INVENTEC - Audit Report / Information 2019

Stock Code:2356

INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Auditors’ Report For the Years Ended December 31, 2019 and 2018

Address: No.66, Hougang Street, Shinlin District, Taipei City, Taiwan, R.O.C. Telephone: 886-2-2881-0721

The independent auditors’ 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’ report and consolidated financial statements, the Chinese version shall prevail.

〜 1 〜

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Representation Letter	3
4. Independent Auditors’ Report	4
5. Consolidated Balance Sheets	5
6. Consolidated Statements of Comprehensive Income	6
7. Consolidated Statements of Changes in Equity	7
8. Consolidated Statements of Cash Flows	8
9. Notes to the Consolidated Financial Statements
(1)Overview	9
(2)Financial Statements Authorization Date and Authorization Process	9
(3)New Standards, Amendments and Interpretations not yet Adopted	9～12
(4)Summary of Significant Accounting Policies	13～33
(5)Significant Accounting Judgments, Estimation, Assumptions, and Sources	33～34
of Estimation Uncertainty
(6)Explanation to Significant Accounts	34～74
(7)Related Party Transactions	74～76
(8)Pledged Assets	77
(9)Significant Commitments and Contingencies	77～79
(10)Losses Due to Major Disasters	79
(11)Subsequent Events	79
(12)Other	80
(13)Other disclosures
(a) Information on significant transactions	80～88
(b) Information on investment	88～89
(c) Information on investment in Mainland China	90～92
(14)Segment Information	92～94

〜 2 〜

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, 2019 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: Tom-Hwar Cho Date: March 24, 2020

〜 3 〜

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KPMG

台北市11049信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 (2) 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 (2) 8101 6667 Xinyi Road, Taipei City 11049, Taiwan (R.O.C.) Internet 網址 kpmg.com/tw

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, 2019 and 2018, 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, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the year ended December 31, 2019 and 2018 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.

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.

〜 4 〜

KPMG, a Taiwan partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

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 Group’s policies.

2. The offsetting agreements of financial assets and liabilities

Please refer to Note 4(g), 6(b) and 6(w) 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 2019 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.

Other Matter

Inventec Corporation has additionally prepared its parent company only financial statements as of and for the years ended December 31, 2019 and 2018, 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.

〜 4-1 〜

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.

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 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 Group’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 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.
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.

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.

〜 4-2 〜

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 LiuFong Yang.

KPMG

Taipei, Taiwan (Republic of China) March 24, 2020

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to 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.

〜 4-3 〜

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

ASSETS Current Assets： 1100 Cash and cash equivalents (Notes (4) and (6)(a)) 1110 Current financial assets at fair value through profit or loss (Notes (4) and (6)(b)) 1120 Current financial assets at fair value through other comprehensive income (Notes (4) and (6)(b)) 1170 Accounts receivable, net (Notes (4) and (6)(c)) 1200 Other receivables, net (Notes (4), (6)(d) and (7)) 1310 Inventories, manufacturing business, net (Notes (4) and (6)(e)) 1479 Other current assets, others (Notes (6)(k)) Non-current assets： 1517 Non-current financial assets at fair value through other comprehensive income (Notes (4) and (6)(b)) 1550 Investments accounted for using equity method, net (Notes (4) and (6)(f)) 1600 Property, plant and equipment (Notes (4) and (6)(g)) 1755 Right-of-use assets (Notes (4) and (6)(h)) 1760 Investment property, net (Notes (4) and (6)(i)) 1780 Intangible assets (Notes (4) and (6)(j)) 1900 Other non-current assets (Notes (4), (6)(k) and (6)(p)) TOTAL ASSETS	2019.12.31 Amount % $ 18,952,967 10 3,958,468 2 1,194,430 1 88,491,343 46 754,975 - 37,345,542 19 1,469,984 1 152,167,709 79 2,243,738 1 247,194 - 30,729,458 16 3,546,126 2 693,315 - 880,774 1 2,584,539 1 40,925,144 21 $ 193,092,853 100	2018.12.31 Amount % 25,062,511 12 2,467,479 1 479,397 - 92,234,720 45 2,534,539 2 42,938,996 21 2,186,792 1 167,904,434 82 359,816 - 273,356 - 30,324,516 15 - - 740,269 - 885,307 - 5,316,224 3 37,899,488 18 205,803,922 100 LIABILITIES AND EQUITY Current Liabilities： 2100 Short-term borrowings (Note (6)(l)) 2120 Current financial liabilities at fair value through profit or loss (Notes (4) and (6)(b)) 2130 Current contract liabilities (Note (4) and (6)(t)) 2170 Accounts payable 2230 Current tax liabilities 2200 Other payables (Note (7)) 2322 Long-term borrowings, current portion (Note (6)(l)) 2280 Current lease liabilities (Notes (4) and (6)(m)) 2399 Other current liabilities, others Non-current Liabilities： 2540 Long-term borrowings (Note (6)(l)) 2640 Net defined benefit liability, non-current (Notes (4) and (6)(o)) 2580 Non-current lease liabilities (Notes (4) and (6)(m)) 2670 Other non-current liabilities, others (Notes (4) and (6)(p)) Total Liabilities Equity attributable to owners of parent： 3110 Ordinary share (Note (6)(q)) 3200 Capital surplus (Note (6)(q)) 3300 Retained earnings (Note (6)(q)) 3400 Other equity interest (Note (6)(q)) Total equity attributable to owners of parent 36XX Non-controlling interests Total Equity TOTAL LIABILITIES AND EQUITY	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 5 127,046,276 66 3,883,134 2 640,401 - 976,791 - 3,575,023 2 9,075,349 4 136,121,625 70 35,874,751 19 2,913,461 2 18,304,941 9 (1,822,005) (1) 55,271,148 29 1,700,080 1 56,971,228 30 $ 193,092,853 100	2018.12.31 Amount % 31,301,280 15 4,958 - 6,717,641 4 76,453,829 37 2,389,874 1 12,638,279 6 556,670 - - - 10,629,884 5 140,692,415 68 3,409,061 2 633,815 - - - 3,347,114 2 7,389,990 4 148,082,405 72 35,874,751 18 2,912,889 1 18,223,198 9 (1,646,357) (1) 55,364,481 27 2,357,036 1 57,721,517 28 205,803,922 100

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

〜 5 〜

(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, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

For they	ears ende	d December 31,
2019	% 100 95 5 1 1 2 - 4 1 - - - - - 1 - 1 - - - - - - - - - - 1 1 - 1 1 - 1 1.54 1.53	2018 Amount % 506,884,018 100 483,002,434 95 23,881,584 5 2,712,807 - 4,887,598 1 8,805,994 2 (15,530) - 16,390,869 3 7,490,715 2 1,161,902 - 1,259,503 - (1,768,283) - (10,575) - 642,547 - 8,133,262 2 2,814,266 1 5,318,996 1 (10,279) - (847,613) - (30,865) - (3,804) - (884,953) - (30,094) - 270 - - - (29,824) - (914,777) - 4,404,219 1 6,499,856 1 (1,180,860) - 5,318,996 1 5,599,822 1 (1,195,603) - 4,404,219 1 1.81
Amount $ 500,952,813 478,121,718 22,831,095 2,607,083 4,303,565 9,523,033 (6,081) 16,427,600 6,403,495 1,347,043 544,082 (1,761,100) (24,459) 105,566 6,509,061 1,672,064 4,836,997 (29,862) 799,514 (56) (6,757) 776,353 (1,026,850) (1,597) - (1,028,447) (252,094) $ 4,584,903 $ 5,507,960 (670,963) $ 4,836,997 $ 5,287,308 (702,405) $ 4,584,903 $ $
		1.80

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

〜 6 〜

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) REVIEWED ONLY, NOT AUDITED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Retained Earnings	Retained Earnings	Retained Earnings	Other Equity Intere	Other Equity Intere
			Exchange Differences on Translation of Foreign Financial Statements (972,359) - (972,359) - (17,891) (17,891) - - - - - (990,250) - (1,014,884) (1,014,884) - - - - - - (2,005,134)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income - 218,474 218,474 - (874,581) (874,581) - - - - - (656,107) - 819,200 819,200 - - - - 20,036 - 183,129
Legal Reserve 9,474,128 - 9,474,128 - - - 675,491 - - - - 10,149,619 - - - 649,986 - - - - - 10,799,605	Special Reserve - - - - - - - 107,546 - - - 107,546 - - - - 1,538,811 - - - - 1,646,357	Unappropriated Retained Earnings
		7,528,408 647,702 8,176,110 6,499,856 (7,562) 6,492,294 (675,491) (107,546) (5,919,334) - - 7,966,033 5,507,960 (24,968) 5,482,992 (649,986) (1,538,811) (5,381,213) - (20,036) - 5,858,979

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

〜 7 〜

(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, 2019 and 2018

(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 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
Impairment loss on non-financial assets
Unrealized foreign exchange loss (gain)
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
Decrease (increase) in accounts receivable
Decrease (increase) in other receivables
Decrease (increase) in inventories
Decrease in other current assets
Total changes in operating assets
Changes in operating liabilities:
Increase (decrease) in financial liabilities held for trading
(Decrease) increase in contract liabilities
(Decrease) increase in accounts payable
Decrease in other payables
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 (outflow) generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities

2019
2018
$ 6,509,061
8,133,262
3,188,382
3,474,042
965,340
1,006,415
(6,081)
(15,530)
1,761,100
1,768,283
(1,347,043)
(1,161,902)
(20,979)
(30,675)
1,040
-
24,459
10,575
(69,439)
(57,338)
(628,476)
-
-
(37,428)
344,916
155,168
30,968
(59,944)
(46,194)
11,045
4,197,993
5,062,711
(266,204)
(404,343)
1,763,074
(15,075,146)
1,772,736
(1,740,079)
4,904,540
(2,642,456)
176,779
525,278
8,350,925
(19,336,746)
103,217
(16,710)
(256,236)
479,640
(3,043,534)
3,728,140
(434,046)
(292,519)
(1,076,565)
(1,512,461)
(44,055)
(47,958)
(4,751,219)
2,338,132
3,599,706
(16,998,614)
7,797,699
(11,935,903)
14,306,760
(3,802,641)
1,367,420
1,490,071
20,979
30,675
(1,995,909)
(1,804,736)
(1,449,100)
(1,448,917)
12,250,150
(5,535,548)

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

〜 8 〜

(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, 2019 and 2018

(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 liquidation 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
Acquisition of investment properties
Decrease in other financial assets
Increase in other non-current assets
Net cash flows (used in) from investing activities
Cash flows from financing activities:
Decrease in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Payment of lease liabilities
(Decrease) increase in other non-current liabilities
Cash dividends paid
Change in non-controlling interests
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

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

〜 8-1 〜

(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, 2019 and 2018

(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.

The consolidated financial statements of the Company as of and for the year ended December 31, 2019 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 24, 2020.

(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 following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2019.

are effective for annual periods beginning on or after January 1, 2019.
	Effective date
New, Revised or Amended Standards and Interpretations	per IASB
IFRS 16 “Leases”	January 1, 2019
IFRIC 23 “Uncertainty over Income Tax Treatments”	January 1, 2019
Amendments to IFRS 9 “Prepayment features with negative compensation”	January 1, 2019
Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”	January 1, 2019
Amendments to IAS 28 “Long-term interests in associates and joint ventures”	January 1, 2019
Annual Improvements to IFRS Standards 2015–2017 Cycle	January 1, 2019

Except for the following items, the Group believes that the adoption of the above IFRSs would not have any material impact on its consolidated financial statements. The extent and impact of signification changes are as follows:

(i) IFRS 16“Leases”

IFRS 16 replaces the existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

〜 9 〜

(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, 2019 and 2018

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

The Group applied IFRS 16 using the modified retrospective approach. The details of the changes in accounting policies are disclosed below,

1) Definition of a lease

Previously, the Group determined at contract inception whether an arrangement is or contains a lease under IFRIC 4. Under IFRS 16, the Group assesses whether a contract is or contains a lease based on the definition of a lease, as explained in Note 4(m).

On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions are leases. The Group applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a lease. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after January 1, 2019.

2) As a lessee

As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Group. Under IFRS 16, the Group recognizes right-of-use assets and lease liabilities for most leases – i.e. these leases are on-balance sheet.

