INVENTEC - Audit Report / Information 2019

Stock Code:2356

INVENTEC CORPORATION

PARENT COMPANY ONLY 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 parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

〜 1 〜

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Independent Auditors’ Report	3
4. Balance Sheets	4
5. Statements of Comprehensive Income	5
6. Statements of Changes in Equity	6
7. Statements of Cash Flows	7
8. Notes to the Parent Company Only Financial Statements
(1)Overview	8
(2)Financial Statements Authorization Date and Authorization Process	8
(3)New Standards, Amendments and Interpretations not yet Adopted	8～11
(4)Significant Accounting Policies	11～28
(5)Significant Accounting Judgments, Estimation, Assumptions, and Sources	29
of Estimation Uncertainty
(6)Explanation to Significant Accounts	29～63
(7)Related Party Transactions	63～67
(8)Pledged Assets	68
(9)Significant Commitments and Contingencies	68
(10)Losses Due to Major Disasters	68
(11)Subsequent Events	68
(12)Other	69
(13)Other disclosures
(a) Information on significant transactions	70～76
(b) Information on investment	77～78
(c) Information on investment in Mainland China	79～80
(14)Segment Information	80
9. List of major account titles	81～96

〜 2 〜

==> picture [169 x 19] intentionally omitted <==

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 financial statements of Inventec Corporation(“the Company”), which comprise the balance sheet as of December 31, 2019 and 2018, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2019 and 2018, and its financial performance and its cash flows for the years ended December 31, 2019 and 2018 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

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

1. Inventory Valuation

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

Description of the key audit matter:

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

〜 3 〜

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 Company’s policies.

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

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

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

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

Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

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

〜 3-1 〜

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain soley responsible for our audit opinion

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

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

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

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

KPMG

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

Notes to Readers

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

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

〜 3-2 〜

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

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 (Note (4) and (6)(c)) 1180 Accounts receivable due from related parties, net (Notes (4), (6)(c) and (7)) 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 (4) and (6)(j)) 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)) 1780 Intangible assets (Notes (4) and (6)(i)) 1900 Other non-current assets (Notes (4), (6)(j), (6)(o), (7) and (8)) TOTAL ASSETS	2019.12.31 Amount % $ 4,698,660 3 182,104 - 1,194,430 1 46,901,062 27 27,188,723 15 47,453,959 27 3,878,921 2 385,103 - 131,882,962 75 2,074,739 1 27,383,652 16 13,225,283 7 13,036 - 71,210 - 1,600,348 1 44,368,268 25 $ 176,251,230 100	2018.12.31 Amount % 2,373,511 1 71,557 - 479,397 - 48,804,422 27 28,667,039 16 52,978,971 30 2,183,875 1 1,166,284 1 136,725,056 76 312,865 - 29,375,472 16 11,531,196 7 - - 74,619 - 1,662,425 1 42,956,577 24 179,681,633 100 LIABILITIES AND EQUITY Current Liabilities： 2100 Short-term borrowings (Note (6)(k)) 2120 Current financial liabilities at fair value through profit or loss (Notes (4) and (6)(b)) 2130 Current contract liabilities (Note (6)(r)) 2170 Accounts payable 2180 Accounts payable due to related parites net (Note (7)) 2230 Current tax liabilities 2200 Other payables (Note (7)) 2280 Current lease liabilities (Note (6)(l)) 2322 Long-term borrowings, current portion (Note (6)(k)) 2399 Other current liabilities Non-current Liabilities： 2540 Long-term borrowings (Note (6)(k)) 2580 Non-current lease liabilities (Note (6)(l)) 2640 Net defined benefit liability, non-current (Notes (4) and (6)(n)) 2670 Other non-current liabilities, others (Notes (4) and (6)(o)) Total Liabilities Equity: 3110 Ordinary share (Note (6)(p)) 3200 Capital surplus (Note (6)(p)) Retained earnings (Note (6)(p)): 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest (Note (6)(p)) Total Equity TOTAL LIABILITIES AND EQUITY	2019.12.31 Amount % $ 21,453,043 12 108,175 - 5,554,820 3 33,426,844 19 43,827,529 25 1,046,130 1 5,332,183 3 5,483 - 300,000 - 4,952,526 3 116,006,733 66 3,050,000 2 7,557 - 640,401 - 1,275,391 1 4,973,349 3 120,980,082 69 35,874,751 20 2,913,461 2 10,799,605 6 1,646,357 1 5,858,979 3 (1,822,005) (1) 55,271,148 31 $ 176,251,230 100	2018.12.31 Amount % 25,244,660 14 4,958 - 5,850,432 3 32,507,121 18 42,944,150 24 954,793 1 5,767,304 3 - - 250,000 - 5,506,148 3 119,029,566 66 3,350,000 2 - - 633,815 - 1,303,771 1 5,287,586 3 124,317,152 69 35,874,751 20 2,912,889 2 10,149,619 6 107,546 - 7,966,033 4 (1,646,357) (1) 55,364,481 31 179,681,633 100

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

〜 4 〜

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

STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

4110 Total sales revenue (Notes (4), (6)(r) and (7)) 5000 Total operating costs (Notes (4), (6)(e) and (7)) Gross profit from operations 5910 Less:Unrealized profit (loss) from sales (Note (7)) 5920 Add:Realized profit (loss) from sales (Note (7)) Gross profit from operations Operating expenses (Notes (4)(q)): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit loss (gain) Total operating expenses Net operating income Non-operating income and expenses (Notes (4), (6)(f) and (6)(t)): 7010 Other income 7020 Other gains and losses, net 7050 Finance costs, net 7775 Share of profit (loss) of subsidiaries, associates and joint ventures accounted for using equity method Total non-operating income and expenses 7900 Profit (loss) from continuing operations before tax 7950 Less: Income tax expenses (Notes (4) and (6)(o)) 8200 Profit Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8380 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss Other comprehensive income, net 8500 Total comprehensive income Earnings per share attributable to stockholders of parent (Notes (4) and (6)(q)) 9750 Basic earnings per share (NT dollars) 9850 Diluted earnings per share (NT dollars)	2019	% 100 96 4 - - 4 - 1 2 - 3 1 - - - 1 1 2 - 2 - - - - - - - - - - 2 1.54 1.53	2018 Amount % 348,798,356 100 334,753,253 96 14,045,103 4 18,889 - 13,751 - 14,039,965 4 1,595,103 - 1,794,062 1 5,036,707 1 6,267 - 8,432,139 2 5,607,826 2 63,464 - 1,093,732 - (1,151,655) - 1,978,533 - 1,984,074 - 7,591,900 2 1,092,044 - 6,499,856 2 (15,243) - (844,849) - (25,100) - (3,049) - (882,143) - 47,215 - (65,106) - - - (17,891) - (900,034) - 5,599,822 2 1.81
	Amount $ 357,462,052 344,938,970 12,523,082 14,174 18,889 12,527,797 1,512,265 1,804,654 5,586,067 5,118 8,908,104 3,619,693 68,002 584,691 (1,207,015) 2,966,083 2,411,761 6,031,454 523,494 5,507,960 (50,641) 830,368 4,377 (10,128) 794,232 (32,310) (982,574) - (1,014,884) (220,652) $ 5,287,308 $ $
			1.80

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

〜 5 〜

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

STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

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 financial statements.

〜 6 〜

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

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities:
Profit before income tax
Adjustments:
Adjustments to reconcile profit before income tax to net cash provided by operating
activities
Depreciation expense
Amortization expense
Expected credit loss
Interest expense
Interest income
Dividend income
Share of profit of subsidiaries, associates and joint ventures accounted for using equity
method
(Gain) loss on disposal of property, plant and equipment
Loss (gain) on disposal of non-current assets held for sale
Gain on disposal of investments
Unrealized foreign exchange loss (gain)
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Changes in operating assets:
(Increase) decrease in financial assets at fair value through profit or loss, mandatorily
measured at fair value
Decrease (increase) in accounts receivable
Decrease (increase) in other receivable
(Increase) decrease in inventories
Decrease (increase) 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
Increase in accounts payable
(Decrease) increase in other payables
Decrease in other current liabilities
Decrease in net defined benefit liabilities
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash inflow (outflow) generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities

2019
2018
$ 6,031,454
7,591,900
408,792
347,395
667,744
542,980
5,118
6,267
1,207,015
1,151,655
(68,002)
(63,464)
(20,301)
(28,866)
(2,966,083)
(1,978,533)
(248)
7,218
(628,983)
-
-
(64)
747,858
(253,809)
(647,090)
(269,221)
(113,791)
40,555
2,404,374
(9,178,676)
4,559,761
(24,117,175)
(1,695,046)
153,267
437,151
(60,079)
5,592,449
(33,162,108)
103,217
(16,711)
(295,612)
547,683
2,804,027
14,829,831
(445,168)
444,183
(553,622)
(1,619,093)
(44,055)
(39,212)
1,568,787
14,146,681
7,161,236
(19,015,427)
6,514,146
(19,284,648)
12,545,600
(11,692,748)
67,911
63,445
4,026,222
5,849,682
(1,279,274)
(1,068,934)
(423,450)
(207,354)
14,937,009
(7,055,909)

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

〜 7 〜

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

STATEMENTS OF CASH FLOWS (CONT'D)

For the Years Ended December 31, 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 investments accounted for using equity method
Proceeds from disposal of investments accounted for using equity method
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
Proceeds from disposal of intangible assets
Increase in other non-current assets
Net cash flows used in investing activities
Cash flows from financing activities:
(Decrease) increase in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Increase in other non-current liabilities
Decrease in other non-current liabilities
Cash dividends paid
Payment of lease liabilities
Net cash flows (used in) from financing activities
Net increase (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 financial statements.

〜 7-1 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

For the years ended December 31, 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.

(2) Financial Statements Authorization Date and Authorization Process

The 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 Company believes that the adoption of the above IFRSs would not have any material impact on its 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.

