CMP - Interim / Quarterly Report 2020

Stock Code:1532

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

with Independent Auditors’ Review Report For the Three Months Ended March 31, 2020 and 2019

Address: 4F, NO.85, SEC.4, REN' AI RD, TAIPEI, TAIWAN, R.O.C. Telephone: 886-2-2711-2831

The independent auditors’ review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ review report and consolidated financial statements, the Chinese version shall prevail.

		Contents	Page
1.	Cover Page		1
2.	Table of Contents		2
3.	Independent Auditors’ Review Report		3
4.	Consolidated Balance Sheets		4
5.	Consolidated Statements of Comprehensive Income		5
6.	Consolidated Statements of Changes in Equity		6
7.	Consolidated Statements of Cash Flows		7
8.	Notes to the Consolidated Financial Statements
	(1)	Company history	8
	(2)	Approval date and procedures of the consolidated financial statements	8
	(3)	New standards, amendments and interpretations adopted	8～9
	(4)	Summary of significant accounting policies	9～11
	(5)	Significant accounting assumptions and judgments, and major sources	11
		of estimation uncertainty
	(6)	Explanation of significant accounts	12～40
	(7)	Related-party transactions	40～46
	(8)	Pledged assets	46
	(9)	Significant commitments and contingencies	47～49
	(10)	Losses due to major disasters	50
	(11)	Subsequent events	50
	(12)	Other	50
	(13)	Other disclosures
		(a) Information on significant transactions	51～54
		(b) Information on investees	54～55
		(c) Information on investment in Mainland China	55～56
		(d) Information on major shareholders	57
	(14)	Segment information	57

Independent Auditors’ Review Report

To the Board of Directors of China Metal Products Co., Ltd.:

Introduction

We have reviewed the accompanying consolidated balance sheets of China Metal Products Co., Ltd. (the “Company”) and its subsidiaries (the “ Group”) as of March 31, 2020 and 2019, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019, and notes to the consolidated financial statements, including a summary of significant accounting policies. 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 Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standards 65, “ Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of the 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 conducted in accordance with the generally accepted auditing standards 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

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect total assets amounting to $5,300,300 thousand and $5,497,528 thousand, constituting 12.50% and 13.56% of consolidated total assets, and total liabilities amounting to $3,433,177 thousand and $3,173,801 thousand, constituting 12.79% and 13.70% of consolidated total liabilities as of March 31, 2020 and 2019, respectively, as well as total comprehensive income (loss) amounting to $(60,424) thousand and $27,018 thousand, constituting 30.77% and 5.46% of the consolidated total comprehensive income (loss) for the three months ended March 31, 2020 and 2019, respectively.

Furthermore, as stated in Note 6(f), the other equity accounted investments of the Group in its investee companies of $815,300 thousand and $860,030 thousand as of March 31, 2020 and 2019, respectively, and its equity in net earnings on these investee companies of $(30,894) thousand and $(5,918) thousand for the three months ended March 31, 2020 and 2019, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

3-1

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2020 and 2019, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2020 and 2019 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors’ review report are Kuo-Yang Tseng and Shih-Chin Chih.

KPMG

Taipei, Taiwan (Republic of China) May 12, 2020

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the 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 accepted and applied in the Republic of China.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2020 and 2019

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2020, December 31, 2019, and March 31, 2019 (Expressed in Thousands of New Taiwan Dollars)

March 31, 2020 Assets Amount % Current assets: 1100 Cash and cash equivalents (Notes 6(a) and (y)) $ 3,895,906 9 1110 Current financial assets at fair value through profit or loss (Notes 6(b) and (y)) 47,200 - 1170 Notes and accounts receivable, net (Notes 6(d), (u) and (y)) 3,249,330 8 1180 Accounts receivable due from related parties, net (Notes 6(y) and 7) 1,047 - 1200 Other receivables (Note 6 (y)) 51,390 - 1210 Other receivables due from related parties (Notes 6(y) and 7) 34,549 - 130X Inventories (Notes 6(e), 8 and 9(a)) 17,768,676 42 1410 Prepayments (Note 9(a)) 299,787 1 1470 Other current assets 264,415 1 1476 Other current financial assets (Notes 6(y), 7, 8 and 9(a)) 1,014,031 2 1480 Incremental costs of obtaining contracts 180,354 - Total current assets 26,806,685 63 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Notes 6(c) and (y)) 208,065 - 1550 Investments accounted for using equity method (Note 6(f)) 815,300 2 1600 Property, plant and equipment (Notes 6(g), 8 and 9(a)) 9,541,452 22 1755 Right-of-use assets (Note 6(h)) 2,365,640 6 1760 Investment property, net (Notes 6(i) and 8) 638,081 2 1780 Intangible assets (Note 6(j)) 409,056 1 1840 Deferred tax assets 33,996 - 1900 Other non-current assets (Notes 6(g), 7 and 9(a)) 886,287 2 1975 Non-current net defined benefit assets 8,026 - 1980 Other non-current financial assets (Notes 6(k), (y), 7 and 9(a)) 680,671 2 Total non-current assets 15,586,574 37 Total assets $ 42,393,259 100	December 31, 2019 Amount % 3,700,547 9 51,440 - 3,903,549 9 515 - 47,180 - 28,160 - 17,686,807 41 268,535 1 243,827 1 1,078,864 2 156,104 - 27,165,528 63 216,065 1 853,073 2 9,589,959 22 2,422,158 6 639,573 2 415,890 1 32,234 - 905,188 2 7,643 - 680,391 1 15,762,174 37 42,927,702 100	March 31, 2019 Amount % 3,984,008 10 12,800 - 4,282,773 10 1,751 - 49,037 - 21,063 - 14,407,549 35 262,534 1 260,968 1 672,499 2 106,202 - 24,061,184 59 225,680 1 860,030 2 10,436,163 26 2,597,479 6 602,904 2 452,305 1 27,200 - 593,451 1 - - 683,000 2 16,478,212 41 40,539,396 100 March 31, 2020 Liabilities and equity Amount % Current liabilities: 2100 Short-term borrowings (Notes 6(l) and (y)) $ 9,744,038 23 2130 Current contract liabilities (Notes 6(u) and 9(a)) 1,662,666 4 2170 Notes and accounts payable (Notes 6(y) and 7) 1,920,574 5 2180 Accounts payable due to related parties (Notes 6(y) and 7) 28,349 - 2200 Other payables (Note 6(y)) 688,596 2 2220 Other payables due to related parties (Notes 6(y) and 7) 9,922 - 2230 Current income tax liabilities 100,882 - 2280 Current lease liabilities (Notes 6(n) and (y)) 189,867 - 2322 Long-term borrowings, current portion (Notes 6(m) and (ac)) 2,634,655 6 2360 Current net defined benefit liabilities - - 2399 Other current liabilities (Notes 6(o) and (q)) 156,615 - Total current liabilities 17,136,164 40 Non-Current liabilities: 2540 Long-term borrowings (Notes 6(m) and (y)) 6,774,732 16 2570 Deferred tax liabilities 621,766 1 2580 Non-current lease liabilities (Notes 6(n) and (y)) 1,944,534 5 2600 Other non-current liabilities (Notes 6(o) and 7) 332,253 1 2640 Non-current net defined benefit liabilities 39,259 - Total non-current liabilities 9,712,544 23 Total liabilities 26,848,708 63 Equity attributable to owners of parent (Note 6(s)): 3100 Share capital 3,852,521 9 3200 Capital surplus 1,523,104 4 3300 Retained earnings 6,512,175 15 3400 Other equity (165,899) - Total equity attributable to owners of parent: 11,721,901 28 36XX Non-controlling interests 3,822,650 9 Total equity 15,544,551 37 Total liabilities and equity $ 42393259 100	March 31, 2020		December 31, 2019		March 31, 2019
			Amount %		Amount %		Amount %
					8,168,354 19 1,388,953 4 2,598,484 6 29,717 - 837,271 2 13,491 - 113,999 - 190,521 - 2,533,247 6 - - 156,465 - 16,030,502 37 8,161,069 19 628,060 1 1,991,672 5 319,118 1 55,190 - 11,155,109 26 27,185,611 63 3,852,521 9 1,523,104 4 6,569,681 15 (56,109) - 11,889,197 28 3,852,894 9 15,742,091 37 42927702 100		7,424,751 18 619,794 2 2,447,137 6 21,077 - 984,934 3 3,694 - 64,326 - 189,928 - 1,007,792 3 1,389 - 163,046 - 12,927,868 32 7,074,618 17 647,166 2 2,133,346 5 327,679 1 56,111 - 10,238,920 25 23,166,788 57 3,852,521 9 1,522,961 4 7,268,435 18 428,368 1 13,072,285 32 4,300,323 11 17,372,608 43 40539396 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Three Months Ended March 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

4000 Operating revenues (Notes 6(u) and 7) 5000 Operating costs (Note 6(e) and 7) Gross profit from operations Operating expenses (Note 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Reversal of expected credit loss (Note 6(d)) Total operating expenses 6500 Net other income and expenses (Note 6(w)) Net operating income Non-operating income and expenses: 7010 Other income (Notes 6(x) and 7) 7020 Other gains and losses (Notes 6(x)) 7050 Finance costs (Note 6(x)) 7375 Share of loss of associates and joint ventures accounted for using equity method (Note 6(f)) Total non-operating income and expenses (Loss) profit from continuing operations before tax 7950 Less: Tax expense (Note 6(r)) 8200 Net (loss) profit 8300 Other comprehensive income: 8310 Items that may not be reclassified subsequently to profit or loss: 8316 Unrealized gain from investments in equity instruments measured at fair value through other comprehensive income (Notes 6(s) and (y)) Total items that may not be reclassified subsequently to profit or loss 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translation of foreign financial statements (Note 6(s)) Total items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income (after tax) 8500 Comprehensive income Net (loss) profit, attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income attributable to: 8710 Owners of parent 8720 Non-controlling interests (Deficit)/earnings per share (expressed in dollars) (Note 6(t)) 9750 Basic (deficit)/earnings per share 9850 Diluted (deficit)/earnings per share	For the Three Months Ended March 31 2020 2019 Amount % Amount % $ 2,266,183 100 3,787,071 100 (1,833,058) (81) (2,865,401) (76) 433,125 19 921,670 24 (108,707) (4) (174,230) (5) (318,133) (14) (383,396) (10) (2,472) - (2,438) - 7,031 - 876 - (422,281) (18) (559,188) (15) 1,976 - 1,070 - 12,820 1 363,552 9 15,842 1 28,021 1 26,349 1 (18,717) - (78,231) (4) (74,859) (2) (30,894) (1) (5,918) - (66,934) (3) (71,473) (1) (54,114) (2) 292,079 8 (11,438) (1) (63,899) (2) (65,552) (3) 228,180 6 - - 17,862 - - - 17,862 - (130,824) (6) 248,775 7 (130,824) (6) 248,775 7 (130,824) (6) 266,637 7 $ (196,376) (9) 494,817 13 $ (57,506) (3) 169,457 4 (8,046) - 58,723 2 $ (65,552) (3) 228,180 6 $ (167,296) (8) 391,755 10 (29,080) (1) 103,062 3 $ (196,376) (9) 494,817 13 $ (0.15) 0.44 $ (0.15) 0.44	For the Three Months Ended March 31 2020 2019 Amount % Amount % $ 2,266,183 100 3,787,071 100 (1,833,058) (81) (2,865,401) (76) 433,125 19 921,670 24 (108,707) (4) (174,230) (5) (318,133) (14) (383,396) (10) (2,472) - (2,438) - 7,031 - 876 - (422,281) (18) (559,188) (15) 1,976 - 1,070 - 12,820 1 363,552 9 15,842 1 28,021 1 26,349 1 (18,717) - (78,231) (4) (74,859) (2) (30,894) (1) (5,918) - (66,934) (3) (71,473) (1) (54,114) (2) 292,079 8 (11,438) (1) (63,899) (2) (65,552) (3) 228,180 6 - - 17,862 - - - 17,862 - (130,824) (6) 248,775 7 (130,824) (6) 248,775 7 (130,824) (6) 266,637 7 $ (196,376) (9) 494,817 13 $ (57,506) (3) 169,457 4 (8,046) - 58,723 2 $ (65,552) (3) 228,180 6 $ (167,296) (8) 391,755 10 (29,080) (1) 103,062 3 $ (196,376) (9) 494,817 13 $ (0.15) 0.44 $ (0.15) 0.44
	2020 Amount % $ 2,266,183 100 (1,833,058) (81) 433,125 19 (108,707) (4) (318,133) (14) (2,472) - 7,031 - (422,281) (18) 1,976 - 12,820 1 15,842 1 26,349 1 (78,231) (4) (30,894) (1) (66,934) (3) (54,114) (2) (11,438) (1) (65,552) (3) - - - - (130,824) (6) (130,824) (6) (130,824) (6) $ (196,376) (9) $ (57,506) (3) (8,046) - $ (65,552) (3) $ (167,296) (8) (29,080) (1) $ (196,376) (9) $ (0.15) $ (0.15)
		0.44

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the Three Months Ended March 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

		Equity Attributable to Owners	Equity Attributable to Owners	Equity Attributable to Owners	of Parent	of Parent		Non- Controlling Interests Total Equity
Share Capital	Capital Surplus	Retained Earnings			Other Equity		Total Equity Attributable to Owners of Parent
					Exchange Differences on Translation of Foreign Financial Statements	Unrealized Gains (Losses) from Financial Assets Measured at Fair Value Through Other Comprehensive Income
Ordinary Shares		Legal Reserve	Special Reserve
$ 3,852,521 - 3,852,521 - - - - - $ 3,852,521 $ 3,852,521 - - - - $ 3,852,521	1,525,666 -	1,572,590 -	49,081 -	5,537,969 (58,290) 5,479,679 169,457 - 169,457 (2,372) - 5,646,764 4,764,453 (57,506) - (57,506) - 4,706,947	136,291 -	69,779 -	12,743,897 (58,290) 12,685,607 169,457 222,298 391,755 (5,077) - 13,072,285 11,889,197 (57,506) (109,790) (167,296) - 11,721,901	4,199,268 16,943,165 (332) (58,622) 4,198,936 16,884,543 58,723 228,180 44,339 266,637 103,062 494,817 (51) (5,128) (1,624) (1,624) 4,300,323 17,372,608 3,852,894 15,742,091 (8,046) (65,552) (21,034) (130,824) (29,080) (196,376) (1,164) (1,164) 3,822,650 15,544,551
	1,525,666	1,572,590	49,081		136,291	69,779
	- -	- -	- -		- 204,436	- 17,862
	-	-	-		204,436	17,862
		- -	- -		- -	- -
		1,572,590	49,081		340,727	87,641
		1,756,147	49,081			87,640
		- -	- -			- -
		-	-			-
		-	-			-
		1,756,147	49,081			87,640

