INVENTEC - AGM Information 2021 | FinancialReports.eu

INVENTEC CORPORATION Minutes of 2021 Annual General Shareholders' Meeting (Translation)

Time�Thursday, July 22, 2021. 9:00 a.m.

Place�Inventec Corporation, No.66, Hougang St., Shilin District, Taipei City.

Quorum�2,702,168,634 shares were represented by shareholders in person and by proxy

(including by exercising voting rights electronically�1,949,155,528 shares), which are mounted to 75.32% of the Company’s 3,587,475,066 issued and outstanding shares.

Chairman�Cho, Tom-Hwar Recorder�Chan, Elysia

Board Members Present�

Director�Cho, Tom-Hwar / Yeh, Kuo-I / Wen, Shih-Chih / Lee, Tsu-Chin / Yeh, LiCheng

Independent Director�Chang, Chang-Pang / Chen, Ruey-Long��Wea, Chi-Lin Attendance�Lin, Wan-Wan, CPA

A. Call the Meeting to Order

The Chairman announced that the aggregate shareholding of the shareholders present in person

or proxy constituted a quorum. The Chairman called the meeting to order.

B. Chairman Remarks: (Omitted)

C. Report Items

2020 Business Report (Please refer to Appendix 1)
2020 Audit Committee’s Review Report (Please refer to Appendix 2)
The Status of Distribution Remuneration of Employees and Directors of Board in 2020. Explanation:
(1) According to the Article 26 of Articles of Incorporation, if the Company has a profit of the year shall distribute not less than 3% of the balance as remuneration to Employees and not more than 3% of the balance as remuneration to Directors of Board.
(2) The Board of Directors and Remuneration Committee resolved to distribute NT$ 675,529,321 as remuneration to employees in cash and NT$ 123,673,830 as remuneration to Directors of Board. There is no difference between the amount of distribution and the expense which has been recognized in 2020.
The Status of Distribution of Profits in Cash Dividends to Shareholders in 2020.

Explanation:

(1) According to the Article 27 of Articles of Incorporation, the Company authorizes the Board of

Directors to distribute dividends and bonuses in cash after resolution, and to report the

foregoing to the shareholders’ meeting.

(2) The distributable net profit for 2020 is NT$ 7,119,591,735. The proposed cash dividend to shareholders is NT$1.85 per share and NT$ 6,636,828,872 as the sum.
(3) The Board of Directors had resolved this profits distribution proposal and would set the exdividend date, payment date and arrange other related matters. In addition, the Board of Directors are authorized to adjust the cash distribution ratio in case of change in the number of issued and outstanding shares of the Company.

D. Ratification Items

Item 1 Proposed by the Board

Proposal: Ratification of the 2020 Business Report and Financial Statements.

Explanation: The Company’s 2020 Individual Financial Statements and Consolidated Financial Statements, including the balance sheet, comprehensive income statement, statements of cash flows, and statement of changes in equity, were audited by independent accountants, Lin, Wan-Wan and Yang, Liu-Fong of KPMG Certified Public Accountants. Also Business Report and Financial Statements have been examined by the Audit Committee of Inventec Corporation and approved by the Board of Directors afterwards. (Please refer to Appendix 1 for Business Report, Appendix 3 for Independent Accountants’ Audit Report and Individual Financial Statements, and Appendix 4 for Independent Accountants’ Audit Report and Consolidated Financial Statements.)
Resolution: Approved and acknowledged as proposed by voting (a total of 2,702,168,634 shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,451,806,073, among which 1,698,802,967 was exercised by electronic transmission, or 90.73% of the total voting rights when votes were cast; the number of votes against is 389,152, among which 389,152 was exercised by electronic transmission; the number of votes abstained is 249,973,409, among which 249,963,409 was exercised by electronic transmission)

Item 2 Proposed by the Board

Proposal: Adoption of the Proposal for Distribution of 2020 Profits

Explanation: The 2020 Profit distribution table had been resolved by the Board of Directors and reviewed by the Audit Committee, please refer to Appendix 5.

