NTC - Interim / Quarterly Report 2020

Stock Code:2408

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Nine Months Ended September 30, 2020 and 2019

Address: No.98, Nanlin Rd., Dake Vil., Taishan Dist., New Taipei City, Taiwan (R.O.C.) Telephone:(02)2904-5858

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

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Review Report
4. Consolidated Balance Sheets
5. Consolidated Statements of Comprehensive Income
6. Consolidated Statements of Changes in Equity
7. Consolidated Statements of Cash Flows
8. Notes to the Consolidated Financial Statements
(1)
Company history
(2)
Approval date and procedures of the consolidated financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Information on major shareholders
(14) Segment information Page

1
2
3
4
5
6
7
8
8
8～10
10～11
11
11～33
33～36
36
36～37
37
37
38
39～40
41
41～42
42
42～43

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Information on major shareholders (14) Segment information	Page
	1 2 3 4 5 6 7 8 8 8`～`10 10`～`11 11 11`～`33 33`～`36 36 36`～`37 37 37 38 39`～`40 41 41`～`42 42 42`～`43

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

KPMG

台北市110615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 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

Independent Auditors’ Review Report

To the Board of Directors of Nanya Technology Corporation ：

Introduction

We have reviewed the accompanying consolidated balance sheets of Nanya Technology Corporation (the "Company") and its subsidiaries (together referred to as the "Group") as of September 30, 2020 and 2019, the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2020 and 2019, as well as the changes in equity and cash flows for the nine months ended September 30, 2020 and 2019, and notes to the consolidated financial statements, including a summary of significant accounting policies. The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard ("IASs") 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph for the nine months ended September 30, 2019, we conducted our reviews in accordance with Statement of Auditing Standards 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” . A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion of the consolidated financial report for the nine months ended September 30, 2019

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect the total assets amounting to $3,110,780 thousand, constituting 1.88% of the consolidated total assets; and the total liabilities amounting to $21,134 thousand, constituting 0.15% of the consolidated total liabilities as of September 30, 2019, as well as the total comprehensive income amounting to $11,435 thousand and $46,460 thousand, constituting 0.54% and 0.53% of the consolidated total comprehensive income for the three months and nine months ended September 30, 2019, respectively.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

3-1

Unqualiflied Conclusion and Qualified Conclusion

Except for the adjustments for the nine months ended September 30, 2019, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries described in the Basis for Qualified Conclusion paragraph for the nine months ended September 30, 2019 above been reviewed by independent auditors, based on our reviews and the review report of another auditor (please refer to Other Matter paragraph), nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of September 30, 2020 and 2019, and of its consolidated financial performance for the three months and nine months ended September 30, 2020 and 2019, as well as of its consolidated cash flows for the nine months ended September 30, 2020 and 2019, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Other Matter

We did not review the financial statements of Formosa Advanced Technologies Co., Ltd., an investment in other accounted for using the equity method of the Group. The financial statements were reviewed by another auditor, whose review report has been furnished to us, and our conclusion, insofar as it relates to the amounts included for Formosa Advanced Technologies Co., Ltd., is based solely on the review report of another auditor. The aforementioned investment accounted for using the equity method amounted to $2,949,195 thousand , constituting 1.78% of the consolidated total assets as of September 30, 2019, and the share of profit of associates accounted for using the equity method amounted to 74,627 thousand and 176,033 thousand, constituting 2.78% and 1.82% of the consolidated total profit before tax for the three months and nine months ended September 30, 2019, respectively.

The engagement partners on the reviews resulting in this independent auditors’ review report are Hui-Chih Ko and Hsin-Yi Kuo.

KPMG

Taipei, Taiwan (Republic of China) November 4, 2020

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated statement of 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 review such consolidated financial statements are those generally accepted and applied in the Republic of China.

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of September 30, 2020 and 2019

Nanya Technology Corporation and Subsidiaries

Consolidated Balance Sheets

September 30, 2020, December 31 and September 30, 2019 (Expressed in Thousands of New Taiwan Dollars)

September 30, 2020 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 47,125,617 28 1150 Notes receivable, net (Notes 6(b)(n)) - - 1160 Notes receivable due from related parties, net (Notes 6(b)(n) and 7) - - 1170 Accounts receivable, net (Notes 6(b)(n)) 9,636,173 6 1180 Accounts receivable due from related parties, net (Note 6(g)) 1,384 - 1200 Other receivables (Note 6(g)) 1,806,927 1 1310 Inventories (Note 6(c)) 15,455,652 10 1410 Prepayments 2,078,465 1 Total current assets 76,104,218 46 Non-current assets: 1550 Investments accounted for using equity method (Note 6(d)) 4,871,850 3 1600 Property, plant and equipment (Notes 6(e) and 7) 81,108,305 49 1755 Right-of-use assets (Note 6(f)) 1,837,302 1 1780 Intangible assets 1,319,201 1 1840 Deferred tax assets 456,866 - 194D Long-term financial lease payments receivable (Note 6(g)) 537,083 - 1990 Other non-current assets (Note 8) 971,640 - Total non-current assets 91,102,247 54 Total assets $ 167,206,465 100	December 31, 2019 Amount % 44,148,979 27 - - 41,545 - 7,291,735 4 - - 1,620,743 1 18,122,496 11 1,637,129 1 72,862,627 44 5,019,236 3 85,530,112 52 99,222 - 296,710 - 555,885 - 689,886 1 46,974 - 92,238,025 56 165,100,652 100	September 30, 2019 Amount % 43,183,908 26 1,039 - - - 8,046,973 5 - - 1,817,457 1 17,561,426 11 1,593,011 1 72,203,814 44 2,949,195 2 88,662,250 54 148,833 - 234,236 - 657,886 - 738,223 - 53,161 - 93,443,784 56 165,647,598 100 Liabilities and Equity Current liabilities: 2170 Accounts payable 2180 Accounts payable to related parties (Note (7)) 2200 Other payables 2220 Other payables to related parties (Note 7) 2230 Current tax liabilities 2280 Current lease liabilities (Notes 6(h) and 7) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2570 Deferred tax liabilities 2580 Non-current lease liabilities (Notes 6(h) and 7) 2640 Net defined benefit liability, non-current 2670 Other non-current liabilities Total non-current liabilities Total liabilities Equity (Note 6(k)): 3110 Ordinary share 3140 Advance receipts for share capital 3200 Capital surplus 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury shares Total equity Total liabilities and equity	September 30, 2020		December 31, 2019		September 30, 2019 Amount % 2,836,676 2 270,690 - 6,828,677 4 1,620,364 1 1,382,167 1 149,622 - 896 - 13,089,092 8 631 - - - 535,465 - 239,762 - 775,858 - 13,864,950 8 30,725,609 19 22,430 - 31,957,132 20 13,128,412 8 273,834 - 76,804,409 46 17,754 - (1,146,932) (1) 151,782,648 92 165,647,598 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except Earnings Per Share)

4000 Operating revenue (Note 6(n) and 7) 5000 Operating costs (Notes 6(e)(f)(i)(l)(o) and 7) Gross profit from operations Operating expenses (Notes 6(e)(f)(i)(l)(o) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses Total operating expenses Net operating income Non-operating income and expenses (Notes 6(b)(e)(g)(h)(p) and 7): 7100 Interest income 7020 Other gains and losses, net 7050 Finance costs 7055 Expected credit impairment gain 7060 Share of profit of associates accounted for using equity method, net Total non-operating income and expenses 7900 Profit from continuing operations before tax 7950 Income tax expenses (Note 6(j)) Profit 8300 Other comprehensive income: (Note 6(k)) 8310 Components of other comprehensive income (loss) income that will not be reclassified to profit or loss 8311 Remeasurements of the net defined benefit 8320 Share of other comprehensive income (loss) of associates accounted for using equity method, components of other comprehensive income (loss) that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income (loss) that will be reclassified to profit or loss Components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Other comprehensive (loss) income, net 8500 Comprehensive income Earnings per share (Note 6(m)) 9750 Basic earnings per share 9850 Diluted earnings per share	For the three months ended September 30, 2020 2019 Amount % Amount % $ 15,323,867 100 14,799,353 100 (11,362,124) (74) (10,662,428) (72) 3,961,743 26 4,136,925 28 (196,425) (1) (204,726) (2) (306,864) (2) (335,332) (2) (1,388,970) (9) (1,344,676) (9) (1,892,259) (12) (1,884,734) (13) 2,069,484 14 2,252,191 15 108,214 - 262,241 1 (195,324) (1) 95,286 1 (6,350) - (725) - - - 108 - 118,517 1 74,627 1 25,057 - 431,537 3 2,094,541 14 2,683,728 18 (481,165) (3) (478,931) (3) 1,613,376 11 2,204,797 15 - - - - (70,408) - (34,541) - - - - - (70,408) - (34,541) - (645,359) (5) (35,514) - - - - - (645,359) (5) (35,514) - (715,767) (5) (70,055) - $ 897,609 6 2,134,742 15 $ 0.53 0.72 $ 0.52 0.72	For the nine months ended September 30, 2020 2019 Amount % Amount % 46,232,094 100 38,611,949 100 (33,791,981) (73) (25,494,613) (66) 12,440,113 27 13,117,336 34 (607,718) (1) (527,521) (1) (1,002,805) (2) (960,819) (3) (3,698,734) (9) (3,552,126) (9) (5,309,257) (12) (5,040,466) (13) 7,130,856 15 8,076,870 21 586,664 1 1,015,088 3 (227,315) - 400,005 1 (6,917) - (2,716) - - - 9,546 - 371,083 1 176,033 - 723,515 2 1,597,956 4 7,854,371 17 9,674,826 25 (1,092,479) (2) (1,136,096) (3) 6,761,892 15 8,538,730 22 - - - - (207,159) - (23,405) - - - - - (207,159) - (23,405) - (1,207,638) (3) 314,993 1 - - - - (1,207,638) (3) 314,993 1 (1,414,797) (3) 291,588 1 5,347,095 12 8,830,318 23 2.21 2.81 2.19 2.77
	2020 Amount % $ 15,323,867 100 (11,362,124) (74) 3,961,743 26 (196,425) (1) (306,864) (2) (1,388,970) (9) (1,892,259) (12) 2,069,484 14 108,214 - (195,324) (1) (6,350) - - - 118,517 1 25,057 - 2,094,541 14 (481,165) (3) 1,613,376 11 - - (70,408) - - - (70,408) - (645,359) (5) - - (645,359) (5) (715,767) (5) $ 897,609 6 $ 0.53 $ 0.52	2020 Amount % 46,232,094 100 (33,791,981) (73) 12,440,113 27 (607,718) (1) (1,002,805) (2) (3,698,734) (9) (5,309,257) (12) 7,130,856 15 586,664 1 (227,315) - (6,917) - - - 371,083 1 723,515 2 7,854,371 17 (1,092,479) (2) 6,761,892 15 - - (207,159) - - - (207,159) - (1,207,638) (3) - - (1,207,638) (3) (1,414,797) (3) 5,347,095 12 2.21 2.19

