EMC — Audit Report / Information 2021

Oct 27, 2021

Stock Code:2383

ELITE MATERIAL CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS

With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

Address: No.18, Datong 1st Rd., Guanyin Dist., Taoyuan City 328, Taiwan (R.O.C.) Telephone: (03)483-7937

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

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Table Of Contents

Contents 1.Cover Page 2.Table of Contents 3.Independent Auditors’ Report 4.Balance Sheets 5.Statements of Comprehensive Income 6.Statements of Changes in Equity 7.Statements of Cash Flows 8.Notes to the Financial Statements (1) Organization and Business (2) Approval Date and Procedures of the Financial Statements (3) New Standards and Interpretations Adopted (4) Significant Accounting Policies (5) Major Sources of Accounting Assumptions, Judgments and Estimation Uncertainty (6) Summary of Major Accounts (7) Related-Party Transactions (8) Pledged Assets (9) Significant Contingencies and Commitments (10) Significant Catastrophic Losses (11) Significant Subsequent Events (12) Others (13) Additional Disclosures a) Information on significant transactions b) Information on investees c) Information on investment in Mainland China d) Major shareholders (14) Segment Information 9.Statements of Important Account

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KPMG

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Independent Auditors’ Report

To the Board of Directors of ELITE MATERIAL CO., LTD.:

Opinion

We have audited the financial statements of ELITE MATERIAL CO., LTD.(“the Company”), which comprise the statement of financial position as of December 31, 2021 and 2020, and the statement of comprehensive income, changes in equity and cash flows for the years ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2021 and 2020, and its financial performance and its cash flows for the year ended December 31, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

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

1.Revenue recognition

Please refer to Note 4(n) "Revenue" and Note 6(o) "Revenue" of the consolidated financial statements.

Description of key audit matter:

The recognition of revenue is based on the fact that the Company has transferred all its ownership and the significant risk of its products to the customers. The judgment on the arrival date of the products involves uncertainty under the FOB destination which is stated in the sales contracts between the Company and the customers. The Company still needs to take the risk of the products before they are delivered to customers.

Therefore, the recognition of revenue was considered to be one of the key audit matters in the audit.

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

How the matter was addressed in our audit:

In relation to the key audit matter above, we have performed certain key audit procedures that included: assessing the accounting policies on the recognition timing of sales revenue and the appropriateness of related internal controls; testing the effectiveness of implementation of internal control ; performing cut-off test for recognition of revenue on the period before and after the reporting date to assess the rationality to the recognition timing of sales revenue.

2. Allowance for Inventory Valuation

Please refer to Note (4)(g) "Inventories" and Note (6)(d)” Inventories” of the consolidated financial statements.

Description of key audit matter:

The printed circuit board and other electronic components are the major products of the Company. Inventories have specific life cycle due to their attributes. Apart from this, the Company prepared certain amounts of security stock to meet the delivery date required by the customers. Inventories are stated at the lower of cost or net realizable value. Consequently, there may be situations that the net realizable value of inventory will exceed its cost. In addition, the Company would purchase the materials in advance for the expected sales orders. The cancellation or the change of orders, and the change of the material used or quantities of the material may lead to product obsolescence. Therefore, the recognition on allowance for inventory valuation and obsolescence loss was considered to be one of the key audit matters in the audit.

How the matter was addressed in our audit:

In relation to the key audit matter above, we have performed certain key audit procedures that included: assessing the allowance for loss due to price decline, obsolete, and slow moving inventories to determine whether policy of the Company is applied; selecting samples to examine their net realizable values to verify the accuracy and completeness of inventory aging report; reassessing the accuracy of allowance for inventory valuation and obsolescence loss according to the Company’ s accounting policy; performing a retrospective review to evaluate the completeness of disclosure for allowance for inventories.

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

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

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

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

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Auditor’s Responsibilities for the Audit of the Financial Statements

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

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

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

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 Company’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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

6. Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit.

We 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.

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

The engagement partners on the audit resulting in this independent auditors’ report are Yi-Chun Chen and Chung-Yi Chiang.

KPMG

Taipei, Taiwan (Republic of China) Febuary 23, 2022

Notes to Readers

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

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

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

Balance Sheets

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

2021.12.31 ASSETS Amount % Current Assets: 1100 Cash and cash equivalents (Note (6)(a)) $ 1,292,713 5 1150 Notes receivable, net (Note (6)(b)) 114,211 - 1170 Accounts receivable, net (Note (6)(b)) 2,321,410 9 1181 Accounts receivable due from related parties (Notes (6)(b) and (7)) 361,577 1 1200 Other receivables, net (Note (6)(c)) 541,377 2 1210 Other receivables due from related parties, net (Notes (6)(c) and (7)) 180,489 1 1310 Inventories (Note (6)(d)) 1,206,273 5 1470 Other current assets 48,021 - 6,066,071 23 Non-Current Assets: 1550 Investments accounted for using equity method, net (Note (6)(e)) 17,822,990 68 1600 Property, plant and equipment (Note (6)(f)) 1,957,319 7 1780 Intangible assets 41,094 - 1840 Deferred tax assets (Note (6)(l)) 238,729 1 1900 Other non-current assets 136,289 1 1920 Guarantee deposits paid 8,566 - 1975 Net defined benefit asset, non-current (Note (6)(k)) 14,619 - 20,219,606 77 Total assets $ 26,285,677 100	2020.12.31 Amount % 962,032 5 206,128 1 1,716,921 8 312,089 1 449,618 2 50,433 - 1,082,476 5 37,240 - 4,816,937 22 14,794,570 68 2,007,189 9 18,019 - 200,749 1 85,002 - 640 - 3,754 - 17,109,923 78 21,926,860 100 2021.12.31 LIABILITIES AND STOCKHOLDERS' EQUITY Amount % Current Liabilities: 2100 Short-term borrowings (Note (6)(g)) $ 551,730 2 2110 Short-term notes payable (Note (6)(h)) 199,820 1 2170 Accounts payable 2,204,281 8 2200 Other payables 1,212,340 5 2220 Other payables to related parties (Note (7)) 453,010 2 2230 Current tax liabilities 147,095 1 2322 Long-term borrowings, current portion (Note (6)(i)) 128,571 - 2399 Other current liabilities, others 41,418 - 4,938,265 19 Non-Current liabilities: 2540 Long-term borrowings (Note (6)(i)) 721,429 3 2570 Deferred tax liabilities (Note(6)(l)) 859,997 3 2645 Guarantee deposits received 13,140 - 1,594,566 6 Total liabilities 6,532,831 25 Equity (Note (6)(m)): 3100 Capital stock 3,329,183 13 3200 Capital surplus 1,868,661 7 Retained earnings: 3310 Legal reserve 2,403,968 9 3320 Special reserve 756,891 3 3351 Accumulated profit and loss 12,298,052 47 3400 Other equity interest (903,909) (4) Total equity 19,752,846 75 Total liabilities and equity $ 26,285,677 100	2021.12.31		2020.12.31 Amount % 399,607 2 - - 1,675,322 8 850,721 4 420,724 2 94,813 - 500,000 2 27,460 - 3,968,647 18 300,000 2 910,910 4 8,673 - 1,219,583 6 5,188,230 24 3,329,183 15 1,868,661 8 2,035,014 9 832,393 4 9,430,270 43 (756,891) (3) 16,738,630 76 21,926,860 100
		Amount %

