Annual Report Website: http://mops.twse.com.tw Stock Code: 2356 Company Website: http://www.inventec.com Publication Date: May 12, 2021

Inventec Corporation

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2020 Annual Report

Notice to readers

This English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

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Name, Title and Contact Information for Company’s Spokesperson	Name, Title and Contact Information for Company’s Spokesperson	Name, Title and Contact Information for Company’s Spokesperson
Name	: Yu, Chin-Pao Tel.	: 886(2) 2881-0721
Title	: Vice President E-mail	: [email protected]
Name, Title and Contact Information for Company’s Deputy Spokesperson
Name	: Wu, Yung-Tsai Tel.	: 886(2) 2881-0721
Title	: President E-mail	: [email protected]

2. Address and Telephone Number of Company’s Headquarters, Branches and Plant Headquarters

Add : No.66, Hougang Street, Shilin District, Taipei City, Taiwan, R.O.C. Tel : 886(2) 2881-0721

Taipei Research and Development Center

Add : No.166, Chengde Road, Sec. 4, Shilin District, Taipei City, Taiwan, R.O.C. Tel : 886(2) 2881-0721

Taoyuan Research and Development Center

Add : No.349, Renhe Road, Sec. 2, Daxi District, Taoyuan City, Taiwan, R.O.C. Tel : 886(3) 390-0000

Taoyuan Science and Technology Park

Add : No.88, Dazhi Road, Taoyuan District, Taoyuan City, Taiwan, R.O.C.

Tel : 886(3) 390-0000

3. Common Share Transfer Agent and Registrar

Name : Registrar and Transfer Agency Department of Taishin International Bank

Add : B1F, No.96, Sec. 1, Jianguo N. Road, Zhongshan District, Taipei City, Taiwan, R.O.C. Website: http: //www.taishinbank.com.tw

Tel. : 886(2) 2504-8125

4. Information of the Certified Public Accountants for the Latest Financial Repot

Name of CPA: Lin, Wan-Wan and Yang, Liu-Fong

CPA Firm: KPMG

Add : 68F, No.7, Sec. 5, Xinyi Road, Xinyi District, Taipei City, Taiwan, R.O.C.

Website: http: //www.kpmg.com.tw

Tel : 886(2) 8101-6666

5. Overseas Trade Places for Listed Negotiable Securities

None

6. Corporate Website

http: //www.inventec.com

Letter to Shareholders ............................................................................................................. 5 Ⅰ . Company Profile ................................................................................................................. 8 1.1 Date of Establishment .................................................................................................... 8 1.2 Company Milestones ..................................................................................................... 8 Ⅱ . Corporate Governance Report ........................................................................................ 10 2.1 Organization ................................................................................................................ 10 2.2 Directors, Supervisors and Managers Information ...................................................... 12 2.3 Corporate Governance Practices ................................................................................. 30 2.4 Certified Public Accountant Fee Information .............................................................. 86 2.5 Information Regarding the Replacement of CPA ........................................................ 89 2.6 Information on Services of the Company’s Chairman, Presidents, Financial or Accounting Managers at the Accounting Firm or Its Affiliates ................................... 90 2.7 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders: ............................................................................................................... 91 2.8 Relationship among the Top Ten Shareholders ........................................................... 93 2.9 Ownership of Shares in Affiliated Enterprises ............................................................ 96 Ⅲ . Capital Overview .............................................................................................................. 97 3.1 Capital and Shares ....................................................................................................... 97 3.2 Bonds. ........................................................................................................................ 103 3.3 Preferred Shares ......................................................................................................... 103 3.4 Global Depository Receipts ....................................................................................... 103 3.5 Employee Stock Options ........................................................................................... 103 3.6 Restricted Employee Shares. ..................................................................................... 103 3.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions. ....... 103 3.8 Financing Plans and Implementation ........................................................................ 103 Ⅳ . Operational Highlights ................................................................................................... 104 4.1 Business Activities ..................................................................................................... 104 4.2 Market and Sales Overview ....................................................................................... 109 4.3 Human Resources ...................................................................................................... 116 4.4 Environmental Protection Expenditure ..................................................................... 117

4.5 Labor Relations ......................................................................................................... 120 4.6 Important Contracts ................................................................................................... 126 Ⅴ . Financial Information .................................................................................................... 127 5.1 Five Year Financial Summary ................................................................................... 127 5.2 Five Year Financial Analysis ..................................................................................... 132 5.3 Audit Committee’s Report in the Most Recent Year ................................................. 137 5.4 Individual Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report ................................................................... 137 5.5 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report……………………………………………137 5.6 The Effect on Company or its Affiliates have Experienced Financial Difficulties ... 137 VI. Review of Financial Conditions, Operating Results, and Risk Management ........... 138 6.1 Analysis of Financial Status ...................................................................................... 138 6.2 Analysis of Operation Results ................................................................................... 140 6.3 Analysis of Cash Flow ............................................................................................... 143 6.4 Major Capital Expenditure Items .............................................................................. 144 6.5 Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year ................................................ 144 6.6 Analysis of Risk Management ................................................................................... 145 6.7 Other Important Matters ............................................................................................ 153 VII. Special Disclosure ......................................................................................................... 154 7.1 Summary of Affiliated Companies ............................................................................ 154 7.2 Private Placement Securities in the Most Recent Years ............................................ 170 7.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years .............................................................................................................. 170 7.4 The Matters Listed in Article 36, Paragraph 3, Subparagraph 2 of the Securities and Exchange Act, which might Materially affect Shareholders' Equity or the Price of the Company's Securities ............................................................................. 170 7.5 Other Matters that Require Additional Description ................................................... 170

Letter to Shareholders

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 high-quality 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

Ⅰ . Company Profile

1.1 Date of Establishment: June 9, 1975

1.2 Company Milestones

1975

． Inventec Corporation was incorporated with a paid-in capital of NT$1 million.

1985

． Step into the phone foundry business.

1988

． Step into the laptop foundry business.

1996

． Inventec Corporation officially listed on Nov 13.

1997

． Established subsidiaries in the United States, Scotland, and Singapore.
． Established Taipei third factory to manufacture notebook.

1998

． Established Taoyuan factory for research and development, and manufacture of high-end desktop and server.

1999

． Established Inventec Micro-Electronics Corp. for calculator business.
． Established Inventec Multimedia and Telecom Corp. for multimedia and communications product business.

2000

． Established Inventec Appliances Corp. for the manufacture and sales of information appliances, WAP phone, science plotter business.
． Established Inventec (Cayman) Corp. for further investment in Inventec Corporation (Shanghai) Co., Ltd.

2008

． The annual shipment volume of laptops from Pudong Park exceeded 16 million units.
． Annual sales exceeded 10 billion U.S. dollars.
． Taipei Research and Development Building officially opened.

2010

． Chongqing manufacturing base completed and shipping commenced.
． Established Inventec Solar Energy Corp.

2015

． Purchased the plant building in Taoyuan Science and Technology Park.

2016

． Established AIMobile Co., Ltd.

2017

． Won the "Quality Paradigm Prize of ISO Plus Award" by SGS.

2018

． Won the Forbes’ 2018 Digital 100.
． Won the "Taiwan Corporate Sustainability Award" and "Corporate Sustainability Report AwardGold Award" for two consecutive years.
． Won the award of National Excellent Performance Healthy Career by the National Health Department of the Ministry of Health and Welfare

2019

． Won first place of HP’s “2018 Best Supplier Evaluation”
． Won the silver medal of the “TTQS Talent Development Quality Management System" of the Ministry of Labor.
． Won the "CSR Award" of first SGS.
． Won the "2019 National Talent Development Award" of the Ministry of Labor.

2020

． Ranked among the top 5% of companies in the corporate governance evaluation of the Taiwan Stock Exchange for five consecutive years.
． Won the Top 100 of the "IoV Intelligent Roadside" invention patents list of global enterprises in the past five years.
． Won the "National Corporate Citizenship Award" by Common Wealth Magazine for seven consecutive years.
． Won the "Taiwan Corporate Sustainability Award" and "Corporate Sustainability Report Award Platinum Award" for two consecutive years"
． Won the USAID intelligent prediction competition.
． Established Strategy Center and Digital Center.

2021

． Fanless Notebook won the 2021 German iF Design Award.

`Ⅱ` . Corporate Governance Report

2.1 Organization

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Board of shareholders
Audit Committee
Board of Directors
Remuneration Committee
Audit Center
Chairman
Strategy Center Social Responsibility Group
Digital Center
AI Center
President
Safety & Health Center
Business Unit Company Unit Factory
Enterprise Business Group Finance Center China
Personal Solution Group Talent Center Pudong Factory
Legal & Intellectual Property Chongqing Factory
Center
Taiwan Factory
Information Technology
Center
Mexico Factory
Environmental Management
Center
Czech Factory
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Organizational Functions

MajorDepartment	Organizational Functions
Audit Center	Overall planning businesses such as internal control system, internal audits, self-assessment, etc. of the Company.
Social Responsibility Group	Plan and execute corporate social responsibility related matters.
Strategy Center	Overall planning the strategic planning and project implementation of the Company.
Digital Center	Overall planning the digital transformation business of the Company.
AI Center	Research and development of artificial intelligence (AI) and IoTs, as well as the application of industry 4.0, are introduced.
Enterprise Business Group	Planning and management of enterprise business computer design, development, manufacturing, production, marketing, after-sales service, etc.
Personal Solution Group	Planning and management of portable computer design, development, manufacturing, production, marketing, after-sales service, etc.
Finance Center	Overall planning of the financial, accounting, investment, and stock affairs business of the Company.
Talent Center	Overall planning of the Company’s human resources related business.
Legal and Intellectual Property Center	Overall planning of legal affairs, intellectual property rights, and other relevant matters.
Information Technology Center	Overall planning of the establishment and operation of a network system structure, product life cycle management system, enterprise resource planning system, manufacturing execution system, quality inspection management system, supply chain management system, form management system, etc. of the Company. Development and sales of enterprise solutions, enterprise system integration and consulting services, office system import and process automation services, and development and sales of green energy solutions.
Environmental Management Center	Overall planning of the Company’s related management business and the integrated planning and supervision of environment and quality.
Pudong Factory	Responsible for design and development, manufacturing, after-sales services, etc. of portable computers, wireless communication products, and corporate computers.
Chongqing Factory	Responsible for design and development, manufacturing, after-sales services, etc. of portable computers, wireless communication products, and corporate computers.
Taiwan Factory	Responsible for design and development, manufacturing, after-sales services, etc. of portable computers, wireless communication products, corporate computers, corporate servers and storage systems.
Mexico Factory	Responsible for production, testing, troubleshooting, after-sales services, etc. of corporate servers and storage systems.
Czech Factory	Responsible for production, testing, troubleshooting, after-sales services, etc. of corporate servers and storage systems.

2.2 Directors, Supervisors and Managers’ Information

2.2.1 Directors

2.2.1.1 Directors’ Information 2021.05.12

Title	Nationality or registered address	Name	Gender	Date elected	Term (Years)	Date first elected	Shareholding when elected	Shareholding when elected	Current shareholding	Current shareholding	Spouse and Minor shareholding	Spouse and Minor shareholding	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Education/Work experience	Selected current positions	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation -ship
Chairman	R.O.C	Cho, Tom-Hwar	Male	2020.06.12	3	2017.06.16	1,004,311	0.03%	1,004,311	0.03%	5,508	0.00%	`－`	`－`	Department of Electrical Engineering, National Taiwan University, Chairman, Inventec Corporation and Inventec Solar Energy Corporation Director, Inventec Appliances Corporation and Simplo Technology Co. Ltd	Note 1	None	None	None
Director	R.O.C	Yeh, Kuo-I	Male	2020.06.12	3	1975.06.09	226,361,330	6.31%	176,361,330	4.92%	69,314,117	1.93%	`－`	`－`	Shilin High School of Commerce Chairman, Inventec Corporation	Note 2	Director	Yeh, Li -Cheng	Father and son
Director	R.O.C	Wen, Shih-Chih	Male	2020.06.12	3	2004.05.27	35,685,590	0.99%	35,685,590	0.99%	37,399	0.00%	`－`	`－`	Xihu Vocational High School of Industry and Commerce Chairman, Shyh Shiunn Investment Corp.	Note 3	None	None	None
Director	R.O.C	Lee, Tsu-Chin	Male	2020.06.12	3	1980.06.08	115,833,835	3.23%	115,833,835	3.23%	`－`	`－`	`－`	`－`	Bachelor of Economics, Tunghai University Chairman, Inventec Corporation	Note 4	None	None	None
Director	R.O.C	Chang, Ching-Sung	Male	2020.06.12	3	2014.06.12	788,644	0.02%	788,644	0.02%	6,743,434	0.19%	`－`	`－`	Master of Electric Engineering, National Taiwan University Chairman, Inventec Appliances Corporation	Note 5	None	None	None

Title	Nationality or registered address	Name	Gender	Date elected	Term (Years)	Date first elected	Shareholding when elected	Shareholding when elected	Current shareholding	Current shareholding	Spouse and Minor shareholding	Spouse and Minor shareholding	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Education/Work experience	Selected current positions	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation -ship
Director	R.O.C	Yeh, Li-Cheng	Male	2020.06.12	3	2020.06.12	67,412,472	1.88%	117,412,472	3.27%	600,000	0.02%	`－`	`－`	Master of Information Engineering, Pace University Chairman, Fu Tai. Investment Co. Ltd. Chairman, Kuo Hsieh Investment Co. Ltd.	Note 6	Director	Yeh, Kuo-I	Father and son
Independent Director	R.O.C	Chang, Chang-Pang	Male	2020.06.12	3	2014.06.12	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	Master of Laws, National Cheng-Chi University Bachelor of Law, Fujen 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 Vice Minister, Ministry of Finance, Chairman, Securities and Exchange Commission, Ministry of Finance	Note 7	None	None	None
Independent Director	R.O.C	Chen, Ruey-Long	Male	2020.06.12	3	2014.06.12	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	Bachelor of Economics, National Chung-Hsing University Chairman, Sinocon Industrial Standards Foundation Chairman, Institute for Information Industry Minister, Ministry of Economic Affairs	Note 8	None	None	None

Title	Nationality or registered address	Name	Gender	Date elected	Term (Years)	Date first elected	Shareholding when elected	Shareholding when elected	Current shareholding	Current shareholding	Spouse and Minor shareholding	Spouse and Minor shareholding	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Education/Work experience	Selected current positions	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation -ship
Independent Director	R.O.C	Wea, Chi-Lin	Male	2020.06.12	3	2020.06.12	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	Doctor of Economics, University of Paris Chairman, Land Bank of Taiwan. Secretary-General, Executive Yuan Administrative Deputy. Adjunct Professor, Business Administration, National Taiwan University.	Note 9	None	None	None

Note 1: Chairman of Inventec Investments Co., Ltd. ； Director of Inventec Corporation (Hong Kong) Ltd., Inventec (Cayman) Corp., IEC (Cayman) Corporation, Inventec Holding (North America) Corp., Inventec (USA) Corp., Inventec Manufacturing (North America) Corp., Inventec Configuration (North America) Corp., Inventec Distribution(North America) Corp., and IEC Technologies,S.de R.L.de C.V.. ； Representative Director of Inventec Development Japan Corporation and Inventec Japan Corporation.
Note 2: Director of Inventec Corporation (Hong Kong) Ltd., PK Venture Capital Corp., Kuo Hsieh Investment Co. Ltd., Fu Tai Investment Co. Ltd., Royal Base Corporation, and Inventec Group Charity Foundation ； Supervisor of Quan Cheng Asset Management Co., Ltd.

Note 3: Chairman of Shyh Shiunn Investment Corp.

Note 4: Chairman of I-Ssu-Tieh Investments Co., Ltd., and Inventec Group Charity Foundation.
Note 5: Chairman of Inventec Appliances Corp., Inventec Appliances (Shanghai) Co.Ltd., Inventec Appliances (Pudong) Corp., Inventec Appliances (Nanjing) Corp.,Inventec Appliances (Jiangning) Corp., Inventec Appliances (Xi'An) Corporation, Inventec Appliances (Nanchang) Co., Ltd., ； Executive Director of Inventec Appliances (Shanghai) Enterprise Co.Ltd., and Apex Business Management & Consulting (Shanghai) Co., Ltd. ； Director of Inventec Appliances (Cayman) Holding Corp., Inventec Appliances (USA) Distribution Corp., Inventec Appliances USA Inc., Jinlife Biotech Corporation, and Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. ; Representative of Inventec Appliances (Malaysia) SDN. BHD.

Note 6: Chairman of Fu Tai. Investment Co. Ltd., Kuo Hsieh Investment Co. Ltd., and Quan Cheng Asset Management Co., Ltd. ； Vice Chairman of Royal Base Corporation ； President of Saint Investment Consulting Corporation ； Director of Win Semiconductors Corp., AIMobile Co. Ltd., Inventec Appliances Corporation, Inventec Besta Co., Ltd., Chainwin Biotech & Agrotech (Cayman Islands) LTD., and Inventec Group Charity Foundation.
Note 7: Chief Executive Officer of Lien Chan Foundation for Peace and Development ； Independent Director of Formosa Petrochemical Corp., Silitech Technology Corporation, Powerchip Technology Corporation ； Director of Inventec Group Charity Foundation.
Note 8: Chairman of Sinocon Industrial Standards Foundation and China Petrochemical Development Corporation ； Independent Director of Formosa Chemicals & Fibre Corporation ； Director of hannstar board corporation, Asia Cement Corporation, Taivex Therapeutics Inc., BES Engineering Corporation, and Inventec Group Charity Foundation.
Note 9: Adjunct Professor of Business Administration, National Taiwan University ； Chairman of IBF Financial Holdings Co., International Bills Finance Corporation, Chi Ding Venture Capital Co., Hua Ding International Venture Capital Co., Ltd., and Yuan Ding Venture Capital Co., Ltd. ； Vice Chairman of Bio Preventive Medicine Corp., ； Independent Director of Formosa Plastics Corporation and Sinbon Electronics Co., Ltd. ； Director of AcBel Polytech Inc., Nuvoton Technology Corp., Elan Microelectronics Corp., and Avatack Co.,LTD ； Supervisor of ACES Electronics Co., Ltd., and Breeze Comprehensive Development.

2.2.1.2.1 Major Shareholders of Inventec Corporation’s Institutional Shareholders: None

2.2.1.2.2 Major Shareholders of Inventec Corporation’s Major Institutional Shareholders: None

2.2.1.3 Directors’ Professional Knowledge and Independence Information

05/12/2021

Criteria Name	Five or More Years Experience or Professional	Five or More Years Experience or Professional	Qualification	Independence`（`Note1`）`	Independence`（`Note1`）`	Independence`（`Note1`）`	Independence`（`Note1`）`	Independence`（`Note1`）`	Independence`（`Note1`）`	Independence`（`Note1`）`	Independence`（`Note1`）`	Independence`（`Note1`）`				Number of other public companies in which the individual is concurrent ly serving as an independe nt director
	An instructor of higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the company in a public or private junior college, or university	A judge, public prosecutor, attorney, CPA, or other professional or technical specialist who has passed a national examination and be awarded a certificate in a profession necessary for the business of the company	Have work experience in the areas of commerce, law, finance, accounting, or otherwise necessary for the business of the company	`〈`1`〉`	`〈`2`〉`	`〈`3`〉`	`〈`4`〉`	`〈`5`〉`	`〈`6`〉`	`〈`7`〉`	`〈`8`〉`	`〈`9`〉`	`〈`10`〉`	`〈`11`〉`	`〈`12`〉`
Cho,Tom-Hwar	-	-	✓	-	-	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	-
Yeh,Kuo-I	-	-	✓	-	-	-	-	-	✓	✓	-	✓	✓	✓	✓	-
Wen,Shih-Chih	-	-	✓	-	-	-	✓	-	✓	✓	✓	✓	✓	✓	✓	-
Lee,Tsu-Chin	-	-	✓	-	-	-	✓	✓	✓	✓	✓	✓	✓	✓	✓	-
Chang,Ching-Sung	-	-	✓	-	-	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	-
Yeh,Li-Cheng	-	-	✓	-	-	-	-	-	✓	✓	✓	✓	✓	✓	✓	-
Chang,Chang-Pang	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	3
Chen,Ruey-Long	-	-	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	1
Wea,Chi-Lin	✓	-	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	2

Note1: The independece criteria to indicate whether the directors or supervisors had met any of the conditions during the 2 years prior to being elected or during the term of office
（1）Not an employee of the Company or its affiliates
（2）Not the directors or supervisors of the Company or the affiliated enterprises (except for those who are independent directors of the Company or the parent company, subsidiaries, or subsidiaries of the same parent company established in accordance with the Act or local laws).

（3）Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranking in the top 10 in holdings.
（4）Not the spouse, second-level blood relative, or lineal blood relative within three degrees of a manager listed in (1) or a person listed in (2) or (3).
（5）Directors, supervisors, or employees indirectly holding more than 5% of the total shares issued by the Company, the top five shareholders, or appointing the representative as the directors or supervisors in accordance with Item 1 or 2 of Article 27 in the Company Law (except for those who are independent directors of the Company and its parent company, subsidiary, or subsidiaries of the same parent company established in the Law or local laws).
（6）Not the directors, supervisors, or employees of other companies with the director’s seat of the Company or with more than half of the voting shares controlled by the same person (except for those who are independent directors of the Company and its parent company, subsidiary, or subsidiaries of the same parent company established in the Law or local laws).
（7）Not the directors, supervisors, or employees of other companies or organizations as the same person as the Company's chairman, general manager, or equivalent position or the spouse (except for those who are independent directors of the Company and its parent company, subsidiary, or subsidiaries of the same parent company established in the Law or local laws).
（8）Not the directors, supervisors, managers, or shareholders with more than 5% shares of specific companies or organizations with financial or business transaction with the Company (except for those who are independent directors of specific companies or organizations holding more than 20% of the total shares issued by the Company but not more than 50%, and of the Company and its parent company, subsidiary, or subsidiaries of the same parent company established in the Law or local laws).
（9）Not professionals of business, legal, financial, accounting, or other related services, entrepreneurs of proprietorships, partnerships, corporations or organizations, partners, directors, supervisors, and managers, or their spouses who provide audit services for the Company or affiliated enterprises or whose cumulative remuneration in the last two years has not exceeded NT$500,000. However, this restriction shall not apply to members of the remuneration committee, open takeover review committee, or special committee for mergers and acquisitions who perform their duties under the Securities and Exchange Act or the relevant statutes of the Mergers and Acquisitions Act.
（10） Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company
（11） Not been a person of any conditions defined in Article 30 of the Company Act.
（12） Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.

2.2.2 Managers’ Information 2021.05.12

Title	Nationality	Name	Gender	On-board date	Current shareholding	Current shareholding	Spouse and Minor shareholding	Spouse and Minor shareholding	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Education/Work experience	Selected current positions	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship
					Shares	%	Shares	%	Shares	%			Title	Name	Relationship
President	R.O.C	Wu, Yung-Tsai	Male	2017.06.16	390,731	0.01%	15,864	0.00%	`－`	`－`	M.B.A. in Management, National Taiwan University of Science and Technology Linco Precision	Note 1	None	None	None
Business Group President	R.O.C	Chang, Hui	Male	2014.12.23	591,291	0.02%	213,554	0.01%	`－`	`－`	M.B.A. in Global Management, Thunderbird School of Global Management	Note 2	None	None	None
Business Group President	R.O.C	Tsai, Chih-An	Male	2014.12.23	746,101	0.02%	13,208	0.00%	`－`	`－`	B.S. in Industrial Engineering and Enterprise Information, Tunghai University Digital Equipment Corporation	Note 3	None	None	None
Senior Vice President	R.O.C	Chiu, ChuiI-Kuan	Male	2017.06.27	410,239	0.01%	82,484	0.00%	`－`	`－`	B.S. in Institute of Control Engineering, National Chiao Tung University	None	None	None	None
Senior Vice President	R.O.C	Chen, Yea-Ping	Male	2013.07.30	120,000	0.00%	20,000	0.00%	`－`	`－`	Ph. D. in Electrical Engineering, University of Wisconsin-Madison Philips Semiconductors	Director of TMY Technology Inc.	None	None	None
Senior Vice President	R.O.C	Yi, Fu-Ming	Male	2016.11.14	65,637	0.00%	`－`	`－`	`－`	`－`	B.S. in Electrical Engineering, Tatung University	Director of Inventec (Chongqing) Corp.	None	None	None
Senior Vice President	R.O.C	Chen, Wei-Chao	Male	2020.07.01	`－`	`－`	`－`	`－`	`－`	`－`	PhD, Institute of Computer Science, University of North Carolina Skywatch Innovation	Chairman of Skywatch Innovation	None	None	None

Title	Nationality	Name	Gender	On-board date	Current shareholding	Current shareholding	Spouse and Minor shareholding	Spouse and Minor shareholding	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Education/Work experience	Selected current positions	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship
					Shares	%	Shares	%	Shares	%			Title	Name	Relationship
Vice President	R.O.C	Chang, Nai-Wen	Female	2004.12.01	28,857	0.00%	`－`	`－`	`－`	`－`	LL.M. in Law, University of Minnesota VIA Technologies Inc.	None	None	None	None
Vice President	R.O.C	Hong, Kuo-Ching	Male	2006.03.01	134,036	0.00%	82,185	0.00%	`－`	`－`	M.B.A. in Executive Master of Business Administration, National Cheng-Chi University	None	None	None	None
Vice President	R.O.C	Chang Yiu-Lang	Male	2007.05.01	`－`	`－`	`－`	`－`	`－`	`－`	B.B.A. in Business Administration, Senshu University M.B.A. in Business Administration, National Taiwan University Alpha Networks	Chairman of AIMobile Co., Ltd.	None	None	None
Vice President	R.O.C	Yu, Chin-Pao	Male	2009.01.20	707,576	0.02%	175,105	0.00%	`－`	`－`	B.B.A. in Accounting, National Cheng Kung University M.B.A. in Executive Master of Business Administration, National Cheng-Chi University	Note 4	None	None	None
Vice President	R.O.C	Chien, Kuei-Fen	Female	2010.01.22	68	0.00%	`－`	`－`	`－`	`－`	M.B.A., Missouri State University Digital Equipment Corporation	None	None	None	None
Vice President	R.O.C	Tsai, Yuh-Chen	Male	2010.12.28	`－`	`－`	`－`	`－`	`－`	`－`	M.S. in Engineering and Computer Science, Syracuse University Arima Computer Corp.	None	None	None	None
Vice President	R.O.C	Hsu, Ching-Wu	Male	2012.01.16	88,508	0.00%	`－`	`－`	`－`	`－`	M.B.A in Finance and Business Administration, National Taiwan University of Science and Technology Sanyo Electric Corp., Ltd.	None	None	None	None

Title	Nationality	Name	Gender	On-board date	Current shareholding	Current shareholding	Spouse and Minor shareholding	Spouse and Minor shareholding	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Education/Work experience	Selected current positions	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship	Executives, directors or supervisors who are spouses or within two degrees of kinship
					Shares	%	Shares	%	Shares	%			Title	Name	Relationship
Vice President	R.O.C	Lin, Shu-Ju	Male	2018.02.27	`－`	`－`	`－`	`－`	`－`	`－`	Ph. D. in Mechanical Engineering,, National Taiwan University of Science and Technology C.T. Star Co., Ltd.	None	None	None	None
Vice President	R.O.C	Yen, Cheng-Lung	Male	2018.02.27	248	0.00%	`－`	`－`	`－`	`－`	M.S. inIndustrial Engineering, National Tsing Hua University. RiTdisplay Corporation	Note 5	None	None	None
Vice President	R.O.C	Chao, Tsai-Hsiu	Female	2018.02.27	6,227	0.00%	20,275	0.00%	`－`	`－`	Master of Business Administration, National Central University Digital Equipment Corporation	Director of Yingtengda (Guangdong) TechnologyCo.,Ltd	None	None	None
Vice President	R.O.C	Li, Jui-Chin	Male	2018.02.27	`－`	`－`	`－`	`－`	`－`	`－`	Master of Business Administration, Syracuse University INTEL	None	None	None	None
Senior Director of Information Technology Center	R.O.C	Yu, Win-Chee	Male	2011.10.01	493,636	0.01%	67,922	0.00%	`－`	`－`	M.S. in Communications Engineering, National Chiao Tung University	None	None	None	None
Senior Director of Talent Center	R.O.C	Lin, Shih-Pin	Male	2015.03.30	28,000	0.00%	`－`	`－`	`－`	`－`	M.S. in Manufacturing Engineering, Boston University Radiant Opto-Electronics Corporation	None	None	None	None
Director of Finance Center	R.O.C	Liang, Wen-Jan	Male	2008.08.01	`－`	`－`	`－`	`－`	`－`	`－`	B.B.A. in Economics, National Taiwan University OCBC Bank	None	None	None	None
Director of Finance Center	R.O.C	Hsiao, I-Ying	Female	2015.04.01	996	0.00%	676	0.00%	`－`	`－`	M.B.A., Baruch College, City University of New York CTBC bank	None	None	None	None

Note 1: Executive Director of Inventec (Pudong) Corp., Inventec (Shanghai) Corp., and Inventec (Beijing) Electronics Technology Co., Ltd., ； Chairman of Inventec Asset-Management (Shanghai) Corporation ； President of Inventec (Shanghai) Corp. ； Director of AIMobile Co., Inventec Investments Co., Ltd., Inventec Holding (North America) Corp.,Ltd., Inventec Manufacturing (India) Private Limited, Inventec (USA) Corp., Inventec Manufacturing (North America) Corp., Inventec Configuration (North America) Corp., Inventec Distribution (North America) Corp., and IEC Technologies,S.de R.L.de C.V..
Note 2: Chairman of Inventec (Chongqing) Corp. ； Executive Director of Inventec (Chongqing) Service Co., Ltd. ； Dircetor of Inventec Appliances Corp., and Inventec Manufacturing (India) Private Limited.
Note 3: Chairman of Inventec (Tianjin) Electronics Co., Ltd., and Inventec (Pudong) Technology Corp., ； President of Inventec (USA) Corp., Inventec Manufacturing (North America) Corp., Inventec Configuration (North America) Corp., Inventec Distribution (North America) Corp., IEC Technologies,S.de R.L.de C.V., and Inventec Holding (North America) Corp.,Ltd. ； Director of Inventec Appliances Corp., Inventec Holding (North America) Corp., Inventec (USA) Corp., Inventec Manufacturing(North America) Corp., Inventec Configuration(North America) Corp., Inventec Distribution(North America) Corp., ； Representative of Inventec (Czech) s.r.o. ； Executive Director of Inventec Hi-Tech Corp., Inventec (Shanghai) Service Co., Ltd., Saint Investment Consulting Corporation, and Shanghai Shun Chuan Technology Corp.
Note 4: Director and President of Inventec Investments Co., Ltd. ； Director of Inventec Solar Engergy Corporation, and Arima Communications Corp., Supervisor of Inventec Appliances Corp., AIMobile Co., Ltd., and E-TON Solar Tech. Co. ； Chief Executive Officer of Inventec Group Charity Foundation ； Supervisor of Inventec Development Japan Corporation, and Inventec Japan Corporation.
Note 5: Director of Inventec (Tianjin) Electronics Co., Ltd., and Inventec (Pudong) Technology Corp.

2.2.3 Remuneration Paid to Directors (Including Independent Directors), Presidents and Vice Presidents

2.2.3.1 Directors’ Remuneration (Including Independent Directors) Unit: NT$ Thousands

Title	Name			Remuneration	Remuneration	Remuneration	Remuneration			Ratio of total to net income	Ratio of total to net income	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Ratio of total to net income	Ratio of total to net income	Compensation paid to directors from an invested company other than the company's subsidiary
		Compensa- tion (A)		Retirement pension (B)		Bonus (C)		Allowance (D)				Salary and allowance (E)		Severance pay (F)		Employees		bonus (G)
		The Company	Companies in the financial report	The Company	Companies in the financial report	The Company	Companies in the financial report	The Comp-any	Companies in the financial report	The Company	Companies in the financial report	The Company	Companies in the financial report	The Company	Companies in the financial report	The Company		Companies in the financial report		The Company	Companies in the financial report
																cash	stock	cash	stock
Chairman	Cho, Tom-Hwar	-	-	-	-	123,674	123,674	1,680	1,865	~~1~~.66%	1.66%	57,511	75,750	1,469	1,469	-	-	-	-	2.44%	2.69%	65
Director	Yeh, Kuo-I
Director	Wen, Shih-Chih
Director	Lee, Tsu-Chin
Director	Chang, Ching-Sung
Director (Note1)	Huang, Kuo-Chun
Director (Note2)	Yeh, Li-Cheng
Independent Director	Chang, Chang-Pang	7,200	7,200	-	-	-	-	1,000	1,055	~~0~~.11%	0.11%	-	-	-	-	-	-	-	-	0.11%	0.11%	420
Independent Director	Chen, Ruey-Long
Independent Director (Note1)	Shyu, Jyuo-Min
Independent Director (Note2)	Wea, Chi-Lin

Please state the remuneration policy, system, standard, and structure of the independent director, and the correlation between the remuneration and the responsibilities, risks, investment time, and other factors: please refer to 2.2.3.5 remuneration of independent directors.
(1). The remuneration of the independent directors of the Company shall be paid monthly as a fixed amount in accordance with the Articles of Association and the Remuneration Method for Directors and Managers. In addition, the independent directors of the Company shall be compensated for travelling expenses according to the number of times they actually attend board, audit committee and remuneration committee meetings. The independent directors of the Company shall not participate in the remuneration distribution of directors.
(2). The remuneration of directors and managers shall be assessed, reviewed, drafted and recommended by the Remuneration Committee of the Company on a regular basis and submitted to the board of directors for approval.
(3). The performance evaluation of the board of directors shall be carried out regularly every year. The chief corporate governance officer shall report to the board of directors for review and improvement, depending on the results of the performance evaluation, which shall serve as a reference for the selection or nomination of directors and individual remuneration.
Apart from those disclosed in the above table, the remuneration received by Company directors for providing services to all companies in financial reports of recent years (such as taking a post as an adviser, other than employee): None.

Note1: Dismissal upon expiration of term on June 12,2020.

Note2: Reelection of directors on June 12,2020.

Bracket	Name	Name	Name	Name
	Total of(A+B+C+D)		Total of(A+B+C+D+E+F+G)
	The Company	Companies in the financial report	The Company	Companies in the financial report
Below NT$ 1,000,000
NT$1,000,000(Included) ~ $2,000,000(Excluded)	Wea, Chi-Lin Shyu, Jyuo-Min	Wea, Chi-Lin Shyu, Jyuo-Min	Wea, Chi-Lin Shyu, Jyuo-Min	Wea, Chi-Lin Shyu, Jyuo-Min
NT$2,000,000(Included) ~ $3,500,000(Excluded)	Chang, Chang-Pang, Chen, Ruey-Long	Chang, Chang-Pang, Chen, Ruey-Long	Chang, Chang-Pang, Chen, Ruey-Long	Chang, Chang-Pang, Chen, Ruey-Long
NT$3,500,000(Included) ~ $5,000,000(Excluded)
NT$5,000,000(Included) ~ $10,000,000(Excluded)	Yeh, Li-Cheng Huang, Kuo-Chun	Yeh, Li-Cheng Huang, Kuo-Chun
NT$10,000,000(Included) ~ $15,000,000(Excluded)	Wen, Shih-Chih, Lee, Tsu-Chin,	Wen, Shih-Chih, Lee, Tsu-Chin,	Yeh, Li-Cheng	Yeh, Li-Cheng
NT$15,000,000(Included) ~ $30,000,000(Excluded)	Chang, Ching-Sung	Chang, Ching-Sung	Wen, Shih-Chih, Lee, Tsu-Chin, Chang, Ching-Sung Huang,Kuo-Chun	Wen, Shih-Chih, Lee, Tsu-Chin, Huang, Kuo-Chun
NT$30,000,000(Included) ~ $50,000,000(Excluded)	Cho, Tom-Hwar Yeh, Kuo-I	Cho, Tom-Hwar Yeh, Kuo-I	Cho, Tom-Hwar Yeh, Kuo-I	Cho, Tom-Hwar Yeh, Kuo-I, Chang,Ching-Sung
NT$50,000,000(Included) ~ $100,000,000(Excluded)
Over NT$100,000,000
Total	11	11	11	11

Note: Supervisor’s remuneration is not applicable (due to the establishment of the audit committee)

2.2.3.2 Compensation Paid to Presidents and Vice Presidents Unit: NT$ Thousands

Title	Name	Compensation (A)	Compensation (A)	Retirement pension (B)	Retirement pension (B)	Bonus (C)	Bonus (C)	Employees bonus (D)	Employees bonus (D)	Employees bonus (D)	Employees bonus (D)	Ratio of total to net income	Ratio of total to net income	Compensation paid to directors from an invested company other than the company's subsidiary
		The Company	Companies in the financial report	The Company	Companies in the financial report	The Company	Companies in the financial report	The Company		Companies in the financial report		The Company	Companies in the financial report
								cash	stock	cash	stock
President	Wu,Yung-Tsai	58,596	58,596	3,054	3,054	63,249	63,674	40,000	-	40,000	-	2.18%	2.19%	25
Business GroupPresident	Chang,Hui
Business GroupPresident	Tsai, Chih-An
Senior Vice President	Chiu,ChuiI-Kuan
Senior Vice President	Chen,Yea-Ping
Senior Vice President	Yi,Fu-Ming
VicePresident(Note1)	Chen, Wei-Chao
VicePresident	Chang,Nai-Wen
Vice President	Hong,Kuo-Ching
VicePresident	ChangYiu-Lang
Vice President	Yu,Chin-Pao
Vice President	Chien,Kuei-Fen
Vice President(Note3)	Lou,Jin-Pang
Vice President	Tsai,Yuh-Chen
VicePresident	Hsu, Ching-Wu
Vice President(Note2)	Chou,Shao-Hsin
Vice President	Lin, Shu-Ju
VicePresident (Note3)	Liu,Ta-Cheng
Vice President	Yen, Cheng-Lung
Vice President	Chao,Tsai-Hsiu
Vice President	Li,Jui-Chin

Note1: On June 30, 2020, Chen, Wei-Chao was appointed as the senior vice president, which took effect on July 1, 2020.

Note2: On February 23, Vice president Chou, Shao-Hsin applied for retirement and was relieved of his position on March 1, 2021.

Note3: On April 27, 2021, Vice president Lou Jin-Pang and Liu Ta-Cheng applied for retirement and were relieved of their positions on May 1, 2021.

Bracket	Name	Name
	The Company	Companies in the financial report
Below NT$ 1,000,000
NT$1,000,000(Included) ~ $2,000,000(Excluded)
NT$2,000,000(Included) ~ $3,500,000(Excluded)	Chen, Wei-Chao (Note1)	Chen, Wei-Chao (Note1)
NT$3,500,000(Included) ~ $5,000,000(Excluded)	Chen, Yea-Ping, Tsai, Yuh-Chen, Hsu, Ching-Wu	Chen, Yea-Ping, Tsai, Yuh-Chen, Hsu, Ching-Wu
NT$5,000,000(Included) ~ $10,000,000(Excluded)	Chiu, ChuiI-Kuan, Chang, Nai-Wen, Hong, Kuo-Ching, Chang, Yiu-Lang, Chien, Kuei-Fen, Chou, Shao-Hsin (Note2), Lin, Shu-Ju, Liu, Ta-Cheng (Note3), Yen ,Cheng-Lung, Chao, Tsai-Hsiu, Li, Jui-Chin, Lou, Jin-Pang (Note3)	Chiu, ChuiI-Kuan, Chang, Nai-Wen, Hong, Kuo-Ching, Chang, Yiu-Lang, Chien, Kuei-Fen, Chou, Shao-Hsin (Note2), Lin, Shu-Ju, Liu, Ta-Cheng (Note3), Yen ,Cheng-Lung, Chao, Tsai-Hsiu, Li, Jui-Chin, Lou, Jin-Pang (Note3)
NT$10,000,000(Included) ~ $15,000,000(Excluded)	Yi, Fu-Ming, Yu, Chin-Pao	Yi, Fu-Ming, Yu, Chin-Pao
NT$15,000,000(Included) ~ $30,000,000(Excluded)	Wu, Yung-Tsai, Chang, Hui, Tsai, Chih-An	Wu, Yung-Tsai, Chang, Hui, Tsai, Chih-An
NT$30,000,000(Included) ~ $50,000,000(Excluded)
NT$50,000,000(Included) ~ $100,000,000(Excluded)
Over NT$100,000,000
Total	21	21

Note1: On June 30, 2020, Chen, Wei-Chao was appointed as the senior vice president, which took effect on July 1, 2020. Note2: On February 23, Vice president Chou, Shao-Hsin applied for retirement and was relieved of his position on March 1, 2021.

Note3: On April 27, 2021, Vice president Lou Jin-Pang and Liu Ta-Cheng applied for retirement and were relieved of their positions on May 1, 2021.

2.2.3.3 Employees’ Profit Sharing Bonus Paid to Manag

Unit: NT$ Thousands

Title	Name	Stock	Cash	Total	Ratio of total amount to net income
President	Wu, Yung-Tsai	-	43,070	43,070	0.57%
Business Group President	Chang, Hui
Business Group President	Tsai, Chih-An
SeniorVicePresident	Chiu, ChuiI-Kuan
SeniorVicePresident	Chen,Yea-Ping
SeniorVicePresident	Yi,Fu-Ming
Senior Vice President (Note1)	Chen, Wei-Chao
VicePresident	Chang, Nai-Wen
VicePresident	Hong, Kuo-Ching
VicePresident	ChangYiu-Lang
VicePresident	Yu, Chin-Pao
VicePresident	Chien,Kuei-Fen
VicePresident (Note3)	Lou, Jin-Pang
Vice President	Tsai, Yuh-Chen
VicePresident	Hsu, Ching-Wu
Vice President (Note2)	Chou, Shao-Hsin
VicePresident	Lin, Shu-Ju
Vice President (Note3)	Liu, Ta-Cheng
VicePresident	Yen,Cheng-Lung
VicePresident	Chao,Tsai-Hsiu
VicePresident	Li, Jui-Chin
Senior Director ofInformation Technology Center	Yu, Win-Chee
Senior DirectorofTalent Center	Lin, Shih-Pin
Directorof Finance Center	Liang, Wen-Jan
Directorof Finance Center	Hsiao, I-Ying

Note1: On June 30, 2020, Chen, Wei-Chao was appointed as the senior vice president, which took effect on July 1, 2020.

Note2: On February 23, Vice president Chou, Shao-Hsin applied for retirement and was relieved of his position on March 1, 2021.

Note3: On April 27, 2021, Vice president Lou Jin-Pang and Liu Ta-Cheng applied for retirement and were relieved of their positions on May 1, 2021.

2.2.3.4 Compare and State the Ratio of Total Remuneration Paid to the Company’s Directors, Supervisors, President and Vice Presidents by the Company and the Companies in the Consolidated Financial Statements to Net Income in the Past Two Years.

Unit: NT$ Thousands

Item	The Company	The Company	Companies in the financial report	Companies in the financial report
	2019	2020	2019	2020
Remuneration of Directors	87,414	133,554	87,534	133,794
Ratio of total to net income	1.59%	1.77%	1.59%	1.77%
Remuneration of the President and Vice President	200,621	164,899	201,071	165,324
Ratio of total to net income	3.64%	2.18%	3.65%	2.19%
Net income	5,507,960	7,547,985	5,507,960	7,547,985

Note: The Company’s audit committee is established on June 16, 2017. The compensation to directors in 2020 was increased compared to 2019 due to increased net income after tax. The total compensation of the president and vice presidents was to less than in 2019 because the number of persons and bonus payments were decreased.
2.2.3.5 The Policies, Standards, and Combinations of Remuneration Paid to Directors, President, and Vice Presidents, the Procedures for Remuneration Determination, and the Correlation with Operational Performance and Risks in the Future
(1). According to the Articles of Incorporation, the Company shall compensate all directors managing Company businesses regardless of profit or loss in operation. The standard shall be based on the degree of participation in the Company's business and the value of contribution, taking into account the general level of the industry. Procedures for the determination of directors’ remuneration shall be submitted to the board of directors for resolutions made by the remuneration committee’s recommendations, and assessed in accordance with the Board Performance Evaluation Method and the Remuneration Method for Directors and Managers. The remuneration of directors shall fully reflect their personal performance and the long-term business performance of the Company, and shall comprehensively consider the operational risks of the Company. For independent directors, a reasonable remuneration differing from that of ordinary directors may be prescribed. The independent directors of the Company shall be paid a fixed amount monthly and shall be compensated for travelling expenses according to the number of times they actually attend board, audit committee and remuneration committee meetings. The independent directors of the Company shall not participate in the remuneration distribution of directors. The remuneration of the remaining directors shall include compensation, salary, bonus and retirement pension. In addition, they shall be

compensated for travelling expenses according to the number of times they actually attend board meetings, and shall participate in the remuneration distribution of directors.

(2). Procedures for the determination of President and Vice Presidents’ remuneration shall be submitted to the board of directors for resolutions made by the remuneration committee’s recommendations. The procedure is based on the "Remuneration Regulations of the Board of Directors and Manager". The Company takes into account the usual level of the industry, and considers the time invested by the individual, the responsibilities assumed, the achievement of personal goals, performance in other positions, and the salary that the company has given to those in the same position in recent years. It should be based on the company's short-term and long-term business goals and financial status, etc., and the reasonableness of the relationship between personal performance, the company's operating performance and future risks, etc. shall also be assessed. The remuneration of managers shall include salary, bonus and retirement pension, and they shall participate in the reward distribution of employees.
(3). The remuneration policies of the Company aim to enhance long-term competitiveness and sustainable operational ability, improve overall operation in the future, and fulfill the ideal of giving full scope to the Company’s talents. In principle, the remuneration payment is fully incorporated with performance. The remuneration system supports the fulfillment of operational strategies and creates long-term and sustainable shareholders’ value. Comprehensive evaluation items include operational performance (revenue, net income after tax, etc.), overall salary, and individual performance for overall consideration, and the payment will be distributed based on individual contributions to carrying out the performance-oriented incentive system.

2.3 Corporate Governance Practices

2.3.1 Information of Board Meeting Operation

(1). A total of 15 (A) meetings of the board of directors were held in 2020. Directors’ attendance status is as follows:

Title	Name	Attendance in person(B)	By proxy	Attendance rate (%)B/A	Remarks
Chairman	Cho, Tom-Hwar	15	0	100%	Reelection on 2020.06.12
Director	Yeh, Kuo-I	15	0	100%	Reelection on 2020.06.12
Director	Wen, Shih-Chih	15	0	100%	Reelection on 2020.06.12
Director	Lee, Tsu-Chin	15	0	100%	Reelection on 2020.06.12
Director	Chang, Ching-Sung	15	0	100%	Reelection on 2020.06.12
Director	Huang, Kuo-Chun	6	0	100%	Removal on 2020.06.12
Director	Yeh, Li-Cheng	9	0	100%	Newly appointed on 2020.06.12
Independent Director	Chang, Chang-Pang	15	0	100%	No more than three consecutive terms
Independent Director	Chen, Ruey-Long	14	1	93%	No more than three consecutive terms
Independent Director	Shyu, Jyuo-Min	6	0	100%	Removal on 2020.06.12
Independent Director	Wea, Chi-Lin	9	0	100%	Newly appointed on 2020.06.12

Other matters that should be recorded:
I. Should any of the following circumstances occur at the Board of Directors Meeting, the date of the Board of Directors, the stage, contents
proposed, opinions of all independent directors, and the Company's handling of	independent directors' opinions, shoud any exist, shall be
specified:
(I) Matters as stipulated in Paragraph 3 of Article 14 of the Securities Exchange Act: Not Applicable (due to the establishment of the
audit committee).
(II) Apart from the above-mentioned matters, other board resolution matters on which an independent director has an adverse or expertise
opinion recorded or in the form of a written statement: None.
II. For the Director's Avoidance of Proposal with a Conflict of Interest, the Name of the Director, Proposal Content, Reason for Conflict of
Interest, and Participation in Votingshall be Specified:
Board of directors meeting Board of directors Contents proposed	Cause of conflict of interest and status of voting participation
Cho, Tom-Hwar
The 36th time of the 15th term 2020.03.24 Yeh, Kuo-I Wen, Shih-Chih, Lee, Tsu-Chin, Chang, Ching-Sung, Huang, Kuo-Chun Discuss the remuneration of the Company's employees and directors in 2019 proposed by Remuneration Committee.	This resolution proposes the directors’ remunerations and, except for the directors prohibited from discussion and voting according to law, the other attending directors have no objection, and this resolution is approved.
The 2nd time of the 16th term 2020.06.12 Chang, Chang-Pang Chen, Ruey-Long Wea, Chi-Lin Appointment of members of the 4th Remuneration Committee.	Except for the directors prohibited from discussion and voting, the other attending directors have no objection, and this resolution is approved.
The 3rd time of the 16th	Except for the directors prohibited from discussion
term Yeh, Li-Cheng Manager appointment	and voting, the other attending directors have no
2020.06.30	objection, and this resolution is approved.

	The 8th time	The 8th time	Yeh, Kuo-I
	of the 16th term 2020.11.10		Lee, Tsu-Chin, Yeh, Li-Cheng Chang, Chang-Pang, Donate TWD 10 million to Inventec Group Charity Foundation. Except for the directors prohibited from discussion and voting, the other attending directors have no objection, and this resolution is approved.
			Chen, Ruey-Long,
			Cho, Tom-Hwar
	The 9th time		Yeh, Kuo-I	The remuneration and year-end	bonus This resolution proposes the directors’
	of the 16th		Wen, Shih-Chih,	plan for directors and managers	of the remunerations and, except for the directors
	term 2020.12.29		Lee, Tsu-Chin, Chang, Ching-Sung Yeh, Li-Cheng Company and the proportion of compensation allocation for employees and directors of the Company prohibited from discussion and voting according to law, the other attending directors have no objection, and this resolution is approved.
III. A		Listed and	OTC Company shall Disclose the Assessment Period,		Duration, Scope, Method, and Content of the Self-Assessment of the
	Board of Directors:
	(2)Assessment Performance of the Board of Directors
		Assessment period Assessment duration		Assessment scope Assessment method	Assessment content
		Once a year 2020		Includes the The Board of	(1) Performance assessment of the Board of Directors: includes the
				entire Board of Directors,	degree of participation in the operation of the Company, the
				Directors, functional	quality of board decisions, the composition and structure of the
				individual committee, and	Board of Directors, the selection and continuing education of
				board internal	directors, and the internal control.
				members, and functional self-assessment of the members	(2) Performance assessment of individual directors: includes the
				committee of the Board of	mastery of the Company's objectives and tasks, the recognition
				Directors	of directors' duties, the participation in the Company's
					operations, internal relationship management and
					communication, the directors' professional and continuing
					education, and the internal control.

(3) Performance assessment of functional committees: includes the degree of participation in the operation of the Company, the recognition of the responsibilities of functional committees, the quality of the decision-making of functional committees, the composition and selection of functional committees, and the internal control.

IV. The goals of strengthening functions of the Board in the current year and most recent year (e.g., establish Audit Committee, promote information transparency) and implementation status: In 2020, the Corporate Governance Best Practice Principles and Corporate Social Responsibility Best Practice Principles was revised, risk management policies and procedures and smart property management plans were formulated, and operations shall be regularly reported to the board of directors every year. In addition, the performance evaluation method of the board of directors was revised to enhance operational efficiency.

Ⅴ. The fulfillment of member diversification of the Board

According to Article 20 of the Corporate Governance Best Practice Principles and Article 3 of Rules for the Election of Directors of the Company, the members of the Board shall have knowledge, skills, and accomplishments as required by the duties. As a whole, the Board shall be able to make operational judgment and accounting and financial analysis, as well as have business management ability, crisis handling ability, industrial knowledge, a global market view, and leadership and decision making abilities. The composition of members of the Board shall be diversified, and a plan for diversified members of the Board aimed at the operation, operational type, and future development trends shall be established, including basic conditions and value (gender, age, nationality, and culture) and professional knowledge and skills (e.g., law, accounting, industry, finance, marketing, or technology). The physical management goals of diversified policies and achievements are as follows:

knowledge and skills (e.g., law, accounting, industry, finance, marketing, or technology). The physical policies and achievements are as follows:	management goals of divers
Managementgoal	Achievement
The number of directors also servingas manager shall be less than one-third of directors	Done
At least two directors shall be specialized in the computer industry,marketing,or technology	Done
At least two independent directors shall be specialized in law,financial accounting,or technology	Done

The implementation of Board member diversification in 2020 was as follows:

Diversified items Name	Nationality	Gender	Law	Accounting and finance	Marketing technology	Operating management	Industry knowledge	Leadership decisions	Operation judgment	Crisis management	International market opinion
Cho, Tom-Hwar	R.O.C	Male	-	-	V	V	V	V	V	V	V
Yeh, Kuo-I	R.O.C	Male	-	V	V	V	V	V	V	V	V
Wen, Shih-Chih	R.O.C	Male	-	-	V	V	V	V	V	V	V
Lee, Tsu-Chin	R.O.C	Male	-	V	V	V	V	V	V	V	V
Chang, hing-Sung	R.O.C	Male	-	-	V	V	V	V	V	V	V
Yeh, Li-Cheng	R.O.C	Male	-	-	V	V	V	V	V	V	V
Chang, Chang-Pang	R.O.C	Male	V	V	-	V	V	V	V	V	V
Chen, Ruey-Long	R.O.C	Male	-	V	-	V	V	V	V	V	V
Wea, Chi-Lin	R.O.C	Male	-	V	V	V	V	V	V	V	V

Note 1: Independent directors (three seats) account for 33%. Note 2: Term of office of independent directors: 2014/06/12 two seats / term of 7 years, 2020/06/12 one seat / term of 1 years

Note 3: The current board of directors consists of nine directors (including three independent directors). They are all extraordinary persons with rich professional practices and are capable of leadership decisions, operational management, operational judgment, crisis handling, industrial knowledge, and international market observation. The three independent directors are specialized in law, economics, and business management, respectively. Among them, Chang, Chang-Pang had served as the political deputy minister of Economic Affairs, administrative deputy minister of Finance, and chairperson of the Taiwan Stock Exchange Corporation; Chen, Ruey-Long had served as minister of Economic Affairs; Wea, Chi-Lin had served as Chairman of Land Bank of Taiwan, Secretary-General of Executive Yuan Administrative Deputy and Adjunct Professor, Business Administration, National Taiwan University. Six directors are specialized in finance and accounting, technology, and industrial marketing to carry out member diversification policies that help the Company promote corporate governance efficacy and operational performance.

VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●	VI. Attendance of Independent Directors at 2020 Board Meetings: ●: Attending in person;◎: Delegated a representative to attend;○: absent Board of directors meeting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Chang, Chang-Pang ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Chen, Ruey-Long ● ● ● ● ● ● ● ● ◎ ● ● ● ● ● ● Shyu, Jyuo-Min ● ● ● ● ● ● Wea, Chi-Lin ● ● ● ● ● ● ● ● ●
Board of directors meeting	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
Chang, Chang-Pang	●	●	●	●	●	●	●	●	●	●	●	●	●	●	●
Chen, Ruey-Long	●	●	●	●	●	●	●	●	◎	●	●	●	●	●	●
Shyu, Jyuo-Min	●	●	●	●	●	●
Wea, Chi-Lin							●	●	●	●	●	●	●	●	●

Note 1: On June 12, 2020, Independent Director Shyu, Jyuo-Min was discharged after his term expires.

Note 2: On June 12, 2020 directors were re-elected, Wea, Chi-Lin was elected as the new Independent Director

2.3.2 Operation of the Audit Committee `：`

A total of 4 (A) meetings of the audit committee were held in 2020. Attendance status is as follows:

Title	Name	Attendance in person (B)	Attendance rate (%) B/A	Remarks
Convener	Chang, Chang-Pang	4	100%	Reelection on 2020.06.12
Committee member	Chen, Ruey-Long	4	100%	Reelection on 2020.06.12
Committee member	Shyu, Jyuo-Min	2	100%	Removal on 2020.06.12
Committee member	Wea, Chi-Lin	2	100%	Newly appointed on 2020.06.12

Audit Committee	Contents proposed	Matters stipulated in paragraphs 14-3 of the Securities Exchange Act	Administration of the Company regarding the opinion of the Audit Committee	Resolution result by the Audit Committee
2020.03.24	1. 2019 statement of internal control system	14-5-11	N	The matter is approved by all the attendees
	2. 2019 financial report and business report	14-5-10	N	The matter is approved by all the attendees
	3. Profit distribution of 2019	14-5-11	N	The matter is approved by all the attendees
	4. Appointment of certified public accountant.	14-5-8	N	The matter is approved by all the attendees
	5. Modification of the Rules of Procedure for Shareholders Meetings	14-5-11	N	The matter is approved by all the attendees
	6. Modification of the Procedures for Acquisition or Disposal of Assets	14-5-3	N	The matter is approved by all the attendees
	7. Modification of the Corporate Governance Best Practice Principles	14-5-11	N	The matter is approved by all the attendees
	8. Modification of the Corporate Social Responsibility Best Practice Principles	14-5-11	N	The matter is approved by all the attendees
2020.5.12	1. 2020 Q1 consolidated financial report	14-5-10	N	The matter is approved by all the attendees
2020.8.11	1. 2020 Q2 consolidated financial report	14-5-10	N	The matter is approved by all the attendees
	2. Modification of the Rules of Procedure for Drirector of board Meetings.	14-5-11	N	The matter is approved by all the attendees
	3. Modification of the Rules Governing the Scope of Powers of Independent Directors	14-5-11	N	The matter is approved by all the attendees
	4. Modification of the Procedures for Election of Directors	14-5-11	N	The matter is approved by all the attendees
	5. Modification of the Codes of Ethical Conduct	14-5-11	N	The matter is approved by all the attendees

1. Revision of the Internal Control System of the Company.	14-5-1	N	The matter is approved by all the attendees
2. 2021 Internal Audit Plan.	14-5-2	N	The matter is approved by all the attendees
3. 2020 Q3 consolidated financial report.	14-5-10	N	The matter is approved by all the attendees
4. Accountant's fees of 2020	14-5-8	N	The matter is approved by all the attendees

b. Apart from the aforementioned item, other cases of resolution not passed by the Audit Committee but agreed to by two-thirds of the entire board of directors: None
B. Regarding execution by independent board directors preventing cases of conflict of interest, name of independent board director, motion content, case of conflict of interest avoided, and voting participation should be described: None
C. Communication of independent board directors with the Chief audit officer and CPA (company finance, major issues of business conditions conducted through communications, and the methods and results should be described).
a. Based on the regulations of "Regulations Governing Establishment of Internal Control Systems by Public Companies" the Chief audit officer will prepare an audit report, follow it up after it is submitted, and hand it over to an independent board director for review by the end of the month after the month in which the auditing items were completed.
b. In view of items for consultation and instruction by independent board directors for improvement and subsequent follow-up, these items should be filed and reported to the independent board director after being completed, and the consultation results should be reported to the board at the end of the month.
c. The Board of Directors will establish an audit project team aimed at important issues of the internal control system to conduct project audits and report the audit results upon completion.
d. The chief audit officer should report to Independent Directors about internal auditing business every month, and the status of communication between the independent board director and the Chief audit officer should be favorable.
e. Independent Directors should carry out communication related to company governance meetings, important finances, and business conditions every season, and the status of communication between the Independent Director and the CPA should be favorable.

D. Communication and scenario of independent board directors with the Chief audit officer and CPA	D. Communication and scenario of independent board directors with the Chief audit officer and CPA	D. Communication and scenario of independent board directors with the Chief audit officer and CPA	Process execution results of the Company Submit to the Board for resolution. The directors have no objection at the meeting. Submit to the Board for resolution. The directors have no objection at the meeting.
Date of meeting	Subject of communication	Items of communication	Process execution results of the Company
2020.03.24 Audit Committee	CPA Chief audit officer	1. Statement of 2019 internal control system 2. 2019 financial report and business report 3. 2019 profit distribution 4. Appointment of certified public accountant 5. Modification of the Rules of Procedure for Shareholders Meetings 6. Modification of the Procedures for Acquisition or Disposal of Assets 7. Modification of the Corporate Governance Best Practice Principles. 8. Modification of the Corporate Social Responsibility Best Practice Principles	Submit to the Board for resolution.
2020.03.24 Corporate governance meeting	CPA Chief audit officer	1. Audit range and opinion of 2019 financial report 2 Description of Key Audit Matters 3. Financial statement and major accounting item analysis description 4. Contingencies 5. Subsequent events	The directors have no objection at the meeting.
2020.05.12 Audit Committee	CPA	1. 2020 Q1 consolidated financial report	Submit to the Board for resolution.
2020.05.12 Corporate governance meeting	CPA Chief audit officer	1. Audit range and opinion of 2020 Q1 financial report 2. Financial statement and major accounting item analysis description 3. Important law updates	The directors have no objection at the meeting.

2020.08.11 Audit Committee	CPA Chief audit officer	1. 2020 Q2 consolidated financial report 2. Modification of the Rules of Procedure for Drirector of board Meetings 3. Modification of the Rules Governing the Scope of Powers of Independent Directors. 4. Modification of the Procedures for Election of Directors. 5. Modification of the Codes of Ethical Conduct.	Submit to the Board for resolution.
2020.08.11 Corporate governance meeting	CPA Chief audit officer	1. Audit range and opinion of 2020 Q2 financial report 2. Financial statement and major accounting item analysis description 3. Important law updates	The directors have no objection at the meeting.
2020.11.10 Audit Committee	CPA Chief audit officer	1. 2020 Q3 consolidated financial report 2. Modification of internal control system 3. 2021 Internal Audit Plan. 4. CPA'sfees of 2020	Submit to the Board for resolution.
2020.11.10 Corporate governance meeting	CPA Chief audit officer	1. Audit range and opinion of 2020 Q3 financial report 2. Analysis of financial statements and important accounting items 3. Key Audit Matters	The directors have no objection at the meeting.

E. The audit committee intends to assist the board of directors in overseeing the quality and integrity of the company's accounting, auditing, and financial reporting processes and financial controls. Matters to be deliberated by the audit committee include:
Establish or amend the internal control system in accordance with Article 14.1 of the Securities Exchange Act
Evaluate the effectiveness of the internal control system
According to Article 36.1 of the Securities and Exchange Act, establish or amend the procedures for asset acquisition or disposal, transaction of derivative commodities, lending, endorsement or security provision and other material financial transactions.
Items relevant to the directors’ interest

Transaction of major asset or derivative commodities
Lending of large amounts, endorsements and security provisions
Raising, issuance or private placement of securities of an equity nature.
Appointment, discharge and remuneration of certified public accountant.
Appointment and removal of finance, accounting or internal audit supervisors
Annual financial reports signed or sealed by the chairman of the board of directors, the manager and accountant in charge, and the second quarter financial report subject to audit and certification by the accountant
Other major issues stipulated by the company or the competent authority
F. Business performance of the audit committee in 2020
The Company holds quarterly audit committee meetings to supervise the company's financial and business conditions and internal control system.
Refer A.a. for detailed operations in 2020
Review of financial reports.
Evaluate the effectiveness of the internal control system: The audit committee evaluates the effectiveness of the Company's internal control systems, policies, and procedures (including financial, operational, risk management, information security, outsourcing, compliance, and other control measures) and then reviews the regular reports submitted by the audit department and the registered public accountant and management, including for risk management and compliance. The audit committee believes that the Company's risk management and internal control systems are effective, as well as that the Company has adopted necessary control mechanisms to monitor and correct any violations.

2.3.3 Participation of Supervisor in Board Meeting: NA. The Company has established the audit committee on June 16, 2017.

2.3.4 Corporate Governance Implementation Status and Deviations from “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
1. Does Company follow “Taiwan Corporate Governance Implementation” to establish and disclose its corporate governance practices?	✓		The Company has established “Inventec Corporate Governance Best Practice Principles” pursuant to “Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies” in 2014. The fifth amendment was approved by the Board of Directors on March 24, 2020. The structure of corporate governance is to reinforce the functions of the Board, establish a mechanism for interaction with shareholders, respect the rights of stakeholders, and promote information transparency,all of which are also disclosed on our website and MOPS.	No difference.
2. Shareholding Structure and Shareholders’ Rights (1) Does Company have Internal Operation Procedures for handling shareholders’ suggestions, concerns, disputes and litigation matters. If yes, has these procedures been implemented accordingly? (2) Does Company possess a list of major shareholders and beneficial owners of these major shareholders? (3) Has the Company built and executed a risk management system and “firewall” between the Companyand its affiliates?	✓ ✓ ✓		(1) The Company has spokesperson, procedures for handling stock affairs, a dedicated mailbox for accepting suggestions, doubts, disputes, and lawsuits managed by the stock affairs department and investor relation department based on procedures. Meanwhile, the stock affairs agency has been commissioned as a window for shareholder services. (2) The Company declares the change of shares held by insiders (directors, managers, and shareholders holding more than 10% shares) on MOPS every month. The stock affairs unit may efficiently control the list of major shareholders and final controllers of major shareholders. (3) The Company has established regulations governing internal control and subsidiaries to establish and implement the risk control of affiliates and a fire wall mechanism.	No difference. No difference. No difference.

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
(4) Has the Company established internal policies that forbid insiders from trading based on non-disclosed information?	✓		(4) The Company has formulated the "Codes of Ethical Conduct" and "Insider Trading Prevention Management Operation Procedure", among others, to prohibit company insiders from utilizing information undisclosed to the market to transact negotiable securities; internal literature is carried out regularly.	No difference.
3. Composition and responsibilities of the Board of Directors (1) Has the Company established a diversification policy for the composition of its Board of Directors and has it been implemented accordingly? (2) Other than the Compensation Committee and the Audit Committee which are required by law, does the Company plan to set up other Board committees? (3) Has the Company established a performance assessment method and the assessment method for the Board of Directors, conducted the performance assessment annually	✓ ✓ ✓		(1) The Company has established member diversification guide-lines pursuant to Article 20 of the Corporate Governance Best Practice Principles, including basic conditions and value (gen-der, age, nationality, and culture) and professional knowledge and skills. Currently, the nine members of the Board (including three independent directors) are specialized in law, finance and accounting, industry, marketing, or technology. Please refer to item (The fulfillment of member diversification of the Board) for the implementation status. (2) All independent directors of the Company serve as members of the Remuneration Committee and Audit Committee. For members, duties, and operation status, please refer to ”Information on operation of Audit Committee” and “Status of Remueration Committee”, respectively. The Company has a “Social Responsibility Group” to promote matters related to corporate social responsibilities. (3) The Company has regulations for evaluating the performance of the Board to carry out corporate governance and promote the functions of the Board. The third amendment was approved by the Board of Directors on December 29, 2020. The director of corporate governance shall be responsible for the implementation and completion of annualperformance evaluations. The scope	No difference. No difference. No difference.

