ALi — Annual Report 2021

Nov 8, 2021

ALI CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2021 AND 2020

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of ALi Corporation

Opinion

We have audited the accompanying consolidated balance sheet of ALi Corporation and its subsidiaries (the “Group”) as at December 31, 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2021, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s 2021 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

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Key audit matters for the Group’s 2021 consolidated financial statements are stated as follows:

Existence of operating revenue from overseas distributors Description

Refer to Note 4(30) for the accounting policy on revenue recognition and Note 6(20) for details of sales revenue.

The Group recognised net operating revenue amounting to NT$2,815,374 thousand for the year ended December 31, 2021. The Group derives revenue mainly from the research, development, design and sales of chipsets for communication, consumer and multimedia products and a range of application specific integrated circuits. Operating revenue thereof is concentrated on the top ten customers, of which some customers are overseas IC distributors and proportion of sales from those types of customers to total sales continues to grow. Given that the impact of pressure from the business growth and competition

in the industry on the Group might increase the risks related to the existence of operating revenue recognition, we considered the existence of operating revenue from the top ten overseas distributors with significant growth a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Assessed and tested the effectiveness of design and implementation of internal controls in relation to existence of sales revenue.

2. Selected samples to perform substantive tests, including verifying sales transactions against customer purchase orders, evidence of sales transactions and receipt vouchers.

3. Obtained and reviewed details of sales revenue, refunds and allowances during a certain period before and after the balance sheet date, and selected samples and verified it against the original documents of sales revenue, refunds and allowances, and assessed whether there are any material or unusual transactions or material refunds after the balance sheet date to ascertain that the recognition of sales revenue meets the requirements for revenue recognition.

Other matter – Prior period financial statements audited by another auditor

The consolidated financial statements of the Group as at and for the year ended December 31, 2020 were audited by other auditors, whose report dated March 2, 2021 expressed an unqualified opinion on those statements.

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Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of ALi Corporation as at and for the years ended December 31, 2021.

Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

Those charged with governance, including audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated financial statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

Hsu, Sheng-Chung For and on Behalf of PricewaterhouseCoopers, Taiwan March 24, 2022

[Hsu,Yung-Chien ]

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ALI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(6) 6(7) 6(2) 6(3) 6(8) 6(9) 6(10) 6(11) 6(12) 6(24)	December 31, 2021 AMOUNT % $ 739,932 19 - - 505,500 13 337,962 9 131,114 3 1,788 - 370,017 10 64,715 2 2,151,028 56 157,302 4 5,000 - 17,422 1 358,796 10 14,292 - 239,857 6 135,657 4 700,665 18 6,297 - 23,055 1 1,658,343 44 $ 3,809,371 100	December 31, 2020	December 31, 2020
		AMOUNT $ 739,932 - 505,500 337,962 131,114 1,788 370,017 64,715 2,151,028 157,302 5,000 17,422 358,796 14,292 239,857 135,657 700,665 6,297 23,055 1,658,343 $ 3,809,371	AMOUNT $ 834,854 27,601 567,100 194,234 110,238 1,389 334,546 60,876 2,130,838 83,789 5,000 17,504 346,737 20,338 241,579 174,697 708,114 5,736 69,941 1,673,435 $ 3,804,273	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortised cost－ current 1170 Accounts receivable, net 1200 Other receivables 1220 Current tax assets 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1535 Financial assets at amortised cost - non-current 1550 Investments accounted for using the equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred tax assets 1920 Guarantee deposits paid 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets				22 1 15 5 3 - 9 1
				56
				2 - - 9 1 6 5 19 - 2
				44
				100

(Continued)

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ALI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2021 December 31, 2020 Notes AMOUNT % AMOUNT % 6(20) $ 6,671 - $ 6,292 - 347,171 9 247,029 7 6(13) 311,340 8 387,380 10 5,784 - 3,189 - 1,739 - 1,946 - 10,685 1 11,351 - 6(20) 20,760 1 33,402 1 704,150 19 690,589 18 6(24) 3,381 - 2,429 - 4,276 - 9,625 1 2,596 - 2,551 - 10,253 - 14,605 1 714,403 19 705,194 19 6(16) 1,934,499 51 1,945,399 51 2,100 - - - 6(17) 1,194,813 31 1,182,030 31 6(18) 649,857 17 649,857 17 ( 648,631) ( 17) ( 555,835) ( 15 ) 6(19) ( 4,695) - ( 19,899) - 6(16) ( 33,845) ( 1) ( 102,544) ( 3 ) 3,094,098 81 3,099,008 81 870 - 71 - 3,094,968 81 3,099,079 81 9 11 $ 3,809,371 100 $ 3,804,273 100

Current liabilities 2130 Contract liabilities - current 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2250 Provisions - current 2280 Lease liabilities - current 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2580 Lease liabilities - non-current 2645 Guarantee deposits received 25XX Total non-current liabilities 2XXX Total liabilities Equity Equity attributable to owners of parent Share capital 3110 Ordinary share 3140 Advance receipts for ordinary share 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Accumulated deficit 3400 Other equity interest 3500 Treasury shares 31XX Equity attributable to owners of parent 36XX Non-controlling interests 3XXX Total equity Commitments and contingent liabilities Significant subsequent events 3X2X Total liabilities and equity

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

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ALI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except for loss per share)

Items

Year ended December 31 2021 2020 Notes AMOUNT % AMOUNT % 6(20) $ 2,815,374 100 $ 2,071,615 100 6(7)(22) ( 1,748,026) ( 62) ( 1,413,905) ( 68) 1,067,348 38 657,710 32 6(22) ( 98,447) ( 3) ( 94,086) ( 5) ( 217,644) ( 8) ( 217,066) ( 10) ( 844,569) ( 30) ( 714,317) ( 35) 12(2) 222 - 12,407 1 ( 1,160,438) ( 41) ( 1,013,062) ( 49) ( 93,090) ( 3) ( 355,352) ( 17) 6,678 - 10,089 1 6(11) 24,606 1 39,531 2 6(21) ( 16,669) ( 1) 10,082 - ( 851) - ( 602) - 6(8) 50 - 49 - 13,814 - 59,149 3 ( 79,276) ( 3) ( 296,203) ( 14) 6(24) ( 10,374) - 55,246 2 ($ 89,650) ( 3) ($ 240,957) ( 12) $ 2,583 - $ 12,640 1 6(24) ( 517) - ( 2,531) - 2,066 - 10,109 1 ($ 87,584) ( 3) ($ 230,848) ( 11) ($ 90,421) ( 3) ($ 238,851) ( 12) 771 - ( 2,106) - ($ 89,650) ( 3) ($ 240,957) ( 12) ($ 88,356) ( 3) ($ 228,730) ( 11) 772 - ( 2,118) - ($ 87,584) ( 3) ($ 230,848) ( 11) 6(25) ($ 0.47) ($ 1.26) ($ 0.47) ($ 1.26)

4000 Operating revenue 5000 Operating costs 5900 Gross loss Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment gain determined in accordance with IFRS 9 6000 Total operating expenses 6900 Net operating loss Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Loss before tax 7950 Income tax (expense) benefit 8200 Loss for the year Other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive income that will be reclassified to profit or loss 8500 Total comprehensive income for the year (Loss) profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive (loss) income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Basic loss per share 9750 Basic loss per share Diluted loss per share 9850 Diluted loss per share

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

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ALI CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

2020 Balance at January 1, 2020 Loss for the year Other comprehensive income (loss) Total comprehensive (loss) income Purchase of treasury shares Issuance of employee restricted stocks Share-based payments Balance at December 31, 2020 2021 Balance at January 1, 2021 (Loss) profit for the year Other comprehensive income Total comprehensive income Treasury shares transferred to employees Share-based payments Retirement of employee restricted stocks Changes in ownership interests in subsidiaries Exercise of employee stock options Balance at December 31, 2021	Notes							Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent				Non-controlling interests		Total equity
			Capital			Capital surplus		Retained	Earnings	Other Equity Interest			Treasury shares		Total
			Ordinary share		Advance receipts for share capital			Legal reserve	Accumulated deficit	Financial statements translation differences of foreign operations		Unearned compensation
	6(16) 6(17) 6(15)(17) 6(16)(17) 6(15)(17) 6(16)(17) 6(17) 6(16)(17)	$ 1,925,399 - - - - 20,000 - $ 1,945,399 $ 1,945,399 - - - - - ( 10,900 ) - - $ 1,934,499			$ - - - - - - - $ - $ - - - - - - - - 2,100 $ 2,100	$ 1,160,172 - - - - 213 21,645 $ 1,182,030 $ 1,182,030 - - - 3,811 7,815 10,900 ( 11,386 ) 1,643 $ 1,194,813		$ 649,857 - - - - - - $ 649,857 $ 649,857 - - - - - - - - $ 649,857	($ 316,984 ) ( 238,851 ) - ( 238,851 ) - - - ($ 555,835 ) ($ 555,835 ) ( 90,421 ) - ( 90,421 ) - - - ( 2,375 ) - ($ 648,631 )	($ 13,432 ) - 10,121 10,121 - - - ($ 3,311 ) ($ 3,311 ) - 2,065 2,065 - - - - - ($ 1,246 )	$ - - - - - ( 20,213 ) 3,625 ($ 16,588 ) ($ 16,588 ) - - - - 13,139 - - - ($ 3,449 )		($ 72,466 ) - - - ( 30,078 ) - - ($ 102,544 ) ($ 102,544 ) - - - 68,699 - - - - ($ 33,845 )	$ 3,332,546 ( 238,851 ) 10,121 ( 228,730 ) ( 30,078 ) - 25,270 $ 3,099,008 $ 3,099,008 ( 90,421 ) 2,065 ( 88,356 ) 72,510 20,954 - ( 13,761 ) 3,743 $ 3,094,098		$ 2,189 ( 2,106 ) ( 12 ) ( 2,118 ) - - - $ 71 $ 71 771 1 772 - - - 27 - $ 870	$ 3,334,735 ( 240,957 ) 10,109 ( 230,848 ) ( 30,078 ) - 25,270 $ 3,099,079 $ 3,099,079 ( 89,650 ) 2,066 ( 87,584 ) 72,510 20,954 - ( 13,734 ) 3,743 $ 3,094,968

