CMC - Interim / Quarterly Report 2021

China Motor Corporation and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 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 June 30, 2021 and 2020, the related consolidated statements of comprehensive income for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the consolidated statements of changes in equity and cash flows for the six months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”). Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

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

Basis for Qualified Conclusion

The financial statements of some non-significant subsidiaries included in the consolidated financial statements were not reviewed. As of June 30, 2021 and 2020, combined total assets of these non-significant subsidiaries were NT$8,465,459 thousand and NT$8,875,570 thousand, respectively, representing 15% and 18%, respectively, of the consolidated total assets, and combined total liabilities of these non-significant subsidiaries were NT$2,835,756 thousand and NT$2,792,156 thousand, respectively, representing 23% and 39%, respectively, of the consolidated total liabilities; for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the amounts of combined comprehensive income (loss) of these non-significant subsidiaries were NT$(6,476) thousand, NT$42,605 thousand, NT$(63,905) thousand and NT$(91,165) thousand, respectively, representing 1%, 4%, 2% and 7%, respectively, of the consolidated total comprehensive income. As disclosed in Note 15 to the consolidated financial statements, as of June 30, 2021 and 2020, some investments accounted for using the equity method were NT$9,305,327 thousand and NT$9,130,065 thousand, respectively, and for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020,

the comprehensive income (loss) of these equity-method investments were NT$387,353 thousand, NT$370,480 thousand, NT$725,685 thousand and NT$74,135 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 June 30, 2021 and 2020, its consolidated financial performance for the three months ended June 30, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the six months ended June 30, 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 August 5, 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, 10 and 30) Financial assets for hedging (Note 11) Notes and accounts receivable, net (Note 12) Trade receivables from related parties (Note 29) Other receivables Inventories (Note 13) Prepayments (Note 29) Other current assets 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 15) Property, plant and equipment (Notes 16, 29 and 30) Right-of-use assets (Note 17) Investment properties (Notes 18 and 30) Intangible assets under development Deferred tax assets Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 19) Short-term bills payable Notes and accounts payable Trade payables to related parties (Note 29) Dividends payable Other payables (Note 20) Current tax liabilities (Note 4) Lease liabilities (Notes 4 and 17) Current portion of long-term borrowings (Note 19) Other current liabilities (Notes 7, 11 and 29) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 19) Deferred tax liabilities Lease liabilities (Notes 4 and 17) Net defined benefit liabilities (Note 4) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 22) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain on investments in financial assets at fair value through other comprehensive income Gain (loss) on the hedging instruments (Note 11) Total other equity Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS (Note 14) Total equity TOTAL		June 30, 2021 (Reviewed) Amount % $ 10,353,960 18 1,020,888 2 436,574 1 136,437 - 873,003 1 1,244,614 2 317,714 1 4,488,315 8 2,627,917 5 224,186 - 21,723,608 38 698,595 1 153,508 - 1,113,299 2 23,979,221 42 6,433,262 11 395,583 1 1,349,498 2 383,929 1 294,332 1 252,730 1 35,053,957 62 $ 56,777,565 100 $ 85,000 - 109,943 - 2,753,687 5 792,654 1 4,028,981 7 2,345,215 4 316,264 1 78,305 - 37,500 - 291,493 1 10,839,042 19 31,250 - 521,552 1 326,168 1 626,583 1 54,184 - 1,559,737 3 12,398,779 22 5,536,203 10 6,413,578 11 9,581,001 17 1,028,359 2 18,938,335 33 29,547,695 52 (1,008,835) (2) 370,265 1 (16,954) - (655,524) (1) 40,841,952 72 3,536,834 6 44,378,786 78 $ 56,777,565 100		December 31, 2020 (Audited) Amount % $ 10,403,769 19 1,059,429 2 366,456 1 120,266 - 914,273 2 1,267,478 2 46,490 - 3,809,653 7 1,728,436 3 662,614 1 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 2 145,700 - 2,641,821 5 284,692 1 87,196 - 37,500 - 216,703 - 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		June 30, 2020 (Reviewed)
						Amount % $ 7,676,382 15 794,828 2 238,858 1 371,182 1 556,780 1 1,750,596 3 465,722 1 3,622,170 7 1,184,909 2 489,296 1 17,150,723 34 666,751 1 201,307 - 839,904 2 22,507,417 45 6,524,801 13 394,159 1 1,360,532 3 356,850 1 211,108 - 266,006 - 33,328,835 66 $ 50,479,558 100 $ 340,000 1 149,997 - 1,853,995 4 676,401 1 140,601 - 1,907,701 4 289,896 1 88,810 - 18,750 - 273,819 - 5,739,970 11 81,250 - 413,114 1 311,623 1 613,823 1 34,174 - 1,453,984 3 7,193,954 14 5,536,203 11 6,413,737 13 9,257,157 18 1,028,359 2 18,814,902 37 29,100,418 57 (1,238,611) (2) 158,927 - 226 - (1,079,458) (2) 39,970,900 79 3,314,704 7 43,285,604 86 $ 50,479,558 100

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

(With Deloitte & Touche review report dated August 5, 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 23 and 29) Net sales Other operating revenue Total operating revenue OPERATING COSTS (Notes 13, 21, 24 and 29) Cost of goods sold Other operating costs Total operating costs GROSS PROFIT REALIZED (UNREALIZED) GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 21, 24 and 29) 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 15) Interest income Other income Gain on disposal of investments (Note 24) Gain (loss) on financial instruments at fair value through profit or loss Expected credit gain (loss) (Notes 10 and 24) Interest expense Other expense Net foreign exchange loss Impairment loss (Note 24) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 25) NET PROFIT FOR THE PERIOD		For the Three Months EndedJune 30	For the Three Months EndedJune 30	For the Three Months EndedJune 30		For theSix Months	For theSix Months	EndedJune 30
		2021		2020		2021		2020
		Amount % $ 7,056,618 93 494,043 7 7,550,661 100 5,816,151 77 55,537 1 5,871,688 78 1,678,973 22 (8,065) - 1,670,908 22 489,128 7 222,741 3 240,912 3 952,781 13 718,127 9 729,629 10 26,142 - 63,702 1 - - 9,594 - 11,430 - (1,680 ) - (1,402 ) - (35,658 ) - (29) - 801,728 11 1,519,855 20 214,459 3 1,305,396 17		Amount % $ 6,778,673 95 337,161 5 7,115,834 100 5,787,909 81 35,650 1 5,823,559 82 1,292,275 18 4,505 - 1,296,780 18 306,021 4 187,240 3 424,328 6 917,589 13 379,191 5 577,506 8 19,966 - 39,385 - 234,953 3 (15,196 ) - (92,441 ) (1 ) (4,474 ) - (6,210 ) - (30,242 ) - (94,529) (1) 628,718 9 1,007,909 14 23,053 - 984,856 14		Amount % $ 15,382,274 95 813,073 5 16,195,347 100 12,788,657 79 90,707 1 12,879,364 80 3,315,983 20 (20,431) - 3,295,552 20 785,631 5 463,716 3 536,346 3 1,785,693 11 1,509,859 9 1,409,966 9 51,235 - 72,913 1 - - 20,917 - 25,175 - (3,657 ) - (3,678 ) - (18,585 ) - (29) - 1,554,257 10 3,064,116 19 402,880 3 2,661,236 16		Amount % $ 14,131,447 96 646,606 4 14,778,053 100 12,058,578 82 66,681 - 12,125,259 82 2,652,794 18 (30,648) - 2,622,146 18 571,687 4 403,798 3 753,123 5 1,728,608 12 893,538 6 719,555 5 43,406 - 57,679 - 224,621 2 (19,213 ) - (61,622 ) - (9,592 ) - (6,523 ) - (38,538 ) - (94,529) (1) 815,244 6 1,708,782 12 110,102 1 1,598,680 11 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Unrealized gain (loss) on investment in equity instruments at fair value through other comprehensive income (Note 22) Gain (loss) on hedging instruments (Notes 11 and 22) Share of other comprehensive income (loss) of associates accounted for using the equity method (Notes 15 and 22) Income tax relating to items that will not be reclassified subsequently to profit or loss (Notes 4 and 25) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (Note 22) Share of the other comprehensive loss of associates and joint ventures accounted for using the equity method (Notes 15 and 22) 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 EndedJune 30	For the Three Months EndedJune 30	For the Three Months EndedJune 30		For theSix Months	For theSix Months	EndedJune 30
		2021		2020		2021		2020
		Amount % $ (2,407 ) - (2,230 ) - 61,307 1 664 - (7,070 ) - (95,478) (1) (45,214) - $ 1,260,182 17 $ 1,253,739 16 51,657 1 $ 1,305,396 17		Amount % $ 12,279 - (9,550 ) - 175,740 2 1,055 - (12,682 ) - (201,805) (3) (34,963) (1) $ 949,893 13 $ 913,207 13 71,649 1 $ 984,856 14		Amount % $ (6,997 ) - (29,347 ) - 155,133 1 4,253 - (12,621 ) - (103,604) (1) 6,817 - $ 2,668,053 16 $ 2,537,616 15 123,620 1 $ 2,661,236 16		Amount % $ (5,241 ) - 5,285 - (55,672 ) (1 ) 24 - (13,271 ) - (284,086) (2) (352,961) (3) $ 1,245,719 8 $ 1,522,172 10 76,508 1 $ 1,598,680 11 (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 26) Basic Diluted		For the Three Months EndedJune 30	For the Three Months EndedJune 30	For the Three Months EndedJune 30		For theSix Months	For theSix Months	EndedJune 30
		2021		2020		2021		2020
		Amount % $ 1,226,474 16 33,708 1 $ 1,260,182 17 $ 2.30 $ 2.30		Amount % $ 909,478 13 40,415 - $ 949,893 13 $ 1.67 $ 1.67		Amount % $ 2,578,484 16 89,569 - $ 2,668,053 16 $ 4.65 $ 4.65		Amount % $ 1,227,996 8 17,723 - $ 1,245,719 8 $ 2.79 $ 2.79

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

(With Deloitte & Touche review report dated August 5, 2021)