〜 8 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

The Company 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 Company determined at contract inception whether an arrangement is or contains a lease under IFRIC 4. Under IFRS 16, the Company 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 Company elected to apply the practical expedient to grandfather the assessment of which transactions are leases. The Company 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 Company 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 Company. Under IFRS 16, the Company recognizes right-of-use assets and lease liabilities for most leases – i.e. these leases are on-balance sheet.

The Company decided to apply recognition exemptions to short-term leases and leases of low-value assets of machinery 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 Company’ s incremental borrowing rate as at January 1, 2019. Right-of-use assets are an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

In addition, the Company 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.
－ Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term.

〜 9 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

－ 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.
3) As a lessor

The Company 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 Company accounted for its leases in accordance with IFRS 16 from the date of initial application.

Under IFRS 16, the Company 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 Company reassessed the classification of a sub-lease contract previously classified as an operating lease under IAS 17. The Company concluded that the sub-lease is a finance lease under IFRS 16.

4) Impacts on financial statements

On transition to IFRS 16, the Company recognised additional $10,596 thousands of rightof-use assets and $10,596 thousands of lease liabilities. When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate at January 1, 2019. The weighted-average rate applied is 1.20%.

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:

Operating lease commitment at December 31, 2018 as disclosed in the Company’s financial statements Recognition exemption for: short-term leases leases of low-value assets Discounted using the incremental borrowing rate at January 1, 2019 Lease liabilities recognized at January 1, 2019	January 1, 2019 $ 12,522 (840) (1,195) 10,487 10,596 10,596

〜 10 〜

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

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

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

(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:

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 Company assesses that the adoption of the abovementioned standards would not have any material impact on its 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 Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

(4) Significant Accounting Policies

The accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language parent company only financial statements, the Chinese version shall prevail.

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

(a) Statement of compliance

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

〜 11 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(b) Basis of preparation
1.Basis of measurement

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

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

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

(c) Foreign currencies
1.Foreign currency transaction

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

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

2.Foreign operations

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

〜 12 〜

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

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

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

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

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

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

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

It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
It is held primarily for the purpose of trading;
It is expected to be realized within twelve months after the reporting period; or
The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

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

An entity shall classify a liability as current when:

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

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

〜 13 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(f) Financial instruments

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

1.Financial assets

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

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

1) Financial assets measured at amortized cost

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

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

〜 14 〜

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

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

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

Some trade receivables are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Company; 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 Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

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

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

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

3) Fair value through profit or loss (FVTPL)

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

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

4) Impairment of financial assets

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

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

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

〜 15 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

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

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

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

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

12-month ECL are the portion of ECL that result from default events that are possible within the 12 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 Company is exposed to credit risk.

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

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

〜 16 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

5) Derecognition of financial assets

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

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

2.Financial liabilities and equity instruments
1) Financial liabilities

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

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

2) Derecognition of financial liabilities

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

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

〜 17 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

3) Offsetting of financial assets and liabilities

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

3.Derivative financial instruments and hedge accounting

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

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

(g) Inventories

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

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

(i) Investment in associates

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

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

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

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

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

〜 18 〜

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

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

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

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

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

(j) Investment in subsidiaries

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

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

(k) 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.

〜 19 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

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

(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 Company.

3.Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a 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

〜 20 〜

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

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

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

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

(m) Leases

Applicable from January 1, 2019

(i) Identifying a lease

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

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

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

〜 21 〜

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

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

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

(ii) As a leasee

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

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

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

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

－ fixed payments, including in-substance fixed payments;
－ variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
－ amounts expected to be payable under a residual value guarantee; and
－ 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:

－
there is a change in future lease payments arising from the change in an index or rate; or
－ there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
－ 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
－ there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
－
there is any lease modifications

〜 22 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

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

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

(iii) As a leasor

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

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

Operating leases are not recognized in the Company’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.

〜 23 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(n) Intangible assets
1.Recognition and measurement

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

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

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

2.Subsequent expenditure

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

3.Amortization

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

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

Computer software cost 1 ~ 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 Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

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

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

〜 24 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

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

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

(p) Provisions

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

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

(q) Revenue

1.Revenue from contracts with customers

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

1)Sale of goods

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

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

〜 25 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

2) Consulting services and Management services

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

3) Financing components

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

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

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

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

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

〜 26 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

3.Termination benefits

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

4.Short-term employee benefits

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

(s) Income taxes

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

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

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

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

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

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

1.the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
2.the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or

〜 27 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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.

(t) Business combination

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

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

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

(u) Earnings per share

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

(v) Operating segments

Please refer to the consolidated financial report of Inventec Corporation for the years ended December 31, 2019 and 2018 for operating segments information.

〜 28 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

The preparation of the financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

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

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

(6) Explanation to Significant Accounts

(a) Cash and cash equivalents

Cash Demand deposits and checking accounts Time deposits Cash and cash equivalents in statement of cash flows	2019.12.31 2018.12.31 $ 1,021 1,065 3,969,817 1,645,592 727,822 726,854 $ 4,698,660 2,373,511

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

〜 29 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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
Mandatorily measured at fair value through profit or loss:
Derivative instruments not used for hedging
Forward exchange contracts
Foreign exchange swap
Non-derivative financial assets
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
56,799
64,553
$
182,104
71,557
$ 108,175
3,398
-
1,560
$
108,175
4,958

The Company uses derivative financial instruments to hedge certain foreign exchange and interest risk the Company is exposed to, arising from its operating, financing and investing activities. The following derivative instruments, without the application of hedge accounting, were classified as mandatorily measured at fair value through profit or loss and held-for-trading financial liabilities on December 31, 2019 and 2018:

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

〜 30 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

2) Financial liabilities:

2) Financial liabilities:
Forward Foreign exchange swap Forward		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 2019.01.07-2019.01.09 USD to TWD 2019.01.18-2019.02.01

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 $ 1,323,650 574,327 1,945,519 217,935 $ 3,269,169 792,262

1) Equity investments at fair value through other comprehensive income

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

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

2) For credit risk and market risk, please refer to note 6(u).
3) As of December 31, 2019 and 2018, the aforesaid financial assets were not pledged as collateral.
(c) Trade receivables

Accounts receivable due from related parties Accounts receivables due from non-related parties Less: Loss allowance	2019.12.31 2018.12.31 $ 27,188,723 28,667,039 46,929,348 48,827,590 (28,286) (23,168) $ 74,089,785 77,471,461

〜 31 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

The Company 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 with the amount of $8,592,912 disclosed on December 31, 2018.

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

Current 1 to 180 days past due More than 180 days past due		2019.12.31
	Gross carrying amount $ 67,748,789 6,249,042 120,240 $ 74,118,071	Weighted- average Loss allowance provision 0.00%~0.50% 25,885 0.04%~0.50% 878 0.04%~100% 1,523 28,286

As of the end of February 29, 2020, the amount that received by the Company is $30,466,835.

Current 1 to 180 days past due More than 180 days past due		2018.12.31
	Gross carrying amount $ 71,259,806 6,131,309 103,514 $ 77,494,629	Weighted- average Loss allowance provision 0.00%~0.50% 22,688 0.04%~0.50% 438 0.04%~0.50% 42 23,168

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

Balance atJanuary 1, 2019 and 2018 Impairment losses recognized Impairment losses reversed Balance at December 31, 2019 and 2018	For the years ended December 31, 2019 2018 $ 23,168 354,553 5,118 6,267 - (337,652) $ 28,286 23,168

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

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

〜 32 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

follows:
			2019.12.31
Purchaser	Assignment Facility $ 17,620,075	Factoring Line Factoring Line Note USD 585,774 2018.12.31		Advanced Amount -	Range of Interest Rate Collateral 2.58%~2.68% The accounts receivable factoring is without recourse but the seller still bears the risks except for eligible obligor’s insolvency.
Non-related parties
Purchaser		Factoring Line Factoring Line Note USD 516,343		Advanced Amount -	Range of Interest Rate Collateral 3.22%~3.39% 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 receivables－related parties Other receivables－non-related parties (e) Inventories Raw materials and consumables Work in process Finished goods	2019.12.31 2018.12.31 $ 47,376,952 52,909,391 77,007 69,580 $ 47,453,959 52,978,971 2019.12.31 2018.12.31 $ 1,661,656 491,780 1,250,578 577,460 966,687 1,114,635 $ 3,878,921 2,183,875

〜 33 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

For the years ended December 31, 2019 and 2018, the write-down (write-up) of inventories amounted to $6,913 and $(26,563), respectively, due to obsolessence 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. In addition, when the factor causing the net realizable value to be lower than the cost is disappeared due to obsolescence or disposal, increase of the net realizable value is recognized in deduction of operating cost. For the years ended December 31, 2019 and 2018, expenses of idle capacity amounted to $3,132 and $15,535, 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:

Subsidiaries Associates	2019.12.31 2018.12.31 $ 27,138,165 29,103,814 245,487 271,658 $ 27,383,652 29,375,472

1.Subsidiaries

Please refer to the consolidated financial statments for the year ended December 31, 2019.