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities:
(Loss) profit before tax
Adjustments:
Adjustments to reconcile profit (loss):
Depreciation expense
Amortization expense
Reversal of expected credit loss
Net loss (gain) on financial assets or liabilities at fair value through profit or loss
Interest expense
Interest income
Share of loss of associates and joint ventures accounted for using equity method
(Gain) loss on disposal of property, plant and equipment
Property, plant and equipment transferred to expenses
Impairment loss on property, plant and equipment
Lease modification gain
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Changes in operating assets:
Current financial assets at fair value through profit or loss
Notes and accounts receivable, net
Accounts receivable due from related parties, net
Other receivables
Inventories
Prepayments
Other current assets
Other financial assets
Incremental costs of obtaining contracts
Total changes in operating assets
Changes in operating liabilities:
Notes and accounts payable (including related parties), net
Other payables
Current contract liabilities
Other current liabilities
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash inflow generated from operations
Interest received
Interest paid
Income taxes paid
Net cash flows generated from operating activities
Cash flows from investing activities:
Proceeds from capital reduction of financial assets at fair value through other comprehensive income
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Increase in other financial assets
Increase in other non-current assets
Net cash flows used in investing activities
Cash flows from financing activities:
Increase in short-term borrowings
Decrease in short-term borrowings
Increase in short-term notes and bills payable
Proceeds from long-term borrowings
Repayments of long-term borrowings
Increase in other non-current liabilities
Payments of lease liabilities
Net cash flows generated from (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

For the Three Months Ended March 31
2020
2019
$ (54,114)
292,079
241,862
251,061
5,209
7,111
(7,031)
(876)
4,240
(788)
78,231
74,859
(11,174)
(17,724)
30,894
5,918
(6,189)
2,002
-
13
-
447
(21)
-
336,021
322,023
-
(9,052)
631,148
118,338
(8,063)
51,724
5,586
20,146
(72,253)
(75,462)
(33,478)
5,049
(23,691)
(101,633)
65,701
191,728
(24,250)
-
540,700
200,838
(637,926)
(123,407)
(199,610)
(87,509)
274,130
81,239
1,265
1,329
(562,141)
(128,348)
(21,441)
72,490
314,580
394,513
260,466
686,592
7,833
14,401
(89,133)
(72,074)
(32,467)
(32,702)
146,699
596,217
8,000
-
(180,258)
(165,937)
4,433
4,714
-
(1,072)
(35)
(68,292)
(3,266)
(111,157)
(171,126)
(341,744)
3,404,251
1,640,215
(1,959,982)
(851,122)
339,754
10,111
633,000
1,199,810
(2,144,118)
(2,152,841)
2,810
9,490
(47,463)
(54,934)
228,252
(199,271)
(8,466)
32,116
195,359
87,318
3,700,547
3,896,690
$
3,895,906
3,984,008

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the Three Months Ended March 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, unless otherwise specified)

(1) Company history

CHINA METAL PRODUCTS CO., LTD. (the “Company”) was established on September 9, 1972, via Ministry of Economic Affairs’ authorization. The registered office is located at 4F, No. 85, Section 4, Ren’ai Road, Taipei. The major business activities of the Company and its subsidiaries (the “Group”) are iron hardware manufacturing and casting, residents and commercial buildings developing, leasing and selling, international hotel servicing and department store retailing. Please refer to Note 14, for the aforementioned information.

(2) Approval date and procedures of the consolidated financial statements:

The accompanying consolidated financial statements were authorized for issue by the Board of Directors on May 12, 2020.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2020.

are effective for annual periods beginning on or after January 1, 2020.
	Effective date
New, Revised or Amended Standards and Interpretations	per IASB
Amendments to IFRS 3 “Definition of a Business”	January 1, 2020
Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”	January 1, 2020
Amendments to IAS 1 and IAS 8 “Definition of Material”	January 1, 2020

The Group assesses that the adoption of the abovementioned standards would not have any material impact on its consolidated financial statements.

(b) The impact of IFRS issued by IASB but not yet endorsed by the FSC

As of the date, the following IFRSs that have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Board (IASB), but have yet to be endorsed by the FSC:
	Effective date
New, Revised or Amended Standards and Interpretations	per IASB
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between	Effective date to
an Investor and Its Associate or Joint Venture”	be determined
	by IASB
IFRS 17 “Insurance Contracts”	January 1, 2021
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”	January 1, 2022

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

(4) Summary of significant accounting policies

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC, and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2019. For the related information, please refer to Note 4 of the consolidated financial statements for the year ended December 31, 2019.

(b) Basis of consolidation

Principles of preparation of the consolidated financial statements are the same as those of the consolidated financial statements for the year ended December 31, 2019. For the related information, please refer to Note 4(c) of the consolidated financial statements for the year ended December 31, 2019.

(i) List of subsidiaries in the consolidated financial statements

Investor	Name of Subsidiary	Principal Activity		Percentage Ownership March 31, 2020 December 31, 2019 March 31, 2019 Note % 100.00 % 100.00 % 100.00 Note 2 % 83.74 % 83.74 % 83.58 Note 1 % 99.00 % 99.00 % 99.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 94.00 % 94.00 % 94.00 Note 1 % 83.33 % 83.33 % 83.33 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 71.72 % 71.72 % 71.72 Note 2	Percentage Ownership March 31, 2020 December 31, 2019 March 31, 2019 Note % 100.00 % 100.00 % 100.00 Note 2 % 83.74 % 83.74 % 83.58 Note 1 % 99.00 % 99.00 % 99.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 94.00 % 94.00 % 94.00 Note 1 % 83.33 % 83.33 % 83.33 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 71.72 % 71.72 % 71.72 Note 2
				March 31, 2020	December 31, 2019
The Company The Company and Sunflower Investment The Company The Company The Company The Company The Company The Company and Sunflower Investment	United Elite Agents Limited (UEA) Atrans Precision Industries Co., Ltd. (Atrans Precision) Sunflower Investment Co., Ltd. (Sunflower Investment) The Hotel National Co., Ltd. (The Hotel National) CHINA METAL AUTOMOTIVE INTERNATIONAL CO., LTD. (CMAI) CMJ CO., LTD. (CMJ) (Note 3) National Management Co., Ltd. (National Management) PUJEN Land Development Co., Ltd. (PUJEN Land Development)	Investing Vehicle parts processing Investing International tourist hotel services and other hotel business approved by the Ministry of Transportation and Communications Vehicle parts retailing Cast iron product retailing Management and consulting services Residents, commercial buildings and factories leasing and developing		% 100.00 % 83.74 % 99.00 % 100.00 % 94.00 % 83.33 % 100.00 % 71.72	% 100.00 % 83.74 % 99.00 % 100.00 % 94.00 % 83.33 % 100.00 % 71.72

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Investor	Name of Subsidiary	Principal Activity		Percentage Ownership March 31, 2020 December 31, 2019 March 31, 2019 Note % 50.00 % 50.00 % 50.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % - % - Notes 1 and 5 % 82.55 % 82.55 % 82.55 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Notes 2 and 4 % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 50.00 % 50.00 % 50.00 Note 1 % 70.00 % 70.00 % 70.00 Note 1 % 50.00 % 50.00 % 50.00 Note 1	Percentage Ownership March 31, 2020 December 31, 2019 March 31, 2019 Note % 50.00 % 50.00 % 50.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % - % - Notes 1 and 5 % 82.55 % 82.55 % 82.55 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Note 2 % 100.00 % 100.00 % 100.00 Notes 2 and 4 % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 50.00 % 50.00 % 50.00 Note 1 % 70.00 % 70.00 % 70.00 Note 1 % 50.00 % 50.00 % 50.00 Note 1
				March 31, 2020	December 31, 2019
The Company and PUJEN Land Development The Company and PUJEN Land Development The Company UEA CMI CMI CMI CMB (H.K.) CMI (BVI) CMP (H.K.) CMP (H.K.) CMW (C.I.) CMW (C.I.) CMJ Atrans Precision PUJEN Land Development PUJEN Land Development PUJEN Land Development	Pu Sheng Construction Co., Ltd. (Pu Sheng Construction) Shangrila Tourism Co., Ltd. (Shangrila Tourism) InterContinental Taichung Co., Ltd. (InterContinental Taichung) China Metal International Holdings Inc. (CMI) China Metal International (BVI) Limited (CMI (BVI)) CMW (Cayman Islands) Co., Ltd. (CMW (C.I.)) CMB (H.K.) Co., Ltd. (CMB (H.K.)) Suzhou CMB Machinery Co., Ltd. (Suzhou CMB) CMP (H.K.) Industry Co., Ltd. (CMP (H.K.)) Tianjin CMT Industry Co., Ltd. (Tianjin CMT) Suzhou CMS Machinery Co., Ltd. (Suzhou CMS) CMW (Tianjin) Industry Co., Ltd. (CMW (Tianjin)) CMI (Wu Han) Precision Machinery Co., Ltd. (CMH) Qingdao Sourcing Specialists Trading Co., Ltd. (Qingdao Sourcing Specialists) FAR HSING (SAMOA) ENTERPRISE CO., LTD. (FAR HSING (SAMOA)) CHINGENG Land Development Co., Ltd. (CHINGENG Land Development) PUJEN CHENGMEI Land Development Co., Ltd. (PUJEN CHENGMEI Land Development) PUCHIA Land Development Co., Ltd. (PUCHIA Land Development)	Residents, commercial buildings and factories leasing and developing Amusement park and hotel services International tourist hotel services Investing and cast iron product retailing Investing Investing Investing Cast iron product designing, manufacturing and retailing Investing Cast iron products, machine parts and vehicle parts designing, developing, manufacturing and selling Vehicle parts, E&M as- casting and finished product developing, manufacturing and selling Vehicle parts, E&M as- casting and finished product developing, manufacturing and selling Vehicle parts, farm wagon parts, industrial wagon parts, household appliances parts and E&M as-casting and molds developing, manufacturing, selling and the after sales services Cast iron product retailing Investing Residents, commercial buildings and factories leasing and developing Residents, commercial buildings and factories leasing and developing Residents, commercial buildings and factories leasing and developing		% 50.00 % 100.00 % 100.00 % 82.55 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 50.00 % 70.00 % 50.00	% 50.00 % 100.00 % - % 82.55 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 50.00 % 70.00 % 50.00

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Investor	Name of Subsidiary	Principal Activity		Percentage Ownership March 31, 2020 December 31, 2019 March 31, 2019 Note % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1	Percentage Ownership March 31, 2020 December 31, 2019 March 31, 2019 Note % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1 % 100.00 % 100.00 % 100.00 Note 1
				March 31, 2020	December 31, 2019
CMAI CMAI CMAI Holding Pilot	Qinxin Trade Co., Ltd. (Qinxin Trade) CMAI Holding, Inc. (CMAI Holding) Pilot Drive LLC (Pilot) CMAI INDUSTRIES INC (CMAI N.A.)	Vehicle parts retailing Investing Assets leasing Vehicle parts retailing		% 100.00 % 100.00 % 100.00 % 100.00	% 100.00 % 100.00 % 100.00 % 100.00

Note 1: An non-significant subsidiary, its financial statements have not been reviewed.

Note 2: The financial statements have been reviewed. Note 3: The former name was “CHINA METAL JAPAN COMPANY LIMITED”. Note 4: Set up in the 4[th] quarter of 2018. Note 5: Set up in the 1[st] quarter of 2020.

(ii) Subsidiaries excluded from the consolidated financial statements: None.

(c) Income taxes

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period.

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.

(d) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year, and be adjusted by the significant market flotation, significant curtailment, settlement or other significant single occasion.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2019. For the related information, please refer to Note 5 of the consolidated financial statements for the year ended December 31, 2019.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2019. Please refer to Note 6 of the 2019 annual consolidated financial statements.

(a) Cash and cash equivalents

Cash on hand Cash in banks Time deposits Cash and cash equivalents	March 31, 2020 $ 7,969 2,021,930 1,866,007 $ 3,895,906	December 31, 2019 March 31, 2019 8,361 9,635 2,164,951 2,275,759 1,527,235 1,698,614 3,700,547 3,984,008

The Group disclosed the sensitivity analysis of the financial assets in Note 6(y).

(b) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss Stocks listed on domestic markets	March 31, 2020 $ 47,200	December 31, 2019 March 31, 2019 51,440 12,800

(i) The Group holds financial assets designated as at FVTPL, which recognizes gain or loss on valuation of financial assets. Please refer to Note 6(x) for the recognized gains or losses.
(ii) The Group disclosed the relative risk of financial instruments in Note 6(y).
(iii) As of March 31, 2020, December 31 and March 31, 2019, the financial assets were not pledged as collateral.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Equity investments at fair value through other comprehensive income Stocks unlisted on domestic markets— MEITA Industrial Co., Ltd. Stocks unlisted on domestic markets— YUHUA Venture Capital Co., Ltd. Stocks unlisted on domestic markets— FUHUA Venture Capital Co., Ltd. Stocks unlisted on domestic markets— GUANGYUAN Investment Co., Ltd. Stocks unlisted on domestic markets— DEVELOPMENT Venture Capital Co., Ltd. Total	March 31, 2020 $ 135,300 830 1,920 44,080 25,935 $ 208,065	December 31, 2019 March 31, 2019 135,300 135,300 830 1,652 1,920 2,713 44,080 44,080 33,935 41,935 216,065 225,680

(i) The Group intends to hold the equity investments for long-term strategic purposes, rather than transaction purposes. Therefore, the investments are measured at FVOCI.
(ii) The Group did not dispose the strategic investments during the first quarter of 2020 and 2019. Therefore, the accumulated income and loss was not transferred in equity.
(iii) Please refer to Note 6(y) for the information on credit risk (including the impairment of debt instrument investments) and market risk.
(iv) As of March 31, 2020, December 31 and March 31, 2019, the financial assets were not pledged as collateral.
(d) Notes and accounts receivable

Notes receivable from operating activities Accounts receivable measured as amortized cost Subtotal Less: Loss allowance Total	March 31, 2020 $ 419,036 2,849,095 3,268,131 18,801 $ 3,249,330	December 31, 2019 March 31, 2019 425,013 436,209 3,504,541 3,867,952 3,929,554 4,304,161 26,005 21,388 3,903,549 4,282,773

The Group applies the simplified approach to provide for the loss allowance used for expected credit losses, which permit the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivable have been grouped based on shared credit risk characteristics and the days past due, as well as forward-looking information including macroeconomics and relative industries information. The loss allowance provision is determined as follows:

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Current 1 to 30 days past due 31 to 90 days past due 91 to 120 days past due 121 days to a year past due Over a year past due Current 1 to 30 days past due 31 to 90 days past due 91 to 120 days past due 121 days to a year past due Over a year past due Current 1 to 30 days past due 31 to 90 days past due 91 to 120 days past due 121 days to a year past due Over a year past due		March 31, 2020
	Gross Carrying Amount Weighted Average Loss Rate Loss Allowance Provision $ 3,030,139 0% - 152,095 0% - 40,182 0% - 7,604 0%~8.87% 597 31,111 17.13~52.79% 11,204 7,000 100% 7,000 $ 3,268,131 18,801 December 31, 2019
	Gross Carrying Amount $ 3,720,432 137,451 17,700 5,770 40,459 7,742 $ 3,929,554	Weighted Average Loss Rate Loss Allowance Provision 0% - 0% - 0% - 0%~8.87% 310 17.13~52.79% 17,953 100% 7,742 26,005 March 31, 2019
	Gross Carrying Amount $ 4,005,036 191,657 67,462 12,729 17,259 10,018 $ 4,304,161	Weighted Average Loss Rate Loss Allowance Provision 0% - 0% - 0%~6% 2,503 3.34~11.82% 694 24.73%~62.68% 8,173 100% 10,018 21,388

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The movements in the allowance for notes and accounts receivable is as follows:

Balance on January 1 Impairment losses reversed Foreign exchange (losses)/gains Balance on March 31	For the Three Months Ended March 31 2020 2019 $ 26,005 21,874 (7,031) (876) (173) 390 $ 18,801 21,388

The financial assets mentioned above were not pledged as collateral.