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Ordinary shares	Special reserve	Other equity interest Unrealized gains Exchange differences on translation of foreign financial statements (losses) on financial assets measured at fair value through other comprehensive income Total other equity interest (179,736) (94,098) (273,834) - - - 314,993 (23,405) 291,588 314,993 (23,405) 291,588 - - - - - - - - - - - - - - - - - - - - - - - - 135,257 (117,503) 17,754 (938,039) (103,061) (1,041,100) - - - (1,207,638) (207,159) (1,414,797) (1,207,638) (207,159) (1,414,797) - - - - - - - - - - - - - - - - - - - - - (2,145,677) (310,220) (2,455,897)	Other equity interest Unrealized gains Exchange differences on translation of foreign financial statements (losses) on financial assets measured at fair value through other comprehensive income Total other equity interest (179,736) (94,098) (273,834) - - - 314,993 (23,405) 291,588 314,993 (23,405) 291,588 - - - - - - - - - - - - - - - - - - - - - - - - 135,257 (117,503) 17,754 (938,039) (103,061) (1,041,100) - - - (1,207,638) (207,159) (1,414,797) (1,207,638) (207,159) (1,414,797) - - - - - - - - - - - - - - - - - - - - - (2,145,677) (310,220) (2,455,897)	Other equity interest Unrealized gains Exchange differences on translation of foreign financial statements (losses) on financial assets measured at fair value through other comprehensive income Total other equity interest (179,736) (94,098) (273,834) - - - 314,993 (23,405) 291,588 314,993 (23,405) 291,588 - - - - - - - - - - - - - - - - - - - - - - - - 135,257 (117,503) 17,754 (938,039) (103,061) (1,041,100) - - - (1,207,638) (207,159) (1,414,797) (1,207,638) (207,159) (1,414,797) - - - - - - - - - - - - - - - - - - - - - (2,145,677) (310,220) (2,455,897)
		Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
$ 31,032,389 - - - - - - - - - (501,360) 194,580 $ 30,725,609 $ 30,733,649 - - - - - - - - - 192,470 $ 30,926,119	39,163	(179,736) - 314,993 314,993 - - - - - - - - 135,257 (938,039) - (1,207,638) (1,207,638) - - - - - - - (2,145,677)		(94,098) - (23,405) (23,405) - - - - - - - - (117,503) (103,061) - (207,159) (207,159) - - - - - - - (310,220)
	- -
	-
	- 234,671 - - - - - -
	273,834
	273,834
	- -
	-
	- 767,266 - - - - -
	1,041,100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit: Depreciation expense Amortization expense Expected credit impairment gain Interest expense Interest income Share-based payments Share of profit of associates accounted for using equity method Gain or loss on disposal of property, plant and equipment Reversal of impairment loss on non-financial assets Unrealized foreign exchange loss Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Notes and accounts receivable (including related parties) Other receivables Inventories prepayments Accounts payable (including related parties) Other payables (including related parties) Other current liabilities Net defined benefit liability Other non-current liabilities Total changes in operating assets and liabilities Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows used in investing activities: Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Decrease in lease and installment receivables Increase in other non-current assets Dividends received Net cash flows used in investing activities Cash flows used in financing activities: Decrease in guarantee deposits received Decrease in other payables to related parties Payment of lease liabilities Cash dividends paid Exercise of employee share options Payments to acquire treasury shares Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the nine months ended September 30, 2020 2019 $ 7,854,371 9,674,826 10,644,574 10,621,739 172,924 66,328 - (9,546) 6,917 2,716 (586,664) (1,015,088) 58,420 117,759 (371,083) (176,033) 6,651 (4,416) - (213,283) 112,337 110,271 (30,748) - 10,013,328 9,500,447 (2,397,657) 1,670,279 (131,866) (424,959) 2,666,844 (5,393,689) (441,336) 165,305 286,091 (384,766) (2,131,367) (1,296,227) (91,586) (672) (3,524) (1,838) (6,794) 16,733 (2,251,195) (5,649,834) 15,616,504 13,525,439 494,447 885,366 (6,540) (373) (1,478,209) (2,011,004) 14,626,202 12,399,428 (4,927,070) (4,655,843) 44 4,712 (504) (5,641) (818,681) (79,529) 198,248 198,248 (945,018) (9,503) 311,324 210,055 (6,181,657) (4,337,501) (3,104) (311,368) (44) (4,115) (144,225) (133,947) (4,600,000) (21,700,000) 581,408 657,132 - (1,029,878) (4,165,965) (22,522,176) (1,301,942) 260,151 2,976,638 (14,200,098) 44,148,979 57,384,006 $ 47,125,617 43,183,908
	2020 $ 7,854,371 10,644,574 172,924 - 6,917 (586,664) 58,420 (371,083) 6,651 - 112,337 (30,748) 10,013,328 (2,397,657) (131,866) 2,666,844 (441,336) 286,091 (2,131,367) (91,586) (3,524) (6,794) (2,251,195) 15,616,504 494,447 (6,540) (1,478,209) 14,626,202 (4,927,070) 44 (504) (818,681) 198,248 (945,018) 311,324 (6,181,657) (3,104) (44) (144,225) (4,600,000) 581,408 - (4,165,965) (1,301,942) 2,976,638 44,148,979 $ 47,125,617

Cash flows from operating activities:
Profit before tax
Adjustments:
Adjustments to reconcile profit:
Depreciation expense
Amortization expense
Expected credit impairment gain
Interest expense
Interest income
Share-based payments
Share of profit of associates accounted for using equity method
Gain or loss on disposal of property, plant and equipment
Reversal of impairment loss on non-financial assets
Unrealized foreign exchange loss
Others
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Notes and accounts receivable (including related parties)
Other receivables
Inventories
prepayments
Accounts payable (including related parties)
Other payables (including related parties)
Other current liabilities
Net defined benefit liability
Other non-current liabilities
Total changes in operating assets and liabilities
Cash inflow generated from operations
Interest received
Interest paid
Income taxes paid
Net cash flows from operating activities
Cash flows used in investing activities:
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Acquisition of intangible assets
Decrease in lease and installment receivables
Increase in other non-current assets
Dividends received
Net cash flows used in investing activities
Cash flows used in financing activities:
Decrease in guarantee deposits received
Decrease in other payables to related parties
Payment of lease liabilities
Cash dividends paid
Exercise of employee share options
Payments to acquire treasury shares
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

For the nine months ended
September 30,
2020
2019
$ 7,854,371
9,674,826
10,644,574
10,621,739
172,924
66,328
-
(9,546)
6,917
2,716
(586,664)
(1,015,088)
58,420
117,759
(371,083)
(176,033)
6,651
(4,416)
-
(213,283)
112,337
110,271
(30,748)
-
10,013,328
9,500,447
(2,397,657)
1,670,279
(131,866)
(424,959)
2,666,844
(5,393,689)
(441,336)
165,305
286,091
(384,766)
(2,131,367)
(1,296,227)
(91,586)
(672)
(3,524)
(1,838)
(6,794)
16,733
(2,251,195)
(5,649,834)
15,616,504
13,525,439
494,447
885,366
(6,540)
(373)
(1,478,209)
(2,011,004)
14,626,202
12,399,428
(4,927,070)
(4,655,843)
44
4,712
(504)
(5,641)
(818,681)
(79,529)
198,248
198,248
(945,018)
(9,503)
311,324
210,055
(6,181,657)
(4,337,501)
(3,104)
(311,368)
(44)
(4,115)
(144,225)
(133,947)
(4,600,000)
(21,700,000)
581,408
657,132
-
(1,029,878)
(4,165,965)
(22,522,176)
(1,301,942)
260,151
2,976,638
(14,200,098)
44,148,979
57,384,006
$
47,125,617
43,183,908

2020
$ 7,854,371
10,644,574
172,924
-
6,917
(586,664)
58,420
(371,083)
6,651
-
112,337
(30,748)
10,013,328
(2,397,657)
(131,866)
2,666,844
(441,336)
286,091
(2,131,367)
(91,586)
(3,524)
(6,794)
(2,251,195)
15,616,504
494,447
(6,540)
(1,478,209)
14,626,202
(4,927,070)
44
(504)
(818,681)
198,248
(945,018)
311,324
(6,181,657)
(3,104)
(44)
(144,225)
(4,600,000)
581,408
-
(4,165,965)
(1,301,942)
2,976,638
44,148,979
$
47,125,617

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards Nanya Technology Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

September 30, 2020 and 2019

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

(1) Company history

Nanya Technology Corporation (the “ Company” ) was legally established with the approval of the Ministry of Economic Affairs on March 4, 1995, with registered address at No.98 Nanlin Road Dake Vil., Taishan District, New Taipei City, Taiwan. The main operating activities of the Company and its subsidiary (the “Group”) are researching, developing, manufacturing and selling semiconductor products, and the import and export of its machinery, equipment and raw materials.

(2) Approval date and procedures of the consolidated financial statements:

The consolidated financial statements were authorized for issuance by the Board of Directors on November 4, 2020.

(3) New standards, amendments and interpretations 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, 2020.

