CMC - Interim / Quarterly Report 2021

China Motor Corporation and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 2021 and 2020 and Independent Auditors’ Review Report

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders China Motor Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of China Motor Corporation and its subsidiaries (collectively, the “Group”) as of March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, the consolidated statements of changes in equity and cash flows for the three months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”). Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

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

Basis for Qualified Conclusion

The financial statements of some non-significant subsidiaries included in the consolidated financial statements were not reviewed. As of March 31, 2021 and 2020, combined total assets of these non-significant subsidiaries were NT$8,221,605 thousand and NT$9,115,891 thousand, respectively, representing 15% and 18%, respectively, of the consolidated total assets, and combined total liabilities of these non-significant subsidiaries were NT$2,497,075 thousand and NT$3,002,479 thousand, respectively, representing 31% and 42%, respectively, of the consolidated total liabilities; for the three months ended March 31, 2021 and 2020, the amounts of combined comprehensive loss of these non-significant subsidiaries were NT$57,429 thousand and NT$133,770 thousand, respectively, representing 4% and 45%, respectively, of the consolidated total comprehensive income. As disclosed in Note 16 to the consolidated financial statements, as of March 31, 2021 and 2020, some investments accounted for using the equity method were NT$14,713,648 thousand and NT$14,220,189 thousand, respectively, and for the three months ended March 31, 2021 and 2020, the comprehensive income (loss) of these equity-method investments were NT$493,768 thousand and NT$(158,899) thousand, respectively, which were calculated on the basis of financial statements that have not been reviewed.

Qualified Conclusion

Based on our reviews, except for the adjustments, if any, as might have been determined to be necessary had the financial statements of the non-significant subsidiaries, the investments accounted for using the equity method and the relevant information as described in the preceding paragraph been reviewed, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2021 and 2020 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 Ya-Ling Wong and Shiow-Ming Shue.

Deloitte & Touche Taipei, Taiwan Republic of China

May 13, 2021

Notice to Readers

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

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss (Note 7) Financial assets at amortized cost (Notes 9 and 10) Financial assets for hedging (Note 11) Notes and accounts receivable, net (Note 12) Trade receivables from related parties (Note 30) Other receivables Inventories (Note 13) Prepayments (Note 30) Non-current assets held for sale (Note 15) Other current assets (Note 31) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Financial assets at amortized cost (Notes 9 and 10) Investments accounted for using the equity method (Note 16) Property, plant and equipment (Notes 17, 30 and 31) Right-of-use assets (Note 18) Investment properties (Notes 19 and 31) 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 31) Short-term bills payable Notes and accounts payable Trade payables to related parties (Note 30) Other payables (Note 21) Current tax liabilities (Note 4) Lease liabilities (Note 18) Current portion of long-term borrowings (Note 20) Other current liabilities (Notes 7, 11 and 30) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 20) Deferred tax liabilities Lease liabilities (Note 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 (loss) on 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 (Note 14) Total equity TOTAL		March 31, 2021 (Reviewed) Amount % $ 9,459,302 17 989,805 2 215,185 - 229,353 - 863,433 2 1,460,093 3 68,897 - 3,814,144 7 2,225,164 4 - - 928,345 2 20,253,721 37 692,267 1 174,283 - 537,603 1 24,387,152 44 6,479,524 12 409,677 1 1,352,257 2 387,978 1 296,005 1 263,110 - 34,979,856 63 $ 55,233,577 100 $ 185,000 - 79,943 - 2,622,029 5 663,993 1 2,068,433 4 415,369 1 88,185 - 43,750 - 286,666 1 6,453,368 12 43,750 - 594,349 1 331,187 1 634,891 1 53,972 - 1,658,149 3 8,111,517 15 5,536,203 10 6,412,314 12 9,257,157 17 1,028,359 2 21,835,882 39 32,121,398 58 (924,236) (2) 361,556 1 (24,290) - - - (586,970) (1) 43,482,945 79 3,639,115 6 47,122,060 85 $ 55,233,577 100		December 31, 2020 (Audited) Amount % $ 10,403,769 19 1,059,429 2 185,970 - 120,266 - 914,273 2 1,267,478 2 46,490 - 3,809,653 7 1,728,436 3 - - 843,100 2 20,378,864 37 672,914 1 178,873 - 540,716 1 23,632,945 43 6,527,229 12 356,732 1 1,355,015 2 373,697 1 307,145 1 273,563 1 34,218,829 63 $ 54,597,693 100 $ 215,000 - 149,963 - 2,586,431 5 907,237 2 2,641,821 5 284,692 - 87,196 - 37,500 - 362,403 1 7,272,243 13 56,250 - 578,310 1 277,908 1 651,430 1 54,908 - 1,618,806 3 8,891,049 16 5,536,203 10 6,411,778 12 9,257,157 17 1,028,359 2 20,544,970 37 30,830,486 56 (926,661) (2) 264,666 1 6,918 - - - (655,077) (1) 42,123,390 77 3,583,254 7 45,706,644 84 $ 54,597,693 100		March 31, 2020 (Reviewed)
						Amount % $ 5,864,674 12 326,421 1 158,948 - 790,262 2 764,716 2 1,645,843 3 68,528 - 3,883,462 8 1,208,771 2 148,023 - 908,181 2 15,767,829 32 680,987 1 189,524 - 611,846 1 23,142,152 47 6,616,317 13 417,521 1 1,363,290 3 464,056 1 215,834 1 103,302 - 33,804,829 68 $ 49,572,658 100 $ 575,000 1 289,937 - 1,780,895 4 512,805 1 1,651,452 3 350,888 1 87,694 - 12,500 - 357,573 1 5,618,744 11 37,500 - 477,161 1 337,786 1 617,339 1 19,631 - 1,489,417 3 7,108,161 14 5,536,203 11 6,414,142 13 9,257,157 19 1,028,469 2 17,908,252 36 28,193,878 57 (1,049,236) (2) (18,043) - (5,095) - (7,538) - (1,079,912) (2) 39,064,311 79 3,400,186 7 42,464,497 86 $ 49,572,658 100

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

(With Deloitte & Touche review report dated May 13, 2021)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

OPERATING REVENUE (Notes 24 and 30) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 13, 22, 25 and 30) Cost of goods sold Other operating costs Total operating costs GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 22, 25 and 30) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Share of profit of associates and joint ventures (Note 16) Interest income Other income Net foreign exchange gain (loss) Gain (loss) on financial instruments at fair value through profit or loss Expected credit gain (Note 10) Interest expense Other expense Total non-operating income and expenses		For the Three Months	For the Three Months	Ended March 31
		2021 Amount % $ 8,325,656 96 319,030 4 8,644,686 100 6,972,506 81 35,170 - 7,007,676 81 1,637,010 19 (12,366) - 1,624,644 19 296,503 4 240,975 3 295,434 3 832,912 10 791,732 9 680,337 8 25,093 1 9,211 - 17,073 - 11,323 - 13,745 - (1,977) - (2,276) - 752,529 9		2020
				Amount % $ 7,352,774 96 309,445 4 7,662,219 100 6,270,669 82 31,031 - 6,301,700 82 1,360,519 18 (35,153) (1) 1,325,366 17 265,666 3 216,558 3 328,795 4 811,019 10 514,347 7 142,049 2 23,440 - 18,294 - (8,296) - (4,017) - 30,819 - (5,118) - (10,645) - 186,526 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 loss on investments in equity instruments at 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 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 FOR THE PERIOD NET PROFIT ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests		For the Three Months	For the Three Months	Ended March 31
		2021 Amount % $ 1,544,261 18 188,421 2 1,355,840 16 (4,590) - (27,117) (1) 93,826 1 3,589 - (5,551) - (8,126) - 52,031 - $ 1,407,871 16 $ 1,283,877 15 71,963 1 $ 1,355,840 16		2020
				Amount % $ 700,873 9 87,049 1 613,824 8 (17,520) - 14,835 - (231,412) (3) (1,031) - (589) - (82,281) (1) (317,998) (4) $ 295,826 4 $ 608,965 8 4,859 - $ 613,824 8

(Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (Note 27) Basic Diluted		For the Three Months	For the Three Months	Ended March 31
		2021 Amount % $ 1,352,010 15 55,861 1 $ 1,407,871 16 $ 2.35 $ 2.35		2020
				Amount % $ 318,518 4 (22,692) - $ 295,826 4 $ 1.12 $ 1.12
				$

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

(With Deloitte & Touche review report dated May 13, 2021)

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

	Equity Attributable toOwners of theCorporation	Equity Attributable toOwners of theCorporation
Ordinary Shares Number of Shares (In Thousands) Amount Capital Surplus 553,620 $ 5,536,203 $ 6,414,118 - - - - - 24 - - - - - - - - - - - - - - - 553,620 $ 5,536,203 $ 6,414,142 553,620 $ 5,536,203 $ 6,411,778 - - 536 - - - - - - - - - - - - - - - - - - 553,620 $ 5,536,203 $ 6,412,314	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 9,257,157 $ 1,029,654 $ 17,306,526 - (1,185 ) 1,185 - - - - - 608,965 - - 527 - - 609,492 - - (8,951 ) - - - $ 9,257,157 $ 1,028,469 $ 17,908,252 $ 9,257,157 $ 1,028,359 $ 20,544,970 - - - - - 1,283,877 - - 263 - - 1,284,140 - - 12,566 - - (5,794) - - - $ 9,257,157 $ 1,028,359 $ 21,835,882	Other Equity Exchange Differences on Translating the Unrealized Gain (Loss) on Financial Assets Equity Directly Financial at Fair Value Associated With Statements of Through Other Gain (Loss) on Non-current Foreign Operations Comprehensive Income Hedging Instruments Assets Held for Sale $ (990,653 ) $ 216,562 $ (19,968 ) $ (7,538 ) - - - - - - - - - - - - (58,583) (243,556) 11,165 - (58,583) (243,556) 11,165 - - 8,951 - - - - 3,708 - $ (1,049,236) $ (18,043) $ (5,095) $ (7,538) $ (926,661 ) $ 264,666 $ 6,918 $ - - - - - - - - - 2,425 103,662 (38,217) - 2,425 103,662 (38,217) - - (12,566 ) - - - 5,794 - - - - 7,009 - $ (924,236) $ 361,556 $ (24,290) $ -
Number of Shares (In Thousands) 553,620 - - - - - - - 553,620 553,620 - - - - - - - 553,620

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

(With Deloitte & Touche review report dated May 13, 2021)

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 reversed Net loss (gain) on fair value change of financial instruments at fair value through profit or loss Interest expense Interest income Share of profit of associates and joint ventures Net gain on disposal of property, plant and equipment Loss on disposal of investments Gain on reversal of impairment loss of non-financial assets Unrealized gain on transactions with associates Unrealized loss (gain) on foreign currency exchange Changes in operating assets and liabilities Financial assets 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 used in operations Income tax paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from refund of shares of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Proceeds from repayment of principal of financial assets at amortized cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 1,544,261 210,504 21,814 (12,050) (11,323) 1,977 (25,093) (680,337) (151) - (9,738) 12,366 (23,444) 65,482 49,725 (192,657) (19,918) 12,915 (521,358) (88,252) 37,204 (242,128) (526,025) (83,955) (16,539) (496,720) (2,778) (499,498) - (446,264) 421,683 (188,009) 1,301	2020 $ 700,873 183,790 31,104 (34,275) 4,017 5,118 (23,440) (142,049) (116) 10,332 (44,783) 35,153 7,528 14,960 428,271 (188,726) (33,649) 783,008 351,033 (63,282) (921,109) (470,727) (773,262) 18,425 (118,061) (239,867) (32,718) (272,585) 404 (482,962) 531,851 (355,923) 1,307 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

Acquisition of intangible assets Decrease in other non-current assets Interest received Dividends received Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Increase (decrease) in short-term bills payable Repayments of long-term borrowings Repayment of the principal portion of lease liabilities Decrease in other non-current liabilities Interest paid Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET 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 Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ (25,341) 12,137 23,407 - (201,086) (30,000) (70,020) (6,250) (18,239) (909) (1,947) (127,365) (3,006) (830,955) 10,519,610 $ 9,688,655	2020 $ - 4,773 20,422 294,697 14,569 (40,000) 105,998 - (22,813) (2,534) (5,100) 35,551 (5,769) (228,234) 6,880,490 $ 6,652,256

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets at March 31, 2021 and 2020:

Cash and cash equivalents in the consolidated balance sheets Cash and cash equivalents included in financial assets for hedging Cash and cash equivalents in the consolidated statements of cash flows		March	31
		2021 $ 9,459,302 229,353 $ 9,688,655	2020 $ 5,864,674 787,582 $ 6,652,256

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

(With Deloitte & Touche review report dated May 13, 2021)

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (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, and is listed on the Taiwan Stock Exchange.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements of the Corporation and its subsidiaries (collectively referred to as the “Group”) were approved by the Corporation’s board of directors on May 11, 2021.