(e) Inventories

Raw materials Work in process Semi-finished goods Finished goods Merchandise Land held for development Properties and land held for sale Construction-in-progress Prepayments for land Other inventories	March 31, 2020 $ 133,141 250,443 156,524 656,077 66,672 6,062,494 3,798,608 6,172,280 123,269 349,168 $ 17,768,676	December 31, 2019 March 31, 2019 129,856 140,421 272,337 233,803 144,254 153,902 876,524 908,339 69,151 65,667 6,032,491 4,055,501 3,798,608 4,209,860 5,906,061 4,282,372 121,228 10,788 336,297 346,896 17,686,807 14,407,549

For the three months ended March 31, 2020 and 2019, the cost of goods sold amounted to $1,833,058 thousand and $2,865,401 thousand, respectively. For the three months ended March 31, 2020 and 2019, the loss for inventory obsolescence from the inventories write-down and the reversal gain from the increase in inventories' net realizable value amounted to $15,953 thousand and $6,486 thousand, respectively.

For the information on inventories pledged as collateral, as of March 31, 2020, December 31 and March 31, 2019, please refer to Note 8.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Investments accounted for using equity method

The components of investments accounted for using the equity method at the reporting date is as follows:

Associates Joint ventures	March 31, 2020 $ 460,738 354,562 $ 815,300	December 31, 2019 March 31, 2019 472,260 456,620 380,813 403,410 853,073 860,030

(i) Associates

Due to the fact that the Group does not have the obligation of assuming the excess losses, it ceased the recognition of the losses from the investment of Amida Trustlink Assets Management Co., Ltd. (Amida Trustlink Assets). For the three months ended March 31, 2020 and 2019, the unrealized investment losses amounted to $67 thousand and $78 thousand, respectively; the accumulated unrealized investment losses, as of March 31, 2020 and 2019, amounted to $57,114 thousand and $56,811 thousand, respectively.

The Group’s financial information for investments accounted for using the equity method that were individually insignificant is as follows:

Carrying amount of individually insignificant associates' equity Attributable to the Group: Net loss Other comprehensive income Comprehensive income	March 31, 2020 $ 460,738	December 31, 2019 March 31, 2019 472,260 456,620 For the Three Months Ended March 31
		2020 2019 $ (4,643) (3,368) - - $ (4,643) (3,368)

(ii) Joint ventures

The Group’s financial information for joint ventures accounted for using the equity method that were individually insignificant is as follows:

Carrying amount of individually insignificant joint ventures' equity	March 31, 2020 $ 354,562	December 31, 2019 March 31, 2019 380,813 403,410

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Attributable to the Group: Net loss Other comprehensive income Comprehensive income	For the Three Months Ended March 31
	2020 2019 $ (26,251) (2,550) - - $ (26,251) (2,550)

(iii) Pledge to secure

As of March 31, 2020, December 31 and March 31, 2019, the investments accounted for using equity method were not pledged as collateral.

(iv) The unreviewed financial statements of investments accounted for using equity method

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

(g) Property, plant and equipment

The cost and accumulated depreciation of the property, plant and equipment of the Group for the three months ended March 31, 2020 and 2019 are as follows:

Land $ 3,106,656 - - - 68	Buildings	Other Equipment 849,881 2,878 (194) 2,813 (4,490)
	3,361,551 676 - - (25,293) 3,336,934 3,456,414 - (9,701) (7,874) 57,472 3,496,311 1,327,569 25,937 - (9,242) 1,344,264
$ 3,106,724		850,888
$ 3,748,835 - - - 27		843,898 5,324 (1,953) 13,092 9,865
$ 3,748,862		870,226
$ - - - -		575,939 17,154 (162) (3,047)
$ -		589,884

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Land $ - - - - - -	Buildings	Other Equipment 533,493 18,957 - (2,018) 8,043 6,387
	1,268,502 26,858 - (9,701) (8,013) 18,612 1,296,258 2,033,982 1,992,670 2,200,053 2,187,912
$ -		564,862
$ 3,106,656		273,942
$ 3,106,724		261,004
$ 3,748,862		305,364
$ 3,748,835		310,405

(i) As of March 31, 2020, December 31 and March 31, 2019, please refer to Note 8 for the details of property, plant and equipment pledged as collateral for the Group’ s long-term loan and financing guarantee.
(ii) The land held by the Group is located at Xinfeng Township Kengzikou and Zaoqiao Township Niclan Lake. According to the laws and regulations, companies cannot be registered as landowners, due to the usage of the land is registered for farming, graveyard and conservation. Therefore, the ownership of the land was passed to individuals and was registered as private personal property. For obtaining the right of land, the Group held the land certificate and entered into an agreement with the registered owner, which specified that the Group retain all rights and obligations of the land, and pledged the land as collateral for the Group. The information regarding the land mentioned above, which is presented in the line item of other non-current assets, is as follows:

Land	March 31, 2020 $ 44,299	December 31, 2019 March 31, 2019 44,299 44,299

(h) Right-of-use assets

The Group leases many assets including land, buildings, machinery and transportation equipment. Information about leases for which the Group as a lessee is presented below:

Cost: Balance on January 1, 2020 Additions Reduction for expiration Influence from exchange rates Balance on March 31, 2020	Land $ 1,002,435 - - (3,895) $ 998,540	Buildings 2,397,748 237 (1,696) - 2,396,289	Machinery 54,032 - - (546) 53,486	Transportation Equipment 25,475 - (1,784) 6 23,697	Office Equipment 2,240 - - 5 2,245	Other Equipment Total 122,607 3,604,537 196 433 (604) (4,084) - (4,430) 122,199 3,596,456

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance on January 1, 2019 After application of IFRS 16 adjustments Additions Influence from exchange rates Balance on March 31, 2019 Accumulated depreciation and impairment loss: Balance at January 1, 2020 After application of IFRS 16 adjustments Depreciation Transferred to construction cost Reduction for expiration Influence from exchange rates Balance on March 31, 2020 Balance on January 1, 2019 After application of IFRS 16 adjustments Depreciation Influence from exchange rates Balance on March 31, 2019 Carrying value: Balance on January 1, 2020 Balance on March 31, 2020 Balance on January 1, 2019 Balance on March 31, 2019	Land $ - 1,017,511 - 11,768 $ 1,029,279 $ 130,437 - 5,857 - - (904) $ 135,390 $ - 115,406 6,101 1,779 $ 123,286 $ 871,998 $ 863,150 $ - $ 905,993	Buildings - 2,394,192 1,183 1,446 2,396,821 999,972 - 40,392 217 (1,402) - 1,039,179 - 837,173 40,812 180 878,165 1,397,776 1,357,110 - 1,518,656	Machinery - 58,966 - (1,991) 56,975 24,730 - 3,805 - - (296) 28,239 - 9,813 4,013 217 14,043 29,302 25,247 - 42,932	Transportation Equipment - 22,155 - 1,070 23,225 15,221 - 1,945 - (1,785) 4 15,385 - 6,670 2,062 2 8,734 10,254 8,312 - 14,491	Office Equipment - 1,658 36 - 1,694 1,022 - 133 - - 2 1,157 - 421 117 - 538 1,218 1,088 - 1,156	Other Equipment Total - - 122,607 3,617,089 - 1,219 - 12,293 122,607 3,630,601 10,997 1,182,379 - - 881 53,013 - 217 (412) (3,599) - (1,194) 11,466 1,230,816 - - 7,476 976,959 880 53,985 - 2,178 8,356 1,033,122 111,610 2,422,158 110,733 2,365,640 - - 114,251 2,597,479

(i) Investment property

Investment property comprises office buildings that are leased to third parties under operating leases, including properties that are held as right-of-use assets, as well as properties that are owned by the Group. The leases of investment properties contain an initial non-cancellable lease term of 5 to 10 years. Some leases provide the lessees with options to extend at the end of the term.

For all investment property leases, the rental income is fixed under the contracts, but some leases require the lessee to reimburse the insurance costs of the Group. When this is the case, the amounts of insurance costs are determined annually.

The movements in the investment property is as follows:

Carrying value: Balance on January 1, 2020 Balance on March 31, 2020 Balance on January 1, 2019 Balance on March 31, 2019	Owned Property Land Buildings Total $ 545,783 93,790 639,573 $ 545,783 92,298 638,081 $ 528,019 76,238 604,257 $ 528,019 74,885 602,904
	Land $ 545,783 $ 545,783 $ 528,019 $ 528,019

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Investment properties comprise a number of commercial properties that are leased to third parties. Each leasing contract includes an original non-cancelable lease term of one to three years, and the lease term of the renewal is available for discussion with the lessee. The contingent rent is not charged in the contract. Please refer to Note 6(p) for the regarding information.

There were no significant additions, disposal, or recognition and reversal of impairment losses of investment property for the three months ended March 31, 2020 and 2019.

Information on depreciation for the period is discussed in Note 12(c), and for the information on rental revenue and other direct operating expense, please refer to Note 6(p).

The fair value of the investment property was not significantly different from those disclosed in the Note 6(l) of the annual consolidated financial statements for the year ended December 31, 2019.

As of March 31, 2020, December 31 and March 31, 2019, the details of investment properties pledged as collateral, please refer to Note 8.

(j) Intangible assets

The movements in the costs of intangible assets, amortization, and impairment loss of the Group are as follows:

Costs: Balance on January 1, 2020 Influence from exchange rates Balance on March 31, 2020 Balance on January 1, 2019 Acquisitions Influence from exchange rates Balance on March 31, 2019 Accumulated amortization and impairment loss: Balance on January 1, 2020 Amortization Influence from exchange rates Balance on March 31, 2020 Balance on January 1, 2019 Amortization Influence from exchange rates Balance on March 31, 2019 Carrying value: Balance on January 1, 2020 Balance on March 31, 2020 Balance on January 1, 2019 Balance on March 31, 2019	Goodwill $ 393,630 (1,580) $ 392,050 $ 405,342 - 6,295 $ 411,637 $ - - - $ - $ - - - $ - $ 393,630 $ 392,050 $ 405,342 $ 411,637	Patent 62,652 (727) 61,925 64,974 - 1,600 66,574 62,652 - (727) 61,925 64,974 - 1,600 66,574 - - - -	Client Relationship 226,177 (2,624) 223,553 234,560 - 5,777 240,337 218,384 3,896 (2,578) 219,702 203,022 5,994 5,015 214,031 7,793 3,851 31,538 26,306	Computer Software Total 32,427 714,886 27 (4,904) 32,454 709,982 24,333 729,209 1,072 1,072 - 13,672 25,405 743,953 17,960 298,996 1,313 5,209 26 (3,279) 19,299 300,926 9,926 277,922 1,117 7,111 - 6,615 11,043 291,648 14,467 415,890 13,155 409,056 14,407 451,287 14,362 452,305

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Other non-current financial assets

Debt obligation receivable－The Splendor Hospitality International Co., Ltd. Debt obligation receivable－Chin Ling Steel Co., Ltd.－non-guaranteed Less: Accumulated impairment－Debt obligation receivable－Chin Ling Steel Co., Ltd. Refundable deposits	March 31, 2020 $ 575,000 23,250 (23,250) 105,671 $ 680,671	December 31, 2019 March 31, 2019 575,000 575,000 23,250 23,250 (23,250) (23,250) 105,391 108,000 680,391 683,000

(i) In June, 2006, the Group and Prince Housing and Development Co., Ltd. (Prince Housing and Development) entered into an assignment of debt agreement with Amida Trustlink Assets which the Group and Prince Housing and Development each owned half of the obligation. The Group and Prince Housing and Development each injected 50% and obtained the major mortgages, collateral, and the appurtenant rights of Taichung Port Splendor Hospitality International Co., Ltd. (Taichung Port Splendor). The Group and Prince Housing and Development agreed to pay Amida Trustlink Assets the residual debt in the agreement, the related costs and returns when the real right of the underlying is completed. The Group and Prince Housing and Development each injected 50% and cofounded The Splendor Hospitality International Co., Ltd. (The Splendor Hospitality International). In November 2006, The Splendor Hospitality International and Taichung Port Splendor entered into a specific asset transfer agreement and obtained the specific assets of Taichung Port Splendor by assuming its debts. The Group’ s right of receivables transferred from Taichung Port Splendor to The Splendor Hospitality International. In December 2006, the Group and Prince Housing and Development signed a supplementary agreement with Amida Trustlink Assets which increased the selling price of all debt obligations and canceled the payment of the related cost and return. The verdinglichung obligatorischer rechte was assumed by the Group and Prince Housing and Development equally. The details of total debt obligation receivable and obligation cost after deducted the received amount in 2007 is as follows:

March 31, 2020

			March 31, 2020
Underlying	Obligation Cost	Obligation Principal	Valuation Assessment Collateral According to the assessment of Zhonglian Real Estate Appraiser Joint Office, the valuation of mortgage is $7,579,711 thousand. After deducting the 1stsecurity, which amounted to $3,960,000 thousand, the residual mortgage attributed to the Group amounted to $1,809,856 thousand. The building of The Splendor Hospitality International (the 2nd security)
The Splendor Hospitality International	$ 575,000	796,845

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Underlying
	Obligation Cost		Obligation Principal
The Splendor Hospitality International Underlying	$ 575,000		796,845
		Obligation Cost	Obligation Principal
The Splendor Hospitality International	$ 575,000		796,845

(ii) As of March 31, 2020, December 31 and March 31, 2019, the costs and principal of debt obligation from Chin Ling Steel were $23,250 thousand and $118,561 thousand, respectively.
(l) Short-term borrowings

Unsecured bank borrowings Secured bank borrowings Notes and bills payable Total Unused credit limit Interest rate range	March 31, 2020 $ 2,887,940 6,286,625 569,473 $ 9,744,038 $ 5,641,523 0.71%~2.83%	December 31, 2019 March 31, 2019 1,638,974 1,272,115 6,299,662 5,707,923 229,718 444,713 8,168,354 7,424,751 6,206,252 8,800,977 0.90%~2.84% 0.91%~3.21%

(i) Borrowing and repayment

For the three months ended March 31, 2020 and 2019, the Group obtained from short-term borrowings amounted to $3,404,251 thousand and $1,640,215 thousand with an interest rate of 0.71%～ 2.25% and 0.91%～ 2.25%; the repayment amounted to $1,959,982 thousand and $851,122 thousand, respectively. Please refer to Note 6(x) for details of the interest expense.