	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
Amendments to IFRS 16 “Covid-19-Related Rent Concessions”	June 1, 2020

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

(b) The impact of IFRS issued by the 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, 2021:

	Effective date
New, Revised or Amended Standards and Interpretations	per IASB
Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying	January 1, 2021
IFRS 9”

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

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” January 1, 2023 － Amendments to IAS 16 “Property, Plant and Equipment Proceeds before January 1, 2022 Intended Use” － Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract” January 1, 2022 Annual Improvements to IFRS Standards 2018-2020 January 1, 2022 Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 Amendments to IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate January 1, 2021 － Benchmark Reform Phase 2”

Those which may be relevant to the Group are set out below:

Issuance / Release
Dates
January 23, 2020

Standards or
Interpretations
Content of amendment
Amendments to IAS 1
“Classification of Liabilities as
Current or Non-current”
The amendments aim to promote consistency
in applying the requirements by helping
companies
determine
whether,
in
the
statement of balance sheet, debt and other
liabilities with an uncertain settlement date
should be classified as current (due or
potentially due to be settled within one year)
or non-current. The amendments include
clarifying the classification requirements for
debt a company might settle by converting it
into equity.

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for full annual consolidated financial statements.

The significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2019. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2019.

(b) Basis of consolidation
(i) List of subsidiaries included in the consolidated financial statements:

Investor	The name of subsidiaries	Business activity		Shareholding	September 30, 2019 Note % 100.00 Note % 100.00 Note % 100.00 Note % 100.00 Note % 100.00 % 100.00 Note % 100.00 Note
			September 30, 2020	December 31, 2019 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
The Company The Company The Company The Company The Company NANYA TECHNOLOGY CORP. H.K. NANYA TECHNOLOGY CORP. H.K.	NANYA TECHNOLOGY CORP. U.S.A NANYA TECHNOLOGY CORP. Delaware NANYA TECHNOLOGY CORP. H.K. NANYA TECHNOLOGY CORP. Japan NANYA TECHNOLOGY INTERNATIONAL LTD. NANYA TECHNOLOGY CORP., Europe GmbH NANYA TECHNOLOGY CORP. Shenzen	Sales of semiconductor products Design of semiconductor products Sales of semiconductor products Sales of semiconductor products General investment business Sales of semiconductor products Sales of semiconductor products	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00

Note: The Company is a non-significant subsidiary, its financial statements for the nine months ended September 30, 2019 have not been reviewed by independent auditors.

(ii) Subsidiaries not included in the consolidated financial statements: None.

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period. (and allocated to current and deferred taxes based on its proportionate size.)

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Except for the following, the preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2019. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2019.

The accounting policies involved significant judgments and the information that have significant effect on the amounts recognized in the consolidated financial statements are as follows:

(a) Judgment of whether the Group has substantive control over its investees

The Group holds 32% of the voting shares of Formosa Advanced Technologies Co., Ltd (FATC), whose shareholders hold 68% of its remaining shares, where 31% of the voting rights are concentrated in a specific shareholder, Formosa Taffeta Co. Ltd., resulting in the Group for failing to obtain more than half of the total number of FATC’s directors and voting rights at a shareholders’ meeting. Therefore, it is determined that the Group has only significant influence over FATC.

(6) Explanation of significant accounts:

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2019. Please refer to Note 6 of the 2019 annual consolidated financial statements.

(a) Cash and cash equivalents

Petty cash Checking accounts and demand deposit Cash equivalents: Time deposits Commercial paper Repurchase agreements collateralized by corporate bonds	September 30, 2020 $ 113 3,948,287 39,539,215 2,546,002 1,092,000 $ 47,125,617	December 31, 2019 147 4,119,539 39,215,453 454,300 359,540 44,148,979	September 30, 2019
			146 4,715,457 36,284,926 1,560,881 622,498
			43,183,908

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Notes and accounts receivable

Notes receivable from operating activities Notes receivable-related parties from non- operating activities Accounts receivable-measured at amortized cost Accounts receivable-related parties	September 30, 2020 $ - - 9,636,173 1,384 $ 9,637,557	December 31, 2019 - 41,545 7,291,735 - 7,333,280	September 30, 2019
			1,039 - 8,046,973 -
			8,048,012

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for notes and accounts receivables (including related parties). To measure the expected credit losses, notes and accounts 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 for notes and account receivable (including related parties) was determined as follows:

September 30, 2020	September 30, 2020
Notes and accounts receivables gross carrying amount Weighted average loss rate $ 9,506,642 - 130,915 - $ 9,637,557 December 31, 2019		Loss allowance provision
		- -
		-

	Weighted average loss rate - -	Loss allowance provision
		- -
		-

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2019	September 30, 2019
Notes and accounts receivables gross carrying amount $ 7,862,119 183,526 2,367 $ 8,048,012	Weighted average loss rate - - -	Loss allowance provision
		- - -
		-

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

Balance on January 1, Reversal of impairment losses Foreign exchange gains Balance on September 30,	For the nine months ended September 30,	For the nine months ended September 30,
	2020 $ - - - $ -	2019
		9,298 (9,546) 248
		-

Raw materials Work in progress Finished goods	September 30, 2020 $ 340,407 6,811,477 8,303,768 $ 15,455,652	December 31, 2019 381,848 7,329,074 10,411,574 18,122,496	September 30, 2019
			526,754 7,604,615 9,430,057
			17,561,426

The Group did not recognize any loss or gain from devaluation of inventories as there was no indication of impairment or net realizable value of inventories has increased because the circumstance that caused the inventory devaluation in prior period has improved on inventories for the three months and nine months ended September 30, 2020 and 2019.

(d) Investments accounted for using equity method

The components of the investments accounted for using equity method were as follows:

Associates	September 30, 2020 $ 4,871,850	December 31, 2019 5,019,236	September 30, 2019
			2,949,195

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The related information of the major associate to the Group was as follows:

Name of Associates Formosa Advanced Technologies Co., Ltd.(FATC)	Nature of Relationship to the Group	Registration Country	Percentage of ownership	Percentage of ownership
			September 30, 2020	December 31, 2019 September 30, 2019 % 32.00 % 19.00
	It mainly engages in assembling and testing of module products, as well as in the research and development of integrated circuits.	Taiwan	% 32.00

The fair value of major associates listed on the Stock Exchange was as follows:

Formosa Advanced Technologies Co., Ltd.	September 30, 2020 $ 15,433,556	December 31, 2019 16,494,889	September 30, 2019
			15,057,667

The aggregated financial information of the major associate was as follows:

The financial information of FATC was as follows:

September 30, 2020 Current assets $ 6,759,313 Non-current assets 5,903,721 Current liabilities (1,199,534) Non-current liabilities (566,958) Net asset $ 10,896,542 Net asset contributed to FATC $ 10,896,542 For the three months ended September 30, 2020 2019 Operating revenue $ 2,380,770 2,456,336 Profit $ 354,902 355,817 Other comprehensive income (220,023) (181,791) Total comprehensive (loss) income $ 134,879 174,026 Comprehensive income contributed to FATC $ 134,879 174,026	September 30, 2020 Current assets $ 6,759,313 Non-current assets 5,903,721 Current liabilities (1,199,534) Non-current liabilities (566,958) Net asset $ 10,896,542 Net asset contributed to FATC $ 10,896,542 For the three months ended September 30, 2020 2019 Operating revenue $ 2,380,770 2,456,336 Profit $ 354,902 355,817 Other comprehensive income (220,023) (181,791) Total comprehensive (loss) income $ 134,879 174,026 Comprehensive income contributed to FATC $ 134,879 174,026	September 30, 2020 Current assets $ 6,759,313 Non-current assets 5,903,721 Current liabilities (1,199,534) Non-current liabilities (566,958) Net asset $ 10,896,542 Net asset contributed to FATC $ 10,896,542 For the three months ended September 30, 2020 2019 Operating revenue $ 2,380,770 2,456,336 Profit $ 354,902 355,817 Other comprehensive income (220,023) (181,791) Total comprehensive (loss) income $ 134,879 174,026 Comprehensive income contributed to FATC $ 134,879 174,026	September 30, 2020 Current assets $ 6,759,313 Non-current assets 5,903,721 Current liabilities (1,199,534) Non-current liabilities (566,958) Net asset $ 10,896,542 Net asset contributed to FATC $ 10,896,542 For the three months ended September 30, 2020 2019 Operating revenue $ 2,380,770 2,456,336 Profit $ 354,902 355,817 Other comprehensive income (220,023) (181,791) Total comprehensive (loss) income $ 134,879 174,026 Comprehensive income contributed to FATC $ 134,879 174,026	December 31, 2019 September 30, 2019 6,631,748 6,287,991 6,643,175 6,623,131 (1,250,356) (1,229,925) (594,494) (597,351) 11,430,073 11,083,846 11,430,073 11,083,846 For the nine months ended September 30, 2020 2019 7,342,406 6,899,134 1,086,685 956,006 (647,371) (123,182) 439,314 832,824 439,314 832,824
	2020 $ 2,380,770 $ 354,902 (220,023) $ 134,879 $ 134,879	2019		2020 7,342,406 1,086,685 (647,371) 439,314 439,314
		2,456,336

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Share of net assets of the major associate at January 1 Total comprehensive income contributed to the Group Uncollected dividends beyond the collection period which are reclassified to capital surplus Cash dividends contributed to the Group Share of net assets of major associate at September 30 Add: good will Less: unrealized profits on upstream sales net assets of the associates Total carrying amount of the major associate	For the nine months ended September 30, 2020 2019 $ 3,657,624 2,157,732 140,580 158,178 14 19 (311,324) (210,055) 3,486,894 2,105,874 1,463,162 887,684 (78,206) (44,363) $ 4,871,850 2,949,195
	2020 $ 3,657,624 140,580 14 (311,324) 3,486,894 1,463,162 (78,206) $ 4,871,850

Share of net assets of the major associate at January 1
Total comprehensive income contributed to the Group
Uncollected dividends beyond the collection period which are
reclassified to capital surplus
Cash dividends contributed to the Group
Share of net assets of major associate at September 30
Add: good will
Less: unrealized profits on upstream sales net assets of the
associates
Total carrying amount of the major associate

