,059) 69,341 1,481,659 930,496 (370,000) 5,991 50,000 (69,093) 29,384 - (13,427) (126,690) (493,835) (2,338) 1,783,877 6,880,490 $ 8,664,367	2019 $ (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 (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, 2020 and 2019:

Cash and cash equivalents in the consolidated balance sheets Cash and cash equivalents included in financial assets for hedging Cash and cash equivalents in the consolidated statements of cash flows		September 30	September 30
		2020 $ 8,580,890 83,477 $ 8,664,367	2019 $ 13,612,051 279,314 $ 13,891,365

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

(With Deloitte & Touche review report dated November 12, 2020) (Concluded)

10 -

CHINA MOTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) (Reviewed, Not Audited)

1. GENERAL INFORMATION

China Motor Corporation (the “Corporation”) is principally engaged in the manufacture and sale of automobiles and its related parts and components. It 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 12, 2020.

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

a. Initial application of the amendments to 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) did not have any material impact on the Group’s accounting policies

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Group’s accounting policies.

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

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”	Effective Date Announced by the IASB (Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) Effective immediately upon promulgation by the IASB January 1, 2021 To be determined by the IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 (Note 4) January 1, 2022 (Note 5)

New IFRSs
“Annual Improvements to IFRS Standards 2018-2020”

Amendments to IFRS 3 “Reference to the Conceptual Framework”

Amendments to IFRS 4 “Extension of the Temporary Exemption from
Applying IFRS 9”

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
“Interest Rate Benchmark Reform - Phase 2”

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

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 16 “Property, Plant and Equipment - Proceeds
before Intended Use”

Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a
Contract”

Effective Date
Announced by the IASB
(Note 1)

January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
Effective immediately upon
promulgation by the IASB
January 1, 2021
To be determined by the IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
11 -
Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 3: The amendments are applicable 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, 2022.
Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the consolidated financial statements were issued, the Group is continuously assessing the possible impact that the application of aforementioned standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” as endorsed and issued into effect by the FSC. Disclosure information included in these interim consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated 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.
12 -
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.

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 interests 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 provision of 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

Combined Shareholding Ratio (%)
September 30,
2020
December 31,
2019
September 30,
2019
Note
43.87
43.87
43.87
a)
100.00
100.00
100.00
52.10
52.10
52.10
100.00
100.00
100.00
100.00
100.00
100.00
-
-
72.81
d)
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)
-
52.10
52.10
f)
52.10
52.10
52.10
(Continued)

13 -

Investor
Investee
Main Business
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
Guangzhou Huayou
Motor Maintenance
Guangzhou Huayou Motor Sales Co., Ltd.
(“Guangzhou Huayou Motor Sales”)
Sales of vehicle and parts

Combined Shareholding Ratio(%)
September 30,
2020
December 31,
2019
September 30,
2019
Note
100.00
100.00
100.00
100.00
100.00
100.00
-
-
72.81
d)
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) and e)
43.87
43.87
43.87
a)
100.00
100.00
100.00
100.00
100.00
100.00
-
-
72.81
d)
100.00
100.00
100.00
-
-
72.81
d)
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
100.00
c)
100.00
100.00
100.00
c)
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
100.00
c)
(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 interest 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 November 2018, Sichuan Huafeng Hanwei, Guangzhou Huayou Motor Maintenance and Guangzhou Huayou Motor Sales resolved to dissolve their companies. As of September 30, 2020, except for the annulment of Guangzhou Huayou Motor Sales and Sichuan Huafeng Hanwei which had been completed in June 2020 and February 2020, respectively, Guangzhou Huayou Motor Maintenance has not completed its liquidation procedures.
d) In order to strengthen the Corporation’s capital structure and focus on the development of its business, the Group transferred 72.81% of its interest held in its subsidiary, Gatetech Technology, to a non-related party. The disposal was completed on November 30, 2019, the date on which the control of Gatetech Technology was transferred to the acquirer.
e) In May 2020, the board of directors of COC resolved to dissolve Shye Shinn. As of September 30, 2020, Shye Shinn has not completed its liquidation procedures.
f) The Group’s board of directors approved to fully dispose of its interest held in its subsidiary, Advance Power Machinery, to Yulon on July 16, 2020. The disposal was completed on July 17, 2020, the date on which the control of Advance Power Machinery was transferred to the acquirer, refer to Note 28.
14 -

For the relationships between the Corporation and its controlled entities as of September 30, 2020, refer to Table 11.

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, please refer to the consolidated financial statements for the year ended December 31, 2019.

1) 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.

2) 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.

3) Leases

The Group negotiates with the lessor for rent concessions as a direct consequence of the Covid-19 to change the lease payments originally due by September 30, 2021, that results in the revised consideration for the lease less than the consideration for the lease immediately preceding the change. There is no substantive change to other terms and conditions. The Group elects to apply the practical expedient to all of these rent concessions, and therefore, does not assess whether the rent concessions are lease modifications. Instead, the Group recognizes the reduction in lease payments in profit or loss (included in reduction of variable lease payments) in the period in which the events or conditions that trigger the concession occurs, and makes a corresponding adjustment to the lease liability.

4) Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they are received.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

15 -

The Group considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of revisions and future periods if the revisions affect both current and future periods.

6. CASH AND CASH EQUIVALENTS

September 30, 2020 Cash Cash on hand $ 3,571 Checking accounts and demand deposits 1,614,783 1,618,354 Cash equivalents Time deposits 6,434,690 Repurchase agreements collateralized by bonds 527,846 6,962,536 $ 8,580,890	December 31, 2019 September 30, 2019 $ 2,093 $ 3,772 1,979,620 1,750,894 1,981,713 1,754,666 3,760,875 10,187,862 - 1,669,523 3,760,875 11,857,385 $ 5,742,588 $ 13,612,051

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Financial assets-current
Financial assets mandatorily classified as at
FVTPL
Non-derivative financial assets
Mutual funds	$	1,289,872	$	339,427	$	653,762
Derivative financial assets (not under hedge
accounting)
Foreign exchange forward contracts		195		304		307
	$	1,290,067	$	339,731	$	654,069
Financial assets-non-current
Financial assets mandatorily classified as at
FVTPL
Non-derivative financial assets
Domestic unlisted shares	$	661,001	$	686,413	$	695,808
Financial liabilities (included in other current
liabilities)
Financial liabilities held for trading
Derivative financial instruments (not under
hedge accounting)
Foreign exchange forward contracts	$	724	$	2,483	$	666

16 -

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

September 30, 2020

			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2020.10.13-2020.10.16	USD4,000/NTD115,762
Sell	RMB/USD	2020.10.13-2020.10.16	RMB27,124/USD4,000
December 31, 2019
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2020.01.06-2020.03.16	USD11,000/NTD330,810
	JPY/NTD	2020.02.25-2020.09.25	JPY600,000/NTD165,910
Sell	RMB/USD	2020.01.13	RMB14,022/USD2,000
September 30, 2019
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2019.10.21	USD2,200/NTD67,859
Sell	RMB/USD	2019.10.21	RMB15,564/USD2,200

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

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Investments in equity instruments at FVTOCI
Domestic investments
Listed shares	$	31,395	$	29,083	$	25,970
Unlisted shares		24,152		25,395		23,145
		55,547		54,478		49,115
Foreign investments
Unlisted shares		148,809		152,864		156,283
	$	204,356	$	207,342	$	205,398

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.

17 -

9. FINANCIAL ASSETS AT AMORTIZED COST

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Current
Principal guaranteed notes	$	94,383	$	8,610	$	369,604
Segregated foreign exchange deposit account for
offshore funds		56,831		-		-
		151,214		8,610		369,604
Less: Allowance for impairment loss		(406)		(54)		(2,299)
	$	150,808	$	8,556	$	367,305
Non-current
Segregated foreign exchange deposit account for
offshore funds	$	559,857	$	-	$	-
Bonds		100,000		801,389		654,574
Preference shares		9,900		9,900		9,900
		669,757		811,289		664,474
Less: Allowance for impairment loss		(4,025)		(34,816)		(5,083)
	$	665,732	$	776,473	$	659,391

a. The coupon rates of principal guaranteed notes were 0.68%-2.30%, 3.00% and 2.55%-3.00% per annum as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively.
b. The National Taxation Bureau, Ministry of Finance had approved the repatriation of funds in accordance with “the Management, Utilization, and Taxation of Repatriated Offshore Funds Act” for the nine months ended September 30, 2020. The funds after tax were deposited into the segregated foreign exchange deposit account. The deposit was restricted under the Act, except that a portion of the funds could be withdrawn and freely utilized or engaged in financial investments or substantive investments. The funds could be withdrawn over a period of three years and five years from the date of depositing them into the segregated foreign exchange deposit account. The rates of offshore funds ranged from 0.30% to 2.20% per annum as of September 30, 2020.
c. The coupon rates of bonds were 0.86%, 0.86%-4.34% and 0.86%-4.34% as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively.
d. The coupon rate of preference shares was 1.50% as of September 30, 2020, December 31, 2019 and September 30, 2019.
e. Refer to Note 10 for information relating to the credit risk management and impairment.
18 -

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

Investments in debt instruments were classified as financial assets at amortized cost.

	September 30,	September 30,	December 31,	December 31,	September 30,
		2020		2019	2019
Gross carrying amount	$	820,971	$	819,899	$ 1,034,078
Less: Allowance for impairment loss		(4,431)		(34,870)	(7,382)
Amortized cost	$	816,540	$	785,029	$ 1,026,696

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 has been a significant increase in the credit risk since initial recognition.

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

Credit Rating Performing No rating	Description The counterparty has a low risk of default and a strong capacity to meet contractual cash flows The preference shares and bonds 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, 2020

Credit Rating Expected Credit Loss Rate Performing 0.0000%-0.4300% No rating 39.9496% December 31, 2019 Credit Rating Expected Credit Loss Rate Performing 0.0769%-0.6221% No rating 20.6080%	Gross Carrying Amount
	At Amortized Cost $ 811,071 9,900 Gross Carrying Amount
	At Amortized Cost $ 659,999 159,900

19 -

September 30, 2019

Credit Rating Expected Credit Loss Rate Performing 0.0769%-0.6221% No rating 32.4908%	Gross Carrying Amount
	At Amortized Cost $ 1,024,178 9,900

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

Balance at January 1, 2020 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance at September 30, 2020 Balance at January 1, 2019 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance at September 30, 2019	Credit Rating
	Performing (12-month ECLs) No rating (Lifetime ECLs - Not Credit- impaired) $ 1,918 $ 32,952 4,063 3,955 (5,532) (32,952) 27 - $ 476 $ 3,955 $ 2,650 $ 3,216 10,413 - (8,887) - (10) - $ 4,166 $ 3,216

a. During the nine months ended September 30, 2020, the Group purchased principal guaranteed notes in the amount of $944,845 thousand and preference shares in the amount of $9,900 thousand, respectively, and correspondingly increased the loss allowance for investments rated as performing by $4,063 thousand and lifetime ECLs by $3,955 thousand; and during the nine months ended September 30, 2019, the Group purchased principal guaranteed notes in the amount of $1,673,882 thousand, and correspondingly increased the loss allowance for investments rated as performing by $10,413 thousand.
b. The investments in principal guaranteed notes of $858,370 thousand, bonds of $750,224 thousand and preference shares of 9,900 thousand were redeemed during the nine months ended September 30, 2020, with consequential reductions in the loss allowance for investments rated as performing of $5,532 thousand and lifetime ECLs of $32,952 thousand; and the 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.
20 -

11. FINANCIAL INSTRUMENTS FOR HEDGING

	September 30,	September 30,	December 31,	December 31,	September	September	30,
		2020		2019		2019
Financial assets
Cash flow hedges - spot rate	$	83,477	$	1,137,902	$	279,314
Cash flow hedges - foreign exchange forward
contracts		-		440			-
	$	83,477	$	1,138,342	$	279,314
Financial liabilities (included in
other current liabilities)
Cash flow hedges - foreign exchange forward
contracts	$	800	$	6,884	$		-

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.

Hedging instruments at fair value and transferred to initial carrying amount of hedged items during the nine months ended September 30, 2020 and 2019, are detailed in Note 23(e).