2.Associates

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

Individually insignificant associates The Company’s share of profit (loss) of the associates Loss from continuing operations Other comprehensive income Total comprehensive income	2019.12.31 2018.12.31 $ 245,487 271,658 For the years ended December 31, 2019 2018 $ (24,518) (11,000) (1,653) (30,595) $ (26,171) (41,595)

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

〜 34 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(g) Property, plant and equipment

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

Land	Building and construction	Machinery and equipment	Transportation equipment	Office equipment	Other facilities
$ 6,480,044 1,160,980 - -	5,112,450 21,839 - -	238,141 373,895 (2,203) -	26,023 2,689 (3,021) -	2,049,760 133,695 (93,824) -	909,543 55,749 - 16,417
$ 7,641,024	5,134,289	609,833	25,691	2,089,631	981,709
$ 7,140,268 - - (660,224)	5,372,060 - (10,029) (249,581)	233,886 4,907 (652) -	22,278 8,850 (5,105) -	2,021,218 46,103 (66,483) 48,922	894,455 8,908 (104,974) 111,154
$ 6,480,044	5,112,450	238,141	26,023	2,049,760	909,543
$ - - -	717,204 115,436 -	229,856 46,872 (2,203)	14,721 3,757 (3,021)	1,895,479 100,795 (93,824)	443,922 137,647 -
$ -	832,640	274,525	15,457	1,902,450	581,569
$ - - - -	854,776 118,519 (10,029) (246,062)	228,299 2,210 (653) -	15,650 4,176 (5,105) -	1,860,823 101,078 (66,422) -	429,521 121,412 (97,175) (9,836)
$ -	717,204	229,856	14,721	1,895,479	443,922
$ 7,641,024	4,301,649	335,308	10,234	187,181	400,140
$ 6,480,044	4,395,246	8,285	11,302	154,281	465,621
$ 7,140,268	4,517,284	5,587	6,628	160,395	464,934

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

〜 35 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(h) Right-of-use assets

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

Cost: Original balance as of January 1, 2019 Effects of retrospective application Balance as of January 1, 2019 after adjustments Additions 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 adjustments Depreciation for the year Original balance as of January 1, 2019 Carrying amounts: Balance as of December 31,2019 (i) Intangible assets	Land $ - 6,348 6,348 - $ 6,348 $ - - - 1,270 $ 1,270 $ 5,078	Vehicles Total - - 4,248 10,596 4,248 10,596 6,725 6,725 10,973 17,321 - - - - - - 3,015 4,285 3,015 4,285 7,958 13,036

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

Cost: Balance at January 1, 2019 Additions Disposals Balance at December 31, 2019 Balance at January 1, 2018 Additions Disposals Balance at December 31, 2018	Software cost $ 999,782 225,618 (119,384) $ 1,106,016 $ 922,718 252,421 (175,357) $ 999,782

〜 36 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Amortization and impairment losses: Balance at January 1, 2019 Amortization for the period Disposals Balance at December 31, 2019 Balance at January 1, 2018 Amortization for the period Disposals Balance at December 31, 2018 Carrying amounts: Balance at December 31, 2019 Balance at December 31, 2018 Balance at January 1, 2018	Software cost $ 925,163 229,027 (119,384) $ 1,034,806 $ 842,027 258,366 (175,230) $ 925,163 $ 71,210 $ 74,619 $ 80,691

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

Operating costs Operating expenses Total	For the years ended December 31,
	2019 2018 $ 107,336 152,448 121,691 105,918 $ 229,027 258,366

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

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

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

Refundable deposits Non-current asset held-for-sale Asset for recovery Deferred Tax Assets Prepayments for investments Others	2019.12.31 2018.12.31 $ 25,855 33,747 - 738,367 208,022 265,412 1,234,583 1,211,850 15,000 - 501,991 579,333 $ 1,985,451 2,828,709

〜 37 〜

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

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

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

On June 26, 2018, in pursuant to the resolution approved by the Board of the Directors, the Company 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.

As of December 31, 2019 and 2018, the other non-current assets were pledged as collateral, please refer to Note 8.

(k) Long-term and short-term borrowings

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

Unsecured bank loans Secured bank loans Total Current Non-current Total Unused credit line		2019.12.31	2019.12.31
	Interest Rate	Currency	Maturity Date Amount 2020.01.03~2020.02.10 $ 3,590,000 2020.01.16~2020.06.02 17,863,043 2031.02.26 3,350,000 $ 24,803,043 $ 21,753,043 3,050,000 $ 24,803,043 $ 34,772,437
	0.65%~2.56% 1.44%	TWD USD TWD

Unsecured bank loans Secured bank loans Total Current Non-current Total Unused credit line		2018.12.31	2018.12.31
	Interest Rate	Currency	Maturity Date Amount 2019.03.27 $ 400,000 2019.01.01~2019.01.23 24,844,660 2031.02.26 3,600,000 $ 28,844,660 $ 25,494,660 3,350,000 $ 28,844,660 $ 29,069,110
	0.74%~3.38% 1.44%	TWD USD TWD

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

〜 38 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

( l ) Lease liabilities

The Company lease liabilities were as follows:

The Company lease liabilities were as follows:
Current Non-current For the maturities analysis, please refer to Note 6(u).	2019.12.31
	$ 5,483 $ 7,557

The amounts recognized in profit or loss were as follows:

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

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

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

1. Real estate leases

As of December 31, 2019, the Company leases land. 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 office buildings contain extension or cancellation options exercisable by the Company up to one year before the end of the non-cancellable contract period. These leases are negotiated and monitored by local management, and accordingly, contain a wide range of different terms and conditions. The extension options held are exercisable only by the Company and not by the lessors. In which leasee is not reasonably certain to use an optional extended lease term, payments associated with the optional period are not included within lease liabilities.

2. Other leases

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

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

〜 39 〜

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

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

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

(m) Operating Leases

1.Leases as lessee

Non-cancellable operating lease payable were as follows:

Within 1 year Period after 1 to 5 years	2018.12.31
	$ 1,300 4,983 $ 6,283

The Company lease land, warehouse under operating leases. The leases typically run for a period of 1 to 10 years, with an option to renew the lease after that date.

For the year ended December 31, 2018 expenses recognized in profit or loss in respect of operating leases was $1,265.

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 Total undiscounted lease payments	2019.12.31
	$ 15,951 4,877 3,490 142 $ 24,460

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

follows:
Within 1 year Period after 1 to 5 years	2018.12.31
	$ 84,325 76,645 $ 160,970

The rental revenues incurred by leasing land, offices and plants were $67,337 and $100,037 for the years ended December 31, 2019 and 2018, respectively.

〜 40 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(n) 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 $ 1,336,939 1,289,116 (696,538) (655,301) $ 640,401 633,815

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

1) Composition of plan assets

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

The Company’s pension reserve account in Bank of Taiwan amounted to $692,189 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.

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company 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 －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 $ 1,289,116 1,259,244 25,096 28,214 18,913 (4,374) 53,137 35,385 (49,323) (29,353) $ 1,336,939 1,289,116

〜 41 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company 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 $ 655,301 601,460 7,711 7,890 21,409 15,768 61,440 59,536 (49,323) (29,353) $ 696,538 655,301

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Operating cost Selling expenses Administration expenses Research and development expenses	For the years ended December 31,
	2019 2018 $ 10,602 12,473 6,783 7,851 $ 17,385 20,324 $ 1,831 1,963 1,903 2,198 4,151 5,227 9,500 10,936 $ 17,385 20,324

5) Actuarial assumptions

The following are the Company’s principal actuarial assumptions:

Present Value of defined benefit obligations:

Discount rate Future salary increases rate	For the years ended December 31,
	2019 2018 0.750% 1.125% 1.625% 1.625%

〜 42 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

The expected allocation payment made by the Company to the defined benefit plans for the one year period after the reporting date was $62,922.

The weighted-average duration of the defined benefit obligation is 11.1 years.

6) Sensitivity analysis

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

obligation shall be as follows:
December 31, 2019 Discount rate December 31, 2018 Discount rate	Influences of defined benefit obligations
	Increased 0.25% Decreased 0.25% $ (35,766) 37,185 (35,699) 37,152

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

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

2.Defined contribution plans

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

The pension costs incurred from the contributions to the to the Bureau of the Labour Insurance amounted to $194,780 and $176,514 for the years ended December 31, 2019 and 2018, respectively. Except for the accounts payable of $54,044 and $51,003 respectively, the Company have been contributed to the Bureau of the Labour Insurance.

〜 43 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(o) Income taxes

1.The components of income tax expense (gain) in the years 2019 and 2018 were as follows:

Current tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Adjustment in tax rate Income tax expense from continuing operations	For the years ended December 31, 2019 2018 $ 514,786 314,187 41,017 529,444 555,803 843,631 (32,309) 283,417 - (35,004) (32,309) 248,413 $ 523,494 1,092,044

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 $ 10,128 3,049

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

Income before tax Income tax using the statutory tax rate Permanent differences Tax credits Change in unrecognized temporary differences Under provision in prior periods (Over) under provision of temporary differences Other Adjustment in tax rate Undistributed earnings additional tax Income tax expense	For the years ended December 31, 2019 2018 $ 6,031,454 7,591,900 1,206,291 1,518,380 (308,822) (360,212) (73,685) (60,000) (105,032) (533,951) - 529,444 (236,275) 31,818 41,017 - - (35,004) - 1,569 $ 523,494 1,092,044

〜 44 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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	2019.12.31 2018.12.31 $ 749,983 855,015

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
Deferred Tax Assets:
Balance at January 1, 2019
Recognized in profit or loss
Recognized in other comprehensive income
Balance at December 31, 2019
Balance at January 1, 2018
Recognized in profit or loss
Recognized in other comprehensive income
Balance at December 31, 2018

Gain (loss) on
investment
Other
Total
$ 1,210,634
48,225
1,258,859
28,521
(48,225)
(19,704)
$
1,239,155
1,239,155
$ 909,370
-
909,370
301,264
48,225
349,489
$
1,210,634
48,225
1,258,859
Deferred
Income
Defined
Benefit Plans
Others
Total
$ 853,028
70,419
288,403
1,211,850
(82,229)
(8,811)
103,645
12,605
-
10,128
-
10,128
$
770,799
71,736
392,048
1,234,583
$ 616,770
63,932
427,023
1,107,725
236,258
3,438
(138,620)
101,076
-
3,049
-
3,049
$
853,028
70,419
288,403
1,211,850

3.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.

〜 45 〜

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

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

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

(p) 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:

		2019.12.31	2018.12.31
Share capital	$	2,891,959	2,891,959
Other		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.

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

If the Company experienced profit for the year, the meeting of shareholders shall decide on the distribution of the statutory earnings reserve either by new shares or by cash, of up to 25 percent of the actual share capital.

2) Special reserve

In accordance with Permit No.1010012865 as issued by the Financial Supervisory Commission on 6 April 2012, a special reserve equal to the contra account of other shareholders' equity is appropriated from the current and prior period earnings. When the debit balance of any of the contra accounts in the shareholders' equity is reversed, the related special reserve can be reversed. The subsequent reversals of the contra accounts in shareholders' equity shall qualify for additional distributions.

