QUANTA COMPUTER INC. AND SUBSIDIARIES · 2020. 12. 29. · Stock Code:2382 QUANTA COMPUTER INC. AND...

Stock Code:2382

QUANTA COMPUTER INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

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

Address: No.188 Wenhua 2nd Rd., Guishan Dist. Taoyuan City, Taiwan, R.O.C.

Telephone: (03)327-2345

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

〜1〜

Table of contents

Contents Page

1.　Cover Page 1

2.　Table of Contents 2

3.　Independent Auditors’ Review Report 3

4.　Consolidated Statements of Financial Position 4

5.　Consolidated Statements of Comprehensive Income 5

6.　Consolidated Statements of Changes in Equity 6

7.　Consolidated Statements of Cash Flows 7

8.　Notes to the Consolidated Financial Statements

(1)Overview 8

(2)Financial Statements Authorization Date and Authorization Process 8

(3)New Standards and Interpretations Adopted 8～9

(4)Significant Accounting Policies 9～14

(5)Major Sources of Accounting Assumptions, Judgments and EstimationUncertainties

15

(6)Explanation to Significant Accounts 15～49

(7)Related Party Transactions 49～51

(8)Pledged Assets 51

(9)Significant Commitments and Contingencies 52～54

(10)Losses Due to Major Disasters 54

(11)Subsequent Events 54

(12)Others 54～55

(13)Other disclosures

(a) Information on significant transactions 55～68

(b) Information on investees 68～71

(c) Information on investment in mainland China 71～74

(d)Major shareholders 74

(14)Segment Information 75

〜2〜

Independent Auditors’ Review Report

To the Board of Directors of Quanta Computer Inc.:

Introduction

We have reviewed the accompanying consolidated statements of financial position of Quanta Computer Inc. andits subsidiaries as of September 30, 2020 and 2019, and the related consolidated statements of comprehensiveincome for the three months and the nine months ended September 30, 2020 and 2019, and changes in equityand cash flows for the nine months ended September 30, 2020 and 2019 and notes to the consolidated financialstatements, including a summary of significant accounting policies. Management is responsible for thepreparation and fair presentation of the consolidated financial statements in accordance with the RegulationsGoverning the Preparation of Financial Reports by Securities Issuers and International Accounting Standards(“ IASs” ) 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial SupervisoryCommission of the Republic of China. Our responsibility is to express a conclusion on the consolidatedfinancial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordancewith Statement of Auditing Standards 65, “ Review of Financial Information Performed by the IndependentAuditor of the Entity”. A review of the consolidated financial statements consists of making inquiries, primarilyof persons responsible for financial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted in accordance with the generallyaccepted auditing standards and consequently does not enable us to obtain assurance that we would becomeaware of all significant matters that might be identified in an audit. Accordingly, we do not express an auditopinion.

Basis for Qualified Conclusion

As stated in Note 4 (b), the consolidated financial statements included the financial statements of certain non-significant subsidiaries, which were not reviewed by independent auditors. These financial statements reflecttotal assets amounting to NT$62,752,549 thousand and NT$150,848,229 thousand, constituting 9.93% and24.58% of consolidated total assets as of September 30, 2020 and 2019, respectively, total liabilities amountingto NT$16,651,876 thousand and NT$55,509,002 thousand, constituting 3.41% and 11.66% of consolidated totalliabilities as of September 30, 2020 and 2019, respectively, and total comprehensive income (loss) amounting to

NT$632,723 thousand, NT$(410,956) thousand, NT$1,072,950 thousand and NT$572,740 thousand,

constituting 7.69%, (11.00)%, 6.85% and 5.64% of consolidated total comprehensive income (loss) for the threemonths and the nine months ended September 30, 2020 and 2019, respectively.

Furthermore, as stated in Note 6 (g), the other equity accounted investments of Quanta Computer Inc. and itssubsidiaries in its investee companies of NT$541,199 thousand and NT$354,903 thousand as of September 30,2020 and 2019, respectively, and its equity in net earnings (loss) on these investee companies of NT$(5,738)

thousand, NT$(11,488) thousand, NT$(30,358) thousand and NT$(11,705) thousand for the three months andthe nine months ended September 30, 2020 and 2019, respectively, were recognized solely on the financialstatements prepared by these investee companies, but not reviewed by independent auditors.

〜3〜

deychang

新建印章

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statementsof certain consolidated subsidiaries and equity accounted investee companies described in the Basis forQualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothinghas come to our attention that causes us to believe that the accompanying consolidated financial statements donot present fairly, in all material respects, the consolidated financial position of Quanta Computer Inc. and itssubsidiaries as of September 30, 2020 and 2019, and of its consolidated financial performance for the threemonths and nine months ended September 30, 2020 and 2019, and its consolidated cash flows for the ninemonths ended September 30, 2020 and 2019, in accordance with the Regulations Governing the Preparation ofFinancial Reports by Securities Issuers and IASs 34, “ Interim Financial Reporting” endorsed and issued intoeffect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors’ review report are Wan-Wan Linand Liu-Fong Yang.

KPMG

Taipei, Taiwan (Republic of China)November 13, 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 ofChina and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financialstatements are those generally accepted and applied in the Republic of China.

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

〜3-1〜

deychang

新建印章

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

REVIEWED ONLY, NOT AUDITED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS AS OF SEPTEMBER 30, 2020 AND 2019


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

SEPTEMBER 30, 2020, DECEMBER 31, 2019, AND SEPTEMBER 30, 2019

(AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

September 30, 2020 December 31, 2019 September 30, 2019　ASSETS Amount % Amount % Amount %Current assets:

1100 　Cash and cash equivalents (Notes (6)(a)) $ 136,272,443 21 192,605,577 31 153,328,409 25

1110 　Current financial assets at fair value through profit or

loss (Notes (6)(b))

23,350,570 4 6,742,086 1 10,597,296 2

1120 　Current financial assets at fair value through other

comprehensive income (Notes (6)(c))

5,738,242 1 5,381,084 1 4,424,416 1

1172 　Accounts receivable, net (Notes (6)(d) and (7)) 220,221,245 35 201,146,463 33 186,808,234 30

1200 　Other receivables, net (Notes (6)(e) and (7)) 3,223,914 1 3,167,221 1 3,197,108 1

1310 　Inventories (Notes (6)(f)) 160,590,459 25 122,568,746 20 169,738,291 27

1476 　Other current financial assets (Note (8)) 16,049,130 2 18,755,574 3 20,551,195 3

1479 　Other current assets, others 4,185,235 1 2,378,404 - 3,879,081 1

569,631,238 90 552,745,155 90 552,524,030 90

Non-current assets:

1510 　Non-current financial assets at fair value through

profit or loss (Notes (6)(b))

431,886 - 321,993 - 344,972 -

1517 　Non-current financial assets at fair value through

other comprehensive income (Notes (6)(c))

1,717,873 - 1,879,363 - 1,552,982 -

1550 　Investments accounted for using equity method

(Notes (6)(g))

541,199 - 340,472 - 354,903 -

1600 　Property, plant and equipment (Notes (6)(h)) 48,266,198 8 47,497,209 8 48,390,168 8

1755 　Right-of-use assets (Notes (6)(i)) 2,302,918 1 3,015,597 1 3,269,643 1

1760 　Investment property, net (Notes (6)(j)) 70,450 - 69,011 - 69,172 -

1780 　Intangible assets (Notes (6)(k)) 884,085 - 832,242 - 905,659 -

1840 　Deferred tax assets 6,255,709 1 6,253,802 1 4,591,879 1

1975 　Net defined benefit asset, non-current 34,648 - 33,701 - 32,701 -

1980 　Other non-current financial assets (Note (8)) 244,702 - 255,489 - 266,517 -

1995 　Other non-current assets, others 1,497,291 - 1,382,899 - 1,280,265 -

62,246,959 10 61,881,778 10 61,058,861 10

TOTAL ASSETS $ 631,878,197 100 614,626,933 100 613,582,891 100

September 30, 2020 December 31, 2019 September 30, 2019　LIABILITIES AND EQUITY Amount % Amount % Amount %Current liabilities:

2100 　Short-term borrowings (Note (6)(l)) $ 146,015,229 23 182,336,322 30 180,414,112 30

2120 　Current financial liabilities at fair value through

profit or loss (Notes (6)(b))

1,393 - 7,030 - - -

2130 　Current contract liabilities 53,964,654 9 47,185,954 8 45,306,149 8

2170 　Accounts payable 204,737,441 32 150,772,704 25 171,966,379 28

2219 　Other payables (Note (7)) 32,802,903 5 28,936,078 5 29,227,901 5

2230 　Current tax liabilities 9,844,275 2 8,098,084 1 6,571,335 1

2250 　Current provisions 321,900 - 336,029 - 175,972 -

2280 　Current lease liabilities (Notes (6)(n)) 780,310 - 926,693 - 920,264 -

2305 　Other current financial liabilities 6,761,803 1 6,214,702 1 6,031,943 1

2320 　Long-term liabilities, current portion (Note (6)(m)) 19,747,200 3 14,419,200 2 - -

2365 　Current refund liabilities 4,432,525 1 3,908,078 1 1,369,018 -

2399 　Other current liabilities, others 52,263 - 54,969 - 79,574 -

　　 479,461,896 76 443,195,843 73 442,062,647 73

Non-Current liabilities:

2540 　Long-term borrowings (Note (6)(m)) 7,076,200 1 26,229,300 4 29,970,700 5

2570 　Deferred tax liabilities 318,452 - 721,858 - 1,399,662 -

2580 　Non-current lease liabilities (Notes (6)(n)) 1,171,483 - 1,658,511 - 1,876,337 -

2640 　Net defined benefit liability, non-current 791,330 - 791,636 - 796,792 -

2670 　Other non-current liabilities, others 85,908 - 98,520 - 94,544 -

　　 9,443,373 1 29,499,825 4 34,138,035 5

　　　Total liabilities 488,905,269 77 472,695,668 77 476,200,682 78

Equity attributable to owners of parent

(Note (6)(q)):

3100 　Share capital 38,626,274 6 38,626,274 6 38,626,274 6

3200 　Capital surplus 14,105,166 2 14,090,564 2 14,095,898 2

3300 　Retained earnings 92,874,270 15 90,494,982 15 85,977,927 14

3400 　Other equity (8,060,045) (1) (7,236,915) (1) (7,316,632) (1)

3500 　Treasury shares (333,094) - (333,094) - (333,094) -

　　Total equity attributable to owners of parent 137,212,571 22 135,641,811 22 131,050,373 21

36XX 　Non-controlling interests 5,760,357 1 6,289,454 1 6,331,836 1

　　　Total equity 142,972,928 23 141,931,265 23 137,382,209 22

TOTAL LIABILITIES AND EQUITY $ 631,878,197 100 614,626,933 100 613,582,891 100

See accompanying notes to financial statements.

〜4〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE)

REVIEWED ONLY, NOT AUDITED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019


For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019Amount % Amount % Amount % Amount %

4000 Operating revenue (Notes (6)(s) and (7)) $ 327,348,154 100 265,141,914 100 787,828,383 100 732,212,930 100

5000 Operating costs (Note (6)(f)) 308,165,979 94 252,367,885 95 742,628,282 94 697,837,049 95

Gross profit from operations 19,182,175 6 12,774,029 5 45,200,101 6 34,375,881 5

5910 Less: Unrealized profit from sales 4,446 - 3,870 - 4,446 - 3,870 -

5920 Add: Realized profit from sales 4,177 - 3,665 - 2,186 - 2,595 -

19,181,906 6 12,773,824 5 45,197,841 6 34,374,606 5

Operating expenses:

6100 　Selling expenses 2,327,755 1 1,940,492 1 5,791,122 1 5,699,502 1

6200 　General and administrative expenses 1,812,528 1 1,664,474 1 5,084,967 1 5,594,602 1

6300 　Research and development expenses 4,735,307 1 3,618,153 1 12,038,458 1 10,940,402 1

8,875,590 3 7,223,119 3 22,914,547 3 22,234,506 3

Net operating income 10,306,316 3 5,550,705 2 22,283,294 3 12,140,100 2

Non-operating income and expenses:

7100 Interest income (Note (6)(u)) 966,919 - 1,725,771 1 3,307,111 - 5,339,228 1

7010 Other income (Notes (6)(u) and (7)) 43,403 - 49,502 - 51,056 - 277,416 -

7020 Other gains and losses, net (Notes (6)(u) and (7)) (93,511) - 282,355 - (1,085,252) - 1,996,234 -

7050 Financial costs (Note (6)(u)) (369,712) - (1,645,646) (1) (1,755,675) - (5,287,461) (1)

7060 Share of profit (loss) of associates and joint ventures accounted for usingequity method (Note (6)(g)) (5,738) - (11,488) - (30,358) - (11,705) -

541,361 - 400,494 - 486,882 - 2,313,712 -

7900 Profit before tax 10,847,677 3 5,951,199 2 22,770,176 3 14,453,812 2

7950 Less: Tax expenses (Note (6)(p)) 2,821,204 1 1,510,621 - 6,125,546 1 2,702,033 -

Profit 8,026,473 2 4,440,578 2 16,644,630 2 11,751,779 2

Other comprehensive income (loss):

8310 Components of other comprehensive income that will not be reclassifiedto profit or loss

8316 Unrealized gains (losses) from investments in equity instrumentsmeasured at fair value through other comprehensive income 754,586 - (514,120) - 324,297 - (1,665,827) -

8320 Share of other comprehensive income of associates and joint venturesaccounted for using equity method, components of othercomprehensive income that will not be reclassified to profit or loss(Note (6)(g)) (672) - 1,169 - (9,131) - 5,777 -

8349 Less: Income tax related to components of other comprehensive incomethat will not be reclassified to profit or loss - - - - - - - -

　Total components of other comprehensive income that will not bereclassified to profit or loss 753,914 - (512,951) - 315,166 - (1,660,050) -

8360 Components of other comprehensive income that will be reclassified toprofit or loss

8361 Exchange differences on translation (554,513) - (192,596) - (1,295,981) - 57,073 -

8370 Share of other comprehensive income of associates and joint venturesaccounted for using equity method, components of othercomprehensive income that will be reclassified to profit and loss(Note (6)(g)) (246) - (750) - 5,142 - 515 -

8399 Less: Income tax related to components of other comprehensive incomethat will be reclassified to profit or loss - - - - - - - -

　Total components of other comprehensive income that will bereclassified to profit or loss (554,759) - (193,346) - (1,290,839) - 57,588 -

Other comprehensive income, net of income tax 199,155 - (706,297) - (975,673) - (1,602,462) -

8500 Total comprehensive income $ 8,225,628 2 3,734,281 2 15,668,957 2 10,149,317 2

Profit attributable to:

8610 Profit, attributable to owners of parent $ 7,871,158 2 4,337,716 2 16,702,389 2 11,429,048 2

8620 Profit, attributable to non-controlling interests 155,315 - 102,862 - (57,759) - 322,731 -

$ 8,026,473 2 4,440,578 2 16,644,630 2 11,751,779 2

Comprehensive income attributable to:

8710 　Comprehensive income, attributable to owners of parent $ 8,086,406 2 3,765,091 2 15,847,879 2 9,855,396 2

8720 　Comprehensive income, attributable to non-controlling interests 139,222 - (30,810) - (178,922) - 293,921 -

$ 8,225,628 2 3,734,281 2 15,668,957 2 10,149,317 2

Earnings per share attributable to parent company (Note (6)(r))

9750 Basic earnings per share (NT dollars) $ 2.04 1.13 4.33 2.97

9850 Diluted earnings per share (NT dollars) $ 2.03 1.12 4.30 2.95


〜5〜




CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019


Equity Attributable to Owners of ParentOther Equity

Share Capital Retained Earnings

ExchangeDifferences onTranslation of

Unrealized Gains(Losses) from

Financial AssetsMeasured atFair Value Total Equity

OrdinaryShare

CapitalSurplus Legal Reserve

SpecialReserve

UnappropriatedRetainedEarnings

ForeignFinancial

Statements

Through OtherComprehensive

IncomeTreasury

Shares

Attributableto Owners of

Parent

Non-Controlling

InterestsTotal

EquityBalance as of January 1, 2019 $ 38,626,274 14,085,280 31,699,285 5,987,359 50,553,544 4,330,076 (10,052,038) (333,094) 134,896,686 6,330,410 141,227,096

Profit for the period - - - - 11,429,048 - - - 11,429,048 322,731 11,751,779

Other comprehensive income for the period - - - - - 101,881 (1,675,533) - (1,573,652) (28,810) (1,602,462)

Total comprehensive income for the period - - - - 11,429,048 101,881 (1,675,533) - 9,855,396 293,921 10,149,317

Appropriation and distribution of retained earnings:

　Legal reserve appropriated - - 1,511,855 - (1,511,855) - - - - - -

　Reversal of special reserve - - - (265,397) 265,397 - - - - - -

　Cash dividends of ordinary share - - - - (13,712,327) - - - (13,712,327) - (13,712,327)

Other changes in capital surplus:

　Changes in equity of subsidiaries accounted for using equity method - 36 - - - - - - 36 83 119

Adjustments of capital surplus for company’s cash dividends received bysubsidiaries - 10,582 - - - - - - 10,582 - 10,582

Changes in non-controlling interests - - - - - - - - - (292,578) (292,578)

Disposal of investments in equity instruments measured at fair value through othercomprehensive income - - - - 21,018 - (21,018) - - - -

Balance as of September 30, 2019 $ 38,626,274 14,095,898 33,211,140 5,721,962 47,044,825 4,431,957 (11,748,589) (333,094) 131,050,373 6,331,836 137,382,209

Balance as of January 1, 2020 $ 38,626,274 14,090,564 33,211,140 5,721,962 51,561,880 3,350,490 (10,587,405) (333,094) 135,641,811 6,289,454 141,931,265

Profit for the period - - - - 16,702,389 - - - 16,702,389 (57,759) 16,644,630

Other comprehensive income for the period - - - - - (1,240,317) 385,807 - (854,510) (121,163) (975,673)

Total comprehensive income for the period - - - - 16,702,389 (1,240,317) 385,807 - 15,847,879 (178,922) 15,668,957

Appropriation and distribution of retained earnings:

　Legal reserve appropriated - - 1,596,712 - (1,596,712) - - - - - -

　Special reserve appropriated - - - 1,514,953 (1,514,953) - - - - - -

　Cash dividends of ordinary share - - - - (14,291,721) - - - (14,291,721) - (14,291,721)

Other changes in capital surplus:

　Changes in equity of subsidiaries accounted for using equity method - 3,654 - - - - - - 3,654 (3,595) 59

Adjustments of capital surplus for company’s cash dividends received bysubsidiaries - 11,030 - - - - - - 11,030 - 11,030

Changes in ownership interests in subsidiaries - (82) - - - - - - (82) 82 -

Changes in non-controlling interests - - - - - - - - - (346,662) (346,662)

Disposal of investments in equity instruments measured at fair value through othercomprehensive income - - - - (31,380) - 31,380 - - - -

Balance as of September 30, 2020 $ 38,626,274 14,105,166 34,807,852 7,236,915 50,829,503 2,110,173 (10,170,218) (333,094) 137,212,571 5,760,357 142,972,928