(ii) Collateral for bank borrowings

Please refer to Note 8 for details of the related assets pledged as collateral.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Long-term borrowings

Unsecured bank borrowings Secured bank borrowings Less: Current portion Unamortized long-term borrowings costs Total Unused credit limit Interest rate range	March 31, 2020 $ 2,042,373 7,367,973 (2,634,655) (959) $ 6,774,732 $ 1,297,038 1.00%~4.21%	December 31, 2019 March 31, 2019 2,449,877 2,164,092 8,244,478 5,918,708 (2,533,247) (1,007,792) (39) (390) 8,161,069 7,074,618 792,170 1,469,859 1.00%~4.03% 1.00%~3.79%

(i) Borrowing and repayment

For the three months ended March 31, 2020 and 2019, the Group obtained from long-term borrowings amounted to $633,000 thousand and $1,199,810 thousand with an interest rate of 1.00%～ 2.00% and 1.00%～ 1.30%; the repayment amounted to $2,144,118 thousand and $2,152,841 thousand, respectively. Please refer to Note 6(x) for details of the interest expense.

(ii) Collateral for bank borrowings

Please refer to Note 8 for details of the related assets pledged as collateral.

(iii) Borrowing covenants

The Group entered into a borrowing contract in a total credit of $3,150,000 thousand with several financial institutions on April 23, 2019. According to the contract, during the borrowing repayment periods the Company should file annual and semi-annual consolidated financial statements which were audited and reviewed by CPA and must comply with certain financial covenants, such as the current ratio shall be greater than or equal to 100%, the debt ratio shall be less than or equal to 200%, the interest coverage ratio shall be greater than or equal to 5 times, and the tangible net value shall be greater than or equal to $14,000,000 thousand. The compliance with the aforementioned covenants will be examined semi-annually. As of December 31, 2019, the Group was in compliance with the above borrowing covenants.

The Group entered into a borrowing contract in a total credit of USD104,000 thousand with one financial institution on July 27, 2017. According to the contract, during the repayment periods the Company should file UEA annual non-consolidated and CMI annual consolidated financial statements which were audited by CPA and must comply with certain financial covenants. The financial covenants based on the years of 2018 and 2017 CMI annual consolidated financial statements is EBITDA/(CPLTD+1), which shall be greater than or equal to 1, and of which based on UEA annual non-consolidated and CMI annual consolidated financial statements is debt ratio, which shall be less than or equal to 80%. The compliance with the aforementioned covenants will be examined annually. As of December 31, 2019, the Group was in compliance with the above borrowing covenants.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Lease liabilities

The details of the lease liabilities is as follows:

Current Non-current	March 31, 2020 $ 189,867 $ 1,944,534	December 31, 2019 March 31, 2019 190,521 189,928 1,991,672 2,133,346

For the maturing analysis, please refer to Note 6(y).

The amounts recognized in profit or loss are as follows:

Interest on lease liabilities Expenses relating to leases short-term assets	For the Three Months Ended March 31
	2020 2019 $ 7,049 6,011 $ 4,423 2,466

The amounts recognized in the statement of cash flows are as follows:

Total cash outflow for leases	For the Three Months Ended March 31
	2020 2019 $ 58,935 63,411

(i) Real estate leases

As of March 31, 2020, the Group leases land and buildings for its offices, retail stores and future project development. The leases of offices, typically run for a period of 2 years, retail stores for a period of 15 years, and the land use rights leased for future project development for 40 to 50 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases provide for additional rent payments that are based on changes in local price index, or sales that the Group makes at the leased store in the period. Some also require the Group to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

Some leases of equipment contain extension or cancellation options exercisable by the Group up to one year before the end of the non-cancellable contract period. These leases are negotiated and monitored by local management, and accordingly, contain a wide range of different terms and conditions. The extension options held are exercisable only by the Group and not by the lessors. In which leasee is not reasonably certain to use an optional extended lease term, payments associated with the optional period are not included within lease liabilities.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

The Group leases equipment and transportation, with lease terms of 2 to 6 years. In some cases, the Group has options to purchase the assets at the end of the contract term.

The Group also leases equipment and machinery, dormitory and company cars with contract terms of one year. These leases are short-term or low-value items which the Group has elected not to recognize right-of-use assets and lease liabilities.

(o) Provisions

Current: Warranties Legal Subtotal Non-current: Financial guarantee contracts Legal Subtotal Total	March 31, 2020 $ 242 42,600 42,842 41,415 236,052 277,467 $ 320,309	December 31, 2019 March 31, 2019 246 36 43,100 - 43,346 36 44,756 53,358 236,052 236,052 280,808 289,410 324,154 289,446

(i) Warranties

The Group’ s warranties are mainly related to the sales of construction projects. They are estimated on the historical data and are expected to occur after 3 to 5 years of selling the construction projects.

(ii) Financial guarantee contracts

The Group assisted the joint venture to obtain the endorsement guarantee of credit limit borrowing from the financial institutions. According to IFRS 9 “ Financial Instruments”, the financial guarantee contracts are measured at fair value.

(iii) Legal

Please refer to Note 9(b) for the information on estimated legal provisions and losses.

(p) Operating leases

Lessor

The Group leases out investment properties under operating lease which was based on the assessment of the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. Please refer to Note 6(i) for the regarding information on investment properties.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

Less than one year One to two years Total undiscounted lease payments	March 31, 2020 $ 7,086 - $ 7,086		December 31, 2019 March 31, 2019 10,678 8,470 355 1,446 11,033 9,916

For the three months ended March 31, 2020 and 2019, rental revenues from investment properties amounted to $2,982 thousand and $1,493 thousand, respectively. The equipment and maintenance costs arising from the investment properties (recognized under "Operating costs") are as follows:

Lease-out property	For the Three Months Ended March 31
	2020 2019 $ 2 2

(q) Employee benefits

(i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material onetime events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2019 and 2018.

The expenses recognized in profit or loss for the Group are as follows:

Operating cost Selling expenses Administration expenses Research and development expenses Total		For the Three Months Ended March 31
	2020 2019 $ 593 246 100 40 277 203 87 30 $ 1,057 519

For the three months ended March 31, 2020 and 2019, the Group’ s employee benefits retirement expenses amounted to $0 and $228 thousand, respectively.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

The Group’s expenses under the pension plan cost to the Bureau of Labor Insurance are as follows:

Operating cost Selling expenses Administration expenses Research and development expenses Total		For the Three Months Ended March 31
	2020 2019 $ 8,055 13,278 512 698 5,258 4,817 83 131 $ 13,908 18,924

(iii) Short-term employee benefits

Paid leave and other liabilities	March 31, 2020 $ 15,673	December 31, 2019 March 31, 2019 20,503 23,680

(r) Income tax

(i) Applicated legal tax rates of foreign subsidiaries: China: 15%~25%; Japan: 29.05%~33.24%; the USA: 21%~27%.
(ii) The income tax expense for the three months ended March 31, 2020 and 2019 are as follows:

Current income tax expense Current period incurred Land value increment taxes Adjustment for prior periods Income tax expense	For the Three Months Ended March 31
	2020 2019 $ 11,438 49,472 - 14,617 - (190) $ 11,438 63,899

(iii) Under income tax return filing of the Group, the income tax returns of the Company had been assessed and approved by the Tax Authority through 2017, other domestic consolidated subsidiaries had been assessed and approved through 2018. The Company and Sunflower Investment did not agree on the proposed tax adjustments from the Tax Authority, and filed the petition of administration. Please refer to Note 9(b) for the details of the petition.

(s) Share capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the three months ended March 31, 2020 and 2019. For the related information, please refer to Note 6(w) of the consolidated financial statements for the year ended December 31, 2019.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Capital surplus

The components of the capital surplus are as follows:

March 31, 2020 From issuance of share capital $ 626,110 Employee stock option of subsidiaries 33,352 From conversion of convertible bonds 863,499 Changes in equity of associates and joint ventures accounted for using equity method 143 $ 1,523,104	December 31, 2019 March 31, 2019 626,110 626,110 33,352 33,352 863,499 863,499 143 - 1,523,104 1,522,961

(ii) Retained earnings

The Company’s Articles of Incorporation require that after-tax earnings shall first be offset against any deficit, and 10% of the balance shall be set aside as legal reserve. The appropriation for legal reserve is discontinued when the balance of the legal reserve equals the total authorized capital. Aside from the aforesaid legal reserve, the Company may, under its Articles of Incorporation or as required by the government, appropriate for special reserve. The remaining balance of the earnings, if any, may be appropriated according to the distribution plan proposed by the Board of Directors and submitted to the shareholders’ meeting for approval. If all or part of the aforementioned employees’ compensation is distributed in cash, the resolution will be approved by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, and the distribution shall be submitted to the shareholders’ meeting.

The Company is in the growth stage of business cycle and the annual earnings and future cash flow is maintained stable. Considering the Company’ s significant investment plan for the future, the Company applied “ Residual dividend policy” for long-term operating plan and funding needs. The dividend distribution of cash and stock is correlated with annual earning. The Company's stock dividends cannot be higher than 70% of the total dividend.

1) Earnings distribution

The Company appropriated its 2019 and 2018 earnings based on the resolution decided during the meeting of the Board of Directors and the shareholders held on May 12, 2020 and June 24, 2019, respectively, as follows:

Common stock dividends per share Cash	2019 Allotment (NTD) Amount $ 0.90 346,727	2018
	Allotment (NTD) $ 0.90	Allotment (NTD) Amount 2.70 1,040,181

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Other equity (net of tax)

Balance on January 1, 2020 Loss attributable to non-controlling interests Exchange differences on foreign operations Cash dividends paid to non-controlling interests Balance on March 31, 2020 Balance on January 1, 2019 Effects of retrospective application Balance on January 1, 2019, after adjustments Profit attributable to non-controlling interests Exchange differences on foreign operations Unrealized gain on financial assets measured at FVOCI Changes in equity of associates and joint ventures accounted for using equity method Cash dividends paid to non-controlling interests Balance on March 31, 2019	Exchange Differences on Translation of Foreign Financial Statements $ (143,749) - (109,790) - $ (253,539) $ 136,291 - 136,291 - 204,436 - - - $ 340,727	Unrealized Gains (Losses) from Financial Assets Measured at FVOCI 87,640 - - - 87,640 69,779 - 69,779 - - 17,862 - - 87,641	Non-controlling Interest Total 3,852,894 3,796,785 (8,046) (8,046) (21,034) (130,824) (1,164) (1,164) 3,822,650 3,656,751 4,199,268 4,405,338 (332) (332) 4,198,936 4,405,006 58,723 58,723 44,339 248,775 - 17,862 (51) (51) (1,624) (1,624) 4,300,323 4,728,691

(t) Earnings per share

The Group’s (deficits)/earnings per share are calculated as follows:

Basic (deficits)/earnings per share
(Loss) profit attributable to owners of the parent

Weighted average number of ordinary shares
Basic (deficits)/earnings per share

Diluted (deficits)/earnings per share
Profit attributable to owners of the parent
(after the adjustment of diluted ordinary shares)

Weighted average number of ordinary shares
Effect of potential diluted ordinary shares
Employee stock option
Weighted average number of ordinary shares
(after the adjustment of diluted ordinary shares)
Diluted (deficits)/earnings per share

For the Three Months Ended March 31
2020
2019
$
(57,506)
169,457
385,252
385,252
$
(0.15)
0.44
$
(57,506)
169,457
385,252
385,252
-
1,406
385,252
386,658
$
(0.15)
0.44

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Revenue from contracts with customers

(i) Disaggregation of revenue

Major geographic markets: Taiwan United States Japan China Europe South America Others Major product/service lines: Iron casting hardware Construction Counter commissions Others Major geographic markets: Taiwan United States Japan China Europe South America Others	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020
	Metal Manufacturing Segment Real Estate Development Segment Lifestyle Hospitality Segment Total $ 107,408 3,463 147,894 258,765 506,698 - - 506,698 349,317 - - 349,317 986,053 - - 986,053 63,468 - - 63,468 6,871 - - 6,871 95,011 - - 95,011 $ 2,114,826 3,463 147,894 2,266,183 $ 2,105,161 - - 2,105,161 - - - - - - 83,580 83,580 9,665 3,463 64,314 77,442 $ 2,114,826 3,463 147,894 2,266,183 For the Three Months Ended March 31, 2019
	Metal Manufacturing Segment $ 120,601 616,321 408,268 1,641,352 71,398 2,445 99,528 $ 2,959,913	Real Estate Development Segment 640,951 - - - - - - 640,951	Lifestyle Hospitality Segment Total 186,207 947,759 - 616,321 - 408,268 - 1,641,352 - 71,398 - 2,445 - 99,528 186,207 3,787,071

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Major product/service lines: Iron casting hardware Construction Counter commissions Others	For the Three Months Ended March 31, 2019	For the Three Months Ended March 31, 2019	For the Three Months Ended March 31, 2019
	Metal Manufacturing Segment $ 2,940,471 - - 19,442 $ 2,959,913	Real Estate Development Segment - 636,301 - 4,650 640,951	Lifestyle Hospitality Segment Total - 2,940,471 - 636,301 84,258 84,258 101,949 126,041 186,207 3,787,071

(ii) Contract balances

Notes and accounts receivable Less: Loss allowance Total Contract assets Contract liabilities–Advance real estate receipts Contract liabilities–Advance receipts	March 31, 2020 $ 3,268,131 (18,801) $ 3,249,330 $ - $ 1,608,723 $ 53,943	December 31, 2019 March 31, 2019 3,929,554 4,304,161 (26,005) (21,388) 3,903,549 4,282,773 - - 1,346,583 592,704 42,370 27,090

For the details of accounts receivable and loss allowance, please refer to Note 6(d).

The amount of revenue recognized for three months ended March 31, 2020 and 2019, that were included in the contract liabilities balance at the beginning of the period were $0 and $94,180 thousand, respestively.

The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied by transferring ownership to the customer and the payment to be received.