〜 46 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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.

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 Other equity (net of taxes) Exchange differences on translation of foreign financial statements Balance, January 1, 2019 $ (990,250) Exchange differences on foreign operations (32,310) Exchange differences on subsidiaries accounted for using equity method (982,574) 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 - Balance, December 31, 2019 $ (2,005,134)		2019 Dividend per share ($) Amount $ 1.30 4,663,718 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) on available- for-sale financial assets Total (656,107) - (1,646,357) - - (32,310) - - (982,574) 830,368 - 830,368 (11,168) - (11,168) 20,036 - 20,036 183,129 - (1,822,005)	2019 Dividend per share ($) Amount $ 1.30 4,663,718 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) on available- for-sale financial assets Total (656,107) - (1,646,357) - - (32,310) - - (982,574) 830,368 - 830,368 (11,168) - (11,168) 20,036 - 20,036 183,129 - (1,822,005)
		Dividend per share ($) $ 1.30 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealize (losses) on a for-sale fin asset (656,107) - - - - - 830,368 - (11,168) - 20,036 - 183,129 -
		$ Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (656,107) - - 830,368 (11,168) 20,036 183,129
			- - - - - -
			-

3.Other equity (net of taxes)

〜 47 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Exchange differences on translation of foreign financial statements Balance, January 1, 2018 $ (972,359) Effects of retrospective application - Balance at January 1, 2018 after adjustments (972,359) Exchange differences on foreign operations 47,215 Exchange differences on subsidiaries accounted for using equity method (65,106) 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 - Balance, December 31, 2018 $ (990,250)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income - 218,474 218,474 - - (844,849) (29,732) (656,107)	Unrealized gains (losses) on available- for-sale financial assets Total 864,813 (107,546) (864,813) (646,339) - (753,885) - 47,215 - (65,106) - (844,849) - (29,732) - (1,646,357)

(q) 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

〜 48 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(r) Revenue from contracts with customers
1.Disaggregation of revenue

Primary geographical markets Taiwan USA Japan Hong Kong, Macao and Mainland China Other countries Major products Computer product Rendering of services Contract balances 2019.12.31 Contract liabilities $ 5,554,820	Primary geographical markets Taiwan USA Japan Hong Kong, Macao and Mainland China Other countries Major products Computer product Rendering of services Contract balances 2019.12.31 Contract liabilities $ 5,554,820	For the years ended December 31,
		2019 2018 $ 6,364,849 1,151,999 289,742,413 284,349,970 11,423,674 9,867,553 9,869,620 10,360,256 40,061,496 43,068,578 $ 357,462,052 348,798,356 $ 357,056,883 348,207,598 405,169 590,758 $ 357,462,052 348,798,356 2018.12.31 2018.1.1 5,850,432 5,302,749
	$ 5,554,820

2.Contract balances

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

The amount of revenue recognized for the year ended December 31, 2019 and 2018 that was included in the contract liability balance at the beginning of the period was $2,064,774 and $1,600,517.

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.

(s) 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.

〜 49 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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 remuneration 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.

(t) Non-operating income and expenses

1.Other income

The details of other income for the years ended December 31, 2019 and 2018, were as follows:

Interest income Bank deposits	For the years ended December 31,
	2019 2018 $ 68,002 63,464

2.Other income and losses

The details of other income and losses for the years ended December 31, 2019 and 2018, were as follows:

Gains on disposal of investments Gains on disposal of assets held-for-sell Foreign exchange (losses) gains Net gains (losses) on financial assets (liabilities) measured at fair value through profit or loss Other income and losses Net other income and losses	For the years ended December 31, 2019 2018 $ - 64 628,983 - (520,088) 821,241 130,758 (46,259) 345,038 318,686 $ 584,691 1,093,732

3.Finance costs

The details of finance expenses for the years ended December 31, 2019 and 2018, were as follows:

Interest expenses Bank borrowings Others	For the years ended December 31,
	2019 2018 $ 688,460 623,708 518,555 527,947 $ 1,207,015 1,151,655

〜 50 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(u) Financial instruments
1.Credit risks
1) Credit risks exposure

The carrying amounts of financial assets represented the maximum credit risk exposure of the Company.

2) Condition of credit risk concentration

Implicit credit risk of the Company is inherent in its cash and accounts receivable. The cash is deposited in different financial institutions. The Company manages the credit risk exposure with each of these financial institutions and believes that cash do not have a significant credit risk concentration.

The major customers of the Company are centralized in the high-tech computer industry. To minimize credit risk, the Company periodically evaluates the Company’s financial positions and the possibility of collecting trade receivables.

Besides, the Company monitors and reviews the recoverable amount of the trade receivables to ensure the uncollectible amount are recognized appropriately as impairment loss. Therefore, the executives evaluate the Company's credit risk to be limited.

As of December 31, 2019 and 2018, 72% and 71% of accounts receivable were attributable to two major customers. Thus, credit risk is significantly centralized.

2.Liquidity risks

The following are the contractual maturities of financial liabilities of the Company, including estimation of interest, but excluding the impact of netting arrangements:

December 31, 2019 Non-derivative financial liabilities Unsecured bank loans Secured bank loans Accounts payable Other payables Lease liabilities Forward exchange contracts not used for hedging: Outflow Inflow	Carrying amount $ 21,453,043 3,350,000 77,254,373 2,522,391 13,040 108,175 - $ 104,701,022	Contractual cash flows 21,532,539 3,621,350 77,254,373 2,522,391 13,236 (10,119,285) 10,011,110 104,835,714	Less than 6 months 21,532,539 173,670 77,254,373 2,522,391 3,596 (10,119,285) 10,011,110 101,378,394	6 to 12 months - 172,590 - - 2,000 - - 174,590	1 to 2 years - 341,940 - - 3,597 - - 345,537	2 to 5 years More than 5 years - - 999,900 1,933,250 - - - - 4,043 - - - - - 1,003,943 1,933,250

〜 51 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

December 31, 2018 Non-derivative financial liabilities Unsecured bank loans Secured bank loans Accounts payable Other payables Forward exchange swap contracts not used for hedging : Outflow Inflow Foreign exchange contracts not used for hedging: Outflow Inflow	Carrying amount $ 25,244,660 3,600,000 75,451,271 2,874,183 3,398 - 1,560 - $ 107,175,072	Contractual cash flows 25,271,898 3,917,520 75,451,271 2,874,183 (1,228,820) 1,225,422 (1,226,840) 1,225,280 107,509,914	Less than 6 months 25,271,898 125,620 75,451,271 2,874,183 (1,228,820) 1,225,422 (1,226,840) 1,225,280 103,718,014	6 to 12 months - 174,570 - - - - - - 174,570	1 to 2 years - 345,900 - - - - - - 345,900	2 to 5 years More than 5 years - - 1,011,780 2,259,650 - - - - - - - - - - - - 1,011,780 2,259,650

The Company 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 Company’ s exposures to significant currency risk were those from its foreign currency denominated financial assets and liabilities as follows:

2019.12.31

Financial assets Monetary items USD Non-monetary items USD Financial Liabilities Monetary items USD	Foreign currency (In thousand) $ 4,158,034 54,667 3,194,435	Exchange rate TWD USD：TWD 30.08 125,073,663 USD：TWD 30.08 1,644,385 USD：TWD 30.08 96,088,605

〜 52 〜

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

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

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

Financial assets Monetary items USD Non-monetary items USD Financial Liabilities Monetary items USD		2018.12.31
	Foreign currency (In thousand) $ 4,301,987 63,027 136,932 3,320,293	Exchange rate TWD USD：TWD 30.67 131,941,941 USD：TWD 30.67 1,933,037 CNY：USD 4.47 611,919 USD：TWD 30.67 101,833,386

2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, loans and borrowings, accounts payable and other payables that are denominated in foreign currency. A 0.5% depreciation or appreciation of the functional currency against all the non-functional currency as of December 31, 2019 and 2018 would have increased or decreased the net profit after tax by $115,940 and $120,434, respectively. The analysis is performed on the same basis for both periods.

3) Gains or losses on foreign exchange

For the years ended December 31, 2019 and 2018, the foreign exchange gain (loss), including realized and unrealized, amounted to $(520,088) and $821,241, respectively. As Company deals with diverse foreign currencies, therefore, the gains or losses on foreign exchange can not be fully disclosured by its materiality.

4.Interest rate analysis

The Company’s financial assets and financial liabilities with interest rate exposure risk were noted in the liquidity risk section.

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

If the interest rate increases or decreases by 0.5%, the Company’s profit will decrease or increase by $13,400 and$14,400 for the years ended December 31, 2019 and 2018, respectively, assuming all other variable factors remain constant. This is mainly due to the Company's variable rate in borrowings.

〜 53 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

5.Fair value of financial instruments
1) Fair value hierarchy

The Company uses the observable market data to evaluate its assets and liabilities. The different inputs of levels of fair value hierarchy in determination of fair value are as follows:

‧Level 1: quoted prices (unadjusted) in active markets for identified assets or liabilities.
‧Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
‧ Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs).

Financial assets and liabilities at fair value through profit or loss and financial assets at fair value through other comprehensive income is measured on a recurring basis. However, for financial instruments not measured at fair value whose carrying amount is estimated reasonably close to the fair value, and for equity investments that has no quoted prices in the active markets and lease liabilities information is not required :

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 measured at fair value Subtotal Financial assets at amortized cost Cash and cash equivalents Accounts receivable and other receivables Refurdable deposit Subtotal Total			2019.12.31	2019.12.31
	Book Value $ 125,305 56,799 182,104 1,194,430 2,074,739 3,269,169 4,698,660 121,543,744 25,855 126,268,259 $ 129,719,532		Fair Value
		Level 1 - - - 1,194,430 - 1,194,430 - - - - 1,194,430	Level 2 125,305 - 125,305 - 129,221 129,221 - - - - 254,526	Level 3 Total - 125,305 56,799 56,799 56,799 182,104 - 1,194,430 1,945,518 2,074,739 1,945,518 3,269,169 - - - - - - - - 2,002,317 3,451,273

〜 54 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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 - - - 513,897 - 513,897 - - - - 513,897	Level 2 7,004 - 7,004 - 60,430 60,430 - - - - 67,434	Level 3 Total - 7,004 64,553 64,553 64,553 71,557 - 513,897 217,935 278,365 217,935 792,262 - - - - - - - - 282,488 863,819

〜 55 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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 28,844,660 Notes payable and accounts payable 75,451,271 Other payables 5,767,304 Subtotal 110,063,235 Total $ 110,068,193			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 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.