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

September 30, 2020

Notional Amount Forward Rate Hedging Instrument Currency (In Thousands) Maturity (JPY1:NTD) Line Item Cash flow hedges Forecast purchases - spot rate JPY/NTD JPY302,892/NTD83,986 2020.10.15- 2020.12.15 0.2753-0.2799 Financial assets for hedging Forecast purchases - foreign exchange forward contracts JPY/NTD JPY200,000/NTD55,460 2020.10.16- 2020.11.16 0.2752-0.2794 Other current liabilities		Carrying A	mount Liabilities I $ - (800) $ (800)	Change in Value Used for Calculating Hedge neffectiveness $ 1,683 (640) $ 1,043
		Assets $ 83,477 - $ 83,477

21 -

		Accumulated
		Gains or Losses
	Change in	on Hedging
	Value Used for	Instruments in
	Calculating	Other Equity as
	Hedge	Continuing
Hedged Item	Ineffectiveness	Hedges
Cash flow hedges
Forecast purchases	$ (1,043)	$ 1,043
December 31, 2019

Notional Amount Forward Rate Hedging Instrument Currency (In Thousands) Maturity (Note) Line Item Cash flow hedges Forecast purchases - spot rate JPY/NTD JPY4,122,832/NTD1,155,466 2020.02.25- 2020.12.15 0.2758-0.2828 Financial assets for hedging Forecast purchases - foreign exchange forward contracts JPY/NTD JPY1,664,000/NTD464,661 2020.01.15- 2020.11.16 0.2752-0.2815 Other current liabilities Forecast purchases - foreign exchange forward contracts USD/NTD USD4,000/NTD120,415 2020.01.13 30.1000-30.1050 (USD1:NTD) Other current liabilities Forecast purchases - foreign exchange forward contracts RMB/USD RMB28,005/USD4,000 2020.01.13 6.9980-7.0110 (USD1:RMB) Financial assets for hedging		Carrying A	mount Liabilities $ - (6,333 ) (551 ) - $ (6,884)	Change in Value Used for Calculating Hedge Ineffectiveness $ (14,051 ) (5,066 ) (441 ) 352 $ (19,206)
		Assets $ 1,137,902 - - 440 $ 1,138,342

Note: JPY1:NTD, unless stated otherwise.

		Accumulated
		Gains or Losses
	Change in	on Hedging
	Value Used for	Instruments in
	Calculating	Other Equity as
	Hedge	Continuing
Hedged Item	Ineffectiveness	Hedges
Cash flow hedges
Forecast purchases	$ 19,206	$ (19,206)
September 30, 2019

Notional Amount Forward Rate Hedging Instruments Currency (In Thousands) Maturity (JPY1:NTD) Line Item Cash flow hedge Forecast purchases - spot rate JPY/NTD JPY970,515/ NTD277,100 2019.11.29 2020.1.14 0.2763-0.2945 Financial assets for hedging		Carrying Amount V Asset In $ 279,314	Change in alue Used for Calculating Hedge effectiveness $ (2,288)

22 -

Hedged Item Cash flow hedges Forecast purchases Comprehensive Income Cash flow hedges Forecast purchases	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity as Hedge Ineffectiveness Continuing Hedges $ 2,288 $ (2,288) Hedging Gains (Losses) Recognized in OCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity as Hedge Ineffectiveness Continuing Hedges $ 2,288 $ (2,288) Hedging Gains (Losses) Recognized in OCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity as Hedge Ineffectiveness Continuing Hedges $ 2,288 $ (2,288) Hedging Gains (Losses) Recognized in OCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity as Hedge Ineffectiveness Continuing Hedges $ 2,288 $ (2,288) Hedging Gains (Losses) Recognized in OCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity as Hedge Ineffectiveness Continuing Hedges $ 2,288 $ (2,288) Hedging Gains (Losses) Recognized in OCI
	For the Three Months Ended September 30 2020 2019 $ 6,198 $ (841)		For the Nine Months Ended September 30
		2020 $ 6,198		2020 $ 11,483	2019 $ 39,756

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

12. NOTES AND ACCOUNTS RECEIVABLE, NET

	September 30,	December 31,	September 30,
	2020	2019	2019
At amortized cost
Notes and accounts receivable	$ 1,058,852	$ 1,206,811	$ 1,094,900
Less: Allowance for impairment loss	(12,107)	(16,348)	(17,642)
	$ 1,046,745	$ 1,190,463	$ 1,077,258

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.

23 -

The aging of receivables is as follows:

	September 30,	December 31,	September 30,
	2020	2019	2019
Not past due	$ 1,015,892	$ 1,154,739	$ 1,036,420
Up 1 to 60 days	945	23,190	23,067
61-90 days	3	1,233	749
Over 90 days	42,012	27,649	34,664
Gross carrying amount	1,058,852	1,206,811	1,094,900
Loss allowance (Lifetime ECLs)	(12,107)	(16,348)	(17,642)
Amortized cost	$ 1,046,745	$ 1,190,463	$ 1,077,258

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

Balance at January 1 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
		2020 $ 16,348 (4,196) (45) $ 12,107	2019 $ 19,771 (1,835) (294) $ 17,642

13. INVENTORIES

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Merchandise	$	247,456	$	121,436	$	271,430
Finished goods		531,110		1,975,823		456,250
Work in progress		279,509		317,658		564,532
Raw materials		2,137,044		2,038,601		2,094,503
Materials in transit		117,821		164,143		99,774
	$	3,312,940	$	4,617,661	$	3,486,489

The costs of inventories recognized as cost of goods sold for the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019 were $6,566,074 thousand, $6,096,812 thousand, $18,624,652 thousand and $19,796,785 thousand, respectively.

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

The Group had a 43.87% interest in Kian Shen as of September 30, 2020, December 31, 2019 and September 30, 2019. The remaining 56.13% interest in Kian Shen is dispersed and held by shareholders unrelated to the Group.

Refer to Table 7 for information on the places of incorporation and principal places of business of the subsidiaries.

24 -

The summarized financial information below represents amounts before intragroup eliminations.

Kian Shen and Kian Shen’s subsidiaries

September 30, 2020 December 31, 2019 September 30, 2019 Current assets $ 865,799 $ 1,041,592 $ 981,447 Non-current assets 4,179,590 3,998,786 3,925,524 Current liabilities (550,139) (592,399) (550,124) Non-current liabilities (364,302) (339,243) (295,643) Equity $ 4,130,948 $ 4,108,736 $ 4,061,204 Equity attributable to: Owners of Kian Shen $ 1,812,247 $ 1,802,502 $ 1,781,650 Non-controlling interests of Kian Shen 2,318,701 2,306,234 2,279,554 $ 4,130,948 $ 4,108,736 $ 4,061,204 For the Three Months Ended September 30 For the Nine Months Ended September 30 2020 2019 2020 2019 Revenue $ 268,562 $ 224,789 $ 727,367 $ 908,728 Profit for the period $ 93,704 $ 77,967 $ 200,922 $ 198,507 Other comprehensive income (loss) for the period 72,820 (154,554) (31,910) (118,321) Total comprehensive income (loss) for the period $ 166,524 $ (76,587) $ 169,012 $ 80,186 Profit attributable to: Owners of Kian Shen $ 41,108 $ 34,204 $ 88,144 $ 87,085 Non-controlling interests of Kian Shen 52,596 43,763 112,778 111,422 $ 93,704 $ 77,967 $ 200,922 $ 198,507 Total comprehensive income (loss) attributable to: Owners of Kian Shen $ 73,054 $ (33,598) $ 74,146 $ 35,178 Non-controlling interests of Kian Shen 93,470 (42,989) 94,866 45,008 $ 166,524 $ (76,587) $ 169,012 $ 80,186	September 30, 2020 December 31, 2019 September 30, 2019 Current assets $ 865,799 $ 1,041,592 $ 981,447 Non-current assets 4,179,590 3,998,786 3,925,524 Current liabilities (550,139) (592,399) (550,124) Non-current liabilities (364,302) (339,243) (295,643) Equity $ 4,130,948 $ 4,108,736 $ 4,061,204 Equity attributable to: Owners of Kian Shen $ 1,812,247 $ 1,802,502 $ 1,781,650 Non-controlling interests of Kian Shen 2,318,701 2,306,234 2,279,554 $ 4,130,948 $ 4,108,736 $ 4,061,204 For the Three Months Ended September 30 For the Nine Months Ended September 30 2020 2019 2020 2019 Revenue $ 268,562 $ 224,789 $ 727,367 $ 908,728 Profit for the period $ 93,704 $ 77,967 $ 200,922 $ 198,507 Other comprehensive income (loss) for the period 72,820 (154,554) (31,910) (118,321) Total comprehensive income (loss) for the period $ 166,524 $ (76,587) $ 169,012 $ 80,186 Profit attributable to: Owners of Kian Shen $ 41,108 $ 34,204 $ 88,144 $ 87,085 Non-controlling interests of Kian Shen 52,596 43,763 112,778 111,422 $ 93,704 $ 77,967 $ 200,922 $ 198,507 Total comprehensive income (loss) attributable to: Owners of Kian Shen $ 73,054 $ (33,598) $ 74,146 $ 35,178 Non-controlling interests of Kian Shen 93,470 (42,989) 94,866 45,008 $ 166,524 $ (76,587) $ 169,012 $ 80,186	September 30, 2020 December 31, 2019 September 30, 2019 Current assets $ 865,799 $ 1,041,592 $ 981,447 Non-current assets 4,179,590 3,998,786 3,925,524 Current liabilities (550,139) (592,399) (550,124) Non-current liabilities (364,302) (339,243) (295,643) Equity $ 4,130,948 $ 4,108,736 $ 4,061,204 Equity attributable to: Owners of Kian Shen $ 1,812,247 $ 1,802,502 $ 1,781,650 Non-controlling interests of Kian Shen 2,318,701 2,306,234 2,279,554 $ 4,130,948 $ 4,108,736 $ 4,061,204 For the Three Months Ended September 30 For the Nine Months Ended September 30 2020 2019 2020 2019 Revenue $ 268,562 $ 224,789 $ 727,367 $ 908,728 Profit for the period $ 93,704 $ 77,967 $ 200,922 $ 198,507 Other comprehensive income (loss) for the period 72,820 (154,554) (31,910) (118,321) Total comprehensive income (loss) for the period $ 166,524 $ (76,587) $ 169,012 $ 80,186 Profit attributable to: Owners of Kian Shen $ 41,108 $ 34,204 $ 88,144 $ 87,085 Non-controlling interests of Kian Shen 52,596 43,763 112,778 111,422 $ 93,704 $ 77,967 $ 200,922 $ 198,507 Total comprehensive income (loss) attributable to: Owners of Kian Shen $ 73,054 $ (33,598) $ 74,146 $ 35,178 Non-controlling interests of Kian Shen 93,470 (42,989) 94,866 45,008 $ 166,524 $ (76,587) $ 169,012 $ 80,186	September 30, 2020 December 31, 2019 September 30, 2019 Current assets $ 865,799 $ 1,041,592 $ 981,447 Non-current assets 4,179,590 3,998,786 3,925,524 Current liabilities (550,139) (592,399) (550,124) Non-current liabilities (364,302) (339,243) (295,643) Equity $ 4,130,948 $ 4,108,736 $ 4,061,204 Equity attributable to: Owners of Kian Shen $ 1,812,247 $ 1,802,502 $ 1,781,650 Non-controlling interests of Kian Shen 2,318,701 2,306,234 2,279,554 $ 4,130,948 $ 4,108,736 $ 4,061,204 For the Three Months Ended September 30 For the Nine Months Ended September 30 2020 2019 2020 2019 Revenue $ 268,562 $ 224,789 $ 727,367 $ 908,728 Profit for the period $ 93,704 $ 77,967 $ 200,922 $ 198,507 Other comprehensive income (loss) for the period 72,820 (154,554) (31,910) (118,321) Total comprehensive income (loss) for the period $ 166,524 $ (76,587) $ 169,012 $ 80,186 Profit attributable to: Owners of Kian Shen $ 41,108 $ 34,204 $ 88,144 $ 87,085 Non-controlling interests of Kian Shen 52,596 43,763 112,778 111,422 $ 93,704 $ 77,967 $ 200,922 $ 198,507 Total comprehensive income (loss) attributable to: Owners of Kian Shen $ 73,054 $ (33,598) $ 74,146 $ 35,178 Non-controlling interests of Kian Shen 93,470 (42,989) 94,866 45,008 $ 166,524 $ (76,587) $ 169,012 $ 80,186
		2020 $ 727,367 $ 200,922 (31,910) $ 169,012 $ 88,144 112,778 $ 200,922 $ 74,146 94,866 $ 169,012	2019 $ 908,728 $ 198,507 (118,321) $ 80,186 $ 87,085 111,422 $ 198,507 $ 35,178 45,008 $ 80,186

25 -

Net cash inflow (outflow) from: Operating activities Investing activities Financing activities Foreign exchange adjustments Net cash outflow Dividends paid to non-controlling interest 15. NON-CURRENT ASSETS HELD FOR SALE September 30, 2020 Investments accounted for using the equity method classified as held for sale $ - Equity directly associated with non-current assets classified as held for sale $ -		For the Nine Months Ended September 30
	2020 2019 $ (100,355) $ (57,416) 181,774 50,269 (107,513) (146,650) 1,960 (62) $ (24,134) $ (153,859) $ 82,399 $ 74,158 December 31, 2019 September 30, 2019 $ 148,023 $ 148,023 $ (7,538) $ (7,538)

In August 2018, the Group entered into a contract for the transfer of its shares in Zhejiang Kanda to a non-related party and collected the proceeds from the contract in installments (discounted price after tax was $390,514 (RMB91,105 thousand)). The disposal was completed in May 2020, the date on which the Group recognized a gain on disposal of investments amounting to $234,953 thousand, and recognized an expected credit loss of $93,833 thousand after taking into consideration the debtor’s current financial position and the value of assets pledged as collateral.