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

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

Statements of Comprehensive Income

For the Years Ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

4000 Operating revenue (Note (6)(o) and Note (7)) 5000 Operating costs (Note (6)(d) and Note (7)) Gross profit from operations 5910 Less: Unrealized profit from sales 5920 Add: Realized profit on from sales Gross profit from operations Operating expenses: 6100 Total selling expenses 6200 Total administrative expenses 6300 Total research and development expenses 6450 Expected credit loss 6300 Total operating expenses Net operating income Non-operating income and expenses: 7100 Total interest income (Note (6)(q)) 7020 Other gains and losses, net (Note (6)(q)) 7370 Share of profit of associates and joint ventures accounted for using equity method 7050 Finance costs (Note (6)(q)) Total non-operating income and expenses Profit from continuing operations before tax 7950 Less: Income tax expenses (Note (6)(l)) Profit 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Losses on remeasurements of defined benefit plans 8316 Unrealized losses from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income, net Total comprehensive income Basic earnings per share (Note (6)(n))(dollars) Diluted earnings per share (Note (6)(n))(dollars)	2021	% 100 (77) 23 - - 23 (4) (7) (4) - (15) 8 - - 58 - 58 66 (6) 60 - - - - (2) - (2) (2) 58 16.50 16.46	2020 Amount 6,930,636 (5,562,113) 1,368,523 (4,051) 4,300 1,368,772 (256,032) (473,491) (255,430) (66) (985,019) 383,753 1,026 (15,223) 3,838,173 (23,185) 3,800,791 4,184,544 (495,545) 3,688,999 675 - (135) 540 94,378 (18,876) 75,502 76,042 3,765,041	% 100 (80)
	Amount $ 9,189,939 (7,104,396) 2,085,543 (9,316) 4,051 2,080,278 (339,529) (673,876) (327,147) (41) (1,340,593) 739,685 920 (45,584) 5,365,858 (9,041) 5,312,153 6,051,838 (558,620) 5,493,218 (1,945) (15,335) 389 (16,891) (164,604) 32,921 (131,683) (148,574) $ 5,344,644 $ $
				20 - -
				20
				(4) (7) (4) -
				(15)
				5
				- - 55 -
				55
				60 (7)
				53
				- - -
				-
				1 -
				1
				1
				54
				11.33
				11.07

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

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

Statements of Changes in Equity

For the Years Ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2020 Profit for the year ended December 31, 2020 Other comprehensive income for the year ended December 31, 2020 Total comprehensive income for the year ended December 31, 2020 Earnings distribution: Legal reserve Special reserve Cash dividends on ordinary share Conversion of convertible bonds Balance at December 31, 2020 Profit for the year ended December 31, 2021 Other comprehensive income for the year ended December 31, 2021 Total comprehensive income for the year ended December 31, 2021 Earnings distribution: Legal reserve Special reserve reversal Cash dividends on ordinary share Balance at December 31, 2021	Share capital Ordinary Shares $ 3,197,080 - - - - - - 132,103 3,329,183 - - - - - - $ 3,329,183	Capital Surplus 628,858 - - - - - - 1,239,803 1,868,661 - - - - - - 1,868,661	Retained earnings	Retained earnings			Total other equity interest Exchange Differences on Unrealised gains (losses) on equity instruments at fair value Translation of Foreign Statements through other comprehensive income (831,955) (438) - - 75,502 - 75,502 - - - - - - - - - (756,453) (438) - - (131,683) (15,335) (131,683) (15,335) - - - - - - (888,136) (15,773)	Total equity 13,519,931 3,688,999 76,042 3,765,041 - - (1,918,248) 1,371,906 16,738,630 5,493,218 (148,574) 5,344,644 - - (2,330,428) 19,752,846
							Exchange Differences on Translation of Foreign Statements (831,955) - 75,502 75,502 - - - - (756,453) - (131,683) (131,683) - - - (888,136)
			Legal Reserve 1,710,929 - - - 324,085 - - - 2,035,014 - - - 368,954 - - 2,403,968	Special Reserve 423,554 - - - - 408,839 - - 832,393 - - - - (75,502) - 756,891	Unappropriated Retained Earnings
					8,391,903
					3,688,999 540
					3,689,539

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

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

Statements of Cash Flows

For the Years Ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit : Depreciation expense Amortization expense Expected credit loss Net gain on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Share of loss of subsidiaries,associates and joint ventures accounted for using equity method Gain on disposal of property, plan and equipment Amortized discounted corporate bonds payable-interest expense Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Accounts receivable due from related parties Other receivable Inventories Deferred revenues Other current assets Other assets Total changes in operating assets Changes in operating liabilities: Accounts payable Other payable Other payable to related parties Other current liabilities Net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from investing activities: Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Acquisition of intangible assets Net cash flows used in investing activities Cash flows from financing activities: (Decrease) increase in short-term loans Decrease in short-term notes and bills payable Proceeds from long-term debt Repayments of long-term debt Increase in guarantee deposits received Cash dividends paid Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021 $ 6,051,838 198,379 9,269 41 - 9,041 (920) (5,365,858) (338) - (5,150,386) 91,917 (604,530) (49,488) (221,869) (123,797) 5,723 (16,481) (51,287) (969,812) 528,959 348,299 32,286 13,958 (12,810) 910,692 (59,120) (5,209,506) 842,332 974 2,151,776 (9,151) (561,921) 2,424,010 - (135,259) 338 (2,226) (32,344) (169,491) 152,123 200,000 750,000 (700,000) 4,467 (2,330,428) (1,923,838) 330,681 962,032 $ 1,292,713	2020 4,184,544 191,491 5,095 66 (1,853) 9,145 (1,026) (3,838,173) (34) 14,040 (3,621,249) 1,084 153,281 208,954 83,596 (274,425) 3,667 6,663 (12,737) 170,083 (196,735) 179,667 (94,192) 8,113 (10,646) (113,793) 56,290 (3,564,959) 619,585 960 3,327,861 (9,076) (762,834) 3,176,496 (761,482) (168,639) 34 (7) (17,270) (947,364) (179,961) (100,000) 950,000 (500,000) 857 (1,918,248) (1,747,352) 481,780 480,252 962,032

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

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020

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

(1) Organization and Business

ELITE MATERIAL CO., LTD. (the "Company") was incorporated on March 24, 1992 as a company limited by shares under the Company Act of the Republic of China (R.O.C.). The main operating activities are the manufacturing and selling of copper clad laminates, electronic-industrial specialty chemical and raw materials, work-in-process, and finished goods of electronic components. The manufacturing and selling of printed circuit board is the main source of sales revenue.

The Company's common shares were traded on the Taipei Exchange (TPEx) on December 26, 1996, and its shares were publicly listed and traded on the Taiwan Stock Exchange (TSE) on November 27, 1998. The Company's registered office is on No.18, Datong 1st Rd., Guanyin Dist., Taoyuan City 328, Taiwan (R.O.C.).

(2) Approval Date and Procedures of the Financial Statements

The Board of Directors approved and issued the financial statements on Febuary 23, 2022.

(5) New Standards and Interpretations Adopted:

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

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2021:

• �Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• �Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from April 1, 2021:

• �Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”

• (b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its financial statements:

• �Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”

• �Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”

• �Annual Improvements to IFRS Standards 2018–2020

• �Amendments to IFRS 3 “Reference to the Conceptual Framework”

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

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

The Company does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

• �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” and amendments to IFRS 17 “ Insurance Contracts”

• �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”

(4) Significant Accounting Policies

The significant accounting policies adopted in the financial statements are as follows. Except for those described individually.

• (a) Statement of compliance

The financial statements have been prepared in accordance with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers (the Guidelines).

• (b) Basis of preparation

• Basis of measurement

The financial statements have been prepared on a historical cost basis except for the following material items in the statement of financial position:

• 1) Financial assets and liabilities at fair value through profit or loss in fair value measurement;

• 2) The net defined benefit liabilities (or assets) is recognized as the fair value of plan assets, net of aggregation of the present value of the defined benefit obligation, with a limit based on a defined benefit assets as disclosed in Note 4(o).

• Functional and presentation currency

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

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• (c) Foreign Currency

• Foreign currency transaction

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

Exchange differences are generally recognized in profit or loss.

1. Foreign operations

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

When the Company disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Company disposes of only part of investment in an associate of a joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, Exchange differences arising from such items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income, and presented in the translation reserve in equity.

• (d) Assets and liabilities classified as current and non-current

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

1. It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

2. It is held primarily for the purpose of trading;

3. It is expected to be realized within twelve months after the reporting period; or

4. The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

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

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

An entity shall classify a liability as current when:

1. It is expected to be settled in the normal operating cycle;

2. It is held primarily for the purpose of trading;

3. It is due to be settled within twelve months after the reporting period; or

4. The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

5. (e) Cash and cash equivalents

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

• (f) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

• 1.Financial assets

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

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

• 1) Financial assets measured at amortized cost

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

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

• �its contractual terms give rise on specified dates to cash flows that are solely payments of principal amount outstanding.