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

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ALI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments Adjustments to reconcile profit (loss) Depreciation expense Amortisation expense Expected credit gain Unrealised loss (gain) on financial assets or liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share-based payments Share of profit of associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plant and equipment Loss on disposal of subsidiaries Unrealized foreign exchange gain Changes in operating assets and liabilities Changes in operating assets Financial assets and liabilities mandatorily measured at fair value through profit or loss, mandatorily measured at fair value Accounts receivable Other receivables Inventories Prepayments Changes in operating liabilities Contract liabilities Accounts payable Other payables Provisions for liabilities Other current liabilities Cash outflow generated from operations Interest received Dividends received Interest paid Income taxes refund (paid) Net cash flows used in operating activities

Year ended December 31 Notes 2021 2020 ($ 79,276 ) ($ 296,203 ) 6(22) 36,946 34,378 6(22) 102,659 96,766 12(2) ( 222 ) ( 12,407 ) 6(21) 3,537 ( 13,711 ) 851 602 ( 6,678 ) ( 10,089 ) ( 115 ) ( 90 ) 6(15) 20,954 25,270 6(8) ( 50 ) ( 49 ) 9 ( 407 ) 6(21) 9,340 - ( 2,224 ) ( 1,785 ) ( 76 ) - ( 143,506 ) 33,323 ( 20,953 ) ( 14,332 ) ( 35,490 ) ( 130,309 ) 42,909 2,116 377 ( 33,025 ) 100,191 50,181 ( 55,628 ) ( 33,365 ) ( 207 ) 760 ( 12,640 ) 11,537 ( 39,292 ) ( 290,839 ) 6,678 10,089 115 90 ( 851 ) ( 602 ) 227 ( 2,056 ) ( 33,123 ) ( 283,318 )

(Continued)

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ALI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortised cost Proceeds from disposal of financial assets at amortised cost Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Proceeds from capital reduction of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of intangible assets Acquisition of intangible assets (Increase) decrease in refundable deposits Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in guarantee deposits received Payments of lease liabilities Exercise of employee share options Payments to acquire treasury shares Treasury shares transferred to employees Acquisition of ownership interests in subsidiaries Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2021 2020 ($ 39,600 ) ($ 153,500 ) 101,200 97,840 ( 595,941 ) ( 1,560,305 ) 531,550 1,548,872 6(2) 14,591 - 6(27) ( 33,088 ) ( 20,557 ) - 433 6(27) ( 82,066 ) ( 103,448 ) ( 589 ) 2,549 ( 103,943 ) ( 188,116 ) 45 253 ( 15,055 ) ( 12,002 ) 6(16) 3,743 - 6(16) - ( 30,078 ) 6(16)(17) 72,510 - 6(26) ( 13,734 ) - 47,509 ( 41,827 ) ( 5,365 ) 12,386 ( 94,922 ) ( 500,875 ) 834,854 1,335,729 $ 739,932 $ 834,854

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

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ALI CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

Ali Corporation (the “Company”) was incorporated on June 10, 1993 as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the research, development, design and sale of chipsets for consumer electronic products and the provision of design and intellectual property rights services for the aforementioned integrated circuits.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND

PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 24, 2022.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by FSC effective from 2021 are as follows:

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 4, ‘Extension of the temporary exemption January 1, 2021 from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘ January 1, 2021 Interest Rate Benchmark Reform— Phase 2’ Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond April 1, 2021 (Note) 30 June 2021’ Note: Earlier application from January 1, 2021 is allowed by the FSC.

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

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	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment: proceeds	January 1, 2022
before intended use’
Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a	January 1, 2022
contract’
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards, Interpretations and Amendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, 'Insurance contracts' Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 – comparative information' Amendments to IAS 1, ‘Classification of liabilities as current or non- current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’	To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

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(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary

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should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities	December 31,2021 December 31,2020 100.00 100.00 - 100.00 99.00 99.00 100.00 - 100.00 - 100.00 100.00 1.00 1.00 100.00 100.00 54.50 54.50 Ownership(%)	December 31,2021 December 31,2020 100.00 100.00 - 100.00 99.00 99.00 100.00 - 100.00 - 100.00 100.00 1.00 1.00 100.00 100.00 54.50 54.50 Ownership(%)	Description
ALi Corporation ALi Corporation ALi Corporation ALi Corporation ALi Corporation ALi (BVI) Microelectronics Corporation ALi (BVI) Microelectronics Corporation ALi (China) Corporation ALi (China) Corporation	ALi (BVI) Microelectronics Corporation ALi Europe Sàrl ALitech India LLP ALi Innovations Corporation ALi (Chengdu) Corporation ALi (China) Corporation ALitech India LLP ALi (Zhuhai) Corporation Zhuhai Feiyang Management Consulting Partnership (Limited Partnership)	Investment Company Research and development and customer technical services Research and development and customer technical services Investment Company Research and development, sales and customer technical services Research and development and customer technical services Research and development and customer technical services Research and development and customer technical services Investment Company	100.00 - 99.00 100.00 100.00 100.00 1.00 100.00 54.50	100.00 100.00 99.00 - - 100.00 1.00 100.00 54.50	(a) (c) (d)

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Ownership(%)
Name of Main business December December
Name of investor subsidiary activities 31, 2021 31, 2020 Description
----- End of picture text -----

ALi (China)	Xsail Technology	Research and	80.00	74.95	(b)
Corporation	Co., Ltd.	development, sales
		and customer
		technical services
Zhuhai Feiyang	Xsail Technology	Research and	20.00	20.00
Management	Co., Ltd.	development, sales
Consulting		and customer
Partnership		technical services
(Limited
Partnership)

  - (a) The Board of Directors during its meeting on July 19, 2019 resolved to liquidate ALi Europe Sàrl, and the liquidation was completed in 2021. Please refer to Note 6(21) for details.

  - (b) In the third quarter of 2021, the Group acquired an additional 5.05% of issued shares of Zhuhai Xuanyang Technology Co., Ltd. Please refer to Note 6(26) for details.

  - (c) ALi Innovations Corporation was established in the fourth quarter of 2021 and was included in the consolidated financial statements since the date of establishment.

  - (d) ALi (Chengdu) Corporation was established in the fourth quarter of 2021 and was included in the consolidated financial statements since the date of establishment.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

• (4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

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• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  • iii. All resulting exchange differences are recognised in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is an associate or joint arrangement, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group retains partial interest in the former foreign associate or joint arrangement after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangement, such transactions should be accounted for as disposal of all interest in these foreign operations.

• (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

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• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realised within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(7) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(8) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

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• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

• D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(9) Accounts receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• C. The Group’s operating pattern of accounts receivable that are expected to be factored is for the purpose of selling, and the accounts receivable are subsequently measured at fair value, with any changes in fair value recognised in profit or loss.

(10) Impairment of financial assets

For financial assets at amortised cost, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Group derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.

－ (12) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

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(13) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

- (14) Investment accounted for using equity method joint ventures

The Group accounts for its interest in a joint venture using equity method. Unrealised profits and losses arising from the transactions between the Group and its joint venture are eliminated to the extent of the Group’s interest in the joint venture. However, when the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, all such losses shall be recognised immediately. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture together with any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.

(15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

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Buildings and structures	3 ~ 50 years
Research and development equipment	2 ~ 15 years
Office equipment	2 ~ 10 years
Leasehold improvements	2 ~ 6 years
Other equipment	3 ~ 15 years

(16) Leasing arrangements (lessee) － right-of-use assets / lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable. The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date.

• The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset and remeasure the lease liability to reflect the partial or full termination of the lease, and recognise the difference in profit or loss.

(17) Investment property

An investment property is stated initially at cost and measured subsequently using the cost model. Investment property is depreciated on a straight-line basis over its estimated useful life of 50 years.

(18) Intangible assets

Computer software and special technology acquired are stated at cost and amortised on a straightline basis over its estimated economic useful life of 2 to 4 years.

(19) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which

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the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(20) Borrowings

Borrowings comprise short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(21) Accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(22) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

(23) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(24) Non-hedging and embedded derivatives

Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognised in profit or loss.

(25) Provisions

Provisions (including warranties) are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that

~23~

reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

(26) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis.

• C. Employees’ compensation and directors’ and supervisors’ remuneration

• Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

- (27) Employee share based payment

• A. For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

• C. Restricted stocks:

• (a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period.

• (b) For restricted stocks where those stocks do not restrict distribution of dividends to employees and employees are not required to return the dividends received if they resign during the vesting period, the Group recognises the fair value of the dividends received by the employees who are expected to resign during the vesting period as compensation cost at the date of dividends declared.