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

September 30, 2020 Investments in associates $ 15,688,684 Investments in joint ventures 7,443,041 $ 23,131,725 a. Investments in associates September 30, 2020 Material associates Yulon $ 7,267,461 Associates that are not individually material 8,421,223 $ 15,688,684	December 31, 2019 September 30, 2019 $ 15,586,288 $ 19,218,925 7,762,637 7,547,892 $ 23,348,925 $ 26,766,817 December 31, 2019 September 30, 2019 $ 7,110,438 $ 10,867,353 8,475,850 8,351,572 $ 15,586,288 $ 19,218,925

26 -
1) Material associates

The Group’s proportion of shareholding and voting rights in Yulon was 16.80% on September 30, 2020, December 31, 2019 and September 30, 2019.

The Group exercises significant influence over Yulon and applies the equity method of accounting because the Group had a representation on the board of directors of Yulon even though the Group holds less than 20% of interest in Yulon.

Refer to Table 7 for the nature of activities, principal place of businesses and countries of incorporation of the associates.

Fair value (Level 1) of investments in associates with available published price quotations is summarized as follows:

	September 30,	December 31,	September 30,
Name of Associate	2020	2019	2019
Yulon	$ 6,018,136	$ 5,126,561	$ 5,152,783

As Yulon adjusted its organizational structure by carrying out a business combination of entities under common control, the consolidated financial statements of Yulon and its subsidiaries for the year ended December 31, 2019 were restated.

The summarized financial information below represents amounts shown in the associates’ consolidated financial statements prepared in accordance with IFRSs, and reflects the adjustments made when the equity method of accounting was applied.

Yulon and Yulon’s subsidiaries

Current assets Non-current assets Current liabilities Non-current liabilities Equity Equity attributable to predecessors’ interests under common control Non-controlling interests Proportion of the Group’s ownership Equity attributable to the Group Cross shareholdings Unrealized gain on sidestream transactions Carrying amount	September 30, 2020 $ 217,899,154 83,439,743 (208,336,609) (34,421,066) 58,581,222 - (11,597,604) $ 46,983,618 16.80% $ 7,893,248 (625,787) - $ 7,267,461	December 31, 2019 $ 231,944,241 81,947,302 (230,603,249) (26,207,143) 57,081,151 - (11,244,743) $ 45,836,408 16.80% $ 7,700,516 (590,078) - $ 7,110,438	September 30, 2019 (Restated) $ 247,355,863 89,614,789 (225,195,860) (33,375,843) 78,398,949 (28,036) (10,288,578) $ 68,082,335 16.80% $ 11,437,832 (573,764) 3,285 $ 10,867,353

27 -

Operating revenue Net profit (loss) for the period Other comprehensive income (loss) Total comprehensive income (loss) for the period Dividends received from Yulon		For the Three Months Ended September 30 2020 2019 (Restated) $ 21,178,914 $ 21,551,899 $ 1,440,115 $ (1,384,445) 170,653 (718,223) $ 1,610,768 $ (2,102,668)		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 21,178,914 $ 1,440,115 170,653 $ 1,610,768		2020 $ 58,553,325 $ 3,090,400 (329,502) $ 2,760,898 $ -	2019 (Restated) $ 62,560,774 $ (3,472,858) 82,886 $ (3,389,972) $ 175,693

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 2020 2019 $ 236,518 $ 196,190 16,211 (19,121) $ 252,729 $ 177,069	For the Three Months Ended September 30 2020 2019 $ 236,518 $ 196,190 16,211 (19,121) $ 252,729 $ 177,069	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 236,518 16,211 $ 252,729		2020 $ 584,371 (66,587) $ 517,784	2019 $ (559,247) 121,152 $ (438,095)

All the associates are accounted for using the equity method.

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 (calculated as the disposal price of $103,475 thousand less the carrying amount of the disposed equity investments 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 (calculated as the disposal price of $105,824 thousand less the carrying amount of the disposed equity investments 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 (calculated as the disposal price of $17,860 thousand less the carrying amount of the disposed equity investments of $18,960 thousand).

28 -

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

The Group is the single largest shareholder of several associates. The Group’s holding is less than 50% of the voting rights in the investees but the Group considered its holding of voting rights relative to the size and dispersion of the other shareholdings, which are not widely dispersed, and concluded that it has neither the ability to direct the relevant activities of the investees nor the control over the investees. The management of the Group considered the Group as exercising significant influence over the investees and, therefore, classified them as associates accounted for using the equity method.

Except for the financial statements of Yulon for the nine months ended September 30, 2020 and 2019 and Hua-Chuang Automobile Information Technical Center for the nine months ended September 30, 2019, the investments accounted for using the equity method and the share of profit or loss and other comprehensive income were based on the associates’ financial statements that have not been reviewed.

Hua-Chuang Automobile Information Technical Center reduced its capital for offsetting accumulated deficits and issued ordinary shares for cash in May and August 2020, respectively. The Group did not subscribe for additional new shares at the percentage of its existing ownership, which resulted in the Group’s combined shareholding to be less than 0.01%. In addition, the Corporation has resigned from its position as member of the board of directors of Hua-Chuang Automobile Information Technical Center and consequently ceased to have significant influence over Hua-Chuang Automobile Information Technical Center.

b. Investments in joint ventures

	September 30,	December 31,	September 30,
	2020	2019	2019
Joint ventures that are not individually
material	$ 7,443,041	$ 7,762,637	$ 7,547,892

Aggregate information of joint ventures that are not individually material is as follows:

The Group’s share of: Net profit of the period Other comprehensive income (loss) Total comprehensive income (loss) for the period	For the Three Months Ended September 30 2020 2019 $ 126,640 $ 241,841 129,692 (284,798) $ 256,332 $ (42,957)	For the Three Months Ended September 30 2020 2019 $ 126,640 $ 241,841 129,692 (284,798) $ 256,332 $ (42,957)	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 126,640 129,692 $ 256,332		2020 $ 391,358 (59,747) $ 331,611	2019 $ 486,017 (189,928) $ 296,089

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

Except for the financial statements of Guangzhou NTN-Yulon Drivetrain Co., Ltd. for the nine months ended September 30, 2020, the investments accounted for using the equity method and the share of profit or loss and other comprehensive income were based on the associates’ financial statements that have not been reviewed.

29 -

17. PROPERTY, PLANT AND EQUIPMENT

	September 30,	December 31,	September 30,
	2020	2019	2019
Assets used by the Group
Land	$ 1,974,774	$ 1,974,774	$ 2,127,397
Land improvements	12,027	13,446	13,308
Buildings	831,450	861,847	1,054,612
Machinery	2,606,575	2,263,515	2,187,208
Other equipment	372,830	408,332	399,940
Construction in progress	702,221	897,340	931,681
	$ 6,499,877	$ 6,419,254	$ 6,714,146

Except for the depreciation recognized and the cost of acquisition of property, plant and equipment for increasing productivity, which totaled $664,073 thousand and $1,088,790 thousand during the nine months ended September 30, 2020 and 2019, respectively, the Group had no other significant disposal of property, plant and equipment.

As a result of the declining sales in the market for several types of vehicles, the estimated future cash flows expected to arise from the related equipment had decreased. Thus, the Group recognized an impairment loss of $36,637 thousand for the three months ended September 30, 2019 and for the nine months ended September 30, 2019. The Group determined the recoverable amount of the relevant assets on the basis of their value in use. The discount rate used for measuring the value in use for the nine months ended September 30, 2019 was 4.44%.

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	Useful Life
	3-20 years 2-60 years 2-24 years 2-20 years

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

18. LEASE ARRANGEMENTS

a. Right-of-use assets

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
Carrying amount
Land	$	61,766	$	82,312	$	89,774
Buildings		304,668		352,877		375,366
Other equipment		9,744		7,732		9,555
	$	376,178	$	442,921	$	474,695

30 -

Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Other equipment	For the Three Months Ended September 30 2020 2019 $ 6,941 $ 7,461 15,575 16,739 1,562 1,549 $ 24,078 $ 25,749	For the Three Months Ended September 30 2020 2019 $ 6,941 $ 7,461 15,575 16,739 1,562 1,549 $ 24,078 $ 25,749	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 6,941 15,575 1,562 $ 24,078		2020 $ 26,730 $ 21,331 47,361 5,003 $ 73,695	2019 $ 22,159 $ 22,391 50,462 4,816 $ 77,669

Except for the aforementioned addition and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the nine months ended September 30, 2020 and 2019.

b. Lease liabilities

	September 30,	December 31,	September 30,
	2020	2019	2019
Carrying amount
Current	$ 87,773	$ 88,697	$ 95,425
Non-current	$ 296,768	$ 359,836	$ 384,038
Range of discount rate for lease liabilities was as follows:
	September 30,	December 31,	September 30,
	2020	2019	2019
Land	1.20%-1.94%	1.20%-1.94%	1.20%-1.94%
Buildings	1.20%-4.35%	1.20%-4.35%	1.20%-4.35%
Other equipment	0.95%-1.37%	0.98%-1.37%	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

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	For the Three Months Ended September 30 2020 2019 $ 4,768 $ 6,604 $ 212 $ 413	For the Three Months Ended September 30 2020 2019 $ 4,768 $ 6,604 $ 212 $ 413	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 4,768 $ 212		2020 $ 13,747 $ 848 $ 91,361	2019 $ 18,646 $ 1,823 $ 102,860

31 -

19. INVESTMENT PROPERTIES

	September 30,	December 31,	September 30,
	2020	2019	2019
Investment properties	$ 1,357,774	$ 1,366,049	$ 1,368,807

Except for the depreciation recognized, the Group did not have any significant addition, disposal, or impairment of investment properties for the nine months ended September 30, 2020 and 2019.

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

The fair values of investment properties of the Group were $2,388,593 thousand and $2,414,732 thousand as of December 31, 2019 and 2018, respectively. The management of the Group had assessed and determined that there were no significant changes in the fair values as of September 30, 2020 and 2019, as compared to that of December 31, 2019 and 2018, respectively.

The Group held freehold interests in all of its investment properties. The investment properties pledged as deposits for certain projects are set out in Note 32.

20. BORROWINGS

a. Short-term borrowings

	September 30,	December 31,	September 30,
	2020	2019	2019
Line of credit borrowings	$ 245,000	$ 615,000	$ 360,000
Bank loans	-	-	270,000
	$ 245,000	$ 615,000	$ 630,000

1) The ranges of interest rates on credit borrowings were 0.36%-0.96%, 0.95%-1.00% and 0.95%-1.10% per annum as of September 30, 2020, December 31, 2019 and September 30, 2019, respectively.
2) The interest rate on bank loans was 0.98% per annum as of September 30, 2019.
b. Long-term borrowings

	September 30,	September 30,	December 31,	December 31,	September	September	30,
		2020		2019		2019
Unsecured borrowings
Line of credit borrowings	$	100,000	$	50,000	$	20,000
Less: Current portions		(31,250)		(6,250)			-
Long-term borrowings	$	68,750	$	43,750	$	20,000

32 -

The aforementioned long-term borrowings are repayable in installments at varying amounts before April 15, 2023. The Group had signed medium-term loan contracts with banks for non-revolving credit facilities. As of September 30, 2020, December 31, 2019 and September 30, 2019, the annual interest rates were 0.725%, 0.975% and 0.975%, respectively.

21. OTHER PAYABLES

September 30, 2020 Payables for salaries or bonuses $ 747,549 Payables for taxes 339,489 Payables for advertisement 262,944 Payables for warranties 196,823 Provisions for employee benefits 94,642 Payables due to capital reduction - Others 727,753 $ 2,369,200	December 31, 2019 September 30, 2019 $ 988,243 $ 772,339 222,322 296,904 126,738 404,623 208,694 234,693 137,121 95,163 - 8,304,305 743,572 718,708 $ 2,426,690 $ 10,826,735

22. RETIREMENT BENEFIT PLANS

For the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, the pension expenses of defined benefit plans were $31,977 thousand, $14,217 thousand, $51,164 thousand and $42,900 thousand, respectively, and these were calculated based on the actuarially determined pension cost rates on December 31, 2019 and 2018, respectively.