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
and regularly, and reported the results of the performance assessment to the Board of Directors, as well as applied it as a reference for individual directors' remuneration and nomination for renewal?			of the 2020 performance evaluation of the executive board covers the performance evaluation of the overall board of directors, functional committees, and individual board members. The evaluation methods include internal self- evaluation of the board of directors, self-evaluation of board members, and evaluation. The internal performance evaluation criteria for the board of directors (functional committee) include: 1. extent of participation in Company operations; 2. enhancing the decision-making quality of the board; 3. board composition and structure; 4. election and continuous learning of board directors; and 5. internal control. There are 25 items in five categories. The performance assessment of the functional committee includes: 1. the degree of participation in the operation of the Company; 2. the recognition to the responsibilities of functional committees; 3. the improvement of the decision-making quality of functional committees; 4. the composition and selection of functional committee members; and 5. the internal control. Preference evaluation items of directors: 1. understanding of the Company’s targets and tasks; 2. understanding of their responsibilities; 3. participation in the Company’s operations; 4. internal relationship management and communication; 5. specialty and continuous advanced studies; and 6. internal control. There are 20 items in six categories. In 2020, the internal self-assessment results of the Board of Directors, the functional committee, and the members of the Board of Directors were all "excellent". The results and recommendations of the 2020 internal board performance appraisal were reported to the Board of Directors in January 2021 and applied as a reference to individual directors' remuneration and nomination for renewal. Furthermore, the Company's Board of Directors performance assessment method stipulates that the assessment must be carried out at least every three years by an external professional independent agency or external team of experts and scholars. The latest external evaluation was carried out in 2018 by KPMG Advisory Services Co Ltd.,an externalprofessional independent organization. Theproject leader

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
			was Zhu Chengguang, executive deputy general manager, and the operation period assessed was from September 4, 2018 to January 9, 2019. The evaluation scope included the overall board of directors, functional committees and individual directors. The evaluation was conducted through data analysis, questionnaires and interviews, and the performance evaluation report was issued based on the results. The evaluation contents of the board of directors included the construction of an effective board of directors, the effective operation of the board of directors, professional development and further training, enterprise foresight, the performance of duties, management at management level, the creation of a corporate culture, communication with stakeholders, and performance evaluation. The evaluation contents of the directors included the mastery of the Company's goals and tasks, the cognition of directors' responsibilities, professional development and further training, the performance of duties, the degree of participation in the Company's operation and internal relationship operation, and communication. The performance evaluation of the audit committee included the construction of an effective audit committee, the effective operation of the audit committee, professional development and further training, the performance of duties, the establishment of a complaint pipeline, the relationship with the board of directors, and performance evaluation. The performance evaluation of the compensation committee included the construction of an effective remuneration committee, the effective operation of the compensation committee, professional development and further training, the performance of duties, relationship with the board of directors, and performance evaluation. In 2018, the results of the performance evaluation of the board of directors, functional committee and board members were "between good and excellent". Optimization suggestions included increasing the quantity of female directors, strengthening the professional development course of directors and the compliance framework of the audit committee to superviseglobal operations and the reporting process.

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
(4) Does the Company regularly evaluate its external auditors’independence?	✓		The results and suggestions of the performance evaluation of the board of directors in 2018 were reported in the board meeting in January 2019. The next external evaluation shall be executed in 2022 covering the 2021 performance period. (4) Every year, after consent is obtained from the Audit Committee, it shall be submitted to the board for resolution and decide to appoint an CPA and regularly examines the CPA’s independence and evaluates whether there is circumstance of violating No. 10 of the Code of Ethics bulletin or the occurrence of circumstances stipulated in Article 47 of the Accounting Act. It further confirms that the CPA has no other financial interests and business relationship with the Company other than the costs of certifying and finance and taxation cases, and checks whether the CPA is a director, manager, or shareholder of the Company or gets payments from the Company, confirming that the CPA is not an interested party. The appointment of an CPA and fee review can only be conducted after the Company has confirmed its independence through the examination of the CPA independence assessment result. The Board meeting dated March 24, 2020 approved the designation and independence evaluation of the independent auditor for 2020.	No difference.
4. Does the Company appoint competent and appropriate corporate governance personnel and corporate governance officer to be in charge of corporate governance affairs (including but not limited to furnishing information required for business execution by	✓		The Board meeting dated February 26, 2019 resolved to specify the corporate governance officer position served by CFO Yu, Chin-Pao with more than three years of work experience in finance, stock affairs and rules of procedure. The major duties include: 1. Managing matters regarding the Board and shareholders’ meetings. 2. Preparing meeting minutes of Board and shareholders’ meetings. 3. Assisting directors with inauguration and continuing study. 4. Providing directors with information as necessaryfor business execution. 5. Assistingdirectors on	No difference.

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
directors, assisting directors’ compliance of law, handling matters related to board meetings and shareholders’ meetings according to law, and recording minutes of board meetings and shareholders’ meetings)?			law compliance. 6. Other matters as stipulated by the Articles of Incorporation or contracts. The 2020 business implementation status was as follows: 1.Assist directors in executing business, provide necessary information and arrange study for directors: (1) The revision and development of the latest laws and regulations related to the business and corporate governance shall be provided to the board members upon taking office, and shall be updated regularly. (2) Provide Company information required by directors, and maintain smooth communication between the directors and business supervisors. (3) Assist in arranging meetings with independent directors, chief audit officer or a certified public accountant. (4) Assist the directors in formulating the annual study plan and arranging courses. 2. Assist the board of directors and shareholders' meeting with procedures and resolutions: (1). Report on corporate governance to the board of directors. (2). Assist and remind directors of the laws and regulations to be followed in the execution of business. 3. Formulate the meeting schedule of directors and inform the directors 7 days prior, convene the meeting, and provide meeting data. Remind in advance of the requirement to issue information of interest and complete the minutes of the meeting within 20 days after the meeting. 4.Handle relevant change registration of the shareholders' meeting in accordance with the law. 5. Executive board performance evaluation. 6.The items as stipulated in the Articles of Incorporation and contracts have been implemented.

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
5. Has the Company established communication channel with interested parties (Including but not limited to shareholders, employees, customers and suppliers, etc.) and disclosed key corporate social responsibility issues frequently enquired by stakeholders on the designated area of the corporate website?	✓		The Company has established a spokesman system, dedicated to handling relevant matters, and the Company website has created an interested party zone to maintain communication channels with interested parties at any time through information delivery by telephone, fax, e-mail, etc., for important corporate social responsibility issues that concern interested parties and their feedback. The Company will properly handle matters to respect and maintain its due rights and interests. The Company will also identify the matter regarding the communication with interested parties and report to the Board meeting periodically. Please go to the Company website for reference.	No difference.
6. Has the Company appointed a professional registrar for its Shareholders’ Meetings?	✓.		The Company has appointed the stock affairs agency department of "Taishin International Bank Co., Ltd." to be responsible for serving shareholders and handling affairs of the Shareholders' Meetings.	No difference.
7. Information Disclosure (1) Has the Company established a corporate website to disclose information regarding its financials, business and corporate governance status? (2) Dose the Company adopt any other information disclosure channels (e.g., maintaining an English-language website, appointing designated personnel to handle information collection and disclosure,appointing	✓ ✓		(1) Chinese and English websites of the Company are available to update and disclose financial business and corporate governance information at any time. (2) The Company has set up Chinese and English websites and assigned dedicated personnel to be responsible for the collection and disclosure of Company information; it has also set up a spokesman and agency spokesman system, and provide information on the corporate briefing session on the company website to which investors may refer.	No difference. No difference.

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
spokespersons, webcasting investors conference, etc)? (3) Does the Company announce and report the annual financial statements within two months after the end of the fiscal year, and announce and report the first, second, and third quarter financial statements as well as the operating status of each month before the prescribed deadline?	✓		(3) The Company has announced and reported the quarterly financial statements and the operation situation of each month within the prescribed period.	No difference.
8. Has the Company disclosed other information to facilitate a better understanding of its corporate governance practices (including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?	✓		1. Employee rights and interests: Pursuant to government laws and decrees and personnel management measures of the Company, the Company provides all kinds of basic due labor conditions, including a working hour mechanism and thorough ask for leave system, as well as provides a stable and safe work environment, and in addition to basic welfares, such as labor insurance, health insurance, pension allocation, etc., employees can also enjoy regular health examinations, group insurance, and thorough employee retirement measures. 2. Employee care: The Company has established the Occupational Safety and Health Committee pursuant to laws to discuss safety and health related regulations. In order to ensure employee safety and health, the Company has formulated the "Occupational Safety and Health Policy", regularly holds all kinds of keynote lectures and courses, provides physician consultation, provides a doctor and mental health counseling and opens diversified channel for employee to express opinions and consultation, and creates good participation	No difference

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
			sense and smooth two-way communication channel. 3. Investor relations: The Company takes guaranteeing shareholders' rights and interests as its main objective, and instantly announces relevant significant Company information, such as finance and business. 4. Supplier relations: In addition to formulating "Codes of Ethical Conduct" and the "Global Employee Code of Conduct Management Measures", The responsibilities of a responsible business alliance (RBA) member include establishing and providing Inventec’s standard of responsible business alliance to suppliers. The standards cover labor, health, safety, environmental, and business ethics matters. Important information about the Company’s suppliers is published in iSupplier placement. A sustainable supply chain explanation session of Inventec Group is held every year in the hopes that the Company can serve as an example and lead more suppliers to jointly improve their environmental protection consciousness and fulfill their corporate social responsibility. 5. Rights of interested parties: Operate pursuant to Articles 51-54 of the "Inventec Corporation Corporate Governance Best Practice Principles" and set up an interested party zone. 6. The implementation of risk management policies and risk measurement standards: please refer to the Analysis of Risk Management in annual report and Evaluation of Risk Matters and Inventec Risk Management of the Inventec Corporate Social Responsibility Report 2020. 7. Execution circumstance of customer policy: The Company has formulated an appropriate customer policy and operation target and adjusts its operation strategy in a timely manner to achieve the target 8. Circumstances of buyingliabilityinsurance for directors: The Companyhas

Item	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
			bought relevant liability insurance for its directors. Related liability insurance for directors is purchased up to January 1, 2022, and the insurance policy will be renewed upon expiration. The insured amount, scope of insurance, and insurance fees of the liability insurance of the directors are reported to the board.
9.Please describe the improvements of the corporate governance evaluation results released by the corporate governance center of the Taiwan Stock Exchange Corporation in the last year, and propose priority matters or measures to strengthen areas yet unimproved. (No need to be filled in by companies that were not subject to evaluation).	✓		The Company has formulated a risk management policy in 2020 and will continuously promote improvement for items not yet scored.	No difference

Continuing professional education hours for directors in 2020

Title	Name	Date	Course	Hours	Institute
Chairman	Cho, Tom-Hwar	2020.03.24	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.12	Impact of COVID-19 on the economic industryand its futureprospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
Director	Yeh, Kuo-I	2020.03.24	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.12	Impact of COVID-19 on the economic industryand its futureprospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
Director	Wen, Shih-Chih	2020.03.24	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.12	Impact of COVID-19 on the economic industry and its future prospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A studyof the small blue cupfrom the	1.5	The Taiwan Corporate Governance Association

Title	Name	Date	Course	Hours	Institute
			perspective of corporate governance - Luckin coffee
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
Director	Lee, Tsu-Chin	2020.03.24	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.12	Impact of COVID-19 on the economic industry and its future prospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
Director	Chang, Ching-Sung	2020.03.24	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.12	Impact of COVID-19 on the economic industry and its future prospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
Director	Yeh, Li-Cheng	2020.03.23	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-BriberyManagement	1.5	The Taiwan Corporate Governance Association

Title	Name	Date	Course	Hours	Institute
			System
		2020.05.11	Impact of COVID-19 on the economic industry and its future prospects	1.5	The Taiwan Corporate Governance Association
		2020.08.10	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.11.09	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
Independent Director	Chang, Chang-Pang	2020.03.24	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.12	Impact of COVID-19 on the economic industry and its future prospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
Independent Director	Chen, Ruey-Long	2020.03.24	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.12	Impact of COVID-19 on the economic industryand its futureprospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.09.04	The responsibility of directors and	3.0	The Taiwan Corporate Governance Association

Title	Name	Date	Course	Hours	Institute
			supervisors in mergers and acquisitions
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
Independent Director	Wea, Chi-Lin	2020.03.23	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.11	Impact of COVID-19 on the economic industryand its futureprospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.08.11	Disclosure of the major information of the Company and the responsibilities of directors and supervisors	3.0	The Taiwan Corporate Governance Association
		2020.08.11	The influence of new company laws on directors,supervisors and shareholders	3.0	The Taiwan Corporate Governance Association
		2020.09.29	The new trend of corporate governance, the transparency of legal persons, and the regulation of money-laundering prevention in M&A	3.0	Securities and Futures Institute
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
		2020.11.27	Economic outlook and industry trends in 2021	3.0	Securities and Futures Institute
		2020.11.27	The role of organizational investors in improvingcorporategovernance	3.0	The Taiwan Corporate Governance Association

Continuing professional education hours for managers in 2020

Title	Name	Date	Course	Hours	Institute
President	Wu, Yung-Tsai	2020.07.12	Breaking chains: The integration of the science and technology industry chain	2.0	Inventec Corporation
		2020.08.25	Digital Ambition Analyst Workshop	2.0	Inventec Corporation
Business Group President	Chang, Hui	2020.10.29	Development trends and application of artificial intelligence	2.0	Inventec Corporation
Business Group President	Tsai, Chih-An	2020.01.08	Intelligent manufacturing drives the digital transformation	2.0	Inventec Corporation
Vice President (Chief Corporate Governance Officer)	Yu, Chin-Pao	2020.03.23	A brief introduction to the Code of Good Faith for Listings and OTC Listings and the ISO 37001 Anti-Bribery Management System	1.5	The Taiwan Corporate Governance Association
		2020.05.11	Impact of COVID-19 on the economic industry and its future prospects	1.5	The Taiwan Corporate Governance Association
		2020.08.11	A study of the small blue cup from the perspective of corporate governance - Luckin coffee	1.5	The Taiwan Corporate Governance Association
		2020.8.24-8.25	Issuer, securities firm, stock exchange accounting director continuous advanced training course	12.0	Accounting Research and Development Foundation
		2020.11.10	New generation consumption behaviors create economic model	1.5	The Taiwan Corporate Governance Association
		2020.12.31	The impact and response of cross-border transactions in line with international tax	3.0	The Taiwan Corporate Governance Association

Title	Name	Date	Course	Hours	Institute
			trends
		2020.12.31	Common tax disputes and tax governance strategies of group enterprises	3.0	The Taiwan Corporate Governance Association
Vice President	Hsu, Ching-Wu	2020.06.11	Practice Discussion on the Introduction of the Code of Integrity Management of Listed OTC Companies - ISO37001 Bribery Prevention Management System	6.0	Securities and Futures Institute
		2020.09.08	The competent authority requires the establishment of "Statutory Supervisors and Personnel" for compliance audits	6.0	Securities and Futures Institute
Vice President	Lin, Shu-Ju	2020.09.08	Performance management	3.0	Inventec Corporation
Vice President	Li, Jui-Chin	2020.09.08	Team leader	3.0	Inventec Corporation
Senior Director of Information Technology Center	Yu, Win-Chee	2020.06.19	Leadership and management	3.0	Inventec Corporation
Senior Director of Talent Center	Lin, Shih-Pin	2020.09.18	2020 MAP Open class of the management ability exploration course	7.0	GPM Co., Ltd.
		2020.11.12-11.13	MAP Certification class of the management ability evaluation coach	14.0	GPM Co., Ltd.

Title	Name	Date	Course	Hours	Institute
Director of Finance Center	Liang, Wen-Jan	2020.08.13	5G application and industry development trends in 2020	2.0	Inventec Corporation
Director of Finance Center	Hsiao, I-Ying	2020.09.17	Lectures on economic analysis	2.0	Inventec Corporation

12. Certificate of License

	Taiwan CPA	CIA	Taiwan CIA	Public Company Accounting Supervisor with Professional Certification	Stock Affair Specialist	Corporate Governance Personnel	Enterprise Internal Control Basic Ability	International Computer Auditor	Internal Control and Audit of the Bank	Certification in Control Self-Assessment
The Number of People	5	4	5	1	2	2	5	1	1	1

13. Board members and the important management succession plan of Company

To strengthen Board functions and reinforce management mechanisms, the Company has established Board structure as appropriate, Board member diversification guidelines, and a candidate nomination system for the election of directors based on the principle of fair treatment to shareholders. Inventec persists in the “human-based” concept, with “talent development” as its basis of sustainable operations, incorporated with strategic goals of the Company, management functions and core values, solid takeover plan, and periodical evaluation of the management succession plan development in May every year, and implementation to ensure sustainable operation. The guidelines for diversification goals of the election of directors cover: (1) basic conditions and value: gender, age, nationality, culture, etc.; (2) professional knowledge and skills: law, accounting, industry, finance, marketing, or technology background, professional skills, and industrial experience. The selection of management: (1) establish a talent echelon: first evaluate the key positions and the abilities, qualifications, and conditions required by these positions and then evaluate potential talents via assessment tools before determining the talent development plan; recognize performance and future potential based on the strategic organizational plan; strategically establish the overall career development of key talents, allowing them to learn to take responsibility through a diversified development plan, such as work instructions, transfers, meeting participation, cross-unit cooperation, project implementation, and workplace training competitiveness as required by future talents. (2) Establish talent development blueprint and competence model: set corresponding management functions and training methods based on hierarchy, apply educational training, performance assessment, and incentive measures for potential successors, develop function-oriented talent resource management models, and ensure the stable development of talent resources and sustainable operation of the Company. The physical taking of professional abilities every year and initiation of individual development projects: organize professional technology training systematically and hold irregular group management meetings, executive meetings, and consensus camps to conduct training programs as required by the key positions. In 2020, two group management meetings, two executive meetings, and nineteen senior management training courses were held. The company's regular shareholders' meeting on June 12, 2020 elected nine directors (including three independent directors). The elected directors were Chao, Tom-Hwar; Yeh, Kuo-I; Wen, Shih-Chih; Lee, Tsu-Chin; Chang, Ching-Sung; and Yeh, Li-Cheng. The first five directors were re-appointed as directors and are familiar with the operation of the company's board of directors, each having their own strengths in industry, marketing or technology. The new director, Yeh, Li-Cheng, has complete academic experience in the fields of information engineering and asset management. The independent directors elected are Chen, Ruey-Long, Chang, Chang-Pang, and Wea, Chi-Lin. The first two of whom are re-appointed as independent directors, each with their respective strengths in law and economy. Wea, Chi-Lin has complete academic experience in the fields of economics and business administration, and has more than five years of work experience required by the company's business, which will be beneficial to the company.

2.3.5 Status of Remueration Committee

2.3.5.1 Remueration Committee

Title (Note1)	Criteria Name	Met one of the following professional qualification requirements with at least five years work experience	Met one of the following professional qualification requirements with at least five years work experience	Met one of the following professional qualification requirements with at least five years work experience			Independence`（`Note2`）`	Independence`（`Note2`）`	Independence`（`Note2`）`	Independence`（`Note2`）`	Independence`（`Note2`）`	Independence`（`Note2`）`			Number of other public companies in which the individual is concurrently serving as an Remueration Committee member
		An instructor of higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the company in a public or private junior college, or university	A judge, public prosecutor, attorney, CPA, or other professional or technical specialist who has passed a national examination and bee awarded a certificate in a profession necessary for the business of the company	Have work experience in the areas of commerce, law, finance, accounting, or otherwise necessary for the business of the company	`1`	`2`	`3`	`4`	`5`	`6`	`7`	`8`	`9`	`10`
Independent Director	Chang, Chang-Pang	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	`3`
Independent Director	Chen, Ruey-Long	`-`	`-`	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	`1`
Independent Director	Wea, Chi-Lin	✓	`-`	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	`3`

Note1 ： Title: Ddirector, independent director, and others 。

Note2 ： During the 2 years before being appointed or during the term of office, a remuneration committee member shall have been or be any of the following:

（1）Not an employee of the Company or any of its affiliates.
（2）Not the directors or supervisors of the Company or the affiliated enterprises (except for those who are independent directors of the Company or the parent company, subsidiaries, or subsidiaries of the same parent company established in accordance with the Act or local laws).
（3）Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under any other's name, in an aggregate amount of 1 percent or more of the total number of issued shares of the Company or ranking in the top 10 in shareholding.
（4）Not the spouse, second-level blood relative, or lineal blood relative within three degrees of the managers listed in (1) or the persons listed in (2) or (3).

（5）Directors, supervisors, or employees indirectly holding more than 5% of the total shares issued by the Company, the top five shareholders, or appointing the representative as directors or supervisors in accordance with Item 1 or 2 of Article 27 in the Company Law (except for those who are independent directors of the Company and its parent company, subsidiary, or subsidiaries of the same parent company established in the Law or local laws).
（6）Not the directors, supervisors, or employees of other companies with the director's seat of the Company or with more than half of the voting shares controlled by the same person (except for those who are independent directors of the Company and its parent company, subsidiary, or subsidiaries of the same parent company established in the Law or local laws).
（7）Not the directors, supervisors, or employees of other companies or organizations as the same person as the Company's chairman, general manager, or equivalent position or the spouse (except for those who are independent directors of the Company and its parent company, subsidiary, or subsidiaries of the same parent company established in the Law or local laws).
（8）Not the directors, supervisors, managers, or shareholders with more than 5% shares of specific companies or organizations with financial or business transactions with the Company (except for those who are independent directors of specific companies or organizations holding more than 20% of the total shares issued by the Company but not more than 50%, and of the Company and its parent company, subsidiary, or subsidiaries of the same parent company established in the Law or local laws).
（9）Not the professionals of business, legal, financial, accounting, or other related services, entrepreneurs of proprietorships, partnerships, corporations or organizations, partners, directors, supervisors, and managers or their spouses who provide the audit services for the Company or affiliated enterprises or whose cumulative remuneration in the last two years has not exceeded NT$500,000. However, this restriction shall not apply to members of the remuneration committee, open takeover review committee, or special committee for mergers and acquisitions who perform their duties under the Securities and Exchange Act or the relevant statutes of the Mergers and Acquisitions Act.
(10) Not been a person of any conditions defined in Article 30 of the Company Act.

2.3.5.2 The State of the Remueration Committee's Implementation

A. The remueration committee comprised of 3 members.

B. Tenure of the remueration committee is from June 12, 2020 to June 11, 2023. A total of 2 (A) meetings of the remueration committee were held in 2020, the status of attendance is as follows:

Title	Name	Attendance in person (B)	By proxy	Attendance rate (%) B/A	Remarks
Chairman	Chang, Chang-Pang	2	0	100%	Reelection on 2020.06.12
Member	Chen, Ruey-Long	2	0	100%	Reelection on 2020.06.12
Member	Shyu, Jyuo-Min	1	0	100%	Removal on 2020.06.12
Member	Wea, Chi-Lin	1	0	100%	Newly appointed on 2020.06.12
Other information to be disclosed: 1. If Board of Directors did not adopt or revise the proposal made by the Remueration Committee, please specify the date, session, agendas and resolutions of the Board of Directors meeting and how the Company handled the proposal made by the Remueration Committee ( If amount of the compensation approved by the Board of Directors is higher than that proposed by the Remueration Committee, please specify the reasons and differences in proposals.): None. 2. If any members of the Remueration Committee were against or reserved their opinions towards the resolutions, please specify the date, session, agendas, opinions of all members and how the opinions were handled: None.

Note: The Company convenes a meeting of the Remuneration Committee every year to establish and review performance and remuneration policies, system, standards, and structure of directors and managers and suggestions to the Board.

2.3.5.3 Operation of the Salary and Remuneration Committee in 2020

Date	Contents Pproposed	Result of Resolution	Company’s Disposal of the Salary and Committee’s Suggestion
2020.03.24	1. Approve the revised Remuneration Committee Charter 2. 2019 remuneration distribution to employees, and board directors	All members of the committee agree to adopt the proposal	Submitted to the board of directors; all present directors agree to adopt the proposal
2020.12.29	1. Approve the revised Remuneration Committee Charter 2. Approve the revised board performance evaluation method. 3. Discuss the performance evaluation and compensation policy, system, standards and structure of the current director and manager. 4. 2020 employee compensation and director compensation ratio. 5. Manager compensation and year-end bonus planning.	All members of the committee agree to adopt the proposal	Submitted to the board of directors; all present directors agree to adopt the proposal

2.3.6 Corporate Social Responsibility and Deviations from “The Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Companies”
Item	Implementation status (Note1)			Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
1. Exercising Corporate Governance (1) Does the Company conduct risk assessment on environmental, social, and corporate governance issues related to the Company's operation in accordance with the principle of materiality and then formulate relevant risk management policies or strategies? (Note3)	✓		The board of directors of the Company approved the revision of the Code of Practice for Corporate Social Responsibility in March 2020, conducted a risk assessment on environmental, social and corporate governance issues related to the Company's operations in accordance with the principle of materiality, and formulated risk management policies. In May 2020, the risk management policy was drafted and submitted to the board of directors, and risk management operations shall be regularly reported to the board of directors every year to strengthen the implementation of the risk management system. The audit committee shall review the effectiveness of the internal control system (including control environment, risk assessment, control operations, information and communication, and supervision operations) and the audit report annually, which shall be then approved by the board of directors. 1. Risk management policy: To efficiently prevent and control risks, promote management performance, and achieve the goal of sustainable operation. Identify material risks, evaluate risks analysis, clarify corresponding strategies, strengthen response mechanisms, effectively reduce risks, enhance competitiveness and design, implement and operate via internal control procedures of all units to achieve effective risk control targets, and maintain the rights of shareholders and the Company’s competitiveness. 2. Risk management organization: All business groups and company units are responsible for risk management based on the nature of their business. The Board and Audit Committee are the final decision makers of risk evaluation and control. 3. Risk management procedures: Each unit shall conduct a regular evaluation every year, implement various internal risk control procedures and take occurrence probabilities and risk impact as the standard to measure risk, and effectively control risk within the acceptable range. All risk management procedures shall be included in the compulsory courses for new recruits to strengthen their awareness of operational risk. Risk management operations shall be reported to the board of directors every year to strengthen the implementation of the risk management	No difference

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
			system. 4. The scope of risk management includes “strategic risks”, “operational risks”, “financial risks”, “lawsuit and intelligence property risks”, “product safety risks”, “information security risks”, and “environmental safety risks”.
2. If the Company set up a unit exclusively or concurrently to execute CSR policies and if the Board appointed member(s) of management team to supervise and report its implementation status to the Board?	✓		The enterprise level of "corporate social responsibility" of the Company is the Chairman of the Board of Directors, and the "Social Responsibility Group" is established under the Chairman to be dedicated to promoting corporate social responsibility related affairs and regularly report to the Board of Directors. Making social responsibility policy, system, or related management guidelines of responsible corporations and the proposal and implementation of a substantive launch plan, report the implementation plan and results to the board every year.	No difference
3. Environment issues (1) If the Company established proper environment management system based on the characteristics of the industry where the Company belongs to? (2) If the Company endeavored to utilize resources more efficiently and utilized renewable materials which have a lower impact on	✓ ✓		(1) The environmental sustainable management system established by the Company gives due consideration to the requirements of the government, customers, employees, community and other interested parties and also refers to international standards such as ISO/IECQ, etc. The system includes the Environmental Management System (ISO 14001), the Hazardous Substance Process Management System (IECQ QC 080000), the Greenhouse Gas Management System (ISO14064-1) and the Energy Management System (ISO50001), amongst others. All the aforementioned preceding systems have passed external certifications and verifications conducted by independent third party certification authorities. Furthermore, these four major management systems are also the communication platforms between Inventec and interested parties. (2) In order to save the resources needed in product production, at the stage of design and development, to maintain product function and quality, the Company has reduced the components and consumable materials needed to be used in product production through the design of common use and reduction of materials and recycling,reusing,etc. Thegreen design	No difference No difference

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
the environment? (3) Has the Company evaluated current and future potential risks and opportunities of climate change to the Company and taken actions corresponding with climate related issues? (4).Has the Company calculated greenhouse gas emission, water consumption and total weight of wastes in previous two years and established policies for energy saving and carbon reduction, greenhouse gas reduction, reduced water consumption or other wastes management?	✓ ✓		strategies of Inventec are divided into the following eight points: 1. Spare no effort to seek approaches to reduce environmental impact; 2. Lessen the total energy consumption in the product life cycle; 3. Mitigate the burden on the land; 4. Design for clean production and use; 5. Design for durability; 6. Design for best function; 7. Design for reuse, recovery, and recycling; 8. Avoid using raw materials with toxic substances in the product. (3) In response to the requirements of local government, customers, and international investment institutions to climate change, the Company follows the climate change governance framework of the Task Force on Climate-related Financial Disclosure (TCFD) to conduct management and disclosure. For details, please refer to the 2020 Inventec Corporate Social Responsibilities Report. (4) a. The major greenhouse gas emission of Inventec (scopes 1 and 2) was 132,920 tons of CO2 equivalent in 2020. In 2019, the major greenhouse gas emission was 132,114 tons of CO2 equivalent. In 2020, Inventec's main source of contribution to greenhouse gas emissions was indirect greenhouse gas emissions from imported energy (Scope 2), accounting for 94.64% of total emissions. In 2020, the emission volumes of Scope 3 was 359,646 metric tons of carbon dioxide equivalent, which was 58,050 tons in 2019. The reason for the increase is mainly related to the newly added inventory calculation items. There are five new items in total : (1) staff commuting, (2) waste treatment, (3) product use stage, (4) purchasing goods and services, and (5) investment b. With regard to energy saving and carbon reduction, the Sector Based Approach of Science Based Target (SBT) version 1.2.1 is adopted to calculate the greenhouse gas reduction target. The greenhouse gas reduction targets are “with benchmark of 2015, the greenhouse gas emission within scopes 1 and 2, shall be reduced 37.5% by 2030”, and “with benchmark of 2020,thegreenhousegas emission within scopes 3,shall be reduced 37.5% by2035”. Seven	No difference No difference

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
			major energy saving projects were promoted in 2020, and more than 1.06 million degrees of electricity were saved, which is equal to reducing 737 tons of CO2 equivalent. All of the above data have been verified by an independent third party verification institution (SGS). c. Regarding water resources management, the water resources management policies of the Company are “water saving for all people; change the act; efficient water consumption, circulation, and recycling”. The water resources management goal is to take 2012 as the base year and reduce water intensity by 24% by 2024. The water consumption in 2020 was 1307.1 thousand tons, which was a 12.76% decrease compared to 1498.2 thousand tons in 2019. The average water consumption per person per year was 65.10 tons in 2020, which was 17.55% decrease compared to 78.95 tons in 2019. All of the above data have been verified by an independent third party verification institution (SGS). d. Regarding waste management, the waste management policies set by the Company are “minimize waste output and maximize resources recycling”. The waste management goal is to use 2014 as the base year to reduce waste by 25% by 2025. The waste volume was 23.5 thousand tons in 2020, a 7.99% increase compared to 21.8 thousand tons in 2019. All of the above data have been verified by an independent third party verification institution (SGS). For details, please refer to the 2020 Inventec Corporate Social Responsibilities Report.
4. Social issues (1) If the Company followed relevant labor laws, and internationally recognized human rights principal, and established appropriate management policies and procedures?	✓		(1) The Company has established “working rules”, “regulations for the code of conduct of global employees”, and “employee complaints and external reporting rules” in accordance with labor related regulations and in reference to international humanity conventions in order to provide employees with fair, just, and good working envi-ronment and conditions without discriminating by race, color, gender, language, religion, politics or other opinions, nationality or family background, property, birth, or other identity to protect human rights. The above regulations are also published on the Intranet for your reference to assure the rights of employees.	No difference

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
(2) Has the Company formulated and implemented reasonable measures for employee benefits (including remuneration, vacation, and other benefits) and properly reflected the operating performance or results in the employee remuneration? (3) If the Company provided safe and healthy working envirnonment to employees and conducted relevant training on safety and health management to employees periodically?	✓ ✓		(2) The Company has established various types of leaves and various employee relationship and club activities. Meanwhile, the Employee Welfare Committee provides or organizes various forms of employee welfare and activities. Reasonable salary welfare policies and the operational performance or results will be reflected in the employee’s compensation as appropriate. (3) In order to improve safety, health, and environment management performance, the Company has established a professional and effective safety, health, environment, and energy management system, and plans the safety, health, and environment management plan pursuant to relevant laws every year, including occupational disaster prevention in its implementation. Emergency response drills are carried out for different issues, such as fire, flood, earthquake, etc. Risk management strategies are discussed and formulated, and all kinds of international information are promptly mastered. In the spirit of sustainable improvement of the safety, health, environment, and energy management system, and with systematized practice and performance, the Company adopts continuous cycling mechanisms from planning, execution, and examination to correction, exerts independent protection and control functions, and reduce potential risks to safety, health, environment, and energy in order to reduce operation risks. Regarding health promotion, new employees are required to provide a physical examination report pursuant to law before reporting for duty; for in-service employees, better than what is required by relevant laws and decrees, the Company regularly carries out all employees`’` health examination every year and implements health management operations. It also regularly cooperates with medical and health institutions to hold all kinds of health lectures and consultations.	No difference No difference

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
(4) If the Company provided career planning, relevant training and skill development for employees? (5) Does the Company comply with relevant laws and regulations and international standards regarding customer health and safety, customer privacy, marketing, and	✓ ✓		(4) By taking corporate operation objectives and development strategies as a training blueprint and being oriented according to actual employee demands, the Company has established an effective training plan of career skill development. (A) Talent asset appreciation: Encourage employees to take in-service training in English and Japanese courses in order to be in line with international norms. (B) Corporate culture communication: After reporting for duty, new employees will receive new employee training to become familiar with internal personnel regulation systems, corporate culture, work environment, etc. All kinds of employee assemblies and communication meetings will be held regularly, in which the senior supervisor will directly deliver Company operation philosophy and operation direction and describe the strategic policy of each department. (C) Supervisor cultivation plan: Basic supervisor training, regular basic/advanced supervisor training, and custom senior management courses will be regularly held in order to improve overall management capability. (D) Professional competency development: According to all kinds of demands to develop professional skills and with the Technical Committee, designedly carry out professional skill training courses. (E) Condense team consensus: Carry out all kinds of team building and encouragement courses and strategic operation meetings based on the demand and build high identification for both the team and the Company. (5) The Company provides customers with a comprehensive and thorough customer relations management service mechanism, from order receiving to the stage of product development and to the stage of mass production. After product delivery, we track the product condition to the customer end and actively care about all feedback from the customer. Through the customer complaint management system and with a complete customer complaint standard operation procedure,the Company prepares reason analysis,correction andprevention solutions inproject	No difference No difference

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
labeling of products and services? Does it develop relevant consumer protection policies and complaint procedures? (6) Has the Company formulated a supplier management policy that requires its suppliers to comply with relevant regulations on environmental protection, occupational safety and health, or labor and human rights, and how is it implemented?	✓		review, and confirms effectiveness in order to give feedback on problem solving to customers and understand real customer demands to achieve the highest customer satisfaction. Furthermore, by periodically holding customer business review meetings, the Company can discuss relevant issues, such as technology research and development, product delivery, product quality, after-sales service, quotation cost, energy saving and carbon reduction, green products, corporate social responsibility, etc., in response to the issues that concern customers. In order to solve the problems reflected by customers, the customer service departments and dedicated contact service have established and customer service website, and provide instant services and response mechanisms through a stationed service mechanism at OEM/ODM customer end. In response to environmental protection legal issues of each country throughout the world and provide customers with better environmental protection service, the Company will assist customers in acquiring product green mark certification, including such certification mechanisms as Taiwan Green Mark, China Green Mark (SEPA), China Energy Saving Mark (CECP), China Energy Saving Label (CEL), Energy Star, American Green Procurement Assessment Guideline (EPEAT), etc., in order to provide global customers more environmentally friendly products and services. (6) With regard to the various assessments of suppliers, in addition to the quality, cost, delivery time, technical skill, and service that are assessed in the general industry, with the rise of corporate social responsibility awareness, the Company will also extend the assessment scope to green products and corporate social responsibility, and the assessment scope will correspond to the Company's requirements for supplier, including the establishment of management systems such as ISO 9001, ISO 14001, ISO 45001, RBA, etc. Through diversified assessment consideration, the Company ensures that the cooperating supplier can specifically respond to important supply chain issues, such as product environmental protection, manufacturing process environmental protection condition operation requirements, restriction of the use of hazardous substances, prohibiting child labor, guaranteeing employee rights and interests, workplace safety, etc. The Company ensures that the supplier does not violate the aforementioned	No difference

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
			circumstances through supplier RBA auditing. Every year, the Company will perform an on-site audit on existing suppliers with medium and high risks and ask for improvement; furthermore, contract contents explicitly stipulate a legal compliance clause, and in case of violation of relevant important laws and regulations and having an obvious impact on the environment and society, the contract can be terminated or canceled pursuant to such clause.
5. Does the Company refer to internationally applicable reporting standards or guidelines to prepare the corporate social responsibility report and other reports that disclose the Company’s non-financial information? Has the report been confirmed or endorsed bya thirdparty?	✓		In order to improve the transparency, completeness, and reliability of information disclosure, for the "2020 Inventec Corporate Social Responsibility Report", the Company designated a third party unit (SGS) to carry out substantial examination and assurance operations on the contents and data in the report according to GRI sustainability report criteria "core option" in order to conform to the GRI core option and AA1000 AS v3 second type high assurance level.	No difference
6. If the Company established any guideline of corporate social responsibility in accordance with “Corporate Social Responsibility Best-Practice Principles for TWSE/GTSM-Listed Companies” and please state the implementation status of the guideline and any reasons for non-implementation: Pursuant to the "Listed Company Corporate Governance Best Practice Principles", the Company has established the "Inventec Corporation Corporate Governance Best Practice Principles" in 2014, as while fulfilling its corporate social responsibility, the Company also ought to give full consideration to the interests of interested parties and treat customers and consumers in a fair and respectful way. Furthermore, social or environmental issues can be solved through commercial methods, which have no impact on the principles of business operations. The third amendment was approved by the Board of Directors on March 24, 2020.
7. Other material information that helps to understand the operation of corporate social responsibility: (1). Environmental protection: To the Company, "environmental protection" is a part of its "social responsibility" in our top ten beliefs, namely "environmental protection, culture, poverty relief,and community". In order to fulfill our corporate citizenshipresponsibilityandpractice the "green energyenvironmentalprotection" of our five major

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
policies, the Company has set Inventec's environmental objectives, environmental policies, and environmental projects in order to guide the overall power of our colleagues to move towards a new vision of green sustainability. (2). Community participation: Integration into community life with practical action and the long-term adoption of community parks and designate dedicated personnel for maintenance and cleaning in order to provide community residents with a comfortable and clean public space. (3). Social contribution: To show consideration for society, the Company responds to blood donation and is earnest toward its social responsibilities. We consecutively receive the national “quality occupational safety and health unit award”, “business environmental protection award” of the EPA, “good blood donation unit award” issued by the MOI, “healthy workplace certification health promotion logo” of the National Health Department, Taipei “good labor safety unit award”, “zero disaster working hours record – golden award” of the MOL, “commonwealth corporate citizen award” of Commonwealth Magazine, and “Taiwan corporate sustainability award” and “corporate sus-tainability report – platinum award” issued by Taiwan Institute for Corporate Sustainability. (4). Social benefit: Inventec encourages employee to actively participate in public service activities such as caring for minority groups, literary and artistic activities and contributing to ecological education, etc. The Inventec Group Charity Foundation was established in 2010, mainly to assist and support public charity organizations from all walks of life in engaging businesses in social welfare. In support of disadvantaged groups, it has been giving out year-end donations to dozens of social welfare public groups over the years before the Spring Festival, to assist them with their long-term social welfare work. The Company has also evaluated the fundraising projects of charities from a variety of areas and has chosen favorable social welfare organizations to which to give charitable donations. Mainly through corporate donations, more than 60 social welfare organizations received donations from the Company in 2020. The social responsibility group of the Company also regularly calls on colleagues for small donations, and raises funds to donate to social welfare institutions such as the "Hsinchu City Charity Foundation" and the "New Life Social Welfare Development Promotion Association" on a monthly basis. The Talent Center also encourages colleagues to participate in World Vision - Hunger Thirty Experience Camp activities. The Company also gets involves in literary and artistic activities by continuously donating to the Taipei Philharmonic Foundation to support its hosting of the Taipei International Choral Festival. With respect to ecological conservation, over the years the Company has been cooperating with the Wild Bird Society of Taipei to promote the environmental education plan of Guandu Nature Park, and encourages staff to become conversation volunteers at the Kwan-tu wetland.

Item	Implementation status (Note1)	Implementation status (Note1)	Implementation status (Note1)	Non-implement -ation and its reason(s)
	Y	N	Summary (Note2)
(5). Consumer rights and interests: The Company has provided product liability insurance. (6). Human rights: The Company has provided public accidental insurance and employee group insurance. (7). Safety and health: In addition to complying with the Occupational Safety and Health Act and relevant subordinate legislations and carrying out all kinds of matters as required, the Company also effectively promotes the Taiwan Occupational Safety and Health Management System (TOSHMS) and International Occupational Health and Safety Assessment Series (ISO 45001), implements all kinds of safety and health business management. The corporate social responsibility related information of the Company, such as corporate governance implementation, sustainable environment development, social benefits, etc., are disclosed on the Company website andmops.twse.com.tw.

2.3.7 Ethical Corporate Management and Deviations from “The Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies

Listed Companies
Items	Implementation status			Non-implementation and its reason(s)
	Y	N	Summary
1. Establishment of Corporate Conduct and Ethics Policy and Implementation Measures (1) Does the Company have a Ethical Corporate Management policy approved by the Board of Directors and clearly state the policy and practice of good faith operation in the regulations and external documents, as well as the commitment of the Board of Directors and senior management to actively implement the operation policy? (2) Has the Company established an assessment mechanism for the risk of dishonest behaviors in order to regularly analyze and evaluate the business activities with high risk of dishonest behaviors within the business scope, formulate the prevention plan hereby, and cover at least the preventive measures for various behaviors in Item 2,Article 7 of	✓ ✓		(1) The Company attaches importance to its reputation and takes integrity and sustainable operations as the maximum assets accumulated by Company operations. Among them, the "Codes of Ethical Conduct" and "Code of Integrity Operation" are the ethical standards of conduct and specifications for integrity operation philosophy for directors, managers, employees, appointees, or those with substantial control capability of the Company in order to prevent the occurrence of conflicts of interest and acts without good faith, as well as let interested parties of the Company better understand the above company standards by which they must abide. (2) The Company implemented a working plan to ensure honest operations, which is to establish effective accounting and internal control systems through the identification of laws and regulations, the formulation of norms, self-assessments and inspections, smooth reporting channels, including the participation of new employees in the Implementation of the Internal Control System and related legal training course, the signing of all colleagues to the Code of Conduct for Employees, and regular education and training, and the signing of contracts with suppliers to prohibit purchases of improper interests. The responsible unit shall set up an evaluation system to assess the risk of dishonest behavior, and shall annually check and assess whether the preventive measures established for the implementation of honest operations are effective in accordance with the detailed	No difference No difference

Items	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
the Good Faith Operation Code of Listed and OTC Companies? (3) Has the Company clearly defined the operation procedures, behavior guidelines, disciplinary punishments, and complaint systems for violations for preventing dishonest conduct plans and then implemented and regularly reviewed and revised the previous disclosure plan?	✓		responsibilities in the Operation Procedures and Behavior Guidelines for Honest Operations of each unit, regularly executes internal auditing and self-assessment operations, and actually checks the Company's compliance in order to prevent the occurrence of acts without good faith. The Company's anti-dishonest behavior plan already covers the preventive measures of the various behaviors mentioned in Item 2, Article 7 of the Good Faith Operation Code of Listed and OTC Companies. (3) The Company has formulated schemes for preventing acts without good faith in the "Global Employee Code of Conduct Management Measures" and "Employee Complaints and External Reporting Management Specifications" pursuant to the "Code of Integrity Operations", including operation procedures, behavioral guidelines, violation punishments, and a complaint system, and implements them. Operation Procedure and Behavioral Guidelines for Honest Operation have been established. Review and revise regularly and annually.	No difference
2. Implementation of Ethical Corporate Management (1) If the Company checked whether the respective counterparty holds any record of unethical misconduct and if the contract terms required the compliance of ethical corporate management policy?	✓		(1) In addition to formulating the "Codes of Ethical Conduct" and "Global Employee Code of Conduct Management Measures", the Company has also formulated "New Manufacturer Assessment Management Measures" that require new manufacturers to have good business reputations and conform to the ethical requirements of the Company. In "Purchase Contracts", it shall explicitly stipulate that the supplier shall abide by the special guarantee clause, in which the payment of commission, proportion commission, brokerage fees, tail end fees, or other beneficial behaviors are prohibited. In case of violation, the Company is entitled to terminate the contract immediately,and the supplier shall unconditionallycooperate to ask such	No difference

Items	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
(2) Has the Company set up a special unit under the Board of Directors to promote the business’s good faith operations, and regularly (at least once a year) reports to the Board of Directors on its good faith management policy, prevention plan, and supervision of its implementation? (3) If the Company established a policy on prevention of conflict of interests, provided appropriate reporting channel and executed rigorously and thoroughly? (4) Has the Company established an effective accounting system and internal control system to implementgood faith operations,	✓ ✓ ✓		person that received benefits for compensation. (2) To fulfill their management responsibility of the good faith operation, prevent interest conflicts, provide the appropriate statements channel, the Company establishes the talent center which is responsible for promoting honest management in the enterprise to take charge of establishment, communication and training of good faith operation policy and dishonest behavior prevention scheme, and the relevant unit supervises the performance, and regularly report relevant plan and performance to the board of director every year. (3) The Company has formulated the "Codes of Ethical Conduct", "Global Employee Code of Conduct Management Measures", and "Employee Complaints and External Reporting Management Specifications" to standardize the prevention of the occurrence of conflict of interest circumstances, explicitly stipulating that directors, managers, and all employees must not accept any gift or business entertaining and prohibiting transactions or business contact between the Company and relatives of colleagues in order to avoid the impact of personal improper interests on company rights and interests. The Company has formulated a conflict of interest prevention policy in the "Code of Integrity Operations" and provides proper channel for directors, supervisors, managers, and other interested parties attending Board of Directors meetings to actively describe whether they have any potential conflict of interest with the Company, which they shall evade. (4) The Company has established an effective accounting system and internal control system. (A)Accounting system: In order to implement integrity operations, an effective accountingsystem has been established. The accountingsystem of the	No difference No difference No difference

Items	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
and has the internal auditing unit drawn up a relevant auditing plan according to the assessment results of the risk of dishonest behavior and checked the compliance of the anti-dishonest behavior plan or entrusted an CPA to carry out the inspection?			Company was formulated pursuant to relevant laws and decrees and principles, such as the Securities Exchange Act, Company Act, Business Accounting Act, Securities Issuer Financial Statement Preparation Standards and International Financial Reporting Standards recognized by the Financial Supervisory Commission, International Accounting Standards, interpretation and interpretation announcements, etc., and was designed in accordance with company regulations, aiming at meeting actual operation requirements. (B) Internal control system: In order to implement integrity operations, the internal control system of the Company is the management process following the "Regulations Governing Establishment of Internal Control Systems by Public Companies" and was designed by its managers, Consent of audit committee, passed by its board of directors, and implemented by the board of directors, managers, and other employees for purpose of promoting sound operations of the Company, so as to reasonably ensure that the following objectives are achieved: (1). Effectiveness and efficiency of operations. (2). Reliability, timeliness, transparency, and regulatory compliance of reporting. (3). Compliance with applicable laws, regulations, and bylaws. Components of Inventec’s internal control system include: (1). control environment, (2). risk assessment, (3). control activities, (4). Information and communication, and (5). monitoring activities. The prevention (risk control) internal control system of Inventec includes: (1). prevention (risk control) risk assessment, (2). prevention (risk control) internal control, (3). prevention (risk control) internal audit, and (4).prevention (risk control) self-assessment result. (C) Internal audit: Preventive audit (risk control) plans are performed according to the audit policy for the following 11 high risks Reported by the board of directors in 2020: ethics, audit authority, inventory management, receivables, costs and expenses, asset preservation, industrial safety and environmental protection,information security,financial reporting (IFRS),financial

Items	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
			regulations, compliance with laws. " Ethical Corporate Management Best Practice Principles of Inventec" and operational risk assessment to develop the audit focus of internal control system for prevention (risk control), and identify potential operational risks as soon as possible, assist the operations team to optimize the internal control system, implement risk management, and take preventive measures in advance, and continuously improve the contribution and value of internal audits to Inventec and its subsidiaries. Internal prevention audit (risk control) plan: The 2020 internal audit plan approved by the board of directors covers: factories (Shilin Factory, Taoyuan Factory, Inventec Computer Factory), subsidiaries (PSG Group, EBG Group, Other Group, a total of 23 and Inventec Appliances Group, a total of 14). The internal audit report and the follow-up report are submitted to the audit committee for inspection prior to the end of the following month after the completion of the audit project Record the review, follow-up, and improvement of internal control deficiencies and submit the review opinions to the Board of Directors together with the opinions of the audit committee. In addition to the "annual audit plan" approved by the board of directors, the preventive (risk control) internal audit shall be carried out for the control operations of each transaction cycle in all factory areas and subsidiaries. To expand the depth of internal audits and promote their greater synergy and contribution, the audit center proposes setting up project audit/supervision in board meetings to expand the scope of audits, conduct in-depth investigations, and put forward project audit/supervision reports based on the audit to enhance the comprehensivenss and contribution of internal audits. The audit center also checks the " Ethical Corporate Management Best Practice Principles " specified operation procedures, propaganda, and educational training of the implementation condition for the prevention plan of dishonest behavior based on the " Ethical Corporate Management Best Practice Principle Code of Inventec" and the "Ethical Corporate Management Best Practice Principle Codeproject audit of

Items	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
(5) If the Company organized training and awareness programs on ethical corporate management to internal and external parties?	✓		Inventec" approved by the Board of Directors, in view of the three high-risk factories and 11 high-risk subsidiaries. (5) To implement integrity management, the responsible unit shall promote the advocacy education of all colleagues, collect and draft important norms, such as the Code of Integrity Management, Operation Procedures and Conduct Guidelines, and Code of Conduct for Global Employees, and advocate matters that colleagues should pay attention to in the implementation of business activities. The integrity management training results from 2020 demonstrate integrity behavior related advocacy and the training ratio in Taiwan as 100%. Training hours totaled 61,991 hours and training expenditure was $7,812,039. There were no major breaches of theprinciple ofgood faith thisyear.	No difference
3.Implementation of whistleblowing system (1) If the Company established a whistleblowing and reward system? Upon receiving a reported case, is there a dedicated personnel handling the reported case? (2) Has the Company established investigation standard operating procedures for accepting accusations, the follow-up measures to be taken after the investigation, and a relevant confidentiality mechanism?	✓ ✓		(1) System management and special personnel for special responsibilities: In order to solve major violations or misconduct, etc. complained about by employees, the Company has set up external and internal complaint management. When employees suffer from improper, illegal, or unreasonable events, they can submit a complaint according to the complaint system. There were no employee complaints or labor cases opened in 2020. (2) Pursuant to the "Employee Complaints and External Reporting Management Specification", the Company has established investigation standard operation procedures and a confidentiality mechanism to accept reporting matters and imposes punishment by referring to trial principles. No appeals in 2020	No difference No difference

Items	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
(3) If the Company established any measures for protecting whistleblowers from inappropriate disciplinary actions?	✓		(3) In the "Employee Complaints and External Reporting Management Specifications", the Company has designated a dedicated complaint accepter and complaint and reporting hotline: Tel.: 2881-0721 ext. 21999 / E-mail: 21999 @inventec.com, and according to the treatment principle, the Company will protect the reporter from discriminations, threats, post transfers, and other unfavorable treatments	No difference
4. Information Disclosure If the Company disclosed ethical corporate management policy and its status of implementation via corporate website or Market Observation Post System?	✓		The website of the Company discloses such information as integrity operation, social responsibility, corporate culture, and operation policy.	No difference
5. If the Company established any guideline of ethical business conduct in accordance with “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies”, please state the implementation status of the guideline and any reasons for non-implementation? Pursuant to the "Listed Company Code of Integrity Operations", the Company formulated the "Inventec Corporation Code of Integrity Operation" in 2014. The fourth amendment was approved by the Board of Directors on August 13, 2019, and the operation has no difference from the rules.
6. If any other information that helped to understand the operation of ethical business conduct and its implementation? (1).Suppliers of the Company need to pass the supplier corporate social responsibility survey appraisal form with the aim that suppliers will fulfill corporate social responsibility. (2).The director conflict of interest system is stipulated in the "Rules for Board of Directors’ Discussion" of the Company in order to ensure that relevant resolutions have no damage to companyrights and interests.

Items	Implementation status	Implementation status	Implementation status	Non-implementation and its reason(s)
	Y	N	Summary
(3).Regarding major operation policies, investment cases, asset acquisition and disposal, bank financing, capital loan to other persons, endorsements, etc. of the Company, they shall be evaluated and analyzed by the relevant responsible unit and proposed to the Board of Directors for resolution. (4).Every year, all departments throughout the Company will carry out self-assessment operations, coordinate with the change of organization and environment in a timely manner, and review the appropriateness of the internal control system and whether colleagues are following the relevant regulations for business execution in order to ensure effective implementation of the internal control system of the Company.

2.3.8 Corporate Governance Guideline and Regulations

Please go to the Company website (http://www.inventec.com), and click on Investor Relations /Corporate Governance for inquiry.

2.3.9 Other Important Information Regarding Corporate Governance: None.

2.3.10 Internal Control System

2.3.10.1 Statement of Internal Control System

Inventec Corporation

Statement of Internal Control System

Mar. 30, 2021

Based on the findings of self-assessment, the Company states the following with regard to its internal control system in 2020:

The Company is fully aware that establishing, operating and maintaining an internal control system are the responsibilities of its Board of Directors and management. The aim of the internal control system is to provide reasonable assurance to effectiveness and efficiency of operations (including profitability, performance and safeguarding of assets), reliability, timeliness, transparency, and regulatory compliance of reporting and compliance with applicable laws, regulations, and bylaws.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can only provide reasonable assurance of accomplishing the aforementioned three objectives. Moreover, the effectiveness of an internal control system may be subject to changes of environmental or circumstances. Nevertheless, the internal control system of the Company contains self-monitoring mechanism and the Company takes corrective actions whenever a deficiency is identified.
The Company evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing Establishment of Internal Control Systems by Public Companies (herein below, the “Regulations”). The criteria adopted by the Regulations identify five components of internal control based on the process of management control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities. Each component further contains several items. Please refer to the Regulations for details.
The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.
Based on the findings of the assessment mentioned in the preceding paragraph, the Company believes that, as of December 31, 2020, its internal control system (including its supervision and management of subsidiaries), as well as its internal controls to monitor the achievement of its objectives concerning effectiveness and efficiency of operations, reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance with applicable laws, regulations, and bylaws, were effective in design and operation, and reasonably assured the achievement of the above-stated objectives.
This Statement will be integral part of the Company’s Annual Report and Prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.
This Statement has been passed by the Board of Directors in their meeting held on Mar. 30, 2021 with zero of nine attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

Inventec Corporation.

Chairman ： Cho, Tom-Hwar

President ： Wu, Yung-Tsai

2.3.10.2 If the Company is Requested by the SEC to Retain CPA’s Service for Examining Internal Control System, the Independent Auditor’s Report must be Disclosed: None

2.3.11 The Penalties Delivered to the Company and the Staffs of the Company, or the Penalties Delivered by the Company to the Staffs for Violations of Internal Control System, the Major Nonconformity, and the Corrective Action in the Most Recent Years and up to the Date of the Annual Report: None.

2.3.12 Resolutions Reached in the Shareholders’ Meeting or by the Board of Directors in the Most Recent Years and up to the Date of the Annual Report Printed:

2.3.12.1 The important resolutions of the general shareholder meeting:

Meetingdate	Abstract of Important Proposals	Implementation Status
2020.06.12	1. Proposal for the acknowledgment of the 2019 Business Report and financial statement of the Company.	Approved by 2,656,537,220 voting rights (among which, 1,290,885,944 voting rights were exercised electronically), accounting for 89.69% of the total voting rights. The approved voting rights exceed the statutory amount, and this proposal is passed.
	2. Proposal for acknowledgment of surplus dividend distribution of the Company in 2019.	Approved by 2,663,374,307 voting rights (among which, 1,297,723,031 voting rights were exercised electronically), accounting for 89.92`％`of the total voting rights. The approved voting rights exceed the statutory amount, and this proposal is passed. NT$1.3 cash dividend is alloted per share. Ex-dividend base date: July 21, 2020. Date of cash dividend distribution: August 11, 2020.
	3. Proposal to revise some articles of Rules of Procedure for Shareholders Meetings.	Approved by 2,649,252,050 voting rights (among which, 1,283,600,774 voting rights were exercised electronically), accounting for 89.45`％`of the total voting rights. The approved voting rights exceed the statutory amount, and this proposal is passed. The revised edition has been published on the company website.
	4. Proposal to revise some articles of Procedures for Acquisition or Disposal of Assets.	Approved by 2,327,693,756 voting rights (among which, 962,042,480 voting rights were exercised electronically), accounting for 78.59`％`of the total voting rights. The approved voting rights exceed the statutory amount, and this proposal is passed. The revised edition has been published on the company website.

	5. Proposal to propose to elect new directors.	The approved voting rights exceed the statutory amount, and this proposal is passed. The election result: The name of the board-elect are Cho Tom-Hwa, Yeh Kuo-I, Wen Shih-Chih, Lee Tsu-Chin, Chang Ching-Sung, Yeh Li-Cheng, Chang Chang-Pang (Independent Director), Chen Ruey-Long (Independent Director), and Wea Chi-Lin (Independent Director). The term will start from June 12, 2020 and conclude on June 11, 2023.
	6. Proposal for release the prohibition on new directors and their representatives from participation in competitive business.	Approved by 2,119,614,354 voting rights (among which, 1,201,049,260 voting were exercised electronically), accounting for 84.29% of the total voting rights. The approved voting rights exceed the statutory amount, and this proposal is passed.

2.3.12.2 The important resolutions of the Board of Directors:

MeetingDate	Important Resolution Matters
2020.01.16	Passed to sell real estate through the mainland reinvested company,Inventec(Pudong)Corp.
2020.01.21	Passed the acquisition of land for futureplant expansion through the North American subsidiary,IEC Technologies,S. de R.L. de C.V.
2020.02.25	Passed to extend the bankquotas.
2020.03.24	Passed Inventec Holding (North America) Corp. to increase capital in IEC Technologies, S. de R.L. de C.V., and acquisition of land through IEC Technologies,S. de R.L. de C.V.
	Passed to issue the 2019 "Inventec Corporation Internal Control System Statement".
	Passed the 2019 employees’,and directors’ rewards distribution as deliberated bythe Remuneration Committee of the Company.
	Passed the 2019 individual and consolidated financial statement,and business report of the Company.
	Passed the 2019 surplus distributionproposal of the Company.
	Passed the appointment of the certifiedpublic accountant.
	Passed the election of directors
	Passed to agree upon relevant matters of the 2020general meetingof the Company.
	Passed the nomination of director candidates
	Passed to remove the restriction of the board directors

MeetingDate	Important Resolution Matters
	Passed the revision of some articles of the Rules of Procedure for Shareholders Meetings.
	Passed the revision of some articles of the Procedures for Acquisition or Disposal of Assets.
	Passed the revision of some articles of Remuneration Committee Charter
	Passed the revision of some articles of Corporate Governance Best Practice Principles
	Passed the revision of some articles of Corporate Social ResponsibilityBest Practice Principles
	Passed to extend the bankquotas.
2020.04.28	Passed to extend the bankquotas.
2020.05.12	Passed the 2020Q1 consolidated financial statement of the Company.
	Passed Inventec (Pudong) Corp lend money to Inventec Asset-Management (Shanghai) Corporation.
	Passed to extend the bankquotas.
2020.06.12	Passed to election of the chairman.
2020.06.12	Passed appointment of general manager and removal of competition restrictions.
	Passed the appointment of members of the 4th Salaryand Compensation Committee
	Passed the investment in Chainwin Agriculture & Animal Technology (Cayman Islands)LTD.
2020.06.30	Passed to stipulate the ex-dividend base date of the cash dividend.
	Passed to appoint managers.
	Passed Inventec(Pudong)Corplend moneyto Inventec Hi-Tech Corp.
2020.07.28	Passed transfer investment companylegalperson designation.
2020.8.11	Passed the 2020Q2 consolidated financial statement of the Company.
	Passed the revision of “2020 Internal Audit Plan(2nd Edition)”.
	Passed the revision of some articles of Rules Governingthe Scope of Powers of Independent Directors
	Passed the revision of some articles of Rules of Procedure for Board Meetings.
	Passed the revision of some articles of Procedures for Election of Directors
	Passed the revision of some articles of Codes of Ethical Conduct
2020.09.29	Passed the investment in Shanghai Shun Chuan TechnologyCorp.
2020.10.27	Passed to extend the bankquotas.

MeetingDate	Important Resolution Matters
2020.11.10	Passed the "2021 Internal Audit Plan".
	Passed the revision of some articles of the internal control system.
	Passed the 2020Q3 consolidated financial statement of the Company.
	Passed the CPA's fees
	Passed the donation of TWD 10 million to Inventec Group Charity Foundation
2020.12.29	Passed the revision of some articles of Remuneration Committee Charter
	Passed the revision of some articles of Evaluation of the Board of Directors
	Passed 2021 businessplan
	Passed theparticipation in the capital increase of the reinvestment companyAIMobile Co.,Ltd.
	Passed the Company's director and manager remuneration,andyear-end bonusplan and employee and director remunerationproportion.
	Passed the Company's independent director remuneration
2021.01.26	Passed Inventec(Chongqing)Corp. 'splans topurchase equipment.
2021.01.29	Passed Inventec(Pudong)TechnologyCorp.'s and Inventec Hi-Tech Corp.'s asset disposalplanproposal.
2021.02.23	Passed manager dismissal.
2021.03.30	Passed to issue the 2020 "Inventec Corporation Internal Control System Statement".
	Passed the 2020 employees’,and directors’ rewards distribution
	Passed the 2020 individual and consolidated financial statement,and business report of the Company.
	Passed the 2020 surplus distributionproposal of the Company.
	Passed the appointment of the certifiedpublic accountant.
	Passed to agree upon relevant matters of the 2021general meetingof the Company.
	Passed the revision of some articles of the Rules of Procedure for Shareholders Meetings.
	Passed the revision of some articles of the Procedures for Election of Directors.
	Passed to remove the restriction of the board directors,Yeh,Li-Cheng
2021.04.27	Passed Inventec(Pudong)TechnologyCorp. and Inventec Hi-Tech Corp. idle asset disposalproposal
	Passed manager dismissal
	Passed Inventec (Pudong) Corp lend money to Inventec Asset-Management (Shanghai) Corporation.

MeetingDate	Important Resolution Matters
2021.05.11	Passed the 2021Q1 consolidated financial statement of the Company.

2.3.13 Major Issues of Record or Written Statement Made by Any Director Dissenting to Important Resolutions Passed by the Board of Directors in the Last Few Years and to the Date of the Annual Report: None.

2.3.14 Resignation or Dismissal of Chairman, President, and Heads of Accounting, Finance, Internal Audit and R&D during 2019 and as of the Annual Report Printing Date: None.

2.4. Certified Public Accountant (CPA) Fee Information

2.4.1 Range of CPAs’ Fee

CPA Firm	CPA	CPA	Auditing Period	Remark
KPMG	Lin Wan-Wan	Yang, Liu-Fong,	2020.01.01~2020.12.31	-

Unit: NT$ Thousands

				Unit: NT$ Thousands
Items Amount Bracket		Auditing Fees	Non-Auditing Fees	Total
1	Below 2,000 thousand
2	2,000 thousand (included) ~ 4,000 thousand (excluded)
3	4,000 thousand (included) ~6,000 thousand (excluded)
4	6,000 thousand (included) ~ 8,000thousand (excluded)		✓
5	8,000 thousand (included) ~ 10,000thousand (excluded)	✓
6	Over 10,000 thousand (included)			✓

Unit: NT$ Thousands

									Unit: NT$Thousands
CPA Firm	CPA	Auditing Fees		Non-Auditing Fees				Auditing Period	Note
			System Design	Industrial and Commercial Registration	HR	Others	Total
KPMG	Lin Wan-Wan	9,050	0	0	0	7,510	7,510	2020.01.01~2020.12.31	Other non-auditing costs primarily include such tax consulting fees as transfer pricing and special method of fund remittance.
	Yang, Liu-Fong							2020.01.01~2020.12.31

2.4.2 For the Non-Audit Fee Paid to CPA, CPA Firm, and Its Affiliate Greater than 25% of the Audit Fee, the Amount of Audit and Non-Audit Fee and Content of Non-Audit Service Should Be Disclosed:

The Auditing Costs Mainly Include the Financial Statement Review and Certificate Verification, Business Income Tax Settlement Declaration and Certificate Verification, Review of the Annual Report of the Shareholders' Meeting, English Report of Financial Statements, English report of Individual Financial Statements, etc. Other Non-Auditing Costs Primarily Include Such Tax Consulting Fees as Transfer Pricing and Special Method of Fund Remittance.

2.4.3 If the CPA Firm Changes, and the Audit Fee Paid in the Year of such Change is Reduced from the Audit Fee of the Previous Year, the Amounts of the Audit Fees Before and After such Change and the Reason of such Change Should Be Disclosed: None

2.4.4 If the Audit Fee Is Reduced by More than 10% from Last Year, the Amount, Ratio, and Reason for the Reduction of the Audit Fee Should Be Disclosed: None

: 2.5 Information Regarding the Replacement of CPA

As part of the internal rotation of the accounting department, from the first quarter of 2021, certified public accountants changes from CPA Lin Wan-Wan and CPA Yang, Liu-Fong to CPA Lin Wan-Wan and CPA Kuo, Rou-Lan, hence it is not applicable.

2.5.1 Former CPA Information:

2.5.1 Former CPA Information:
Date of alternation	March 30, 2021 (Approved by board meetings)
Reason for alternation	As part of the internal rotation of the accounting department
Please specify where the appointment is terminated or unaccepted by the appointer or CPA	Related parties Situation			CPA	Appointer
	Voluntarytermination of appointment			Not Applicable	Not Applicable
	No further acceptance(continuation)of appointment			Not Applicable	Not Applicable
Opinion and reason for any audit report other than unqualified opinion in the last two years		Not Applicable
Any disagreement with the issuer	Yes		Accounting principles orpractices
			Discloser of financial statement
			Scope or steps of the audit
			Others

	No
	Remarks : Not Applicable
Other disclosures	As part of the internal rotation of the accounting department, hence it is not applicable.

2.5.2 Successor CPA Information:

2.5.2 Successor CPA Information:
Name of the firm	Not Applicable
Name of the CPAs	Not Applicable
Date of appointment	Not Applicable
Prior to the formal engagement of the successor CPA, if the Company has consulted the CPA regarding the accounting treatment of or application of accounting principles to a specified transaction, or the type of audit opinion that might be rendered on the Company’s financial statement, what was the subject consulted and what was the result?	Not Applicable
The successor CPA’s written opinion regarding the matters on which the Company did not agree with the former CPA	Not Applicable

2.5.3 Reply of the Previous Accountant: As part of the internal rotation of the accounting department, hence it is not applicable.