(v) Employees' compensation and remuneration of directors

Based on the amended Company’ s Articles of Incorporation, employees’ compensation is appropriated at the rate of at least 2.5% and remuneration of directors is appropriated no more than 2.5% of profit before tax, respectively. Prior years’ accumulated deficit is first offset before any appropriation of profit, then calculate the employees’ compensation and remuneration of directors by the appropriate ratio stipulated in the bylaws. The employees to whom the Company distributes employees’ compensation, or issued new restricted employee shares, employee stock option certificates, preemptive right of new shares, and transfer of shares include the employees of subsidiaries which are qualified with the requirements stipulated by the Board of Directors.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

There were no appropriation for remuneration to employees and directors for the three months ended March 31, 2020 due to the operation losses incurred by the Company during the period. For the three months ended March 31, 2019, appropriated employees’ compensation and remuneration of directors by $5,098 thousand and $4,902 thousand, respectively, which were estimated on the basis of the Company’s net profit before tax, excluding employees’ compensation and the remuneration of directors of each period, then multiplied by the percentage of remuneration of employees and directors as specified in the Company's Articles of Incorporation. Such amounts were recognized as operating cost or operating expense for the three months ended March 31, 2020 and 2019. The number of shares to be distributed were calculated based on the closing price of the Company’ s ordinary shares, one day prior to Board of Directors meeting. Management is expecting that the differences, if any, between the actual distributed amounts and estimated amounts will be treated as changes in accounting estimates and charged to profit or loss.

There were no significant difference between employees' compensation and remuneration of directors approved by the Board of Directors meeting and the estimated amount for the years of 2019 and 2018.

Information on the employees' compensation and remuneration of directors approved by the Board of Directors meeting is available on the Market Observation Post System website of the Taiwan Stock Exchange.

(w) Net other income and expenses

The information on net other income and expenses is listed as follows:

Rental revenue $ (x) Non-operating income and expenses	For the Three Months Ended March 31 2020 2019 1,976 1,070

(i) Other income

The information on other income is listed as follows:

The information on other income is listed as follows:
	For	the Three Months	Ended March 31
		2020	2019
Interest income
Interest income from bank deposits	$	7,833	14,401
Interest income from financial guarantee contracts		3,341	3,323
Total interest income		11,174	17,724
Others		4,668	10,297
Total other income	$	15,842	28,021

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other gains and losses

The information on other gains and losses is listed as follows:

		For the Three Months	Ended March 31
		2020	2019
Gains (losses) on disposal of property, plant and
equipment	$	6,189	(2,002)
Foreign exchange gains (losses)		24,814	(17,045)
(Losses) gains on financial assets at FVTPL		(4,240)	788
Impairment loss on property, plant and equipment		-	(447)
Other losses		(414)	(11)
Net amount of other gains and losses	$	26,349	(18,717)

(iii) Finance costs

The information on interest costs is listed as follows:

		For the Three Months	Ended March 31
		2020	2019
Bank borrowing interest expense	$	70,740	68,470
Lease liability interest expense		7,049	6,011
Other finance costs		442	378
Net amount of finance costs	$	78,231	74,859

For the three months ended March 31, 2020 and 2019, the capitalized interest costs amounted to $10,024 thousand and $4,755 thousand, respectively.

(y) Financial instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to Note 6(ac) of the consolidated financial statements for the year ended December 31, 2019.

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets and contract assets represent the maximum amount exposed to credit risk.

2) Concentration of credit risk

Since the Group had a large number of unrelated customers, the concentration of the credit risk is limited.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Credit risks of receivables and debt securities

For the information regarding credit risk exposure of notes and accounts receivables, please refer to Note 6(d). Other financial assets at amortized cost include other receivables and time deposits.

All of these financial assets mentioned above are considered to be low risk, therefore, the impairment provision recognized during the period was limited to 12 months expected losses. For the allowance of impairment on financial assets for the three months ended March 31, 2020 and 2019, please refer to Note 6(d).

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments, but not the impact of netting agreements.

Contractual Cash Flow March 31, 2020 Non-derivative financial liabilities Bank borrowings $ 19,602,134 Lease liabilities 2,404,574 Notes and accounts payables (including related parties) 1,948,923 Other payables (including related parties) 698,518 $ 24,654,149 December 31, 2019 Non-derivative financial liabilities Bank borrowings $ 19,546,749 Lease liabilities 2,459,427 Notes and accounts payables (including related parties) 2,628,201 Other payables (including related parties) 850,762 $ 25,485,139 March 31, 2019 Non-derivative financial liabilities Bank borrowings $ 16,507,722 Lease liabilities 2,622,792 Notes and accounts payables (including related parties) 2,468,214 Other payables (including related parties) 988,628 $ 22,587,356	Within 6 Months 5,593,839 109,002 1,948,923 698,518 8,350,282 2,685,966 109,857 2,628,201 850,762 6,274,786 4,298,390 109,952 2,468,214 988,628 7,865,184	6-12 Months 3,396,872 107,214 - - 3,504,086 4,771,158 107,755 - - 4,878,913 1,353,275 109,306 - - 1,462,581	1-2 Years 5,404,077 204,514 - - 5,608,591 4,103,271 209,687 - - 4,312,958 5,444,323 216,271 - - 5,660,594	2-5 Years Over 5 Years 5,159,385 47,961 587,009 1,396,835 - - - - 5,746,394 1,444,796 7,917,829 68,525 585,500 1,446,628 - - - - 8,503,329 1,515,153 5,318,295 93,439 591,257 1,596,006 - - - - 5,909,552 1,689,445

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Currency risk

1) Exposure of foreign currency risk

The Group’s significant exposure to foreign currency risk is as follows:

The Group’s significant exposure t	o foreign currency risk is as	follows:	follows:
March 31, 2020 Foreign Currency Exchange Rate NTD Financial assets Monetary items USD:NTD $ 19,748 30.23 596,994 USD:CNY 114,352 7.10 3,456,857 USD:JPY 708 108.43 21,403 EUR:NTD 874 33.24 29,041 EUR:CNY 1,068 7.80 35,512 JPY:NTD 62,848 0.28 17,522 JPY:CNY 62,329 0.07 17,377 HKD:USD 6,196 0.13 24,166 Financial liabilities Monetary items USD:NTD 1,023 30.23 30,940 USD:CNY 104,705 7.10 3,165,233 EUR:CNY 15,859 7.80 527,154 HKD:USD 390,880 0.13 1,524,432	December 31, 2019 Foreign Currency Exchange Rate NTD 25,467 29.98 763,486 33,943 6.96 1,017,620 639 108.62 19,163 2,354 33.59 79,064 2,258 7.79 75,842 93,893 0.28 25,914 33,989 0.06 9,381 9,752 0.13 37,546 - 29.98 - 109,837 6.96 3,292,900 8,618 7.79 289,492 390,880 0.13 1,504,888	March 31, 2019
	Foreign Currency 25,467 33,943 639 2,354 2,258 93,893 33,989 9,752 - 109,837 8,618 390,880	Foreign Currency 42,164 111,865 643 1,239 1,938 67,275 11,004 2,642 - 108,638 4,605 502,560	Exchange Rate NTD 30.82 1,299,503 6.73 3,447,664 110.74 19,818 34.61 42,895 7.56 67,062 0.28 18,723 0.06 3,062 0.13 10,384 30.82 - 6.73 3,348,215 7.56 159,365 0.13 1,975,061

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, borrowings, accounts payable and other payables that are denominated in foreign currency. A 1% of appreciation or depreciation of each major foreign currency against the Group’ s functional currency as of March 31, 2020 and 2019 would have increased (decreased) the after-tax net income for the three months ended March 31, 2020 and 2019 by $2,098 thousand and $1,147 thousand, respectively. The analysis assumes that all other variables remain constant and was performed on the same basis for both periods.

As the Group deals in diverse foreign currencies, gains or losses on foreign exchange were summarized as a single amount. For the three months ended March 31, 2020 and 2019, the foreign exchange gains (losses), including both realized and unrealized, amounted to $24,814 thousand and $(17,045) thousand, respectively.

(iv) Interest rate analysis

The interest risk exposure from financial assets and liabilities has been disclosed in the note of liquidity risk management.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The following sensitivity analysis is based on the risk exposure to interest rates on the derivative and non-derivative financial instruments at the reporting date. For variable rate instruments, the sensitivity analysis assumes the variable rate liabilities are outstanding for the whole year at the reporting date.

If the interest rate increases or decreases by 1% the Group’s net income will decrease /increase by $30,091 thousand and $32,100 thousand for the three months ended March 31, 2020 and 2019, respectively, assuming all other variable factors remain constant. This is mainly due to the Group’s variable rate bank borrowings.

(v) Other market price risk

If the equity price changes, the impact of equity price change to other comprehensive income will be as follows, assuming the analysis were based on the same basis, and other variables considered in the analysis remain the same:

Increase 10% Decrease 10%	For the Three Months Ended March 31 2020 2019 Other Comprehensive Income (net of tax) Net Income (Loss) (net of tax) Other Comprehensive Income (net of tax) Net Income (Loss) (net of tax) $ 20,807 4,720 22,568 1,280 $ (20,807) (4,720) (22,568) (1,280)
	2020 Other Comprehensive Income (net of tax) Net Income (Loss) (net of tax) $ 20,807 4,720 $ (20,807) (4,720)
	Other Comprehensive Income (net of tax) $ 20,807 $ (20,807)

(vi) Fair value of financial instruments

1) Fair value hierarchy

The Group measured its financial assets at FVOCI on a recurring basis. The carrying amount and fair value of the Group’ s financial assets and liabilities, including the information on fair value hierarchy are as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

Financial assets at FVTPL Non-current financial assets at FVOCI Financial assets measured at amortized cost Financial liabilities measured at amortized cost		March 31, 2020	March 31, 2020	March 31, 2020
	Book Value $ 47,200 $ 208,065 $ 8,924,175 $ 23,935,267		Fair Value
		Level 1 47,200 - - -	Level 2 - - - -	Level 3 Total - 47,200 208,065 208,065 - - - -

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2019	December 31, 2019	December 31, 2019
Book Value $ 51,440 $ 216,065 $ 9,437,822 $ 24,523,826		Fair Value
	Level 1 Level 2 51,440 - - - - - - - March 31, 2019		Level 3 Total - 51,440 216,065 216,065 - - - -
Book Value $ 12,800 $ 225,680 $ 9,692,717 $ 21,287,277		Fair Value
	Level 1 12,800 - - -	Level 2 - - - -	Level 3 Total - 12,800 225,680 225,680 - - - -

2) Valuation techniques for financial instruments measured at fair value

Financial instruments traded in active markets are based on quoted market prices. Market prices quoted from main exchanges and over-the-counter are the basis of fair value of equity instruments and credit instrument traded in active markets.

If the quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument does not accord with the definition aforementioned, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of non-active market.

If the financial instruments held by the Group have active market, the measurements of fair value are categorized as follows:

The listed redeemable bonds, listed stocks, drafts and bonds are recognized as financial assets and liabilities traded in active markets by the standards and nature. The fair value is measured at the market quoted price.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

If the financial instruments held by the Group have no active market, the measurements of fair value are categorized as follows:

Equity instruments without quoted price: The fair value is measured at discounted cash flow model. The assumption is discounted investees’ expected future cash flows by using the discounting rate which reflects the time value of money and the return of the investment.
3) Transfers between Level 1 and Level 2

There were no transfers in either direction for the three months ended March 31, 2020 and 2019.

4) Reconciliation of Level 3 instruments

Reconciliation of Level 3 instruments
		Non-current Financial
		Assets at FVOCI
		Equity Instrument
		without Quoted Price
Balance on January 1, 2020	$	216,065
Capital reduction		(8,000)
Balance on March 31, 2020	$	208,065
Balance on January 1, 2019	$	207,818
Total gains recognized as other comprehensive income		17,862
Balance on March 31, 2019	$	225,680

The total gains or losses is listed under “unrealized gain on financial assets at FVOCI”. The information regarding assets held as of March 31, 2020 and 2019 is as follows:

Total gains or losses Recognized as other comprehensive income (which is listed under "unrealized gain on financial assets of FVOCI")	For the Three Months Ended March 31
	2020 2019 $ - 17,862

5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Group’s major financial instruments that use Level 3 inputs to measure fair value is “financial assets measured at FVOCI – equity investments”.

Most of the Group’s financial assets in Level 3 have only one significant unobservable input, while its equity investments without an active market have more than one significant unobservable inputs. The significant unobservable inputs of equity investments without an active market are individually independent, and there is no correlation between them.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Quantified information regarding significant unobservable inputs are as follows:

Item Financial assets at FVOCI equity investments without active market	Valuation Technique Dividend discount model	Significant Unobservable Inputs Inter-relationship between Significant Unobservable Inputs and Fair Value Measurement ‧Average expected future dividend income of 5 years (As of March 31, 2020,December 31 and March 31, 2019 were $0~$30,176 thousand, $0~30,176 thousand, and $0~31,752 thousand, respectively.) ‧The estimated fair value would increase, if the 5- year average expected future dividend income is increased. ‧Weighted average capital cost (As of March 31, 2020, December 31 and March 31, 2019, were 4.95%,3.45% and 3.95%, respectively.) ‧Discounting rate without market liquidity (As of March 31, 2020,December 31 and March 31, 2019, were all 15%) ‧The estimated fair value would decrease, if the weighted average capital cost is increased. ‧The estimated fair value would decrease, if the discounting rate without market liquidity is increased.

6) Fair value measurements in Level 3-sensitivity analysis of reasonably possible alternative assumptions

The Group’ s measurement on the fair value of financial instruments is deemed reasonable despite different valuation models or assumptions may lead to different results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

March 31, 2020 Financial assets at FVOCI Equity investments without an active market December 31, 2019 Financial assets at FVOCI Equity investments without an active market March 31, 2019 Financial assets at FVOCI Equity investments without an active market	Inputs % 4.95 % 3.45 % 3.95	Fluctuation in Inputs 1% 1% 1%	Other Comprehensive Income Favorable Unfavorable 7,043 (6,695) 8,103 (7,693) 8,498 (8,069)

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

(z) Financial risk management

There were no significant changes in the Group’ s financial risk management and policies as disclosed in Note 6(ad) of the consolidated financial statements for the year ended December 31, 2019.

(aa) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2019. Also, management believes that there were no significant changes in the Group’s capital management information as disclosed for the year ended December 31, 2019. Please refer to Note6 (ae) of the consolidated financial statements for the year ended December 31, 2019 for further details.

(7) Related-party transactions:

(a) The ultimate parent company

The company is both the parent company and the ultimate controlling party of the Group.

