INVENTEC - AGM Information 2023 | FinancialReports.eu

INVENTEC CORPORATION

Minutes of 2023 Annual General Shareholders' Meeting (Translation)

Time：Thursday, June 13, 2023. 9:00 a.m.

Place：International Reception Room of The Grand Hotel, No. 1, Sec. 4, Zhongshan N. Rd., Zhongshan Dist., Taipei City.

Quorum：3,056,589,814 shares were represented by shareholders in person and by proxy (including by exercising voting rights electronically：2,111,962,942 shares), which are mounted to 85.20% of the Company’s 3,587,475,066 issued and outstanding shares.

Chairman：Cho, Tom-Hwar Recorder：Mia Yu

Board Members Present：(All of 9 board members present)

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

Chang, Ching-Sung/ Yeh, Li-Cheng

Independent Director：Chang, Chang-Pang (Audit Committee Convenor) /Chen, Ruey-Long/ Wea, Chi-Lin

Attendance：Wu, Zhi-Guang, Attorney/ Kuo, Rou-Lan, 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

2022 Business Report (Please refer to Appendix 1) All shareholders are informed for the above.
2022 Audit Committee’s Review Report (Please refer to Appendix 2) All shareholders are informed for the above.
The Status of Distribution Remuneration of Employees and Directors of Board in 2022 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$ 516,363,664 as remuneration to employees in cash and NT$ 68,342,250 as remuneration to Directors of Board. There is no difference between the amount of distribution and the expense which has been recognized in 2022.

All shareholders are informed for the above.

The Status of Distribution of Profits in Cash Dividends to Shareholders in 2022. 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 2022 is NT$ 7,408,955,541. The proposed cash dividend to shareholders is NT$1.5 per share and NT$5,381,212,599 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.

All shareholders are informed for the above.

Question raised by shareholder account number 00512745, the securities investment trust funds account of Cathay MSCI Taiwan ESG Sustainability High Dividend Yield ETF:

Inventec may have already done something in ESG field but did not disclose enough ESG information to the public, such as the rating agency of MSCI. Cathy suggests Inventec shall take the initiative to contact MSCI and disclose relevant complete information proactively, so the stakeholders can understand the actual efforts which Inventec has devoted to ESG.

The above shareholders’ questions were answered by the chairman as follows : Inventec has the consensus to proactively communicate with stakeholders and compile the feedback, and to diversify the ESG information disclosure channels. Besides the annual report and sustainability summary report, Inventec already plans to establish the ESG website and update from time to time. We will also contact the ESG rating agency proactively. The stakeholders may obtain the real-time information about our ESG actions and our business performances.

D. Ratification Items

Item 1 Proposed by the Board Proposal: Ratification of the 2022 Business Report and Financial Statements.

Explanation: The Company’s 2022 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, Wan-Wan Lin and Rou-Lan Kuo of KPMG Certified Public Accountants. Also, Business

Report and Financial Statements have been approved by the Board and examined by the Audit Committee of Inventec Corporation. (Please refer to Appendix 1 for Business Report, Appendix 3 for Independent Accountants’ Audit Report and Individual Finance Statements, and Appendix 4 for Independent Accountants’ Audit Report and Consolidated Finance Statements.)

Proceeding: No question was raised.

Resolution: Approved and acknowledged as proposed by voting (a total of 3,056,382,814shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,837,568,154, among which 1,893,181,430 was exercised by electronic transmission, or 92.84％ of the total voting rights when votes were cast; the number of votes against is 1,678,321, among which 1,678,321 was exercised by electronic transmission; the number of votes abstained is: 217,136,339, among which 217,103,191 were exercised by electronic transmission)

Item 2 Proposed by the Board

Proposal: Adoption of the Proposal for Distribution of 2022 Profits

Explanation: The 2022 Profit distribution table had been resolved by the Board of Directors and reviewed by the Audit Committee, please refer to Appendix 5.

Proceeding: No question was raised.

Resolution: Approved and acknowledged as proposed by voting (a total of 3,056,382,814 shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,847,641,877, among which 1,903,255,153was exercised by electronic transmission, or 93.17％ of the total voting rights when votes were cast; the number of votes against is 331,218, among which 331,218 was exercised by electronic transmission ； the number of votes abstained is 208,409,719, among which208,376,571 was exercised by electronic transmission)

E. Election Matters

Proposed by the Board

Proposal: Proposes to Elect New Directors.

Explanation: (1) The present directors (16[th] ) of the Company were elected at shareholders’ meeting on June 12, 2020 for a term of office of three years and the term of office will expire in June 11, 2023.