Resolution: Approved and acknowledged as proposed by voting (a total of 2,702,168,634 shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,451,047,939, among which 1,698,044,833 was exercised by electronic transmission, or 90.70 % of the total voting rights when votes were cast; the number of votes against is 4,959,781, among which 4,959,781 was exercised by electronic transmission�the number of votes abstained is 246,160,914, among which 246,150,914 was exercised by electronic transmission)

E. Discussion Items

Item 1 Proposed by the Board

Proposal: Discussion of Amendments to the “Procedures for Election of Directors”.

Explanation: Propose to amend “Procedures for Election of Directors” according to the Sample Template for “XXX Co., Ltd. Procedures for Election of Directors” amended per June 3, 2020 Letter No. Taiwan-Stock-Governance-1090009468.Please refer to the comparison chart of amendments below.

Comparison Chart of Amendments to “Procedures for Election of Directors”

	Original Version			Amendment Version	Reason
Article 3	Directors who shall be elected among the persons with disposing capacity, even though not shareholders. The overall composition of the board of directors shall be taken into consideration in the selection of the Corporation's directors. (The following content omitted.)	Article 3		The overall composition of the board of directors shall be taken into consideration in the selection of the Corporation's directors. (The following content omitted.)	Revise the wording to comply with Sample Template.
Article 6	The cumulative voting system shall be used for election of the directors at this Corporation. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. The board of directors shall prepare separate ballots for directors in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot shall be specified on the ballots,	Article 6		The cumulative voting system shall be used for election of the directors at this Corporation. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates.A person with the right to conveneshall prepare separate ballots for directors in numbers corresponding to the directors to be elected. The number of voting rights associated with each ballot	Revise the wording to comply with Sample Template.

	which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.		shall be specified on the ballots, which shall then be distributed to the attending shareholders at the shareholders meeting. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders.
Article 7	The number of directors shall be provided by the Articles of Incorporation of the Company. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. The position left vacant by such decision shall be filled by the candidate with the next most votes in the original election before the date the new registration license. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.	Article 7	The number of directors shall calculate the voting rights of independent directors and non- independent directors separately in accordance with Articles of Incorporation and approved by board of director.Those receiving ballots representing the highest numbers of voting rights will be elected separately in turn according to their respective numbers of votes. The position left vacant by such decision shall be filled by the candidate with the next most votes in the original election before the date the new registration license. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the chair drawing lots on behalf of any person not in attendance.	Revise the wording to comply with Sample Template.
Article 8	Before the election begins, the chair shall appoint a number of persons to perform the respective duties of vote monitoring and counting personnel. All monitoring personnel shall be shareholders of this Corporation.	Article 8	Before the election begins, the chair shall appoint a number of persons to perform the respective duties of vote monitoring and counting personnel. All monitoring personnel shall be shareholders of this Corporation.	Revise the wording
Article 9	The ballot boxes shall be prepared by the board of directors and publicly checked by the vote monitoring personnel before voting commences.	Article 9	The ballot boxes shall be prepared by theperson with the right to conveneand publicly checked by the vote monitoring personnel before voting commences.	Revise the wording to comply with Sample Template.
Article 10	If a candidate is a shareholder, a voter must enter the candidate's account name and shareholder account number in the "candidate" column of the ballot; for a non- shareholder, the voter shall enter the candidate's full name and identity card number. However, when the candidate is a governmental organization or juristic-person shareholder, the name of the governmental organization orjuristic-person	Delete		To comply with the candidate nomination rules, shareholders should elect directors from the list of candidates and can learn about the names, academic