(b) Names and relationship with related parties

The followings are entities that have had transactions with related parties during the periods covered in the consolidated financial statements.

in the consolidated financial statements.
Name of Related Party	Relationship with the Group
The Splendor Hospitality International Co., Ltd.	Joint ventures
(The Splendor Hospitality)
CMAAN Health Co., Ltd. (CMAAN Health)	Joint ventures
Amida Trustlink Assets Management Co., Ltd.	Associates
(Amida Trustlink Assets)
Hua-Pu Development Co., Ltd. (Hua-Pu Development)	Joint venture of subsidiaries
Keng-Hsin Urban Renewal Co., Ltd.	Associate of subsidiaries
(Keng-Hsin Urban Renewal)
ADVANCISION (CAYMAN) Industries Co., Ltd.	Associate of subsidiaries
(ADVANCISION (CAYMAN))
Beyond Fitness Co., Ltd. (Beyond Fitness)	Associate of subsidiaries
Acore Material Technology Co., Ltd.	Associate of subsidiaries
(Acore Material Technology)
Fuzhou Aprec Mechanical and Electrical Co., Ltd.	Subsidiaries of subsidiaries' associates
(Fuzhou Aprec)

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Related Party

Advancision Corporation (Advancision) Chain-Yuan Investment Co., Ltd. (Chain-Yuan Investment) Kemitek Industrial Corp. (Kemitek Industrial)

CMP PUJEN Foundation for Arts and Culture (Foundation) San Lien Educational Foundation (San Lien Foundation) Pu Yuan Construction Co., Ltd. (Pu Yuan Construction) LEESCO Development Co., Ltd. (LEESCO Development) Hao Bao Investment Co., Ltd. (Hao Bao Investment) Gee Lien Resource Development Corp. (Gee Lien Resource) Mr. Ming Shiann, Ho Mr. Ting Fung, Lin

Relationship with the Group Subsidiaries of subsidiaries' associates Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Key Management

(i) Sales to related parties

The amounts of significant sales transactions and outstanding balance between the Group and related parties are as follows:

Associates Other related parties	Sales	Sales	Notes and Accouts Receivables March 31, 2020 December 31, 2019 March 31, 2019 1,036 498 1,751 11 17 - 1,047 515 1,751	Notes and Accouts Receivables March 31, 2020 December 31, 2019 March 31, 2019 1,036 498 1,751 11 17 - 1,047 515 1,751
	For the Three Months Ended March 31			December 31, 2019 March 31, 2019 498 1,751 17 - 515 1,751
	2020 $ 1,147 35 $ 1,182	2019 1,696 123 1,819

The sales between the Group and related parties approximated the market price.

(ii) Purchases from related parties

The amounts of significant purchases transactions and outstanding balances between the Group and related parties are as follows:

Associates Other related parties	Purchases For the Three Months Ended March 31 2020 2019 $ 14,682 13,500 1,663 - $ 16,345 13,500	Notes March 31, 2020 27,892 704 28,596	and Accouts Payable
			December 31, 2019 March 31, 2019 29,434 21,062 2,823 15 32,257 21,077
	2020 $ 14,682 1,663 $ 16,345

The purchases mentioned above could not compare to the market because the Group did not purchase the same items from non-related parties. The payment terms with related parties are not significantly different from those with third parties.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Leases

1) Rental expenses

The information on office leased by the Group is as follows:

Joint ventures Other related parties: Mr. Ming Shiann, Ho Others Other related parties	Rental Expenses For the Three Months Ended March 31 2020 2019 $ - 12 578 578 15 15 $ 593 605 Guarantee Deposit Paid (Recognized under other current and non-current financial assets) March 31, 2020 December 31, 2019 March 31, 2019 $ 443 443 452	Rental Expenses
		For the Three Months Ended March 31
	March 31, 2020 $ 443

2) Rental revenues

The information on office leased to related parties is as follows:

Associates: Advancision Beyond Fitness Acore Material Technology Others Other related parties: Foundation Others Associates	Rental Revenues For the Three Months Ended March 31 2020 2019 $ 67 143 - 383 - 383 9 9 306 76 15 - $ 397 994 Guarantee Deposit Received (Recognized under other non-current liabilities) March 31, 2020 December 31, 2019 March 31, 2019 $ 300 300 240	Rental Revenues
		For the Three Months Ended March 31
	March 31, 2020 $ 300

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Providing services to related party

The information on providing management consulting and application services to related parties is as follows:

Associates Joint ventures	Service Revenues
	For the Three Months Ended March 31
	2020 2019 $ 75 - 1,840 1,438 $ 1,915 1,438

(v) Non-performing receivables

Joint ventures: The Splendor Hospitality Joint ventures: The Splendor Hospitality		Total Claims
	March 31, 2020 $ 796,845	December 31, 2019 March 31, 2019 796,845 796,845 Costs of Claims
	March 31, 2020 $ 575,000	December 31, 2019 March 31, 2019 575,000 575,000

The claims mentioned above was recognized in other non-current financial assets, please refer to Note 6(k).

(vi) Guarantees and endorsements

The information on guarantees and endorsements of financing quotas and actual usage is as follows:

Joint ventures: The Splendor Hospitality $ Others $	Borrowing Limits	Borrowing Limits
	March 31, 2020 2,150,000 45,680 2,195,680	December 31, 2019 March 31, 2019 1,900,000 2,100,000 45,680 95,680 1,945,680 2,195,680

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Joint ventures: The Splendor Hospitality Others	Actual Usage Amount	Actual Usage Amount
	March 31, 2020 $ 1,620,000 45,680 $ 1,665,680	December 31, 2019 March 31, 2019 1,640,000 1,650,000 45,680 55,681 1,685,680 1,705,681

(vii) Guarantee for bank borrowings

The Group didn’t pay any guarantee fee to related parties as a guarantor.

(viii) Property transaction

The information on acquisitions of assets (including capitalized costs from development projects, which was recognized under other non-current assets) and subsidiaries investments from related parties is as follows:

	For	the Three Months	Ended March 31
		2020	2019
Other related parties	$	834	-

The information on construction in retention for development projects to be paid by the Group is as follows:

Other related parties	March 31, 2020 $ 138	December 31, 2019 March 31, 2019 138 -

(ix) Other transactions

1) The information on donation to related parties is as follows:

Other related parties: Foundation	Donation
	For the Three Months Ended March 31
	2020 2019 $ 15 125

2) The information on management services provided by related parties is as follows:

Other related parties:Foundation	Management Service Expenses
	For the Three Months Ended March 31
	2020 2019 $ 3,500 600

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) The information on other services or transactions provided by related parties is as follows:

Associates Joint ventures Other related parties	Other Expenses
	For the Three Months Ended March 31
	2020 2019 $ - 5 - 37 28 36 $ 28 78

4) The amounts on revenues from providing guarantees and endorsements to related parties is as follows:

Joint ventures: The Splendor Hospitality Others	Interest Revenues For the Three Months Ended March 31
	2020 2019 $ 3,260 3,216 81 107 $ 3,341 3,323

5) Other receivables and advance payments from related parties

Associates: Keng-Hsin Urban Renewal Others Joint ventures Other related parties: LEESCO Development Others	Other Receivables (including advance payments)	Other Receivables (including advance payments)
	March 31, 2020 $ 30,183 100 131 3,900 235 $ 34,549	December 31, 2019 March 31, 2019 27,773 20,190 53 584 96 240 - - 238 49 28,160 21,063

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

6) Other payables and advance receipts from related parties

Associates Joint ventures Other related parties Key Management	Other Payables (including advance receipts)	Other Payables (including advance receipts)
	March 31, 2020 $ 8,001 2 1,919 - $ 9,922	December 31, 2019 March 31, 2019 12,062 3,479 97 118 1,307 97 25 - 13,491 3,694

(d) Key management transactions

The compensation of key management is as follows:

Short-term employee benefits Post-employment benefits	For the Three Months Ended March 31
	2020 2019 $ 22,697 31,295 414 561 $ 23,111 31,856

(8) Pledged assets

The information on pledged assets' carrying value is as follows:

Pledged Assets	Object	March 31, 2020 $ 1,466,374 332,600 597,490 5,841,338 4,222,195 3,776,433 59,356 644,261 $ 16,940,047	December 31, 2019 March 31, 2019 1,250,335 1,412,375 330,012 412,738 598,843 602,904 5,865,338 3,955,953 2,850,050 2,739,462 3,776,433 4,146,680 27,636 42,804 606,649 166,937 15,305,296 13,479,853
Land (including other non-current assets) Buildings Investment properties Inventories—Land held for development Inventories— Construction in progress Inventories—Buildings and land held for sale Other current financial assets 〃	The credit limits of long- term and short-term bank borrowings 〃〃〃〃 The credit limits of short- term borrowings Bank acceptance bills Trusts

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(9) Significant commitments and contingencies

(a) The Group’s unrecognized contractual commitments are as follows:
(i) The unused standby letters of credit for purchasing machinery and equipment and raw material are as follows:

Unused standby letters of credit	March 31, 2020 $ -	December 31, 2019 March 31, 2019 - 1,156

(ii) The unrecognized contractual commitment from contracts of buildings for future operational use, selling and purchasing of equipment, decorating constructions, and engineering constructions entered into by the Group is as follows:

Total contract price Total amounts paid under contracts (Note)	March 31, 2020 $ 8,806,969 $ 1,667,738	December 31, 2019 March 31, 2019 5,153,812 4,736,100 1,331,255 859,691

Note: Recognized in “prepayments for equipment and construction in progress”, “other noncurrent assets”, “inventory- construction in progress” and “administrative expenses”.

(iii) The Group’s total selling price for presale construction projects is as follows:

Total contract price Total amounts received under contracts (recognized under current contract liabilities)	March 31, 2020 $ 10,808,262 $ 1,603,135	December 31, 2019 March 31, 2019 10,032,583 4,355,504 1,340,994 592,704

(iv) The Group’s purchase contracts of building capacity is as follows:

Total contract price Total amounts paid under contracts (recognized under prepayments)	March 31, 2020 $ 200,944 $ 116,570	December 31, 2019 March 31, 2019 200,944 200,944 116,570 116,570

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) The Group’s security deposits paid to landlords for joint construction projects is as follows:

		March 31,	December 31,	March 31,
		2020	2019	2019
Security deposits of joint construction
projects (recognized under other
current and non-current
financial assets)	$	304,334	283,614	219,940
The Group’s security deposits for renting		real estates is as	follows:
		March 31,	December 31,	March 31,
		2020	2019	2019
Security deposits (recognized under
other current and non-current
financial assets)	$	97,412	97,311	97,712

(vi) The Group’s security deposits for renting real estates is as follows:
(vii) The Group’s unrecognized contractual commitments for purchasing land is as follows:

Total contract price Total amounts paid under contracts (recognized under inventories— prepayments for land)	March 31, 2020 $ 289,542 $ 123,269	December 31, 2019 March 31, 2019 279,342 219,342 121,229 10,788

(viii) The Group and The Presbyterian Church in Taiwan entered into an real estate leasing contract, with the contract term of 40 years, commencing the day after the signing date, September 30, 2016. For the development of the leasing real estates, the Group agreed to pay development royalty amounted to $126,000 thousand. As of March 31, 2020 and 2019, the accumulated royalties paid amounted to $126,000 thousand, respectively, which was recognized under other non-current assets and transferred to right-of-use assets when the first application of IFRS16 on January1, 2019, and was depreciated by the contract term.

(b) Contingencies

(i) Please refer to Note 7 for the Group’s guarantees and endorsements for related parties' loans as of March 31, 2020 and 2019.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Contingencies for the Company and subsidiaries- the stages of Sunflower Investment Daguangsan tax petition for real estate transaction and non-performing receivables, and the petition stages of CMW (Tianjin) sales contract dispute is as follows:

Litigant Issue The Filing a petition for the Company administrative penalty of the value-added tax in the Daguangsan real estate transaction which was approved by National Taxation Bureau of Taipei Sunflower Since 2011, Sunflower Investment Investment had received several administrative penalties approved by National Tax Bureau of Taipei which arose from the withholding tax, valueadded tax, enterprise income tax and undistributed earning tax of the Daguangsan nonperforming receivables. The Company has sought administrative remedy for the aforementioned verdict.

CMW CMW (Tianjin) engaged in (Tianjin) a sales contract dispute with its customer and received the arbitration notice in February 2019, which the arbitration tribunal was formed in April 2019. The appeal is now in the trial of arbitration tribunal.

Current Status

National Taxation Bureau of Taipei has approved the additional value-added tax and the regarding penalty amounted to $38,497 thousand, which the Company had paid $25,665 thousand in 2012. The Company was dissatisfied with the verdict from the original authority, which has filed the administrative petition. According to the ruling of the Taipei High Administrative Court, the lawsuit has now been suspended.

National Tax Bureau of Taipei reduced the approved value-added tax and the regarding penalties to the total amount of $564,452 thousand on June 6, 2014, which arose from Daguangsan nonperforming receivables. The aforementioned amount had been paid in the amount of $46,174 thousand. The Company was dissatisfied with the verdicts and filed the petitions of the review, appeal and administrative litigation, which are being processed by the authority. The administrative litigation was filed against Taipei High Administrative Court on December 24, 2013. In accordance with the Administrative Regulation Article 177, Section 1 and 2, Taipei High Administrative Court suspended the proceeding of the lawsuit on July 25, 2016. Considering the risk of losing the lawsuit in the future, the Company assessed the aforementioned possible losses based on the conservative principle and estimate the contingent liabilities. For details of regarding contingencies, please refer to Note 6(o).

The customer requested CMW (Tianjin) to compensate for the loss caused by the deficiency of the product quality. However, CMW (Tianjin) developed the product based on the technical criterion and specifications provided by the customer. During the development stage, CMW (Tianjin) found a problem within the design and reminded the customer to modify. Due to the pressure of supply, the customer did not agree the proposal of the design modification to its end customers. In addition, the customer failed to follow the schedule in the process of verifying and approving the materials CMW (Tianjin) used in the production, which was inappropriate to the supply chain quality assurance. CMW (Tianjin) believes that the arbitration request lacks the facts and conclusive evidence, which is not possible for CMW (Tianjin) to take the whole responsibility of the end customers’ loss. The case appointed lawyer stated that it is unlikely that all of the customers’ arbitration requests will be accepted. The arbitration tribunal of this case was formed, however, the court session for the trial has not been opened. The engagement attorney stated that the arbitration request raised by the customer is unlikely to be supported. The responsible party will be determined after the third party examines the defective products. This case is still in the trial of the arbitration tribunal. Considering the risk of losing the lawsuit, the Company assessed the aforementioned possible losses based on the conservative principle to estimate the contingent liabilities. For the details of regarding contingencies, please refer to Note 6(o).

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(10) Losses due to major disasters: None.

(11) Subsequent events:

Due to the outbreak of COVID-19 in the beginning of 2020, the China operation business environment still remained uncertain. However, there were no significant influences on the operation. Since the global situation is changing, the assessment of the impact is not probable. The Group will continue to monitor the situation and give assessment of the impact of those changes.