2.6 Information on Services of the Company’s Chairman, Presidents, Financial or Accounting Managers at the Accounting Firm or Its Affiliates

If the chairman, president, and financial or accounting manager of the Company who had worked for the independent auditor or the related party in the most recent year, the name, title, and the term with the independent auditor or the related party must be disclosed: None.

2.7 Change in Shareholding of Directors, Managers and Major Shareholders Who Own 10% or More of Invnetec Corporation Shares

Invnetec Corporation	Shares
				Unit: Thousand shares
Title	Name	2020		2021/1/1~2020/05/12
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman	Cho,Tom-Hwar	0	0	0	0
Director	Yeh,Kuo-I	(50,000)	0	0	0
Director	Wen,Shih-Chih	0	0	0	0
Director	Lee,Tsu-Chin	0	0	0	0
Director	Chang,Ching-Sung	0	0	0	0
Director(Note2)	Huang,Kuo-Chun	0	0	Not Applicable	Not Applicable
Director(Note3)	Yeh,Li-Cheng	50,000	0	0	0
Independent Director	Chang,Chang-Pang	0	0	0	0
Independent Director	Chen,Ruey-Long	0	0	0	0
Independent Director(Note2)	Shyu,Jyuo-Min	0	0	Not Applicable	Not Applicable
Independent Director(Note3)	Wea,Chi-Lin	0	0	0	0
President	Wu, Yung-Tsai	0	0	0	0
Business GroupPresident	Chang,Hui	0	0	0	0
Business GroupPresident	Tsai,Chih-An	0	0	0	0
Senior Vice President	Chiu,ChuiI-Kuan	0	0	0	0
Senior Vice President	Chen,Yea-Ping	0	0	0	0
SeniorVicePresident	Yi,Fu-Ming	0	0	0	0
Senior Vice President(Note4)	Chen,Wei-Chao	0	0	0	0
Vice President	Chang,Nai-Wen	0	0	0	0
Vice President	Hong,Kuo-Ching	0	0	0	0
Vice President	ChangYiu-Lang	0	0	0	0
Vice President	Yu,Chin-Pao	0	0	0	0
Vice President	Chien,Kuei-Fen	0	0	0	0
Vice President(Note6)	Lou,Jin-Pang	0	0	Not Applicable	Not Applicable
Vice President	Tsai,Yuh-Chen	0	0	0	0
Vice President	Hsu,Ching-Wu	0	0	0	0
Vice President(Note5)	Chou,Shao-Hsin	0	0	Not Applicable	Not Applicable

Title	Name	2020	2020	2021/1/1~2020/05/12	2021/1/1~2020/05/12
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Vice President	Lin, Shu-Ju	0	0	0	0
Vice President(Note6)	Liu, Ta-Cheng	0	0	Not Applicable	Not Applicable
VicePresident	Yen ,Cheng-Lung	0	0	0	0
Vice President	Chao,Tsai-Hsiu	0	0	0	0
Vice President	Li,Jui-Chin	0	0	0	0
Senior Director of Information TechnologyCenter	Yu, Win-Chee	(80)	0	0	0
Senior Director of Talent Center	Lin,Shih-Pin	0	0	0	0
Director of Finance Center	Liang,Wen-Jan	0	0	0	0
Director of Finance Center	Hsaio,I-Ying	0	0	0	0

Note 1: The Company has no shareholder holding more than ten percent of the total stock.

Note 2: Director Huang, Kuo-Chun and independent director Shyu, Jyuo-Min resigned upon expiration of their terms on June 12, 2020. Note 3: Directors were re-elected on June 12, 2020; Yeh, Li-Cheng is the new director and Wea, Chi-Lin is the new independent director. Note 4: On June 30, 2020, Chen, Wei-Chao was appointed as the senior vice president, which took effect on July 1, 2020.

Note 5: On February 23, 2021, vice president, Chou, Shao-Hsin applied for retirement and was relieved of his managerial position on March 1, 2021. Note 6: On April 27, 2021, vice president, Lou, Jin-Pang and Liu, Ta-Cheng applied for retirement and were relieved of their managerial positions on May 1, 2021.

Note 7: The date of formulating data is the date of publication.

2.7.1 Information of Shares Transferred

2021/05/12 Unit: Share

2021/05/12						Unit: Share
Name	The reason	Date	Trading counterparties	Relation	Shares	Price
Yu, Win-Chee	Endowment	2020/07/06	Yu, Pei-Lun	Father and daughter	80,000	25.80

Note: The date of formulating data is the date of publication.

2.7.2 Information of Equity Pledged: None.

2.8 Information on the Relationship of the Top Ten Shareholders as Related Parties, Spouses, or Blood Relatives within Two Degrees

2021.04.20

Unit: Share

Name	Shareholding	Shareholding	Spouse and	Minor	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	The	Relationship
	Shares	%	Shares	%	Shares	%	Name	Relations
Yeh, Kuo-I	176,361,330	4.92%	69,314,117	1.93%	-	-	Yeh, Li-Chuan Yeh, Li-Cheng Kuo Hsieh Investment Co., Ltd. Fu Tai Investment Co., Ltd. Wang, Fu-Tai	Relative within the second degree of kinship Relative within the second degree of kinship Director Director Spouse
Shyh Shiunn Investment Corp.	139,416,690	3.89%	-	-	-	-	Wen, Shih-Chih	Chairman
Shyh Shiunn Investment Corp.: Representative, Wen,Shih-Chih	35,685,590	0.99%	37,399	0.00%	-	-
Lai-Chu Investment Co., Ltd.	136,721,634	3.81%	-	-	-	-	Yang, Yuan-Yuan	Chairman
Lai-Chu Investment Co., Ltd.Representative Yang,Yuan-Yuan	-	-	-	-	-	-	-	-

Name	Shareholding	Shareholding	Spouse and	Minor	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	The	Relationship
	Shares	%	Shares	%	Shares	%	Name	Relations
Fu Tai Investment Co., Ltd.	126,781,074	3.53%	-	-	-	-	Yeh, Li-Cheng Yeh, Kuo-I Wang,Fu-Tai	Chairman Director Director
Fu Tai Investment Co., Ltd. Representative, Yeh, Li-Cheng	117,412,472	3.27%	600,000	0.02%	-	-	Yeh, Kuo-I Wang, Fu-Tai Yeh, Li-Quan Kuo Hsieh Investment Co.,Ltd..	Relative within the second degree of kinship Relative within the second degree of kinship Relative within the second degree of kinship Chairman
Kuo Hsieh Investment Co., Ltd.	126,752,558	3.53%	-	-	-	-	Yeh, Li- Cheng Yeh, Kuo-I Wang,Fu-Tai	Chairman Director Director
Kuo Hsieh Investment Co., Ltd. Representative, Yeh, Li-Cheng	117,412,472	3.27%	600,000	0.02%	-	-	Yeh, Kuo-I Wang, Fu-Tai Yeh, Li-Quan Kuo Hsieh Investment Co., Ltd. Fu Tai Investment Co.,Ltd.	Relative within the second degree of kinship Relative within the second degree of kinship Relative within the second degree of kinship Chairman Chairman
Yeh, Li-Cheng	117,412,472	3.27%	600,000	0.02%	-	-	Yeh, Kuo-I Wang, Fu-Tai Yeh, Li-Quan	Relative within the second degree of kinship Relative within the second degree of kinship Relative within the second degree of kinship

Name	Shareholding	Shareholding	Spouse and	Minor	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	The	Relationship
	Shares	%	Shares	%	Shares	%	Name	Relations
							Kuo Hsieh Investment Co., Ltd. Fu Tai Investment Co.,Ltd.	Chairman Chairman
Yuanta/P-shares Taiwan Dividend Plus ETF	117,274,250	3.27%	-	-	-	-	-	-
Lee, Tsu-Chin	115,833,835	3.23%	-	-	-	-	-	-
Yeh, Li-Quan	93,398,405	2.60%	2,511,196	0.07%	-	-	Yeh, Kuo-I Wang, Fu-Tai Yeh, Li-Cheng	Relative within the second degree of kinship Relative within the second degree of kinship Relative within the second degree of kinship
Wang, Fu-Tai	69,314,117	1.93%	176,361,330	4.92%	-	-	Yeh, Li-Chuan Kuo Hsieh Investment Co., Ltd. Fu Tai Investment Co., Ltd. Yeh, Kuo-I	Relative within the second degree of kinship Director Director Spouse

Note 1: The top ten shareholders shall all be listed; for corporate shareholders, the name and representative of the corporate shareholder shall be listed respectively.

Note 2: The calculation of shareholding ratio means the calculation of shareholding ratio in the name of oneself, spouse, minor children, or other person. Note 3: For the corporate shareholders and natural person shareholders listed above, any relationship between and among them shall be disclosed. Note 4: Note: The date of formulating data is the book closure date of shares

2.9 Ownership of Shares in Affiliated Enterprises

2021.04.20 Unit: Thousand shares

2021.04.20					Unit: Thousand shares	Unit: Thousand shares
Long-Term Investment	Ownership by Inventec		Direct/Indirect Ownership by Directors and Management		Total
	Shares	%	Shares	%	Shares	%
Inventec Appliances Corporation	536,857	100.00%	-	-	536,857	100.00%
Inventec Besta Co., Ltd	23,405	37.53%	2,840	4.55%	26,245	42.08%
Inventec Investment Corporation	108,800	100.00%	-	-	108,800	100.00%
Inventec Solar Energy Corporation	108,150	33.45%	59,574	18.43%	167,724	51.88%
AIMobile Co., Ltd.	18,250	73.00%	-	-	18,250	73.00%

Note 1: It is the investment of Company by adopting the Equity Method.

Note 2: The date of formulating data is the book closure date of shares

Ⅲ . Capital O verview

3.1 Capital and shares

3.1.1 Capital and Shares 05/12/2021

Month/ Year	Par Value (NT)	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remark	Remark
		Shares (1,000)	Amount (NT$1,000)	Shares (1,000)	Amount (NT$1,000)	Sources of Capital (NT$10,000)	Capital Increased by Assets Other thanCash	Other
1988.11	10	22,060	220,600	22,060	220,600	Capital increase NT 3,000 by Cash	`－`	November 1, 1988 (77), No. 09283
1989.08	10	66,999	660,000	33,200	332,000	Capital increase NT 4,080.80 by Cash Capital increase NT 7,059.20 by Earnings	`－`	August 21, 1989 (78), No. 01724
1990.05	10	100,000	1,000,000	76,360	763,600	Capital increase NT 3,320 by Capital Surplus Capital increase NT 39,840 by Earnings	`－`	May 30, 1990 (79), No. 28599
1991.07	10	100,000	1,000,000	83,996	839,960	Capital increase NT 7,636 by CapitalSurplus	`－`	July 18, 1991 (80), No. 01592
1992.06	10	100,795	1,007,952	100,795	1,007,952	Capital increase NT 16,799.20 byEarnings	`－`	June 17, 1992 (81), No. 01286
1993.07	10	120,954	1,209,542	120,954	1,209,542	Capital increase NT 20,159 by Earnings	`－`	July 20, 1993 (82), No. 30624
1994.06	10	145,145	1,451,451	145,145	1,451,451	Capital increase NT 24,191 by Earnings	`－`	June 20, 1994 (83), No. 28255
1995.06	10	174,174	1,741,741	174,174	1,741,741	Capital increase NT 29,029 by Earnings	`－`	June 21, 1995 (84), No. 36512
1996.06	10	226,426	2,264,263	226,426	2,264,263	Capital increase NT 52,252 by Earnings	`－`	June 21, 1995 (84), No. 38703
1997.05	10	600,000	6,000,000	508,560	5,085,604	Capital increase NT 282,134 by Earnings	`－`	May 06, 1997 (86), No. 36918
1998.05	10	1,000,000	10,000,000	835,407	8,354,069	Capital increase NT9,663 by Eapital Surplus Capital increase NT 317,184 by Earnings	`－`	May 12, 1998 (87), No. 41354
1998.05	10	1,000,000	10,000,000	855,407	8,554,069	Capital increase NT 20,000 by Cash	`－`	May 20, 1998 (87), No. 41353
1999.05	10	1,250,000	12,500,000	1,140,000	11,400,000	Capital increase NT 284,593 by Earnings	`－`	May 17, 1999 (88), No. 46068
2000.05	10	1,500,000	15,000,000	1,375,860	13,758,600	Capital increase NT 22,800 by Capital Surplus Capital increase NT 213,060 by Earnings	`－`	May 22, 2000 (89), No. 43743
2001.05	10	2,000,000	20,000,000	1,660,700	16,607,000	Capital increase NT 27,517.2 by Capital Surplus Capital increase NT 257,322.8 byEarnings	`－`	May 18, 2001 (90), No. 130976
2002.06	10	2,000,000	20,000,000	1,835,000	18,350,000	Capital increase NT 24,910.5 by Capital Surplus Capital increase NT 149,389.5 by Earnings	`－`	June 14, 2002 (91), No. 132472
2003.06	10	2,500,000	25,000,000	2,026,000	20,260,000	Capital increase NT 191,000 by Earnings	`－`	June 18, 2003 (92), No. 0920127026

Month/ Year	Par Value (NT)	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remark	Remark
		Shares (1,000)	Amount (NT$1,000)	Shares (1,000)	Amount (NT$1,000)	Sources of Capital (NT$10,000)	Capital Increased by Assets Other thanCash	Other
2004.06	10	2,500,000	25,000,000	2,137,000	21,370,000	Capital increase NT 111,000 by Earnings	`－`	June 08, 2004 (93), No. 0930125427
2005.06	10	2,500,000	25,000,000	2,205,700	22,057,000	Capital increase NT 68,700 by Earnings	`－`	June 24, 2005 (94), No.0940125418
2006.06	10	2,500,000	25,000,000	2,301,000	23,010,000	Capital increase NT 95,300 by Earnings	`－`	June 27, 2006 (95), No. 0950126555
2007.06	10	2,500,000	25,000,000	2,427,800	24,278,000	Capital increase NT 126,800 by Earnings	`－`	June 25, 2007 (96), No. 0960031988
2008.06	10	3,000,000	30,000,000	2,561,000	25,610,000	Capital increase NT 133,200 by Earnings	`－`	June 24, 2008 (97), No. 0970031477
2009.06	10	3,000,000	30,000,000	2,821,426	28,214,260	Capital increase NT 260,426 by Earnings	`－`	June 25, 2009 (98), No. 0980031805
2010.06	10	3,000,000	30,000,000	2,962,497	29,624,973	Capital increase NT 141,071 by Earnings	`－`	June 25, 2010 (99), No. 0990032858
2011.08	10	3,500,000	35,000,000	3,468,922	34,689,218	Capital increase NT 506,425 by Merging	`－`	August 19, 2011 (100), No.1000037640
								September 01, 2011 (100),No. 1000041230
2011.10	10	3,500,000	35,000,000	3,466,159	34,661,595	Cancellation of Treasury Stocks NT2,762	`－`	`－`
2012.06	10	3,650,000	36,500,000	3,587,475	35,874,751	Capital increase NT 121,316 by Earnings	`－`	June 27, 2012 (101), No.1010028496

Unit: Share; 05/12/2021

Shares Category	Authorized Capital	Authorized Capital	Authorized Capital	Remarks
	Issued Shares(Listed)	Non-Issued	Total
Registered Common Shares	3,587,475,066	62,524,934	3,650,000,000

Information for shelf registration: None

3.1.2 Composition of Shareholders

04/20/2021

						04/20/2021
Item	Government Agencies	Financial Institutions	Other Juridical Person	Domestic Natural Persons	Foreign Institutions and Natural Persons	Total
Number of Shareholders	10	76	202	135,784	836	136,908
Shareholding (shares)	15,145,555	347,803,295	742,418,848	1,633,227,124	848,880,244	3,587,475,066
Percentage	0.42%	9.70%	20.69%	45.53%	23.66%	100.00%

3.1.3 Shareholding Distribution Status

04/20/2021

3.1.3 Shareholding Distribution	Status		04/20/2021
Class of Shareholding (Unit : Share)	Number of Shareholders	Shareholding (Shares)	Percentage
1~ 999	29,792	8,622,008	0.24%
1,000~ 5,000	76,423	168,750,331	4.70%
5,001~ 10,000	16,210	124,723,393	3.48%
10,001~ 15,000	4,856	60,815,365	1.70%
15,001~ 20,000	2,975	55,053,563	1.53%
20,001~ 30,000	2,416	61,761,339	1.72%
30,001~ 40,000	1,050	37,609,994	1.05%
40,001~ 50,000	719	33,696,941	0.94%
50,001~ 100,000	1,196	85,971,626	2.40%
100,001~ 200,000	567	80,481,723	2.24%
200,001~ 400,000	261	74,132,783	2.07%
400,001~ 600,000	102	50,314,593	1.40%
600,001~ 800,000	57	39,713,539	1.11%
800,001~1,000,000	31	28,101,234	0.78%
1,000,001~999,999,999	253	2,677,726,634	74.64%
Total	136,908	3,587,475,066	100.00%

Preferred share: The Company did not issue any preferred share.

3.1.4 List of Major Shareholder

04/20/2021

	04/20/2021	04/20/2021
Shareholder's Name	Shareholding
	Shares	Percentage
Yeh, Kuo-I	176,361,330	4.92%
Shyh Shiunn Investment Corp.	139,416,690	3.89%
Lai-Chu InvestmentCo., Ltd	136,721,634	3.81%
Fu Tai Investment Co., Ltd	126,781,074	3.53%
Kuo Hsieh Investment Co., Ltd	126,752,558	3.53%
Yeh, Li-Cheng	117,412,472	3.27%
Yuanta/P-shares Taiwan Dividend Plus ETF	117,274,250	3.27%
Lee, Tsu-Chin	115,833,835	3.23%
Yeh, Li-Quan	93,398,405	2.60%
Wang, Fu-Tai	69,314,117	1.93%

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3.1.5 Market Price Per Share, Net Value, Earnings and Dividends for Latest Two Years

Unit：NT$ ； Thousand shares

	Year	Year	2019	2020	01/01/2021
Item					~03/31/2021
Market Price per Share (Note1)	Highest Market Price		25.55	28.40	28.00
	Lowest Market Price		20.50	18.75	22.65
	Average Market Price		23.10	23.46	25.29
Net Worth Per Share	Before Distribution		15.41	16.16	14.65
	After Distribution		14.11	14.31 (Note5)	`－`
Earnings Per Share	Weighted Average Share Numbers		3,587,475	3,587,475	3,587,475
	Earnings Per Share		1.54	2.10	0.32
Dividends Per Share	Cash Dividends		1.30	1.85 (Note5)	`－`
	Stock Dividend	Dividends from Retained Earnings	`－`	`－`	`－`
		Dividends from Capital Surplus	`－`	`－`	`－`
	Accumulated Undistributed Dividends		`－`	`－`	`－`
Return on Investment	Price / Earnings Ratio (Note2)		15.00	11.17	`－`
	Price / Dividend Ratio (Note3)		17.77	12.68 (Note5)	`－`
	Cash Dividend Yield Rate (Note4)		6%	8% (Note5)	`－`

Note1: Source of the materials: Taiwan Stock Exchange Corporation

Note2: Price / Earnings Ratio = Average Market Price / Earnings Per Share Note3: Price / Dividend Ratio = Average Market Price / Cash Dividends Per Share Note4: Cash Dividend Yield Rate = Cash Dividends Per Share / Average Market Price Note5: Including 2020 dividend amount resolved by the Board on March 30, 2021

3.1.6 Corporate Dividend Policy and Implementation Condition

1. Corporate dividend policy

Pursuant to the provisions of the Articles of Incorporation, if there is a surplus in the general annual report of the Company, it shall first be used to pay taxes and offset accumulated losses, and then 10% will be withdrawn as a statutory surplus reserve, except when the statutory surplus reserve has accumulatively reached the total paid-up capital of the Company. Furthermore, the special surplus reserve shall be set or returned according to the operation demand of the Company and pursuant to relevant laws and decrees. If there is still surplus and accumulated undistributed surplus, a proper amount shall be reserved according to operation demand, and a dividend of no less than 10% of the surplus in the current year shall be paid. The Board of Directors shall prepare a surplus distribution proposal and submit it to the Shareholders' Meeting for acknowledgment. The dividend policy of the Company considers the future fund demand and long-term financial planning of the Company, as well as shareholders' demand on cash inflow. If there is a surplus in the annual report, the cash dividend distributed every year shall not be less than 10% of the total cash and stock dividend distributed in the current year.

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2. Dividend distribution situation

The dividend distribution situations of the Company for past five years are summarized in the following table:

following table:
Year	2016	2017	2018	2019	2020
Cash Dividend	1.45	1.65	1.50	1.30	1.85
Stock Dividend	-	-	-	-	-

3.1.7 The Impact of Stock Grants Proposed by the Shareholders' Meeting at this Time on Company Business Performance and Earnings Per Share: This (2021) Shareholders' Meeting has not proposed any stock grants.

3.1.8 Remuneration of Employees, and Directors

Percentage or scope of remuneration of employees, and directors as stated in the Articles of Incorporation
According to the Articles of Incorporation of the Company, if the Company experiences overall annual profit, no less than 3% shall be allocated as employee remuneration and no more than 3% as director remuneration. However, when the Company has accumulated losses, it shall reserve the compensation amount in advance. Employee remuneration may be issued in cash or stock, the issuing object may include employees subordinated to the Company and conforming to certain conditions, and the conditions and methods thereof will be stipulated by the Board of Directors.
Estimation base of employee, and director remuneration in this estimation, the number of shares calculation base for employee remuneration in stock distribution, and accounting treatment when the actual distribution amount differs from the estimated amount.
(1) Estimation base of employee, and director remuneration in this estimation: Pursuant to the Articles of Association of the Company, if the Company experiences overall annual profit, no less than 3% shall be allocated as employee remuneration and no more than 3% as director remuneration. However, when the Company has accumulated losses, it shall reserve the compensation amount in advance.
(2) The number of shares calculation base for employee remuneration in stock distribution: In this period, no employee remuneration is in stock distribution.
(3) When the actual distribution amount differs from the estimated amount, the balance thereof will be listed as cost adjustments in the actual distribution year.

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Situation of the Board of Directors' passing remuneration distribution
(1) The amount of employee, and director remuneration in cash or stock distribution. If it differs from the estimated amount in the recognized expense year, the balance, reason, and handling situation shall be disclosed: the Board of Directors passed a resolution, determining that the remuneration of employees in 2020 is NT$ 675,529,321, and the remuneration of directors in 2020 is NT$ 123,673,830, which are the same as the recognized expense amount in 2020.
(2) The proportion of employee remuneration amount in stock distribution in the net profit after tax in individual financial statements of this period and the total employee remuneration: None
For the actual distribution situation of employee, and director remuneration last year (including distributed shares, amount, and stock price), if it differs from the recognized employee, and director remuneration, the balance, reason, and handling situation shall be specified.

In 2019, the relevant information on the employee and director remuneration is summarized below: Employee bonus distribution: NT$ 424,704,269; director remuneration distribution: NT$ 77,753,550 and the total distribution amount is NT$ 502,457,819. It is the same as the recognized expense amount in 2019.

The distribution situation passed by the Shareholders' Meeting is the same as the proposed situation passed by the Board of Directors.

3.1.9 Company’s Situation Regarding Buying Back Company Shares: None.

3.2 Bonds: None.

3.3 Preferred Shares: None.

3.4 Global Depository Receipts: None.

3.5 Employee Stock Options: None.

3.6 Restricted Employee Shares: None.

3.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions: None.

3.8 Financing Plans and Implementation

3.8.1 Plans: None.

3.8.2 Implementation: None.

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Ⅳ . Operational Highlights

4.1 Business Activities

4.1.1. Business Scope

Major business contents

The major business items of the Group include the manufacturing and sale of computer software and hardware products, as well as the assembly and sale of communication and digital assistant products, etc.

Proportion of consolidated business

Year Item	2019	2020
IT Product	99.18%	99.77%
Others	0.82%	0.23%
Total	100.00%	100.00%

Commodity items and new commodities planned to be developed
A. Personal information products: Notebook PC, Desktop, AIO and Thin Client.
B. Business solutions: servers, blade servers, network switches, storage equipment, rack solutions and server management software, etc.
C. Smart devices include smart hand-held products, portable automatic navigation devices, media players, video and imaging products, and wearable devices.

4.1.2 Industry Overview

The current situation and development of the industry
(1) Notebook computers
- Although the delivery momentum of notebook computers globally has been slow in recent years, the demand for notebook computers surged in the second quarter due to the popularization of telecommuting and remote teaching caused by the global epidemic in 2020 (according to statistics from the Institute for Information Industry (III)). The purchase boom of notebook computers in the second half of the year remained strong due to the delayed delivery of orders caused by the shortage of some parts and components, as well as the increased demand for online entertainment and home economy due to the limitation of people's daily activities. In addition, notebook sales continued to flourish in the fourth quarter due to increased e-commerce and the Christmas shopping season. In 2020, shipments of notebook computers in Taiwan was about 161 million, a sharp increase of 24.81% from the previous year.

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Looking to 2021, the COVID-19 epidemic is still not completely eliminated, so remote work, classes and online entertainment have become daily activities in many sectors. Although the demand for notebook computers remains optimistic, the serious shortage of materials has led to the postponement of orders. Moreover, transportation costs and time have increased significantly due to the impact of the epidemic, so it is still difficult for consumers to buy notebook computers. Affected by Covid-19, the global political environment and the unstable economic situation will become the norm and will test how major factories face the fluctuation of supply and demand in the short term, and the adjustment of the long-term global layout and supply chains.

(2) Servers and Cloud computing

In response to the demand of recent years to store large amounts of digital data, manufacturers from all around the world have successively joined the field of cloud computing and driven various innovative services. With the constant ramp-up of output value of the cloud industry as a whole, the number of companies investing in cloud services is increasing. The growth momentum of global servers is mainly from large data centers in the US. Meanwhile, telecom and internet service providers in mainland China are also growing, the demand for data processing and storage is rising, and shipments from mainland China data centers are continuously increasing.

In terms of server shipments in 2020, DIGITIMES Research analyzed that while shipments dropped sharply in the first quarter due to the Covid-19 outbreak, they peaked in the second quarter as the supply chain resumed normal operations. In the second half of the year, the high demand for cloud services due to remote working and learning continued as the global epidemic swept the globe, and the overall server market remained hot. It is estimated that shipments of servers increased by 7.9% year on year to 16 million units in 2020. Looking ahead to 2021, Covid-19 will continue having an impact on supply chain component acquisition, assembly and testing operations. However, the demand for large data centers for cloud services, online shopping, video and audio platforms will continue to expand in response to new lifestyles derived from the epidemic. In addition, the launch of new generation CPU platforms of two major brands will trigger a replacement trend, so server shipments worldwide will hopefully maintain growth momentum in 2021; volumes in Taiwan plants alone are expected to grow by nearly 6%.

(3) Smart device

According to data from the III, global shipments of smart phones in 2020 were around the 1.239 billion mark; a decrease of 13.7% compared to that in 2019. Affected by Covid-19, the supply chain was shut down for a period in the first half of the year and the subsequent supply of raw materials and components was tight. Countries also suffered at economic level and the demand for consumer products was severely impacted. Due to the low comparative base period, it is estimated that the number of smart phones globally will reach 1.352 billion in 2021, with an annual growth rate of 9.1%.

Furthermore, the increased emphasis on health surveillance and the need for close monitoring of health conditions due to the Covid-19 outbreak, coupled with the greater

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reliance of consumers on smart watches and earwear devices for remote work, fitness activities and health tracking, have boosted sales of wearable devices. Wearables sales overall reached $69 billion in 2020, up 49.3% from 2019, according to research firm Gartner, among which earwear devices topped the list, followed by smart watches. This market is expected to continue to grow to US $81.5 billion in 2021; an annual increase of 18%.

2. Relevance of upstream, midstream, and downstream of the information hardware industry

Upstream component manufacturing industry (1) CPU (2) ODD (3) HDD (4) LCD panel (5) Battery (6) Memory (7) Network device (8) Keyboard (9) Mainboard (10) Adaptor (11) Other components	Midstream semi-finished products processing industry Module and Assembly	Downstream product
		distribution industry Distributor

3. All kinds of product development trends and competition situations

(1) Notebook computers

In the face of the highly competitive situation in the notebook computer market, brand manufacturers continue to launch products combining all kinds of new technology applications. As a highly mature product market, low prices are not the main consideration of consumers, but rather function and quality. In addition to the development of high-price and high-standard game e-sports notebook computers, mainstream ones of major manufacturers also actively introducing new applications such as dual screens, folding functions, 5G communications and AI chips. Niche products are one of the development priorities of notebook computers. After the COVID-19 epidemic, remote work environments are expected to become an important part of the future for governments, businesses and schools around the world, which is particularly beneficial to the development of the notebook computers market. Commercial computers focus on high efficiency, high endurance, light weight and good online ability. Additionally, the importance of asset security has been highlighted due to remote working. AI technology helps to improve asset security protection and optimize the user experience.

106

(2) Server and cloud computing

As for cloud services, it also focuses on the development of emerging technologies with the continuous growth of demand in addition to the transfer of basic services. Meanwhile, hardware also needs to be improved so that software and hardware can be integrated to support the application of related technologies. To meet the needs of the cloud market, manufacturers are actively developing new technologies to meet this market demand, such as introducing edge computing driven by the development of 5G and the Internet of Things to solve real-time demand and apply blockchain technology gradually in commercial fields. Technologies such as AI, and Container and Quantum Computing are also subjects for sustainable development.

With the rise of large-scale data centers and white box servers, manufacturers are actively exploring new markets and customers, providing more value-added service solutions that rely on the excellent production base of terminal products, including storage, software and services as part of the overall server bundling model, all of which helps solve local data center hardware integration problems. To fulfill market demand, server computing capacity needs to be enhanced. A single CPU has been unable to meet the current computing market in recent years. A server with GPU (a graphics processor unit), FPGA (a field programmable logic gate array), and ASIC (a special application integrated circuit) has become the focus of development following the gradual increase in demand of the artificial intelligence computing market. This trend is also expected to increase the growth force of the overall cloud server market as demand for the construction of artificial intelligence server infrastructure grows.

(3) Smart devices

Faced with a mature industry environment, smartphone manufacturers continue to improve hardware specifications and cost performance as part of the strategy to increase market share through lower-tier models. In terms of product line planning, hardware and software specifications are enhanced, while panel and memory specifications are continuously improved. Industrial competitiveness is not only reflected in the research and development of high-speed computing capabilities of basic products, but also through the introduction of new technologies such as 3D sensing, wireless and fast charging functions, AI chips and multi-lens configuration. Manufacturers are also actively engaged in the research and development of folding panels and 5G related technologies, which are expected to offer consumers a better experience.

In addition to the continuous development of wearable devices in watches, wireless earphones and head-mounted cameras, the application of related products in cross-industries are also expanding, such as heart rate sensors in sports and medical fields, noise reduction of hearing aids, and sleep measurement devices. In medical treatments, smart patches with non-invasive health monitoring and sensing is a growing rapidly area; devices can be applied on the surface of the skin to measure body vitals such as temperature, heartbeat, and blood glucose levels. Some products can even inject insulin for diabetic patients with better effects than other wearable devices; this is expected to become a new trend in the wearable device market in the future.

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The development of 5G worldwide has brought a new wave of demand for the Internet of Things. Connectivity and remote-control terminals in the smart home is the future trend. Additionally, intelligent medical and automotive electronics will also gain new growth momentum. Since wearable devices can meet the needs of consumers in various markets and users are categorized into more and more detailed groups, the design and development of products are gradually diversified to present a small number of verified competitors. In the future, a company must have good product design, and production and marketing capabilities to gain an advantage in this market.

4.1.3 Overview of Technology and Research and Development

Table of research and development expenditure investment by the Group in the past two years

years
Year	2019	2020
R&D Expenses (Unit: NT$ Thousand)	9,523,033	9,715,204
R&D Expenses to Revenue (%)	1.90	1.91
Growth Rate (%)	8.14	2.02

"Innovation" is the basic spirit of the Group foundation’s operation philosophy; it is the best medium for shaping our enterprise's differentiation value, as well as our commitment to our customers and partners. Therefore, we pay special attention to innovation research and development and patents for invention in order to improve the international competitiveness and influence of our Group. Over the years, the Group has invested considerable amounts of expenditure into product research and development, with the research and development expenditure of the Group in the past two years reaching NT$9.52 billion and NT$9.72 billion, respectively. In the future, we will continue to invest large amounts of funds. We will be dedicated to the improvement and expansion of original product line function, understanding the demand of end consumers through product innovation, and participation in the research and development design of major international manufacturers in order to strengthen the market concept of original product design. We will further master, collect, and analyze the after-sales demands of consumers through a global logistics service structure. Moreover, we will actively cooperate with major component manufacturers, fully master the core design capability, and establish cross-domain technology application platforms by integrating software and hardware with integrative functions.

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4.1.4 Long-Term and Short-Term Business Development Plans

Short-term business development plans
(1) Research and develop demand-oriented products and expand the depth and width of product research and development level.
(2) Starting with "innovation", "quality", "open mind” and “execution” management ideas, the Company’s operation technology and management tools are integrated to improve business performance.
(3) Adheres to industry regulations, strives for innovation and improvement, and meets customer and market needs in the quickest and most direct way.
(4) Actively carry out global arrangement, properly utilize each local resource advantage, and construct an optimized global supply chain and operation network.
Long-term business development plans
(1) Establish three technology development centers to deploy AI, Industry 4.0 and 5G.
(2) Combine industry trends, continue the transformation of laptops, and continue to develop four major areas (servers, industrial Internet of Things, smart devices, and smart homes).
(3) Focus on new business opportunities for long-term development; automotive electronics and medical care.
(4) Under omni-directional thinking, carry out enterprise innovation and strategic layout to achieve the goal of sustainable growth, protect employees' rights and interests, and implement corporate social responsibility.

4.2 Market and sales overview

4.2.1 Market Analysis

Sales Territory of Major Products

Major Product Department	Name	Major Sales Territory
Computer product	Notebook computers, servers, and other electronic information products	America, Europe, Asia

Market share, supply and demand situation, and growth in the future market
(1) Notebook computers

Due to the Covid-19 outbreak, remote environments have become an important trend of the future of work. Compared to desktop computers, light and convenient notebook computers are more flexible and meet market preferences. The development of the notebook computer industry in Taiwan is strongly connected with global industrial development factors and deeply affected by the outsourcing strategy of customers. With

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continuous emphasis on efficiency and specification improvement by major brands, Taiwan leads the world in design and manufacturing technology, and still has considerable advantages in contract manufacturing of mid-to-high end notebook computers. Moreover, due to their global operational capability, rapid response and economic scale, Taiwan OEM manufacturers are still commissioned with design and manufacturing contracts by international brands with a leading global market share. Adhering to the concept of continuous innovation, the Group has won customers' favor for its technical strength of notebook computer research and design by providing customers with a full range of product specifications, solutions, and services, and investing in a professional research and development team to drive excellent product design and quality assurance. By virtue of this excellent global operation and research service capacity, the most flexible production modes, and localization of customer production modes, it has become the world's leading manufacturer of notebook computers. Looking to 2021, the market remains uncertain due to Covid-19, and the consequential problem of component availability, which will affect the overall sales of notebook computers.

(2) Servers and Cloud computing
Cloud computing and mobile devices have developed rapidly in recent years, and the growing demand for new technology applications has promoted the growth of the whole cloud market. In addition to the traditional server business, manufacturers in Taiwan are actively accelerating transformation and upgrading to provide software and hardware integrated data center solutions in addition to hardware OEM, and are strengthening the competitiveness of the whole cloud data center market. The Group has actively developed cloud services for the past few years, focusing on the Internet of Things, big data and cloud technologies to promote the development of the industry. It also continues to further increase research and development investment to link servers and artificial intelligence to the Internet of Things. Furthermore, it has also introduced smart factories combined with 5G for the server production line, and carries out related solution development to continuously improve on its competitive advantages and business performance; paying particular attention to customer development and research and development. Recently, new platforms have been launched in two major CPU manufacturers and the long-distance demand brings business opportunities to the commercial, educational and consumer markets. It is expected that cloud computing demand will continue on this upward trajectory, and large data center servers will benefit. The future operation performance of the Group will continue to be enhanced.

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(3) Smart devices

The penetration rate of smart phones in the market is high and growth rate flat. The sales volume in the future will mainly depend on replacement trends when contracts expire or products fail, but growth momentum looks optimistic thanks to 5G mobile communication technology. With the introduction of 5G mobile phones, new products launched by brand manufacturers are gradually marked at affordable prices, which is conducive to further promoting the general public to upgrade 5G terminals and adopt services in the process of 5G commercialization. On the whole, the cooperative relationship between mobile phone brand manufacturers and OEM is stable, but both stakeholders need to pay close attention to market development trends to meet the challenge of intense competition. By continuously innovating customer value, the Group is committed to strengthening design, testing and manufacturing capabilities, and is actively integrating design and OEM processes. With the maturity of research and development, testing technology and product design capabilities, the Group will no doubt occupy a place in the field of smart phone manufacturing.

Smart wearable devices have grown significantly in recent years and come in various forms. Major brands are committed to designing wearable devices independent of smart phones, and are actively combining the data collected by wearable devices with user information. Suggestions to increase product differentiation and practicality will enhance its added value. Smart wearables, smart speakers, smart homes, and 5G modules and devices are expected to maintain steady growth in the next few years. With existing design and manufacturing advantages as well as long-term accumulated technology development and service experiences in the fields of intelligent terminal, broadband and acoustics from software to hardware, testing, verification, design, and production, intelligent devices and other application products produced can meet customer needs and create maximum value. In the future, the Group will continue to focus on new business opportunities for long-term development, such as smart home and medical care products, and aim to continue enterprise innovation and strategic planning to achieve sustainable growth goals.

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Competition niche, favorable and unfavorable factors in development prospects, and solutions
(1) Favorable factors
- A. Smart production becomes a trend
  - With the advent of the 5G era, 5G smart manufacturing is expected to provide faster and more flexible production capacity for the production line, which is a key business opportunity for the manufacturing industry to actively deploy. The Group continued to expand its resources, actively develop 5G private network system integration and architecture capabilities, and successfully transformed its manufacturing factory into a 5G smart factory. By combining Industry 4.0 and 5G applications, we will move towards building a global smart manufacturing factory.
- B. Cloud computing is the mainstream in future development
  - The cloud computing industry and big data are both growing rapidly. In the future, the cloud application business opportunities are infinite. The Group has been the industry leader in the aspect of server OEM; through existing hardware technology and application software development, we can take our place in the cloud computing industry.
- C. Construct an all-around system product line
  - Based on the good foundation of an existing all-around product line, in addition to continuing to consolidate the notebook computer and server product fields, the Group is also gradually expanding to relevant fields such as peripheral software products, electronic information products, etc. with higher added value.
- D. Establishment of a global logistics supply chain system
  - In addition to strengthening the status of global manufacturing, research and development, and the logistics center, the Group is also actively utilizing production advantages and research and development factors in the Greater China economic circle in order to construct a real time co-working platform with high efficiency and a market feedback mechanism, and together with the setup of a research and development innovation center, we will enhance technology and product design innovation capability.
(2) Unfavorable factors
- A. Industrial technology is rapidly changing and constantly updating the environment of shortening product life cycle and meager profits, causing fierce industry competition.

Solution: The Group will formulate a relevant operation risk management mechanism to consider various operation strategies as relevant solutions; in addition to coordinating with customers for the research and development of relevant demanded commodities, we are also dedicated to patent and intellectual property innovation in order to strengthen Group resource integration and expand emerging business investments and arrangements to respond to changes in the market.

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B. The rapid expansion of low-cost computers, and the development of leading industry standards by suppliers and brand manufacturers, and the pulsation of mastering channels have squeezed downstream manufacturer profits.

Solution: In addition to being dedicated to the development of high added value products and all-around products, we also actively improve operation efficiency in such aspects as production, marketing, logistics, etc. to reduce operation costs and improve overall operation efficiency through constructing Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and six sigma improvement strategy.

C. Since manufacturers in our country cannot sufficiently supply some important key components, and we still rely on supply from overseas manufacturers, controlling both material sources and price is not easy.

Solution: The Company has long-term cooperative and strategic ally relationships with major suppliers and has established multiple supply sources for important components to ensure sufficient component supply; we also seek all kinds of approaches to integrate the supply chain and reduce the impact.

D. Our business is mainly export sales, so the change of exchange rate will significantly impact company revenue and profit-making.

Solution: Most of the important components of the Company are purchased and imported overseas and priced with foreign currency, and the sales are mostly priced with foreign currency, which can naturally offset the impact of change of exchange rate on revenue and cost. Furthermore, taking currency hedging measures can help us reasonably avoid exchange rate risk.

4.2.2 Important Uses and Production Processes of Major Products

1. Important uses of major product

Product name	Product type	Important use
Computer products	Notebook computers, servers, and other electronic information products	Notebook computers are used for the storage, computing, and analysis of digital and character data, data transfer and receiving, etc. Through a server host machine, several computers can execute the function of computing, transfer, and data storage at the same time.

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2. Production process

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Automatic assembly Semi-finished product assembly
SMT op eration Automatic assembly LCMSemi-semifinished product assembly-finished product assembly
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SA operation Test
SA operation
Welding repair and troubleshooting Process inspectiontest
Welding repair and troubleshooting
Test
Process inspection
Test
Finished product F inished product assembly
assembly Image DL
PackingPacking Finished product Finished product
Finished product assemblyFinished product assembly Image DL shipment
shipment
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Outgoing quality
Outfit assemblyOutfit assembly Visual inspection Process inspection Outgoing quality controlcontrol
on appearance
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4.2.3 Major Raw Materials' Supply Condition

The major raw materials of the Group include central processing units, liquid crystal displays, hard disks, etc. For the stability with regard to the quality of raw materials suppliers, both delivery accuracy and quality specifications are factors in choosing suppliers. The Group maintains a good cooperative relationship with its suppliers while adopting a decentralized procurement process. We not only aim to strengthen the collection and analysis of market conditions, but also strive for timely material supply to ensure reasonable costs and sufficient material supply.

Key Material Suppliers

Item	CPU	PANEL	SSD	HDD
Suppliers	INTEL	AUO	KIOXIA	WD
	AMD	BOE	SAMSUNG	TOSHIBA
	-	INX	WD	SEAGATE

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4.2.4 Major Accounts in the Past Two Years

A. Major Suppliers

									Unit: NT$Thousand As of end of Q1, 2021 Company Amount Percentage of total Net Purchases Relationship with the issuer A 57,879,701 52 Nil Others 53,236,560 48 - Total Net Purchases 111,116,261 100 - Unit: NT$Thousand	Unit: NT$Thousand As of end of Q1, 2021 Company Amount Percentage of total Net Purchases Relationship with the issuer A 57,879,701 52 Nil Others 53,236,560 48 - Total Net Purchases 111,116,261 100 - Unit: NT$Thousand	Unit: NT$Thousand As of end of Q1, 2021 Company Amount Percentage of total Net Purchases Relationship with the issuer A 57,879,701 52 Nil Others 53,236,560 48 - Total Net Purchases 111,116,261 100 - Unit: NT$Thousand	Unit: NT$Thousand As of end of Q1, 2021 Company Amount Percentage of total Net Purchases Relationship with the issuer A 57,879,701 52 Nil Others 53,236,560 48 - Total Net Purchases 111,116,261 100 - Unit: NT$Thousand
		2019				2020			As of end of Q1, 2021
Item	Company	Amount	Percentage of total Net Purchases	Relationship with the issuer	Company	Amount	Percentage of total Net Purchases	Relationship with the issuer	Company	Amount	Percentage of total Net Purchases	Relationship with the issuer
1	A	250,974,024	54	Nil	A	256,448,318	52	Nil	A	57,879,701	52	Nil
2	Others	213,631,093	46	-	Others	237,960,604	48	-	Others	53,236,560	48	-
	Total Net Purchases	464,605,117	100	-	Total Net Purchases	494,408,922	100	-	Total Net Purchases	111,116,261	100	-
B. Major		Clients
		2019				2020			As of end of Q1, 2021
Item	Company	Amount	Percentage of total Net Sales	Relationship with the issuer	Company	Amount	Percentage of total Net Sales	Relationship with the issuer	Company	Amount	Percentage of total Net Sales	Relationship with the issuer
1	A	325,666,020	65	Nil	A	333,461,728	66	Nil	A	74,512,281	67	Nil
2	Others	175,286,793	35	-	Others	174,832,470	34	-	Others	37,335,908	33	-
	Total Net Sales	500,952,813	100	-	Total Net Sales	508,294,198	100	-	Total Net Sales	111,848,189	100	-

4.2.5 Production Value in the Most Recent Years

Unit: 1,000 pcs, NT$ Thousand

				Unit:1,000 pcs, NT$Thousand	Unit:1,000 pcs, NT$Thousand	Unit:1,000 pcs, NT$Thousand
Quantity and Value Major Product	2019			2020
	Capacity	Quantity	Value	Capacity	Quantity	Value
IT Product	251,095	209,386	408,547,923	268,023	158,256	422,513,853
Others	254,087	181,396	4,201,914	129,600	45,437	1,367,828
Total	505,182	390,782	412,749,837	397,623	203,693	423,881,681

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4.2.6 Sales Value in the Most Recent Years

Unit: 1,000 pcs, NT$ Thousand

					Unit: 1,000pcs,NT$ Thousand	Unit: 1,000pcs,NT$ Thousand	Unit: 1,000pcs,NT$ Thousand	Unit: 1,000pcs,NT$ Thousand
Quantity and Value Major Product	2019				2020
	Domestic		Export		Domestic		Export
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
IT Product	5,989	8,091,536	265,901	488,746,660	7,094	32,249,613	444,605	474,864,408
Others	56,661	1,454,292	127,840	2,660,325	30,768	767,482	23,535	412,695
Total	62,650	9,545,828	393,741	491,406,985	37,862	33,017,095	468,140	475,277,103

4.3 Human Resources

4.3 Human	Resources
	Year	2019	2020	Up to Mar. 31, 2021
Employee Number	Direct Labor	33,995	20,637	19,625
	Indirect Labor	12,412	11,982	11,946
	Total	46,407	32,619	31,509
Average Age		30.03	31.90	31.68
Average Seniority		4.00	4.66	4.48
Education Distribution %	PhD Degree	0.15%	0.15%	0.15%
	Master Degree	7.30%	7.65%	7.58%
	College	33.96%	33.20%	32.72%
	High School (and below)	58.58%	59.00%	59.54%

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4.4 Environmental Protection Expenditure

4.4.1 The losses incurred due to environmental pollution (including the compensation and violation of environmental laws and regulations in the environmental protection inspection results; the punishment date, punishment number, violation of regulations and articles, violation contents, and punishment contents):

In recent years and as of the date of publication, the Company has not suffered loss or punishment due to polluting the environment.

4.4.2 Future Solutions (Including Improvement Measures) and Possible Expenditures

To fulfill sustainable development strategies, the Company develops a series of actions every year. In 2020, the environmental protection expenditures of Inventec were more than TWD one hundred and forty million and included mainly waste disposal, pollution prevention equipment maintenance, environment detection, ecological landscaping, green management system authentication, environmental label product certification, environmental education, energy conservation and carbon reduction engineering, environmental conservation activities, occupational health, green supply chain management, carbon emissions trading, etc.

The Company mainly refers to the “climate-related financial disclosures” report published by the Task Force on Climate-related Financial Disclosure (TCFD) for corresponding actions related to the impact of climate change. Said disclosure is made from the perspectives of governance, strategy, risk management, and indicator and target. Highlighted requirements are shown in the “Inventec TCFD management structure”. Please refer to the 2020 Inventec Corporate Social Responsibility Report” for details.

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Governance	Strategy	Risk Management	Indicator and Target
* The Chairman is the highest responsible person for climate risk management. The President is the person responsible for the highest level of management. Issue internal control documents to ensure the roles and responsibilities for climate change All business units and company units shall include climate change related risks and opportunities for risk management Add climate change issues, management procedures, and strategic planning into the Company’s management system and internal control system. *The Finance/corporate governance manager shall report the climate change management results to the President and Board of Directors.	Risks: All business units and company units shall define risk evaluation and identification procedures, keep abreast of policies and regulations, technologies, market, goodwill, and risk elements of extreme climate based on climate actions to conduct short term (within 3 years), mid-term (3~5 years), and long-term (5~10 years) risk control measures and integrate them into the operational management structure of such units. Opportunity: All business units and company units shall evaluate the niche for potential opportunities, seeking opportunities related to the market, product/services, resource efficiency, and developing new business and services to conduct short-term (within 3 years), mid-term (3~5 years), and long-term (5~10 years) opportunity control measures and integrate them into the operational management structure of such units. To achieve the goal set for the 2°C scenario, Inventec will continue the energy saving and carbon reduction management (scope 2), as well as the project (scope 1 and 3) Inventec strategies: •Develop low carbon products, encourage green development •Energy conversion performance, invest in renewable energy •Be dedicated to a low carbon environment and carbon reduction for all people •Promote clean production, implement a green factory •Connect with a circular	Inventec conducts various risk identification and opportunity evaluations via all functional units of risk management organization based on their functional features and operation process for risk management. The Board of Directors and Audit Committee shall be the final decision makers of risk evaluation and control. Risk management steps In addition to following risk management policies approved by the Board, the climate action systems (various ISO management systems) established by the plant shall be integrated into the operational management flow in accordance with the following risk management steps: 1. Identify risk issues 2.Determine material risks 3.Identify opportunities 4.Study mediation/adaptation measures Mediation/adaptation management -Introduce ISO50001 energy management system -Encourage green development -Energy conversion performance -Green building management -Clean production - Expand sustainable supply chain management *Adaptation -Promote engineering technology -Acquire infrastructure -Develop low carbon products -Invest in renewable energy	Greenhouse gas physical taking indicator Disclose greenhouse gas emissions (scope 1, 2, and 3) Science-based reduction target: With the benchmark year 2015, the target is to reduce 37.5% of greenhouse gas emissions in scope 1 and 2 in 2030 With the benchmark year 2020, the target is to reduce 37.5% of greenhouse gas emissions in scope 3 in 2035 Reclaimable energy target Expand reclaimable energy conversion facilities to continuously increase reclaimable energy by 5% Energy saving target -HQ energy saving (EUI) With the benchmark year 2014, the unit area electric consumption will be reduced by 10% in 2024. -Energy saving for information center control room (PUE) With the benchmark year 2019, the target is to reduce 11% by 2025. -Plant energy saving (EI) With the benchmark year 2018, the target is to reduce 5% by 2025. Water resources management target Taking 2012 as the base year, water intensity will be reduced by 24% by 2024. Waste management target Taking 2014 as the base year, waste will be reduced by 25% by 2025. *Product energy saving design target -Computers Specification Version8.025%

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economy, promote green living

The energy saving design target for notebooks: the energy use efficiency shall be 25% higher than the latest ENERGY STAR Computers Specification Version 8.0 -Server energy saving design target: the energy use efficiency meets ENERGY STAR Computer Servers Specification Version 3.0

To ensure the enterprise’s sustainable development, Inventec continuously optimizes existing whole green management system. Regarding a sustainable environment, in addition to carrying out energy saving measures and promoting energy efficiency equipment, the Company is dedicated to break through current conditions and continuously establish clean solar power generation devices in plants in China. The solar power generated in 2020 was 5,392,295 degrees. Meanwhile, the Company is cooperating with the carbon management of local governments by purchasing carbon rights via carbon trading at an exchange center as stipulated for implementing carbon neutrality.

To expand the influence of a sustainable environment, the Company aggressively promotes a sustainable supply chain. We pass on such requirements as integrity operation, information disclosure, and conflict minerals to cooperative partners via assistances and integration with suppliers. We expect these efforts to contribute to the sustainable supply chain development.

The Company is dedicated to long-term environmental ecology protection. We adopt community parks, organize community environmental lectures, participate in the conservation of the important national wetlands at “Guandu Natural Park”, have adopted the north pond ecology area in “Guandu Natural Park”, and sponsor wetland environmental education plans for schools in remote areas. We hope that more people and students may understand the function and importance of the wetlands, cherish this precious land, and help maintain diverse flora and fauna.

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4.5 Labor Relations

Attaching importance to and maintaining harmonious labor-capital relationships has always been one of the important foundations of the Company’s operation and management; measures that promote labor-capital relationships are summarized below:

4.5.1 Welfare Measure and Retirement System

The Company aims to provide a stable working environment with room for development, allowing talents to stably and continuously create value! Based on governmental laws and regulations, the Company’s employees enjoy various basic labor conditions, including two days off every week, flexible working hours, and a complete leave request system. To encourage and promote attention on health and balance between life and work, various health, parenting, travel, finance management, sporting, relaxation, and inspirational lectures and activities are organized. The Company provides financial support for employees to establish club activities. So far, 32 clubs have been created, including sport, art, music, handicraft, and public welfare, allowing employees to expand their hobby fellow life circle through a casual and relaxing time. The employee welfare committee provides colleagues with various cash gifts and money for weddings, funerals, and festivals. The Company also provides group and travel insurance for all employees to supplement employees’ accidental and medical protection. As for safety, health, and work protection, in addition to such basic welfare as labor, national health insurance, and pension fund, each employee may enjoy periodical physical checkups, complete group insurance, and employee retirement regulations based on the “Labor Pension Act”, which are firmly implemented pursuant to relevant laws and regulations. Regarding the old system, appropriate labor pension funds were periodically reserved and deposited into a dedicated account in the Bank of Taiwan, while the Supervisory Committee of the Labor Pension Reserve was responsible for the management and application of the pension reserve. For the new system, aiming at employees who select the new system, the Company has appropriated 6% pension fund every month to the personal deposit account of the employee at the Labor Insurance Bureau since July 1, 2005 in accordance with the new system of retirement regulations concurrently adopted. For those who voluntarily submit pension deposits, the Company deducts the monthly salary of the employee based on the voluntary paid pension rate and deposits it into the personal savings account of the employee at the Labor Insurance Bureau on behalf of the employee. Furthermore, performance-oriented promotions, bonuses, and various incentive

The regulations of the Labor Pension Act application to the Company are as follows: 1. A worker may request retirement in any of the following circumstances: (1) workers whose seniority exceeds fifteen years and are aged over 55, (2) workers whose seniority exceeds twenty five years; (3) workers whose seniority exceeds ten years and are aged over 60. 2. Compulsory retirement: The Company may mandatorily order workers to retire in any of the following circumstances: (1) the age of the worker reaches 65, (2) the worker is incompetent to work due to mental/physical disability, (3) the Company may report to the central competent

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authority for the adjustment of age as stipulated in subparagraph 1 for workers engaging in such works requiring dangerous, heavy physical strength and are of a special nature, provided that the age shall not be less than 55 years old.

4.5.2 Work Environment and Employee Personal Safety Protection Measures

Within the Company, the Industrial Safety and Health Office is responsible for planning all kinds of safety, health, and environment management matters and supervising relevant departments in implementing and executing all kinds of safety, health, and environment affairs. Furthermore, the Company has created an Occupational Safety and Health Committee pursuant to law, which works on such matters as safety and health related regulations, an occupational safety and health management system, an educational training implementation plan, preventing hazardous equipment or raw materials, operating environmental monitoring and improvements, occupational health management, health promotion, health protection, etc., which will be planned, promoted and propagated to each department for implementing and executing relevant matters. Furthermore, in order to ensure employee safety and health, we have formulated the "Occupational Safety and Health Policy" to focus on occupational safety and health related matters, actively carry out occupational safety and health education, prevent the occurrence of occupational disasters, promote a healthy workplace, facilitate employee health, and establish good communication and consulting channel to effectively carry out continuous improvement in order to reduce the risk of all kinds of hazards and let all employees work peacefully in a safe professional environment.

The Company has acquired all kinds of certifications in safety, health, and environment energy systems, including "TOSHMS Taiwan Occupational Safety and Health Management System", "ISO-45001 International Occupational Health and Safety Assessment Series", "ISO-14001 Environmental Management System", and "ISO-50001 Energy Management System" certification. We have also actively coordinated with all kinds of government policies to promote and participate in relevant activities in order to further facilitate good and harmonious labor-capital relationships, fulfill our corporate social responsibility, and move towards the objective of corporate sustainable development.

Occupational safety and health policy: The Company has formulated its Occupational Safety and Health Policy according to the requirements of the Taiwan Occupational Safety and Health Management System (TOSHMS) and International Occupational Health and Safety Assessment Series (ISO 45001), taking them as the highest criteria for guaranteeing employees’ work safety.
Setting of Occupational Safety and Health Committee and conference convening: The Company will regularly convene the Occupational Safety and Health Committee conference; it is currently convened once every quarter, so four times a year.
Safety, health and environment management plan and occupational disaster prevention: Safety, health, and environment management plans are formulated pursuant to law and include occupational disaster prevention. Items that are planned to be formulated include: working environment or operation hazard identification, assessment and control, hazardous chemicals classification and marking, general education and management, purchase management, contractor management, safety and health operational standard

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formulation, occupational disaster, near miss and investigation, handling and statistical analysis on events affecting physical and psychological health, safety, health, and environment management records, performance assessment measures, etc.

Health management plan and physical health examinations: Before reporting to the Company, new employees shall provide a physical examination report pursuant to law; moreover, better than what is required by regulations, in-service personnel will regularly receive health examinations every year.
Operating environment monitoring and occupational disease prevention measures: Based on the operating environment hazard property of the Company, as well as monitoring purpose and relevant guidance announced by the central governing authority, the Company has formulated an operating environment monitoring plan that includes a sampling strategy and regularly carrying out operating environment monitoring accordingly. Meanwhile, we also conduct results comparisons according to test results; if the test data is relatively higher than the previous test data, we will immediately carry out a risk identification investigation in order to reduce site hazards and achieve the objective of preventing occupational disease and reducing site risk.
Strengthen contracting management: The Company has formulated contractor safety operation management measures and requires the engineering unit to carry out contractor safety and health educational training before starting engineering construction. Relevant units will convene contractor safety and health management conferences to carry out hazard notification and ask suppliers to sign the "Contracting Unit/Contractor Safety and Health Meeting Minutes", "Contractor Safety and Health Management Commitment", and "Contractor In-plant Work Application" of the Company. Upon engineering construction, the contractor shall follow all kinds of operation management measures of the Company, and the occupational safety and health unit will execute contractor safety appraisal and abnormal deficiency analysis, as well as execute prevention education according to the appraisal and analysis results in order to ensure reduction of risks that might be caused by contracting construction.
Hazard risk assessment identification: Pursuant to the Taiwan Occupational Safety and Health Management System "TOSHMS" and International Occupational Health and Safety Assessment Series "ISO 45001", the Company has formulated safety and health hazard risk identification and assessment management measures, regularly execute comprehensive hazard identification and risk assessment operations according to all kinds of potential factors that may cause personnel injury or accident, and further formulate occupational safety and health targets, objects, and management plans as the basis for planning the safety and health management system.
Safety and health educational training promotion: The Company will carry out safety, health, and environment management and educational training for new employees, and conducts environment and safety risk evaluation, management project, lab education, legal lectures, special operation, system document, internal auditing, and other educational training for safety, hygiene, environment seedling, and related personnel in order to lower the risk of occupational disasters and ensure on-site job safety.
The Company will regularly carry out fire lecturing and fire drills, emergency evacuation drills, and fire tour inspections, regularly check all kinds of safety facilities,

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and conduct task grouping and fire equipment drills to implement disaster prevention and relief work.

Product development and design shall emphasize environmental issues and are aimed at the advantages of low energy consumption, low pollution, recoverable, and recyclable. Furthermore, energy saving and carbon reduction matters will be carried out to reduce waste generation and the impact on the environment in order to achieve the objectives of zero public hazard, diligent waste reduction, green products, and ecological preservation, thus fulfilling our corporate responsibility and promoting sustainable environmental protection.
The Company respects the life of laborers and emphasizes the health of colleagues by effectively carrying out occupational health promotion activities and implementing health management; furthermore, the Company is devoted to zero disaster related prevention work to maintain zero disasters and care for its employee in order to improve its healthy corporate image and move towards a healthy and sustainable workplace.

4.5.3 Further Education and Training for Employees

The Company adheres to a "talent-oriented" cultivation philosophy, provides outstanding internal and external teachers and diversified cultivation channels to company talents, and is devoted to balancing the emphasis on educational training and learning development in order to continuously promote the Company’s corporate culture and continuously improve its competitive advantage. In 2020, the expenditures related to employee training were NT$7,812,039, and the total training hours were 61,991 hours.

"Talent cultivation" is the foundation for Inventec's sustainable operation, and the Company continuously creates a friendly environment for employee's learning and growth. The educational training system of the Company is divided into five major types of courses centered on core value courses and delivers the corporate culture and value theory of Inventec. Taking level type course and function type course as the two major axis, the Company teaches employees in accordance with their aptitude, specifically plans personal development plan for employee's career development, and assists colleagues to strengthen the capabilities required at work. The language school provides further language education opportunities to the employees to improve their personal competitive advantage; digital courses provide a diversified learning environment, which allows colleagues to learn anytime, anywhere. Course descriptions are summarized below:

(1) Core value course: Inventec pursues the maximization of shareholders' equity while implementing corporate responsibility to make a certain contribution to society. All the Company’s colleagues, from top to bottom and from inside out, have been shaped with "Inventec" DNA through official conferences and activities, allowing employees to acknowledge the operation philosophy of the Company and become "Inventec Staff". Contents include such courses and activities as monthly meetings, assistant level meetings, management forums, strategic meetings, soft/incentive lectures, team building exercises, etc.
(2) Level type course: Management courses are planned according to the demand of

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colleagues at different levels; through meetings and daily communication, it improves the colleagues' management capability and establishes a common communication language and management beliefs to improve organizational performance. Contents include: Inventec EMBA advanced class, senior supervisor training, advanced supervisor training, basic supervisor training, professional training, new employee training, production personnel training, etc.

(3) Function type course: These provide all kinds of professional knowledge and technical bases, as well as advanced courses and lectures, to satisfy the functions of employees needed in different specialties. Contents include innovation, product technology, research and development production technology, patent and intellectual property, industry intelligence, environmental safety and health, etc.
(4) Language school: In response to international development and the competition of the Group, Inventec has been devoted to cultivating technology talents with multi-language capabilities. English and Japanese seminars are held every quarter, thus providing colleagues a learning environment for continuous language learning in the company, and foreign language skills classes are also set up to immediately satisfy colleagues' business demands. Meanwhile, internal English and Japanese tests will be held every quarter to encourage colleagues to pass the test to acquire substantial affirmation and allowance.
(5) Digital course: These provide colleagues an e-Learning on-line learning service, constructs the Inventec networking academy, and is open as an important media for employees' independent learning in order to facilitate the improvement and innovation of technical capability, as well as further promote organizational learning and improve work value and organizational competitiveness. Its contents cover all kinds of language, management, and professional courses, thus allowing employees to learn independently without time and place limitations.

4.5.4 Employee Code of Conduct

The Company has formulated "Global Employee Code of Conduct Management Measures" in each plant, which stipulate the basic code of conduct for labor and capital on the basis of fairness and impartiality. As an Inventec employee, when facing all kinds of work behaviors and ethical and legal problems, we shall aim to create shareholder and employee value and ensure social responsibility; therefore, under the precondition of following the basic requirements of laws and ethical standards of each country or district, we shall abide by all kinds of internal control systems of the Company. Upon reporting for duty, every colleague must sign and abide by it, and it shall be placed on the internal portal website, so that all colleagues can read it at any time, and regularly carry out signing and promotion work; the code of conduct is hereby summarized below:

(1) Safeguard a healthy work environment without sexual discrimination.
(2) All company-related confidential information must be kept confidential.
(3) Employees must protect the personal information of other persons circulated internally or acquired upon business execution.
(4) Employees must protect intellectual property rights.

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(5) Employees must abide by copyright regulations.
(6) Employees must not be involved in corruption or bribery of any kind.
(7) Employees must not participate in insider trading and avoid conflicts of interest.

In case of violation of the relevant requirements above, relevant punishment will be imposed without exception.

In order to provide all employees with a healthy, safe, and highly efficient working environment, the "Global Employee Code of Conduct Management Measures" also stipulates that no employee or applicant shall be discriminated against or deprived of talent development opportunities due to gender, age, race, color, nationality, religion, disability, or other factors irrelevant to the legal interests of Inventec. Furthermore, each plant has set up an "Employee Complaint System" to guarantee a fair arbitration mechanism when employees suffer from human rights related infringements. In the plants in mainland China, a grassroots employee caring group has been especially set up to handle employee complaints and understand the employee's voice through employee interviews, etc.

4.5.5 Communication Mechanism between Employer and Employees

Through all the communication mechanisms listed below, the Company provides employees with real-time responses and regular communication channels in order to facilitate a harmonious working atmosphere and create a win-win situation for both the labor and capital.

(1) Two-way talks between grassroots employees and senior supervisor: quarterly meetings and all kinds of symposiums occasionally held.
(2) Management policy and business process communication: communication meetings for employee representatives from each department will be regularly held every month.
(3) Cross-department communication and labor and capital communication: an internal portal platform sets the multi-functional "Employee Opinion Exchange Area".
(4) Instant response problem and information consultation: each unit has established a service consultation window and service hot line.
(5) Employee welfare policy and welfare promotion: employee welfare committee monthly meetings and temporary meetings.
(6) Grassroots employees care group: handle employee complaints and understand the employees' voice through employee interviews, etc.
4.5.6 In the Most Recent Year and as of the Publication of the Annual Report, the Losses Arising from Labor Disputes (including Labor Inspection Results Violating the Labor Standards Act, the Date, File Number of Punishment, Violated Article, Content of Punishment) and Disclose an Estimate of Possible Expenses that could be Currently Incurred and in the Future and Measures being or to be Taken. If a Reasonable Estimate cannot be Made, an Explanation of the Facts of why it cannot be Made shall be Provided.

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No violations were detected in labor inspections in 2020. There were two violations of the Labor Standard Law in 2021 (the date of disciplinary action was 2021/01/12 (Beishi Labor No. 10961190201), and the violation of regulations fall under Item 2 of Article 32 of the Labor Standard Law; and Item 1 of Article 24 of the Labor Standard Law). The Company did not suffer loss from labor dispute in most recent year and as of the publication of the annual report; it is estimated that the Company should not suffer the loss from labor dispute in condition that the Company continuously and aggressively promote and carry out various employee welfare measures.