〜6〜




CONSOLIDATED STATEMENTS OF CASH FLOWS



For the Nine Months EndedSeptember 30,

2020 2019Cash flows from operating activities:

Profit before tax $ 22,770,176 14,453,812

Adjustments:

Adjustments to reconcile profit:

Depreciation expense 5,213,614 6,133,508

Amortization expense 933,294 860,998

Expected credit gain (167,035) (212,927)

Net (gain) loss on financial assets or liabilities at fair value through profit or loss (32,745) 15,889

Interest expense 1,755,675 5,287,461

Interest income (3,307,111) (5,339,228)

Dividend income (51,056) (277,416)

Share of loss of associates and joint ventures accounted for using equity method 30,358 11,705

Loss on disposal of property, plant and equipment 902,725 580,938

Property, plant and equipment transferred to expenses 96 -

Gain on disposal of intangible assets - (54)

Gain on disposal of investments (9) (59,777)

Loss on disposal of investments accounted for using equity method 6,841 -

(Reversal of) impairment loss on non-financial assets (74,241) 2,092

Unrealized foreign exchange loss 97,800 102,600

Other adjustments (20,204) (437)

Total adjustments to reconcile profit 5,288,002 7,105,352

Changes in operating assets and liabilities:

Changes in operating assets:

Financial assets at fair value through profit or loss, mandatorily measured at fair value 66,048 (193,687)

Accounts receivable (25,342,947) 19,059,961

Other receivables (860,629) (30,048)

Inventories (41,984,906) (32,875,402)

Other current assets (1,199,607) 830,695

Other financial assets (435,860) (412,117)

Net defined benefit assets (947) (1,069)

Total changes in operating assets (69,758,848) (13,621,667)

Changes in operating liabilities:

Contract liabilities 6,778,700 13,111,452

Accounts payable 66,839,101 (6,857,122)

Other payables 4,815,689 (2,427,287)

Current provisions (14,129) 22,264

Other financial liabilities 548,073 1,217,676

Other current liabilities 682,633 (1,064,756)

Net defined benefit liabilities (306) (298)

Other liabilities 2,260 1,274

Total changes in operating liabilities 79,652,021 4,003,203

Total changes in operating assets and liabilities 9,893,173 (9,618,464)

Total adjustments 15,181,175 (2,513,112)


〜7〜




CONSOLIDATED STATEMENTS OF CASH FLOWS




2020 2019Cash inflow generated from operations 37,951,351 11,940,700

Interest received 3,849,400 6,668,631

Dividends received 51,056 279,269

Interest paid (2,013,314) (6,898,423)

Income taxes paid (5,485,060) (2,626,807)

Net cash from operating activities 34,353,433 9,363,370

Cash flows from investing activities:

Acquisition of financial assets at fair value through other comprehensive income (7,471) (297,738)

Proceeds from disposal of financial assets at fair value through other comprehensive income 91,595 69,335

Proceeds from capital reduction of financial assets at fair value through other comprehensive

income 38,596 19,017

Acquisition of financial assets at fair value through profit or loss (16,776,100) (4,822,081)

Acquisition of investments accounted for using equity method (245,157) (105,789)

Proceeds from disposal of investments accounted for using equity method 1,982 -

Proceeds from capital reduction of investments accounted for using equity method - 9,751

Acquisition of property, plant and equipment (7,687,941) (5,305,666)

Proceeds from disposal of property, plant and equipment 1,034,178 943,355

Acquisition of intangible assets (312,921) (332,253)

Proceeds from disposal of intangible assets - 54

Acquisition of investment properties (1,937) -

Increase in other financial assets (96,235) (20,915)

Decrease in other financial assets 2,677,032 10,572,938

Increase in other non-current assets (855,119) (529,343)

Decrease in other non-current assets 7,600 24,088

Net cash (used in) from investing activities (22,131,898) 224,753

Cash flows from financing activities:

Increase in short-term borrowings 7,661,880 31,915,850

Decrease in short-term borrowings (43,088,924) (97,282,128)

Proceeds from long-term borrowings 673,300 17,827,267

Repayments of long-term borrowings (14,106,200) (6,455,267)

Repayments of principal portion of lease liabilities (674,804) (715,364)

Increase in other financial liabilities 3,596 729

Decrease in other financial liabilities (12,087) (9,649)

Increase in other non-current liabilities 107 -

Decrease in other non-current liabilities - (507)

Cash dividends paid (14,658,247) (13,977,189)

Change in non-controlling interests 61,425 14,617

Cash dividends returned 59 119

Net cash used in financing activities (64,139,895) (68,681,522)

Effect of exchange rate changes on cash and cash equivalents (4,414,774) 1,140,724

Net decrease in cash and cash equivalents (56,333,134) (57,952,675)

Cash and cash equivalents at beginning of period 192,605,577 211,281,084

Cash and cash equivalents at end of period $ 136,272,443 153,328,409


〜7-1〜




NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2020 AND 2019

(AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

UNLESS OTHERWISE SPECIFIED)

(1)　Overview　

Quanta Computer Inc. (the “Company”) was incorporated on May 9, 1988, as a company limited by sharesand registered under the Ministry of Economic Affairs, R.O.C.. The address of the Company’s registeredoffice is No. 188, Wenhua 2nd Rd., Guishan Dist., Taoyuan City, Taiwan, R.O.C.. The Company and itssubsidiaries (together referred to as the “Group”) engage primarily in the manufacturing, processing, andsales of laptop computers and telecommunication products.

(2)　Financial Statements Authorization Date and Authorization Process 　

The consolidated financial statements for the nine months ended September 30, 2020 and 2019 wereauthorized for issuance by the board of directors on November 13, 2020.

(3) New Standards and Interpretations Adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the FinancialSupervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The following new standards, interpretations and amendments have been endorsed by the FSC andare effective for annual periods beginning on or after January 1, 2020.

New, Revised or Amended Standards and InterpretationsEffective date

per IASBAmendments 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 materialimpact 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 andare effective for annual periods beginning on or after January 1, 2021:


per IASBAmendments to IFRS 4 “Extension of the Temporary Exemption from ApplyingIFRS 9”

January 1, 2021

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

〜8〜








(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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


per IASBAmendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Betweenan Investor and Its Associate or Joint Venture”

Effective date tobe determinedby 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 beforeIntended Use”

January 1, 2022

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 RateBenchmark Reform－Phase 2”

January 1, 2021

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

(4)　Significant Accounting Policies

(a) Statement of compliance 　

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

Except the following accounting policies mentioned below, the significant accounting policiesadopted in the consolidated financial statements are the same as those in the consolidated financialstatement 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.

〜9〜








(b) Basis of consolidation 　

1.List of subsidiaries in the consolidated financial statements：

Shareholding

Name ofInvestor

Name ofSubsidiary

PrincipalActivity

September 30,2020

December 31,2019

September 30,2019 Note

The Company Quanta International Limited(QIL)

Holding company %100.00 %100.00 %100.00

〞 QCJ Corp. After-sales service and saleof computers andtelecommunication products

%100.00 %100.00 %100.00 Note 6

〞 Quanta ComputerTechnology InvestmentCorp. (QCTI)

Investment company %100.00 %100.00 %100.00 Note 6

〞 Quanta Venture Capital Co.,Ltd. (QVC)

Venture capital %100.00 %100.00 %100.00 Note 6

〞 Quanta Cloud TechnologyInc. (QCTTW)

Sale of computers andperipherals

%100.00 %99.99 %99.99 Note 6

〞 THINKTECH COMERCIODE INFORMATICA LTDA(ThinkTech)


%83.16 %83.16 %83.16 Note 6

〞 QMB Co., Ltd. (QMB) Manufacture and sale ofcomputers, peripherals andconsumer products

%100.00 %100.00 %100.00 QMB was established onAugust 15, 2019. Note 6

〞 Quanta Cloud TechnologySingapore Pet. Ltd. (QCTS)

Sale and after-sales serviceof computer peripherals

%100.00 %- %- QCTS was establishedon January 1, 2020. Note 6

The Companyand QCTI

Quanta Storage Inc. (QSI) Manufacture and sale ofoptical storage equipment,and computer storagedevices and peripherals

%30.22 %30.22 %30.22 Note 1

〞 RoyalTek Company Ltd.(RTK)

Design, manufacture,processing, distribute, andsale of satellite guidednavigation systems andperipherals, navigatedmaps, and digital maps

%37.57 %37.57 %37.57 Note 1

〞 Quanta Microsystem Inc.(QMIT)

Electronic company %100.00 %100.00 %100.00 Note 6

QIL QCE Computer B.V. (QCE) Sale and after-sales serviceof computer peripherals

%100.00 %100.00 %100.00 Note 6

〞 Access InternationalCompany (AIC)

Holding company %100.00 %100.00 %100.00

〞 Quanta ASIA LTD. (QAL) Investment company andafter-sales service

%100.00 %100.00 %100.00

〞 Quanta Capital ManagementLtd. (QCML)


〞 QCT LLC (QCT-USA) Sale of computerperipherals

%100.00 %100.00 %100.00 Note 6

〞 QCT Inc. (QCTC) Investment company %100.00 %100.00 %100.00 Note 6

QCE THINKTECH COMERCIODE INFORMATICA LTDA(ThinkTech)


%16.84 %16.84 %16.84 Note 6

〜10〜








Shareholding

Name ofInvestor

Name ofSubsidiary

PrincipalActivity

September 30,2020

December 31,2019


AIC Quanta ManufacturingIncorporation (QMI)

Assembly and processing ofcomputers and peripherals

%100.00 %100.00 %100.00 Note 6

〞 Quanta Service Incorporation(QSI-USA)

After-sales service ofcomputers and peripherals

%100.00 %100.00 %100.00 Note 6

〞 Quanta Computer USA, Inc.(QCA)


%100.00 %100.00 %100.00 Note 6

〞 QCH, Inc., a Nevadacorporation (QCH)


%100.00 %100.00 %100.00

QMI Quanta ManufacturingNashville LLC (QMN)

Assembly and processing ofcomputers and peripherals

%100.00 %100.00 %100.00 Note 6

QSI-USA Quanta Service NashvilleLLC (QSN)


%100.00 %100.00 %100.00 Note 6

QCA Quanta Computer NashvilleLLC (QCN)


%100.00 %100.00 %100.00 Note 6

QCH QCH Nashville LLC(QCHN)


%100.00 %100.00 %100.00 Note 6

QAL Quanta Development LTD.(QDL)

Holding Company %100.00 %100.00 %100.00

〞 Quanta InternationalTechnology LTD. (QIT)

Sale of computers andperipherals, and investmentcompany

%100.00 %100.00 %100.00 Note 6

〞 Q_Bus International Limited(Q_Bus)

Holding company %100.00 %100.00 %100.00 Note 6

QCTC QCT Korea Inc. (QCTK) Sale of computers andperipherals

%100.00 %100.00 %100.00 Note 6

QIT QCG Computer GMBH Assembly and processing ofcomputers and peripherals

%100.00 %100.00 %100.00 Note 6

QDL Quanta Development(HONG KONG) Limited(QDL(HK))

Sale of computers andperipherals, and investmentcompany

%100.00 %100.00 %100.00

QDL (HK) Tech-Front (Shanghai)Computer Co., Ltd. (TFC)

Manufacture and sale ofcomputers and peripherals

%100.00 %100.00 %100.00 Note 6

〞 Tech-Com (Shanghai)Computer Co., Ltd. (TCC)


%100.00 %100.00 %100.00

〞 Tech-Com (Chongqing)Computer Co., Ltd. (TCQ)

Manufacture and sale ofcomputers, mobilecommunication, storagedevice, peripherals andaccessories

%100.00 %100.00 %100.00 Note 6

〞 Tech-Trend (Shanghai)Computer Co., Ltd. (TTC)

Sale and after-sales serviceof computers andperipherals

%100.00 %100.00 %100.00 Note 6

〞 Tech-Lead (Shanghai)Computer Co., Ltd. (TLC)

After-sales service ofcomputers

%100.00 %100.00 %100.00 Note 6

〞 Tech-Giant (Shanghai)Computer Co., Ltd. (TGC)


%100.00 %100.00 %100.00 Note 6

〞 Tech-Wave (Shanghai)Logistics Co., Ltd. (TWW)

Storage service %100.00 %100.00 %100.00 Note 6

〞 Tech-Full Computer(Changshu) Co., Ltd. (TNC)

Manufacture and sale ofcomputers, mobilecommunication, storagedevice, peripherals andaccessories

%100.00 %100.00 %100.00

〜11〜








Shareholding

Name ofInvestor

Name ofSubsidiary

PrincipalActivity

September 30,2020

December 31,2019


QDL (HK) Tech-Front (Chongqing)Computer Co., Ltd. (TFQ)

Processing, manufactureand sale of computers

%100.00 %100.00 %100.00 Note 2

〞 Tech-Wave (Chongqing)Logistics Co., Ltd. (TWQ)

Storage service %100.00 %100.00 %100.00 Note 6

〞 Kenseisha Shanghai P.M.P.Co., Ltd. (KSH)

Manufacture and sale ofprecision machinery,peripherals and metallicmolds

%100.00 %100.00 %100.00 Note 6

〞 CloudTech (Chongqing)Technology Co., Ltd.(YDCQ)

Sale of servers and switches %100.00 %100.00 %100.00 Note 6

〞 Fly Dragon International Ltd.(FDDT)

Investment company andtrading company

%100.00 %100.00 %100.00 Note 6

〞 Dragon Grand Group Ltd.(DGDT)

Investment company andtrading company

%100.00 %100.00 %100.00 Note 6

FDDT Kenseisha Changshu P.M.PCo., Ltd. (KCC)

Manufacture and sale ofmachine cases, molds andtools

%100.00 %100.00 %100.00 Note 6

DGDT Dragnotech Metallic IndustryCo., Ltd. (SJDT)

Manufacture and sale ofcomputers and componentsof peripherals

%100.00 %100.00 %100.00 Note 6

Q_Bus Exmore Services HoldingLimited (EXM)

Holding company %95.00 %95.00 %95.00 Note 6

〞 Tech Chain Ltd. (TCL) Holding company %100.00 %100.00 %100.00 Note 6

EXM Exmore Services Holding(HONG KONG) Limited(EXMHK)


EXMHK Gem-Tech (Shanghai)Precision Mold Co., Ltd.(GTM)

Manufacture and sale ofnon-metallic product molds

%100.00 %100.00 %100.00 Note 6

TCL Tech Chain (HONG KONG)Limited (TCLHK)


TCLHK Zhan Yun (Shanghai)Electronics Co., Ltd. (ZYES)


%100.00 %100.00 %100.00 Note 6

〞 Zhan Yun (Chongqing)Electronics Co., Ltd.(ZYEQ)


%- %- %100.00 The cancellation ofregistration wascompleted in October2019.

QSI Quanta Storage InternationalLtd. (QSI (CAYMAN))

Investment company %100.00 %100.00 %100.00

〞 Quanta Storage InvestmentInc.


〞 Techman Electronics(Thailand) Co., Ltd. (TMT)

Manufacture and sale ofcomputer storage devicesand components ofperipherals

%100.00 %100.00 %100.00 Note 6

〞 Techman Incorporation(TAI)

Factory automationplanning, installation andimplementation

%100.00 %100.00 %100.00 Note 4、Note 6

〞 TM SMT SDN. BHD.(JVM)

Sale of computer storagedevices and components ofperipherals

%51.00 %51.00 %51.00 Note 6

〜12〜








Shareholding

Name ofInvestor

Name ofSubsidiary

PrincipalActivity

September 30,2020

December 31,2019


QSI Techman Robot Inc. (TRI) Manufacture and sale ofindustrial collaborativerobots

%91.66 %- %- Note 3

QSI(CAYMAN)

Quanta Storage (BVI) Ltd.(QSL (BVI))


〞 E-Foward Technology Ltd.(SAMOA) (E-Foward (SAMOA))


%100.00 %100.00 %100.00

QSL(BVI) Quanta Storage Holding(Hong Kong) Ltd. (QHH)


〞 Techman Electronic (HongKong) Limited (QIH)


〞 Techman Asia Ltd. (TMA) Sale and after-sales serviceof computer storage devicesand components ofperipherals

%- %100.00 %100.00 Note 5、Note 6

QHH Quanta Storage (Shanghai),Ltd. (QSS)


%100.00 %100.00 %100.00

QIH Techman Electronics(Changshu) Ltd.(Techman)


%100.00 %100.00 %100.00

E-Foward(SAMOA)

Quanta Storage Asia Ltd.(SAMOA) (QSA)

Sale and after-sales serviceof computer storage devicesand components ofperipherals

%100.00 %100.00 %100.00

Quanta StorageInvestment Inc.

Techman Robot Inc. (TRI) Manufacture and sale ofindustrial collaborativerobots

%- %100.00 %100.00 Note 3

TRI Techman Robot (HONGKONG) Ltd. (TRH)


TRH Techman Robot (Shanghai)Ltd. (TRS)

After-sales service and saleof industrial collaborativerobots and components ofperipherals

%100.00 %100.00 %100.00 Note 6

TM SMT SDN.BHD. (JVM)

TM SMT (Thailand)COMPANY LIMITED.(JVMT)

Sale of computer storagedevices and components ofperipherals

%100.00 %- %- JVMT was establishedon August 7, 2020.Note 6

RTK Royaltek InternationalEnterprises Ltd. (RTKI)


RTKI Royaltek Trading (Changshu)Co., Ltd.

Import and export businessand wholesale of electronicproducts

%100.00 %100.00 %100.00

QMIT Quanta Cloud TechnologyJapan Inc. (QCTJ)

Sale of computerperipherals

%100.00 %100.00 %100.00 Note 6

QCTTW Quanta Cloud TechnologyGermany GmbH (QCTG)

Sale of computerperipherals

%100.00 %100.00 %100.00 Note 6

〜13〜








Note 1: Although the Company holds less than half of these companies’ voting right, theCompany has actual effect to lead these companies’ activities, considering the fact thatthese companies’ other equity shares are highly separated and considering theparticipation of other shareholders from previous shareholders’ meetings. In addition, noother sign suggests that any collectively decision-making agreement between othershareholders exist. Therefore, the Company considers these companies as subsidiaries.

Note 2: The subsidiary, Tech-Front (Chongqing) Computer Co., Ltd., became a significantsubsidiary with effect from the fiscal year 2020. It was a non-significant subsidiary andits financial statements were not reviewed in the third quarter of 2019.

Note 3: The subsidiary, Quanta Storage Inc., adjusted its organizational structure in the firstquarter of 2020. Quanta Storage Investment Inc. reduced its capital on February 5, 2020.All shares of Techman Robot Inc. owned by Quanta Storage Investment Inc. were used tooffset the amount of capital reduction. The shareholding of Techman Robot Inc. ownedby Quanta Storage Investment Inc. was decreased to 0%. After the capital reduction, allshares of Techman Robot Inc. are fully held by Quanta Storage Inc.. Post the adjustmentof organizational structure, Techman Robot Inc. issued employee stock options and allshares were subscribed by employees, thus the shareholding of Techman Robot Inc.owned by Quanta Storage Inc. was decreased to 92%.

Note 4: The subsidiary, Techman Automation Incorporation, changed its company name onregistration certificate to Techman Incorporation with effect from February 21, 2020.