For the nine months ended
September 30,
2020
2019
$ 3,657,624
2,157,732
140,580
158,178
14
19
(311,324)
(210,055)
3,486,894
2,105,874
1,463,162
887,684
(78,206)
(44,363)
$
4,871,850
2,949,195

2020
$ 3,657,624
140,580
14
(311,324)
3,486,894
1,463,162
(78,206)
$
4,871,850

(e) Property, plant and equipment

Cost: Balance as of January 1, 2020 Additions Disposals Reclassification Effect of exchange rate change Balance as of September 30, 2020 Balance as of January 1, 2019 Additions Disposals Reclassification Effect of exchange rate change Balance as of September 30, 2019 Accumulated depreciation / impairment: Balance as of January 1, 2020 Depreciation for the period Disposals Reclassification Effect of exchange rate change Balance as of September 30, 2020 Balance as of January 1, 2019 Depreciation for the period Reversal of impairment loss Disposals Reclassification Effect of exchange rate change Balance as of September 30, 2019 Carrying amounts: Balance as of September 30, 2020 Balance as of December 31, 2019 Balance as of September 30, 2019	Land $ 1,013,924 - - - - $ 1,013,924 $ 1,013,924 - - - - $ 1,013,924 $ - - - - - $ - $ - - - - - - $ - $ 1,013,924 $ 1,013,924 $ 1,013,924	Building 8,157,551 - (12,660) - (14) 8,144,877 7,740,635 - - 416,922 72 8,157,629 2,295,380 239,976 (5,965) - (12) 2,529,379 1,978,349 237,029 - - - 53 2,215,431 5,615,498 5,862,171 5,942,198	Machinery and equipment 195,903,720 662,441 (687,930) 1,603,048 14 197,481,293 180,746,435 1,494,970 (89,892) 12,979,294 (3,550) 195,127,257 119,651,185 10,225,074 (687,930) (41,963) 421 129,146,787 106,196,034 10,206,524 (213,283) (92,546) (9,904) (981) 116,085,844 68,334,506 76,252,535 79,041,413	Other equipment 919,015 50,287 (153,594) 16,090 (138) 831,660 1,132,778 35,313 (6,431) 13,822 4,948 1,180,430 766,657 33,327 (153,594) 10,466 22 656,878 986,840 29,190 - (3,481) 9,904 2,272 1,024,725 174,782 152,358 155,705	Under construction 2,249,124 5,508,201 - (1,787,730) - 5,969,595 13,886,443 2,032,605 - (13,410,038) - 2,509,010 - - - - - - - - - - - - - 5,969,595 2,249,124 2,509,010	Total 208,243,334 6,220,929 (854,184) (168,592) (138) 213,441,349 204,520,215 3,562,888 (96,323) - 1,470 207,988,250 122,713,222 10,498,377 (847,489) (31,497) 431 132,333,044 109,161,223 10,472,743 (213,283) (96,027) - 1,344 119,326,000 81,108,305 85,530,112 88,662,250

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Right-of-use assets

Cost：
Balance at January 1, 2020
Additions
Decrease
Balance at September 30, 2020
Balance at January 1, 2019
Decrease
Balance at September 30, 2019
Accumulated depreciation:
Balance at January 1, 2020
Depreciation for the period
Decrease
Balance at September 30, 2020
Balance at January 1, 2019
Depreciation for the period
Balance at September 30, 2019
Carrying Amount:
Balance at September 30, 2020
Balance at December 31, 2019
Balance at September 30, 2019
Balance at January , 2019 Land
$ 297,829
1,884,277
(297,829)
$
1,884,277
$ 300,605
(2,776)
$
297,829
$ 198,607
146,197
(297,829)
$
46,975
$ -
148,996
$
148,996
$
1,837,302
$
99,222
$
148,833
$
300,605

(g) Lease receivables

(i) On June 18, 2009, the Group signed an amended long-term lease agreement with Inotera Memories, Inc. (its name was changed to Micron Technology Taiwan in March, 2017, referred to as "MTTW") on the lease of building, facilities and land located on 348, 348-1 and 348-3, Hwa Ya Section, Kueishan District, Taoyuan City. This amended lease agreement, which took effect retroactively from January 1, 2009, includes the renewal term. Initial lease term is from January 1, 2009 to December 31, 2018. However, MTTW is entitled to renew this amended lease agreement for an unlimited number of consecutive additional terms of five years each, by providing a written notice with the intention to renew the lease term commencing from January 1, 2019. MTTW has completed the renewal of its lease agreement, with a written notice on December 13, 2018. In addition, MTTW has an exclusive option to purchase the leased assets for a total purchase price of USD50,000 thousand on and after January 1, 2024. Also, the rental receivable for the entire year of 2009 has been waived. Initial yearly rentals for the leased building (including facilities and land) were USD13,010 thousand and USD1,990 thousand, respectively from January 1, 2010 to December 31, 2018; the first yearly renewal

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

rentals for the leased building (including facilities and land) will be USD8,010 thousand and USD1,990 thousand, respectively, from January 1, 2019 to December 31, 2023; the subsequent yearly renewal rentals for the leased building (including facilities and land) will be USD10 thousand and USD1,990 thousand commencing from January 1, 2024. The amended lease agreement for the building (including facilities) is treated as a capital lease because (a) the present value of the periodic rental payments made since the inception date is at least 90% of the market value of the leased assets and (b) the lease term is equal to 75% or more of the total estimated economic life of the leased assets. The land is treated as an operating lease.

(ii) The total lease receivable from the capital lease of the building (including facilities) was $5,185,620; the implicit interest rate was 10.56%. The cost of the leased assets at the beginning of the lease period was $2,656,223. The difference was recognized as unrealized interest revenue of $2,529,397. For the three months and nine months ended September 30, 2020 and 2019, the Group recognized the interest revenue of $18,990, $23,651, $60,571 and $74,199, respectively, from the amortization of unrealized interest revenue.

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

Less than one year One to two years Two to three years Three to four years Four to five years Total lease payments receivable Unearned finance income Present value of lease payments receivable	September 30, 2020 $ 264,330 264,330 264,330 66,082 - 859,072 (120,849) $ 738,223	December 31, 2019 264,330 264,330 264,330 264,330 - 1,057,320 (181,420) 875,900	September 30, 2019 264,330 264,330 264,330 264,330 68,083 1,125,403 (203,951) 921,452

For credit risk information, please refers to Note 6(q).

(h) Lease liabilities

Current Non-current	September 30, 2020 $ 177,833 $ 1,662,485	December 31, 2019 99,924 -	September 30, 2019
			149,622
			-

For the maturity analysis, please refer to Note 6(q).

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amounts recognized in profit or loss were as follows:

For the three months ended September 30 2020 2019 $ 6,276 645 $ 25,402 18,608	For the nine months ended September 30	For the nine months ended September 30
2020 $ 6,276 $ 25,402	2020 6,688 67,861	2019
		2,463
		52,053

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

Total cash outflow for leases	For the nine months ended September 30,	For the nine months ended September 30,
	2020 $ 218,362	2019
		185,448

(i) Land lease

As of September 30, 2020, the Group leases its land with a period of 3 to 10 years. The lease included an option to terminate the contract, which is exercisable only by the Group and not by the lessors. The lease payment changes annually based on a local price index.

(ii) Other leases

The Group leases staff dorm, factory, parking lots and office spaces with contract terms ranging from one to five years. These leases are short-term or with low-value items. The Group applied the recognition exemptions and elected not to recognize its right-of-use assets and lease liabilities for these leases.

(i) Employee benefits

(i) Defined benefit plan

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2019 and 2018.

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

For the three months ended September 30,	For the three months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
2020 $ 1,515 978 $ 2,493	2019	2020 4,649 2,830 7,479	2019
	1,879 1,086		5,743 3,153
	2,965		8,896

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

The Group’s expenses under the pension plan cost to the Bureau of local government were as follows:

Operating cost Operating expenses Total	For the three months ended September 30,	For the three months ended September 30,		For the nine months ended September 30,	For the nine months ended September 30,
	2020 $ 23,457 22,760 $ 46,217	2019 22,729 17,649		2020 70,180 63,009 133,189	2019 68,199 51,455 119,654
		40,378

(j) Income tax

(i) The Group’s income tax expenses were as follows:

For the three months ended September 30,	For the three months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
2020 $ 315,459 - - 103,526 62,180 $ 481,165	2019	2020 1,306,335 (588,184) 171,974 103,526 98,828 1,092,479	2019
	319,364 - - - 159,567		738,640 (485,929) 673,894 - 209,491 1,136,096
	478,931

(ii) The Company's tax returns have been examined by the ROC tax authority through 2017.

(k) Capital and other equity

Except as described below, there was no material change in equity for the nine months ended September 30, 2020 and 2019. Please refer to Note 6(m) of the consolidated financial statements as of and for the year ended December 31, 2019 for the related detail disclosures on equity.

(i) Ordinary Share

On February 26, May 6 and August 6 , 2020, the Company’s Board of Directors approved to issue the Company's ordinary shares deriving from the exercise of employee share options. The Company had issued 632 thousand, 664 thousand and 17,951 thousand ordinary shares at par value, respectively, with an issuing prices of $29.2, $29.2 and $28.5 to $29.2 per share, which totaled 192,470 thousand. All issued shares were paid up upon issuance and the related process for registration had been completed.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the third quarter of 2020, the Company’s ordinary shares were derived from the exercise of employee share options. Accordingly, the Company had issued 798 thousand ordinary shares, at issuing prices of $28.5 to $29.6 per share, which totaled $23,147, which was recognized as advance receipts for share capital as of September 30, 2020.

(ii) Capital surplus

Premium from the issuance of stock Employee stock option plans Expired employee stock option plans Past due unclaimed dividends Change in equity of associates accounted for using equity method	September 30, 2020 $ 29,379,775 2,790,727 262,499 79 38 $ 32,433,118	December 31, 2019 29,010,509 2,732,307 262,499 - 24 32,005,339	September 30, 2019
			28,994,659 2,699,950 262,499 - 24
			31,957,132

(iii) Retain earning

According to the Company's Articles of Incorporation, the Company's annual net profit, after providing for income tax and covering the losses of previous years, is first set aside for legal reserve at the rate of 10% thereof until the accumulated balance of legal reserve equals the total issued capital and any special reserves pursuant to relevant laws and regulations. The remainder, plus the undistributed earnings of the previous years, are distributed or left undistributed for business purposes according to the resolution of the stockholders’dividend distribution plan, which are initially proposed by the Board of Directors and adopted by the shareholders in the annual stockholders’ meeting.