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.
b. New IFRSs issued by 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 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 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction” 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 IASB (Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 4) January 1, 2023 (Note 5) January 1, 2023 (Note 6) January 1, 2022 (Note 7) January 1, 2022 (Note 8)

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

Amendments to IFRS 3 “Reference to the Conceptual Framework”

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 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

Amendments to IAS 12 “Deferred Tax related to Assets and
Liabilities arising from a Single Transaction”

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 IASB (Note 1)

January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 4)
January 1, 2023 (Note 5)
January 1, 2023 (Note 6)
January 1, 2022 (Note 7)
January 1, 2022 (Note 8)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
10 -
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 annual reporting period beginning on or after January 1, 2022.
Note 4: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 5: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 6: Except that deferred taxes will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.
Note 7: 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 8: 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 the 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;
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2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Basis of consolidation
1) Principles for preparing the consolidated financial statements

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

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

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

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

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

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 in production
and service industries
China Engine Corporation (“China
Engine”)
Manufacture of automobile engine
and parts
Sino Diamond Motors Corporation (“Sino
Diamond Motors”)
Sales and providing after sales
service of vehicle
Alliance Investment & Management Co.,
Ltd. (“Alliance Investment &
Management”)
Investment
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 in production
and service industries

Combined Shareholding Ratio (%)
March 31,
2021
December 31,
2020
March 31,
2020
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
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)
(Continued)

12 -

Investor
Investee
Main Business
China Engine
Advance Power Machinery Co., Ltd.
(“Advance Power Machinery”)
Manufacture of automobile engine
and parts
Advance Power Investment Co., Ltd.
(“Advance Power Investment”)
Investment and sales
Sino Diamond Motors
Hwa-Yu Corporation Ltd. (“Hwa-Yu”)
Overseas investment in production
and service industries
Brilliant Insight International Consultancy
Service Co., Ltd. (“Brilliant Insight
International”)
Consulting and servicing business
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 in production
and service industries
Fujian Rui Hua Consulting Co., Ltd.
(“Fujian Rui Hua”)
Consulting and servicing business
Greentrans Investment
Jiangsu Greentrans Automotive Parts Co.,
Ltd. (“Jiangsu Greentrans”)
Production and sales of parts of
electronic motorcycle
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(%)
March 31,
2021
December 31,
2020
March 31,
2020
Note
-
-
52.10
e)
52.10
52.10
52.10
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
42.30
42.30
42.30
b)
-
-
49.76
b) and d)
43.87
43.87
43.87
a)
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
f)
100.00
100.00
100.00
-
-
-
c)
-
-
100.00
c)
100.00
100.00
100.00
f)
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 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) On November 2018, Sichuan Huafeng Hanwei, Guangzhou Huayou Motor Sales and Guangzhou Huayou Motor Maintenance resolved to dissolve their respective companies and the annulment was completed in February, June and December 2020, respectively.
d) In May 2020, the board of directors of COC resolved to dissolve Shye Shinn. The annulment of Shye Shinn had been completed in December 2020.
e) 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.
f) In December 2020, Dongguan Huayi and Dongguan Huashun resolved to dissolve their respective companies. As of March 31, 2021, the liquidation had not been completed.

For the relationships between the Corporation and its controlled entities as of March 31, 2021, refer to Table 10.

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

13 -
d. Other significant accounting policies

Except for the following, please refer to the consolidated financial statements for the year ended December 31, 2020.

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.

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.

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

Cash Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits Repurchase agreements collateralized by bonds	March 31, 2021 $ 2,185 2,343,346 2,345,531 6,953,315 160,456 7,113,771 $ 9,459,302	December 31, 2020 $ 1,338 3,473,411 3,474,749 6,558,227 370,793 6,929,020 $ 10,403,769	March 31, 2020 $ 2,716 1,941,743 1,944,459 3,917,215 3,000 3,920,215 $ 5,864,674

14 -

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts Financial assets-non-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Domestic unlisted shares Financial liabilities (included in other current liabilities) Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) Foreign exchange forward contracts	March 31, 2021 December 31, 2020 $ 983,769 $ 1,056,288 6,036 3,141 $ 989,805 $ 1,059,429 $ 692,267 $ 672,914 $ 3,888 $ -	March 31, 2020 $ 323,837 2,584 $ 326,421 $ 680,987 $ 2,724

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

March 31, 2021

Notional Amount Transaction Currency Maturity Date (In Thousands) Buy USD/NTD 2021.04.09-2021.04.29 USD9,000/NTD250,300 Sell RMB/USD 2021.04.09-2021.05.21 RMB104,326/USD16,000 December 31, 2020 Notional Amount Transaction Currency Maturity Date (In Thousands) Buy JPY/NTD 2021.02.25-2021.03.26 JPY300,000/NTD79,900 Sell RMB/USD 2021.01.04-2021.01.29 RMB78,635/USD12,000

15 -

March 31, 2020

March 31, 2020
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2020.04.08-2020.06.05	USD7,500/NTD223,066
	JPY/NTD	2020.08.27-2020.09.25	JPY300,000/NTD82,570
Sell	RMB/USD	2020.04.07-2020.04.27	RMB31,344/USD4,500

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

Investments in equity instruments at FVTOCI Domestic investments Listed shares Unlisted shares Foreign investments Unlisted shares	March 31, 2021 December 31, 2020 $ 32,087 $ 30,370 24,077 24,145 56,164 54,515 118,119 124,358 $ 174,283 $ 178,873	March 31, 2020 $ 18,586 24,989 43,575 145,949 $ 189,524

These investments in equity instruments are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Principal guaranteed notes Segregated foreign exchange deposit account for offshore funds Less: Allowance for impairment loss Non-current Segregated foreign exchange deposit account for offshore funds Bonds Preference shares Less: Allowance for impairment loss	March 31, 2021 December 31, 2020 $ 178,660 $ 136,540 37,043 50,017 215,703 186,557 (518) (587) $ 215,185 $ 185,970 $ 431,748 $ 434,841 100,000 100,000 9,900 9,900 541,648 544,741 (4,045) (4,025) $ 537,603 $ 540,716	March 31, 2020 $ 159,635 - 159,635 (687) $ 158,948 $ - 605,310 9,900 615,210 (3,364) $ 611,846

16 -
a. The coupon rates of principal guaranteed notes ranged from 0.45%-2.60%, 0.52%-2.50% and 1.60%-2.85% per annum as of March 31, 2021, December 31, 2020 and March 31, 2020, 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 year ended December 31, 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 both ranged from 0.10% to 1.50% per annum as of March 31, 2021 and December 31, 2020.
c. The coupon rates of bonds were both 0.86% per annum as of March 31, 2021 and December 31, 2020 and ranged from 0.86%-4.30% per annum as of March 31, 2020.
d. The coupon rate of preference shares was 1.50% per annum as of March 31, 2021, December 31, 2020 and March 31, 2020.
e. Refer to Note 10 for information relating to the credit risk management and impairment.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

Investments in debt instruments were classified as at amortized cost.

Gross carrying amount Less: Allowance for impairment loss Amortized cost	March 31, 2021 December 31, 2020 $ 757,351 $ 731,298 (4,563) (4,612) $ 752,788 $ 726,686	March 31, 2020 $ 774,845 (4,051) $ 770,794

The Group invests only in debt instruments that have higher credit ratings and low credit risk after impairment assessment. The credit rating information is supplied 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 and makes an assessment whether there has been a significant increase in the credit risk since initial recognition.

In determining the expected credit losses for debt instrument investments, the Group considers the historical default rates of each credit rating supplied by external rating agencies, the current financial condition of debtors, and the future prospects of the industries. 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

17 -

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

March 31, 2021

Expected Credit Credit Rating Loss Rate Performing 0.00%-0.29% No rating 39.9496% December 31, 2020 Expected Credit Credit Rating Loss Rate Performing 0.00%-0.43% No rating 39.9496% March 31, 2020 Expected Credit Credit Rating Loss Rate Performing 0.07%-0.43% No rating 20.6080%	Gross Carrying Amount
	At Amortized Cost $ 747,451 9,900 Gross Carrying Amount
	At Amortized Cost $ 721,398 9,900 Gross Carrying Amount
	At Amortized Cost $ 764,945 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, 2021 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance atMarch31, 2021 Balance at January 1, 2020 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance atMarch31, 2020	Credit Rating
	Performing (12-month ECLs) No rating (Lifetime ECLs - Not Credit- impaired) $ 657 $ 3,955 1,294 - (1,369) - 26 - $ 608 $ 3,955 $ 1,918 $ 32,952 2,077 - (1,500) (30,912) (484) - $ 2,011 $ 2,040

18 -
a. During the three months ended March 31, 2021 and 2020, the Group purchased principal guaranteed notes in the amounts of $446,264 thousand and $482,962 thousand, respectively, and correspondingly the loss allowance for investments rated as performing increased by $1,294 thousand and $2,077 thousand, respectively.
b. Investments in principal guaranteed notes of $405,616 thousand expired and were redeemed during the three months ended March 31, 2021, with a consequential reduction in the loss allowance for investments rated as performing of $1,369 thousand; and investments in principal guaranteed notes of $332,151 thousand and bonds of $199,700 thousand expired and were redeemed during the three months ended March 31, 2020, with a consequential reduction in the loss allowance for investments rated as performing of $1,500 thousand and lifetime ECLs of $30,912 thousand.

11. FINANCIAL INSTRUMENTS FOR HEDGING

Financial assets Cash flow hedge - spot rate Cash flow hedge - foreign exchange forward contracts Financial liabilities (included in other current liabilities) Cash flow hedge - foreign exchange forward contracts	March 31, 2021 December 31, 2020 $ 229,353 $ 115,841 - 4,425 $ 229,353 $ 120,266 $ 4,444 $ 79	March 31, 2020 $ 787,582 2,680 $ 790,262 $ 5,148

The Group’s hedging strategy is to enter into foreign exchange forward contracts and to buy foreign currency banknotes 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 denominated purchases. Those transactions are designated as cash flow hedges. Basis adjustments are made to the initial carrying amounts of non-financial hedged items when the anticipated purchases take place.