Note 5: The subsidiary, Techman Asia Limited, was liquidated by the resolution of the Borad ofDirectors on May 6, 2020. The investment fund was remitted on August 11, 2020. Theremittance was declared to the Investment Commission for reference.

Note 6: Companies are non-significant and their financial statements have not been reviewed.

2. Subsidiaries excluded from the interim consolidated financial statements: None.

(c) Income Taxes 　

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

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interimreporting period by the effective annual tax rate as forecasted by the management. This should berecognized fully as tax expense for the current period.

Temporary differences between the carrying amounts of assets and liabilities for financial reportingpurposes and their respective tax bases shall be measured based on the tax rates that have beenenacted or substantively enacted at the time of the asset or liability is recovered or settled, and berecognized directly in equity or other comprehensive income as tax expense.

(d) Employee Benefits 　

Pension cost for an interim period is calculated on a year-to-date basis by using the actuariallydetermined pension cost rate at the end of the prior financial year, adjusted for significant marketfluctuations since that time and for significant curtailments, settlements, or other significant one-offevents.

〜14〜








(5)　Major Sources of Accounting Assumptions, Judgments and Estimation Uncertainties

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

In the preparation of the consolidated financial statements, the major sources of significant accountingjudgments and estimation uncertainty are consistent with Note (5) of the consolidated financial statementsfor the year ended December 31, 2019.

(6)　Explanation to Significant Accounts

Except as described in the following paragraphs, there were no significant differences with those disclosedin the 2019 annual consolidated financial statements. Please refer to Note (6) of the consolidated financialstatements for the year ended December 31, 2019, for other related information.

(a) Cash and cash equivalents 　

September 30,2020

December 31,2019

September 30,2019

Cash on hand, demand deposits and checking accounts $ 62,614,062 79,384,407 61,250,352

Time deposits 73,276,396 112,319,496 91,212,211

Short-term notes and bills 381,985 901,674 865,846

Cash and cash equivalents in 　consolidated statements of cash flows

$ 136,272,443 192,605,577 153,328,409

The Group’s interest risk and sensitivity analysis of financial assets and liabilities were disclosed inNote (6)(v).

(b) Financial assets and liabilities at fair value through profit or loss 　

September 30,2020

December 31,2019

September 30,2019

Mandatorily measured at fair value through profit orloss:

Non-derivative financial assets

Beneficiary certificates $ 23,751,906 6,885,120 10,911,705

Convertible bonds - 150,200 -

Private equity 30,550 28,759 29,353

Derivative instruments not used for hedging

Forward foreign exchange contracts - - 1,210

Total $ 23,782,456 7,064,079 10,942,268

〜15〜








September 30,2020

December 31,2019

September 30,2019

Financial liabilities designated at fair value throughprofit or loss:

Held-for-trading financial liabilities:

Derivative instruments not used for hedging

Forward foreign exchange contracts $ 1,393 7,030 -

The Group held derivative financial instruments to hedge certain foreign exchange and interest riskthe Group is exposed to, arising from its operating, financing and investing activities. The followingderivative instruments that did not apply hedge accounting were classified as mandatorily measuredat fair value through profit or loss and held-for-trading financial liabilities:

September 30, 2020Amount

(in thousands) Currency Maturity periodForward foreign exchangecontracts

　US dollars sold USD 21,000 USD against TWD 2020.10.15~2020.10.27

　US dollars purchased USD 28,000 TWD against USD 2020.10.19~2020.12.10

December 31, 2019Amount




September 30, 2019Amount




The aforesaid financial assets were not pledged as collateral.

〜16〜








(c) Financial assets at fair value through other comprehensive income 　

September 30,2020

December 31,2019

September 30,2019

Debt instruments at fair value through othercomprehensive income

Debt investments $ - 64,305 65,902

Equity instruments at fair value through othercomprehensive income

Public quoted entity 5,914,811 5,528,483 4,565,753

Private equity 1,541,304 1,667,659 1,345,743

Subtotal 7,456,115 7,196,142 5,911,496

Total $ 7,456,115 7,260,447 5,977,398

1.Debt investments at fair value through other comprehensive income

The Group has assessed that the above securities were held within a business model whoseobjective was achieved by both collecting the contractual cash flows and by selling securities.Therefore, they have been classified as debt investments at fair value through other comprehensiveincome.

2.Equity investments at fair value through other comprehensive income

The Group designated the equity securities at fair value through other comprehensive incomebecause these equity securities represent those investments that the Group intends to hold forlong-term for strategic purposes.

For the three months ended September 30, 2020 and 2019 and for the nine months endedSeptember 30, 2020 and 2019, the Group has sold its financial assets designated at fair valuethrough other comprehensive income. The shares sold had a fair value of $88,305, $24,019,$91,595 and $69,335. The Group realized a (loss) gain of $(2,293), $(4,171), $(31,380) and$21,018, which has been transferred from other equity to retained earnings.

3.For credit risk (including the impairment of debt investments) and market risk, please refer to Note(6)(v).

4.The aforesaid financial assets were not pledged as collateral.

〜17〜








(d) Accounts receivable 　

September 30,2020

December 31,2019

September 30,2019

Accounts receivable-measured as amortized cost $ 214,039,872 198,515,774 174,317,891

Accounts receivable-fair value through othercomprehensive income 7,010,245 3,685,883 14,015,678

Less: Allowance for impairment (828,872) (1,055,194) (1,525,335)

Net $ 220,221,245 201,146,463 186,808,234

The Group has assessed a portion of its accounts receivable that was held within a business modelwhose objective is achieved by both collecting contractual cash flows and selling financial assets.Therefore, such accounts receivable was measured at fair value through other comprehensiveincome.

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use oflifetime expected loss provision for all receivables. To measure the expected credit losses, tradereceivables have been grouped based on shared credit risk characteristics and the days past due, aswell as incorporated forward looking information. The loss allowance provisions were determined asfollows:

September 30, 2020

Accountsreceivable

carrying amount

Weighted-average

expected creditloss rate

Allowancelifetime

expected creditloss

Current $ 217,472,038 0.17% 372,994

1 to 60 days past due 3,147,274 9.37% 294,908

61 to 120 days past due 162,554 3.23% 5,245

More than 121 days past due 268,251 58.05% 155,725

$ 221,050,117 828,872

December 31, 2019

Accountsreceivable

carrying amount

Weighted-average


Allowancelifetime

expected creditloss

Current $ 194,626,897 0.18% 341,759

1 to 60 days past due 6,528,569 4.60% 300,605

61 to 120 days past due 579,097 12.30% 71,222

More than 121 days past due 467,094 73.13% 341,608

$ 202,201,657 1,055,194

〜18〜








September 30, 2019

Accountsreceivable

carrying amount

Weighted-average


Allowancelifetime

expected creditloss

Current $ 181,456,989 0.11% 192,563

1 to 60 days past due 4,933,229 4.75% 234,534

61 to 120 days past due 679,105 28.72% 195,071

More than 121 days past due 1,264,246 71.44% 903,167

$ 188,333,569 1,525,335

The movements in the allowance for impairment for accounts receivable were as follows:


2020 2019

Balance as of January 1 $ 1,055,194 2,118,233

Impairment losses reversed (164,577) (213,808)

Bad debts written off (59,260) (383,291)

Effect of movements in exchange rate (2,485) 4,201

Balance as of September 30 $ 828,872 1,525,335

The aforementioned financial assets of the Group were not pledged as collateral or long-termborrowings.

The Group signed the accounts receivable factoring agreements without recourse with differentfinancial institutions. According to the agreements, the Group transfers almost all risks and rewardsto debtors, thus is eligible for derecognizing the financial assets. The amounts receivable fromfinancial institutions were recognized as other receivables upon the derecognition of those tradereceivables. The relevant information of the unexpired accounts receivable at the reporting date wereas follows:

Unit: in thousands

September 30, 2020

PurchaserAmount

DerecognizedCreditUnused

CreditAdvanced

AmountRecognized in

OtherReceivables

Range ofInterest Rate

SignificantTransferring

TermsFinancialInstitutions

$ 36,651,537 US$ 241,400 US$ 1,230,000 932,337 0.74%~0.86% None

〜19〜








December 31, 2019

PurchaserAmount


CreditAdvanced

AmountRecognized in

OtherReceivables




$ 41,464,212 US$ 122,699 US$ 1,345,300 1,051,400 2.14%~2.34% None

September 30, 2019

PurchaserAmount


CreditAdvanced

AmountRecognized in

OtherReceivables




$ 32,589,549 US$ 451,536 US$ 1,017,900 993,933 2.53%~2.57% None

The Group signed the accounts receivable factoring agreements with different financial institutions.According to the agreements, the Group bears almost all risks and rewards, and thus is ineligible forderecognizing the financial assets. The book value of the accounts receivable factored but yetderecognized at the reporting date were as follows:

Unit：in thousandsSeptember 30, 2020

PurchaserAmount

transferred Credit Line

Credit Advanced(accounted under

short-termborrowings)

Range ofInterest Rate Collateral

FinancialInstitutions

$ 11,634,008 US$ 650,000 US$ 400,620 0.65%~0.70% None

December 31, 2019

PurchaserAmount






$ 19,511,747 US$ 650,000 US$ 649,526 2.01%~2.73% None

September 30, 2019

PurchaserAmount






$ 13,522,848 US$ 650,000 US$ 435,659 2.40%~2.52% None

〜20〜








(e) Other receivables 　

September 30,2020

December 31,2019

September 30,2019

Other receivables $ 3,226,964 3,172,729 3,202,029

Less: Allowance for impairment (3,050) (5,508) (4,921)

$ 3,223,914 3,167,221 3,197,108

As of September 30, 2020, December 31, 2019, and September 30, 2019, the aging analysis of otherreceivables, which were past due, were as follows:

September 30,2020

December 31,2019

September 30,2019

1 to 60 days past due $ 69,078 84,543 44,250

61 to 120 days past due 200,064 10,108 11,057

More than 121 days past due 151,105 12,614 12,067

Total $ 420,247 107,265 67,374

The movements in the allowance for impairment for other receivables for the nine months endedSeptember 30, 2020 and 2019, were as follows:


2020 2019Balance as of January 1 $ 5,508 4,040

Impairment loss (reversed) recognized (2,458) 881

Balance as of September 30 $ 3,050 4,921

( f ) Inventories 　

September 30,2020

December 31,2019

September 30,2019

Finished goods $ 52,163,702 59,786,969 84,694,437

Work-in-process 8,246,766 8,178,971 9,041,378

Raw materials 93,285,247 47,061,780 69,305,179

Inventory in-transit 6,894,744 7,541,026 6,697,297

Total $ 160,590,459 122,568,746 169,738,291

〜21〜








For the three months ended September 30, 2020 and 2019 and for the nine months ended September30, 2020 and 2019, the details of cost of goods sold were as follows:


2020 2019 2020 2019

Cost of goods sold $ 305,847,853 250,439,097 735,123,508 693,888,100

Net amount of inventoryobsolescence and disposal ofscrapping

2,851,698 2,640,413 6,436,492 7,986,576

(Reversal) recognized losseson inventory valuation andobsolescence

(425,235) (662,574) 1,221,393 (4,051,913)

Idle capacity loss 224 32,012 93,607 258,830

Others (108,561) (81,063) (246,718) (244,544)

Total $ 308,165,979 252,367,885 742,628,282 697,837,049

The factor leading to the net realizable value of inventories is lower than the cost was vanished, sothat the reversal of write-down of inventories was recognized resulting from the increase in netrealizable value for the three months ended September 30, 2020 and 2019 and for the nine monthsended September 30, 2019.

(g) Investments accounted for using equity method 　

The Group’ s financial information for investments accounted for using equity method that areindividually insignificant was as follows:

September 30,2020

December 31,2019

September 30,2019

Carrying amount of individually insignificant associates’equity

$ 541,199 340,472 354,903


2020 2019 2020 2019

Attributable to the Group:

Loss from continuingoperation $ (5,738) (11,488) (30,358) (11,705)

Other comprehensiveincome (loss) (918) 419 (3,989) 6,292

Total comprehensiveincome $ (6,656) (11,069) (34,347) (5,413)

The aforesaid investments accounted for using equity method were not pledged as collateral.

Investments were accounted for by the equity method and the share of profit or loss and othercomprehensive income of those investments were calculated based on the financial statements thathave not been reviewed.

〜22〜








(h) Property, plant and equipment 　

The cost, depreciation, and impairment loss of the property, plant and equipment of the Group for thenine months ended September 30, 2020 and 2019, were as follows:

Land Buildings

Machinery andmiscellaneous

equipment

Equipment tobe inspected

andconstruction in

progress Total

Cost or deemed cost:

　Balance as of January 1, 2020 $ 7,722,481 28,879,637 55,603,136 864,104 93,069,358

　Additions 397,621 233,539 5,932,691 1,540,104 8,103,955

　Disposal and obsolescence - (255,545) (8,354,066) - (8,609,611)

　Effect of movements in exchangerate (13,085) (688,264) (1,472,793) (58,713) (2,232,855)

　Balance as of September 30, 2020 $ 8,107,017 28,169,367 51,708,968 2,345,495 90,330,847


　Additions 74,103 172,088 4,687,222 585,496 5,518,909


　Effect of movements in exchangerate 303 140,856 564,339 (27,425) 678,073

　Balance as of September 30, 2019 $ 7,367,140 29,379,640 58,659,233 743,378 96,149,391

Depreciation and impairment losses:

　Balance as of January 1, 2020 $ 57,496 11,515,832 33,998,821 - 45,572,149

　Depreciation for the period - 701,963 3,769,728 - 4,471,691


　Impairment loss reversed - - (74,241) - (74,241)

　Effect of movements in exchangerate - (293,378) (938,864) - (1,232,242)

　Balance as of September 30, 2020 $ 57,496 11,668,873 30,338,280 - 42,064,649

　Balance as of January 1, 2019 $ 57,496 10,854,439 34,611,021 - 45,522,956

　Depreciation for the period - 682,513 4,632,355 - 5,314,868


　Impairment loss recognized - - 2,092 - 2,092

　Effect of movements in exchangerate - 48,437 351,699 - 400,136

　Balance as of September 30, 2019 $ 57,496 11,583,204 36,118,523 - 47,759,223

〜23〜








Land Buildings

Machinery andmiscellaneous

equipment

Equipment tobe inspected

andconstruction in

progress Total

Book values:


　Balance as of September 30, 2020 $ 8,049,521 16,500,494 21,370,688 2,345,495 48,266,198


　Balance as of September 30, 2019 $ 7,309,644 17,796,436 22,540,710 743,378 48,390,168

As of September 30, 2020, December 31, 2019, and September 30, 2019, the aforesaid property,plant and equipment were not pledged as collateral.

( i ) Right-of-use assets

The Group leases many assets including land, buildings, machinery and equipment andtransportation equipment. The movements in right-of-use assets were as follow:

Land BuildingsMachinery and

equipmentTransportation

equipment TotalCost:

　Balance as of January 1, 2020 $ 556,795 3,446,974 100,218 468 4,104,455

　Additions - 66,616 60,171 - 126,787

　Reductions (1,745) (175,002) - - (176,747)

　　Effect of movements in exchange

rate (16,795) (105,339) (3,676) - (125,810)

　Balance as of September 30, 2020 $ 538,255 3,233,249 156,713 468 3,928,685

　Balance as of January 1, 2019 $ 571,934 3,022,224 61,698 - 3,655,856

　Additions - 406,651 - - 406,651

　Effect of movements in exchangerate 2,359 21,267 501 - 24,127

　Balance as of September 30, 2019 $ 574,293 3,450,142 62,199 - 4,086,634

Depreciation and impairment losses:


　Depreciation for the period 12,114 707,779 21,415 117 741,425

　Reductions (77) (159,641) - - (159,718)

　Effect of movements in exchangerate (762) (41,103) (2,933) - (44,798)


〜24〜








Land BuildingsMachinery and

equipmentTransportation

equipment Total　Balance as of January 1, 2019 $ - - - - -

　Depreciation for the period 12,664 762,380 43,111 - 818,155

　Effect of movements in exchangerate (52) (1,096) (16) - (1,164)

　Balance as of September 30, 2019 $ 12,612 761,284 43,095 - 816,991

Book values:



　Balance as of January 1, 2019 $ 571,934 3,022,224 61,698 - 3,655,856

　Balance as of September 30, 2019 $ 561,681 2,688,858 19,104 - 3,269,643

( j ) Investment property 　

Investment property comprises factories that are leased to third parties under operating leases, aswell as properties that are owned by the Group. The rent income of the leases of investmentproperties is fixed.

Land and landimprovement Buildings Total

Book values:

　Balance as of January 1, 2020 $ 52,664 16,347 69,011

　Balance as of September 30, 2020 $ 52,664 17,786 70,450


　Balance as of September 30, 2019 $ 52,664 16,508 69,172

There were no significant additions, disposals, or recognition and reversal of impairment losses ofinvestment property for the nine months ended September 30, 2020 and 2019. Please refer to Note(12)(a) for depreciation amounts this period. Please refer to Note (6)(j) of the consolidated financialstatements for the year ended December 31, 2019, for other related information.

The fair value of the investment property was not significantly different from those disclosed in Note(6)(j) of the consolidated financial statements for the year ended December 31, 2019.

As of September 30, 2020, December 31, 2019, and September 30, 2019, the aforesaid investmentproperties were not pledged as collateral.

〜25〜








(k) Intangible assets 　

GoodwillSoftware and

trademark TotalBook values:


Balance as of September 30, 2020 $ 407,292 476,793 884,085


Balance as of September 30, 2019 $ 407,292 498,367 905,659

There were no significant additions, disposals, or recognition and reversal of impairment losses ofintangible assets for the nine months ended September 30, 2020 and 2019. Please refer to Note (12)(a) for amortization amounts this period. Please refer to Note (6)(k) of the consolidated financialstatements for the year ended December 31, 2019, for other related information.

( l ) Short-term borrowings 　

September 30,2020

December 31,2019

September 30,2019

Credit loan $ 130,935,377 164,077,762 161,553,477

Purchase loan 15,079,852 18,258,560 18,860,635

Total $ 146,015,229 182,336,322 180,414,112

Range of interest rates 0.39%~3.50% 1.02%~4.00% 1.02%~4.35%

Please refer to Note (8) for details of the Group’s assets pledged as collateral for bank borrowings.

The Group’s interest risk and sensitivity analysis of financial assets and liabilities were disclosed inNote (6)(v).