� 11 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Impairment of financial assets

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

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

• �debt securities that are determined to have low credit risk at the reporting date; and

• �other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

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

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

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

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

• �significant financial difficulty of the borrower or issuer;

• �a breach of contract;

• �the lender of the borrow, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• �it is probable that the borrower will enter bankruptcy or other financial reorganization;or

• �the disappearance of an active market for a security because of financial difficulties.

� 12 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

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

• 3) Derecognition of financial assets

Financial assets are derecognized when the contractual rights of the cash inflow from the assets are terminated, or when the Company transfers substantially all the risks and rewards of ownership of the financial assets.

1. Financial liabilities and equity instruments

2. 1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

Compound financial instruments issued by the Company comprise convertible notes that can be converted to share capital at the option of the holder when the number of shares to be issued is fixed.

The liability component of a compound financial instrument is recognized initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognized initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition.

Interest related to the financial liability is recognized in profit or loss, and included in nonoperating income and expenses.

On conversion, the financial liability is reclassified to equity, and no gain or loss is recognized.

� 13 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• 2) Financial liabilities

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

3) Other financial liabilities

Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method. Interest expense not capitalized as capital cost is recognized in profit or loss, and is included in the statement of comprehensive income.

• 4) Derecognizing of financial liabilities

The Company derecognizes a financial liability when its contractual obligation has been discharged or cancelled or expires. The difference between the carrying amount of a financial liability removed and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss, and is included in the statement of comprehensive income.

• 5) Financial guarantee contract

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

A financial guarantee contract not designated as at fair value through profit or loss issued by the Company is recognized initially at fair value plus any directly attributable transaction costs. After initial recognition, it is measured at the higher of (a) the contractual obligation amount determined in accordance with IAS 37, or (b) the amount initially recognized less, when appropriate, cumulative amortization recognized in accordance with IAS 18.

• (g) Inventories

Inventories are measured at the lower of cost or net realizable value. The cost of inventories consists of all costs of purchase and other costs incurred in bringing them to their present location and condition. Inventory cost is calculated using the weighted-average-cost formula.

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

• (h) Investment in associates

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

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

� 14 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

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

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

When the Company’s share of losses of an associated equals or exceeds its interests in an associate, it discounters recognizing its share of further losses. After the recognized interest is redact to zero. Additional losses are provided for and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i) Investment in subsidiaries

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

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

• (j) Property, plant, and equipment

• Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

1. Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

1. Depreciation

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

Land is not depreciated.

� 15 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1)	Buildings	2	years~	56	years
2)	Machineries	3	years~	19	years
3)	Miscellaneous equipment	2	years~	14	years

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

• (k) Intangible assets

Software that is acquired by the Company is measured at cost less accumulated amortization and any accumulated impairment losses.

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.

The depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value.

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows:

1. Softwares 1 years~10 years 2. Loyalties 9 years

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

• (l) Impairment – non financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

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

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

� 16 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

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

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

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

(m) Provisions

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

The provision of sales discounts from defective products is recognized when selling. The provision is estimated and measured on related probabilities of historical experience data and all possible results.

(n) Revenue

1. Revenue from contracts with customers

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

1) Sale of goods-electronic components

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

The Company’s obligation to provide a refund for faulty products is recognized at the time of sale. Accumulated experience is used to estimate such returns at the time of sale. The amount estimated is recognized as a provision for warranty at reporting date.

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

� 17 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• (o) Employee benefits

• Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

1. Defined benefit plans

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

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

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

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

3. Short-term employee benefits

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

• (p) Income taxes

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

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

� 18 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

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

1. temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

2. temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

3. taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

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

1. the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

2. the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

3. 1) the same taxable entity; or

4. 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date, and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

• (q) Earnings per share

The Company discloses the Company's basic and diluted earnings per share attributable to ordinary equity holders. The basic earnings per share are calculated as the profit attributable to the ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding, after adjustment for the effects of all potential dilutive ordinary shares, such as convertible bonds.

• (r) Operating segments

Please refer to the consolidated financial report of Elite Material Co., Ltd. for the years ended December 31, 2021 and 2020 for operating segments information.

� 19 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

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

The preparation of the financial statements in conformity with the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

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

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

(a) Valuation of inventories

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

(6) Summary of Major Accounts

• (a) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Savings accounts Time deposits	2021.12.31 $ 375 994,218 298,120 $ 1,292,713	2020.12.31
		469 639,155 322,408
		962,032

Please refer to Note 6(r) for the interest analysis of financial assets and liabilities.

• (b) Notes and accounts receivable

Note receivables from operating activities Trade receivables�measured as amortized cost Less: Loss allowance	2021.12.31 $ 114,560 2,684,035 (1,397) $ 2,797,198	2020.12.31
		206,477 2,030,017 (1,356)
		2,235,138

� 20 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

The Company has assessed a portion of its trade receivables that was held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; therefore, such trade receivables were measured at fair value through other comprehensive income. In addition, trade receivables, which did not qualify to be measured at amortized costs and FVOCI, were measured at fair value through profit or loss.

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

Current 1 to 30 days past due 31 to 120 days past due More than 120 days past due Current 1 to 30 days past due 31 to 120 days past due		2021.12.31
	Gross carrying amount $ 2,771,496 19,567 7,532 - $ 2,798,595	Weighted- average 0.04% 0.50% 1.00% - 2020.12.31	Loss allowance provision
			1,224 98 75 -
			1,397
		Weighted- average 0.06% 0.16% 0.68%	Loss allowance provision
			1,232 63 61
			1,356

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

The movement in the allowance for notes and trade receivable	was as follows:	was as follows:
Balance at January 1 Impairment losses recognized Amounts written off Balance at December 31	For the years ended December 31,
	2021 $ 1,356 41 - $ 1,397	2020
		1,392 66 (102
		1,356

� 21 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• (c) Other receivables

Other receivables
Other receivables Other receivables due related parties, net Less: Loss allowance	2021.12.31 $ 541,377 180,489 - $ 721,866	2020.12.31
		449,618 50,433 -
		500,051

Based on historical experience, the Company expects no credit losses by event of default from the aforementioned other receivables, therefore the expected credit loss rate is 0.

• (d) Inventories

Materials Work-in-process Finished goods Inventory in-transit	2021.12.31 $ 871,692 85,816 221,792 26,973 $ 1,206,273	2020.12.31
		708,831 117,952 247,652 8,041
		1,082,476

As of December 31, 2021 and 2020, the details of operating cost were as follows:

Cost of goods sold Loss on disposal of scrap Losses on inventory valuation and obsolescence Revenue from sales of scraps	2021 $ 7,148,110 6,366 2,932 (53,012) $ 7,104,396	2020
		5,568,722 12,448 11,619 (30,676
		5,562,113

As of December 31, 2021 and 2020, the Company's inventories were not pledged as collateral.

Losses on inventory valuation and obsolescence are due to obsolescence or out of use, which results in net realizable value being lower than historical cost. Therefore, it’s classified as operating cost.

• (e) Investments accounted for using equity method

Investments accounted for using equity method
Subsidiaries Associates	2021.12.31 $ 17,822,990 - $ 17,822,990	2020.12.31
		14,794,570 -
		14,794,570

Subsidiaries

Please refer to the consolidated financial statements of the year ended 2021.

� 22 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• (f) Property, plant and equipment

The cost and depreciation of the property, plant and equipment of the Company for the years ended December 31, 2021 and 2020, were as follows:

Cost: Balance at January 1, 2021 Additions Disposals Reclassification Balance at December 31, 2021 Balance at January 1, 2020 Additions Disposals Reclassification Balance at December 31, 2020 Depreciation: Balance at January 1, 2021 Depreciation for the year Disposals Balance at December 31, 2021 Balance at January 1, 2020 Depreciation for the year Disposals Balance at December 31, 2020 Carrying amounts: At December 31, 2021 At December 31, 2020 At January 1, 2020	Land $ 470,621 - - - $ 470,621 $ 470,621 - - - $ 470,621 $ - - - $ - $ - - - $ - $ 470,621 $ 470,621 $ 470,621	Buildings 866,836 - (2,662) 10,819 874,993 860,706 - - 6,130 866,836 415,240 34,613 (2,662) 447,191 380,872 34,368 - 415,240 427,802 451,596 479,834	Machinery 2,711,350 - (43,078) 112,509 2,780,781 2,661,788 - (20,704) 70,266 2,711,350 2,029,033 112,897 (43,078) 2,098,852 1,941,034 108,703 (20,704) 2,029,033 681,929 682,317 720,754	Other equipment 710,845 - (26,360) 74,520 759,005 698,169 - (29,773) 42,449 710,845 475,301 50,869 (26,360) 499,810 456,654 48,420 (29,773) 475,301 259,195 235,544 241,515	Equipment under installation and construction in progress 167,111 148,509 - (197,848) 117,772 102,306 183,650 - (118,845) 167,111 - - - - - - - - 117,772 167,111 102,306	Total 4,926,763 148,509 (72,100) -
						5,003,172
						4,793,590 183,650 (50,477) -
						4,926,763
						2,919,574 198,379 (72,100)
						3,045,853
						2,778,560 191,491 (50,477)
						2,919,574
						1,957,319
						2,007,189
						2,015,030

As of December 31, 2021 and 2020, the property, plant and equipment were not pledged as collateral for long-term debt and financing.