(12) Other:

(a) The Securities and Futures Investors Protection Center (SFIPC) filed a criminal incidental civil action on behalf of the Company against the former chairman of the Company, Mr. Ming Shiann, Ho. However, the SFIPC was dissatisfied with the High Court’s decision on June 26, 2018 and filed an appeal to the Supreme Court, the appeal was handed back over to the High Court for reconsideration on August 22, 2019, which is in trial in the Tainan Branch of Taiwan High Court. On February 28, 2020, both parties agreed to temporarily suspend the case mentioned above.
(b) The SFIPC filed a lawsuit against the Company, its directors and supervisors, and certain employees of the Group. On March 27, 2019, the Supreme Court vacated the adjudication on February 13, 2018 and remanded it to the Taiwan High Court. On January 2, 2020, Taiwan High Court dismissed the appeal filed by the SFIPC for the second time. On February 5, 2020, the SFIPC filed an appeal to the Supreme Court against the aforementioned conviction, which is now in trial in the Supreme court.
(c) Employee benefits, depreciation, and amortization are summarized as follows:

By function By item	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
	2020			2019
	Operating Costs	Operating Expenses	Total	Operating Costs	Operating Expenses	Total
Employee benefits
Salary	144,049	135,141	279,190	175,063	167,733	342,796
Labor and health insurance	11,362	10,034	21,396	19,346	13,997	33,343
Pension	8,648	6,317	14,965	13,524	6,147	19,671
Others	13,716	9,568	23,284	12,801	11,278	24,079
Depreciation	170,557	71,305	241,862	173,120	77,941	251,061
Amortization	459	4,750	5,209	325	6,786	7,111

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions for the three months ended March 31, 2020, required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

(i) Loans to other parties:

Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:
													(In Thousands of NTD)
No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance During the Period	Ending Balance (Note 1)	Actual Borrowing Amount	Interest Rate	Nature for Financing (Note 2)	Transaction Amount for Business	Reasons for Short-term Financing	Allowance for Doubtful Accounts	Collateral		Financing Limit for Each Borrower (Note 3)	Aggregate Financing Limit (Note 4)
													Item	Value
1	Tianjin CMT	Suzhou CMB	Accounts receivable due from related parties	Yes	216,000	213,000	213,000	0.75%	2	-	Operation requirements	-		-	328,845	438,460
1	Tianjin CMT	CMW (Tianjin)	Accounts receivable due from related parties	Yes	194,400	191,700	191,700	0.75%	2	-	Operation requirements	-		-	328,845	438,460
2	FAR HSING (SAMOA)	Atrans Precision	Accounts receivable due from related parties	Yes	30,250	30,230	30,230	1.00%	2	-	Operation requirements	-		-	49,368	65,824

Note 1: Balance of loan as of the reporting date was within the credit limits approved by the Board of Directors.
Note 2: 1. For business transactions.
For the necessity of short-term financing.
Note 3: The lender’s total amount available for lending shall not exceed 30% of its net worth.

Note 4: The lender’s total amount available for lending shall not exceed 40% of its net worth.

Note 5: Intra-group transactions have been eliminated in the consolidated financial statements.

(ii) Guarantees and endorsements for other parties:

										(In Thousands of NTD)	(In Thousands of NTD)	(In Thousands of NTD)	(In Thousands of NTD)
No.	Name of Guarantor/ Endorse	Counter-party of Guarantee and Endorsement		Limitation on Amount of Guarantees and Endorsements for a Specific Enterprise (Note 4)	Highest Balance for Guarantees and Endorsements During the Period	Ending Balance (Note 2)	Actual Borrowing Amount	Property Pledged for Guarantees and Endorsements	Ratio of Accumulated Amounts of Guarantees and Endorsements to Net Worth of the Latest Financial Statements	Maximum Amount for Guarantees and Endorsements (Note 5)	Parent Company Endorsements/ Guarantees to Third Parties on Behalf of Subsidiary (Note 3)	Subsidiary Endorsements/ Guarantees to Third Parties on Behalf of Parent Company (Note 3)	Endorsements/ Guarantees to Third Parties on Behalf of Companies in Mainland China (Note 3)
		Name	Relationship with the Company (Note 1)
0	The Company	Sunflower Investment	1	4,688,760	110,000	110,000	60,500	-	% 0.94	5,860,950	Y	N	N
0	The Company	The Hotel National	1	4,688,760	100,000	50,000	50,000	-	% 0.43	5,860,950	Y	N	N
0	The Company	Shangrila Tourism	1	4,688,760	652,500	652,500	426,000	-	% 5.57	5,860,950	Y	N	N
0	The Company	The Splendor Hospitality	2	4,688,760	2,150,000	2,150,000	1,620,000	-	% 18.34	5,860,950	N	N	N
0	The Company	CMAAN Health	2	4,688,760	45,680	45,680	45,680	-	% 0.39	5,860,950	N	N	N
1	CMAI N.A.	Pilot	4	55,483	57,228	53,127	52,814	-	% 95.75	55,483	N	N	N
2	CMI	UEA	3	3,911,681	1,524,432	1,524,432	1,524,432	-	% 15.59	4,889,602	N	N	N

Note 1: 1.The Company held directly or indirectly more than 50% of the shares with voting rights.
2.Due to the joint investment relationship, all of the shareholders of the Group endorse the company in accordance with their investment ratio.
3.The company held directly or indirectly more than 50% of the shares with voting rights.
4.The company held directly or indirectly more than 90% of the shares with voting rights.

Note 2: Balance of guarantees and endorsements as of the reporting date was within the credit limit approved by the Board of Directors.

Note 3: The following three situations are filled in Y: the endorsement of the subsidiary by the Company; the endorsement of the Company by the subsidiary and the endorsement to the company located in Mainland China.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Note 4: The guarantor’s total amount available for guarantee and endorsement shall not exceed the percentage mentioned below of its net worth: The Company 40%, CMAI N.A.100%, and CMI 40%.

Note 5: The guarantor’s total amount available for guarantee and endorsement shall not exceed the percentage mentioned below of its net worth: The Company 50%, CMAI N.A.100%, and CMI 50%.

(iii) Securities held as of March 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of NTD)

				(In Thousands	(In Thousands	(In Thousands	(In Thousands	of NTD)
Name of Holder	Category and Name of Security	Relationship with Issued Company	Account	Ending Balance				Note
				Shares/Units	Carrying Value	Percentage of Ownership (%)	Fair Value
The Company	MEITA Industrial Co., Ltd.	The Company is the legal person	Non-current financial assets at FVOCI	1,351,164	135,300	% 3.12	135,300
The Company	YUHUA Venture Capital Co., Ltd.	-	Non-current financial assets at FVOCI	112,574	830	% 1.25	830
The Company	FUHUA Venture Capital Co., Ltd.	-	Non-current financial assets at FVOCI	86,625	1,920	% 1.67	1,920
The Company	GUANGYUAN Investment Co., Ltd.	-	Non-current financial assets at FVOCI	5,000,000	44,080	% 3.91	44,080
The Company	DEVELOPMENT Venture Capital Co., Ltd.	The Company is the legal person	Non-current financial assets at FVOCI	4,400,000	25,935	% 4.00	25,935
The Company	Pacific Electric Wire & Cable Co., Ltd.	-	Current financial assets at FVTPL	81,666	-	% 0.01	-
Sunflower Investment	YungTay Engineering Co., Ltd.	-	Current financial assets at FVTPL	800,000	47,200	% 0.19	47,200
Sunflower Investment	i1. COM, INC.	-	Non-current financial assets at FVOCI	100,000	-	% 0.52	-
The Hotel National	Century National Technology Co., Ltd.	-	Non-current financial assets at FVOCI	35,600	-	% 2.34	-

(iv) Individual securities acquired or disposed of with accumulated amount exceeding NT$300 million or 20% of the share capital: None.

(v) Information on the acquisition of real estate exceeding NT$300 million or 20% of the share capital: None.

(vi) Information on the disposal of real estate exceeding of NT$300 million or 20% of the share capital: None.

(vii) Information regarding related-party transactions for purchases and sales exceeding NT$300 million or 20% of the share capital:

(In Thousands of NTD)

									(In Thousands of	(In Thousands of	NTD)
Name of Company	Related Party	Nature of Relationship	Transaction Details				Transactions with Terms Different from Others		Notes/Accounts Receivable (Payable)		Note
			Purchase/Sale	Amount	Percentage of Total Purchases/Sales	Payment Terms	Unit Price	Payment Terms	Ending Balance	Percentage of Total Notes/Accounts Receivable (Payable)
uzhou CMS	CMI	Subsidiaries	Sale	176,073	% 31.23	120~180 days	-	-	1,165,738	68.30%
MW (Tianjin)	CMW (C.I.)	Subsidiaries	Sale	203,891	% 35.34	120~180 days	-	-	1,453,348	62.16%

Note : Intra-group transactions have been eliminated in the consolidated financial statements.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the share capital:

(In Thousands of NTD/In CNY)

Name of Company	Counter-party	Nature of Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Bad Debts
					Amount	Action Taken
CMI	CMB (H.K.)	Parent company	Accounts receivable due from related parties, other 208,991	-	-	-	CNY 1,500,000	-
CMW (C.I.)	CMI	Subsidiaries	Accounts receivable due from related parties, other 2,294,252	-	-	-	-	-
CMW (C.I.)	CMW (Tianjin)	Parent company	Accounts receivable due from related parties, other 286,952	-	-	-	-	-
CMP (H.K.)	CMI	Subsidiaries	Accounts receivable due from related parties, other 355,818	-	-	-	-	-
CMW (Tianjin)	CMW (C.I.)	Subsidiaries	Accounts receivable due from related parties 1,453,348	0.55	-	-	CNY 12,332,660	-
Tianjin CMT	CMI	Subsidiaries	Accounts receivable due from related parties 283,843	-	-	-	-	-
Tianjin CMT	CMW (Tianjin)	Affiliates	Accounts receivable due from related parties, other 191,700	-	-	-	-	-
Tianjin CMT	Suzhou CMB	Affiliates	Accounts receivable due from related parties, other 213,000	-	-	-	-	-
Suzhou CMS	CMI	Subsidiaries	Accounts receivable due from related parties 1,165,738	0.57	-	-	CNY 6,932,050	-

Note : Intra-group transactions have been eliminated in the consolidated financial statements.

(ix) Trading in derivative instruments: None.
(x) Business relationships and significant intercompany transactions:

(In Thousands of NTD)

No. (Note 1)	Name of Company	Name of Counter-party	Nature of Relationship (Note 2)	Intercompany Transactions (Note 3)	Intercompany Transactions (Note 3)	Intercompany Transactions (Note 3)	Intercompany Transactions (Note 3)
				Account	Amount	Trading Terms	Percentage of the Total Consolidated Revenue or Total Assets (Note 4)
0	China Metal Products	Atrans Precision	1	Operating revenue	18,153	60~90 days	0.80%
1	CMW (Tianjin)	CMW (C.I.)	2	Operating revenue	203,891	120~180 days	9.00%
3	Suzhou CMS	CMI	2	Operating revenue	176,073	120~180 days	7.77%
4	Suzhou CMB	Suzhou CMS	3	Operating revenue	10,631	120~180 days	0.47%
4	Suzhou CMB	CMI	2	Operating revenue	15,528	120~180 days	0.69%
6	National Management	China Metal Products	2	Operating revenue	15,850	OA 25 days	0.70%
0	China Metal Products	Atrans Precision	1	Accounts receivable due from related parties	24,819	60~90 days	0.06%
1	CMW (Tianjin)	CMW (C.I.)	2	Accounts receivable due from related parties	1,453,348	120~180 days	3.43%
2	Tianjin CMT	CMI	2	Accounts receivable due from related parties	283,843	120~180 days	0.67%
2	Tianjin CMT	CMW (Tianjin)	3	Accounts receivable due from related parties	35,241	120~180 days	0.08%
3	Suzhou CMS	CMI	2	Accounts receivable due from related parties	1,165,738	120~180 days	2.75%
4	Suzhou CMB	Suzhou CMS	3	Accounts receivable due from related parties	10,961	120~180 days	0.03%
4	Suzhou CMB	CMB (H.K.)	2	Accounts receivable due from related parties	40,744	120~180 days	0.10%
4	Suzhou CMB	CMI	2	Accounts receivable due from related parties	33,221	120~180 days	0.08%
5	CMAI (N.A.)	CMAI	2	Accounts receivable due from related parties	15,297	90~120 days	0.04%
2	Tianjin CMT	CMW (Tianjin)	3	Other receivables due from related parties	191,700	-	0.45%
2	Tianjin CMT	Suzhou CMS	3	Other receivables due from related parties	11,099	-	0.03%
2	Tianjin CMT	Suzhou CMB	3	Other receivables due from related parties	213,000	-	0.50%
11	CMAI	CMAI (N.A.)	1	Other receivables due from related parties	12,016	-	0.03%

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

No. (Note 1)	Name of Company	Name of Counter-party	Nature of Relationship (Note 2)	Intercompany Transactions (Note 3) Account Amount Trading Terms Percentage of the Total Consolidated Revenue or Total Assets (Note 4)	Intercompany Transactions (Note 3) Account Amount Trading Terms Percentage of the Total Consolidated Revenue or Total Assets (Note 4)	Intercompany Transactions (Note 3) Account Amount Trading Terms Percentage of the Total Consolidated Revenue or Total Assets (Note 4)	Intercompany Transactions (Note 3) Account Amount Trading Terms Percentage of the Total Consolidated Revenue or Total Assets (Note 4)
					Amount	Trading Terms	Percentage of the Total Consolidated Revenue or Total Assets (Note 4)
7	CMI	CMB (H.K.)	1	Other receivables due from related parties	208,991	-	0.49%
8	CMW (C.I.)	CMW (Tianjin)	1	Other receivables due from related parties	286,952	-	0.68%
8	CMW (C.I.)	CMI	2	Other receivables due from related parties	2,294,252	-	5.41%
10	CMP (H.K.)	CMI	2	Other receivables due from related parties	355,818	-	0.84%
12	CHINGENG Land Development	PUJEN Land Development	2	Other receivables due from related parties	30,138	-	0.07%
13	FAR HSING (SAMOA)	Atrans Precision	2	Other receivables due from related parties	30,230	-	0.07%
9	CMB (H.K.)	Suzhou CMB	1	Other long-term receivables due from related parties	26,259	-	0.06%

Note 1: For the inter-company business relationship and transaction condition in the “Number” column, the labeling method is as follows: 1. Parent company - 0.

Subsidiaries – In sequence from 1.

Note 2: Relationship is classified into three types:

Parent company to subsidiary.
Subsidiary to parent company.
Subsidiary to subsidiary.

Note 3: The Group only disclosed the information on sales and accounts receivable with subsidiary and did not give unnecessary details of opposite purchases and accounts payables in this part.

Note 4: The transaction amount is divided by the consolidated operating revenue or the consolidated total assets.

Note 5: Intra-group transactions have been eliminated in the consolidated financial statements.