For the hedges of highly probable forecasted purchases, the critical terms (i.e., the notional amount, period and subject) 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 value of the corresponding hedged items will be systematically changed in the opposite direction in respond to movements in the underlying exchange rate.

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 are expected to emerge from these hedging relationships. During the three months ended March 31, 2021 and 2020, hedging instruments at fair value and transferred to the initial carrying amount of hedged items are detailed in Note 23(e).

19 -

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

March 31, 2021

										Change in
										Value Used for
										Calculating
		Notional Amount		Forward Rate			Carrying Amount			Hedge
Hedging Instrument	Currency	(In Thousands)	Maturity	(Note)	Line Item		Assets	Liabilities		Ineffectiveness
Cash flow hedge
Forecast purchases -	JPY/NTD	JPY890,001/NTD237,908	2021.04.11-	0.2665-0.2732	Financial assets	$	229,353	$	-	$ (7,762 )
spot rate			2021.06.21		for hedging
Forecast purchases -	JPY/NTD	JPY1,020,000/NTD266,545	2021.04.14-	0.2580-0.2675	Other current		-		(4,444	) (3,791)
foreign exchange			2021.06.17		liabilities
forward contracts						$	229,353	$	(4,444	) $ (11,553)
Note: JPY1:NTD, unless stated otherwise.
									Accumulated
									Gains or Losses
						Change in			on Hedging
					Value Used for				Instruments in
						Calculating			Other Equity
						Hedge			Continuing
Hedged	Item				Ineffectiveness					Hedges
Cash flow hedge
Forecast purchases						$	11,553		$ (11,553)
December 31,	2020

											Change in
											Value Used for
											Calculating
		Notional Amount		Forward Rate			Carrying Amount				Hedge
Hedging Instrument	Currency	(In Thousands)	Maturity	(Note)	Line Item		Assets	Liabilities			Ineffectiveness
Cash flow hedge
Forecast purchases -	JPY/NTD	JPY419,258/NTD113,979	2021.02.15-	0.2700-0.2794	Financial assets	$	115,841	$	-		$ 1,489
spot rate			2021.03.14		for hedging
Forecast purchases -	JPY/NTD	JPY1,880,000/NTD503,630	2021.01.15-	0.2665-0.2692	Financial assets		4,425		-		3,540
foreign exchange			2021.03.22		for hedging
forward contracts
Forecast purchases -	JPY/NTD	JPY225,000/NTD60,975	2021.01.27	0.2710	Other current		-		(79	)	(63)
foreign exchange					liabilities
forward contracts						$	120,266	$	(79	)	$ 4,966
Note: JPY1:NTD, unless stated otherwise.
									Accumulated
									Gains or Losses
						Change in			on Hedging
					Value Used for				Instruments in
						Calculating			Other Equity
						Hedge			Continuing
Hedged	Item				Ineffectiveness					Hedges
Cash flow hedges
Forecast purchases						$	(4,966)		$		4,966

20 -

March 31, 2020

Notional Amount Forward Rate Hedging Instrument Currency (In Thousands) Maturity (Note) Line Item Cash flow hedge Forecast purchases - spot rate JPY/NTD JPY2,824,900/NTD790,025 2020.04.14- 2020.12.15 0.2758-0.2828 Financial assets for hedging Forecast purchases - foreign exchange forward contracts JPY/NTD JPY500,000/NTD136,990 2020.05.18- 2020.07.16 0.2729-0.2757 Financial assets for hedging Forecast purchases - foreign exchange forward contracts USD/NTD USD5,000/NTD149,014 2020.04.20- 2020.05.18 29.7680-29.8550 (USD:NTD) Financial assets for hedging Forecast purchases - foreign exchange forward contracts RMB/USD RMB41,821/USD6,000 2020.04.07- 2020.05.18 6.9490-7.0010 (USD:RMB) Other current liabilities Forecast purchases - foreign exchange JPY/NTD JPY640,000/NTD177,694 2020.07.16- 2020.11.16 0.2752-0.2799 Other current liabilities forward contracts		Carrying A	mount Liabilities I $ - - - (3,399 ) (1,749) $ (5,148)	Change in Value Used for Calculating Hedge neffectiveness $ 280 1,026 1,118 (2,719 ) (1,399) $ (1,694)
		Assets $ 787,582 1,282 1,398 - - $ 790,262

Note: JPY1:NTD, unless stated otherwise.

Hedged Item Cash flow hedge Forecast purchases Comprehensive Income Impact Cash flow hedges Forecast purchases	Change in Value Used for Calculating Hedge Accumulated Gains or Losses on Hedging Instruments in Other Equity Continuing Ineffectiveness Hedges $ 1,694 $ (1,694) Hedging Gains (Losses) Recognized inOCI	Change in Value Used for Calculating Hedge Accumulated Gains or Losses on Hedging Instruments in Other Equity Continuing Ineffectiveness Hedges $ 1,694 $ (1,694) Hedging Gains (Losses) Recognized inOCI	Change in Value Used for Calculating Hedge Accumulated Gains or Losses on Hedging Instruments in Other Equity Continuing Ineffectiveness Hedges $ 1,694 $ (1,694) Hedging Gains (Losses) Recognized inOCI
	For the Three Months Ended March 31
		2021 $ (27,117)	2020 $ 14,835

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

12. NOTES AND ACCOUNTS RECEIVABLE, NET

At amortized cost Notes and accounts receivable Less: Allowance for impairment loss	March 31, 2021 December 31, 2020 $ 873,504 $ 922,742 (10,071) (8,469) $ 863,433 $ 914,273	March 31, 2020 $ 777,544 (12,828) $ 764,716

21 -

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 records of the customer and the customer’s current financial position. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The aging of receivables was as follows:

Not past due 1 to 60 days past due 61 to 90 days past due Over 90 days past due Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	March 31, 2021 December 31, 2020 $ 865,164 $ 917,086 6,301 3,260 776 433 1,263 1,963 873,504 922,742 (10,071) (8,469) $ 863,433 $ 914,273	March 31, 2020 $ 727,783 1,585 539 47,637 777,544 (12,828) $ 764,716

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

Balance at January 1 Add: Net remeasurement of loss allowance Less: Net remeasurement of loss allowance Foreign exchange gains and losses Balance at March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 8,469 1,695 - (93) $ 10,071	2020 $ 16,348 - (3,456) (64) $ 12,828

13. INVENTORIES

Merchandise Finished goods Work in progress Raw materials Materials in transit	March 31, 2021 December 31, 2020 $ 183,188 $ 128,537 769,146 1,240,435 339,842 279,501 2,360,669 2,081,440 161,299 79,740 $ 3,814,144 $ 3,809,653	March 31, 2020 $ 245,154 394,088 413,902 2,531,948 298,370
		$ 3,883,462

The costs of inventories recognized as cost of goods sold for the three months ended March 31, 2021 and 2020 were $6,972,506 thousand and $6,270,669 thousand, respectively.

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

The remaining 56.13% interest in Kian Shen is dispersed and held by shareholders unrelated to the Group as of the three months ended March 31, 2021, December 31, 2020 and March 31, 2020.

22 -

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

The summarized financial information below represents amounts before intragroup eliminations of Kian Shen and Kian Shen’s subsidiaries:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Equity attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Revenue Profit for the period Other comprehensive loss for the period Total comprehensive loss for the period Profit attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Total comprehensive income (loss) attributable to: Owners of Kian Shen Non-controlling interests of Kian Shen Net cash inflow (outflow) from: Operating activities Investing activities Financing activities Foreign exchange adjustments Net cash inflow (outflow)	March 31, 2021 $ 1,174,543 4,109,532 (561,818) (339,997) $ 4,382,260 $ 1,922,497 2,459,763 $ 4,382,260	December 31, 2020 March 31, 2020 $ 1,242,835 $ 925,751 4,041,897 3,981,308 (573,234) (519,260) (387,522) (312,999) $ 4,323,976 $ 4,074,800 $ 1,896,928 $ 1,787,615 2,427,048 2,287,185 $ 4,323,976 $ 4,074,800 For the Three Months Ended March 31	December 31, 2020 March 31, 2020 $ 1,242,835 $ 925,751 4,041,897 3,981,308 (573,234) (519,260) (387,522) (312,999) $ 4,323,976 $ 4,074,800 $ 1,896,928 $ 1,787,615 2,427,048 2,287,185 $ 4,323,976 $ 4,074,800 For the Three Months Ended March 31	December 31, 2020 March 31, 2020 $ 1,242,835 $ 925,751 4,041,897 3,981,308 (573,234) (519,260) (387,522) (312,999) $ 4,323,976 $ 4,074,800 $ 1,896,928 $ 1,787,615 2,427,048 2,287,185 $ 4,323,976 $ 4,074,800 For the Three Months Ended March 31	December 31, 2020 March 31, 2020 $ 1,242,835 $ 925,751 4,041,897 3,981,308 (573,234) (519,260) (387,522) (312,999) $ 4,323,976 $ 4,074,800 $ 1,896,928 $ 1,787,615 2,427,048 2,287,185 $ 4,323,976 $ 4,074,800 For the Three Months Ended March 31
				2021 $ 317,524 $ 86,971 (28,687) $ (58,284) $ 38,154 48,817 $ 86,971 $ 25,569 32,715 $ 58,284 $ 37,311 (161,680) (76,600) 1,096 $ (199,873)	2020 $ 207,671 $ 15,148 (49,084) $ (33,936) $ 6,645 8,503 $ 15,148 $ (14,888) (19,048) $ (33,936) $ (68,267) 146,358 19,677 1,211 $ 98,979

23 -

15. NON-CURRENT ASSETS HELD FOR SALE

Investments accounted for using the equity method classified as held for sale Equity directly associated with non-current assets classified as held for sale	March 31, 2021 December 31, 2020 $ - $ - $ - $ -	March 31, 2020 $ 148,023 $ (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.

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates Investments in joint ventures a. Investments in associates Material associates Yulon Associates that are not individually material	March 31, 2021 $ 16,840,500 7,546,652 $ 24,387,152 March 31, 2021 $ 7,779,803 9,060,697 $ 16,840,500	December 31, 2020 $ 16,335,980 7,296,965 $ 23,632,945 December 31, 2020 $ 7,561,633 8,774,347 $ 16,335,980	March 31, 2020 $ 15,480,539 7,661,613
			$ 23,142,152
			March 31, 2020 $ 7,081,037 8,399,502
			$ 15,480,539

1) Material associates

The Group held 16.80% interest in Yulon on March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

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

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

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

Name of Associate Yulon	March 31, 2021 December 31, 2020 $ 7,343,771 $ 7,818,908	March 31, 2020 $ 3,854,754

24 -

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 subsidiaries

Current assets Non-current assets Current liabilities Non-current liabilities Equity Non-controlling interests Proportion of the Group’s ownership Equity attributable to the Group Cross-shareholding Carrying amount Operating revenue Net profit for the period Other comprehensive loss Total comprehensive income for the period	March 31, 2021 $ 216,512,304 86,623,182 (200,062,022) (36,210,089) 66,863,375 (16,770,135) $ 50,093,240 16.80% $ 8,415,664 (635,861) $ 7,779,803		December 31, 2020 March 31, 2020 $ 215,186,668 $ 229,623,407 86,136,078 81,081,046 (201,009,483) (227,773,310) (35,437,943) (25,577,387) 64,875,320 57,353,756 (16,136,852) (11,564,484) $ 48,738,468 $ 45,789,272 16.80% 16.80% $ 8,188,063 $ 7,692,598 (624,430) (611,561) $ 7,561,633 $ 7,081,037 For the Three Months Ended March 31	December 31, 2020 March 31, 2020 $ 215,186,668 $ 229,623,407 86,136,078 81,081,046 (201,009,483) (227,773,310) (35,437,943) (25,577,387) 64,875,320 57,353,756 (16,136,852) (11,564,484) $ 48,738,468 $ 45,789,272 16.80% 16.80% $ 8,188,063 $ 7,692,598 (624,430) (611,561) $ 7,561,633 $ 7,081,037 For the Three Months Ended March 31
			2021 $ 20,471,216 $ 2,029,650 (33,234) $ 1,996,416	2020 $ 17,572,356 $ 547,251 (273,067) $ 274,184

2) Aggregate information of associates that are not individually material

The Group’s share of: Net profit for the period Other comprehensive income (loss) Total comprehensive income (loss) for the period	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 226,602 71,576 $ 298,178	2020 $ 148,612 (189,807) $ (41,195)

All the associates are accounted for using the equity method.