(Concluded)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

		Equity Attributable to Owners of the	Corporation
Ordinary Sh	ares Amount Capital Surplus $ 5,536,203 $ 6,414,118 - - - (381 ) - - - - - - - - - - - - $ 5,536,203 $ 6,413,737 $ 5,536,203 $ 6,411,778 - - - - - 1,800 - - - - - - - - - - - - - - $ 5,536,203 $ 6,413,578	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 9,257,157 $ 1,029,654 $ 17,306,526 - (1,295 ) 1,295 - - (7,532 ) - - - - - 1,522,172 - - 368 - - 1,522,540 - - (7,927 ) - - - $ 9,257,157 $ 1,028,359 $ 18,814,902 $ 9,257,157 $ 1,028,359 $ 20,544,970 323,844 - (323,844 ) - - (3,875,342 ) - - - - - - - - 2,537,616 - - 1,008 - - 2,538,624 - - 23,509 - - 30,418 - - - $ 9,581,001 $ 1,028,359 $ 18,938,335	Other Equity Exchange Differences on Translating the Financial Unrealized Gain on Financial Assets at Fair Value Equity Directly Associated with Statements of Through Other Gain (Loss) on Non-current Foreign Operations Comprehensive Income Hedging Instruments Assets Held for Sale $ (990,653 ) $ 216,562 $ (19,968 ) $ (7,538 ) - - - - - - - - - - - - - - - - (247,958) (65,562) 11,438 7,538 (247,958) (65,562) 11,438 7,538 - 7,927 - - - - 8,756 - $ (1,238,611) $ 158,927 $ 226 $ - $ (926,661 ) $ 264,666 $ 6,918 $ - - - - - - - - - - - - - - - - - - - - - (82,174) 159,526 (37,492) - (82,174) 159,526 (37,492) - - (23,509 ) - - - (30,418 ) - - - - 13,620 - $ (1,008,835) $ 370,265 $ (16,954) $ -
			Exchange Differences on Translating the Financial Unrealized Gain on Financial Assets at Fair Value Statements of Through Other Foreign Operations Comprehensive Income $ (990,653 ) $ 216,562 - - - - - - - - (247,958) (65,562) (247,958) (65,562) - 7,927 - - $ (1,238,611) $ 158,927 $ (926,661 ) $ 264,666 - - - - - - - - - - (82,174) 159,526 (82,174) 159,526 - (23,509 ) - (30,418 ) - - $ (1,008,835) $ 370,265
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 August 5, 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 loss (gain) recognized Net loss (gain) on fair value change of financial instruments at fair value through profit or loss Interest expenses Interest income Dividend income Share of profit of associates and joint ventures Net loss on disposal of property, plant and equipment Gain on disposal of investments Impairment loss (gain on reversal) of non-financial assets Unrealized gain on transactions with associates Unrealized gain on foreign currency exchange Gain on lease modifications Changes in operating assets and liabilities Financial instruments at fair value through profit or loss Notes and accounts receivable Trade receivables from related parties Other receivables Inventories Prepayments Other current assets Notes and accounts payable Trade payables to related parties Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 3,064,116 415,014 43,780 (23,777) (20,917) 3,657 (51,235) (255) (1,409,966) 773 - (15,243) 20,431 (27,264) - 36,422 39,727 22,776 (30,971) (648,150) (924,185) 438,423 168,791 (111,859) (259,365) (58,717) (24,847) 647,159 (387,443) 259,716	2020 $ 1,708,782 408,532 64,601 56,025 19,213 9,592 (43,406) (405) (719,555) 2,229 (224,621) 53,626 30,648 (11,399) (1,826) (452,203) 639,232 (293,639) 222,134 1,045,800 375,344 171,733 (847,903) (308,363) (514,034) 52,177 (121,577) 1,320,737 (175,215) 1,145,522 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CASH FLOWS FROM INVESTING ACTIVITIES Disposal of financial assets at fair value through other comprehensive income 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 investments accounted for using the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease (increase) 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 Decrease in short-term bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Repayment of the principal portion of lease liabilities Increase (decrease) in other non-current liabilities Interest paid Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (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 Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 18,368 - (1,345,378) 703,354 (12,000) (340,283) 27,704 (32,352) 21,366 46,343 875,878 (37,000) (130,000) (40,020) - (25,000) (38,540) (670) (3,676) (237,906) (14,023) (29,213) 10,519,610 $ 10,490,397	2020 $ - 404 (1,111,258) 1,046,078 - (485,482) 20,034 (7,595) (257,425) 41,700 1,091,131 337,587 (275,000) (33,942) 50,000 - (47,034) 12,034 (9,664) (303,606) (12,429) 1,167,074 6,880,490 $ 8,047,564 (Continued)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets at June 30, 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		June 30	June 30
		2021 $ 10,353,960 136,437 $ 10,490,397	2020 $ 7,676,382 371,182 $ 8,047,564

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

(With Deloitte & Touche review report dated August 5, 2021) (Concluded)

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CHINA MOTOR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 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 August 3, 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. The IFRSs endorsed by the FSC for application starting from 2022

Effective Date New IFRSs Announced by IASB “Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 1) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 2) Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 3) before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 4) Contract”

Note 1: 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 2: 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 3: 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 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
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As of the date the consolidated financial statements were issued, the Group assessed that the application of the aforementioned standards and interpretations will not have a significant impact on the Group’s financial position and financial performance.

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

Effective Date New IFRSs Announced by IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 2) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 3) Amendments to IAS 12 “Deferred Tax related to Assets and January 1, 2023 (Note 4) Liabilities arising from a Single Transaction”

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 3: 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 4: Except for deferred taxes that 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.

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 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.

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The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Basis of consolidation
1) Principles for preparing the consolidated financial statements

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

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

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

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

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

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.

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2) Subsidiaries included in the consolidated financial statements

Investor
Investee
Main Business
China-Motor Corporation
(parent)
Kian Shen Corporation (“Kian Shen”)
Production of frame of heavy duty
car and mold
Hwa Wei Holdings Corporation Ltd.
(“Hwa Wei”)
Overseas investment 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
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 (%)
June 30,
2021
December 31,
2020
June 30,
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)
-
-
52.10
e)
52.10
52.10
52.10
g)
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
-
-
-
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. Owning 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.
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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 June 30, 2021, the liquidation had not been completed.
g) The Group’s board of directors resolved to dissolve Advance Power Machinery on December 10, 2020. As of June 30, 2021, the liquidation had not been completed.

For the relationships between the Corporation and its controlled entities as of June 30, 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.

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 recent development of the COVID-19 in Taiwan and its economic environment implications when making its critical accounting estimates in cash flow projections, growth rate, discount rate, profitability, etc. 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 the revisions and future periods if the revisions affect both current and future periods.

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6. CASH AND CASH EQUIVALENTS

7.	Cash Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits Repurchase agreements collateralized by bonds FINANCIAL INSTRUMENTS AT FAIR VALUE Financial assets-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts Financial 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	June 30, 2021 December 31, 2020 $ 2,393 $ 1,338 2,930,236 3,473,411 2,932,629 3,474,749 7,401,829 6,558,227 19,502 370,793 7,421,331 6,929,020 $ 10,353,960 $ 10,403,769 THROUGH PROFIT OR LOSS June 30, 2021 December 31, 2020 $ 1,016,821 $ 1,056,288 4,067 3,141 $ 1,020,888 $ 1,059,429 $ 698,595 $ 672,914 $ 2,645 $ -	June 30, 2020 $ 2,868 2,560,217 2,563,085 5,058,326 54,971 5,113,297 $ 7,676,382 June 30, 2020 $ 794,333 495 $ 794,828 $ 666,751 $ 4,928

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

June 30, 2021

			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2021.07.06-2021.09.07	USD19,500/NTD538,536
	JPY/NTD	2021.08.27-2021.09.27	JPY300,000/NTD75,485
Sell	RMB/USD	2021.07.09-2021.09.07	RMB80,502/USD12,500
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
June 30, 2020
			Notional Amount
Transaction	Currency	Maturity Date	(In Thousands)
Buy	USD/NTD	2020.07.06-2020.08.14	USD9,500/NTD282,247
	JPY/NTD	2020.08.27-2020.09.25	JPY300,000/NTD82,570
Sell	RMB/USD	2020.07.06-2020.07.17	RMB17,804/USD2,500

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	June 30, 2021 December 31, 2020 $ 16,642 $ 30,370 24,024 24,145 40,666 54,515 112,842 124,358 $ 153,508 $ 178,873	June 30, 2020 $ 31,512 24,686 56,198 145,109 $ 201,307

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.

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9. FINANCIAL ASSETS AT AMORTIZED COST

Current Pledged deposits (Note 30) 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	June 30, 2021 December 31, 2020 $ 240,318 $ 180,486 175,908 136,540 20,858 50,017 437,084 367,043 (510) (587) $ 436,574 $ 366,456 $ 1,007,444 $ 434,841 100,000 100,000 9,900 9,900 1,117,344 544,741 (4,045) (4,025) $ 1,113,299 $ 540,716	June 30, 2020 $ 180,486 50,292 8,296 239,074 (216) $ 238,858 $ 514,807 317,640 9,900 842,347 (2,443) $ 839,904

a. The rates of pledged deposits ranged from 0.65%-0.82%, 0.65%-1.03% and 0.65%-1.115% per annum as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
b. The coupon rates of principal guaranteed notes ranged from 0.48%-2.60%, 0.52%-2.50% and 1.90%-2.30% per annum as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
c. 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” during the six months ended June 30, 2021 and 2020. The funds after tax were deposited into the segregated foreign exchange deposit account. The deposit was restricted under the Act, except that a portion of the funds could be withdrawn and freely utilized or engaged in financial investments or substantive investments. The funds could be withdrawn over a period of three years and five years from the date of depositing them into the segregated foreign exchange deposit account. The rates of offshore funds ranged from 0.001%-1.50%, 0.10%-1.50% and 0.30%-1.50% per annum as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
d. The coupon rates of bonds were both 0.86% per annum as of June 30, 2021 and December 31, 2020 and ranged from 0.86%-4.20% per annum as of June 30, 2020.
e. The coupon rate of preference shares was 1.50% per annum as of June 30, 2021, December 31, 2020 and June 30, 2020.
f. Refer to Note 10 for information relating to the credit risk management and impairment.
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10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

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

Gross carrying amount Less: Allowance for impairment loss Amortized cost	June 30, 2021 December 31, 2020 $ 1,554,428 $ 911,784 (4,555) (4,612) $ 1,549,873 $ 907,172	June 30, 2020 $ 1,081,421 (2,659) $ 1,078,762

The Group invests only in debt instruments that are rated the equivalent of investment grade or higher and have 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

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

June 30, 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%	Gross Carrying Amount
	At Amortized Cost $ 1,544,528 9,900 Gross Carrying Amount
	At Amortized Cost $ 901,884 9,900

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June 30, 2020

Expected Credit Credit Rating Loss Rate Performing 0.00%-0.43% No rating 20.6080%	Gross Carrying Amount
	At Amortized Cost $ 1,071,521 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 at June 30, 2021 Balance at January 1, 2020 Financial assets purchased (a) Derecognition (b) Change in exchange rates or others Balance at June 30, 2020	Credit Rating
	Performing (12-month ECLs) No rating (Lifetime ECLs - Not Credit- impaired) $ 657 $ 3,955 2,068 - (2,148) - (23) - $ 600 $ 3,955 $ 1,918 $ 32,952 2,529 - (3,725) (30,912) (103) - $ 619 $ 2,040

a. During the six months ended June 30, 2021 and 2020, the Group purchased principal guaranteed notes in the amounts of $712,944 thousand and $588,155 thousand, respectively, and correspondingly the loss allowance for investments rated as performing increased by $2,068 thousand and $2,529 thousand, respectively.
b. Investments in principal guaranteed notes of $674,195 thousand expired and were redeemed during the six months ended June 30, 2021, with consequential reductions in the loss allowance for investments rated as performing of $2,148 thousand; and investments in principal guaranteed notes of $546,395 thousand and bonds of $498,670 thousand expired and were redeemed during the six months ended June 30, 2020, with consequential reduction in the loss allowance for investments rated as performing of $3,725 thousand and lifetime ECLs of $30,912 thousand.
20 -

11. FINANCIAL INSTRUMENTS FOR HEDGING

Financial assets Cash flow hedges - spot rate Cash flow hedges - foreign exchange forward contracts Financial liabilities (included in other current liabilities) Cash flow hedges - foreign exchange forward contracts	June 30, 2021 December 31, 2020 $ 136,437 $ 115,841 - 4,425 $ 136,437 $ 120,266 $ 2,980 $ 79	June 30, 2020 $ 371,182 - $ 371,182 $ 4,105

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 six months ended June 30, 2021 and 2020, hedging instruments at fair value and transferred to the initial carrying amount of hedged items are detailed in Note 22(e).