4.6 Important Contracts

Contract Nature	Counterparty	Contract Term	Major Contents	Restrictions
Sales Agreement	HP Inc.	Three years from 1998/6/1; automatically renewable for one year terms	Acceptance of order and production of HP branded notebook products	The duty of confidentiality
Quality Agreement		Same as above	Production of notebook products compliant with HP quality requirements based on Sales Agreement.	The duty of confidentiality
Service and Support Agreement		Same as above	Provision of necessary components, after sales services and related technical support for HP branded notebook products made based on Sales Agreement	The duty of confidentiality
Sales Contract	Hewlett Packard Enterprise Company	Four years from 2000/12/1; automatically renewable for one year terms	Acceptance of order and production of HP branded server products	The duty of confidentiality
Quality Agreement		Same as above	Production of server products compliant with HP quality requirements based on Sales Agreement.	The duty of confidentiality
Service and Support Agreement		Same as above	Provision of necessary components, after sales services and related technical support for HP branded server products made based on Sales Agreement	The duty of confidentiality
Syndicated Loans Contract	Syndicated Loans banks	2020/10/14~2022/10/13. An extension of three years may be applied for in writing within nine months from the date of signing the contract to three months before the expiration of the contract. Such an extension may only be implemented once.	The Participantbanks agree to provide agreed credit line to Inventec Corporation during the contract term	None

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Ⅴ . Financial I nformation

5.1 Five Year Financial Summary

5.1.1 Five Year Financial Summary - Consolidated Balance Sheet

Unit: NT$ Thousands

Year Item	Year Item	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	01/01/2021 ~3/31/2021
		2016	2017	2018	2019	2020
Current Assets		136,793,121	168,324,564	167,904,434	152,167,709	173,469,952	177,171,452
Property, Plant and Equipment		38,666,219	33,351,252	30,324,516	30,729,458	28,004,583	27,975,741
Intangible Assets		890,024	892,416	885,307	880,774	875,801	925,498
Other Assets		6,023,853	6,199,595	6,689,665	9,314,912	11,811,101	11,550,531
Total Assets		182,373,217	208,767,827	205,803,922	193,092,853	214,161,437	217,623,222
Current Liabilities	Before Distribution	115,082,956	142,830,554	140,692,415	127,046,276	140,543,688	152,152,447
	After Distribution	120,284,795	148,749,888	146,073,628	131,709,994	147,180,517	-
Non-Current Liabilities		6,782,999	7,006,659	7,389,990	9,075,349	15,727,006	13,066,625
Total Liabilities	Before Distribution	121,865,955	149,837,213	148,082,405	136,121,625	156,270,694	165,219,072
	After Distribution	127,067,794	155,756,547	153,463,618	140,785,343	162,907,523	-
Total Equity Attributable to Owners of Parent		54,792,873	55,682,837	55,364,481	55,271,148	57,984,659	52,567,564
Share Capital		35,874,751	35,874,751	35,874,751	35,874,751	35,874,751	35,874,751
Capital Surplus		2,913,096	2,912,889	2,913,461	2,913,461	2,899,284	2,899,284
Retained Earnings	Before Distribution	15,486,313	17,002,536	18,223,198	18,304,941	21,112,549	15,620,439
	After Distribution	10,284,474	11,083,202	12,841,985	13,641,223	14,475,720	-
Other Equity Interest		518,713	-107,546	-1,646,357	-1,822,005	-1,901,925	-1,826,910
Treasury Stock		-	-	-	-	-	-
Non-Controlling Interests		5,714,389	3,247,777	2,357,036	1,700,080	-93,916	-163,414
Total Equity	Before Distribution	60,507,262	58,930,614	57,721,517	56,971,228	57,890,743	52,404,150
	After Distribution	55,305,423	53,011,280	52,340,304	52,307,510	51,253,914	-

Note 1: Above financial information has been audited (review) by CPA.

Note 2: The Company also compiles individual statements. The brief individual balance sheet of the recent five years is as follows.

Note 3: The amount of item “After Distribution” was resolved by the Board on March 30, 2021.

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Five Year Financial Summary - Individual Balance Sheet

Unit: NT$ Thousands

		Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands
Year Item		Five-Year Financial Summary
		2016	2017	2018	2019	2020
Current Assets		99,131,197	106,190,186	136,725,056	131,882,962	154,010,745
Property, Plant and Equipment		12,310,646	12,407,998	11,531,196	13,225,283	13,535,629
Intangible Assets		73,653	80,691	74,619	71,210	66,262
Other Assets		35,829,227	35,076,031	31,350,762	31,071,775	38,630,013
Total Assets		147,344,723	153,754,906	179,681,633	176,251,230	206,242,649
Current Liabilities	Before Distribution	87,388,360	92,865,658	119,029,566	116,006,733	135,951,357
	After Distribution	92,590,199	98,784,992	124,410,779	120,670,451	142,588,186
Non-current liabilities		5,163,490	5,206,411	5,287,586	4,973,349	12,306,633
Total Liabilities	Before Distribution	92,551,850	98,072,069	124,317,152	120,980,082	148,257,990
	After Distribution	97,753,689	103,991,403	129,698,365	125,643,800	154,894,819
Total Equity Attributable to Owners of Parent		54,792,873	55,682,837	55,364,481	55,271,148	57,984,659
Share Capital		35,874,751	35,874,751	35,874,751	35,874,751	35,874,751
Capital Surplus		2,913,096	2,913,096	2,912,889	2,913,461	2,899,284
Retained Earnings	Before Distribution	15,486,313	17,002,536	18,223,198	18,304,941	21,112,549
	After Distribution	10,284,474	11,083,202	12,841,985	13,641,223	14,475,720
Other Equity Interest		518,713	-107,546	-1,646,357	-1,822,005	-1,901,925
Treasury Stock		-	-	-	-	-
Non-Controlling Interests		-	-	-	-	-
Total Equity	Before Distribution	54,792,873	55,682,837	55,364,481	55,271,148	57,984,659
	After Distribution	49,591,034	49,763,503	49,983,268	50,607,430	51,347,830

Note 1: Above financial information has been audited (review) by CPA.

Note 2: The amount of item “After Distribution” was resolved by the Board on March 30, 2021.

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5.1.2 Five Year Financial Summary-Consolidated Statement of Comprehensive Income

Unit: NT$ Thousands

Year Item	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	01/01/2021 ~ 03/31/2021
	2016	2017	2018	2019	2020
Sales Revenues	428,466,015	467,512,347	506,884,018	500,952,813	508,294,198	111,848,189
Gross Profit from Operation	23,957,770	25,039,143	23,881,584	22,831,095	21,112,917	5,120,184
OperatingProfit	8,184,463	8,729,569	7,490,715	6,403,495	4,441,086	981,348
Non-Operating Income and Expenses	-1,094,554	-1,543,121	642,547	105,566	5,904,619	423,881
Profit before Income Tax	7,089,909	7,186,448	8,133,262	6,509,061	10,345,705	1,405,229
Profit for the Period	4,971,373	4,337,038	5,318,996	4,836,997	6,572,978	1,077,147
Loss from Discontinued Operations	-	-	-	-	-	-
Profit(Loss)for the Period	4,971,373	4,337,038	5,318,996	4,836,997	6,572,978	1,077,147
Other Comprehensive Income (Loss) for the Period, Net of Tax	-2,315,310	-659,830	-914,777	-252,094	-152,304	73,089
Total Comprehensive Income for the Period	2,656,063	3,677,208	4,404,219	4,584,903	6,420,674	1,150,236
Profit Attributable to Owners of Parent	5,637,120	6,754,912	6,499,856	5,507,960	7,547,985	1,144,719
Profit Attributable to Non-ControllingInterests	-665,747	-2,417,874	-1,180,860	-670,963	-975,007	-67,572
Comprehensive Income Attributable to Owners of Parent	3,334,322	6,091,803	5,599,822	5,287,308	7,391,406	1,219,734
Comprehensive Income Attributable to Non-ControllingInterests	-678,259	-2,414,595	-1,195,603	-702,405	-970,732	-69,498
Basic Earnings Per Share	1.57	1.88	1.81	1.54	2.10	0.32

Note 1: Above financial information has been audited (review) by CPA.

Note 2: The Company also compiles individual statements. The brief individual comprehensive income sheet of the recent five years is as follows.

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Unit: NT$ Thousands

	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands
Year Item	Five-Year Financial Summary
	2016	2017	2018	2019	2020
Sales Revenues	308,709,688	323,126,751	348,798,356	357,462,052	407,434,848
Gross Profit from Operation	12,856,696	14,062,611	14,045,103	12,523,082	11,783,972
Operating Profit	5,219,930	5,558,554	5,607,826	3,619,693	2,259,187
Non-Operating Income and Expenses	1,305,987	2,353,134	1,984,074	2,411,761	7,334,369
Profit before Income Tax	6,525,917	7,911,688	7,591,900	6,031,454	9,593,556
Profit for the Period	5,637,120	6,754,912	6,499,856	5,507,960	7,547,985
Loss from Discontinued Operations	-	-	-	-	-
Profit (Loss) for the Period	5,637,120	6,754,912	6,499,856	5,507,960	7,547,985
Other Comprehensive Income (Loss) for the Period, Net of Tax	-2,302,798	-663,109	-900,034	-220,652	-156,579
Total Comprehensive Income for the Period	3,334,322	6,091,803	5,599,822	5,287,308	7,391,406
Profit Attributable to Owners of Parent	5,637,120	6,754,912	6,499,856	5,507,960	7,547,985
Profit Attributable to Non-Controlling Interests	-	-	-	-	-
Comprehensive Income Attributable to Owners of Parent	3,334,322	6,091,803	5,599,822	5,287,308	7,391,406
Comprehensive Income Attributable to Non-Controlling Interests	-	-	-	-	-
Basic Earnings Per Share	1.57	1.88	1.81	1.54	2.10

Note 1: Above financial information has been audited (review) by CPA.

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5.1.3 CPAs and Their Opinions for Most Recent 5-Year

Year	CPA Firm	CPA’s Name	Auditing Opinion	Remarks
2016	KPMG	Chen, Ying-Ju and Yang, Liu-Fong	Unqualified
2017	KPMG	Lin, Wan-Wan and Yang, Liu-Fong	Unqualified	Internal Adjustment in the AccountingFirm
2018	KPMG	Lin, Wan-Wan and Yang, Liu-Fong	Unqualified
2019	KPMG	Lin, Wan-Wan and Yang, Liu-Fong	Unqualified
2020	KPMG	Lin, Wan-Wan and Yang, Liu-Fong	Unqualified

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5.2 Five-Year Financial Analysis

Item	Year	Year		Five-Year Financial Analysis	Five-Year Financial Analysis	Five-Year Financial Analysis	Five-Year Financial Analysis	01/01/2021~ 03/31/2021
			2016	2017	2018	2019	2020
Capital structure (%)	Debt ratio		66.82	71.77	71.95	70.50	72.97	75.92
	Ratio of long-term capital to property, plant and equipment		174.03	197.71	214.72	214.93	262.88	234.03
Solvency (%)	Current ratio		118.86	117.85	119.34	119.77	123.43	116.44
	Quick ratio		90.95	89.96	88.69	90.28	93.85	86.43
	Times interest earned (Times)		12.83	6.25	5.60	4.70	10.81	9.46
Operating ability	Accounts receivable turnover (Times)		6.48	6.22	5.92	5.54	5.63	4.99
	Average collection period		56	59	62	66	65	73
	Inventory turnover (Times)		12.60	11.82	11.21	11.32	11.81	9.46
	Accounts payable turnover (Times)		6.34	6.22	6.45	6.47	6.69	5.63
	Average days in sales		28.96	30.87	32.56	32.24	30.90	38.58
	Property, plant, and equipment turnover (Times)		11.08	14.02	16.72	16.30	18.15	15.99
	Total assets turnover (Times)		2.35	2.24	2.46	2.59	2.37	2.06
Profitability	Return on total assets (%)		3.05	2.80	3.25	3.13	3.64	2.24
	Return on stockholders' equity (%)		8.06	7.26	9.12	8.43	11.45	7.81
	To pay-in Capital (%)	Operating income	22.81	24.33	20.88	17.85	12.38	2.74
		PBT	19.76	20.03	22.67	18.14	28.84	3.92
	Net profit margin (%)		1.16	0.93	1.05	0.97	1.29	0.96
	Basic earnings per share ($)		1.57	1.88	1.81	1.54	2.10	0.32
Cash flow	Cash flow ratio (%)		7.58	1.59	-3.93	9.64	3.08	2.50
	Cash flow adequacy ratio (%)		115.45	73.92	33.25	49.19	29.74	29.82
	Cash reinvestment ratio (%)		0.03	-0.03	-0.11	0.06	-0.00	0.04
Leverage	Operating leverage		2.51	2.93	4.72	6.01	5.59	3.62
	Financial leverage		1.08	1.19	1.31	1.38	1.31	1.20

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Analysis of financial ratio change in the last two years. (If the difference does not exceed 20%, the analysis is not required.)

Ratio of long-term capital to property, plant and equipment: Mainly due to the growth of revenue and increase of long-term liabilities.
Times interest earned: Mainly due to the decrease in capital costs and increase of net profit before tax in the current period.
Return on stockholders' equity: This has mainly been caused by the increase in net gains on financial assets (liabilities) measured at fair value through profit or loss, and gain on disposal of property, plant and equipment.
Operating income to pay-in capital: Mainly due to the influence of COVID-19, the decrease in operating margin ratio.
PBT to pay-in capital: This has mainly been caused by the increase in net gains on financial assets (liabilities) measured at fair value through profit or loss, and gain on disposal of property, plant and equipment.
Net profit margin: This has mainly been caused by the increase in net gains on financial assets (liabilities) measured at fair value through profit or loss, and gain on disposal of property, plant and equipment.
Basic earnings per share: This has mainly been caused by the increase in net gains on financial assets (liabilities) measured at fair value through profit or loss, and gain on disposal of property, plant and equipment.
Cash flow ratio: The decrease in operating cash flow is mainly due to the tight supply of raw materials and prosperous shipments, strategic material preparation in line with customer demand, and the payment of accounts payable.
Cash flow adequacy ratio: The decrease in operating cash flow is mainly due to the tight supply of raw materials and prosperous shipments, strategic material preparation in line with customer demand, and the payment of accounts payable.
Cash reinvestment ratio: The decrease in operating cash flow is mainly due to the tight supply of raw materials and prosperous shipments, strategic material preparation in line with customer demand, and the payment of accounts payable.

Note1: Above financial information has been audited (review) by CPA.

Note2: The Company compiles individual statements analysis of financial ratio shall be disclosed.

Note3: The International Financial Reporting Standards have been adopted for less than five years, hence they are not calculated.

Note4: Equations:

(1). Capital Structure:
Debt ratio ＝ Total liability ／ Total assets

Ratio of long-term capital to property, plant and equipment ＝（ Net shareholders’ equity ＋ Non-current liability ）／ Net property, plant and equipment

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(2). Solvency:

Current ratio ＝ Current assets ／ Current liability

－－ Quick ratio ＝（ Current assets Inventory Prepaid expense ）／ Current liability

Times interest earned ＝ Net income before tax and interest expense ／ Interest expense of the year

(3). Operating ability:

Account receivable turnover ＝ Net sales ／ Average accounts receivable (including accounts receivable and notes receivable derived from business operation)

Days sales in accounts receivable ＝ 365 ／ Account receivable turnover

＝ Inventory turnover Cost of goods sold ／ Average inventory amount

＝ Account payable turnover Cost of goods sold ／ Average accounts payable (including accounts payable and notes payable derived from business operation)

Average days in sales ＝ 365 ／ Inventory turnover

Ratio of property, plant and equipment ＝ Net sales ／ Average of net property, plant and equipment

Total assets turnover ＝ Net sales ／ Average total assets

(4). Profitability:

Return on assets ＝〔 Net income (loss) ＋ Interest expense× （１－ Tax rate ）〕／ Average total assets

＝ Return on shareholders’ equity Net income (loss) ／ Net average shareholders’ equity

＝ Operating income (pre-tax income) to Paid-in Capital Ratio Operating income (pre-tax Income) ／ Paid-in Capital

Profit ratio ＝ Net income (loss) ／ Net sales

－ Basic earnings per share ＝（ Profit attributable to owners of parent Preferred stock dividend) ）／ Weighted average stock shares issued

(5). Cash flow:

Cash flow ratio ＝ Net cash flow from operating activity ／ Current liability

＝ Cash flow adequacy ratio Net cash flow from operating activity in the past 5 years ／ In the past 5 years (Capital expenditure ＋ Inventory interest ＋ Cash dividend)

Cash reinvestment ratio ＝ (Net cash flow from operating activity － Cash dividend) ／ (property, plant and equipment ＋ Long- term investment ＋ Other assets ＋ Working capital)

(6). Leverage:

＝－ Degree of operating leverage (Net operating income Variable operating cost and expense) ／ Operating income

＝－ Degree of financial leverage Operating income ／ (Operating income Interest expense)

134

Five-Year Individual Financial Analysis

Item	Year	Year		Five-Year Financial	Five-Year Financial	Analysis
			2016	2017	2018	2019	2020
Capital structure (%)	Debt ratio		62.81	63.78	69.19	68.64	71.89
	Ratio of long-term capital to property, plant and equipment		487.03	490.73	525.98	455.53	519.31
Solvency ( % )	Current ratio		113.44	114.35	114.87	113.69	113.28
	Quick ratio		112.59	111.78	112.98	110.31	111.47
	Times interest earned (Times)		18.25	11.73	7.59	6.00	14.47
Operating ability	Accounts receivable turnover (Times)		5.66	5.01	4.76	4.72	5.06
	Average collection period		64	73	77	77	72
	Inventory turnover (Times)		378.68	198.41	144.21	111.91	123.89
	Accounts payable turnover (Times)		5.43	5.10	4.91	4.52	4.72
	Average days in sales		0.96	1.84	2.53	3.26	2.95
	Property, plant, and equipment turnover (Times)		25.08	26.04	30.25	27.03	30.10
	Total assets turnover (Times)		2.10	2.10	1.94	2.03	1.98
Profitability	Return on total assets (%)		4.20	4.89	4.45	3.64	4.24
	Return on stockholders' equity (%)		10.13	12.23	11.71	9.96	13.33
	To pay-in Capital (%)	Operating income	14.55	15.49	15.63	10.09	6.30
		PBT	18.19	22.05	21.16	16.81	26.74
	Net profit margin (%)		1.83	2.09	1.86	1.54	1.85
	Basic earnings per share ($)		1.57	1.88	1.81	1.54	2.10
Cash flow	Cash flow ratio (%)		19.19	-4.91	-5.93	12.88	-0.52
	Cash flow adequacy ratio (%)		142.21	83.50	75.93	83.15	46.29
	Cash reinvestment ratio (%)		0.19	-0.15	-0.20	0.15	-0.07
Leverage	Operating leverage		2.71	3.09	4.34	7.58	8.82
	Financial leverage		1.08	1.15	1.26	1.50	1.46

135

Analysis of financial ratio change in the last two years. (If the difference does not exceed 20%, the analysis is not required.)

Times interest earned: Mainly due to the decrease in capital costs and increase of net profit before tax in the current period.
Return on stockholders' equity: This has mainly been caused by the increase in share of loss of subsidiaries, associates and joint ventures accounted for using equity method.
Operating income to pay-in capital: Mainly due to the influence of COVID-19, the decrease in operating margin ratio.
PBT to pay-in capital: This has mainly been caused by the increase in share of loss of subsidiaries, associates and joint ventures accounted for using equity method.
Net profit margin: This has mainly been caused by the increase in Share of loss of subsidiaries, associates and joint ventures accounted for using equity method.
Basic earnings per share: This has mainly been caused by the increase in Share of loss of subsidiaries, associates and joint ventures accounted for using equity method.
Cash flow ratio: The decrease in operating cash flow is mainly due to the tight supply of raw materials and prosperous shipments, strategic material preparation in line with customer demand, and the payment of accounts payable.
Cash flow adequacy ratio: The decrease in operating cash flow is mainly due to the tight supply of raw materials and prosperous shipments, strategic material preparation in line with customer demand, and the payment of accounts payable.
Cash reinvestment ratio: The decrease in operating cash flow is mainly due to the tight supply of raw materials and prosperous shipments, strategic material preparation in line with customer demand, and the payment of accounts payable.

Note 1: Above financial information has been audited (review) by CPA.

Note 2: Net cash flow of operating activities is not included.

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5.3 Audit Committee’s Report in the Most Recent Year

Inventec Corporation

Audit Committee’s Review Report

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.

Convener of the Audit Committee: Chang, Chang-Pang Date: March 30, 2021

5.4 Individual Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report

Please refer to Appendix Ⅰ .

5.5 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report

Please refer to Appendix II.

5.6 The Effect on Company or its Affiliates have Experienced Financial Difficulties:

In 2020, reinvestment company, Inventec Solar Energy Corporation entered into bank credit and debit negotiations for a loan repayment period extension of long-term and short-term loans by one year. On June 10, 2020, Inventec obtained the approval of more than half of the total debt amount of the creditor bank. The extension period ends on May 31, 2021. In 2021, the bank filed another application for bank creditor and debt negotiation, but it was unsuccessful as of the date of publication of the annual report.

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VI. Review of Financial Conditions, Operating Results, and Risk Management

6.1 Analysis of Financial Status

6.1.1. Consolidated

6.1.1. Consolidated
			Unit: NT$Thousand
Year Item	2020	2019	Difference
			Amount	%
Current assets	173,469,952	152,167,709	21,302,243	14.00%
Property, plant and equipment	28,004,583	30,729,458	-2,724,875	-8.87%
Intangible assets	875,801	880,774	-4,973	-0.56%
Other assets	11,811,101	9,314,912	2,496,189	26.80%
Total assets	214,161,437	193,092,853	21,068,584	10.91%
Current liabilities	140,543,688	127,046,276	13,497,412	10.62%
Non-current liabilities	15,727,006	9,075,349	6,651,657	73.29%
Total liabilities	156,270,694	136,121,625	20,149,069	14.80%
Share capital	35,874,751	35,874,751	-	-
Capital surplus	2,899,284	2,913,461	-14,177	-0.49%
Retained earnings	21,112,549	18,304,941	2,807,608	15.34%
Total equity attributable to owners of parent	57,984,659	55,271,148	2,713,511	4.91%

Analysis of financial ratio changed in the last two years. (If the difference does not exceed 20%, the analysis is not required.)

Other assets: This has mainly been caused by the increase in Non-current financial assets at fair value through other comprehensive income.
Non-current liabilities: Mainly due to the revenue growth and increase in long-term borrowings

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6.1.2. Individual

Unit: NT$Thousand

6.1.2. Individual			Unit: NT$Thousand	Unit: NT$Thousand
Year Item	2020	2019	Difference
			Amount	%
Current assets	154,010,745	131,882,962	22,127,783	16.78%
Property, plant and quipment	13,535,629	13,225,283	310,346	2.35%
Intangible assets	66,262	71,210	-4,948	-6.95%
Other assets	38,630,013	31,071,775	7,558,238	24.33%
Total assets	206,242,649	176,251,230	29,991,419	17.02%
Current liabilities	135,951,357	116,006,733	19,944,624	17.19%
Non-current liabilities	12,306,633	4,973,349	7,333,284	147.45%
Total liabilities	148,257,990	120,980,082	27,277,908	22.55%
Share capital	35,874,751	35,874,751	-	-
Capital surplus	2,899,284	2,913,461	-14,177	-0.49%
Retained earnings	21,112,549	18,304,941	2,807,608	15.34%
Total equity	57,984,659	55,271,148	2,713,511	4.91%

Analysis of financial ratio changed in the last two years. (If the difference does not exceed 20%, the analysis is not required.)

Other assets: This has mainly been caused by the increase in investments accounted for using equity method.
Non-current liabilities: Mainly due to the revenue growth and increase in long-term borrowings

6.1.3. Impact on Significant Changes in Financial Conditions Over the Past Two Years and the Future Response Plan

According to the analysis above, we can learn that changes in financial conditions of the Company over the past last two years have been caused by normal operating activities, hence there is no current requirement for a special future response plan.

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6.2 Analysis of Operation Results

6.2.1 Consolidated

6.2.1 Consolidated
	Unit: NT$ Thousand 2020 2019 Amount changed Change percentage (%) Amount Amount 508,294,198 500,952,813 7,341,385 1.47% - - - - 508,294,198 500,952,813 7,341,385 1.47% -487,181,281 -478,121,718 -9,059,563 1.89% 21,112,917 22,831,095 -1,718,178 -7.53% -16,671,831 -16,427,600 -244,231 1.49% 4,441,086 6,403,495 -1,962,409 -30.65% 5,904,619 105,566 5,799,053 -5493.30% 10,345,705 6,509,061 3,836,644 58.94% -3,772,727 -1,672,064 -2,100,663 125.63% 7,547,985 5,507,960 2,040,025 37.04% -975,007 -670,963 -304,044 45.31% 6,572,978 4,836,997 1,735,981 35.89%
Year Item	2020	2019	Amount changed	Change percentage (%)
	Amount	Amount
Gross Sales Revenue	508,294,198	500,952,813	7,341,385	1.47%
Less`：`Sales Discounts and Allowances	-	-	-	-
Net Sales Revenue	508,294,198	500,952,813	7,341,385	1.47%
OperatingCosts	-487,181,281	-478,121,718	-9,059,563	1.89%
Gross Profit from Operation	21,112,917	22,831,095	-1,718,178	-7.53%
OperatingExpense	-16,671,831	-16,427,600	-244,231	1.49%
OperatingProfit	4,441,086	6,403,495	-1,962,409	-30.65%
Non-operatingIncome and Expense	5,904,619	105,566	5,799,053	-5493.30%
Income from Operations of continued segments - before tax	10,345,705	6,509,061	3,836,644	58.94%
Less: Income Tax(Expense)	-3,772,727	-1,672,064	-2,100,663	125.63%
Profit attributable to owners ofparent	7,547,985	5,507,960	2,040,025	37.04%
Profit attributable to non-controlling interests	-975,007	-670,963	-304,044	45.31%
Income from Operations of continued segments - after tax	6,572,978	4,836,997	1,735,981	35.89%

Analysis of financial ratio changed in the last two years. (If the difference does not exceed 20%, the analysis is not required.)

Operating Profit: Mainly due to the influence of COVID-19, the rise in operating costs and decrease in operating margins.
Non-operating Income and Expense: This has mainly been caused by the increase in net gains (losses) on financial assets (liabilities) measured at fair value through profit or loss, and gain on disposal of property, plant and equipment.
Income from Operations of Continued Segments - Before tax: This has mainly been caused by the increase in non-operating Income.
Income Tax: This has mainly been caused by the increase in the pre-tax net profit of the continuous business department.
Profit Attributable to Owners of Parent: This has mainly been caused by the increase in the pre-tax net profit of the continuous business department.
Profit Attributable to Non-Controlling Interests: This has mainly been caused by the increase in asset impairment.
Income from Operations of Continued Segments - After Tax: This has mainly been caused by the increase in the pre-tax net profit of the continuous business department.

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Individual

Individual
	Unit: NT$ Thousand 2020 2019 Amount changed Change percentage (%) Amount Amount 407,434,848 357,462,052 49,972,796 13.98% - - - - 407,434,848 357,462,052 49,972,796 13.98% -395,650,876 -344,938,970 -50,711,906 14.70% 11,783,972 12,523,082 -739,110 -5.90% -11,807 -14,174 2,367 -16.70% 14,174 18,889 -4,715 -24.96% 11,786,339 12,527,797 -741,458 -5.92% -9,527,152 -8,908,104 -619,048 6.95% 2,259,187 3,619,693 -1,360,506 -37.59% 7,334,369 2,411,761 4,922,608 204.11% 9,593,556 6,031,454 3,562,102 59.06% -2,045,571 -523,494 -1,522,077 290.75% 7,547,985 5,507,960 2,040,025 37.04%
Year Item	2020	2019	Amount changed	Change percentage (%)
	Amount	Amount
Gross Sales Revenue	407,434,848	357,462,052	49,972,796	13.98%
Less`：`Sales Discounts and Allowances	-	-	-	-
Net Sales Revenue	407,434,848	357,462,052	49,972,796	13.98%
OperatingCosts	-395,650,876	-344,938,970	-50,711,906	14.70%
Gross Profit from operation	11,783,972	12,523,082	-739,110	-5.90%
Less`：`Unrealized Profit(Loss) from Sales	-11,807	-14,174	2,367	-16.70%
Plus`：`Realized Profit(Loss) from Sales	14,174	18,889	-4,715	-24.96%
Realized Gross Profit from operation	11,786,339	12,527,797	-741,458	-5.92%
OperatingExpense	-9,527,152	-8,908,104	-619,048	6.95%
OperatingProfit	2,259,187	3,619,693	-1,360,506	-37.59%
Non-operatingIncome and Expense	7,334,369	2,411,761	4,922,608	204.11%
Income from operations of continued segments - before tax	9,593,556	6,031,454	3,562,102	59.06%
Less: Income Tax Expense	-2,045,571	-523,494	-1,522,077	290.75%
Income from operations of continued segments - after tax	7,547,985	5,507,960	2,040,025	37.04%

Analysis of financial ratio changed in the last two years. (If the difference does not exceed 20%, the analysis is not required.)

Realized Profit (Loss) from Sales: This has mainly been caused by the advanced customer shipment at the end of the year.
Operating Income: Mainly due to the influence of COVID-19, the rise in operating costs and decrease in operating margins.
Non-Operating Income and Expense: This has mainly been caused by the increase of investment income by adopting the equity method.
Income from Operations of Continued Segments - Before Tax: This has mainly been caused by the increase in non-operating income.
Income Tax Expense: This has mainly been caused by the increase in the pre-tax net profit of the continuous business department.
Income from Operations of Continued Segments - After Tax: This has mainly been caused by the increase in the pre-tax net profit of the continuous business department.

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6.2.2 Expected Sales Volume and its Basis

The COVID-19 epidemic spread around the world in 2020, remote working and teaching increased, and the replacement of commercial type machines was rolled out in favor of shipments of notebook computers; a trend that will continue to grow in 2021. However, there is still a shortage and pressure on key components and economic recovery after the epidemic, and overall shipments of notebook computers are expected to rise slightly. The Company will continue to be committed to product innovation and emerging applications such as the Internet of things and e-sport products, which will hopefully bring sustainable growth momentum to personal computer products.

People's lifestyles changed dramatically due to the impact of the epidemic in 2020, and server shipments grew with the demand for cloud services driven by remote work and teaching. Looking to the year 2021, although corporate customers are likely to cut back on server expenditure due to the impact of epidemic, the overall market demand is still showing growth as demand for cloud services and remote office services continues to increase. Moreover, Intel and AMD new generation server CPU platforms will move to mass production, which is expected to drive part of replacement trends. Overall, the shipments of servers in 2021 can be viewed optimistically. However, the development of the epidemic and economic recovery are not yet clear, so the Company will still tread cautiously and flexibly so it can respond and adapt quickly to developments and market changes.

The overall smart device industry declined in 2020 due to the epidemic, together with a high penetration rate of smart phones, prolonged replacement cycle, and reduced degree of innovation, which is likely to recover in 2021. Shipments are expected to grow due to the replacement trend driven by 5G. However, the degree of recovery is not yet clear, and the epidemic situation remains unclear and uncontrollable, hence the Company will strive to maintain small, stable growth.

6.2.3 Possible Impact on the Future Financial Business of the Company and Response Plan

In the face of an increasingly fierce competitive environment, the Company will continuously carry out vertical integration and enter into strategic alliances to seek new opportunities, as well as focusing on core business operations, so as to respond to further market changes in the future. As for the demand of investment that might occur due to the growth of operations, the professional team of the Company will see that excellent financial planning in put in place through rigorous internal and external financial risk management analysis, allocation of integrated financial resources, and consideration of the costs of investments to ensure smooth operation of the Company. The Company has no current doubts of significant impact on finances of the business.

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6.3 Analysis of Cash Flow

Unit: NT$ thousand

				Unit: NT$ thousand	Unit: NT$ thousand
Beginning cash balance A	Annual net cash flow from operating activities B	Annual cash outflow C	Cash surplus (insufficient) amount A+B-C	Remedial measures for cash shortfall
				Investment plan	Financial management plan
32,951,595	3,848,350	10,822,206	25,977,739	`－`	`－`
1. Analysis on change of cash flow this year: Operating activity: The overall gross profit rate was affected by the epidemic in 2020. However, the Group continued to adjust its proportion of products, improve the cost structure, reduce operating expenses, and properly use fund procurements by the company team, so that the operating cash flow of the year would not be affected, and the overall cash flow was sufficient to meet the Group's operating expenses. 2. Remedial measures for expected cash shortfall and liquidity analysis: Comprehensively influenced by all kinds of cash flow activities, there should be no circumstance causing insufficient cash this year. 3. Cash liquidity analysis in the coming year: Beginning cash balance (A): NT$ 32,951,595 thousand Expected annual net cash flow from operating activity (B): NT$ 3,848,350 thousand Expected annual cash outflow (C): NT$ 10,822,206 thousand Expected cash surplus (insufficient) amount (A+B-C): NT$ 25,977,739 thousand Looking into 2021, the professional team of the Company will continuously improve the cost structure and devote itself to stabilizing the gross profit margin. Together with the significant impact of cost control, it is expected that cash flow for business activities will be abundant. As well as the expenditure for business activities due to investment activities such as assets procurement, equipment replacement, cash dividend distribution, and similar expenses, the Company also takes advantage of loans from financial institutions to invest in the business, resulting in efficient cash flow thanks to this proper arrangement and management.

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6.4 Major Capital Expenditure Items

6.4.1 Employment of Significant Capital Expenditure and Capital Source:

Unit: NT$ thousand

				Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
Planned project	Actual or expected capital source	Actual or expected completion date	Total capital needed	Circumstance of actual or expected capital employment
				2020	2021	2022	2023
Purchase more plant space and equipment	Own capital	Current year	14,433,923	2,433,923	4,000,000	4,000,000	4,000,000

Note: The actual and expected capital employment in significant capital expenditure is consolidated data.

6.4.2 The Impact of Significant Capital Expenditure on Financial Business

Purchase and update machines and research and development equipment: New product research and development lineup are increased in order to accelerate product development schedules and improve production efficiency.

6.5 Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year

Since its establishment in 1975, Inventec has laid a deep and stable foundation by focusing on the production and OEM of calculators, and later notebook computers, electronic dictionaries, servers and intelligent devices. It has stepped into the popular 5G applications market, medical treatment and vehicle applications. The increasingly updated multi-faceted layout has created a new situation for the Group. By applying AI and 5G to intelligent devices, Inventec Appliances Corp., a subsidiary of the Group, is expected to make a significant contribution to the Group by driving a new wave of demand to Internet of Things in the future. Meanwhile, Besta which always focuses on computer dictionary and translation software. In the future, Besta will continue to develop cloud-related products to reach a new peak. The solar energy company faced the unbalanced issue of market supply and demand, striving for modification of active operational strategy.

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6.6 Analysis of Risk Management

6.6.1 The Impact of Interest Rate, Change in Exchange Rate, Inflation on Loss and Profit of the Company, and Future Resolutions:
Impact on loss and profit of the Company:

Impact on loss and profit	of the Company:
2020	Net amount of interest income(expenditure)	Net amount of exchange(loss) profit
Unit: NT$ thousand	132,385	(461,964)

Future resolutions:
A. Interest rate: The COVID-19 epidemic caused a sharp decline in global economic development in 2020. Early this year, thanks to the arrival of vaccines and strong post-pandemic demand, the battered economy has begun to show signs of life. To reduce the potential risk of the epidemic to the economy, the US Federal Reserve announced that it will maintain low interest rates and implement a quantitative easing policy, while the central bank is expected to maintain a loose monetary policy to keep domestic capital flow stable to maintain the stability of domestic economic and financial development and the needs of people's livelihood. The Company carefully evaluates the risk of interest rate changes in operating its funds and makes the best use of its capital portfolio after considering both liquidity and security.
B. Exchange rate: Bailouts and fiscal expansions in major economies have led to higher investments, trade and consumption, but have also resulted in the spillover of capital, thus redirecting international capital movements and affecting national monetary policy. Taiwan has been export-oriented for a long time; the central bank has been trying to prevent the flow of hot capital in the United States in the face of the uncertainties caused by the trade war between China and the United States, the global epidemic, global financial vulnerability changes, and geopolitical risk. Taiwan has been export-oriented, and the central bank is bound to keep the exchange rate dynamic in order to assist enterprises in their export and investment decisions. Since the Company is deeply rooted in the international market, its main exchange rate policy is to naturally avoid risks after debt and creditors' rights are offset, as well as to reduce the exchange rate risk through currency hedging.
C. Inflation: Monetary policies and currency inflation are often mutually reinforcing to prevent the distortion of real interest rates and exchange rates. Although the quantitative easing policy of the United States may result in inflation, the central bank expects domestic inflation to be moderate, and so there is no urgent risk to economic activities of our country. The situation is expected to remain relatively stable in 2021. In the future, the Company will continue to actively observe market

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conditions and effectively control costs and operating expenses to mitigate the impact of currency inflation on operations and prevent the phenomenon of false profits and real losses.

6.6.2 Engage in High Risk and High Leverage Investments, Lend Funds to Other Parties, Endorsement and Derivatives Transaction Policy, Main Reasons for Profit or Loss, and Future Resolutions:

Based on a steady operation philosophy, the Company mainly focuses on the operation of its original product field. Regarding investments, in addition to relevant investments in the original industry, upstream and downstream of the product field, vertical cooperation, etc., the Company does not engage in any high risk or high leverage investments. Regarding lending funds to other parties, endorsements, and derivatives related transactions, such is actually handled according to the execution policy stipulated in Procedures for Acquisition and Disposal of Assets, Procedures for Lending Funds to Other Parties, and Procedures for Endorsements and Guarantees of the Company. In the future, the Company will still rigorously execute such matters according to the handling procedures of relevant regulations in order to guarantee the maximum rights and interests of the Company and its shareholders.

6.6.3 Future Research and Development Plan and Research and Development Expenditures Expected to be Invested

Innovation and quality: "Innovation" is the cornerstone of differentiation, which is a main factor for breaking through in a competitive environment. The group will continuously adhere to its innovative business philosophy and remain committed to customers and partners with the highest "quality" improvements in the future.
Future research and development plan:
A. Notebook computers: Inventec has been focusing on research and development of notebook computers for a long time. Due to the residential economy effect derived from the epidemic in 2020, overall shipments still grew under the support of remote business opportunities. In response to the new models of medium- and high-level hybrid business laptops launched by brand manufacturers, it will introduce mobile CPU equipped with Intel's new generation Tiger Lake platform in addition to strengthening the application fields of sound effect technology, AI and video in 2021 to offer even more outstanding innovative and high-quality products.
B. Servers and cloud services: With the rise of artificial intelligence and changes to industrial modes, major data centers have expanded their cloud demand and invested in related development fields. The so-called mastery of the cloud can connect the world. The Company has strong hardware, software, and research and development capabilities and will continue to expand its alliance with strategic partners, in addition to the customized complete solutions to increase the added value of products, in order to pursue growth. Furthermore,

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with the cooperation of industry 4.0, the smart factory combined with 5G application will be established and be able to provide customers with high quality, short delivery times, low cost and excellent service products. In 2021, the server and cloud business of the Company is expected to grow in accordingly with the launch of the server CPU of Intel's new generation Whitley Ice lake platform.

C. Smart devices: The future holds an era with the digital economy at the core. |The development of 5G, AI and Internet of Things will connect everything intelligently and accelerate the digital transformation of the industry. In a smart device, the Company enters from intelligent wear, intelligent speaker, intelligent household, and medical treatment, combined with the AI and 5G module.; In addition to the storage, memory, communication, multimedia application, and additional values, based on the accumulated intelligent terminal, broadband, and acoustic field, more diversified development is expected in the future. With the introduction of relevant cloud technology, it is expected to become the benchmark of the global wireless communication industry.
Research and development expenditure expected to be invested: At the rapid outbreak time of information communication, the future development plan of the Company will continue to move by mastering market fluctuation and understanding customer demands. In response to new market environments, manufacturing process improvement, and technology development, the Group is expected to input more than NT$ 10.2 billion in research and development this year and will control the product development and market sales schedule within six months.
The research and development plans in recent years, current progress of unfinished research and development plans, research and development expenses that need to be invested, expected time of completing mass production, and major factors influencing the success of research and development in the future:

Recent Annual Plans	Current Progress	Research and Development Expenses to be Invested	Time of Completing Mass Production (Note)	Major Factors Influencing the Success of Research and Development in the Future
Notebook computer	Under development	NT$ 2.6 billion	2022	Provision of long-term accumulated software and hardware technology and customized overall solutions
Server and cloud computing	Under development	NT$ 4.3 billion	2022	Provision of long-term accumulated software and hardware technology and customized overall solutions
Smart phone and wireless communication devices	Under development	NT$ 1.2 billion	2022	Continuous innovation, good quality, excellent talent, design, manufacturing, marketing, and after-sales service capability

Note: This refers to the mass production time currently expected; the actual situation is still subject to market and customer demands.

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6.6.4 Important Policies at Home and Abroad, the Impact of Law Changes on the Company’s Financial Operations, and Resolutions:

The relevant units of the Company have always strictly followed important policies at home and abroad, as well as law changes, and pay close attention to any changes at all times. They also actively coordinate and adjust company financial business activities in response to such changed matters. With regard to the promotion of corporate governance by competent authorities, successive issuing and amendment of the Company Act, Securities Exchange Act, and handling criterion for all kinds of businesses, the reformation of the tax regulations environment, etc., the Company actively coordinates to handle such matters as required.

6.6.5 The Impact of Technology Change and Industry Change on Company Financial Operations and Resolutions:

5G has led to a new trend in global science and technology, enabling more alliances between different industries to create unique competitiveness. The digital economy will be the core of the future. Inventec intends to build AI Internet of Things products, combining digital technology with its own technology in cloud computing and AI applications, and actively engage in the development of 5G. To connect world-class management, it has set up short-, medium- and long-term business goals through digital transformation blueprints, improved quality, and optimized the process to realize intelligent production links via the collection, application and analysis of big data in tandem with the Internet of Things and artificial intelligence technology. Thus, the 5G intelligent factory came into being. In addition, it is expected to serve as the best management tool for technological and industrial change through active and effective use of financial and IT digitization.

6.6.6 The Impact of Corporate Image Change on Corporate Crisis Management and Resolutions:

Corporate governance focuses on autonomy and self-examination to achieve the goal of self-discipline through standardization, while sustainable operations emphasize people and the environment to fulfill corporate social responsibility through continuous efforts. Inventec has always adhered to the concept of integrity and sustainable management, encourages colleagues to face these challenges head-on, and join the company to enhance strength and sense of identity through the core values of "innovation, quality, open mind and execution" to further increase the Company's competitiveness. In the future, we need to do "one more responsibility, one more concern". Through the Internet of Things, we can obtain experience and share resources to maximize social responsibility.

The Company adheres to a consistent operation philosophy and corporate culture. Through internal management mechanisms and external auditing execution, the Company vigorously examines and approves the setting and execution of objectives and strategies, actually mastering the overall organizational risk. As of the publication date of this annual report, the Company has no impact on enterprise crisis management caused by a change of corporate image.

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6.6.7 Expected Benefits of Mergers, Possible Risks, and Resolutions:

Since 2020 and as of the publication date of this annual report, the Company has no circumstances related to conducting a merger.

6.6.8 Expected Benefits of Plant Expansion, Possible Risks, and Resolutions:

The revision of the trade map has brought about a fair-trade battle. In response to the changing trade environment and the increasing flexibility of orders, the Group has expanded its production base overseas by adjusting operation planning to reduce the risk of production concentration. The Company has also carefully evaluated its plant expansion plan in accordance with the economic environment and market demand, and also disposed of part of the Shanghai Pudong subsidiary plant through the activation of assets in early 2021 to reduce capital exposure risk. With the reallocation of production capacity, a win-win situation will be created.

6.6.9 Risks Faced in Centralized Goods Purchase and Sales and Resolutions:

In the era of Sino-US trade barriers and the post-epidemic situation, the manufacturing industry needs to build a highly resilient supply chain to face the risk of supply chains breaking and strengthen demand forecasts, procurement bargaining and supplier management mechanisms globally. These actions will disperse the risk of product manufacturing, and raw material supply and distribution from regional customer demand. The Company has already adjusted its production strategy. Whether the purchase of key components or the sale of the whole machine, the Company strives for diversification in supply and demand. The so-called "serving the hour" will effectively prevent the dilemma caused by the excessive concentration of purchases and sales.

6.6.10 The Impact of Massive Transfer or Change of Stock Equity between and among Directors, Supervisors, or Major Shareholders Holding More than Ten Percent of the Total Share of the Company and Resolutions: None.

6.6.11 The Impact of Change of Operation Rights of the Company, Risks, and Resolutions: None.

6.6.12 Litigation or Non-Litigation Cases:

Significant litigation, non-litigation or administrative litigation cases of the Company and affiliated companies in the past two years, such cases that have been sentenced or are currently pending, and the results thereof that have a significant impact on shareholders’ equity or securities price: None
As of the publication date of annual report, whether the Directors, Supervisors, President, and shareholders with shareholding ratio over ten percent of the Company are involved in any

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significant litigation, non-litigation or administrative litigation cases, such cases have been sentenced or are currently pending, and the results thereof have a significant impact on shareholders' equity or securities price: None.

6.6.13 Other Important Risks and Counter Measures

Description of information safety risk evaluation and analysis and corresponding measures
A. Establish information safety organization: The Company attaches great importance to information safety, and the information safety response team has been established under the auspices of the president and includes the production line information safety response teams of both the Personal Solution Group (PSG) and the Enterprise Business Group (EBG) to implement and strengthen the management of information safety. According to the "2019 internal audit plan", the Company will audit Inventec’s information safety project, monitor the information safety management system (ISMS) risk evaluation plan and implementation of the information safety system, and submit the audit results to the Board of Directors.
B. Implement information security management: In accordance with the "Information Safety Management Regulations", in order to carry out Inventec’s information safety management, meet customers’ expectations of Inventec’s information safety, ensure the confidentiality, integrity, and availability of the enterprise system and network transmissions, prevent illegal use, and the Company will continue to provide information safety education training for employees, actively perform risk weakness management, and ensure the safety of the physical environment, computer host, network use, system access, development and maintenance safety, and mobile devices. Violations of the safety protection regulations will be subject to the "Personnel Management Regulations".
C. Strengthen Company employees' information security awareness: The "Code of Conduct for Employees" signed by the employees every year contains information safety protection matters. Information safety announcements shall be issued in a timely manner to remind employees to be careful of information safety risks. The Company regularly organizes information safety education and training courses for new employees so that they understand the relevant information safety management regulations of Inventec, cultivate information safety concepts, and comply with the information safety regulations. The Company further advocates information safety education and training for its employees and provides them with the latest information safety cases and trending safety information to improve employees’ information safety attainment.
D. Anti-virus and hacker monitoring: To monitor the virus detection situation in every factory around the world and carry out necessary protection measures and virus detection and killing management, track the cause for computer viruses of the factories, and confirm that any virus has been eradicated. Every month, the president presided over the information safety conference to discuss the current information safety events reported in the news and present related information safety measures to prevent the production line from stopping and affecting the Company's operations due an information safety event.
E. Weakness management and vulnerability repair: regularly use the vulnerability scanning system to check for vulnerabilities in the external service host, strengthen system patch updates

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management, assess the system software update status every month and report to the General Manager, to mitigate weakness management and take necessary vulnerability repair and protection measures.

F. Information security international certification: The factory and scope of Inventec having obtained its ISO 27001 international information security certification is as follows:
(A). Taipei headquarters: The computer room and CTM (Common Tracking Management) system maintenance and operation in Shilin factory.
(B). Taoyuan factory: The computer room, computer room maintenance and operation, IT information, testing technology, MES service units, EBM (Engineering BOM Management) system, and PEN (Process Engineering Notice) system.
(C). Chongqing factory: The information security management activities related to the operation and maintenance of the office, security, production, and test information system and computer room.
(D). Shanghai factory: Information security management activities related to the maintenance and operation of the Company's internal information system and production information system (including the computer room).
(E). Czech factory: Server Assembly and Services, PC Assembly and Services.
G. Information security check : Every year, the Company shall undergo and information safety audit of customers by an external third party, in addition to an internal self-audit, and review information safety matters according to ISO 27001 and other information safety and control regulations, including safety policies, information safety organization, human resources safety, assets management, access control, cryptography, physical and environmental safety, operations safety, communication safety, information system development and maintenance, supplier relations, information event management, operation management, and compliance checks.
H. Information security protection strengthening:
(A). For equipment replacement operations and upgrades, old equipment is continuously replaced, and an operating system that has been terminated is upgraded to enhance system availability and security.
(B). Upgrade the next-generation firewall, consolidate the network boundary, guard against external threats, establish a two-layer defense architecture, separate the production line, client terminal, and computer room server network, and improve the depth of security protection.
(C). Import the bastion host or jump host, simplify the online entry of the host, reduce the risk of infiltration, enhance the online monitoring of the host, and use the dynamic password to protect privileged accounts.

151

  - (D). Promote two-factor authentication and send the second layer OTP (One Time Password) through SMS to verify the identity of the logon to prevent the risk of the account and password being stolen or broken.

  - (E). Strengthen APT attack protection and introduce an APT (Advanced Persistent Threat) protection scheme to prevent malware and hacker attacks and protect Inventec’s information security.

  - (F). Guard against hacker phishing email attacks, enable email protection mechanisms, filter malicious attachments and phishing links, and avoid social engineering attacks that will cause harm to the Company.

Climate change risk: Following the TCFD climate change governance framework for mitigation and adjustment practices, according to climate action practices, define the risk assessment and identification procedures, policies and regulations, technology, market, goodwill and extreme weather, assess the potential niche opportunities, search for opportunities in new energy resources, markets, products/services, and resource efficiency, developing new businesses and services, and integrate them into the Company's operating procedures.
Legal changes: Immediately grasp changes in laws, policies and litigation practices related to the Company's operations in real time; implement the U.S. Export Control Act, confidential information, and copyright compliance programs; take measures to respond to the legal risks associated with the COVID-19 outbreak; and conduct seminars on intellectual rights in legal affairs and educational training for new recruits, to facilitate risk management and intellectual property protection.
Risk of operational suspension due to the COVID-19 epidemic: In response to the COVID-19 epidemic, adjust production strategies and strengthen business continuity management. Due to the spread and impact of COVID-19, there may be a risk of plant operations being suspended. In order to ensure continuous operation, Inventec has set up an epidemic prevention response team in each plant to formulate epidemic prevention plans, implement epidemic prevention measures, schedule staff epidemic prevention life, deploy the value chain in advance, serve customers without interruption, and ensure continuous operation.
A. Externally:
(A). Uninterrupted customer service:
- a. Responding to Inventec’s Epidemic Prevention Plan in accordance with the customer supply chain BCP plan.
- b. Participating in the training of COVID-19 prevention measures held by customers, and cooperating with customers in epidemic prevention and response.
- c. According to the requirements of the customer value chain, adjust the production of products in off-site factories to ensure fulfilment of local customer demands.

152

(B). Continuous supply chain management:

a. Confirming the detailed material status of raw materials through the Inventec e-Supply Chain information system
b. When the epidemic situation is critical, the purchasing staff cooperate with the Company HR's work-from-home plan to maintain operations.
c. In line with customer value chain requirements, increase raw material inventory management to ensure the fulfilment of customer demand.
(C). Group companies are unaffected
a. Purchase of video and hardware equipment, and connecting with each factory team to achieve project tasks.
b. AR augmented real-time communication and intuitive remote guidance to improve the efficiency of remote communication.

B. Internally:

(A). Epidemic prevention and taking care of health
a. Rolling adjustment of epidemic prevention policies.
b. Switching to telephone or video conferencing.
c. Wearing masks during the whole process to ensure the health and safety of employees.
(B). Two programs for travel and attendance management
a. Remote workplace.
b. Work from home.
(C). Steady growth in operation management
a. Digital transformation.
b. Industrial upgrading: combining smart factory to create the world's first open-architecture
- 5G independent enterprise private network.

6.7 Other Important Matters: None.

153

VII. Special Disclosure

7.1 Summary of Affiliated Companies

7.1.1 The Chart of Inventec Corporation

==> picture [790 x 406] intentionally omitted <==

----- Start of picture text -----

Inventec
Corporation
Inventec
America) Holding (North Corp. (Czech), s.r.o. Inventec 100% Corporation(Cayman) 100% IEC (Cayman) Inventec 100% Corp. (Hong Kong) Corporation Inventec 100% Ltd. Manufacturing (India) Private Inventec Limited 99.99% Investments Co., LtdInvnetec 100% . CorporationInventec 33.45% Energy Solar Appliances Inventec 100% Corp. Development Corporation Inventec 100%Japan Corporation Inventec Japan 100% AIMobile Co., 73%Ltd. Co., Ltd.Inventec 37.53% Besta
100%
4.64 % 9.57 %
0.01 %
Refer to the chart Refer to the Refer to the Inventec Refer to the
of Inventec
Holding (North Inventec chart of Inventec chart of Electronics (Tianjin) Inventec chart of
America) (Cayman) (Cayman) Co., Ltd. Appliances
Corp. Corp. Corp. 100% Corp
Note1 ：
Investments in subsidiaries
Inventec Investments accounted for under the equity method
(Beijing) Investments between subsidiaries
Electronics
Technology Note 2 ： As of 12/31/2020
Co., Ltd
100%
----- End of picture text -----

154

The Chart of Inventec Holding (North America) Corp.

==> picture [781 x 357] intentionally omitted <==

----- Start of picture text -----

Inventec
Corporation
Inventec Holding
(North America)
Corp.
100%
Inventec Inventec
Inventec Inventec Distribution IEC
Manufacturing Configuration
(USA) (North America) Technologies, S. de
(North America) (North America)
Corp. Corp. R.L. de C.V.
Corp. Corp.
100% 100% 99%
100% 100%
1%
----- End of picture text -----

155

The Chart of Inventec (Cayman) Corp.

==> picture [790 x 418] intentionally omitted <==

----- Start of picture text -----

Inventec
Corporation
Inventec IEC
(Cayman) (Cayman)
Corp Corporation
100% 100%
12.67 %
(Shanghai) Inventec Technology (Pudong) Inventec (Pudong) Inventec Service Co., (Shanghai) Inventec Inventec Hi-Tech Huan Hsin (Zhejiang) Inventec (Chongqing) Inventec (Chongqing) Service Co., Inventec
Corp. Corp. Corp Ltd Corp. Technology Co., Corp. Ltd
51.06% 100% 100% Ltd. 87.33%
100% 53.73% 100%
100%
48.94% 46.27%
Inventec Saint
Asset-Management Investment
(Shanghai) Consulting
Corporation Corporation
100%
78%
----- End of picture text -----

156

The Chart of Inventec Apliances Corp.

==> picture [73 x 168] intentionally omitted <==

----- Start of picture text -----

Inventec
Corporation
Inventec
Appliances Corp.
100%
Inventec
Appliances
(Cayman)
Holding Corp.
100%
----- End of picture text -----

==> picture [770 x 113] intentionally omitted <==

----- Start of picture text -----

Inventec Appliances Inventec Inventec Inventec Inventec Inventec Inventec Inventec
Appliances Appliances Appliances
(USA) Distribution Appliances Appliances Appliances Appliances (XI'AN)
100%Corp. Corporation USA 100%Inc. (Shanghai) Co.Ltd.100% (Pudong) Corp.100% (Jiangning) 100%Corp. (Nanjing) Corp.100% Corporation100% Corporation(Nanchang) 100%
Inventec Appliances EnterpriseCo.Ltd(Shanghai) . Management & Consulting (Shanghai) Co., Ltd.Apex Business Manufacturing Co., Ltd(Nanchang) Intelligent Inventec Appliances (Malaysia) SDN. BHDInventec Appliances
100%
100% 100% 100% .
----- End of picture text -----

157

7.1.2 Inventec Corporation Subsidiaries

Unit: NT$ Thousands, As of 12/31/2020

Company	Date of Incorpo- -ration	Place of Registration	Capital Stock	Business Activities
Inventec Corporation (Hong Kong) Ltd.	1990.08	Level 54 Hopewell Centre 183 Queen’s Road East, Hong Kong	9,163	Investing in Mainland China and import and export business
Inventec (Tianjin) Electronics Co., Ltd.	1993.11	Room 401-410, Wanzhao Smart Valley Building, No. 218 Hongqi Road, Nankai District, Tianjin, China	142,400	Electronic products hardware and software development and manufacturing.
Inventec (Beijing) Electronics Technology Co., Ltd.	1994.07	A206-207, Information Center, Zhongguancun Software Parkt, Beijing, China.	41,296	Production of computer-related products and after-sale services; sale of self-produced products; business information consultation
Inventec (Cayman) Corp.	2000.06	Floor 4, Willow House, Cricket Square, P.O. Box 2804, Grand Cayman KY1-1112, Cayman Islands	9,812,963	Holding Company
Inventec (Shanghai) Corp	2000.10	Room 402-4, Building 6, No.789 Puxing Road, Minhang District, Shanghai, China	2,087,127	Computer product assembly and sale of accessories
Inventec Asset-Management (Shanghai) Corporation	2014.06	Commercial 08, 1st Floor, Building 7, No. 1528, Gumei Road, Xuhui District, Shanghai, China	1,869,030	Real estate development and management
Inventec (Pudong) Corp.	2003.01	Building 1, No.789, Puxing Road (5/1 Hill, Block 105, Pujiang Town), MinhangDistrict, Shanghai, China	1,424,000	Computer product assembly and sale
Inventec (Pudong) Technology Corp.	2004.04	Building 6, No.789, Puxing Road(2/2 Hill, Block 106, Pujiang Town), MinhangDistrict, Shanghai, China	1,668,692	Computer products and accessories production and marketing
Inventec (Shanghai) Service Co., Ltd	2004.03	Room 402-5, Building 6, No.789 Puxing Road, Minhang District, Shanghai, China	188,679	Software product development services and sales
Saint Investment Consulting Corporation	2019.09	Room C224, Building 2, No.1628 Suzhao Road, Minhang District, Shanghai, China	87,296	Business management consulting
Inventec Hi-Tech Corp.	2004.09	Building 2, No.789, Puxing Road (5/1 Hill, Block 105, Pujiang Town), MinhangDistrict, Shanghai, China	1,424,000	Computer products assembly operations and sale
Inventec Huan Hsin (Zhejiang) Technology Co., Ltd.	2007.03	No.8, XinDa Road, Huimin Avenue, Jiashan County, Zhejiang Province, China	817,376	Production and sale of electronic calculators and external equipment
Inventec (Chongqing) Corp.	2010.05	No.66, Xiqu Sceond Road, Shapingba District, ChongQing, China	2,136,000	Computer products assembly operations and sale
Inventec (Chongqing) Service Co., Ltd.	2010.05	3F Building No.98, Xiqu Sceond Road, Shapingba District, ChongQing, China	28,480	Computer products assembly operations and sale

158

Company	Date of Incorpo- -ration	Place of Registration	Capital Stock	Business Activities
IEC (Cayman) Corporation	2013.11	Floor 4, Willow House, Cricket Square, P.O. Box 2804, Grand Cayman KY1-1112, Cayman Islands	739,500	Holding Company
Inventec Holding (North America) Corp.	1997.09	11450 Compaq Center Dr. West Suite 200, Houston, TX 77070	142,400	Holding company in America
Inventec (USA) Corp.	1997.02	11450 Compaq Center Dr. West Suite 200, Houston, TX 77070	14,240	Computer product assembles and warranty services
Inventec Manufacturing (North America)Corp.	1997.09	11450 Compaq Center Dr. West Suite 200, Houston, TX 77070	56,960	Technical and Marketing support service
Inventec Distribution (North America)Corp.	1998.08	11450 Compaq Center Dr. West Suite 200, Houston, TX 77070	14,240	Sale of computer products
Inventec Configuration (North America)Corp.	1998.08	11450 Compaq Center Dr. West Suite 200, Houston, TX 77070	56,960	Assembly of computer products
IEC Technologies, S. de R.L. de C.V.	2006.09	Blvd.Independencia #10150,Centro Industrial del Norte #1, CD Juarez, Chihuahua,Mexico 32575	57,124	Assembly of computer and related.
Inventec (Czech), s.r.o.	2004.02	Modrice, Central Trade Park Evropska 863 664 42 Modrice, Czech Republic	90,576	Assembly of computer products and after-sale services
Inventec Development Japan Corporation	2004.12	7F, No.1 Shinbashi-Ekimae BL.,2-20-15 Shinbashi, Minakotu-ku, Tokyo, Japan	10,984	Development, design, and sale of computer accessories
Inventec Manufacturing (India) Private Limited	2015.04	Old No. 3, New No.5 Vanitha 3rd Avenue, Besant Nagar, Chennai Chennai TN 600090 INDIA	218,288	Computer product assembly and after-sale services
Invnetec Investments Co., Ltd.	2009.08	3F-1, No.166, Sec. 4, Chengde Rd., Shilin Dist., Taipei City, Taiwan	1,088,000	Investment activities
Inventec Solar Energy Corporation	2010.10	No.349, Sec 2, Renhe Rd., Daxi Township, Taoyuan City, Taiwan.	3,233,548	Research and development, production, and sale of solar cells
Inventec Appliances Corp.	2000.05	No.37, Wugong 5th Road, Wugu District, New Taipei City, Taiwan	5,368,573	Wireless terminal products
Inventec Appliances (Cayman) Holding Corp.	2000.06	The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands.	5,693,864	Holding Company
Inventec Appliances (USA) Distribution Corp.	2000.07	5700 Tennyson Parkway Suite 300, Plano, Texas 75024	130	Sale of electronics products and accessories
Inventec Appliances Corporation USA Inc.	2006.04	2880 Lakeside Drive, Suite 247, Santa Clara,California 95054	33	Sales activities
Inventec Appliances (Shanghai) Co.Ltd.	1991.07	No.7, Gui Qing Rd., Shanghai, China.	1,469,568	Development, design, and sale of electronics products and leasing
Inventec Appliances (Shanghai) Enterprise Co.Ltd.	2015.04	Room B506, Building 3, No.7 Gui Qing Road, Xuhui District, Shanghai, China.	34,919	Hardware and software development and consulting and electronic product sales
Apex Business Management & Consulting (Shanghai)Co.,Ltd.	2009.07	Room 701, Building 3, No.7 Gui Qing Road, Shanghai, China.	2,190	Business Administration

159

Company	Date of Incorpo- -ration	Place of Registration	Capital Stock	Business Activities
Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	2018.06	No.189, Torch 3rd Road, Nanchang High-tech Industrial Development, Nanchang City, Jiangxi Province, China	261,889	Wearable intelligent equipment manufacturing, and the research and development, design, processing, manufacturing, and sale of electronic products and communication equipment
Inventec Appliances (Pudong) Corp.	2004.03	Building 1-3, No.789 Puxing Road, Minhang District, Shanghai, China	2,192,960	Development, design, and manufacturing of wireless communication products and mobile communication equipment
Inventec Appliances (Malaysia) SDN. BHD	2018.09	253G-4-3A, Premier Centre, Jalan Burma, 10350 Penang, Malaysia	501,784	Sale of related electronic materials andproducts
Inventec Appliances (Nanjing) Corp.	1993.10	No.100 Xian He Street, Nanjing, China	142,400	Real Estate Rental and Leasing
Inventec Appliances (Jiangning) Corp.	2004.02	No.133, Jiang-Jun Road, Jiangning Economic and Technological Development Zone, Nanjing, China.	1,936,640	Development, design, and manufacturing of mobile communication devices (mobile phones), telephone sets (excluding multimedia advanced functions), etc
Inventec Appliances (XI’AN) Corporation	2007.12	No.50 Jin-Ye 1st Road High-tech Industrial Development Zone, Xi'an China	113,920	Development and design of related communication and electronic products and software, related technical services, and house rentals
Inventec Appliances (Nanchang) Corporation	2008.12	C401-417, No. 698 Jingdong Boulevard, High-Tech Zone of Nanchang, Jiangxi, China.	59,808	Development, design, and sale of communication and electronic-related products and software
AIMobile Co., Ltd.	2016.05	6F, No.166 Chengde Rd Sec 4, Shilin District, Taipei City, Taiwan	250,000	Research and development, production, and sale of intelligent mobile devices
Inventec Japan Corporation	2019.08	7F, No.1 Shinbashi-Ekimae BL.,2-20-15 Shinbashi, Minakotu-ku, Tokyo, Japan	2,746	Commercial trade and management

7.1.3 Shareholders in Common of Inventec Corporation and Its Subsidiaries with Deemed Control and Subordination: None.

160

7.1.4 Industrial Classification in Inventec Corporation Subsidiaries

Industrial Classification	Company	Relationships to Related Party
Holding company	Inventec Corporation (HongKong) Ltd.	Direct investment in Inventec (Beijing) Electronics Technology Co., Ltd. and Inventec (Tianjin) Electronics Co., Ltd.
Electric Product Manufacturing	Inventec (Tianjin) Electronics Co., Ltd.	Research, manufacture, sale and warranty services of electronicproducts and related.
Electric Product Manufacturing	Inventec (Beijing) Electronics Technology Co., Ltd.	Manufacture, and warranty services of computers and related,sales of self-manufactured products; as well as business information consultation.
Holding company	Inventec(Cayman) Corp.	Direct investment in Inventec(Shanghai) Corp. etc.
Electric Product Manufacturing	Inventec (Shanghai) Corp.	Import and export trade agency of computer products and accessories
Electric Product Manufacturing	Inventec Asset-Management (Shanghai)Corporation	Real estate development and management
Electric Product Manufacturing	Inventec(Pudong)Corp.	Computerproduct assemblyand sale
Electric Product Manufacturing	Inventec (Pudong) Technology Corp	Computer products and accessories production and marketing
Electric Product Manufacturing	Inventec(Shanghai)Service Co., Ltd	Research and sale of sofewareproducts
Electric Product Manufacturing	Saint Investment Consulting Corporation	Business management consulting
Electric Product Manufacturing	Inventec Hi-Tech Corp.	Computerproducts assemblyoperations and sale
Electric Product Manufacturing	Inventec Huan Hsin (Zhejiang) TechnologyCo., Ltd.	Computer products assembly operations and sale
Electric Product Manufacturing	Inventec(Chongqing)Corp.	Computerproducts assemblyoperations and sale
Electric Product Manufacturing	Inventec (Chongqing) Service Co., Ltd.	Computer products assembly operations and sale
Holding company	IEC (Cayman) Corporation	Direct investment in Inventec Technology (Chongqing) Corp.
Holding company	Inventec Holding (North America) Corp.	Direct investment in Inventec (USA) Corp. etc.
Electric Producs Manufacturing	Inventec(USA)Corp.	Computer product assembles and warranty services
Electric Product Manufacturing	Inventec Manufacturing (North America)Corp.	Technical and Marketing support service
Electric Product Manufacturing	Inventec Distribution (North America) Corp.	Computer product assembles and sales
Electric Products Manufacturing	Inventec Configuration (North America)Corp.	Computer product assembles
Electric Products Manufacturing	IEC Technologies, S. de R.L. de C.V.	Assemblyof servers and related.
Electric Products Manufacturing	Inventec (Czech), s.r.o.	Computer product assembles and warranty services
Electric Product Manufacturing	Inventec Development Japan Corporation	Developing, designing and selling computer peripherals
Electric Product Manufacturing	Inventec Manufacturing (India) Private Limited	Computer product assembles and warranty services
Investment	Invnetec Investments Co., Ltd.	Investment activities

161

Industrial Classification	Company	Relationships to Related Party
Energy Technical Services	Inventec Solar Energy Corporation	Developing, production and selling of solar cells.
Electric Product Manufacturing	Inventec Appliances Corp.	Communication and digital accessory product assembles and sales
Holding company	Inventec Appliances (Cayman) HoldingCorp.	Investment in Inventec Electronics (Shanghai) Co., Ltd. etc.
Electric Product Manufacturing	Inventec Appliances (USA) Distribution Corp.	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances Corporation USA Inc.	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances (Shanghai) Co.Ltd.	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances (Shanghai) Enterprise Co.Ltd.	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Apex Business Management & Consulting (Shanghai)Co., Ltd.	Business Administration
Electric Product Manufacturing	Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances (Pudong) Corp.	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances (Malaysia) SDN. BHD	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances (Nanjing) Corp.	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances (Jiangning) Corp.	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances (XI’AN) Corporation	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	Inventec Appliances (Nanchang) Corporation	Communication and digital accessory product assembles and sales
Electric Product Manufacturing	AIMobile Co., Ltd.	Research and development, production, and sale of intelligent mobile devices
Electric Product Manufacturing	Inventec Japan Corporation	Commercial trade and management

162

7.1.5 Rosters of directors, supervisors, and presidents of Inventec corporation’s subsidiaries

Unit: Shares ； % As of 12/31/2020

			Shareholding	Shareholding
Company	Title	Name		Investment
			Shares
				Holding (%)

Inventec		Representative of Inventec Corporation`：`
Corporation	Director	Yeh, Kuo-I	2,500,000	100%
(Hong Kong) Ltd.	Director	Cho, Tom-Hwar
		Representative of Inventec Corporation (Hong Kong) Ltd.`：`
	Chairman	Tsai, Chih-An
Inventec (Tianjin)
	Director	Yen, Cheng-Lung
Electronics Co.,			N/A	100%
	Director	Fan, Kang
Ltd.
	Supervisor	Chen, Pei-Chia

	*General manager	Fan,Kang

Inventec (Beijing)		Representative of Inventec Corporation (HongKong) Ltd.`：`
Electronics	Chairman	Wu, Yung-Tsai
			N/A	100%
Technology Co.,	Supervisor	Chen, Pei-Chia

Ltd.	*General manager	Chiu, Chuan-Cheng

Inventec		Representative of Inventec Corporation`：`
			301,768,161	100%
(Cayman) Corp.	Director	Cho, Tom-Hwar

		Representative of Inventec (Cayman) Corp.`：`
Inventec	Chairman	Wu, Yung-Tsai
			N/A	51.06%
(Shanghai) Corp.	Supervisor	Chen, Pei-Chia

	*General manager	Wu,Yung-Tsai
		Representative of Inventec (Shanghai) Corp.`：`
	Chairman	Wu, Yung-Tsai
Inventec
	Director	Wang, Tien-Hui		78%
Asset-Management
	Supervisor	Chen, Pei-Chia	N/A
(Shanghai)
		Representative of Shanghai Caohejing Hi-Tech Park
Corporation.				22%
	Director	Development Corp.`：`Hsueh, Han

	*General manager	Wang, Tien-Hui
		Representative of Inventec (Cayman) Corp.`：`
Inventec (Pudong)	Chairman	Wu, Yung-Tsai
			N/A	100%
Corp.	Supervisor	Chen, Pei-Chia

	*General manager	Wang, Tien-Hui
		Representative of Inventec (Cayman) Corp.`：`
	Chairman	Tsai, Chih-An
Inventec (Pudong)	Director	Yen, Cheng-Lung
			N/A	100%
Technology Corp.	Director	Liao, Meng-Chieh

	Supervisor	Chen, Pei-Chia
	*General manager	Liao,Meng-Chieh
		Representative of Inventec (Cayman) Corp.`：`
Inventec	Chairman	Tsai, Chih-An
(Shanghai) Service	Supervisor	Chen, Pei-Chia	N/A	53.73%
Co., Ltd	*General manager	Liao, Meng-Chieh

163

			Shareholding	Shareholding
Company	Title	Name		Investment
			Shares
				Holding (%)

		Representative of Inventec (Shanghai) Service Co., Ltd`：`
Saint Investment	Chairman	Tsai, Chih-An
Consulting	Supervisor	Chen, Pei-Chia	N/A	100%
Corporation	*General manager	Yeh, Li-Cheng


		Representative of Inventec (Cayman) Corp.`：`
Inventec Hi-Tech	Chairman	Tsai, Chih-An
			N/A	100%
Corp.	Supervisor	Chen, Pei-Chia

	*General manager	Liao, Meng-Chieh
Inventec Huan
	Liquidator	Huang, Kuo-Chun
Hsin (Zhejiang)
	Liquidator	Chen, Pei-Chia	N/A	100%
Technology Co.,
	Liquidator	Kang, Chien-Ming
Ltd.