• (c) For restricted stocks where employees do not need to pay to acquire those stocks, if employees resign during the vesting period, the Company will redeem at no consideration and retire

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those stocks, and the Company recognises such stocks redeemed as a deduction to share capital and an adjustment to capital surplus at the grant date in accordance with the terms and conditions of restricted stocks.

(28) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

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(29) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

• (30) Revenue recognition

• A. Sales of goods

  • (a) The Group manufactures and sells chipsets for consumer electronic products. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

  • (b) Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts or sales discounts and allowances. Accumulated experience is used to estimate and provide for the volume discounts or sales discounts and allowances, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected volume discounts or sales discounts payable to customers in relation to sales made until the end of the reporting period.

  • (c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Sales of services

The Group provides design and intellectual property rights services for integrated circuits. Revenue from providing services is recognised in the accounting period in which the services are rendered.

The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.

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(31) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION

UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

None.

(2) Critical accounting estimates and assumptions

• A. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

• B. Realisability of deferred tax assets

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred tax assets.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
		December 31, 2021		December 31, 2020
Cash on hand	$	4	$	6
Checking accounts and demand deposits		437,270		432,536
Cash equivalents
Time deposits maturing within three months		302,658		402,312
	$	739,932	$	834,854

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The Group reclassified the time deposits maturing over three months to ‘financial assets at amortised cost’. Refer to Note 6(3) for details.

(2) Financial assets at fair value through profit or loss

Assets Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks Beneficiary certificates Non-current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates	December31,2021 - $ - - $ 157,302 $ 157,302 $	December 31, 2020
		7,204 $ 20,397
		27,601 $
		83,789 $
		83,789 $

• A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

December31,2021 Equity instruments 9,445 $ Financial products 331 Beneficiary certificates 13,409) ( Derivative instruments 76) ( Hybrid instruments 172 ( 3,537) ($	December31,2020 3,742 $ 67 10,334 - 432) 13,711 $

The aforementioned derivative instruments are forward foreign exchange contracts which were entered into by the Group to hedge exchange rate risk of import or export proceeds and foreign currency positions. However, these forward foreign exchange contracts are not accounted for under

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hedge accounting. As of December 31, 2021, the above forward foreign exchange transactions have been closed and settled.

• B. The Group received proceeds from capital reduction of the aforementioned private equity fund investment $14,591.

• C. The Group has no financial assets at fair value through profit or loss pledged to others.

• D. Information relating to credit risk of financial assets and liabilities at fair value through profit or loss is provided in Note 12(2).

(3) Financial assets at amortised cost

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December 31, 2021 December 31, 2020
Current items:
Time deposits maturing over three months $ 505,500 $ 567,100
Non-current items:
Time deposits maturing over three months $ 5,000 $ 5,000
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• A. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

• B. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

(4) Accounts receivable

Accounts receivable
			December 31, 2021			December31,2020
Accounts receivable	$		337,996	$		204,934
Less: Allowance for uncollectible accounts	(		34)	(		10,700)
	$		337,962	$		194,234
A. The ageing analysis of accounts receivable	that		were past due but not impaired is as follows:
			December31,2021			December31,2020
Not past due		$	280,720		$	193,386
Up to 30 days			57,276			868
31-60 days			-			-
61-180 days			-			-
Over 181 days			-			10,680
		$	337,996		$	204,934

• A. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

The above ageing analysis was based on past due date.

• B. As of January 1, 2020, the balance of accounts receivable amounted to $238,258.

• C. Information relating to credit risk of accounts receivable is provided in Note 12(2).

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(5) Transfer of financial assets

Transferred financial assets that are derecognised in their entirety

• A. The Group entered into a factoring agreement with financial institutions to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable, but is liable for the losses incurred on any business dispute. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognised the transferred accounts receivable.

• B. The information on accounts receivable transferred but not yet due as of December 31, 2021 and 2020 is as follows:

December 31, 2021 Accounts receivable transferred (amount derecognised) 53,286 $ Amount advanced 39,391 $ Amount retained (shown as ‘other receivables’) 13,895 $	December31,2020 74,978 $ 51,950 $ 23,028 $

• C. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• D. As of December 31, 2021 and 2020, the interest rates of amount advanced ranged between 0.85% ~ 0.89% and 0.86% ~ 1.05%, respectively.

• E. As of December 31, 2021 and 2020, the total limits of the accounts receivable factoring were USD 10 million and USD 22 million, respectively.

(6) Other receivables

Other receivables
Tax refund receivable Amounts retained for accounts receivable factoring Others	December31,2021 110,172 $ 13,895 7,047 131,114 $	December31,2020
		80,665 $ 23,028 6,545 110,238 $

The counterparties of the Group’s other receivables are financial institutions and government organisations with high credit quality, so the Group expects that the probability of counterparty default is remote. Thus, there was no significant credit risk.

(7) Inventories

Inventories
Raw materials Work in progress Finished goods Total (net amount)	December31,2021 183,274 $ 119,619 67,124 370,017 $	December31,2020
		72,185 $ 197,583 64,778 334,546 $

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The cost of inventories recognised as expense for the year:

The cost of inventories recognised as	expense for the	year:	year:
		Year ended December		31
		2021		2020
Cost of goods sold	$	1,819,968	$	1,430,813
Gain on reversal of decline in
market value (Note)	(	71,942)	(	16,908)
	$	1,748,026	$	1,413,905

Note: The Group reversed from a previous inventory write-down because part of the inventories whose net realisable value was lower than cost was sold.

(8) Investments accounted for using the equity method

Joint ventures Individually immaterial joint ventures	December31,2021 17,422 $	December31,2020 17,504 $

Joint ventures

The operating results of the Group’s share in all individually immaterial joint ventures and associates are summarised below:

are summarised below:
Profit for the year from continuing operations Total comprehensive income	2021 2020 50 $ 49 $ 50 $ 49 $ YearendedDecember31
		49 $ 49 $

(9) Property, plant and equipment

At January 1 Cost Accumulated depreciation and impairment 2021 Opening net book amount as at January 1 Additions Disposals Depreciation charge Net exchange differences Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation and impairment				2021
	Buildings Research and and development Office Leasehold Other Land structures equipment equipment improvements equipment Total 241,844 $ 140,261 $ 180,657 $ 41,587 $ 8,889 $ 20,295 $ 633,533 $ - 63,200) ( 163,557) ( 34,657) ( 5,088) ( 20,294) ( 286,796) ( 241,844 $ 77,061 $ 17,100 $ 6,930 $ 3,801 $ 1 $ 346,737 $ 241,844 $ 77,061 $ 17,100 $ 6,930 $ 3,801 $ 1 $ 346,737 $ - 927 21,535 3,420 6,397 12 32,291 - - 9) ( - - - 9) ( - 3,758) ( 10,490) ( 3,027) ( 2,858) ( 2) ( 20,135) ( - - 67) ( 20) ( - 1) ( 88) ( 241,844 $ 74,230 $ 28,069 $ 7,303 $ 7,340 $ 10 $ 358,796 $ 241,844 $ 141,188 $ 199,962 $ 44,338 $ 15,242 $ 20,116 $ 662,690 $ - 66,958) ( 171,893) ( 37,035) ( 7,902) ( 20,106) ( 303,894) ( 241,844 $ 74,230 $ 28,069 $ 7,303 $ 7,340 $ 10 $ 358,796 $						Total
							633,533 $ 286,796) (
							346,737 $
							358,796 $
							662,690 $ 303,894) (
							358,796 $

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At January 1 Cost Accumulated depreciation and impairment 2020 Opening net book amount as at January 1 Additions Disposals Depreciation charge Net exchange differences Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation and impairment	Buildings Research and and development Office Leasehold Other Land structures equipment equipment improvements equipment Total 241,844 $ 139,026 $ 177,656 $ 61,757 $ 10,033 $ 20,149 $ 650,465 $ - 59,039) ( 158,144) ( 58,196) ( 9,051) ( 20,138) ( 304,568) ( 241,844 $ 79,987 $ 19,512 $ 3,561 $ 982 $ 11 $ 345,897 $ 241,844 $ 79,987 $ 19,512 $ 3,561 $ 982 $ 11 $ 345,897 $ - 1,235 9,972 5,898 3,854 - 20,959 - - 4) ( 4) ( 16) ( 2) ( 26) ( - 4,161) ( 12,513) ( 2,538) ( 1,015) ( 7) ( 20,234) ( - - 133 13 4) ( 1) ( 141 241,844 $ 77,061 $ 17,100 $ 6,930 $ 3,801 $ 1 $ 346,737 $ 241,844 $ 140,261 $ 180,657 $ 41,587 $ 8,889 $ 20,295 $ 633,533 $ - 63,200) ( 163,557) ( 34,657) ( 5,088) ( 20,294) ( 286,796) ( 241,844 $ 77,061 $ 17,100 $ 6,930 $ 3,801 $ 1 $ 346,737 $ 2020	Total

－ (10) Leasing arrangements lessee

• A. The Group leases various assets including buildings. Rental contracts are typically made for periods of 1 to 3 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Buildings and structures Buildings and structures	December31,2021 December31,2020 Carrying amount Carrying amount 14,292 $ 20,338 $ YearendedDecember31	December31,2020
		Carrying amount
	2021 Depreciationcharge 15,089 $	2020
		Depreciationcharge
		12,422 $

• C. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $9,164 and $22,025, respectively.