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

June 30, 2021

Notional Amount Forward Rate Hedging Instrument Currency (In Thousands) Maturity (JPY1:NTD) Line Item Cash flow hedges Forecast purchases - spot rate JPY/NTD JPY541,200/NTD140,776 2021.07.13- 2021.09.16 0.2580-0.2675 Financial assets for hedging Forecast purchases - foreign exchange JPY/NTD JPY510,000/NTD131,310 2021.07.14- 2021.08.20 0.2570-0.2584 Other current liabilities forward contracts		Carrying A	mount Liabilities I $ - (2,980) $ (2,980)	Change in Value Used for Calculating Hedge neffectiveness $ (4,123 ) (2,384) $ (6,507)
		Assets $ 136,437 - $ 136,437

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		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	$ 6,507	$ (6,507)

December 31, 2020

Notional Amount Forward Rate Hedging Instruments Currency (In Thousands) Maturity (Note) Line Item Cash flow hedge Forecast purchases - spot rate JPY/NTD JPY419,258/NTD113,979 2021.02.15- 2021.03.14 0.2700-0.2794 Financial assets for hedging Forecast purchases - foreign exchange forward contracts JPY/NTD JPY1,880,000/NTD503,630 2021.01.15- 2021.03.22 0.2665-0.2692 Financial assets for hedging Forecast purchases - foreign exchange JPY/NTD JPY225,000/NTD60,975 2021.01.27 0.2710 Other current liabilities forward contracts		Carrying A	mount Liabilities I $ - - (79) $ (79)	Change in Value Used for Calculating Hedge neffectiveness $ 1,489 3,540 (63) $ 4,966
		Assets $ 115,841 4,425 - $ 120,266

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 Items	Ineffectiveness	Hedges
Cash flow hedge
Forecast purchases	$ (4,966)	$ 4,966

June 30, 2020

Notional Amount Forward Rate Hedging Instrument Currency (In Thousands) Maturity (JPY1:NTD) Line Item Cash flow hedges Forecast purchases - spot rate JPY/NTD JPY1,349,263/$375,243 2020.08.17- 2020.12.15 0.2729-0.2800 Financial assets for hedging Forecast purchases - foreign exchange JPY/NTD JPY740,000/$205,244 2020.07.16- 2020.11.16 0.2752-0.2799 Other current liabilities forward contracts		Carrying A	mount Liabilities I $ - (4,105) $ (4,105)	Change in Value Used for Calculating Hedge neffectiveness $ (1,857 ) (3,284) $ (5,141)
		Assets $ 371,182 - $ 371,182

22 -

Hedged Item Cash flow hedge Forecast purchases Comprehensive Income Impact Cash flow hedges Forecast purchases	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 5,141 $ (5,141) Hedging Gains (Losses) Recognized in OCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 5,141 $ (5,141) Hedging Gains (Losses) Recognized in OCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 5,141 $ (5,141) Hedging Gains (Losses) Recognized in OCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 5,141 $ (5,141) Hedging Gains (Losses) Recognized in OCI	Change in Value Used for Calculating Accumulated Gains or Losses on Hedging Instruments in Other Equity Hedge Ineffectiveness Continuing Hedges $ 5,141 $ (5,141) Hedging Gains (Losses) Recognized in OCI
	For the Three Months Ended June 30 2021 2020 $ (2,230) $ (9,550)			For the Six Months Ended June 30
		2021 $ (2,230)		2021 $ (29,347)	2020 $ 5,285

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	June 30, 2021 December 31, 2020 $ 882,752 $ 922,742 (9,749) (8,469) $ 873,003 $ 914,273	June 30, 2020 $ 567,390 (10,610) $ 556,780

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.

23 -

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	June 30, 2021 December 31, 2020 $ 878,997 $ 917,086 2,413 3,260 533 433 809 1,963 882,752 922,742 (9,749) (8,469) $ 873,003 $ 914,273	June 30, 2020 $ 520,562 3,389 219 43,220 567,390 (10,610) $ 556,780

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 June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 8,469 1,398 - (118) $ 9,749	2020 $ 16,348 - (5,597) (141) $ 10,610

13. INVENTORIES

Merchandise Finished goods Work in progress Raw materials Materials in transit	June 30, 2021 December 31, 2020 $ 82,469 $ 128,537 1,452,115 1,240,435 328,551 279,501 2,591,040 2,081,440 34,140 79,740 $ 4,488,315 $ 3,809,653	June 30, 2020 $ 193,251 384,772 463,043 2,333,749 247,355
		$ 3,622,170

The costs of inventories recognized as cost of goods sold for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020 was $5,816,151 thousand, $5,787,909 thousand, $12,788,657 thousand and $12,058,578 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 June 30, 2021, December 31, 2020 and June 30, 2020.

Refer to Table 6 for information on the country of incorporation and principal places of business of Kian Shen and its subsidiaries.

24 -

The summarized financial information below represents amounts before intragroup eliminations.

Kian Shen and Kian Shen’s subsidiaries

June 30, 2021 December 31, 2020 June 30, 2020 Current assets $ 1,161,737 $ 1,242,835 $ 935,733 Non-current assets 4,129,651 4,041,897 4,023,382 Current liabilities (693,745) (573,234) (626,219) Non-current liabilities (339,991) (387,522) (368,472) Equity $ 4,257,652 $ 4,323,976 $ 3,964,424 Equity attributable to: Owners of Kian Shen $ 1,867,832 $ 1,896,928 $ 1,739,193 Non-controlling interests of Kian Shen 2,389,820 2,427,048 2,225,231 $ 4,257,652 $ 4,323,976 $ 3,964,424 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 Revenue $ 372,689 $ 251,134 $ 690,213 $ 458,805 Profit for the period $ 68,850 $ 92,070 $ 155,821 $ 107,218 Other comprehensive loss for the period (31,978) (55,646) (60,665) (104,730) Total comprehensive income for the period $ 36,872 $ 36,424 $ 95,156 $ 2,488 Profit attributable to: Owners of Kian Shen $ 30,205 $ 40,392 $ 68,359 $ 47,037 Non-controlling interests of Kian Shen 38,645 51,678 87,462 60,181 $ 68,850 $ 92,070 $ 155,821 $ 107,218 Total comprehensive income attributable to: Owners of Kian Shen $ 16,176 $ 15,979 $ 41,745 $ 1,091 Non-controlling interests of Kian Shen 20,696 20,445 53,411 1,397 $ 36,872 $ 36,424 $ 95,156 $ 2,488	June 30, 2021 December 31, 2020 June 30, 2020 Current assets $ 1,161,737 $ 1,242,835 $ 935,733 Non-current assets 4,129,651 4,041,897 4,023,382 Current liabilities (693,745) (573,234) (626,219) Non-current liabilities (339,991) (387,522) (368,472) Equity $ 4,257,652 $ 4,323,976 $ 3,964,424 Equity attributable to: Owners of Kian Shen $ 1,867,832 $ 1,896,928 $ 1,739,193 Non-controlling interests of Kian Shen 2,389,820 2,427,048 2,225,231 $ 4,257,652 $ 4,323,976 $ 3,964,424 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 Revenue $ 372,689 $ 251,134 $ 690,213 $ 458,805 Profit for the period $ 68,850 $ 92,070 $ 155,821 $ 107,218 Other comprehensive loss for the period (31,978) (55,646) (60,665) (104,730) Total comprehensive income for the period $ 36,872 $ 36,424 $ 95,156 $ 2,488 Profit attributable to: Owners of Kian Shen $ 30,205 $ 40,392 $ 68,359 $ 47,037 Non-controlling interests of Kian Shen 38,645 51,678 87,462 60,181 $ 68,850 $ 92,070 $ 155,821 $ 107,218 Total comprehensive income attributable to: Owners of Kian Shen $ 16,176 $ 15,979 $ 41,745 $ 1,091 Non-controlling interests of Kian Shen 20,696 20,445 53,411 1,397 $ 36,872 $ 36,424 $ 95,156 $ 2,488	June 30, 2021 December 31, 2020 June 30, 2020 Current assets $ 1,161,737 $ 1,242,835 $ 935,733 Non-current assets 4,129,651 4,041,897 4,023,382 Current liabilities (693,745) (573,234) (626,219) Non-current liabilities (339,991) (387,522) (368,472) Equity $ 4,257,652 $ 4,323,976 $ 3,964,424 Equity attributable to: Owners of Kian Shen $ 1,867,832 $ 1,896,928 $ 1,739,193 Non-controlling interests of Kian Shen 2,389,820 2,427,048 2,225,231 $ 4,257,652 $ 4,323,976 $ 3,964,424 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 Revenue $ 372,689 $ 251,134 $ 690,213 $ 458,805 Profit for the period $ 68,850 $ 92,070 $ 155,821 $ 107,218 Other comprehensive loss for the period (31,978) (55,646) (60,665) (104,730) Total comprehensive income for the period $ 36,872 $ 36,424 $ 95,156 $ 2,488 Profit attributable to: Owners of Kian Shen $ 30,205 $ 40,392 $ 68,359 $ 47,037 Non-controlling interests of Kian Shen 38,645 51,678 87,462 60,181 $ 68,850 $ 92,070 $ 155,821 $ 107,218 Total comprehensive income attributable to: Owners of Kian Shen $ 16,176 $ 15,979 $ 41,745 $ 1,091 Non-controlling interests of Kian Shen 20,696 20,445 53,411 1,397 $ 36,872 $ 36,424 $ 95,156 $ 2,488
$
$
$

	2021 $ 690,213 $ 155,821 (60,665) $ 95,156 $ 68,359 87,462 $ 155,821 $ 41,745 53,411 $ 95,156	2020 $ 458,805 $ 107,218 (104,730) $ 2,488 $ 47,037 60,181 $ 107,218 $ 1,091 1,397 $ 2,488

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Net cash inflow (outflow) from: Operating activities Investing activities Financing activities Foreign exchange adjustments Net cash inflow		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 24,693 273,484 (165,698) (5,162) $ 127,317	2020 $ (138,186) 244,704 19,331 302 $ 126,151

As of June 30, 2021 and 2020, Kian Shen had declared dividends amounting to $161,480 thousand and $146,800 thousand, respectively. As of the issuance date of the Group’s consolidated financial statements, the Corporation and non-controlling interests of Kian Shen have not received the dividends.

15. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates Investments in joint ventures	June 30, 2021 $ 16,973,928 7,005,293 $ 23,979,221	December 31, 2020 $ 16,335,980 7,296,965 $ 23,632,945	June 30, 2020 $ 15,290,896 7,216,521 $ 22,507,417

a. Investments in associates

Material associates Yulon Associates that are not individually material	June 30, 2021 $ 7,748,829 9,225,099 $ 16,973,928	December 31, 2020 $ 7,561,633 8,774,347 $ 16,335,980	June 30, 2020 $ 7,134,450 8,156,446 $ 15,290,896

1) Material associates

The Group’s proportion of shareholding and voting rights in Yulon was 16.80% on June 30, 2021, December 31, 2020 and June 30, 2020.