23. EQUITY

a. Share capital

1) Ordinary shares

September 30, 2020 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, 2019 September 30, 2019 1,800,000 1,800,000 $ 18,000,000 $ 18,000,000 553,620 553,620 $ 5,536,203 $ 5,536,203

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 purposes of adjusting its capital structure and enhancing the return on shareholders’ equity, the Corporation resolved in its board of directors meeting on March 27, 2019 and subsequently in the shareholders’ meeting in June 2019 to implement a capital reduction in cash through the return of share proceeds to shareholders. The total capital reduction amounted to $8,304,305 thousand, which represented the cancellation of 830,431 thousand shares (capital reduction ratio was 60%).

33 -

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 the capital reduction, which was set as August 8, 2019, had been approved by the board of directors in August 2019 and the change in registration was completed on August 19, 2019.

b. Capital surplus

	September 30,	December 31,	September 30,
	2020	2019	2019
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
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	36,135	38,384	15,786
	$ 6,411,869	$ 6,414,118	$ 6,391,520

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 of 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 a 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 the 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.

The shareholders of the Corporation held their regular meeting in June 2020 and in that meeting, resolved the amendments to the dividend policy of the Corporation’s Articles of Incorporation, where the regulation of “dividends cannot be distributed if the Corporation has a deficit” has been deleted.

34 -

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 reversed from a special reserve by the Corporation.

Due to the net loss incurred in 2019, the Corporation’s resolution to not distribute dividends was approved in the shareholders’ meeting.

The appropriation of earnings for 2018 had been approved in the shareholders’ meeting in June 2019. The appropriations and dividends per share are as follows:

	For the Years	For the Years
		Ended
	December 31,
		2018
Legal reserve	$	359,300
Cash dividends	$	2,352,886
Cash dividends per share (NT$)	$	1.7

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

d. Special reserve

Balance 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
		2020 $ 1,029,654 (1,185) (110) $ 1,028,359	2019 $ 1,046,967 (377) (5) $ 1,046,585

e. Other equity items

1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Recognized during the period Share from associates and join ventures accounted for using the equity method Exchange differences on translating the financial statements of foreign operations		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ (990,653) (115,661) (5,362)	2019 $ (646,278) (28,447) (158,559) (Continued)

35 -

Reclassification adjustments Disposal of foreign operations 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
		2020 $ 10,332 - (110,691) $ (1,101,344)	2019 $ - 1,773 (185,233) $ (831,511) (Concluded)

2) Unrealized valuation 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 gain on equity instruments transferred to retained earnings due to disposal by associates Cumulative unrealized gain on equity instruments transferred to retained earnings due to disposal Balance at September 30 3) Cash flow hedges		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 216,562 (2,286) (52,481) (54,767) (919) - $ 160,876	2019 $ 117,177 (17,488) 160,647 143,159 (85,455) (17) $ 174,864

Balance at January 1 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 Unrealized gain (loss) from cash flow hedges 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
		2020 $ (19,968) 6,285 4,515 4,006 14,806 9,449 $ 4,287	2019 $ 20,997 35,972 - (74) 35,898 (59,257) $ (2,362)

36 -

f. Non-controlling interests

Balance at January 1 Attributable to non-controlling interests: Share of profit for the period Other comprehensive loss 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 dividends distributed by subsidiaries Balance at September 30		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 3,422,878 167,211 (430) (448) (17,420) (18,298) (126,690) $ 3,445,101	2019 $ 3,613,814 124,790 (3,614) (11,147) (51,652) (66,413) (112,397) $ 3,559,794

24. REVENUE

Revenue from contracts with customers Revenue from the sale of goods Revenue from the sale of vehicles Revenue from the sale of components Service revenue Rental income Other revenue		For the Three Months Ended September 30 2020 2019 $ 6,003,079 $ 5,584,445 1,699,643 1,488,761 7,702,722 7,073,206 345,710 276,570 23,184 17,003 17,339 23,690 $ 8,088,955 $ 7,390,469		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 6,003,079 1,699,643 7,702,722 345,710 23,184 17,339 $ 8,088,955		2020 $ 17,692,636 4,141,533 21,834,169 920,192 67,248 45,399 $ 22,867,008	2019 $ 18,670,658 4,535,304 23,205,962 1,084,434 49,080 59,667 $ 24,399,143

37 -

25. NET PROFIT

Net profit includes the following:

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 of intangible assets by function Research and development expenses	For the Three Months Ended September 30 2020 2019 $ 179,411 $ 165,307 51,854 61,405 $ 231,265 $ 226,442 $ 1,351 $ 1,711 8,042 12,250 $ 9,393 $ 13,961 $ 20,304 $ 13,193	For the Three Months Ended September 30 2020 2019 $ 179,411 $ 165,307 51,854 61,405 $ 231,265 $ 226,442 $ 1,351 $ 1,711 8,042 12,250 $ 9,393 $ 13,961 $ 20,304 $ 13,193	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 179,411 51,854 $ 231,265 $ 1,351 8,042 $ 9,393 $ 20,304		2020 $ 476,947 162,850 $ 639,797 $ 4,048 29,338 $ 33,386 $ 60,912	2019 $ 598,401 184,421 $ 782,822 $ 5,800 39,065 $ 44,865 $ 37,902

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

Rental income from investment properties Direct operating expenses from investment properties that generate rental income Employee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans Short-term benefits		For the Three Months Ended September 30 2020 2019 $ 17,506 $ 16,594 $ 6,328 $ 5,210 For the Three Months Ended September 30 2020 2019 $ 17,167 $ 19,402 31,977 14,217 49,144 33,619 792,158 811,522 $ 841,302 $ 845,141		For the Nine Months Ended September 30	For the Nine Months Ended September 30
				2020 2019 $ 51,739 $ 49,753 $ 14,816 $ 15,924 For the Nine Months Ended September 30
		2020 $ 17,167 31,977 49,144 792,158 $ 841,302		2020 $ 54,479 51,164 105,643 2,313,831 $ 2,419,474	2019 $ 63,122 42,900 106,022 2,563,301 $ 2,669,323 (Continued)

c. Employee benefits expense

38 -

An analysis of employee benefits expenses by function Operating costs Operating expenses		For the Three Months Ended September 30 2020 2019 $ 414,835 $ 451,631 426,467 393,510 $ 841,302 $ 845,141		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 414,835 426,467 $ 841,302		2020 $ 1,213,284 1,206,190 $ 2,419,474	2019 $ 1,443,663 1,225,660 $ 2,669,323 (Concluded)

d. Employees’ compensation and remuneration of directors

According to the Articles of Incorporation of the Corporation, the Corporation accrues 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, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, the amounts of employees’ compensation and remuneration of directors are as follows:

Amount

Employees’ compensation Remuneration of directors	For the Three Months Ended September 30 2020 2019 $ 10,333 $ 499 $ 4,897 $ 3,660	For the Three Months Ended September 30 2020 2019 $ 10,333 $ 499 $ 4,897 $ 3,660	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 10,333 $ 4,897		2020 $ 16,748 $ 12,780	2019 $ 793 $ 3,660

If there will be change in the proposed amounts after the annual consolidated financial statements were authorized for issue, the differences will be recorded as a change in accounting estimate in the subsequent year.

Due to the net loss before income tax for the year ended December 31, 2019, the Corporation did not accrue employees’ compensation and remuneration of directors. The employees’ compensation and remuneration of directors for the year ended December 31, 2018, which were approved by the Corporation’s board of directors in March 2019, are as follows:

Employees’ compensation Remuneration of directors	For the Year Ended December 31, 2018	For the Year Ended December 31, 2018
		Cash $ 33,511 $ 19,746

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 year ended December 31, 2018.

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

39 -

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 Taxation for repatriated offshore funds Adjustments for the prior periods Deferred tax In respect of the current period Adjustments for the prior periods Income tax expense recognized in profit or loss	For the Three Months Ended September 30 2020 2019 $ 26,815 $ 49,501 5,835 - - (2) 32,650 49,499 (20,292) 72,044 - (389) (20,292) 71,655 $ 12,358 $ 121,154	For the Three Months Ended September 30 2020 2019 $ 26,815 $ 49,501 5,835 - - (2) 32,650 49,499 (20,292) 72,044 - (389) (20,292) 71,655 $ 12,358 $ 121,154	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 26,815 5,835 - 32,650 (20,292) - (20,292) $ 12,358		2020 $ 61,857 121,108 (15,055) 167,910 (45,450) - (45,450) $ 122,460	2019 $ 345,467 - (22,628) 322,839 140,418 43,986 184,404 $ 507,243

The tax rate applicable to subsidiaries in China is 25%. Tax rates used by other entities in the Group operating in other jurisdictions are based on the tax laws in those jurisdictions.

In July 2019, the President of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings.

In July 2019, the President of the ROC announced the regulations on the Management, Utilization, and Taxation of Repatriated Offshore Funds Act. Within two years from the date of enforcement of this Act, profit-seeking enterprises may be subject to taxation based on these regulations upon approval by the tax authorities. A tax rate of 8% applies to the first year’s repatriation of funds, while a tax rate of 10% applies to the second year’s repatriation of funds; the statutory rate of 20% is not applicable. If substantive investments are subsequently made, profit-seeking enterprises may apply for a refund of 50% of the tax paid for qualifying investment amounts.

As of September 30, 2020, the Group repatriated $685,351 thousand (RMB161,076 thousand and US$367 thousand) after approval was obtained from the National Taxation Bureau, Ministry of Finance. The total amount of withholding tax on income was $121,108 thousand, comprising $66,468 thousand based on the source of income and $54,640 thousand based on the preferential tax rate at 8%.

40 -

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current period Cash flow hedges	For the Three Months Ended September 30 2020 2019 $ (707) $ 139	For the Three Months Ended September 30 2020 2019 $ (707) $ 139	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ (707)		2020 $ (683)	2019 $ (3,784)

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 2020 2019 $ 1.73 $ 0.38 $ 1.73 $ 0.38	For the Three Months Ended September 30 2020 2019 $ 1.73 $ 0.38 $ 1.73 $ 0.38	Unit: NT$ Per Share For the Nine Months Ended September 30	Unit: NT$ Per Share For the Nine Months Ended September 30	Unit: NT$ Per Share For the Nine Months Ended September 30
		2020 $ 1.73 $ 1.73		2020 $ 4.52 $ 4.52	2019 $ 0.29 $ 0.29

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

Net Profit for the Period

For the Three Months Ended September 30 For the Nine Months Ended September 30 2020 2019 2020 2019 Profit used in the computation of basic earnings per share $ 943,229 $ 336,826 $2,465,401 $ 346,192 Weighted Average Number of Ordinary Shares Outstanding (In Thousands of Shares) For the Three Months Ended September 30 For the Nine Months Ended September 30 2020 2019 2020 2019 Weighted average number of ordinary shares used in the computation of basic earnings per share Weighted average number of ordinary shares 553,620 896,624 553,620 1,219,790 Adjustment for shares held by associates (8,239) (13,344) (8,239) (18,154) 545,381 883,280 545,381 1,201,636 (Continued)	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 553,620 (8,239) 545,381	2019 1,219,790 (18,154) 1,201,636 (Continued)

41 -

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 2020 2019 399 32 545,780 883,312	For the Three Months Ended September 30 2020 2019 399 32 545,780 883,312	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 399 545,780		2020 399 545,780	2019 494 1,202,130 (Concluded)

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 was included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

28. DISPOSAL OF SUBSIDIARY

The Group’s board of directors approved to fully dispose of its interest held in its subsidiary, Advance Power Machinery, to Yulon on July 16, 2020. The disposal was completed on July 17, 2020, the date on which the control of Advance Power Machinery was transferred to the acquirer.

a. Consideration received from disposal

Sales proceeds received $ 10,787

b. Analysis of assets and liabilities on the date control was lost

	Advance Power
	Machinery
Current assets
Cash and cash equivalents	$ 12,983
Trade receivables form related parties	10,844
Other receivables	1,579
Other current assets	30
Non-current assets
Other non-current assets	20
Current liabilities
Other payables	(14,311)
Current tax liabilities	(31)
Other current liabilities	(245)
Net assets disposed of	$ 10,869

42 -
c. Loss on disposal of subsidiaries

		Advance Power	Advance Power
		Machinery
	Consideration received	$	10,787
	Net assets disposed of		(10,869)
	Loss on disposal	$	(82)
d.	Net cash and cash equivalent outflow on disposal of subsidiary
	Proceeds of disposal	$	10,787
	Less: Cash and cash equivalent balances disposed of		(12,983)
	Net cash outflow on disposal of subsidiaries	$	(2,196)

29. CAPITAL MANAGEMENT

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

30. FINANCIAL INSTRUMENTS

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

The Group’s management believes the carrying amounts of financial assets and financial liabilities 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.