The Group decided to apply recognition exemptions to short-term leases and leases of low-value assets of dormitories, vehicles and leases of other equipment.

Leases classified as operating leases under IAS 17

At transition, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group’s incremental borrowing rate as at January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

In addition, the Group used the following practical expedients when applying IFRS 16 to leases.

－ Applied a single discount rate to a portfolio of leases with similar characteristics.
－ Adjusted the right-of-use assets by the amount of IAS 37 onerous contract provision immediately before the date of initial application, as an alternative to an impairment review.

〜 10 〜

(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, 2019 and 2018

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

－ Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term.
－ Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
－ Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.
Leases previously classified as finance leases

For leases that were classified as finance leases under IAS 17, the carrying amount of the right-of-use asset and the lease liability at January 1, 2019 are determined at the carrying amount of the lease asset and lease liability under IAS 17 immediately before that date.

3) As a lessor

The Group is not required to make any adjustments on transition to IFRS 16 for leases in which it acts as a lessor, except for a sub-lease. The Group accounted for its leases in accordance with IFRS 16 from the date of initial application.

Under IFRS 16, the Group is required to assess the classification of a sub-lease by reference to the right-of-use asset, not the underlying asset. On transition, the Group reassessed the classification of a sub-lease contract previously classified as an operating lease under IAS 17. The Group concluded that the sub-lease is a finance lease under IFRS 16.

4) Impacts on financial statements

On transition to IFRS 16, the Group recognised additional $3,589,104 thousands of rightof-use assets and $1,074,436 thousands of lease liabilities, the difference resulting from land access and the difference of lease smoothing. When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate at January 1, 2019. The weighted-average rate applied is 2.29%.

The explanation of differences between operating lease commitments disclosed at the end of the annual reporting period immediately preceding the date of initial application, and lease liabilities recognized in the statement of financial position at the date of initial application disclosed as follows:

〜 11 〜

(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, 2019 and 2018

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

Operating lease commitment at December 31, 2018 as disclosed in
the Group’s
consolidated financial statements
Recognition exemption for:
short-term leases
leases of low-value assets
Variable lease payment based on an index or a rate
Discounted using the incremental borrowing rate at January 1, 2019
Finance lease liabilities recognized as at December 31, 2018
Lease liabilities recognized at January 1, 2019

January 1, 2019
$ 1,140,086
(26,303)
(1,592)
(12,935)
$
1,099,256
$ 1,074,436
-
$
1,074,436

(b) The impact of IFRS endorsed by FSC but not yet effective

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2020 in accordance with Rule No. 1080323028 issued by the FSC on July 29, 2019:

	Effective date
New, Revised or Amended Standards and Interpretations	per IASB
Amendments to IFRS 3 “Definition of a Business”	January 1, 2020
Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”	January 1, 2020
Amendments to IAS 1 and IAS 8 “Definition of Material”	January 1, 2020

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

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

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

The Group assessed that the above IFRSs may not be relevant to the Group.

〜 12 〜

(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, 2019 and 2018

(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.

(c) Basis of consolidation
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 ebility to affect those returns through its power over the entity.

〜 13 〜

(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, 2019 and 2018

(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

Investor	Name of Subsidiary	Principal activity	Shareholding Ratio 2019.12.31 2018.12.31 Note	Shareholding Ratio 2019.12.31 2018.12.31 Note
			2019.12.31
The Company 〞〞〞〞〞〞〞〞 The Company、 Inventec Investments Co., Ltd. and Inventec Appliances Corp. The Company and Inventec Investments Co., Ltd.	Inventec Corporation (Hong Kong) Ltd. Inventec Holding (North America) Corp. Inventec (Cayman) Corp. IEC (Cayman) Corporation Inventec (Czech), s.r.o. Inventec Development Japan Corporation Inventec Investments Co., Ltd. AIMobile Co., Ltd. Inventec Japan Corporation Inventec Solar Energy Corporation E-TON Solar Tech. Co., Ltd	Investing in Mainland China and import and export business Investment of holding company in America Holding Company Holding Company Computer products assembly operations Developing, designing and selling computer peripherals Investment company Developing, production and selling of intelligent mobile devices Trading and management services Developing, production and selling of multi-crystalline solar cells Manufacturing and selling of solar cells	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 55.00 % 100.00 % 47.65 % 34.65	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 55.00 % - The subsidiary was established on August 29, 2019. % 47.65 % 34.65

〜 14 〜

(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, 2019 and 2018

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

Investor	Name of Subsidiary	Principal activity	Shareholding Ratio 2019.12.31 2018.12.31 Note	Shareholding Ratio 2019.12.31 2018.12.31 Note
			2019.12.31
The Company The Company and Inventec Investments Co., Ltd. Inventec Corporation (Hong Kong) Ltd. 〞 Inventec (Cayman) Corp. and Inventec (Pudong) Technology Corp. Inventec (Cayman) Corp. 〞〞〞〞〞〞 Inventec (Cayman) Corp. and IEC (Cayman) Corporation Inventec (Shanghai) Corp. Inventec Holding (North America) Corp. 〞〞〞〞 Inventec Appliances Corp. Inventec Appliances (Cayman) Holding Corp. 〞〞〞〞〞〞〞〞	Inventec Appliances Corp. Inventec Manufacturing (India) Private Limited Inventec Electronics (Tianjin) Co., Ltd. Inventec (Beijing) Electronics Technology Co., Ltd. Inventec (Shanghai) Corp. Inventec (Pudong) Corp. Inventec (Pudong) Technology Corp. Inventec (Shanghai) Service Co., Ltd. Inventec Hi-Tech Corp. Inventec Huan Hsin (Zhejiang) Technology Co., Ltd. Inventec (Chongqing) Service Co., Ltd TPV-Inventa Holding Ltd. Inventec (Chongqing) Corp. Inventec Asset-Management (Shanghai) Corporation Inventec (USA) Corporation Inventec Manufacturing (North America) Corporation Inventec Configuration (North America) Corporation Inventec Distribution (North America) Corporation IEC Technologies, S. de R.L. de C.V. Inventec Appliances (Cayman) Holding Corp. Inventec Appliances (USA) Distribution Corp. Inventec Appliances Corporation USA, Inc. 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) Corporation Inventec Appliances (Malaysia) SDN. BHD.	Wireless terminal products Computer product assembles and warranty services Electronic product software and hardware development manufacturing 〞 Electronic product software and hardware development manufacturing 〞〞〞〞 Complete of the electronic computer and product and sale of external equipment Electronic product software and hardware development manufacturing Holding Company Assembly and sale of computer products Equipment leasing, Storage, technological development and sale of computer Computer product assembles 〞〞〞〞 Holding Company Marketing promotion Customer information service Telecommunication research Electronic communication and products manufacturing 〞 House leasing Telecommunication research and service 〞 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 % 90.00 % 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	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 Inventec (Pudong) Technology Corp. participated in the cash capital increase of Inventec (Shanghai) Corp. in March, 2018. % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 90.00 % 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 The subsidiary was established on September 27, 2018.

〜 15 〜

(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, 2019 and 2018

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

Investor	Name of Subsidiary	Principal activity	Shareholding Ratio 2019.12.31 2018.12.31 Note	Shareholding Ratio 2019.12.31 2018.12.31 Note
			2019.12.31
Inventec Appliances (Shanghai) Co., Ltd. 〞〞	Inventec Appliances (Shanghai) Enterprise Co., Ltd. APEX Business Management & Consulting (Shanghai) Co., Ltd. Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	Development and consultation on software and hardware; as well as selling of electronic products Business management Telecommunication research and manufacturing	% 100.00 % 100.00 % 100.00	% 100.00 % 100.00 % 100.00 The subsidiary was established on June 21, 2018.

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.

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 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.

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.

〜 16 〜

(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, 2019 and 2018

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

(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 had and demand deposits. Cash equipments 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.

(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.

〜 17 〜

(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, 2019 and 2018

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

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.

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.

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.

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.

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.

〜 18 〜

(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, 2019 and 2018

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

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 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.

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.

〜 19 〜

(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, 2019 and 2018

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

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.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 month 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 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..

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 charge 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 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.

〜 20 〜

(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, 2019 and 2018

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

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

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.

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.

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 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.

(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.

〜 21 〜

(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, 2019 and 2018

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

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.

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.

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.

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.

〜 22 〜

(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, 2019 and 2018

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

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 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 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.

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.

〜 23 〜

(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, 2019 and 2018

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

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

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

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.

〜 24 〜

(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, 2019 and 2018

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

(m) Leases

Applicable from January 1, 2019

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 leasee

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 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.

〜 25 〜

(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, 2019 and 2018

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

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.

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 is 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 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.

〜 26 〜

(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, 2019 and 2018

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

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.

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 rightof-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’.

Applicable before January 1, 2019

1.Lessor

Lease income from an operating lease is recognized in profit or loss on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense over the lease term on the same basis as the lease income. Incentives granted to the lessee to enter into the operating lease are spread over the lease term on a straight-line basis so that the lease income received is reduced accordingly.

Contingent rents are recognized as income in the period when the lease adjustments are confirmed.

2.Lessee

Other leases are operating leases and are not recognized in the Group’s statement of financial position.

Payments made under operating lease (excluding insurance and maintenance expenses) are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.

〜 27 〜

(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, 2019 and 2018

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

(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.

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

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:

1)	Trademark rights	10 years
2)	Computer software cost	1 years~ 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.

〜 28 〜

(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, 2019 and 2018

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

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.

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

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.

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.

〜 29 〜

(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, 2019 and 2018

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

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.

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.

〜 30 〜

(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, 2019 and 2018

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

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.

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 nonvesting 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.

〜 31 〜

(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, 2019 and 2018

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

(t) 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 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.

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.

〜 32 〜

(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, 2019 and 2018

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

(u) Business combination

The Group accounts for business combiations using the acquisition method. The goodwill arising from an aquisition 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 noncontrolling interest are measured at their acquisition-date fair values, unless another measurement basis is required by IFRSs endorsed by F.S.C..

(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.

〜 33 〜

(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, 2019 and 2018

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

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.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

(a) Offsetting financial instruments

The Group’s financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

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:

(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.

(6) Explanation to Significant Accounts

(a) Cash and cash equivalents

Cash Demand deposits and checking accounts Time deposits Cash and cash equivalents in consolidated statement of cash flows	2019.12.31 2018.12.31 $ 9,416 11,059 16,249,163 19,719,122 2,694,388 5,332,330 $ 18,952,967 25,062,511

Refer to Note 6(w) for the sensitivity analysis and interest rate risk of the financial assets and liabilities of the Group.

〜 34 〜

(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, 2019 and 2018

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

(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
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

2019.12.31
2018.12.31
$ -
3,997
125,305
3,007
115,909
57,885
3,660,455
2,338,037
56,799
64,553
$
3,958,468
2,467,479
$ 108,175
3,398
-
1,560
$
108,175
4,958

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:

Foreign exchange swap Forward Forward Foreign exchange swap		2019.12.31
	Contract Amount USD 335,000	Currency Maturity Period USD to TWD 2020.02.18-2020.03.18 2018.12.31
	Contract Amount USD 20,000 USD 40,000 USD 40,000	Currency Maturity Period USD to CNY 2019.02.15 USD to TWD 2019.01.07-2019.01.09 USD to TWD 2019.01.18-2019.02.01

〜 35 〜

(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, 2019 and 2018

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

2) Financial liabilities:

Financial liabilities:
Forward Forward Foreign exchange swap		2019.12.31
	Contract Amount USD 335,000	Currency Maturity Period USD to TWD 2020.02.18-2020.03.18 2018.12.31
	Contract Amount USD 40,000 USD 40,000	Currency Maturity Period USD to TWD 2019.01.18-2019.02.01 USD to TWD 2019.01.07-2019.01.09

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	2019.12.31 2018.12.31 $ 1,323,651 574,327 2,114,517 264,886 $ 3,438,168 839,213

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.

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(w).
3) As of December 31, 2019 and 2018, the aforesaid financial assets were not pledged as collateral.
(c) Note and trade receivables

Accounts receivables Less: Allowance for impairment	2019.12.31 2018.12.31 $ 88,594,198 92,354,729 (102,855) (120,009) $ 88,491,343 92,234,720

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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, 2019 and 2018, the amounts of trade receivables measured at fair value through other comprehensive income were $3,061,165 and $12,267,301, respectively.