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

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

b. Investments in joint ventures

Joint ventures that are not individually material	March 31, 2021 December 31, 2020 $ 7,546,652 $ 7,296,965	March 31, 2020 $ 7,661,613

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Net profit (loss) of the period Other comprehensive income (loss) Total comprehensive income (loss) for the period	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 246,282 3,405 $ 249,687	2020 $ (30,116) (70,908) $ (101,024)

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

Except for Guangzhou NTN-Yulon Drivertrain Co., Ltd., the investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on the joint ventures’ financial statements that have not been reviewed.

17. PROPERTY, PLANT AND EQUIPMENT

Assets used by the Group Land Land improvement Buildings Machinery Other equipment Construction in progress	March 31, 2021 December 31, 2020 $ 1,974,774 $ 1,974,774 11,561 12,048 825,500 839,986 2,872,153 2,872,387 382,406 375,027 413,130 453,007 $ 6,479,524 $ 6,527,229	March 31, 2020 $ 1,974,774 12,963 847,372 2,572,772 412,533 795,903 $ 6,616,317

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Except for the depreciation recognized and the cost of acquisition of property, plant and equipment for increasing productivity, which totaled $142,727 thousand and $355,923 thousand during the three months ended March 31, 2021 and 2020, respectively, the Group had no other significant disposal or impairment loss of property, plant and equipment.

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

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

Acquisition of property, plant and equipment includes the increase in payables for equipment of $45,282 thousands for the three months ended March 31, 2021.

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 31.

18. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Buildings Other equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Other equipment	March 31, 2021 $ 119,813 280,493 9,371 $ 409,677	December 31, 2020 March 31, 2020 $ 54,807 $ 74,851 292,648 334,945 9,277 7,725 $ 356,732 $ 417,521 For the Three Months Ended March 31	December 31, 2020 March 31, 2020 $ 54,807 $ 74,851 292,648 334,945 9,277 7,725 $ 356,732 $ 417,521 For the Three Months Ended March 31	December 31, 2020 March 31, 2020 $ 54,807 $ 74,851 292,648 334,945 9,277 7,725 $ 356,732 $ 417,521 For the Three Months Ended March 31
			2021 $ 73,544 $ 6,898 11,164 1,546 $ 19,608	2020 $ 2,148 $ 7,462 16,052 1,713 $ 25,227

Except for the aforementioned addition and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the three months ended March 31, 2021 and 2020.

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b. Lease liabilities

	March 31,	December 31,	March 31,
	2021	2020	2020
Carrying amount
Current	$ 88,185	$ 87,196	$ 87,694
Non-current	$ 331,187	$ 277,908	$ 337,786
Range of discount rate for lease liabilities was as follows:
	March 31,	December 31,	March 31,
	2021	2020	2020
Land	1.20%-1.41%	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%	0.95%-1.37%	0.98%-1.37%

c. Material leasing 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 March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 2,946 $ 492 $ 22,810	2020 $ 3,637 $ 250 $ 29,414

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

19. INVESTMENT PROPERTIES

Investment properties	March 31, 2021 December 31, 2020 $ 1,352,257 $ 1,355,015	March 31, 2020 $ 1,363,290

Except for depreciation recognized, the Group did not have significant addition, disposal, or impairment of investment properties during the three months ended March 31, 2021 and 2020.

28 -

The investment properties held by the Group were 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 $2,278,789 thousand and $2,273,093 thousand as of December 31, 2020 and 2019, respectively. The management of the Group had assessed and determined that there were no significant changes in the fair values as of March 31, 2021 and 2020, as compared to that as of December 31, 2020 and 2019, respectively.

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

20. BORROWINGS

a. Short-term borrowings

Line of credit borrowings Bank loans	March 31, 2021 December 31, 2020 $ 185,000 $ 215,000 - - $ 185,000 $ 215,000	March 31, 2020 $ 475,000 100,000 $ 575,000

1) The ranges of interest rates on credit borrowings were 0.36%-0.94%, 0.36%-0.96% and 0.95%-1.10%. per annum as of March 31, 2021, December 31, 2020 and March 31, 2020, respectively.
2) The interest rate on bank loans was 1.20% per annum as of March 31, 2020.
b. Long-term borrowings

	March 31,	December 31,	March 31,
	2021	2020	2020
Unsecured borrowings
Line of credit borrowings	$ 87,500	$ 93,750	$ 50,000
Less: Current portions	(43,750)	(37,500)	(12,500)
Long-term borrowings	$ 43,750	$ 56,250	$ 37,500

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 with non-revolving credit facilities. As of March 31, 2021, December 31, 2020 and March 31, 2020, the annual interest rates all were 0.725%.

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21. OTHER PAYABLES

Payables for salaries or bonuses Payables for taxes Payables for warranties Payables for equipment Payables for advertisement Provisions for employee benefits Others	March 31, 2021 December 31, 2020 $ 682,284 $ 1,081,979 210,280 183,287 196,745 206,309 169,100 214,382 134,032 171,646 89,601 138,475 586,391 645,743 $ 2,068,433 $ 2,641,821	March 31, 2020 $ 488,849 209,764 200,590 44,503 16,044 85,543 606,159 $ 1,651,452

22. RETIREMENT BENEFIT PLANS

For the three months ended March 31, 2021 and 2020, the pension expenses of defined benefit plans were $9,410 thousand and $9,588 thousand, respectively, and these were calculated based on the pension cost rate determined by the actuarial calculation on December 31, 2020 and 2019, respectively.

23. EQUITY

a. Share capital
1) Ordinary shares

Number of shares authorized (in thousands) Amount of shares authorized Number of shares issued and fully paid (in thousands) Capital issued	March 31, 2021 1,800,000 $ 18,000,000 553,620 $ 5,536,203	December 31, 2020 1,800,000 $ 18,000,000 553,620 $ 5,536,203	March 31, 2020 1,800,000
			$ 18,000,000
			553,620
			$ 5,536,203

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

b. Capital surplus

	March 31,	December 31,	March 31,
	2021	2020	2020
May be used to offset a deficit, distributed as
cash dividends, or transferred to share
capital (Note 1)
Conversion of bonds	$ 5,183,923	$ 5,183,923	$ 5,183,923
Issuance of ordinary shares	1,184,920	1,184,920	1,184,920
Others	4,666	4,666	4,666
			(Continued)

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May only be used to offset a deficit Changes in percentage of ownership interest in subsidiaries (Note 2) Share of changes in capital surplus of associates	March 31, 2021 December 31, 2020 $ 2,225 $ 2,225 36,580 36,044 $ 6,412,314 $ 6,411,778	March 31, 2020 $ 2,225 38,408 $ 6,414,142 (Concluded)

Note 1: Such capital surplus may be used to offset a deficit; in addition, when the Corporation has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Corporation’s capital surplus and to once a year).
Note 2: Such capital surplus arises from the effect of changes in ownership interests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions 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 Corporation’s articles of incorporation, 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 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.

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

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

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The appropriations of earnings for 2020 that were proposed by the board of directors on March 23, 2021 were as follows:

	Appropriation	Appropriation	Dividends Per
	of	Earnings	Share (NT$)
Legal reserve	$	323,844
Cash dividends		3,875,342	$ 7.0

The appropriations of earnings for 2020 will be resolved by the shareholders in their meeting to be held in June 2021.

The Corporation proposed to not distribute any dividends due to the net loss incurred in 2019.

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

d. Special reserve

Balance at January 1 Reversals Disposal of subsidiaries Balance at March 31		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 1,028,359 - $ 1,028,359	2020 $ 1,029,654 (1,185) $ 1,028,469

e. Other equity items

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

Balance at January 1 Recognized for the period Exchange differences on translating the financial statements of foreign operations Share from associates and join ventures accounted for using the equity method Reclassification adjustments Disposal of foreign operations Other comprehensive income (loss) recognized for the period Balance at March 31		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ (926,661) (4,629) 7,054 - 2,425 $ (924,236)	2020 $ (990,653) (8,876) (60,039) 10,332 (58,583) $ (1,049,236)

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2) Unrealized gain (loss) 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 (loss) of equity instruments transferred to retained earnings due to disposal by associates Cumulative unrealized gain of equity instruments transferred to retained earnings due to disposal Balance at March 31 3) Cash flow hedges Balance at January 1 Recognized for the period Gain (loss) on changes in the fair value of hedging instruments Foreign currency risk - foreign exchange forward contracts Foreign currency risk - spot rate Unrealized loss from cash flow hedges for using the equity method Other comprehensive income (loss) recognized for the period Transferred to initial carrying amount of hedged items Balance at March 31 f. Non-controlling interests Balance at January 1 Attributable to non-controlling interests: Share in profit for the period Other comprehensive income (loss) recognized for the period Unrealized loss on financial assets at FVTOCI Exchange differences on translating the financial statements of foreign entities Share in other comprehensive loss of associates and joint ventures accounted for using the equity method Other comprehensive income (loss) recognized for the period Balance at March 31		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 2020 $ 264,666 $ 216,562 (4,590) (14,256) 108,252 (229,300) 103,662 (243,556) (12,566) 8,951 5,794 - $ 361,556 $ (18,043) For the Three Months Ended March 31
		2021 2020 $ 6,918 $ (19,968) (7,546) 3,181 (15,982) 10,623 (14,689) (2,639) (38,217) 11,165 7,009 3,708 $ (24,290) $ (5,095) For the Three Months Ended March 31
		2021 $ 3,583,254 71,963 - (922) (15,180) (16,102) $ 3,639,115	2020 $ 3,422,878 4,859 (3,264) (2,045) (22,242) (27,551) $ 3,400,186

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24. REVENUE

Revenue from contracts with customers Revenue from the sale of goods Revenue from sale of vehicles Revenue from sale of components Service revenue Rental income Other revenue		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 6,846,895 1,478,761 8,325,656 285,421 23,525 10,084 $ 8,644,686	2020 $ 6,189,210 1,163,564 7,352,774 272,850 22,647 13,948 $ 7,662,219

25. NET PROFIT

Net profit concludes as follow:

a. Depreciation and amortization

		For the Three Months Ended	For the Three Months Ended	For the Three Months Ended	For the Three Months Ended
			March 31
			2021		2020
	An analysis of depreciation by function
	Operating costs	$	163,883	$	125,546
	Operating expenses		46,621		58,244
		$	210,504	$	183,790
	An analysis of amortization by function
	Operating costs	$	1,395	$	1,368
	Operating expenses		9,359		9,432
		$	10,754	$	10,800
	An analysis of amortization in intangible assets by function
	Research and development expenses	$	11,060	$	20,304
b.	Rental income and operating expenses directly related to investment	properties

Rental income of investment properties Direct operating expenses of investment properties generating rental income	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 16,748 $ 5,629	2020 $ 17,399 $ 5,581

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c. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans Short-term benefits An analysis of employee benefits expense by function Operating costs Operating expenses	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 21,779 9,410 31,189 843,936 $ 875,125 $ 435,842 439,283 $ 875,125	2020 $ 19,113 9,588 28,701 790,078 $ 818,779 $ 404,877 413,902 $ 818,779

d. Employees’ compensation and remuneration of directors

According to the articles of incorporation of the Corporation, the Corporation accrued employees’ compensation and remuneration of directors at 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. The employees’ compensation and remuneration of directors for the three months ended March 31, 2021 and 2020 are as follows:

Amount

Employees’ compensation Remuneration of directors	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 10,982 $ 6,922	2020 $ 1,640 $ 3,526

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

The appropriations of employees’ compensation and remuneration of directors for the year ended December 31, 2020 that were resolved by the Corporation’s board of directors in March 2021 are as follows:

Employees’ compensation Remuneration of directors	For the Year Ended December 31, 2019	For the Year Ended December 31, 2019
		Cash $ 31,923 $ 17,130

There is 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.