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• D. Information on profit or loss in relation to lease contracts is as follows:

==> picture [461 x 83] intentionally omitted <==

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

Year ended December 31
2021 2020
Items affecting profit or loss
Interest expense on lease liabilities $ 815 $ 547
Expense on short-term lease contracts $ 1,017 $ 1,444
----- End of picture text -----

• E. For the years ended December 31, 2021 and 2020, the Group’s total cash outflow for leases were $16,887 and $13,992, respectively.

(11) Investment property

At January 1 Cost Accumulated depreciation ( Opening net book amount as at January 1 Depreciation charge ( Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation (	2021 Land and structures 275,157 $ 33,578) ( 241,579 $ 241,579 $ 1,722) ( 239,857 $ 275,157 $ 35,300) ( 239,857 $	2020 Land and structures 275,157 $ 31,856) 243,301 $ 243,301 $ 1,722) 241,579 $ 275,157 $ 33,578) 241,579 $

• A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property (shown as ‘other income’) Direct operating expenses arising from the investment property that generated rental income during the year (shown as ‘other gains and losses’) (	2021 2020 10,714 $ 14,429 $ 1,722) $ 1,722) ($ YearendedDecember31
	2021 10,714 $ 1,722) $

The lease contract on the aforementioned investment property was terminated early following the notification by the lessee and mutual consent by both parties in May 2021. Thus, the lessee made a penalty payment of $5,200 to the Company as agreed in the contract, shown as ‘other income’.

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• B. The fair value of the investment property held by the Group as at December 31, 2021 and 2020 was $526,654 and $545,942, respectively, which was valued using the comparison approach based on market transaction prices and is categorised within Level 3 in the fair value hierarchy.

• C. The maturity analysis of the lease payments under the operating leases is as follows:

1st year 2nd year 3rd year 4th year 5th year	December 31, 2021 14,970 $ 7,732 7,073 7,073 6,484 43,332 $	December 31, 2020
		14,526 $ 14,545 7,515 6,286 - 42,872 $

(12) Intangible assets

Intangible assets
Acquired special Computer software technology Total At January 1 Cost 549,073 $ 660,844 $ 1,209,917 $ Accumulated amortisation 469,141) ( 566,079) ( 1,035,220) ( 79,932 $ 94,765 $ 174,697 $ 2021 Opening net book amount as at January 1 79,932 $ 94,765 $ 174,697 $ Additions 42,861 20,622 63,483 Amortisation charge (mainly research and development expenses) 59,901) ( 42,758) ( 102,659) ( Net exchange differences - 136 136 Closing net book amount as at December 31 62,892 $ 72,765 $ 135,657 $ At December 31 Cost 591,830 $ 473,481 $ 1,065,311 $ Accumulated amortisation 528,938) ( 400,716) ( 929,654) ( 62,892 $ 72,765 $ 135,657 $ 2021		2021
			Total

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(13)

Other payables Acquired special Computer software technology Total At January 1 Cost 504,140 $ 551,945 $ 1,056,085 $ Accumulated amortisation 411,137) ( 521,157) ( 932,294) ( 93,003 $ 30,788 $ 123,791 $ 2020 Opening net book amount as at January 1 93,003 $ 30,788 $ 123,791 $ Additions 44,826 102,809 147,635 Amortisation charge (mainly research and development expenses) 57,898) ( 38,868) ( 96,766) ( Net exchange differences 1 36 37 Closing net book amount as at December 31 79,932 $ 94,765 $ 174,697 $ At December 31 Cost 549,073 $ 660,844 $ 1,209,917 $ Accumulated amortisation 469,141) ( 566,079) ( 1,035,220) ( 79,932 $ 94,765 $ 174,697 $ 2020 December31,2021 December31,2020 Wages and salaries and bonuses payable 163,799 $ 204,251 $ Intangible assets payable 64,841 83,424 Others 82,700 99,705 311,340 $ 387,380 $

(14) Pensions

A. Defined contribution plans

• i. Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. The Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

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• ii. The Company’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations.

• iii. The Company's foreign subsidiaries contribute pension in accordance with the pension regulations in their territory respectively.

• B. The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2021 and 2020, were $38,715 and $17,108, respectively.

• (15) Share-based payment

• A. Compensatory employee stock options

December 31, 2021 and 2020, were $38,715 and $17,108, respectively. re-based payment Compensatory employee stock options	December 31, 2021 and 2020, were $38,715 and $17,108, respectively. re-based payment Compensatory employee stock options	December 31, 2021 and 2020, were $38,715 and $17,108, respectively. re-based payment Compensatory employee stock options	December 31, 2021 and 2020, were $38,715 and $17,108, respectively. re-based payment Compensatory employee stock options
(a) Details of the Company’s payment arrangements for employee stock options as				of December
31, 2021		are	as	follows:
		Unit granted	Contract period	Vesting
Type ofarrangement	Grant date	(inthousands)	(years)	conditions
Employee stock options	2019.12.02	5,000	4.5	Note 1
〃	2020.03.19	500	4.5	Note 1
〃	2020.08.20	4,255	5	Note 2
〃	2020.10.20	330	5	Note 2

• Note 1: Employees can exercise their stock options in tranches at a certain percentage each trance, subject to their continued service through the respective vesting dates (two, three and four years).

• Note 2: Employees can exercise their stock options in tranches at a certain percentage each trance, subject to their continued service through the respective vesting dates (two and three years).

• (b) The fair value of employee stock options granted on grant date is measured using the binomial and trinomial tree models. Relevant information is as follows:

Grant date	Stock price (in dollars)	Exercise price (in dollars)	Expected price volatility	Expected option life (inyears)	Expected dividend rate Risk-free interest rate 0% 0.5777% 0% 0.6211% 0% 0.3190% 0% 0.2304%	Fair value per unit (in dollars)
2019.12.02 2020.03.19 2020.08.20 2020.10.20	17.90 11.55 23.85 24.75	17.90 11.55 23.85 24.75	42.16% 42.26% 46.01% 44.78%	4.5 4.5 5 5		6.33 4.1 8.06~8.79 9.58

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• (c) Details of compensatory employee stock options for the years ended December 31, 2021 and 2020 are as follows:

Options Options outstanding at January 1 Options granted Options forfeited Options exercised Options outstanding at December 31 Options exercisable at December 31	Number of options (in thousands) average exercise price (indollars) 10,085 20.32 $ - - 3,590) ( 20.42 210) ( 17.82 6,285 20.35 720 17.90 2021		2020	2020
	Number of options (in thousands) 10,085 - 3,590) ( 210) ( 6,285 720		Number of options (in thousands) 5,000 5,085 - - 10,085 -	average exercise price (indollars)
				17.90 $ 22.70 - - 20.32

(d) The expenses arising from the Company’s compensatory employee stock option transactions (equity-settled) for the years ended December 31, 2021 and 2020 amounted to $16,182 and $11,982, respectively.

B. Employee restricted stocks

• (a) Details of the Company’s payment arrangements for employee restricted stocks as of December 31, 2021 are as follows:

December 31, 2021 are as follows:
Type ofarrangement Grant date Restricted stocks to employees (Note 2) 2020.08.20 〃 2020.10.20	Unit granted (inthousands)	Contract period (years)	Vesting conditions
	1,900 100	3.0 3.0	Note 1 Note 1

• Note 1: For employees who remain with the Company since the grant date of restricted stocks, whose operating performance achieve the target performance and overall contribution set out by the Company, and who did not violate the labour contract and relevant contract terms during the vesting period, restricted stocks vest in tranchses at the a certain percentage each tranch during the contract period.

• Note 2: The issued employee restricted stocks before meeting the vesting conditions are subject to certain restrictions as follows:

• i. Employee restricted stocks cannot be sold, transferred, donated, pledged, requested the Company to buy back, or disposed in any other ways, except for inheritance.

• ii. The rights to attend, propose, speak or vote at the shareholders’ meeting are implemented in accordance with the trust custody contract.

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• iii. Other rights are the same as the issued ordinary shares of the Company. However, the return of capital from capital reduction of the Company needs to be kept in the trust before meeting the vesting conditions.

• iv. Where employees fail to meet the vesting conditions, the Company will redeem at no consideration and retire those stocks.

• (b) The fair value of employee restricted stocks granted on grant date is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

Grant date	Stock price (in dollars) Exercise price (in dollars) 24.75 - 23.85 -	Expected price volatility Expected option life (in years) 0.58~ 2.58 0.42~ 2.42 19.73% 60.09%	Expected dividend rate	Risk-free interest rate Fair value per unit (in dollars) 0.1805%~ 0.2397% 0.1479%~ 0.1873% 23.85 24.75
2020.10.20 2020.08.20			0% 0%

• (c) Details of employee restricted stocks for the years ended December 31, 2021 and 2020 are as follows:

2021 Number of shares Employee restricted stocks (inthousands) Stocks granted but not yet vested at January 1 2,000 Stocks granted - Stocks retired 1,090) ( Stocks granted but not yet vested at December 31 910	2020
	Number of shares (in thousands)
	- 2,000 -
	2,000

• (d) The expenses arising from the Company’s employee restricted stocks (equity-settled) for the years ended December 31, 2021 and 2020 amounted to $156 and $3,625, respectively.