	shareholder shall be entered in the column for the candidate's account name in the ballot paper, or both the name of the governmental organization or juristic-person shareholder and the name of its representative may be entered. When there are multiple representatives, the names of each respective representative shall be entered.			experience and other information of the candidates from the list of candidates before the shareholders’ meeting, so that it is not necessary to use shareholder’s account number or identity card number to identify the candidate’s identity, so this article is deleted.
Article 11	A ballot is invalid under any of the following circumstances: 1. The ballot was not prepared by the board of directors. 2. A blank ballot is placed in the ballot box. 3. The writing is unclear and indecipherable or has been altered. 4. The candidate whose name is entered in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register, or the candidate whose name is entered in the ballot is a non- shareholder, and a cross-check shows that the candidate's name and identity card number do not match. 5. Other words or marks are entered in addition to the candidate's account name or shareholder account number (or identity card number) and the number of voting rights allotted. 6. The name of the candidate entered in the ballot is identical to that of another shareholder, but no shareholder account number or identity card number is provided in the ballot to identify such individual.	Article 10	A ballot is invalid under any of the following circumstances: 1. The ballot was not prepared by theperson with the right to convene. 2. A blank ballot is placed in the ballot box. 3. The writing is unclear and indecipherable or has been altered. 4. The candidate whose name is entered in the ballotdo not match the list of candidates of directors aftercross-check. 5. Other words or marks are entered in addition to the number of voting rights allotted.	Adjust article number and amend to comply with Sample Template.
Article 12	The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation, including	Article 11	The voting rights shall be calculated on site immediately after the end of the poll, and the results of the calculation,	Revise the wording to comply with Sample

	the list of persons elected as directors and the numbers of votes with which they were elected, shall be announced by the chair on the site.		including the list of persons elected as directors and the numbers of votes with which they were elected,and the list of fail to be elected directors and the numbers of votes which they were obtained, shall be announced bythe chair on the site.	Template.
Article 13		Article 12		Adjust article number
Article 14		Article 13		Adjust article number

Resolution: Approved as proposed by voting (a total of 2,702,168,634 shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,437,709,229, among which 1,684,706,123 was exercised by electronic transmission, or 90.21% of the total voting rights when votes were cast; the number of votes against is 424,139, among which 424,139 was exercised by electronic transmission; the number of votes abstained is 264,035,266, among which 264,025,266 was exercised by electronic transmission)

Item 2 Proposed by the Board

Proposal: Discussion of Amendments to the “Rules of Procedure for Shareholders Meetings ”.

Explanation: Propose to amend “Rules of Procedure for Shareholders Meetings” according to the Sample Template for “XXX Co., Ltd. Rules of Procedure for Shareholders Meetings” amended per January 28, 2021 Letter No. Taiwan-Stock-Governance1100001446.

Please refer to the comparison chart of amendments below.

Comparison Chart of Amendments to “Rules of Procedure for Shareholders Meetings”

	Original Version		Amendment Version	Reason
Article 2	The Company’s shareholders meeting shall be convened by the board of directors unless applicable laws and regulations provide otherwise. (The following content omitted.) The election or discharge of directors, the amendment of this Company’s Articles of Incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or spin-off the Company, or the matters specified in Article 185, paragraph 1 of the CompanyLaw,	Article 2	The Company’s shareholders meeting shall be convened by the board of directors unless applicable laws and regulations provide otherwise. (The following content omitted.) The election or discharge of directors, the amendment of this Company’s Articles of Incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or spin-off the Company, or the matters specified in Article 185,	Revise listed to the reason for shareholders’ meeting to be convened

	or Article 43-6 of the Securities and Exchange Law, or Article 56- 1 or Article 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be listed and the essential contents shall be explained among the reasons for the meeting, and may not be proposed as extraordinary motions.			paragraph 1 of the Company Law, orArticle 26-1and Article 43-6 of the Securities and Exchange Law, or Article 56-1 or Article 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be listed and the essential contents shall be explained among the reasons for the meeting, and may not be proposed as extraordinary motions.
Article 3	For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by this Corporation and stating the scope of the proxy's authorization. (The following content omitted.)	Article 3		For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by this Corporation and stating the scope of the proxy's authorization. (The following content omitted.) After the service of the power of attorney of a proxy to the company, in case the shareholder issuing the said proxy intends to attend the shareholders’meeting in person or to exercise his/her/its voting power in writing or by way of electronic transmission , a proxy rescission notice shall be filed with the company two days prior to the date of the shareholders’meeting as scheduled in the shareholders’ meeting notice so as to rescind the proxy at issue, otherwise, the voting power exercised by the authorized proxy at the meeting shall prevail.	Specify the proxy rescission written notice to comply with Sample Template.
Article 7	If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairman of the board. When the chairman of the board is on leave or for any reason unable to exercise the powers of the chairman, the chairman shall appoint one of the directors to act as chair. It is advisable that shareholders meetings convened by the board of directors be attended by a majority of the directors. If a shareholders meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the meeting. When	Article 7		If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairman of the board. When the chairman of the board is on leave or for any reason unable to exercise the powers of the chairman, the chairman shall appoint one of the directors to act as chair. It is advisable that shareholders meetings convened by the board of directors bechaired by the chairperson of the board in person andattended by a majority of the directorsin person. If a shareholders meeting is convened by a party with power to convene but other than the	Revise the wording to comply with Sample Template.