(2) According to Article of Incorporation, The Company shall elect new directors at shareholders’ meeting of this year. The 17[th] nine directors (including three independent directors) shall be elected, and their three-year term will start from June 13, 2023 and conclude on June 12, 2026. The term of present directors will end until the shareholders’ meeting is completed. According to Article of Incorporation, the election adopts the candidate nomination system. The list of nominees had been resolved by the Board of Directors as the list of candidates for directors on March 14, 2023, and the shareholders

shall elect the directors from the list. For the “Procedures for Election of Directors” of the Company, please refer to the Stockholders’ Meeting Agenda Handbook.

(3) Please refer to relevant information of the list of candidates for directors and independent directors below:

Type	Name of nominee	Educations	Experiences	Current Positions	Shareholding (shares)
Director	Cho, Tom-Hwar	Electrical Engineering, National Taiwan University. EMBA, Shanghai Jiao Tong University.	Chairman, Inventec Corporation. Chairman, Inventec Solar Energy Corporation. Director, Inventec Appliances Corporation. Director, Simplo Technology Co., Ltd.	Chairman, Inventec Corporation. Chairman, Inventec Investments Co., Ltd. Director, Inventec Corporation (Hong Kong), Ltd. Director, Inventec (Cayman) Corporation. Director, IEC (Cayman) Corporation. Director, Inventec Holding (North America) Corporation. Director, Inventec (USA) Corporation. Director, Inventec Manufacturing (North America) Corporation. Director, Inventec Configuration (North America) Corporation. Director, Inventec Distribution(North America) Corp. Director, IEC Technologies,S.de R.L.de C.V. Director, Inventec Development Japan Corporation. Director, Inventec Japan Corporation.	1,004,311
Director	Yeh, Kuo-I	Taipei Municipal Shilin High School of Commerce	Chairman, Inventec Corporation	Chairman, First Generation Investment Co. Ltd. Director, Inventec Corporation (Hong Kong), Ltd. Director, Inventec Group Charity Foundation. Supervisor, RNS Asset Management Company	176,361,330
Director	Wen, Shih-Chih	Xihu Vocational High School of Industry and Commerce	Chairman, Shyh Shiunn Investment Corp.	Chairman, Shyh Shiunn Investment Corp.	35,685,590
Director	Lee, Tsu-Chin	Bachelor of Economics, Tunghai University	Chairman, Inventec Corporation	Chairman, Inventec Group Charity Foundation Chairman, Esther Investment Co., Ltd.	115,833,835

				Chiarman, Taiwan Electrical and Electronic Manufacturers’ Association.
Director	Chang, Ching-Sung	Master of Electrical Engineering, National Taiwan University	Chairman, Inventec Appliances Corporation	Chairman, Inventec Appliances Corporation. Chairman, Inventec Appliances (Shanghai) Co. Ltd. Chairman, Inventec Appliances (Pudong) Corporation. Chairman, Inventec Appliances (Jiangning) Corporation. Chairman, Inventec Appliances (Nanchang) Corporation. Chairman, Inventec Easy Doctor Corporation. Executive Director, Inventec Appliances (XI'AN) Corporation. Executive Director, Inventec Appliances (Shanghai) Enterprise Co., Ltd. Executive Director, APEX Business Management & Consulting (Shanghai) Co., Ltd. Executive Director, Inventec Appliances (Nanjing) Corporation. Director, Inventec Appliances (Cayman) Holding Corporation. Director, Inventec Appliances (USA) Distribution Corporation. Director, Inventec Appliances USA Inc. Director, Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Director, Inventec Appliances (Malaysia) SDN.BHD.	788,644
Director	Yeh, Li-Cheng	Master of Information Engineering, Pace University	Chairman, Fulltime Investment Corporation Chairman, Goldshare Investment Corporation.	Chairman, Fulltime Investment Corporation. Chairman, Goldshare Investment Corporation. Chairman, RNS Asset Management Company. Chairman, AIMobile Co., Ltd. Chairman, InveneXt System Co., Ltd. Vice Chairman, Royal Base Corporation.	117,412,472