The Group has agreements with different financial institutions to offset its financial assets andliabilities. The following table lists the netting information of these financial assets and liabilities asof September 30, 2020, December 31, 2019, and September 30, 2019:

September 30, 2020

PropertyFinancial assets/

liabilities recognized

Financial assets/liabilities offset

in the statement offinancial position

Net financial assets/liabilities reported in the statement offinancial position

Bank deposits / Bank borrowings $ 562,447,944 562,447,944 -

〜26〜








December 31, 2019





Net financial assets/liabilities reportedin the statement offinancial position


September 30, 2019





Net financial assets/liabilities reportedin the statement offinancial position


(m) Long-term borrowings 　

Amount

Names of financial institutionNon-current

portionCurrentportion Total

Collateral orGuarantee

September 30, 2020

Syndicated agreement with Mizuho Bankand other 19 participating banks (ii) $ - 11,325,600 11,325,600 None

Syndicated agreement with Credit AgricoleCorporate & Investment Bank and other 15participating banks (i) - 8,421,600 8,421,600 None

National development agreement withTaiShin International Bank (iii) 1,500,000 - 1,500,000 None

National development agreement withMega International Commercial Bank (iv) 1,139,800 - 1,139,800 None

National development agreement withTaipei Fubon Bank (v) 1,500,000 - 1,500,000 None

National development agreement withE.Sun Commercial Bank (vi) 1,936,400 - 1,936,400 None

National development agreement withCTBC Bank (vii) 1,000,000 - 1,000,000 None

Total $ 7,076,200 19,747,200 26,823,400

〜27〜








Amount

Names of financial institutionNon-current

portionCurrentportion Total

Collateral orGuarantee

December 31, 2019

Syndicated agreement with Mizuho Bankand other 19 participating banks (ii) $ 19,826,400 - 19,826,400 None

Syndicated agreement with Credit AgricoleCorporate & Investment Bank and other 15participating banks (i) - 14,419,200 14,419,200 None





National development agreement withCTBC Bank (vii) 936,900 - 936,900 None

Total $ 26,229,300 14,419,200 40,648,500

September 30, 2019

Syndicated agreement with Mizuho Bankand other 19 participating banks (ii) $ 9,001,600 - 9,001,600 None

Syndicated agreement with Credit AgricoleCorporate & Investment Bank and other 15participating banks (i) 14,899,200 - 14,899,200 None





National development agreement withCTBC Bank (vii) 603,900 - 603,900 None

Total $ 29,970,700 - 29,970,700

〜28〜








(i) Effective December 2015, the Company and its subsidiary, QIL, entered into syndicated creditagreement with Credit Agricole Corporate and Investment Bank and other 18 participatingfinancial institutions. Under which, the Company and QIL will share the term facility andrevolving facility amounted to USD480,000 thousand for a period of 3 years. The borrowingduration is agreed to extend for 2 years with Credit Agricole Corporate and Investment Bankand other 15 participating financial institutions. The loan bears floating interest rates.According to the agreements, the Company takes joint and several liabilities for QIL’ srepayments.

(ii) Effective July 2018, the Company and its subsidiary, QIL, entered into syndicated creditagreement with Mizuho Bank and other 19 participating financial institutions. The agreementincluded two trenches, A and B. In trench A, the term facility and revolving facility availableto the Company and QIL amounted to USD560,000 thousand. In trench B, the term facilityand revolving facility available amounted to USD320,000 thousand and the agreementamounted to USD880,000 thousand with floating interest rates for a period of 3 years. Theborrowing duration is allowed to extend for 2 years, but the extension is limited to one timeonly. According to the agreements, the Company takes joint and several liabilities for QIL’srepayments.

(iii) Effective June 2019, the Company entered into credit agreement with TaiShin InternationalBank. The loan facility of agreement amounted to $1,500,000 with floating interest rates for aperiod of 7 years. The agreement started on June 4, 2019.

(iv) Effective June 2019, the Company entered into credit agreement with Mega InternationalCommercial Bank. The loan facility of agreement amounted to $1,300,000 with floatinginterest rates for a period of 7 years. The agreement started on June 19, 2019.

(v) Effective June 2019, the Company entered into credit agreement with Taipei Fubon Bank. Theloan facility of agreement amounted to $1,500,000 with floating interest rates for a period of 7years. The agreement started on June 4, 2019.

(vi) Effective June 2019, the Company entered into credit agreement with E.Sun CommercialBank. The loan facility of agreement amounted to $2,000,000 with floating interest rates for aperiod of 7 years. The agreement started on July 3, 2019.

(vii) Effective June 2019, the Company entered into credit agreement with CTBC Bank. The loanfacility of agreement amounted to $1,000,000 with floating interest rates for a period of 7years. The agreement started on July 4, 2019.

(viii) Under these agreements, the Group shall adhere to certain financial provisions such as currentratios, leverage ratios, interest coverage ratios and tangible net worth at the end dates of thesemi-annual and the annual accounting periods (June 30 and December 31). Otherwise, theborrowings will be considered due and payable immediately. As of September 30, 2020, theGroup was in compliance with the above financial covenants.

〜29〜








(ix) The interest rates for all aforementioned credit facilities were 0.000%~1.206%,0.095%~2.958% and 0.095%~3.201% as of September 30, 2020, December 31, 2019, andSeptember 30, 2019, respectively.

(x) The Group’ s interest risk and sensitivity analysis of financial assets and liabilities weredisclosed in Note (6)(v).

(n) Lease liabilities

The carrying amounts of the Group’s lease liabilities were as follows:

September 30,2020

December 31,2019

September 30,2019

Current $ 780,310 926,693 920,264

Non-current $ 1,171,483 1,658,511 1,876,337

For the maturity analysis, please refer to note (6)(v).

The amounts recognized in profit or loss were as follows:

For the Three Months EndedSeptember 30,


2020 2019 2020 2019Interest expenses on lease

liabilities$ 12,607 19,024 43,471 59,780

Variable lease paymentsnot included in themeasurement of leaseliabilities

$ 45,380 45,177 135,516 125,878

Expenses relating toshort-term leases

$ 49,408 36,932 125,258 168,407

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


2020 2019Total cash outflow for leases $ 979,838 1,069,429

1. Land and Building leases

As of September 30, 2020, the Group leases land and buildings for its office space, warehouseand staff dormitory. The leases typically run for a period of 1 to 10 years. Some leases include anoption to renew the lease for an additional period of the same duration after the end of thecontract term.

〜30〜








2. Other leases

The Group leases machinery and equipment, and transportation equipment with lease terms of 2years and 3 years, respectively. In some cases, the Group has no options to purchase the assets atthe end of the contract term; in other cases, it does not guarantee the residual value of the leasedassets at the end of the contract term.

(o) Employee benefits

1.Defined benefit plans

In prior fiscal year, there was no material volatility of the market, reimbursement and settlement orother material one-time events. As a result, pension cost in the accompanying interim financialstatements is measured and disclosed as of December 31, 2019 and 2018.

The details of the Group’s expenses were as follows:


2020 2019 2020 2019

Operating costs $ 232 270 707 719

Selling expenses 67 111 204 413

General andadministrative expenses

2,754 3,289 8,280 10,174

Research anddevelopment expenses 1,067 1,319 3,185 3,681

$ 4,120 4,989 12,376 14,987

2.Defined contribution plans

The Group’s pension expenses under the pension plan cost to the Bureau of Labor Insurance wereas follows:


2020 2019 2020 2019

Operating costs $ 14,438 11,259 42,297 26,146

Selling expenses 7,178 6,642 21,400 19,847

General andadministrative expenses

20,347 19,789 60,847 59,528

Research anddevelopment expenses 68,971 63,802 204,037 187,251

Total $ 110,934 101,492 328,581 292,772

The Group allocates 6% of each employee’s monthly wages to the labor pension personal accountat the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act.Under this defined contribution plan, the Group allocates a fixed amount to the Bureau of theLabor Insurance without additional legal or constructive obligations.

〜31〜








3.The Group’s pension expenses of foreign subsidiaries allocated in accordance with local laws andregulations were $602,754, $883,284, $1,455,659 and $2,281,980 for the three months endedSeptember 30, 2020 and 2019 and for the nine months ended September 30, 2020 and 2019.

(p) Income taxes

The details of the Group’s income tax expense were as follows:


2020 2019 2020 2019

Current tax expense

　Current period $ 3,027,292 868,815 6,546,660 2,060,227

Deferred tax expense

　Origination and reversal oftemporary differences (206,088) 641,806 (421,114) 641,806

Income tax expense fromcontinuing operations $ 2,821,204 1,510,621 6,125,546 2,702,033

The Company’s tax returns through 2017 have been assessed and approved by the Tax Authority.

(q) Share capital and other equity 　

Except for the following disclosure, there is no significant difference in capital and other equity forthe nine months ended September 30, 2020 and 2019. Please refer to Note (6)(r) of the consolidatedfinancial statements for the year ended December 31, 2019, for other related information.

1.Retained earnings

According to the Articles of Incorporation, after-tax earnings are initially used to offsetcumulative losses, and 10% of the remainder is set aside as a legal reserve, except when the legalreserve of the Company reaches paid-in capital of the Company. Special reserve may beappropriated if necessary, and then any remaining profit together with any undistributed retainedearnings shall be distributed according to the distribution plan proposed by the Board of Directorsand submitted to the shareholders’ meeting for approval.

During the shareholder’s meeting on June 19, 2020 and June 21, 2019, the shareholders approvedto distribute the 2019 and 2018 earnings. The earnings were appropriated as follows:

For the Years Ended December 31,

2019 2018Dividendper share(TWD) Amount

Dividendper share(TWD) Amount

Dividends distributed to ordinaryshareholders

　Cash $ 3.70 $ 14,291,721 3.55 13,712,327

〜32〜








2.Treasury stock

1) The Company’s shares held by its subsidiaries were as follows:

September 30, 2020Shares

(in thousands) Cost Market priceRTK 8,109 $ 333,094 613,032

December 31, 2019Shares


September 30, 2019Shares


3.Other equity interest after tax

Exchange differenceson translation offoreign financial

statement

Unrealized gains(losses) from

financial assetsmeasured at fair

value through othercomprehensive

income Total

Balance as of January 1, 2020 $ 3,350,490 (10,587,405) (7,236,915)

Exchange differences on translation of foreignfinancial statement (1,245,459) - (1,245,459)

Exchange differences on associates accounted forusing equity method 5,142 - 5,142

Unrealized gains (losses) from financial assetsmeasured at fair value through othercomprehensive income - 394,938 394,938

Disposal of investments measured at fair valuethrough other comprehensive income - 31,380 31,380

Unrealized gains (losses) from financial assetsmeasured at fair value through othercomprehensive income of associates accountedfor using equity method - (9,131) (9,131)

Balance as of September 30, 2020 $ 2,110,173 (10,170,218) (8,060,045)

〜33〜








Exchange differenceson translation offoreign financial

statement

Unrealized gains(losses) from

financial assetsmeasured at fair

value through othercomprehensive

income Total

Balance as of January 1, 2019 $ 4,330,076 (10,052,038) (5,721,962)

Exchange differences on translation of foreignfinancial statement 101,366 - 101,366

Exchange differences on associates accounted forusing equity method 515 - 515

Unrealized gains (losses) from financial assetsmeasured at fair value through othercomprehensive income - (1,681,310) (1,681,310)

Disposal of investments measured at fair valuethrough other comprehensive income - (21,018) (21,018)

Unrealized gains (losses) from financial assetsmeasured at fair value through othercomprehensive income of associates accountedfor using equity method - 5,777 5,777

Balance as of September 30, 2019 $ 4,431,957 (11,748,589) (7,316,632)

4.Non-controlling interests after tax


2020 2019

Balance as of January 1 $ 6,289,454 6,330,410

Shares attributed to non-controlling interests

　Net profit (57,759) 322,731

　Exchange differences on translation of foreign financial assets (50,522) (44,293)

　Unrealized gains (losses) from financial assets measured at fairvalue through other comprehensive income (70,641) 15,483

　Changes in non-controlling interests (346,662) (292,578)

　Others (3,513) 83

Balance as of September 30 $ 5,760,357 6,331,836

〜34〜








(r) Earnings per share 　

For the three months ended September 30, 2020 and 2019 and for the nine months ended September30, 2020 and 2019, the basic and diluted earnings per share were calculated as follows:

1.Basic earnings per share



2020 2019 2020 2019

Profit attributable toordinary shareholdersof the Company

$ 7,871,158 4,337,716 16,702,389 11,429,048

(Unit: thousand shares)



2020 2019 2020 2019

Weighted averagenumber of ordinaryshares (basic)

3,854,519 3,854,519 3,854,519 3,854,519

2.Diluted earnings per share



2020 2019 2020 2019

Profit attributable toordinary shareholdersof the Company

$ 7,871,158 4,337,716 16,702,389 11,429,048

(Unit: thousand shares)



2020 2019 2020 2019

Weighted averagenumber of ordinaryshares (basic)

3,854,519 3,854,519 3,854,519 3,854,519

Effect of employeestock compensation

22,393 7,208 30,386 25,461

Weighted averagenumber of ordinaryshares (diluted)

3,876,912 3,861,727 3,884,905 3,879,980

〜35〜








( s ) Revenue from contracts with customer

1.Disaggregation of Revenue



2020 2019 2020 2019

Primary geographicalmarkets:

America $ 170,103,310 137,531,663 402,633,299 371,243,652

Mainland China 34,432,629 29,645,757 90,281,653 78,486,364

Netherlands 21,649,328 21,935,798 49,363,220 53,864,583

Japan 25,825,639 16,269,023 58,623,494 44,722,027

Other countries 75,337,248 59,759,673 186,926,717 183,896,304

$ 327,348,154 265,141,914 787,828,383 732,212,930

Major products:

Electronic products $ 327,119,863 263,976,985 785,794,658 728,781,465

Other products 228,291 1,164,929 2,033,725 3,431,465

$ 327,348,154 265,141,914 787,828,383 732,212,930

(t) Remuneration to employees and directors 　

In accordance with the Articles of Incorporation, the Company should contribute no less than 2% of

the profit as employee remuneration and less than 2% as directors’ remuneration when there is profitfor the year. However, if the Company has accumulated deficits, the profit should be reserved tooffset the deficit. The recipients of shares and cash may include employees of the Company’ saffiliated companies who meet certain conditions.

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

30, 2020 and 2019, the Company estimated its employee remuneration amounting to $818,331,

$407,973, $1,692,982 and $1,009,192, and directors’ remuneration amounting to $3,600, $10,500,

$10,800 and $31,500, respectively. The estimated amounts mentioned above are calculated based onthe net profit before tax, excluding the remuneration to employees and directors of each period,multiplied by the percentage of remuneration to employees and directors as specified in the Articlesof Incorporation. These remunerations were expensed under operating costs or operating expensesduring 2020 and 2019.

〜36〜








For the years ended December 31, 2019 and 2018, the remuneration to employees amounted to

$1,464,876 and $1,364,914, and the remuneration to directors amounted to $42,000 and $42,000,respectively. The amounts, as stated in the consolidated financial statements, are identical to those ofthe actual distributions for 2018. The amount of employee remuneration stated in the consolidatedfinancial statements is identical to that of the actual distribution for 2019. The amount of directors

remuneration of the actual distribution was $28,000 less than that of estimation in the consolidatedfinancial statements. The difference will be treated as changes in accounting estimates and adjustedin profit or loss in 2020. The information is available on the Market Observation Post Systemwebsite.

(u) Non-operating income and expenses 　

1.Interest income

The details of interest income were as follows:



2020 2019 2020 2019Interest income from

bank deposits $ 961,922 1,710,096 3,283,112 5,310,607Others 4,997 15,675 23,999 28,621Total $ 966,919 1,725,771 3,307,111 5,339,228

2.Other income

The details of other income were as follows:



2020 2019 2020 2019Dividend income $ 43,403 49,502 51,056 277,416

3.Other gains and losses

The details of other gains and losses were as follows:



2020 2019 2020 2019Foreign exchange

gains (losses) $ 76,715 409,838 (619,498) 2,500,558

Gains on financialassets (liabilities) atfair value throughprofit or loss

4,531 (31,871) 83,323 (13,154)

Losses on sale ofreceivables

(62,659) (79,849) (150,105) (431,389)

Others (112,098) (15,763) (398,972) (59,781)Net $ (93,511) 282,355 (1,085,252) 1,996,234

〜37〜








4.Financial costs

The details of financial costs were as follows:



2020 2019 2020 2019Interest expenses $ 369,712 1,645,646 1,755,675 5,287,461

(v) Financial instruments 　

Except for the condition mentioned below, there was no significant change in the fair value of theGroup’ s financial instruments and degree of exposure to credit risk, liquidity risk and market riskarising from financial instruments. For the related information, please refer to Note (6)(w) of theconsolidated financial statements for the year ended December 31, 2019.

1.Liquidity risks

The following are the contractual maturities of financial liabilities of the Group, includingestimated interest payments and excluding the impact of netting arrangements:

Carryingamount

Contractualcash flow

Within 6months 6-12 months 1-2 years 2-5 years

More than5 years

September 30, 2020

Non-derivative　financial liabilities

　Long-term and short-termborrowings $ 172,838,629 173,073,878 153,859,728 12,130,641 - - 7,083,509

　Payables 244,302,147 244,302,147 244,078,725 63,223 160,199 - -

　Lease liabilities 1,951,793 2,067,607 411,999 398,089 579,612 464,800 213,107

　Other forward 　　foreign exchange　　contract:

　　Inflow (5,913) (5,913) (5,913) - - - -

　　Outflow 7,306 7,306 7,306 - - - -

$ 419,093,962 419,445,025 398,351,845 12,591,953 739,811 464,800 7,296,616

〜38〜








Carryingamount

Contractualcash flow

Within 6months 6-12 months 1-2 years 2-5 years

More than5 years

December 31, 2019


　Long-term and short-term borrowings $ 222,984,822 224,552,758 182,162,866 15,238,038 20,709,482 - 6,442,372

　Payables 185,923,484 185,923,484 185,645,572 - 277,912 - -


Derivative financial　liabilities

　Forward foreign 　　exchange　　contract:

　　Inflow (4,006) (4,006) (4,006) - - - -

　　Outflow 11,036 11,036 11,036 - - - -

$ 411,500,540 413,239,864 368,287,188 15,741,732 21,804,385 683,620 6,722,939

September 30, 2019


　Long-term and short-termborrowings $ 210,384,812 211,916,120 179,511,134 1,337,373 24,958,848 - 6,108,765

　Payables 207,226,223 207,226,223 206,911,430 32,870 281,923 - -


$ 420,407,636 422,127,832 386,882,035 1,884,655 26,169,689 772,074 6,419,379

The Group does not expect that the cash flows included in the maturity analysis to occursignificantly earlier or at significantly different amounts.

〜39〜








2.Market risks

1) Currency risks exposure

September 30, 2020

Functionalcurrency

Exchangerate Currency

Foreigncurrency

(in thousands)Carryingamount

Financial assets

　Monetary items

　TWD 29.040 USD $ 11,152,872 323,879,235

　TWD 0.275 JPY 2,999,115 824,457

　USD 0.001 KRW 9,190,337 227,429

　USD 0.009 JPY 4,351,523 1,198,024

　USD 0.147 CNY 3,517,443 14,999,272

Financial liabilities

　Monetary items

　TWD 29.040 USD 7,885,605 229,384,073

USD 0.009 JPY 7,359,689 2,023,897

　USD 0.147 CNY 3,008,949 12,832,289

December 31, 2019

Functionalcurrency


Foreigncurrency


Financial assets

　Monetary items

　TWD 30.040 USD $ 11,699,828 351,462,900

　TWD 0.276 JPY 8,361,850 2,308,707

　USD 0.001 KRW 38,099,014 988,508

　USD 0.009 JPY 4,950,439 1,363,086

　USD 0.143 CNY 2,160,358 9,302,653


　Monetary items

　TWD 30.040 USD 8,559,558 257,284,848

USD 0.009 JPY 9,543,934 2,628,742

USD 0.143 CNY 3,004,815 12,938,143

〜40〜








September 30, 2019

Functionalcurrency


Foreigncurrency


Financial assets

　Monetary items

　TWD 31.040 USD $ 10,321,228 320,370,788

　TWD 0.288 JPY 8,489,230 2,444,898

　USD 0.001 KRW 41,194,374 1,064,408

　USD 0.009 JPY 5,093,226 1,466,955

　USD 0.141 CNY 3,013,527 13,225,109


　Monetary items

　TWD 31.040 USD 8,088,863 251,059,432

USD 0.009 JPY 9,260,436 2,668,367

　USD 0.141 CNY 3,045,363 13,364,824

2) Sensitivity analysis

The Group’s foreign exchange exposure to foreign currency risk arises from the translation ofthe foreign currency exchange gains and losses on cash and cash equivalents, accountsreceivable, other receivables, loans and borrowings, accounts payable and other payables thatare denominated in foreign currency. Assuming other variables remain the same, a 1%depreciation or appreciation of the TWD against foreign currency for the nine months endedSeptember 30, 2020 and 2019, would have increased or decreased the net profit after tax by$767,459 and $570,945, respectively. The analysis is performed on the same basis for bothperiods.