		Representative of Inventec (Cayman) Corp.`：`
	Chairman	Chang, Hui
				87.33%
	Director	Yin, Fu-Ming
Inventec
	Supervisor	Chen, Pei-Chia	N/A
(Chongqing) Corp.
		Representative of IEC (Cayman) Corporation`：`
				12.67%
	Director	Yu, Sa-Hua

	*General manager	Yu,Sa-Hua
		Representative of Inventec (Cayman) Corp.`：`
Inventec
	Chairman	Chang, Hui
(Chongqing)			N/A	100%
	Supervisor	Chen, Pei-Chia
Service Co., Ltd.
	*General manager	Yu,Sa-Hua

		Representative of Inventec Corporation`：`
IEC (Cayman)
			25,000,000	100%
Corporation	Director	Cho, Tom-Hwar


Inventec Holding (North America) Corp.	Director Director Director *General manager	Representative of Inventec Corporation`：` Cho, Tom-Hwar Wu, Yung-Tsai Tsai, Chih-An Tsai, Chih-An	5,000,000	100%
Inventec (USA) Corp.	Director Director Director *General manager	Representative of Inventec Holding (North America) Corp.`：` Cho, Tom-Hwar Wu, Yung-Tsai Tsai, Chih-An Tsai,Chih-An	500,000	100%
Inventec Manufacturing (North America) Corp.	Director Director Director *General manager	Representative of Inventec Holding (North America) Corp.`：` Cho, Tom-Hwar Wu, Yung-Tsai Tsai, Chih-An Tsai,Chih-An	2,000,000	100%
Inventec Distribution (North America) Corp.	Director Director Director *General manager	Representative of Inventec Holding (North America) Corp.`：` Cho, Tom-Hwar Wu, Yung-Tsai Tsai, Chih-An Tsai,Chih-An	500,000	100%

164

			Shareholding	Shareholding
Company	Title	Name		Investment
			Shares
				Holding (%)

Inventec Configuration (North America) Corp.	Director Director Director *General manager	Representative of Inventec Holding (North America) Corp.`：` Cho, Tom-Hwar Wu, Yung-Tsai Tsai, Chih-An Tsai,Chih-An	2,000,000	100%
IEC Technologies, S. de R.L. de C.V.	Director Director *General manager	Representative of Inventec Holding (North America) Corp.`：` Cho, Tom-Hwar Wu, Yung-Tsai Tsai,Chih-An	2	100%
Inventec (Czech), s.r.o.	Representative Representative Representative	Representative of Inventec Corporation`：` Tsai, Chih-An John William Busby Tseng, Kuang-Chao	68,000,000	100%
Inventec Development Japan Corporation	Representative Supervisor	Representative of Inventec Corporation`：` Cho, Tom-Hwar Yu, Chin-Pao	45,100	100%
Inventec Manufacturing (India) Private Limited	Director Director Director	Representative of Inventec Corporation`：` Wu, Yung-Tsai Chang, Hui Wu, Hsiang-Chin	55,994,400 NA	99.99% NA
Invnetec Investments Co., Ltd.	Chairman Director Director Supervisor *General manager	Representative of Inventec Corporation`：` Cho, Tom-Hwar Wu, Yung-Tsai Yu, Chin-Pao Cheng, Hsien-Ho Yu, Chin-Pao	108,800,000	100%
Inventec Solar Energy Corporation	Director Chairman Director Director Supervisor Supervisor General manager	Inventec Corporation Hsieh, Jui-Hai Representative of Invnetec Investments Co., Ltd.`：` Yu, Chin-Pao Yen, Hao Cheng, Hsien-Ho Hsu, Shen-Chun Yen, Hao	108,150,000 7,291,760 15,000,000 2,378,000 530,000 79,500 2,378,000	33.45% 2.26% 4.64% 0.74% 0.16% 0.02% 0.74%
Inventec Appliances Corp.	Chairman Director Director Director Director Supervisor *General manager	Representative of Inventec Corporation`：` Chang, Ching-Sung Ho, Tai-Shui Yeh, Li-Cheng Chang, Hui Tsai, Chih-An Yu, Chin-Pao Ho, Tai-Shui	536,857,254	100%
Inventec Appliances (Cayman) Holding Corp.	Director	Representative of Inventec Appliances Corporation`：` Chang, Ching-Sung	199,574,638	100%

165

			Shareholding	Shareholding
Company	Title	Name		Investment
			Shares
				Holding (%)

Inventec Appliances (USA) Distribution Corp.	Director *General manager	Representative of Inventec Appliances (Cayman) Holding Corp.`：` Chang, Ching-Sung Wang,Po-Hung	400,000	100%
Inventec Appliances Corporation USA Inc.	Director *General manager	Representative of Inventec Appliances (Cayman) Holding Corp.`：` Chang, Ching-Sung Wang, Po-Hung	10,000	100%
Inventec Appliances (Shanghai) Co.Ltd.	Chairman Director Director Supervisor *General manager	Representative of Inventec Appliances (Cayman) Holding Corp.`：` Chang, Ching-Sung Tsai, Shih-Kuang Ho, Tai-Shui Tseng, Ching-An Tsai,Shih-Kuang	N/A	100%
Inventec Appliances (Shanghai) Enterprise Co.Ltd.	Chairman Supervisor *General manager	Representative of Inventec Appliances (Shanghai) Co.Ltd.`：` Chang, Ching-Sung Tseng, Ching-An Tsai,Shih-Kuang	N/A	100%
Apex Business Management & Consulting (Shanghai) Co., Ltd.	Chairman Supervisor *General manager	Representative of Inventec Appliances (Shanghai) Co.Ltd.`：` Chang, Ching-Sung Chang, Shu-Ching Tsai, Shih-Kuang	N/A	100%
Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	Chairman Director Director Supervisor *General manager	Representative of Inventec Appliances (Shanghai) Co.Ltd.`：` Ho, Tai-Shui Chang, Ching-Sung Chang, Ju-Nan Chang, Shu-Ching Chang,Ju-Nan	N/A	100%
Inventec Appliances (Pudong) Corp.	Chairman Director Director Director Director Supervisor *General manager	Representative of Inventec Appliances (Cayman) Holding Corp.`：` Chang, Ching-Sung Lin, Wen-Yao Chen, Kun-Hui Ho, Tai-Shui Wang, Hung-Hsiang Tseng, Ching-An Chen,Kun-Hui	N/A	100%
Inventec Appliances (Malaysia) SDN. BHD	Representative Director Director *General manager	Representative of Inventec Appliances (Pudong) Corp.`：` Chang, Ching-Sung Lee, Huai-En Lee, Tee-Hiang Lee,Huai-En	71,000,000	100%
Inventec Appliances (Nanjing) Corp.	Chairman Director Director Supervisor *General manager	Representative of Inventec Appliances (Cayman) Holding Corp.`：` Chang, Ching-Sung Kao, Chao-Yang Chen, Po-Cheng Chang, Shu-Ching Kao,Chao-Yang	N/A	100%

166

			Shareholding	Shareholding
Company	Title	Name		Investment
			Shares
				Holding (%)

Inventec Appliances (Jiangning) Corp.	Chairman Director Director Supervisor *General manager	Representative of Inventec Appliances (Cayman) Holding Corp.`：` Chang, Ching-Sung Kao, Chao-Yang Chen, Po-Cheng Chang, Shu-Ching Kao,Chao-Yang	N/A	100%
Inventec Appliances (XI’AN) Corporation	Chairman Director Director Supervisor *General manager	Representative of Inventec Appliances (Cayman) Holding Corp.`：` Chang, Ching-Sung Kao, Chao-Yang Pien, Yung-Tsai Chang, Shu-Ching Pien,Yung-Tsai	N/A	100%
Inventec Appliances (Nanchang) Corporation	Chairman Director Director Supervisor *General manager	Representative of Inventec Appliances (Cayman) Holding Corp.`：` Chang, Ching-Sung Chen, Kun-Hui Chang, Ju-Nan Chang, Shu-Ching Chang,Ju-Nan	N/A	100%
AIMobile Co., Ltd.	Chairman Director Director Director Director Supervisor Supervisor General manager	Representative of Inventec Corporation`：` Chang, Yu-Lien Wu, Yung-Tsai Yeh, Li-Cheng Representative of Advantech Co., Ltd.`：` Liu, Ke-Chen Chiang, Ming-Chih Yu, Chin-Pao Tsai, Shu-Mei Chang, Kuo-Pin	18,250,000 6,750,000 0 0 0	73.00% 27.00% 0.00% 0.00% 0.00%
Inventec Japan Corporation	Representative Supervisor	Representative of Inventec Corporation`：` Cho, Tom-Hwar Yu, Chin-Pao	200	100%

Note: General managers marked with * are assigned and are not individual shareholders.

167

7.1.6 Operational highlights of Inventec company subsidiaries

Unit: NT$ Thousands (Except EPS) ； As of 12/31/2020

Company	Capital	Total Assets	Total Liabilities	Total Stockholders' Equity	Sales Revenue	Operating Income	Income after Tax	EPS after Tax
Inventec Corporation (Hong Kong) Ltd.	9,163	102,166,465	101,800,851	365,614	299,226,353	(1,128)	10,896	－
Inventec (Tianjin) Electronics Co., Ltd.	142,400	333,598	103,030	230,567	200,432	3,775	2,345	－
Inventec (Beijing) Electronics Technology Co., Ltd.	41,296	96,539	19,181	77,358	24,509	48	1,516	－
Inventec(Cayman) Corp.	9,812,963	21,100,327	0	21,100,327	0	(281)	7,722,888	－
Inventec(Shanghai)Corp.	2,087,127	13,739,021	11,879,905	1,859,116	50,278,916	123,021	93,305	－
Inventec Asset-Management (Shanghai)Corporation	1,869,030	3,597,855	1,835,813	1,762,043	0	(22,599)	(22,349)	－
Inventec(Pudong)Corp.	1,424,000	4,881,143	754,471	4,126,672	0	(131,706)	3,550,998	－
Inventec (Pudong) TechnologyCorp.	1,668,692	40,830,639	34,208,342	6,622,297	91,653,022	940,839	2,274,369	－
Inventec (Shanghai) Service Co., Ltd	188,679	126,529	3,322	123,206	0	(1,310)	(971)	－
Saint Investment ConsultingCorporation	87,296	87,331	2	87,330	0	(1)	33	－
Inventec Hi-Tech Corp.	1,424,000	1,557,867	419,473	1,138,394	1,867	(81,598)	(57,017)	－
Inventec Huan Hsin (Zhejiang) Technology Co., Ltd.	817,376	4,087	251	3,837	0	(2,134)	(2,120)	－
Inventec (Chongqing) Corp.	2,136,000	57,008,792	49,047,660	7,961,132	268,159,240	1,618,719	2,365,436	－
Inventec (Chongqing) Service Co., Ltd.	28,480	116,155	76,113	40,042	44,241	(358)	(1,330)	－
IEC (Cayman) Corporation	739,500	1,178,105	0	1,178,105	0	0	273,585	－
Inventec Holding (North America) Corp.	142,400	1,281,813	0	1,281,813	0	0	62,310	－
Inventec(USA)Corp.	14,240	213,258	0	213,258	0	0	(1)	－
Inventec Manufacturing (North America)Corp.	56,960	277,274	19,242	258,032	307,383	17,399	12,595	－
Inventec Distribution (North America)Corp.	14,240	18,266,141	17,861,742	404,399	75,557,607	14,886	33,230	－
Inventec Configuration (North America)Corp.	56,960	338,820	145,361	193,459	654,907	2,036	1,121	－
IEC Technologies, S. de R.L. de C.V.	57,124	435,158	138,240	296,917	615,757	33,106	15,028	－
Inventec(Czech), s.r.o.	90,576	12,171,145	12,056,601	114,544	29,262,612	30,817	78,541	－
Inventec Development Japan Corporation	10,984	17,742	65	17,677	0	(986)	(1,036)	－

168

Company	Capital	Total Assets	Total Liabilities	Total Stockholders' Equity	Sales Revenue	Operating Income	Income after Tax	EPS after Tax
Inventec Manufacturing (India) Private Limited	218,288	14,688	613	14,075	0	(688)	34,347	－
Inventec Investments Co., Ltd.	1,088,000	125,093	170	124,923	0	(241)	(52,959)	(0.49)
Inventec Solar Energy Corporation	3,233,548	1,387,603	2,347,744	(960,141)	1,180,176	(715,894)	(1,695,966)	(5.24)
Inventec Appliances Corp.	5,368,573	28,682,573	20,205,607	8,476,966	35,940,116	937,622	679,517	1.27
Inventec Appliances (Cayman)HoldingCorp.	5,693,864	16,545,017	0	16,545,017	0	0	(300,331)	－
Inventec Appliances (USA)Distribution Corp.	130	169,363	76,676	92,687	4,064,325	1,389	1,127	－
Inventec Appliances Corporation USA Inc.	33	27,330	14,327	13,003	20,304	1,895	885	－
Inventec Appliances (Shanghai)Co.Ltd.	1,469,568	1,953,387	181,555	1,771,832	4,488	(115,498)	(34,975)	－
Inventec Appliances (Shanghai) EnterpriseCo.Ltd.	34,919	27,257	1,872	25,385	0	(6,307)	(2,026)	－
Apex Business Management & Consulting (Shanghai) Co.,Ltd.	2,190	93,206	9,170	84,036	81,804	30,541	25,252	－
Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	261,889	849,568	743,874	105,694	665,129	(110,358)	(81,203)	－
Inventec Appliances (Pudong)Corp.	2,192,960	16,877,166	8,019,430	8,857,736	35,309,933	(664,669)	(569,471)	－
Inventec Appliances (Malaysia)SDN. BHD	501,784	828,649	346,309	482,340	5,536	(17,538)	(19,102)	－
Inventec Appliances (Nanjing)Corp.	142,400	350,412	6,590	343,822	0	(3,437)	12,695	－
Inventec Appliances (Jiangning)Corp.	1,936,640	6,642,008	1,347,812	5,294,196	4,709,356	222,099	308,573	－
Inventec Appliances (XI’AN)Corporation	113,920	126,745	75,988	50,757	0	(14,789)	10,358	－
Inventec Appliances (Nanchang)Corporation	59,808	90,894	9,636	81,258	0	(51,993)	(50,163)	－
AIMobile Co., Ltd.	250,000	372,102	204,633	167,469	243,433	(85,012)	(81,693)	(3.27)
Inventec Japan Corporation	2,746	3,910	729	3,181	11,266	623	414	－

169

7.1.7 Consolidated financial statements of affiliates

Representation Letter

The entities that are required to be included in the combined financial statements of Inventec Corporation as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Inventec Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Company Name: Inventec Corporation Chairman: Cho, Tom-Hwar Date: March 30, 2021

7.2 Private Placement Securities in the Most Recent Years: None

7.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years: None

7.4 The Matters Listed in Article 36, Paragraph 3, Subparagraph 2 of the Securities and Exchange Act, which might Materially Affect Shareholders' Equity or the Price of the Company's Securities: None

7.5 Other Matters that Require Additional Description: None

170

Appendix `Ⅰ` : Individual Financial Statements Audited by CPA of 2020

171

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.

172

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.

173

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.

174

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

BALANCE SHEETS

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

2020.12.31	2020.12.31	2019.12.31 Amount % 21,453,043 12 108,175 - 5,554,820 3 33,426,844 19 43,827,529 25 1,046,130 1 5,332,183 3 5,483 - 300,000 - 4,952,526 3
154,010,745 75
821,436 - 2,215,585 1 33,775,936 16 13,535,629 7 9,057 - 66,262 - 1,807,999 1
	135,951,357 66	116,006,733 66
	8,446,000 4 5,024 - 656,171 - 3,199,438 2	3,050,000 2 7,557 - 640,401 - 1,275,391 1
	12,306,633 6	4,973,349 3
52,231,904 25	148,257,990 72	120,980,082 69
	35,874,751 17 2,899,284 1 11,345,901 6 1,822,004 1 7,944,644 4 (1,901,925) (1)	35,874,751 20 2,913,461 2 10,799,605 6 1,646,357 1 5,858,979 3 (1,822,005) (1)
	57,984,659 28	55,271,148 31
$ 206,242,649 100	$ 206,242,649 100	176,251,230 100

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

175

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

STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Amount $ 407,434,848 395,650,876	202 0 % 100 97	2019	% 100 96
		Amount 357,462,052 344,938,970
11,783,972 11,807 14,174	3 - -	12,523,082 14,174 18,889	4 - -
11,786,339	3	12,527,797	4
1,760,505 1,895,856 5,826,007 44,784	- 1 1 -	1,512,265 1,804,654 5,586,067 5,118	- 1 2 -
9,527,152	2	8,908,104	3
2,259,187	1	3,619,693	1
26,738 62,496 (226,992) (712,190) 8,184,317	- - - - 2	68,002 95,853 488,838 (1,207,015) 2,966,083	- - - - 1
7,334,369	2	2,411,761	1
9,593,556 2,045,571	3 1	6,031,454 523,494	2 -
7,547,985	2	5,507,960	2
(63,130) 352,106 4,050 (12,626)	- - - -	(50,641) 830,368 4,377 (10,128)	- - - -
305,652	-	794,232	-
(65,492) (396,739) -	- - -	(32,310) (982,574) -	- - -
(462,231)	-	(1,014,884)	-
(156,579)	-	(220,652)	-
$ 7,391,406	2	5,287,308	2
$	2.10		1.54
$	2.08		1.53

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

176

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

STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Capital Stock	Capital Surplus	Retained Earnings	Other Equity Interest	Other Equity Interest	Total Equity 55,364,481 5,507,960 (220,652)
			Exchange Differences on Translation of Foreign Financial Statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
Share Capital		Legal Reserve Special reserve Unappropriated Retained Earnings 10,149,619 107,546 7,966,033 - - 5,507,960 - - (24,968)
$ 35,874,751 - -	2,912,889 - -		(990,250) - (1,014,884)	(656,107) - 819,200
-	-	- - 5,482,992	(1,014,884)	819,200	5,287,308
- - - - -	- - - 572 -	649,986 - (649,986) - 1,538,811 (1,538,811) - - (5,381,213) - - - - - (20,036)	- - - - -	- - - - 20,036	- - (5,381,213) 572 -
35,874,751 - -	2,913,461 - -	10,799,605 1,646,357 5,858,979 - - 7,547,985 - - (43,201)	(2,005,134) - (462,231)	183,129 - 348,853	55,271,148 7,547,985 (156,579)
-	-	- - 7,504,784	(462,231)	348,853	7,391,406
- - - - - - -	- - - 679 - (14,856) -	546,296 - (546,296) - 175,647 (175,647) - - (4,663,718) - - - - - (19,258) - - - - - (14,200)	- - - - - - -	- - - - 19,258 - 14,200	- - (4,663,718) 679 - (14,856) -
$ 35,874,751	2,899,284	11,345,901 1,822,004 7,944,644	(2,467,365)	565,440	57,984,659

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

177

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

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before income tax Adjustments: Adjustments to reconcile profit before income tax to net cash provided by operating activities Depreciation expense Amortization expense Expected credit loss Interest expense Interest income Dividend income Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Gain on disposal of non-current assets held for sale Gain on disposal of investments accounted for using equity method Unrealized foreign exchange loss Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Increase in financial assets at fair value through profit or loss, mandatorily measured at fair value (Increase) decrease in accounts receivable (Increase) decrease in other receivable Decrease (increase) in inventories Decrease (increase) in other current assets Total changes in operating assets Changes in operating liabilities: Increase in financial liabilities held for trading Increase (decrease) in contract liabilities Increase in accounts payable Increase (decrease) in other payables Increase (decrease) in other current liabilities Decrease in net defined benefit liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash (outflow) inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows (used in) from operating activities	2020 $ 9,593,556 561,757 578,179 44,784 712,190 (26,738) (30,069) (8,184,317) (52) - (20,602) 647,091	2019 6,031,454 408,792 667,744 5,118 1,207,015 (68,002) (20,301) (2,966,083) (248) (628,983) - 747,858
	(5,717,777)	(647,090)
	(277,459) (13,264,562) (7,651,920) 1,490,976 (2,486,104)	(113,791) 2,404,374 4,559,761 (1,695,046) 437,151
	(22,189,069)	5,592,449
	73,893 681,559 13,020,360 372,754 2,903,673 (47,360)	103,217 (295,612) 2,804,027 (445,168) (553,622) (44,055)
	17,004,879	1,568,787
	(5,184,190)	7,161,236
	(10,901,967)	6,514,146
	(1,308,411) 27,158 1,367,069 (702,702) (94,652)	12,545,600 67,911 4,026,222 (1,279,274) (423,450)
	(711,538)	14,937,009

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

178

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

STATEMENTS OF CASH FLOWS (CONT'D)

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from disposal of non-current assets held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other non-current assets Net cash flows used in investing activities Cash flows from financing activities: Increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Decrease in other non-current liabilities Cash dividends paid Payment of lease liabilities Net cash flows from (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2020 - - - (214,979) (100,000) - (1,023,258) 90,301 (117,321) (740,559)	2019 (1,699,658) 29,964 26,400 - (57,954) 931,655 (2,016,289) 248 (225,618) (353,905)
	(2,105,816)	(3,365,157)
	2,732,587 19,343,800 (14,019,800) (2,243) (4,663,718) (5,810)	(3,602,533) - (250,000) (8,676) (5,381,213) (4,281)
	3,384,816	(9,246,703)
	567,462 4,698,660	2,325,149 2,373,511
	$ 5,266,122	4,698,660

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

179

(English Translation of Financial Statements and Report Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Overview

Inventec Co., Ltd. (the “Company”) was organized in 1975. The Company engages primarily in the ’ developing, manufacturing, processing and trading of computers and related products. The Company s registered office address is located at No.66 Hougang Street, Shilin District, Taipei City, Taiwan, R.O.C. The shares of the Company became officially listed and traded on the Taiwan Stock Exchange in November 1996.

(2) Financial Statements Authorization Date and Authorization Process

The financial statements were authorized for issuance by the Board of Directors on March 30, 2021.

(3) New Standards, Amendments and Interpretations not yet 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 Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2020:

Amendments to IFRS 3 “Definition of a Business”
Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”
Amendments to IAS 1 and IAS 8 “Definition of Material”
Amendments to IFRS 16 “COVID-19-Related Rent Concessions”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its financial statements:

Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform － ” Phase 2
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Company does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
“ －
● Amendments to IAS 16 Use” Property, Plant and Equipmentt Proceeds before Intended

180

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

“ － ” ● Amendments to IAS 37 Onerous Contracts Cost of Fulfilling a Contract

● Annual Improvements to IFRS Standards 2018-2020

● Amendments to IFRS 3 “Reference to the Conceptual Framework”

● Amendments to IAS 1 “Disclosure of Accounting Policies”

● Amendments to IAS 8 “Definition of Accounting Estimates”

(4) Significant Accounting Policies

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 parent company only financial statements, the Chinese version shall prevail.

The significant accounting policies presented in the financial statements are summarized below. Except for the explanation of Note3, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

These annual financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(b) Basis of preparation
1.Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in Note 4(q).
2.Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan Dollar, which is the Company’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

181

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(c) Foreign currencies
1.Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss except for an investment in equity securities designed as at fair value through other comprehensive income, which is recognized in other comprehensive income.

2.Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non controlling interests. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
It is held primarily for the purpose of trading;
It is expected to be realized within twelve months after the reporting period; or

182

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

An entity shall classify a liability as current when:

It is expected to be settled in the normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or
The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(f) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

1.Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

183

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

184

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

4) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧debt securities that are determined to have low credit risk at the reporting date; and
‧other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Company considers a financial asset to be in default when the financial asset is more than year past due or the debtor is unlikely to pay its credit obligations to the Company in full.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Company is exposed to credit risk.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

185

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

‧significant financial difficulty of the borrower or issuer;
‧a breach of contract such as a default or being more than 1 year past due;
‧the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

2.Financial liabilities and equity instruments
1) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

186

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

3) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

3.Derivative financial instruments and hedge accounting

The Company holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control or jointly control, over the financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

187

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The financial statements include the Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align the accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

When the Company’s share of losses of an associate equals or exceeds its interest in associates, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extend that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

The Company discontinues the use of equity method and measures the retained niterest at fair value from the date when its investment ceases to be an associate. The difference between the fair value of retained interest and proceeds from disposing, and the carrying amount of the investment at the date the equity method that was discontinued is recognized in profit or loss. The Company accounts for all the amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss (or retained earnings) on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss from equity to profit or loss (or retained earnings) (as a reclassification adjustment) when the equity method is discontinued. If the Company's ownership interest in an associate is reduced, while it continues to apply the equity method, the Company reclassifies the proportion of the gain or loss, that had previously been recognized in other comprehensive income relating to that reduction in ownership interest, to profit or loss.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Company’s proportionate interest in the net assets of the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. The aforesaid adjustment should first be adjusted under additional paid-in capital. If the additional paid-in capital resulting from changes in ownership interest is not sufficient, the remaining difference is debited to retained earnings. If the Company’s ownership interest is reduced due to the additional subscription to the shares of associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(i) Investment in subsidiaries

The subsidiaries in which the Company holds controlling interest are accounted for under equity method in the parent company only financial statements. Under equity method, the net income, other comprehensive income and equity in the parent company only financial statement are the same as those attributable to the owners of parent in the consolidated financial statements.

The changes in ownership of the subsidiaries are recognized as equity transaction.

188

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(j) Joint Arrangements

A joint arrangement is an arrangement of which two or more parties have joint control. The IFRS classifies joint arrangements into two types-joint operations and joint ventures, and have the following characteristics: (a) The parties are bound by a contractual arrangement; (b) The contractual arrangement gives two or more of those parties joint control of the arrangement. IFRS 11 “Joint Arrangements ” defines joint control as the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities (i.e. activities that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control.

A joint venture is a joint arrangement whereby the Company has joint control of the arrangement (i.e. joint venturers) in which the Company has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. The Company recognizes its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless, the Company qualifies for exemption from that Standard.

When assessing the classification of a joint arrangement, the Company considers the structure and legal form of the arrangement, the terms in the contractual arrangement and other facts and circumstances. When the facts and circumstances change, the Company reevaluates whether the classification of the joint arrangement has changed.

(k) Property, plant, and equipment
1.Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

2.Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

3.Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

189

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

are as follows:
Buildings	10 ~ 50years
Machinery	2 ~ 11years
Transportation equipment	3 ~ 6years
Furniture and office facilities	2 ~ 14years
Power equipment	2 ~ 16years
Renovation and leasehold improvements	2 ~ 20years
Miscellaneous equipment	2 ~ 16years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(l) Leases
(i) Identifying a lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the Company has the right to direct the use of the asset throughout the period of use only if either:
the Company has the right to direct how and for what purpose the asset is used throughout the period of use; or
the relevant decisions about how and for what purpose the asset is used are predetermined and:
- － the Company has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
- － the Company designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

190

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

(ii) As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

1) fixed payments, including in-substance fixed payments;
2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
3) amounts expected to be payable under a residual value guarantee; and
4) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

1) there is a change in future lease payments arising from the change in an index or rate; or
2) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset; or

191

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

4) there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
5) there are any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less and leases of low-value assets, including other equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(iii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(m) Intangible assets
1.Recognition and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

192

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

3.Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

Computer software cost 1year~6 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(n) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

193

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(o) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probably that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

A provision for warranties is recognized when the underlying products or services are sold, based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

(p) Revenue
1.Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

1)Sale of goods

The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and ’ price to sell the products, and there is no unfulfilled obligation that could affect the customer s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

2) Consulting services and Management services

The Company provides advisory and management services. Revenue from providing services is recognized in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. The proportion of services provided is determined based on the costs incurred to date as a proportion of the total estimated costs of the transaction.

3) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

194

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(q) Employee benefits
1.Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

2.Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

3.Termination benefits

Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognizes costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

4.Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

195

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(r) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

1.temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
2.temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
3.taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date, and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

1.the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
2.the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

196

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(s) Business combination

The Company accounts for business combinations using the acquisition method. The goodwill arising from an acquisition is measured as the excess of (i) the consideration transferred (which is generally measured at fair value) and (ii) the amount of non-controlling interest in the acquiree, both over the identifiable net assets acquired at the acquisition date. If the amount calculated above is a deficit balance, the Company recognized that amount as a gain on a bargain purchase in profit or loss immediately after reassessing whether it has correctly identified all of the assets acquired and all of the liabilities assumed.

All the transaction costs incurred for the business combination are recognized immediately as the Company’s expenses when incurred, except for the issuance of debt or equity instruments.

For each business combination, the Company measures any non-controlling interests in the acquiree ’ ’ either at fair value or at the non-controlling interest s proportionate share of the acquiree s identifiable net assets, if the non-controlling interests are present ownership interests and entitle their holders to a proportionate share of the Company’s net assets in the event of liquidation. Other non-controlling interests are measured at their acquisition-date fair values, unless another measurement basis is required by the IFRSs endorsed by the FSC.

(t) Earnings per share

The Company disclose the Company’s basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible bonds and employee compensation.

(u) Operating segments

Please refer to the consolidated financial report of Inventec Corporation for the years ended December 31, 2020 and 2019 for operating segments information.

(5) Significant Accounting Judgments, Estimation, Assumptions, and Sources of Estimation Uncertainty

The preparation of the financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers 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 management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

The Company does not have any accounting policies which involve significant judgment which have significant influence to the annual financial statements.

197

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows, Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

(a) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Refer to note 6(e) for further description of the valuation of inventories.

(6) Explanation to Significant Accounts

(a) Cash and cash equivalents

Cash Demand deposits and checking accounts Time deposits Cash and cash equivalents in statement of cash flows	2020.12.31 $ 1,072 4,536,510 728,540	2019.12.31 1,021 3,969,817 727,822
	$ 5,266,122	4,698,660

Refer to Note 6(v) for the currency risk of the financial assets of the Company.

(b) Financial assets and liabilities at fair value through profit or loss and financial assets at fair value through other comprehensive income
1.Financial assets and liabilities at fair value through profit or loss

Financial assets at fair value through profit or loss Mandatorily measured at fair value through profit or loss: Derivative instruments not used for hedging Forward exchange contracts Foreign exchange swap Non-derivative financial assets Emerging stock Unquoted financial instruments Unsecured convertible bonds Total	2020.12.31 $ 13,606 237,568 232,340 589,096 16,415	2019.12.31 - 125,305 - 56,799
	$ 1,089,025	182,104

198

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Financial liabilities at fair value through profit or loss Held-for-trading financial liabilities Forward exchange contracts Foreign exchange swap Total	2020.12.31 $ 142,530 39,538	2019.12.31 108,175 -
	$ 182,068	108,175

The Company uses derivative financial instruments to hedge certain foreign exchange and interest risk the Company is exposed to, arising from its operating, financing and investing activities. The following derivative instruments, without the application of hedge accounting, were classified as mandatorily measured at fair value through profit or loss and held-for-trading financial liabilities on December 31, 2020 and 2019:

1) Financial assets:

Foreign exchange swap Forward Foreign exchange swap ) Financial liabilities: Foreign exchange swap Forward Forward		2020.12.31	Maturity Period 2021.01.06-2021.06.11 2021.01.07-2021.06.09 Maturity Period 2020.02.18-2020.03.18 Maturity Period 2021.01.06-2021.03.25 2021.01.07-2021.06.11 Maturity Period 2020.02.18-2020.03.18
	Contract Amount USD 715,000 USD 214,000	Currency USD to TWD USD to TWD 2019.12.31
	Contract Amount USD 335,000	Currency USD to TWD 2020.12.31
	Contract Amount USD 114,000 USD 615,000	Currency USD to TWD USD to TWD 2019.12.31
	Contract Amount USD 335,000	Currency USD to TWD

2) Financial liabilities:

199

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income Stocks listed on domestic markets Stocks not listed on domestic markets Total	2020.12.31 $ 1,496,291 2,124,983	2019.12.31 1,323,650 1,945,519
	$ 3,621,274	3,269,169

1) Equity investments at fair value through other comprehensive income

The Company designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term strategic purposes.

Global Strategic Venture Capital Co., Ltd. was liquidated on November 17, 2020. The fair value of the residual property received by the Company was $14,150, resulting in the Company to realize a loss of $14,200, which was recognized as other comprehensive income, then later on, was reclassified to retained earnings.

For strategic purposes, the Company has sold its equity investments at fair value through other comprehensive income of $29,964 in 2019, resulting in the Company to realize a loss of $20,036, which was recognized as other comprehensive income, then later on, reclassified to retained earnings.

2) For credit risk and market risk, please refer to note 6(v).
3) As of December 31, 2020 and 2019, the aforesaid financial assets were not pledged as collateral.
(c) Trade receivables

Accounts receivable due from related parties Accounts receivables due from non-related parties Less: Loss allowance	2020.12.31 $ 27,718,823 59,201,602 (34,867)	2019.12.31 27,188,723 46,929,348 (28,286)
	$ 86,885,558	74,089,785

200

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provision in Taiwan were determined as follows:

	2020.12.31	Loss allowance provision 33,572 872 423
Gross carrying amount $ 79,817,018 7,102,984 423	Weighted-ave rage
	0.00%~0.50% 0.04%~0.50% 0.04%~100%
$ 86,920,425		34,867

As of the end of February 28, 2021, the amount that received by the Company is $48,381,015.

	2019.12.31	Loss allowance provision 25,885 878 1,523
Gross carrying amount $ 67,748,789 6,249,042 120,240	Weighted-ave rage
	0.00%~0.50% 0.04%~0.50% 0.04%~100%
$ 74,118,071		28,286

The movement in the allowance for notes and trade receivable was as follows:

Balance at January 1, 2020 and 2019 Impairment losses Amounts written off Balance at December 31, 2020 and 2019	For the years ended December 31, 2020 2019 $ 28,286 23,168 7,567 5,118 (986) -	For the years ended December 31, 2020 2019 $ 28,286 23,168 7,567 5,118 (986) -
	2020 $ 28,286 7,567 (986)
	$ 34,867	28,286

The allowance for impairment account is used to record bad debt expenses. If the Company believes that it may not be able to collect the receivables. The accumulated impairment was used to offset the receivables when it is certain they are unrecoverable, after related legal actions were taken by the Company.

As of December 31, 2020 and 2019, none of the receivables above are pledged as collateral for loans and borrowings.

201

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As of December 31, 2020 and 2019, the Company sold its accounts receivable without recourse as follows:

			2020.12.31			Significant Transferring Terms
Purchaser	Amount Derecognized	Credit Unused	Credit Advanced	Amount Recognized in Other Receivables	Range of Interest Rate
Non-related parties	$ 15,566,808	USD 153,413	USD 546,587	-	0.99%~1.05%	The accounts receivable factoring is without recourse but the seller still bears the risks except for eligible obligor’s insolvency. Significant Transferring Terms
			2019.12.31
Purchaser	Amount Derecognized	Credit Unused	Credit Advanced	Amount Recognized in Other Receivables	Range of Interest Rate
Non-related parties	$ 17,620,075	Note	USD 585,774	-	2.58%~2.68%	The accounts receivable factoring is without recourse but the seller still bears the risks except for eligible obligor’s insolvency.

Note: The purchaser has the right to make factoring transactions with the company based on the amount allocated by the client under factoring agreement.

(d) Other receivables

Other receivables－related parties Other receivables－non-related parties Less: Loss allowance	2020.12.31 $ 54,723,480 237,797 (34,642)	2019.12.31 47,376,952 77,007 -
	$ 54,926,635	47,453,959

The movement in the allowance for impairment with respect to other receivables was as follows:

Impairment losses recognized Written off Ending balance	For the years ended December 31, 2020 $ 37,217 (2,575)
	$ 34,642

202

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(e) Inventories

Raw materials and consumables Work in process Finished goods	2020.12.31 $ 1,182,506 675,657 529,782	2019.12.31 1,661,656 1,250,578 966,687
	$ 2,387,945	3,878,921

For the years ended December 31, 2020 and 2019, the write-up of inventories amounted to $11,198 and $6,913, respectively, due to obsolescence or out of use, which causes the net realizable value to be lower than the cost. For the years ended December 31, 2020 and 2019, expenses of idle capacity amounted to $26,306 and $3,132, respectively.

As of December 31, 2020 and 2019, the aforesaid inventories were not pledged as collateral.

(f) Investments accounted for using equity method

The investment using equity method was as follows:

The investment using equity method was as follows:
Subsidiaries Associates	2020.12.31 $ 33,565,625 210,311	2019.12.31 27,138,165 245,487
	$ 33,775,936	27,383,652

1.Subsidiaries

Please refer to the consolidated financial statements for the year ended December 31, 2020.

2.Associates

The Company’s financial information for investments in individually insignificant associates accounted for using equity method at the reporting date was as follows. These financial information are included in the financial statements.

Individually insignificant associates The Company’s share of profit (loss) of the associates Loss from continuing operations Other comprehensive income Total comprehensive income	2020.12.31 $ 210,311	2019.12.31 245,487
	For the years ended December 31, 2020 2019 $ (17,891) (24,518) (17,285) (1,653)
	2020 $ (17,891) (17,285)
	$ (35,176)	(26,171)

As of December 31, 2020 and 2019, the Company’s investments under equity method has not been pledged as collaterals.

203

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As of December 31, 2020 and 2019, the Company’s investments under equity method has not been pledged as collaterals.

3.Judgment on whether the invested company has substantial control
1) For whether the invested company has substantial control, refer to the consolidated financial report for the years ended December 31, 2020.
2) Judgment on existence of substantial control over investee

The Company holds 37.528% of the outstanding voting shares of Inventec Besta Co., Ltd. (Besta) and obtains only one seat among all six board directors. Therefore, the Company does not have existing rights and the current ability to direct the investee's relevant activities, thus, the Company does not have control over Besta.

(g) Loss control of subsidiaries

The meeting of shareholders of E-Ton Solar Tech. Co., Ltd. ("E-ton") decided to dismiss their respective companies in 2020. It is currently in liquidation process. As a result, The Company lose control of these subsidiaries.

The details of assets and liabilities of the aforesaid subsidiaries were as follows:

Cash and cash equivalents Property, plant and equipment Investment property Other receivables Other current assets Other assets Notes payable Other payables Long-term payable Other liabilities Carrying amount of net asset of the former subsidiary	$ 5,710 302,951 1,026,336 40 27,253 239,358 (395) (19,369) (190,000) (109,093)
	$ 1,282,791

(h) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2020 and 2019 were as follows:

Cost or deemed cost: Balance at January 1, 2020 Additions Disposals Other Balance at December 31, 2020	Land	Building and construction	Machinery and equipment	Transportation equipment	Office equipment	Other facilities	Others	Total
	$ 7,641,024 - - -	5,134,289 - - -	609,833 460,993 (122,054) 188,085	25,691 107 - -	2,089,631 248,294 (91,356) 8,927	981,709 139,746 (8,256) 142,093	349,747 112,984 - (348,230)	16,831,924 962,124 (221,666) (9,125)
	$ 7,641,024	5,134,289	1,136,857	25,798	2,255,496	1,255,292	114,501	17,563,257

204

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Land	Building and construction	Machinery and equipment	Transportation equipment	Office equipment	Other facilities	Others	Total
$ 6,480,044 1,160,980 - -	5,112,450 21,839 - -	238,141 373,895 (2,203) -	26,023 2,689 (3,021) -	2,049,760 133,695 (93,824) -	909,543 55,749 - 16,417	16,417 349,747 - (16,417)	14,832,378 2,098,594 (99,048) -
$ 7,641,024	5,134,289	609,833	25,691	2,089,631	981,709	349,747	16,831,924
$ - - -	832,640 119,987 -	274,525 148,772 (51,857)	15,457 3,260 -	1,902,450 141,882 (74,731)	581,569 141,931 (8,257)	- - -	3,606,641 555,832 (134,845)
$ -	952,627	371,440	18,717	1,969,601	715,243	-	4,027,628
$ - - -	717,204 115,436 -	229,856 46,872 (2,203)	14,721 3,757 (3,021)	1,895,479 100,795 (93,824)	443,922 137,647 -	- - -	3,301,182 404,507 (99,048)
$ -	832,640	274,525	15,457	1,902,450	581,569	-	3,606,641
$ 7,641,024	4,181,662	765,417	7,081	285,895	540,049	114,501	13,535,629
$ 7,641,024	4,301,649	335,308	10,234	187,181	400,140	349,747	13,225,283
$ 6,480,044	4,395,246	8,285	11,302	154,281	465,621	16,417	11,531,196

As of December 31, 2020 and 2019, the property, plant and equipment were pledged as collateral, please refer to Note 8.

(i) Right-of-use assets

The Company leases many assets including land and vehicles. Information about leases for which the Company as a lessee is presented below:

Land $ 6,348 -	Vehicles 10,973 1,946	Total 17,321 1,946
$ 6,348	12,919	19,267
$ 6,348 -	4,248 6,725	10,596 6,725
$ 6,348	10,973	17,321

205

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Land $ 1,270 1,270	Vehicles 3,015 4,655	Total 4,285 5,925
$ 2,540	7,670	10,210
$ - 1,270	- 3,015	- 4,285
$ 1,270	3,015	4,285
$ 3,808	5,249	9,057
$ 5,078	7,958	13,036
$ 6,348	4,248	10,596

(j) Intangible assets

The costs of intangible assets and amortization of the Company for the years ended December 31, 2020 and 2019 were as follows:

Cost: Balance at January 1, 2020 Additions Disposals Balance at December 31, 2020 Balance at January 1, 2019 Additions Disposals Balance at December 31, 2019 Amortization and impairment losses: Balance at January 1, 2020 Amortization for the period Disposals Balance at December 31, 2020	Software cost $ 1,106,016 117,321 (68,586)
	$ 1,154,751
	$ 999,782 225,618 (119,384)
	$ 1,106,016
	$ 1,034,806 122,269 (68,586)
	$ 1,088,489

206

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Balance at January 1, 2019 Amortization for the period Disposals Balance at December 31, 2019 Carrying amounts: Balance at December 31, 2020 Balance at December 31, 2019 Balance at January 1, 2019	Software cost $ 925,163 229,027 (119,384)
	$ 1,034,806
	$ 66,262
	$ 71,210
	$ 74,619

The amortization of intangible assets is respectively included in the statement of comprehensive income:

Operating costs Operating expenses Total	For the years ended December 31, 2020 2019 $ 7,408 107,336 114,861 121,691	For the years ended December 31, 2020 2019 $ 7,408 107,336 114,861 121,691
	2020 $ 7,408 114,861
	$ 122,269	229,027

As of December 31, 2020 and 2019, the aforesaid intangible assets were not pledged as collateral.

(k) Other current assets and other non-current assets

The other current assets-others and other non-current assets of the Company were as follows:

Refundable deposits Asset for recovery Restricted assets Deferred tax assets Payment on behalf of others Prepayments for investments Others	2020.12.31 $ 28,930 260,999 132,954 1,172,586 2,511,971 - 571,766	2019.12.31 25,855 208,022 - 1,234,583 - 15,000 501,991
	$ 4,679,206	1,985,451

The Company determines the substance of the transaction in terms of sales and production, as well as production of the same target, to complete its sales contract. The Company has the nature of an agent, and so the transaction is reflected as the net amount after the purchases and sales are written off. The unused inventory of purchases is listed as payments from others.

207

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As of December 31, 2020 and 2019, the other non-current assets were pledged as collateral, please refer to Note 8.

(l) Long-term and short-term borrowings

The significant terms and conditions of long-term and short-term borrowings were as follows:

	2020.12.31	2020.12.31	Amount
Interest Rate	Currenc y	Maturity Date
0.48%~1.01% %% 1.19%%			$ 4,900,000 24,989,173 3,050,000
			$ 32,939,173
			$ 24,493,173 8,446,000
			$ 32,939,173
			$ 32,100,467
			Amount
Interest Rate	Currenc y	Maturity Date
0.65%~2.56% %% 1.44%%		2020.01.03~2020.02.10 2020.01.16~2020.06.02 2031.02.26	$ 3,590,000 17,863,043 3,350,000
	TWD USD TWD
			$ 24,803,043
			$ 21,753,043 3,050,000
			$ 24,803,043
			$ 34,772,437

1.Please refer to Note 8 for details of the related assets pledged as collateral.
2.Important borrowing restrictions

The Company entered into syndicated credit agreements with a number of financial institutions. Under these agreements, the Company shall adhere to certain financial provisions such as current ratios, leverage ratios, interest coverage ratios and tangible net worth in the annual report on the balance sheet date. Otherwise, the borrowings will be considered due and payable immediately. As of December 31, 2020 and 2019, the Company was in compliance with the above financial covenants.

208

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(m) Lease liabilities

The Company lease liabilities were as follows:

The Company lease liabilities were as follows:
Current Non-current	2020.12.31 $ 4,152	2019.12.31 5,483
	$ 5,024	7,557

For the maturities analysis, please refer to Note 6(v).

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value, excluding short-term leases of low-value assets	For the years ended December 31, 2020 2019 $ 123 124	For the years ended December 31, 2020 2019 $ 123 124
	2020 $ 123
	$ 1,666	1,203
	$ 208	425

The amounts recognized in the statement of cash flows for the Company was as follows:

Total cash outflow for leases	For the years ended December 31, 2019 2019 $ 7,807 6,033
	2019 $ 7,807

1. Real estate leases

The Company leases land for its office and plants. 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 of equipment contain extension or cancellation options exercisable by the Company 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 Company and not by the lessors. In which lessee is not reasonably certain to use an optional extended lease term, payments associated with the optional period are not included within lease liabilities.

2. Other leases

The Company leases vehicles, with lease terms of two to three years. In some cases, the Company has option to guarantees the residual value of the leased assets at the end of the contract term.

The Company also leases other equipment with contract terms of one to three years. These leases are short-term and or leases of low-value items. The Company has elected not to recognize right-of-use assets and lease liabilities for these leases.

209

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(n) Operating Leases

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

Less than one year One to two years Two to three years Three to four years Total undiscounted lease receivables	2020.12.31 $ 20,116 11,040 862 -	2019.12.31 15,951 4,877 3,490 142
	$ 32,018	24,460

The rental revenues incurred by leasing land, offices and plants were $32,427 and $75,552 for the years ended December 31, 2020 and 2019, respectively.

(o) Employee benefits

1.Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities	2020.12.31 $ 1,400,254 (744,083)	2019.12.31 1,336,939 (696,538)
	$ 656,171	640,401

The Company makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive an annual payment based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued two-year time deposits with interest rates offered by local banks.

The Company’s pension reserve account in Bank of Taiwan amounted to $740,284 at the end of December 31, 2020. For information on the utilization of the labor pension fund assets including the assets allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

210

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company on 2020 and 2019 were as follows:

Defined benefit obligation at January 1 Current service costs and interest Remeasurement on the net defined benefit liability －Experience adjustments arising on the actuarial gain or loss －Actuarial loss (gain) arising from changes in financial assumptions Benefits paid by the plan assets Defined benefit obligation at December 31	For the years ended December 31, 2020 2019 $ 1,336,939 1,289,116 20,948 25,096 50,016 18,913 35,562 53,137 (43,211) (49,323)	For the years ended December 31, 2020 2019 $ 1,336,939 1,289,116 20,948 25,096 50,016 18,913 35,562 53,137 (43,211) (49,323)
	2020 $ 1,336,939 20,948 50,016 35,562 (43,211)
	$ 1,400,254	1,336,939

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company on 2020 and 2019 were as follows:

Fair value of plan assets at January 1 Interest income Remeasurement on the net defined benefit liability －Return on plan assets (excluding current interest) Contributions made Benefits paid by the plan assets Fair value of plan assets at December 31	For the years ended December 31, 2020 2019 $ 696,538 655,301 5,460 7,711 22,448 21,409 62,848 61,440 (43,211) (49,323)	For the years ended December 31, 2020 2019 $ 696,538 655,301 5,460 7,711 22,448 21,409 62,848 61,440 (43,211) (49,323)
	2020 $ 696,538 5,460 22,448 62,848 (43,211)
	$ 744,083	696,538

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company on 2020 and 2019 were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations	For the years ended December 31, 2020 2019 $ 10,921 10,602 4,567 6,783	For the years ended December 31, 2020 2019 $ 10,921 10,602 4,567 6,783
	2020 $ 10,921 4,567
	$ 15,488	17,385

211

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Operating cost Selling expenses Administration expenses Research and development expenses	For the years ended December 31,	For the years ended December 31,
	2020 $ 1,712 1,711 3,605 8,460	2019
		1,831 1,903 4,151 9,500
	$ 15,488	17,385

5) Actuarial assumptions

The following are the Company’s principal actuarial assumptions:

Present Value of defined benefit obligations:

Discount rate Future salary increases rate	For the years ended December 31,	For the years ended December 31,
	2020 0.500%% 1.625%%	2019
		0.750%% 1.625%%

The expected allocation payment made by the Company to the defined benefit plans for the one year period after the reporting date was $64,113.

The weighted-average duration of the defined benefit obligation is 10.50.0 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation for 2020 and 2019 shall be as follows:

December 31, 2020 Discount rate December 31, 2019 Discount rate	Influences of defined benefit obligations	Influences of defined benefit obligations
	Increased 0.25% $ (35,562) (35,766)	Decreased 0.25%
		36,934 37,185

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

212

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Defined contribution plans

In accordance with the provisions of the Labor Pension Act, the Company contribute an amount equal to 6% of the employee’s monthly wages to the Labor Pension personal account with the Bureau of the Labor Insurance.

The pension costs incurred from the contributions to the to the Bureau of Labor Insurance amounted to $213,407 and $194,780 for the years ended December 31, 2020 and 2019, respectively. Except for the accounts payable of $57,639 and $54,044 respectively, the Company have been contributed to the Bureau of Labor Insurance.

(p) Income taxes

1.The components of income tax expense (gain) in the years 2020 and 2019 were as follows:

Current tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Income tax expense from continuing operations	For the years ended December 31, 2020 2019 $ 423,773 514,786 (79,484) 41,017	For the years ended December 31, 2020 2019 $ 423,773 514,786 (79,484) 41,017
	2020 $ 423,773 (79,484)
	344,289	555,803
	1,701,282	(32,309)
	$ 2,045,571	523,494

The amount of income tax recognized in other comprehensive income for 2020 and 2019 was as follows:

follows:
Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans	For the years ended December 31, 2020 2019 $ 12,626 10,128
	2020 $ 12,626

213

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

Income before tax Income tax using the statutory tax rate Permanent differences Tax credits Change in unrecognized temporary differences (Over) under provision of temporary differences Other Undistributed earnings additional tax Income tax expense	For the years ended December 31, 2020 2019 $ 9,593,556 6,031,454	For the years ended December 31, 2020 2019 $ 9,593,556 6,031,454
	2020 $ 9,593,556
	1,918,711 (97,100) (86,797) 178,946 207,430 (79,484) 3,865	1,206,291 (308,822) (73,685) (105,032) (236,275) 41,017 -
	$ 2,045,571	523,494

Under provision in prior periods is estimation of the difference between approved amounts by Tax Authority and the declared amounts.

2.Deferred tax assets and liabilities
1) Unrecognized deferred tax assets

Deferred tax assets that have not been recognized in respect of the following items:

Tax effect of deductible temporary differences	2020.12.31 $ 928,929	2019.12.31 749,983

2) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2020 and 2019 were as follows:

Gain (loss) on investment	Other - -	Total 1,239,155 1,626,659
$ 1,239,155 1,626,659
$ 2,865,814		2,865,814
$ 1,210,634 28,521	48,225 (48,225)	1,258,859 (19,704)
$ 1,239,155	-	1,239,155

214

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Deferred Income	Defined Benefit Plans	Others	Total 1,234,583 (74,623) 12,626
$ 770,799 37,318 -	71,736 (9,472) 12,626	392,048 (102,469) -
$ 808,117	74,890	289,579	1,172,586
$ 853,028 (82,229) -	70,419 (8,811) 10,128	288,403 103,645 -	1,211,850 12,605 10,128
$ 770,799	71,736	392,048	1,234,583

3.The Company’s income tax returns through 2018 have been examined and approved by the Tax Authority.

(q) Capital and reserves

As of December 31, 2020 and 2019, the authorized capital of the Company both consisted of 3,650,000 thousand shares and both issued worth $36,500,000, with par value of $10 per share, and its outstanding capital both consisted of 3,587,475 thousand shares of stock. All issued shares were paid up upon issuance.

1.Capital surplus

The components of the capital surplus were as follows:

Share capital Other	2020.12.31 $ 2,891,959 7,325	2019.12.31 2,891,959 21,502
	$ 2,899,284	2,913,461

In accordance with the ROC company Act, realized capital reserves can only be reclassified as share capital or distributed as cash dividends after offsetting losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the securities offering and Issuance Guidelines, the amount of capital reserve to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

2.Retained earnings

The Company’s Articles of Incorporation require that after-tax earnings shall first be offset against any deficit, and 10% of the rest 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. Special reserve may be appropriated for operations or to meet regulations. The remaining earnings, if any, may be appropriated for operations according to the proposal, and the distributed dividends may not be lower than 10% of the earnings. Surplus distribution based on issuance of new shares approved by the Board of Directors, should be resolved during the shareholder's meeting. In consideration of the Company's long-term operating plan, funding needs, and

215

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

satisfying shareholder demand for cash flow, the Company distributes cash dividends of at least 10% of the aggregate of cash dividends and stock dividends if the distributions include cash dividend. In accordance with Article 240 of the ROC Company Act, the Company authorizes the distribution of dividends and bonuses or its legal reserve and capital reserve, according to Article 241 of the ROC Company Act, in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors; then such distribution shall be submitted to the shareholder's meeting.

1) Legal reserve

If the Company experienced profit for the year, the meeting of shareholders shall decide on the distribution of the statutory earnings reserve either by new shares or by cash, of up to 25 percent of the actual share capital.

2) Special reserve

In accordance with Permit No.1010012865 as issued by the Financial Supervisory Commission on 6 April 2012, a special reserve equal to the contra account of other shareholders' equity is appropriated from the current and prior period earnings. When the debit balance of any of the contra accounts in the shareholders' equity is reversed, the related special reserve can be reversed. The subsequent reversals of the contra accounts in shareholders' equity shall qualify for additional distributions.

3) Earnings Distribution

On March 24, 2020, the Company's Board and Directors resolved to distribute the 2019 earnings. On June 14, 2019, the shareholder's meetings resolve to distribute the 2018 earnings. These earnings were appropriated for distribution as follows:

Dividends distributed to common shareholders Cash	2019	2019		2018 Dividend per share ($) Amount 1.50 5,381,213
	Dividend per share ($)	Amount		Dividend per share ($)
	$ 1.30	4,663,718		1.50

The information on prior year's distribution of the Company's earnings were announced through the Market Observation Post System on the internet.

On March 30, 2021, the Company's Board of Directors resolved to appropriate the 2020 earnings respectively, as follows:

Dividends distributed to common shareholders Cash	2020 Dividend per share ($) Amount $ 1.85 6,636,829
	Dividend per share ($)
	$ 1.85

216

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3.Other equity (net of taxes)

Balance at January 1, 2020 Exchange differences on foreign operations Exchange differences on associates accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method Disposal of investments accounted for using equity method Disposal of investments in equity instruments designed at fair value through other comprehensive incom Balance at December 31, 2020 Balance at January 1, 2019 Exchange differences on foreign operations Exchange differences on associates accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method Disposal of investments in equity instruments designed at fair value through other comprehensive incom Balance at December 31, 2019	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
	$ (2,005,134) (65,492) (396,739) - - - e -	183,129 - - 352,106 (3,253) 19,258 14,200
	$ (2,467,365)	565,440
	$ (990,250) (32,310) (982,574) - - e -	(656,107) - - 830,368 (11,168) 20,036
	$ (2,005,134)	183,129

(r) Earnings per share

The following are the calculation of basic earnings per share and diluted earnings per share:

Basic earnings per share: Profit attributable to ordinary shareholders Weighted average number of ordinary shares (thousand shares) Basic earnings per share (NT dollars)	For theyears ended December 31, 2020 2019 $ 7,547,985 5,507,960	For theyears ended December 31, 2020 2019 $ 7,547,985 5,507,960
	2020 $ 7,547,985
	3,587,475	3,587,475
	$ 2.10	1.54

217

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For the years ended December 31, 2020 2019 $ 7,547,985 5,507,960	For the years ended December 31, 2020 2019 $ 7,547,985 5,507,960	For the years ended December 31, 2020 2019 $ 7,547,985 5,507,960
2020 $ 7,547,985
3,587,475 32,907		3,587,475 23,150
3,620,382		3,610,625
$ 2.08		1.53
For the years ended December 31, 2020 2019 $ 31,704,545 6,364,849 321,088,197 289,742,413 5,970,995 11,423,674 8,317,851 9,869,620 40,353,260 40,061,496
2020 $ 31,704,545 321,088,197 5,970,995 8,317,851 40,353,260
$ 407,434,848		357,462,052
$ 407,113,297 321,551		357,056,883 405,169
$ 407,434,848		357,462,052
	2019.12.31 5,554,820	2019.1.1 5,850,432

218

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For details on accounts receivable and allowance for impairment, please refer to note 6(c).

The amount of revenue recognized for the year ended December 31, 2020 and 2019 were $1,683,970 and $2,064,774, respectively.

The contract liabilities primarily relate to deferred recognition of warranty revenue, for which revenue is recognized when the warranties are redeemed or when they expire.

(t) Remuneration of employees and directors

The Company's Articles of Incorporation require that earnings shall first be offset against any deficit. A minimum of 3% will be distributed as employee remuneration and a maximum of 3% will be allocated as directors' remuneration.

If the employee remuneration is distributed in the form of stock or cash, the employees qualifying for such distribution shall include the employees of the subsidiaries of the Company who meet certain specific requirements. Such qualified employees and the distribution ratio shall be decided by the Board of Directors.

The remuneration of employees amounted to $675,529 and $424,704 and the remuneration of directors amounted to $123,674 and $77,754 for the years ended December 31, 2020 and 2019, respectively. These amounts are calculated using the Company's profit before tax for each period described above, and are determined using the earnings allocation method which stated under the Company's article. These remunerations were expensed under operating cost or expenses in 2020 and 2019. Related information would be available at the Market Observation Post System after the meeting of the shareholders has been convened.

There were no differences between the amounts to be distributed as remuneration to employees and directors in 2020 and 2019 and the amounts stated in the individual reports.

(u) Non-operating income and expenses
1.Interest income

The details of interest income were as follows:

The details of interest income were as follows:
Interest income from bank deposits
	2020 $ 26,738

2.Other income

The details of other income were as follows:

Rent income Dividend income	For the years ended December 31, 2020 2019 $ 32,427 75,552 30,069 20,301	For the years ended December 31, 2020 2019 $ 32,427 75,552 30,069 20,301
	2020 $ 32,427 30,069
	$ 62,496	95,853

219

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3.Other income and losses

The details of other income and losses were as follows:

Gains on disposal of investments Gains on disposal of assets held-for-sell Foreign exchange (losses) gains Net gains (losses) on financial assets (liabilities) measured at fair value through profit or loss Other income and losses Net other income and losses	For the years ended December 31, 2020 2019 $ 20,602 - - 628,983 (1,490,122) (520,088) 715,969 130,758 526,559 249,185	For the years ended December 31, 2020 2019 $ 20,602 - - 628,983 (1,490,122) (520,088) 715,969 130,758 526,559 249,185
	2020 $ 20,602 - (1,490,122) 715,969 526,559
	$ (226,992)	488,838

4.Finance costs

The details of finance expenses were as follows:

Interest expenses Bank borrowings Others	For the years ended December 31, 2020 2019 $ 460,522 688,460 251,668 518,555	For the years ended December 31, 2020 2019 $ 460,522 688,460 251,668 518,555
	2020 $ 460,522 251,668
	$ 712,190	1,207,015

(v) Financial instruments

1.Credit risks

1) Credit risks exposure

The carrying amounts of financial assets represented the maximum credit risk exposure of the Company.

2) Condition of credit risk concentration

Implicit credit risk of the Company is inherent in its cash and accounts receivable. The cash is deposited in different financial institutions. The Company manages the credit risk exposure with each of these financial institutions and believes that cash do not have a significant credit risk concentration.

The major customers of the Company are centralized in the high-tech computer industry. To minimize credit risk, the Company periodically evaluates the Company’s financial positions and the possibility of collecting trade receivables.

220

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Besides, the Company monitors and reviews the recoverable amount of the trade receivables to ensure the uncollectible amount are recognized appropriately as impairment loss. Therefore, the executives evaluate the Company's credit risk to be limited.

As of December 31, 2020 and 2019, 68% and 72% of accounts receivable were attributable to two major customers. Thus, credit risk is significantly centralized.

2.Liquidity risks

The following are the contractual maturities of financial liabilities of the Company, including estimation of interest, but excluding the impact of netting arrangements:

Carrying amount	Contractual cash flows	Less than 6 months	6 to 12 months	1 to 2years	2 to 5years	More than 5years - 1,598,418 - - - - - - -
$ 29,889,173 3,050,000 90,239,454 5,644,166 9,176 142,530 - 39,538 -	30,010,610 3,236,011 90,239,454 5,644,166 9,285 (17,205,665) 17,063,135 (3,209,668) 3,170,130	24,240,024 167,775 90,239,454 5,644,166 2,765 (17,205,665) 17,063,135 (3,209,668) 3,170,130	29,234 166,883 - - 1,465 - - - -	5,741,352 331,089 - - 3,375 - - - -	- 971,846 - - 1,680 - - - -
$ 129,014,037	128,957,458	120,112,116	197,582	6,075,816	973,526	1,598,418
$ 21,453,043 3,350,000 77,254,373 2,522,391 13,040 108,175 -	21,532,539 3,621,350 77,254,373 2,522,391 13,236 (10,119,285) 10,011,110	21,532,539 173,670 77,254,373 2,522,391 3,596 (10,119,285) 10,011,110	- 172,590 - - 2,000 - -	- 341,940 - - 3,597 - -	- 999,900 - - 4,043 - -	- 1,933,250 - - - - -
$ 104,701,022	104,835,714	101,378,394	174,590	345,537	1,003,943	1,933,250

The Company are not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

221

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3.Currency risks

1) Exposure to currency risks

The Company’s exposures to significant currency risk were those from its foreign currency denominated financial assets and liabilities as follows:

Foreign currency (In thousand) Financial assets Monetary items USD $ 5,103,055 Non-monetary items USD 57,844 Financial Liabilities Monetary items USD 4,092,120 Foreign currency (In thousand) Financial assets Monetary items USD $ 4,158,034 Non-monetary items USD 54,667 Financial Liabilities Monetary items USD 3,194,435		2020.12.31	TWD 145,335,006 1,647,427 116,543,578 TWD 125,073,663 1,644,385 96,088,605
		Exchange rate USD：TWD 28.48 USD：TWD 28.48 USD：TWD 28.48 2019.12.31
		Exchange rate USD：TWD 30.08 USD：TWD 30.08 USD：TWD 30.08

2) Sensitivity analysis

The Company’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, loans and borrowings, accounts payable and other payables that are denominated in foreign currency. A 0.5% depreciation or appreciation of the functional currency against all the non-functional currency as of December 31, 2020 and 2019 would have increased or decreased the net profit after tax by $115,155 and $115,940, respectively. The analysis is performed on the same basis for both periods.