				Director, Inventec Appliances Corporation. Director, WIN Semiconductors Corporation. Director, Inventec Besta Co., Ltd. Director, Chainwin Biotech and Agrotech (Cayman Islands) Ltd. Director, Inventec Group Charity Foundation. President, Saint Investment Consulting Corporation.
Independent Director	Chang, Chang-Pang	Master of Laws, National Cheng-Chi University. Bachelor of Law, Fu Jen Catholic University.	Chief Executive Officer, Lien Chan Foundation for Peace and Development. Chairman, Fuhwa Financial Holding Co., LTD. Deputy Minister, Ministry of Economic Affairs. Deputy Secretary- General, Executive Yuan. Administrative Deputy Minister, Ministry of Finance. Chairperson, Securities and Futures Commission, Ministry of Finance.	Chief Executive Officer, Lien Chan Foundation for Peace and Development. Chairman, Grand Cathay Venture Capital Co.,Ltd. Chairman, Asia-Pacific	0
				Emerging Industries Venture
				Capital Co., Ltd. Chairman, Prudence Venture Investment Corporation. Chairman, Global Investment Holdings Co.,Ltd. Independent Director, Formosa Petrochemical Corporation. Director, Grand Cathay Venture CapitalⅡCo.,Ltd. Director, Inventec Group Charity Foundation. Managing Director, China Investment and Development Co.,Ltd
Independent Director	Chen, Ruey-Long	Bachelor of Economics, National Chung-Hsing University.	Chairman, Sinocon Industrial Standards Foundation. Chairman, Institute for Information Industry. Minister, Ministry of Economic Affairs.	Chairman, Sinocon Industrial Standards Foundation. Chairman & CEO, China Petrochemical Development Corporation. Independent Director, Formosa Chemicals & Fibre Corporation. Director, HannStar Board Corporation. Director, Asia Cement Corporation. Director, Kaohsiung Monomer Company Ltd. Director, BES Engineering Corporation. Director, Tatung Company. Director, Taivex Therapeutics Corporation. Director, Inventec Group Charity Foundation.	0

Independen Director	t Wea, Chi-Lin	Doctor of Economics, University of Paris.	Chairman, Land Bank of Taiwan. Secretary-General, Executive Yuan. Administrative Deputy Chairperson, International Business, National Taiwan University	Chairman, IBF Financial Holdings Co., Ltd. Chairman, International Bills Finance Corporation. Chairman, Top Taiwan VI Venture Capital Co., Ltd. Chairman, Top Taiwan VIII Venture Capital Co., Ltd. Independent Director, Formosa Plastics Corporation. Director, AcBel Polytech Inc. Director, Nuvoton Technology Corporation. Director, Elan Microelectronics Corporation. Director, Avatack Co., Ltd., Director, Rakuten International Commercial Bank Co., Ltd. Director, Inventec Group Charity Foundation. Supervisor, Breeze Comprehensive Development. Adjunct Professor, Business Administration, National Taiwan University.	0

Proceeding: No question was raised. Election Results:

n Results:
Type	Name	Number of Votes
Director	Yeh,Li-Cheng	3,246,995,324
Director	Yeh,Kuo-I	3,076,726,537
Director	Wen,Shih-Chih	2,875,865,561
Director	Lee,Tsu-Chin	2,741,886,525
Director	Cho,Tom-Hwar	2,589,249,335
Director	Chang,Ching-Sung	2,580,219,909
Independent Director	Chang,Chang-Pang	2,218,088,763
Independent Director	Chen,Ruey-Long	2,216,634,948
Independent Director	Wea,Chi-Lin	2,214,989,296

F. Other Proposals

Proposed by the Board

Proposal: Proposal for Release the Prohibition on New Directors and Their Representatives from Participation in Competitive Business.

Explanation: (1) According to provisions of Company Act Article 209, 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) Propose to the shareholders’ meeting to approved that the prohibition of business strife on current re-elected directors were lifted from the onboard date.

(3) For the scope of the new directors to lift the competitive behavior restrictions, please

refer to the following table of the director's concurrent positions in another companies.