• C. Treasury stock transferred to employees

• (a) Details of the Company’s payment arrangements for treasury shares transferred to employees as of December 31, 2021 are as follows:

Type ofarrangement	Grant date	Unit granted (inthousands)
Treasury stock transferred to employees 〃 〃 〃 〃 〃 〃	2019.04 2020.12 2021.01 2021.04 2021.07 2021.08 2021.12	1,209 1,341 2 297 423 22 223

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• (b) The fair value of treasury shares transferred to employees granted on grant date is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

==> picture [442 x 42] intentionally omitted <==

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

Exercise Expected Expected Expected Fair value
Stock price price (in price option life dividend Risk-free per unit
Grant date (in dollars) dollars) volatility (in years) rate interest rate (in dollars)
----- End of picture text -----

Grant date	Stock price (in dollars)	Exercise price (in dollars)	Expected price volatility	Expected option life (in years)	Expected dividend rate	Risk-free interest rate	Fair value per unit (in dollars)
2019.04	13.35	23.56	36.81%	1.09	0%	0.5208%	1.416
2020.12	23.10~ 30.35	14.89~ 26.76	44.40%	0.15	0%	0.0466%	4.24~8.22
2021.01	30.35	26.76	44.40%	0.15	0%	0.0466%	4.24
2021.04	23.49	14.94	47.19%	0.02	0%	0.0802%	8.55
2021.07	28.6	26.85	45.50%	0.09	0%	0.0463%	2.53
2021.08	29.7	23.65	46.16%	0.05	0%	0.0488%	6.07
2021.12	32.3	29.17	52.81%	0.09	0%	0.2067%	3.88

• (c) The expenses arising from the Company’s treasury shares transferred to employees (equitysettled) for the years ended December 31, 2021 and 2020 amounted to $4,616 and $9,663, respectively.

(16) Share capital

• A. As of December 31, 2021, the Company’s authorised capital and paid-in capital were $3,600,000 and $1,934,499, respectively, with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

Movements in the number of the Company’s ordinary shares outstanding are as follows:

2021 Number of shares (inthousands) At January 1 189,623 Treasury shares transferred to employees 3,294 Retirement of employee restricted stocks 1,090) ( Issuance of employee restricted stocks - Purchase of treasury shares - ( At December 31 191,827	2020 Number of shares (inthousands) 189,623 - - 2,000 2,000) 189,623

• B. The shareholders during their meeting on June 12, 2020 adopted a resolution to issue employee restricted stocks (see Note 6(15)) with the effective dates set on August 20, 2020 and October 20, 2020. The subscription price is $0 (in dollars) per share. The employee restricted stocks issued are subject to certain transfer restrictions before their vesting conditions are met. After meeting their vesting conditions, the rights and obligations of these shares issued are the same as other issued ordinary shares.

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• C. For the year ended December 31, 2021, the total number of shares converted from employee stock options was 210 thousand shares, and the payment for the shares amounted to $3,743. As of December 31, 2021, there were 210 thousand shares unregistered, shown as ‘advance receipts for share capital’ of $2,100. The Board of Directors during its meeting on January 26, 2022 adopted a resolution to set the effective date of capital increase for the conversion on February 7, 2022.

• D. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

shares are as follows:
Number of shares Carrying (in thousands) amount At January 1 4,917 102,544 $ Treasury shares transferred to employees 3,294) ( 68,699) ( Purchase of treasury shares - - At December 31 1,623 33,845 $ 2021	2020
	Number of shares (in thousands) 2,917 - 2,000 4,917	Carrying amount
		72,466 $ - 30,078
		102,544 $

The Company repurchased its shares for transferring to employees.

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

• (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

(17) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

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2021

At January 1 Exercise of employee stock options Retirement of employee restricted stocks Treasury shares transferred to employees Share-based payments Changes in ownership interests in subsidiaries (Note) At December 31 At January 1 Issuance of employee restricted stocks Share-based payments At December 31	Sharepremium 1,075,660 $ 2,972 - - - - 1,078,632 $ Sharepremium 1,075,660 $ - - 1,075,660 $	Treasury Employee Employee share restricted stock transactions stocks options 26,722 $ 213 $ 68,049 $ - - 1,329) ( - 10,900 - 3,811 - - 4,616 12,983) ( 16,182 - - - 35,149 $ 1,870) ($ 82,902 $ Treasury Employee Employee share restricted stock transactions stocks options 17,059 $ - $ 56,067 $ - 213 - 9,663 - 11,982 26,722 $ 213 $ 68,049 $ 2020	Changes in ownership interests in subsidiaries 11,386 $ - - - - 11,386) ( - $ Changes in ownership interests in subsidiaries 11,386 $ - - 11,386 $	Total 1,182,030 $ 1,643 10,900 3,811 7,815 11,386) ( 1,194,813 $ Total 1,160,172 $ 213 21,645 1,182,030 $

(18) Accumulated deficits to be covered

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The appropriation of the remaining earnings, if any, along with the accumulated unappropriated retained earnings at beginning of year shall be proposed by the Board of Directors and resolved at the shareholders’ meeting as dividends to shareholders.

• B. As the Company is in the growing stage, the Company takes into consideration its investment environment, capital needs, business and financial plans and other factors to determine the total distributable earnings of the year. The dividends will be distributed in the form of cash or shares. However, cash dividends shall account for at least 10% of the total dividends distributed. The information relating to employees’ compensation and directors’ remuneration as stipulated in the the Company’s Articles of Incorporation is provided in Note 6(23).

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• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. The shareholders during their meetings in August 2021 and June 2020 resolve not to distribute dividends due to losses incurred in 2020 and 2019, respectively. Information on the aforementioned resolutions adopted at the shareholders’ meeting will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(19) Other equity items

Other equity items
				2021
		Foreign currency		Unearned
		translation		compensation		Total
At January 1	($	3,311)	($	16,588)	($	19,899)
Currency translation		2,065		-		2,065
Share-based payments		-		13,139		13,139
At December 31	($	1,246)	($	3,449)	($	4,695)
				2020
		Foreign currency		Unearned
		translation		compensation		Total
At January 1	($	13,432)	$	-	($	13,432)
Currency translation		10,121		-		10,121
Issuance of employee restricted stocks		-	(	20,213)	(	20,213)
Share-based payments		-		3,625		3,625
At December 31	($	3,311)	($	16,588)	($	19,899)

(20) Operating revenue

Operating revenue
Sales of goods Sales of services	2021 2020 2,813,950 $ 2,062,225 $ 1,424 9,390 2,815,374 $ 2,071,615 $ Year ended December 31
	2021 2,813,950 $ 1,424 2,815,374 $

• A. The Group’s operating revenues are mainly revenue arising from contracts with customers, and revenue is recognised at a point in time.

• B. Contract liabilities

The Group has recognised the following revenue-related contract liabilities:

Contract liabilities - advance sales receipts	December31,2021 6,671 $	December31,2020 6,292 $

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Revenue recognised that was included in the contract liability balance at the beginning of the year

	December31,2021	December 31, 2020
Contract liabilities - advance sales receipts	5,763 $	39,154 $
C. Refund liabilities (shown as ‘other current	liabilities’)
	December31,2021	December 31, 2020
Refund liabilities - current	15,935 $	30,070 $

The Group’s refund liabilities were mainly related to the sales of chipsets for consumer electronic products, and were estimated based on historical data on refunds and allowances and by taking into account management’s judgement and other known factors indicating that sales returns and allowances are likely to occur.

(21) Other gains and losses

allowances are likely to occur. Other gains and losses
		YearendedDecember		31
		2021		2020
(Loss) gains on financial assets and liabilities	($	3,537)	$	13,711
at fair value through profit or loss
Foreign exchange losses	(	1,705)	(	1,265)
Losses on disposals of investments in
subsidiaries	(	9,340)		-
Depreciation charges on investment property	(	1,722)	(	1,722)
Others	(	365)	(	642)
	($	16,669)	$	10,082

(22) Expenses by nature

Expenses by nature
Employee benefit expense Short-term employee benefits Share based payment Post-employment benefits Depreciation expense Amortisation expense	YearendedDecember31
	2021 784,985 $ 20,954 38,715 36,946 102,659 984,259 $	2020
		706,485 $ 25,270 17,108 34,378 96,766
		880,007 $

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(23) Employees’ compensation and directors’ remuneration

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 5% for employees’ compensation and shall not be higher than 1.5% for directors’ remuneration.

• B. The Company incurred losses for the years ended December 31, 2021 and 2020, and thus did not accrue employees’ compensation and directors’ remuneration.