222

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3) Gains or losses on foreign exchange

For the years ended December 31, 2020 and 2019, the foreign exchange loss, including realized and unrealized, amounted to $1,490,122 and $520,088, respectively. As Company deals with diverse foreign currencies, therefore, the gains or losses on foreign exchange cannot be fully disclosed by its materiality.

4.Interest rate analysis

The Company’s financial assets and financial liabilities with interest rate exposure risk were noted in the liquidity risk section.

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

If the interest rate increases or decreases by 0.5%, the Company’s profit will decrease or increase by $12,200 and$13,400 for the years ended December 31, 2020 and 2019, respectively, assuming all other variable factors remain constant. This is mainly due to the Company's variable rate in borrowings.

5.Fair value of financial instruments

1) Fair value hierarchy

The Company uses the observable market data to evaluate its assets and liabilities. The different inputs of levels of fair value hierarchy in determination of fair value are as follows:

‧Level 1: quoted prices (unadjusted) in active markets for identified assets or liabilities.
‧Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
‧Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs).

Financial assets and liabilities at fair value through profit or loss and financial assets at fair value through other comprehensive income is measured on a recurring basis. However, for financial instruments not measured at fair value whose carrying amount is estimated reasonably close to the fair value, and for equity investments that has no quoted prices in the active markets and lease liabilities information is not required:

		2020.12.31	2020.12.31	Total 251,174 837,851
Book Value $ 251,174 837,851		Fair Value
	Level 1 - 232,340	Level 2 251,174 -	Level 3 - 605,511
1,089,025	232,340	251,174	605,511	1,089,025

223

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

		2020.12.31	2020.12.31	Total 1,420,469 2,200,805
Book Value 1,420,469 2,200,805		Fair Value
	Level 1 1,420,469 -	Level 2 - 75,822	Level 3 - 2,124,983
3,621,274	1,420,469	75,822	2,124,983	3,621,274
5,266,122 141,812,193 28,930	- - -	- - -	- - -	- - -
147,107,245	-	-	-	-
$ 151,817,544	1,652,809	326,996	2,730,494	4,710,299
$ 182,068	-	182,068	-	182,068
	- - - -	- - - -	- - - -	- - - -
128,831,969	-	-	-	-
$ 129,014,037	-	182,068	-	182,068
		2019.12.31		Total 125,305 56,799
Book Value $ 125,305 56,799		Fair Value
	Level 1 - -	Level 2 125,305 -	Level 3 - 56,799
182,104	-	125,305	56,799	182,104
1,194,430 2,074,739	1,194,430 -	- 129,220	- 1,945,519	1,194,430 2,074,739
3,269,169	1,194,430	129,220	1,945,519	3,269,169

224

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

		2019.12.31	2019.12.31	Total - - -
Book Value 4,698,660 121,543,744 25,855		Fair Value
	Level 1 - - -	Level 2 - - -	Level 3 - - -
126,268,259	-	-	-	-
$ 129,719,532	1,194,430	254,525	2,002,318	3,451,273
$ 108,175	-	108,175	-	108,175
	- - - -	- - - -	- - - -	- - - -
107,402,639	-	-	-	-
$ 107,510,814	-	108,175	-	108,175

2) Valuation techniques and assumption for financial instruments measured at fair value:

The fair value of financial assets and liabilities were decided in accordance with the solutions as follows:

(2.1)Non-derivative financial instruments
A. The stocks of listed companies are financial assets with standard terms which are traded in the active markets. Their fair values are based on the quoted market prices.
B. The fair value of private equity is based on standard terms and quoted market prices.
C. The fair value of unquoted instruments were estimated using either the discounted cash flow model in which future cash flow were estimated and discounted or the fair value of the recognized assets and liabilities of the consolidated subsidiaries on the measurement day.
(2.2)Derivative financial instruments

Foreign exchange swap and forward exchange were usually evaluated in the latest forward rate.

3) Transfers between level 1 and level 2

There were no transfers between level 1 and level 2 of the fair value for the years ended December 31, 2020 and 2019.

225

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

4) The following table shows the movements in fair value measurements under level 3 of the fair value hierarchy:

Balance as of January 1, 2020 Total gains and losses recognized in Profit or loss Other comprehensive income Purchase Disposals Effect of movements in exchange rate Balance as of December 31, 2020 Balance as of January 1, 2019 Total gains and losses recognized in Profit or loss Other comprehensive income Purchase Disposals Proceeds from capital reduction Balance as of December 31, 2019	At fair value through profit or loss $ 56,799 (5,770) - 629,462 - (74,980)	Fair value through other comprehensive income 1,945,519 - 193,614 - (14,150) -
	$ 605,511	2,124,983
	$ 64,553 (4,509) - 1,748 (4,993) -	217,935 - 47,835 1,706,149 - (26,400)
	$ 56,799	1,945,519

The amount reclassified under IFRS 9 has been included in the balance as of January 1, 2018.

For the years ended December 31, 2020 and 2019, total gains and losses included in “other gains and losses” and “unrealized gains and losses from financial assets at fair value through other comprehensive income” were as follows:

Total gains and losses recognized in: In profit or loss, and including“other gains and losses” In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”)	For the years ended December 31, 2020 2019 $ (5,770) (4,509) 193,614 47,835
	2020 $ (5,770) 193,614

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

The Company uses level 3 inputs to measure fair value through profit or loss, and fair value through other comprehensive income financial assets.

226

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through profit or loss－financial instruments without an active market Financial assets at fair value through profit or loss－equity instruments investments without an active market Financial assets at fair value through profit or loss－equity instruments investments without an active market Financial assets at fair value through other comprehensive income－equity instruments investments without an active market	Valuation Technique Comparable Listed Companies Method Net Asset Value Method Comparable Listed Companies Method Net Asset Value Method	Significant Non-observable Input ‧Discount due to Lack of Market liquidity (30%) ‧Net Asset Value ‧‧Discount due to Lack of Market liquidity (30%) ‧Net Asset Value	The Relationship between Significant Non-observable Input and FairValue
			‧The estimated fair value would increase (decrease) if the price of earnings ratio multiple is higher (lower) and the marketability discount is lower (higher) ‧Not applicable ‧The estimated fair value would increase (decrease) if the marketability discount is lower (higher) ‧No applicable

6) Sensitivity analysis for fair values of financial instruments using Level 3 Inputs

The Company's fair value measurement on financial instruments is reasonable. However, the measurement would differ if different valuation models or valuation parameters are used. For financial instruments using level 3 inputs, if the valuation parameters are changed, the impact on net income or loss and other comprehensive income or loss will be as follows:

December 31, 2020 Financial assets at fair value through profit or loss Financial instruments without an active market Financial assets at fair value through other comprehensive income Equity instruments without an active market December 31, 2019 Financial assets at fair value through other comprehensive income Equity instruments without an active market	Input	Variation	Impact on Fair V Net incom Favorable Change	alue Change on e or loss	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change - - 10,625 (10,625) 32,693 (32,693)
				Unfavorable Change	Favorable Change
	Discount Rate Market Multiple Market Multiple	0.5% 0.5% 0.5%	$ 2,945 - $ -	(2,945) - -	- 10,625 32,693

The favorable change and unfavorable change refer to the fluctuation of fair value. The fair value is calculated based on the different levels of unobservable inputs. The table above shows the impact on single input. Therefore, the relations and variations between inputs are not considered.

227

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

6.Offsetting financial assets and financial liabilities

The Company has financial instruments transactions applicable to the International Financial Reporting Standards Sections 42 NO. 32 approved by the FSC which required for offsetting. Financial assets and liabilities relating those transactions are recognized in the net amount of the balance sheets.

The Company also performs transactions not applicable to the International Financial Reporting Standards Sections 42 NO. 32, but the Company has an exercisable master netting arrangement or similar agreement in place with its counterparties, and both parties reach a consensus regarding net settlement. The aforesaid exercisable master netting arrangement or similar agreement can be net settled after offsetting the financial assets and financial liabilities. Otherwise, the transaction can be settled at the total amount. In the event of default involving one of the parties, the other party can have the transaction net settled.

The following tables present the aforesaid offsetting financial assets and financial liabilities.

2020.12.31 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not off set in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) $ 72,194 - 72,194 - - 72,194	2020.12.31 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not off set in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) $ 72,194 - 72,194 - - 72,194	2020.12.31 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not off set in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) $ 72,194 - 72,194 - - 72,194	2020.12.31 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not off set in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) $ 72,194 - 72,194 - - 72,194	2020.12.31 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not off set in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) $ 72,194 - 72,194 - - 72,194	2020.12.31 Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not off set in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) $ 72,194 - 72,194 - - 72,194
Gross amounts of recognized financial assets (a)	Gross amounts of financial liabilities offset in the balance sheet (b)	Net amount of financial assets presented in the balance sheet (c)=(a)-(b)	Amounts not off set in the balance sheet (d)
			Financial instruments (Note)	Cash collateral received
$ 72,194	-	72,194	-	-	72,194
		2020.12.31
Financial	liabilities that are
Gross amounts of recognized financial liabilities (a)	Gross amounts of financial assets offset in the balance sheet (b)	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b)	Amounts not off set in the balance sheet (d)
			Financial instruments (Note)	Cash collateral received
$ 182,068	-	182,068	-	-	182,068
		2019.12.31
Gross amounts of recognized financial assets (a)	Gross amounts of financial liabilities offset in the balance sheet (b)	Net amount of financial assets presented in the balance sheet (c)=(a)-(b)	Amounts not off set in the balance sheet (d)
			Financial instruments (Note)	Cash collateral received
$ 33,069	-	33,069	-	-	33,069

228

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

		2019.12.31 offset which have an exercisable master netting arrangement or similar agreement Net amount of financial liabilities presented in Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 108,175 - - 108,175	2019.12.31 offset which have an exercisable master netting arrangement or similar agreement Net amount of financial liabilities presented in Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 108,175 - - 108,175	2019.12.31 offset which have an exercisable master netting arrangement or similar agreement Net amount of financial liabilities presented in Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 108,175 - - 108,175	2019.12.31 offset which have an exercisable master netting arrangement or similar agreement Net amount of financial liabilities presented in Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 108,175 - - 108,175
Financial	liabilities that are
Gross amounts of recognized financial liabilities (a)	Gross amounts of financial assets offset in the balance sheet (b)	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b)	Amounts not off set in the balance sheet (d)
			Financial instruments (Note)	Cash collateral received
$ 108,175	-	108,175	-	-	108,175

Note: Master netting arrangements are included.

(w) Financial risk management
1.Overview

The Company have exposures to the following risks from its financial instruments:

1) credit risk
2) liquidity risk
3) market risk

The following likewise discusses the Company ’ s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risk exposures, please refer to the respective notes in the accompanying parent company only financial statements.

2.Risk management framework

The Company are exposed to credit risk, market risk, operating risk and liquidity risk due to its ’ operating activities. To lower the latent unfavorable effects of changing market to the Company s financial performance, the Company have made efforts in identifying and evaluating the risks and avoiding the uncertainty of the market through derivative financial instruments.

The Board of Directors has the overall responsibility for the establishment and oversight of the Company’s risk management framework. The financial units follow the risk management policies, and report the operating status to the Board of Directors regularly. The internal auditors perform regular reviews by taking risk management control procedures and report to the Board of Directors.

3.Credit risk

Please refer to Note 6(v) for the analysis of credit risk of cash, cash equivalent and accounts receivable.

229

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

4.Liquidity risk

Liquidity risk is a risk that the Company is unable to meet the obligations associated with its ’ financial liabilities that are settled by delivering cash or another financial asset. The Company s approach to managing liquidity is to ensure, as much as possible, that it always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company use actual cost to estimate the cost of its products and services to better assist the Company's monitoring on the cash flow and optimizing the return on investment. As of December 31, 2020, the capital and working funds of the Company are sufficient to meet its entire contractual obligation; therefore, the management is not expecting any significant issue on liquidity risk. As of December 31, 2020 and 2019, the Company's unused credit line were amounted to $32,100,467 and $34,772,437, respectively.

5.Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rate, and equity prices which will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

The Company buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions are carried out within the guidelines set by the Company.

1) Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Company primarily the New Taiwan Dollars (TWD). The currencies used in these transactions are denominated in TWD and USD.

The Company often uses the principle of natural hedging as its basis, and proceed supplemented by derivative instruments for hedging exchange rate risk.

The interest is denominated in the same currency as borrowings. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Company. This provides an economic hedge without derivatives being entered into, and therefore, hedge accounting is not applied in these circumstances.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

230

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Interest rate risk

The Company’s interest rate risk arises from long-term borrowings bearing floating interest rates. The fluctuation of the market interest rate changes the floating interest rates of the long-term borrowings, and thus affect the future cash flow. In order to decrease the effect of the market interest rate fluctuation on to the future cash flow, the Company periodically evaluates bank and currency borrowing rate to hedge the cash flow risk caused by the market interest rate fluctuation.

(x) Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, additional paid-in capital, retained earnings of the Company. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Company’s objective for managing capitals is to maintain investor, creditor and market confidence, and to sustain future development of the business by making debts and capital the most suitable capital structure and optimizing the best of it based on industrial scales, future growth development, and capital expenditures needed for plants and equipment. Thus, the Company calculates the operating funds based on the life cycle of the products, plans for the development in the long run, and then decides the most suitable capital structure considering the business cycle.

The Company ensures the financial resources and the operating plan are sufficient to support the future needs of operating funds, capital expenditures, debt refunding and dividend distribution.

The Company’s debt to equity ratio at the reporting date was as follows:

2020.12.31 $ 148,257,990 (5,266,122)	2020.12.31 $ 148,257,990 (5,266,122)	2019.12.31 120,980,082 (4,698,660)
142,991,868		116,281,422
$ 57,984,659		55,271,148
	246.60%	210.38%

According to the Company’s management, there were no changes in the Company’s approach to capital management as of December 31, 2020.

(y) Investing and financing activities not affecting current cash flow

The Company has no investing and financing activities which did not affect the current cash flow for the year ended December 31, 2020.

1.For right-of-use assets under leases, please refer to Note 6(i).

231

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Reconciliation of liabilities arising from financing activities was as follows:

Long-term borrowings Short-term borrowings(including current portion of long-term borrowings) Lease liabilities (note) Total liabilities from financing activities Long-term borrowings Short-term borrowings(including current portion of long-term borrowings) Total liabilities from financing activities	January 1, 2020 Cash flows $ 3,050,000 5,624,000 21,753,043 2,432,588 13,040 (5,810)	Non-cash changes Reclassification Foreign exchange movement December 31, 2020 (300,000) 72,000 8,446,000 300,000 7,542 24,493,173 1,946 - 9,176
	$ 24,816,083 8,050,778	1,946 79,542 32,948,349
	January 1, 2019 Cash flows $ 3,350,000 - 25,494,660 (3,852,533) 10,596 (4,281)	Non-cash changes Reclassification Foreign exchange movement December 31, 2019 (300,000) - 3,050,000 300,000 (189,084) 21,753,043 6,725 - 13,040
	$ 28,855,256 (3,856,814)	6,725 (189,084) 24,816,083

Note: Reclassification is due to additional and early terminated lease liability during this period.

(7) Related Party Transactions

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the parent company only financial statements.

Name of related party Relationship with the Company Inventec Besta Co., Ltd. Associates Inventec Group Charity Foundation Over one-third of total amount of fund donated by the Company Inventec Corporation (Hong Kong) Ltd. Subsidiary Inventec Holding (North America) Corp. Subsidiary Inventec (Czech), s.r.o Subsidiary Inventec Development Japan Corporation Subsidiary Inventec Japan Corporation Subsidiary Inventec Investment Co., Ltd. Subsidiary AIMobile Co., Ltd. Subsidiary Inventec Solar Energy Corporation Subsidiary Inventec Appliances Corp. Subsidiary Inventec Manufacturing (India) Private Limited Subsidiary Inventec Appliances (Jiangning) Corp. Indirect holding subsidiary

232

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(b) Significant transactions with related parties
1.Sale revenue

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

related parties were as follows:
Subsidiaries Inventec Holding (North America) Corp. Inventec (Czech), s.r.o Other subsidiaries Associates	For the years ended December 31, 2020 2019 $ 71,105,867 59,284,144 26,100,876 28,950,547 265,992 97,127 1,027 1,720
	2020 $ 71,105,867 26,100,876 265,992 1,027
	$ 97,473,762	88,333,538

After the Company receives the orders from all regions, the production and marketing department arranges to sell semi-finished products to the subsidiaries. The price is determined in accordance with mutual agreements. Since the subsidiaries are the overseas offices providing after-sales and assembling service, there is no other comparable objects, and the average collection terms are 90~105 days for sales.

For associates and other related parties, the price and terms were determined in accordance with mutual agreements with its collection terms of OA 90 days for sales. Receivables from related parties were not secured with collaterals.

Unrealized profit (loss) from sales to the subsidiaries of the Company for the years ended December 31, 2020 and 2019 were $11,807 and $14,174, respectively.

2.Purchase

The amounts of significant purchase transactions between the Company and related parties were as follows:

Subsidiaries Inventec Corporation (Hong Kong) Ltd. Other subsidiaries Associates	For the years ended December 31, 2020 2019 299,231,642 264,957,998 1,909,549 1,554,271 4,227 -	For the years ended December 31, 2020 2019 299,231,642 264,957,998 1,909,549 1,554,271 4,227 -
	2020 299,231,642 1,909,549 4,227
	$ 301,145,418	266,512,269

For the Company’s purchase of materials used for after-sales service from subsidiaries, the price and terms were determined in accordance with mutual agreements with payment terms of 60~105 days.

233

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3.Accounts receivable from related parties

The amounts of accounts receivable between the Company and related parties were as follows:

Financial Statement Account Related Party Categories	2020.12.31 2019.12.31 $ 16,589,292 15,937,407 10,953,538 11,231,269 175,993 20,047 54,544,416 47,244,779 144,356 130,868 66 1,305
Accounts receivable Subsidiaries Inventec Holding (North America) Corp. Inventec (Czech), s.r.o Other subsidiaries Other receivables Subsidiaries Inventec Corporation (Hong Kong) Ltd. Other subsidiaries Associates
	$ 82,407,661 74,565,675

Note: Other receivables from subsidiaries are mainly generated from purchasing material for subsidiaries.

4.Accounts payable to Related Parties

The amounts of accounts payables between the Company and related parties were as follows:

Financial Statement Account Related Party Categories	2020.12.31 2019.12.31 $ 47,083,769 43,413,344 293,272 414,185 678 - 68,559 143,278 994 340
Accounts payable Subsidiaries Inventec Corporation (Hong Kong) Ltd. Other subsidiaries Accounts payable Associates Other payables Subsidiary Associates
	$ 47,447,272 43,971,147

Note: Other payables are mainly the payments of computer software, toolings, payment on behalf of others and software development.

234

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

5.Property transactions
1) Acquisition of property, plant, equipment

For the years ended December 31, 2020 and 2019, the Company purchased property, plant, equipment from subsidiaries, and associates and paid the amount $9,976 and $52,919, respectively.

2) Disposal of property, plant and equipment

For the year ended December 31, 2020, the Company sold machinery, office equipment and software to subsidiaries. The total prices and gain on property disposal were $90,104 and $3,427, respectively.

3) For the year ended December 31, 2019, the Company purchased software for products from Inventec Corporation (Hong Kong) Ltd., amounted to $103,995. The price and term were determined in accordance with mutual agreements with payment term within three months.
4) In 2000, the Company paid property, deferred assets, assets stated under expense to investment Inventec Appliances Corp. resulting in gain on disposal of $103,713 and other revenue of $31,693. In addition, selling of property, plant and equipment, deferred assets and assets stated under expense has generated gain on disposal of $5,829 and other revenue of $6,427. As of December 31, 2020 and 2019, the unrealized gain on property disposal were $18,886 and $19,649, respectively.
5) In 1999, the Company sold property, deferred assets, assets stated under expense and trademarks to Inventec Besta Co., Ltd., resulting in a gain on property disposal of $51,712 and other revenue of $40,453. As of December 31, 2020 and 2019, the unrealized other revenues are both $1,211.
6.After-sale service, product processing and support services

The payments of after-sale service, product processing and support services to related parties were as follows:

Subsidiaries Inventec Holding (North America) Corp. Inventec Corporation (Hong Kong) Ltd. Other subsidiaries	For theyears ended December 31, 2020 2019 $ 311,221 432,424 322,021 346,668 559,735 129,588	For theyears ended December 31, 2020 2019 $ 311,221 432,424 322,021 346,668 559,735 129,588
	2020 $ 311,221 322,021 559,735
	$ 1,192,977	908,680

235

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

7.Acquired investments accounted by the equity method

The Board of directors resolved to establish Inventec Japan Corporation on July 23, 2019. The Company invested 200 shares amounting to JPY10,000 thousand.

In March, 2016, the company reinvested $165,000 in AIMobile Co., Ltd., with a shareholding ratio of 55%. In addition, AIMobile Co., Ltd. was approved by the Board of Directors to handle cash capital on August 24, 2018. Taking 25 January, 2018 as the base date for capital increase, the ’ company s investment amounted to 5,500 thousands of shares, totaling $55,000.

AIMobile Co., Ltd., through a resolution of the Board of Directors, made a cash capital increase on 2 December, 2020. With December 31, 2020 as the base date for capital increase, the Company invested 10,000 shares, $100,000, the shareholding ratio increased to 73%.

8.Others

1) Rental and building management fee collected from and related parties were as follows:

Subsidiaries Associates	For the years ended December 31, 2020 2019 $ 9,517 58,876 5,336 7,099	For the years ended December 31, 2020 2019 $ 9,517 58,876 5,336 7,099
	2020 $ 9,517 5,336
	$ 14,853	65,975

2) For the years ended December 31, 2020 and 2019, the amount of donation for other related parties were $10,000 and $10,000, respectively.
(c) Key management personnel compensation

Key management personnel compensation includes:

Key management personnel compensation includes:
Short-term employee benefits Post-employment benefit	For the years ended December 31, 2020 2019 $ 383,258 347,602 4,524 2,038
	2020
	$ 383,258 4,524
	$ 387,782	349,640

236

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(8) Pledged Assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	2020.12.31 $ 28,930 132,954 5,840,331	2019.12.31 25,855 - 5,893,692 5,919,547
Refundable deposits (Other non-current assets) Restricted assets (Other non-current assets) Land, buildings, structures, machinery and equipment, net (Property, plant and equipment) Total	Customs duty guarantee and membership card The fund remitted back to special-purpose account Long-term borrowings
		$ 6,002,215

(9) Significant Commitments and Contingencies

(a) Major Commitments:

1.Unused standby letters of credit were as follows: None.

2.Promissory notes issued for the bank credit and MOEA TDP performance guarance were as follows:

TWD USD	2020.12.31 $ 15,898,550 1,643,000	2019.12.31 15,890,600 1,356,000

(b) Contingencies: None.

(10) Losses Due to Major Disasters : None.

(11) Subsequent Events : None.

237

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(12) Other

(a) The employee benefits, depreciation, depletion and amortization expenses categorized by function were as follows:

By function By item	For the years ended December 31, 2020	For the years ended December 31, 2020	For the years ended December 31, 2020	For the years ended December 31, 2019	For the years ended December 31, 2019	For the years ended December 31, 2019
	Operating costs	Operating and non-operating expense	Total	Operating costs	Operating and non-operating expense	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	1,072,516 98,114 34,265 - 48,350 247,106 71,623	4,758,618 331,473 194,630 133,554 146,321 314,651 506,556	5,831,134 429,587 228,895 133,554 194,671 561,757 578,179	715,810 57,625 25,265 - 31,621 100,248 176,000	4,368,055 317,725 186,900 87,414 164,352 308,544 491,744	5,083,865 375,350 212,165 87,414 195,973 408,792 667,744

The Company For the years ended December 31, 2020 and 2019 employees and employee benefits expenses were as follows:

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages Average adjustment of employee salaries and wages Remuneration receivedby supervisors	2020 5,635 4 $ 1,187 $ 1,036 (4.25)% $ -	2020 5,635 4 $ 1,187 $ 1,036 (4.25)% $ -	2019 4,704
			4
			1,248
			1,082
		(4.25)%	-

The Company's salary and remuneration policy (including directors, supervisors, managers and employees) is as follows:

The Company's salary and remuneration policy is committed to link with performance and to implement a performance-oriented remuneration system.

The remuneration system considers the Company's operating objectives along with financial status and comprehensively evaluates various categories such as performance and makes differentiated assessments based on individual contributions.

238

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

1.Regardless operating profit or loss of the Company ’ s business, the Company shall pay remuneration regularity to all directors. The remuneration is determined by the participation to the Company's operating performance of directors, the value of directors’ contribution to the Company's operations, and peer salary levels, then are reviewed by the remuneration committee and are submitted to the board of directors for further decision.
2.The individual salary and remuneration of directors and managers shall refer to the general salary level of peers. It should also consider personal duties contributions, performance, and conjunct with the company’s operating goals and performance. Policies should be reviewed by the remuneration committee and sent to the Board of Directors for further decision.
3.The employee's remuneration includes monthly salary based on job grades, bonuses in accordance to performance, and remuneration measured on the level of Company's profitability.
Note: The Company's Articles of Association specify that no less than 3% of profit shall be allocated for employees' remuneration and no more than 3% of profit shall be allocated for directors' remuneration.

(13) Other disclosures

(a) Information on significant transactions

The following is the information on significant transactions required by the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the year ended December 31, 2020:

1. Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Col	lateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1 2 3 3 4	Inventec (Chongqing) Corp.(Note 2) Inventec Appliances (Nanjing) Corp.(Note 3) Inventec Appliances (Shanghai) Co., Ltd.(Note 3) 〞 Inventec Appliances Corp. (Note 3)	Inventec Asset-Managemen t (Shanghai) Corporation Inventec Appliances (XI'AN) Corporation Inventec Appliances (Shanghai) Enterprise Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Inventec Appliances (Malaysia) SDN. BHD.	Other receivables 〞〞〞〞	Y Y Y Y Y	523,800 100,395 30,555 131,400 800,000	- 82,935 - 130,950 800,000	- 56,745 - 130,950 328,409	3.045% - 3.045% 1.95%	2 2 2 2 2	- - - - -	Working Capital 〞〞〞〞	- - - - -	None 〞〞〞〞	- - - - -	3,184,453 343,822 1,771,832 1,771,832 8,476,966	3,184,453 343,822 1,771,832 1,771,832 8,476,966

239

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

==> picture [475 x 86] intentionally omitted <==

----- Start of picture text -----

Highest Range of
balance of interest Purposes of Transaction
financing to Actual usage rates fund amount for Reasons
other parties amount during financing business for Individual Maximum limit
Name of Name of Account Related during the Ending during the the for the between two short-term Allowance Collateral funding loan of fund
Number lender borrower name party period balance period period borrower parties financing for bad debt Item Value limits financing
5 Inventec Inventec Hi-Tech Other Y 87,600 87,300 - - 2 - Working - None - 4,126,672 4,126,672
(Pudong) Corp. Corp. receivables Capital
(Note 4)
5 〞 Inventec 〞 Y 1,401,600 1,396,800 1,163,567 5.225% 2 - 〞 - 〞 - 1,650,669 1,650,669
Asset-Managemen
t (Shanghai)
Corporation
----- End of picture text -----

Note 1: (1)Those with business contact, please fill in 1.

(2)Those necessary for short term financing, please fill in 2.
Note 2: Where an inter-company or inter-firm short-term financing facility is necessary, total financing amount shall not exceed 40 percent of the company's net worth as stated in its latest financial report. Each financing amount shall not exceed 100 percent of the permitted aggregate amount
of loans of the company.
Note 3: Among Subsidiaries which the parent company holds 100% voting power, aggregate amount of loans shall not exceed the company's net worth as stated in its latest financial report, and each amount of loans shall not exceed 100 percent of the permitted aggregate amount of loans of the company.
Note 4: Where an inter-company or inter-firm short-term financing facility is necessary, total financing amount shall not exceed 40 percent of the company's net worth as stated in its latest financial report. Each financing amount shall not exceed 100 percent of the permitted aggregate amount
of loans of the company. Among Subsidiaries which the parent company holds 100% voting power, aggregate amount of loans shall not exceed

the company's net worth as stated in its latest financial report, and each amount of loans shall not exceed 100 percent of the permitted aggregate amount of loans of the company.

Note 5: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

2. Guarantees and endorsements for other parties:

		(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during theperiod	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements /guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsement s/guarantees to third parties on behalf of companies in Mainland China
		Name	Relationshi p with the Company
1	Inventec Appliances Corp.	Inventec Appliances (Jiangning) Corp.	2	4,238,483	1,163,146	1,163,146	-	-	13.72%	4,238,483	N	N	N

Note 1: The relationship between the entity for which the endorsement/guarantee is made and the Company:

1.The Company has business relationship.

2.Subsidiaries in which the Company directly holds more than 50 percent of its voting shares.
3.An investee in which the Company and subsidiary holds more than 50 percent of its voting shares.

Note 2: The total amount of guarantees and endorsements cannot exceed 50 percent of the Company's net asset value for the current year; the amount of each guarantee and endorsement cannot exceed 50 percent of the Company's net asset value for the current year.

Note 3: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

240

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Securities held as balance sheet date (excluding investment subsidiaries, associates and joint ventures) :

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
The Company 〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞	WK Technology Fund IV Corp. Amphastar Pharmaceuticals Inc. Arima Communications Corp. WIN Semiconductors Corp. Tomorrow Studio Co., Ltd Tai Yi Precision Corporation New E Materials Co., Ltd. Rasilient Systems, Inc. preference share SKSpruce Holding Limited preferred stock CloudMosa Technologies, Inc. preferred stock QEEXO, Co. preferred stock Rescale, Inc. preferred stock Sensel, Inc. preferred stock ZT Group Int'l, Inc. SKSpruce Holding Limited convertible short-term note Empass Technology Entire Technology Co., Ltd. E-TON Solar Tech. Co., Ltd Imedtac Co., Ltd. TMY Technology Inc.	- - - - - - - - - - - - - - - - - - - -	Non-current financial assets at fair value through other comprehensive income 〞〞 Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income 〞〞〞〞〞〞〞〞〞 Current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss 〞〞〞〞	645 26 21,114 4,063 29 2,540 1,760 3,632 3,746 235 568 355 532 70 - 450 3,260 94,889 1,000 2,857	5,084 14,780 75,822 1,405,689 166 - 12,197 - 41,755 - 15,923 26,544 12,370 2,010,944 16,415 19,184 232,340 452,619 59,350 57,943	1.52% 0.05% 10.15% 0.96% 0.20% 6.67% 16.00% 6.20% 3.72% 2.95% 3.09% 1.37% 3.38% 10.00% - % 6.80% 4.50% 29.70% 10.19% 8.00%	5,084 14,780 75,822 1,405,689 166 - 12,197 - 41,755 - 15,923 26,544 12,370 2,010,944 16,415 19,184 232,340 452,619 59,350 57,943

241

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
Inventec (Cayman) Corp. Saint Investment Consulting Corporation Inventec (Chongqing) Corp. Inventec (Beijing) Electronics Technology Co., Ltd. Inventec Electronics (Tianjin) Co., Ltd. Inventec Development Japan Corporation Inventec Investments Co., Ltd. 〞〞〞〞 Inventec Appliances Corp. 〞〞〞〞〞〞〞〞〞〞	Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. Testron Technology (JiangSu) Co., Ltd. Kunshan Joing Technology Co., Ltd. Bank of Communications Pension CNY Financial products ICBC Wealth Management Corporation Tian Libao No. 2 Net Worth Management Product Famm Co., Ltd. EPISTAR Corporation UCFUNNEL CO LTD Sagacity Tech. Co., Ltd. Living Pattern Technology Inc. E-TON Solar Tech. Co., Ltd SCOPE INDUSTRIES BERHAD Rong Cheng Tech. Co., Ltd. Tai Yi Precision Corporation Siano Mobile Silicon Inc. All People Health Social Enterprise Co.,Ltd. GCT Semiconductor, Inc. Pandigital Worldwide, Ltd. 3GTMobile Corporation Linc Global Inc. (Proximiant, Inc.) Molekule, Inc. XMEMS LABS INC	- - - - - - - - - - - - - - - - - - - - - -	Non-current financial assets at fair value through other comprehensive income 〞 Current financial assets at fair value through profit or loss 〞〞 Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income 〞〞 Non-current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income 〞〞〞〞〞〞〞〞〞	20,000 2,778 5,948 - - 100 1,761 83 79 4 15,813 32,000 1,950 635 461 100 93 939 314 594 1,603 1,778	1,175,931 68,964 207,736 52,379 109,120 9,192 72,911 9,653 - 626 75,429 72,549 - - - 1,000 - - - - 152,800 24,057	12.10% 10.00% 2.96% - % - % 16.00% 0.16% 5.00% 15.00% 13.70% 4.95% 4.16% 9.38% 1.67% 0.15% 11.76% 0.12% 4.80% 2.88% 5.30% 1.57% 3.05%	1,175,931 68,964 207,736 52,379 109,120 9,192 72,911 9,653 - 626 75,429 72,549 - - - 1,000 - - - - 152,800 24,057

242

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

==> picture [442 x 120] intentionally omitted <==

----- Start of picture text -----

Ending balance
Category and name of Relationship with Shares/Units Percentage of Fair value
Name of holder security company Account title (thousands) Carrying value ownership (%) (Note1) Note
Inventec Appliances Cardio Ring - Non-current financial - 14,795 - % 14,795
Corp. Technologies, Inc. assets at fair value
convertible long-term through profit or loss
note
Inventec Appliances Siano Mobile Silicon Inc. - 〞 99 - 0.03% -
(Cayman) Holding
Corp.
〞 Leadtone Limited(Class - 〞 1,250 - 2.36% -
B preferred stock)
〞 Digital Chaotex Holdings - 〞 446 - 2.08% -
Ltd.( Class A2 preferred
stock)
----- End of picture text -----

Note 1: The value of publicly traded company is market value, and the value of private entity is net asset value. The net asset value was calculated based on audited financial statements or non audited financial statements.

Note 2: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock:

					(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)
Name of company	Category and name of security (Note 1)	Account name (Note 1)	Name of counter-party	Relationship with the company	Beginning Balance		Purchases		Sales				Ending Balance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
Inventec (Cayman) Corp. Inventec (Chongqing) Corp. Inventec Appliances (Shanghai) Corp. 〞 Inventec Appliances (Nanjing) Co. Ltd. Inventec Appliances (Jiangning) Corp.	Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. common shares CMBC Wealth Management Services SCSB Winners CNY Financial Product Bank of China SCSB Winners CNY Financial Product 〞	Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss 〞〞〞〞	Cash Capital Increase CMBC Bank of Shanghai Bank of China Bank of Shanghai 〞	Non-related parties - - - - -	- - - - - -	- 862,093 325,959 301,853 152,006 1,893,146	20,000 - - - - -	1,175,931 - 955,947 296,370 198,382 4,781,313	- - - - - -	- 870,449 1,292,301 605,403 355,752 6,723,267	- 862,093 1,281,906 598,223 350,388 6,674,459	- 8,356 10,395 7,180 5,364 48,808	20,000 - - - - -	1,175,931 - - - - -

Note 1: The amounts above are valued at exchange rate.

Note 2: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

243

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Acquisition of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.
Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock:

(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)
Name of company	Types of property	Transaction Date	Original Acquisition Date	Book value	Transaction amount	Receipt Terms	Gain (loss) on disposal	Counter-party	Relationship	Purpose of disposal	Price reference	Other terms
Inventec (Pudong) Co., Ltd. L	and and Building	2020.01.06	2003.06.27~ 2007.12.31	740,483	5,912,920	100%	4,890,869	Shanghai Jingshuo Data Science & Technology Co., Ltd.	Non-related parties	Optimize assets N t w R R	egotiated based on he valuation report ith the amounts of MB1,340,170 and MB1,364,810	None

Note 1: The price has been included tax, and the transfer has been cornpleted.

Related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship		Transacti	on details		Trans diffe	actions with terms rent from others	Notes/Accounts r	eceivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sale	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company 〞〞〞〞〞〞 Inventec Holding (North America) Corp. 〞〞〞〞	Inventec Holding (North America) Corp. Inventec (Czech), s.r.o. AIMobile Co., Ltd. Inventec Corporation (Hong Kong) Ltd. Inventec Appliances (Jiangning) Corp. Inventec Holding (North America) Corp. Inventec (Czech), s.r.o. The Company The Company Inventec (Pudong) Technology Corp. Inventec (Czech), s.r.o. Inventec (Czech), s.r.o.	Subsidiary 〞〞〞〞〞〞 Parent 〞 Associates 〞〞	Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Purchases	71,105,867 26,100,876 190,326 299,231,642 344,879 800,083 764,846 71,105,867 800,083 647,061 1,125,297 289,861	17.45% 6.41% 0.05% 76.45% 0.09% 0.20% 0.20% 89.75% 1.05% 0.85% 1.48% 0.37%	90-105 days 90-105 days 60 days 90-105 days 90 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days	- - - - - - - - - - - -	No general trading partner can be compared. 〞〞〞〞〞〞〞〞〞〞〞	16,589,292 10,953,538 108,031 (47,083,769) (92,431) (62,178) (138,655) (16,589,292) 62,178 112,290 242,702 (31,241)	19.09% 12.61% 0.12% 52.18% 0.10% 0.07% 0.15% 93.30% 0.97% 1.75% 3.77% 0.18%

244

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of company	Related party	Nature of relationship		Transacti	on details		Trans diffe	actions with terms rent from others	Notes/Accounts r	eceivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sale	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
Inventec (Czech), s.r.o. 〞〞〞〞 Inventec Corporation (Hong Kong) Ltd. 〞〞 Inventec (Pudong) Technology Corp. 〞〞〞 Inventec (Shanghai) Corp. Inventec (Chongqing) Corp. 〞〞 Inventec Appliances Corp. 〞〞〞	The Company The Company Inventec Holding (North America) Corp. Inventec Holding (North America) Corp. Inventec (Pudong) Technology Corp. The Company Inventec (Pudong) Technology Corp. Inventec (Chongqing) Corp. Inventec Corporation (Hong Kong) Ltd. Inventec (Shanghai) Corp. Inventec Holding (North America) Corp. Inventec (Czech), s.r.o. Inventec (Pudong) Technology Corp. Inventec Corporation (Hong Kong) Ltd. Inventec Appliances (Pudong) Corp. Inventec Appliances (Pudong) Corp. Inventec Appliances (Pudong) Corp. Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Inventec Appliances (USA) Distribution Corp.	Parent 〞 Associates 〞〞 Parent Associates 〞〞〞〞〞〞〞〞〞〞〞〞〞	Purchases Sales Purchases Sales Sales Sales Purchases Purchases Sales Sales Purchases Purchases Purchases Sales Sales Purchases Purchases Purchases Purchases Sales	26,100,876 764,846 1,125,297 289,861 131,200 299,231,642 36,587,835 262,643,807 36,587,835 50,835,082 647,061 131,200 50,835,082 262,643,807 3,461,826 3,680,438 30,918,894 1,046,079 658,785 3,466,765	92.80% 2.61% 4.28% 0.99% 0.45% 100.00% 12.23% 87.77% 39.92% 55.46% 0.68% 0.14% 100.00% 97.94% 1.29% 1.38% 89.13% 3.02% 1.90% 9.65%	90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90 days 60 days 60 days 1-2 months 1-2 months 1-2 months 1-2 months	- - - - - - - - - - - - - - - - - - - -	No general trading partner can be compared. 〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞	(10,953,538) 138,655 (242,702) 31,241 18,675 47,083,769 (8,339,964) (38,743,806) 8,339,964 10,882,010 (112,290) (18,675) (10,882,010) 38,743,806 - - (9,058,738) (256,111) (153,221) 76,546	96.76% 1.65% 2.14% 0.37% 0.22% 46.27% 8.20% 38.07% 42.29% 55.18% 0.35% 0.06% 100.00% 98.81% - % - % 89.80% 2.54% 1.52% 1.34%

245

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of company	Related party	Nature of relationship		Transacti	on details		Trans diffe	actions with terms rent from others	Notes/Accounts r	eceivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sale	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
Inventec Appliances (USA) Distribution Corp. Inventec Appliances (Pudong) Corp. 〞〞〞 Inventec Appliances (Jiangning) Corp. 〞 Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. 〞 AIMobile Co., Ltd.	Inventec Appliances Corp. Inventec Appliances Corp. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Inventec (Chongqing) Corp. Inventec (Chongqing) Corp. Inventec Appliances Corp. The Company Inventec Appliances Corp. Inventec Appliances (Pudong) Corp. The Company	Associates 〞〞〞〞〞 Parent Associates 〞 Parent	Purchases Sales Sales Sales Purchases Sales Sales Sales Purchases Purchases	3,466,765 30,918,894 679,313 3,680,438 3,461,826 1,046,079 344,879 658,785 679,313 190,326	100.00% 87.33% 1.70% 10.40% 12.72% 22.07% 7.31% 98.89% 98.65% 87.80%	1-2 months 1-2 months 1-2 months 60 days 60 days 1-2 months 90 days 1-2 months 1-2 months 60 days	- - - - - - - - - -	No general trading partner can be compared. 〞〞〞〞〞〞〞〞〞	(76,546) 9,058,738 374,674 - - 256,111 92,431 153,221 (374,674) (108,031)	100.00% 96.10% 3.90% - % - % 23.67% 8.54% 98.48% 99.67% (94.17)%

Note 1: Based on the negotiated price while trading.

Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of capital stock:

					(Expressed in T	(Expressed in T	housands of New Taiwan Dollars)	housands of New Taiwan Dollars)
Name of company	Counter party	Relationship	Ending balance	Turnover balance	Overdue		Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
The Company 〞〞〞 Inventec Holding (North America) Corp. 〞	Inventec Holding (North America) Corp. AIMobile Co., Ltd. Inventec (Czech), s.r.o. Inventec Corporation (Hong Kong) Ltd. (Note) Inventec (Czech), s.r.o. Inventec (Pudong) Technology Corp.	Subsidiary Subsidiary Subsidiary Subsidiary Associates Associates	16,589,292 108,031 10,953,538 54,544,416 242,702 112,290	4.37 2.97 2.35 - 4.53 9.03	2,693,480 30,878 3,978,775 11,228,394 - -	Received in the subsequent period Received in the subsequent period Received in the subsequent period Received in the subsequent period	7,473,792 63,923 5,083,626 37,115,539 - -	- - - - - -

246

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of company	Counter party	Relationship	Ending balance	Turnover balance	Ov	erdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
Inventec (Czech), s.r.o. Inventec Corporation (Hong Kong) Ltd. 〞〞 Inventec (Pudong) Technology Corp. 〞 Inventec (Chongqing) Corp. Inventec Appliances (Pudong) Corp. 〞 Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	The Company The Company Inventec (Pudong) Technology Corp. (Note) Inventec (Chongqing) Corp. (Note) Inventec Corporation (Hong Kong) Ltd. Inventec (Shanghai) Corp. Inventec Corporation (Hong Kong) Ltd. Inventec Appliances Corp. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Inventec Appliances Corp. Inventec Appliances Corp.	Parent Parent Associates Associates Associates Associates Associates Associates Associates Associates Associates	138,655 47,083,769 23,828,947 30,715,470 8,339,964 10,882,010 38,743,806 9,058,738 374,674 256,111 153,221	7.60 6.61 - - 2.82 5.29 8.15 2.61 3.63 4.78 8.60	- - 11,205,570 22,824 - 32,561 - - - - -	Received in the subsequent period Received in the subsequent period Received in the subsequent period Received in the subsequent period	138,655 37,733,251 6,402,488 30,713,051 1,565,414 5,171,927 36,167,837 3,853,102 30,551 256,111 153,221	- - - - - - - - - - -

Note 1: The receivables were not yielded by sales or purchases; therefore there is no turnover rate.

Trading in derivative instruments: Please refer to notes (6)(b) and (6)(v).
(b) Information on investment:

The following is the information on investees for the year ended December 31, 2020 (excluding investees in Mainland China):

(In Thousands of New Taiwan Dollars, Except for Share Data)

Investor company	Investee company	Location	Main businesses and products	Original inve	stment amount	Balance	as of December 3	1, 2020	Net income (loss) of the investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares/Units (In thousands)	Percentage of ownership	Carrying value
The Company 〞〞〞〞	Inventec Besta Co., Ltd. Inventec Corporation (Hong Kong) Ltd. Inventec Holding (North America) Corp. Inventec Appliances Corp. Inventec (Cayman) Corp.	Taipei Hong Kong USA New Taipei City Cayman	Electronic dictionary Investing in Mainland China and import and export business Investment of holding company in America Wireless terminal products Holding Company	420,34 167,16 159,00 9,656,87 9,812,96	7 420,347 2 167,162 3 159,003 7 9,656,877 3 9,812,963	23,405 2,500 5,000 536,857 301,768	37.53% 100.00% 100.00% 100.00% 100.00%	210,311 365,614 1,281,813 9,246,421 21,100,327	(47,675) 10,896 62,310 679,517 7,722,888	(17,892) 10,896 62,310 679,517 7,722,888	Associate under equity method Subsidiary 〞〞〞

247

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Investor company	Investee company	Location	Main businesses and products	Original inves	tment amount	Balance	as of December 3	1, 2020	Net income (loss) of the investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares/Units (In thousands)	Percentage of ownership	Carrying value
The Company 〞〞〞〞〞〞〞 Inventec Investment Co., Ltd. 〞 Inventec Appliances Corp. 〞〞	IEC (Cayman) Corporation Inventec (Czech), S.R.O. Inventec Investment Co., Ltd. Inventec Solar Energy Corporation Inventec Development Japan Corporation Inventec Japan Corporation AIMobile Co., Ltd. Inventec Manufacturing (India) Private Limited Inventec Solar Energy Corporation Inventec Manufacturing (India) Private Limited Inventec Appliances (Cayman) Holding Corp. Gainia Intellectual Asset Services, Inc. Inventec Solar Energy Corporation	Cayman Czech Taipei Taoyuan Japan Japan Taipei India Taoyuan India Cayman Taipei Taoyuan	Holding Company Computer products assembly operations Investment Company Developing, production and selling of multicrystalline solar cells Developing, designing and selling computer peripherals Trading and management service Developing, production and selling of intelligent mobile device Computer products assembly operations Developing, production and selling of multicrystalline solar cells Computer products assembly operations Holding Company Intellectual property rights integrative services Developing, production and selling of multicrystalline solar cells	739,500 85,921 1,000,000 1,087,800 630,845 2,954 182,500 281,691 150,000 28 5,683,886 6,400 311,160	739,500 85,921 1,000,000 1,087,800 630,845 2,954 220,000 281,691 150,000 28 5,683,886 6,400 311,160	25,000 - 108,800 108,150 45 - 18,250 55,994 15,000 6 199,575 205 30,930	100.00% 100.00% 100.00% 33.45% 100.00% 100.00% 73.00% 99.99% 4.64% 0.01% 100.00% 38.90% 9.57%	1,178,105 114,544 124,923 (296,204) 17,677 3,181 122,282 10,738 (44,540) 1 16,545,017 1,332 (91,841)	273,585 78,541 (52,959) (1,695,966) (1,036) 414 (81,693) 34,347 (1,695,966) 34,347 (300,331) (1,096) (1,695,966)	273,585 78,541 (52,959) (546,206) (1,036) 414 (44,924) 35,455 - - - - -	Subsidiary 〞〞〞〞〞〞〞 Associate Company 〞〞 Associate under equity method Associate Company

248

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Investor company	Investee company	Location	Main businesses and products	Original inv	estment amount	Balance	as of December 3	1, 2020	Net income (loss) of the investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares/Units (In thousands)	Percentage of ownership	Carrying value
Inventec Appliances (Cayman) Holding Corp. 〞 Inventec Appliances (Pudong) Corp.	Inventec Appliances (USA) Distribution Corp Inventec Appliances Corporation USA Inc. Inventec Appliances (Malaysia) SDN. BHD.	. USA S P s , USA S Malaysia s p	elling of MP3 layer, PDA and cience plotter elling services Manufacture and ale of electronic materials and roducts	22,78 1,42 501,78	4 22,784 4 1,424 4 -	400 10 71,000	100.00% 100.00% 100.00%	92,687 13,003 482,340	1,127 885 (19,102)	- - -	Associate Company 〞〞

Note 1: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports. Note 2: According to the regulations, the Company are not required to disclose the share of income / loss of investees..

(c) Information on investment in Mainland China:
The names of investees in Mainland China, the main businesses and products, and other

information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 2)	Book value	Accumulated remittance of earnings in current period (Note 6)
					Out-flow	Inflow
Inventec (Shanghai) Service Co., Ltd Inventec (ChongQing) Service Co., Ltd Inventec (Pudong) Co., Ltd. Inventec (Shanghai) Co., Ltd. Inventec (ChongQing) Corporation Inventec (Pudong) Technology Corp. Inventec Electronics (Tianjin) Co., Ltd. Inventec (Beijing) Electronics Technology Co., Ltd. Inventec Hi-Tech Corporation	Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Software production Software production Multimedia computer and system parts assembling	188,679 28,480 1,424,000 2,087,127 2,136,000 1,668,692 142,400 41,296 1,424,000	(2) (2) (2) (2) (2) (2) (2) (2) (2)	56,960 28,480 1,424,000 840,160 2,136,000 1,424,000 121,040 41,296 1,424,000	- - - - - - - - -	- - - - - - - - -	56,960 28,480 1,424,000 840,160 2,136,000 1,424,000 121,040 41,296 1,424,000	(971) (1,330) 3,550,998 93,305 2,365,436 2,274,369 2,345 1,516 (57,017)	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(971) (1,330) 3,550,998 93,305 2,365,436 2,273,877 2,345 1,516 (57,017)	123,206 40,042 4,126,672 1,859,116 7,961,132 6,615,064 230,567 77,358 1,138,394	30,234 - - - 2,242,107 321,599 149,517 - -

249

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 2)	Book value	Accumulated remittance of earnings in current period (Note 6)
					Out-flow	Inflow
Inventec Huan Hsin (Zhejiang) Technology Co., Ltd. Inventec Asset-Management (Shanghai) Corporation Saint Investment consulting corporation Inventec Appliances (Shanghai) Co., Ltd. Inventec Appliances (Pudong) Corp. Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanjing) Corp. Inventec Appliances (XI'AN) Corporation Inventec Appliances (Nanchang) Corp. APEX Business Management & Consulting (Shanghai) Co., Ltd. Inventec Appliances (Shanghai) Enterprise Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	Complete of the electronic computer and product and sale of external equipment Equipment leasing, storage, technological development and saleof computer Business management consulting Electronic communication and products assemble Electronic communication and products assemble Electronic communication and products assemble House leasing Electronic communication and products assemble Electronic communication and products assemble Business Management Development and consultation on software and hardware; as well as selling of electronic products Electronic communication and products assemble	817,376 1,869,030 87,296 1,469,568 2,192,960 1,936,640 142,400 113,920 59,808 2,190 34,919 261,889	(2) (3) (3) (2) (2) (2) (2) (2) (2) (3) (3) (3)	822,474 - - 1,370,401 2,192,960 1,196,160 255,793 113,920 59,808 - - -	- - - - - - - - - - - -	- - - - - - - - - - - -	822,474 - - 1,370,401 2,192,960 1,196,160 255,793 113,920 59,808 - - -	(2,120) (22,349) 33 (34,975) (569,471) 308,573 12,695 10,358 (50,163) 25,252 (2,026) (81,203)	100.00% 78.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(2,120) (17,432) 33 (34,975) (545,196) 306,693 12,695 10,358 (50,163) 25,252 (2,026) (81,203)	3,837 1,374,393 87,330 1,771,832 8,854,398 5,291,450 382,786 50,757 81,258 84,036 25,385 105,694	- - - 1,535,981 2,297,117 1,636,736 85,353 - - - - -

2. Limitation on investment in Mainland China:

Name of Company	Accumulated Investment in Mainland China as of December 31, 2020	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 3,4,7)
The Company Inventec Appliances Corp.	8,378,214 5,252,510	8,378,214 5,252,510	- 5,086,180

Note 1: There are three ways of investments as following:

(a) Direct investment in Mainland China.

(b) Indirect investment in Mainland china through a subsidiary in a third place.

250

(English Translation of Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Note 2: The base of recognition of investment income (loss) is the financial statement audited by CPA of the investee company.

Note 3: In accordance with the regulation of amended limitation calculation of Investment Commission in 29 August, 2008, MOEA (IDB) committed the Company were in the scope of operating headquarter; therefore there is no need to calculate the limitation.

Note 4: The upper limit on investment of Inventec Appliances Corp. is the higher of 60% of net value or 60% of consolidated net value. Note 5: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports. Note 6: The amount of foreign currencies were exchanged to New Taiwan Dollars in historical exchange rates. Note 7: After the accumulated investment in Mainland China as of Dcecmber 31, 2020, deducted the accumulated remittance of earnings in current period, the difference of Inventec Appliance Corp. was still under the upper limit on investment.

Note 8: The inter-company transactions with the Company were eliminated in the consolidated financial statements

3. Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China for the year “ ” ended December 31, 2020, are disclosed in Information on significant transactions .

(d) Major shareholders: No shareholders hold more than 5% shares.

(14) Segment Information

Please refer to consolidated financial report of Inventec Corporation for the year ended December 31, 2020.

251

INVENTEC CORPORATION

Statement of Cash and Cash Equivalents

December 31, 2020

(In Thousands of New Taiwan Dollars)

Item	Description	Amount $ 450 622 1,072 1,384 90,112 4,445,014 728,540 5,265,050 $ 5,266,122
Cash Cash in bank	Petty cash Foriegn cash Subtotal Checking accounts Demand deposits Foriegn deposits USD 156,034 JPY 3,822 CNY 17 EUR 1 Time deposits Subtotal

252

INVENTEC CORPORATION

Statement of Changes in Financial Assets Measured at Fair Value through Other Comprehensive Income - Current

For the year ended December 31, 2020

(In Thousands of New Taiwan Dollars)

Name of financial instrument	Share or units	Interest rate	Accumulate d impairment	Fair value Unit price Total amount 346.00 1,405,689
				Unit price
WIN Semiconductors Corp.	4,063 $ 40,630	- %	-	346.00

253

INVENTEC CORPORATION

Statement of Trade Receivables

December 31, 2020

(In Thousands of New Taiwan Dollars)

Client Name	Amount $ 42,557,810 8,522,803 8,120,989	Note
Non-related parties: HP ASUSTEK Other Subtotal Less: Allowance for impairment Net amount Related parties: Inventec Holding (North America) Corp. Inventec (Czech), S.R.O. Other Subtotal Less: Allowance for impairment Net amount Total		The year-end balance of each client doesn't exceed 5% of the account balance. The year-end balance of each client doesn't exceed 5% of the account balance.
	59,201,602 (34,867)
	59,166,735
	16,589,292 10,953,538 175,993
	27,718,823
	- 27,718,823
	$ 86,885,558

254

INVENTEC CORPORATION

Statement of Other Receivables

December 31, 2020

(In Thousands of New Taiwan Dollars)

Item	Description	Amount $ 236,116 54,688,838 1,681	Note
Non-related parties Related parties Earned revenue receivable Total	Payment on behalf of others Payment of materials on behalf of others Interest receivable from bank
		$ 54,926,635

Statement of Inventory

Item	Amount Cost Net realized value $ 1,225,291 1,171,277 691,631 683,313 536,647 526,593	Amount Cost Net realized value $ 1,225,291 1,171,277 691,631 683,313 536,647 526,593
	Cost $ 1,225,291 691,631 536,647
Raw materials Work in process Finished goods Subtotal Less: Allowance for inventory market decline and obsolescence Total
	2,453,569 (65,624)	2,381,183

	$ 2,387,945

255

INVENTEC CORPORATION

Statement of Other Current Assets

December 31, 2020

(In Thousands of New Taiwan Dollars)

Item	Description	Amount $ 863 74,913
Prepayments Payment on behalf of others Asset for recovery Other	Premium Other Subtotal Other Other
		75,776 2,511,971 260,999 22,461
		$ 2,871,207

256

Inventec Corporation

Statement of Non-current financial assets at fair value through

profit or loss

For the year ended December 31, 2020

(In Thousands of New Taiwan Dollars)

Beginning Balance Shares/(in thousand) Fair value - $ - - - - - - - - - $ -	Beginning Balance Shares/(in thousand) Fair value - $ - - - - - - - - - $ -	Addition Shares/(in thousand) Amount 450 19,184 3,260 232,340 94,889 452,619 1,000 59,350 2,857 57,943 821,436	Addition Shares/(in thousand) Amount 450 19,184 3,260 232,340 94,889 452,619 1,000 59,350 2,857 57,943 821,436	Decrease Shares/(in thousand) Amount - - - - - - - - - - -	Decrease Shares/(in thousand) Amount - - - - - - - - - - -	Ending balance Shares/(in thousand) Fair value 450 19,184 3,260 232,340 94,889 452,619 1,000 59,350 2,857 57,943 821,436	Ending balance Shares/(in thousand) Fair value 450 19,184 3,260 232,340 94,889 452,619 1,000 59,350 2,857 57,943 821,436
Shares/(in thousand)		Shares/(in thousand) 450 3,260 94,889 1,000 2,857		Shares/(in thousand)		Shares/(in thousand) 450 3,260 94,889 1,000 2,857
- - - - -				- - - - -
	$ -		821,436		-		821,436

257

INVENTEC CORPORATION

Statement of Changes in Financial Assets Measured at fair Value － through Other Comprehensive Income Non-current

For the year ended December 31, 2020

(In Thousands of New Taiwan Dollars)

Beginning Balance Shares (in thousand) Fair value 645 $ 5,632 2,835 14,940 21,114 129,221 29 176 2,540 - 1,760 14,555 70 1,699,658 - - 1,864,182 235 11,150 3,632 - 3,746 138,701 568 27,703 355 26,637 532 6,366 210,557 $ 2,074,739	Addition Shares (in thousand) Amount - - - - - - - - - - - - - 311,286 26 14,780 326,066 - - - - - - - - - - - 6,004 6,004 332,070	Addition Shares (in thousand) Amount - - - - - - - - - - - - - 311,286 26 14,780 326,066 - - - - - - - - - - - 6,004 6,004 332,070	Decrease Shares (in thousand) Amount - 548 2,835 14,940 - 53,399 - 10 - - - 2,358 - - - - 71,255 - 11,150 - - - 96,946 - 11,780 - 93 - - 119,969 191,224	Decrease Shares (in thousand) Amount - 548 2,835 14,940 - 53,399 - 10 - - - 2,358 - - - - 71,255 - 11,150 - - - 96,946 - 11,780 - 93 - - 119,969 191,224	Ending balance Shares (in thousand) Fair value 645 5,084 - - 21,114 75,822 29 166 2,540 - 1,760 12,197 70 2,010,944 26 14,780 2,118,993 235 - 3,632 - 3,746 41,755 568 15,923 355 26,544 532 12,370 96,592 2,215,585	Ending balance Shares (in thousand) Fair value 645 5,084 - - 21,114 75,822 29 166 2,540 - 1,760 12,197 70 2,010,944 26 14,780 2,118,993 235 - 3,632 - 3,746 41,755 568 15,923 355 26,544 532 12,370 96,592 2,215,585
	Shares (in thousand) - - - - - - - 26 - - - - - -		Shares (in thousand) - 2,835 - - - - - - - - - - - -		Shares (in thousand) 645 - 21,114 29 2,540 1,760 70 26 235 3,632 3,746 568 355 532

		326,066		71,255		2,118,993
		- - - - - 6,004		11,150 - 96,946 11,780 93 -		- - 41,755 15,923 26,544 12,370
210,557		6,004		119,969		96,592
$ 2,074,739		332,070		191,224		2,215,585

258

INVENTEC CORPORATION

Statement of Changes in Investments Accounted for Using the

Equity Method

For the Year Ended December 31, 2020

(In Thousands of New Taiwan Dollars)

Beginning Balance Shares (in thousand) Amount 23,405 $ 245,487 2,500 354,041 5,000 1,290,344 536,857 9,714,377 301,768 13,887,270 25,000 958,568 - 32,250 45 17,630 - 2,774 108,800 178,323 94,889 396,783 55,994 (25,580) 22,000 81,383 $ 27,133,650 108,150 $ 250,002	Ad	dition Amount - 11,573 - - 7,213,057 219,537 82,294 47 407 - - 36,318 40,899	Dec	rease Amount 35,176 - 8,531 467,956 - - - - - 53,400 396,783 - -		Ending balanc	e Amount 210,311 365,614 1,281,813 9,246,421 21,100,327 1,178,105 114,544 17,677 3,181 124,923 - 10,738 122,282	Market Val	e or Net Assets lue Total amount 230,071 365,614 1,281,813 9,246,421 21,100,327 1,178,105 114,544 17,677 3,181 124,923 - 10,738 122,282	Note
	Shares (in thousand)		Shares (in thousand) - - - - - - - - - - 94,889 - 13,750 -		Shares (in thousand) 23,405 2,500 5,000 536,857 301,768 25,000 - 45 - 108,800 - 55,994 18,250 108,150	Percentage of ownership		Unit price
	- - - - - - - - - - - - 10,000 -					37.53% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% - % 99.99% 73.00% 33.45%		9.83 - - - - - - - - - - - - -		Note 〞〞〞〞〞〞〞〞〞〞〞〞 Note 1
$ 27,133,650		7,604,132		961,846			33,775,936		33,795,696
$ 250,002		-		546,206			(296,204)		(296,204)

Note : The value of listed company is market value, and the value of private entity is net equity.

Note1: Other non-current liabilities, others.

259

INVENTEC CORPORATION

Statement of Other Non-current Assets

December 31, 2020

(In Thousands of New Taiwan Dollars)

Item	Description	Amount $ 2,776,909 (2,337,485) 1,172,586 132,954 28,930 34,105	Note
Deferred expense Less: Accumulated, depreciation Deferred tax assets Restricted assets Refundable deposits Other assets	Toolings Membership card and customs duty guarantee
		$ 1,807,999

260

INVENTEC CORPORATION

Statement of Short-term Borrowings

December 31, 2020

(In Thousands of New Taiwan Dollars)

Type	Description	Ending balance $ 5,919,969 5,259,907 4,260,116 2,191,639 1,708,206 1,704,372 1,448,964 1,000,000 400,000 300,000	Contract Period 2020.11.05-2021.03.10 2020.10.08-2021.03.26 2020.11.11-2021.01.15 2020.10.29-2021.01.27 2020.12.03-2021.06.01 2020.11.04-2021.01.13 2020.12.17-2021.03.17 2020.11.27-2021.02.26 2020.10.07-2021.01.07 2020.11.13-2021.01.13	Range of interest rate Loan commitment 0.48%-0.61% USD 223,000 0.74%-0.85% USD 250,000 0.50%-0.51% USD 150,000 0.63% TWD 2,325,000 0.70% USD 80,000 0.67% USD 80,000 0.73% TWD 1,800,000 0.80% USD 60,000 0.68% USD 80,000 0.85% USD 30,000	Collateral None 〞〞〞〞〞〞〞〞〞	Note
Short-term borrowings	Citi Bank DBS Bank Bank of Taiwan Hua Nan Bank Mega Bank Taishin Bank Land Bank Mizuho Bank Sumito Mitsui Bank OCBC Bank
		$ 24,193,173

261

INVENTEC CORPORATION

Statement of Accounts Payable

December 31, 2020

(In Thousands of New Taiwan Dollars)

Vendor name	Amount $ 15,992,173 6,795,321 20,074,241	Note
Non-related parties: HP International Pte. Ltd. Asustek Computer Incorporation Other Subtotal Related parties: Inventec Corporation (Hong Kong) Ltd. Other Subtotal Total		The year-end balance of each client doesn't exceed 5% of the account balance. The year-end balance of each client doesn't exceed 5% of the account balance.
	42,861,735
	47,083,769 293,950
	47,377,719
	$ 90,239,454

262

INVENTEC CORPORATION

Statement of Other Payables

December 31, 2020

(In Thousands of New Taiwan Dollars)

Item	Description	Amount $ 2,700,935 22,439 563,559 2,357,233 $ 5,644,166
Other payables Total	Payables for salary and bonus Payables for purchasing softwares Inventory processing fee Other Statement of Other Current Liabilities

Item	Description	Amount $ 746 56,604 4,557,593 3,241,256	Note
Other current liabilities	Advance receipts Receipts under custody Temporary credits Other
		$ 7,856,199

263

INVENTEC CORPORATION

Statement of Long-term Borrowings

December 31, 2020

(In Thousands of New Taiwan Dollars)

Creditor	Description	Amount $ 5,696,000 2,033,333 1,016,667 (300,000)	Term of contract 2020.10.14-2022.10.14 2016.02.26-2031.02.26 2016.02.26-2031.02.26	Interest rate Collateral 1.01% None 1.19% Land and building 1.19% 〞	Note
Syndicated agreement with Hua Nan Bank and other 13 participating banks Hua Nan Bank Bank of Taiwan Less: Long-term Borrowings, current portion Total	- Secured borrowings 〞				With financial covenant No financial covenant 〞
		$ 8,446,000

264

INVENTEC CORPORATION

Statement of Other Non-current Liabilities

December 31, 2020

(In Thousands of New Taiwan Dollars)

Item	Description	Amount $ 2,865,814 36,859 561 296,204	Note
Other non-current liabilities	Deferred tax liabilities Deferred credits Gaurantee deposits received Credit balance of investments accounted for using equity method
		$ 3,199,438

265

INVENTEC CORPORATION

Statement of Operating Costs

For the year ended December 31, 2020

(In Thousands of New Taiwan Dollars)

Item Cost of goods sold from manufacturing Direct material Add: Raw material, January 1 Purchase Gain on physical inventory Less: Raw material, December 31 Transferred to expense Sale Loss on physical inventory Direct labor Manufacturing expenses Cost of manufacturing Add: Work in process, January 1 Purchase Gain on physical inventory Less: Work in process, December 31 Transferred to expense Loss on physical inventory Transferred to warrunty Cost of finished goods Add: Finished goods, January 1 Gain on physical inventory Less: Finished goods, December 31 Loss on inventory Transferred to expense Transferred to warranty Cost of material sold Cost of merchandise sold (triangle trade) Loss of inventory valuation Cost of warranty Expense of idle capacity Loss on physical inventory Cost of provision of sales return Total operating costs	Amount Subtotal Total $ 29,147,821 13,592,903 1,706,188 14,139,890 35,119 (1,225,291) (89,335) (932,473) (41,195) 748,072 1,796,817 16,137,792 1,255,327 12,570,148 386 (691,631) (167,077) (687) (159) 29,104,099 971,832 3,484 (536,647) (4,054) (382,894) (7,999) 932,473 364,989,767 11,198 589,340 26,306 6,947 (52,976) $ 395,650,876	Amount Subtotal Total $ 29,147,821 13,592,903 1,706,188 14,139,890 35,119 (1,225,291) (89,335) (932,473) (41,195) 748,072 1,796,817 16,137,792 1,255,327 12,570,148 386 (691,631) (167,077) (687) (159) 29,104,099 971,832 3,484 (536,647) (4,054) (382,894) (7,999) 932,473 364,989,767 11,198 589,340 26,306 6,947 (52,976) $ 395,650,876
	Subtotal $ 13,592,903 1,706,188 14,139,890 35,119 (1,225,291) (89,335) (932,473) (41,195) 748,072 1,796,817 16,137,792 1,255,327 12,570,148 386 (691,631) (167,077) (687) (159) 29,104,099 971,832 3,484 (536,647) (4,054) (382,894) (7,999)

266

INVENTEC CORPORATION

Statement of Selling Expenses

For the year ended December 31, 2020

(In Thousands of New Taiwan Dollars)

Item	Decription	Amount $ 486,323 390,190 474,956 104,666 304,370	Note
Salary and wages expense Amortization expense Freight Miscellaneous expense Other expense
		$ 1,760,505

Statement of Administrative Expenses

Item	Description	Amount $ 941,120 255,266 140,401 118,094 103,152 337,823	Note
Salary and wages expense Miscellaneous expense Depreciation expense Repair expense Professional service fees Other expense
		$ 1,895,856

267

INVENTEC CORPORATION

Statement of Research and Development Expenses

December 31, 2020

(In Thousands of New Taiwan Dollars)

Item	Description	Amount $ 3,649,479 661,063 315,530 1,199,935	Note
Salary and wages expense Supplies Examination expense Other expense
		$ 5,826,007

268

Appendix II: Consolidated financial statements with subsidiaries audited by CPA of 2020

269

Independent Auditors ’ Report

To the Board of Directors of Inventec Corporation:

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the year ended December 31, 2020 and 2019 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit 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 Consolidated Financial Statements section of our report. We are independent of the Group 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 consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated 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(h), Note 5 and Note 6(e) for accounting policies, significant accounting assumptions and judgments, major sources of estimation uncertainty and related disclosure information for inventory, respectively.