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

September 30, 2020

Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments	Level 1 $ 1,289,872 - - $ 1,289,872	Level 2 $ - - - $ -	Level 3 $ - 661,001 195 $ 661,196	Total $ 1,289,872 661,001 195 $ 1,951,068 (Continued)

43 -

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) Financial liabilities for hedging Derivative financial instruments (included in other current liabilities) December 31, 2019 Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Overseas unlisted shares	Level 1 $ 31,395 - - $ 31,395 $ 83,477 $ - $ - Level 1 $ 339,427 - - $ 339,427 $ 29,083 - - $ 29,083	Level 2 $ - - - $ - $ - $ - $ - Level 2 $ - - - $ - $ - - - $ -	Level 3 $ - 24,152 148,809 $ 172,961 $ - $ 724 $ 800 Level 3 $ - 686,413 304 $ 686,717 $ - 25,395 152,864 $ 178,259	Total $ 31,395 24,152 148,809 $ 204,356 $ 83,477 $ 724 $ 800 (Concluded) Total $ 339,427 686,413 304 $ 1,026,144 $ 29,083 25,395 152,864 $ 207,342 (Continued)

44 -

Financial assets for hedging Non-derivative financial instruments Derivative financial instruments 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) 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	Level 1 $ 1,137,902 - $ 1,137,902 $ - $ - Level 1 $ 653,762 - - $ 653,762 $ 25,970 - - $ 25,970 $ 279,314	Level 2 $ - - $ - $ - $ - Level 2 $ - - - $ - $ - - - $ - $ -	Level 3 $ - 440 $ 440 $ 2,483 $ 6,884 Level 3 $ - 695,808 307 $ 696,115 $ - 23,145 156,283 $ 179,428 $ -	Total $ 1,137,902 440 $ 1,138,342 $ 2,483 $ 6,884 (Concluded) Total $ 653,762 695,808 307 $ 1,349,877 $ 25,970 23,145 156,283 $ 205,398 $ 279,314 (Continued)

45 -

Level 1 Level 2 Level 3 Total

Financial liabilities Financial liabilities at FVTPL Derivative financial instruments (included in other current liabilities)	$ -	$ -	$ 666	$ 666

(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 nine months ended September 30, 2020

Financial Assets Equity Instruments at FVTPL Derivative Financial Instruments at FVTPL Equity Instruments at FVTOCI Derivative Financial Instruments for Hedging Balance at January 1 $ 686,413 $ 304 $ 178,259 $ 440 Recognized in profit or loss (25,412) (109) - - Recognized in other comprehensive loss - - (5,298) (440) Balance at September 30 $ 661,001 $ 195 $ 172,961 $ - Financial Liabilities Derivative Financial Instruments at FVTPL Derivative Financial Instruments for Hedging Balance at January 1 $ 2,483 $ 6,884 Recognized in profit or loss (1,759) - Recognized in other comprehensive loss - (6,084) Balance at September 30 $ 724 $ 800 For the nine months ended September 30, 2019 Financial Assets Equity Instruments at FVTPL Derivative Financial Instruments at FVTPL Equity Instruments at FVTOCI Balance at January 1 $ 734,341 $ 23 $ 208,723 Recognized in profit or loss (38,533) 284 - Recognized in other comprehensive loss - - (29,278) Sales - - (17) Balance at September 30 $ 695,808 $ 307 $ 179,428	$	Total $ 865,416 (25,521) (5,738) $ 834,157 Total 9,367 (1,759) (6,084) 1,524 Total 943,087 (38,249) (29,278) (17) 874,543
	$
	$
Financial Assets Equity Instruments at FVTPL Balance at January 1 $ 734,341 Recognized in profit or loss (38,533) Recognized in other comprehensive loss - Sales - Balance at September 30 $ 695,808
	$

46 -

Derivative Financial Instruments at FVTPL

Financial Liabilities Balance at January 1 Recognized in profit or loss Balance at September 30	FVTPL $ 79 587
	$ 666

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 are as follows:

	September	September	30,	December 31,	December 31,	September 30,
		2020		2019		2019
Operating income ratio	0.20-5.58 times			0.20-5.22 times		0.14-5.68 times
Gross profit ratio	2.23-17.18 times 2.23-17.18 times					0.32-13.64 times
EBIT ratio		-		-		2.44-23.21 times
EBITDA ratio	5.21-24.22 times 5.21-24.22 times					8.51-10.82 times
Post-tax profit ratio	13.24-71.17 times 13.24-71.17 times					11.99-85.49 times
P/B ratio	0.57-7.82 times			0.73-7.82 times		0.79-4.94 times
Discount rate for lack of		32.28%		32.28%		32.28%
marketability
If the inputs to the valuation model		were changed to		reflect reasonably		possible alternative
assumptions while all the other variables were			held constant, the		fair values	of the shares would
have increased (decreased) as follows:
		September 30,		December 31,		September 30,
			2020		2019	2019
Operating income ratio
0.1 time increase		$	54,350	$	36,573	$ 58,962
0.1 time decrease		$ (54,350)		$	(36,573)	$ (58,962)
Gross profit ratio
1 time increase		$	5,384	$	5,384	$ 65,697
1 time decrease		$	(5,384)	$	(5,384)	$ (65,697)
EBIT ratio
1 time increase		$	-	$	-	$ 18,188
1 time decrease		$	-	$	-	$ (18,188)
EBITDA ratio
1 time increase		$	3,874	$	3,874	$ 189
1 time decrease		$	(3,874)	$	(3,874)	$ (189)
Post-tax profit ratio
1 time increase		$	10,660	$	10,660	$ 11,020
1 time decrease		$ (10,660)		$	(10,660)	$ (11,020)

47 -

	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
		2020		2019		2019
P/B ratio
0.1 time increase		$ 70,139		$ 72,633		$ 84,544
0.1 time decrease		$ (70,139)		$ (72,633)		$ (84,544)
						(Concluded)
Categories of financial instruments
	September 30,		December 31,		September 30,
		2020		2019		2019
Financial assets
FVTPL
Mandatorily at FVTPL	$	1,951,068	$	1,026,144	$	1,349,877
Financial assets for hedging		83,477		1,138,342		279,314
Financial assets at amortized cost (Note 1)		12,921,200		9,973,131		18,454,513
Financial assets at FVTOCI		204,356		207,342		205,398
Financial liabilities
Amortized cost (Note 2)		5,851,886		6,978,997		14,080,494
FVTPL (included in other current liabilities)
Held for trading		724		2,483		666
Financial liabilities for hedging (included in
other current liabilities)		800		6,884		-

c. Categories of financial instruments
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), guarantee deposits (included in other non-current assets) and long-term receivables (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 borrowings (current portion of long-term borrowing included) and deposits received (included in other non-current liabilities).

d. Financial risk management objectives and policies

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

1) Market risk

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

48 -

a) Foreign currency risk

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

Sensitivity analysis

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

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

USD Impact	USD Impact	USD Impact
For the Nine Months Ended September 30
	2020 2019 $ (5,232) $ (7,397) EUR Impact
For the Nine Months Ended September 30
	2020 2019 $ (245) $ (803) JPY Impact
For the Nine Months Ended September 30
	2020 2019 $ 710 $ 659 $ (1,386) $ (2,793) RMB Impact
For the Nine Months Ended September 30
	2020 $ (14,823)	2019 $ (11,118)

49 -

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,	September 30,	December 31,	December 31,	September 30,
		2020		2019	2019
Cash flow interest rate risk
Financial assets	$	9,461,541	$	7,060,429	$ 14,071,304
Financial liabilities		534,930		848,939	709,963
Fair value interest rate risk
Lease liabilities		384,541		448,533	479,463

Sensitivity analysis

The sensitivity analysis below was 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 liabilities 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, 2020 and 2019 would have increased/decreased by $16,737 thousand and $25,053 thousand, respectively.

A decrease in the Group’s sensitivity to interest rates 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.

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, 2020 and 2019 would have increased/decreased by $64,494 thousand and $32,688 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, 2020 and 2019 would have increased/decreased by $1,570 thousand and $1,299 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

Financial assets are subject to the potential impact of the failure of the Group's counterparties to satisfy their performance obligations; the impact includes the concentration of credit risk, contract amounts and other receivables of the financial products engaged in by the Group. As the counterparties are banks, securities firms and dealers with good credit ratings, no significant credit risk is expected.

50 -

3) Liquidity risk

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

31. TRANSACTIONS WITH RELATED PARTIES

All intragroup transactions and balances between the Corporation and its subsidiaries, which are related parties of the Corporation, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed below.

a. Names and categories of related parties

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

Mitsubishi Corporation (Mitsubishi Corp.)

Tai Yuen Textile Co., Ltd.

Le Wen Investment Co., Ltd.

Yulon Management Company Ltd. (Yulon Management)

Mitsubishi Corporation (Taiwan) Ltd.

Mitsubishi Motors Philippines Corporation

Mitsubishi Motors Thailand

Mitsubishi Motors Europe B.V.

Mitsubishi Motors Middle East and Africa

Mitsubishi Corporation Technos

Shye Shyang Mechanical Industrial Co., Ltd.

Fuzhou Samnel Mechanical and Electrical Co., Ltd.

Uni-Calsonic Corp.

Yulon Motor Co., Ltd. (Yulon)

Fortune Motors Co., Ltd. (Fortune Motors)

ROC Spicer Ltd. (ROC-Spicer)

Uni Auto Parts Manufacture Co., Ltd. (Uni Auto Parts
Manufacture)

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

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

Yulon IT Solutions Inc. (Yulon IT)

Sinjang Co., Ltd. (Sin Jang)

Related Party Category

Investors that has significant influence
over the Group
Investors that has significant influence
over the Group
Investors that has significant influence
over the Group
Investors that has significant influence
over the Group
Subsidiary of investors that has
significant influence over the Group
Subsidiary of investors that has
significant influence over the Group
Subsidiary of investors that has
significant influence over the Group
Subsidiary of investors that has
significant influence over the Group
Subsidiary of investors that has
significant influence over the Group
Subsidiary of investors that has
significant influence over the Group
Subsidiary of investors that has
significant influence over the Group
The Group is its key management
personnel
The Group is its key management
personnel
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
(Continued)

51 -

Related Party Name
Sin Gan Co., Ltd. (Sin Gan)

Tokio Marine Newa Insurance Co., Ltd.

Hong Shuo Cultural Enterprises, Co., Ltd.

Hsiang Shuo Enterprises

Sinqual Technology Co., Ltd.

Yufong Property Management Co., Ltd.

Taiwan Acceptance Corporation (Taiwan Acceptance)

Yue Sheng Industrial Co., Ltd.

Luxgen Motor Co., Ltd. (Luxgen)

Yulon Nissan Motor Co., Ltd.

Y-Teks Co., Ltd.

YES-Energy Service Co., Ltd. (Yulon Energy Service Co.,
Ltd.)

Yue Ki Industrial Co., Ltd. (Yue Ki Industrial)

Carplus Auto Leasing Corporation

eCBO Information Services Co., Ltd.

Fortune HS Leasing Co., Ltd. (Hsieh-Shin Motors Co., Ltd.)
Yu Rich Financial Services Company

ROC-Keeper Industrial Ltd.

Shanghai Chiashun Motor Sales Co., Ltd.

Shanghai Hopeful Wheel Automobile Maintenance Co., Ltd.
Fuzhou Lianhong Motor Parts Co., Ltd.

Advance Power Machinery Co.

Guangzhou NTN-Yulon Drivetrain Co., Ltd.

Xiangyang NTN-Yulon Drivetrain Co., Ltd.

South East (Fujian) Motor Corporation Ltd.

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)

Yuanchuang Industrial Investment Consulting Co., Ltd.