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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.

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.

26. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current period Adjustments for the prior periods Deferred tax In respect of the current period Income tax expense recognized in profit or loss	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 157,305 - 157,305 31,116 $ 188,421	2020 $ 69,504 (15,351) 54,153 32,896 $ 87,049

The tax rate applicable to used by subsidiaries in China is 25%. Tax rates applicable to other entities of 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.

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current period Cash flow hedges	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 3,589	2020 $ (1,031)

c. Income tax assessments

The income tax returns of the Corporation through 2018 have been assessed by the tax authorities.

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27. EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share Diluted earnings per share	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 2.35 $ 2.35	2020 $ 1.12 $ 1.12

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

Net Profit for the Period

Profit of the Corporation	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $1,283,877	2020 $ 608,965

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

Weighted average number of ordinary shares used in the computation of basic earnings per share Weighted average number of ordinary shares Adjustment for associates holding shares Effect of potentially dilutive ordinary shares Employees’ compensation Weight average number of ordinary shares used in the computation of diluted earnings per share	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 553,620 (8,239) 545,381 752 546,133	2020 553,620 (8,239) 545,381 66 545,447

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. 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.

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29. FINANCIAL INSTRUMENTS

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

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

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

March 31, 2021 Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Foreign 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)	Level 1 $ 983,769 - - $ 983,769 $ 32,087 - - $ 32,087 $ 229,353 $ - $ -	Level 2 $ - - - $ - $ - - - $ - $ - $ - $ -	Level 3 $ - 692,267 6,036 $ 698,303 $ - 24,077 118,119 $ 142,196 $ - $ 3,888 $ 4,444	Total $ 983,769 692,267 6,036 $ 1,682,072 $ 32,087 24,077 118,119 $ 174,283 $ 229,353 $ 3,888 $ 4,444

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December 31, 2020

Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Foreign unlisted shares Financial assets for hedging Non-derivative financial instruments Derivative financial instruments Financial liabilities Financial liabilities for hedging Derivative financial instruments (included in other current liabilities) March 31, 2020 Financial assets Financial assets at FVTPL Mutual funds Domestic unlisted shares Derivative financial instruments	Level 1 $ 1,056,288 - - $ 1,056,288 $ 30,370 - - $ 30,370 $ 115,841 - $ 115,841 $ - Level 1 $ 323,837 - - $ 323,837	Level 2 $ - - - $ - $ - - - $ - $ - - $ - $ - Level 2 $ - - - $ -	Level 3 $ - 672,914 3,141 $ 676,055 $ - 24,145 124,358 $ 148,504 $ - 4,425 $ 4,425 $ 79 Level 3 $ - 680,987 2,584 $ 683,571	Total $ 1,056,288 672,914 3,141 $ 1,732,343 $ 30,370 24,145 124,358 $ 178,873 $ 115,841 4,425 $ 120,266 $ 79 Total $ 323,837 680,987 2,584 $ 1,007,408 (Continued)

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Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares Foreign unlisted shares 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)	Level 1 $ 18,586 - - $ 18,586 $ 787,582 - $ 787,582 $ - $ -	Level 2 $ - - - $ - $ - - $ - $ - $ -	Level 3 $ - 24,989 145,949 $ 170,938 $ - 2,680 $ 2,680 $ 2,724 $ 5,148	Total $ 18,586 24,989 145,949
				$ 189,524
				$ 787,582 2,680
				$ 790,262
				$ 2,724
				$ 5,148

(Concluded)

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

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

For the three months ended March 31, 2021

Financial Assets
Equity
Instruments at
FVTPL
Derivative
Financial
Instruments at
FVTPL
Equity
Instruments at
FVTOCI
Derivative
Financial
Instruments
for Hedging
Balance at January 1
$ 672,914
$ 3,141
$ 148,504
$ 4,425

Recognized in profit or loss
19,353
2,895
-
-
Recognized in other
comprehensive loss

-

-

(6,308)

(4,425)

Balance at March 31
$ 692,267
$ 6,036
$ 142,196
$ -

Total
$ 828,984
22,248

(10,733)
$ 840,499

40 -

Financial Liabilities Derivative Financial Instruments at FVTPL Derivative Financial Instruments for Hedging Balance at January 1 $ - $ 79 Recognized in profit or loss 3,888 - Recognized in other comprehensive income - 4,365 Balance at March 31 $ 3,888 $ 4,444 For the three months ended March 31, 2020	Total $ 79 3,888 4,365 $ 8,332

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 (5,426) 2,280 - - Recognized in other comprehensive income (loss) - - (7,321) 2,240 Balance at March 31 $ 680,987 $ 2,584 $ 170,938 $ 2,680 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 241 - Recognized in other comprehensive income - (1,736) Balance at March 31 $ 2,724 $ 5,148	$	Total $ 865,416 (3,146) (5,081) $ 857,189 Total 9,367 241 (1,736) 7,872
	$

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.
41 -
b) Domestic unlisted securities to which the market approach was applied: The fair values of domestic unlisted shares referred to stock prices of listed companies with operating activities that were similar to those of the Corporation. The material unobservable inputs were as follows:

	March 31,	December 31,	March 31,
	2021	2020	2020
Operating income ratio	0.69-5.21 times	0.69-5.21 times	0.20-5.22 times
Gross profit ratio	-	-	2.23-17.18 times
EBITDA ratio	4.75-36.25 times	4.75-36.25 times	5.21-24.22 times
Post-tax profit ratio	-	-	13.24-71.17 times
P/B ratio	0.43-3.86 times	0.43-3.86 times	0.73-7.82 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 increase (decrease) as follows:

	March 31,	March 31,	December	December	31,	March 31,	March 31,
		2021		2020			2020
Operating income ratio
0.1 time increase	$	15,258	$	25,129		$	36,532
0.1 time decrease	$	(15,258)	$	(25,129)		$	(36,532)
Gross profit ratio
1 time increase	$	-	$		-	$	5,384
1 time decrease	$	-	$		-	$	(5,384)
EBITDA ratio
1 time increase	$	8,984	$	8,984		$	3,874
1 time decrease	$	(8,984)	$	(8,984)		$	(3,874)
Post-tax profit ratio
1 time increase	$	-	$		-	$	10,660
1 time decrease	$	-	$		-	$	(10,660)
P/B ratio
0.1 time increase	$	81,181	$	79,510		$	72,110
0.1 time decrease	$	(81,181)	$	(79,510)		$	(72,110)

c. Categories of financial instruments

	March 31,	December	31,	March 31,
	2021	2020		2020
Financial assets
FVTPL
Mandatorily classified at FVTPL	$ 1,682,072	$ 1,732,343		$ 1,007,408
Financial assets for hedging	229,353	120,266		790,262
Financial assets at amortized cost (Note 1)	13,454,121	13,989,558		9,713,913
Financial assets at FVTOCI	174,283	178,873		189,524
Financial liabilities
Amortized cost (Note 2)	5,723,302	6,612,232		4,874,770
FVTPL (included in other current liabilities)
Held for trading	3,888		-	2,724
Financial liabilities for hedging (included in
other current liabilities)	4,444		79	5,148

42 -
Note 1: The balances include financial assets measured at amortized cost, which comprised cash and cash equivalents, debt investments, notes and accounts receivable (including related parties), 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 comprised short-term borrowings, short-term bills payable, notes and accounts payable (including related parties), other payables, long-term borrowing (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.

a) Foreign currency risk

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

Sensitivity analysis

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

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

Loss	USD Impact	USD Impact	USD Impact
	For the Three Months Ended March 31
		2021 $ (5,901)	2020 $ (6,929)

43 -

JPY Impact	JPY Impact	JPY Impact
For the Three Months Ended March 31
	2021 2020 $ 703 $ (262) $ (4,923) $ (11,054) RMB Impact
For the Three Months Ended March 31
	2021 $ (19,124) $ -	2020 $ (10,465) $ (1,779)

b) Interest rate risk

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

	March 31,	December 31,	March 31,
	2021	2020	2020
Cash flow interest rate risk
Financial assets	$ 10,397,420	$ 11,184,954 $	6,832,304
Financial liabilities	352,443	458,713	914,937
Fair value interest rate risk
Lease liabilities	419,372	365,104	425,480

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 three months ended March 31, 2021 and 2020 would have increased/decreased by $6,278 thousand and $3,698 thousand, respectively.

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

c) Other price risk

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

Sensitivity analysis

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

44 -

If equity prices had been 5% higher/lower, pre-tax profit for the three months ended March 31, 2021 and 2020 would have increased/decreased by $49,188 thousand and $16,192 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the three months ended March 31, 2021 and 2020 would have increased/decreased by $1,604 thousand and $929 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

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

3) Liquidity risk

The Group has sufficient operating capital to meet cash requirements for settlement of derivative transactions. Thus, liquidity risk is low. As of March 31, 2021 December 31, 2020 and March 31, 2020, the Group had available unutilized unsecured and secured financing facilities (including bills and letters) of $1,765,000 thousand, $2,005,000 thousand and $1,505,000 thousand, respectively.

30. TRANSACTIONS WITH RELATED PARTIES

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

a. Names and categories of related parties

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

Mitsubishi Corporation (Mitsubishi Corp.)

Tai Yuen Textile Co., Ltd.

Le Wen Investment Co., Ltd.

Yulon Management Company Ltd. (Yulon Management)

Mitsubishi Corporation (Taiwan) Ltd.

Mitsubishi Motors Philippines Corporation

Mitsubishi Motors Thailand

Mitsubishi Motors Europe B.V.