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 in Taiwan were determined as follows:

Current 1 to 180 days past due More than 180 days past due		2019.12.31
	Gross carrying amount $ 84,510,859 3,963,098 120,241 $ 88,594,198	Weighted- average Loss allowance provision 0%~1% 89,828 0.04%~10% 11,504 0.04%~100% 1,523 102,855

As of the end of February 29, 2020, the amount that received by the Group is $62,583,740.

Current 1 to 180 days past due More than 180 days past due		2018.12.31
	Gross carrying amount $ 90,085,860 2,104,983 163,886 $ 92,354,729	Weighted- average Loss allowance provision 0%~1% 107,278 0.04%~10% 1,539 0.04%~100% 11,192 120,009

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

Balance at January 1, 2019 and 2018 Impairment losses recognized Amounts written off Foreign exchange (losses) gains Balance at December 31, 2019 and 2018	For the years ended December 31, 2019 2018 $ 120,009 200,021 (6,081) (15,530) (10,903) (64,593) (170) 111 $ 102,855 120,009

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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

As of December 31, 2019 and 2018, none of the receivables above are pledged as collateral for loans and borrowings.

As of December 31, 2019 and 2018, the Group sold its accounts receivable without recourse as follows:

(Unit: Foreign currency/TWD in Thousands)

			2019.12.31
Purchaser	Assignment Facility $ 25,959,896	Factoring Line Factoring Line Note USD 863,028		Advanced Amount -	Range of Interest Rate Collateral 2.58%~2.74% The accounts receivable factoring is without recourse but the seller still bears the risks except for eligible obligor’s insolvency.
Non-related parties

			2018.12.31
Purchaser	Assignment Facility $ 23,739,573	Factoring Line Factoring Line Note USD 774,032		Advanced Amount -	Range of Interest Rate Collateral 3.10%~3.50% The accounts receivable factoring is without recourse but the seller still bears the risks except for eligible obligor’s insolvency.
Non-related parties

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 accounts receivable－related parties Other accounts receivable－non-related parties Inventories Raw materials and consumables Work in process Finished goods Materials and supplies in transit	2019.12.31 2018.12.31 $ 1,305 2,776 753,670 2,531,763 $ 754,975 2,534,539 2019.12.31 2018.12.31 $ 24,313,559 27,406,883 8,709,279 8,587,820 4,288,687 6,895,663 34,017 48,630 $ 37,345,542 42,938,996

(e) Inventories

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

For the years ended December 31, 2019 and 2018, the (write-up) write-down of inventories amounted to $(170,081) and $731,093, respectively. Loss on inventory valuation and obsolescence is due to obsolescence or out of use, which causes the net realizable value to be lower than the cost. Loss on inventory valuation and obsolescence is recognized in operating cost. For the years ended December 31, 2019 and 2018, expenses of idle capacity amounted to $189,385, and $189,686, respectively.

As of December 31, 2019 and 2018, the aforesaid inventories were not pledged as collateral.

(f) Investments accounted for using equity method

The investment using equity method was as follows:

Associate	2019.12.31 2018.12.31 $ 247,194 273,356

1.Associate

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 The Group’s share of profit (loss) of the associates Loss from continuing operations Other comprehensive income Total comprehensive income	2019.12.31 2018.12.31 $ 247,194 273,356 For the years ended December 31, 2019 2018 $ (24,459) (10,575) (1,653) (30,595) $ (26,112) (41,170)

As of December 31, 2019 and 2018, the Group’s investments under equity method has not been pledged as collaterals.

(g) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2019 and 2018 were as follows:

Cost or deemed cost: Balance at January 1, 2019 Additions Disposals Other Effect of movements in exchange rate Balance at December 31, 2019	Land	Building and construction	Machinery and equipment	Transportation equipment	Office equipment	Other facilities	Leasehold improvements	Others Total 895,869 73,132,352 1,060,361 3,886,897 - (4,029,618) (81,929) 101,495 (22,570) (1,166,571) 1,851,731 71,924,555
	$ 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)
	$ 7,884,298	20,800,616	24,774,688	103,832	5,325,639	10,517,913	665,838

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(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, 2019 and 2018

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

Land	Building and construction	Machinery and equipment	Transportation equipment	Office equipment	Other facilities	Leasehold improvements
$ 7,383,543 - - (660,224) -	22,122,167 15,736 (10,029) (825,033) (78,971)	28,314,781 824,863 (2,408,366) 64,486 28,317	97,927 15,166 (5,433) 370 (434)	5,063,002 324,452 (177,499) 49,185 42,317	10,618,755 46,610 (153,058) 131,705 (36,262)	1,439,720 30,168 (16,490) (6,455) 1,467
$ 6,723,319	21,223,870	26,824,081	107,596	5,301,457	10,607,750	1,448,410
$ 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)
$ 10,231	6,653,767	20,714,397	71,883	4,683,815	8,540,656	520,348
$ - - - 9,183 - -	6,237,622 494,111 (10,029) 40,699 (359,853) (43,745)	22,828,327 1,630,610 (2,399,051) 70,732 - 26,889	57,388 15,717 (5,433) - - (343)	4,351,762 431,224 (184,023) 1,561 - 31,976	7,591,361 847,572 (141,366) 27,268 (9,837) (38,867)	1,277,565 38,126 (16,484) 5,725 - 1,449
$ 9,183	6,358,805	22,157,507	67,329	4,632,500	8,276,131	1,306,381
$ 7,874,067	14,146,849	4,060,291	31,949	641,824	1,977,257	145,490
$ 7,383,543	15,884,545	5,486,454	40,539	711,240	3,027,394	162,155
$ 6,714,136	14,865,065	4,666,574	40,267	668,957	2,331,619	142,029

The Group performed an impairment test on the property, plant and equipment. Based on the experience of the past and the actual operating result, the discounted rate used in 2019 and 2018 were 10.50% and 9.36%~11.36%. 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, 2019 and 2018, the impairment losses were $30,256 and $155,168, respectively. The meeting of shareholders of E-Ton Solar Tech. Co., Ltd (E-Ton) decided to discontinue its business on solar cell manufacturing and disposed its related assets on June 21, 2019. The fair value of asset impairment is based on the valuation of the independent valuator. The inputs of levels of fair value hierarchy in determining the fair value was classified to Level 3, measured at cost, while the value of an object is estimated by the cost of reacquisition or reconstruction, less, the accumulated depreciation and other deductibles, taking into consideration the current situation, economy, and function of the object. Besides, E-Ton reassessed its impairment and additionally recognized the amount of $263,603 as impairment loss on related assets for the years ended December 31, 2019.

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(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, 2019 and 2018

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

As of December 31, 2019 and 2018, the property, plant and equipment were pledged as collateral, please refer to Note 8.

(h) 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:

Cost: Original balance as of January 1, 2019 Effects of retrospective application Balance as of January 1, 2019 after retrospection Additions Termination before the expiration Effect of changes in foreign exchange rates Balance as of December 31, 2019 Accumulated depreciation and impairment losses: Original balance as of January 1, 2019 Effects of retrospective application Balance as of January 1, 2019 after retrospection Depreciation for the period Termination before the expiration Effect of changes in foreign exchange rates Balance as of December 31, 2019 Carrying amount: Balance as of December 31, 2019	Land $ - 2,834,870 2,834,870 2,433 (142,852) (100,203) $ 2,594,248 $ - - - 103,985 - (16,504) $ 87,481 $ 2,506,767	Buildings - 739,876 739,876 489,540 (1,407) (28,073) 1,199,936 - - - 179,681 - (4,747) 174,934 1,025,002	Vehicles - 8,232 8,232 7,168 - (32) 15,368 - - - 4,679 - (21) 4,658 10,710	Other Total - - 6,126 3,589,104 6,126 3,589,104 - 499,141 (1,030) (145,289) (9) (128,317) 5,087 3,814,639 - - - - - - 1,624 289,969 (174) (174) (10) (21,282) 1,440 268,513 3,647 3,546,126

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, the Board of directors of E?ton resolved to apply for the purchase of land No. 455 and 455-1 in the Science and Technology Section of Annan District on November 11, 2019. 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.

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(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, 2019 and 2018

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

(i) Investment property

Cost or deemed cost: Balance at January 1, 2019 Reclassification Balance at December 31, 2019 Balance at January 1, 2018 Disposals for the period Balance at December 31, 2018 Depreciation and impairment losses: Balance at January 1, 2019 Depreciation for the period Balance at December 31, 2019 Balance at January 1, 2018 Depreciation for the period Impairment loss Balance at December 31, 2018 Carrying amounts: Balance at December 31, 2019 Balance at January 1, 2018 Balance at December 31, 2018 Fair value: Balance at December 31, 2019 Balance at December 31, 2018	Building and construction
	$ 1,567,942 1,964 $ 1,569,906 $ 992,490 575,452 $ 1,567,942 $ 827,673 48,918 $ 876,591 $ 697,200 16,682 113,791 $ 827,673 $ 693,315 $ 295,290 $ 740,269 $ 1,121,740 $ 1,198,009

Cost or deemed cost:
Balance at January 1, 2019
Reclassification
Balance at December 31, 2019
Balance at January 1, 2018
Disposals for the period
Balance at December 31, 2018
Depreciation and impairment losses:
Balance at January 1, 2019
Depreciation for the period
Balance at December 31, 2019
Balance at January 1, 2018
Depreciation for the period
Impairment loss
Balance at December 31, 2018
Carrying amounts:
Balance at December 31, 2019
Balance at January 1, 2018
Balance at December 31, 2018
Fair value:
Balance at December 31, 2019
Balance at December 31, 2018

Building and
construction

$ 1,567,942
1,964
$
1,569,906
$ 992,490
575,452
$
1,567,942
$ 827,673
48,918
$
876,591
$ 697,200
16,682
113,791
$
827,673
$
693,315
$
295,290
$
740,269
$
1,121,740
$
1,198,009

Based on the purposes of earning rental income or for capital appreciation income or both, the Group reclassified buildings to investment property.

The fair value of investment property as disclosed in the financial statements is based on the valuation of the independent valuator. The inputs of levels of fair value hierarchy in determing the fair value is classified to Level 3. It is measured at cost, and value of an object is estimated by the cost of reacquisition or reconstruction deducting the accumulated depreciation and other deductibles, with a consideration of current situation, economy, and function of the object.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

The Group assessed the recoverable amount for investment property and recognized the accumulative impairment loss of both $502,250 as of December 31, 2019 and 2018.

Please refer to Note 8 for the information of the Group’s investment property pledged as collateral as of December 31, 2019 and 2018.

(j) Intangible assets

The costs of intangible assets, amortization, and impairment loss of the Group for the years ended December 31, 2019 and 2018 were as follows:

Cost: Balance at January 1, 2019 Additions Disposals Effect of movements in exchange rate Balance at December 31, 2019 Balance at January 1, 2018 Additions Disposals Effect of movements in exchange rate Balance at December 31, 2018 Amortization and impairment losses: Balance at January 1, 2019 Amortization for the period Disposals Effect of movements in exchange rate Balance at December 31, 2019 Balance at January 1, 2018 Amortization for the period Disposals Effect of movements in exchange rate Balance at December 31, 2018	Goodwill $ 980,719 - - - $ 980,719 $ 980,719 - - - $ 980,719 $ 172,299 - - - $ 172,299 $ 172,299 - - - $ 172,299	Patent and trademark right 456 - - - 456 754 - (298) - 456 456 - - - 456 740 14 (298) - 456	Software cost Total 1,017,473 1,998,648 226,789 226,789 (121,112) (121,112) (215) (215) 1,122,935 2,104,110 939,302 1,920,775 255,741 255,741 (177,470) (177,768) (100) (100) 1,017,473 1,998,648 940,586 1,113,341 231,299 231,299 (121,112) (121,112) (192) (192) 1,050,581 1,223,336 855,320 1,028,359 262,828 262,842 (177,470) (177,768) (92) (92) 940,586 1,113,341

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(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, 2019 and 2018

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

Carrying amounts: Balance at December 31, 2019 Balance at January 1, 2018 Balance at December 31, 2018	Goodwill $ 808,420 $ 808,420 $ 808,420	Patent and trademark right - 14 -	Software cost Total 72,354 880,774 83,982 892,416 76,887 885,307

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,
	2019 2018 $ 107,840 153,238 123,459 109,604 $ 231,299 262,842

As of December 31, 2019 and 2018, 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 Group were as follows:

Refundable deposits Prepayments to suppliers Long-term prepaid rents Restricted assets Non-current asset held-for-sale Deferred Tax assets Others	2019.12.31 2018.12.31 $ 173,802 251,272 6,724 12,930 - 1,039,047 64,081 137,806 - 774,672 1,653,148 1,611,026 2,156,768 3,676,263 $ 4,054,523 7,503,016

On June 26, 2018, in pursuant to the resolution approved by the Board of the Directors, the group decided to sell its land and plant; therefore, entered into an agreement about the selling price of $1,380,000. The related legal transfer process was completed on January 4, 2019.