Related Party Category

Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Change in relationship from subsidiary
to associate since July 17, 2020
Joint venture
Joint venture
Joint venture
Joint venture
Joint venture
Joint venture
Joint venture
Joint venture
Substantive related party
(Concluded)

b. Operating transactions

1) Sales of goods

Related Party Line Item Category/Name Sales Associates Fortune Motors Shung Ye Motor Others Investors and subsidiaries of the investors that have significant influence over the Group Joint ventures		For the Three Months Ended September 30 2020 2019 $ 5,043,216 $ 4,264,007 1,337,975 1,426,718 330,175 227,146 6,711,366 5,917,871 7,796 14,998 5,535 9,076 $ 6,724,697 $ 5,941,945		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 5,043,216 1,337,975 330,175 6,711,366 7,796 5,535 $ 6,724,697		2020 $ 14,490,055 3,911,496 648,050 19,049,601 58,051 20,477 $ 19,128,129	2019 $ 14,207,203 4,546,945 676,639 19,430,787 79,797 23,113 $ 19,533,697

52 -

2) Purchases of goods

Related Party Line Item Category/Name Purchases Investors and subsidiaries of the investors that have significant influence over the Group Mitsubishi Motors Corp. Mitsubishi Corp. Others Associates The Group is its key management Joint ventures		For the Three Months Ended September 30 2020 2019 $ 345,521 $ - - 467,095 - 21,002 345,521 488,097 552,534 430,563 86,072 63,586 27,229 62,811 $ 1,011,356 $ 1,045,057		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 345,521 - - 345,521 552,534 86,072 27,229 $ 1,011,356		2020 $ 920,223 341,230 10,381 1,271,834 1,381,455 208,495 84,011 $ 2,945,795	2019 $ 246 1,819,044 97,102 1,916,392 1,521,772 230,663 161,575 $ 3,830,402

3) Technical services expense

Related Party Line Item Category/Name Cost of goods sold and selling and marketing expenses Investors that have significant influence over the Group		For the Three Months Ended September 30 2020 2019 $ 53,735 $ 50,713		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 53,735		2020 $ 173,701	2019 $ 170,961

4) Development expense

Related Party Line Item Category/Name Research and development expense Investors that have significant influence over the Group Others		For the Three Months Ended September 30 2020 2019 $ 9,244 $ 12,436 - - $ 9,244 $ 12,436		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 9,244 - $ 9,244		2020 $ 34,984 - $ 34,984	2019 $ 37,353 3 $ 37,356

5) Other expense

Related Party Line Item Category/Name Selling and marketing expenses and general and administrative Investors and subsidiaries of the investors that have significant influence over the Group expenses Others		For the Three Months Ended September 30 2020 2019 $ 23,109 $ 26,326 4,493 4,597 $ 27,602 $ 30,923		For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 23,109 4,493 $ 27,602		2020 $ 67,911 11,877 $ 79,788	2019 $ 80,979 10,961 $ 91,940

53 -

6) Contract liabilities

	Related Party	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
Line Item	Category/Name		2020		2019		2019
Other current	Associates
liabilities	Luxgen	$	58,585	$	19,356	$	19,356
	Sin Jang		-		16,792		16,792
	Others		7,803		8,476		5,026
			66,388		44,624		41,174
	Others		7,334		273		1,173
		$	73,722	$	44,897	$	42,347
Receivables from related parties
	Related Party	September 30,		December 31,		September 30,
Line Item	Category/Name		2020		2019		2019
Trade receivables	Associates
from related	Fortune Motors	$	1,183,075	$	903,195	$	1,279,232
parties	Shung Ye Motor		313,655		340,042		378,450
	Others		182,302		188,082		235,651
			1,679,032		1,431,319		1,893,333
	Joint ventures		10,654		18,235		17,972
	Others		1,199		7,585		11,209
		$	1,690,885	$	1,457,139	$	1,922,514
Payables to related parties
	Related Party	September 30,		December 31,		September 30,
Line Item	Category/Name		2020		2019		2019
Trade payables to	Associates
related parties	Uni Auto Parts	$	114,013	$	147,613	$	48,225
	Manufacture
	Yue Ki Industrial		92,401		99,801		65,812
	ROC-Spicer		88,473		100,743		26,484
	Yulon		79,490		92,546		97,834
	Others		114,106		239,311		140,011
			488,483		680,014		378,366
	Investors and
	subsidiaries of the
	investors that have
	significant influence
	over the Group
	Mitsubishi Motors		105,948		92,215		51,875
	Corp.
	Yulon Management		70,134		94,522		70,732
	Others		5,809		39,110		1,717
			181,891		225,847		124,324
							(Continued)

7) Receivables from related parties
8) Payables to related parties
54 -

	Related Party	September 30,	September 30,	December 31,	December 31,	September 30,	September 30,
Line Item	Category/Name		2020		2019		2019
	The Group is its key
	management	$	54,708	$	68,622	$	33,662
	Others		8,912		9,267		8,806
		$	733,994	$	983,750	$	545,158
							(Concluded)
Prepayments
	Related Party	September 30,		December 31,		September 30,
Line Item	Category/Name		2020		2019		2019
Prepayments	Joint ventures	$	8,736	$	12,426	$	15,930
	Investors and
	subsidiaries of
	investors that have
	significant influence
	over the Group
	Mitsubishi Corp.		-		187,877		95,820
	Others		227		2,610		2,324
			227		190,487		98,144
	Others		259		-		238
		$	9,222	$	202,913	$	114,312

9) Prepayments

10) Acquisition of property, plant and equipment

Related Party Line Item Category/Name Property, plant and equipment Associates Others	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 74,262 6,940 $ 81,202	2019 $ 51,783 - $ 51,783

The outstanding payables to related parties had no guarantees and would be paid in cash. The Group receives guarantees of the receivables from some related parties. For the nine months ended September 30, 2020 and 2019, no loss allowance was recognized for trade receivables from related parties.

The prices and payment terms for the Group’s transactions with related parties are the same as that for third parties. For lease contracts entered into with related parties, rental prices were determined by reference to the market, and had general payment terms.

The Group signed a contract with Mitsubishi Motors Corporation, refer to Note 33 for the details.

55 -

c. Remuneration of key management personnel

The remunerations of directors and key executives for the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, respectively, were as follows:

Short-term employee benefits Post-employment benefits	For the Three Months Ended September 30 2020 2019 $ 26,295 $ 28,564 428 595 $ 26,723 $ 29,159	For the Three Months Ended September 30 2020 2019 $ 26,295 $ 28,564 428 595 $ 26,723 $ 29,159	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2020 $ 26,295 428 $ 26,723		2020 $ 77,855 1,280 $ 79,135	2019 $ 78,527 1,781 $ 80,308

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

32. ASSETS PLEDGED AS COLLATERAL

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

	September 30,	December 31,	September 30,
	2020	2019	2019
Property, plant and equipment	$ 509,261	$ 510,304	$ 741,755
Pledged deposits (included in other current
assets)	180,486	179,939	179,939
Investment properties	52,323	52,323	52,323
	$ 742,070	$ 742,566	$ 974,017

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant commitments and contingencies of the Group as of September 30, 2020 were as follows:

a. Guarantee notes amounted to $4,262,762 thousand, which had been issued to financial institutions as collaterals for loans; unused letters of credit amounted to $29,093 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 2006.03.01-2025.04.08 2005.07.01-2025.09.07	Agreement Price Royalty was determined based on the FOB price of automobiles sold and manufactured parts repaired Royalty was determined based on the fixed amount of automobiles sold per unit and 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.
56 -

34. OTHER ITEMS

Due to the impact of the COVID-19 pandemic, the Group experienced a decline in its operating revenue for the nine months ended September 30, 2020. As the epidemic eases and policy restrictions are loosened, the Group expects that operations will gradually return to normal.

In response to the impact of the epidemic, the Group’s subsidiaries have successively applied for various subsidies such as salary and working capital from the government of Taiwan and mainland China. As of September 30, 2020, the government funding in the amount of $17,248 thousand had been received.

Based on the information available as of the balance sheet date, the Group considered the economic implications of the epidemic when making its critical accounting estimates, refer to Note 5.

35. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

September 30, 2020

		Foreign		Carrying
		Currency	Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	326,283	4.2690	$ 1,392,901
USD		18,415	29.1000	535,878
JPY		521,345	0.2756	143,683
Non-monetary items
Investments accounted for using the equity
method
RMB		1,198,555	4.2690	5,116,630
EUR		79,131	34.1500	2,702,309
Foreign currency liabilities
Monetary items
JPY		475,967	0.2756	131,177

57 -

December 31, 2019

		Foreign		Carrying
		Currency	Exchange Rate	Amount
Foreign currency assets
Monetary items
JPY	$	4,178,677	0.2760	$ 1,153,315
RMB		188,277	4.3050	810,532
USD		23,983	29.9800	718,997
Non-monetary items
Investments accounted for using the equity
method
RMB		1,234,368	4.3050	5,313,955
EUR		84,261	33.5900	2,830,313
Foreign currency liabilities
Monetary items
JPY		662,503	0.2760	182,851
September 30, 2019
		Foreign		Carrying
		Currency	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

For the three months ended September 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019, the amounts of net foreign exchange gain (loss) were $20,695 thousand, $(37,634) thousand, $(17,843) thousand and $(12,303) 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.

36. SEPARATELY DISCLOSED ITEMS

Except for those listed in Notes 7, 11 and 30 and Tables 1 to 11, there were no other separately disclosed items.

58 -

37. SEGMENT INFORMATION

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

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

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 2020 2019 $ 21,157,114 $ 21,844,885 1,977,389 2,734,759 34,401 51,181 (301,896) (231,682) $ 22,867,008 $ 24,399,143		Segment Income or Loss	Segment Income or Loss
				For the Nine Months Ended September 30
		2020 $ 21,157,114 1,977,389 34,401 (301,896) $ 22,867,008		2020 $ 2,824,920 6,094 (11,534) (629) 2,818,851 (227,627) 163,848 $ 2,755,072	2019 $ 1,100,820 7,500 (10,965) (629) 1,106,726 (211,400) 82,899 $ 978,225

Intersegment transactions are determined by reference to market prices.

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

59 -

TABLE 1

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period (Note 1)	Ending Balance (Note 1)	Actual Amount Borrowed (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	$ 600,000	$ 390,000	$ 390,000	1	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,231,930	$ 8,212,864
1	Dongguan Huayi	Dongguan Huashun	Other receivables	Yes	85,380 (RMB 20,000 thousand)	85,380 (RMB 20,000 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,231,930	8,212,864
2	Dongguan Huashun	Dongguan Huayi	Other receivables	Yes	85,380 (RMB 20,000 thousand)	85,380 (RMB 20,000 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,231,930	8,212,864
3	Tianjin Hwarui	Tianjin Hwahong Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables	Yes Yes Yes	42,690 (RMB 10,000 thousand) 85,380 (RMB 20,000 thousand) 85,380 (RMB 20,000 thousand)	42,690 (RMB 10,000 thousand) 85,380 (RMB 20,000 thousand) 85,380 (RMB 20,000 thousand)	- - -	- - -	Short-term financing Short-term financing Short-term financing	- - -	Working capital Working capital Working capital	- - -	- - -	- - -	1,231,930 1,231,930 1,231,930	8,212,864 8,212,864 8,212,864
4	Tianjin Hwahong	Tianjin Hwarui Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables	Yes Yes Yes	85,380 (RMB 20,000 thousand) 85,380 (RMB 20,000 thousand) 85,380 (RMB 20,000 thousand)	85,380 (RMB 20,000 thousand) 85,380 (RMB 20,000 thousand) 85,380 (RMB 20,000 thousand)	- - -	- - -	Short-term financing Short-term financing Short-term financing	- - -	Working capital Working capital Working capital	- - -	- - -	- - -	1,231,930 1,231,930 1,231,930	8,212,864 8,212,864 8,212,864

Note 1: Converted at the exchange rate of RMB1:NT$4.269 as of September 30, 2020.

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

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

Note 4: Eliminated during the preparation of the consolidated financial statements.

60 -

TABLE 2

CHINA MOTOR CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 (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 Amount Borrowed	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	Dongguan Huayi Tianjin Hwarui	Subsidiary Subsidiary	20% of the Corporation’s issued capital, $1,107,241 thousand 20% of the Corporation’s issued capital, $1,107,241 thousand	$ 426,900 (RMB 100,000 thousand) 426,900 (RMB 100,000 thousand)	$ 85,380 (RMB 20,000 thousand) 85,380 (RMB 20,000 thousand)	$ - -	$ - -	0.21 0.21	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	Yes Yes

Note: Converted at the exchange rate of RMB1:NT$4.269 as of September 30, 2020.