� 23 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• (g) Short-term borrowings

Unsecured bank loans Unused short-term credit lines Range of interest rates (h) Short-terms notes payable Commercial paper payable Less: discount unamortized Net amount Interest rate (i) Long-term borrowings Unsecured bank loans Less: current portion Total Unsecured credit Range of interest rates Due year	2021.12.31 $ 551,730 $ 3,666,707 0.49%~0.85% 2021.12.31 $ 200,000 (180) $ 199,820 0.58%~0.65% 2021.12.31 $ 850,000 (128,571) $ 721,429 $ 4,650,000 0.80%~1.05% 2022~2024	2020.12.31 399,607 2,495,383 0.51%~0.90% 2020.12.31 - - - - 2020.12.31 800,000 (500,000) 300,000 4,000,000 0.89%~1.25% 2021~2023

For the exposure information of the Company's rate foreign currency and current risk, please refer to Note (6)(r).

The Company signed a loan contract with the financial institution. According to the provisions of the contract, the Company’s financial statements must maintain specific current ratios, debt ratios, net tangible assets, and interest coverage ratios on the balance sheet date during the loan period. If such financial ratios breached specific conditions of the loan contract, they shall be improved by means of cash capital increase or other means in accordance with the agreement. As of December 31, 2021 and 2020, the Company did not violate any of the above financial ratio restrictions.

� 24 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

(j) Unsecured convertible bonds

Unsecured convertible bonds
Profit or loss revalued by fair value of Embedded derivative instruments – call and put rights, included in financial assets at fair value through profit or loss Interest expense	For the years ended December 31,
	2021 $ - $ -	2020
		1,853
		14,040

The Company issued the fourth unsecured 5-year convertible bonds which bear no interest on May 16, 2017, with the maturity date on May 16, 2022. The total convertible corporate bonds issued amounted to TWD 1,500,000, with an effective interest rate of 1.80%. The Holders have the right to require the Company to redeem their convertible bonds in cash at an amount equal to the principal amount of the Bonds (with interest) at any time during the forty days after May 16, 2020. The conversion price of the convertible bonds were set based on the issued regulation. The fourth unsecured convertible bonds have been fully converted as of August 17, 2019.

(k) Employee benefits

1. Defined benefit plans

The Company determined the movement in the present value of the defined benefit obligations and fair value of plan assets as follows:

and fair value of plan assets as follows:
Present value of defined benefit obligation Fair value of plan assets Net defined benefit (assets) liabilities	2021.12.31 $ 99,666 (114,285) $ (14,619)	2020.12.31
		104,435 (108,189
		(3,754)

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

1) Composition of plan assets

The Company sets aside pension funds in accordance with the regulations of the Council of Labor Affairs, and the pension funds are managed by the Pension Supervisory Committee. The annual budget for the allocation of the minimum income cannot be lower than the income calculated based on the interest rate of the banks’ two-year time deposit in accordance with the Management and Utilization of Labor Pension Funds regulations.

The Company’s Bank of Taiwan pension reserve account balance amounted to $114,285 at the end of the reporting period. The information used to calculate pension fund assets includes the asset allocation and yield of the fund. Please refer to the information published on the website of the Council of Labor Affairs and the Labor Pension Supervisory Committee.

� 25 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• 2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company were as follows:

Defined benefit obligation at January 1 Current service costs and interest Remeasurement on the net defined benefit liabilities �Actuarial losses (gains) arising from experience adjustments �Actuarial losses (gains) arising from changes in financial assumptions Benefit pay under the plan Defined benefit obligation at December 31	2021 $ 104,435 1,209 599 2,657 (9,234) $ 99,666	2020 122,754 2,047 (3,455) 6,085 (22,996)
		104,435

• 3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

Fair value of plan assets at January 1 Interest income Remeasurement on the net defined benefit liabilities �Return on plan assets (excluding current interest) Contribution paid by the employer Benefit paid Fair value of plan assets at December 31	2021 $ 108,189 707 1,311 13,312 (9,234) $ 114,285	2020 115,187 1,313 3,306 11,379 (22,996)
		108,189

• 4) Expenses recognized in profit or loss

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

The expenses recognized in profit or loss for the Compan	y were as follows:
Current service costs Net interest of net defined benefit liabilities	2021 $ 563 (61) $ 502	2020 709 24
		733

� 26 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

Operating costs Selling expenses Administrative expenses Research and development expenses	2021 $ 357 21 80 44 $ 502	2020
		543 30 115 45
		733

• 5) Remeasurement on the net defined benefit liabilities recognized in other comprehensive income

The Company’ s remeasurement on the net defined benefit liabilities recognized in other comprehensive income as follows:

Cumulative amount at January 1 Recognized during the period Cumulative amount at December 31	2021 $ 19,813 1,945 $ 21,758	2020
		20,488 (675)
		19,813

6) Actuarial assumptions

The following are the Company’s principal actuarial assumptions of Present Value of defined benefit obligations:

Discount rate Future salary increase rate	2021.12.31 2020.12.31 % 0.63 % 0.63 % 2.00 % 2.00

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $13,534.

The weighted average lifetime of the defined benefits plan is 14.06 years.

7) Sensitivity analysis

When calculating the present value of the defined benefit obligations, the Company uses judgments and estimations to determine the actuarial assumptions, including discount rate and future salary changes, as of the financial statement date. Any changes in the actuarial assumptions may significantly impact the amount of the defined benefit obligations.

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

December 31, 2021 Discount rate Future salary increasing rate	Influences of defined benefit obligations
	Increased 0.25% Decreased 0.25% (2,760) 2,871 2,777 (2,685)

� 27 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

December 31, 2020 Discount rate Future salary increasing rate	Influences of defined benefit obligations Increased 0.25% Decreased 0.25% (3,104) 3,233 3,128 (3,020)

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

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2021 and 2020, respectively.

2. Defined contribution plans

The Company set aside 6% of the employees’ monthly wages to the Labor Pension personal accounts at the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act.

The Company set aside a fixed amount to the Bureau of the Labor Insurance without the payment of additional legal or constructive obligations.

For the years ended December 31, 2021 and 2020, the Company set aside $37,798 and $33,453, respectively, under the pension plan to the Bureau of the Labor Insurance.