	there are two or more such convening parties, they shall mutually select a chair from among themselves.			board of directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.
Article 8	The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within 1 month. When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.	Article 8		The chair shall call the meeting to orderand announce relevant information of the number of non- voting rights and the number of shares attendingat the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made.If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned. If the quorum is not met after two postponementsas referred to in the preceding paragraph,and the attending shareholders still represent less than one third of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within 1 month. When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.	Amend relevant information announced at the meeting to comply with Sample Template.
Article 12	A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares. (The following content omitted.)	Article 12		A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares. When the Company holds a shareholder meeting, it shall adopt exercise of voting rights by electronic means and may adopt	Specify the matters related to exercise of voting rights by correspondence or electronic means to comply with Sample Template.

				exercise of voting rights by correspondence. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting. A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company before two days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent. After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, before two business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail. (The following content omitted.)
Article 14	The election of directors or	Article 14		The election of directors or	Revise the

	supervisors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.		supervisors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were electedand the list of fail to be elected directors and the numbers of votes which they were obtained.The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.	wording to comply with Sample Template.

Resolution: Approved as proposed by voting (a total of 2,702,168,634 shares with voting rights represent when votes were cast; the number of voting rights for approval is 2,437,710,282, among which 1,684,707,176 was exercised by electronic transmission, or 90.21% of the total voting rights when votes were cast; the number of votes against is 420,120, among which 420,120 was exercised by electronic transmission; the number of votes abstained is 264,038,232, among which 264,028,232 was exercised by electronic transmission)

Item 3 Proposed by the Board

Proposal: Proposal for Release the Prohibition on Director Yeh, Li-Cheng from Participation in Competitive Business.
Explanation: (1) According to provisions of Company Act Article 209 Item 1, a director who does anything for himself or on behalf of another person that is within the scope
of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
(2) The meeting of shareholders on June 12, 2020 approved that the prescribed non-compete restrictions on current directors was lifted from the on board date. Here is the proposal for another release of the prohibition on current director from participation in competitive business. Please refer to the list of current director’s new position in other companies below.

List of Current Director’s New Position in Other Companies	List of Current Director’s New Position in Other Companies	List of Current Director’s New Position in Other Companies	List of Current Director’s New Position in Other Companies
Position	Name	Serve in other Company	Position in other company
Director	Yeh, Li-Cheng	Inventec Besta Co., Ltd.	Director

Resolution: Approved as proposed by voting (a total of 2,584,756,162 shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,308,672,689 among which 1,673,082,055 was exercised by electronic transmission, or 89.31% of the total voting rights when votes were cast; the number of votes against is 921,209, among which 921,209 was exercised by electronic transmission; the number of votes abstained is 275,162,264 among which 275,152,264 was exercised by electronic transmission)

F . Extraordinary Motions �None

G. Adjournment

Meeting adjourned: 9:22 am.

**In case of any discrepancy between the English version and the Chinese version of the minute of 2021 Annual General Shareholders’ Meeting of Inventec Corporation, the Chinese version shall prevail.