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

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

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

Name of Associate Yulon	June 30, 2021 December 31, 2020 $ 7,102,035 $ 7,818,908	June 30, 2020 $ 5,651,017

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

Yulon and Yulon’s subsidiaries

Current assets Non-current assets Current liabilities Non-current liabilities Equity Non-controlling interests Proportion of the Group’s ownership Equity attributable to the Group Cross shareholdings Carrying amount	June 30, 2021 $ 224,578,259 85,338,407 (207,965,083) (35,501,740) 66,449,843 (16,529,598) $ 49,920,245 16.80% $ 8,386,601 (637,772) $ 7,748,829	December 31, 2020 $ 215,186,668 86,136,078 (201,009,483) (35,437,943) 64,875,320 (16,136,852) $ 48,738,468 16.80% $ 8,188,063 (626,430) $ 7,561,633	June 30, 2020 $ 222,920,040 79,817,191 (220,199,111) (25,530,950) 57,007,170 (10,877,618) $ 46,129,552 16.80% $ 7,749,765 (615,315) $ 7,134,450

Operating revenue Net profit for the period Other comprehensive loss Total comprehensive income for the period		For the Three Months Ended June 30 2021 2020 $ 17,911,454 $ 19,813,005 $ 1,695,871 $ 1,103,034 (173,049) (227,088) $ 1,522,822 $ 875,946		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 17,911,454 $ 1,695,871 (173,049) $ 1,522,822		2021 $ 38,382,670 $ 3,725,521 (206,283) $ 3,519,238	2020 $ 37,374,411 $ 1,650,285 (500,155) $ 1,150,130

As of June 30, 2021, Yulon had declared dividends amounting to $1,000,000 thousand which have not been received as of the issuance date of the consolidated financial statements for the six months ended June 30, 2021.

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2) Aggregate information of associates that are not individually material

The Group’s share of: Net profit for the period Other comprehensive income (loss) Total comprehensive income for the period	For the Three Months Ended June 30 2021 2020 $ 258,129 $ 199,241 35,967 107,009 $ 294,096 $ 306,250	For the Three Months Ended June 30 2021 2020 $ 258,129 $ 199,241 35,967 107,009 $ 294,096 $ 306,250		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 258,129 35,967 $ 294,096		2021 $ 484,731 107,543 $ 592,274	2020 $ 347,853 (82,798) $ 265,055

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.

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

b. Investments in joint ventures

Joint ventures that are not individually material	June 30, 2021 December 31, 2020 $ 7,005,293 $ 7,296,965	June 30, 2020 $ 7,216,521

Aggregate information of joint ventures that are not individually material:

The Group’s share of: Net profit of the period Other comprehensive loss Total comprehensive income for the period	For the Three Months Ended June 30 2021 2020 $ 323,985 $ 294,834 (57,097) (118,531) $ 266,888 $ 176,303	For the Three Months Ended June 30 2021 2020 $ 323,985 $ 294,834 (57,097) (118,531) $ 266,888 $ 176,303		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 323,985 (57,097) $ 266,888		2021 $ 570,267 (53,692) $ 516,575	2020 $ 264,718 (189,439) $ 75,279

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

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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.

16. PROPERTY, PLANT AND EQUIPMENT

Assets used by the Group Land Land improvements Buildings Machinery Other equipment Construction in progress	June 30, 2021 December 31, 2020 $ 1,974,774 $ 1,974,774 11,073 12,048 814,028 839,986 2,827,262 2,872,387 368,988 375,027 437,137 453,007 $ 6,433,262 $ 6,527,229	June 30, 2020 $ 1,974,774 12,495 832,004 2,642,871 377,269 685,388 $ 6,524,801

Except for the depreciation recognized and the cost of acquisition of property, plant and equipment for increasing productivity, which totaled $307,164 thousand and $485,482 thousand during the six months ended June 30, 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	Useful Life
	3-20 years 2-60 years 2-24 years 2-20 years

Acquisition of property, plant and equipment includes the decrease in payables for equipment of $33,119 thousands for the six months ended June 30, 2021

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 30.

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17. LEASE ARRANGEMENTS

a. Right-of-use assets

June 30, 2021 December 31, 2020 June 30, 2020 $ 118,783 $ 54,807 $ 67,922 268,306 292,648 317,652 8,494 9,277 8,585 $ 395,583 $ 356,732 $ 394,159 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 80,021 $ 23,222 $ 6,889 $ 6,928 $ 13,787 $ 14,390 11,145 15,734 22,309 31,786 1,496 1,728 3,042 3,441 $ 19,530 $ 24,390 $ 39,138 $ 49,617	June 30, 2021 December 31, 2020 June 30, 2020 $ 118,783 $ 54,807 $ 67,922 268,306 292,648 317,652 8,494 9,277 8,585 $ 395,583 $ 356,732 $ 394,159 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 80,021 $ 23,222 $ 6,889 $ 6,928 $ 13,787 $ 14,390 11,145 15,734 22,309 31,786 1,496 1,728 3,042 3,441 $ 19,530 $ 24,390 $ 39,138 $ 49,617	June 30, 2021 December 31, 2020 June 30, 2020 $ 118,783 $ 54,807 $ 67,922 268,306 292,648 317,652 8,494 9,277 8,585 $ 395,583 $ 356,732 $ 394,159 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 80,021 $ 23,222 $ 6,889 $ 6,928 $ 13,787 $ 14,390 11,145 15,734 22,309 31,786 1,496 1,728 3,042 3,441 $ 19,530 $ 24,390 $ 39,138 $ 49,617	June 30, 2021 December 31, 2020 June 30, 2020 $ 118,783 $ 54,807 $ 67,922 268,306 292,648 317,652 8,494 9,277 8,585 $ 395,583 $ 356,732 $ 394,159 For the Three Months Ended June 30 For the Six Months Ended June 30 2021 2020 2021 2020 $ 80,021 $ 23,222 $ 6,889 $ 6,928 $ 13,787 $ 14,390 11,145 15,734 22,309 31,786 1,496 1,728 3,042 3,441 $ 19,530 $ 24,390 $ 39,138 $ 49,617
	$

2021 $ 6,889 11,145 1,496 $ 19,530		2021 $ 80,021 $ 13,787 22,309 3,042 $ 39,138	2020 $ 23,222 $ 14,390 31,786 3,441 $ 49,617

Except for the aforementioned addition and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the six months ended June 30, 2021 and 2020.

b. Lease liabilities

	June 30,	December 31,	June 30,
	2021	2020	2020
Carrying amounts
Current	$ 78,305	$ 87,196	$ 88,810
Non-current	$ 326,168	$ 277,908	$ 311,623
Range of discount rate for lease liabilities was as follows:
	June 30,	December 31,	June 30,
	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%	0.95%-1.37%

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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 June 30 2021 2020 $ 3,845 $ 5,342 $ 1,506 $ 386	For the Three Months Ended June 30 2021 2020 $ 3,845 $ 5,342 $ 1,506 $ 386		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 3,845 $ 1,506		2021 $ 6,791 $ 1,998 $ 49,535	2020 $ 8,979 $ 636 $ 61,894

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.

18. INVESTMENT PROPERTIES

Investment properties	June 30, 2021 December 31, 2020 $ 1,349,498 $ 1,355,015	June 30, 2020 $ 1,360,532

Except for the depreciation recognized, the Group did not have significant addition, disposal, or impairment of investment properties during the six months ended June 30, 2021 and 2020.

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 June 30, 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 30.

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19. BORROWINGS

a. Short-term borrowings

Line of credit borrowings Bank loans	June 30, 2021 December 31, 2020 $ 85,000 $ 215,000 - - $ 85,000 $ 215,000	June 30, 2020 $ 240,000 100,000 $ 340,000

1) The ranges of interest rates on credit borrowings were 0.36%-0.90%, 0.36%-0.96% and 0.95%-0.98% per annum as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
2) The interest rate on bank loans was 1.10% per annum as of June 30, 2020.
b. Long-term borrowings

Unsecured borrowings Line of credit borrowings Less: Current portions Long-term borrowings	June 30, 2021 December 31, 2020 $ 68,750 $ 93,750 (37,500) (37,500) $ 31,250 $ 56,250	June 30, 2020 $ 100,000 (18,750) $ 81,250

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 June 30, 2021, December 31, 2020 and June 30, 2020, the annual interest rates all were 0.725%.

20. OTHER PAYABLES

Payables for salaries or bonuses Payables for advertisement Payables for taxes Payables for warranties Payables for equipment Provisions for employee benefits Others	June 30, 2021 December 31, 2020 $ 804,106 $ 1,081,979 429,549 171,646 299,834 183,287 193,459 206,309 181,263 214,382 93,473 138,475 343,531 645,743 $ 2,345,215 $ 2,641,821	June 30, 2020 $ 560,308 162,768 308,616 198,114 69,339 89,509 519,047
		$ 1,907,701

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21. RETIREMENT BENEFIT PLANS

For the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the pension expenses of defined benefit plans were $7,897 thousand, $9,599 thousand, $17,307 thousand and $19,187 thousand, respectively, and these were calculated based on the pension cost rate determined by the actuarial calculation on December 31, 2020 and 2019, respectively.

22. EQUITY

a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Amount of shares authorized Number of shares issued and fully paid (in thousands) Shares issued and fully paid	June 30, 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	June 30, 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

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note 1) Conversion of bonds Issuance of ordinary shares Others May be used to offset a deficit only Changes in percentage of ownership interest in subsidiaries (Note 2) Share of changes in capital surplus of associates	June 30, 2021 December 31, 2020 $ 5,183,923 $ 5,183,923 1,184,920 1,184,920 4,666 4,666 2,225 2,225 37,844 36,044 $ 6,413,578 $ 6,411,778	June 30, 2020 $ 5,183,923 1,184,920 4,666 2,225 38,003 $ 6,413,737

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.
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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 24.

The operating environment of the Corporation is considered a mature and steady industry. In determining the amount of dividends to be distributed, 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.

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 Group suspends its originally scheduled shareholders’ meeting in response to the FSC’s announcement: “For pandemic prevention, the FSC demands public companies to postpone their shareholders’ meetings”. The shareholders’ meeting will be held on July 15, 2021. However, the voting result by way of electronic transmission regarding the appropriation of earnings for 2020 reached the legal resolution threshold and the Group adjusted related amount accordingly.

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

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d. Special reserve

Balance at January 1 Reversals Disposal of subsidiaries and associates Disposal of property, plant and equipment Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 1,028,359 - - $ 1,028,359	2020 $ 1,029,654 (1,185) (110) $ 1,028,359

e. Other equity items

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

Balance at January 1 Recognized during the period Share from associates and join ventures accounted for using the equity method Exchange differences on translating the financial statements of foreign operations Reclassification adjustments Disposal of foreign operations Other comprehensive loss recognized for the period Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ (926,661) (72,139) (10,035) - (82,174) $ (1,008,835)	2020 $ (990,653) (238,899) (19,391) 10,332 (247,958) $ (1,238,611)

2) Unrealized valuation gain on financial assets at FVTOCI

Balance at January 1 Recognized for the period Unrealized loss - equity instruments Share from associates accounted for using the equity method Other comprehensive gain (loss) recognized for the period Cumulative unrealized loss (gain) of equity instruments transferred to retained earnings due to disposal by associates Cumulative unrealized loss of equity instruments transferred to retained earnings due to disposal Balance at June 30		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 264,666 (6,997) (166,523) 159,526 (23,509) (30,418) $ 370,265	2020 $ 216,562 (3,393) (62,169) (65,562) 7,927 - $ 158,927

		$

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3) Cash flow hedges

Balance at January 1 Recognized for the period Gain on changes in the fair value of hedging instruments Foreign currency risk - spot rate Foreign currency risk - foreign exchange forward contracts Unrealized gain (loss) from cash flow hedges for using the equity method Other comprehensive income (loss) recognized for the period Transferred to initial carrying amount of hedged items Balance at June 30 f. Non-controlling interests Balance at January 1 Attributable to non-controlling interests: Share of 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 operations Share in other comprehensive loss of associates and joint ventures accounted for using the equity method Other comprehensive income (loss) recognized for the period Cash dividends distributed by subsidiaries Balance at June 30			For the Six Months Ended June 30	For the Six Months Ended June 30
			2021 2020 $ 6,918 $ (19,968) (18,955) 3,438 (6,139) 1,871 (12,398) 6,129 (37,492) 11,438 13,620 8,756 $ (16,954) $ 226 For the Six Months Ended June 30
		2021 $ 3,583,254 123,620 - (2,586) (31,465) (34,051) (135,989) $ 3,536,834		2020 $ 3,422,878 76,508 (1,848) (4,212) (52,725) (58,785) (125,897) $ 3,314,704