(l) Income taxes (profits)

• 1.Income tax expense recognized in profits or losses

The amount of income tax was as follows:

Current income tax expense: Current period Adjustment for prior periods Deferred tax expense: Origination and reversal of temporary differences Income tax expense	2021 $ 634,473 (20,270) 614,203 (55,583) $ 558,620	2020 771,796 -
		771,796
		(276,251)
		495,545

� 28 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

Income tax (expense) benefit recognized in other comprehensive income:

2021 Items that will not be reclassified subsequently to profit or loss: Actuarial losses and gains on defined benefit plans $ 389 Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements $ 32,921 The reconciliation of income tax and profit before tax was as follows: 2021 Profit excluding income tax $ 6,051,838 Income tax using the Company’s domestic tax rate $ 1,210,368 Non-deductible expenses 13,368 Tax incentives (3,140) Deductible temporary differences (694,989) Prior (overestimate) underestimate (20,270) Undistributed earnings additional tax 53,283 Total $ 558,620	2020
	(135)
	(18,876)
	2020
	4,184,544
	836,909 15,871 (9,998) (376,556) - 29,319
	495,545

The reconciliation of income tax and profit before tax was as follows:

2.Deferred tax assets and liabilities

1) Unrecognized Deferred Tax Liabilities

For the years ended December 31, 2021 and 2020, deferred tax liabilities are not recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The relevant amounts are as follow:

Consolidated amount of taxable temporary differences associated with investments in subsidiaries Amounts are not recognized as deferred tax liabilities	2021.12.31 $ 11,996,735 $ 2,399,347	2020.12.31
		8,521,793
		1,704,359

� 29 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

2) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2021 and 2020 are as follows:

Deferred Tax Liabilities: Balance at January 1, 2021 Debited (Credited) in income statement Balance at December 31, 2021 Balance at January 1, 2020 Debited (Credited) in income statement Balance at December 31, 2020 Deferred Tax Assets: Balance at January 1, 2021 Debited (Credited) in income statement Debited (Credited) in equity Exchange differences on translation of foreign operations Balance at December 31, 2021 Balance at January 1, 2020 Debited (Credited) in income statement Debited (Credited) in equity Exchange differences on translation of foreign operations Balance at December 31, 2020

Unrealized gain on investment income Defined Benefit Plans Total $ (910,910) - (910,910) 52,295 (1,382) 50,913 $ (858,615) (1,382) (859,997) $ (1,185,403) - (1,185,403) 274,493 - 274,493 $ (910,910) - (910,910) Defined Benefit Plans Current provisions Unrealized losses on inventories Cumulative translation adjustment Others Total $ 791 4,139 10,051 185,416 352 200,749 (1,180) 2,493 586 - 2,771 4,670 389 - - - - 389 - - - 32,921 - 32,921 $ - 6,632 10,637 218,337 3,123 238,729 $ 3,055 2,749 7,727 204,292 179 218,002 (2,129) 1,390 2,324 - 173 1,758 (135) - - - - (135) - - - (18,876) - (18,876) $ 791 4,139 10,051 185,416 352 200,749

1. The Company’s tax returns for the years through 2019 were examined and approved by the Taipei National Tax Administration.

(m) Capital and other equity

1. Issuance of ordinary shares

As of December 31, 2021 and 2020, the total value of nominal ordinary shares amounted to $6,000,000 and $4,000,000. The par value of each share is $10. In total, there were 332,918 in thousands of ordinary shares, issued. All issued shares were paid up upon issuance.

� 30 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

Reconciliation of shares outstanding for the years ended December 31, 2021 and 2020 was as follows:

follows:
Balance at January 1 Conversion of convertible bonds Balance at December 31	Ordinary shares (in thousands of shares)
	2021 332,918 - 332,918	2020
		319,708 13,210
		332,918

As of December 31, 2020, the convertible bonds were converted to 13,210 new ordinary shares of stock, which were issued at the amount of $1,425,400. The registration procedures were completed.

2. Capital surplus

The balance of additional paid-in capital was as follows:

Share capital Premium from convertible bonds	2021.12.31 $ 95,627 1,773,034 $ 1,868,661	2020.12.31
		95,627 1,773,034
		1,868,661

According the the R.O.C company Act, capital reserves can only be reclassified as share capital or be distributed as cash dividends after offsetting against losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the Securities Offering and Issuance Guidelines, the amount of capital reserves to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

3. Retained earnings

The Company's article of incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

Taking into account the characteristics of industrial growth and stabilizing the financial structure of the Company, the Company will not distribute dividends when in deficit.

Under the policy of dividend distribution, the Company shall first take into consideration its future development, financial situation and shareholders' rewards, as well as its programs to meet its capital expenditure budget in determining the cash in need. After the aforementioned consideration, the Company will distribute the cash dividends to its shareholders. Cash dividends shall not be more than 20% of the total dividends.

� 31 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

Surplus distributed should be, on principle, 10% to 70% of distributable surplus. Distributable surplus is accounted for as profit, after setting aside reserves, plus, prior-year undistributed earnings. Any remaining profit shall be distributed according to the stockholders' meeting for approval.

1) Legal reserve

10 percent of net income should be set aside as statutory earnings reserve until it is equal to share capital. If the Company experienced profit for the year, the meeting of shareholders shall decide on the distribution of the statutory earnings reserve, either by new shares or by cash, of up to 25 percent of the actual share capital.

2) Special reserve

A portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the difference of the current-period total net reduction of other shareholders’ equity and the balance of the special reserve that mentioned in the previous paragraph. Similarly, a portion of undistributed prior period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’equity shall qualify for additional distributions. As of December 31, 2021, the special reserve of $75,502 was reversed and as of December 31, 2020, $408,839 was reclassified as special reserve.

3) Earnings distribution

The earnings distribution for 2020 and 2019 was decided by the general meeting of shareholders held on July 1, 2021, and June 18, 2020.

The relevant dividend distribution to shareholders is as follows:

Dividends distributed to ordinary shareholders Cash	2020	2020	2020	2019 Dividend per Share (TWD$) Amount 5.76 1,918,248	2019 Dividend per Share (TWD$) Amount 5.76 1,918,248
	Dividend per Share (TWD$)		Amount		Amount
	$ 7.00		2,330,428		1,918,248

� 32 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

4. Other equity

Balance at January 1, 2021 Exchange difference on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance at December 31, 2021 Balance at January 1, 2020 Exchange difference on translation of foreign financial statements Balance at December 31, 2020	Foreign currency translation differences for foreign operations $ (756,453) (131,683) - $ (888,136) $ (831,955) 75,502 $ (756,453)	Unrealized gains (losses) on equity instruments at fair value through other comprehensive income (438) - (15,335) (15,773) (438) - (438)	Total
			(756,891) (131,683) (15,335)
			(903,909)
			(832,393) 75,502
			(756,891)

(n) Earnings per share

The Company calculated the basic and diluted EPS as follows:

1. Basic earnings per share

The calculation of basic earnings per share for the years ended December 31, 2021 and 2020, were based on the profit attributable to ordinary shareholders of the Company and the weighted-average number of ordinary shares outstanding, calculated as follows:

1) Profit attributable to ordinary shareholders

Profit attributable to ordinary shareholders of the Company 2) Weighted-average number of ordinary shares Issued ordinary shares at January 1 Effect of convertible notes Weighted-average number of ordinary shares at December 31	2021 $ 5,493,218 2021 332,918 - 332,918	2020
		3,688,999
		2020
		319,708 5,886
		325,594

� 33 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

2. Diluted earnings per share

The calculation of diluted earnings per share for the years ended December 31, 2021 and 2020, were based on profit attributable to ordinary shareholders of the Company and the weightedaverage number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, calculated as follows:

1) Profit attributable to ordinary shareholders of the Company (diluted)

Profit attributable to ordinary shareholders of the Company (basic) Convertible preference shares dividends Profit attributable to ordinary shareholders of the Company (diluted)	2021 $ 5,493,218 - $ 5,493,218	2020
		3,688,999 9,749
		3,698,748

2) Weighted-average number of ordinary shares (diluted)

Weighted-average number of ordinary shares (basic) Effect of convertible bond Effect of employee stock compensation Weighted-average number of ordinary shares (diluted) at December 31	2021 332,918 - 801 333,719	2020
		325,594 7,324 1,110
		334,028

For calculation of the dilutive effect of the stock option, the average market value is assessed based on the quoted market price where the Company’s option is outstanding.

• 3.Earnings per share were as follow:

Basic earnings per share Diluted earnings per share venue from contracts with customers Disaggregation of revenue Primary geographical markets Taiwan China Other	2021 $ 16.50 $ 16.46 2021 $ 5,856,611 1,312,375 2,020,953 $ 9,189,939	2020
		11.33
		11.07
		2020
		4,726,774 868,560 1,335,302
		6,930,636

• (o) Revenue from contracts with customers

• Disaggregation of revenue

� 34 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

Major products Prepare Capper clad laminate Mass lam foundry Other	2021 $ 3,605,301 3,553,454 1,058,056 973,128 $ 9,189,939	2020
		3,036,645 2,696,485 758,502 439,004
		6,930,636

• (p) Rewards of employees, directors and supervisors

In accordance with the Company's article, which was approved by the shareholders, the Company shall assign 3% as rewards to employees, and less than 1.2% as rewards to directors and supervisors, if there are earnings during the year. However, the Company has to retain the amount while there are accumulated loss.