As it belongs to a highly capital-intensive industry with strong growth potential, the Company adopts a dividend distribution policy which is in line with its plans for product line expansion and the demand of fund. This policy requires that the distribution of cash dividends shall be equal to at least 50% of the Company's total dividend distribution every year.

1) Legal reserve

When the Group incurs no loss, it may, in pursuant to a resolution to be adopted by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by cash. Only the portion of legal reserve which exceeds 25 percent of the paid-in capital may be distributed.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Special Reserve

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions.

3) Earrings distribution

Earnings distribution for 2019 and 2018 were approved by the general meetings of shareholders were held on May 28, 2020 and May 30, 2019, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends attributable to ordinary shareholders: Cash dividends Dividends attributable to ordinary shareholders: Cash dividends	For the year ended December 31, 2019	For the year ended December 31, 2019
	Dividends per share Amount $ 1.50 4,600,000 For the year ended December 31, 2018	Amount
		4,600,000
	Dividends per share $ 7.11	Amount
		21,700,000

(iv) Other equity (net of tax)

Balance as of January 1, 2020 Exchange differences on translation of foreign financial statements Unrealized loss from financial of assets measured at fair value through other comprehensive loss, associates accounted for using equity method Balance as of September 30, 2020	Exchange differences on translation of foreign financial statements $ (938,039) (1,207,638) - $ (2,145,677)	Unrealized loss from financial assets measured at fair value through other comprehensive income (103,061) - (207,159) (310,220)	Total (1,041,100) (1,207,638) (207,159) (2,455,897) (Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance as of January 1, 2019 Exchange differences on translation of foreign financial statements Unrealized gain from financial of assets measured at fair value through other comprehensive income, associates accounted for using equity method Balance as of September 30, 2019	Exchange differences on translation of foreign financial statements $ (179,736) 314,993 - $ 135,257	Unrealized loss from financial assets measured at fair value through other comprehensive income (94,098) - (23,405) (117,503)	Total (273,834) 314,993 (23,405) 17,754

(l) Share-based payment

Except as described below, there was no material change on the share-based payment transactions for the nine months ended September 30, 2020 and 2019. Please refer to Note 6(n) of consolidated financial statements as of and for the year ended December 31, 2019 for related disclosures on sharebased payment transactions.

The company approved to distribute its cash dividends in the third quarter of 2020. As a result, the exercise price of the 8th and 9th batch of the employee stock option plan were adjusted to $28.5 dollars and $29.6 dollars respectively, in accordance with the offering and exercising terms and conditions of ESOP.

(i) Relevant information of employee stock option plans

The Company:

For the nine months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
2020 Weighted- average exercise (price TWD) Number of options (Thousand Units) $ 29.25 28,202 28.52 (19,926) - - 28.55 (2,359) 28.51 5,917 28.51 5,917	2019 Weighted- average exercise (price TWD) Number of options (Thousand Units) 34.49 109,382 29.22 (20,016) 35.60 (60,367) 29.24 (519) 30.08 28,480 30.07 5,808
Weighted- average exercise (price TWD) $ 29.25 28.52 - 28.55 28.51 28.51	Weighted- average exercise (price TWD) 34.49 29.22 35.60 29.24 30.08 30.07
		28,480
		5,808

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Compensation cost

Compensation cost arising from share options granted to employees	For the three months ended September 30,	For the three months ended September 30,		For the nine months ended September 30,	For the nine months ended September 30,
	2020 $ 1,860	2019		2020 58,420	2019
		32,509			117,759

(m) Earnings per share

For the three months ended September 30,	For the three months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
2020 $ 1,613,376 3,072,893 $ 0.53 $ 1,613,376 3,072,893 3,184 8,588 3,084,665 $ 0.52	2019	2020 6,761,892 3,062,632 2.21 6,761,892 3,062,632 10,073 10,586 3,083,291 2.19	2019
	2,204,797		8,538,730
	3,052,680		3,042,467
	0.72		2.81
	2,204,797		8,538,730
	3,052,680 17,401 12,659		3,042,467 22,049 12,659
	3,082,740		3,077,175
	0.72		2.77

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Revenue from contracts with customers

(i) Disaggregation of revenue

	For the three months ended September 30, 2020	For the three months ended September 30, 2020
Manufacturing department Overseas sales department Total $ 3,697,795 386,799 4,084,594 - 335,274 335,274 138,976 317,625 456,601 15,663 96,780 112,443 6,823,689 2,072,862 8,896,551 18,989 117,387 136,376 106,614 353,827 460,441 - 131,536 131,536 6,358 179,805 186,163 56,222 67,135 123,357 6,399 394,132 400,531 $ 10,870,705 4,453,162 15,323,867 $ 10,829,924 4,452,898 15,282,822 40,781 264 41,045 $ 10,870,705 4,453,162 15,323,867 For the three months ended September 30, 2019		Total
		4,084,594 335,274 456,601 112,443 8,896,551 136,376 460,441 131,536 186,163 123,357 400,531
		15,323,867
		15,282,822 41,045
		15,323,867
Manufacturing department $ 4,970,539 - 7,757 23,530 5,637,169 118,709 144,405 - 106,938 $ 11,009,047	Overseas sales department 311,311 460,663 176,088 172,438 1,929,921 40,924 181,729 97,341 419,891 3,790,306	Total
		5,281,850 460,663 183,845 195,968 7,567,090 159,633 326,134 97,341 526,829
		14,799,353

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	For the three months ended September 30, 2019	For the three months ended September 30, 2019
Manufacturing department Overseas sales department Total $ 10,969,856 3,790,025 14,759,881 39,191 281 39,472 $ 11,009,047 3,790,306 14,799,353 For the nine months ended September 30, 2020		Total
		14,759,881 39,472
		14,799,353
	Overseas sales department 1,360,838 1,131,487 927,946 340,969 5,565,690 361,404 870,558 411,723 389,236 203,572 1,006,193 12,569,616 12,568,811 805 12,569,616	Total
		14,008,603 1,131,487 1,189,313 403,386 25,413,305 413,022 1,244,644 411,723 450,330 409,605 1,156,676
		46,232,094
		46,126,497 105,597
		46,232,094

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2019	For the nine months ended September 30, 2019	For the nine months ended September 30, 2019
Manufacturing department $ 15,494,544 - 22,536 142,330 12,822,351 188,746 282,620 - 312,667 $ 29,265,794 $ 29,149,737 116,057 $ 29,265,794 September 30, 2020 $ - - 9,636,173 1,384 $ 9,637,557	Overseas sales department 489,398 1,416,325 601,602 378,987 4,463,908 136,718 438,274 277,850 1,143,093 9,346,155 9,345,316 839 9,346,155 December 31, 2019 - 41,545 7,291,735 - 7,333,280	Total
		15,983,942 1,416,325 624,138 521,317 17,286,259 325,464 720,894 277,850 1,455,760
		38,611,949
		38,495,053 116,896
		38,611,949
		September 30, 2019 1,039 - 8,046,973 -
		8,048,012

For details on notes and accounts receivable (including related parties), and loss allowance for impairment, please refer to note 6(b).

(o) Remuneration to employees

According to the Group's articles of incorporation, if the Group makes a profit, it should appropriate for employee compensation which is calculated based on 1% to 12% of the Group's net income before tax before deduction of employee compensation, and after offsetting accumulated deficits, if any, should be distributed as employee compensations. Employees who are entitled to receive the above-mentioned employee compensation, in shares or cash, include the employees of the subsidiaries of the Group who meet certain specific requirements.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The estimated employee remuneration which was charged to profit or loss under operating costs or expense amounted to $41,929, $167,948, $493,822 and $539,035 for the three months and nine months ended September 30, 2020 and 2019, respectively. This employee remuneration was estimated based on the Company's net income before tax before deducting any employee compensation, according to the earnings allocation method as stated under the Company's articles of association. If there is any difference between the actual amounts and the estimated amounts of employee remuneration to employees after the financial reports are issued, the management of the Company is expecting that the differences will be treated as a change in accounting estimates and recognized through profit or loss in the following year.

There is no difference between the estimated employee remuneration, which was stated in the financial statements for the year ended December 31, 2019, and the amounts approved by the Company's Board of Directors.

The difference between the estimated employee remuneration, which was stated in the financial statement for the year ended December 31, 2018, and the amount of actual distributions in 2019, amounted to $1,739,997. The Company recognized difference of $3 in profit or loss in 2019.

(p) Non-operating income and expenses
(i) Interest income

Interest income from bank deposits and short-term notes Interest income from financial assets measured at amortized cost Other gains and losses Foreign exchange gains (losses) Reversal of impairment gain on non-financial assets Gain or loss on disposal of property, plant and equipment Others	For the three months ended September 30 2020 2019 $ 89,224 238,590 18,990 23,651 $ 108,214 262,241 For the three months ended September 30, 2020 2019 $ (228,511) (38,396) - 92,961 (6,671) 4,703 39,858 36,018 $ (195,324) 95,286	For the three months ended September 30 2020 2019 $ 89,224 238,590 18,990 23,651 $ 108,214 262,241 For the three months ended September 30, 2020 2019 $ (228,511) (38,396) - 92,961 (6,671) 4,703 39,858 36,018 $ (195,324) 95,286	For the three months ended September 30 2020 2019 $ 89,224 238,590 18,990 23,651 $ 108,214 262,241 For the three months ended September 30, 2020 2019 $ (228,511) (38,396) - 92,961 (6,671) 4,703 39,858 36,018 $ (195,324) 95,286	For the three months ended September 30 2020 2019 $ 89,224 238,590 18,990 23,651 $ 108,214 262,241 For the three months ended September 30, 2020 2019 $ (228,511) (38,396) - 92,961 (6,671) 4,703 39,858 36,018 $ (195,324) 95,286	For the nine months ended September 30 2020 2019 526,093 940,889 60,571 74,199 586,664 1,015,088 For the nine months ended September 30, 2020 2019 (352,725) 78,150 - 213,283 (6,651) 4,416 132,061 104,156 (227,315) 400,005 (Continued)
		2020 (228,511) - (6,671) 39,858 (195,324)	2019		2020 (352,725) - (6,651) 132,061 (227,315)
	$ $

(i) Other gains and losses

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Finance costs

For the three months ended September 30,	For the three months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
2020 $ 27 6,276 47 $ 6,350	2019	2020 87 6,688 142 6,917	2019
	32 645 48		110 2,463 143
	725		2,716

(q) Financial instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note6(s) of the consolidated financial statements for the year ended December 31, 2019.