On March 28, 2017, in pursuant to the resolution approved by the Board of the Directors, the Group decided to sell its land-use right, plant and equipment; therefore, entered into an agreement on April 19, 2017. The selling price of the above agreement is $551,386, and its difference between the book values amounting to $117,642 was recognized as impairment loss in 2017. The related legal transfer of the equipment was completed in September, 2019.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2019 and 2018

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

As of December 31, 2019 and 2018, the details of 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:

	2019.12.31	2019.12.31	2019.12.31
Interest Rate	Currency
1.44%~5.23% 0.65%~3.79%

Interest Rate	Currency	Maturity Date Amount 2019.07.28~2031.02.26 $ 3,795,000 2019.01.04~2020.07.25 2,172,420 2019.01.02~2019.12.04 28,871,043 2019.01.03~2019.01.28 428,548 $ 35,267,011 $ 31,857,950 3,409,061 $ 35,267,011 $ 57,330,499	Amount
1.44%~2.13% 0.74%~4.80%	TWD TWD USD CNY

1.Collateral of bank loans

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

2.Contract of bank loans

According to the credit loan facility agreement with the banks in 2018, Inventec Solar Energy Corporation must comply with certain financial covenants based on its audited annual financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Due to the market's decreasing demand of the product of Inventec Solar Energy Corporation, the Company could not meet the requirement of the above financial covenants. Therefore, the Comapny must compensate by paying an annual rate of 0.15% based on the unpaid monthly principle from May 1, 2019 to the date when the Company meets all the requirements regarding its financial covenants.

(m) Lease liabilities

The Group lease liabilities were as follows:

Current Non-current For the maturities analysis, please refer to Note 6(w).	2019.12.31	2019.12.31
	$ 200,289 $ 976,791

The amounts recognized in profit or loss were as follows:

		For the years
		ended December
		31, 2019
Interest on lease liabilities	$	33,318
Variable lease payments not included in the measurement of lease liabilities	$	138,426
Expenses relating to short-term leases	$	77,005
Expenses relating to leases of low-value assets, excluding short-term leases of low-value	$	8,969
assets

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

Total cash outflow for leases	For the years ended December 31, 2019
	$ 454,696

1. Real estate leases

As of December 31, 2019, 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 leasee is not reasonably certain to use an optional extended lease term, payments associated with the optional period are not included within lease liabilities.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

2. Other leases

The Group leases vehicles and 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.

(n) Operating Leases

1.Leases as lessee

Non-cancellable operating lease payables on December 31, 2018 were as follows:

Within 1 year Period after 1 to 5 years Period after 5 years	2018.12.31
	$ 158,022 522,682 177,025 $ 857,729

The Group lease a number of land, office, warehouse, factory facilities and staff dormitories under operating leases. The leases typically run for a period of 1 to 20 years, with an option to renew the lease after that date. The Group lease the land which is located on Ke Gong Section, Annan Dist., Tainan City, the first two years of the leasing period is rent free; in the third and forth year the rent accounts for 60% of the agreed rent in the contract; the fifth and sixth year the rent accounts for 80% of the agreed rent in the contract, and the full amount of the agreed rent is applied for the rest of the period.

For the year ended December 31, 2018 expenses recognized in profit or loss in respect of operating leases was $204,677.

2.Leases as Lessor

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

Less than one year One to two years Two to three years Three to four years Four to five years More than five years Total undiscounted lease payments	2019.12.31
	$ 178,121 137,669 99,733 69,278 34,846 41,354 $ 561,001

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(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, 2019 and 2018

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

The future minimum lease payments under non-cancellable leases on December 31, 2018 was as follows:

follows:
Within 1 year Period after 1 to 5 years Period after 5 years	2018.12.31
	$ 205,074 441,245 80,587 $ 726,906

The rental revenues incurred by leasing plants were $282,985 and $214,616 for the years ended December 31, 2019 and 2018, 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	2019.12.31 2018.12.31 $ 1,736,857 1,698,756 (1,155,255) (1,083,799) $ 581,602 614,957

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, 2019 and 2018, the defined benefit plans amounted to $58,799 and $18,858, 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 $1,148,039 at the end of December 31, 2019. 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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 Group on 2019 and 2018 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
Defined benefit obligation at December 31

For the years ended December 31,
2019
2018
$ 1,698,756
1,666,682
31,862
36,599
157
4
6,237
(9,825)
62,157
45,322
(62,312)
(40,026)
$
1,736,857
1,698,756

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Group on 2019 and 2018 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, 2019 2018 $ 1,083,799 1,000,117 12,136 13,048 36,268 26,629 85,364 84,031 (62,312) (40,026) $ 1,155,255 1,083,799

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group on 2019 and 2018 were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations	For the years ended December 31,
	2019 2018 $ 13,268 15,760 6,458 7,791 $ 19,726 23,551

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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,
	2019 2018 $ 1,877 2,085 2,172 2,508 5,096 7,002 10,581 11,956 $ 19,726 23,551

5) Actuarial assumptions

The following are the Group’s principal actuarial assumptions:

Present Value of defined benefit obligations:

Discount rate Future salary increases rate	2019.12.31 2018.12.31 0.75%~0.80% 1.00%~1.20% 1.63%~2.50% 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 $87,127.

The weighted-average duration of the defined benefit obligation is 9.8~20.2 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation for 2019 and 2018 shall be as follows:

December 31, 2019 Discount rate Future salary increasing rate December 31, 2018 Discount rate Future salary increasing rate	Influences of defined benefit obligations
	Increased 0.25% Decreased 0.25% (44,775) 46,506 45,239 (43,785) (45,613) 47,437 46,307 (44,761)

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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2019 and 2018.

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 the Labour Insurance amounted to $252,488 and $253,041 for the years ended December 31, 2019 and 2018, respectively.

The pension expenses contributed by the foreign entities following the local regulations amounted to $1,606,987 and $1,742,434 for the years ended December 31, 2019 and 2018, respectively.

(p) Income taxes

1.The components of income tax expense (gain) for the years ended December 31, 2019 and 2018 were as follows:

were as follows:
Current tax expense Current period Other Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Adjustment in tax rate Recognition of previously unrecognized tax losses Income tax expense from continuing operations	For the years ended December 31,
	2019 2018 $ 1,421,969 1,386,775 41,017 - (10,265) 596,271 1,452,721 1,983,046 219,343 687,445 - 136,725 - 7,050 219,343 831,220 $ 1,672,064 2,814,266

The amount of income tax recognized in other comprehensive income for 2019 and 2018 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,
	2019 2018 $ 6,757 3,804

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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 Company’s domestic tax rate
Permanent differences
Tax-exempt income
Tax credits and use of tax losses
Recognition of previously recognized tax losses
Current-year losses for which no deferred tax asset was
recognized
Change in unrecognized temporary differences
(Over) under provision in prior periods
Over provision of temporary differences
Adjustment in tax rate
Undistributed earnings additional tax
Other
Income tax expense

For the years ended December 31,
2019
2018
$
6,509,061
8,133,262
2,323,999
2,266,316
(664,387)
(498,115)
(8,067)
(3,321)
(54,072)
(60,000)
27,846
30,619
254,967
838,908
(171,871)
(505,273)
(10,024)
596,271
(245,429)
(15,182)
-
136,725
26
1,573
219,076
25,745
$
1,672,064
2,814,266

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 The carryforward of unused tax losses	2019.12.31 2018.12.31 $ 2,307,990 3,138,116 3,059,605 3,924,964 $ 5,367,595 7,063,080

The carryforward of unused tax credits were 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

The Susidiaries 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, 2019 and 2018, 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, 2019, the company that have loss carry forwards which can be used to offset profit were as follow. Among the taxable losses, $14,932 were recognized as deferred tax assets.

As of December 31, 2019, the Group did not recognized its prior years' loss carry-forwards as deferred tax assets, whose expiry years were as follows:

The carryforward of unused losses	Unused loss Expiry year $ 15,398,770 2021~2028

Due to the unstable economic environment recovery, the realizability of tax assets of the tax losses, which amounted to $15,398,770, 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, 2019 and 2018 were as follows:

Deferred Tax Liabilities: Balance at January 1, 2019 Recognized in profit or loss Balance at December 31, 2019 Balance at January 1, 2018 Recognized in profit or loss Balance at December 31, 2018	Gain (loss) on investment $ 3,014,371 305,870 $ 3,320,241 $ 2,137,695 876,676 $ 3,014,371	Other Total 50,824 3,065,195 (42,449) 263,421 8,375 3,328,616 - 2,137,695 50,824 927,500 50,824 3,065,195

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Deferred Tax Assets: Balance at January 1, 2019 Recognized in profit or loss Recognized in other comprehensive income Effect of movements in exchange rate Balance at December 31, 2019 Balance at January 1, 2018 Recognized in profit or loss Recognized in other comprehensive income Recognized directly in equity Effect of movements in exchange rate Balance at December 31, 2018	Warranty expense $ 935,721 (89,295) - - $ 846,426 $ 739,866 195,855 - - - $ 935,721	Loss of market decline on financial assets - - - - 42,610 (32,082) - (10,528) - -	Defined Benefit Plans 79,899 (13,111) 6,757 - 73,545 76,565 (470) 3,804 - - 79,899	Others Total 595,406 1,611,026 146,484 44,078 - 6,757 (8,713) (8,713) 733,177 1,653,148 658,023 1,517,064 (67,023) 96,280 - 3,804 - (10,528) 4,406 4,406 595,406 1,611,026

3.Income Tax approval

The Company’s income tax returns through 2016 have been examined and approved by the Tax Authority.

The Company disagreed with the opinion held by the tax authorities on certain parts its total income tax payment amounting to $253,607 in 2015; therefore, it applied for a reassessment concerning the matter.

(q) Capital and reserves

As of December 31, 2019 and 2018, 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	2019.12.31 2018.12.31 $ 2,891,959 2,891,959 21,502 20,930 $ 2,913,461 2,912,889

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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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 which are presented in the annual stockholders' meeting by the Board of Directors. 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.

1) Legal reserve

In accordance with the ROC Company Act, 10 percent of net income should be set aside as legal reserve, until it is equal to share capital. 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 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

During the meeting of shareholders on June 14, 2019 and June 14, 2018, the shareholders approved to distribute the 2018 and 2017 earnings, respectively, as follows:

Dividends distributed to common shareholders Cash	2018	2018	2018	2017 Dividend per share ($) Amount 1.65 5,919,334
	Dividend per share ($)		Amount
	$ 1.50		5,381,213

The information on prior year's distribution of the Company's earnings were announced through the Market Observation Post System on the internet.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

On March 24, 2020, the Company's Board of Directors resolved to appropriate the 2019 earnings, respectively, as follows:

Dividends distributed to common shareholders Cash	2019	2019
	Dividend per share ($) $ 1.30	Amount
		4,663,718

3.Other equity (net of taxes) and non-controlling interests

Exchange differences on translation of foreign financial statements Balance, January 1, 2019 $ (990,250) Exchange differences on foreign operations (1,013,287) Exchange differences on subsidiaries accounted for using equity method (1,597) 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 income - Profit attributable to non-controlling interest - Actuarial gains and losses - Others - Balance, December 31, 2019 $ (2,005,134) Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance, January 1, 2018 (972,359) - Effects of retrospective application - 218,474 Balance at January 1, 2018 after adjustments (972,359) 218,474 Exchange differences on foreign operations (18,161) - Exchange differences on subsidiaries accounted for using equity method 270 - Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income - (844,388) Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method - (30,193) Profit attributable to non-controlling interest - - Actuarial gains and losses - - Others - - Balance, December 31, 2018 $ (990,250) (656,107)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (656,107) - - 818,376 824 20,036 - - - 183,129 Unrealized gains (losses) on available-for-sale financial assets 864,813 (864,813) - - - - - - - - -	Non-controlling interests Total 2,357,036 710,679 (13,563) (1,026,850) - (1,597) (18,862) 799,514 - 824 - 20,036 (670,963) (670,963) 983 983 45,449 45,449 1,700,080 (121,925) Non-controlling interests Total 3,247,777 3,140,231 - (646,339) 3,247,777 2,493,892 (11,933) (30,094) - 270 (3,225) (847,613) - (30,193) (1,180,860) (1,180,860) 54 54 305,223 305,223 2,357,036 710,679

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(q) Share-Based payments

1.AIMobile Co. Ltd

As of December 31, 2019, 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 (%)	2019
	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.