Related Party Category

Investors that have significant influence
over the Group
Investors that have significant influence
over the Group
Investors that have significant influence
over the Group
Investors that have significant influence
over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
Subsidiary of investors that have
significant influence over the Group
(Continued)

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Related Party Category

Related Party Name

Mitsubishi Motors Middle East and Africa Subsidiary of investors that have significant influence over the Group Shye Shyang Mechanical Industrial Co., Ltd. The Group is its key management personnel Fuzhou Samuel Mechanical and Electrical Co., Ltd. The Group is its key management personnel Uni-Calsonic Corp. Associate Yulon Motor Co., Ltd. (Yulon) Associate Fortune Motors Co., Ltd. (Fortune Motors) Associate ROC Spicer Ltd. (ROC-Spicer) Associate Uni Auto Parts Manufacture Co., Ltd. (Uni Auto Parts Associate Manufacture) Shung Ye Motor Co., Ltd. (Shung Ye Motor) Associate Hua-Chuang Automobile Information Technical Center Co., Associate Ltd. Yulon IT Solutions Inc. Associate Sinjang Co., Ltd. (Sin Jang) Associate Sin Gan Co., Ltd. Associate Tokio Marine Newa Insurance Co., Ltd. Associate Hong Shuo Cultural Enterprises, Co., Ltd. Associate Hsiang Shuo Enterprises Associate Sinqual Technology Co., Ltd. Associate Yufong Property Management Co., Ltd. Associate Taiwan Acceptance Corporation Associate Yue Sheng Industrial Co., Ltd. Associate Luxgen Motor Co., Ltd. (Luxgen) Associate Yulon Nissan Motor Co., Ltd. Associate Y-Teks Co., Ltd. Associate Yes-Energy Service Co., Ltd. Associate Yue Ki Industrial Co., Ltd. (Yue Ki Industrial) Associate Carplus Auto Leasing Corporation Associate Fortune HS Leasing Co., Ltd. Associate Yu Rich Financial Services Company Associate ROC-Keeper Industrial Ltd. Associate Fuzhou Lianhong Motor Parts Co., Ltd. Associate Advance Power Machinery Co. Change in relationship from subsidiary to associate since July 17, 2020 Guangzhou NTN-Yulon Drivertrain Co., Ltd. Joint venture Xiangyang NTN-Yulon Drivertrain Co., Ltd. Joint venture South East (Fujian) Motor Corporation Ltd. Joint venture Fujian Benz Automotive Co., Ltd. Joint venture Fuzhou Fushiang Motor Industrial Co., Ltd. Joint venture Xiamen King-Long Kian-Shen Frame Joint venture Hangzhou King-Long Kian-Shen Co., Ltd. Joint venture China Engine (Fujian) Joint venture Yuanchuang Industrial Investment Consulting Co., Ltd. Substantive related party Vivianwu Journalism Award Foundation Substantive related party (Concluded)

46 -

b. Operating transactions

1) Sales of goods

Line Item Related Party Category/Name Sales Associates Fortune Motors Shung Ye Motor Others Investors and subsidiaries of investors that have significant influence over the Group Others 2) Purchases of goods Line Item Related Party Category/Name Purchases Associates Investors and subsidiaries of investors that have significant influence over the Group The Group is its key management personnel Joint ventures 3) Technical services expense Line Item Related Party Category/Name Cost of goods sold and selling and marketing expenses Investors that have significant influence over the Group 4) Development expense Line Item Related Party Category/Name Research and development expense Investors that have significant influence over the Group		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 2020 $ 5,380,431 $ 4,745,043 1,424,593 1,341,405 179,189 134,663 6,984,213 6,221,111 16,271 21,752 4,788 8,142 $ 7,005,272 $ 6,251,005 For the Three Months Ended March 31
		2021 2020 $ 584,428 $ 335,958 479,907 647,058 81,793 49,921 6,595 25,641 $ 1,152,723 $ 1,058,578 For the Three Months Ended March 31
		2021 2020 $ 60,745 $ 60,237 For the Three Months Ended March 31
		2021 $ -	2020 $ 2,241

47 -

5) Other expense

Line Item Related Party Category/Name Selling and marketing expenses and general and administrative Investors and subsidiaries of investors that have significant influence over the Group expenses Others 6) Contract liabilities Line Item Related Party Category/Name March 31, 2021 Other current Associates liabilities Luxgen $ 58,585 Sin Jang - Others 3,771 62,356 Investors that have significant influence over the Group 16,993 Others 7 $ 79,356 7) Receivables from related parties Line Item Related Party Category/Name March 31, 2021 Trade receivables Associates from related Fortune Motors $ 1,010,255 parties Shung Ye Motor 268,117 Others 159,918 1,438,290 Investors and subsidiaries of investors that have significant influence over the Group 11,573 Joint ventures 10,230 Others - $ 1,460,093		For the Three Months Ended March 31	For the Three Months Ended March 31
	2021 $ 13,474 2,206 $ 15,680 December 31, 2020 $ 58,585 - 6,902 65,487 16,393 - $ 81,880 December 31, 2020 $ 724,638 338,521 189,089 1,252,248 3,960 11,270 - $ 1,267,478		2020 $ 21,594 2,359 $ 23,953 March 31, 2020 $ 19,356 16,792 18,690 54,838 - 301 $ 55,139 March 31, 2020 $ 1,233,922 274,044 94,751 1,602,717 19,751 23,374 1 $ 1,645,843

48 -

8) Payables to related parties

Line Item Related Party Category/Name Trade payables to Associates related parties Yulon Uni Auto Parts Manufacture Yue Ki Industrial Fortune Motors ROC-Spicer Others Investors and subsidiaries of investors that have significant influence over the Group Mitsubishi Motors Corp. Yulon Management Others The Group is its key management personnel Others Prepayments Line Item Related Party Category/Name Prepayments Investors and subsidiaries of investors that have significant influence over the Group Others	March 31, 2021 December 31, 2020 $ 71,438 $ 57,163 116,294 148,010 97,249 113,048 42,014 65,266 78,290 100,270 103,040 118,385 508,325 602,142 62,665 127,147 21,764 93,243 10,933 7,786 95,362 228,176 51,419 67,906 8,887 9,013 $ 663,993 $ 907,237 March 31, 2021 December 31, 2020 $ 7,407 $ 119 3,974 3,756 $ 11,381 $ 3,875	March 31, 2020 $ 73,955 67,202 60,891 53,024 48,175 66,653 369,900 78,190 23,918 2,072 104,180 30,344 8,381 $ 512,805 March 31, 2020 $ 40,808 9,056 $ 49,864

9) Prepayments

10) Acquisitions of property, plant and equipment

Line Item Related Party Category/Name Property, plant and Associates equipment Others		For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 6,802 - $ 6,802	2020 $ 59,502 3,600 $ 63,102

49 -

The outstanding payables to related parties were not guaranteed and would be paid in cash. The Group received guarantees from some of the receivables from related parties. For the three months ended March 31, 2021 and 2020, no loss allowance was recognized for trade receivables from related parties.

The prices and payment terms of 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 32 for the details.

c. Remuneration of key management personnel

The remuneration of directors and key executives for the three months ended March 31, 2021 and 2020 was as follows:

Short-term employee benefits Post-employment benefits	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2021 $ 27,567 288 $ 27,855	2020 $ 25,002 425 $ 25,427

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

31. ASSETS PLEDGED AS COLLATERAL

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

Property, plant and equipment Pledged deposits (included in other current assets) Investment properties	March 31, 2021 December 31, 2020 $ 508,565 $ 508,913 239,974 180,486 52,323 52,323 $ 800,862 $ 741,722	March 31, 2020 $ 509,957 180,048 52,323 $ 742,328

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant commitments and contingencies of the Group as of March 31, 2021 were as follows:

a. The Group issued guarantee notes amounting to $4,235,243 thousand which had been pledged as collateral for loans from banks and other financial institutions and for government grants; unused letters of credit amounted to $50,151 thousand.
50 -
b. The Group entered into agreements with Mitsubishi Motors Corp. as stated below:

Project Technical royalty Technical royalty	Content Technical cooperation and manufacture of Delica and other car models Technical cooperation and manufacture of Outlander and other car models	Date of Agreement/ Expiry Date 2006.3.1-2025.4.8 2005.7.1-2025.9.7	Agreement Price Royalty was agreed to be the basis of the FOB price of automobiles sold and manufactured parts repaired Royalty was agreed to be the fixed amount of automobiles sold per unit and the basis of the FOB price of manufactured parts repaired	Payment
				Paid every 6 months within 90 days Paid every 6 months within 60-90 days

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

33. OTHER ITEMS

Due to the impact of the COVID-19 pandemic, the Group experienced a decline in its operating revenue for the three months ended March 31, 2020. As the epidemic eases and policy restrictions are loosened, the Group expects that operations will gradually return to normal.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

March 31, 2021

		Foreign		Carrying
		Currency	Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	356,467	4.344	$ 1,548,494
USD		21,172	28.535	604,148
JPY		976,881	0.2577	251,742
Non-monetary items
Investments accounted for using the equity
method
RMB		1,074,161	4.344	4,666,154
EUR		99,125	33.48	3,318,709
December 31, 2020
		Foreign		Carrying
		Currency	Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	327,164	4.377	$ 1,431,995
USD		19,214	28.48	547,208
JPY		717,026	0.2763	198,114
				(Continued)

51 -

		Foreign			Carrying
		Currency	Exchange Rate		Amount
Non-monetary items
Investments accounted for using the equity
method
RMB	$	1,071,073	4.377	$	4,688,087
EUR		86,458	35.02		3,027,742
Foreign currency liabilities
Monetary items
RMB		44,915	4.377		196,592
JPY		646,121	0.2763		178,523
					(Concluded)
March 31, 2020
		Foreign			Carrying
		Currency	Exchange Rate		Amount
Foreign currency assets
Monetary items
RMB	$	224,849	4.2550	$	956,732
JPY		3,060,939	0.2788		853,390
USD		20,840	30.2250		629,891
Non-monetary items
Investments accounted for using the equity
method
RMB		1,215,001	4.2550		5,169,829
EUR		86,431	33.2400		2,872,962
Foreign currency liabilities
Monetary items
JPY		442,049	0.2788		123,243

For the three months ended March 31, 2021 and 2020, net foreign exchange gains (losses) were $17,073 thousand and $(8,296) thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions.

35. SEPARATELY DISCLOSED ITEMS

Oher than those disclosed in Notes 7, 11 and 29 and Tables 1 to 10, there are no other separately disclosed items.

36. SEGMENT INFORMATION

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

52 -

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 remuneration of directors Other non-operating income and expenses, net Profit before income tax		Segment Revenues For the Three Months Ended March 31 2021 2020 $ 8,121,349 $ 7,133,668 601,681 614,278 7,980 9,398 (86,324) (95,125) $ 8,644,686 $ 7,662,219		Segment Income or Loss	Segment Income or Loss
				For the Three Months Ended March 31
		2021 $ 8,121,349 601,681 7,980 (86,324) $ 8,644,686		2021 $ 1,574,261 10,572 (4,754) (200) 1,579,879 (107,810) 72,192 $ 1,544,261	2020 $ 740,501 1,103 (5,935) (210) 735,459 (79,063) 44,477 $ 700,873

Intersegment transactions were accounted for according to market prices.