(i) For credit risk exposure of notes and accounts receivables (including related parties), please refer to note 6(b).

Other financial assets at amortized cost includes other receivables, time deposits and refundable deposits.

Considering that the Group deals only with other external parties with good credit standing and with the above investment grade financial institutions, all of the above financial assets are considered to have low credit risk.

As of September 30, 2020, December 31 and September 30, 2019, no allowance for impairment was provided because there was no indication of credit-impaired for the 12-month ECL or lifetime ECL allowance for other financial assets measured at amortized cost.

(ii) Liquidity risk

The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including estimated interest payments but excluding the impact of netting agreements:

September 30, 2020 Non-derivative financial liabilities Financing from other related parties Accounts payable (including related parties) Other payables (including related parties) Lease liabilities (including current portion)		Carrying amount $ 3,406 4,077,641 5,420,501 1,840,318 $ 11,341,866	Contractual cash flow 3,511 4,077,641 5,420,501 1,964,784 11,466,437	Within 6 months - 4,077,641 5,420,501 100,758 9,598,900	6-12months 3,511 - - 100,758 104,269	1-2years - - - 201,517 201,517	2-5years - - - 806,065 806,065	Over 5 years
								- - - 755,686
								755,686

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2019 Non-derivative financial liabilities Financing from other related parties Accounts Payable (including related parties) Other payable (including related parties) Lease liabilities-current September 30, 2019 Non-derivative financial liabilities Financing from other related parties Accounts payable (including related parties) Other payables (including related parties) Lease liabilities-(current)		Carrying amount $ 3,450 2,706,958 7,852,560 99,924 $ 10,662,892 $ 3,510 3,107,366 8,445,531 149,622 $ 11,706,029	Contractual cash flow 3,635 2,706,958 7,852,560 100,336 10,663,489 3,668 3,107,366 8,445,531 150,505 11,707,070	Within 6 months 3,635 2,706,958 7,852,560 100,336 10,663,489 79 3,107,366 8,445,531 100,337 11,653,313	6-12months - - -	1-2years - - - - - - - - -	2-5years - - - - - - - - -	Over 5 years
								- - -
					-			-
					3,589 - - 50,168			- - - -
					53,757			-

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

(iii) Currency risk
1) Exposure to currency risk

The Group's significant exposure to foreign currency risk was as follows:

Financial assets: Monetary items USD JPY EUR HKD Financial liabilities: Monetary items USD JPY EUR	September 30, 2020	September 30, 2020	New Taiwan Dollars 11,532,440 4,880 3,575 2,872,763 4,254,377 1,244,758 31,361	Dec	ember 31, 2019	New Taiwan Dollars 7,298,748 245,610 4,851 880,608 3,400,924 556,715 155,511	September 30, 2019	September 30, 2019
	Foreign currency (in thousands) $ 395,950 17,783 105 767,790 $ 146,068 4,536,290 921	Exchange rate (dollars) 29.126 0.2744 34.0506 3.7416 29.126 0.2744 34.0506		Foreign currency (in thousands) 242,435 888,926 144 227,936 112,965 2,014,894 4,616	Exchange rate (dollars) 30.106 0.2763 33.690 3.863 30.106 0.2763 33.6895		Foreign currency (in thousands) 393,810 1,662,378 61 68,469 131,174 2,302,487 434	Exchange rate (dollars) New Taiwan Dollars 31.042 12,224,650 0.2875 477,934 33.9439 2,071 3.9581 271,007 31.042 4,071,903 0.2875 661,965 33.9439 14,732

The Group's exposure to foreign currency risk arises from the translation of the foreign currency exchange fluctuations on cash and cash equivalents, accounts receivable, accounts payable (including related parties) and other payable (including related parties) which are denominated in different foreign currencies. A 1% depreciation of the TWD against the USD, JPY, EUR and HKD as of September 30, 2020 and 2019 would have increased the net income before tax by $88,832 and $82,271 for the nine months ended September 30, 2020 and 2019, respectively. This analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis as prior year.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Since the Group has many kinds of functional currency, the information on foreign exchange loss on monetary items is disclosed by total amount. For the nine months ended September 30, 2020 and 2019, foreign exchange gain (including realized and unrealized portions) amounted to $(352,725) and $78,150, respectively.

(iv) interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group's financial liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases by 1% when reporting to management internally, which also represents the Group management's assessment of the reasonably possible interest rate change.

If the interest rate had increased by 1 basis points, the Group’ s net income would have increased or decreased by $34 and $35 for the nine months ended September 30, 2020 and 2019 with all other variable factors remaining constant. This is mainly due to the Group’ s borrowing at variable rates and investment in variable-rate bills.

(v) Fair value of financial instruments
1) Types and fair value of financial instruments

The carrying amount and fair value of the Group's financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described on the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities disclosure of fair value information is not required:

	September 30, 2020	September 30, 2020	September 30, 2020
Book Value $ 47,125,617 9,637,557 1,605,787 738,223 $ 59,107,184		Fair Value
	Level 1 - - - - -	Level 2 - - - - -	Level 3 - - - - -	Total - - - -
				-

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	September 30, 2020	September 30, 2020	September 30, 2020
Book Value $ 4,077,641 5,423,907 1,840,318 $ 11,341,866	Fair Value Level 1 Level 2 Level 3 - - - - - - - - - - - - December 31, 2019	Fair Value
				Total - - -
				-

Book Value $ 44,148,979 7,333,280 1,434,729 875,900 $ 53,792,888 $ 2,706,958 7,856,010 99,924 $ 10,662,892	Fair Value Level 1 Level 2 Level 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - September 30, 2019	Fair Value
				Total - - - -
				-
				- - -
				-
				Total - - - -
Book Value $ 43,183,908 8,048,012 1,636,228 921,452 $ 53,789,600 $ 3,107,366 8,449,041 149,622 $ 11,706,029		Fair Value
	Level 1 - - - - - - - - -	Level 2 - - - - - - - - -	Level 3 - - - - - - - - -
				-
				- - -
				-

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) There were no transfers from financial assets for the nine months ended September 30, 2020 and 2019.

(r) Financial risk management

There were no significant changes in the Group's financial risk management and policies as disclosed in Note 6(t) of the consolidated financial statements for the year ended December 31, 2019.

(s) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2019. Also, management believes that there were no significant changes in the Group's capital management information as disclosed for the year ended December 31, 2019. Please refer to Note 6(v) of the consolidated financial statements for the year ended December 31, 2019 for further details.

(t) The investing and financing activities on non-cash transactions

The Group's investing and financing activities on non-cash transactions for the nine months ended September 30, 2020 and 2019 were as follows:

(i) Acquisition of right-of-use assets by lease, please refer to Note6(f).

(ii)

Acquisition of property, plant and equipment Add: Payables on equipment at beginning of period Less: Payables on equipment at end of period Other Cash Paid Acquisition of intangible assets Add: Payables on patent authorization at beginning of period Less: Payables on patent authorization at end of period Other Cash paid	For the nine months ended September 30, 2020 2019	For the nine months ended September 30, 2020 2019
	2020
	$ 6,220,929 973,002 (2,099,018) (167,843) $ 4,927,070 $ 1,650,880 204,017 (993,500) (42,716) $ 818,681	3,562,888 2,069,866 (976,911) - 4,655,843 292,838 - (210,360) (2,949) 79,529

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Retirement of treasury shares

For the nine months ended September 30, 2019 2,665,621

(iv) Reconciliation of liabilities arising from financing activities was as follows :

Non-Cash changes	Non-Cash changes	Non-Cash changes	September 30, 2020
Additions Increased by other payables Interest expense 1,884,277 (70) 412 Non-Cash changes
			1,840,318
			September 30, 2019
Change in an index of lease payment (2,776)	Increased by other payables (16,723)	Interest expense 2,463
			149,622

(7) Related-party transactions:

(a) Names and relationship with related parties

The following are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

Name of related party

Formosa Petrochemical Corporation Fromosa Carpet Co.,Ltd

Nan Ya Photonics Incorporation

Formosa Technologies (Nanjing) Corporation Formosa Sumco Technology Corporation Formosa Advanced Technologies Co., Ltd. (referred to as "FATC")

Formosa Technologies Corporation Formosa Biomedical Technology Corp. Formosa Plastics Corporation Formosa Waters Technology Co., Ltd. Nan Ya Plastics Corporation

Relationship with the Group

The Group's other related parties The Group's other related parties The Group's other related parties The Group's other related parties The Group's other related parties The Group's associates

The Group's other related parties The Group's other related parties The Group's other related parties The Group's other related parties The entity with significant influence over the Group

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Significant transactions with related parties

(i) Sales to related parties

Relationship	Sale	s For the nine months ended September 30, 2020 2019 1,337 -	Accounts r	ceivable to rela	ted parties
	For the three months ended September 30, 2020 2019 $ 1,337 -
	2020 $ 1,337	2020 1,337	September 30, 2020	December 31, 2019 -	September 30, 2019 -
Associates			1,384

(ii) Purchase from related parties

Relationship	Purch	Purch	ases For the nine months ended September 30, 2020 2019 62,499 79,512 801 984 453,248 1,038,483 166,026 234,715 682,574 1,353,694	Accounts	payable to relat	ed parties
	For the three months ended September 30, 2020 2019 $ 18,447 18,048 37 - 151,799 255,129 64,968 64,359 $ 235,251 337,536
	2020 $ 18,447 37 151,799 64,968 $ 235,251		2020 62,499 801 453,248 166,026 682,574	September 30, 2020	December 31, 2019 6,183 - 119,204 7,812 133,199	September 30, 2019 6,044 - 249,187 15,459
Entities with significant influence over the Group Associates Other related parties: Formosa Sumco Technology Corporation Other related parties				5,882 - 100,175 3,836
		337,536		109,893		270,690

The terms and pricing of purchase transactions with related parties were not significantly different from those offered by other vendors. The payment terms ranged from one to two months, which were no different from the payment terms given by other vendors.