(b) Information on investees:

The following is the information on investees for the three months ended March 31, 2020 (excluding information on investees in Mainland China):

(In Thousands of NTD/In USD and CNY)

Name of Investor	Name of Investee	Location	Main Businesses	Original Investment Amount	Original Investment Amount	Balance as of March 31, 2020	Balance as of March 31, 2020	Balance as of March 31, 2020	Net Income (Losses) of Investee	Share of Profits/Losses of Investee	Note
				March 31, 2020	December 31, 2019	Shares	Percentage of Ownership	Carrying Value
The Company	UEA	British Virgin Islands	Investing in CMI	865,286	865,286	667,820	% 100.00	6,743,332	75,288	75,288	Subsidiaries
The Company	Sunflower Investment	Taiwan	Investing	99,000	99,000	67,006,291	% 99.00	845,736	(21,076)	(20,865)	Subsidiaries
The Company	Atrans Precision	Taiwan	Vehicle parts processing	236,780	236,780	25,149,502	% 70.47	397,149	(6,881)	(4,849)	Subsidiaries
The Company	CMJ	Japan	Cast iron product retailing	4,887	4,887	500	% 83.33	70,915	15,019	12,515	Subsidiaries
The Company	CMAI	Hong Kong	Vehicle parts retailing	71,644	71,644	2,820,000	% 94.00	195,834	(2,408)	(2,263)	Subsidiaries
The Company	Pu Sheng Construction	Taiwan	Residents, commercial buildings and factories leasing and developing	30	30	3,000	% 30.00	9,997	50	15	Subsidiaries
The Company	PUJEN Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	2,003,067	2,003,067	158,877,643	% 56.65	3,855,962	(56,590)	(55,968)	Subsidiaries
The Company	Amida Trustlink Assets	Taiwan	Real estate developing, leasing and financial claims acquiring from financial institutions	44,576	44,576	16,763,726	% 35.21	(21,760)	(140)	-	Investees accounted for using equity method
The Company	The Hotel National	Taiwan	International tourist hotel services and other hotel business approved by the Ministry of Transportation and Communications	1,304,549	1,304,549	31,200,000	% 100.00	763,670	(22,988)	(23,461)	Subsidiaries
The Company	National Management	Taiwan	Management and consulting services	10,000	10,000	1,000,000	% 100.00	12,984	(1,810)	(1,810)	Subsidiaries
The Company	The Splendor Hospitality	Taiwan	International tourist hotel services	975,000	975,000	97,500,000	% 50.00	302,094	(46,956)	(26,738)	Joint ventures accounted for using equity method
The Company	Shangrila Tourism	Taiwan	Amusement park and hotel services	359,470	359,470	18,131,840	% 80.00	194,048	(11,149)	(8,622)	Subsidiaries
The Company	CMAAN Health	Taiwan	Management and consulting services	50,000	50,000	5,000,000	% 50.00	47,345	1,148	494	Joint ventures accounted for using equity method
The Company	InterContinental Taichung	Taiwan	International tourist hotel services	300	-	30,000	% 100.00	257	(43)	(43)	Subsidiaries

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Investor	Name of Investee	Location	Main Businesses	Original Investment Amount	Original Investment Amount	Balance as of March 31, 2020	Balance as of March 31, 2020	Balance as of March 31, 2020	Net Income (Losses) of Investee	Share of Profits/Losses of Investee	Note
				March 31, 2020	December 31, 2019	Shares	Percentage of Ownership	Carrying Value
Sunflower Investment	PUJEN Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	280,768	280,768	42,269,213	% 15.07	990,535	(56,590)	Exempt from disclosure	Subsidiaries of the Company
Sunflower Investment	Atrans Precision	Taiwan	Vehicle parts processing	77,836	77,836	4,737,380	% 13.27	74,115	(6,881)	Exempt from disclosure	Subsidiaries of the Company
Sunflower Investment	Amida Trustlink Assets	Taiwan	Real estate developing, leasing and financial claims acquiring from financial institutions	-	-	5,951,619	% 12.50	(7,726)	(140)	Exempt from disclosure	Investees accounted for using equity method
Sunflower Investment	ADVANCISION (CAYMAN)	Cayman Islands	Investing and cast iron product retailing	29,154	29,154	1,871,288	% 4.46	30,994	(6,116)	Exempt from disclosure	Investee accounted for using equity method
Sunflower investment	Fantasystory Inc.	Taiwan	Interior design, landscape design, and urban renewal	19,793	19,793	1,742,746	% 19.80	19,593	-	Exempt from disclosure	Investee accounted for using equity method
UEA	CMI	Cayman Islands	Investing in CMI (BVI) and cast iron product retailing	USD 136,536,250	USD 136,536,250	823,281,475	% 82.55	USD 271,423,503	USD 3,579,995	Exempt from disclosure	Subsidiaries of UEA
CMI	CMI (BVI)	British Virgin Islands	Investing in CMP (H.K.)	USD 280,426	USD 280,426	161	% 100.00	USD 1,134,955,619	USD 16,520,866	Exempt from disclosure	Subsidiaries of CMI
CMI	CMW (C.I.)	Cayman Islands	Investing in CMW (Tianjin) and CMH	USD 75,156,500	USD 75,156,500	50,000,000	% 100.00	CNY 1,708,380,726	CNY 19,668,690	Exempt from disclosure	Subsidiaries of CMI
CMI	CMB (H.K.)	Hong Kong	Investing in Suzhou CMB	USD 85,820,000	USD 85,820,000	82,000,000	% 100.00	CNY 577,780,237	CNY (7,873,023)	Exempt from disclosure	Subsidiaries of CMI
CMI(BVI)	CMP (H.K.)	Hong Kong	Investing in Tianjin CMT and Suzhou CMS	USD 21,000,000	USD 21,000,000	21,000,000	% 100.00	CNY 1,137,310,685	CNY 16,520,866	Exempt from disclosure	Subsidiaries of CMI(BVI)
CMAI	CMAI Holding	USA	Investing	USD 8,328,644	USD 8,328,644	8,328,644	% 100.00	USD 2,459,915	USD (127,656)	Exempt from disclosure	Subsidiaries of CMAI
CMAI Holding	Pilot	USA	Assets leasing	USD 8,328,644	USD 8,328,644	8,328,644	% 100.00	USD 2,459,915	USD (127,656)	Exempt from disclosure	Subsidiaries of CMAI Holding
Pilot	CMAI (N.A.)	USA	Vehicle parts retailing	USD 7,792,972	USD 7,792,972	7,792,972	% 100.00	USD 1,679,719	USD (155,648)	Exempt from disclosure	Subsidiaries of Pilot
Atrans Precision	FAR HSING (SAMOA)	SAMOA	Investing	USD 4,922,055	USD 4,922,055	4,922,055	% 100.00	154,966	(1,638)	Exempt from disclosure	Subsidiaries of Atrans Precision
Atrans Precision	Acore Material	Taiwan	Mechanical equipment, electronic parts and other equipment manufacturing	31,000	31,000	775,000	% 21.23	-	(533)	Exempt from disclosure	Associates of Atrans Precision
FAR HSING (SAMOA)	ADVANCISION (CAYMAN)	Cayman Islands	Investing and cast iron product retailing	USD 4,959,029	USD 4,959,029	9,068,414	% 21.59	USD 3,998,177	USD (203,107)	Exempt from disclosure	Investees of FAR HSING (SAMOA) accounted for using equity method
PUJEN Land Development	Pu Sheng Construction	Taiwan	Residents, commercial buildings and factories leasing and developing	20	20	2,000	% 20.00	6,665	50	Exempt from disclosure	Subsidiaries of the Company
PUJEN Land Development	Keng-Hsin Urban Renewal	Taiwan	Residents, commercial buildings and factories leasing and developing	250,928	250,928	32,864,188	% 30.00	315,231	(9,275)	Exempt from disclosure	Investees of PUJEN Land Development accounted for using equity method
PUJEN Land Development	CHINGENG Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	72,500	72,500	7,250,000	% 50.00	69,467	(45)	Exempt from disclosure	Subsidiaries of PUJEN Land Development
PUJEN Land Development	PUJEN CHENGMEI Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	59,500	59,500	5,950,000	% 70.00	40,827	(98)	Exempt from disclosure	Subsidiaries of PUJEN Land Development
PUJEN Land Development	PUCHIA Land Development	Taiwan	Residents, commercial buildings and factories leasing and developing	35,000	35,000	3,500,000	% 50.00	27,922	39	Exempt from disclosure	Subsidiaries of PUJEN Land Development
PUJEN Land Development	Shangrila Tourism	Taiwan	Amusement park and hotel services	89,867	89,867	4,532,960	% 20.00	48,512	(11,149)	Exempt from disclosure	Subsidiaries of the Company
PUJEN Land Development	Hua-Pu Development	Taiwan	Residents, commercial buildings and factories leasing and developing	5,000	5,000	500,000	% 50.00	5,123	(12)	Exempt from disclosure	Joint ventures of PUJEN Land Development accounted for using equity method
PUJEN Land Development	Beyond Fitness	Taiwan	Sport training and other consulting service	4,050	4,050	405,000	% 36.82	3,542	320	Exempt from disclosure	Investees of PUJEN Land Development accounted for using equity method

(c) Information on investment in Mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of NTD, CNY, USD and JPY)

Main Businesses	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2020	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of March 31, 2020	Net Income (Losses) of the Investee	Percentage of Ownership	Investment Income (Losses) (Notes 2,3)	Book Value (Note 3)	Accumulated Remittance of Earnings in Current Period (Note 5)
				Outflow	Inflow
Cast iron products, machine parts and vehicle parts designing, developing, manufacturing and selling	906,900 (USD30,000)	2	388,238	-	-	388,238	2,116 (CNY491)	82.55%	1,747 (CNY405)	1,096,151 (CNY257,312)	82,542
Cast iron products, machine parts and vehicle parts designing, developing, manufacturing and selling	725,520 (USD24,000)	2	423,406	-	-	423,406	66,996 (CNY15,544)	82.55%	55,279 (CNY12,826)	3,390,712 (CNY795,942)	14,601
						(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of Investee	Main Businesses	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2020	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of March 31, 2020	Net Income (Losses) of the Investee	Percentage of Ownership	Investment Income (Losses) (Notes 2,3)	Book Value (Note 3)	Accumulated Remittance of Earnings in Current Period (Note 5)
					Outflow	Inflow
Suzhou CMB	Cast iron product designing, manufacturingand retailing	2,478,860 (USD82,000)	2	-	-	-	-	(28,639) (CNY(6,645))	82.55%	(23,642) (CNY(5,485))	2,630,220 (CNY617,423)	-
CMW (Tianjin)	Vehicle parts, E&M as- casting and finished product developing, manufacturing and selling	967,360 (USD32,000)	2	-	-	-	-	2,697 (CNY626)	82.55%	13,193 (CNY3,061)	4,190,143 (CNY983,602)	-
CMH	Vehicle parts, farm wagon parts, industrial wagon parts household appliances parts and E&M as-casting and molds developing, manufacturing, selling and after sales services	722,044 (USD23,885)	2	-	-	-	-	(2,186) (CNY(507))	82.55%	(1,805) (CNY(419))	703,289 (CNY165,091)	-
Qinxin Trade	Vehicle parts retailing	4,232 (USD140)	2	-	-	-	-	(3,452) (USD(115))	94.00%	(3,245) (USD(108))	937 (USD31)	-
Qingdao Sourcing Specialists	Cast iron product retailing	3,023 (USD100)	2	-	-	-	-	2,104 (JPY7,613)	83.33%	1,753 (JPY6,344)	33,236 (JPY119,211)	-

(ii) Limitation on investment in Mainland China:

(In Thousands of NTD and USD)	(In Thousands of NTD and USD)	(In Thousands of NTD and USD)
Accumulated Investment in Mainland China as of March 31, 2020	Investment Amount Authorized by the Investment Commission, MOEA	Upper Limit on Investment (Note 4)
811,644	6,306,612 (USD 208,621 )	-

Note 1: Method of investment is classified into three types:
1. Directly invested in Mainland China.
2. Indirectly invested in Mainland China through the third region.
3. Other methods.
Note 2: The recognition basis of the investment income and losses is the financial report audited by an international accounting firm which is in partnership with the accounting firm in the R.O.C.
Note 3: The amount stated is the investment income and losses and the book value of the investment at the end of the period which is recognized by the subsidiaries established through the investment in the third region.
Note 4: The Company complies with the amended Permit 9704604680 ‘ Investment or technical cooperation review principal in China’ which is numbered 9704604680, which obtained the certification documents of the operational scope of the operational headquarters from the Industrial Development Bureau, Ministry of Economic Affairs, with the valid period from March 3, 2020 to March 2, 2023. The restriction on the cumulative investment amount or proportion in China is not applicable.
Note 5: As of March 31, 2020, the company had obtained a surplus of $2,213,997 thousand (USD71,955 thousand) from the investment companies set up in the third region. The surplus was remitted to the companies by the subsidiaries which was invested indirectly in China and then was remitted to Taiwan. It was impossible to distinguish the remittance from the company in China.
Note 6: The aforementioned investments have been eliminated in the consolidated financial statements.
Note 7: The amount in the table is translated by the spot rate on the financial reporting date.
(iii) Significant transactions: None.

(Continued)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Chain-Yuan Investment Co., Ltd.	47,340,965	% 12.28
Fubon Life Assurance Co., Ltd.	27,944,000	% 7.25
Mr. Ming Shiann, Ho	26,312,540	% 6.82

(14) Segment information:

The Group’s operating segment information and reconciliation are as follows:

For the Three Months Ended March 31, 2020 Revenue from external customers Intersegment revenues Total revenue Reportable segment profit or loss For the Three Months Ended March 31, 2019 Revenue from external customers $ Intersegment revenues Total revenue $ Reportable segment profit or loss $	Metal Manufacturing Segment	Real Estate Development Segment 3,463 1,292 4,755 (77,720) 640,951 28 640,979 133,170	Lifestyle Hospitality Segment 147,894 19,340 167,234 (37,987) 186,207 19,990 206,197 (25,343)	Reconciliation and Elimination Total - 2,266,183 (502,129) - (502,129) 2,266,183 (108,120) (54,114) - 3,787,071 (788,717) - (788,717) 3,787,071 (18,377) 292,079
	$ 2,114,826 481,497 $ 2,596,323 $ 169,713 2,959,913 768,699 3,728,612 202,629

Note: The amount of assets and liabilities of the Group’ s reportable segments was not provided to the management. It is not required for disclosure.

AI assistant

CMP — Interim / Quarterly Report 2020

51855_rns_2020-11-13_02fabba5-666a-426b-89cd-2067381a0d66.pdf

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Table of contents

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

KPMG

Notes to Readers

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Three Months Ended March 31, 2020 and 2019

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the Three Months Ended March 31, 2020 and 2019

(1) Company history

(2) Approval date and procedures of the consolidated financial statements:

(3) New standards, amendments and interpretations adopted:

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies

(b) Basis of consolidation

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Income taxes

(d) Employee benefits

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Inventories

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Investments accounted for using equity method

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Intangible assets

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Other non-current financial assets

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Long-term borrowings

(i) Borrowing and repayment

(ii) Collateral for bank borrowings

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Lease liabilities

(i) Real estate leases

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

(o) Provisions

(i) Warranties

(ii) Financial guarantee contracts

(p) Operating leases

Lessor

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

(r) Income tax

(s) Share capital and other equity

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Capital surplus

(ii) Retained earnings

1) Earnings distribution

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

CHINA METAL PRODUCTS CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Revenue from contracts with customers

CMP Interim / Quarterly Report 2020