3) Gains or losses on foreign exchange

Since the Group has many kinds of functional currency, the information on foreign exchangegain (loss) on monetary items is disclosed by total amount. For the nine months endedSeptember 30, 2020 and 2019, foreign exchange gain (including realized and unrealizedportions) amounted to $(619,498) and $2,500,558, respectively.

〜41〜








4) Interest rate analysis

Please refer to the notes on liquidity risk management and the Group’s interest rate exposure toits financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivativeand non-derivative financial instruments on the reporting date. Regarding liabilities withvariable interest rates, the analysis is based on the assumption that the amount of liabilitiesoutstanding at the reporting date was outstanding throughout the year.

If the interest rate increases or decreases by 0.25% basis points, the Group’s net income wouldhave increased / decreased by $163,405 and $160,441 for the nine months ended September 30,2020 and 2019, due to the Group’s borrowings at variable rates. This analysis assumes that allother variables remain constant.

5) Other price risk

If the equity price changes, and it is based on the same basis for both years and assumes that allother variables remain the same, the impact to comprehensive income will be as follows:

For the Nine Months Ended September 30,

2020 2019

Equity price on thereporting date

Othercomprehensive

income after-taxProfit (loss)

after-tax

Othercomprehensive

income after-taxProfit (loss)

after-tax

Stock－Increase 7% $ 521,928 2,139 413,805 2,055

Stock－Decrease 7% $ (521,928) (2,139) (413,805) (2,055)

Beneficiary certificates　－Increase 1% $ - 237,519 - 109,117

Beneficiary certificates

　－Decrease 1% $ - (237,519) - (109,117)

3.Fair value information

1) The categories and fair values of financial instruments

The measurement basis of the financial assets and liabilities at fair value through profit or lossand the financial assets at fair value through other comprehensive income is repetitive. Thecarrying amount and fair value of the Group’ s financial assets and liabilities, including theinformation on fair value hierarchy were as follows; however, except as described in thefollowing paragraphs, for financial instruments not measured at fair value whose carryingamount is reasonably close to the fair value, and lease liabilities, disclosure of fair valueinformation is not required:

〜42〜








September 30, 2020Fair value

Book value Level 1 Level 2 Level 3 TotalFinancial assets at fair value

through profit or loss

Mandatorily measured at fairvalue through profit or loss $ 23,782,456 23,350,570 - 431,886 23,782,456

Financial assets at fair valuethrough other comprehensiveincome

Public quoted equity 5,914,811 5,914,811 - - 5,914,811

Private equity 1,541,304 - - 1,541,304 1,541,304

Accounts receivable 7,010,245 - - - -

　　Sub-total 14,466,360 5,914,811 - 1,541,304 7,456,115

Financial assets measured atamortized cost

Cash and cash equivalents 136,272,443 - - - -


Other receivables 3,223,914 - - - -

Other financial assets 16,293,832 - - - -

　　Sub-total 369,001,189 - - - -

　Total $ 407,250,005 29,265,381 - 1,973,190 31,238,571

Financial liabilities at fair valuethrough profit or loss

Forward foreign exchange contracts $ 1,393 - 1,393 - 1,393

Financial liabilities measured atamortized cost

Short-term borrowings 146,015,229 - - - -

Accounts payable and otherpayables 237,540,344 - - - -

Long-term borrowings, currentportion 19,747,200 - - - -

Long-term borrowings 7,076,200 - - - -

Other financial liabilities 6,761,803 - - - -

Lease liabilities 1,951,793 - - - -

　　Sub-total 419,092,569 - - - -

　Total $ 419,093,962 - 1,393 - 1,393

〜43〜








December 31, 2019Fair value



Mandatorily measured at fairvalue through profit or loss $ 7,064,079 6,591,886 - 472,193 7,064,079



Private equity 1,667,659 - - 1,667,659 1,667,659

Debt investments 64,305 64,305 - - 64,305


　　Sub-total 10,946,330 5,592,788 - 1,667,659 7,260,447






　　Sub-total 412,244,441 - - - -

　Total $ 430,254,850 12,184,674 - 2,139,852 14,324,526

Financial liabilities at fair valuethrough profit or loss

Forward foreign exchange contracts $ 7,030 - 7,030 - 7,030


Short-term borrowings 182,336,322 - - - -


Long-term borrowings, currentportion 14,419,200 - - - -




　　Sub-total 411,493,510 - - - -

　Total $ 411,500,540 - 7,030 - 7,030

〜44〜








September 30, 2019Fair value



Mandatorily measured at fairvalue through profit or loss $ 10,942,268 10,596,086 1,210 344,972 10,942,268



Private equity 1,345,743 - - 1,345,743 1,345,743

Debt investments 65,902 65,902 - - 65,902


　　Sub-total 19,993,076 4,631,655 - 1,345,743 5,977,398






　　Sub-total 350,135,785 - - - -

　Total $ 381,071,129 15,227,741 1,210 1,690,715 16,919,666


Short-term borrowings $ 180,414,112 - - - -





　Total $ 420,407,636 - - - -

〜45〜








2) Valuation techniques for financial instruments not measured at fair value

The Group’s financial assets and liabilities measured at amortized cost use the discounted cashflows to estimate fair values.

3) Valuation techniques for financial instruments measured at fair value

A.Non-derivative financial instruments

The fair value of financial instruments traded in an active market is based on quoted marketprice. The quotation, which is published by the main exchange center, is included in the fairvalue of the listed securities instruments.

The Group holds the financial instruments with the active market, the categories andcharacteristics of fair value are listed as follow:

Certificates-open-end mutual funds, stocks of public quoted companies and debt investmentswith quoted market price are the financial instruments with standard terms and conditionsand traded in an active market. These fair values are based on market quoted price.

The Group holds the financial instrument without active market, the categories andcharacteristics of fair value are listed as follows:

Debt instrument without quoted prices: The discounted cash flow method is used to estimatethe fair value. The main assumption for the model is to discount the expected future cashflow by using a discount rate that reflects the time value of money and risks.

Equity instrument without quoted prices: The market price method and the net asset valuemethod are used to estimate the fair value. The market price method uses recent financingactivity of investment target or market price of similar financial instrument, includingconsider market condition, to estimate fair value. The main assumption for the net assetvalue method is using the net asset value per share as the measuring basis.

B.Derivative financial instruments

Forward exchange rate to date is used to estimate the fair value of forward foreign contract.

4) For the nine months ended September 30, 2020 and 2019, there were no transferring from eachlevel in the fair value hierarchy.

〜46〜








5) Changes in level 3 of the fair value

At fair value throughprofit or loss

Fair value throughother comprehensive

income

Non-derivativefinancial assets

mandatorily measuredat fair value through

profit or lossUnquoted equity

instruments

Balance as of January 1, 2020 $ 472,193 1,667,659

Total gains and losses recognized

　　In profit or loss (15,696) -

　　In other comprehensive income - (94,922)

Reclassification and effect of movements in exchange rate (25) -

　Acquisition 122,764 7,470

　Disposal / Redemption (147,350) (38,903)

Balance as of September 30, 2020 $ 431,886 1,541,304

Balance as of January 1, 2019 $ 614,769 795,623


　　In profit or loss (56,890) -

　　In other comprehensive income - 271,514

　Reclassification and effect of movements in exchange rate 4,883 -

　Acquisition 309,744 297,738

　Disposal / Redemption (527,534) (19,132)

Balance as of September 30, 2019 $ 344,972 1,345,743

The aforementioned total gains and losses were recognized in “ other gains and losses” and“ unrealized gains and losses from financial assets at fair value through other comprehensiveincome” . The details of the assets which the Group still held as of September 30, 2020 and2019, were as follows:



2020 2019 2020 2019


　In profit or loss (accounted as “othergains and losses”)

$ (12,505) (51,893) (12,846) (58,777)

In other comprehensive income(accounted as “unrealized gainsand losses from financial assets atfair value through othercomprehensive income”)

(5,611) 177,048 (94,922) 271,513

〜47〜








6) Quantified information for significant unobservable inputs (level 3) used in fair valuemeasurement

The Group’ s financial instruments that use Level 3 inputs to measure fair value includefinancial assets measured at fair value through profit or loss and financial assets measured atfair value through other comprehensive income-equity investments.

Quantified information of significant unobservable inputs was as follows:

ItemValuationtechniques

Significant non-observable inputs

The relationshipbetween significant

Non-observable inputsand fair values

Financial assets at fairvalue through profit orloss-equity instrumentswithout active market

Net asset valuemethod

‧Net asset value ‧Not applicable

Financial assets at fairvalue through othercomprehensive income-equity instrumentswithout active market

Net asset valuemethod

‧Net asset value ‧Not applicable

(w) Financial risk management 　

There were no significant differences of the Group’ s financial risk management and policies withthose disclosed in Note (6)(x) of the consolidated financial statements for the year ended December31, 2019.

(x) Capital Management 　

Management believes that the objectives, policies and processes of capital management of the Grouphave been applied consistently with those described in Note (6)(y) of the consolidated financialstatements for the year ended December 31, 2019. Also, management believes that there were nosignificant changes in the Group’s capital management information as disclosed for the year endedDecember 31, 2019.

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

For the nine months ended September 30, 2020 and 2019, the Group’ s investing and financingactivities which did not affect the current cash flow were acquisition of right-of-use assets fromleasing. Please refer to Note (6)(i).

〜48〜








Reconciliation of liabilities arising from financing activities was as follows:

Non-cash changes

January 1, 2020 Cash flows Others ReclassificationMovements inexchange rate

September 30,2020

Long-term borrowings $ 26,229,300 (13,432,900) - (6,008,000) 287,800 7,076,200

Long-term liabilities,current portion

14,419,200 - - 6,008,000 (680,000) 19,747,200

Short-term borrowings 182,336,322 (35,427,044) - - (894,049) 146,015,229

Lease liabilities 2,585,204 (674,804) 111,459 - (70,066) 1,951,793

Total liabilities fromfinancing activities

$ 225,570,026 (49,534,748) 111,459 - (1,356,315) 174,790,422

Non-cash changes

January 1, 2019 Cash flows AcquisitionMovements inexchange rate

September 30,2019

Long-term borrowings $ 18,443,210 11,372,000 - 155,490 29,970,700

Short-term borrowings 244,487,055 (65,366,278) - 1,293,335 180,414,112

Lease liabilities 3,102,982 (715,364) 406,651 2,332 2,796,601

Total liabilities from financing activities $ 266,033,247 (54,709,642) 406,651 1,451,157 213,181,413

(7)　Related Party Transactions

(a) Names and relationship with related parties

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

Name of related party Relationship with the GroupQuanta Culture & Education Foundation Same chairman (other related parties)

Quanta Computer Employee WelfareCommittee

Same person in charge (other related parties)

Quanta Arts Foundation Same chairman (other related parties)

Quanta Medical Technology Foundation Same chairman (other related parties)

Chinese National Association of Industry andCommerce, Taiwan (CNAIC)

The Company’s chairman is a member of thecouncil of CNAIC. (other related parties)

SINOCON Industrial Standards Foundation(SINOCON)

The Company’s chairman is a member of thecouncil of SINOCON. (other related parties)

EBN Technology Corporation An investee company accounted for using equitymethod (Affiliates)

Guangsheng (Tianjin) Technology Co., Ltd. An investee company accounted for using equitymethod (Affiliates)

Trump-link (Beijing) Technology Co., Ltd. An investee company accounted for using equitymethod (Affiliates)

〜49〜








(b) Significant transactions with related parties

1.Revenues from related parties

The amounts of significant sales between the Group and related parties were as follows:



2020 2019 2020 2019

Affiliates $ 2,403,586 1,106,385 5,909,719 1,196,215

Other related parties 142 138 444 392

$ 2,403,728 1,106,523 5,910,163 1,196,607

There is no significant difference in terms and conditions of the sales to associates between thoseprovided to third parties.

2.Receivables from related parties

Receivables from related parties were as follows:

Account Category of related partySeptember 30,

2020December 31,

2019September 30,

2019

Accounts receivable Affiliates $ 1,237,735 370,181 1,245,389

Other receivables Other related parties 3,103 5,906 2,230

$ 1,240,838 376,087 1,247,619

3.Payables to related parties

Payables to related parties were as follows:

Account Category of related partySeptember 30,

2020December 31,

2019September 30,

2019

Other payables Other related parties $ 52,828 42,813 42,397

4.Others



2020 2019 2020 2019

Affiliates

Other income $ 15 5 30 20

〜50〜










2020 2019 2020 2019

Other related parties

Rental income $ 5,238 4,331 13,899 18,837

Other income 1,121 1,039 2,711 2,599

Donation expenses (41,720) (5,500) (58,318) (12,377)

Employee benefits (154,545) (126,743) (376,377) (350,144)

Other expenses - (2) (88) (64)

$ (189,906) (126,875) (418,173) (341,149)

(c) Transactions with key management personnel

Compensation for key management personnel includes:



2020 2019 2020 2019

Short-term employee benefits$ 295,098 169,735 641,990 445,612

Post-employment benefits 648 648 1,976 1,872

$ 295,746 170,383 643,966 447,484

(8)　Pledged Assets 　

The book values of pledged assets were as follows:

Pledgedassets Object

September 30,2020

December 31,2019

September 30,2019

Pledged timedeposits

Bank borrowings, customs collateraland deposits for factory lease, etc.

$ 15,167,127 18,343,450 19,248,163

Restrictedbank deposit

Lawsuit guaranty - - 20,626

Guaranteedeposits paid

Deposits for office and factorylease, and long-term materialpurchase contracts, etc.

219,313 235,482 261,617

$ 15,386,440 18,578,932 19,530,406

〜51〜








(9)　Significant Commitments and Contingencies

(a) Promissory notes issued as guarantee for purchasing, borrowings, foreign exchange forwardcontracts and import or export bills advance were as follows:

September 30,2020

December 31,2019

September 30,2019

TWD $ 41,918,000 58,300,000 38,900,000

USD (in thousands) 8,437,900 8,279,900 8,279,900

(b) As of September 30, 2020, December 31, 2019, and September 30, 2019, the guarantee notesreceived from outsourcing, vendor performance, and construction contracts amounted to $578,117

and $502,532 and $400,885, respectively.

(c) Significant litigation:

1.Litigation 1:

QSI and its subsidiary, Quanta Storage America, Inc., and other peers in DVD industry receivedan antitrust lawsuit (IN RE OPTICAL DISK DRIVE ANTITRUST LITIGATION) in 2010. OnNovember 22, 2019, United States Court of Appeals for the Ninth Circuit declared the judgmentagainst the plaintiff who purchased indirectly; QSI and its subsidiary won the appeal of this case,and the full litigation process was terminated.

2.Litigation 2:

In October 2017, QSI and its subsidiary, Quanta Storage America, Inc., received the investigationresult of the antitrust lawsuit from the European Union Court. The result includes a fine of $7,146thousand Euros imposed on QSI. QSI has received the formal verdict and recognized relevantlosses and provisions. Meanwhile, QSI has appealed to the European Union Court.

3.Litigation 3:

In March 2014, QSI and its subsidiary, Quanta Storage America, Inc., noticed that HP Inc. filed anantitrust lawsuit on DVD players. On October 25, 2019, the jury of the court of Southern Districtof Texas determined the facts that QSI and its subsidiary, Quanta Storage America, Inc., wereinvolved in anti-competitive practices. The first-instance court ruled that the plaintiff waspermitted to be compensated USD 176,000 thousand by all the defendants (including QSI and itssubsidiary, Quanta Storage America, Inc., Sony Optiarc Inc., Toshiba Corp., Hitachi-LG DataStorage Inc., Panasonic Corp., NEC Corp., and Samsung Electronics Co. Ltd.) for damages ofselling the products. The plaintiff (HP Inc.) made a further motion to the district court judge inaccordance with Federal law in order to claim a higher compensation after the first judgment. OnJanuary 3, 2020, QSI and its subsidiary, Quanta Storage America, Inc., noticed that the court of

〜52〜








Southern District of Texas made an amended judgment in response to the plaintiff’s (HP inc.’s)motion, with the compensation amount increased to USD 528,000 thousand. After deducting thesettlement money amounted to USD 89,350 thousand negotiated by the plaintiff (HP Inc.) and theother defendants, the remaining compensation amounted to USD 438,650 thousand will be fullypaid by QSI and its subsidiary, Quanta Storage America, Inc.. QSI has received the formal verdictand accrued relevant losses and provisions in the annual report of 2019. Meanwhile, QSI hasappealed to the U.S. Fifth Circuit.

In the first quarter of 2020, the plaintiff (HP Inc.) requested the court of Southern District ofTexas to enforce the properties of QSI. At the request of the court, QSI transferred the intellectualproperty rights in the United States to the court for custody. Meanwhile, QSI claimed to the courtof Southern District of Texas that QSI was unable to fully cooperate with the enforcement. Theplaintiff (HP Inc.) considered that QSI’s claim applied to “Contempt of Court” and requested thecourt of Southern District of Texas to penalize against the claim. The penalty started from May 1,2020. QSI has appealed against the penalty to the U.S. Fifth Circuit according to the United StatesCourt of Appeals. On April 30, 2020, the U.S. Fifth Court has approved the temporary suspensionof the original penalty adjudged by the court of Southern District of Texas. However, the court ofSouthern District of Texas could still determine whether to execute the penalty ex-officio. OnJune 7, 2020, QSI has received a joint appeal decision of antitrust lawsuit on DVD players andturnover order from the U.S. Fifth Circuit. The U.S. Fifth Court decided to remain the samejudgment on the antitrust lawsuit with the compensation amounted to USD 438,650 thousand. TheU.S. Fifth Court also made the judgment on turnover order, which invalidate the original transferdate of properties.

On June 19, 2020, QSI and the plaintiff (HP. Inc) had settled and signed the confidentialreconciliation agreement. Both parties agreed to withdraw all related litigation. QSI has dealt withthe case according to the reconciliation agreement and the related accounting standard andregulations.