• Information about the appropriation of employees’ compensation and directors’ remuneration by the Company as proposed by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(24) Income tax

• A. Income tax expenses

• (a) Components of income tax expense:

tax ome tax expenses Components of income tax expense:
	Year ended December			31
	2021			2020
Current tax:
Current tax on profits for the year	($	8,121)	($	5,908)
Prior year income tax under (over)
estimation		5,631	(	4,940)
Total current tax	(	2,490)	(	10,848)
Deferred tax:
Origination and reversal of
temporary differences	(	7,884)		66,094
Income tax (expense) benefit	($	10,374)	$	55,246

• (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

Currency translation differences (	2021 2020 517) $ 2,531) ($

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B. Reconciliation between income tax expense and accounting profit

		YearendedDecember	YearendedDecember	31
		2021		2020
Tax calculated based on loss before tax	($	15,116)	$	56,649
and statutory tax rate
Expenses disallowed by tax regulation	(	9)	(	6)
Tax exempt income by tax regulation		2,656	(	196)
Adjustment for temporary difference not
recognised as deferred tax assets	(	3,536)		3,739
Prior year income tax underestimation		5,631	(	4,940)
Income tax (expense) benefit	($	10,374)	$	55,246

C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

Recognised in Recognised in other comprehensive January1 profit or loss income December31 Deferred tax assets: －Temporary differences: Loss for market value decline and obsolete and slow-moving inventories 67,368 $ 32,972) ($ - $ 34,396 $ Investments accounted for using the equity method 117,114 27,529) ( - 89,585 Unrealised exchange loss 13,043 1,614 - 14,657 Tax losses 492,946 56,727 - 549,673 Others 17,643 4,772) ( 517) ( 12,354 708,114 $ 6,932) ($ 517) ($ 700,665 $ Deferred tax liabilities: －Temporary differences: Unrealised gain on valuation of financial assets 1,582) ($ 1,582 $ - $ - $ Others 847) ( 2,534) ( - 3,381) ( 2,429) ($ 952) ($ - $ 3,381) ($ 2021		2021	2021
			Recognised in other comprehensive income December31 - $ 34,396 $ - 89,585 - 14,657 - 549,673 517) 12,354 517) $ 700,665 $ - $ - $ - 3,381) ( - $ 3,381) ($	December31

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					2020	2020
						Recognised
						in other
				Recognised in		comprehensive
		January1		profit	or loss	income			December31
Deferred tax assets:
－Temporary differences:
Loss for market value decline and	$	72,566	($		5,198)	$	-		$	67,368
obsolete and slow-moving
inventories
Investments accounted for using the equity method		118,142	(		1,028)		-			117,114
Unrealised exchange loss		12,379			664		-			13,043
Tax losses		423,148			69,798		-			492,946
Others		17,783			2,391	(	2,531)			17,643
	$	644,018	$		66,627	($	2,531)		$	708,114
Deferred tax liabilities:
－Temporary differences:
Unrealised gain on valuation of	($	641)	($		941)	$	-	($		1,582)
financial assets
Others	(	1,242)			395		-	(		847)
	($	1,883)	($		546)	$	-	($		2,429)

• D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

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December 31, 2021
Amount filed/ Unrecognised
Year incurred assessed Unused amount deferred tax assets Expiry date
----- End of picture text -----

Year incurred	Amount filed/ assessed	Unused amount	Unrecognised deferred tax assets	Expiry date
2015 2016 2017 2018 2019 2020 2021	111,888 $ 315,962 560,532 659,850 534,669 264,966 724,973	111,888 $ 315,962 560,532 659,850 534,669 264,966 724,973 2020	111,888 $ 312,588 - - - - -	2025 2026 2027 2028 2029 2030 2031
Year incurred 2015 2016 2017 2018 2019 2020	Amount filed/ assessed 111,888 $ 315,962 560,532 659,850 540,975 340,521	Unused amount 111,888 $ 315,962 560,532 659,850 540,975 340,521	Unrecognised deferred tax assets 65,000 $ - - - - -	Expirydate
				2025 2026 2027 2028 2029 2030

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• E. The Company’s income tax returns through 2019 have been assessed and approved by the Tax Authority.

(25) Loss per share

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

Year ended December 31, 2021
Weighted average number of
ordinary shares outstanding Loss per share
Amount after tax (share in thousands) (in dollars)
Basic loss per share
Loss attributable to
ordinary shareholders
of the parent ($ 90,421) 190,397 ($ 0.47)
Year ended December 31, 2020
Weighted average number of
ordinary shares outstanding Loss per share
Amount after tax (share in thousands) (in dollars)
Basic loss per share
Loss attributable to
ordinary shareholders
of the parent ($ 238,851) $ 188,963 ($ 1.26)
----- End of picture text -----

The potential ordinary shares have anti-dilutive effect due to net loss for the years ended December 31, 2021 and 2020, so the calculation of diluted loss per share is the same as the calculation of basic loss per share.

(26) Transactions with non-controlling interest

In the third quarter of 2021, the Group acquired an additional 5.05% of issued shares of Zhuhai Xuanyang Technology Co., Ltd. for a cash consideration of $13,734. The carrying amount of noncontrolling interest in Zhuhai Xuanyang Technology Co., Ltd. was ($27) at the acquisition date. This transaction resulted in an increase in the non-controlling interest by $27 and a decrease in the equity attributable to owners of the parent by $13,761. The effect of changes in interests in Zhuhai Xuanyang Technology Co., Ltd. on the equity attributable to owners of the parent for the years ended December 31, 2021 is shown below:

	YearendedDecember31,2021	YearendedDecember31,2021
Carrying amount of non-controlling interest acquired	($	27)
Consideration paid to non-controlling interest	(	13,734)
Capital surplus and retained earnings - recognition of changes
in ownership interest in subsidiaries	($	13,761)

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(27) Supplemental cash flow information

A. Investing activities with cash payments for purchases of property, plant and equipment:

			YearendedDecember31	YearendedDecember31	YearendedDecember31
			2021		2020
Purchase of property, plant and		$	32,291		20,959 $
equipment
Add: Opening balance of payable on
equipment			1,651		1,249
Less: Ending balance of payable on
equipment	(		854)	(	1,651)
Cash paid during the year		$	33,088		20,557 $

B. Investing activities with cash payments for purchases of intangible assets:

Purchase of intangible assets Add: Opening balance of payable on intangible assets Less: Ending balance of payable on intangible assets ( Cash paid during the year	2021 2020 63,483 $ 147,635 $ 83,424 39,237 64,841) 83,424) ( 82,066 $ 103,448 $ YearendedDecember31
	2021 63,483 $ 83,424 64,841) ( 82,066 $

7. Related Party Transactions

(1) Significant related party transactions

The Company's significant related party transactions are with all the subsidiaries included in the consolidated financial statements. The relevant transactions have been eliminated in the consolidated financial statements. There are no other significant related party transactions. Please refer to Note 13 for details.

(2) Key management compensation

or details. Key management compensation
Short-term employee benefits Share based payment Post-employment benefits	Year ended December31
	2021 28,341 $ 3,238 185 31,764 $	2020
		35,804 $ 8,486 216
		44,506 $

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8. Pledged Assets

The Group’s assets pledged as collateral are as follows:

Pledged Assets The Group’s assets pledged as	collateral are as follows:
	Book	value
Pledged assets	December31,2021	December31,2020	Purpose
Financial assets at amortised			Customs guarantee
cost – non-current	5,000 $	5,000 $	deposits

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

None.

(2) Commitments

• A. The Group issued promissory notes to banks as guarantees for short-term credit facilities, export bill negotiations and financial transactions. As of December 31, 2021 and 2020, the facilities available for use amounted to $995,560 and $1,009,160, respectively. These facilities have not yet been drawn down by the Group as of the respective balance sheet date.

• B. The Group entered into a long-term outsourcing service contract with a supplier in 2020 whereby the Group promises to outsource a minimum quantity of packaging and testing at the lowest price.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

The Company’s wholly-owned subsidiary, ALi Innovations Corporation, invested in AIXLINK, Ltd. (AIXLINK) in January 2022 as approved by the Board of Directors. AIXLINK is primarily engaged in the design, development and sales of integrated circuits. The Group’s total investment amounted to RMB 16,765 thousand, which had been paid as of the report date. As of the financial report issuance date, the relevant investment consideration has been paid. In addition, AIXLINK continues to enter into capital increase subscription agreements with other external investors.

12. Others

(1) Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholders’ interest. The Group manages and adjusts its capital structure depending on changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

(2) Financial instruments

• A. Financial instruments by category

Information on the Group’s financial assets (financial assets at fair value through profit or loss, financial assets at amortised cost, cash and cash equivalents, accounts receivable and other

~49~

receivables) and financial liabilities (accounts payable, other payables and lease liabilities) is provided in Note 6 and consolidated balance sheets.

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance. Information on the Group’s usage of derivative financial instruments is provided in Note 6(2).

• (b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Exchange rate risk

• i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Group used in various functional currency, primarily with respect to the USD and RMB. Foreign exchange rate risk arises from future commercial transactions, recognised assets and liabilities, and net investments in foreign operations.

• ii. Management has set up a policy to require the Group to manage their foreign exchange risk against their functional currency. The Group is required to hedge their entire foreign exchange risk exposure with the Group treasury. The Group treasury uses forward foreign exchange contracts to manage the foreign exchange risk arising from future commercial transactions and recognised assets and liabilities. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

• iii. The Group’s businesses involve some non-functional currency operations (the Group’s functional currency: NTD). According to the simulated results, if the exchange rates had changed by 1%, post-tax loss for the years ended December 31, 2021 and 2020 would have increased by $1,643 and $1,073, respectively. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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(Foreign currency: functional currency) Financial assets Monetary items USD:NTD USD:RMB RMB:NTD Non-monetary items RMB:NTD Financial liabilities Monetary items USD:NTD USD:RMB RMB:NTD	Foreign currency Exchange Book value (In thousands) rate (NTD) 14,301 $ 27.68 395,852 $ 5,262 6.372 145,651 4,170 4.344 18,114 167,656 $ 4.344 728,297 $ 11,613 $ 27.68 321,448 $ 40 6.372 1,095 16,753 4.344 72,775 December31,2021	Foreign currency Exchange Book value (In thousands) rate (NTD) 14,301 $ 27.68 395,852 $ 5,262 6.372 145,651 4,170 4.344 18,114 167,656 $ 4.344 728,297 $ 11,613 $ 27.68 321,448 $ 40 6.372 1,095 16,753 4.344 72,775 December31,2021	December31,2020	December31,2020	December31,2020
	Foreign currency (In thousands) 14,301 $ 5,262 4,170 167,656 $ 11,613 $ 40 16,753	Exchange rate 27.68 6.372 4.344 4.344 27.68 6.372 4.344	Foreign currency (In thousands) 9,509 $ 1,261 30,039 126,349 $ 9,376 $ 113 13,848	Exchange rate 28.48 6.5067 4.377 4.377 28.48 6.51 4.377	Book value (NTD)
					270,816 $ 35,905 131,481 553,029 $ 267,028 $ 3,228 60,613

• iv. The total exchange (loss) gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2021 and 2020, amounted to a loss of $1,705 and a loss of $1,265, respectively.