The employees mentioned before include the employees in the subsidiaries who meet the specific conditions.

For the years ended December 31, 2021 and 2020, rewards of employees of $189,120 and $130,767 and directors of $63,040 and $43,589, respectively, were estimated and recognized as current expense. These amounts were calculated using the Company’s profit before tax before rewards of employees and directors for the year ended December 31, 2021 and 2020, and using the earnings allocation method which was stated under the Company’s article. These rewards were charged to profit or loss under operating costs or operating expenses for the year ended December 31, 2021 and 2020.

Related information of distributions of remuneration to employees and directors can be accessed from the Market Observation Post System on the website.

There is no difference between the rewards of employees and directors that was decided by the Board of Directors and the financial report’s estimated amounts in 2021 and 2020.

• (q) Non-operating income and expenses

• Interest income

The details of other revenue were as follows:

Interest income

2021 $ 920	2020
	1,026

� 35 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

2. Other gains and losses

The details of other gains and losses were as follows:

Disposal gain on property, plant and equipment Foreign currency exchange loss, net Gain on financial assets at fair value through profit or loss Other profits (losses) Other gains (loss), net Finance costs The details of finance cost were as follows: Interest expense	2021 $ 338 (46,950) - 1,028 $ (45,584) 2021 $ 9,041	2020 34 (15,807) 1,853 (1,303)
		(15,223)
		2020 23,185

3. Finance costs

(r) Financial instruments

1. Credit risk

2. 1) Credit risks exposure

As of December 31, 2021 and 2020, the maximum exposure to credit risk arising from failure of performance of the counter-party and from financial guarantee made by the Company were as follows:

• A. The carrying amount of financial assets recognized in the financial statements;

• B. Financial guarantee made by the Company amounting to USD 10,600 thousands, 12,200 thousands, and USD 54,600 thousands, 5,000 thousands, respectively.

2.Liquidity risk

The following are the contractual maturities of financial liabilities of the Company, including estimated interest payments and excluding the impact of netting arrangements:

Balance at December 31, 2021 Non-derivative financial liabilities Unsecured bank loans Short-term notes payable Accounts payable Balance at December 31, 2020 Non-derivative financial liabilities Unsecured bank loans Accounts payable	Carrying amount $ 1,401,730 199,820 2,204,281 $ 3,805,831 $ 1,199,607 1,675,322 $ 2,874,929	Contractual cash flows 1,418,916 200,000 2,204,281 3,823,197 1,210,112 1,675,322 2,885,434	Within 6 months 499,494 200,000 2,204,281 2,903,775 902,239 1,675,322 2,577,561	6-12 months 189,547 - - 189,547 1,596 - 1,596	1-2 years 427,672 - - 427,672 3,150 - 3,150	More than 2 years
						302,203 - -
						302,203
						303,127 -
						303,127

� 36 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier or in significantly different amounts.

• 3.Currency risk

• 1) Currency risk exposure

The Company’s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD Financial liabilities Monetary items USD		2021.12.31	TWD 2,895,012 2,156,681		2020.12.31
	Foreign currency (thousands of dollars)	Exchange rate		Foreign currency (thousands of dollars)	Exchange rate TWD 28.480 2,231,010 28.480 1,744,118
	$ 104,589 77,915	27.680 27.680		78,336 61,240

• 2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, bank loans, accounts payable and other payable that are denominated in foreign currency.

A 1% appreciation or depreciation of the TWD against the USD as at December 31, 2021 and 2020, would have increased or decreased net income by $6,441 and $4,059, respectively. This analysis assumes that all other variables remain constant.

• 3) Foreign exchange gain and loss on monetary items

The foreign exchange gains (losses) of Company monetary items converted into the functional currency amount and converted to parent Company’ s functional currency Taiwan Dollar exchange rate information were as follows:

TWD	2021 Foreign exchange losses Average exchange rate $ (46,950) -	2020 Foreign exchange losses Average exchange rate (15,807) -
	Foreign exchange losses $ (46,950)

4. Interest analysis

The interest rate exposure of the Company’ s financial assets and liabilities is described on liquidity risk management.

The following sensitivity analysis is based on the exposure to interest rate risk of the financial assets and liabilities on the reporting date.

� 37 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

For variable rate instruments, the sensitivity analysis assumes the variable rate liabilities are outstanding for the whole year on the reporting date. The Company’ s internal management reported the increases or decreases in the interest rates and the exposure to changes in interest rates of 0.5% is considered by management to be a reasonable change of interest rate.

If the interest rate increases or decreases by 0.5%, the Company’ s net income will decrease /increase by $8,958 and $5,127 for the years ended December 31, 2021 and 2020, respectively, assuming all other variable factors remain constant. This is mainly due to the Company’s variable rate borrowing.

5. Fair value

• 1) The kinds of financial instruments and fair value

The fair value of financial assets and liabilities at fair value through profit or loss is measured on a recurring basis. The carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and for equity investments that has no quoted prices in the active markets and whose fair value cannot be reliably measured, disclosure of fair value information is not required :

Financial assets measured at amortized cost Cash and cash equivalents Notes and account receivable Other receivable Refundable deposits Total Financial liabilities measured at amortized cost Short-term borrowings Accounts payable Other payable Guarantee deposits receivable Total			2021.12.31	2021.12.31
	Book Value $ 1,292,713 2,797,198 721,866 8,566 $ 4,820,343 $ 1,401,730 2,204,281 1,665,350 13,140 $ 5,284,501		Fair value
		Level 1 - - - - - - - - - -	Level 2 - - - - - - - - - -	Level 3 - - - - - - - - - -	Total
					- - - -
					-
					- - - -
					-

� 38 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

Financial assets measured at amortized cost Cash and cash equivalents Notes and account receivable Other receivable Refundable deposits Total Financial liabilities measured at amortized cost Short-term borrowings Account payable Other payable Guarantee deposits Total			2020.12.31	2020.12.31
	Book value $ 962,032 2,235,138 500,051 640 $ 3,697,861 $ 1,199,607 1,675,322 1,271,445 8,673 $ 4,155,047		Fair value
		Level 1 - - - - - - - - - -	Level 2 - - - - - - - - - -	Level 3 - - - - - - - - - -	Total
					- - - -
					-
					- - - -
					-

• 2) Valuation techniques for financial instruments measured at fair value

• A. Non-derivative financial instruments

A financial instrument is regarded as being quoted in an active market. The major exchange and the Over-the-Counter of Central Government’s bonds is the basis to the fair value of listing equity instruments and liability instruments in active market.

If quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have quoted price in active market. If a financial instrument does not accord with the definition aforementioned, then it is considered to be without quoted price in active market. In general, market with low trading volume or high bid-ask spreads is an indication of non-active market.

• (s) Financial risk management

• Overview

The nature and the extent of the Company’ s risks arising from financial instruments, which include credit risk, liquidity risk and market risk, are discussed below. Also, the Company’ s objectives, policies and procedures of measuring and managing risks are discussed below.

For more quantitative information about the financial instruments, please refer to the other related notes of the financial statements.

� 39 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

2. Risk management framework

The financial management department, which provides intra-company services, is responsible for coordinating domestic and international financial market operations, as well as monitoring and managing operation-related financial risks through the internal risk report. The internal risk report analyzes risk exposure of the Company through range and depth. The Company uses derivative financial instruments to hedge risks and to alleviate their impacts. Usage of derivative financial instruments is subject to regulations approved of by the Board of Directors. The regulation is a written document pertaining the usage of exchange risk, interest risk, credit risk, derivative and non-derivative financial instruments, as well as the investment of the remaining working capital. The internal auditors review the policy compliance and risk exposure on a regular basis. The Company does not engage in opportunistic operations of financial instruments (including derivative financial instruments). The financial management department reports to The Company Risk management Committee quarterly. The Company Risk Management Committee is an independent organization that is responsible for monitoring risk management and enforcing policies to reduce risk exposure.

3. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment.

1) Accounts receivable and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company’ s customer base, including the default risk of the industry in which customers operate, as these factors may have an influence on credit risk.

The management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’ s standard payment terms are offered. The Company’ s review includes external ratings, when available, and in some cases bank references. Credit limits are established for each customer, which represent the maximum open amount without requiring approval from the General Manager’ s office; these limits are reviewed quarterly. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a cash basis.