4.Litigation 4:

In June 2017, QSI and its subsidiary, Quanta Storage America, Inc., noticed that FTI Consulting,Inc. filed an expert and wintness fee arbitration with American Arbitration Association. AmericanArbitration Association made an arbitration result on October 15, 2018 that QSI and its subsidiary,Quanta Storage America, Inc., have to pay USD$577 thousand. According to the nature of thecase, the arbitration result still needs to be confirmed and recognized by the U.S. Judiciaryrequested by the arbitration claimant. Until now, the arbitration claimant has not requested U.S.District court with jurisdiction to recognize the result according to the U.S. Federal ProcedureLaw. The case won't enter the first trial stage of the U.S. judicial proceedings until the arbitrationclaimant initiates the judicial proceedings.

〜53〜








5.Litigation 5:

The subsidiary, Techman Electronics (Thailand) Co., Ltd., received the notice of contract disputeabout human resource from the outsourcing human resourcing agency in May 2020. The claimingamount of the contract dispute is THB 6,229 thousand. Techman Electronics (Thailand) Co., Ltd.has appointed external attorney to manage this case.

QSI will evaluate the reasonableness of recognized expenses during every financial reportingperiod based on the nature of the case, the expected loss and materiality of the amount, theprogress of the case, and the comments of the professional consultants. Also, QSI has madenecessary adjustments in a manner deemed appropriate. However, the final amount will not be setuntil the termination of related cases. Although QSI will actively defend the aforementioned caseswhich have not yet reconciled and which are still in progress, the potential losses (if any) cannotbe calculated accurately at the present time due to the unpredictability nature of legal cases. QSIcannot rule out the prossibility that it fails to win or settle all the related cases. The related fines,judgement amounts, or reconciliation might have material negative impact on the business,operations, and prospects of QSI.

(10) Losses Due to Major Disasters : None.

(11) Subsequent Events

Effective October 2020, the Company and its subsidiary, QIL, entered into syndicated credit agreementwith Mega International Commercial Bank and other 17 participating financial institutions. Under which,the Company and QIL will share the term facility and revolving facility amounted to USD 1,200,000thousand for a period of 3 years. The borrowing duration is agreed to extend for 2 years with MegaInternational Commercial Bank and other 17 participating financial institutions. The loan bears floatinginterest rates. According to the agreements, the Company takes joint and several liabilities for QIL'srepayments.

(12) Others

(a) The employee benefits, depreciation, depletion and amortization expenses categorized by functionwere as follows:

By function For the Three Months Ended September 30, 2020 For the Three Months Ended September 30, 2019

By item Operatingcost

Operatingexpense Total

Operatingcost


Employee benefits

　Salary 6,426,472 4,493,819 10,920,291 6,523,723 3,415,946 9,939,669

　Labor and healthinsurance

499,076 244,112 743,188 745,999 247,509 993,508

　Pension 546,735 171,073 717,808 795,669 194,096 989,765

　Others 548,727 184,487 733,214 577,242 169,131 746,373

Depreciation 1,406,449 297,690 1,704,139 1,862,363 211,511 2,073,874

Amortization 218,624 111,155 329,779 184,911 115,365 300,276

〜54〜








By function For the Nine Months Ended September 30, 2020 For the Nine Months Ended September 30, 2019

By item Operatingcost


Operatingcost


Employee benefits

　Salary 17,983,982 11,361,516 29,345,498 18,810,587 10,204,900 29,015,487

　Labor and healthinsurance

1,249,270 703,933 1,953,203 1,797,212 754,689 2,551,901

　Pension 1,329,533 467,083 1,796,616 2,031,386 558,353 2,589,739

　Others 1,853,090 498,404 2,351,494 1,543,530 499,600 2,043,130

Depreciation 4,342,992 870,622 5,213,614 5,067,949 1,065,559 6,133,508

Amortization 639,104 294,190 933,294 503,463 357,535 860,998

(13) Other disclosures 　

(a) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governingthe Preparation of Financial Reports by Securities Issuers” for the Group for the nine months endedSeptember 30, 2020:

1. Fund financing to other parties:

(Amounts Expressed in Thousands of New Taiwan Dollars)

Number Name of Name of Account Related

Highestbalance of

financing toother partyduring the Ending

Actual usageamount during

Range ofinterest

rates during

Purposes offund

financing forthe borrower

Transactionamount for

businessbetween

Reasonsfor short

-term Loss Collateral

Individualfunding

loan limits

Maximumlimit of fund

financing

(Note 1) lender borrower name party period balance the period the period (Note 2) two parties financing allowance Name Value (Note 3) (Note 3)

0 The Company Tech-Full

Computer

(Changshu)

Co., Ltd.

Other

receivables

Yes 6,388,800 2,323,200 1,161,600 2.30% 2 - Operating

Capital

- - 54,885,028 54,885,028

〞〞 Kenseisha

Changshu

P.M.P Co.,

Ltd.

〞 Yes 1,392,468 - - - 2 - Operating

Capital

- - 54,885,028 54,885,028

〞〞 Kenseisha

Shanghai

P.M.P. Co.,

Ltd.

〞 Yes 726,000 720,192 720,192 1.20% 2 - Operating

Capital

- - 54,885,028 54,885,028

〞〞 QCH INC., A

NEVADA

CORP.

〞 Yes 23,232,000 23,232,000 22,277,993 - 1 161,259,152 Business

Contact

- - 54,885,028 54,885,028

〞〞 QMB CO.,

LTD.

〞 Yes 580,800 580,800 - - 2 - Operating

Capital

- - 54,885,028 54,885,028

〞〞 Tech-Front

(Chongqing)

Computer

Co., Ltd.

〞 Yes 23,232,000 23,232,000 - - 1 312,394,354 Business

Contact

- - 54,885,028 54,885,028

1 Dragontech

Metallic

Industry Co.,

Ltd.

Kenseisha

Shanghai

P.M.P. Co.,

Ltd.

〞 Yes 203,280 - - - 2 - Operating

Capital

- - 1,189,321 1,189,321

2 Dragon Grand

Group Ltd.

Fly Dragon

International

Ltd.

〞 Yes 36,300 36,300 34,848 1.20% 2 - Operating

Capital

- - 1,679,551 1,679,551

〜55〜








Number Name of Name of Account Related

Highestbalance of

financing toother partyduring the Ending


Range ofinterest

rates during

Purposes offund

financing forthe borrower

Transactionamount for

businessbetween

Reasonsfor short

-term Loss Collateral

Individualfunding

loan limits

Maximumlimit of fund

financing

(Note 1) lender borrower name party period balance the period the period (Note 2) two parties financing allowance Name Value (Note 3) (Note 3)

3 Kenseisha

Shanghai

P.M.P. Co., Ltd.

Kenseisha

Changshu

P.M.P Co.,

Ltd.

Other

receivables

Yes 580,800 - - - 2 - Operating

Capital

- - 2,616,472 2,616,472

Note 1: The numbers denote the following:1. 0 is issuer.2. Investees are listed by names and numbered starting with 1.

Note 2: Purpose of fund financing for the borrower:1. For those companies with business contact, please fill in 1.2. For those companies with short-term financing needs, please fill in 2.

Note 3: Maximum limitation on fund financing:(1) Limitation on the Company’s total fund financing amount and individual party

1) The Company’s total fund financing amount cannot exceed 40% of its net asset value. 2) For those companies with business contact, the amount of each fund financing cannot exceed the trading amount between the two parties. The

trading amount means the higher of sales or purchases.3) For those companies with short-term financing needs, the amount of each fund financing cannot exceed two times of the borrower’s net asset

value, and should be calculated together with guarantees and endorsements for those companies. For foreign companies that are 100% directlyor indirectly owned by the Company, the amount of fund financing is not restricted to above 3 items. However, the amount of each fundfinancing cannot exceed 40% of the Company’s net asset value.

(2) Limitation on the subsidiaries’ total fund financing amount and individual party1) The Company’s total fund financing amount cannot exceed four times of its net asset value. 2) For those companies with business contact, the amount of each fund financing cannot exceed the trading amount between the two parties. The

trading amount means the higher of sales or purchases.3) For those companies with short-term financing needs, the amount of each fund financing cannot exceed two times of the borrower’s net asset

value, and should be calculated together with guarantees and endorsements for those companies. For foreign companies that are 100% directlyor indirectly owned by the Company, or foreign companies that are 100% directly or indirectly owned by the Company leading to theCompany, the amount of fund financing is not restricted to above 3 items. However, the amount of each fund financing cannot exceed fourtimes of the Company’s net asset value.

Note 4: The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

2. Guarantees and endorsements for other parties: 　


Counter-party of guaranteeand endorsement

Limitation onamount of

guarantees andHighest balancefor guarantees Balance of

Ratio ofaccumulatedamounts of

guarantees and Maximum

Parentcompany

endorsementsSubsidiary

endorsements

Endorsements/guarantees

to third partieson

Number(Note 1)

Name of theguarantor Name

Relationshipwith the

Company(Note 3)

endorsementsfor a specific

enterprise(Note 2)

andendorsements

during theperiod

guarantees andendorsementsas of reporting

date


the period

Propertypledged on

guarantees andendorsements

endorsements to net worth of thelatest financial

statements

amount forguarantees and endorsements

(Note 2)

guarantees to third parties

on behalf ofsubsidiary

guarantees tothird parties onbehalf of parent

company

behalf ofcompanies

in MainlandChina

0 The Company QIL 2 137,212,571 33,686,400 33,686,400 14,229,600 - %24.55 137,212,571 Y

Note 1: 0 is issuer.Note 2: Maximum amount for guarantees and endorsements:

1. The total amount of guarantees and endorsements cannot exceed 50% of the Company’s net asset value for the current year. 2. The amount of each guarantee and endorsement cannot exceed 20% of the Company’s net asset value for the current year. 3. If the amount of each guarantee and endorsement reaches $10,000, the aggregate of the amount of guarantee and endorsement, long-term

investment, and fund financing cannot exceed 30% of the Company’s net asset value stated in recent financial statements.4. For guarantees and endorsements to those companies with business contact, the accumulated amount cannot exceed the trading amount between the

two parties for the current year.5. For companies that are more than 90% directly or indirectly owned by the Company, the amount of each guarantee and endorsement cannot exceed

10% of the Company’s net asset value.6. For companies that are 100% directly or indirectly owned by the Company, the amount of each guarantee and endorsement is not restricted to item

1, but cannot exceed the Company’s net asset value for the current year.7. The total amount of guarantees and endorsements of the Company and its subsidiaries cannot exceed 50% of the Company’s net asset value for the

current year. The amount of guarantees and endorsements of the Company and its subsidiaries for each company cannot exceed 20% of theCompany’s net asset value for the current year.

Note 3: Relationship with the Company:1. The company has business relationship.2. Subsidiaries in which the Company holds more than 50% of its total outstanding common shares.3. The investee company which is held more than 50% of its total outstanding common shares by the Company and its subsidiaries.


〜56〜








3. Information regarding securities held at balance sheet date (excluding investment in subsidiaries,associates and joint ventures): 　

(Amounts Expressed in Thousands of New Taiwan Dollars)Ending balance

Name of holderCategory and name of

securityRelationship with

the Company Account title Number of shares Book valuePercentage of

sharesFair value(Note 1) Note

Beneficiary Certificate

The Company UPAMC James Bond Money

Market Fund

- Current financial

assets-mandatorily

measured at FVTPL

85,704,727 1,442,351 %- 1,442,351

〞 Taishin 1699 Money Market

Fund

- 〞 161,238,832 2,198,282 %- 2,198,282

〞 Jih Sun Money Market Fund - 〞 46,011,732 687,181 %- 687,181

〞 Taishin Ta-Chong Money

Market Fund

- 〞 56,311,039 805,760 %- 805,760

〞 Nomura Taiwan Money

Market Fund

- 〞 48,694,789 800,133 %- 800,133

〞 Union Money Market Fund - 〞 56,777,557 755,090 %- 755,090

〞 Prudential Financial Money

Market Fund

- 〞 43,766,790 697,647 %- 697,647

〞 FSITC Taiwan Money

Market Fund

- 〞 67,322,252 1,038,069 %- 1,038,069

〞 Fubon Chi-Hsiang Money

Market Fund

- 〞 111,777,615 1,765,259 %- 1,765,259

〞 Yuanta De-Li Money Market

Fund

- 〞 18,290,339 300,439 %- 300,439

〞 TCB Taiwan Money Market

Fund

- 〞 149,262,246 1,526,983 %- 1,526,983

〞 CTBC Hwa-win Money

Market Fund

- 〞 107,432,795 1,192,450 %- 1,192,450

〞 Franklin Templeton Sinoam

Money Market Fund

- 〞 74,942,931 780,778 %- 780,778

〞 Fuh Hwa Money Market

Fund

- 〞 103,894,247 1,510,051 %- 1,510,051

〞 Hua Nan Kirin Money Market

Fund

- 〞 116,005,863 1,398,648 %- 1,398,648

〞 Capital Money Market Fund - 〞 86,142,136 1,400,008 %- 1,400,008

〞 Hua Nan Phoenix Money

Market Fund

- 〞 66,715,162 1,092,354 %- 1,092,354

〞 FSITC Money Market Fund - 〞 9,202,440 1,653,715 %- 1,653,715

Common Stock

〞 Ever Fortune.AI Co., Ltd. - Non-current financial

assets-mandatorily

measured at FVTPL

2,573,000 29,799 %2.86 29,799

〞 AU Optronics Corporation - Current financial

assets at FVOCI

443,930,307 4,972,020 %4.61 4,972,020

〞 High Power Lighting Corp. - Non-current financial

assets at FVOCI

638,085 6,553 %2.75 6,553

〞 Cyberon Corporation - 〞 1,617,600 156,009 %15.56 156,009

〞 CDIB Bioscience Ventures I,

Inc.

- 〞 3,545,123 25,589 %16.00 25,589

〞 Maxima Ventures I, Inc.,

Taiwan

- 〞 105,000 1,386 %18.79 1,386

〞 CDIB Capital Innovation

Accelerator Co., Ltd.

- 〞 15,000,000 155,883 %17.86 155,883

〜57〜








Ending balance





The Company Global Strategic Investment

Fund

- Non-current financial

assets at FVOCI

735,000 21,574 %3.77 21,574

Other

〞 Morgan Stanley Dean Witter

Venture Partners IV, L.P.

- 〞 - 687 %- 687

〞 SBCVC Fund III, L.P. - 〞 - 59,112 %- 59,112

〞 Viscovery (Cayman) Holding

Company Ltd.

- 〞 1,000,391 29,051 %4.52 29,051

〞 Translink Capital Partners II,

L.P.

- 〞 - 81,074 %- 81,074

〞 Tier IV, Inc. - 〞 125,000 274,900 %1.77 274,900

〞 Lumus, LTD. - 〞 93,347 145,201 %2.13 145,201

〞 PHI Fund, L.P. - Non-current financial

assets-mandatorily

measured at FVTPL

- 233,526 %- 233,526

Common Stock

QCML WK Global Investment III

Ltd.


assets at FVOCI

1,807,313 156,464 %6.58 156,464

〞 CDIB Bio Science Venture

Management (BVI), Inc.

- 〞 18,750 645 %5.24 645

Common Stock

Quanta Storage Inc. Taiwan Mobile Co., Ltd. - Current financial

assets at FVOCI

2,556,000 246,909 %0.07 246,909

〞 Far EasTone

Telecommunications Co.,

Ltd.

- 〞 3,709,000 226,249 %0.11 226,249

〞 Chuanghwa Telecom Co.,

Ltd.

- 〞 2,720,000 291,040 %0.04 291,040

〞 Far Eastern New Century

Corporation

- 〞 80,000 2,024 %- 2,024


〞 Jih Sun Money Market Fund - Current financial

assets-mandatorily

measured at FVTPL

6,517,189 97,333 %- 97,333


〞 Franklin Templeton Sinoam

Money Market Fund

- 〞 22,440,889 233,796 %- 233,796


Quanta Storage

Investment Inc.

Mega Diamond Money

Market Fund

- 〞 472,198 5,968 %- 5,968


Common Stock


assets at FVOCI

189,690 1,948 %0.82 1,948

Common Stock

QSI (CAYMAN) BluSense - Non-current financial

assets-mandatorily

measured at FVTPL

24,000 751 %8.62 751

〜58〜








Ending balance






Techman Robot Inc. Jih Sun Money Market Fund - Current financial

assets-mandatorily

measured at FVTPL

4,650,892 69,461 %- 69,461


Techman

Incorporation

Union Money Market Fund - 〞 37,655,139 500,779 %- 500,779


Quanta Microsystem

Inc.

Shin Kong Chi-Shin Money

Market Fund

- 〞 24,927,609 388,724 %- 388,724

Common Stock

Quanta Venture

Capital Co., Ltd.

PK Venture Capital Co., Ltd. - Non-current financial

assets at FVOCI

642,600 2,884 %13.33 2,884

〞 High Power Lighting Corp. - 〞 521,117 5,352 %2.25 5,352

〞 Ostar Meditech Corp. - 〞 834,000 - %11.64 -

〞 Global Strategic Investment

Fund (Samoa)

- 〞 1,739,783 12,361 %4.90 12,361

〞 Lumus, LTD. - 〞 168,023 261,360 %3.84 261,360

Other

〞 Translink Capital Partners III

L.P.

- 〞 - 157,124 %- 157,124

〞 China Renewable Energy

Fund, L.P.


assets-mandatorily

measured at FVTPL

- 167,810 %- 167,810


Quanta Computer

Technology

Investment Corp.

Mega Diamond Money

Market Fund

- Current financial

assets-mandatorily

measured at FVTPL

12,494,581 157,912 %- 157,912


〞 FSITC Taiwan Money

Market Fund

- 〞 13,688,800 211,073 %- 211,073

Common Stock


assets at FVOCI

476,982 4,899 %2.06 4,899

Common Stock

RoyalTek Company

Ltd.

Quanta Computer Inc. Parent company of

RoyalTek Company

Ltd.

〞 8,108,885 613,032 %0.21 613,032

〞 Ostar Meditech Corp. - 〞 258,914 - %3.61 -

〞 E.SUN Financial Holdings

Co., Ltd.

- 〞 2,209,152 56,554 %0.02 56,554

〞 Mega Financial Holdings Co.,

Ltd.

- 〞 1,700,000 47,260 %0.01 47,260

〞 Taiwan Mobile Co., Ltd. - 〞 230,000 22,218 %0.01 22,218

〞 Taiwan Cooperative Financial

Holdings Co., Ltd.

- 〞 1,630,017 31,785 %0.01 31,785

〜59〜








Ending balance






RoyalTek Company

Ltd.

Nomura Taiwan Money

Market Fund

- Current financial

assets-mandatorily

measured at FVTPL

5,815,704 95,561 %- 95,561


Quanta Cloud

Technology Inc.

Union Money Market Fund - 〞 5,640,454 75,013 %- 75,013

Note 1: The market values for non-public listed companies are the net asset values. The net asset values use recent unaudited financial statements of thosecompanies.


4. Accumulated buying/selling of the same marketable securities for which the dollar amountreaches $300 million or 20% or more of paid-in capital:

(Amounts Expressed in Thousands of New Taiwan Dollars)Beginning balance Purchases Sales Ending balance

Name ofCompany

Category andname ofsecurity Account name

Name ofcounter-

party


CompanyShares/Units Amount

Shares/Units Amount

Shares/Units Price Cost

Disposalgain(loss)

Shares/Units Amount

Quanta Computer

Inc.