23. REVENUE

Revenue from contracts with customers Revenue from the sale of goods Revenue from the sale of vehicles Revenue from the sale of components		For the Three Months Ended June 30 2021 2020 $ 5,643,076 $ 5,500,347 1,413,542 1,278,326 7,056,618 6,778,673		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 5,643,076 1,413,542 7,056,618		2021 $ 12,489,971 2,892,303 15,382,274	2020 $ 11,689,557 2,441,890 14,131,447 (Continued)

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Service revenue Rental income Other revenue		For the Three Months Ended June 30 2021 2020 $ 456,271 $ 306,975 34,329 25,165 3,443 5,021 $ 7,550,661 $ 7,115,834		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 456,271 34,329 3,443 $ 7,550,661		2021 $ 745,609 60,663 6,801 $ 16,195,347	2020 $ 584,614 50,220 11,772 $ 14,778,053 (Concluded)

24. NET PROFIT (LOSS)

Net profit is concluded as follows:

a. Depreciation and amortization

An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Operating expenses An analysis of amortization in intangible assets by function Research and development expenses	For the Three Months Ended June 30 2021 2020 $ 154,048 $ 171,990 50,462 52,752 $ 204,510 $ 224,742 $ 1,425 $ 1,329 9,480 11,864 $ 10,905 $ 13,193 $ 11,061 $ 20,304	For the Three Months Ended June 30 2021 2020 $ 154,048 $ 171,990 50,462 52,752 $ 204,510 $ 224,742 $ 1,425 $ 1,329 9,480 11,864 $ 10,905 $ 13,193 $ 11,061 $ 20,304		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 154,048 50,462 $ 204,510 $ 1,425 9,480 $ 10,905 $ 11,061		2021 $ 317,931 97,083 $ 415,014 $ 2,820 18,839 $ 21,659 $ 22,121	2020 $ 297,536 110,996 $ 408,532 $ 2,697 21,296 $ 23,993 $ 40,608

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

Rental income from investment properties Direct operating expenses of investment properties generating rental income	For the Three Months Ended June 30 2021 2020 $ 16,634 $ 16,834 $ 6,593 $ 6,597	For the Three Months Ended June 30 2021 2020 $ 16,634 $ 16,834 $ 6,593 $ 6,597		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 16,634 $ 6,593		2021 $ 33,382 $ 12,222	2020 $ 34,233 $ 12,178

37 -

c. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans Short-term benefits An analysis of employee benefits expenses by function Operating costs Operating expenses		For the Three Months Ended June 30 2021 2020 $ 16,908 $ 18,199 7,897 9,599 24,805 27,798 806,627 731,595 $ 831,432 $ 759,393 $ 424,642 $ 393,572 406,790 365,821 $ 831,432 $ 759,393		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 16,908 7,897 24,805 806,627 $ 831,432 $ 424,642 406,790 $ 831,432		2021 $ 38,687 17,307 55,994 1,650,563 $ 1,706,557 $ 860,484 846,073 $ 1,706,557	2020 $ 37,312 19,187 56,499 1,521,673 $ 1,578,172 $ 798,449 779,723 $ 1,578,172

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 the rates of no less than 0.1% and no higher than 0.5%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors. For the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the employees’ compensation and remuneration of directors are as follows:

Amount

Employees’ compensation Remuneration of directors	For the Three Months Ended June 30 2021 2020 $ 10,849 $ 4,775 $ 6,833 $ 4,357	For the Three Months Ended June 30 2021 2020 $ 10,849 $ 4,775 $ 6,833 $ 4,357		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 10,849 $ 6,833		2021 $ 21,831 $ 13,755	2020 $ 6,415 $ 7,883

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, 2020	For the Year Ended December 31, 2020
		Cash $ 31,923 $ 17,130

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There was no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2020.

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.

e. Impairment loss

Intangible assets under development Property, plant and equipment	For the Three Months Ended June 30 2021 2020 $ - $ 94,497 29 32 $ 29 $ 94,529	For the Three Months Ended June 30 2021 2020 $ - $ 94,497 29 32 $ 29 $ 94,529		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ - 29 $ 29		2021 $ - 29 $ 29	2020 $ 94,497 32 $ 94,529

The Group intends to modify vehicle engines, and the future cash flows expected to arise from the related intangible assets of engines had decreased to zero. Therefore, the Group recognized an impairment loss of $94,497 thousand for the six months ended June 30, 2020.

f. Gain on disposal of investments

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 thousand (RMB91,105 thousand)). The disposal was completed in May 2020, the date on which the Group recognized a gain on disposal of investments amounting to $234,953 thousand, and recognized an expected credit gain (loss) of $25,118 thousand and $(93,833) thousand for the six months ended June 30, 2021 and 2020, respectively, after taking into consideration the debtor’s current financial position and the value of the assets pledged as collateral.

39 -

25. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of tax expense are as follows:

Current tax In respect of the current period Taxation for repatriated offshore funds Tax refund for offshore funds Income tax on unappropriated earnings Adjustments for the prior periods Deferred tax In respect of the current period Adjustments for the prior periods Income tax expense recognized in profit or loss	For the Three Months Ended June 30 2021 2020 $ 128,340 $ (33,276) 146,230 114,087 (5,124) - 8,400 - 7,915 296 285,761 81,107 (71,071) (58,054) (231) - (71,302) (58,054) $ 214,459 $ 23,053	For the Three Months Ended June 30 2021 2020 $ 128,340 $ (33,276) 146,230 114,087 (5,124) - 8,400 - 7,915 296 285,761 81,107 (71,071) (58,054) (231) - (71,302) (58,054) $ 214,459 $ 23,053		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 128,340 146,230 (5,124) 8,400 7,915 285,761 (71,071) (231) (71,302) $ 214,459		2021 $ 285,645 146,230 (5,124) 8,400 7,915 443,066 (39,955) (231) (40,186) $ 402,880	2020 $ 35,042 115,273 - - (15,055) 135,260 (25,158) - (25,158) $ 110,102

The tax rate applicable to 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.

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

In May 2021, the Group repatriated $699,991 thousand (EUR20,691 thousand) after approval was obtained from the National Taxation Bureau, Ministry of Finance. Total income tax withholdings was $146,230 thousand, comprising $77,777 thousand based on the source of income and $68,453 thousand based on the preferential tax rate at 10%.

40 -

In February, June and July 2020, the Group repatriated $613,208 thousand (RMB146,261 thousand) after approval was obtained from the National Taxation Bureau, Ministry of Finance. Total income tax withholdings was $115,273 thousand, comprising $66,468 thousand based on the source of income and $48,805 thousand based on the preferential tax rate of 8%. Subsequent substantive investments amounted to $122,052 thousand, and application for the refund of tax was $5,124 thousand.

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current period Cash flow hedges	For the Three Months Ended June 30 2021 2020 $ 664 $ 1,055	For the Three Months Ended June 30 2021 2020 $ 664 $ 1,055		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 664		2021 $ 4,253	2020 $ 24

c. Income tax assessments

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

26. EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share Diluted earnings per share	For the Three Months Ended June 30 2021 2020 $ 2.30 $ 1.67 $ 2.30 $ 1.67	For the Three Months Ended June 30 2021 2020 $ 2.30 $ 1.67 $ 2.30 $ 1.67	For the Six Months Ended June 30	For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 2.30 $ 2.30		2021 $ 4.65 $ 4.65	2020 $ 2.79 $ 2.79

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 June 30 2021 2020 $ 1,253,739 $ 913,207		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 1,253,739		2021 $ 2,537,616	2020 $ 1,522,172

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

Weighted average number of ordinary shares used in the computation of basic earnings per share Weighted average number of ordinary shares Adjustment for shares held by associates Effect of potentially dilutive ordinary shares Employees’ compensation Weight average number of ordinary shares used in the computation of diluted earnings per share	For the Three Months Ended June 30 2021 2020 553,620 553,620 (8,239) (8,239) 545,381 545,381 284 175 545,665 545,556	For the Three Months Ended June 30 2021 2020 553,620 553,620 (8,239) (8,239) 545,381 545,381 284 175 545,665 545,556		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 553,620 (8,239) 545,381 284 545,665		2021 553,620 (8,239) 545,381 578 545,959	2020 553,620 (8,239) 545,381 175 545,556

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

Since 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.

27. 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 will not be significantly changed in the future.

28. 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.

42 -
b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy

June 30, 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 $ 1,016,821 - - $ 1,016,821 $ 16,642 - - $ 16,642 $ 136,437 $ - $ -	Level 2 $ - - - $ - $ - - - $ - $ - $ - $ -	Level 3 $ - 698,595 4,067 $ 702,662 $ - 24,024 112,842 $ 136,866 $ - $ 2,645 $ 2,980	Total $ 1,016,821 698,595 4,067 $ 1,719,483 $ 16,642 24,024 112,842 $ 153,508 $ 136,437 $ 2,645 $ 2,980

43 -

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 Non-derivative financial instruments Derivative financial instruments Financial liabilities Financial liabilities for hedging Derivative financial instruments (included in other current liabilities) June 30, 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 $ 794,333 - - $ 794,333	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 $ - 666,751 495 $ 667,246	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 $ 794,333 666,751 495 $ 1,461,579 (Continued)

44 -

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 $ 31,512 - - $ 31,512 $ 371,182 $ - $ -	Level 2 $ - - - $ - $ - $ - $ -	Level 3 $ - 24,686 145,109 $ 169,795 $ - $ 4,928 $ 4,105	Total $ 31,512 24,686 145,109 $ 201,307 $ 371,182 $ 4,928 $ 4,105 (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 six months ended June 30, 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 $ 148,503 $ 4,425 Recognized in profit or loss 25,681 926 - - Recognized in other comprehensive loss - - (11,637) (4,425) Balance at June 30 $ 698,595 $ 4,067 $ 136,866 $ - Financial Liabilities Derivative Financial Instruments at FVTPL Derivative Financial Instruments for Hedging Balance at January 1 $ - $ 79 Recognized in profit or loss 2,645 - Recognized in other comprehensive income - 2,901 Balance at June 30 $ 2,645 $ 2,980	$	Total $ 828,983 26,607 (16,062) $ 839,528 Total 79 2,645 2,901 5,625
	$

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For the six months ended June 30, 2020

Financial Assets Equity Instruments at FVTPL Derivative Financial Instruments at FVTPL Equity Instruments at FVTOCI Derivative Financial Instruments for Hedging Balance at January 1 $ 686,413 $ 304 $ 178,259 $ 440 Recognized in profit or loss (19,662) 191 - - Recognized in other comprehensive loss - - (8,464) (440) Balance at June 30 $ 666,751 $ 495 $ 169,795 $ - 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 2,445 - Recognized in other comprehensive income - (2,779) Balance at June 30 $ 4,928 $ 4,105	$	Total $ 865,416 (19,471) (8,904) $ 837,041 Total 9,367 2,445 (2,779) 9,033
	$

3) Valuation techniques and inputs applied for Level 3 fair value measurement
a) Derivative financial instruments: The fair values of foreign exchange forward contracts of future cash flows are estimated based on observable forward exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.
b) Domestic unlisted securities to which the market approach was applied: The fair values of domestic unlisted shares referred to stock prices of listed companies with operating activities that were similar to those of the Corporation. The material unobservable inputs were as follows:

	June 30,	December 31,	June 30,
	2021	2020	2020
Operating income ratio	0.69-5.18 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	0.45-7.82 times
Discount rate for lack of	32.28%	32.28%	32.28%
marketability

46 -

If the inputs to the valuation model were changed to reflect reasonably possible alternative assumptions while all the other variables were held constant, the fair values of the shares would have increased (decreased) as follows:

Operating income ratio 0.1 time increase 0.1 time decrease Gross profit ratio 1 time increase 1 time decrease EBITDA ratio 1 time increase 1 time decrease Post-tax profit ratio 1 time increase 1 time decrease P/B ratio 0.1 time increase 0.1 time decrease	June 30, 2021 December 31, 2020 $ 31,976 $ 25,129 $ (31,976) $ (25,129) $ - $ - $ - $ - $ 8,984 $ 8,984 $ (8,984) $ (8,984) $ - $ - $ - $ - $ 82,462 $ 79,510 $ (82,462) $ (79,510)	June 30, 2020 $ 36,535 $ (36,535) $ 5,384 $ (5,384) $ 3,874 $ (3,874) $ 10,660 $ (10,660) $ 70,467 $ (70,467)

c. Categories of financial instruments

		June 30,	December	December	31,	June 30,
		2021		2020		2020
Financial assets
FVTPL
Mandatorily at FVTPL	$	1,719,483	$	1,732,343 $		1,461,579
Financial assets for hedging		136,437		120,266		371,182
Financial assets at amortized cost (Note 1)		14,516,199		13,989,558		12,004,429
Financial assets at FVTOCI		153,508		178,873		201,307
Financial liabilities
Amortized cost (Note 2)		6,170,993		6,612,232		5,038,537
FVTPL (included in other current liabilities)
Held for trading		2,645			-	4,928
Financial liabilities for hedging (included in
other current liabilities)		2,980			79	4,105

Note 1: The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, debt investments, notes and accounts receivable (related parties included), other receivables, other financial assets (included in other current assets), guarantee deposits (included in other non-current assets) and long-term receivables (included in other non-current assets).

Note 2: The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, short-term bills payable, notes and accounts payable (related parties included), other payables, long-term borrowings (current portion of long-term borrowings included) and deposits received (included in other non-current liabilities).
47 -

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

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

Loss Gain (loss) Gain (loss) Equity		USD Impact	USD Impact
		For the Six Months Ended June 30
		2021 2020 $ (7,343) $ (5,884) EUR Impact
		For the Six Months Ended June 30
		2021 2020 $ (6,103) $ 42 JPY Impact
		For the Six Months Ended June 30
		2021 $ 15 $ (2,650)	2020 $ (943) $ (5,748)

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Loss		RMB Impact	RMB Impact
		For the Six Months Ended June 30
		2021 $ (15,192)	2020 $ (17,168)

b) Interest rate risk

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

	June 30,	December 31,	June 30,
	2021	2020	2020
Cash flow interest rate risk
Financial assets	$ 11,759,017	$ 11,184,954 $	8,751,153
Financial liabilities	263,693	458,713	589,997
Fair value interest rate risk
Lease liabilities	404,473	365,104	400,433

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 six months ended June 30, 2021 and 2020 would increase/decrease by $14,369 thousand and $10,201 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.

If equity prices had been 5% higher/lower, pre-tax profit for the six months ended June 30, 2021 and 2020 would have increased/decreased by $50,841 thousand and $39,717 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the six months ended June 30, 2021 and 2020 would have increased/decreased by $832 thousand and $1,576 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

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2) Credit risk

There is a potential impact on the amounts of financial assets 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 credit risk is low because the counterparties 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 June 30, 2021, December 31, 2020 and June 30, 2020, the Group had available unutilized unsecured and secured financing facilities (including bills and letters) of $6,514,160 thousand, $6,448,979 thousand and $6,956,751 thousand, respectively.

29. 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

Tai Yuen Textile Co., Ltd.

Le Wen Investment Co., Ltd.

Yulon Management Company Ltd.

Mitsubishi Corporation (Taiwan) Ltd.

Mitsubishi Motors Philippines Corporation

Mitsubishi Motors Thailand

Mitsubishi Motors Europe B.V.

Mitsubishi Motors Middle East and Africa

Shye Shyang Mechanical Industrial Co., Ltd.

Fuzhou Samuel Mechanical and Electrical Co., Ltd.

Related Party Category

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

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Related Party Name
Uni-Calsonic Corp.

Yulon Motor Co., Ltd. (Yulon)

Fortune Motors Co., Ltd. (Fortune Motors)

ROC Spicer Ltd. (ROC-Spicer)

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

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

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

Yulon IT Solutions Inc.

Sinjang Co., Ltd.

Sin Gan Co., Ltd.

Tokio Marine Newa Insurance Co., Ltd.

Hong Shuo Cultural Enterprises, Co., Ltd.

Hsiang Shuo Enterprises

Sinqual Technology Co., Ltd.

Yufong Property Management Co., Ltd.

Taiwan Acceptance Corporation

Yue Sheng Industrial Co., Ltd.

Luxgen Motor Co., Ltd. (Luxgen)

Yulon Nissan Motor Co., Ltd.

Y-Teks Co., Ltd.

Yes-Energy Service Co., Ltd.

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

Carplus Auto Leasing Corporation

Fortune HS Leasing Co., Ltd.

Yu Rich Financial Services Company

ROC-Keeper Industrial Ltd.

Fuzhou Lianhong Motor Parts Co., Ltd.

Advance Power Machinery Co.

Fu-Lun Motors Co., Ltd.

Looplus Service Technology Inc.

Guangzhou NTN-Yulon Drivertrain Co., Ltd.

Xiangyang NTN-Yulon Drivertrain Co., Ltd.

South East (Fujian) Motor Corporation Ltd.

Fujian Benz Automotive Co., Ltd.

Fuzhou Fushiang Motor Industrial Co., Ltd.

Xiamen King-Long Kian-Shen Frame

Hangzhou King-Long Kian-Shen Co., Ltd.

China Engine (Fujian)

Yuanchuang Industrial Investment Consulting Co., Ltd.

Related Party Category

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

51 -

b. Operating transactions

1) Sales of goods

Related Party Line Item Category/Name Sales Associates Fortune Motors Shung Ye Motor Others Investors and subsidiaries of the investors that have significant influence over the Group Joint ventures		For the Three Months Ended June 30 2021 2020 $ 4,686,466 $ 4,701,796 1,038,494 1,232,116 178,406 183,212 5,903,366 6,117,124 29,024 28,503 4,127 6,800 $ 5,936,517 $ 6,152,427		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 4,686,466 1,038,494 178,406 5,903,366 29,024 4,127 $ 5,936,517		2021 $ 10,066,897 2,463,087 357,595 12,887,579 45,295 8,915 $ 12,941,789	2020 $ 9,446,839 2,573,521 317,875 12,338,235 50,255 14,942 $ 12,403,432

2) Purchases of goods

Related Party Line Item Category/Name Purchases Associates Investors and subsidiaries of the investors that have significant influence over the Group The Group is its major management Joint ventures		For the Three Months Ended June 30 2021 2020 $ 610,202 $ 492,963 220,328 279,255 89,889 72,502 5,746 31,141 $ 926,165 $ 875,861		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 610,202 220,328 89,889 5,746 $ 926,165		2021 $ 1,194,630 700,235 171,682 12,341 $ 2,078,888	2020 $ 828,921 926,313 122,423 56,782 $ 1,934,439

3) Technical services expense

Related Party Line Item Category/Name Cost of goods sold and selling and marketing expenses Investors that have significant influence over the Group		For the Three Months Ended June 30 2021 2020 $ 49,614 $ 59,729		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 49,614		2021 $ 110,359	2020 $ 119,966

4) Development expense

Related Party Line Item Category/Name Research and development expense Investors that have significant influence over the Group		For the Three Months Ended June 30 2021 2020 $ 690 $ 3,822		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 690		2021 $ 690	2020 $ 6,063

52 -

5) Other expense

Related Party Line Item Category/Name Selling and marketing expenses and general and administrative Investors and subsidiaries of the investors that have significant influence over the Group expenses Others		For the Three Months Ended June 30 2021 2020 $ 21,261 $ 23,208 5,062 5,025 $ 26,323 $ 28,233		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 21,261 5,062 $ 26,323		2021 $ 34,735 7,268 $ 42,003	2020 $ 44,802 7,384 $ 52,186

6) Contract liabilities

Line Item Related Party Category/Name Other current Associates liabilities Luxgen Others Investors that have significant influence over the Group Others Receivables from related parties Line Item Related Party Category/Name Trade receivables Associates from related Fortune Motors parties Shung Ye Motor Others Investors and subsidiaries of investors that have significant influence over the Group Joint ventures	June 30, 2021 December 31, 2020 $ 58,585 $ 58,585 3,672 6,902 62,257 65,487 15,813 16,393 - - $ 78,070 $ 81,880 June 30, 2021 December 31, 2020 $ 899,164 $ 724,638 189,499 338,521 123,867 189,089 1,212,530 1,252,248 24,251 3,960 7,833 11,270 $ 1,244,614 $ 1,267,478	June 30, 2020 $ 58,585 35,736 94,321 - 301 $ 94,622 June 30, 2020 $ 1,281,476 281,053 174,568 1,737,097 1,290 12,209 $ 1,750,596

7) Receivables from related parties

53 -

8) Payables to related parties

Line Item Related Party Category/Name Trade payables to Associates related parties Uni Auto Parts Manufacture Yue Ki Industrial ROC-Spicer Yulon Others Investors and subsidiaries of the investors that have significant influence over the Group Mitsubishi Motors Corp. Yulon Management. Others The Group is its major management Others 9) Prepayments Line Item Related Party Category/Name Prepayments Joint ventures Others	June 30, 2021 December 31, 2020 $ 137,278 $ 148,010 111,729 113,048 96,338 100,270 84,128 57,163 137,341 183,651 566,814 602,142 105,986 127,147 43,025 93,243 6,252 7,786 155,263 228,176 61,876 67,906 8,701 9,013 $ 792,654 $ 907,237 June 30, 2021 December 31, 2020 $ 1,121 $ 3,681 439 194 $ 1,560 $ 3,875	June 30, 2020 $ 102,705 69,626 78,992 78,703 115,293 445,319 124,337 47,026 3,583 174,946 47,486 8,650 $ 676,401 June 30, 2020 $ 9,406 1,146 $ 10,552

10) Acquisition of property, plant and equipment

Related Party Line Item Category/Name Property, plant and equipment Associates Others		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 10,947 - $ 10,947	2020 $ 68,357 6,940 $ 75,297

The outstanding payables to related parties were not guaranteed and would be paid in cash. The Group’s receivables from some of the related parties were guaranteed. For the six months ended June 30, 2021 and 2020, no loss allowance was recognized for trade receivables from related parties.