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

53 -

TABLE 1

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE THREE MONTHS ENDED MARCH 31, 2021 (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	$ 600,000	$ 600,000	0.9	Short-term financing	$ -	Working capital	$ -	-	$ -	$ 1,304,488	$ 8,696,589
1	Dongguan Huayi	Dongguan Huashun	Other receivables	Yes	86,880 (RMB 20,000 thousand)	86,880 (RMB 20,000 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,304,488	8,696,589
2	Dongguan Huashun	Dongguan Huayi	Other receivables	Yes	86,880 (RMB 20,000 thousand)	86,880 (RMB 20,000 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,304,488	8,696,589
3	Tianjin Hwarui	Tianjin Hwahong Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables	Yes Yes Yes	43,440 (RMB 10,000 thousand) 86,880 (RMB 20,000 thousand) 86,880 (RMB 20,000 thousand)	43,440 (RMB 10,000 thousand) 86,880 (RMB 20,000 thousand) 86,880 (RMB 20,000 thousand)	- - -	- - -	Short-term financing Short-term financing Short-term financing	- - -	Working capital Working capital Working capital	- - -	- - -	- - -	1,304,488 1,304,488 1,304,488	8,696,589 8,696,589 8,696,589
4	Tianjin Hwahong	Tianjin Hwarui Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables	Yes Yes Yes	86,880 (RMB 20,000 thousand) 86,880 (RMB 20,000 thousand) 86,880 (RMB 20,000 thousand)	86,880 (RMB 20,000 thousand) 86,880 (RMB 20,000 thousand) 86,880 (RMB 20,000 thousand)	- - -	- - -	Short-term financing Short-term financing Short-term financing	- - -	Working capital Working capital Working capital	- - -	- - -	- - -	1,304,488 1,304,488 1,304,488	8,696,589 8,696,589 8,696,589

Note 1: Converted at the exchange rates of RMB1:NT$4.344 as of March 31, 2021.

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

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

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

54 -

TABLE 2

CHINA MOTOR CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE THREE MONTHS ENDED MARCH 31, 2021 (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	$ 86,880 (RMB 20,000 thousand) 86,880 (RMB 20,000 thousand)	$ 86,880 (RMB 20,000 thousand) 86,880 (RMB 20,000 thousand)	$ - -	$ - -	0.20 0.20	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$4.344 as of March 31, 2021.

55 -

TABLE 3

CHINA MOTOR CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD MARCH 31, 2021

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

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		March 31, 2021	March 31, 2021		Note
				Number of Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
China Motor Corporation	Beneficiary certificates Franklin Templeton Sinoam Money Market Fund Prudential Financial Money Market Fund Cathay Taiwan Money Market Fund BlackRock Global Fund - World Technology Fund JPMorgan Funds - China Fund Franklin Biotechnology Discovery Fund Allianz Global Investors Taiwan Money Market Fund Hua Nan Phoenix Money Market Fund Paradigm Pion Money Market Sinopac Money Market Fund Templeton Global Climate Change Fund AB American Growth Portfolio JPMorgan Asia Growth Fund UPAMC James Bond Money Market 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	23,121 13,834 8,019 20 18 31 2,714 1,856 2,610 2,167 62 6 34 612 657	$ 241,293 220,876 100,572 42,389 39,604 37,296 34,305 30,433 30,402 30,400 26,605 25,441 23,947 10,314 7,301	- - - - - - - - - - - - - - -	$ 241,293 220,876 100,572 42,389 39,604 37,296 34,305 30,433 30,402 30,400 26,605 25,441 23,947 10,314 7,301

(Continued)

56 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		March 31, 2021	March 31, 2021
				Number of Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
Alliance Investment & Management Hwa Lin	Shares Shye Shyang Mechanical Industrial Myson Century, Inc. Taiwan Aerospace NORM Pacific Automation Corp. Carnival Com2B (Cayman) Corp. Principal guaranteed notes President Securities 100% Principle Guaranteed Note Corporate bonds Evergreen Marine Corporation Shares Samuel (Cayman) Co., Ltd. CARPLUS Auto Leasing Corporation T-Car Inc. Solidlite Corporation Site information service Phalanx Biotech Group Preference shares Rock Financial Risk Service Co., Ltd. Principal guaranteed notes President Securities 100% Principle Guaranteed Note	Corporate director Corporate director - - - - - - - - - - - - - -	Financial assets at fair value through profit or loss - non-current Fair value through other comprehensive income financial assets - non-current Fair value through other comprehensive income financial assets - non-current Fair value through other comprehensive income financial assets - non-current Fair value through other comprehensive income financial assets - non-current Fair value through other comprehensive income financial assets - non-current Financial assets at amortized cost financial assets - current Financial assets at amortized cost - non-current Fair value through other comprehensive income financial assets - non-current Financial assets at fair value through profit or loss - non-current Fair value through other comprehensive income financial assets - non-current Fair value through other comprehensive income financial assets - non-current Fair value through other comprehensive income financial assets - non-current Fair value through other comprehensive income financial assets - non-current Financial assets at amortized cost financial assets - non-current Financial assets at amortized cost financial assets - current	9,009 4,705 811 128 95 2,000 - - 6,327 3,248 1,275 789 65 696 - -	$ 619,754 30,957 11,325 1,851 1,130 - 43,314 99,910 92,586 72,513 25,533 6,044 2,893 1,964 5,945 134,828	10.00 7.84 0.60 0.45 0.05 4.44 - - 15.07 3.45 4.05 3.60 0.54 0.85 - -	$ 619,754 30,957 11,325 1,851 1,130 - - - 92,586 72,513 25,533 6,044 2,893 1,964 - -
							(Continued)

57 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account	March 31, 2021	March 31, 2021	March 31, 2021	March 31, 2021	Note
				Number of Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
Brilliant Insight International China Engine	Beneficiary certificates Taishin Ta-Chong Money Market Beneficiary certificates Hua Nan Phoenix Money Market Fund	- -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	180 4,880	$ 2,574 80,017	- -	$ 2,574 80,017

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

(Concluded)

58 -

TABLE 4

CHINA MOTOR CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE THREE MONTHS ENDED MARCH 31, 2021

(In Thousands of New Taiwan Dollars)

Seller/Buyer	Related Party	Relationship			Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total (Note 1)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total (Note 1)
China Motor Corporation (“CMC”) Sino Diamond Motors Kian Shen	Fortune Motors Shung Ye Motor Mitsubishi Motors Corp. Kian Shen (Note 2) Uni Auto Parts Manufacture ROC-Spicer Shung Ye Motor Fortune Motors Mitsubishi Motors Corp. China Motor Corporation (Note 2)	Investee accounted for using the equity method Investee accounted for using the equity method Director of CMC Subsidiary Investee accounted for using the equity method Investee accounted for using the equity method Investee accounted for using the equity method Investee accounted for using the equity method Director of CMC Parent company	Sale Sale Purchase Purchase Purchase Purchase Sale Sale Purchase Sale	$ (5,229,541) (1,093,837) 266,643 197,684 180,019 124,397 (330,738) (150,890) 213,264 (197,684)	(68) (14) 6 4 4 3 (63) (29) 60 (62)	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 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 collected within 45 days after the month of delivery	$ - - - - - - - - - -	- - - - - - - - - -	$ 1,004,845 212,796 (62,395) (142,438) (116,294) (78,290) 50,373 5,258 (270) 142,438	52 11 (2) (5) (4) (3) 66 7 - 64

Note 1: The proportion of the individual company’s total purchase (sale) or total receivable (payable).

Note 2: Eliminated during the preparation of the consolidated financial statements.

59 -

TABLE 5

CHINA MOTOR CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL MARCH 31, 2021

(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	$ 1,004,845 212,796 142,438	24.25 18.39 5.17	$ - - -	- - -	$ 1,004,804 212,791 65,834	$ - - -

60 -

TABLE 6

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE THREE MONTHS ENDED MARCH 31, 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of March 31, 2021	As of March 31, 2021	As of March 31, 2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				March 31, 2021	December 31, 2020	Number of Shares	%	Carrying Amount
China Motor Corporation Kian Shen Kian Shen Investment Alliance Investment & Management Sino Diamond Motors Hua-Yu China Engine CMI	Yulon Kian Shen (Note 5) Fortune Motors Sino Diamond Motors (Note 5) Tokio Marine Newa Insurance (Note 1) Alliance Investment & Management (Note 5) Daimler Vans Hong Kong Ltd. ROC-Spicer CMI (Note 5) COC (Note 5) Hwa Wei (Note 5) Uni Auto Parts Manufacture Shung Ye Motor (Notes 2 and 4) China Engine (Note 5) Uni-Calsonic Yue Ki Industrial Co., Ltd. Tai-Ya Investment Hwa Chung Motors (Note 5) Kian Shen Investment (Note 5) KSIHK (Note 5) Greentrans Investment (Note 5) Hua-Yu (Note 5) China Engine (Note 5) Brilliant Insight International (Note 5) Shung Ye Motor (Note 3) Fortune Motors Hwa-Lin (Note 5) Advance Power Investment (Note 5) Hwa Wei (Note 5)	Miaoli, Taiwan Taoyuan, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Hong Kong Taoyuan, Taiwan Samoa Taoyuan, Taiwan British Virgin Islands Miaoli, Taiwan Taipei, Taiwan Taoyuan, Taiwan Miaoli, Taiwan Hsinchu, Taiwan Hong Kong Taoyuan, Taiwan British Virgin Islands Hong Kong Samoa Samoa Taoyuan, Taiwan Taoyuan, Taiwan Taipei, Taiwan Taipei, Taiwan British Virgin Islands Mauritius British Virgin Islands	Manufacture and sale of vehicles The production of frame of heavy duty car and mold Sales and providing after sales service of vehicle Sales and providing after sales service of vehicle Property insurance Investment Investment Manufacture and sales of automobile parts Investment The production of mold, fixture and gauge of vehicle Overseas investment on production and service industries The production of mold, fixture and gauge of vehicle Sales and providing 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 Investment Overseas investment on production and service industries Manufacture of automobile engine and parts Consulting and service Sales and providing after sales service of vehicle Sales and providing after sales service of vehicle Overseas investment on production and service industries Reinvestment and sales Overseas investment on production and service industries	$ 3,835,585 344,800 2,132,826 2,192,724 955,941 1,200,030 2,011,363 683,032 1,402 412,125 1,202 109,813 391,142 625,978 105,806 109,396 79,505 328,900 328,888 US$ 25,907 Thousand 344,229 1,489,334 11,000 22,000 180 24 US$ 37,229 thousand 59,456 1,428,503	$ 3,835,585 344,800 2,132,826 2,192,724 955,941 1,200,030 2,011,363 683,032 1,402 412,125 1,202 109,813 391,142 625,978 105,806 109,396 79,505 328,900 328,888 US$ 25,907 Thousand 344,229 1,489,334 11,000 22,000 180 24 US$ 37,229 Thousand 59,456 1,428,503	166,714,441 32,201,367 132,116,729 151,067,030 61,510,524 183,000,000 46,565,750 147,990 40,000 33,564,678 40,000 13,032,137 29,667,632 87,999,000 6,083,525 2,936,222 2,242,077 8,790,000 10,296,000 25,907,000 11,200,000 36,942,942 1,000 2,200,000 12,368 1,000 33,392,942 3,750,000 60,000	16.80 43.87 41.93 100.00 20.57 100.00 32.45 29.60 100.00 49.76 40.00 15.00 39.98 52.10 31.20 15.08 29.00 100.00 100.00 100.00 100.00 100.00 - 100.00 0.02 - 100.00 100.00 60.00	$ 7,779,803 2,166,534 4,865,788 1,349,634 2,194,795 1,283,106 3,318,709 556,990 348,643 832,326 231,027 358,225 405,340 446,656 131,872 99,492 64,878 82,913 4,037,061 RMB 904,723 thousand 215,215 823,920 5 12,369 222 20 736,508 84,510 346,540	$ 1,358,135 86,971 370,701 18,627 138,841 2,763 778,897 41,640 (60,874) 47,246 (101,514) 22,062 15,004 (1,644) 7,249 (12,025) (9,446) 4,218 97,165 RMB 20,375 thousand (974) 12,607 (1,644) (3,676) 15,004 370,701 13,629 - (101,514)	$ 207,453 37,845 155,425 16,438 28,559 2,763 252,752 12,976 (60,874) 23,529 (40,605) 3,287 5,999 (717) 2,240 (1,819) (2,739) 4,218 - - - - - - - - - - -	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 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 Subsidiary Subsidiary Subsidiary Subsidiary Investee accounted for using the equity method Investee accounted for using the equity method Subsidiary Subsidiary Subsidiary

(Continued)

61 -

(Concluded)

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of March 31, 2021	As of March 31, 2021	As of March 31, 2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				March 31, 2021	December 31, 2020	Number of Shares	%	Carrying Amount
Hwa Chung Motors COC	Ling Wei (Note 5) Greentrans (Note 5) Y. M. Hi-Tech (Note 5)	Taipei, Taiwan Taipei, Taiwan Taoyuan, Taiwan	Sales of second-hand vehicle Sales of motorcycle and parts Steel cutting	$ 31,000 10,000 46,250	$ 31,000 10,000 46,250	6,308,397 1,000,000 4,250,000	100.00 100.00 85.00	$ 44,298 10,153 76,038	$ 4,764 (639) 4,057	$ - - -	Subsidiary Subsidiary Subsidiary

Note 1: During preparation of the consolidated financial statements, price making of $75,455 thousand from intra-group transaction had been eliminated.