(iii) Consigned out for processing

Relationship	Amo For the three months ended September 30, 2020 2019 $ 1,701,480 1,833,392	unt For the nine months ended September 30, 2020 2019 5,463,007 5,183,993	Other payables to relate September 30, 2020 December 31, 2019 1,022,841 1,202,342	Other payables to relate September 30, 2020 December 31, 2019 1,022,841 1,202,342	d parties
		2020		December 31, 2019 1,202,342	September 30, 2019 1,616,819
Associates		5,463,007

The term of transactions with the related parties above is 60 days after the end of each month when processed consigned goods are received.

(iv) Financing from related parties

Financial costs	Financial costs	Financial costs	Financial costs
For the three months ended September 30		For the nine months ended September 30
2020 27	2019	2020 87	2019
	32		110

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	Other payables to	related parties
Bala	nce of borrowings December 31, 2019 September 30, 2019 3,450 3,510	September 30, 2020 30	Interest payable
September 30, 2020 $ 3,406	December 31, 2019 3,450		December 31, 2019 65	September 30, 2019
				35

(v) Property transactions

Acquisition of equipment

Acquisition price For the nine months ended September 30, 2020 2019 $ 24,650 - - 340 $ 24,650 340	Other payables to related	Other payables to related	parties
2020 $ 24,650 - $ 24,650	September 30, 2020 24,650 - 24,650	December 31, 2019 - - -	September 30, 2019
			- -
			-

(vi) Leases

Acquisition price	Acquisition price	Acquisition price	Acquisition price
For the three months ended September 30,		For the nine months ended September 30,
2020 $ 15,311	2019	2020 45,940	2019
	12,675		36,769

The rentals charged to the entities with significant influence over the Company are determined based on the local market prices, and rents are paid monthly.

The Group entered into 9 to 10 year lease agreements between July and August 2020, as well as a 3-year lease agreement in July 2017, with Nan Ya Plastics Corporation, at the total values of $2,015,018 and $617,862, respectively. Also, for the three months and nine months ended September 30, 2020 and 2019, the Group recognized the amount of $6,276, $645, $6,688 and $2,463, as interest expense, respectively. Furthermore, as of September 30, 2020, December 31 and September 30, 2019, the balance of lease liabilities amounted to $1,840,318,$99,924 and $149,622, respectively. In additions, for the nine months ended September 30, 2020, the Group recognized the additional amount of $1,884,277 of right-of-use assets. Please refer to Note 6(f) for the details on right-of-use assets.

(vii) Other

Other i	Other i	come For the nine months ended September 30 2020 2019 2,476 -	Notes rece	ivable from related	parties
For the three months ended September 30,
2020 $ 2,476	2019	2020 2,476	September 30, 2020 -	December 31, 2019 41,545	September 30, 2019
	-				-

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Key management personnel compensation

Key management personnel compensation comprised:

For the three months ended September 30,	For the three months ended September 30,	For the nine months ended September 30,	For the nine months ended September 30,
2020 $ 42,028 - $ 42,028	2019 68,259 855	2020 66,850 702 67,552	2019 92,222 3,087 95,309

	69,114

Please refer to Note 6(l) for the details of share-based payment.

(8) Pledged assets:

The Group’s assets pledged to secure loans are as follows:

Pledged assets Other non-current assets Other non-current assets	Object	September 30, 2020 $ 4,985 926,032 $ 931,017	December 31, 2019 5,122 - 5,122	September 30, 2019
	Office leasing Remitted funds for investment plan			5,270 -
				5,270

(9) Commitments and contingencies:

(a) Significant commitments

Guarantees for importation goods provided by bank Unused letters of credit Total	September 30, 2020 $ 935,000 295,299 $ 1,230,299	December 31, 2019 1,045,000 39,023 1,084,023	September 30, 2019
			1,045,000 29,739
			1,074,739

(b) Contingent liabilities

(i) In 2000, the Company was charged by Brazil's Ministry of Justice as being involved in the International Monopolies, which influences Brazil's DRAM market. Consequently, the Company, other large international companies and individuals are investigated at the same time. The lawsuit was in a court hearing. The Company has engaged counsels to properly handle it to ensure the Company's rights.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) In October 2016, Lone Star Silicon Innovations LLC (Lone Star) filed a lawsuit against Nanya Technology Corp. (Nanya) and two of its subsidiaries, Nanya Technology Corp., USA (NTC USA) and Nanya Technology Corp., Delaware (NTC Delaware), to the US District Court of East Texas for patent infringement. The lawsuit was handed over to the US District Court of Northern California in July 2017, wherein it was denied in January 2018. Therefore, Lone Star appealed to the US Court of Appeals for the Federal Circuit on the said matter. The case is still in progress. The Group has engaged lawyers to handle the case to ensure its rights.
(iii) In November 2019, Monterey Research LLC (Monterey) filed a lawsuit against Nanya Technology Corp. (Nanya) and two of its subsidiaries, Nanya Technology Corp., USA (NTC USA) and Nanya Technology Corp., Delaware (NTC Delaware), to the US District Court of Delaware for patent infringement. The Company has engaged counsels to properly handle it to ensure the Company's rights.
(iv) The original Joint Venture agreement signed by the Company, Micron Technology, Inc. and its related parties was terminated after Micron Semiconductor Co. completed its share-swap with Micron Technology Taiwan. Both parties had mutually agreed to sign a cooperation agreement, the details of the agreement were as follows:
1) The estimated cost for improving specific environmental safety and factory facilities in mutually operating period of joint venture agreement amounted to US$54,030 thousand; the Company agreed to share the 50% portion of the total costs and accrued it as expense of $850,000 (USD27,015 thousand) to other payable. The Company will share the cost based on the actual amounts at the appointed time. As of September 30, 2020 and 2019, the payment amounting to $200,950 and $47,200 had been recognized by the Company, respectively.
2) The Company agreed to share the 50% portion of the total losses for penalty, improving costs and suspending operation before the date of share-swap in the following two to five years due to an existing event of environmental safety and factory facilities which violated the laws.

(10) Losses Due to Major Disasters: None

(11) Subsequent Events: None

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(12) Other:

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

follows:
	For the three months ended September 30, 2020			For the three months ended September 30, 2019
	Cost of goods sold	Operating expenses	Total	Cost of goods sold	Operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension expenses Remuneration of directors Other personnel expenses Depreciation expenses Amortization expenses	651,474 48,306 24,972 - 18,235 3,419,986 126,831	561,786 42,495 23,738 1,550 8,092 110,155 1,267	1,213,260 90,801 48,710 1,550 26,327 3,530,141 128,098	766,822 48,526 24,608 - 18,058 3,600,520 26,614	607,558 35,945 18,735 1,560 6,020 77,891 -	1,374,380 84,471 43,343 1,560 24,078 3,678,411 26,614

	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020	For the nine months ended September 30, 2020	For the nine months ended September 30, 2019	For the nine months ended September 30, 2019	For the nine months ended September 30, 2019
	Cost of goods sold	Operating expenses	Total	Cost of goods sold	Operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension expenses Remuneration for directors Other personnel expenses Depreciation expenses Amortization expenses	2,300,147 146,506 74,829 - 55,039 10,322,877 171,657	1,713,279 122,715 65,839 4,800 21,818 321,697 1,267	4,013,426 269,221 140,668 4,800 76,857 10,644,574 172,924	2,196,744 143,790 73,942 - 53,789 10,443,183 66,328	1,545,634 107,177 54,608 4,990 17,782 178,556 -	3,742,378 250,967 128,550 4,990 71,571 10,621,739 66,328

(b) The Group's operations were not affected by seasonality or cyclicality factors.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The followings were the information on significant transactions required by the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the nine months ended September 30, 2020:

(i) Loans to other parties: None
(ii) Guarantees and endorsements for other parties: None
(iii) Securities held at the reporting date (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Category and name of security	Relationship with company	Account title		Endingbalance	Endingbalance		Note
			Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
Memoright (Cayman) Co., Ltd.	-	Financial assets measured at amortized cost and fair value through other comprehensive income	-	-	-	-

(iv) Information regarding purchase or sale of securities for the period exceeding $300 million or 20% of the capital stock: None
(v) Acquisition of individual real estate with amount exceeding $300 million or 20% of the Company's paid-in capital: None
(vi) Disposal of individual real estate with amount exceeding $300 million or 20% of the Company's paid-in capital: None
(vii) Related-party transaction for purchases and sales for which amounts exceeding $100 million or 20% of the Company's paidin capital:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions different fr	with terms om others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase /Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company Nanya Technology Corp., Delaware Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Corp., Europe GmbH Nanya Technology Corp., HK The Company The Company	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Japan Nanya Technology Corp., Europe GmbH Nanya Technology Corp., HK Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Nanya Technology Corp Formosa Sumco Technology Corporation Formosa Biomedical Technology Corporation	Subsidiary Subsidiary Subsidiary subsidiary The parent company The parent company The parent company The parent company The parent company Other related parties Other related parties	(Sale) (Sale) (Sale) (Sale) (Sale) Purchase Purchase Purchase Purchase Purchase Purchase	(7,350,094) (2,820,765) (2,022,335) (131,628) (341,659) 7,350,094 2,820,765 2,022,335 131,628 453,248 107,075	(15.98)% (6.13)% (4.40)% (0.29)% 100.00% 100.00% 100.00% 100.00% 100.00% 5.03% 1.19%	O/A 60~90Days O/A 180Days O/A 60~90Days O/A 60~90 Days O/A 60~90 Days O/A 60~90Days O/A 180Days O/A 60~90Days O/A 60~90Days O/A 60Days Payment after arrival and inspection of good	- - - - - - - - - - -		2,155,916 696,844 472,305 37,311 41,695 (2,155,916) (696,844) (472,305) (37,311) (100,175) (3,374)	22.01% 7.11% 4.82% 0.38% 100.00% (100.00)% (100.00)% (100.00)% (100.00)% (2.46)% (0.08)%	(Note) (Note) (Note) (Note) (Note) (Note) (Note) (Note) (Note) - -

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

Note: The transactions were written off in the consolidated financial statements.