54 -

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

The Group signed a contract with Mitsubishi Motors Corporation, refer to Note 31 for the details.

c. Remuneration of key management personnel

The remuneration of directors and key executives for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020 was as follows:

Short-term employee benefits Post-employment benefits	For the Three Months Ended June 30 2021 2020 $ 28,905 $ 26,409 296 427 $ 29,201 $ 26,836	For the Three Months Ended June 30 2021 2020 $ 28,905 $ 26,409 296 427 $ 29,201 $ 26,836		For the Six Months Ended June 30	For the Six Months Ended June 30
		2021 $ 28,905 296 $ 29,201		2021 $ 56,472 584 $ 57,056	2020 $ 51,560 852 $ 52,412

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

30. ASSETS PLEDGED AS COLLATERAL

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

Property, plant and equipment Pledged deposits (Note 9) Investment properties	June 30, 2021 December 31, 2020 $ 508,217 $ 508,913 240,318 180,486 52,323 52,323 $ 800,858 $ 741,722	June 30, 2020 $ 509,609 180,486 52,323 $ 742,418

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

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

a. The Group issued guarantee notes amounting to $4,428,195 thousand, which had been pledged as collateral for loans from banks and other financial institutions; unused letters of credit amounted to $37,465 thousand.
55 -

b. The Group entered into an agreement with Mitsubishi Motors Corporation as stated below:

Project Technical royalty Technical royalty	Content Technical cooperation and manufacture of Delica and other car models Technical cooperation and manufacture of Outlander and other car models	Date of Agreement/ Expiry Date 2006.03.01-2025.04.08 2005.07.01-2025.09.07	Agreement Price Royalty was agreed to be the basis of the FOB price of automobiles sold and manufactured parts repaired Royalty was agreed to be the fixed amount of automobiles sold per unit and the basis of the FOB price of manufactured parts repaired	Payment
				Paid every 6 months within 90 days Paid every 6 months within 60-90 days

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

32. OTHER ITEMS

The Group’s operating revenue was affected by the impact of the COVID-19 pandemic which has evolved globally and is currently impacting Taiwan. Based on the information available as of the balance sheet date, the Group considered the economic implications of the pandemic when making its critical accounting estimates; refer to Note 5.

33. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

June 30, 2021

		Foreign		Carrying
		Currency	Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	350,297	4.309	$ 1,509,429
EUR		18,628	33.15	617,520
USD		21,514	27.86	599,391
JPY		776,940	0.2521	195,867
Non-monetary items
Investments accounted for using the equity
method
RMB		1,074,686	4.309	4,630,821
EUR		85,641	33.15	2,839,003
Foreign currency liabilities
Monetary items
RMB		78,232	4.309	337,101
JPY		541,563	0.2521	136,528

56 -

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
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
June 30, 2020
		Foreign		Carrying
		Currency	Exchange Rate	Amount
Foreign currency assets
Monetary items
RMB	$	398,350	4.191	$ 1,669,484
JPY		2,000,551	0.2751	550,352
USD		13,249	29.63	392,574
Non-monetary items
Investments accounted for using the equity
method
RMB		1,211,468	4.191	5,077,262
EUR		74,785	33.27	2,488,105
Foreign currency liabilities
Monetary items
JPY		608,464	0.2751	167,388

For the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, net foreign exchange losses were $35,658 thousand, $30,242 thousand, $18,585 thousand and $38,538 thousand, respectively. It is impractical to disclose net foreign exchange losses by each significant foreign currency due to the variety of the foreign currency transactions.

34. SEPARATELY DISCLOSED ITEMS

Except for those listed in Notes 7, 11 and 28 and Tables 1 to 10, there were no other separately disclosed items.

57 -

35. SEGMENT INFORMATION

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

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

Vehicle manufacturing Channel Others Adjustment and eliminations Administration cost and remunerations of directors Other non-operating income and expenses, net Profit before income tax		Segment Revenues For the Six Months Ended June 30 2021 2020 $ 15,041,134 $ 13,694,241 1,337,062 1,239,372 17,997 19,431 (200,846) (174,991) $ 16,195,347 $ 14,778,053		Segment Income or Loss	Segment Income or Loss
				For the Six Months Ended June 30
		2021 $ 15,041,134 1,337,062 17,997 (200,846) $ 16,195,347		2021 $ 3,117,231 15,211 (8,458) (375) 3,123,609 (203,784) 144,291 $ 3,064,116	2020 $ 1,765,109 4,086 (9,081) (419) 1,759,695 (146,602) 95,689 $ 1,708,782

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, gain on disposal of investments, gain (loss) on financial instruments at fair value through profit or loss, expected credit gain (loss), interest expense, other expense, net foreign exchange loss, impairment loss 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.

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TABLE 1

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE SIX MONTHS ENDED JUNE 30, 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	$ -	-	$ -	$ 1,225,259	$ 8,168,390
1	Dongguan Huayi	Dongguan Huashun	Other receivables	Yes	86,180 (RMB 20,000 thousand)	86,180 (RMB 20,000 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,225,259	8,168,390
2	Dongguan Huashun	Dongguan Huayi	Other receivables	Yes	86,180 (RMB 20,000 thousand)	86,180 (RMB 20,000 thousand)	-	-	Short-term financing	-	Working capital	-	-	-	1,225,259	8,168,390
3	Tianjin Hwarui	Tianjin Hwahong Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables	Yes Yes Yes	43,090 (RMB 10,000 thousand) 86,180 (RMB 20,000 thousand) 86,180 (RMB 20,000 thousand)	43,090 (RMB 10,000 thousand) 86,180 (RMB 20,000 thousand) 86,180 (RMB 20,000 thousand)	- - -	- - -	Short-term financing Short-term financing Short-term financing	- - -	Working capital Working capital Working capital	- - -	- - -	- - -	1,225,259 1,225,259 1,225,259	8,168,390 8,168,390 8,168,390
4	Tianjin Hwahong	Tianjin Hwarui Dongguan Huayi Dongguan Huashun	Other receivables Other receivables Other receivables	Yes Yes Yes	86,180 (RMB 20,000 thousand) 86,180 (RMB 20,000 thousand) 86,180 (RMB 20,000 thousand)	86,180 (RMB 20,000 thousand) 86,180 (RMB 20,000 thousand) 86,180 (RMB 20,000 thousand)	- - -	- - -	Short-term financing Short-term financing Short-term financing	- - -	Working capital Working capital Working capital	- - -	- - -	- - -	1,225,259 1,225,259 1,225,259	8,168,390 8,168,390 8,168,390

Note 1: Converted at the exchange rate of RMB1:NT$4.309 as of June 30, 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.

59 -

TABLE 2

CHINA MOTOR CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE SIX MONTHS ENDED JUNE 30, 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	$ 86,180 (RMB 20,000 thousand) 86,180 (RMB 20,000 thousand)	$ 86,180 (RMB 20,000 thousand) 86,180 (RMB 20,000 thousand)	$ - -	$ - -	0.21 0.21	50% of the Corporation’s issued capital, $2,768,102 thousand 50% of the Corporation’s issued capital, $2,768,102 thousand	No No	No No	Yes Yes

Note: Converted at the exchange rate of RMB1:NT$4.309 as of June 30, 2021.

60 -

TABLE 3

CHINA MOTOR CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD JUNE 30, 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		June 30, 2021	June 30, 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 Sinopac Money Market Fund Paradigm Pion Money Market Templeton Global Climate Change Fund JPMorgan Asia Growth Fund UPAMC James Bond Money Market Fund CTBC Hua Win Money Market Fund Shares Shye Shyang Mechanical Industrial Myson Century, Inc. Taiwan Aerospace	- - - - - - - - - - - - - - Corporate director Corporate director -	Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	23,121 13,834 8,019 20 18 31 2,714 1,856 2,167 2,610 62 34 612 657 9,009 2,352 811	$ 241,434 221,004 100,622 45,874 42,168 36,600 34,321 30,449 30,412 30,410 26,885 23,951 10,318 7,304 632,563 15,055 11,398	- - - - - - - - - - - - - - 10.00 3.92 0.60	$ 241,434 221,004 100,622 45,874 42,168 36,600 34,321 30,449 30,412 30,410 26,885 23,951 10,318 7,304 632,563 15,055 11,398

(Continued)

61 -

Holding Company Name	Type and Name/Issuer of Marketable Security	Relationship with the Holding Company	Financial Statement Account		June 30, 2021	June 30, 2021		Note
				Number of Shares (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
Kian Shen Alliance Investment & Management Hwa Lin China Engine Ling Wei	NORM Pacific Automation Corp. Carnival Com2B (Cayman) Corp. Corporate bonds Evergreen Marine Corporation Principal guaranteed notes President Securities 100% Principal Guaranteed Note Beneficiary certificates FSITC Money Market 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% Principal Guaranteed Note Beneficiary certificates Hua Nan Phoenix Money Market Fund Beneficiary certificates Prudential Financial Money Market Fund	- - - - - - - - - - - - - - - -	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - current Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at amortized cost - non-current Financial assets at amortized cost - current Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	128 95 2,000 - - 1,942 6,327 3,248 1,275 789 65 216 - - 4,880 1,565	$ 1,611 1,587 - 99,910 42,965 30,005 89,948 66,032 22,894 6,380 2,893 1,742 5,945 132,433 80,058 25,006	0.45 0.05 4.44 - - - 15.07 3.45 4.05 3.60 0.54 0.85 - - - -	$ 1,611 1,587 - - - 30,005 89,948 66,032 22,894 6,380 2,893 1,742 - - 80,058 25,006

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

(Concluded)

62 -

TABLE 4

CHINA MOTOR CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2021

(In Thousands of New Taiwan Dollars)

Seller/Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% to Total (Note 1)	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total (Note 1)
China Motor Corporation (“CMC”) Sino Diamond Motors Kian Shen COC	Fortune Motors Shung Ye Motor Mitsubishi Motors Corp. Kian Shen (Note 2) Uni Auto Parts Manufacture ROC-Spicer Shye Shyang Mechanical Industrial COC (Note 2) Shung Ye Motor Fortune Motors Mitsubishi Motors Corp. China Motor Corporation (Note 2) China Motor Corporation (Note 2) Yulon	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 Director of Shye Shyang Mechanical Industrial Subsidiary Investee accounted for using the equity method Investee accounted for using the equity method Director of CMC Parent company Parent company Investee accounted for using the equity method	Sale Sale Purchase Purchase Purchase Purchase Purchase Purchase Sale Sale Purchase Sale Sale Sale	$ (9,593,421) (1,863,421) 441,936 397,537 371,062 260,614 168,819 157,920 (599,637) (473,408) 258,299 (397,537) (157,920) (149,091)	(67) (13) 5 4 4 3 2 2 (50) (40) 58 (58) (28) (26)	Payment collected 15-90 working days after the goods have been delivered Payment collected 15-75 working days after the goods have been delivered Payment made 7 working days after the goods are shipped Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment made within 45 days after the month of delivery Payment 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 Payment collected within 45 days after the month of delivery Payment collected within 45 days after the month of delivery	$ - - - - - - - - - - - - - -	- - - - - - - - - - - - - -	$ 894,006 155,483 (105,601) (140,492) (137,278) (96,338) (61,876) (63,887) 21,293 5,086 (384) 140,492 63,887 48,756	51 9 (3) (5) (4) (3) (2) (2) 43 10 - 55 25 19

Note 1: The proportion of the individual company’s total purchases (sales) or total receivables (payables).