Note 2: During preparation of the consolidated financial statements, loss on disposal of $22,538 thousand from intra-group transaction had been eliminated.

Note 3: During preparation of the consolidated financial statements, gain on disposal of $31 thousand from intra-group transaction had been eliminated.

Note 4: During preparation of the consolidated financial statements, side stream transaction of $2,189 thousand had been eliminated.

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

62 -

TABLE 7

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE THREE MONTHS ENDED MARCH 31, 2021 (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, 2021 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2021 (Note 1)	Net Income (Loss) of the Investee (Notes 2 and 3)	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Notes 2 and 3)	Carrying Amount as of March 31, 2021 (Note 1)	Accumulated Repatriation of Investment Income as of March 31, 2021 (Note 1)
					Outward	Inward
South East (Fujian) Motor (Note 4) China Engine (Fujian) Fujian Benz Automotive Guangzhou NTN-YULON Drivertrain Fuzhou Fushiang Motor Industrial Xiangyang NTN-YULON Drivertrain Xiamen King-Long Kian-Shen Frame Beijing NTN-SEOHAN Driveshaft (Note 5) Jiangsu Greentrans Automotive Parts (Note 6) 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	$ 3,937,830 (US$ 138,000 thousand) 428,025 (US$ 15,000 thousand) 9,608,760 (EUR 287,000 thousand) 356,688 (US$ 12,500 thousand) 507,352 (US$ 17,780 thousand) 970,190 (US$ 34,000 thousand) 417,024 (RMB 96,000 thousand) 171,210 (US$ 6,000 thousand) 319,592 (US$ 11,200 thousand) 889,677 (RMB 204,806 thousand) 373,267 (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 The Corporation indirectly owns these investees through investment 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	$ 984,458 (US$ 34,500 thousand) 214,013 (US$ 7,500 thousand) 1,559,030 (EUR 46,566 thousand) 142,675 (US$ 5,000 thousand) 80,897 (US$ 2,835 thousand) - 43,573 (US$ 1,527 thousand) 15,409 (US$ 540 thousand) 319,592 (US$ 11,200 thousand) 308,321 (US$ 10,805 thousand) 74,476 (US$ 2,610 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 984,458 (US$ 34,500 thousand) 214,013 (US$ 7,500 thousand) 1,559,030 (EUR 46,566 thousand) 142,675 (US$ 5,000 thousand) 80,897 (US$ 2,835 thousand) - 43,573 (US$ 1,527 thousand) 15,409 (US$ 540 thousand) 319,592 (US$ 11,200 thousand) 308,321 (US$ 10,805 thousand) 74,476 (US$ 2,610 thousand)	$ (407,077) - 1,558,084 (EUR 45,588 thousand) 171,170 (RMB 39,116 thousand) 1,184 (RMB 271 thousand) 80,363 (RMB 18,365 thousand) (11,458) (RMB 2,618 thousand) - (974) 78,178 (14,452) (US$ 509 thousand)	25.00 38.03 16.23 17.55 15.35 17.55 21.94 - 100.00 29.00 20.25	$ (101,769) - 252,806 (EUR 7,392 thousand) 68,468 (RMB 15,646 thousand) 415 (RMB 95 thousand) 32,145 (RMB 7,346 thousand) (5,729) (RMB 1,309 thousand) - (974) 22,672 (2,927) (US$ 103 thousand)	$ 490,745 168,198 3,317,131 (EUR 99,078 thousand) 1,893,701 (RMB 435,953 thousand) 503,724 (RMB 115,958 thousand) 981,493 (RMB 225,942 thousand) 202,365 (RMB 46,585 thousand) - 215,202 438,212 66,068 (US$ 2,315 thousand)	$ 742,566 (US$ 26,023 thousand) - 1,090,142 (EUR 32,561 thousand) 909,112 (RMB 209,280 thousand) 215,263 (RMB 49,554 thousand) - - - - 44,882 (RMB 10,332 thousand) -
												(Continued)

63 -

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, 2021 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2021 (Note 1)	Net Income (Loss) of the Investee (Notes 2 and 3)	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Notes 2 and 3)	Carrying Amount as of March 31, 2021 (Note 1)	Accumulated Repatriation of Investment Income as of March 31, 2021 (Note 1)
							Outward	Inward
Fujian Rui Hua (Note 6) Tianjin Hwarui (Note 6) Dongguan Huayi (Note 6) Dongguan Huashun (Note 6) Tianjin Hwahong (Note 6)	Consultation and services Sales and maintenance of vehicle and parts Sales and maintenance of vehicle and parts Sales of vehicle and parts Sales of vehicle and parts		97,019 (US$ 3,400 thousand) 228,851 (US$ 8,020 thousand) 126,981 (US$ 4,450 thousand) 108,600 (RMB 25,000 thousand) 130,320 (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		97,019 (US$ 3,400 thousand) 221,460 (US$ 7,761 thousand) 120,332 (US$ 4,217 thousand) - -	- - - - -	- - - - -	97,019 (US$ 3,400 thousand) 221,460 (US$ 7,761 thousand) 120,332 (US$ 4,217 thousand) - -	(1,022) (2,267) (6) - (166) (RMB 38 thousand)	100.00 100.00 100.00 100.00 100.00	(1,022) (2,267) (6) - (166) (RMB 38 thousand)	87,375 194,909 14,232 13,188 (RMB 3,036 thousand) 128,704 (RMB 29,628 thousand)	- - - - -

Accumulated Outward Remittance for Investment in Mainland China as of March 31, 2021 (Note 1)		Investment Amount Authorized by the Investment Commission, MOEA (Note 1)			Upper Limit on the Amount of the Investment Stipulated by Investment Commission, MOEA
$5,055,766 (US$122,542 thousand and EUR46,566 thousand)		$5,983,669 (US$193,895 thousand and EUR13,467 thousand)			$26,089,767

Note 1: Converted at the exchange rates on March 31, 2021: US$1=NT$28.535, RMB1=NT$4.344, EUR1=NT$33.48.

Note 2: Converted at average exchange rates for the three months ended March 2021: US$1=NT$28.366, RMB1=NT$4.376, EUR1=NT$34.2.

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

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

Note 5: Beijing NTN-SEOHAN Driveshaft was disposed of in February 2021. The Group had applied to the Investment Commission, MOEA for a decrease in the amount of investments in mainland China on March 30, 2021 and received authorization letter of MOEAIC-Second No. 11000085360 on April 15, 2021.

Note 6: Eliminated during the preparation of the consolidated financial statements.

(Concluded)

64 -

TABLE 8

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE THREE MONTHS ENDED MARCH 31, 2021

(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	Subsidiary Subsidiary	Other receivables Cost of goods sold Accounts payable	$ 600,000 197,684 142,438	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	1.09 2.29 0.26

Note 1: This table includes transactions for amounts over one hundred million.

Note 2: Eliminated during the preparation of the consolidated financial statements.

65 -

TABLE 9

CHINA MOTOR CORPORATION

INFORMATION OF MAJOR SHAREHOLDERS MARCH 31, 2021

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 information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Corporation as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

66 -

TABLE 10

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FRAMEWORK OF INTERCOMPANY INVESTMENT RELATIONSHIPS AND SHAREHOLDING PERCENTAGE MARCH 31, 2021

==> picture [964 x 504] 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
Co., Ltd.
100.00% 100.00% 100.00% 100.00%
KSIHK Fujian Rui Hwa-Lin Hwa Wei Holdings
(Hong Kong) Hua (British Virgin Jiangsu (British Virgin
Islands) Greentrans Islands)
100.00% 99.75%
0.25%
Tianjin Hwarui
Dongguan Huayi
100.00% 100.00%
Dongguan Tianjin
Huashun Hwahong
----- End of picture text -----

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

67 -

Hedged Item Cash flow hedge Forecast purchases Comprehensive Income Impact Cash flow hedges Forecast purchases	Change in Value Used for Calculating Hedge Accumulated Gains or Losses on Hedging Instruments in Other Equity Continuing Ineffectiveness Hedges $ 1,694 $ (1,694) Hedging Gains (Losses) Recognized inOCI	Change in Value Used for Calculating Hedge Accumulated Gains or Losses on Hedging Instruments in Other Equity Continuing Ineffectiveness Hedges $ 1,694 $ (1,694) Hedging Gains (Losses) Recognized inOCI	Change in Value Used for Calculating Hedge Accumulated Gains or Losses on Hedging Instruments in Other Equity Continuing Ineffectiveness Hedges $ 1,694 $ (1,694) Hedging Gains (Losses) Recognized inOCI
	For the Three Months Ended March 31
		2021 $ (27,117)	2020 $ 14,835

AI assistant

CMC — Interim / Quarterly Report 2021

51979_rns_2021-12-29_7cf7f389-9d55-4b81-b904-d3ae97ce5500.pdf

China Motor Corporation and Subsidiaries

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notice to Readers

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

b. Basis of preparation

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

March 31, 2021

March 31, 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

March 31, 2021

11. FINANCIAL INSTRUMENTS FOR HEDGING

March 31, 2021

March 31, 2020

12. NOTES AND ACCOUNTS RECEIVABLE, NET

13. INVENTORIES

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

15. NON-CURRENT ASSETS HELD FOR SALE

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

1) Material associates

Yulon and subsidiaries

17. PROPERTY, PLANT AND EQUIPMENT

18. LEASE ARRANGEMENTS

b. Lease liabilities

c. Material leasing activities and terms

d. Other lease information

19. INVESTMENT PROPERTIES

20. BORROWINGS

21. OTHER PAYABLES

22. RETIREMENT BENEFIT PLANS

23. EQUITY

c. Retained earnings and dividend policy

e. Other equity items

24. REVENUE

25. NET PROFIT

c. Employee benefits expense

Amount

26. INCOME TAXES

a. Income tax recognized in profit or loss

c. Income tax assessments

27. EARNINGS PER SHARE

Unit: NT$ Per Share

Net Profit for the Period

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

28. CAPITAL MANAGEMENT

29. FINANCIAL INSTRUMENTS

December 31, 2020

1) Market risk

a) Foreign currency risk

CMC Interim / Quarterly Report 2021