Appendix 1 Business Report

Welcome to Inventec's annual shareholders' meeting. Due to Covid-19, the global consumer markets and robust investment participation were seriously disrupted in the first half of 2020. Major global economies zealously stimulate economic development through various fiscal policies and financial instruments. Following the rollout of various vaccines, the global economy seems to signal optimism about economic recovery in the second half of 2020. However, the disturbed U.S. election and the ongoing trade war between the U.S. and China has also reshaped the global economy. It is hard to predict economic trends; yet Inventec still makes most specific contribution by providing customers with diversified, quality products. Under the effort of all our staffs, our turnover has achieved over TWD 500 billion for three consecutive years. Furthermore, profits have increased in comparison to the previous year adding the contribution of non-operating revenue. The business performance of 2020, the 2021 business plan and outlook are highlighted as below：

Business performance report for the year 2020:

The consolidated revenue reached more than TWD 508.2 billion, slightly higher than in 2019 by 1.47% (consolidated revenue of TWD 500.9 billion). The consolidated pre-tax operating profit was TWD 10.3 billion, which was an increase of 58.94% as compared with 2019. The after-tax net profit attributable to the parent company's shareholders was more than TWD 7.5 billion, which was an increase of 37.04% when compared with the previous year. The consolidated after-tax earnings were TWD 2.10 per share, which increased more than 36% as compared with the EPS of 1.54 in 2019.

Operating income was mainly benefited from the product differentiation and non-operating income and expenses benefitted from the contribution of idle assets revitalization. With more people working from home and adapting to distance learning, the sales revenue of notebook computers was about TWD275.8 billion. This is an increase of 11.78% as compared with the previous year. Additionally, the sales revenue from server products which equates to approximately TWD191.3 billion, increased by 14.65% as compared with the previous year. This attributed to a greater demand for data centers by cloud service providers. Although smart device products face readjustment due to customer product strategies, this sales revenue still contributed TWD39.9 billion. Conversely, the group's solar energy company faced the unbalanced issue of market supply and demand, striving for modification of active operational strategy. The solar-related sales revenue was TWD1.1 billion.

Corporate governance and corporate social responsibility

Ethical corporate management is always the prime directive of Inventec. We have set up competence of each functional committee under the Board and established a corporate governance unit to improve corporate governance. We also enhance information transparency and strengthen communication with stakeholders to achieve the goal of sustainable operation. We value talent development and will comply with Environmental, Social and Governance (ESG) related issues; reinforce the disclosure of relevant information; voluntarily fulfill the sustainable development of environment and society and we will collaborate closely with “Inventec Group Charity Foundation” to perform corporate social responsibilities.

Impact of external competition, the regulatory environment, and the overall operational environment and countermeasures

The trade war between the two major economies of U.S. and China has let both experience the inevitably degenerating relationship. And they are developing their own field of core technology and products. Furthermore, the sudden Covid-19 pandemic situation have also let many people make abrupt shift to working from home, and cause the national-wide lockdown crisis. The

company has demonstrated unbending and devoted determination to develop diversified and highquality products to satisfy customers' needs through appropriate adjustment of supply chain, planning of production base and breakthrough of technological innovations.

2021 Business plan and outlook

The IMF projected that the 2021 global economic growth to be 6% and we presume that all major economies will gradually recover. Although the stimulus and relief package released by different countries might trigger the concern of inflation, the company is actively creating a favorable operational environment based on the niche of product development. The company has also set the goal of revenue growth higher than previous periods. The business plan and outlook are classified into the following aspects:

I. Products business:

The server businesses benefitted from emergence of new platforms and significant business growth in large data center customers, the higher percentage of customer orders and operational growth is reasonably foreseeable.
Notebooks have benefited from the effects of the stay-at-home economy fueling by Covid-19 pandemic. Brand suppliers are introducing new middle- to high-end mixed models of commercial notebook, and they will strengthen the AI and digital applications. With outstanding product design and quality assurance over years. Notebook business operation is expected to remain in its heyday.
Due to the constant introduction of new IoT and AI applications, the market demand for smart devices remains robust. However, the orders are taken according to the consideration on status of product quotation. Therefore, it needs to evaluate subsequently the efficiency of capacity utilization, expand new customers and increased orders from existing customers. In contrast to the operation of last year, new products will be introduced into the market in succession throughout this year.
The development of emerging business is also in progress: automotive electronics are under developed, focusing on designing to reach the level of smart car configuration. As for the application of medical products, it is hoped that Inventec will be involved in providing comprehensive smart health care.