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

63 -

TABLE 5

CHINA MOTOR CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL JUNE 30, 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	$ 894,006 155,483 140,492	23.77 17.81 5.23	$ - - -	- - -	$ 894,006 150,973 70,456	$ - - -

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TABLE 6

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE SIX MONTHS ENDED JUNE 30, 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 June 30, 2021	As of June 30, 2021	As of June 30, 2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				June 30, 2021	December 31, 2020	Number of Shares	%	Carrying Amount
China Motor Corporation Kian Shen Kian Shen Investment Alliance Investment & Management Sino Diamond Motors	Yulon Kian Shen (Note 6) Fortune Motors Sino Diamond Motors (Note 6) Tokio Marine Newa Insurance (Note 1) Alliance Investment & Management (Note 6) Daimler Vans Hong Kong Ltd. ROC-Spicer CMI (Note 6) COC (Note 6) Hwa Wei (Note 6) Uni Auto Parts Manufacture Shung Ye Motor (Notes 2 and 4) China Engine (Note 6) Uni-Calsonic Yueki Industrial Co., Ltd. Tai-Ya Investment Hwa Chung Motors (Note 6) Kian Shen Investment (Note 6) KSIHK (Note 6) Greentrans Investment (Note 6) Hua-Yu (Note 6) China Engine (Note 6) Brilliant Insight International (Note 6) Shung Ye Motor (Note 3) Fortune Motors Looplus Service Technology Inc.	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 Hsinchu, Taiwan	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 Information software services and rental and leasing	$ 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 344,369 1,489,334 11,000 22,000 180 24 11,984	$ 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 344,369 1,489,334 11,000 22,000 180 24 -	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 1,000 770,429	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 - 21.88	$ 7,748,829 2,111,726 4,987,083 1,357,766 2,223,079 1,270,810 2,839,003 535,058 332,604 792,968 220,366 359,404 408,595 454,551 130,055 94,924 65,110 82,482 4,085,275 RMB 921,647 thousand 212,957 828,379 5 8,551 224 20 11,499	$ 2,301,464 155,821 647,282 26,156 602,007 (2,638) 1,780,925 87,963 (76,333) 58,741 (127,199) 29,493 24,726 13,588 17,153 (42,238) (8,451) 3,787 177,358 RMB 37,299 thousand (1,499) 19,462 13,588 (7,495) 24,726 647,282 (2,219)	$ 354,968 67,908 271,395 24,451 123,833 (2,638) 577,910 26,561 (76,333) 29,082 (50,879) 4,367 9,885 7,177 5,290 (6,387) (2,451) 3,787 - - - - - - - - -	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 Investee accounted for using the equity method

(Continued)

65 -

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of June 30, 2021	As of June 30, 2021	As of June 30, 2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				June 30, 2021	December 31, 2020	Number of Shares	%	Carrying Amount
Hua-Yu China Engine Brilliant Insight International CMI Hwa Chung Motors COC	Hwa-Lin (Note 6) Advance Power Investment (Notes 5 and 6) Looplus Service Technology Inc. Hwa Wei (Note 6) Ling Wei (Note 6) Greentrans (Note 6) Y. M. Hi-Tech (Note 6)	British Virgin Islands Mauritius Hsinchu, Taiwan British Virgin Islands Taipei, Taiwan Taipei, Taiwan Taoyuan, Taiwan	Overseas investment on production and service industries Reinvestment and sales Information software services and rental and leasing Overseas investment on production and service industries Sales of second-hand vehicle Sales of motorcycle and parts Steel cutting	US$ 37,229 thousand 59,456 16 1,428,503 58,000 10,000 46,250	US$ 37,229 thousand 59,456 - 1,428,503 31,000 10,000 46,250	33,392,942 3,750,000 1,000 60,000 6,308,397 1,000,000 4,250,000	100.00 100.00 0.03 60.00 100.00 100.00 85.00	$ 741,507 - 15 330,550 71,807 9,244 78,798	$ 20,313 - (2,219) (127,199) 5,273 (1,548) 7,304	$ - - - - - - -	Subsidiary Subsidiary Investee accounted for using the equity method Subsidiary 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, sidestream transaction of $1,550 thousand had been eliminated.

Note 5: The Group’s board of directors resolved to dissolve Advance Power Machinery on December 10, 2020. As of June 30, 2021, the liquidation had not been completed.

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

(Concluded)

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TABLE 7

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE SIX MONTHS ENDED JUNE 30, 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 June 30, 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 June 30, 2021 (Note 1)	Accumulated Repatriation of Investment Income as of June 30, 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 7) 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	$ 3,844,680 (US$ 138,000 thousand) 417,900 (US$ 15,000 thousand) 9,514,050 (EUR 287,000 thousand) 348,250 (US$ 12,500 thousand) 495,351 (US$ 17,780 thousand) 947,240 (US$ 34,000 thousand) 413,664 (RMB 96,000 thousand) 167,160 (US$ 6,000 thousand) 312,032 (US$ 11,200 thousand) 882,509 (RMB 204,806 thousand) 370,259 (RMB 85,927 thousand)	Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Indirect investment in mainland China through a company registered in a third region Direct investment in mainland China Indirect investment in mainland China through a company registered in a third region	$ 961,170 (US$ 34,500 thousand) 208,950 (US$ 7,500 thousand) 1,543,663 (EUR 46,566 thousand) 139,300 (US$ 5,000 thousand) 78,983 (US$ 2,835 thousand) - 42,542 (US$ 1,527 thousand) 15,044 (US$ 540 thousand) 312,032 (US$ 11,200 thousand) 301,027 (US$ 10,805 thousand) 72,715 (US$ 2,610 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 961,170 (US$ 34,500 thousand) 208,950 (US$ 7,500 thousand) 1,543,663 (EUR 46,566 thousand) 139,300 (US$ 5,000 thousand) 78,983 (US$ 2,835 thousand) - 42,542 (US$ 1,527 thousand) 15,044 (US$ 540 thousand) 312,032 (US$ 11,200 thousand) 301,027 (US$ 10,805 thousand) 72,715 (US$ 2,610 thousand)	$ (724,717) - 3,562,472 (EUR 104,902 thousand) 320,661 (RMB 73,648 thousand) (22,860) (RMB -5,250 thousand) 152,738 (RMB 35,080 thousand) (15,645) (RMB -3,593 thousand) - (1,499) 181,790 (12,310) (US$ -437 thousand)	25.00 38.03 16.23 17.55 15.35 17.55 21.94 - 100.00 29.00 20.25	$ (181,179) - 577,999 (EUR 17,020 thousand) 128,265 (RMB 29,549 thousand) (8,001) (RMB -1,838 thousand) 61,095 (RMB 14,032 thousand) (7,823) (RMB -1,797 thousand) - (1,499) 52,719 (2,493) (US$ -89 thousand)	$ 411,044 167,361 2,844,303 (EUR 85,801 thousand) 1,937,963 (RMB 449,748 thousand) 46,176 (RMB 107,026 thousand) 1,002,395 (RMB 232,628 thousand) 198,634 (RMB 46,097 thousand) - 212,944 464,531 66,030 (US$ 2,370 thousand)	$ 725,001 (US$ 26,023 thousand) - 1,841,549 (EUR 55,552 thousand) 901,788 (RMB 209,280 thousand) 213,528 (RMB 49,554 thousand) - - - - 44,521 (RMB 10,332 thousand) -

(Continued)

67 -

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 June 30, 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 June 30, 2021 (Note 1)	Accumulated Repatriation of Investment Income as of June 30, 2021 (Note 1)
							Outward	Inward
Fujian Rui Hua (Note 7) Tianjin Hwarui (Note 7) Dongguan Huayi (Notes 6 and 7) Dongguan Huashun (Notes 6 and 7) Tianjin Hwahong (Note 7)	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		$ 94,724 (US$ 3,400 thousand) 223,437 (US$ 8,020 thousand) 123,977 (US$ 4,450 thousand) 107,725 (RMB 25,000 thousand) 129,720 (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		$ 94,724 (US$ 3,400 thousand) 216,221 (US$ 7,761 thousand) 117,486 (US$ 4,217 thousand) - -	$ - - - - -	$ - - - - -	$ 94,724 (US$ 3,400 thousand) 216,221 (US$ 7,761 thousand) 117,486 (US$ 4,217 thousand) - -	$ (850) (3,361) (6) - (35) (RMB -8 thousand)	100.00 100.00 100.00 100.00 100.00	$ (850) (3,361) (6) - (35) (RMB -8 thousand)	$ 86,835 192,244 14,117 13,082 (RMB 3,036 thousand) 127,796 (RMB 29,658 thousand)	$ - - - - -

Accumulated Outward Remittance for Investment in Mainland China as of June 30, 2021 (Note 1)		Investment Amount Authorized by Investment Commission, MOEA (Note 1)			Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$4,957,683 (US$122,542 thousand and EUR46,566 thousand)		$5,833,301 (US$193,355 thousand and EUR13,467 thousand)			$24,505,171

Note 1: Converted at the exchange rates on June 30, 2021: US$1= NT$27.86, RMB1= NT$4.309, EUR1= NT$33.15.
Note 2: Converted at the average exchange rates of the six months ended June 30, 2021: US$1= NT$28.172, RMB1= NT$4.354, EUR1= NT$33.96.
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: In December 2020, Dongguan Huayi and Dongguan Huashun resolved to dissolve their respective companies. As of June 30, 2021, the liquidation had not been completed.

Note 7: Eliminated during the preparation of the consolidated financial statements.

(Concluded)

68 -

TABLE 8

CHINA MOTOR CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 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 COC	Subsidiary Subsidiary Subsidiary	Other receivables Cost of goods sold Accounts payable Cost of goods sold	$ 600,000 397,537 140,492 157,920	The prices and payment terms were based on agreements. Transaction price 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 Transaction price determined based on the market price, and the transaction terms are similar to that for transactions with non-related parties	1.06 2.45 0.25 0.98

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

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

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TABLE 9

CHINA MOTOR CORPORATION

INFORMATION OF MAJOR SHAREHOLDERS JUNE 30, 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 table discloses shareholding information of shareholders whose shareholding percentage is 5% or above. The Taiwan Depository & Clearing Corporation calculates the total number of ordinary shares and special shares (including treasury shares) that have completed the dematerialized registration and delivery on the last business day of the quarter. The share capital reported in the consolidated financial statements and the actual number of shares that have completed the dematerialized registration and delivery may be different due to difference in the basis of calculation.

70 -

TABLE 10

CHINA MOTOR CORPORATION AND SUBSIDIARIES

FRAMEWORK OF INTERCOMPANY INVESTMENT RELATIONSHIPS AND PERCENTAGE OF SHARES HELD JUNE 30, 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% 100.00%
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.

71 -

AI assistant

CMC — Interim / Quarterly Report 2021

51979_rns_2021-12-29_30f814a6-ec53-47c7-959a-9d2f5cc9be19.pdf

China Motor Corporation and Subsidiaries

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notice to Readers

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

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

CHINA MOTOR CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2) Subsidiaries included in the consolidated financial statements

1) Employee benefits

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

June 30, 2021

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

June 30, 2021

June 30, 2020

11. FINANCIAL INSTRUMENTS FOR HEDGING

June 30, 2021

December 31, 2020

June 30, 2020

12. NOTES AND ACCOUNTS RECEIVABLE, NET

13. INVENTORIES

14. SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS

Kian Shen and Kian Shen’s subsidiaries

15. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

a. Investments in associates

1) Material associates

Yulon and Yulon’s subsidiaries

16. PROPERTY, PLANT AND EQUIPMENT

17. LEASE ARRANGEMENTS

a. Right-of-use assets

b. Lease liabilities

c. Material leasing activities and terms

d. Other lease information

18. INVESTMENT PROPERTIES

19. BORROWINGS

20. OTHER PAYABLES

21. RETIREMENT BENEFIT PLANS

22. EQUITY

Ordinary shares

c. Retained earnings and dividend policy

d. Special reserve

e. Other equity items

2) Unrealized valuation gain on financial assets at FVTOCI

3) Cash flow hedges

23. REVENUE

24. NET PROFIT (LOSS)

c. Employee benefits expense

Amount

e. Impairment loss

25. INCOME TAXES

b. Income tax recognized in other comprehensive income

26. EARNINGS PER SHARE

Unit: NT$ Per Share

Net Profit for the Period

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

27. CAPITAL MANAGEMENT

28. FINANCIAL INSTRUMENTS

CMC Interim / Quarterly Report 2021