Taishin 1699

Money Market

Fund

Current financial

assets-mandatorily

measured at FVTPL

- - 52,934,426 719,072 705,791,585 9,611,024 597,487,179 8,135,374 8,131,878 3,496 161,238,832 2,198,282

〞 Taishin Ta-

Chong Money

Market Fund

〞 - - - - 126,604,376 1,811,326 70,293,337 1,005,726 1,005,600 126 56,311,039 805,760

〞 Yuanta Wan

Tai Money

Market Fund

〞 - - - - 105,829,662 1,612,800 105,829,662 1,613,020 1,612,800 220 - -

〞 Jih Sun

Money Market

Fund

〞 - - 54,821,178 815,608 170,359,167 2,540,202 179,168,613 2,671,282 2,668,608 2,674 46,011,732 687,181

〞 Hua Nan

Phoenix

Money Market

Fund

〞 - - 13,437,612 219,290 242,864,370 3,974,219 189,586,820 3,102,479 3,101,192 1,287 66,715,162 1,092,354

〞 Hua Nan

Kirin Money

Market Fund

〞 - - - - 232,011,725 2,796,998 116,005,862 1,398,578 1,398,420 158 116,005,863 1,398,648

〞 Union Money

Market Fund

〞 - - 35,910,409 475,960 1,091,166,973 14,489,319 1,070,299,825 14,212,488 14,210,196 2,292 56,777,557 755,090

〞 Prudential

Financial

Money Market

Fund

〞 - - 19,919,988 316,363 113,735,450 1,811,494 89,888,648 1,431,494 1,430,226 1,268 43,766,790 697,647

〞 FSITC

Taiwan

Money Market

Fund

〞 - - 41,643,354 639,767 124,315,281 1,915,843 98,636,383 1,518,693 1,517,546 1,147 67,322,252 1,038,069

〞 FSITC Money

Market Fund

〞 - - - - 20,635,053 3,706,635 11,432,613 2,053,845 2,052,989 856 9,202,440 1,653,715

〜60〜








Beginning balance Purchases Sales Ending balance

Name ofCompany

Category andname ofsecurity Account name

Name ofcounter-

party


CompanyShares/Units Amount

Shares/Units Amount

Shares/Units Price Cost

Disposalgain(loss)

Shares/Units Amount

Quanta Computer

Inc.

Cathay

Taiwan

Money Market

Fund

Current financial

assets-mandatorily

measured at FVTPL

- - - - 172,723,577 2,161,404 172,723,577 2,161,956 2,161,404 552 - -

〞 UPAMC

James Bond

Money Market

Fund

〞 - - 20,250,637 339,769 269,815,771 4,538,791 204,361,681 3,437,168 3,436,243 925 85,704,727 1,442,351

〞 Nomura

Taiwan

Money Market

Fund

〞 - - - - 163,286,038 2,682,094 114,591,249 1,882,516 1,882,000 516 48,694,789 800,133

〞 Fubon Chi-

Hsiang Money

Market Fund

〞 - - 11,667,833 183,702 413,485,662 6,525,913 313,375,880 4,945,764 4,944,395 1,369 111,777,615 1,765,259

〞 Yuanta De-Li

Money Market

Fund

〞 - - - - 85,362,452 1,400,569 67,072,113 1,100,674 1,100,143 531 18,290,339 300,439

〞 Capital Money

Market Fund

〞 - - - - 348,286,383 5,655,933 262,144,247 4,257,499 4,256,002 1,497 86,142,136 1,400,008

〞 SinoPac TWD

Money Market

Fund

〞 - - - - 62,921,429 881,460 62,921,429 881,561 881,460 101 - -

〞 TCB Taiwan

Money Market

Fund

〞 - - - - 367,965,579 3,763,383 218,703,333 2,236,943 2,236,440 503 149,262,246 1,526,983

〞 CTBC Hwa-

win Money

Market Fund

〞 - - - - 409,943,285 4,547,317 302,510,490 3,355,905 3,354,910 995 107,432,795 1,192,450

〞 Franklin

Templeton

Sinoam

Money Market

Fund

〞 - - 70,147,811 728,071 258,486,891 2,689,570 253,691,771 2,639,570 2,636,852 2,718 74,942,931 780,778

〞 Fuh Hwa

Money Market

Fund

〞 - - - - 248,162,736 3,606,195 144,268,489 2,096,498 2,096,200 298 103,894,247 1,510,051

Quanta Storage

Inc.

Franklin

Templeton

Sinoam

Money Market

Fund

〞 - - 26,998,586 280,221 52,740,067 548,726 57,297,764 595,950 595,010 940 22,440,889 233,796

〞 Union Money

Market Fund

〞 - - 2,047,171 27,133 87,538,018 1,162,483 66,043,679 876,912 876,567 345 23,541,510 313,081

〞 Jih Sun

Money Market

Fund

〞 - - 24,213,139 360,233 12,316,173 183,346 30,012,123 447,470 446,363 1,107 6,517,189 97,333

Techman

Incorporation

Union Money

Market Fund

〞 - - - - 37,655,139 500,000 - - - - 37,655,139 500,779

〜61〜








5. Acquisition of real estate for which the dollar amount reaches $300 million or 20% or more ofpaid-in capital : None. 　

6. Disposition of real estate for which the dollar amount reaches $300 million or 20% or more ofpaid-in capital: None.

7. Related-party transactions for purchases and sales with amounts exceeding the lower of $100million or 20% of the capital stock:


Transaction details

Reasons why anddescription of how thetransaction conditions

differ from generaltransactions Account/note receivable (payable)

Name ofcompany Related party

Nature ofrelationship

Purchase/Sale Amount

Percentageof total

purchases/sales

Paymentterms Unit price Payment terms

EndingBalance

Percentage oftotal accounts/

notes receivable(payable) Notes

Quanta Computer

Inc.

QCH Associate Sales (161,259,152) %(21.73) Net 45~240

days

- - 36,981,519 %16.24

〞 QCTJ 〞〞 (5,035,479) %(0.68) 〞 - - 2,929,160 %1.29

〞 QCTK 〞〞 (493,878) %(0.07) 〞 - - 299,397 %0.13

〞 QCT-USA 〞〞 (5,273,536) %(0.71) 〞 - - 1,383,741 %0.61

〞 QDL(HK) 〞〞 (1,626,572) %(0.22) 〞 - - 982,972 %0.43

〞 QCTG 〞〞 (156,570) %(0.02) 〞 - - 336,128 %0.15

〞 TTC 〞〞 (341,972) %(0.05) 〞 - - - %-

〞 TFQ 〞〞 (121,179) %(0.02) 〞 - - - %-

〞 QCTTW 〞〞 (182,735) %(0.02) Net 120 days - - 111,420 %0.05

〞 TFC 〞 Purchases 39,438,300 %4.88 Net 45~120

days

- - - %-

〞 TCC 〞〞 402,022,543 %49.74 〞 - - (27,285,589) %(55.91)

〞 TGC 〞〞 476,098 %0.06 〞 - - (551,435) %(1.13)

〞 TNC 〞〞 20,111,519 %2.49 〞 - - (204,008) %(0.42)

〞 TFQ 〞〞 312,394,354 %38.65 〞 - - - %-

〞 TCQ 〞〞 27,104,250 %3.35 〞 - - - %-

〞 QMB 〞〞 5,120,287 %0.63 〞 - - - %-

〞 QCH 〞〞 1,588,642 %0.20 Net 45~240

days

- - - %-

QSI QSA 〞 Sales (1,054,901) %(15.00) Net 90 days - - 15,675 %0.76

〞〞〞 Purchases 1,661,179 %27.18 〞 - - (302,844) %(14.28)

〞 QSS 〞〞 2,378,236 %38.91 〞 - - (812,141) %(38.30)

〞 TMT 〞〞 1,769,342 %28.95 〞 - - (535,866) %(25.27)

QSA QSI The same

ultimate

parent

company

Sales (1,661,179) %(61.27) 〞 - - 302,844 %81.48

〞〞〞 Purchases 1,054,901 %39.03 〞 - - (15,675) %(2.07)

QSS 〞〞 Sales (2,378,236) %(99.15) 〞 - - 812,141 %98.53

TMT 〞〞〞 (1,769,342) %(95.57) 〞 - - 534,249 %95.59

〜62〜








Transaction details






Percentageof total

purchases/sales


EndingBalance



RTK TGC The same

ultimate

parent

company

Purchases 432,650 %68.18 Net 60 days - - (69,015) %(61.33)

QDL(HK) Quanta Computer

Inc.

Ultimate

parent

company

〞 1,626,572 %96.70 Net 45~240

days

- - (982,972) %(100.00)

QCH 〞〞〞 161,259,152 %90.41 〞 - - (36,981,519) %(78.71)

〞 QMI Associate 〞 209,537 %0.12 Net 45~120

days

- - (104,924) %(0.22)

〞 QMN 〞〞 1,004,194 %0.56 Net 120 days - - (257,515) %(0.55)

〞 Quanta Computer

Inc.

Ultimate

parent

company

Sales (1,588,642) %(0.90) Net 45~240

days

- - - %-

〞 QSI-USA Associate 〞 (103,616) %(0.06) Net 45~120

days

- - 54,669 %0.21

QMI QCH 〞〞 (209,537) %(100.00) 〞 - - 104,924 %100.00

QCT-USA Quanta Computer

Inc.

Ultimate

parent

company

Purchases 5,273,536 %94.87 Net 45~240

days

- - (1,383,741) %(100.00)

QCTK 〞〞〞 493,878 %94.52 〞 - - (299,397) %(100.00)

QCTJ 〞〞〞 5,035,479 %88.21 〞 - - (2,929,160) %(100.00)

QMN QCH Associate Sales (1,004,194) %(92.37) Net 120 days - - 257,515 %94.20

QSI-USA 〞〞 Purchases 103,616 %44.78 Net 45~120

days

- - (54,669) %(100.00)

QCTG Quanta Computer

Inc.

Ultimate

parent

company

〞 156,570 %99.78 Net 45~240

days

- - (336,128) %(98.59)

QMB TCC The same

ultimate

parent

company

〞 229,850 %4.61 Net 45~120

days

- - (228,552) %(6.06)

〞 Quanta Computer

Inc.

Ultimate

parent

company

Sales (5,120,287) %(100.00) 〞 - - - %-

TGC 〞〞〞 (476,098) %(51.91) 〞 - - 551,435 %75.63

〞 RTK The same

ultimate

parent

company

〞 (432,650) %(47.17) Net 60 days - - 69,015 %9.47

TLC TCC Associate 〞 (291,446) %(30.20) Net 60~120

days

- - 63,516 %21.46

〞 TFC 〞〞 (183,892) %19.06 Net 45~120

days

- - 30,336 %10.25

〞〞〞 Purchases 107,790 %13.17 〞 - - (22,405) %(20.53)

〞 TCC 〞〞 386,982 %47.30 Net 60~120

days

- - (80,447) %(73.71)

〜63〜








Transaction details






Percentageof total

purchases/sales


EndingBalance



TCC Quanta Computer

Inc.

Ultimate

parent

company

Sales (402,022,543) %(99.65) Net 45~120

days

- - 27,285,589 %48.62

〞 TLC Associate 〞 (386,982) %(0.10) Net 60~120

days

- - 80,447 %0.14

〞 QMB The same

ultimate

parent

company

〞 (229,850) %(0.06) Net 45~120

days

- - 228,552 %0.41

〞 TTC 〞〞 (789,380) %(0.20) Net 45 days - - 679,115 %1.21

〞 TLC 〞 Purchases 291,446 %0.07 Net 60~120

days

- - (63,516) %(0.05)

〞 TFQ 〞〞 525,204 %0.13 Net 45~120

days

- - (195,072) %(0.16)

TNC Quanta Computer

Inc.

Ultimate

parent

company

Sales (20,111,519) %(100.00) 〞 - - 204,008 %98.10

TFC 〞〞〞 (39,438,300) %(80.54) 〞 - - - %-

〞 TTC Associate 〞 (558,930) %(1.14) 〞 - - 730,363 %5.20

〞 YDCQ 〞〞 (5,772,403) %(11.79) Net 120 days - - 1,821,959 %12.97

〞 TLC 〞〞 (107,790) %(0.22) Net 45~120

days

- - 22,405 %0.16

〞〞〞 Purchases 183,892 %0.38 〞 - - (30,336) %(0.13)

TFQ Quanta Computer

Inc.

Ultimate

parent

company

Sales (312,394,354) %98.14 〞 - - - %-

〞 YDCQ Associate 〞 (5,346,696) %(1.68) Net 120 days - - 2,553,395 %2.74

〞 TCC 〞〞 (525,204) %(0.17) Net 45~120

days

- - 195,072 %0.21

〞 KSH 〞 Purchases 535,003 %0.17 Net 45 days - - (110,298) %(0.07)

〞 Quanta Computer

Inc.

Ultimate

parent

company

〞 121,179 %0.04 Net 45~240

days

- - - %-

KSH TFQ Associate Sales (535,003) %(35.69) Net 45 days - - 110,298 %15.41

YDCQ TFC 〞 Purchases 5,772,403 %51.92 Net 120 days - - (1,821,959) %(41.65)

〞 TFQ 〞〞 5,346,696 %48.08 〞 - - (2,553,395) %(58.35)

〞 Guangsheng

(Tianjin)

Technology Co.,

Ltd.

Affiliate Sales (5,838,856) %(51.42) Net 60~90

days

- - 1,220,274 %37.87

〜64〜








Transaction details






Percentageof total

purchases/sales


EndingBalance



TTC TFC Associate Purchases 558,930 %33.07 Net 45~120

days

- - (730,363) %(50.37)

〞 TCC 〞〞 789,380 %46.70 Net 45 days - - (679,115) %(46.84)

〞 Quanta Computer

Inc.

Ultimate

parent

company

〞 341,972 %20.23 Net 45~240

days

- - - %-

TCQ 〞〞 Sales (27,104,250) %(100.00) Net 45~120

days

- - - %-

QCTTW 〞〞 Purchases 182,735 %99.30 Net 120 days - - (111,420) %(99.48)

Note 1: The purchase/sale prices listed above are not comparable to the one for other trading partners. There is no significant difference in terms andconditions of the agreed payment terms and general purchasing terms.


8. Receivables from related parties with amount exceeding the lower of $100 million or 20% ofcapital stock: 　


Name of Nature of Ending TurnoverPast-due receivables from

related party Amount received in Loss

related party Related-party relationship balance rate Amount Action taken subsequent period allowance

Quanta ComputerInc.

QCH Associate 36,981,519 4.88 - - 21,542,694 -

〞 QCT-USA 〞 1,383,741 2.53 - - - -

〞 QDL(HK) 〞 982,972 2.19 - - 319,622 -

〞 QCTJ 〞 2,929,160 1.71 - - - -

〞 ThinkTech 〞 104,985 - - - - -

〞 QCTK 〞 299,397 0.89 - - - -

〞 QCTG 〞 336,128 0.67 - - - -

〞 QCTTW 〞 111,420 1.50 - - - -

〞 QMB 〞 1,635,461 - - - 3,364 -

QSA QSI The same ultimateparent company

302,844 6.89 - - 29,040 -

QSS 〞〞 812,141 4.19 - - 435,600 -

TMT 〞〞 534,249 3.51 - - 49,368 -

TCC Quanta ComputerInc.

Ultimate parentcompany

27,285,589 34.83 - - - -

〞 TTC Associate 679,115 2.93 - - - -

〞 QMB The same ultimateparent company

228,552 2.68 - - - -

TNC Quanta ComputerInc.


204,008 1.71 - - - -

TFQ YDCQ Associate 2,553,395 3.47 - - - -

〞 TCC 〞 195,072 5.06 - - - -

TGC Quanta ComputerInc.


551,435 1.79 - - - -

〜65〜








Name of Nature of Ending TurnoverPast-due receivables from

related party Amount received in Loss

related party Related-party relationship balance rate Amount Action taken subsequent period allowance

KSH TFQ Associate 110,298 5.41 - - - -

TFC TTC 〞 730,363 1.03 - - - -

〞 YDCQ 〞 1,821,959 5.47 - - - -

QMN QCH 〞 257,515 5.74 - - - -

QCN QSN 〞 182,334 0.40 - - - -

YDCQ Guangsheng (Tianjin)Technology Co., Ltd.

Affiliate 1,220,274 9.86 - - - -

QMI QCH Associate 104,924 3.86 - - - -

Note: The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

9. Derivative transactions: 　

Please refer to Note (6)(b) and (6)(v) for related information.

10. Business relationships and significant inter-company transactions:

(Amounts Expressed in Thousands of New Taiwan Dollars)Intercompany transactions

Number Name of the company Name of the counter-party


(Note 2) Account name Amount Trading terms

Percentage of theconsolidated net

revenue or total assets(Note 3)

0 Quanta Computer Inc. QCH、QCT-USA、QDL(HK)、QCTJ、QCTK、QCTG、TTC、TFQ、QCTTW

1 Sales 174,491,073 Terms not comparable toother general tradingpartners

%22.15

〞〞 TFC、TCC、TNC、TGC、TFQ、TCQ、QCH、QMB

1 Purchases 808,255,993 Terms not comparable toother general tradingpartners

%100.00

〞〞 QCH、QCT-USA、QDL(HK)、QCTJ、QCTK、QCTG、QCTTW

1 Accounts receivable 43,024,337 The same as the term forother general tradingpartners

%6.81

〞〞 TNC、TGC、TCC 1 Accounts payable 28,041,032 The same as the term forother general tradingpartners

%4.44

1 QCH Quanta Computer Inc. 2 Purchases 161,259,152 Terms not comparable toother general tradingpartners

%20.47

〞〞〞 2 Accounts payable 36,981,519 The same as the term forother general tradingpartners

%5.85

〞〞〞 2 Sales 1,588,642 Terms not comparable toother general tradingpartners

%0.20

2 QCT-USA 〞 2 Purchases 5,273,536 Terms not comparable toother general tradingpartners

%0.67


%0.22

3 QDL(HK) 〞 2 Purchases 1,626,572 Terms not comparable toother general tradingpartners

%0.21

〞〞〞 2 Accounts payable 982,972 The same as the term forother general tradingpartners

%0.16

〜66〜








Intercompany transactions






4 QCTJ Quanta Computer Inc. 2 Purchases 5,035,479 Terms not comparable toother general tradingpartners

%0.64


%0.46

5 QCTK 〞 2 Purchases 493,878 Terms not comparable toother general tradingpartners

%0.06


%0.05

6 TFC 〞 2 Sales 39,438,300 Terms not comparable toother general tradingpartners

%4.88

7 TCC 〞 2 Sales 402,022,543 Terms not comparable toother general tradingpartners

%49.74

〞〞〞 2 Accounts receivable 27,285,589 The same as the term forother general tradingpartners

%4.32

8 TGC 〞 2 Sales 476,098 Terms not comparable toother general tradingpartners

%0.06

〞〞〞 2 Accounts receivable 551,435 The same as the term forother general tradingpartners

%0.09

9 TNC 〞 2 Sales 20,111,519 Terms not comparable toother general tradingpartners

%2.49

〞〞〞 2 Accounts receivable 204,008 The same as the term forother general tradingpartners

%0.03

10 TFQ 〞 2 Sales 312,394,354 Terms not comparable toother general tradingpartners

%38.65

〞〞〞 2 Purchases 121,179 Terms not comparable toother general tradingpartners

%0.02

11 TTC 〞 2 Purchases 341,972 Terms not comparable toother general tradingpartners

%0.04

12 TCQ 〞 2 Sales 27,104,250 Terms not comparable toother general tradingpartners

%3.35

13 QCTG 〞 2 Purchases 156,570 Terms not comparable toother general tradingpartners

%0.02


%0.05

〜67〜








Intercompany transactions






14 QCTTW Quanta Computer Inc. 2 Purchases 182,735 Terms not comparable toother general tradingpartners

%0.02


%0.02

15 QMB 〞 2 Sales 5,120,287 Terms not comparable toother general tradingpartners

%0.63

Note 1: The numbers denote the following:

1. 0 represents the Company.