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’s investments in equity securities comprise shares issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the year ended December 31, 2020 would have increased/decreased by $72, as a result of gains/losses on equity securities classified as at fair value through profit or loss. As of December 31, 2021, the Group has no investment in equity securities issued by the above domestic and foreign companies.

Cash flow and fair value interest rate risk

The Group did not have any long-term and short-term borrowings, and thus assessed that the Group has no significant interest rate risk.

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(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.

• ii. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered.

• Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the management. The utilisation of credit limits is regularly monitored.

• iii. Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits with banks and financial institutions, investments in funds and short-term financial products with banks and financial institutions and other financial instruments. Because the counterparties of the Group and performing parties are banks with good credit and financial institutions and government organisations with investment grade or above, the possibility of default is remote. Thus, the Group has no significant credit risk.

• iv. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 181 days.

• v. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

• If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• vi. The Group recognises expected credit losses based on the lifetime expected credit loss. The lifetime expected credit losses are estimated by using a provision matrix and taking into consideration the past default records and current financial position of the customer, economic condition of the industry in which the customer operates and the industry forecasts and outlook. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision matrix uses past due days of accounts receivable to determine expected loss rates and is not further distinguished according to the Group’s different customer base.

• vii. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i.) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;

• (ii.) Default or delinquency in interest or principal repayments;

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• (iii.) Adverse changes in national or regional economic conditions that are expected to cause a default.

• viii. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• ix. The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. The calculation is as follows:

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1~30 days 31~60 days 61~180 days Over 180 days
Not past due past due past due past due past due Total
December 31, 2021
5.00%~
Expected loss rate 0.01% 0.01% 0.01% 100.00%
50.00%
Total book value $ 280,720 $ 57,276 $ - $ - $ - $ 337,996
Lifetime expected
credit losses ($ 28) ($ 6) $ - $ - $ - ($ 34)
1~30 days 31~60 days 61~180 days Over 180 days
Not past due past due past due past due past due Total
December 31, 2020
5.00%~
Expected loss rate 0.01% 0.01% 0.01% 100.00%
50.00%
Total book value $ 193,386 $ 868 $ - $ - $ 10,680 $ 204,934
Lifetime expected
credit losses ($ 20) $ - $ - $ - ($ 10,680) ($ 10,700)
----- End of picture text -----

• x. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable are as follows:

		2021		2020
		Accountsreceivable		Accountsreceivable
At January 1	$	10,700	$	23,107
Reversal of impairment loss	(	222)	(	12,407)
Write-off during the year	(	10,444)		-
At December 31	$	34	$	10,700

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

• ii. Group treasury invests surplus cash in interest bearing current accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

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• iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

	Less than 1	Less than 1	Between 1	Between 1	Between 3	Between 3	Over 5	Over 5
December31,2021		year	and 3 years		and	5 years	years			Total
Non-derivative
financial liabilities:
Non-interest-bearing	$	658,511	$	2,596	$	-	$	-	661,107 $
liabilities
Lease liabilities		11,039		4,315		-		-		15,354
	Less than 1		Between 1		Between 3		Over 5
December31,2020		year	and3 years		and	5 years	years			Total
Non-derivative
financial liabilities:
Non-interest-bearing	$	634,409	$	2,551	$	-	$	-	636,960 $
liabilities
Lease liabilities		12,006		9,805		-		-		21,811
Except for the abovementioned, none			of the Group’s financial				liabilities	is	expired within
one year.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and fund beneficiary certificates is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(11).

• C. Financial instruments not measured at fair value

• The carrying amounts of cash and cash equivalents, accounts receivable, other receivables, financial assets at amortised cost, accounts payable, other payables and lease liabilities are approximate to their fair values.

~54~

• D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2021 and 2020 are as follows:

• (a) The related information of natures of the assets and liabilities is as follows:

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

December 31, 2021 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
- Fund beneficiary certificates $ 18,334 $ - $ 138,968 $ 157,302
December 31, 2020 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
- -
-Equity securities $ 7,204 $ $ $ 7,204
-
- Fund beneficiary certificates 40,707 63,479 104,186
Total $ 47,911 $ - $ 63,479 $ 111,390
----- End of picture text -----

• (b) The methods and assumptions the Group used to measure fair value are as follows:

• i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

The instruments the Group used market quoted prices as are listed below by characteristics:	their fair values (that is, Level 1)
Listed shares Market quoted price Closing price	Open-endfund
	Net asset value

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.

The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. Forward exchange contracts are usually valued based on the current forward exchange rate.

• iv. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment

~55~

to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• v. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

• E. For the years ended December 31, 2021 and 2020, there was no transfer between Level 1 and Level 2.

• F. The following chart is the movement of Level 3 for the year ended December 31, 2021 and 2020:

2021 Financial assets at fair value through profit or loss Equityinstruments At January 1 63,479 $ Proceeds from capital reduction of financial assets at fair value through profit or loss 14,591) ( Gains and losses recognised in profit or loss 10,760) ( Acquired in the year 101,267 Effect of exchange rate changes 427) ( At December 31 138,968 $	2020
	Equity instruments
	51,934 $ - 10,435 - 1,110
	63,479 $

• G. For the years ended December 31, 2021 and 2020, there was no transfer into or out from Level 3.

• H. Treasury is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

~56~

Fair value at December 31, 2021 private equity fund investment 37,701 $ Limited partnership private equity fund investment 101,267 $ Non-derivative equity instrument: Fair value at December 31, 2020 private equity fund investment 63,479 $ Non-derivative equity instrument:	Valuation technique	Significant unobservable input Range Discount for lack of marketability 30% Discount for lack of marketability 0% Significant unobservable input Range Discount for lack of marketability 30%	Relationship of inputs to fairvalue The higher the discount for lack of marketability, the lower the fair value The higher the discount for lack of marketability, the lower the fair value Relationship of inputs to fairvalue
	Net asset value Net asset value Valuation technique
	Net asset value		The higher the discount for lack of marketability, the lower the fair value

• J. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

Financialassets	Input	Change ± 1% Change ± 1%	Favourable change Unfavourable change 1,390 $ 1,390) ($ December 31, 2021 Recognised inprofit or loss Favourable change Unfavourable change 635 $ 635) ($ December 31, 2020 Recognisedinprofit or loss
Fund beneficiary certificates Financialassets	Discount for lack of marketability Input
			Favourable change 635 $ (
Fund beneficiary certificates	Discount for lack of marketability

(4) Other matter

The Group has adopted relevant epidemic prevention measures in respond to the COVID-19 pandemic and various epidemic prevention measures promoted by the government. The pandemic has no material impact on the Group’s operations and business in 2021.

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13. Supplementary Disclosures

(1) Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: Please refer to table 1.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.

• I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 4.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 5.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 6.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to tables 1 and 5.

(4) Major shareholders information

Name of, number of shares held by and ownership percentage of shareholders who own 5% or more of shareholding ratio: None.

14. Operating segment information

(1) General information

The Group operates business only in a single industry. The chief operating decision-maker who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2) Measurement of segment information

The Chief Operating Decision-Maker assesses the performance of the operating segments based on the consolidated financial statements. The accounting policy of operating segments is the same as that described in Note 4.

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(3) Information about segment profit or loss, assets and liabilities

The revenue from external customers and segment financial information reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the consolidated statement of comprehensive income.

(4) Reconciliation for segment income (loss)

The segment assets, liabilities and profit before income tax reported to the Chief Operating DecisionMaker is measured in a manner consistent with that in the consolidated balance sheet and consolidated statement of comprehensive income. As a result, no reconciliation was reported.