61 -

TABLE 3

CHINA MOTOR CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD SEPTEMBER 30, 2020

(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, 2020		Note
				Number of Shares (In Thousands)	Carrying Amount (Note 2)	Percentage of Ownership (%)	Fair Value
China Motor Corporation	Beneficiary certificates Franklin Templeton SinoAm Money Market Prudential Financial Money Market Fund Allianz Global Investors Taiwan Money Market Fund The RSIT Enhanced Money Market Fund Fubon Chi Hsiang Money Market Fund Cathay Taiwan Money Market Fund Fuh Hwa Yu Li Money Market Fund Hua Nan Phoenix Money Market Fund Sinopac Money Market Fund Paradigm Pion Money Market Templeton Global Climate Change Fund Franklin Biotechnology Discovery Fund UPAMC James Bond Money Market Fund AB American Growth Portfolio JPMorgan Funds - China Fund JPMorgan Asia Growth Fund BlackRock Global Fund - World Technology Fund CTBC Hua Win Money Market Fund	- - - - - - - - - - - - - - - - - -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	23,121 13,834 13,481 10,849 8,277 8,019 5,901 1,856 2,167 2,610 72 9 612 2 3 17 5 657	$ 240,882 220,516 170,165 130,720 130,719 100,440 80,068 30,393 30,368 30,367 25,090 10,356 10,301 9,847 9,834 9,767 9,653 7,292	- - - - - - - - - - - - - - - - - -	$ 240,882 220,516 170,165 130,720 130,719 100,440 80,068 30,393 30,368 30,367 25,090 10,356 10,301 9,847 9,834 9,767 9,653 7,292

(Continued)

62 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		September	30, 2020
				Number of Shares (In Thousands)	Carrying Amount (Note 2)	Percentage of Ownership (%)	Fair Value
Greentrans KSIHK Alliance Investment & Management	Shares Shye Shyang Mechanical Industrial Myson Century, Inc. Taiwan Aerospace NORM Pacific Automation Corp. Carnival Com2B (Cayman) Corp. Hua-Chuang Automobile Information Technical Center Corporate bonds Evergreen Marine Corporation Beneficiary certificates CTBC Hwa 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 Hua-Chuang Automobile Information Technical Center Preference shares Rock Financial Risk Service Co., Ltd.	Corporate director Corporate director - - - - Associate - - - - - - - - - Associate -	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at amortized cost - non-current Financial assets at fair value through profit or loss - current Financial assets at fair value through 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 fair value through other comprehensive income - non-current Financial assets at amortized cost - non-current	9,009 4,705 811 128 95 2,000 Note 3 - 451 - 6,327 3,248 1,275 789 65 696 Note 3 -	$ 593,115 30,345 11,402 1,719 1,050 - - 99,930 5,004 30,982 (RMB 7,258 thousand) 95,115 67,886 22,712 5,793 2,713 2,525 - 5,945	10.00 7.84 0.60 0.45 0.05 4.44 Note 3 - - 9.00 15.07 3.45 4.05 3.60 0.54 0.85 Note 3 -	$ 593,115 30,345 11,402 1,719 1,050 - - - 5,004 30,982 95,115 67,886 22,712 5,793 2,713 2,525 - -
							(Continued)

63 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		September	30, 2020		Note
				Number of Shares (In Thousands)	Carrying Amount (Note 2)	Percentage of Ownership (%)	Fair Value
Sino Diamond Motors Hwa Lin Brilliant Insight International Ling Wei	Shares Hua-Chuang Automobile Information Technical Center Principal guaranteed notes President Securities 100% Principal Guaranteed Note Beneficiary certificates Taishin Ta-Chong Money Market Beneficiary certificates Prudential Financial Money Market Fund CTBC Hua Win Money Market Fund	Associate - - - -	Financial assets at fair value through other comprehensive income - 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 Financial assets at fair value through profit or loss - current	Note 3 - 354 1,068 541	$ - 93,977 5,067 17,017 6,006	Note 3 - - - -	$ - - 5,067 17,017 6,006

Note 1: Refer to Tables 7 and 8 for the information of investments in subsidiaries and associates.

Note 2: Converted at the exchange rate of RMB1=NT$4.269 as of September 30, 2020.

Note 3: The Corporation, Alliance Investment & Management and Sino Diamond Motors held 20 shares, 9 shares and 9 shares of Hua-Chuang Automobile Information Technical Center, respectively. The combined percentage of ownership is less than 0.01% and is not disclosed.

(Concluded)

64 -

TABLE 4

CHINA MOTOR CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

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

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending	Balance
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain on Disposal	Number of Shares	Amount
Hwa-Lin	Shares Zhejiang Kangda Motor Industry And Trading	Non-current assets held for sale	Zhejiang Kangqiao Auto Industry And Trade Group	-	9,800	$ 148,023	-	$ -	9,800	$ 390,514 (RMB 91,105 thousand)	$ 155,561 (Note)	$ 234,953	$ -	$ -

Note: Comprises investments accounted for using the equity method classified as held for sale of $148,023 thousand and equity directly associated with non-current assets classified as held for sale of $7,538 thousand.

65 -

TABLE 5

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, 2020

(In Thousands of New Taiwan Dollars)

Seller/Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total (Note 2)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total (Note 2)
China Motor Corporation (“CMC”) Sino Diamond Motors Kian Shen	Fortune Motors Shung Ye Motor Mitsubishi Motors Corp. Uni Auto Parts Manufacture Kian Shen (Note 1) ROC-Spicer Shye Shyang Mechanical Industrial COC (Note 1) Yue Ki Industrial Mitsubishi Corp. Shung Ye Motor Fortune Motors Mitsubishi Motors Corp. Mitsubishi Corp. China Motor Corporation (Note 1)	Investee accounted for using the equity method Investee accounted for using the equity method Director of CMC Investee accounted for using the equity method Subsidiary Investee accounted for using the equity method Corporate director Subsidiary Investee accounted for using the equity method Director of CMC Investee accounted for using the equity method Investee accounted for using the equity method Director of CMC Director of CMC Parent company	Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Purchase Sale	$ (13,966,939) (2,878,940) 532,443 441,834 392,408 324,609 204,271 204,116 121,907 105,119 (1,032,443) (523,055) 387,780 236,111 (392,408)	(70) (14) 5 4 3 3 2 2 1 1 (62) (31) 38 23 (54)	Payment collected 15-90 working days after the goods have been delivered Payment collected 15-75 working days after the goods have been delivered Payment made 7 working days after the goods are shipped Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment made 7 working days after the goods are shipped Payment collected 7-45 days after goods have been delivered Payment collected 15-45 days after goods have been delivered Payment made 7 working days after the goods are shipped Payment made 10 days before the goods are shipped Payment collected within 45 days after the month of delivery	$ - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - -	$ 1,180,517 264,426 (105,904) (114,013) (111,960) (88,452) (54,708) (57,086) (32,279) (1,162) 47,334 2,557 (44) - 111,960	53 12 (4) (5) (5) (4) (2) (2) (1) - 71 4 - - 70

(Continued)

66 -

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)
COC	China Motor Corporation (Note 1) Yulon	Parent company Investee accounted for using the equity method	Sale Sale	$ (204,116) (198,281)	(22) (21)	Payment collected within 45 days after the month of delivery Payment collected within 45 days after the month of delivery	$ - -	- -	$ 57,086 48,653	13 11

Note 1: Eliminated during the preparation of the consolidated financial statements.

Note 2: The proportion of the individual company’s total purchases (sales) or total receivables (payables).

(Concluded)

67 -

TABLE 6

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, 2020

(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 Kian Shen	Fortune Motors Shung Ye Motor China Motor Corporation	Investee accounted for using the equity method Investee accounted for using the equity method Parent company	$ 1,180,517 264,426 111,960	17.90 14.73 4.32	$ - - -	- - -	$ 1,180,517 262,216 51,825	$ - - -

68 -

TABLE 7

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 (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, 2020	As of September 30, 2020	As of September 30, 2020	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				September 30, 2020	December 31, 2019	Number of Shares (In Thousands)	%	Carrying Amount
China Motor Corporation Kian Shen Kian Shen Investment Alliance Investment & Management Sino Diamond Motors	Yulon 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 5) China Engine (Note 1) Uni-Calsonic Yue Ki Industrial Co., Ltd. Tai-Ya Investment Hwa Chung Motors (Note 1) Kian Shen Investment (Note 1) KSIHK (Note 1) Hua-Chuang Automobile Information Technical Center Greentrans Investment (Note 1) Hua-Yu (Note 1) Hua-Chuang Automobile Information Technical Center China Engine (Note 1) Brilliant Insight International (Note 1) Shung Ye Motor (Note 4) Fortune Motors	Miaoli, Taiwan Taoyuan, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Hong Kong Taoyuan, Taiwan Samoa Taoyuan, Taiwan British Virgin Islands Taipei, Taiwan Miaoli, Taiwan Taipei, Taiwan Taoyuan, Taiwan Miaoli, Taiwan Hsinchu, Taiwan Hong Kong Taoyuan, Taiwan British Virgin Islands Hong Kong Taipei, Taiwan Samoa Samoa Taipei, Taiwan Taoyuan, Taiwan Taoyuan, Taiwan Taipei, Taiwan Taipei, Taiwan	Manufacture and sale of vehicles The production of frame of heavy duty car and mold Sales and provision of after-sales service of vehicle Sales and provision of 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 provision of after-sales service of vehicle Manufacture of automobile engine and parts Manufacture and sale of automobile parts Manufacture and sales of car components Investment Manufacture and sale of vehicles Investment Investment Product design Investment Overseas investment on production and service industries Product design Manufacture of automobile engine and parts Consulting and service Sales and provision of after-sales service of vehicle Sales and provision of after-sales service of vehicle	$ 3,835,585 344,800 2,132,826 2,192,724 955,941 1,200,030 2,011,363 675,896 1,402 412,125 1,202 1,028,013 109,813 391,142 625,978 105,806 109,396 79,505 328,900 328,888 US$ 25,907 thousand 473,760 344,369 1,489,334 473,760 11,000 22,000 180 24	$ 3,835,585 344,800 2,132,826 2,192,724 955,941 1,200,030 2,011,363 675,896 1,402 412,125 1,202 1,028,013 109,813 391,142 625,978 105,806 109,396 79,505 328,900 328,888 US$ 25,907 thousand 473,760 344,369 1,489,334 473,760 11,000 22,000 180 24	262,228 32,201 132,117 151,067 61,511 183,000 46,566 145 40 33,565 40 - 13,032 29,668 87,999 6,084 2,936 2,242 8,790 10,296 25,907 - 11,200 36,943 - 1 2,200 12 1	16.80 43.87 41.95 100.00 20.57 100.00 32.45 29.00 100.00 49.76 40.00 Note 6 15.00 39.98 52.10 31.20 15.08 29.00 100.00 100.00 100.00 Note 6 100.00 100.00 Note 6 - 100.00 0.02 -	$ 7,267,461 2,056,464 4,541,147 1,313,788 1,991,150 1,263,896 2,702,309 514,817 640,039 782,727 425,288 - 348,274 399,865 444,050 135,274 101,350 67,231 78,562 3,993,120 RMB 910,763 thousand - 203,225 820,708 - 5 10,813 219 16	$ 1,508,696 200,922 954,245 133,937 715,754 (7,877) 1,568,294 71,985 (223,995) 78,316 (373,259) - (190,748) 13,346 28,415 12,708 (29,771) (7,663) 6,883 252,343 RMB 53,821 thousand - (17,332) 131,386 - 28,415 (8,559) 13,346 954,245	$ 219,854 88,213 400,210 133,921 147,848 (7,877) 508,911 20,857 (223,995) 39,010 (149,304) - (28,589) 5,336 15,274 3,965 (4,507) (2,222) 6,883 - - - - - - - - - -	Investee accounted for using the equity method Subsidiary Investee accounted for using the equity method Subsidiary Investee accounted for using the equity method Subsidiary Investee accounted for using the equity method Investee accounted for using the equity method Subsidiary Subsidiary Subsidiary Note 6 Investee accounted for using the equity method Investee accounted for using the equity method Subsidiary Investee accounted for using the equity method Investee accounted for using the equity method Investee accounted for using the equity method Subsidiary Subsidiary Subsidiary Note 6 Subsidiary Subsidiary Note 6 Subsidiary Subsidiary Investee accounted for using the equity method Investee accounted for using the equity method

(Continued)

69 -

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of September 30, 2020	As of September 30, 2020	As of September 30, 2020	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				September 30, 2020	December 31, 2019	Number of Shares (In Thousands)	%	Carrying Amount
Hua-Yu China Engine CMI Hwa Chung Motors COC	Hwa-Lin (Note 1) Advance Power Investment (Note 1) Advance Power Machinery (Notes 1 and 8) Hwa Wei (Note 1) Ling Wei (Note 1) Greentrans (Note 1) Y. M. Hi-Tech (Note 1) Shye Shinn (Notes 1 and 7)	British Virgin Islands Mauritius Miaoli, Taiwan British Virgin Island Taipei, Taiwan Taipei, Taiwan Taoyuan, Taiwan British Virgin Islands	Overseas investment on production and service industries Reinvestment and sales Manufacture of vehicle and parts Overseas investment on production and service industries Sales of second-hand vehicle Sales of motorcycle and parts Steel cutting Investment	US$ 37,229 thousand 59,456 - 1,428,503 31,000 10,000 46,250 US$ 968 thousand	US$ 37,229 thousand 59,456 5,000 1,428,503 31,000 10,000 46,250 US$ 968 thousand	33,393 3,750 - 60 3,608 1,000 4,250 968	100.00 100.00 - 60.00 100.00 100.00 85.00 100.00	$ 734,102 82,025 - 637,933 39,212 10,972 70,162 28,169	$ 133,921 (8,688) 82 (373,259) 6,263 596 9,670 261	$ - - - - - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Note 1: Eliminated during the preparation of the consolidated financial statements.