2) Expenses and liabilities resulted from share-based payments

As of December 31, 2019, expense and liability resulted from share-based payments are accounted as follow:

2019 Expenses and liabilities $ 1,040

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(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)
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,

2019
2018
$
5,507,960
6,499,856
3,587,475
3,587,475
$
1.54
1.81
$
5,507,960
6,499,856
3,587,475
3,587,475
23,150
26,691
3,610,625
3,614,166
$
1.53
1.80

(s) Revenue from contracts with customers
Disaggregation of revenue

Primary geographical markets Taiwan USA Japan Hong Kong, Macao and Mainland China Other countries	For the years ended December 31, 2019	For the years ended December 31, 2019
	Core $ 6,882,698 341,349,096 13,200,986 66,912,430 68,492,986 $ 496,838,196	Solar Energy Total 2,663,130 9,545,828 350,212 341,699,308 - 13,200,986 1,009,619 67,922,049 91,656 68,584,642 4,114,617 500,952,813

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Major products
Computer product
Solar energy
Rendering of services
Primary geographical markets
Taiwan
USA
Japan
Hong Kong, Macao and Mainland
China
Other countries
Major products
Computer product
Solar energy
Rendering of services
2. Contract balances
Notes and Accounts receivable
(included related parties)
Less: allowance for impairment
Total
Contract liabilities

For the years ended December 31, 2019
Core
Solar Energy
Total
$ 495,945,745
-
495,945,745
-
4,114,617
4,114,617
892,451
-
892,451
$
496,838,196
4,114,617
500,952,813
For the years ended December 31, 2018
Core
Solar Energy
Total
$ 1,570,094
496,623
2,066,717
339,739,366
5,844
339,745,210
14,012,032
-
14,012,032
69,019,938
4,923,778
73,943,716
74,492,760
2,623,583
77,116,343
$
498,834,190
8,049,828
506,884,018
$ 497,761,557
-
497,761,557
-
8,049,828
8,049,828
1,072,633
-
1,072,633
$
498,834,190
8,049,828
506,884,018
2019.12.31
2018.12.31
2018.1.1
$ 88,594,198
92,354,729
78,808,650
(102,855)
(120,009)
(200,021)
$
88,491,343
92,234,720
78,608,629
2019.12.31
2018.12.31
2018.1.1
$
6,449,213
6,717,641
6,054,658

For details on notes and accounts receivable and allowance for impairment, please refer to note 6(c).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

The amount of revenue recognized for the years ended December 31, 2019 and 2018 that were included in the contract liability balance at the beginning of the period were $9,863,711 and $14,414,084, 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 $424,704 and $490,803 and the remuneration of directors amounted to $77,754 and $97,342 for the years ended December 31, 2019 and 2018, 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 2019 and 2018. 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 2019 and 2018 and the amounts stated in the individual reports.

(u) Non-operating income and expenses

1.Other income

The details of other income were as follows:

The details of other income were as follows:
Interest income	For the years ended December 31,
	2019 2018 $ 1,347,043 1,161,902

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

2.Other income and losses

The details of other income and losses were as follows:

Foreign exchange (losses) gains Gain on disposal of investments Net gains (losses) on financial assets (liabilities) measured at fair value through profit or loss Gain on disposal of property, plant and equipment Gain on non-current assets held-for-sell Impairment loss on property, plant and equipment Other impairment reversal (loss) Other	For the years ended December 31, 2019 2018 $ (999,798) (193,420) - 37,428 240,750 427,187 69,439 57,338 628,476 - (293,859) (155,168) (51,057) - 950,131 1,086,138 $ 544,082 1,259,503

3.Finance costs

The details of finance expenses were as follows:

The details of finance expenses were as follows:
Interest expenses Bank borrowings Others	For the years ended December 31,
	2019 2018 $ 936,338 967,122 824,762 801,161 $ 1,761,100 1,768,283

(v) 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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, 2019 and 2018, 65% and 62% 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, 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 December 31, 2018 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Accounts payable Other payables Derivative financial liabilities Forward exchange contracts not used for hedging : Outflow Inflow Foreign exchange swap contracts not used for hedging: Outflow Inflow	Carrying amount $ 4,183,134 25,225,579 71,342,557 6,169,489 1,177,080 108,175 - $ 108,206,014 $ 3,795,000 31,472,011 76,453,829 6,910,513 3,398 - 1,560 - $ 118,636,311	Contractual cash flows 4,628,036 26,354,636 71,342,557 6,169,489 1,308,241 (10,119,285) 10,011,110 109,694,784 4,113,867 31,521,635 76,453,829 6,910,513 (1,228,820) 1,225,422 (1,226,840) 1,225,280 118,994,886	Less than 6 months 189,281 26,339,684 71,342,557 6,169,489 112,656 (10,119,285) 10,011,110 104,045,492 256,857 31,386,104 76,453,829 6,910,513 (1,228,820) 1,225,422 (1,226,840) 1,225,280 115,002,345	6 to 12 months 192,619 14,952 - - 119,727 - - 327,298 239,680 76,470 - - - - - - 316,150	1 to 2 years 382,057 - - - 181,668 - - 563,725 345,900 59,061 - - - - - - 404,961	2 to 5 years More than 5 years 1,930,829 1,933,250 - - - - - - 456,376 437,814 - - - - 2,387,205 2,371,064 1,011,780 2,259,650 - - - - - - - - - - - - - - 1,011,780 2,259,650

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2019 and 2018

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

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:

Financial assets Monetary items USD CNY JPY Non-monetary items USD Financial Liabilities Monetary items USD CNY Financial assets Monetary items USD CNY JPY Non-monetary items USD CNY		2019.12.31
	Foreign currency (In thousand) $ 4,595,867 633,654 293,178 3,593,671 6,563 59,255 3,743,732 522,687 379,553 309,273	Exchange rate TWD USD：TWD 30.08 138,243,679 USD：CNY 6.98 19,060,312 USD：CZK 22.62 8,818,794 CNY：USD 0.14 15,495,191 JPY：TWD 0.28 1,838 USD：TWD 30.08~32.19 1,785,737 USD：TWD 30.08 112,611,459 USD：CNY 6.98 15,722,425 USD：CZK 22.62 11,416,954 CNY：USD 0.14 1,333,523 2018.12.31
	Foreign currency (In thousand) $ 4,770,256 719,605 377,586 4,094,673 5,874 67,615 136,932	Exchange rate TWD USD：TWD 30.67 146,303,375 USD：CNY 6.86 22,070,285 USD：CZK 22.47 11,580,563 CNY：USD 0.15 18,298,274 JPY：TWD 0.28 1,645 USD：TWD 30.44~32.19 2,074,391 CNY：TWD 4.47 611,919

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Financial Liabilities Monetary items USD CNY		2018.12.31
	Foreign currency (In thousand) 3,901,653 635,811 434,596 293,499	Exchange rate TWD USD：TWD 30.67 119,663,698 USD：CNY 6.86 19,500,323 USD：CZK 22.47 13,329,059 CNY：USD 0.15 1,311,941

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, 2019 and 2018 would have increased or decreased the net profit after tax by $158,427 and $120,441, 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, 2019 and 2018, the foreign exchange loss, including realized and unrealized, amounted to $999,798 and $193,420, 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.

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 Group’s profit will decrease or increase by $14,290 and $15,035 for the years ended December 31, 2019 and 2018, respectively, assuming all other variable factors remain constant. This is mainly due to the Group's variable rate in borrowings and time deposits.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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).

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 whose fair value cannot be reliably measured, the disclosure of their fair value information is not required :

Financial assets at fair value through profit or loss Derivative financial assets Non-derivative financial assets mandatorily measured at fair value through profit or loss Subtotal Financial assets at fair value through other comprehensive income Stocks of listed companies Unquoted equity instruments Subtotal Financial assets at amortized cost Cash and cash equivalents Accounts receivable and other receivables Other financial assets and refundable deposit Subtotal Total			2019.12.31	2019.12.31
	Book Value $ 125,305 3,833,163 3,958,468 1,194,430 2,243,738 3,438,168 18,952,967 89,246,318 237,884 108,437,169 $ 115,833,805		Fair Value
		Level 1 - 115,909 115,909 1,194,430 - 1,194,430 - - - - 1,310,339	Level 2 125,305 - 125,305 - 129,221 129,221 - - - - 254,526	Level 3 Total - 125,305 3,717,254 3,833,163 3,717,254 3,958,468 - 1,194,430 2,114,517 2,243,738 2,114,517 3,438,168 - - - - - - - - 5,831,771 7,396,636

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

	2019.12.31	2019.12.31
	Fair Value
Level 1 - - - - - - -	Level 2 108,175 - - - - - 108,175 2018.12.31	Level 3 Total - 108,175 - - - - - - - - - - - 108,175
	Fair Value
Level 1 - 57,885 57,885 513,897 - 513,897 - - - - 571,782	Level 2 7,004 - 7,004 - 60,430 60,430 - - - - 67,434	Level 3 Total - 7,004 2,402,590 2,460,475 2,402,590 2,467,479 - 513,897 264,886 325,316 264,886 839,213 - - - - - - - - 2,667,476 3,306,692

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Book Value Financial liabilities at fair value through profit or loss Derivative financial liabilities $ 4,958 Financial liabilities at amortized cost Bank loans 35,267,011 Account payable 76,453,829 Other payable 12,638,279 Subtotal 124,359,119 Total $ 124,364,077			2018.12.31	2018.12.31
			Fair Value
		Level 1 - - - - - -	Level 2 4,958 - - - - 4,958	Level 3 Total - 4,958 - - - - - - - - - 4,958

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 equity instruments were 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 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, 2019 and 2018.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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, 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
Balance as of January 1, 2018
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, 2018

At fair value
through profit or
loss
Fair value
through other
comprehensive
income
$ 2,402,590
264,886
89,880
-
-
16,981
14,208,509
1,858,948
(12,770,353)
-
-
(26,400)
(213,372)
102
$
3,717,254
2,114,517
$ 8,163,208
340,757
445,062
-
-
(73,695)
11,111,780
-
(16,817,264)
-
-
(2,765)
(500,196)
589
$
2,402,590
264,886

The amount reclassified under IFRS 9 has been included in the balance as of January 1, 2018.

For the years ended December 31, 2019 and 2018, 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 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, 2019 2018 $ 4,752 (25,996) 16,981 (73,695)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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 (available-for-sale) financial assets.

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income－equity instruments investments without an active market 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 investments without an active market	Valuation Technique Comparable Listed Companies Method Discounted Cash Flow Method Net Asset Value Method	Significant Non-observable Input The Relationship between Significant Non-observable Input and Fair Value ‧ Market Multiple (0.85~1.92) ‧ Discount due to Lack of Market liquidity (20%~30%) ‧ The estimated fair value would increase (decrease) if the price of earnings ratio multiple is higher (lower) and the marketability discount is lower (higher) ‧ Discounted Rate (3.20%~4.00% on December 31, 2019 3.30%~4.45% on December 31, 2018) ‧ The higher the discount rate, the lower the fair value ‧ Net Asset Value ‧ 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, 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 December 31, 2018 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 Discount Rate Market Multiple Discount Rate Market Multiple	Variation	Impact on Fair V Net incom	alue Change on e or loss Unfavorable Change (2,187) - (1,016) -	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change - - 33,497 (33,497) - - 676 (676)
			Favorable Change $ 2,187 - $ 1,016 -
		0.5% 0.5% 0.5% 0.5%

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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.