Position	Name	Concurrent position in another company
Director	Yeh, Kuo-I	Chairman, First Generation Investment Co. Ltd. Supervisor, RNS Asset Management Company.
Director	Wen, Shih-Chih	Chairman, Shyh Shiunn Investment Corp.
Director	Lee, Tsu-Chin	Chairman, Esther Investment Co., Ltd.
Director	Yeh, Li-Cheng	Chairman, Fulltime Investment Corporation. Chairman, Goldshare Investment Corporation. Chairman, RNS Asset Management Company. Chairman, AIMobile Co., Ltd. Vice Chairman, Royal Base Corporation. Director, WIN Semiconductors Corporation. Director, Inventec Besta Co., Ltd. Director, Chainwin Biotech and Agrotech (Cayman Islands) Ltd. President, Saint Investment Consulting Corporation.
Independent Director	Chang, Chang-Pang	Chairman, Grand Cathay Venture Capital Co.,Ltd. Chairman, Asia-Pacific Emerging Industries Venture Capital Co., Ltd. Chairman, Prudence Venture Investment Corporation. Chairman, Global Investment Holdings Co.,Ltd. Independent Director, Formosa Petrochemical Corporation. Director, Grand Cathay Venture CapitalⅡCo.,Ltd. Managing Director, China Investment and Development Co.,Ltd
Independent Director	Chen, Ruey-Long	Chairman & CEO, China Petrochemical Development Corporation. Independent Director, Formosa Chemicals & Fibre Corporation. Director, HannStar Board Corporation. Director, Asia Cement Corporation. Director, Kaohsiung Monomer Company Ltd. Director, BES Engineering Corporation. Director, Tatung Company. Director, Taivex Therapeutics Corporation.
Independent Director	Wea, Chi-Lin	Chairman, IBF Financial Holdings Co., Ltd. Chairman, International Bills Finance Corporation. Chairman, Top Taiwan VI Venture Capital Co., Ltd. Chairman, Top Taiwan VIII Venture Capital Co., Ltd. Independent Director, Formosa Plastics Corporation. Director, AcBel Polytech Inc. Director, Nuvoton Technology Corporation. Director, Elan Microelectronics Corporation. Director, Avatack Co., Ltd., Director, Rakuten International Commercial Bank Co., Ltd. Supervisor, Breeze Comprehensive Development.

Proceeding: No question was raised.

Resolution: Approved as proposed by voting (deducted 447,086,182 shares due to the conflict of interest, a total of 2,609,503,632 shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,081,027,724, among which 1,548,041,592 was exercised by electronic transmission, or 79.74% of the total voting rights when votes were cast; the number of votes against is 278,653,841 among which 278,653,841 was exercised by electronic transmission; the number of votes abstained is 249,822,067, among which 249,581,919 was exercised by electronic transmission)

G. Extraordinary Motions :

Proceeding: No proposal was raised.

H. Adjournment

The Chairman announced the Meeting adjourned at 9:38 am on the same date.

*In case of any discrepancy between the English version and the Chinese version of the minute of 2023 Annual General Shareholders’ Meeting of Inventec Corporation, the Chinese version shall prevail.

Appendix 1 Business Report

In the face of new challenges during the post-pandemic era, and global inflation upward pressure driven by soaring energy and raw material prices, along with the persistent impact of geopolitical risks, Inventec's management team continues to adopt effective contingency strategies, monitor market trends closely and adjust synchronous response plans to ensure normal operations at all plants and protect the health and safety of all employees during the coronavirus pandemic. In the meantime, Inventec has posted record annual operating revenue through providing competitive and high-quality products to our customers. We would like to thank all shareholders for their long-term support and trust.

2022 Operating Results and Technology Development

In 2022, Inventec’s consolidated operating revenue reached NT$541.7 billion, an increase of 4.24% from 2021 (the consolidated operating revenue of NT$519.7 billion). Meanwhile, the consolidated net operating income reached NT$6.6 billion, an increase of 41.16% from 2021. However, since non-operating income and expenses were affected by the slowdown in the revitalization pace of idle assets as well as the increase in operating costs due to the supply chain disruption, the consolidated profit before tax was NT$7.1 billion, a decrease of 6.78% from 2021. As a result, the net profit after tax attributable to shareholders of the parent company was NT$6.1 billion, a decrease of 6.26% from the previous year. Consolidated earnings per share after tax was NT$1.71.

Although the demand for laptop computer products was affected by inventory adjustments of brand customers in the second half of 2022, Inventec's operating revenue from laptop computers only decreased slightly by 5% compared to the same period last year, primarily due to the boost of development of new models and the growth in gaming laptop computers. Despite supply chain disruptions, the operating revenue from server products still increased by nearly 18% year-on-year thanks to strong demand growth of large data centers. Smart device products have recovered from the slide last year and contributed NT$35 billion in operating revenue, supported by new products.

In response to geopolitical risks, Inventec continues to expand its production capacity in Czech Republic in Europe and Mexico in the Americas, while the subsidiary Inventec Appliances Corp. is also expanding its deployment in Southeast Asia simultaneously to strengthen smart product manufacturing and meet customer needs.

In terms of new technology applications, Inventec, together with Intel and Microsoft, has launched 5G Next Lab to provide AI-integrated 5G connectivity solution built on world-class chips and industry-leading core network software, applicable to various smart scenarios such as smart factories, smart homes, smart healthcare and smart transportation to drive next-generation industrial innovation.