270

Description of the key audit matter:

The Group’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:

2. The offsetting agreements of financial assets and liabilities

Please refer to Note 4(g), 6(b) and 6(x) for accounting policy and detailed information on the agreements of financial assets and liabilities offsetting.

Description of the key audit matter:

In order to use fund flexibly, the Group handled multiple kinds of financial instruments which IAS was endorsed by FSC to offset financial assets and liabilities and be reported in the balance sheet. The disclosure of financial instruments which are not expired on the reporting date would influence the judgment of report reader.

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 examining whether the amount of the signed contract were within the scope authorized by the Board of Directors; sampling transactions in 2020 to examine whether contracts were signed with banks; review the contracts to check if the regulation of offsetting criteria was met; and assessing whether the disclosure of financial assets and liabilities offsetting is appropriate.

3. Disposal of property, plant and equipment of subsidiary

Please refer to Note 4(l), 4(m), 6(h) and 6(i) for accounting policy and detailed information for disposal of property, plant and equipment of subsidiary.

Description of the key audit matter:

For optimizing idled assets and lowing the Group's operating costs, the Group disposed the idled assets. Due to the significance of amount, the disposal of property, plant and equipment 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 include examining whether the disposal of property, plant and equipment has been approved by the Board of Directors; in accordance with the Company's acquisition and disposal of assets processing procedures to obtain the professional valuation report; verifying the sale documents, confirming and calculating whether the gains and losses on the disposal are appropriate; examining whether depreciation recognition has been terminated at the asset disposal date, and that the cost and accumulated depreciation have been removed from the account.

271

Other Matter

Inventec Corporation has additionally prepared its parent company only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unqualified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’ 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 Group or to cease operations, or has no realistic alternative but to do so.

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

Auditor ’ s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated financial statements.

Identify and assess the risks of material misstatement of the consolidated 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 Group’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 Groupwe conclude that a material uncertainty exists, we are required to draw attention in our auditors’s ability to continue as a going concern. If ’ report to the related disclosures in the consolidated 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 Group to cease to continue as a going concern.

272

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated 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 entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated 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 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 audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ audit 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’ audit report and consolidated financial statements, the Chinese version shall prevail.

273

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

2020.12.31	2020.12.31	2019.12.31 Amount % 25,166,518 13 108,175 - 6,449,213 4 71,342,557 37 2,319,023 1 11,571,105 6 359,061 - 200,289 - 9,530,335 5
173,469,952 81
911,660 - 3,657,808 2 211,643 - 28,004,583 13 3,403,891 2 - - 875,801 - 3,626,099 2
	140,543,688 66	127,046,276 66
	8,990,825 4 656,171 - 748,035 - 5,331,975 3	3,883,134 2 640,401 - 976,791 - 3,575,023 2
	15,727,006 7	9,075,349 4
	156,270,694 73	136,121,625 70
	35,874,751 17 2,899,284 1 21,112,549 10 (1,901,925) (1)	35,874,751 19 2,913,461 2 18,304,941 9 (1,822,005) (1)
40,691,485 19
	57,984,659 27 (93,916) -	55,271,148 29 1,700,080 1
	57,890,743 27	56,971,228 30
$ 214,161,437 100	$ 214,161,437 100	193,092,853 100

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

274

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

A	mount 508,294,198 487,181,281	For t	he yea	rs ended Dec 31,	ember % 100 95
		202 0 % 100 96		2019
			A	mount 500,952,813 478,121,718
$
	21,112,917	4		22,831,095	5
	2,795,370 4,190,267 9,715,204 (29,010)	- 1 2 -		2,607,083 4,303,565 9,523,033 (6,081)	1 1 2 -
	16,671,831	3		16,427,600	4
	4,441,086	1		6,403,495	1
	1,186,629 276,301 5,514,251 (1,054,244) (18,318)	- - 1 - - 1		1,347,043 312,249 231,833 (1,761,100) (24,459)	- - - - - -
	5,904,619			105,566
	10,345,705 3,772,727	2 1		6,509,061 1,672,064	1 -
	6,572,978	1		4,836,997	1
	(53,824) 365,376 (16,646) (10,746)	- - - -		(29,862) 799,514 (56) (6,757)	- - - -
	305,652	-		776,353	-
	(457,317) (639) -	- - -		(1,026,850) (1,597) -	- - -
	(457,956)	-		(1,028,447)	-
	(152,304)	-		(252,094)	-
$	6,420,674	1		4,584,903	1
$	7,547,985 (975,007)	1 -		5,507,960 (670,963)	1 -
$	6,572,978	1		4,836,997	1
$	7,391,406 (970,732)	1 -		5,287,308 (702,405)	1 -
$	6,420,674	1		4,584,903	1
$		2.10			1.54
$		2.08			1.53

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

		Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent Non - controllin g interests 55,364,481 2,357,036 5,507,960 (670,963) (220,652) (31,442)	Total Equity 57,721,517 4,836,997 (252,094)
Capital Stock	Capital Surplus	Retained Earnings		Other Equity Interest
				Exchange Differences on Translation Unrealized gains (losses) from financial assets measured at fair value of Foreign Financial Statements through other comprehensive income (990,250) (656,107) - - (1,014,884) 819,200
Share Capital		Legal Reserve Special Reserve 10,149,619 107,546 - - - -	Unappropriated Retained Earnings
$ 35,874,751 - -	2,912,889 - -		7,966,033 5,507,960 (24,968)
-	-	- -	5,482,992	(1,014,884) 819,200	5,287,308 (702,405)	4,584,903
- - - - - -	- - - - - 572	649,986 - - 1,538,811 - - - - - - - -	(649,986) (1,538,811) (5,381,213) - (20,036) -	- - - - - - - - - 20,036 - -	- - - - (5,381,213) - - 44,981 - - 572 468	- - (5,381,213) 44,981 - 1,040
35,874,751 - -	2,913,461 - -	10,799,605 1,646,357 - - - -	5,858,979 7,547,985 (43,201)	(2,005,134) 183,129 - - (462,231) 348,853	55,271,148 1,700,080 7,547,985 (975,007) (156,579) 4,275	56,971,228 6,572,978 (152,304)
-	-	- -	7,504,784	(462,231) 348,853	7,391,406 (970,732)	6,420,674
- - - - - - - -	- - - - (14,856) - - 679	546,296 - - 175,647 - - - - - - - - - - - -	(546,296) (175,647) (4,663,718) (19,258) - - (14,200) -	- - - - - - - 19,258 - - - - - 14,200 - -	- - - - (4,663,718) - - - (14,856) - - (823,820) - - 679 556	- - (4,663,718) - (14,856) (823,820) - 1,235
$ 35,874,751	2,899,284	11,345,901 1,822,004	7,944,644	(2,467,365) 565,440	57,984,659 (93,916)	57,890,743

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

276

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit: Depreciation expense Amortization expense Expected credit reversal gain Interest expense Interest income Dividend income Share-based payments transactions Share of losses of associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Gain on disposal of non-current assets held-for-sale Gain on disposal of investments accounted for using equity method Impairment loss on non-financial assets Unrealized foreign exchange loss Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Increase in financial assets at fair value through profit or loss, mandatorily measured at fair value (Increase) decrease in accounts receivable (Increase) decrease in other receivables (Increase) decrease in inventories (Increase) decrease in other current assets Total changes in operating assets Changes in operating liabilities: Increase in financial liabilities held for trading Increase (decrease) in contract liabilities Increase (decrease) in accounts payable Decrease in other payables Increase (decrease) in other current liabilities Decrease in net defined benefit liabilities, non-current Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from operating activities	2020 $ 10,345,705 2,901,598 951,942 (29,010) 1,054,244 (1,186,629) (30,069) 1,234 18,318 (4,773,910) - (24,435) 952,222 908,619 (774)	2019 6,509,061 3,188,382 965,340 (6,081) 1,761,100 (1,347,043) (20,979) 1,040 24,459 (69,439) (628,476) - 344,916 30,968 (46,194)
	743,350	4,197,993
	(409,902) (3,405,318) (4,664) (5,753,543) (2,711,422)	(266,204) 1,763,074 1,772,736 4,904,540 176,779
	(12,284,849)	8,350,925
	144,351 1,367,153 4,008,134 (54,069) 2,249,990 (47,360)	103,217 (256,236) (3,043,534) (434,046) (1,076,565) (44,055)
	7,668,199	(4,751,219)
	(4,616,650)	3,599,706
	(3,873,300)	7,797,699
	6,472,405 926,665 30,069 (974,169) (2,127,658)	14,306,760 1,367,420 20,979 (1,995,909) (1,449,100)
	4,327,312	12,250,150

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

277

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT'D)

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Proceeds from disposal of non-current assets held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Effect on loss of control over subsidiary's cash Acquisition of investment properties (Increase) decrease in other financial assets Increase in other non-current assets Net cash flows from (used in) investing activities Cash flows from financing activities: Increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Increase (decrease) in other non-current liabilities Cash dividends paid Change in non-controlling interests Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2020 (1,258,524) - - (7,136,355) 10,245,574 - (2,433,923) 5,821,830 (118,581) (5,710) (345,283) (781,915) (1,177,205)	2019 (1,852,458) 29,964 26,400 (14,206,762) 12,852,650 967,538 (3,818,085) 102,894 (226,789) - (2,062) 132,325 (829,098)
	2,809,908	(6,823,483)
	6,830,904 19,473,486 (14,470,076) (199,245) 175,204 (4,663,718) -	(5,941,567) 865,440 (556,670) (196,978) (27,383) (5,381,213) 44,981
	7,146,555	(11,193,390)
	(285,147) 13,998,628 18,952,967	(342,821) (6,109,544) 25,062,511
	$ 32,951,595	18,952,967

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

278

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Overview

The consolidated financial statements of the Company as of and for the year ended December 31, 2020 comprised the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Group primarily is involved in the developing, computer hardware and software products, manufacturing, processing and trading of computers and related products, and sale of wired and wireless communication and digital accessory products. Please refer to Note 4(c) for details.

(2) Financial Statements Authorization Date and Authorization Process

The consolidated financial statements were authorized for issuance by the Board of Directors on March 30, 2021.

(3) New Standards, Amendments and Interpretations not yet 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 details of impact on the Group’s adoption of the new amendments beginning January 1, 2020 are as follows:

(i) Amendments to IFRS 16 “COVID-19-Related Rent Concessions”

As a practical expedient, a lessee may elect not to assess whether a rent concession that meets certain conditions is a lease modification, rather any changes in lease liability are recognized in profit or loss. The amendments have been endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) in July 2020, earlier application from January 1, 2020 is permitted. Related accounting policy is explained in Note 4(m).

The Group has elected to apply the practical expedient for all rent concessions that meet the criteria beginning January 1, 2020, with early adoption. No adjustment was made upon the initial application of the amendments. The amounts recognized in profit or loss for the year ended December 31, 2020 was $6,203 thousand.

279

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(ii) Other amendments

The following new amendments, effective January 1, 2020, do not have a significant impact on the Group’s consolidated financial statements:

Amendments to IFRS 3 “Definition of a Business”
Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”
Amendments to IAS 1 and IAS 8 “Definition of Material”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform － ” Phase 2
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Group does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
“ －
● Amendments to IAS 16 Property, Plant and Equipment Proceeds before Intended Use”
“ － ”
● Amendments to IAS 37 Onerous Contracts Cost of Fulfilling a Contract
Annual Improvements to IFRS Standards 2018-2020
Amendments to IFRS 3 “Reference to the Conceptual Framework”
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”

280

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(4) Summary of Significant Accounting Policies

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 consolidated financial statements, the Chinese version shall prevail.

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for the explanation of Note3, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

These consolidated annual financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “ the Regulations ” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed by FSC (hereinafter referred to as the IFRSs endorsed by FSC).

(b) Basis of preparation
1.Basis of measurement

Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) Cash-settled share-based payment liabilities are measured at fair value;
4) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in Note 4(r).
2.Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar, which is the Company’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

1.Principle of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

281

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intra group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

When the Group loses control over a subsidiary, it derecognizes the assets (including any goodwill) and liabilities of the subsidiary, and any related non-controlling interests and other components of equity. Any interest retained in the former subsidiary is measured at fair value when control is lost, with the resulting gain or loss being recognized in profit or loss. The Group recognizes as gain or loss in profit or loss the difference between (i) the fair value of the consideration received as well as any investment retained in the former subsidiary at its fair value at the date when control is lost; and (ii) the assets (including any goodwill), liabilities of the subsidiary as well as any related non-controlling interests as their carrying amounts at the date when control is lost, as gain or loss in profit or loss. When the Group loses control of its subsidiary, it accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if it had directly deposed of the related assets or liabilities.

2.List of subsidiaries in the consolidated financial statements

List of subsidiaries in the consolidated financial statements

Principal
Investor
Name of Subsidiary
activity

Shareholding Ratio
2020.12.31
2019.12.31
Note

The Company
Inventec Corporation (Hong Kong) Ltd.
Investing in Mainland China and import
and export business
〞
Inventec Holding (North America) Corp.
Investment of holding company in
America
〞
Inventec (Cayman) Corp.
Holding Company
〞
IEC (Cayman) Corporation
Holding Company
〞
Inventec (Czech), s.r.o.
Computer products assembly operations
〞
Inventec Development Japan Corporation
Developing,
designing
and selling
computer peripherals
〞
Inventec Investments Co., Ltd.
Investment company
〞
AIMobile Co., Ltd.
Developing, production and selling of
intelligent mobile devices
〞
Inventec Japan Corporation
Trading and management services
〞
Inventec Appliances Corp.
Wireless terminal products

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
73.00%
55.00%
100.00%
100.00% The subsidiary was established
on August 29, 2019.
100.00%
100.00%

282

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Principal
Investor
Name of Subsidiary
activity

Shareholding Ratio
2020.12.31
2019.12.31
Note

The Company、
Inventec Investments
Co., Ltd. and Inventec
Appliances Corp.
Inventec Solar Energy Corporation
Developing, production and selling of
multi-crystalline solar cells
47.65%
47.65%
The Company and
Inventec Investments
Co., Ltd.
E-TON Solar Tech. Co., Ltd
Manufacturing and selling of solar cells
-
%
34.65% E-ton decided to dismiss on
March 26, 2020. It is currently in
liquidation process.
〞
Inventec Manufacturing (India) Private
Limited
Computer product assembles and
warranty services
100.00%
100.00%
Inventec Corporation
(Hong Kong) Ltd.
Inventec Electronics (Tianjin) Co., Ltd.
Electronic product software and
hardware development manufacturing
100.00%
100.00%
〞
Inventec (Beijing) Electronics Technology
Co., Ltd.
〞
100.00%
100.00%
Inventec (Cayman)
Corp. and Inventec
(Pudong) Technology
Corp.
Inventec (Shanghai) Corp.
Electronic product software and
hardware development manufacturing
100.00%
100.00%
〞
Inventec (Shanghai) Service Co., Ltd.
〞
100.00%
-
%
Inventec (Cayman)
Corp.
Inventec (Pudong) Corp.
〞
100.00%
100.00%
〞
Inventec (Pudong) Technology Corp.
〞
100.00%
100.00%
〞
Inventec (Shanghai) Service Co., Ltd.
〞
-
%
100.00%
〞
Inventec Hi-Tech Corp.
〞
100.00%
100.00%
〞
Inventec Huan Hsin (Zhejiang) Technology
Co., Ltd.
Complete of the electronic computer
and product and sale of external
equipment
100.00%
100.00% The cancellation of registration
process was completed in
January 18, 2021.
〞
Inventec (Chongqing) Service Co., Ltd
Electronic product software and
hardware development manufacturing
100.00%
100.00%
〞
TPV-Inventa Holding Ltd.
Holding Company
-
%
90.00% The cancellation of registration
process was completed in March
27, 2020.
Inventec (Cayman)
Corp. and IEC
(Cayman)
Corporation
Inventec (Chongqing) Corp.
Assembly and sale of computer products
100.00%
100.00%
Inventec (Shanghai)
Corp.
Inventec Asset-Management (Shanghai)
Corporation
Equipment leasing, Storage,
technological development and sale of
computer
78.00%
78.00%
Inventec (Shanghai)
Service Co., Ltd.
Saint Investment Consulting Corporation
Business management consulting
100.00%
-
% The subsidiary was established
on September 4, 2019, and
Inventec (Shanghai) Service Co.,
Ltd. invested it on April 30,
2020.
Inventec Holding
(North America)
Corp.
Inventec (USA) Corporation
Computer product assembles
100.00%
100.00%
〞
Inventec Manufacturing (North America)
Corporation
〞
100.00%
100.00%
〞
Inventec Configuration (North America)
Corporation
〞
100.00%
100.00%
〞
Inventec Distribution (North America)
Corporation
〞
100.00%
100.00%
Inventec Holding
(North America)
Corp. and Inventec
Distribution (North
America) Corporation
IEC Technologies, S. de R.L. de C.V.
〞
100.00%
100.00%
Inventec Appliances
Corp.
Inventec Appliances (Cayman) Holding Corp. Holding Company
100.00%
100.00%

283

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Principal
Investor
Name of Subsidiary
activity

Shareholding Ratio
2020.12.31
2019.12.31
Note

Inventec Appliances
(Cayman) Holding
Corp.
Inventec Appliances (USA) Distribution
Corp.
Marketing promotion
〞
Inventec Appliances Corporation USA, Inc. Sale of electronics products
〞
Inventec Appliances (Shanghai) Co., Ltd.
Telecommunication research
〞
Inventec Appliances (Pudong) Corp.
Electronic communication and products
manufacturing
〞
Inventec Appliances (Jiangning) Corp.
〞
〞
Inventec Appliances (Nanjing) Corp.
House leasing
〞
Inventec Appliances (XI'AN) Corporation
Telecommunication research and service
〞
Inventec Appliances (Nanchang) Corporation
〞
〞
Inventec Appliances (Malaysia) SDN. BHD. Manufacture and sale of electronic
materials and products
Inventec Appliances
(Shanghai) Co., Ltd.
Inventec Appliances (Shanghai) Enterprise
Co., Ltd.
Development and consultation on
software and hardware; as well as
selling of electronic products
〞
APEX Business Management & Consulting
(Shanghai) Co., Ltd.
Business management
〞
Inventec Appliances (Nanchang) Intelligent
Manufacturing Co., Ltd.
Manufacture of wearable devices and
developing, design, manufacture and
sale of telecommunications
Inventec Appliances
(Pudong) Corp.
Inventec Appliances (Malaysia) SDN. BHD. Manufacture and sale of electronic
materials and products

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
-
%
100.00% Transferred 100% shares to
Inventec Appliances (Pudong)
Corp. on July 20, 2020.
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
% Acquired 100% shares from
Inventec Appliances (Cayman)
Holding Corp. on July 20, 2020.

3.Subsidiaries excluded from the consolidated financial statements: None.
(d) Foreign currencies
1.Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

2.Foreign operations

284

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(e) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
It is held primarily for the purpose of trading;
It is expected to be realized within twelve months after the reporting period; or
The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

An entity shall classify a liability as current when:

It is expected to be settled in the normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or
The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equipment are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

285

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(g) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

1.Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Some trade receivables are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Group; therefore, those receivables are measured at FVOCI. However, they are included in the ‘trade receivables’ line item.

286

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧debt securities that are determined to have low credit risk at the reporting date; and
‧other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

287

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group ’ s historical experience and informed credit assessment as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Group considers a financial asset to be in default when the financial asset is more than year past due or the debtor is unlikely to pay its credit obligations to the Group in full.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

The maximum period considered when estimating ECL is the maximum contractual period over which the Group is exposed to credit risk.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

‧significant financial difficulty of the borrower or issuer;
‧a breach of contract such as a default or being more than 1 year past due;
‧the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧the disappearance of an active market for a security because of financial difficulties.

288

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The gross carrying amount of a financial asset is written off either partially or in full to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’ s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

2.Financial liabilities and equity instruments
1) Financial liabilities

2) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

3) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

289

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) Investment in associates

Associates are those entities in which the Group has significant influence, but not control or jointly control, over the financial and operating policies.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align the accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Gains and losses resulting from the transactions between the Group and an associate are recognized only to the extent of unrelated Group’s interest in the associate.

When the Group’s share of losses of an associate equals or exceeds its interest in associates, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extend that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group discontinues the use of equity method and measures the retained interest at fair value from the date when its investment ceases to be an associate. The difference between the fair value of retained interest and proceeds from disposing and the carrying amount of the investment at the date the equity method that was discontinued is recognized in profit or loss. The Group accounts for all the amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss (or retained earnings) on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (or retained earnings) (as a reclassification adjustment) when the equity method is discontinued. If the Group's ownership interest in an associate or a joint venture is reduced, while the entity continues to apply the equity method, the Group reclassifies the proportion of the gain or loss, that had previously been recognized in other comprehensive income relating to that reduction in ownership interest, to profit or loss.

290

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group shall continue to apply the equity method without remeasuring the retained interest.

When the Group subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Group’s proportionate interest in the net assets of the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. The aforesaid adjustment should first be adjusted under additional paid-in capital. If the additional paid-in capital resulting from changes in ownership interest is not sufficient, the remaining difference is debited to retained earnings. If the Group’s ownership interest is reduced due to the additional subscription to the shares of associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(j) Joint Arrangements

A joint venture is a joint arrangement whereby the Group has joint control of the arrangement (i.e. joint venturers) in which the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. The Group recognizes its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless, the Group qualifies for exemption from that Standard. Please refer to 6(f) for the application of the equity method.

When assessing the classification of a joint arrangement, the Group considers the structure and legal form of the arrangement, the terms in the contractual arrangement and other facts and circumstances. When the facts and circumstances change, the Group reevaluates whether the classification of the joint arrangement has changed.

(k) Investment property

Investment property is a property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition and subsequently at cost less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and its carrying amount) is recognized in profit or loss.

291

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

When the use of an investment property changes such that it is reclassified as property, plant and equipment, its book value at the date of reclassification becomes its cost for subsequent accounting.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

Buildings 25years

(l) Property, plant, and equipment
1.Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

2.Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

3.Depreciation

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

are as follows:
Buildings	10 ~ 50years
Machinery	2 ~ 11years
Transportation equipment	3 ~ 6years
Furniture and office facilities	2 ~ 14years
Power equipment	2 ~ 16years
Renovation and leasehold improvements	2 ~ 20years
Miscellaneous equipment	2 ~ 16years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

292

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(m) Leases
1.Identifying a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

1) The contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) The Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) The Group has the right to direct the use of an asset throughout the period of use only if either:

‧the Group has the right to direct how and for what purpose the asset is used throughout the period of use; or

‧the relevant decisions about how and for what purpose the asset is used are predetermined and:

－ The Group has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
－ The Group designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

2.As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

293

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Lease payments included in the measurement of the lease liability comprise the following:

1) Fixed payments, including in-substance fixed payment;
2) Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
3) Amounts expected to be payable under a residual value guarantee; and
4) Payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

1) there is a change in future lease payments arising from the change in an index or rate; or
2) there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or
3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset; or
4) there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
5) there are any lease modifications.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

If an arrangement contains lease and non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of housing, transportation, and other equipment that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

294

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As a practical expedient, the Group elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

1) the rent concessions occurring as a direct consequence of the COVID-19 pandemic;
2) the change in lease payments that resulted in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
3) any reduction in lease payments that affects only those payments originally due on, or before, June 30, 2021; and
4) there is no substantive change in other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

3.As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Group applies IFRS15 to allocate the consideration in the contract. The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(n) Intangible assets
1.Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

295

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

2.Subsequent expenditure

3.Amortization

The estimated useful lives for current and comparative periods are as follows:

1) Trademark rights	10 years
2) Computer software cost	1 year~6 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(o) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

296

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(p) Provisions

A provision is recognized if, as a result of a past event, the Group has a present obligation that can be estimated reliably, and it is probably that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

1.Warranties

2.Onerous contracts

A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment loss on the assets associated with that contract.

(q) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

1.Sale of goods

The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price ’ to sell the products, and there is no unfulfilled obligation that could affect the customer s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

297

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Consulting services and Management services

The Group provides advisory and management services. Revenue from providing services is recognized in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. The proportion of services provided is determined based on the costs incurred to date as a proportion of the total estimated costs of the transaction.

3.Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

(r) Employee benefits
1.Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

2.Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

298

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3.Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognizes costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

4.Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(s) Share-based payment

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Grant date of a share-based payment award is the date which the board of directors and the employees have made an agreement on the price and number of the new award.

(t) Income taxes

1.temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

299

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
3.taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

1.the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and
2.the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
(u) Business combination

The Group accounts for business combinations using the acquisition method. The goodwill arising from an acquisition is measured as the excess of (i) the consideration transferred (which is generally measured at fair value) and (ii) the amount of non-controlling interest in the acquiree, both over the identifiable net assets acquired at the acquisition date. If the amount calculated above is a deficit balance, the Group recognized that amount as a gain on a bargain purchase in profit or loss immediately after reassessing whether it has correctly identified all of the assets acquired and all of the liabilities assumed.

All the transaction costs incurred for the business combination are recognized immediately as the Group’s expenses when incurred, except for the issuance of debt or equity instruments.

For each business combination, the Group measures any non-controlling equity interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’ s identifiable net assets, if the non-controlling interests are present ownership interests and entitle their holders to a proportionate share of the Group's net assets in the event of liquidation. Other non-controlling interest are measured at their acquisition-date fair values, unless another measurement basis is required by IFRSs endorsed by F.S.C..

300

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(v) Earnings per share

The Group disclose the Company’s basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible bonds and employee compensation.

(w) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Each operating segment consists of standalone financial information.

(5) Significant Accounting Judgments, Estimation, Assumptions, and Sources of Estimation

Uncertainty

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs 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.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

(a) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Group estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Refer to note 6(e) for further description of the valuation of inventories.

301

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(6) Explanation to Significant Accounts

(a) Cash and cash equivalents

Cash and cash equivalents
Cash Demand deposits and checking accounts Time deposits Cash and cash equivalents in consolidated statement of cash flows	2020.12.31 $ 7,013 27,934,618 5,009,964	2019.12.31 9,416 16,249,163 2,694,388
	$ 32,951,595	18,952,967

Refer to Note 6(x) for the sensitivity analysis and interest rate risk of the financial assets and liabilities of the Group.

(b) Financial assets and liabilities at fair value through profit or loss and financial assets at fair value through other comprehensive income

1.Financial assets and liabilities at fair value through profit or loss

Financial assets at fair value through profit or loss Derivative instruments not used for hedging Forward exchange contracts Foreign exchange swap Non-derivative financial assets Stocks of listed companies Emerging stock Unquoted financial instruments Unsecured convertible bonds Total Financial liabilities at fair value through profit or loss Held-for-trading financial liabilities Forward exchange contracts Foreign exchange swap Total	2020.12.31 $ 13,606 237,568 145,460 232,340 1,033,760 31,210	2019.12.31 - 125,305 115,909 - 3,660,455 56,799
	$ 1,693,944	3,958,468
	$ 210,598 39,538	108,175 -
	$ 250,136	108,175

302

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group uses derivative financial instruments to hedge certain foreign exchange and interest risk the Group is exposed to, arising from its operating, financing and investing activities. The following derivative instruments, without the application of hedge accounting, were classified as mandatorily measured at fair value through profit or loss financial assets and held-for-trading financial liabilities.

1) Financial assets:

	2020.12.31
Contract Amount USD 715,000 USD 214,000	Currency USD to TWD USD to TWD 2019.12.31	Maturity Period
		2021.01.07~2021.06. 11 2021.01.06-2021.06.0 9
Contract Amount USD 335,000	Currency USD to TWD 2020.12.31	Maturity Period
		2020.02.18-2020.03.1 8
Contract Amount USD 114,000 USD 615,000 USD 28,306	Currency USD to TWD USD to TWD USD to CNY 2019.12.31	Maturity Period
		2021.01.06-2021.03.2 5 2021.01.07~2021.06. 11 2021.07.05
Contract Amount USD 335,000	Currency USD to TWD	Maturity Period
		2020.02.18-2020.03.1 8

303

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income Stocks listed on domestic markets Stocks not listed on domestic markets Total	2020.12.31 $ 1,496,291 3,567,206	2019.12.31 1,323,651 2,114,517
	$ 5,063,497	3,438,168

1) Equity investments at fair value through other comprehensive income

The Group designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term strategic purposes.

Global Strategic Venture Capital Co., Ltd. was liquidated on November 17, 2020. The fair value of the residual property received by the Group was $14,150, resulting in the Group to realize a loss of $14,200, which was recognized as other comprehensive income, then later on, was reclassified to retained earnings.

For strategic purposes, the Group has sold its equity investments at fair value through other comprehensive income of $29,964 in 2019, resulting in the Group to realize a loss of $20,036, which was recognized as other comprehensive income, then later on, reclassified to retained earnings.

2) For credit risk and market risk, please refer to note 6(x).
3) As of December 31, 2020, the aforesaid financial assets were not pledged as collateral.
(c) Note and trade receivables

Accounts receivable- non-related parties Accounts receivable- related parties Less: Loss allowance	2020.12.31 $ 91,807,993 75,749 (72,433)	2019.12.31 88,594,198 - (102,855)
	$ 91,811,309	88,491,343

The Group has assessed a portion of its trade receivables that was held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; therefore, such trade receivables were measured at fair value through other comprehensive income. As of December 31, 2020 and 2019, the amounts of trade receivables measured at fair value through other comprehensive income were $2,035,693 and $3,061,165, respectively.

304

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. The loss allowance provision was determined as follows:

	2020.12.31	Loss allowance provision 57,719 11,802 2,912
Gross carrying amount $ 90,849,182 1,031,417 3,143	Weighted-ave rage
	0%~0.5% 0.04%~10% 0.04%~100%
$ 91,883,742		72,433

As of the end of February 28, 2021, the amount that received by the Group is $59,848,686.

	2019.12.31	Loss allowance provision 89,828 11,504 1,523
Gross carrying amount $ 84,510,859 3,963,098 120,241	Weighted-ave rage
	0%~1% 0.04%~10% 0.04%~100%
$ 88,594,198		102,855

The movement in the allowance for notes and trade receivable was as follows:

Balance at January 1, 2020 and 2019 Gains on reversal of impairment losses Amounts written off Foreign exchange gains (losses) Balance at December 31, 2020 and 2019	For the years ended December 31, 2020 2019 $ 102,855 120,009 (29,537) (6,081) (986) (10,903) 101 (170)	For the years ended December 31, 2020 2019 $ 102,855 120,009 (29,537) (6,081) (986) (10,903) 101 (170)
	2020 $ 102,855 (29,537) (986) 101
	$ 72,433	102,855

The allowance for impairment account is used to record bad debt expenses. If the Group believes that it may not be able to collect the receivables. The accumulated impairment was used to offset the receivables when it is certain they are unrecoverable, after related legal actions were taken by the Group.

As of December 31, 2020 and 2019, none of the receivables above are pledged as collateral for loans and borrowings.

305

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As of December 31, 2020 and 2019, the Group sold its accounts receivable without recourse as follows:

(Unit: Foreign currency/TWD in Thousands)

		2020.12.31	2020.12.31			Significant Transferring Terms
Purchaser	Amount Derecognized	Amount Advanced		Amount Recognized in other Receivable	Range of Interest Rate
		Unpaid	Paid
Non-related parties	$ 26,692,929 USD 153,413		USD 937,252	-	0.99%~1.45%	The accounts receivable factoring is without recourse but the seller still bears the risks except for eligible obligor’s insolvency. Significant Transferring Terms
		Note	2019.12.31
Purchaser	Amount Derecognized	Amount Advanced		Amount Recognized in other Receivable	Range of Interest Rate
		Unpaid	Paid
Non-related parties	$ 25,959,896 Note		USD 863,028	-	2.58%~2.74%	The accounts receivable factoring is without recourse but the seller still bears the risks except for eligible obligor’s insolvency.

Note: The purchaser has the right to make factoring transactions with the company based on the amount allocated by the client under factoring agreement.

(d) Other receivables

Other receivables
Other accounts receivable－related parties Other accounts receivable－non-related parties	2020.12.31 $ 66 844,375	2019.12.31 1,305 753,670
	$ 844,441	754,975

306

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(e) Inventories

Raw materials and consumables Work in process Finished goods Materials and supplies in transit	2020.12.31 $ 28,128,939 6,541,004 5,518,187 1,228,193	2019.12.31 24,313,559 8,709,279 4,288,687 34,017
	$ 41,416,323	37,345,542

For the years ended December 31, 2020 and 2019, the write-up of inventories amounted to $204,495 and $170,081, respectively. When the factor causing the net realizable value to be lower than the cost is disappeared due to obsolescence or disposal, the increase of the net realizable value is recognized in deduction of operating cost. For the years ended December 31, 2020 and 2019, expenses of idle capacity amounted to $177,928, and $189,385, respectively.

As of December 31, 2020 and 2019, the aforesaid inventories were not pledged as collateral.

(f) Investments accounted for using equity method

The investment using equity method was as follows:

The investment using equity method was as follows:
Associate 1.Associate	2020.12.31 $ 211,643	2019.12.31 247,194

The Group’s financial information for investments in individually insignificant associates accounted for using equity method at the reporting date was as follows. These financial information are included in the consolidated financial statements.

Individually insignificant associates	2020.12.31 $ 211,643	2019.12.31 247,194

307

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group’s share of profit (loss) of the associates Loss from continuing operations Other comprehensive income Total comprehensive income	For the years ended December 31, 2020 2019 $ (18,318) (24,459) (17,285) (1,653)	For the years ended December 31, 2020 2019 $ (18,318) (24,459) (17,285) (1,653)
	2020 $ (18,318) (17,285)
	$ (35,603)	(26,112)

As of December 31, 2020 and 2019, the Group’s investments under equity method has not been pledged as collaterals.

2.Judgment on existence of substantial control over investee

The Group holds 37.528% of the outstanding voting shares of Inventec Besta Co., Ltd. (Besta) and obtains only one seat among all six board directors. Therefore, the Group does not have existing rights and the current ability to direct the investee's relevant activities, thus, the Group does not have control over Besta.

(g) Loss control of subsidiaries

The meeting of shareholders of E-Ton Solar Tech. Co., Ltd ("E-Ton") decided to dismiss their respective companies in 2020. It is currently in liquidation process. As a result, The Group lose control of these subsidiaries.

The details of assets and liabilities of the aforesaid subsidiaries were as follows:

Cash and cash equivalents Property, plant and equipment Investment property Other receivables Other current assets Other assets Notes payable Other payables Long-term payable Other liabilities Carrying amount of net asset of the former subsidiary	$ 5,710 302,951 1,026,336 40 27,253 239,358 (395) (19,369) (190,000) (109,093)
	$ 1,282,791

308

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(h) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2020 and 2019 were as follows:

Land	Building and construction	Machinery and equipment	Transportation equipment	Office equipment	Other facilities	Leasehold improvements	Others	Total
$ 7,884,298 - - (99,541) -	20,800,616 3,730 (1,934,553) (1,413,577) (111,783)	24,774,688 928,886 (2,728,309) (2,147,735) (252,331)	103,832 261 (535) - (304)	5,325,639 379,645 (427,344) 3,293 (101,365)	10,517,913 201,185 (1,941,375) 107,073 (80,994)	665,838 11,323 (2,372) (268,277) (10,119)	1,851,731 1,019,096 - (734,064) 23,961	71,924,555 2,544,126 (7,034,488) (4,552,828) (532,935)
$ 7,784,757	17,344,433	20,575,199	103,254	5,179,868	8,803,802	396,393	2,160,724	62,348,430
$ 6,723,319 1,160,979 - - -	21,223,870 26,287 - 945 (450,486)	26,824,081 1,038,500 (2,832,173) 125,735 (381,455)	107,596 6,197 (7,676) - (2,285)	5,301,457 362,160 (268,183) 8,440 (78,235)	10,607,750 188,424 (102,842) 48,304 (223,723)	1,448,410 43,989 (818,744) - (7,817)	895,869 1,060,361 - (81,929) (22,570)	73,132,352 3,886,897 (4,029,618) 101,495 (1,166,571)
$ 7,884,298	20,800,616	24,774,688	103,832	5,325,639	10,517,913	665,838	1,851,731	71,924,555
$ 10,231 - - - (10,231) -	6,653,767 390,371 (1,357,351) - (1,199,936) (26,203)	20,714,397 1,248,589 (2,426,248) 800,125 (2,338,422) (200,414)	71,883 11,787 (535) - - (130)	4,683,815 379,979 (455,805) - (16,142) (82,070)	8,540,656 527,463 (1,902,176) 149,690 (13,414) (76,162)	520,348 46,496 (2,043) - (6,996) (291,472)	- - - - - -	41,195,097 2,604,685 (6,144,158) 949,815 (3,585,141) (676,451)
$ -	4,460,648	17,798,027	83,005	4,509,777	7,226,057	266,333	-	34,343,847
$ 9,183 - - 1,048 -	6,358,805 447,101 - 945 (153,084)	22,157,507 1,405,856 (2,811,683) 285,487 (322,770)	67,329 13,709 (7,495) - (1,660)	4,632,500 371,935 (256,028) 109 (64,701)	8,276,131 574,099 (101,929) 5,978 (213,623)	1,306,381 36,795 (818,710) 292 (4,410)	- - - - -	42,807,836 2,849,495 (3,995,845) 293,859 (760,248)
$ 10,231	6,653,767	20,714,397	71,883	4,683,815	8,540,656	520,348	-	41,195,097
$ 7,784,757	12,883,785	2,777,172	20,249	670,091	1,577,745	130,060	2,160,724	28,004,583
$ 6,714,136	14,865,065	4,666,574	40,267	668,957	2,331,619	142,029	895,869	30,324,516
$ 7,874,067	14,146,849	4,060,291	31,949	641,824	1,977,257	145,490	1,851,731	30,729,458

As of December 31, 2020 and 2019, the property, plant and equipment were pledged as collateral, please refer to Note 8. The Group performed an impairment test on its property, plant and equipment, based on the experience of the past and actual operating result, the discontinued rate used in for the years ended December 31, 2020 and 2019 were 11.40% and 10.50%. Thus, the Group adopted the value in use as its recoverable amount, and recognized the impairment losses based on the differences between the book values and the recoverable amounts of the property, plant and equipment. For the years ended December 31, 2020 and 2019, the impairment losses were $949,815 and $30,256, respectively.

309

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The meeting of shareholders of E-Ton decided to discontinue its business of solar cell manufacturing and dispose of related assets on June 21, 2019. Besides, E-Ton reassessed the impairment and additionally recognized $263,603 on impairment loss of related assets for the ended December 31, 2019.

Inventec (Pudong) Co., Ltd. disposed its plant and property on January 16, 2020, please refer to Note 13 for related information.

(i) Right-of-use assets

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

Land	Buildings	Vehicles	Other	Total 3,814,639 103,848 (210,793) 176,815 5,590
$ 2,594,248 4,427 (188,602) 76,078 15,100	1,199,936 96,228 (17,578) 103,651 (9,360)	15,368 3,193 (181) (2,914) (115)	5,087 - (4,432) - (35)
$ 2,501,251	1,372,877	15,351	620	3,890,099
$ 2,834,870 2,433 (142,852) (100,203)	739,876 489,540 (1,407) (28,073)	8,232 7,168 - (32)	6,126 - (1,030) (9)	3,589,104 499,141 (145,289) (128,317)
$ 2,594,248	1,199,936	15,368	5,087	3,814,639
$ 87,481 70,875 (32,698) (10,768) 826	174,934 207,032 (16,597) - (4,529)	4,658 5,682 (181) (1,053) (64)	1,440 1,062 (1,862) - (30)	268,513 284,651 (51,338) (11,821) (3,797)
$ 115,716	360,840	9,042	610	486,208
$ - 103,985 - (16,504)	- 179,681 - (4,747)	- 4,679 - (21)	- 1,624 (174) (10)	- 289,969 (174) (21,282)
$ 87,481	174,934	4,658	1,440	268,513
$ 2,385,535	1,012,037	6,309	10	3,403,891
$ 2,834,870	739,876	8,232	6,126	3,589,104
$ 2,506,767	1,025,002	10,710	3,647	3,546,126

310

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(j) Investment property

Cost or deemed cost: Balance at January 1, 2020 Others Balance at December 31, 2020 Balance at January 1, 2019 Reclassification Balance at December 31, 2019 Depreciation and impairment losses: Balance at January 1, 2020 Depreciation for the period Others Balance at December 31, 2020 Balance at January 1, 2019 Depreciation for the period Balance at December 31, 2019 Carrying amounts: Balance at December 31, 2020 Balance at January 1, 2019 Balance at December 31, 2019 Fair value: Balance at December 31, 2020 Balance at December 31, 2019	Building and construction $ 1,569,906 (1,569,906)
	$ -
	$ 1,567,942 1,964
	$ 1,569,906
	$ 876,591 12,262 (888,853)
	$ -
	$ 827,673 48,918
	$ 876,591
	$ -
	$ 740,269
	$ 693,315
	$ -
	$ 1,121,740

Based on the purposes of earning rental income or for capital appreciation income or both, the Group reclassified buildings to investment property.

311

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

In order to facilitate the future sale of the factory and owned buildings in Annan District, 2nd Rd. through deducting the land price by the rent paid, E-ton resolved to apply for the purchase of land No. 455 and 455-1 in the Science and Technology Section of Annan District. E-ton obtained the approval letter from the Industrial Development Bureau on January 3, 2020, at a price of $687,108, resulting in the payable to be $327,587 after deducting the rent paid and security deposit. E-ton entered into an agreement with its related party on January 31, 2020 and borrowed the amount of $190,000 for land purchase on February 4, 2020. The Group has loss control over E-ton on March 26, 2020, therefore all investment properties are eliminated.

Please refer to Note 8 for the information of the Group’s investment property pledged as collateral as of December 31, 2019.

(k) Intangible assets

The costs of intangible assets, amortization, and impairment loss of the Group for the years ended December 31, 2020 and 2019 were as follows:

Goodwill $ 980,719 - - - -	Patent and trademark right	Software cost 1,122,935 118,581 (68,586) - 84	Total 2,104,110 118,581 (68,586) (456) 84
	456 - - (456) -
$ 980,719	-	1,173,014	2,153,733
$ 980,719 - - -	456 - - -	1,017,473 226,789 (121,112) (215)	1,998,648 226,789 (121,112) (215)
$ 980,719	456	1,122,935	2,104,110

312

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Goodwill $ 172,299 - - - -	Patent and trademark right	Software cost 1,050,581 123,559 (68,586) - 79	Total 1,223,336 123,559 (68,586) (456) 79
	456 - - (456) -
$ 172,299	-	1,105,633	1,277,932
$ 172,299 - - -	456 - - -	940,586 231,299 (121,112) (192)	1,113,341 231,299 (121,112) (192)
$ 172,299	456	1,050,581	1,223,336
$ 808,420	-	67,381	875,801
$ 808,420	-	76,887	885,307
$ 808,420	-	72,354	880,774

The amortization of intangible assets and impairment losses are respectively included in the statement of comprehensive income:

Operating costs Operating expenses Total	For the years ended December 31, 2020 2019 $ 7,466 107,840 116,093 123,459	For the years ended December 31, 2020 2019 $ 7,466 107,840 116,093 123,459
	2020 $ 7,466 116,093
	$ 123,559	231,299

As of December 31, 2020 and 2019, the aforesaid intangible assets were not pledged as collateral.

313

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(l) Other current assets and other non-current assets

The other current assets-others and other non-current assets of the Group were as follows:

Refundable deposits Prepayments to suppliers Restricted assets Payment on behalf of others Deferred Tax assets Others	2020.12.31 $ 69,662 21,581 1,127,892 2,511,971 1,767,526 2,385,778	2019.12.31 173,802 6,724 64,081 - 1,653,148 2,156,768
	$ 7,884,410	4,054,523

The Group determines the substance of the transaction in terms of sales and production, as well as production of the same target, to complete its sales contract. The Group has the nature of an agent, and so the transaction is reflected as the net amount after the purchases and sales are written off. The unused inventory of purchases is listed as payments from others.

As of December 31, 2020 and 2019, the details of other non-current assets were pledged as collateral, please refer to Note 8.

(m) Long-term and short-term borrowings

The significant terms and conditions of long-term and short-term borrowings were as follows:

	2020.12.31	2020.12.31	Amount $ 3,050,000 544,825 9,320,106 28,293,818 3,575
Interest Rate	Currenc y	Maturity Date
1.19%~5.23% 0.48%~2.90%		2031.02.26 2024.02.14 2021.01.06~2021.05.31 2021.01.06~2022.10.14 2021.05.31
	TWD CNY TWD USD EUR
			$ 41,212,324
			$ 32,221,499 8,990,825
			$ 41,212,324
			$ 70,541,804

314

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

	2019.12.31	2019.12.31	Amount $ 3,350,000 833,134 5,847,701 19,377,878
Interest Rate	Currenc y	Maturity Date
1.44%~5.23% 0.65%~3.79%		2031.02.26 2024.02.14 2020.01.03~2020.07.2 5 2020.01.03~2020.11.1 7
	TWD CNY TWD USD
			$ 29,408,713
			$ 25,525,579 3,883,134
			$ 29,408,713
			$ 75,851,186

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

2.Important borrowing restrictions

The Group entered into syndicated credit agreements with a number of financial institutions. Under these agreements, the Group shall adhere to certain financial provisions such as current ratios, leverage ratios, interest coverage ratios and tangible net worth in the annual report on the balance sheet date. Otherwise, the borrowings will be considered due and payable immediately. As of December 31, 2020 and 2019, the Group was in compliance with the above financial covenants.

3.Contract of bank loans

According to the “Key points for the Ministry of Economic Affairs to Assist Enterprises in Bank Credit and Debt Negotiations”, Inventec Solar Energy Corporation applied to the Industrial Development Bureau for Claims and liability negotiation on April 7, 2020, requesting a one year extension of repayment period for its long and short-term loans. The approval of more than half of the total creditor bank claims on June 10, 2020 was based on the bank meetings held on April 30, and May 18, 2020.

During the extension period due on May 31, 2021, the financial restraints will not be calculated. On the other hand, the interest rate for borrowing in Taiwan dollars is calculated at the rate of 1.50% (but not lower than the interest on advances from major shareholders), and the interest rate for borrowing in US dollars is calculated at the rate of 2.20%.

315

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(n) Lease liabilities

The Group lease liabilities were as follows:

Current Non-current	2020.12.31 $ 216,479	2019.12.31 200,289
	$ 748,035	976,791

For the maturities analysis, please refer to Note 6(x).

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Variable lease payments not included in the measurement of lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets Covid-19-related rent concessions (recognized as deduction of depreciation expenses)	For the years ended December 31, 2020 2019 $ 29,006 33,318	For the years ended December 31, 2020 2019 $ 29,006 33,318
	2020 $ 29,006
	$ 44,532	138,426
	$ 29,999	77,005
	$ 52,154	8,969
	$ 6,203	-

The amounts recognized in the statement of cash flows for the Group were as follows:

Total cash outflow for leases	For the years ended December 31, 2020 2019 $ 354,936 454,696
	2020 $ 354,936

1. Real estate leases

The Group leases land and buildings for its office space and plants. The leases of office space typically run for 2 to 13 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 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 lessee is not reasonably certain to use an optional extended lease term, payments associated with the optional period are not included within lease liabilities.

316

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2. Other leases

The Group leases vehicles and other equipment, with lease terms of two to five years. In some cases, the Group has options to purchase the assets at the end of the contract term; in other cases, it guarantees the residual value of the leased assets at the end of the contract term.

The Group also leases dormitory, vehicles and other equipment with contract terms of one to two years. These leases are short-term and leases of low-value items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.

(o) Operating Leases

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

Less than one year One to two years Two to three years Three to four years Four to five years More than five years Total undiscounted lease receivables	2020.12.31 $ 296,860 211,283 137,976 59,269 55,332 13,965	2019.12.31 178,121 137,669 99,733 69,278 34,846 41,354
	$ 774,685	561,001

The rental revenues incurred by leasing plants were $246,232 and $291,270 for the years ended December 31, 2020 and 2019, respectively.

(p) Employee benefits

1.Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

follows:
Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities	2020.12.31 $ 1,768,018 (1,192,773)	2019.12.31 1,736,857 (1,155,255)
	$ 575,245	581,602

317

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive an annual payment based on years of service and average salary for the six months prior to retirement. As of December 31, 2020 and 2019, the defined benefit plans amounted to $80,926 and $58,799, respectively, which were accounted as other current assets.

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued two-year time deposits with interest rates offered by local banks.

The Group’s pension reserve account in Bank of Taiwan amounted to $1,186,634 at the end of December 31, 2020. For information on the utilization of the labor pension fund assets including the assets allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Group on 2020 and 2019 were as follows:

Defined benefit obligation at January 1 Current service costs and interest Remeasurement on the net defined benefit liability －Actuarial loss (gain) arising from changes in demography assumption －Experience adjustments arising on the actuarial gain or loss －Actuarial loss (gain) arising from changes in financial assumptions Benefits paid by the plan assets Settlement Defined benefit obligation at December 31	For the years ended December 31, 2020 2019 $ 1,736,857 1,698,756 26,212 31,862 - 157 47,255 6,237 43,393 62,157 (85,189) (62,312) (510) -	For the years ended December 31, 2020 2019 $ 1,736,857 1,698,756 26,212 31,862 - 157 47,255 6,237 43,393 62,157 (85,189) (62,312) (510) -
	2020 $ 1,736,857 26,212 - 47,255 43,393 (85,189) (510)
	$ 1,768,018	1,736,857

318

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Group on 2020 and 2019 were as follows:

Fair value of plan assets at January 1 Interest income Remeasurement on the net defined benefit liability －Return on plan assets (excluding current interest) Contributions made Benefits paid by the plan assets Settlement Fair value of plan assets at December 31	For theyears ended December 31, 2020 2019 $ 1,155,255 1,083,799 8,910 12,136 36,920 36,268 85,974 85,364 (85,189) (62,312) (9,097) -	For theyears ended December 31, 2020 2019 $ 1,155,255 1,083,799 8,910 12,136 36,920 36,268 85,974 85,364 (85,189) (62,312) (9,097) -
	2020 $ 1,155,255 8,910 36,920 85,974 (85,189) (9,097)
	$ 1,192,773	1,155,255

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group on 2020 and 2019 were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Operating cost Selling expenses Administration expenses Research and development expenses	For theyears ended December 31, 2020 2019 $ 13,202 13,268 4,100 6,458	For theyears ended December 31, 2020 2019 $ 13,202 13,268 4,100 6,458
	2020 $ 13,202 4,100
	$ 17,302	19,726
	$ 1,757 1,907 4,367 9,271	1,877 2,172 5,096 10,581
	$ 17,302	19,726

319

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

5) Actuarial assumptions

The following are the Group’s principal actuarial assumptions:

Present Value of defined benefit obligations:

Present Value of defined benefit obligations:
Discount rate Future salary increases rate	2020.12.31 0.50%% 1.63%~2.00%	2019.12.31
		0.75%~0.80% 1.63%~2.50%

The expected allocation payment made by the Group to the defined benefit plans for the one year period after the reporting date was $86,982.

The weighted-average duration of the defined benefit obligation is 8.7~12.5 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation for 2020 and 2019 shall be as follows:

December 31, 2020 Discount rate Future salary increasing rate December 31, 2019 Discount rate Future salary increasing rate	Influences of defined benefit obligations	Influences of defined benefit obligations
	Increased 0.25% (43,393) 43,681 (44,775) 45,239	Decreased 0.25%
		45,029 (42,320) 46,506 (43,785)

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

320

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Defined contribution plans

In accordance with the provisions of the Labor Pension Act, the Group contribute an amount equal to 6% of the employee’s monthly wages to the Labor Pension personal account with the Bureau of the Labor Insurance.

The pension costs incurred from the contributions to the to the Bureau of Labor Insurance amounted to $256,097 and $252,488 for the years ended December 31, 2020 and 2019, respectively.

The pension expenses contributed by the foreign entities following the local regulations amounted to $756,918 and $1,606,987 for the years ended December 31, 2020 and 2019, respectively.

(q) Income taxes
1.The components of income tax expense (gain) for the years ended December 31, 2020 and 2019 were as follows:

Current tax expense Current period Other Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Change in unrecognized deductible temporary differences Recognition of previously unrecognized tax losses Income tax expense from continuing operations	For the years ended December 31, 2020 2019 $ 1,588,272 1,421,969 816,680 41,017 (114,742) (10,265)	For the years ended December 31, 2020 2019 $ 1,588,272 1,421,969 816,680 41,017 (114,742) (10,265)
	2020 $ 1,588,272 816,680 (114,742)
	2,290,210	1,452,721
	1,303,593 178,946 (22)	219,343 - -
	1,482,517	219,343
	$ 3,772,727	1,672,064

The amount of income tax recognized in other comprehensive income for 2020 and 2019 was as follows:

Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans	For the years ended December 31, 2020 2019 $ 10,746 6,757
	2020 $ 10,746

321

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

For the years ended December 31, 2020 2019 Income before tax $ 10,345,705 6,509,061 Income tax using the Company’s domestic tax rate 3,592,046 2,323,999 Permanent differences (202,801) (664,387) Tax-exempt income (7,272) (8,067) Tax credits and use of tax losses (86,797) (54,072) Recognition of previously recognized tax losses - 27,846 Current-year losses for which no deferred tax asset was recognized (1,076,571) 254,967 Change in unrecognized temporary differences 1,149,848 (171,871) (Over) under provision in prior periods (114,742) (10,265) Over provision of temporary differences 334,433 (245,188) Undistributed earnings additional tax 3,865 26 Other 180,718 219,076 Income tax expense $ 3,772,727 1,672,064	For the years ended December 31, 2020 2019 $ 10,345,705 6,509,061	For the years ended December 31, 2020 2019 $ 10,345,705 6,509,061
	2020 $ 10,345,705
		2,323,999 (664,387) (8,067) (54,072) 27,846 254,967 (171,871) (10,265) (245,188) 26 219,076
	$ 3,772,727	1,672,064

2.Deferred tax assets and liabilities
1) Unrecognized deferred tax assets

Deferred tax assets that have not been recognized in respect of the following items:

Tax effect of deductible temporary differences The carryforward of unused tax losses	2020.12.31 $ 1,117,423 774,311	2019.12.31 2,307,990 3,059,605
	$ 1,891,734	5,367,595

The carryforward of unused tax credits was determined in accordance with the rules established by each taxation authorities, and can be applied to offset against profit and income tax in the future respectively. The deferred tax assets have not been recognized in respect of the aforementioned items because they are not probable that future taxable profit will be available against which the Group can utilize the benefits therefrom.

322

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Subsidiaries located in China, where the income tax rate is 25%, in accordance with the rules for the implementation of the Income Tax Law of the People's Republic of China for enterprises with Foreign Investment and Foreign Enterprises, was entitled to the preferential treatment for advanced technology industries with respect to reduction of or exemption from income tax. Under such tax law, commencing with the first profit-making year is exempted from income tax in the first and second profitable year and is entitled to a 50% reduction from the third to fifth year.

The Group invested in the companies which were incorporated in the Cayman Islands. The earnings of these entities are not taxable by the local government in their respective jurisdictions. Other foreign subsidiaries are taxed in accordance with the Income Tax Law of their respective jurisdiction.

As of December 31, 2020 and 2019, the Group estimated that the part of the temporary differences does not have more than 50% possibility to realize in the visible future, so they were not recognized as deferred tax assets.

Each company is taxed in accordance with the income tax law of their respective jurisdiction. Unused operating loss carry-forwards can be applied to offset against profit in the future after being examined by the Tax Authority. As of December 31, 2020, the company that have loss carry forwards which can be used to offset profit were as follow. Among the taxable losses, $0 were recognized as deferred tax assets.

As of December 31, 2020, the Group did not recognize its prior years' loss carry-forwards as deferred tax assets, whose expiry years were as follows:

deferred tax assets, whose expiry	years were as follows:
The carryforward of unused losses	Unused loss $ 3,972,301	Expiry year
		2021~2029

Due to the unstable economic environment recovery, the realizability of tax assets of the tax losses, which amounted to $3,972,301, is doubtful. Therefore, the Group has recognized the partial tax losses as deferred tax assets. If the sales grow continuously, the Group would recognize the aforementioned tax losses in the future and generate the additional tax benefits.

2) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2020 and 2019 were as follows:

Gain (loss) on investment	Other	Total 3,328,616 1,588,082
$ 3,320,241 1,566,594	8,375 21,488
$ 4,886,835	29,863	4,916,698
$ 3,014,371 305,870	50,824 (42,449)	3,065,195 263,421
$ 3,320,241	8,375	3,328,616

323

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Warranty expense	Defined Benefit Plans	Others	Total 1,653,148 105,565 10,746 (1,933)
$ 846,426 50,088 - -	73,545 (9,472) 10,746 -	733,177 64,949 - (1,933)
$ 896,514	74,819	796,193	1,767,526
$ 935,721 (89,295) - -	79,899 (13,111) 6,757 -	595,406 146,484 - (8,713)	1,611,026 44,078 6,757 (8,713)
$ 846,426	73,545	733,177	1,653,148

3.Income Tax approval

The Company’s income tax returns through 2018 have been examined and approved by the Tax Authority.

4.Business income tax administrative remedies

The Group adopted the transfer pricing method on income tax declaration from year 2013 to 2014. As the calculation had a conflict with the opinion of the tax authority, the Group applied for administrative relief after paying the approved additional tax. The administrative appeal and litigation procedures are in progress.

(r) Capital and reserves

1.Capital surplus

The components of the capital surplus were as follows:

Share capital Other	2020.12.31 $ 2,891,959 7,325	2019.12.31 2,891,959 21,502
	$ 2,899,284	2,913,461

324

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Retained earnings

The Company’s articles of incorporation require that after-tax earnings shall first be offset against any deficit, and 10% of the rest 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. Special reserve may be appropriated for operations or to meet regulations. The remaining earnings, if any, may be appropriated for operations according to the proposal, and the distributed dividends may not be lower than 10% of the earnings. Surplus distribution based on issuance of new shares approved by the Board of Directors, should be resolved during the shareholder's meeting. In consideration of the Company's long-term operating plan, funding needs, and satisfying shareholder demand for cash flow, the Company distributes cash dividends of at least 10% of the aggregate of cash dividends and stock dividends if the distributions include cash dividend. In accordance with Article 240 of the ROC Company Act, the Company authorizes the distribution of dividends and bonuses or its legal reserve and capital reserve, according to Article 241 of the ROC Company Act, in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors; then such distribution shall be submitted to the shareholder's meeting.

1) Legal reserve

2) Special reserve

In accordance with Permit No.1010012865 as issued by the Financial Supervisory Commission on April 6, 2012, a special reserve equal to the contra account of other shareholders' equity is appropriated from the current and prior period earnings. When the debit balance of any of the contra accounts in the shareholders' equity is reversed, the related special reserve can be reversed. The subsequent reversals of the contra accounts in shareholders' equity shall qualify for additional distributions.

3) Earnings Distribution

On March 24, 2020, the Company's Board of Directors resolved to distribute the 2019 earnings. On June 14, 2019, the shareholder's meetings resolved to distribute the 2018 earnings. These earnings were appropriated for distribution as follows:

Dividends distributed to common shareholders Cash	2019	2019
	Dividend per share ($)	Amount
	$ 1.30	4,663,718 1.50

The information on prior year's distribution of the Company's earnings were announced through the Market Observation Post System on the internet.

325

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

On March 30, 2021, the Company's Board of Directors resolved to appropriate the 2020 earnings respectively, as follows:

2020 Dividend per share ($) Amount

Dividends distributed to common shareholders Cash $ 1.85 6,636,829

3.Other equity (net of taxes) and non-controlling interests

Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Non-controlling interests
$ (2,005,134) (461,592) (639) - - - - - -	183,129 - - 365,376 (16,523) 19,258 14,200 - -	1,700,080 4,275 - - - - - (975,007) (823,264)
$ (2,467,365)	565,440	(93,916)
(990,250) (1,013,287) (1,597) - - - - - -	(656,107) - - 818,376 824 20,036 - - -	2,357,036 (13,563) - (18,862) - - (670,963) 983 45,449
$ (2,005,134)	183,129	1,700,080

Note: Due to losing control over the subsidiary, the impact amounted to $838,676.

326

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(s) Share-Based payments
1.AIMobile Co. Ltd

As of December 31, 2020, share-based payments of AIMobile Co. Ltd are as follows:

Grant date Number of shares granted Contractual life Grant target Vesting period	Equity transaction
	Employee Stock Option Plan
	March 25, 2019 1,605 thousand units 5 year Employees of AIMobile Co. Ltd Subsequent 2~4 years service

1) Determining the fair value of equity instruments granted

AIMobile Co. Ltd adopted the Black-Scholes Model to calculate the fair value of the stock option at grant date, and the assumptions adopted in this valuation model were as follows:

Fair value at grant date Share price at grant date Exercise price Expected volatility(%) Expected life of the option (year) Expected dividend yield rate Risk free interest rate (%)	2020 Employee Stock Option Plan 2.28 / 2.77 / 3.29 10.4 10 30.971% / 34.193% / 36.901% 2.60 / 3.30 / 4.15 -% 0.574% / 0.597% / 0.621%

AIMobile Co. Ltd use the historical volatility as base to estimate the expected volatility; the duration of stock options is in accordance with the regulations. The expected dividends were set at 0, and the risk-free rate was set considering the rate of the short-term government bonds. The definition of fair value did not cover the service fee of the trade or the non-market achievement conditions.

327

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Expenses and liabilities resulted from share-based payments

As of December 31, 2020 and 2019, expense and liability resulted from share-based payments are accounted as follow:

Expenses and liabilities	2020 $ 1,234	2019 1,040

(t) Earnings per share

The following are the calculation of basic earnings per share and diluted earnings per share:

Basic earnings per share: Profit attributable to ordinary shareholders Weighted average number of ordinary shares (thousand shares) Basic earnings per share (NT dollars) Diluted earnings per share: Profit attributable to ordinary shareholders of the Company (adjusted for the effects of all dilutive potential ordinary shares) Weighted average number of ordinary shares (thousand shares) Effect of dilutive potential common shares (thousand shares) profit sharing to employees Weighted average number of ordinary shares (adjusted for the effects of all dilutive potential ordinary shares) Diluted earnings per share (NT dollars)	For the years ended December 31, 2020 2019 $ 7,547,985 5,507,960	For the years ended December 31, 2020 2019 $ 7,547,985 5,507,960
	2020 $ 7,547,985
	3,587,475	3,587,475
	$ 2.10	1.54
	$ 7,547,985	5,507,960
	3,587,475 32,907	3,587,475 23,150
	3,620,382	3,610,625
	$ 2.08	1.53

328

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(u) Revenue from contracts with customers
Disaggregation of revenue

For the years ended December 31, 2020 Core Others Total $ 32,249,613 767,482 33,017,095 345,570,121 104,146 345,674,267 7,723,625 - 7,723,625 68,334,265 212,354 68,546,619 53,236,397 96,195 53,332,592	For the years ended December 31, 2020 Core Others Total $ 32,249,613 767,482 33,017,095 345,570,121 104,146 345,674,267 7,723,625 - 7,723,625 68,334,265 212,354 68,546,619 53,236,397 96,195 53,332,592	For the years ended December 31, 2020 Core Others Total $ 32,249,613 767,482 33,017,095 345,570,121 104,146 345,674,267 7,723,625 - 7,723,625 68,334,265 212,354 68,546,619 53,236,397 96,195 53,332,592
Core $ 32,249,613 345,570,121 7,723,625 68,334,265 53,236,397	Others 767,482 104,146 - 212,354 96,195
$ 507,114,021	1,180,177	508,294,198
$ 506,413,658 700,363 -	- - 1,180,177	506,413,658 700,363 1,180,177
$ 507,114,021	1,180,177	508,294,198
For the years ended December 31, 2019 Core Others Total $ 6,882,698 2,663,130 9,545,828 341,349,096 350,212 341,699,308 13,200,986 - 13,200,986 66,912,430 1,009,619 67,922,049 68,492,986 91,656 68,584,642
Core $ 6,882,698 341,349,096 13,200,986 66,912,430 68,492,986	Others 2,663,130 350,212 - 1,009,619 91,656
$ 496,838,196	4,114,617	500,952,813
$ 495,945,745 892,451 -	- - 4,114,617	495,945,745 892,451 4,114,617
$ 496,838,196	4,114,617	500,952,813

329

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2. Contract balances

Contract balances
Notes and Accounts receivable (included related parties) Less: Loss allowance Total Contract liabilities	2020.12.31 $ 91,883,742 (72,433)	2019.12.31 88,594,198 (102,855)	2019.1.1 92,354,729 (120,009)
	$ 91,811,309	88,491,343	92,234,720
	$ 7,828,232	6,449,213	6,717,641

For details on notes and accounts receivable and allowance for impairment, please refer to note 6(c).

The amount of revenue recognized for the years ended December 31, 2020 and 2019 were $7,431,819 and $9,863,711, respectively.

The contract liabilities primarily relate to deferred recognition of warranty revenue, for which revenue is recognized when the warranties are redeemed or when they expire.

(v) Remuneration of employees and directors

The Company's articles of incorporation require that earnings shall first be offset against any deficit. A minimum of 3% will be distributed as employee remuneration and a maximum of 3% will be allocated as directors' remuneration.

There were no differences between the amounts to be distributed as remuneration to employees and directors in 2020 and 2019 and the amounts stated in the individual reports.