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.

2019.12.31	2019.12.31	2019.12.31	2019.12.31	2019.12.31
Financial assets that are offset which have an exercisable master netting arrangement or similar agreement
Gross amounts of recognized financial assets (a) $ 413,711,801 33,069 $ 413,744,870		Gross amounts of financial liabilities offset in the balance sheet (b) 413,317,202 - 413,317,202	Net amount of financial assets 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) 394,599 - - 394,599 33,069 - - 33,069 427,668 - - 427,668 2019.12.31
	Financial liabilities that are		offset which have an exercisable master netting arrangement or similar agreement
		Gross amounts of financial assets offset in the balance sheet (b) -	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b) 108,175	Amounts not off set in the balance sheet (d) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) - - 108,175
				Financial instruments (Note) -

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

2018.12.31

Financial assets that are offset which have an exercisable master netting arrangement or similar agreement	Financial assets that are offset which have an exercisable master netting arrangement or similar agreement	Financial assets that are offset which have an exercisable master netting arrangement or similar agreement	Financial assets that are offset which have an exercisable master netting arrangement or similar agreement	Financial assets that are offset which have an exercisable master netting arrangement or similar agreement
Gross amounts of recognized financial assets (a) $ 345,419,300 4,238 $ 345,423,538		Gross amounts of financial liabilities offset in the balance sheet (b) 345,029,979 - 345,029,979	Net amount of financial assets 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) 389,321 - - 389,321 4,238 - - 4,238 393,559 - - 393,559 2018.12.31
	Financial liabilities that are		offset which have an exercisable master netting arrangement or similar agreement
		Gross amounts of financial assets offset in the balance sheet (b) -	Net amount of financial liabilities presented in the balance sheet (c)=(a)-(b) 3,704	Amounts not off set in the balance sheet (d) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) - - 3,704
				Financial instruments (Note) -

Note: Master netting arrangements are included.

(w) 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 risks 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

The Board of Directors has the overall responsibility for the establishment and oversight of the Group’s risk management framework. The financial units follows 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(w) 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, 2019, 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, 2019 and 2018, the Group's unused credit line were amounted to $75,851,186 and $57,330,499, 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 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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.

(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, 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.

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	2019.12.31 2018.12.31 $ 136,121,625 148,082,405 (18,952,967) (25,062,511) $ 117,168,658 123,019,894 $ 56,971,228 57,721,517 $ 56,971,228 57,721,517 % 205.66 % 213.13

According to the Company's management, there were no changes in the Group's approach to capital management as of December 31, 2019.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(y) Investing and financing activities not affecting current cash flow

The Group has no investing and financing activities which did not affect the current cash flow for the years ended December 31, 2019.

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, 2019 $ 3,409,061 31,857,950 1,074,436 $ 36,341,447 January 1, 2018 $ 3,965,731 36,993,107 $ 40,958,838	Cash flows 865,440 (6,498,237) (196,978) (5,829,775) Cash flows (387,609) (4,567,702) (4,955,311)	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 1,177,080 199,374 (125,253) 30,585,793 Non-cash changes Reclassification Foreign exchange movement December 31, 2018 (169,061) - 3,409,061 169,061 (736,516) 31,857,950 - (736,516) 35,267,011
			Reclassification (169,061) 169,061 -

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.

Relationship with the Group

Associates

Inventec Besta (XiAn) Co., Ltd. Subsidiary of associates Gainia Intellectual Asset Services, Inc. Associates Inventec Group Charity Foundation Over one-third of total amount of fund donated by the Company

Inventec Welfare Committee Kou-I Yeh

The same chairman of the Group Director of the board of the Company

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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:
Associates Other related parties	For the years ended December 31,

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.

2.Purchase

The amounts of significant purchase transactions between the Group and associates were as follows:

follows:
Associates	For the years ended December 31,
	2019 2018 $ - 8,177

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	2019.12.31 2018.12.31 $ 1,305 2,776
Other receivables	Associates

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	2019.12.31 2018.12.31 $ 2,477 1,256 250,000 - $ 252,477 1,256
Other payables 〞	Associates Other related parties

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

5.Property transactions

1) Acquisition of property, plant, equipment, intangible assets and other assets

For the years ended December 31, 2019 and 2018, the Group purchased equipment, intangible assets and other assets from Inventec Besta Co., Ltd. and paid the amount $29,479 and $8,343, respectively.

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, 2019 and 2018, the unrealized other revenues are both $1,211.

6.Others

1) Rental and other revenue collected from related parties were as follows:

Associates 2) Donation for other related parties were as follows: Other related parties	For the years ended December 31,
	2019 2018 $ 8,009 10,556 For the years ended December 31,
	2019 2018 $ 10,000 14,000

3) Payments for system development expenses, maintenance expenses and service expenses to associates were as follows:

associates were as follows:
Associates Key management personnel compensation Key management personnel compensation includes:	For the years ended December 31,
	2019 2018 $ 7,281 6,889

Short-term employee benefits Post-employment benefit	For the years ended December 31,
	2019 2018 $ 530,154 582,406 4,361 3,756 $ 534,515 586,162

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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
Refundable deposits (Other
non-current assets)
Customs duty guarantee and rental
deposit
Restricted cash in banks
(Other current assets and
Other non-current assets)
Customs duty guarantee, warranty
guarantee and borrowings
Land, buildings, structures,
machinery and
equipment, net (Property,
plant and equipment,
investment property and
right-of-use assets)
Current portion long-term
borrowings, as well as long-term
borrowings and credit line
Total

2019.12.31
2018.12.31
$ 173,802
251,272
64,081
137,806
8,395,434
6,929,232
$
8,633,317
7,318,310

(9) Significant Commitments and Contingencies

(a) Major Commitments:
1.Unused standby letters of credit were as follows:

		2019.12.31	2018.12.31
EUR	$	67	99
USD		3,795	5,796
TWD		13,461	38,509
Promissory	notes issued for bank credit, forward contracts, Secured deposits		for executin
technology	agreements with the government and property deposits were as follows:
		2019.12.31	2018.12.31
TWD	$	22,379,023	22,866,027
USD		1,464,400	1,400,400

2.Promissory notes issued for bank credit, forward contracts, Secured deposits for executing technology agreements with the government and property deposits were as follows:
(b) Contingencies

The relationship between E-Ton Solar Tech Co., Ltd. (E-Ton) and JI-EE Industry Co., Ltd. (JI-EE) has deteriorated due to a dispute over the lands and buildings which JI-EE leased to E-Ton. JI-EE claimed that the lease expired on December 31, 2013 and decided to discontinue to lease the aforesaid lands and buildings to E-Ton. Therefore, E-Ton filed a temporary injunction to the Tainan District Court concerning this matter.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Tainan District Court requests that E-Ton should provide a guarantee deposit of 0.12 billion New Taiwan Dollars for the temporary injunction mentioned above. In return, JI-EE should leave the driveways and gates of the building (which is located on No. 73 and 74 Ke Gong Section, Annan Dist., Tainan City) in its current condition until the civil action is resolved. Furthermore, JI-EE should allow E-Ton to continue using the other buildings located on No.16-1, 16-7, and 16-10 Ke Gong Section, Annan Dist., Tainan City. After E-ton provided the guarantee deposit, the Tainan District Court issued the Enforcement Order No.82 of Si-Zhi-Chuan-Jian-Zi (2014), so that JI-EE has to follow the aforementioned injunction.

E-Ton received the Civil Ruling No. 160 of Si-Sheng-Zi (2014) from the Tainan District Court requesting E-Ton to file an civil action against JI-EE in time.

Accordingly E-Ton summited the indictment to the same Court on July 15, 2014, with case file No. 196 of Zhong-Su-Zi (2014), to confirm the continuance of the lease. On May 4, 2018, the Court ruled against the continuance of the lease for the land and factory located at No. 498, Sec. 2, Bentien Rd, An-nan District of Tainan City, under the condition that JI-EE has to maintain the current status of the driveways and gates of the compound located at No. 73 and 74 Ke Gong Section, Annan Dist., Tainan City. In addition, JI-EE has to continue recognizing the lease agreement it entered into with E-Ton regarding the building located at No. 16-10 in No. 73 and 74 Ke Gong Section and allow E- Ton to make use of its driveway (from the gate to the building). Also, JI-EE has to permit E-Ton to freely use the door and the staircase (from Ground floor to 4th floor) of the annex building (within the compound) located at No 16-1 Ke Gong Section. E-Ton, on the other hand, filed an appeal by requesting the Tainan District Court to handover the case to the Taiwan High Court for another decision on May 23, 2018. Now the preparation procedure is still in progress. On November 15, 2018, E-ton and JI-EE both agreed to settle this lawsuit. However, since there is a great difference between the selling price of the aforesaid lands and buildings offering by JI-EE and the buying price offering by E-ton, E-ton and JI-EE then requested the Court for continuance of this trial on February 26, 2019 and March 5, 2019, respectively. The Court has finished the inspection on May 31, 2019, and has continued the trial on July 22, 2019. The Tainan High Court accepted the termination of the lawsuit between E-ton and JI-EE on December 12, 2019. If neither company appeals within four months after the termination date, the court will assume the lawsuit has been withdrawn by E-ton.

In accordance with the Payment Order No.6096 of Si-Cu-Zi (2014) from Tainan District Court, JIEE advocated that E-Ton should pay a penalty of $8,537, plus, interest payables accrued with an annual interest rate of 5% from the issuance date of the Payment Order to the payment date.

E-Ton disagreed with the demand of JI-EE and filed an appeal to the Tainan District Court against JI-EE. In the appeal JI-EE expanded its claims against E-Ton asking for compensation for the damage occurred between January to March, 2014. According to Judgment No. 73 of Zhong-Su-Zi (2014), Tainan District Court granted the demand of JI-EE, which resulted to the compensation of $6,098, plus, interest payables accrued with an annual interest rate of 5% from the issuance date on May 22, 2014. Therefore, E-Ton filed an appeal to the Taiwan High Court-Tainan Branch against JIEE on December 5, 2014 and JI-EE filed another expansion of claims afterwards.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

On September 29, 2016, Taiwan High Court ordered E-Ton to pay the amount of $48,785 as compensation (including interest), as well as expenses for its appeal and expansion of claims. JI-EE may make a motion for provisional execution with a payment of $16,270 to the court as guarantee deposit. However, the motion will be denied if E-Ton pays $48,785 to the court as guarantee deposit.

E-ton filed an appeal to the Supreme Court through Taiwan High Court-Tainan Branch on October 17, 2016.

In accordance with the verdict handed by the Taiwan High Court, JI-EE has the right to seize parts of E-Ton’ s real estate properties. Therefore, on December 7, 2016, JI-EE exercised its right in the company of staff from the district court. On the same date, however, E-Ton paid the required amount stated in the verdict, to the district court as its guarantee deposit. Therefore, on December 8, 2016, the district court agreed to halt its execution in seizing E-Ton’s properties.

On November 26, 2018, the Supreme Court remanded the case to the Taiwan High Court Tainan Branch Court. JI-EE submitted the pleading to expand the demand which E-Ton shall pay the amount of $67,079 and annual interest rate of 5% from the issuance date to discharge date on January 28, 2019. Both Parties have mutually agreed to suspend the procedure and negotiate a settlement on January 28, 2019. Afterwards JI-EE filed to continue the trail on April 17 ,2019. Eventually both Parties have reached a settlement on June 3, 2019, and E-Ton remitted the settlement fee $91,274 on June 19, 2019. JI-EE also acquired the above mentioned guarantee deposit of $48,785.

(10) Losses Due to Major Disasters : None.