〜 56 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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 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 Proceeds from capital reduction Balance as of December 31, 2018	At fair value through profit or loss Fair value through other comprehensive income $ 64,553 217,935 (4,509) - - 47,835 1,748 1,706,149 (4,993) - - (26,400) $ 56,799 1,945,519 $ 88,826 291,632 (27,477) - - (70,932) 3,204 - - (2,765) $ 64,553 217,935

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 $ (4,509) (27,477) 47,835 (70,932)

〜 57 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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 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 other comprehensive income－equity instruments investments without an active market	Valuation Technique Comparable Listed Companies Method Net Asset Value Method	Significant Non-observable Input The Relationship between Significant Non-observable Input and Fair Value ‧ Discount due to Lack of Market liquidity (30%) ‧ The estimated fair value would increase (decrease) if the marketability discount is lower (higher) ‧ 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 other comprehensive income Equity instruments without an active market December 31, 2018 Financial assets at fair value through other comprehensive income Equity instruments without an active market	Input Market Multiple Market Multiple	Variation	Impact on Fair V Net incom	alue Change on e or loss Unfavorable Change - -	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change 32,693 (32,693) 507 (507)
			Favorable Change $ - $ -
		0.5% 0.5%

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.

〜 58 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

6.Offsetting financial assets and financial liabilities

The Company has financial instruments transactions applicable to the International Financial Reporting Standards Sections 42 NO. 32 approved by the FSC which required for offsetting. Financial assets and liabilities relating those transactions are recognized in the net amount of the balance sheets.

The Company also performs transactions not applicable to the International Financial Reporting Standards Sections 42 NO. 32, but the Company has an exercisable master netting arrangement or similar agreement in place with its counterparties, and both parties reach a consensus regarding net settlement. The aforesaid exercisable master netting arrangement or similar agreement can be net settled after offsetting the financial assets and financial liabilities. Otherwise, the transaction can be settled at the total amount. In the event of default involving one of the parties, the other party can have the transaction net settled.

The following tables present the aforesaid offsetting financial assets and financial liabilities.

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) $ 33,069		Gross amounts of financial liabilities offset in the balance sheet (b) -	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) 33,069 - - 33,069 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 Amounts not off set in the balance sheet (d) the balance sheet (c)=(a)-(b) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) 108,175 - - 108,175 2018.12.31
	Financial assets that are offset which have an exercisable master netting arrangement or similar agreement
		Gross amounts of financial liabilities offset in the balance sheet (b) -	Net amount of financial assets presented in the balance sheet (c)=(a)-(b) 4,238	Amounts not off set in the balance sheet (d) Financial instruments (Note) Cash collateral received Net amount (e)=(c)-(d) - - 4,238
				Financial instruments (Note) -

〜 59 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

		2018.12.31	2018.12.31
Financial liabilities that are		offset which have an exercisable master netting arrangement or similar agreement
Gross amounts of recognized financial liabilities (a) $ 3,704	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 and non-cash financial collaterals are included.

(v) Financial risk management
1.Overview

The Company have exposures to the following risks from its financial instruments:

1) credit risk

2) liquidity risk

3) market risk

The following likewise discusses the Company’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying parent company only financial statements.

2.Risk management framework

The Company are exposed to credit risk, market risk, operating risk and liquidity risk due to its operating activities. To lower the latent unfavorable effects of changing market to the Company’s financial performance, the Company have made efforts in identifying and evaluating the risks and avoiding the uncertainty of the market through derivative financial instruments.

The Board of Directors has the overall responsibility for the establishment and oversight of the Company’ s risk management framework. The financial units 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(u) for the analysis of credit risk of cash, cash equivalent and accounts receivable.

〜 60 〜

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

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

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

4.Liquidity risk

Liquidity risk is a risk that the Company is unable to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as much as possible, that it always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company use actual cost to estimate the cost of its products and services to better assist the Company's monitoring on the cash flow and optimizing the return on investment. As of December 31, 2019, the capital and working funds of the Company are sufficient to meet its entire contractual obligation; therefore, the management is not expecting any significant issue on liquidity risk. As of December 31, 2019 and 2018, the Company's unused credit line were amounted to $34,772,437 and $29,069,110, respectively.

5.Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rate, and equity prices which will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

The Company buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions are carried out within the guidelines set by the Company.

1) Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Company primarily the New Taiwan Dollars (TWD). The currencies used in these transactions are denominated in TWD and USD.

The Company often uses the principle of natural hedging as its basis, and proceed supplemented by derivative instruments for hedging exchange rate risk.

The interest is denominated in the same currency as borrowings. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Company. This provides an economic hedge without derivatives being entered into, and therefore, hedge accounting is not applied in these circumstances.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

〜 61 〜

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

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

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

2) Interest rate risk

The Company’ s interest rate risk arises from long-term borrowings bearing floating interest rates. The fluctuation of the market interest rate changes the floating interest rates of the longterm borrowings, and thus affect the future cash flow. In order to decrease the effect of the market interest rate fluctuation on to the future cash flow, the Company periodically evaluates bank and currency borrowing rate to hedge the cash flow risk caused by the market interest rate fluctuation.

(z) Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, additional paid-in capital, retained earnings of the Company. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Company’ s objective for managing capitals is to maintain investor, creditor and market confidence, and to sustain future development of the business by making debts and capital the most suitable capital structure and optimizing the best of it based on industrial scales, future growth development, and capital expenditures needed for plants and equipment. Thus, the Company calculates the operating funds based on the life cycle of the products, plans for the development in the long run, and then decides the most suitable capitial structure considering the business cycle.

The Company ensures the financial resources and the operating plan are sufficient to support the future needs of operating funds, capital expenditures, debt refunding and dividend distribution.

The Company’s debt to equity ratio at the reporting date was as follows:

Total Liabilities Less: cash and cash equivalents Net debt Total Equity Debt to equity ratio	2019.12.31 2018.12.31 $ 120,980,082 124,317,152 (4,698,660) (2,373,511) 116,281,422 121,943,641 $ 55,271,148 55,364,481 % 210.38 % 220.26

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

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

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

〜 62 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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 $ 3,350,000 25,494,660 10,596 $ 28,855,256 January 1, 2018 $ 3,600,000 14,167,878 $ 17,767,878	Cash flows - (3,852,533) (4,281) (3,856,814) Cash flows - 11,233,940 11,233,940	Non-cash changes Reclassification Foreign exchange movement December 31, 2019 (300,000) - 3,050,000 300,000 (189,084) 21,753,043 6,725 - 13,040 6,725 (189,084) 24,816,083 Non-cash changes Reclassification Foreign exchange movement December 31, 2018 (250,000) - 3,350,000 250,000 (157,158) 25,494,660 - (157,158) 28,844,660
			Reclassification (250,000) 250,000 -

Note: Reclassification is due to additional and early terminated lease liability during this period.

(7) Related Party Transactions

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the parent company only financial statements.

the parent company only financial statements.
Name of related party	Relationship with the Company
Inventec Besta Co., Ltd.	Associates
Inventec Group Charity Foundation	Over one-third of total amount of fund donated by
	the Company
Inventec Corporation (Hong Kong) Ltd.	Subsidiary
Inventec Holding (North America) Corp.	Subsidiary
Inventec (Czech), s.r.o	Subsidiary
Inventec Development Japan Corporation	Subsidiary
Inventec Japan Corporation	Subsidiary
Inventec Investment Co., Ltd.	Subsidiary
AIMobile Co., Ltd.	Joint venture
Inventec Solar Energy Corporation	Subsidiary
E-TON Solar Tech Co., Ltd.	Subsidiary
Inventec Appliances Corp.	Subsidiary
Inventec Manufacturing (India) Private Limited	Subsidiary
Inventec Appliances (Jiangning) Corp.	Indirect holding subsidiary

〜 63 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 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:
Subsidiaries Inventec Holding (North America) Corp. Inventec (Czech), s.r.o Other subsidiaries Associates	For the years ended December 31,
	2019 2018 $ 59,284,144 65,414,426 28,950,547 32,901,012 97,127 164,565 1,720 8 $ 88,333,538 98,480,011

After the Company receives the orders from all regions, the production and marketing department arranges to sell semi-finished products to the subsidiaries. The price is determined in accordance with mutual agreements. Since the subsidiaries are the overseas offices providing after-sales and assembling service, there is no other comparable objects, and the average collection terms are 90 days for sales.

For associates and other related parties, the price and terms were determined in accordance with mutual agreements with its collection terms of OA 90 days for sales. Receivables from related parties were not secured with collaterals.

Unrealized profit (loss) from sales to the subsidiaries of the Company for the years ended December 31, 2019 and 2018 were $14,174 and $18,889 respectively.

2.Purchase

The amounts of significant purchase transactions between the Company and related parties were as follows:

The amounts of significant purchase transactions between as follows:	the Company and related parties wer
Subsidiaries Inventec Corporation (Hong Kong) Ltd. Other subsidiaries	For the years ended December 31,

For the Company’s purchase of materials used for after-sales service from subsidiaries, the price and terms were determined in accordance with mutual agreements with payment terms of 60~90 days.