330

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(w) Non-operating income and expenses
1.Interest income

The details of interest income were as follows:

The details of interest income were as follows:
Interest income from bank deposits	For the years ended December 31, 2020 2019 $ 1,186,629 1,347,043
	2020 $ 1,186,629

2.Other income

The details of other income were as follows:

Rent income Dividend income	For the years ended December 31, 2020 2019 $ 246,232 291,270 30,069 20,979	For the years ended December 31, 2020 2019 $ 246,232 291,270 30,069 20,979
	2020 $ 246,232 30,069
	$ 276,301	312,249

3.Other income and losses

The details of other income and losses were as follows:

Foreign exchange losses Gains on disposal of investments Net gains on financial assets (liabilities) measured at fair value through profit or loss Gains on disposal of property, plant and equipment Gains on non-current assets held-for-sell Impairment loss on property, plant and equipment Other impairment loss Other	For the years ended December 31, 2020 2019 $ (461,964) (999,798) 24,435 - 1,114,261 240,750 4,773,910 69,439 - 628,476 (949,815) (293,859) (2,407) (51,057) 1,015,831 637,882	For the years ended December 31, 2020 2019 $ (461,964) (999,798) 24,435 - 1,114,261 240,750 4,773,910 69,439 - 628,476 (949,815) (293,859) (2,407) (51,057) 1,015,831 637,882
	2020 $ (461,964) 24,435 1,114,261 4,773,910 - (949,815) (2,407) 1,015,831
	$ 5,514,251	231,833

4.Finance costs

The details of finance expenses were as follows:

Interest expenses Bank borrowings Others	For the years ended December 31, 2020 2019 $ 609,087 936,338 445,157 824,762	For the years ended December 31, 2020 2019 $ 609,087 936,338 445,157 824,762
	2020 $ 609,087 445,157
	$ 1,054,244	1,761,100

331

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(x) Financial instruments
1.Credit risks

1) Credit risks exposure

The carrying amounts of financial assets and contract assets represented the maximum credit risk exposure of the Group.

2) Condition of credit risk concentration

Implicit credit risk of the Group is inherent in its cash and accounts receivable. The cash is deposited in different financial institutions. The Company manages the credit risk exposure with each of these financial institutions and believes that cash do not have a significant credit risk concentration.

The major customers of the Group are centralized in the high-tech computer industry. To minimize credit risk, the Company periodically evaluates the Company’s financial positions and the possibility of collecting trade receivables.

Besides, the Consolidated Company monitors and reviews the recoverable amount of the trade receivables to ensure the uncollectible amount are recognized appropriately as impairment loss. Therefore, the executives evaluate the Group's credit risk to be limited.

As of December 31, 2020 and 2019, 63% and 65% of accounts receivable were attributable to two major customers. Thus, credit risk is significantly centralized.

2.Liquidity risks

The following are the contractual maturities of financial liabilities of the Group, including estimation of interest, but excluding the impact of netting arrangements:

December 31, 2020 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Accounts payable Other payables Lease liabilities Derivative financial liabilities Forward exchange contracts not used for hedging: Outflow Inflow Foreign exchange swap contracts not used for hedging : Outflow Inflow	Carrying amount	Contractual cash flows	Less than 6 months	6 to 12 months	1 to 2years	2 to 5years	More than 5years 1,598,418 - - - 283,646 - - - -
	$ 3,594,825 37,617,499 74,370,226 11,595,245 964,514 210,598 - 39,538 -	3,871,406 39,026,892 74,370,226 11,595,245 1,100,855 (18,092,129) 17,881,531 (3,209,668) 3,170,130	182,167 33,256,306 74,370,226 11,595,245 115,403 (18,092,129) 17,881,531 (3,209,668) 3,170,130	181,354 29,234 - - 134,958 - - - -	447,247 5,741,352 - - 171,981 - - - -	1,462,220 - - - 394,867 - - - -
	$ 128,392,445	129,714,488	119,269,211	345,546	6,360,580	1,857,087	1,882,064

332

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

December 31, 2019 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Accounts payable Other payables Lease liabilities Derivative financial liabilities Forward exchange contracts not used for hedging : Outflow Inflow	Carrying amount	Contractual cash flows	Less than 6 months	6 to 12 months	1 to 2years	2 to 5years	More than 5years 1,933,250 - - - 437,814 - -
	$ 4,183,134 25,225,579 71,342,557 6,169,489 1,177,080 108,175 -	4,628,036 26,354,636 71,342,557 6,169,489 1,308,241 (10,119,285) 10,011,110	189,281 26,339,684 71,342,557 6,169,489 112,656 (10,119,285) 10,011,110	192,619 14,952 - - 119,727 - -	382,057 - - - 181,668 - -	1,930,829 - - - 456,376 - -
	$ 108,206,014	109,694,784	104,045,492	327,298	563,725	2,387,205	2,371,064

The Group are not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

3.Currency risks

1) Exposure to currency risks

The Group's exposures to significant currency risk were those from its foreign currency denominated financial assets and liabilities as follows:

Foreign currency (In thousand) Financial assets Monetary items USD $ 5,480,099 433,993 317,555 CNY 3,553,701 JPY 7,167 Non-monetary items USD 57,844 Financial Liabilities Monetary items USD 4,480,491 242,494 396,525 CNY 345,548		2020.12.31	TWD 156,073,220 12,360,121 9,043,960 15,511,194 1,935 1,647,427 127,604,384 6,906,229 11,293,032 1,508,248
		Exchange rate USD：TWD 28.48 USD：CNY 6.52 USD：CZK 21.38 CNY：USD 0.15 JPY：TWD 0.27 USD：TWD 28.48 USD：TWD 28.48 USD：CNY 6.52 USD：CZK 21.38 CNY：USD 0.15

333

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Foreign currency (In thousand) Financial assets Monetary items USD $ 4,595,867 633,654 293,178 CNY 3,593,671 JPY 6,563 Non-monetary items USD 59,255 Financial Liabilities Monetary items USD 3,743,732 522,687 379,553 CNY 309,273		2019.12.31	TWD 138,243,679 19,060,312 8,818,794 15,495,191 1,838 1,785,737 112,611,459 15,722,425 11,416,954 1,333,523
		Exchange rate USD：TWD 30.08 USD：CNY 6.98 USD：CZK 22.62 CNY：USD 0.14 JPY：TWD 0.28 USD：TWD 30.08~32.19 USD：TWD 30.08 USD：CNY 6.98 USD：CZK 22.62 CNY：USD 0.14

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, loans and borrowings, accounts payable and other payables that are denominated in foreign currency. A 0.5% depreciation or appreciation of the functional currency against all the non-functional currency as of December 31, 2020 and 2019 would have increased or decreased the net profit after tax by $179,933 and $158,427, respectively. The analysis is performed on the same basis for both periods.

3) Gains or losses on foreign exchange

As Group deals with diverse foreign currencies, therefore, the gains or losses on foreign exchange were summarized as a single amount. For the years ended December 31, 2020 and 2019, the foreign exchange loss, including realized and unrealized, amounted to $(461,964) and $(999,798), respectively.

4.Interest rate analysis

The Group’s financial assets and financial liabilities with interest rate exposure risk were noted in the liquidity risk section.

334

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

If the interest rate increases or decreases by 0.5%, the Group’s profit will decrease or increase by $12,200 and $14,290 for the years ended December 31, 2020 and 2019, respectively, assuming all other variable factors remain constant. This is mainly due to the Group's variable rate in borrowings and time deposits.

5.Fair value of financial instruments
1) Fair value hierarchy

The Group uses the observable market data to evaluate its assets and liabilities. The different inputs of levels of fair value hierarchy in determination of fair value are as follows:

‧Level 1: quoted prices (unadjusted) in active markets for identified assets or liabilities.
‧Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
‧Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs).

		2020.12.31	2020.12.31	Total 251,174 1,442,770
Book Value $ 251,174 1,442,770		Fair Value
	Level 1 - 377,800	Level 2 251,174 -	Level 3 - 1,064,970
1,693,944	377,800	251,174	1,064,970	1,693,944
1,420,469 3,643,028	1,420,469 -	- 75,822	- 3,567,206	1,420,469 3,643,028
5,063,497	1,420,469	75,822	3,567,206	5,063,497
32,951,595 92,655,750	- -	- -	- -	- -
125,607,345	-	-	-	-
$ 132,364,786	1,798,269	326,996	4,632,176	6,757,441

335

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

		2020.12.31	2020.12.31
Book Value $ 250,136		Fair Value		Total 250,136
	Level 1 -	Level 2 250,136	Level 3 -
	- - - -	- - - -	- - - -	- - - -
128,142,309	-	-	-	-
$ 128,392,445	-	250,136	-	250,136
		2019.12.31
Book Value $ 125,305 3,833,163		Fair Value		Total 125,305 3,833,163
	Level 1 - 115,909	Level 2 125,305 -	Level 3 - 3,717,254
3,958,468	115,909	125,305	3,717,254	3,958,468
1,194,430 2,243,738	1,194,430 -	- 129,221	- 2,114,517	1,194,430 2,243,738
3,438,168	1,194,430	129,221	2,114,517	3,438,168
18,952,967 89,246,318 237,884	- - -	- - -	- - -	- - -
108,437,169	-	-	-	-
$ 115,833,805	1,310,339	254,526	5,831,771	7,396,636

336

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2019.12.31

			2019.12.31	2019.12.31
Book Value Financial liabilities at fair value through profit or loss Derivative financial liabilities $ 108,175 Financial liabilities at amortized cost Bank loans 29,408,713 Accounts payable 71,342,557 Other payables 11,571,105 Lease liabilities 1,177,080 Subtotal 113,499,455 Total $ 113,607,630	Book Value $ 108,175		Fair Value		Total 108,175
		Level 1 -	Level 2 108,175	Level 3 -
		- - - -	- - - -	- - - -	- - - -
	113,499,455	-	-	-	-
	$ 113,607,630	-	108,175	-	108,175

2) Valuation techniques and assumption for financial instruments measured at fair value:

The fair value of financial assets and liabilities was decided in accordance with the solutions as follows:

(2.1) Non-derivative financial instruments
A. The stocks of listed companies are financial assets with standard terms which are traded in the active markets. Their fair values are based on the quoted market prices.
B. The fair value of private equity is based on standard terms and quoted market prices.
C. The fair value of unquoted equity instruments was estimated using the market comparable price or net asset value method. The assumption of market comparable price method was based on a comparison between the market prices of each listed company, multiplied by using the estimated price. The discount effect is adjusted due to lack of market liquidity in equity securities.
D. The fair value of unquoted instruments was estimated using either the discounted cash flow model in which future cash flow were estimated and discounted or the fair value of the recognized assets and liabilities of the consolidated subsidiaries on the measurement day.
(2.2) Derivative financial instruments

Foreign exchange swap and forward exchange were usually evaluated in the latest forward rate.

3) Transfers between level 1 and level 2

There were no transfers between level 1 and level 2 of the fair value for the years ended December 31, 2020 and 2019.

337

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

4) The following table shows the movements in fair value measurements under level 3 of the fair value hierarchy:

Balance as of January 1, 2020 Total gains and losses recognized in Profit or loss Other comprehensive income Purchase Disposals Transfers out of Level 3 Effect of movements in exchange rate Balance as of December 31, 2020 Balance as of January 1, 2019 Total gains and losses recognized in Profit or loss Other comprehensive income Purchase Disposals Proceeds from capital reduction Effect of movements in exchange rate Balance as of December 31, 2019	At fair value through profit or loss $ 3,717,254 78,434 - 7,617,410 (10,159,972) (74,980) (113,176)	Fair value through other comprehensive income 2,114,517 - 206,885 1,258,524 (14,150) - 1,431
	$ 1,064,970	3,567,207
	$ 2,402,590 89,880 - 14,208,509 (12,770,353) - (213,372)	264,886 - 16,981 1,858,948 - (26,400) 102
	$ 3,717,254	2,114,517

Total gains and losses recognized in: In profit or loss, and included“other gains and losses” In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	For the years ended December 31, 2020 2019 $ (5,737) 4,752 206,885 16,981
	2020 $ (5,737) 206,885

338

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

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

The Company uses level 3 inputs to measure fair value through profit or loss, and fair value through other comprehensive income financial assets. Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through profit or loss－financial instruments without an active market Financial assets at fair value through profit or loss－equity instruments investments without an active market Financial assets at fair value through profit or loss－equity instruments investments without an active market Financial assets at fair value through other comprehensive income－equity instruments investments without an active market Financial assets at fair value through other comprehensive income－equity instruments investments without an active market	Valuation Technique Discounted Cash Flow Method Net Asset Value Method Comparable Listed Companies Method Comparable Listed Companies Method Net Asset Value Method	Significant Non-observable Input ‧Discounted Rate (3.20% on December 31, 2020 and 3.20%~4.00% on December 31, 2019) ‧Net Asset Value ‧Discount due to Lack of Market liquidity (30%) ‧Market Multiple (0.85~1.92) ‧Discount due to Lack of Market liquidity (20%~30%) ‧Net Asset Value	The Relationship between Significant Non-observable Input and FairValue
			‧The higher the discount rate, the lower the fair value ‧Not applicable ‧The estimated fair value would increase (decrease) if the price of earnings ratio multiple is higher (lower) and the marketability discount is lower (higher) ‧The estimated fair value would increase (decrease) if the price of earnings ratio multiple is higher (lower) and the marketability discount is lower (higher) ‧Not applicable

6) Sensitivity analysis for fair values of financial instruments using Level 3 Inputs

December 31, 2020 Financial assets at fair value through profit or loss Financial instruments without an active market Financial assets at fair value through other comprehensive income Equity instruments without an active market	Input	Variation	Impact on Fair V Net incom Favorable Change	alue Change on e or loss	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change - - 17,790 (17,790)
				Unfavorable Change	Favorable Change
	Discount Rate Market Multiple	0.5% 0.5%	$ 13,709 -	(13,709) -	- 17,790

339

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INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

December 31, 2019 Financial assets at fair value through profit or loss Financial instruments without an active market Financial assets at fair value through other comprehensive income Equity instruments without an active market	Input	Variation	Impact on Fair V Net incom	alue Change on e or loss	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change - - 33,497 (33,497)
			Favorable Change	Unfavorable Change	Favorable Change
	Discount Rate Market Multiple	0.5% 0.5%	$ 2,187 -	(2,187) -	- 33,497

6.Offsetting financial assets and financial liabilities

The Group has financial instruments transactions applicable to the International Financial Reporting Standards Sections 42 NO. 32 approved by the FSC which required for offsetting. Financial assets and liabilities relating those transactions are recognized in the net amount of the balance sheets.

The Group also performs transactions not applicable to the International Financial Reporting Standards Sections 42 NO. 32, but the Group has an exercisable master netting arrangement or similar agreement in place with its counterparties, and both parties reach a consensus regarding net settlement. The aforesaid exercisable master netting arrangement or similar agreement can be net settled after offsetting the financial assets and financial liabilities. Otherwise, the transaction can be settled at the total amount. In the event of default involving one of the parties, the other party can have the transaction net settled.

The following tables present the aforesaid offsetting financial assets and financial liabilities.

2020.12.31

	2020.12.31	2020.12.31	2020.12.31	2020.12.31	2020.12.31	2020.12.31
Offsetting agreement Derivative financial instruments Total	Financial assets that are offset which have an exercisable master netting arrangement or similar agreement Gross amounts Gross amounts of financial liabilities offset Net amount of financial assets presented in Amounts not off set in the balance sheet (d) of recognized financial assets (a) in the balance sheet (b) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) $ 390,039,674 389,593,639 446,035 - - 446,035 72,194 - 72,194 - - 72,194
	Gross amounts of recognized financial assets (a)	Gross amounts of financial liabilities offset in the balance sheet (b)	Net amount of financial assets presented in the balance sheet (c)=(a)-(b)	Amounts not off set in the balance sheet (d)
				Financial instruments (Note)	Cash collateral received
	$ 390,039,674 72,194	389,593,639 -	446,035 72,194	- -	- -	446,035 72,194
	$ 390,111,868	389,593,639	518,229	-	-	518,229

340

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

		2020.12.31 offset which have an exercisable master netting arrangement or similar agreement Net amount of financial liabilities presented in Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 182,068 - - 182,068	2020.12.31 offset which have an exercisable master netting arrangement or similar agreement Net amount of financial liabilities presented in Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 182,068 - - 182,068	2020.12.31 offset which have an exercisable master netting arrangement or similar agreement Net amount of financial liabilities presented in Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 182,068 - - 182,068	2020.12.31 offset which have an exercisable master netting arrangement or similar agreement Net amount of financial liabilities presented in Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 182,068 - - 182,068
Financial	liabilities that are
Gross amounts of recognized financial liabilities (a)	Gross amounts of financial assets offset in the balance sheet (b)	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b)	Amounts not off set in the balance sheet (d)
			Financial instruments (Note)	Cash collateral received
$ 182,068	-	182,068	-	-	182,068
		2019.12.31
Gross amounts of recognized financial assets (a)	Gross amounts of financial liabilities offset in the balance sheet (b)	Net amount of financial assets presented in the balance sheet (c)=(a)-(b)	Amounts not off set in the balance sheet (d)
			Financial instruments (Note)	Cash collateral received
$ 413,711,801 33,069	413,317,202 -	394,599 33,069	- -	- -	394,599 33,069
$ 413,744,870	413,317,202	427,668	-	-	427,668
		2019.12.31
Financial	liabilities that are
Gross amounts of recognized financial liabilities (a)	Gross amounts of financial assets offset in the balance sheet (b)	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b)	Amounts not off set in the balance sheet (d)
			Financial instruments (Note)	Cash collateral received
$ 108,175	-	108,175	-	-	108,175

Note: Master netting arrangements are included.

341

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(y) Financial risk management

1.Overview

The Group have exposures to the following risks from its financial instruments:

1) credit risk

2) liquidity risk

3) market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risk exposures, please refer to the respective notes in the accompanying consolidated financial statements.

2.Risk management framework

The group are exposed to credit risk, market risk, operating risk and liquidity risk due to its operating activities. To lower the latent unfavorable effects of changing market to the Group's financial performance, the Group have made efforts in identifying and evaluating the risks and avoiding the uncertainty of the market through derivative financial instruments.

The Board of Directors has the overall responsibility for the establishment and oversight of the Group’s risk management framework. The financial units follow the risk management policies, and report the operating status to the Board of Directors regularly. The internal auditors perform regular reviews by taking risk management control procedures and report to the Board of Directors.

3.Credit risk

Please refer to Note 6(x) for the analysis of credit risk of cash, cash equivalent and accounts receivable.

4.Liquidity risk

Liquidity risk is a risk that the Group is unable to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as much as possible, that it always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group use actual cost to estimate the cost of its products and services to better assist the Group's monitoring on the cash flow and optimizing the return on investment. As of December 31, 2020, the capital and working funds of the Group are sufficient to meet its entire contractual obligation; therefore, the management is not expecting any significant issue on liquidity risk. As of December 31, 2020 and 2019, the Group's unused credit line were amounted to $70,541,804 and $75,851,186, respectively.

342

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

5.Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rate, and equity prices which will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

The Group buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions are carried out within the guidelines set by the Group.

1) Currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of the Group’s entities, primarily the New Taiwan Dollars (TWD), US Dollars (USD), Czech Koruna (CZK), Japanese Yen (JPY) and China Yuan (CNY). The currencies used in these transactions are denominated in TWD, USD, JPY and CNY.

The Group often uses the principle of natural hedging as its basis, and proceed supplemented by derivative instruments for hedging exchange rate risk.

The interest is denominated in the same currency as borrowings. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group. This provides an economic hedge without derivatives being entered into, and therefore, hedge accounting is not applied in these circumstances.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

2) Interest rate risk

The Group's interest rate risk arises from long-term borrowings bearing floating interest rates. The fluctuation of the market interest rate changes the floating interest rates of the long-term borrowings, and thus affect the future cash flow. In order to decrease the effect of the market interest rate fluctuation on to the future cash flow, the Group periodically evaluates bank and currency borrowing rate to hedge the cash flow risk caused by the market interest rate fluctuation.

(z) Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, additional paid-in capital, retained earnings, other equity interest and non-controlling interests of the Group. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.

343

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The group's objective for managing capitals is to maintain investor, creditor and market confidence, and to sustain future development of the business by making debts and capital the most suitable capital structure and optimizing the best of it based on industrial scales, future growth development, and capital expenditures needed for plants and equipment. Thus, the Group calculates the operating funds based on the life cycle of the products, plans for the development in the long run, and then decides the most suitable capital structure considering the business cycle.

The Group ensures the financial resources and the operating plan are sufficient to support the future needs of operating funds, capital expenditures, debt refunding and dividend distribution.

The Group’s debt to equity ratio at the reporting date was as follows:

Total Liabilities Less: cash and cash equivalents Net debt Total Equity Adjusted Capital Debt to capital ratio	2020.12.31 $ 156,270,694 (32,951,595)	2020.12.31 $ 156,270,694 (32,951,595)	2019.12.31 136,121,625 (18,952,967) 117,168,658 56,971,228 56,971,228 205.66%
	$ 123,319,099
	$ 57,890,743
	$ 57,890,743
		213.02%

According to the Company's management, there were no changes in the Group's approach to capital management as of December 31, 2020.

(aa) Investing and financing activities not affecting current cash flow

The Group investing and financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, were as follows:

1.For right-of-use assets under leases, please refer to Note 6(i).
2.Reconciliation of liabilities arising from financing activities was as follows:

Long-term borrowings Short-term borrowings (including current portion of long-term borrowings) Lease liabilities (Note) Total liabilities from financing activities	January 1, 2020 Cash flows $ 3,883,134 5,331,728 25,525,579 6,502,586 1,177,080 (199,245)	Non-cash changes Reclassification Foreign exchange movement December 31, 2020 (300,000) 75,963 8,990,825 300,000 (106,666) 32,221,499 (6,985) (6,336) 964,514
	$ 30,585,793 11,635,069	(6,985) (37,039) 42,176,838

344

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Long-term borrowings Short-term borrowings (including current portion of long-term borrowings) Lease liabilities (Note) Total liabilities from financing activities	January 1, 2019 Cash flows $ 3,409,061 865,440 31,857,950 (6,498,237) 1,074,436 (196,978)	Non-cash changes Reclassification Foreign exchange movement December 31, 2019 (359,061) (32,306) 3,883,134 359,061 (193,195) 25,525,579 199,374 100,248 1,177,080
	$ 36,341,447 (5,829,775)	199,374 (125,253) 30,585,793

Note: Reclassification is due to additional and early terminated lease liability during this period.

(7) Related Party Transactions

(a) Names and relationship with related parties

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

Name of related party Inventec Besta Co., Ltd. Inventec Besta (XiAn) Co., Ltd. Gainia Intellectual Asset Services, Inc. Inventec Group Charity Foundation Inventec Welfare Committee Kou-I Yeh Ching-Sung Chang Li-Cheng Yeh	Relationship with the Group
	Associates Subsidiary of associates Associates Over one-third of total amount of fund donated by the Company The same chairman of the Group Director of the board of the Company Director of the board of the Company Director of the board of the Company

(b) Significant transactions with related parties
1.Sale revenue

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

Associates Other related parties	For the years ended December 31, 2020 2019 $ 88,274 1,805 310 - $ 88,584 1,805
	2020 $ 88,274 310 $ 88,584

For associates and other related parties, the price and terms were determined in accordance with mutual agreements with its collection terms of OA 30~90 days for sales. Receivables from related parties were not secured with collaterals, and did not require provisions for impairment.

345

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2.Purchase

The amounts of significant purchase transactions between the Group and associates were as follows:

Associates	For the years ended December 31, 2020 2019 $ 6,672 -
	2020 $ 6,672

There is no other vendor as comparison for the above purchases, and the purchase prices are based 。 on the settling price agreed by both sides. The payment term is 30~75 days

3.Accounts receivable from related parties

The amounts of accounts receivable between the Group and related parties were as follows:

Financial Statement Account Related Party Categories	2020.12.31 2019.12.31 $ 75,749 - 66 1,305
Accounts receivables Associates Other receivables Associates
	$ 75,815 1,305

4.Accounts payable to Related Parties

The amounts of accounts payables between the Group and related parties were as follows:

Financial Statement Account Related Party Categories	2020.12.31 2019.12.31 $ 678 - 1,046 2,477 300,000 250,000
Accounts payable Associates Other payables Associates 〞 Other related parties
	$ 301,724 252,477

As of December 31, 2020 and 2019, the Group borrowed the amount of $300,000 and $250,000 from shareholders, respectively, which were accounted as other payables. The borrowing interest rate were 1.50% and 2.13%.

5.Property transactions
1) Acquisition of property, plant, equipment, intangible assets and other assets

For the years ended December 31, 2020 and 2019, the Group purchased equipment, intangible assets and other assets from Inventec Besta Co., Ltd. and paid the amount of $12,620 and $29,479, respectively.

346

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INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) In 1999, the Group sold property, deferred assets, assets stated under expense, and trademarks to Inventec Besta Co., Ltd., resulting in a gain on property disposal of $51,712 and other revenue of $40,453. As of December 31, 2020 and 2019, the unrealized other revenues are both $1,211.
6.Others
1) Rental and other revenue collected from related parties were as follows:

Associates Donations for other related parties were as follows: Other related parties	For the years ended December 31, 2020 2019 $ 6,206 8,009
	2020 $ 6,206
	For the years ended December 31, 2020 2019 $ 10,000 10,000
	2020 $ 10,000

2) Donations for other related parties were as follows:
3) Payments for system development expenses, maintenance expenses and service expenses to associates were as follows:

Associates	For the years ended December 31, 2020 2019 $ 3,935 7,281
	2020 $ 3,935

Key management personnel compensation includes:

Short-term employee benefits Post-employment benefit	For the years ended December 31, 2020 2019 $ 494,902 530,154 6,192 4,361	For the years ended December 31, 2020 2019 $ 494,902 530,154 6,192 4,361
	2020 $ 494,902 6,192
	$ 501,094	534,515

347

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(8) Pledged Assets

The carrying values of pledged assets were as follows:

Pledged assets	Object		2020.12.31	2019.12.31
Refundable deposits	Membership guarantee and rental	$	69,662	173,802
(Other non-current	deposit
assets)
Restricted cash in banks	Guarantee and the account of		1,127,892	64,081
(Other current assets	repatriated offshore funds
and Other non-current
assets)
Land, buildings,	Current portion long-term		8,438,458	8,395,434
structures, machinery	borrowings, as well as long-term
and equipment, net	borrowings and credit line
(Property, plant and
equipment, investment
property and
right-of-use assets)
Total		$	9,636,012	8,633,317
ignificant Commitments and Contingencies
(a) Major Commitments:
1.Unused standby letters of credit were as follows:
			2020.12.31	2019.12.31
EUR		$	360	67
USD			56	3,795
TWD			25,345	13,461
2.Promissory notes issued for bank credit, forward contracts, secured deposits				for executing
technology agreements with the government and property deposits were as follows:
			2020.12.31	2019.12.31
TWD		$	21,940,262	22,379,023
USD			1,776,400	1,464,400

(9) Significant Commitments and Contingencies

(b) Contingencies: None.

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events: None.

348

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(12) Other

(a) The employee benefits, depreciation, depletion and amortization expenses categorized by function were as follows:

By function By item	For the years ended December 31, 2020	For the years ended December 31, 2020	For the years ended December 31, 2020	For the years ended December 31, 2019	For the years ended December 31, 2019	For the years ended December 31, 2019
	Operating costs	Operating and non-operating expense	Total	Operating costs	Operating and non-operating expense	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	8,860,268 778,575 608,446 506,400 1,894,677 220,322	8,666,824 696,797 421,871 268,056 1,006,921 731,620	17,527,092 1,475,372 1,030,317 774,456 2,901,598 951,942	13,153,184 1,219,787 1,385,171 652,059 2,062,583 388,711	8,531,621 728,830 494,030 327,926 1,125,799 576,629	21,684,805 1,948,617 1,879,201 979,985 3,188,382 965,340

(13) Other disclosures

(a) Information on significant transactions

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

1. Loans to other parties:

												(In T	housa	nds of	New Taiwan	Dollars)
Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Col	lateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1 2 3 3 4	Inventec (Chongqing) Corp.(Note 2) Inventec Appliances (Nanjing) Corp.(Note 3) Inventec Appliances (Shanghai) Co., Ltd.(Note 3) 〞 Inventec Appliances Corp.(Note 3)	Inventec Asset-Managemen t (Shanghai) Corporation Inventec Appliances (XI'AN) Corporation Inventec Appliances (Shanghai) Enterprise Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Inventec Appliances (Malaysia) SDN. BHD.	Other receivables 〞〞〞〞	Y Y Y Y Y	523,800 100,395 30,555 131,400 800,000	- 82,935 - 130,950 800,000	- 56,745 - 130,950 328,409	- 3.045% - 3.045% 1.95%	2 2 2 2 2	- - - - -	Working Capital 〞〞〞〞	- - - - -	None 〞〞〞〞	- - - - -	3,184,453 343,822 1,771,832 1,771,832 8,476,966	3,184,453 343,822 1,771,832 1,771,832 8,476,966

349

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

==> picture [475 x 106] intentionally omitted <==

----- Start of picture text -----

Highest Range of
balance of interest Purposes of Transaction
financing to Actual usage rates fund amount for Reasons
other parties amount during financing business for Individual Maximum limit
Name of Name of Account Related during the Ending during the the for the between two short-term Allowance Collateral funding loan of fund
Number lender borrower name party period balance period period borrower parties financing for bad debt Item Value limits financing
5 Inventec Inventec Hi-Tech Other Y 87,600 87,300 - - 2 - Working - None - 4,126,672 4,126,672
(Pudong) Corp. receivables Capital
Corp.(Note 4)
5 〞 Inventec 〞 Y 1,401,600 1,396,800 1,163,567 5.225% 2 - 〞 - 〞 - 1,650,669 1,650,669
Asset-Managemen
t (Shanghai)
Corporation
Note 1: (1) Those with business contact, please fill in 1.
----- End of picture text -----

(2) Those necessary for short term financing, please fill in 2.
Note 2: Where an inter-company or inter-firm short-term financing facility is necessary, total financing amount shall not exceed 40 percent of the company's net worth as stated in its latest financial report. Each financing amount shall not exceed 100 percent of the permitted aggregate amount of loans of the company.
Note 3: Among Subsidiaries which the parent company holds 100% voting power, aggregate amount of loans shall not exceed the company's net worth as stated in its latest financial report, and each amount of loans shall not exceed 100 percent of the permitted aggregate amount of loans of the company.
Note 4: Where an inter-company or inter-firm short-term financing facility is necessary, total financing amount shall not exceed 40 percent of the company's net worth as stated in its latest financial report. Each financing amount shall not exceed 100 percent of the permitted aggregate amount of loans of the company. Among Subsidiaries which the parent company holds 100% voting power, aggregate amount of loans shall not exceed the company's net worth as stated in its latest financial report, and each amount of loans shall not exceed 100 percent of the permitted aggregate amount of loans of the company.
Note 5: The transactions with the Group were eliminated in the consolidated financial statements.

Note 6: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

2. Guarantees and endorsements for other parties:

==> picture [467 x 108] intentionally omitted <==

----- Start of picture text -----

(In Thousands of New Taiwan Dollars)
Counter-party of guarantee and Parent Subsidiary Endorsement
endorsement Highest company endorsements/ s/guarantees
balance for Balance of Property endorsements guarantees to third
Limitation on guarantees guarantees pledged for Ratio of accumulated /guarantees to third parties on
amount of and and guarantees amounts of guarantees Maximum to third parties on behalf of
Relationshi guarantees and endorsements endorsements Actual usage and and endorsements to amount for parties on behalf of companies
Name of p with the endorsements for a during the as of reporting amount during endorsements net worth of the latest guarantees and behalf of parent in Mainland
No. guarantor Name Company specific enterprise period date the period (Amount) financial statements endorsements subsidiary company China
1 Inventec Inventec Appliances 2 4,238,483 1,163,146 1,163,146 - - 13.72% 4,238,483 N N Y
Appliances (Jiangning) Corp.
Corp.
Note 1: The relationship between the entity for which the endorsement/guarantee is made and the Company:
1.The Company has business relationship.
----- End of picture text -----

2.Subsidiaries in which the Company holds more than 50 percent of its voting power.
3.An investee in which the Company and subsidiary holds more than 50 percent of its voting shares.
4.Subsidiaries in which the Company holds more than 90 percent of its voting power.
5.Companies in accordance with contractual provisions established by mutual applicants or in need of project.
6.Companies that are endorsed and guaranteed by all capital shareholders based on their shareholding ratio due to a joint investment relationship.
7.The performance of pre-sale house sales contract between intra-industry companies in accordance with the Consumer Protection Law requires joint guarantees.
Note 2: Both the aggregate amount of endorsements/guarantees and the amount of endorsements/guarantees for a single enterprise by Inventec Appliance Corp. cannot exceed 50 percent of its net worth as stated in its latest financial statement.
Note 3: The transactions with the Group were eliminated in the consolidated financial statements.

Note 4: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

350

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Securities held as of balance sheet date (excluding investment subsidiaries, associates and joint ventures) :

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Highest percentage of ownership (%) during theyear	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
The Company 〞〞〞〞〞〞〞〞〞〞〞〞〞	WK Technology Fund IV Corp. Amphastar Pharmaceuticals Inc. Arima Communications Corp. WIN Semiconductors Corp. Tomorrow Studio Co., Ltd Tai Yi Precision Corporation New E Materials Co., Ltd. Rasilient Systems, Inc. preference share SKSpruce Holding Limited preferred stock CloudMosa Technologies, Inc. preferred stock QEEXO, Co. preferred stock Rescale, Inc. preferred stock Sensel, Inc. preferred stock ZT Group Int'l, Inc.	- - - - - - - - - - - - - -	Non-current financial assets at fair value through other comprehensive income 〞〞 Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income 〞〞〞〞〞〞〞〞〞	645 26 21,114 4,063 29 2,540 1,760 3,632 3,746 235 568 355 532 70	5,084 14,780 75,822 1,405,689 166 - 12,197 - 41,755 - 15,923 26,544 12,370 2,010,944	1.52% 0.05% 10.15% 0.96% 0.20% 6.67% 16.00% 6.20% 3.72% 2.95% 3.09% 1.37% 3.38% 10.00%	5,084 14,780 75,822 1,405,689 166 - 12,197 - 41,755 - 15,923 26,544 12,370 2,010,944	1.52% 0.05% 10.15% 0.96% 0.20% 6.67% 16.00% 6.20% 3.72% 2.95% 3.09% 1.37% 3.38% 10.00%

351

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Highest percentage of ownership (%) during theyear	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
The Company 〞〞〞〞〞 Inventec (Cayman) Corp. Saint Investment Consulting Corporation Inventec (Chongqing) Corp. Inventec (Beijing) Electronics Technology Co., Ltd. Inventec Electronics (Tianjin) Co., Ltd. Inventec Development Japan Corporation Inventec Investments Co., Ltd. 〞〞〞	SKSpruce Holding Limited convertible short-term note Empass Technology Entire Technology Co., Ltd. E-TON Solar Tech. Co., Ltd Imedtac Co., Ltd. TMY Technology Inc. Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. Testron Technology (JiangSu) Co., Ltd. Kunshan Joing Technology Co., Ltd. Bank of Communications Pension CNY Financial products ICBC Wealth Management Corporation Tian Libao No. 2 Net Worth Management Product Famm Co., Ltd. EPISTAR Corporation UCFUNNEL CO LTD Sagacity Tech. Co., Ltd. Living Pattern Technology Inc.	- - - - - - - - - - - - - - - -	Current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss 〞〞〞〞 Non-current financial assets at fair value through other comprehensive income 〞 Current financial assets at fair value through profit or loss 〞〞 Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income 〞〞	- 450 3,260 94,889 1,000 2,857 20,000 2,778 5,948 - - 100 1,761 83 79 4	16,415 19,184 232,340 452,619 59,350 57,943 1,175,931 68,964 207,736 52,379 109,120 9,192 72,911 9,653 - 626	- % 6.80% 4.50% 29.70% 10.19% 8.00% 12.10% 10.00% 2.96% - % - % 16.00% 0.16% 5.00% 15.00% 13.70%	16,415 19,184 232,340 452,619 59,350 57,943 1,175,931 68,964 207,736 52,379 109,120 9,192 72,911 9,653 - 626	- % 6.80% 4.50% 29.70% 10.19% 8.00% 12.10% 10.00% 2.96% - % - % 16.00% 0.16% 0.05% 15.00% 13.70%

352

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Highest percentage of ownership (%) during theyear	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
Inventec Investments Co., Ltd. 〞〞〞〞 Inventec Appliances Corp. 〞〞〞〞〞〞〞 Inventec Appliances (Cayman) Holding Corp. 〞〞	E-TON Solar Tech. Co., Ltd SCOPE INDUSTRIES BERHAD Rong Cheng Tech. Co., Ltd. Tai Yi Precision Corporation Siano Mobile Silicon Inc. All People Health Social Enterprise Co.,Ltd. GCT Semiconductor, Inc. Pandigital Worldwide, Ltd. 3GTMobile Corporation Linc Global Inc. (Proximiant, Inc.) Molekule, Inc. XMEMS LABS INC Cardio Ring Technologies, Inc. convertible long-term note Siano Mobile Silicon Inc. Leadtone Limited(Class B preferred stock) Digital Chaotex Holdings Ltd.( Class A2 preferred stock)	- - - - - - - - - - - - - - -	Non-current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income 〞〞 Non-current financial assets at fair value through other comprehensive income 〞〞〞〞〞〞 Non-current financial assets at fair value through profit or loss 〞〞〞	15,813 32,000 1,950 635 461 100 93 939 314 594 1,603 1,778 - 99 1,250 446	75,429 72,549 - - - 1,000 - - - - 152,800 24,056 14,795 - - -	4.95% 4.16% 9.38% 1.67% 0.15% 11.76% 0.12% 4.80% 2.88% 5.30% 1.57% 3.05% - % 0.03% 2.36% 2.08%	75,429 72,549 - - - 1,000 - - - - 152,800 24,057 14,795 - - -	4.95% 4.16% 9.38% 1.67% 0.15% 11.76% 0.12% 4.80% 2.88% 5.30% 1.75% 3.49% - % 0.03% 2.36% 2.08%

Note 2: The transactions with the Group were eliminated in the consolidated financial statements.

Note 3: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

353

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock:

					(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)
Name of company	Category and name of security (Note 1)	Account name (Note 1)	Name of counter-party	Relationship with the company	Beginning Balance		Purchases		Sales				Ending Balance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
Inventec (Cayman) Corp. Inventec (Chongqing) Corp. Inventec Appliances (Shanghai) Corp. 〞 Inventec Appliances (Nanjing) Co. Ltd. Inventec Appliances (Jiangning) Corp.	Chainwin Biotech and Agrotech (Cayman Islands) Co., Ltd. common shares CMBC Wealth Management Services SCSB Winners CNY Financial Product Bank of China SCSB Winners CNY Financial Product 〞	Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss 〞〞〞〞	Cash Capital Increase CMBC Bank of Shanghai Bank of China Bank of Shanghai 〞	Non-related parties - - - - -	- - - - - -	- 862,093 325,959 301,853 152,006 1,893,146	20,000 - - - - -	1,175,931 - 955,947 296,370 198,382 4,781,313	- - - - - -	- 870,449 1,292,301 605,403 355,752 6,723,267	- 862,093 1,281,906 598,223 350,388 6,674,459	- 8,356 10,395 7,180 5,364 48,808	20,000 - - - - -	1,175,931 - - - - -

Note 1: The amounts above are valued at exchange rate.

Note 2: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

Acquisition of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.
Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock:

(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)	(Amounts Expressed in Thousands of New Taiwan Dollars)
Name of company	Types of property	Transaction Date	Original Acquisition Date	Book value	Transaction amount	Receipt Terms	Gain (loss) on disposal	Counter-party	Relationship	Purpose of disposal	Price reference	Other terms
Inventec (Pudong) Co., Ltd.	Land and Building	2020.01.16	2003.06.27~ 2007.12.31	740,483	5,912,920	100%	4,890,869	Shanghai Jingshuo Data Science & Technology Co., Ltd.	Non-related parties	Optimize assets	Negotiated based on the valuation report with the amounts of RMB1,340,170 and RMB 1,364,810	None

Note 1: The price has been included tax, and the transfer has been completed.

354

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship		Transacti	on details		Trans diffe	actions with terms rent from others	Notes/Accounts r	eceivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sale	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company 〞〞〞〞〞〞 Inventec Holding (North America) Corp. 〞〞〞〞 Inventec (Czech), s.r.o. 〞〞〞〞 Inventec Corporation (Hong Kong) Ltd. 〞〞	Inventec Holding (North America) Corp. Inventec (Czech), s.r.o. AIMobile Co., Ltd. Inventec Corporation (Hong Kong) Ltd. Inventec Appliance Inventec Holding (North America) Corp. Inventec (Czech), s.r.o. The Company The Company Inventec (Pudong) Technology Corp. Inventec (Czech), s.r.o. Inventec (Czech), s.r.o. The Company The Company Inventec Holding (North America) Corp. Inventec Holding (North America) Corp. Inventec (Pudong) Technology Corp. The Company Inventec (Pudong) Technology Corp. Inventec (Chongqing) Corp.	Subsidiary 〞〞〞〞〞〞 Parent 〞 Associates 〞〞 Parent 〞 Associates 〞〞 Parent Associates 〞	Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Purchases Purchases Sales Purchases Sales Sales Sales Purchases Purchases	71,105,867 26,100,876 190,326 299,231,642 344,879 800,083 764,846 71,105,867 800,083 647,061 1,125,297 289,861 26,100,876 764,846 1,125,297 289,861 131,200 299,231,642 36,587,835 262,643,807	17.45% 6.41% 0.05% 76.45% 0.09% 0.20% 0.20% 89.75% 1.05% 0.85% 1.48% 0.37% 92.80% 2.61% 4.28% 0.99% 0.45% 100.00% 12.23% 87.77%	90-105 days 90-105 days 60 days 90-105 days 90 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90 days	- - - - - - - - - - - - - - - - - - - -	No general trading partner can be compared. 〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞	16,589,292 10,953,538 108,031 (47,083,769) (92,431) (62,178) (138,655) (16,589,292) 62,178 112,290 242,702 (31,241) (10,953,538) 138,655 (242,702) 31,241 18,675 47,083,769 (8,339,964) (38,743,806)	19.09% 12.61% 0.12% 52.18% 0.10% 0.07% 0.15% 93.30% 0.97% 1.75% 3.77% 0.18% 96.76% 1.65% 2.14% 0.37% 0.22% 46.27% 8.20% 38.07%

355

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of company	Related party	Nature of relationship		Transacti	on details		Trans diffe	actions with terms rent from others	Notes/Accounts r	eceivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sale	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
Inventec (Pudong) Technology Corp. 〞〞〞 Inventec (Shanghai) Corp. Inventec (Chongqing) Corp. 〞〞 Inventec Appliances Corp. 〞〞〞 Inventec Appliances (USA) Distribution Corp. Inventec Appliances (Pudong) Corp. 〞〞〞 Inventec Appliances (Jiangning) Corp. 〞	Inventec Corporation (Hong Kong) Ltd. Inventec (Shanghai) Corp. Inventec Holding (North America) Corp. Inventec (Czech), s.r.o. Inventec (Pudong) Technology Corp. Inventec Corporation (Hong Kong) Ltd. Inventec Appliences (Pudong) Corp. Inventec Appliences (Pudong) Corp. Inventec Appliances (Pudong) Corp. Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Inventec Appliances (USA) Distribution Corp. Inventec Appliances Corp. Inventec Appliances Corp. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Inventec (Chongqing) Corp. Inventec (Chongqing) Corp. Inventec Appliances Corp. The Company	Associates 〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞 Parent	Sales Sales Purchases Purchases Purchases Sales Sales Purchases Purchases Purchases Purchases Sales Purchases Sales Sales Sales Purchases Sales Sales	36,587,835 50,835,082 647,061 131,200 50,835,082 262,643,807 3,461,826 3,680,438 30,918,894 1,046,079 658,785 3,466,765 3,466,765 30,918,894 679,313 3,680,438 3,461,826 1,046,079 344,879	39.92% 55.46% 0.68% 0.14% 100.00% 97.94% 1.29% 1.38% 89.13% 3.02% 1.90% 9.65% 100.00% 87.33% 1.70% 10.40% 12.72% 22.07% 7.31%	90-105 days 90-105 days 90-105 days 90-105 days 90-105 days 90 days 60 days 60 days 1-2 months 1-2 months 1-2 months 1-2 months 1-2 months 1-2 months 1-2 months 60 days 60 days 1-2 months 90 days	- - - - - - - - - - - - - - - - - - -	No general trading partner can be compared. 〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞	8,339,964 10,882,010 (112,290) (18,675) (10,882,010) 38,743,806 - - (9,058,738) (256,111) (153,221) 76,546 (76,546) 9,058,738 374,674 - - 256,111 92,431	42.29% 55.18% 0.35% 0.06% 100.00% 98.81% - % - % 89.80% 2.54% 1.52% 1.34% 100.00% 96.10% 3.90% - % - % 23.67% 8.54%

356

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of company	Related party	Nature of relationship		Transacti	on details		Trans diffe	actions with terms rent from others	Notes/Accounts r	eceivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sale	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. 〞 AIMobile Co., Ltd.	Inventec Appliances Corp. Inventec Appliances (Pudong) Corp. The Company	Associates 〞 Parent	Sales Purchases Purchases	658,785 679,313 190,326	98.89% 98.65% 87.80%	1-2 months 1-2 months 60 days	- - -	No general trading partner can be compared. 〞〞	153,221 (374,674) (108,031)	98.48% 99.67% (94.17)%

Note 1: Based on the negotiated price while trading. Note 2: The transactions with the Group were eliminated in the consolidated financial statement.

Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of capital stock:

					(Expressed in T	(Expressed in T	housands of New Taiwan Dollars)	housands of New Taiwan Dollars)
Name of company	Counter party	Relationship	Ending balance	Turnover balance	Overdue		Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
The Company 〞〞〞 Inventec Holding (North America) Corp. 〞 Inventec (Czech), s.r.o. Inventec Corporation (Hong Kong) Ltd. 〞〞 Inventec (Pudong) Technology Corp. 〞 Inventec (Chongqing) Corp. Inventec Appliences (Pudong) Corp. 〞	Inventec Holding (North America) Corp. AIMobile Co., Ltd. Inventec (Czech), s.r.o. Inventec Corporation (Hong Kong) Ltd. (Note) Inventec (Czech), s.r.o. Inventec (Pudong) Technology Corp. The Company The Company Inventec (Pudong) Technology Corp. (Note) Inventec (Chongqing) Corp. (Note) Inventec Corporation (Hong Kong) Ltd. Inventec (Shanghai) Corp. Inventec Corporation (Hong Kong) Ltd. Inventec Appliances Corp. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	Subsidiary Subsidiary Subsidiary Subsidiary Associates Associates Parent Parent Associates Associates Associates Associates Associates Associates Associates	16,589,292 108,031 10,953,538 54,544,416 242,702 112,290 138,655 47,083,769 23,828,947 30,715,470 8,339,964 10,882,010 38,743,806 9,058,738 374,674	4.37 2.97 2.35 - 4.53 9.03 7.60 6.61 - - 2.82 5.29 8.15 2.61 3.63	2,693,480 30,878 3,978,775 11,228,394 - - - - 11,205,570 22,824 - 32,561 - - -	Received in the subsequent period Received in the subsequent period Received in the subsequent period Received in the subsequent period Received in the subsequent period Received in the subsequent period Received in the subsequent period Received in the subsequent period	7,473,792 63,923 5,083,626 37,115,539 - - 138,655 37,733,251 6,402,488 30,713,051 1,565,414 5,171,927 36,167,837 3,853,102 30,551	- - - - - - - - - - - - - - -

357

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of company	Counter party	Relationship	Ending balance	Turnover balance	Ov	erdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	Inventec Appliances Corp. Inventec Appliances Corp.	Associates Associates	256,111 153,221	4.78 8.60	- -		256,111 153,221	- -

Note 1: The receivables were not yielded by sales or purchases; therefore, there is no turnover rate.

Note 2: The aforementioned inter-company transactions were eliminated in the consolidated financial statements.

Trading in derivative instruments: Please refer to notes (6)(b) and (6)(x).
Business relationships and significant inter-company transactions:

No.	Name of company	Name of counter party	Existing relationship with the counter- par ty	Transactions	Transactions	Transactions	Transactions
				Account name	Amount	Terms of trading	Percentage of the consolidated total revenue or total assets
0 1 2	Inventec Corporation 〞〞〞〞〞〞 Inventec Corporation (Hong Kong) Ltd. 〞〞〞〞〞 Inventec Appliances Corp. 〞	Inventec Holding (North America) Corp. 〞 Inventec (Czech), s.r.o. 〞 Inventec Corporation (Hong Kong) Ltd. 〞〞 Inventec (Pudong) Technology Corp. 〞〞 Inventec (Chongqing) Corp. 〞〞 Inventec Appliances (Pudong) Corp. 〞	1 1 1 1 1 1 1 3 3 3 3 3 3 3 3	Sales Account Receivable Sales Account Receivable Purchases Other Receivable Account Payable Purchases Account Payable Account Receivable Purchases Account Payable Account Receivable Purchases Account Payable	71,105,867 16,589,292 26,100,876 10,953,538 299,231,642 54,544,416 47,083,769 36,587,835 8,339,964 23,828,947 262,643,807 38,743,806 30,715,470 30,918,894 9,058,738	Negotiated price 90-105 days Negotiated price 90-105 days Negotiated price 90-105 days 〞 Negotiated price 90-105 days 〞 Negotiated price 90 days 〞 Negotiated price 1-2 months	14% 8% 5% 5% 59% 25% 22% 7% 4% 11% 52% 18% 14% 6% 4%

Note 1: The labeling method is as follows:

1.Parent company labeled 0.
2.Subsidiaries labeled in number sequence from 1.

Note 2: Relationship is classified into three types:

1.Parent company to subsidiary.
2.Subsidiary to parent company.
3.Subsidiary to subsidiary.
Note 3: The transaction amount is calculated as a proportion of the consolidated revenue or assets. If categorized as an asset or liability, the calculation is compared with the consolidated asset; if categorized as income or loss, the calculation is compared with the consolidated income or loss.

358

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(b) Information on investment:

The following is the information on investees for the year ended December 31, 2020 (excluding investees in Mainland China):

							(In Thousands	(In Thousands	of New Taiwa	n Dollars, Except for Sha	n Dollars, Except for Sha	re Data)
Investor company	Investee company	Location	Main businesses and products	Original inves	tment amount	Balance a	s of December 3	1, 2020	Highest percentage of ownership during the year	Net income (loss) of the investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares/Units (In thousands)	Percentage of ownership	Carrying value
The Company 〞〞〞〞〞〞〞〞〞〞〞〞	Inventec Besta Co., Ltd. Inventec Corporation (Hong Kong) Ltd. Inventec Holding (North America) Corp. Inventec Appliances Corp. Inventec (Cayman) Corp. IEC (Cayman) Corporation Inventec (Czech), S.R.O. Inventec Investment Co., Ltd. Inventec Solar Energy Corporation Inventec Development Japan Corporation Inventec Japan Corporation AIMobile Co., Ltd. Inventec Manufacturing (India) Private Limited	Taipei Hong Kong USA New Taipei City Cayman Cayman Czech Taipei Taoyuan Japan Japan Taipei India	Electronic dictionary Investing in Mainland China and import and export business Investment of holding company in America Wireless terminal products Holding Company Holding Company Computer products assembly operations Investment Company Developing, production and selling of multicrystalline solar cells Developing, designing and selling computer peripherals Trading and management service Developing, production and selling of intelligent mobile device Computer products assembly operations	420,347 167,162 159,003 9,656,877 9,812,963 739,500 85,921 1,000,000 1,087,800 630,845 2,954 182,500 281,691	420,347 167,162 159,003 9,656,877 9,812,963 739,500 85,921 1,000,000 1,087,800 630,845 2,954 220,000 281,691	23,405 2,500 5,000 536,857 301,768 25,000 - 108,800 108,150 45 - 18,250 55,994	37.53% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 33.45% 100.00% 100.00% 73.00% 99.99%	210,311 365,614 1,281,813 9,246,421 21,100,327 1,178,105 114,544 124,923 (296,204) 17,677 3,181 122,282 10,738	37.53% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 33.45% 100.00% 100.00% 73.00% 99.99%	(47,675) 10,896 62,310 679,517 7,722,888 273,585 78,541 (52,959) (1,695,966) (1,036) 414 (81,693) 34,347	(17,892) 10,896 62,310 679,517 7,722,888 273,585 78,541 (52,959) (546,206) (1,036) 414 (44,924) 35,455	Associate under equity method Subsidiary 〞〞〞〞〞〞〞〞〞〞〞

359

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Investor company	Investee company	Location	Main businesses and products	Original inves	tment amount	Balance a	s of December 3	1, 2020	Highest percentage of ownership during the year	Net income (loss) of the investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares/Units (In thousands)	Percentage of ownership	Carrying value
Inventec Investment Co., Ltd. 〞 Inventec Appliances Corp. 〞〞 Inventec Appliances (Cayman) Holding Corp. 〞 Inventec Appliences (Pudong) Corp.	Inventec Solar Energy Corporation Inventec Manufacturing (India) Private Limited Inventec Appliances (Cayman) Holding Corp. Gainia Intellectual Asset Services, Inc. Inventec Solar Energy Corporation Inventec Appliances (USA) Distribution Corp. Inventec Appliances Corporation USA, Inc. Inventec Appliances (Malaysia) SDN. BHD.	Taoyuan India Cayman Taipei Taoyuan USA USA Malaysia	Developing, production and selling of multicrystalline solar cells Computer products assembly operations Holding Company Intellectual property rights integrative services Developing, production and selling of multicrystalline solar cells Selling of MP3 Player, PDA and science plotter Selling services Manufacture and sale of electronic materials and products	150,000 28 5,683,886 6,400 311,160 22,784 1,424 501,784	150,000 28 5,683,886 6,400 311,160 22,784 1,424 -	15,000 6 199,575 205 30,930 400 10 71,000	4.64% 0.01% 100.00% 38.90% 9.57% 100.00% 100.00% 100.00%	(44,540) 1 16,545,017 1,332 (91,841) 92,687 13,003 482,340	4.64% 0.01% 100.00% 38.90% 9.57% 100.00% 100.00% 100.00%	(1,695,966) 34,347 (300,331) (1,096) (1,695,966) 1,127 885 (19,102)	- - - - - - - -	Associate Company 〞〞 Associate under equity method Associate Company 〞〞〞

Note 1: The transactions with the Group were eliminated in the consolidated financial statements.

Note 2: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports. Note 3: According to the regulations, investment companies other than the Company are not required to disclose the share of income / loss of investees.

360

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(c) Information on investment in Mainland China:
The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (losses) of the investee	Percentage of ownership	Highest percentage of ownership during the yeas	Investment income (losses) (Note 2)	Book value	Accumulated remittance of earnings in current period (Note 8)
					Out-flow	Inflow
Inventec (Shanghai) Service Co., Ltd Inventec (ChongQing) Service Co., Ltd Inventec (Pudong) Co., Ltd. Inventec (Shanghai) Co., Ltd. Inventec (ChongQing) Corporation Inventec (Pudong) Technology Corp. Inventec Electronics (Tianjin) Co., Ltd. Inventec (Beijing) Electronics Technology Co., Ltd. Inventec Hi-Tech Corporation Inventec Huan Hsin (Zhejiang) Technology Co., Ltd. Inventec Asset-Management (Shanghai) Corporation Saint Investment consulting corporation Inventec Appliances (Shanghai) Co., Ltd. Inventec Appliances (Pudong) Corp. Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanjing) Corp.	Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Software production Software production Multimedia computer and system parts assembling Complete of the electronic computer and product and sale of external equipment Equipment leasing, storage, technological development and saleof computer Business management consulting Electronic communication and products assemble Electronic communication and products assemble Electronic communication and products assemble House leasing	188,679 28,480 1,424,000 2,087,127 2,136,000 1,668,692 142,400 41,296 1,424,000 817,376 1,869,030 87,296 1,469,568 2,192,960 1,936,640 142,400	(2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (3) (3) (2) (2) (2) (2)	56,960 28,480 1,424,000 840,160 2,136,000 1,424,000 121,040 41,296 1,424,000 822,474 - - 1,370,401 2,192,960 1,196,160 255,793	- - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - -	56,960 28,480 1,424,000 840,160 2,136,000 1,424,000 121,040 41,296 1,424,000 822,474 - - 1,370,401 2,192,960 1,196,160 255,793	(971) (1,330) 3,550,998 93,305 2,365,436 2,274,369 2,345 1,516 (57,017) (2,120) (22,349) 33 (34,975) (569,471) 308,573 12,695	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 78.00% 100.00% 100.00% 100.00% 100.00% 100.00%	100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 78.00% 100.00% 100.00% 100.00% 100.00% 100.00%	(971) (1,330) 3,550,998 93,305 2,365,436 2,273,877 2,345 1,516 (57,017) (2,120) (17,432) 33 (34,975) (545,196) 306,693 12,695	123,206 40,042 4,126,672 1,859,116 7,961,132 6,615,064 230,567 77,358 1,138,394 3,837 1,374,393 87,330 1,771,832 8,854,398 5,291,450 382,786	30,234 - - - 2,242,107 321,599 149,517 - - - - - 1,535,981 2,297,117 1,636,736 85,353

361

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of investee	Main businesses and products	Total amount o paid-in capital	f Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (losses) of the investee	Percentage of ownership	Highest percentage of ownership during the yeas	Investment income (losses) (Note 2)	Book value	Accumulated remittance of earnings in current period (Note 8)
					Out-flow	Inflow
Inventec Appliances (XI'AN) Corporation Inventec Appliances (Nanchang) Corp. APEX Business Management & Consulting (Shanghai) Co., Ltd. Inventec Appliances (Shanghai) Enterprise Inventec Appliances (Nan chang) Intelligent Manufacturing Co., Ltd.	Electronic communication and products assemble Electronic communication and products assemble Business Management Development and consultation on software and hardware; as well as selling of electronic products Manufacture of wearable devices and developing, design, manufacture and sale of telecommunications	113,920 59,808 2,190 34,919 261,889	(2) (2) (3) (3) (3)	113,920 59,808 - - -	- - - - -	- - - - -	113,920 59,808 - - -	10,358 (50,163) 25,252 (2,026) (81,203)	100.00% 100.00% 100.00% 100.00% 100.00%	100.00% 100.00% 100.00% 100.00% 100.00%	10,358 (50,163) 25,252 (2,026) (81,203)	50,757 81,258 84,036 25,385 105,694	- - - - -

2. Limitation on investment in Mainland China:

Name of Company	Accumulated Investment in Mainland China as of December 31, 2020	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 3,4,7)
The Company Inventec Appliances Corp.	8,378,214 5,252,510	8,378,214 5,252,510	- 5,086,180

Note 1: There are three ways of investments as following:

(a) Direct investment in Mainland China.
(b) Indirect investment in Mainland china through a subsidiary in a third place.
(c) Others
Note 2: The base of recognition of investment income (loss) is the financial statement reviewed by CPA or book value of the investee company.
Note 3: In accordance with the regulation of amended limitation calculation of Investment Commission in 29 August, 2008, MOEA (IDB) committed the Company were in the scope of operating headquarter; therefore there is no need to calculate the limitation.
Note 4: The upper limit on investment of Inventec Appliances Corp. is the higher of 60% of net value or 60% of consolidated net value.
Note 5: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.
Note 6: The amount of foreign currencies was exchanged to New Taiwan Dollars in historical exchange rates.
Note 7: After the accumulated investment in Mainland China as of December 31, 2020, deducted the accumulated remittance of earnings in current period, the difference of Inventec Appliance Corp. was still under the upper limit on investment.

Note 8: The inter-company transactions with the Group were eliminated in the consolidated financial statements

3. Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China for the year “ ” ended December 31, 2020, are disclosed in Information on significant transactions .

(d) Information on major shareholder: No shareholders hold more than 5% shares.

362

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(14) Segment Information

(a) General information

The Group reportable segments: core department and other department. The core department manufactures computer products and sells them to customers. The other department develops and manufactures emerging environmental energy.

The reportable segments are the Group’s strategic divisions. They offer different products and services, and are managed separately because they require different technological and marketing strategies.

(b) Information about reportable segments and their measurement and reconciliations

	For the year ended December 31, 2020	For the year ended December 31, 2020	Total 508,294,198 -
Core $ 507,114,021 -	Others 1,180,177 -	Adjustment and Elimination - -
$ 507,114,021	1,180,177	-	508,294,198
$ 1,006,066 3,383,282 - $ 12,065,474	48,178 470,258 952,222 (1,719,769)	- - - -	1,054,244 3,853,540 952,222 10,345,705
$ -	-	-	-
	For the year ended December 31, 2019		Total 500,952,813 -
Core $ 496,838,196 -	Others 4,114,617 -	Adjustment and Elimination - -
$ 496,838,196	4,114,617	-	500,952,813
$ 1,685,343 3,474,967 - $ 7,506,185	75,757 678,755 344,916 (997,124)	- - - -	1,761,100 4,153,722 344,916 6,509,061
$ -	-	-	-

363

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

INVENTEC CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Taxation or extraordinary activity is not able to be allocated to each reportable segment. In addition, not all reportable segments include depreciation and amortization of significant non-cash items. The reportable amount is the same as the report used by the chief operating decision maker.

The operating segment accounting policies are similar to those described in Note (2) “Significant accounting policies”. Reportable segment profit or loss is based on operating profit or loss before taxation, and as the base of performance evaluation.

Since the evaluated amount of the Group’s asset was not provided to the chief operating decision maker, the evaluated amount of the assets which should be disclosed was 0.

Segment information was disclosed in consolidated financial statement; therefore it was not disclosed in individual financial statement.

Revenue from the external customers of the Group was as follows:

Products and Services Computer product Rendering of services Others Total	For the years ended December 31, 2020 2019 $ 506,413,658 495,945,745 700,363 892,451 1,180,177 4,114,617	For the years ended December 31, 2020 2019 $ 506,413,658 495,945,745 700,363 892,451 1,180,177 4,114,617
	2020 $ 506,413,658 700,363 1,180,177
	$ 508,294,198	500,952,813

(d) Geographical information

In presenting information on the basis of geography, the revenue is based on the geographical location of customers and non-current assets are based on the geographical location of the assets.

By region Revenue from external customers: Taiwan USA Japan Hong Kong, Macao and Mainland China Other countries Total	For the years ended December 31, 2020 2019 $ 33,017,095 9,545,828 345,674,267 341,699,308 7,723,625 13,200,986 68,546,619 67,922,049 53,332,592 68,584,642	For the years ended December 31, 2020 2019 $ 33,017,095 9,545,828 345,674,267 341,699,308 7,723,625 13,200,986 68,546,619 67,922,049 53,332,592 68,584,642
	2020 $ 33,017,095 345,674,267 7,723,625 68,546,619 53,332,592
	$ 508,294,198	500,952,813

364

By region Non-current assets Taiwan Mainland China USA Other countries Total	2020.12.31 $ 15,677,635 16,105,546 364,272 1,036,387	2019.12.31 17,738,485 17,056,370 393,666 610,850
	$ 33,183,840	35,799,371

Non-current assets include property, plant and equipment, investment property, intangible assets and other assets, not including financial instruments, deferred tax assets, pension fund assets and rights arising from an insurance contract (non-current).

(e) Major customers: Revenue

For	the years ended	December 31,
	2020	2019
$	333,461,728	325,666,020

365

Inventec Corporation

Chairman: Cho, Tom-Hwar

366

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AI assistant

INVENTEC — Annual Report 2020

52026_rns_2021-07-30_71a6ce09-8849-4b25-9e27-d6d613b1a7cd.pdf

Inventec Corporation

2020 Annual Report

Notice to readers

3. Common Share Transfer Agent and Registrar

4. Information of the Certified Public Accountants for the Latest Financial Repot

5. Overseas Trade Places for Listed Negotiable Securities

6. Corporate Website

Contents

Letter to Shareholders

Business performance report for the year 2020:

Corporate governance and corporate social responsibility

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

2021 Business plan and outlook

I. Products business:

II. Digital transformation:

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

Ⅰ . Company Profile

1.1 Date of Establishment: June 9, 1975

1.2 Company Milestones

1975

1985

1988

1996

1997

1998

1999

2000

2008

2010

2015

2016

2017

2018

2019

2020

2021

Ⅱ . Corporate Governance Report

2.1 Organization

2.2 Directors, Supervisors and Managers’ Information

2.2.1 Directors

2.2.1.1 Directors’ Information 2021.05.12

2.2.1.2.1 Major Shareholders of Inventec Corporation’s Institutional Shareholders: None

2.2.1.3 Directors’ Professional Knowledge and Independence Information

2.2.2 Managers’ Information 2021.05.12

2.2.3 Remuneration Paid to Directors (Including Independent Directors), Presidents and Vice Presidents

2.2.3.1 Directors’ Remuneration (Including Independent Directors) Unit: NT$ Thousands

2.3 Corporate Governance Practices

2.3.1 Information of Board Meeting Operation

2.3.2 Operation of the Audit Committee ：

2.3.3 Participation of Supervisor in Board Meeting: NA. The Company has established the audit committee on June 16, 2017.

2.3.4 Corporate Governance Implementation Status and Deviations from “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”

12. Certificate of License

13. Board members and the important management succession plan of Company

2.3.5 Status of Remueration Committee

2.3.5.1 Remueration Committee

2.3.5.2 The State of the Remueration Committee's Implementation

A. The remueration committee comprised of 3 members.

2.3.5.3 Operation of the Salary and Remuneration Committee in 2020

2.3.6 Corporate Social Responsibility and Deviations from “The Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

2.3.7 Ethical Corporate Management and Deviations from “The Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies

2.3.8 Corporate Governance Guideline and Regulations

2.3.9 Other Important Information Regarding Corporate Governance: None.

2.3.10 Internal Control System

2.3.10.1 Statement of Internal Control System

2.3.12 Resolutions Reached in the Shareholders’ Meeting or by the Board of Directors in the Most Recent Years and up to the Date of the Annual Report Printed:

2.3.12.1 The important resolutions of the general shareholder meeting:

2.3.12.2 The important resolutions of the Board of Directors:

2.4. Certified Public Accountant (CPA) Fee Information

2.4.1 Range of CPAs’ Fee

2.4.2 For the Non-Audit Fee Paid to CPA, CPA Firm, and Its Affiliate Greater than 25% of the Audit Fee, the Amount of Audit and Non-Audit Fee and Content of Non-Audit Service Should Be Disclosed:

2.4.3 If the CPA Firm Changes, and the Audit Fee Paid in the Year of such Change is Reduced from the Audit Fee of the Previous Year, the Amounts of the Audit Fees Before and After such Change and the Reason of such Change Should Be Disclosed: None

2.4.4 If the Audit Fee Is Reduced by More than 10% from Last Year, the Amount, Ratio, and Reason for the Reduction of the Audit Fee Should Be Disclosed: None

: 2.5 Information Regarding the Replacement of CPA

2.5.1 Former CPA Information:

2.5.2 Successor CPA Information:

2.5.3 Reply of the Previous Accountant: As part of the internal rotation of the accounting department, hence it is not applicable.

2.6 Information on Services of the Company’s Chairman, Presidents, Financial or Accounting Managers at the Accounting Firm or Its Affiliates

INVENTEC Annual Report 2020

`Ⅱ` . Corporate Governance Report

2.3.2 Operation of the Audit Committee `：`