(11) Subsequent Events

(a) 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, the Board of directors of E-Ton resolved to apply for the purchase of land No. 455 and 455-1 in the Science and Technology Section of Annan District on November 11, 2019. 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.
(b) Due to having zero operating income for six consecutive months, E-Ton terminated its production of solar cell business based on the resolution made during the shareholders’ meeting on June 21, 2019. According to the 12th business rule, Article 2(1)(7) of Taipei Exchange, the public trading of E-ton's securities shall be terminated. The Taipei Exchange announced the termination date of stock exchange of E-ton to be January 13, 2020. The Board of Directors approved to liquidate E-ton on February 10, 2020; this decision will be submitted during the extraordinary shareholders’ meeting for approval on March 26, 2020.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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, 2019	For the years ended December 31, 2019	For the years ended December 31, 2019	For the years ended December 31, 2018	For the years ended December 31, 2018	For the years ended December 31, 2018
	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	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	15,242,544 1,234,991 1,524,674 807,165 2,283,324 520,249	8,533,478 686,090 494,352 269,167 1,190,718 486,166	23,776,022 1,921,081 2,019,026 1,076,332 3,474,042 1,006,415

(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, 2019:

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	Coll	ateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1 1 2 3	Inventec (Chongqing) Corp.(Note 2) 〞 Inventec (Pudong) Technology Corp.(Note 3) Inventec Appliances (Nanjing) Corp.(Note 4)	Inventec Huan Hsin (Zhejiang) Technology Co., Ltd. Inventec Asset- Management (Shanghai) Corporation Inventec Asset- Management (Shanghai) Corporation Inventec Appliances (XI'AN) Corporation	Other receivables 〞 Other receivables 〞	Y Y Y Y	151,470 550,800 596,700 119,002	- 517,440 - 99,176	- 517,440 - 77,616	- 5.225% - 3.045%	2 2 2 2	- - - -	Working Capital 〞〞〞	- - - -	None 〞〞〞	- - - -	6,128,178 2,723,635 1,483,732 326,835	6,809,087 3,026,261 1,854,665 326,835

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
4 4 5	Inventec Appliances (Shanghai) Co., Ltd.(Note 4) 〞 Inventec Appliances Corp.	Inventec Appliances (Shanghai) Interprise Inventec Appliances (Nanchang) Intelligent manufacturing Co., Ltd. Inventec Appliances (Malaysia) SDN. BHD.	Other receivables 〞 Other receivables	Y Y Y	32,130 137,490 800,000	30,184 129,360 800,000	- 64,680 31,649	- 3.045% 1.95%	2 2 2	- - -	Working Capital 〞〞	- - -	None 〞〞	- - -	1,785,604 1,785,604 8,944,922	1,785,604 1,785,604 8,944,922

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 90 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 90 percent of the company's net worth as stated in its latest financial report and each amount of loans shall not exceed 90 percent of the permitted aggregate amount of loans of the company.
Note 3: Where an inter-company or inter-firm short-term financing facility is necessary, provided as below:
(1)Total financing amount shall not exceed 40 percent of the company's net worth as stated in its latest financial report.
(2)Each financing amount shall not exceed 80 percent of the permitted aggregate amount of loans of the company.
Note 4: 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.

Guarantees and endorsements for other parties: None.
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	Highest percentage of ownership (%) during the year	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
The Company 〞〞	WK Technology Fund IV Corp. Global Strategy Venture Capital Corporation Arima Communications Corp.	- - -	Non-current financial assets at fair value through other comprehensive income 〞〞	645 2,835 21,114	5,632 14,940 129,221	% 1.52 % 6.45 % 10.15	5,632 14,940 129,221	% 1.52 % 6.45 % 10.15

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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	Ending balance	Highest percentage of ownership (%) during the year	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
The Company 〞〞〞〞〞〞〞〞〞〞〞 Inventec (Beijing) Electronics Technology Co., Ltd. Inventec (Chongqing) Corp. Inventec Development Japan Corporation Inventec Investments Co., Ltd. 〞〞〞〞	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 SKSpruce Holding Limited convertible short-term note Bank of Communications Pension CNY Financial products CMBC Wealth Management Services Famm Co., Ltd. EPISTAR Corporation UCFUNNEL CO LTD DIITU GLOBAL INC. Sagacity Tech. Co., Ltd. Living Pattern Technology Inc.	- - - - - - - - - - - - - - - - - - - -	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 other comprehensive income Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income 〞〞〞	4,063 29 2,540 1,760 3,632 3,746 235 568 355 532 70 - - - 100 1,761 83 1 79 4	1,194,430 176 - 14,555 - 138,701 11,150 27,703 26,637 6,366 1,699,658 56,799 51,525 862,093 8,097 56,973 7,507 - - 595	% 0.96 % 0.30 % 6.67 % 16.00 % 6.20 % 3.77 % 2.95 % 3.10 % 1.53 % 4.21 % 10.00 % - % - % - % 14.30 % 0.16 % 5.00 % 10.00 % 15.00 % 13.70	1,194,430 176 - 14,555 - 138,701 11,150 27,703 26,637 6,366 1,699,658 56,799 51,525 862,093 8,097 56,973 7,507 - - 595	% 0.96 % 0.30 % 6.67 % 16.00 % 6.20 % 3.49 % 2.95 % 3.12 % 1.53 % 4.23 % 10.00 % - % - % - % 14.30 % 0.16 % 5.00 % 10.00 % 15.00 % 13.70

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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	Ending balance	Highest percentage of ownership (%) during the year	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
E-TON Solar Tech. Co., Ltd Inventec Appliances Corp. 〞〞〞〞〞〞〞〞〞 Inventec Appliances (Cayman) Holding Corp. 〞〞 Inventec Appliances (Shanghai) Co., Ltd. 〞 Inventec Appliances (Nanjing) Co. Ltd. Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanchang) Corporation	Hua-chuang Automobile Information Technical Center Co., Ltd. EPISTAR Corporation Scope Industries Berhad Rong Cheng Tech. Co., Ltd. Tai Yi Precision Corporation Siano Mobile Silicon Inc. GCT Semiconductor, Inc. Pandigital Worldwide, Ltd. 3GTMobile Corporation Linc Global Inc. (Proximiant, Inc.) Molekule, Inc. Siano Mobile Silicon Inc. Leadtone Limited(Class B preferred stock) Digital Chaotex Holdings Ltd.( Class A2 preferred stock) BOC Guaranteed CNY On Schedule Financial Product 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 〞 Non-current financial assets at fair value through other comprehensive income 〞〞〞〞〞〞〞〞〞〞 Current financial assets at fair value through profit or loss 〞〞〞〞	2,830 500 32,000 1,950 635 461 93 939 314 594 1,603 99 1,250 446 - - - - -	- 16,175 42,761 - - - - - - 152,800 - - - 301,853 325,959 152,006 1,893,146 73,873	% 0.86 % 0.05 % 5.19 % 9.38 % 1.67 % 0.15 % 0.12 % 4.80 % 2.88 % 5.30 % 1.75 % 0.03 % 2.36 % 2.08 % - % - % - % - % -	- 16,175 42,761 - - - - - - 152,800 - - - 301,853 325,959 152,006 1,893,146 73,873	% 1.00 % 0.05 % 5.19 % 9.38 % 1.67 % 0.15 % 0.12 % 4.80 % 2.88 % 5.30 % 1.75 % 0.03 % 2.36 % 2.08 % - % - % - % - % -

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 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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)

Name of company	Category and name of security (Note 1)	Account name (Note 1)	Name of counter-party	Relationship with the company	Beginning Balance	Beginning Balance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
The Company Inventec (Chongqing) Corp. Inventec Appliances (Shanghai) Corp. 〞 Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanchang) Corporation	ZT Group Int'l, Inc common stock CMBC Wealth Management Services SCSB Winners CNY Financial Product BOC Guaranteed CNY On Schedule Financial Product 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 〞〞〞〞	Shareholders (non-related parties) CMBC Bank of Shanghai Bank of China Bank of Shanghai 〞	- - - - - -	- - - - - -	- - 326,882 292,229 1,343,201 94,394	- - - - - -	1,699,658 1,757,893 979,977 1,218,953 9,252,637 369,152	- - - - - -	- 903,071 989,122 1,217,648 8,754,164 392,604	- 895,800 980,900 1,209,329 8,702,692 389,673	- 7,271 8,222 8,319 51,472 2,931	- - - - - -	1,699,658 862,093 325,959 301,853 1,893,146 73,873

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:

(In Thousands of New Taiwan Dollars)

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter-party	Relationship with the Company	If the cou	nter-party is a re previous transfe	lated party, r informatio	disclose the n	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
The Company	Land and property	2019.10.03	1,178,980	100% paid	China Electric Manufactuing Corporation	Non-related party				-	$1,197,273 and $1,292,283 according to appraisal report	Business expansion	N/A

Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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. 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. 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 Hi-Tech Corp. Inventec (Chongqing) Corp.	Subsidiary 〞 Subsidiary 〞〞〞 Parent Parent Associates Associates Associates Parent Parent Associates 〞〞 Parent Associates 〞〞	Sales Sales Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Purchases Purchases Sales Purchases Sales Sales Sales Purchases Purchases Purchases	59,284,144 28,950,547 264,957,998 575,837 354,169 624,075 59,284,144 354,169 614,126 285,466 367,959 28,950,547 624,075 285,466 367,959 179,420 264,957,998 36,133,147 282,195 228,542,656	% 16.58 % 8.10 % 76.00 % 0.17 % 0.10 % 0.18 % 93.84 % 0.55 % 0.95 % 0.45 % 0.58 % 96.27 % 2.09 % 0.83 % 1.23 % 0.60 % 100.00 % 13.64 % 0.11 % 86.26	90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days 90 days	- - - - - - - - - - - - - - - - - - - -	No general trading partner can be compared. 〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞	15,937,407 11,231,269 (43,413,344) (97,624) (254,006) (62,547) (15,937,407) 254,006 31,059 92,708 (13,976) (11,231,269) 62,547 (92,708) 13,976 15,349 43,413,344 (17,615,637) (96,679) (25,701,028)	% 21.51 % 15.16 % 56.20 % 0.13 % 0.33 % 0.08 % 98.25 % 3.01 % 0.37 % 1.10 % 0.09 % 98.14 % 0.72 % 0.81 % 0.16 % 0.18 % 47.81 % 19.40 % 0.11 % 28.31

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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 Hi-Tech 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 Corporation (Hong Kong) Ltd. Inventec (Pudong) Technology Corp. Inventec Corporation (Hong Kong) Ltd. Inventec Appliances (Pudong) Corp. Inventec Appliances (Jiangning) Corp. Inventec Appliances (USA) Distribution Corp. Inventec Appliances Corp. Inventec Appliances Corp. The Company Inventec Appliances Corp.	Associates 〞〞〞〞〞〞〞〞〞〞〞 Parent Associates	Sales Sales Purchases Purchases Sales Purchases Sales Purchases Purchases Sales Purchases Sales Sales Sales	36,133,147 40,701,473 614,126 179,420 282,195 40,701,473 228,542,656 74,818,373 1,199,492 5,283,790 5,283,790 74,818,373 575,837 1,199,492	% 45.74 % 51.53 % 0.79 % 0.23 % 98.78 % 100.00 % 95.99 % 97.59 % 1.56 % 6.73 % 100.00 % 99.92 % 10.73 % 22.67	90 days 90 days 90 days 90 days 90 days 90 days 90 days 1-2 months 1-2 months 1-2 months 1-2 months 1-2 months 90 days 1-2 months	- - - - - - - - - - - - - -	No general trading partner can be compared. 〞〞〞〞〞〞〞〞〞〞〞〞〞	17,615,637 8,333,694 (31,059) (15,349) 96,679 (8,333,694) 25,701,028 (14,461,779) (181,330) 2,190,393 (2,190,393) 14,461,779 97,624 181,330	% 66.68 % 31.55 % 0.10 % 0.05 % 99.35 % 100.00 % 90.46 % 97.96 % 1.23 % 16.49 % 100.00 % 99.98 % 9.30 % 17.28

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 Thousands of New Taiwan Dollars)

Name of company	Counter party	Relationship	Ending balance	Turnover balance	Ov	erdue	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. (Note)	Subsidiary Subsidiary Subsidiary	15,937,407 11,231,269 47,244,779	3.79 2.37 -	1,948,009 3,544,728 17,767,604	Received in the subsequent period Received in the subsequent period Received in the subsequent period	9,280,414 4,543,640 19,530,497	- - -