2. Subsidiaries are listed by names and numbered starting with 1.

Note 2: Relationship with the listed companies:

1. The Company to subsidiary

2. Subsidiary to the Company

3. Subsidiary to subsidiary

Note 3: The transaction amount is calculated as a proportion of the consolidated revenue or assets. If categorized as an asset or liability, the calculation iscompared with the consolidated assets; if categorized as income or loss, the calculation is compared with the consolidated income or loss.

(b) Information on investees: 　

For the nine months ended September 30, 2020, the following is the information on investees(excluding information on investees in Mainland China):

(Amounts Expressed in Thousands of New Taiwan Dollars)Initial investment amount Balance as of September 30, 2020 Net income Investment

Name of theinvestor

Name of investee Location Major operations September 30,

2020

December 31,

2019

Shares Ratio ofshares

Book value (losses) of theinvestee

income(losses)

Note

Quanta Computer

Inc.

QCJ Corp. Japan After-sales service

and sale of

computers and

telecommunication

products

3,115 3,115 200 %100.00 2,355 (213) (213)

〞 QIL and its

subsidiaries

Cayman,

U.S.A., etc.

Investment company

and sale,

manufacture and

after-sales service of

computer peripherals

23,953,469 21,049,469 82,484,396 %100.00 27,754,439 (3,160,056) (2,320,195)Note 1

〞 WK Technology

Fund VI Limited

Taiwan Venture capital 108,375 108,375 10,837,500 %21.43 60,677 3,009 644

〞 QSI and its

subsidiaries

Taiwan Manufacture and sale

of optical storage

equipment, computer

storage devices and

peripherals

243,142 243,142 82,881,664 %29.78 2,109,586 (67,477) (20,080)

〞 QVC Taiwan Venture capital 1,000,133 1,000,133 100,000,000 %100.00 1,058,074 (18,629) (18,629)

〞 CAM CID Asia

Pacific Investment

Corp.

BVI Venture capital - 1,427 - %- - - -

〞 QCTI Taiwan Investment company 600,000 600,000 60,000,000 %100.00 647,044 (3,263) (3,263)

〜68〜








Initial investment amount Balance as of September 30, 2020 Net income Investment

Name of theinvestor


2020

December 31,

2019



income(losses)

Note

Quanta Computer

Inc.

QMIT and its

subsidiaries

Taiwan Electronic company

and import and

export business and

wholesale of

electronic products

232,750 232,750 17,500,000 %75.19 339,185 (19,842) (14,919)

〞 Tech View

International

Technology Inc.

Taiwan Manufacture of

electronic

components

1 1 107 %42.80 - - - Note 2

〞 Plenty Link

Technology Co.,

Ltd

Cayman Overseas investment

and trade company

91,476 91,476 3,150,000 %17.50 21,298 (11,354) (1,987)

〞 RTK and its

subsidiaries

Taiwan Design, manufacture,

processing, distribute

and sale of satellite

guided navigation

systems and

peripherals,

navigated maps, and

digital maps

807,586 807,586 18,603,598 %36.76 511,964 22,570 (2,725)

〞 QCTTW and its

subsidiaries

Taiwan Sale of computers

and peripherals

541,995 541,990 28,200,000 %100.00 (67,686) (36,658) (36,630)

〞 EBN Technology

Corp.


electronic

components

125,625 125,625 8,375,000 %25.00 65,019 (58,055) (14,512)

〞 Quantum

Optoelectronics Inc.

Taiwan Design and

manufacture of

optomechanical

systems

17,500 17,500 1,750,000 %20.00 1,210 (9,772) (1,954)

〞 ThinkTech Brazil Sale of computers

and peripherals

742,558 742,558 94,878,816 %83.16 (87,826) (44,052) (36,634)

〞 QT Medical, Inc. U.S.A Research and

development and

manufacture of

medical equipment

87,085 87,085 1,666,000 %13.51 82,566 (23,201) (3,165)

〞 QMB Co., Ltd. Thailand Manufacture and sale

of computers,

peripherals and

consumer products

1,920,336 959,224 399,999,997 %100.00 1,864,252 9,950 9,950

〞 QCTS Singapore Sale and after-sales

service of computer

peripherals

29,040 - 1,000,000 %100.00 23,154 (6,032) (6,032)

〞 Cloud River

Biomedicine, Inc.

Taiwan Research and

development and

manufacture of

medical equipment

90,000 - 377,855 %8.29 88,518 (31,953) (1,482)

〞 LIONS Taiwan

Technology Inc.

Taiwan Sale of computers

and peripherals

120,299 - 729,084 %16.67 119,127 (15,769) (1,172)

〜69〜









Name of theinvestor


2020

December 31,

2019



income(losses)

Note

Quanta Storage

Inc.

QSI (CAYMAN) Cayman Investment company 2,405,093 2,724,533 - %100.00 4,254,088 (12,114) 9,411 Note 1

〞 Quanta Storage

Investment Inc.

Taiwan Investment company 28,000 600,000 2,800,000 %100.00 53,410 5,870 5,870

〞 NU Inc. Taiwan Wholesale and retail

of computers and

peripherals

91,000 91,000 4,291,364 %29.80 26,232 (1,530) (456)

〞 TMT Thailand Manufacture and sale

of computer storage

devices and

components of

peripherals

1,033,039 1,033,039 10,999,998 %100.00 1,026,975 (18,240) (18,240)

〞 TRI Taiwan Manufacture and sale

of industrial

collaborative robots

500,000 - 50,000,000 %91.66 499,731 (63,978) (65,329)

〞 TAI Taiwan Factory automation

planning. installation

and implementation

500,000 5,000 50,000,000 %100.00 502,046 1,231 1,231

〞 JVM Malaysia Sale of computer

storage devices and

components of

peripherals

15,214 15,214 2,040,000 %51.00 13,967 432 220

QSI (CAYMAN) QSL (BVI) BVI Investment company 1,699,421 2,018,861 - %100.00 3,885,931 (24,271) (24,271)

〞 E-Forward SAMOA Manufacture and sale

of computer storage

devices and

components of

peripherals

174,240 174,240 - %100.00 366,694 10,414 10,414

QSL (BVI) QHH Hong Kong Investment company 1,094,770 1,094,770 - %100.00 2,691,815 31,924 31,924

〞 QIH Hong Kong Investment company 806,928 1,097,328 - %100.00 1,245,527 (56,314) (56,314)

〞 TMA SAMOA Sale and after-sales

service of computer

storage devices and

components of

peripherals

- 29,040 - %100.00 - 115 115

E-Forward

(SAMOA)

QSA SAMOA Sale and after-sales

service of computer

storage devices and

components of

peripherals

174,240 174,240 - %100.00 346,010 10,280 10,280

Quanta Storage

Investment Inc.

EBN Technology

Corp.


electronic

components

10,970 10,970 1,000,000 %2.98 7,763 (58,055) (1,745)

〞 TRI Taiwan Manufacture and sale

of industrial


- 500,000 - %- - (63,978) 7,586

TRI TRH Hong Kong Investment company 92,638 92,638 - %100.00 34,729 (27,037) (27,037)

JVM JVMT Thailand Sale of computer

storage devices and

components of

peripherals

4,775 - - %100.00 4,506 (80) (80)

RTK RTKI SAMOA Investment company 45,377 41,260 1,565,000 %100.00 2,976 (2,231) (2,231)

〜70〜









Name of theinvestor


2020

December 31,

2019



income(losses)

Note

QCTI QSI and its

subsidiaries

Taiwan Manufacture and sale

of optical storage

equipment, computer

storage devices and

peripherals

33,526 33,526 1,212,000 %0.44 30,847 (67,477) (294)

〞 RTK and its

subsidiaries

Taiwan Design, manufacture,

processing, distribute

and sale of satellite

guided navigation

systems and

peripherals,

navigated maps, and

digital maps

8,571 8,571 409,194 %0.81 11,891 22,570 182

〞 QMIT and its

subsidiaries

Taiwan Electronic company

and import and

export business and

wholesale of

electronic products

115,500 115,500 5,775,000 %24.81 111,931 (19,842) (4,923)

QVC Plenty Link

Technology Co.,

Ltd

Cayman Overseas investment

and trade company

91,476 91,476 3,150,000 %17.50 21,298 (11,354) (1,987)

〞 Quantum

Optoelectronics Inc.

Taiwan Design and

manufacture of

optomechanical

systems

17,500 17,500 1,750,000 %20.00 1,210 (9,772) (1,954)

Note 1: The difference to the subsidiary is mainly unrealized gross profit from sales.Note 2: Evaluated to have indicators of impairment in 2008 and recognized impairment loss of $89,985.Note 3: The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

(c) Information on investment in Mainland China:

1. The names of investees in Mainland China, the main business and products, and other

information:


Name of the investee in Mainland China

Mainbusiness

and

Totalamount of

capitalMethod ofinvestment

Accumulatedoutflow of

investment fromTaiwan as of

January 1, Investment flows



September 30,Net income (loss)

of the

Direct/indirect

shareholding(%) by the

Currentinvestment gains

and losses Carrying

Accumulatedremittance ofearnings in

(Note 2) products surplus (Note 1) 2020 Outflow Inflow 2020 investee Company (Note 2) Amount current period

The Company

TFC (2)1) (Note 4) Manufacture and

sale of computers

and peripherals

3,486,252 (2) 1,780,425 - - 1,780,425 191,163 %100.00 191,163 10,131,141 2,055,033

TCC (2)1) Manufacture and

sale of computers

and peripherals

3,720,024 (2) 3,390,276 - - 3,390,276 18,206 %100.00 18,206 14,207,488 3,488,941

TTC (2)1) Sale and after-sales

service of

computers and

peripherals

248,002 (2) 216,929 - - 216,929 36,857 %100.00 36,857 819,045 836

TLC (2)1) After-sales service

of computers

232,412 (2) 229,416 - - 229,416 117,391 %100.00 117,391 1,459,679 11,919

TGC (2)1) Manufacture and

sale of computers

and peripherals

287,588 (2) 284,592 - - 284,592 72,363 %100.00 72,363 909,818 41,631

〜71〜









Mainbusiness

and

Totalamount of








of the

Direct/indirect



and losses Carrying



TWW (2)1) Storage service 275,880 (2) 275,880 - - 275,880 31,293 %100.00 31,293 703,684 -

TFQ (2)1) Processing,

manufacture and

sale of computers

1,393,920 (2) 1,393,920 - - 1,393,920 281,588 %100.00 281,588 3,865,610 -

TWQ (2)3) Storage service 145,200 (2) 145,200 - - 145,200 18,656 %100.00 18,656 273,296 -

TNC (2)1) Manufacture and

sale of computers,

mobile

communication

storage device

peripherals and

accessories

4,936,219 (2) 4,936,219 1,161,600 - 6,097,819 (876,835) %100.00 (876,835) 315,202 -

TCQ (2)1) Manufacture and

sale of computers,

mobile

communication

storage device

peripherals and

accessories

1,452,000 (2) 1,452,000 - - 1,452,000 132,363 %100.00 132,363 1,670,210 -

KSH (2)1) Manufacture and

sale of precision

machinery,

peripherals and

metallic molds

522,720 (2) 229,126 - - 229,126 112,804 %100.00 112,804 991,755 -

YDCQ (2)1) Sale of servers and

switches

29,040 (2) 29,040 - - 29,040 228,846 %100.00 228,846 251,659 -

GTM (2)1) Manufacture and

sale of non-

metallic product

molds

400,752 (2) 475,617 - - 475,617 6,895 %100.00 6,895 258,051 -

ZYES (2)1) Manufacture and

sale of computers

and components of

peripherals

2,410,320 (2) 2,574,977 - - 2,574,977 (12,260) %100.00 (12,260) 159,180 -

ZYEQ (2)1) Manufacture and

sale of computers

and components of

peripherals

3,339,600 (2) 3,339,600 - - 3,339,600 - %100.00 - - -

KCC (2)1) Manufacture and

sale of machine

cases, molds and

tools

726,000 (2) 58,022 - - 58,022 (73,521) %100.00 (73,521) 426,413 -

SJDT (2)3) Manufacture and

sale of computers

and components of

peripherals

209,088 (2) 39,727 - - 39,727 (21,425) %100.00 (21,425) 369,699 -

〜72〜









Mainbusiness

and

Totalamount of








of the

Direct/indirect



and losses Carrying



Dongguan Shuang-Ying

Photoelectric Technology

Co., Ltd.(2)3)

Manufacture and

sale of optical

equipment and

electric

components

435,600 (2) 58,806 - - 58,806 (19,730) %17.50 (3,453) 107,595 -

QSI

QSS (2)1) Manufacture and

sale of computer

storage devices and

components of

peripherals

871,200 (2) 871,200 - - 871,200 32,024 %100.00 32,024 2,682,596 1,924,444

Techman (2)1) Manufacture and

sale of computer

storage devices and

components of

peripherals

522,720 (2) 813,120 - 290,400 522,720 (56,199) %100.00 (56,199) 1,243,125 -

TRS (2)1) After-sales service

and sale of

industrial


and components of

peripherals

87,120 (2) 87,120 - - 87,120 (27,037) %100.00 (27,037) 34,729 -

QVC

Dongguan Shuang-Ying

Photoelectric Technology

Co., Ltd.(2)3)

Manufacture and

sale of optical

equipment and

electric

components

435,600 (2) 58,806 - - 58,806 (19,730) %17.50 (3,453) 107,595 -

Guangsheng (Tianjin)

Technology Co., Ltd.(2)3)

Computer software

development and

related consulting

and technical

services; sale of

computer hardware

and software and

electronic products

63,964 (3) 12,793 - - 12,793 (5,771) %20.00 (1,160) 10,856 -

Trump-link (Beijing)

Technology Co., Ltd.(2)3)

Sale and after-sales

service of server,

switch and storage

devices

160,057 (3) - 34,526 - 34,526 445 %20.00 572 35,425 -

RTK

Royaltek Trading

(Changshu) Co., Ltd.(2)1)

Import and export

business and

wholesale of

electronic products

44,255 (2) 40,129 4,126 - 44,255 (2,230) %100.00 (2,230) 2,964 -

〜73〜








2. Limitation on investment in Mainland China: 　


Company

Accumulated Investmentin Mainland China

as of September 30, 2020

Investment Amounts Authorizedby Investment Commission MOEA

Limitation on Investment inMainland China Authorized byInvestment Commission MOEA

(Note 3)

The Company 24,029,538 34,033,703 -

QSI 1,481,040 1,785,960 -

QVC 106,125 458,386 682,476

RTK 44,255 85,144 882,401

Note 1: Investments in Mainland China are differentiated by the following three methods:(1) Direct investment in Mainland China with remittance through a third region.(2) Indirect investment in Mainland China through an existing investee company in a third region.(3) Other methods

Note 2: Recognition of investment gain or loss during current period is pursuant to the following:(1) If the corporation is in the set-up phase, notes are required.(2) Recognition basis of investment gains or losses is determined by the following three types, and related notes are required.

1) Financial statements of the investee company were audited and certified by an international firm in cooperation with an R.O.C. accountingfirm.

2) Financial statements of the investee company were audited and certified by the external accountant of the parent company.3) Others

Note 3:(1) Maximum limitation of the Company and QSI: In accordance with the Regulations Governing the Approval of Investment or TechnicalCooperation in Mainland China revised on August 29, 2008, the Company obtained the certificate of qualified operating headquarters issued bythe Industrial Development Bureau, Ministry of Economic Affairs, and therefore no limitations on investment in Mainland China.

(2) Maximum limitation of QVC and RTK: the maximum limitation is the higher of $80,000 for small and medium size enterprises or sixty percent ofthese companies’ net asset value or consolidated net asset value.

Note 4: The difference between the issued capital and cumulative investment amount is the difference between the price paid and the cost of the machineryequipment.

Note 5: Viscovery (Cayman) Holding Company Limited, an investee of the Company, holds investment in Mainland China. Therefore, the Company hasincreased USD71,999 investment amount authorized by Investment Commission MOEA.

Note 6: China Renewable Energy Fund, LP (CREF), an investee of Quanta Venture Capital Co., Ltd., holds investment in Mainland China. Therefore, QuantaVenture Capital Co., Ltd. has increased USD12,386,221 investment amount authorized by Investment Commission MOEA.

3. Significant transactions：　

The significant inter-company transactions with the subsidiary in Mainland China, which wereeliminated in the preparation of consolidated financial statements, are disclosed in “Informationon significant transactions”.

(d) Major shareholders:

ShareholdingShareholder’s Name

Shares Percentage

CIANYU INVESTMENT CO., LTD. 572,401,374 %14.81

Barry Lam 415,738,138 %10.76

〜74〜








(14) Segment Information

The Group’s operating segments financial information and reconciliation were as follows:

For the Three Months EndedSeptember 30, 2020

Electronicdepartment

Otherdepartments

Adjustment andelimination Total

Operating revenue:

　Revenue from external customers $ 327,119,863 228,291 - 327,348,154

　Inter-segment revenue 406,556,523 433,240 (406,989,763) -

Total $ 733,676,386 661,531 (406,989,763) 327,348,154

Reportable segment profit (loss) $ 9,129,286 (1,352,775) 249,962 8,026,473

For the Three Months EndedSeptember 30, 2019

Operating revenue:

　Revenue from external customers $ 263,976,985 1,164,929 - 265,141,914

　Inter-segment revenue 346,377,720 735,668 (347,113,388) -

Total $ 610,354,705 1,900,597 (347,113,388) 265,141,914

Reportable segment profit (loss) $ 6,034,242 (915,999) (677,665) 4,440,578

For the Nine Months EndedSeptember 30, 2020

Operating revenue:


　Inter-segment revenue 1,001,107,837 1,706,629 (1,002,814,466) -

Total $ 1,786,902,495 3,740,354 (1,002,814,466) 787,828,383

Reportable segment profit (loss) $ 17,344,488 (1,504,661) 804,803 16,644,630

For the Nine Months EndedSeptember 30, 2019

Operating revenue:


　Inter-segment revenue 970,925,652 2,424,322 (973,349,974) -

Total $ 1,699,707,117 5,855,787 (973,349,974) 732,212,930

Reportable segment profit (loss) $ 13,445,157 (1,157,495) (535,883) 11,751,779

〜75〜

Date post:	25-Mar-2021
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

QUANTA COMPUTER INC. AND SUBSIDIARIES · 2020. 12. 29. · Stock Code:2382 QUANTA COMPUTER INC. AND...

Documents