〜 64 〜

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

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

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

3.Accounts receivable from related parties

The amounts of accounts receivable between the Company and related parties were as follows:

Financial Statement Account	Related Party Categories	2019.12.31 2018.12.31 $ 15,937,407 15,381,248 11,231,269 13,173,039 20,047 112,752 47,244,779 52,836,155 130,868 70,459 1,305 2,776 $ 74,565,675 81,576,429
Accounts receivable Other receivables	Subsidiaries Inventec Holding (North America) Corp. Inventec (Czech), s.r.o Other subsidiaries Subsidiaries Inventec Corporation (Hong Kong) Ltd. Other subsidiaries Associates

Note: Other receivables from subsidiaries are mainly generated from purchasing material for subsidiaries.

4.Accounts payable to Related Parties

The amounts of accounts payables between the Company and related parties were as follows:

Financial Statement Account	Related Party Categories	2019.12.31 2018.12.31 $ 43,413,344 42,694,889 414,185 249,261 143,278 230,087 340 881 $ 43,971,147 43,175,118
Accounts payable Other payables	Subsidiaries Inventec Corporation (Hong Kong) Ltd. Other subsidiaries Subsidiary Associates

Note: Other payables are mainly the payments of computer software, toolings, payment on behalf of others and software development.

〜 65 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

5.Property transactions
1) Acquisition of property, plant, equipment

For the years ended December 31, 2019 and 2018, the Company purchased property, plant, equipment from subsidiaries, and associates and paid the amount $52,919 and $6,177, respectively.

2) Disposal of property, plant and equipment

For the years ended December 31, 2018, the Company sold machinery, office equipment and software to subsidiaries. The total prices gain on property disposal was $2,100 and $1,912, respectively.

3) Acquisition of financial assets

The Company reinvested the amount of $165,000 in AI Mobile Co., ltd. (AI) in March 2016, resulting in its shareholding to increase to 55%.

A resolution was made during the board meeting on August 24, 2018 for AI to increase its cash capital, wherein the Company participated and invested 5,500 thousand shares amounting to $55,000, with the record date set on January 25, 2019.

4) For the years ended December 31, 2019 and 2018, the Company purchased software for products from Inventec Corporation (Hong Kong) Ltd., amounted to $103,995 and $152,320, respectively. The price and term were determined in accordance with mutual agreements with payment term within three months.
5) In 2000, the Company paid property, deferred assets, assets stated under expense to investment Inventec Appliances Corp. resulting in gain on disposal of $103,713 and other revenue of $31,693. In addition, selling of property, plant and equipment, deferred assets and assets stated under expense has generated gain on disposal of $5,829 and other revenue of $6,427. As of December 31, 2019 and 2018, the unrealized gain on property disposal were $19,649 and $20,412, respectively.
6) In 1999, the Company sold property, deferred assets, assets stated under expense and trademarks to Inventec Besta Co., Ltd., resulting in a gain on property disposal of $51,712 and other revenue of $40,453. As of December 31, 2019 and 2018, the unrealized other revenues are both $1,211.

〜 66 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

6.After-sale service, product processing and support services

The payments of after-sale service, product processing and support services to related parties were as follows:

Subsidiaries Inventec Holding (North America) Corp. Inventec Corporation (Hong Kong) Ltd. Other subsidiaries	For the years ended December 31,
	2019 2018 $ 432,424 436,168 346,668 379,411 129,588 55,500 $ 908,680 871,079

7.Acquired investments accounted by the equity method

The Board of directors resolved to establish Inventec Japan Corporation on July 23, 2019. The Company invested 200 shares amounting to JPY10,000 thousand.

8.Others

1) Rental and building management fee collected from and related parties were as follows:

Subsidiaries Associates	For the years ended December 31,
	2019 2018 $ 58,876 95,983 7,099 9,669 $ 65,975 105,652

2) For the years ended December 31, 2019 and 2018, the amount of donation for other related parties were $10,000 and $14,000, respectively.
(c) Key management personnel compensation

Key management personnel compensation includes:

Key management personnel compensation includes:
Short-term employee benefits Post-employment benefit	For the years ended December 31,
	2019 2018 $ 347,602 388,067 2,038 1,894 $ 349,640 389,961

〜 67 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 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 membership card Land, buildings, structures, machinery and equipment, net (Property, plant and equipment) Long-term borrowings Total	2019.12.31 2018.12.31 $ 25,855 33,747 5,893,692 5,947,052 $ 5,919,547 5,980,799

(9) Significant Commitments and Contingencies

(a) Major Commitments:

1.Unused standby letters of credit were as follows: None.

2.Promissory notes issued for the bank credit were as follows:

TWD USD	2019.12.31 2018.12.31 $ 15,890,600 15,375,000 1,356,000 1,281,000

(b) Contingencies: None.

(10) Losses Due to Major Disasters : None.

(11) Subsequent Events : None.

〜 68 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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 Remuneration of directors Others Depreciation Amortization	715,810 57,625 25,265 - 31,621 100,248 176,000	4,368,055 317,725 186,900 87,414 164,352 308,544 491,744	5,083,865 375,350 212,165 87,414 195,973 408,792 667,744	482,976 37,847 19,125 - 14,414 42,348 179,137	4,204,510 293,131 177,713 122,183 96,805 305,047 363,843	4,687,486 330,978 196,838 122,183 111,219 347,395 542,980

The Company For the years ended December 31, 2019 and 2018 employees and employee benefits expenses were as follows:

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages Average adjustment of employee salaries and wages	2019 2018 4,704 4,065 4 4 $ 1,248 1,312 $ 1,082 1,154 % (6.24)

〜 69 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(13) Other disclosures

(a) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the year ended December 31, 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 4 4 5	Inventec (Chongqing) Corp.(Note 2) 〞 Inventec (Pudong) Technology Corp.(Note 3) Inventec Appliances (Nanjing) Corp.(Note 4) Inventec Appliances (Shanghai) Co., Ltd.(Note 4) 〞 Inventec Appliances Corp.	Inventec Huan Hsin (Zhejiang) Technology Co., Ltd. Inventec Asset- Management (Shanghai) Corporation Inventec Asset- Management (Shanghai) Corporation Inventec Appliances (XI'AN) Corporation Inventec Appliances (Shanghai) Enterprise Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd. Inventec Appliances (Malaysia) SDN. BHD.	Other receivables 〞 Other receivables 〞〞〞 Other receivables	Y Y Y Y Y Y Y	151,470 550,800 596,700 119,002 32,130 137,490 800,000	- 517,440 - 99,176 30,184 129,360 800,000	- 517,440 - 77,616 - 64,680 31,649	- 5.225% - 3.045% - 3.045% 1.95%	2 2 2 2 2 2 2	- - - - - - -	Working Capital 〞〞〞〞〞 Working Capital	- - - - - - -	None 〞〞〞〞〞 None	- - - - - - -	6,128,178 2,723,635 1,483,732 326,835 1,785,604 1,785,604 8,944,922	6,809,087 3,026,261 1,854,665 326,835 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 in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

〜 70 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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		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	WK Technology Fund IV Corp. Global Strategy Venture Capital Corporation Arima Communications Corp. WIN Semiconductors Corp. Tomorrow Studio Co., Ltd Tai Yi Precision Corporation New E Materials Co., Ltd. Rasilient Systems, Inc. preference share SKSpruce Holding Limited preferred stock CloudMosa Technologies, Inc. preferred stock QEEXO, Co. preferred stock Rescale, Inc. preferred stock Sensel, Inc. preferred stock SKSpruce Holding Limited convertible short- term note Bank of Communications Pension CNY Financial products CMBC Wealth Management Services Famm Co., Ltd.	- - - - - - - - - - - - - - - - - -	Non-current financial assets at fair value through other comprehensive income 〞〞 Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income 〞〞〞〞〞〞〞〞〞 Current financial assets at fair value through profit or loss - 〞 Non-current financial assets at fair value through other comprehensive income	645 2,835 21,114 4,063 29 2,540 1,760 3,632 3,746 235 568 355 532 70 - - - 100	5,632 14,940 129,221 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	% 1.52 % 6.45 % 10.15 % 0.96 % 0.30 % 6.67 % 16.00 % 6.20 % 3.77 % 2.95 % 3.10 % 1.53 % 4.21 % 10.00 % - % - % - % 14.30	5,632 14,940 129,221 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

〜 71 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 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		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value (Note1)
Inventec Investments Co., Ltd. 〞〞〞〞 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	EPISTAR Corporation UCFUNNEL CO LTD DIITU GLOBAL INC. Sagacity Tech. Co., Ltd. Living Pattern Technology Inc. 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 〞〞〞	- - - - - - - - - - - - - - - - - - - - - - - -	Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income 〞〞〞 Non-current financial assets at fair value through other comprehensive income 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 〞〞〞〞	1,761 83 1 79 4 2,830 500 32,000 1,950 635 461 93 939 314 594 1,603 99 1,250 446 - - - - -	56,973 7,507 - - 595 - 16,175 42,761 - - - - - - 152,800 - - - 301,853 325,959 152,006 1,893,146 73,873	% 0.16 % 5.00 % 10.00 % 15.00 % 13.70 % 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 % - % - % - % - % -	56,973 7,507 - - 595 - 16,175 42,761 - - - - - - 152,800 - - - 301,853 325,959 152,006 1,893,146 73,873

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.

〜 72 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

Note 2: The transactions in foreign currencies were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock:

(Amounts Expressed in Thousands of New Taiwan Dollars)

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 plant	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.

〜 73 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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.	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	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	% 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	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)	% 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

〜 74 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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 Corporation (Hong Kong) Ltd. 〞 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 Hi-Tech Corp. Inventec (Chongqing) 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	Purchases Purchases Sales Sales Purchases Purchases Sales Purchases Sales Purchases Purchases Sales Purchases Sales Sales Sales	282,195 228,542,656 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	% 0.11 % 86.26 % 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 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. 〞〞〞〞〞〞〞〞〞〞〞〞〞〞〞	(96,679) (25,701,028) 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	% 0.11 % 28.31 % 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.