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Name of company	Counter party	Relationship	Ending balance	Turnover balance	Overdue	Overdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
Inventec Holding (North America) Corp. Inventec Corporation (Hong Kong) Ltd. 〞〞〞 Inventec (Pudong) Technology Corp. 〞 Inventec (Chongqing) Corp. Inventec Appliances Corp. Inventec Appliances (Pudong) Corp. Inventec Appliances (Jiangning) Corp.	The Company The Company Inventec (Pudong) Technology Corp. (Note) Inventec Hi-Tech Corp. (Note) Inventec (Chongqing) Corp. (Note) Inventec Corporation (Hong Kong) Ltd. Inventec (Shanghai) Corp. Inventec Corporation (Hong Kong) Ltd. Inventec Appliances (USA) Distribution Corp. Inventec Appliances Corp. Inventec Appliances Corp.	Parent Parent Associates Associates Associates Associates Associates Associates Subsidiary Associates Associates	254,006 43,413,344 25,352,583 238,430 21,653,765 17,615,637 8,333,694 25,701,028 2,190,393 14,461,779 181,330	1.95 6.15 - - - 2.55 5.20 8.13 2.20 5.06 6.35	- 7,830,536 17,529,175 238,430 - 7,830,536 668,593 - - - -	Received in the subsequent period Received in the subsequent period Received in the subsequent period Intensive follow-up on collection Received in the subsequent period Received in the subsequent period	61,119 25,117,582 4,342,394 - 15,188,102 4,454,423 5,363,869 20,663,159 1,855,613 10,573,487 181,330	- - - - - - - - - - -

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)(u).
Business relationships and significant inter-company transactions:

No.	Name of company	Name of counter party	Existing relationship with the counter- party		Tr	ansactions
				Account name	Amount	Terms of trading	Percentage of the consolidated total revenue or total assets
0 1	Inventec Corporation Inventec Corporation (Hong Kong) Ltd.	Inventec Holding (North America) Corp. Inventec (Czech), s.r.o. Inventec Corporation (Hong Kong) Ltd. Inventec (Pudong) Technology Corp. Inventec (Chongqing) Corp.	1 1 1 1 1 1 1 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	59,284,144 15,937,407 28,950,547 11,231,269 264,957,998 47,244,779 43,413,344 36,133,147 17,615,637 25,352,583 228,542,656 25,701,028 21,653,765	Negotiated price 90 days Negotiated price 90 days Negotiated price 90 days 〞 Negotiated price 90 days 〞 Negotiated price 90 days 〞	% 12 % 8 % 6 % 6 % 53 % 24 % 22 % 7 % 9 % 13 % 46 % 13 % 11

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

==> picture [433 x 154] intentionally omitted <==

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

Transactions
Existing
relationship
with the Percentage of the
Name of counter- Account consolidated total
No. Name of company counter party party name Amount Terms of trading revenue or total assets
2 Inventec Appliances Corp. Inventec Appliances 3 Purchases 74,818,373 Negotiated price 15 %
(Pudong) Corp.
3 Account Payable 14,461,779 1-2 months 7 %
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.
----- End of picture text -----

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.

(b) Information on investment:

The following is the information on investees for the year ended December 31, 2019 (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 inves	tment amount	Balance a	s of December 3	1, 2019	Highest percentage of ownership during the year	Net income (loss) of the investee	Share of profits/losses of investee	Note
				December 31, 2019	December 31, 2018	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	Taipei Hong Kong USA New Taipei City Cayman Cayman Czech Taipei Taoyuan	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	420,347 167,162 159,003 9,656,877 9,812,963 739,500 85,921 1,000,000 1,087,800	420,347 167,162 159,003 9,656,877 9,812,963 739,500 85,921 1,000,000 1,087,800	23,405 2,500 5,000 536,857 301,768 25,000 - 108,800 108,150	% 37.53 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 33.45	245,487 354,041 1,290,344 9,714,377 13,887,270 958,568 32,250 178,323 250,002	% 37.53 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 33.45	(65,332) 41,683 42,420 1,471,489 1,461,840 201,949 174,569 (36,251) (265,187)	(24,518) 41,683 42,420 1,471,489 1,461,840 201,949 174,569 (36,251) (84,209)	Associate under equity method Subsidiary 〞〞〞〞〞〞〞

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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, 2019	Highest percentage of ownership during the year	Net income (loss) of the investee	Share of profits/losses of investee	Note
				December 31, 2019	December 31, 2018	Shares/Units (In thousands)	Percentage of ownership	Carrying value
The Company 〞〞〞〞 Inventec (Cayman) Corp. Inventec Investment Co., Ltd. 〞〞 Inventec Appliances Corp. 〞〞 Inventec Appliances (Cayman) Holding Corp. 〞〞	Inventec Development Japan Corporation Inventec Japan Corporation E-TON Solar Tech. Co., Ltd. AIMobile Co., Ltd. Inventec Manufacturing (India) Private Limited TPV-Inventa Holding Ltd. Inventec Solar Energy Corporation E-TON Solar Tech. Co., Ltd. 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.	Japan Japan Tainan Taipei India Hong Kong Taoyuan Tainan India Cayman Taipei Taoyuan USA 〞 Malaysia	Developing, designing and selling computer peripherals Trading and management service Manufacturing and Selling of solar cells Developing, production and selling of intelligent mobile device Computer products assembly operations Holding Company Developing, production and selling of multicrystalline solar cells Manufacturing and Selling of 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	630,845 2,954 4,193,723 220,000 281,691 1,022,987 150,000 615,050 28 6,003,205 6,400 311,160 24,064 1,504 7,033	630,845 - 4,193,723 165,000 281,691 1,022,987 150,000 615,050 28 6,003,205 6,400 311,160 24,064 1,504 7,033	45 - 94,889 22,000 55,994 302,421 15,000 15,813 6 199,575 205 30,930 400 10 1,000	% 100.00 % 100.00 % 29.70 % 55.00 % 99.99 % 90.00 % 4.64 % 4.95 % 0.01 % 100.00 % 38.90 % 9.57 % 100.00 % 100.00 % 100.00	17,630 2,774 396,783 81,383 (25,580) - 34,134 66,315 (2) 16,663,394 1,707 70,384 96,744 12,830 6,918	% 100.00 % 100.00 % 29.70 % 55.00 % 99.99 % 90.00 % 4.64 % 4.95 % 0.01 % 100.00 % 38.90 % 9.57 % 100.00 % 100.00 % 100.00	(1,453) 24 (731,238) (97,582) (6,315) (1) (265,187) (731,238) (6,315) 1,386,742 150 (265,187) 2,149 941 (32)	(1,453) 24 (217,051) (53,648) (10,761) - - - - - - - - - -	Subsidiary 〞〞〞〞 Associate Company 〞〞〞〞 Associate under equity method 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, investment companies other than the Company are not required to disclose the share of income / loss of investees..

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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-incapital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2019	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2019	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 10)
					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 Inventec Appliances (Shanghai) Co., Ltd.	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 Electronic communication and products assemble	87,232 30,080 1,504,000 2,061,784 2,256,000 1,504,000 150,400 43,616 1,504,000 863,296 1,846,335 1,552,128	(2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (3) (2)	60,160 30,080 1,504,000 887,360 2,256,000 1,504,000 127,840 43,616 1,504,000 868,680 - 1,447,390	- - - - - - - - - - - -	- - - - - - - - - - - -	60,160 30,080 1,504,000 887,360 2,256,000 1,504,000 127,840 43,616 1,504,000 868,680 - 1,447,390	(266) (3,184) (132,262) 54,414 1,752,033 178,991 17,244 119 (105,961) 111,716 (16,313) (45,591)	% 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 % 78.00 % 100.00	(266) (3,184) (132,262) 54,414 1,752,033 172,250 17,244 119 (105,961) 111,716 (12,724) (45,591)	36,453 40,897 493,305 1,742,383 7,565,652 4,629,922 225,401 74,889 1,182,102 5,929 1,375,290 1,785,604	30,234 - - - 2,242,107 321,599 149,517 - - - - 1,535,981

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Name of investee	Main businesses and products	Total amount of paid-incapital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2019	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2019	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 10)
					Out-flow	Inflow
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.	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	2,316,160 2,045,440 150,400 120,320 63,168 2,164 34,494 258,708	(2) (2) (2) (2) (2) (3) (3) (3)	2,316,160 1,263,360 270,163 120,320 63,168 - - -	- - - - - - - -	- - - - - - - -	2,316,160 1,263,360 270,163 120,320 63,168 - - -	1,028,995 404,613 14,344 7,459 (13,332) 21,255 (6,302) (68,737)	% 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	1,015,156 405,649 14,344 7,459 (13,332) 21,255 (6,302) (68,737)	9,307,263 4,917,654 365,800 39,689 130,889 57,536 27,121 186,351	2,297,117 1,636,736 85,353 - - - - -

2. Limitation on investment in Mainland China:

2. Limitation on inves	tment in Mainland China:
Name of Company	Accumulated Investment in Mainland China as of December 31, 2019	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 3,4)
The Company Inventec Appliances Corp.	8,848,900 5,547,595	8,848,900 5,547,595	- 5,366,953

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 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, 2019, 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

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

3. Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China for the year ended December 31, 2019, are disclosed in “Information on significant transactions”.

(14) Segment Information

(a) General information

The Group reportable segments: core department and solar energy department. Core department manufactures computer products and sells to customers. Solar energy 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

Revenue Revenue from external customers Total revenue Interest expenses Depreciation and amortization Other material non-cash item Asset Impairment Reportable segment net operating income (loss) Reportable segment assets Revenue Revenue from external customers Intersegment revenues Total revenue Interest expenses Depreciation and amortization Other material non-cash item Asset Impairment Reportable segment net operating income (loss) Reportable segment assets		For the year ended December 31, 2019	For the year ended December 31, 2019
	Core $ 496,838,196 $ 496,838,196 $ 1,685,343 3,332,157 - $ 7,506,185 $ -	Solar energy Adjustment and Elimination Total 4,114,617 - 500,952,813 4,114,617 - 500,952,813 75,757 - 1,761,100 678,755 - 4,010,912 344,916 - 344,916 (997,124) - 6,509,061 - - - For the year ended December 31, 2018
		Solar energy 8,049,828 - 8,049,828 82,018 662,711 155,168 (1,904,527) -	Adjustment and Elimination Total - 506,884,018 (102) - (102) 506,884,018 - 1,768,283 - 4,480,457 - 155,168 - 8,133,262 - -

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(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, 2019 and 2018

(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 Solar energy Rendering of services Total	For the years ended December 31,
	2019 2018 $ 495,945,745 497,761,557 4,114,617 8,049,828 892,451 1,072,633 $ 500,952,813 506,884,018

(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,
	2019 2018 $ 8,404,613 2,066,717 341,635,993 339,745,210 13,200,986 14,012,032 67,922,049 73,943,716 69,789,172 77,116,343 $ 500,952,813 506,884,018

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

By region Non-current assets Taiwan Mainland China USA Other countries Total	2019.12.31 2018.12.31 $ 17,738,485 16,735,906 17,056,370 17,656,686 393,666 113,718 610,850 89,288 $ 35,799,371 34,595,598

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,
	2019	2018
$	325,666,020	314,828,524
	33,781,052	40,148,535
$	359,447,072	354,977,059

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AI assistant

INVENTEC — Audit Report / Information 2019

52026_rns_2019-11-30_a869fba4-ddd9-4f0d-b524-d21b1aa1d0b9.pdf

INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Table of contents

Representation Letter

KPMG

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

1. Inventory Valuation

2. The offsetting agreements of financial assets and liabilities

Other Matter

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

KPMG

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2019 and 2018

(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, 2019 and 2018

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) REVIEWED ONLY, NOT AUDITED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS INVENTEC CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Equity attributable to owners of parent

(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, 2019 and 2018

(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, 2019 and 2018

(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, 2019 and 2018

(1) Overview

(2) Financial Statements Authorization Date and Authorization Process

(3) New Standards, Amendments and Interpretations not yet Adopted:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(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, 2019 and 2018

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

(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, 2019 and 2018

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(4) Summary of Significant Accounting Policies

(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, 2019 and 2018

(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, 2019 and 2018

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

1.Foreign currency transactions

2.Foreign operations

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

INVENTEC Audit Report / Information 2019