(viii) Receivables from related parties with amounts exceeding $100 million or 20% of the Company's paid-in capital:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance of accounts receivable from related parties	Turnover rate	Over	due	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
The Company The Company The Company	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Japan Nanya Technology Europe GmbH	Subsidiary Subsidiary Subsidiary	2,155,916 696,844 472,305	5.35 6.51 6.29	- - -	- - -	885,380 229,504 287,277	- - -

Note: the transactions were written off in the consolidated financial statements.

(ix) Trading in derivative instruments: None
(x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

					(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of company	Name of counter-party	Nature of relationship		Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0 0 0 0 1 0 0 0 0 1	Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp Nanya Technology Corp.Delaware Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp. Nanya Technology Corp.Delaware	Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Europe GmbH Nanya Technology Corp. HK Nanya Technology Corp. Nanya Technology Corp., U.S.A Nanya Technology Corp., Japan Nanya Technology Europe GmbH Nanya Technology Corp. HK Nanya Technology Corp.	1 1 1 1 2 1 1 1 1 2	Sales Sales Sales Sales Sales Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable	7,350,094 2,820,765 2,022,335 131,628 341,659 2,155,916 696,844 472,305 37,311 41,695	On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions On the basis of general conditions	15.90% 6.10% 4.37% 0.28% 0.74% 1.29% 0.42% 0.28% 0.02% 0.02%

Note 1: Assigned numbers represent the following:

0 represents the parent company.
The subsidiaries are represented numerically starting from 1.

Note 2: The terms of transactions are defined as follows:

Parent company to subsidiary.
Subsidiary to parent company.
Subsidiary to Subsidiary.

Note 3: The business relationship and significant transactions between the parent company and the subsidiary only disclose the importations of sales and account receivable, did not repeat about the purchase and account payable.

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Information on investees (excluding information on investees in Mainland China):

The following is the information on investees for the nine months ended September 30, 2020:

(In Thousands of New Taiwan Dollars / Shares)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance	as of September 30, 2020	as of September 30, 2020	Net income of investee	Share of profits of investee	Note
				September 30, 2020	December 31, 2019	Shares	Percentage of ownership	Carrying value
The Company The Company The Company The Company The Company The Company Nanya Technology Corp., HK	Nanya Technology Corp., U.S.A. Nanya Technology Corp., Delaware Nanya Technology Corp., HK Nanya Technology Corp., Japan Nanya Technology International, Ltd. Formosa Advanced Technologies Co., Ltd. Nanya Technology Europe GmbH	U.S.A U.S.A Hong Kong Japan British Virgin Island Yunlin Germany	Sales of semiconductor products Design of semiconductor products Sales of semiconductor products Sales of semiconductor products General investment business Assembling, testing and producing modules for IC Sales of semiconductor products	20,392 36,005 66,271 20,161 37,004,400 5,099,482 30,056	20,392 36,005 66,271 20,161 37,004,400 5,099,482 30,056	2 - 20 1 1 141,511 -	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 32.00 % 100.00	160,838 175,358 69,038 177,484 35,032,525 4,871,850 76,680	15,500 17,423 9,711 (3,872) 481,002 1,086,685 10,664	15,500 17,423 9,711 (3,872) 481,002 371,083 10,664	(Note1) (Note1) (Note1) (Note1) (Note 1) (Note 2) (Note1)

Note: (1) The transactions were written off in the consolidated financial statements.

(2) Investment accounted for using equity method.
(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of September 30, 2020	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Nanya Technology Corp., Shenzhen	Sales of semiconductor products	28,689 (USD985 thousand	) (Note 1)	28,689 (USD985 thousand)	-	-	28,689 (USD985 thousand)	(2,260)	100.00%	(2,260) (Note 2)	12,825	-

Note 1 ： Indirect investment in Nanya Technology Corp., Shenzhen through Nanya Technology Corp., HK.

Note 2 ： The financial statements were reviewed by a certified public accountant of the Taiwanese parent company.

Note3 ： The transactions were written off in thee consolidated financial statements.

(ii) Limitation on investment in Mainland China:

(In Thousands of New Taiwan Dollars)

Accumulated Investment in Mainland China as of September 30, 2020 (Note 1)	Investment Amounts Authorized by Investment Commission, MOEA (Note 1)	Upper Limit on Investment (Note 2)
28,689 (USD985 thousand)	28,689 (USD985 thousand)	92,039,141

Note 1 ： The exchange rate of New Taiwan dollars to US dollars on June 30, 2020 was USD1 ： TWD 29.126 Note 2 ： 60% of net equity.

(iii) Significant transactions: None

(Continued)

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(d) Information on major shareholders:

Shareholding Shareholder’s Name	Shares	Percentage
Nan Ya Plastics Corporation	907,303,775	% 29.33
Formosa Chemicals & Fibre Corporation	334,815,409	% 10.82
Formosa Plastics Corporation	334,815,409	% 10.82
Formosa Petrochemical Corp	334,815,409	% 10.82

Note 1: The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of total non-physical ordinary shares and preference shares (including treasury shares) on the last business date of each quarter. The actual registered non-physical shares may be different from the capital shares disclosed in the financial statement due to different calculation basis.
Note 2: If shares are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust ac count. The shareholders holding more than 10% of the total shares of the company should declare insider’ s equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the trust assets which the insider has discretion over use. For details of the insider’s equity announcement please refer to the TWSE website.

(14) Segment information:

Segment information:
Revenue: From external customers From sales among intersegments Total revenue Reportable segment profit or loss Revenue: From external customers From sales among intersegments Total revenue Reportable segment profit or loss Revenue: From external customers From sales among intersegments Total revenue Reportable segment profit or loss		For the three months ended September 30,			2020
	Overseas sales division $ 4,453,162 10,989 $ 4,464,151 $ (714)	Overseas R&D division Manufacturing divisions Investment divisions - 10,870,705 - 138,666 4,294,081 - 138,666 15,164,786 - 6,884 2,094,265 80,644 For the three months ended September 30,			Adjustments and eliminated - (4,443,736) (4,443,736) (86,538) 2019	Total
						15,323,867 -
						15,323,867
						2,094,541

		Overseas R&D division Manufacturing divisions Investment divisions Adjustments and eliminated - 11,009,047 - - 165,966 3,702,566 - (3,882,277) 165,966 14,711,613 - (3,882,277) 8,339 2,683,207 217,249 (228,684) For the nine months ended September 30, 2020				Total
						14,799,353 -
						14,799,353
						2,683,728

		Overseas R&D division - 341,659 341,659 17,423	Manufacturing divisions 33,662,478 12,324,821 45,987,299 7,853,462	Investment divisions - - - 481,002	Adjustments and eliminated - (12,700,305) (12,700,305) (519,764)	Total
						46,232,094 -
						46,232,094
						7,854,371

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

	For the nine months ended September 30, 2019	For the nine months ended September 30, 2019	For the nine months ended September 30, 2019	For the nine months ended September 30, 2019
Overseas sales division $ 9,346,155 38,147 $ 9,384,302 $ 30,122 Overseas sales division $ 3,802,276 $ 2,842,369 $ 2,987,322 Overseas sales division $ 3,383,158 $ 2,439,109 $ 2,578,476	Overseas R&D division - 345,408 345,408 17,667 Overseas R&D division 176,415 178,026 169,252 Overseas R&D division 1,057 14,345 560	Manufacturing divisions 29,265,794 9,128,471 38,394,265 9,673,497 Manufacturing divisions 167,229,704 165,093,440 165,664,086 Manufacturing divisions 13,831,135 13,081,887 13,881,438	Investment divisions - - - 745,134 Investment divisions 35,032,525 37,056,800 31,790,334 Others divisions - 18 -	Adjustments and eliminated - (9,512,026) (9,512,026) (791,594) Adjustments and eliminated (39,034,455) (40,069,983) (34,963,396) Adjustments and eliminated (3,407,454) (2,446,260) (2,595,524)	Total
					38,611,949 -
					38,611,949
					9,674,826
					Total
					167,206,465
					165,100,652
					165,647,598
					Total
					13,807,896
					13,089,099
					13,864,950

AI assistant

NTC — Interim / Quarterly Report 2020

52061_rns_2020-12-09_efec48ff-670d-46d1-a4bf-7da543d7070c.pdf

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion of the consolidated financial report for the nine months ended September 30, 2019

Unqualiflied Conclusion and Qualified Conclusion

Other Matter

KPMG

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of September 30, 2020 and 2019

Nanya Technology Corporation and Subsidiaries

Consolidated Balance Sheets

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Except Earnings Per Share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2020 and 2019

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

Nanya Technology Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2020 and 2019

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards Nanya Technology Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

September 30, 2020 and 2019

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

(1) Company history

(2) Approval date and procedures of the consolidated financial statements:

(3) New standards, amendments and interpretations adopted:

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

(a) Statement of compliance

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Employee benefits

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

(6) Explanation of significant accounts:

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Notes and accounts receivable

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Right-of-use assets

(g) Lease receivables

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Lease liabilities

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

(i) Employee benefits

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

(j) Income tax

(k) Capital and other equity

(i) Ordinary Share

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Capital surplus

(iii) Retain earning

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Special Reserve

3) Earrings distribution

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Compensation cost

(m) Earnings per share

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Revenue from contracts with customers

(i) Disaggregation of revenue

NANYA TECHNOLOGY CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

NTC Interim / Quarterly Report 2020