〜 75 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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 Corporation (Hong Kong) Ltd. 〞〞〞 Inventec (Pudong) Technology Corp. 〞 Inventec (Chongqing) Corp. Inventec Appliances Corp. Inventec Appliances (Pudong) Corp. Inventec Appliances (Jiangning) Corp.	Inventec Holding (North America) Corp. Inventec (Czech), s.r.o. Inventec Corporation (Hong Kong) Ltd. (Note) 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.	Subsidiary Subsidiary Subsidiary Parent Parent Associates Associates Associates Associates Associates Associates Subsidiary Associates Associates	15,937,407 11,231,269 47,244,779 254,006 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	3.79 2.37 - 1.95 6.15 - - - 2.55 5.20 8.13 2.20 5.06 6.35	1,948,009 3,544,728 17,767,604 - 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 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	9,280,414 4,543,640 19,530,497 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.

Trading in derivative instruments: Please refer to notes (6)(b) and (6)(u).

〜 76 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

(b) Information on investment:

The following is the information on investees for the year ended December 31, 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	as of December 3	1, 2019	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 Inventec Development Japan Corporation Inventec Japan Corporation E-TON Solar Tech. Co., Ltd. AIMobile Co., Ltd.	Taipei Hong Kong USA New Taipei City Cayman Cayman Czech Taipei Taoyuan Japan Japan Tainan Taipei	Electronic dictionary Investing in Mainland China and import and export business Investment of holding company in America Wireless terminal products Holding Company Holding Company Computer products assembly operations Investment Company Developing, production and selling of multicrystalline solar cells Developing, designing and selling computer peripherals Trading and management service Manufacturing and Selling of solar cells Developing, production and selling of intelligent mobile device	420,347 167,162 159,003 9,656,877 9,812,963 739,500 85,921 1,000,000 1,087,800 630,845 2,954 4,193,723 220,000	420,347 167,162 159,003 9,656,877 9,812,963 739,500 85,921 1,000,000 1,087,800 630,845 - 4,193,723 165,000	23,405 2,500 5,000 536,857 301,768 25,000 - 108,800 108,150 45 - 94,889 22,000	% 37.53 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 33.45 % 100.00 % 100.00 % 29.70 % 55.00	245,487 354,041 1,290,344 9,714,377 13,887,270 958,568 32,250 178,323 250,002 17,630 2,774 396,783 81,383	(65,332) 41,683 42,420 1,471,489 1,461,840 201,949 174,569 (36,251) (265,187) (1,453) 24 (731,238) (97,582)	(24,518) 41,683 42,420 1,471,489 1,461,840 201,949 174,569 (36,251) (84,209) (1,453) 24 (217,051) (53,648)	Associate under equity method Subsidiary 〞〞〞〞〞〞〞〞〞〞〞

〜 77 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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	as of December 3	1, 2019	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 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.	India Hong Kong Taoyuan Tainan India Cayman Taipei Taoyuan USA 〞 Malaysia	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	281,691 1,022,987 150,000 615,050 28 6,003,205 6,400 311,160 24,064 1,504 7,033	281,691 1,022,987 150,000 615,050 28 6,003,205 6,400 311,160 24,064 1,504 7,033	55,994 302,421 15,000 15,813 6 199,575 205 30,930 400 10 1,000	% 99.99 % 90.00 % 4.64 % 4.95 % 0.01 % 100.00 % 38.90 % 9.57 % 100.00 % 100.00 % 100.00	(25,580) - 34,134 66,315 (2) 16,663,394 1,707 70,384 96,744 12,830 6,918	(6,315) (1) (265,187) (731,238) (6,315) 1,386,742 150 (265,187) 2,149 941 (32)	(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, the Company are not required to disclose the share of income / loss of investees..

〜 78 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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	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. Inventec Appliances (Pudong) Corp. Inventec Appliances (Jiangning) Corp. Inventec Appliances (Nanjing) Corp.	Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Multimedia computer and system parts assembling Software production Software production Multimedia computer and system parts assembling Complete of the electronic computer and product and sale of external equipment Equipment leasing, storage, technological development and saleof computer Electronic communication and products assemble Electronic communication and products assemble Electronic communication and products assemble House leasing	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 2,316,160 2,045,440 150,400	(2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (3) (2) (2) (2) (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 2,316,160 1,263,360 270,163	- - - - - - - - - - - - - - -	- - - - - - - - - - - - - - -	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 2,316,160 1,263,360 270,163	(266) (3,184) (132,262) 54,414 1,752,033 178,991 17,244 119 (105,961) 111,716 (16,313) (45,591) 1,028,995 404,613 14,344	% 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	(266) (3,184) (132,262) 54,414 1,752,033 172,250 17,244 119 (105,961) 111,716 (12,724) (45,591) 1,015,156 405,649 14,344	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 9,307,263 4,917,654 365,800	30,234 - - - 2,242,107 321,599 149,517 - - - - 1,535,981 2,297,117 1,636,736 85,353

〜 79 〜

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 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	Investment income (losses) (Note 2)	Book value	Accumulated remittance of earnings in current period (Note 10)
					Out-flow	Inflow
Inventec Appliances (XI'AN) Corporation Inventec Appliances (Nanchang) Corp. APEX Business Management & Consulting (Shanghai) Co., Ltd. Inventec Appliances (Shanghai) Enterprise Inventec Appliances (Nanchang) Intelligent Manufacturing Co., Ltd.	Electronic communication and products assemble Electronic communication and products assemble Business Management Development and consultation on software and hardware; as well as selling of electronic products Electronic communication and products assemble	120,320 63,168 2,164 34,494 258,708	(2) (2) (3) (3) (3)	120,320 63,168 - - -	- - - - -	- - - - -	120,320 63,168 - - -	7,459 (13,332) 21,255 (6,302) (68,737)	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00	7,459 (13,332) 21,255 (6,302) (68,737)	39,689 130,889 57,536 27,121 186,351	- - - - -

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 Company were eliminated in the consolidated financial statements

3. Significant transactions:

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

(14) Segment Information

Please refer to consolidated financial report of Inventec Corporation for the year ended December 31, 2019.

〜 80 〜

INVENTEC CORPORATION

Statement of Cash and Cash Equivalents

December 31, 2019

(In Thousands of New Taiwan Dollars)

Item	Description Amount Petty cash $ 450 Foriegn cash 571 Subtotal 1,021 Checking accounts 259 Demand deposits 39,611 Foriegn deposits USD 130,617 3,929,947 JPY 3,218 EUR 3 CNY 1 Time deposits 727,822 Subtotal 4,697,639 $ 4,698,660
Cash Cash in bank

〜 81 〜

						Note
				Fair value	Unit Total	price amount	294.00 1,194,430
Statement of Changes in Financial Assets Measured at Fair Value	through Other Comprehensive Income - Current	For the year ended December 31, 2019	(In Thousands of New Taiwan Dollars)		Share Total Interest Acquisition Accumulated	or units Par value amount rate cost impairment	4,063 $ 40,630 1,194,430 % - 113,690 -
						Description	Stock
				Name of	financial	instrument	WIN	Semiconductors	Corp.

INVENTEC CORPORATION

Statement of Trade Receivables

December 31, 2019

(In Thousands of New Taiwan Dollars)

Client Name	Description	Amount Note $ 37,134,307 9,795,041 The year-end balance of each client doesn't exceed 5% of the account balance. 46,929,348 (28,286) 46,901,062 15,937,407 11,231,269 20,047 The year-end balance of each client doesn't exceed 5% of the account balance. 27,188,723 - 27,188,723 $ 74,089,785
Non-related parties : HP Other Subtotal Less: Allowance for impairment Net amount Related parties : Inventec Holding (North America) Corp. Inventec (Czech), S.R.O. Other Subtotal Less: Allowance for impairment Net amount Total

〜 83 〜

INVENTEC CORPORATION

Statement of Other Receivables

December 31, 2019

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 74,906 47,376,952 2,101 $ 47,453,959
Non-related parties Related parties Earned revenue receivable Total	Payment on behalf of others Payment of materials on behalf of others Interest receivable from bank

Statement of Inventory

Item	Amount Cost Net realized value Note $ 1,706,188 1,664,674 1,255,327 1,244,023 971,832 964,816 3,933,347 3,873,513 (54,426) $ 3,878,921
	Cost $ 1,706,188 1,255,327 971,832 3,933,347 (54,426) $ 3,878,921
Raw materials Work in process Finished goods Subtotal Less: Allowance for inventory market decline and obsolescence Total

〜 84 〜

INVENTEC CORPORATION

Statement of Other Current Assets

December 31, 2019

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 76 41,076 41,152 88,821 208,022 47,108 $ 385,103
Prepayments Payment on behalf of others Asset for recovery Other	Premium Other Subtotal Other Other

〜 85 〜

		Note
		Collateral		None		〞	〞	〞	〞	〞	〞	〞			〞	〞	〞	〞	〞	〞	〞
Ending balance	Shares (in	thousand) Fair value		645 5,632		2,835 14,940	21,114 129,221	29 176	2,540 -	- -	1,760 14,555	70 1,699,658	1,864,182		235 11,150	3,632 -	3,746 138,701	568 27,703	- -	355 26,637	532 6,366	210,557	2,074,739
Decrease	Shares (in	thousand) Amount		- -		- 879	- -	100 62	- -	5,000 34,500	2,640 22,097	- -	57,538		- 6,809	- -	- -	- -	915 30,670	- -	- 18,040	55,519	113,057
Addition	Shares (in	thousand) Amount		- 1,504		- -	- 68,791	- -	- -	- -	- -	70 1,699,658	1,769,953		- -	- -	676 77,361	- 18,569	- -	- 9,048	- -	104,978	1,874,931
Beginning Balance	Shares (in	thousand) Fair value		645 $ 4,128		2,835 15,819	21,114 60,430	129 238	2,540 -	5,000 34,500	4,400 36,652	- -	151,767		235 17,959	3,632 -	3,070 61,340	568 9,134	915 30,670	355 17,589	532 24,406	161,098	$ 312,865
		Name of financial instrument	Common Stock	WK Technology Fund IV Corp.	Global Strategy Venture Capital	Corporation	Arima Communications Corp.	Tomorrow Studio Co., Ltd.	Tai Yi Precision Corporation	Asia Pacific Telecom Co., Ltd.	New E Materials Co., Ltd.	ZT Group Int'l, Inc.	Subtotal	Preferred Stock	CloudMosa Technologies, Inc.	Rasilient Systems, Inc.	SKSpruce Holding Limited	QEEXO Co.	Planetary Network Technologies Inc.	Rescale Inc.	Sensel Inc.	Subtotal	Total