In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, whether they are a wholesale, retail or end-user customer, geographic location, industry, aging profile, maturity and existence of previous financial difficulties. Customers that are graded as “high risk” are placed on a restricted customer list and monitored by the General Manager’ s office. If customers default, the Company will stop transactions with those customers or trade on a cash basis.

The Company established an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss incurred but not yet identified. The collective loss allowance is determined based on historical data on payment statistics for similar financial assets.

� 40 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

2) Bank deposit

The credit risk exposure in the bank deposits and transaction contract of foreign derivation instruments is measured and monitored by the General Manager's office. The Company only deals with financial institutions; therefore, there are no significant doubts regarding default on the above financial instruments, and as a result, there is no significant credit risk.

4. Liquidity risk

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

The Company uses activity-based costing to cost its products, which assists it in monitoring cash flow requirements. The Company aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash flows on financial liabilities over the succeeding 90 days. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. As of December 31, 2021 and 2020, the Company’s unused credit line were amounted to $8,316,707 and $6,495,383, respectively.

5. Market risk

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

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

1) Currency risk

The Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities, primarily the New Taiwan Dollar (TWD), and US Dollar (USD). Besides, the Company uses natural hedging principle to hedge by controlling the net amount of each currency of the Company in accordance with the condition of the exchange rate market. The Company hedges the currency risk with forward foreign currency whose mature date is in a year from report date and currency swap contract.

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

� 41 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• 2) Interest risk

The Company’s borrowings were on the basis of floating interest rate. The Company is not involved in the situation of changing floating interest rate into fixed rate with interest rate swap agreement. The Company periodically assessed the borrowing rates of the banks and every currency to make provisions for interest-changed rate risk. In addition, the Company creates favorable relationship with banks to get lower financial costs from borrowings in order for it to strengthen its working capital to lower its dependency on bank borrowings, as well as situation of changing floating interest rate and scatter interest-changed rate risk.

• 3) Other market price risk

The Company does not enter into any commodity contracts other than to meet the Company’s expected usage and sales requirements; such contracts are not settled on a net basis.

(t) Capital management

The Company maintains and manages its capital to meet the minimum paid-in capital required by the competent authority, and to optimize the balance of liabilities and equity in order to maximize shareholders' return. By periodically reviewing and measuring relative cost, risk, and rate of return to ensure profit and to maintain adequate financial ratios, the Company may adopt various financing approaches to balance its capital structure in order to meet the demands for capital expenditures, working capital, settlements of liabilities, and dividend payments in normal course of business for the future.

• (u) Investing and financing activities not affecting current cash flow

The Company investing and financing activities which did not affect the current flow in the years ended December 31, 2021 and 2020, were as follow:

Short-term borrowings Long-term borrowings Short-term notes payable Total liabilities from financing activities Short-term borrowings Long-term borrowings Total liabilities from financing activities	2021.1.1 $ 399,607 800,000 - $ 1,199,607 2019.1.1 $ 579,568 350,000 $ 929,568	Cash flow 152,123 50,000 200,000 402,123 Cash flow (179,961) 450,000 270,039	Non-cash changes Acquisition Foreign exchange movement Fair value changes - - - - - - - - (180) - - (180) Non-cash changes Acquisition Foreign exchange movement Fair value changes - - - - - - - - -	Non-cash changes Acquisition Foreign exchange movement Fair value changes - - - - - - - - (180) - - (180) Non-cash changes Acquisition Foreign exchange movement Fair value changes - - - - - - - - -	2021.12.31 551,730 850,000 199,820
					1,601,550
					2020.12.31 399,607 800,000
			Acquisition - - -	Foreign exchange movement - - -
					1,199,607

� 42 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

(7) Related-Party Transactions

• (a) Parent company and ultimate controlling company

The Company is both the parent company and the ultimate controlling party of the Group.

• (b) Names and relationship with related parties

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

Name of related party Relationship with the Company EMC OVERSEAS HOLDING The Company its subsidiaries INCORPORATED Grand Wuhan Incorporated The Company its subsidiaries EMC INTERNATIONAL HOLDING The Company its subsidiaries

Grand Wuhan Incorporated The Company its subsidiaries EMC INTERNATIONAL HOLDING The Company its subsidiaries INCORPORATED Grand Zhuhai Incorporated The Company its sub-subsidiaries Grand Shanghai Incorporated The Company its sub-subsidiaries Grand Zhongshan Incorporated The Company its sub-subsidiaries EMC SPECIAL APPLICATION The Company its sub-subsidiaries INCORPORATED Elite Electronic Material (Kunshan) Co., Ltd. The Company its sub-subsidiaries Elite Electronic Material (Zhongshan) Co., Ltd. The Company its sub-subsidiaries Elite Electronic Material (Huangshi) Co., Ltd. The Company its sub-subsidiaries EMD SPECIALTY MATERIALS, LLC The Company its sub-subsidiaries EMC USA HOLDING INCORPORATED The Company its sub-subsidiaries TECHNICA USA The Company associates

• (c) Significant transactions with related parties

1. Sales

The amounts of significant sales and royalties sales by the Company to related parties were as follows:

Sub-Subsidiaries Associates	For the years ended December 31,	For the years ended December 31,
	2021 $ 1,292,023 97,953 $ 1,389,976	2020
		787,901 70,000
		857,901

The selling price for related parties approximated the market price. The credit terms ranged from 90 to 120 days, which approximated those for routine sales transactions; the royalties are negotiated by both parties.

� 43 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

2. Purchases

The amounts of significant purchases by the Company from related parties were as follows:

The amounts of significant purchases by the Company from	related parties were as follows:	related parties were as follows:
Sub-Subsidiaries	For the years ended December 31,
	2021 $ 100,592	2020
		78,834

The terms and pricing of purchase transactions with related parties were not significantly different from those offered by other vendors. The payment terms ranged from 90 to 120 days, which were no different from the payment terms given by other vendors.

3. Receivables from related parties

The receivables from related parties were as follows:

Account	Relationship	2021.12.31 $ 310,458 51,119 177,122 45 $ 538,744	2020.12.31
Accounts receivable Accounts receivable Other receivables Other receivables	Sub-Subsidiaries Associates Sub-Subsidiaries Associates		276,715 35,374 50,433 -
			362,522

The receivables from related parties were uncollateralized, and no provisions for doubtful debt were required after the assessment by the management.

1. Payables to related parties

Account	Relationship	2021.12.31 $ 63,394 450,082 2,928 $ 516,404 2021.12.31 $ 3,322	2020.12.31
			19,569 418,187 2,537
			440,293
			2020.12.31
			-

5. Loans to related parties

The loans to related parties were as follow:

The interest charged by the Company to related parties is based on the average interest rate charged by financial institutions on the Company's borrowings. The loans to related parties are unsecured.

� 44 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

1. Guarantee

As of December 31, 2021, the Company had provided a guarantee for loans taken out by its subsidiaries, please refer to Note 13(a) for further explanations.

• 7.Other transactions to related parties

Account	Relationship Associates	2021.12.31 $ 3,891	2020.12.31 2,885
Selling expenses

• (d) Key management personal compensation

Key management personnel compensation comprised:

Short-term employee benefits Termination benefits	For the years ended December 31,	For the years ended December 31,
	2021 $ 192,538 2,774 $ 195,312	2020
		136,535 2,891
		139,426

(8) Pledged Assets

The carrying values of pledged assets were as follows:

Assets	Purpose of Pledge Deposits for lease and natural gass, etc.	2021.12.31 $ 8,566	2020.12.31 640
Refundable deposits

(9) Significant Contingencies and Commitments

• (a) Major Commitments and contingencies were as follows:

• Unused standby letters of credit

Unused standby letters of credit TWD USD	2021.12.31 2020.12.31 $ 69,047 85,193 5,384 2,987

1. The royalties of eco-material technique treatment with Company A, etc., the paid royalties were as follows:

2021 $ 14,401	2020 14,109

1. As of December 31, 2021 and 2020, the amounts of Performance Letter of Guarantee issued by Mega International Commercial Bank-Zhongli Branch for the purpose of Customs for guaranty of domestic tariff and for guaranty of hiring foreigners to be employed were $5,000.