(5) Information on products and services

Information on products and services for the years ended December 31, 2021 and 2020 are as follows:

Sales of goods Sales of services	2021 2020 2,813,950 $ 2,062,225 $ 1,424 9,390 2,815,374 $ 2,071,615 $ Year ended December31

(6) Geographical information

Geographical information for the years ended December 31, 2021 and 2020 is as follows:

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

Year ended December 31, 2021 December 31, 2020
Non-current Non-current
Revenue assets Revenue assets
----- End of picture text -----

	Revenue YearendedDec	Non-current assets ember31,2021	Revenue December	Non-current assets 31,2020
Hong kong Mainland China Korea Singapore Taiwan France Others	1,449,875 $ 567,062 276,340 226,428 166,060 118,001 11,608 2,815,374 $	- $ 31,689 - - 745,624 - 641 777,954 $	784,427 $ 359,962 212,971 185,135 218,700 291,803 18,617 2,071,615 $	- $ 31,153 - - 826,694 - 1,181
				859,028 $

(7) Major customer information

Major customer information of the Group for the years ended December 31, 2021 and 2020 is as follows:

ollows:
A B C	Year ended December31
	2021 518,234 $ 510,540 365,287 1,394,061 $	2020
		184,009 $ 280,314 116,714
		581,037 $

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ALi Corporation and Subsidiaries

Provision of endorsements and guarantees to others

Year ended December 31, 2021

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Party being

		Party being	Party being
Number （Note 1）	Endorser/ guarantor	endorsed/guaranteed		（Note 3） Limit on endorsements/ guarantees provided for a single party	（Note 4） Maximum outstanding endorsement/ guarantee amount as of December 31, 2021	Outstanding endorsement/ guarantee amount at December 31, 2021 （Note 5）	Actual amount drawn down （Note 6）	collateral Amount of endorsements/ guarantees secured with	company(%) Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor	Ceiling ontotal amount ofendorsements/ guarantees provided （Note 3）	（Note 7） Provision of endorsements/ guarantees by parent company to subsidiary	（Note 7） Provision of endorsements/ guarantees by subsidiary to parent company	（Note 7） Provision of endorsements/ guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/ guarantor （Note 2）
0	ALi Corporation	Xsail Technology Co., Ltd.	4	618,820 $	145,000 $	- $	- $	- $	0.00	1,547,049 $	Y	N	Y

• Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’.

• (2) The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

• (1) Having business relationship.

• (2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

• (4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

• (5) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

• (6) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

• (7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

Note 3: Limit on endorsements/guarantees provided for a single party is 20% of the Company’s net asset value. Ceiling on total amount of endorsements/guarantees provided is 50% of the Company’s net asset value.

Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

• Note 5: Fill in the amount approved by the Board of Directors or the chariman if the chairman has been authorised by the Board of Directors based on subparagraph 8, Article 12 of the Regulations Governing

Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.

• Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

• Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Table 1, page 1

ALi Corporation and Subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2021

			December 31, 2021
Securities held by Table 2	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021		Fair value Footnote Expressed in thousands of NTD (Except as otherwise indicated)
				Number of shares or units	Book value	Ownership (%)	Fair value
ALi Corporation ALi Corporation ALi Corporation ALi Corporation Ali (BVI) Microelectronics Corporation	Stocks MiiiCasa Holding (Cayman) Inc. EE SOLUTIONS, INC. Beneficiary certificates NFC Limited Partnership PGIM 4 Year Maturity Emerging Market Infrastructure Bond Fund CMC Capital Investment, L.P.	None None None None None	Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through profit or loss - non-current	5,000,000 695,500 101,267,157 2,000,000 -	$ - - 101,267 18,334 37,701	6.90 2.40 - - -	$ - - 101,267 18,334 37,701

Table 2, page 1

ALi Corporation and Subsidiaries

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2021

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		compared to third party transactions Differences in transaction terms	compared to third party transactions Differences in transaction terms	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
ALi (Zhuhai) Corporation ALi (China) Corporation	ALi Corporation ALi Corporation	Parent company Parent company	Service revenue Service revenue	195,925 $ 106,557	100.00% 100.00%	30 days end of month 30 days end of month	Traded at prices agreed upon by both parties Traded at prices agreed upon by both parties	No significant difference No significant difference	44,128 $ 28,415	94.84% 40.29%

Table 3, page 1

ALi Corporation and Subsidiaries

Significant inter-company transactions during the reporting periods

Year ended December 31, 2021

Table 4

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 4)
0 0 0 0 1 1 1 1 2	ALi Corporation ALi Corporation ALi Corporation ALi Corporation ALi (Chengdu) Corporation ALi (Chengdu) Corporation ALi (Chengdu) Corporation ALi (Chengdu) Corporation ALi (China) Corporation	ALi (China) Corporation ALi (China) Corporation ALi (Zhuhai) Corporation ALi (Zhuhai) Corporation ALi (Zhuhai) Corporation ALi (Zhuhai) Corporation ALi (China) Corporation ALi (China) Corporation ALi (Chengdu) Corporation	1 1 1 1 3 3 3 3 3	Outsourcing service expenses Other payables Outsourcing service expenses Other payables Licencing revenue Accounts receivable Licencing revenue Accounts receivable Other receivables	106,557 $ 28,415 195,925 44,128 43,380 41,442 43,380 41,442 41,442	30 days end of month 30 days end of month 30 days end of month 30 days end of month In accordance with the contract In accordance with the contract In accordance with the contract In accordance with the contract In accordance with the contract	3.78% 0.75% 6.96% 1.16% 1.54% 1.09% 1.54% 1.09% 1.09%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1)Parent company is ‘0’.

• (2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between

• subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

• (1)Parent company to subsidiary.

• (2)Subsidiary to parent company.

• (3)Subsidiary to subsidiary.

Note 3: The standards of disclosure for inter-company transactions are purchased or sales of goods and receivables/payables from/to related parties reaching NT$25 million or 20% of paid-in capital or more

• Note 4: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Table 4, page 1

ALi Corporation and Subsidiaries Information on investees December 31, 2021 Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2021	as at December 31,2021	Net profit (loss) of the investee for the year ended December 31,2021	Investment income (loss) recognised by the Company for the year ended December 31,2021	Footnote
				Balance as at December 31,2021	Balance as at December 31,2020	Number of shares	Ownership (%)	Book value
ALi Corporation ALi Corporation ALi Corporation ALi Corporation ALi (BVI) Microelectronics Corporation	ALi（BVI）Microelectronics Corporation ALi Europe Sàrl ALitech India LLP ALi Innovations Corporation ALitech India LLP	British Virgin Islands Switzerland India Cayman Islands India	Investment company Research and development and customer technical services Research and development and customer technical services Investment company Research and development and customer technical services	$ 3,249,452 - 5,850 83,535 52	$ 3,249,452 456,379 5,850 - 52	105,916,532 - - 3,000,000 -	100.00 - 99.00 100.00 1.00	$ 567,828 - 7,755 83,086 78	$ 34,788 3,228 898 683 898	$ 25,028 3,228 889 683 9	Note 1

Note 1: The Board of Directors during its meeting on July 19, 2019 resolved to liquidate ALi Europe Sàrl, and the liquidation was completed in 2021.

Table 5, page 1

ALi Corporation and Subsidiaries

Information on investments in Mainland China

Year ended December 31, 2021

Table 6

Investee in Mainland China Table 6	Main business activities	Paid-in capital （Note 1）	Investment method （Note 3）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2021		Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Net income of investee as of December 31,2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2021 （Note 2）	Book value of investments in Mainland China as of December 31,2021	Accumulated amount of investment income remitted back to Taiwan as of December 31,2021 Footnote Expressed in thousands of NTD (Except as otherwise indicated)
					Remitted to China	Remitted back to Taiwan
ALi (Zhuhai) Corporation ALi (China) Corporation Shenzhen Tianchen Semiconductor Technology Partnership (Limited Partnership) Shenzhen Tianchen Semiconductor Technology Co. Ltd. Zhuhai Feiyang Management Consulting Partnership (Limited Partnership) ALi (Chengdu) Corporation Xsail Technology Co., Ltd.	Research and development and customer technical services Research and development and customer technical services Investment company Research and development, sales and customer technical services Investment company Research and development, sales and customer technical services Research and development, sales and customer technical services	$ 24,832 222,213 34,752 17,376 1,738 81,750 8,688	2 2 2 2 2 1 2	$ 18,649 207,600 - - - - -	$ - - - - - 81,656 -	$ - - - - - - -	$ 18,649 207,600 - - - 81,656 -	$ 21,744 46,169 99 48 1,811 90,942 9,070	100.00 100.00 50.00 50.00 54.50 100.00 90.90	$ 21,744 46,169 50 24 987 ( 4,494) 8,297	$ 95,581 571,606 17,422 8,547 1,043 77,383 8,710	$ - - - - - - -	Note 5 Note 6 Note 6

Table 6, page 1

Accumulated amount of Investment amount approved Ceiling on investments in remittance from Taiwan to by theInvestment Commission Mainland China imposed by Mainland China as of of the Ministry ofEconomic theInvestment Commission of Company name December 31, 2021 Affairs (MOEA) MOEA (Note 7) ALi Corporation $ 343,620 $ 599,652 $ 1,856,981

Note 1: The numbers in this table are expressed in New Taiwan Dollars. Foreign currencies are translated into New Taiwan dollars using the exchange rates on the financial reporting date or the average exchange rate during the reporting period. Note 2: Investment income (loss) recognised by the Company for the year ended December 31, 2021 was evaluated based on each investee’s audited financial statements for the corresponding period.

Note 3: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

• (1)Directly invest in a company in Mainland China..

• (2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

Note 4: The investment amount of USD 1,290 thousand previously made by the Company in ALi (Shanghai) Corporation, which was liquidated in August 2019, has been recovered by the Company’s subsidiary, ALi Electronic Technology (China) Co., Ltd. Note 5: ALi (China) Corporation jointly established Shenzhen Tianchen Semiconductor Technology Partnership (Limited Partnership) with Shenzhen Skyworth Digital Technology Co.,Ltd., and used its own capital to make capital contributions. Note 6: ALi (China) Corporation used its own capital to make capital contributions to Zhuhai Feiyang Management Consulting Partnership (Limited Partnership) and Xsail Technology Co., Ltd.

Note 7: It was calculated based on 60% of the Company’s net asset value in the consolidated financial statements.

Table 6, page 2