			Note	Note	〞	〞	〞	〞	〞	〞	〞	〞	〞	〞	〞	〞	〞
			Collateral	None	〞	〞	〞	〞	〞	〞	〞	〞	〞	〞	〞	〞	〞
Market Value or Net	Assets Value	Total	Unit price amount	10.95 255,583	- 354,041	- 1,290,344	- 9,714,377	- 13,887,270	- 958,568	- 32,250	- 17,630	- 2,774	- 178,323	- 250,002	1.57 148,976	- (25,580)	- 81,383	27,145,941
			Amount	245,487	354,041	1,290,344	9,714,377	13,887,270	958,568	32,250	17,630	2,774	178,323	250,002	396,783	(25,580)	81,383	27,383,652
	Beginning Balance Addition Decrease Ending balance	Shares (in Shares (in Shares (in Shares (in Percentage	Name of investee thousand) Amount thousand) Amount thousand) Amount thousand) of ownership	Inventec Besta Co., Ltd. (Note 1) 23,405 $ 271,658 - - - 26,171 23,405 % 37.53	Inventec Corporation (Hong Kong) Ltd. 2,500 661,918 - - - 307,877 2,500 % 100.00	Inventec Holding (North America) Corp. 5,000 1,271,119 - 19,225 - - 5,000 % 100.00	Inventec Appliances Corp. (Note 1) 536,857 11,078,816 - - - 1,364,439 536,857 % 100.00	Inventec (Cayman) Corp. 301,768 14,020,459 - - - 133,189 301,768 % 100.00	IEC (Cayman) Corporation 25,000 958,186 - 382 - - 25,000 % 100.00	Inventec (Czech), S.R.O. - (143,541) - 175,791 - - - % 100.00	Inventec Development Japan Corporation 45 24,244 - - - 6,614 45 % 100.00	Inventec Japan Cororation - - - 2,774 - - - % 100.00	Inventec Investment Co., Ltd. 108,800 212,659 - - - 34,336 108,800 % 100.00	Inventec Solar Energy Corporation 108,150 334,211 - - - 84,209 108,150 % 33.45	E-Ton Solar Tech. Co., Ltd. 94,889 621,962 - - - 225,179 94,889 % 29.70	Manufacturing (India) Private Limited 55,994 (15,678) - - - 9,902 55,994 % 99.99	AI Mobile Co., Ltd. 16,500 79,459 5,500 1,924 - - 22,000 % 55.00	$ 29,375,472 200,096 2,191,916	Note : The value of listed company is market value, and the value of private entity is net equity.

INVENTEC CORPORATION

Statement of Other Non-current Assets

December 31, 2019

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 2,195,789 (1,891,393) 1,234,583 25,855 15,000 20,514 $ 1,600,348
Deferred expense Less: Accumulated, depreciation Deferred tax assets Refundable deposits Prepayments for investments Other assets	Toolings Membership card and customs duty guarantee Empass Technology Inc.

〜 88 〜

	Collateral	None	〞	〞	〞	〞	〞	〞	〞	〞	〞
Loan	commitment	USD 80,000	USD 50,000	USD 205,000	USD 80,000	USD 80,000	TWD 1,500,000	TWD 3,000,000	TWD 2,325,000	TWD 1,800,000	USD 150,000
Range of	interest rate	0.76%	2.53%	2.17%	0.65%	2.39%	2.41%	2.52%	1.00%~2.56%	2.52%	2.54%
	Contract Period	2019.08.07~2020.02.07	2019.12.16~2020.01.16	2019.12.05~2020.02.10	2019.10.28~2020.02.10	2019.12.05~2020.06.02	2019.12.26~2020.03.26	2019.12.12~2020.03.11	2019.12.05~2020.03.04	2019.12.12~2020.03.11	2019.12.19~2020.02.14
	Ending balance	1,000,000	601,600	5,985,920	2,390,000	2,405,308	1,437,757	1,840,753	1,406,045	1,699,256	2,686,404	21,453,043
		$										$
	Description	Fubon Bank	BNP paribas Bank	Citi Bank	Sumito Mitsui Bank	Mega Bank	E, Sun Bank	First Bank	Hua Nan Bank	Land Bank	Bank of Taiwan
	Type	Short-term borrowings

INVENTEC CORPORATION

Statement of Accounts Payable

December 31, 2019

(In Thousands of New Taiwan Dollars)

Vendor name	Description	Amount Note $ 15,879,990 3,715,098 2,082,230 11,749,526 The year-end balance of each client doesn't exceed 5% of the account balance. 33,426,844 43,413,344 414,185 The year-end balance of each client doesn't exceed 5% of the account balance. 43,827,529 $ 77,254,373
Non-related parties : HEWLETT PACKARD INTERNATIONAL PTE LTD. HEWLETT PACKARD CARIBE Y ANDINA BV LLC HEWLETT PACKARD ENTERPRISE CRL Other Subtotal Related parties : Inventec Corporation (Hong Kong) Ltd. Other Subtotal Total

〜 90 〜

INVENTEC CORPORATION

Statement of Other Payables

December 31, 2019

(In Thousands of New Taiwan Dollars)

Item	Description Amount Payables for purchasing softwares $ 92,698 Payables for salary and bonus 2,793,565 Inventory processing fee 599,036 Subtotal 1,846,884 $ 5,332,183
Other payables Total

Statement of Other Current Liabilities

Item	Description	Amount Note $ 1,387 32,014 2,673,297 2,245,828 $ 4,952,526
Other current liabilities	Advance receipts Receipts under custody Temporary credits Other

〜 91 〜

	Note	No financial covenant		〞
	Collateral	Land and building		〞
	Interest rate	% 1.44		% 1.44
(In Thousands of New Taiwan Dollars)	Amount Term of contract	2,233,333 2016.02.26~2031.02.26		1,116,667 2016.02.26~2031.02.26	(300,000)		3,050,000
		$					$
	Description	Secured	borrowings	〞
	Creditor	Hua Nan Bank		Bank of Taiwan	Less: Long-term Borrowings,	current portion	Total

INVENTEC CORPORATION

Statement of Other Non-current Liabilities

December 31, 2019

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 1,239,155 35,675 561 $ 1,275,391
Other non-current liabilities	Deferred tax liabilities Unearned revenue Gaurantee deposits received

〜 93 〜

INVENTEC CORPORATION

Statement of Operating Costs

For the year ended December 31, 2019

(In Thousands of New Taiwan Dollars)

Item Cost of goods sold from manufacturing Direct material Add: Raw material, January 1 Purchase Gain on physical inventory Less: Raw material, December 31 Transferred to expense Sale Inventory loss Direct labor Manufacturing expenses Cost of manufacturing Add: Work in process, January 1 Purchase Inventory profit Less: Work in process, December 31 Transferred to expense Inventory loss Cost of finished goods Add: Finished goods, January 1 Inventory profit Less: Finished goods, December 31 Inventory loss Transferred to expense Transferred to warranty Cost of material sold Cost of merchandise sold (triangle trade) Gain from price recovery of inventory Cost of warranty Expense of idle capacity Gain on physical inventory Cost of provision of sales return Total operating costs	Amount	Amount
	Subtotal Total $ 15,455,363 4,778,155 529,276 7,065,852 792 (1,706,188) (410,212) (690,922) (10,443) 354,604 1,165,101 6,297,860 584,044 10,177,890 1,262 (1,255,327) (137,735) (4,323) 15,663,671 1,118,068 564 (971,832) (469) (322,857) (31,782) 690,922 327,582,411 6,913 1,130,224 3,132 12,615 57,390 $ 344,938,970	Total
		15,455,363 690,922 327,582,411 6,913 1,130,224 3,132 12,615 57,390

〜 94 〜

INVENTEC CORPORATION

Statement of Selling Expenses

For the year ended December 31, 2019

(In Thousands of New Taiwan Dollars)

Item	Decription	Amount Note $ 424,950 370,053 339,876 207,143 170,243 $ 1,512,265
Salary and wages expense Amortization expense Freight Miscellaneous expense Other expense

Statement of Administrative Expenses

Item	Description	Amount Note $ 909,775 232,960 138,467 93,883 429,569 $ 1,804,654
Salary and wages expense Miscellaneous expense Depreciation expense Repair expense Other expense

〜 95 〜

INVENTEC CORPORATION

Statement of Research and Development Expenses

December 31, 2019

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 3,297,984 890,525 1,397,558 $ 5,586,067
Salary and wages expense Supplies Other expense

〜 96 〜

AI assistant

INVENTEC — Audit Report / Information 2019

52026_rns_2019-11-30_c00fc963-b13b-4523-b6e9-ac0872b11163.pdf

INVENTEC CORPORATION

PARENT COMPANY ONLY FINANCIAL STATEMENTS

Table of contents

KPMG

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

1. Inventory Valuation

Description of the key audit matter:

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

Auditor’s Responsibilities for the Audit of the Financial Statements

Notes to Readers

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

BALANCE SHEETS

December 31, 2019 and 2018

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

STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

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

STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2019 and 2018

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

STATEMENTS OF CASH FLOWS (CONT'D)

For the Years Ended December 31, 2019 and 2018

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

For the years ended December 31, 2019 and 2018

(1) Overview

(2) Financial Statements Authorization Date and Authorization Process

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

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

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

(4) Significant Accounting Policies

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

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

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

1.Financial assets

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

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

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

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

(i) Investment in associates

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

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

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

(j) Investment in subsidiaries

(k) Joint Arrangements

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

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D)

For the years ended December 31, 2019 and 2018

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

INVENTEC Audit Report / Information 2019