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 $1,072 thousand had been eliminated.
Note 6: Hua-Chuang Automobile Information Technical Center reduced its capital for offsetting accumulated deficits and issued ordinary shares for cash in May and August 2020, respectively. The Group did not subscribe for additional new shares at a percentage of its existing ownership, which resulted in the Group’s combined shareholding to be less than 0.01%. In addition, the Corporation has resigned from its position as member of the board of directors of Hua-Chuang Automobile Information Technical Center and consequently ceased to have significant influence over Hua-Chuang Automobile Information Technical Center. Therefore, Hua-Chuang Automobile Information Technical Center is reclassified as financial asset at fair value through other comprehensive income, please refer to Table 3.
Note 7: In May 2020, the board of directors of Shye Shinn resolved to dissolve the company. As of September 30, 2020, Shye Shinn has not completed its liquidation procedures.
Note 8: Advance Power Machinery had been disposed in July 2020.

(Concluded)

70 -

TABLE 8

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 (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, 2020 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of September 30, 2020 (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, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of September 30, 2020 (Note 1)
					Outward	Inward
South East (Fujian) Motor (Note 4) China Engine (Fujian) Fujian Benz Automotive Guangzhou NTN-YULON Drivetrain Fuzhou Fushiang Motor Industrial Xiangyang NTN-YULON Drivetrain 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	$ 4,015,800 (US$ 138,000 thousand) 436,500 (US$ 15,000 thousand) 9,801,050 (EUR 287,000 thousand) 363,750 (US$ 12,500 thousand) 517,398 (US$ 17,780 thousand) 989,400 (US$ 34,000 thousand) 409,824 (RMB 96,000 thousand) 174,600 (US$ 6,000 thousand) 325,920 (US$ 11,200 thousand) 874,317 (RMB 204,806 thousand) 366,822 (RMB 85,927 thousand)	Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Direct investment in mainland China Indirect investment in mainland China through a company registered in a third region	$ 1,003,950 (US$ 34,500 thousand) 218,250 (US$ 7,500 thousand) 1,590,229 (EUR 46,566 thousand) 145,500 (US$ 5,000 thousand) 82,499 (US$ 2,835 thousand) - 44,436 (US$ 1,527 thousand) 15,714 (US$ 540 thousand) 325,920 (US$ 11,200 thousand) 314,426 (US$ 10,805 thousand) 75,951 (US$ 2,610 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 1,003,950 (US$ 34,500 thousand) 218,250 (US$ 7,500 thousand) 1,590,229 (EUR 46,566 thousand) 145,500 (US$ 5,000 thousand) 82,499 (US$ 2,835 thousand) - 44,436 (US$ 1,527 thousand) 15,714 (US$ 540 thousand) 325,920 (US$ 11,200 thousand) 314,426 (US$ 10,805 thousand) 75,951 (US$ 2,610 thousand)	$ (1,379,533) (34,753) 3,137,740 (EUR 93,608 thousand) 414,954 (RMB 97,430 thousand) (39,878) (RMB 9,363 thousand) 242,503 (RMB 56,939 thousand) (8,637) (RMB 2,027 thousand) - (17,297) 143,004 (10,104) (US$ 339 thousand)	25.00 38.03 16.23 17.55 15.35 17.55 21.94 3.95 100.00 29.00 20.25	$ (344,883) (17,377) 509,102 (EUR 15,188 thousand) 165,982 (RMB 38,972 thousand) (13,957) (RMB 3,277 thousand) 97,001 (RMB 22,776 thousand) (4,318) (RMB 1,014 thousand) - (17,297) 41,471 (2,046) (US$ 69 thousand)	$ 968,811 166,558 2,072,358 (EUR 79,132 thousand) 1,975,363 (RMB 462,722 thousand) 488,865 (RMB 114,515 thousand) 944,345 (RMB 221,210 thousand) 209,073 (RMB 48,975 thousand) 30,982 (RMB 7,258 thousand) 203,211 375,900 68,329 (US$ 2,348 thousand)	$ 757,269 (US$ 26,023 thousand) - 1,000,766 (EUR 29,305 thousand) 684,624 (RMB 160,371 thousand) 207,315 (RMB 48,563 thousand) - - - - 44,107 (RMB 10,332 thousand) -

(Continued)

71 -

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, 2020 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of September 30, 2020 (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, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of September 30, 2020 (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) Dongguan Huashun (Note 5) Tianjin Hwahong (Note 5) Guangzhou Huayou Motor Sales (Notes 5 and 6)	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		$ 170,760 (RMB 40,000 thousand) 98,940 (US$ 3,400 thousand) 372,771 (US$ 12,810 thousand) - 233,382 (US$ 8,020 thousand) 129,495 (US$ 4,450 thousand) 106,725 (RMB 25,000 thousand) 128,070 (RMB 30,000 thousand) -	Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region		$ 35,153 (US$ 1,208 thousand) 98,940 (US$ 3,400 thousand) 325,891 (US$ 11,199 thousand) 387,903 (US$ 13,330 thousand) 225,845 (US$ 7,761 thousand) 122,715 (US$ 4,217 thousand) - - -	$ - - - - - - - - -	$ - - - - - - - - -	$ 35,153 (US$ 1,208 thousand) 98,940 (US$ 3,400 thousand) 325,891 (US$ 11,199 thousand) 387,903 (US$ 13,330 thousand) 225,845 (US$ 7,761 thousand) 122,715 (US$ 4,217 thousand) - - -	$ - (2,534) - 25,022 (3,497) (19,218) (20,350) (RMB 4,778 thousand) (341) (RMB 80 thousand) -	- 100.00 100.00 - 100.00 100.00 100.00 100.00 -	$ - (2,534) - 25,022 (3,497) (19,218) (20,350) (RMB 4,778 thousand) (341) (RMB 80 thousand) -	$ - 86,568 36,485 - 193,992 60,537 56,795 (RMB 13,304 thousand) 125,748 (RMB 29,456 thousand) -	$ - - - - - - - - -

Accumulated Outward Remittance for Investment in Mainland China as of September 30, 2020 (Note 1)		Investment Amount Authorized by Investment Commission, MOEA (Note 1)			Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$5,774,140 (US$143,777 thousand and EUR46,566 thousand)		$6,809,373 (US$218,195 thousand and EUR13,467 thousand)			$24,638,592

Note 1: Converted at the exchange rates on September 30, 2020, US$1=NT$29.1, RMB1=NT$4.269, EUR1=NT$34.15.

Note 2: Converted at the average exchange rates for the first nine months of 2020, US$1= NT$29.817, RMB1=NT$4.259, EUR1=NT$33.52.

Note 3: Except for Guangzhou NTN-YULON Drivetrain Co., Ltd., the investments accounted for using the equity method and the share of profit or loss and other comprehensive income were based on the associates’ financial statements that have not been reviewed.

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

Note 5: Eliminated during the preparation of the consolidated financial statements.

(Continued)

72 -
Note 6: In November 2018, Sichuan Huafeng Hanwei, Guangzhou Huayou Motor Maintenance and Guangzhou Huayou Motor Sales resolved to dissolve their companies. As of September 30, 2020, except for the annulment of Guangzhou Huayou Motor Sales and Sichuan Huafeng Hanwei which had been completed in June 2020 and February 2020, respectively, Guangzhou Huayou Motor Maintenance has not completed its liquidation procedures.
Note 7: In August 2018, the Group entered into a contract for the transfer of its shares in Zhejiang Kanda to a non-related party and collected the proceeds from the contract in installments (discounted price after tax was $390,514 (RMB91,105 thousand)). The disposal was completed in May 2020, the date on which the Group recognized a gain on disposal of investment amounting to $234,953 thousand, and recognized an expected credit loss of $93,833 thousand after taking into consideration the debtor’s current financial position and the value of assets pledged as collateral.

(Concluded)

73 -

TABLE 9

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(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	Sino Diamond Motors Kian Shen COC	Subsidiary Subsidiary Subsidiary	Other receivables Cost of goods sold Cost of goods sold	$ 390,000 392,408 204,116	The prices and payment terms were based on agreements. Transaction price was determined based on the market price, and the transaction terms are similar to that for transactions with non-related parties Transaction price was determined based on the market price, and the transaction terms are similar to that for transactions with non-related parties	0.74 1.72 0.89

Note 1: Eliminated during the preparation of the consolidated financial statements.

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

74 -

TABLE 10

CHINA MOTOR CORPORATION

INFORMATION OF MAJOR SHAREHOLDERS SEPTEMBER 30, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Ownership Percentage (%)
Tai Yuen Textile., Ltd. Mitsubishi Motors Corp. Yulon Motor Co., Ltd. Diamond Hosiery & Thread Co., Ltd.	139,435,815 77,507,309 44,592,177 37,438,652	25.19 14.00 8.05 6.76

Note: The table discloses shareholding information of shareholders whose shareholding percentage is 5% or above. The Taiwan Depository & Clearing Corporation calculates the total number of ordinary shares and special shares (including treasury shares) that have completed the dematerialized registration and delivery on the last business day of the quarter. The share capital reported in the consolidated financial statements and the actual number of shares that have completed the dematerialized registration and delivery may be different due to difference in the basis of calculation.

75 -

TABLE 11

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FRAMEWORK OF INTERCOMPANY INVESTMENT RELATIONSHIPS AND PERCENTAGE OF SHARES HELD SEPTEMBER 30, 2020

==> picture [998 x 506] intentionally omitted <==

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

Parent Corporation
43.87% 52.10% 100.00% 100.00% 100.00% 100.00% 49.76%
Alliance CMI
Kian Shen China Engine Sino Diamond Hwa Chung COC
Investment & (Samoa)
Motors Motors
Management
(Note)
60.00% 100.00% 100.00% 85.00%
100.00% 100.00%
100.00% 100.00% 100.00%
Kian Shen Investment Advance Power Investment Hua-Yu (Samoa) Brilliant Insight International Investment Greentrans 40.00% Greentrans Ling Wei Y.M.
(British Virgin Hi-Tech
(Mauritius) Consultancy (Samoa)
Islands) Service 100.00%
Co., Ltd.
100.00% 100.00% 100.00% 100.00%
KSIHK Fujian Rui Hwa-Lin Hwa Wei Holdings Shye Shinn
(Hong Kong) Hua (British Virgin Jiangsu (British Virgin (British Virgin
Islands) Greentrans Islands) Islands)
100.00% 99.75% 100.00%
0.25% Guangzhou
Dongguan Huayi Tianjin Hwarui
Huayou Motor
Maintenance
100.00% 100.00%
Tianjin
Dongguan
Huashun Hwahong
----- End of picture text -----

Note: Since Sino Diamond Motors only holds 1 thousand shares of China Engine, the percentage of ownership is not disclosed.

76 -

AI assistant

CMC — Interim / Quarterly Report 2020

51979_rns_2020-12-30_6ab67ecc-88e1-4964-9e1f-60660b4d31b5.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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1) Employee benefits

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

September 30, 2020

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

September 30, 2019

11. FINANCIAL INSTRUMENTS FOR HEDGING

September 30, 2020

12. NOTES AND ACCOUNTS RECEIVABLE, NET

13. INVENTORIES

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

Kian Shen and Kian Shen’s subsidiaries

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Yulon and Yulon’s subsidiaries

17. PROPERTY, PLANT AND EQUIPMENT

18. LEASE ARRANGEMENTS

c. Material lease-in activities and terms

d. Other lease information

19. INVESTMENT PROPERTIES

20. BORROWINGS

21. OTHER PAYABLES

22. RETIREMENT BENEFIT PLANS

23. EQUITY

a. Share capital

2) Capital reduction

b. Capital surplus

d. Special reserve

e. Other equity items

2) Unrealized valuation gain on financial assets at FVTOCI

f. Non-controlling interests

24. REVENUE

25. NET PROFIT

a. Depreciation and amortization

d. Employees’ compensation and remuneration of directors

Amount

26. INCOME TAXES

b. Income tax recognized in other comprehensive income

27. EARNINGS PER SHARE

Net Profit for the Period

28. DISPOSAL OF SUBSIDIARY

29. CAPITAL MANAGEMENT

30. FINANCIAL INSTRUMENTS

Level 1 Level 2 Level 3 Total

Derivative Financial Instruments at FVTPL

d. Financial risk management objectives and policies

1) Market risk

a) Foreign currency risk

Sensitivity analysis

b) Interest rate risk

Sensitivity analysis

CMC Interim / Quarterly Report 2020