II. Digital transformation:

To be able to commensurate with world-leading management technology, digital transformation is imperative. We will use the digital transformation blueprint to redefine our business model and operational flow, reshuffle organization, and set performance goals. It will also optimize operational indicators and focus on a combinatory benefit analysis of developing product, and

also enhance profit visibility and precise project management.

III. "AI for Industries" and "Industries for AI":

All Inventec production plants already successively transformed into smart manufacturing plants. With advanced process technology incorporated with IoT, big data, and AI technology, we aim to improve quality and we also aim to optimize the processes with smart production link in order to develop the smart plant for industrial 4.0 and 5G applications. These innovations will achieve a new milestone in AI for industries. On the other hand, the Industries for AI will focus on the development of medical field and autonomous machine from AI technology to provide better medical care for an improved quality of life.

"Innovation, quality, open mind, and execution" are the core concept of Inventec's operation. We will follow the internal protocol of company culture to transfer the internal experience to the employees, share resource, stick to strict management and abide by through execution to face a challenging operational environment. Inventec has transformed from a traditional assembly company to an engineering company that provides its customers with all-in-one product design and

total solution services. With the rapid change in international business, Inventec will uphold the spirit to "face the challenges, resilient within the changes " to move forward. We believe that we will achieve the goal of continuous business growth and simultaneously fulfill corporate social responsibility through our comprehensive thinking, innovative and strategic business plans to create business value for all shareholders and employees.

Finally, best wishes to you all!

Chairman: Cho, Tom-Hwar President: Wu, Yung-Tsai Accounting Officer: Yu, Chin-Pao

Appendix 2

Audit Committee’s Review Report

Date: Mar.30, 2021

The Board of Directors has prepared and submitted to us the Company’s 2020 Business Report, Financial Statements and proposal for profit distribution. The Financial Statements have been audited, certified and issued an audit report by Wan-Wan Lin and Liu-Fong Yang of KPMG Certified Public Accountants. The Business Report, Financial Statements and profit distribution proposal have been reviewed and determined to be correct and accurate by the Audit Committee members. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

Inventec Corporation

Convener of the Audit Committee: Chang, Chang-Pang

Appendix 3-Independent Auditors’ Report and Individual Financial Statements for Year 2020 Independent Auditors’ Report

To the Board of Directors of Inventec Corporation:

Opinion

We have audited the financial statements of Inventec Corporation (“the Company”), which comprise the balance sheet as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years ended December 31, 2020 and 2019 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Inventory Valuation

Please refer to Note 4(g), Note 5(a), and Note 6(e) for accounting policies, significant accounting assumptions and judgments, major sources of estimation uncertainty, and related disclosure information for inventory, respectively.

Description of the key audit matter:

The Company’s materials may be obsolescence or slow-moving due to the risk of price decline in inventory, the material prepared for designing products and forecast orders may be canceled or changed, or changed on components and quantities. Therefore, the valuation of inventories has been identified as a key audit matter.

How the matter was addressed in our audit:

In relation to the key audit matter above, we have performed certain key audit procedures that included assessing the appropriateness of inventories valuation policies; ensuring the process of inventory valuation is in conformity with the accounting policies; inspecting the inventory aging report; recalculating estimation of inventory valuation based on the Company’s policies.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain soley responsible for our audit opinion

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Wan-Wan Lin and Liu-Fong Yang.

KPMG

Taipei, Taiwan (Republic of China) March 30, 2021

Notes to Readers

The accompanying parent company only financial statements are intended only to present the 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 audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ audit report and the accompanying parent company only 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’ audit report and parent company only financial statements, the Chinese version shall prevail.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) INVENTEC CORPORATION