As for the development of emerging businesses, Inventec focuses on the application of in-vehicle products, the introduction of 5G-related integrated products, smart healthcare, cloud-based health management and precision medicine. At present, a number of products and solutions have been launched and successfully promoted into domestic and overseas markets.

Outstanding Achievements in Sustainable Development

Inventec has established the "Sustainability Committee" (hereinafter referred to as the Committee) and set up the "Sustainability Office" as a dedicated unit to assist the Committee in performing various ESG sustainability initiatives. The Committee has also set up six functional teams, including corporate governance, green innovation, sustainable environment, sustainable supply chain, risk management and social inclusion, to develop strategies and implement various projects. Through the specialized division of functional teams and cross-departmental cooperation, the Committee will lead all colleagues to work together for sustainable development and contribute to environmental protection, corporate governance, and social participation at all levels. The goal is to internalize the spirit of sustainability into the DNA of the Company, realize the value of innovation with modesty and practice, and set a new benchmark for sustainable enterprises.

Inventec has achieved outstanding results in promoting sustainable development. In view of the rapid changes in the circular economy and technology, the Company actively promotes various ESG governance indicators such as "Green Energy and Environmental Protection", "Smart Manufacturing", "5G Mobile Communication" and "Digital Transformation", so that customers, suppliers and Inventec can achieve a win-win situation for all parties. In terms of concrete results, the Company has been highly recognized by all sectors, and has won honors such as "Best Companies to Work for in Asia 2022" in Taiwan, "Excellence in Corporate Social Responsibility" Award by CommonWealth Magazine, "Taiwan Top 100 Sustainable Model Enterprise Award" and "Corporate Sustainability Report Award - Platinum".

The Business Plan for 2023 and Future Outlook

Given the impact of persistent inflation, geopolitical factors and diversified production strategies, the global economic outlook remains conservative. However, the good news is that the borders of countries are gradually reopening and the cycle of interest rate hikes in the U.S. is expected to dwindle in the future, which makes the prospect of a soft landing for the global economy more promising.

Overview of the Business Plan for 2023

(1) The Company will enhance digital resilience and digital management mechanisms through digital transformation action plans and collaborate with partners to create global business opportunities.

(2) The Company will focus on three key areas in its internal management to enhance profitability: 1. Establish an optimal inventory level to reduce the impact of interest rate spikes; 2. Strictly control operating

expenses and saving costs; 3. Improve production efficiency and enhance automation at each plant.

(3) The existing business groups will continue to maintain a stable market share: Laptop computers are expected to see an increase in both shipment volume and average unit price due to the addition of new gaming projects; Servers will continue to grow given the launch of new platform applications and the business expansion of CSP (major cloud service provider); For smart devices, the Vietnam plant is expected to acquire new customers successively and its shipment, revenue and profit contribution look forward to increase after mass production.

(4) As for the new business groups established in 2022, after years of planning and deployment, Inventec has actively invested in the integration of 5G private network systems, automotive electronics with an emphasis on the field of electronic control, and smart medical-related healthcare markets, aiming to jointly drive the growth momentum for the Inventec group.

For a long time, Inventec has always adhered to the Company’s core values of “Innovation, Quality, Open Mind and Execution” to adjust its business strategy in the face of changes within the industrial environment. In line with the United Nations Sustainable Development Goals (SDGs), the Company continues to perform ESG sustainability-related action strategies, which include requiring suppliers to improve the production process and fulfill their environmental protection responsibilities, reducing the carbon footprint of the Group’s production environment, providing a friendly workplace, and expanding participation in caring for the society. Looking into the future, it is expected that Inventec will be able to strengthen its long-term competitive advantages, expand the scale of its business operations, actively develop long-term strategic relationships with partners, and create higher corporate value for shareholders.

We wish all of you good health and all the best.

Chairman: Cho, Tom-Hwar

President: Wu, Yung-Tsai

Accounting Officer: Yu, Chin-Pao

Appendix 2

Audit Committee’s Review Report

Date: Mar.14, 2023

The Board of Directors has prepared and submitted to us the Company’s 2022 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 Rou-Lan Kuo 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 2022

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, 2022 and 2021, 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, 2022 and 2021, and its financial performance and its cash flows for the years then ended December 31, 2022 and 2021 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 Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of 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 Norm of Professional Ethics for Certified Public Account of Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirement. 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 Notes (4)(g), (5)(a) and (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 Standards on Auditing of 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 the Standards on Auditing of the Republic of China, we exercise professional judgment and 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 Rou-Lan Kuo.

KPMG

Taipei, Taiwan (Republic of China) March 14, 2023

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