� 45 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

1. As of October 30, 2020, the Group's Board of Directors resolved to purchase land and buildings for the growth of the Group's operations, and signed the purchase contract with an unrelated party and the total contract price was $2.16 billion. Both parties agreed that the land needs to be in compliance with the land pollution remediation regulations. Since the relevant restoration works have not been completed, the ownership registration has not yet been transferred.

2. 5.As of December 31, 2021, the Company planned to get a government grant and obtained the performance guarantee letter issued by the bank. The amount of the guarantee letter was $7,200.

(10) Significant Catastrophic Losses: None.

• (11) Significant Subsequent Events: None.

(12) Others

• (a) Employee benefits, depreciation, and amortization expenses, categorized as operating cost or expense, were as follows:

Categorized as Nature	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2020	For the year ended December 31, 2020	For the year ended December 31, 2020
	Operating Cost	Operating Expense	Total	Operating Cost	Operating Expense	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others employee benefits Depreciation Amortization	618,111 54,972 24,735 - 37,842 184,643 249	575,146 25,850 13,565 63,522 12,194 13,736 9,020	1,193,257 80,822 38,300 63,522 50,036 198,379 9,269	561,617 47,455 23,046 - 28,143 180,730 209	374,956 18,749 11,140 44,071 7,489 10,761 4,886	936,573 66,204 34,186 44,071 35,632 191,491 5,095

As of December 31, 2021 and 2020, the additional information about the numbers of employees and employee benefit were as follows:

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages Adjustment of average salaries and wages Supervisors’ remuneration

� 46 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• 1.The Company's salary and remuneration policy (including directors, managers and employees) are as follows:

The remunerations to directors, managers and employees are in accordance with the principles of fairness and competition. In addition, the wages of the employees of the Company are paid based on the grade table set according to the complexity of their work, the degree of their responsibilities, and the professional skills required. Furthermore, the remuneration of the Company’ s directors and employees is determined by reference to the Company’ s overall operating performance, future risks and development trends of the industry, as well as the individual’ s performance achievement rate and contribution to the Company; reasonable remuneration is also taken into consideration.

• 2.The Company did not have supervisors, therefore, there was no remunerations of supervisors.

• (b) As of December 31, 2021, the Company's Board of Directors resolved to issue the unsecured convertible bonds for purchasing properties and working capital needs. The total amount raised is expected to be capped at $3.5 billion, with the par value of $100 thousand, and the issue period will be 5 years. The issue price is based on 100%~102% of the par value. Other conditions and measures will be dealt with in accordance with relevant acts and regulations, and will be announced separately after reported to the competent authority for approval.

(13) Additional Disclosures

• (a) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the year ended December 31, 2021:

1. Fund financing to other parties:

								(Expressed in tho	(Expressed in tho	usands of	New Taiw	an dollars,unless other	an dollars,unless other	an dollars,unless other	wise specified)	wise specified)
No	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance ?for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing
													Item	Value
0 1 2	Elite Material Co., Ltd. Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd.	TECHNICA USA Elite Electronic Material (Huangshi) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd.	Other receivables- related parties Other receivables- related parties Other receivables- related parties	Y Y Y	12,582 1,201,216 1,402,880	12,456 1,185,912 1,390,080	3,322 1,172,880 803,640	2.00% 3.00% 3.00%	1 2 2	97,953 - -	- Operating demand Operating demand	- - -	- - -	- - -	48,977 (Note 3) 2,982,979 (Note 4) 1,913,073 (Note 5)	5,925,854 (Note 3) 2,982,979 (Note 4) 1,913,073 (Note 5)

Note 1: The number is filled as follows:

1. 0 is the Company.

2. Subsidiaries are numbered as 1 sequentially.

Note 2:1. Having dealings with the Company.

1. Those who have the needs in short-term financing.

2. Note 3:The company with business contact, the amount of each fund financing cannot exceed 50% of total amount of purchase (sales) transactions in the recent year and cannot exceed 3% of the Company's net asset value; the total amount of fund financing cannot exceed 30% of the Company's net asset value.

3. Note 4:The total amount of fund financing could not exceed 30% of the lender's net asset value and the Company's net asset value, while the maximum financing amount for a single company could not exceed 30% of the lender's net asset value .

4. Note 5:The total maximum financing amount cannot exceed 30% of the lender's net asset value, while the maximum financing amount for a single company cannot exceed 30% of the lender's net value.

� 47 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

1. Guarantees and endorsements for other parties:

		(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)	(Expressed in thousands of New Taiwan dollars,unless otherwise specified)
No. (Note 1)	Name of company	Counter-party		Limitation on amount of guarantees and endorsements for a specific enterprise (Note 3)	Highest balance for guarantees and endorsements during theperiod	Balance of guarantees and endorsements as of reporting date	Actual usage amount during theperiod	Property pledged on guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements (Note 3)	Parent Company endorsement/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsement/ guarantees to third parties on behalf of parent company	Endorsements/guar antees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 2)
0 0 0 0 0 1 2	Elite Material Co., Ltd. � � � � Elite Electronic Material (Kunshan) Co., Ltd. (Note 4) Elite Electronic Material (Zhongshan) Co., Ltd.	Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd. EMD SPECIALTY MATERIALS,LLC TECHNICA USA Elite Electronic Material (Huangshi) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd.	2 2 2 2 6 4 4	9,876,423 9,876,423 9,876,423 9,876,423 9,876,423 994,326 3,188,455	85,605 142,675 1,139,200 285,350 17,121 784,800 2,400,780	- - - 276,800 16,608 781,920 2,391,968	- - - 166,080 16,608 467,436 1,331,212	- - - - - - -	% - % - % - % 1.40 % 0.08 % 7.86 % 37.51	19,752,846 19,752,846 19,752,846 19,752,846 19,752,846 9,943,264 6,376,910	Y Y Y Y		Y Y Y Y Y

Note 1: 0 is the Company.

Note 2:1. Entities with business relationship with the Company.

1. A subsidiary in which the Company directly holds more than 50% of its voting shares.

2. A investee in which the Company and subsidiary holds more than 50% of its voting shares.

3. A parent company in which the Company directly or Subsidiaries indirectly holds more than 90% of its voting shares.

4. Companies in same type of business and providing mutual endorsements/ guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project.

5. Shareholders making endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.

6. Companies in same type of business providing guarantees of pre-sale contracts according to the regulation.

7. Note 3: The total maximum endorsement / guarantee cannot exceed 100% of the Company's net worth in its latest financial statements, while the maximum endorsement / guarantee amount for a single company cannot exceed 50% of the Company's net worth in its latest financial statements.

8. Note 4: The Company or the company in which directly or indirectly holds more than 90% of the voting shares may be endorsed and the amount shall not exceed 10% of the company’s net worth.

9. Information regarding securities held at balance sheet date:

Information regarding securities held at balance sheet date:	Information regarding securities held at balance sheet date:	Information regarding securities held at balance sheet date:	Information regarding securities held at balance sheet date:	Information regarding securities held at balance sheet date:	Information regarding securities held at balance sheet date:	Information regarding securities held at balance sheet date:	Information regarding securities held at balance sheet date:	Information regarding securities held at balance sheet date:
(Expressed in thousands of New Taiwan dollars, unless otherwise specified)
Name of holder	Category and name of security	Category and name of security	Account title	Ending balance				Note
				Number	Book value	Percentage	Market value
EMC OVERSEAS HOLDING INCORPORARTED	PROUD STAR INTERNATIIONAL LIMITED	-	Non-current financial assets at fair value through other comprehensive income	500,000	-	% 3.26	-

1. Accumulated buying/selling of the same marketable securities for which the dollar amount reaches $300 million or 20% or more of paid-in capital: None.

� 48 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

1. Acquisition of real estate for which the dollar amount reaches $300 million or 20% or more of paid-in capital :

(In Thousands of New Taiwan Dollars)

Name of Company	Name of property	Transaction date	Transaction amount	Status of payment	Counterparty	Relationship with the Company	If the country is a related party, disclose the previous transfer information	If the country is a related party, disclose the previous transfer information	If the country is a related party, disclose the previous transfer information	If the country is a related party, disclose the previous transfer information	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
Elite Material Co., Ltd.	Land and plant	2021.12.31	2,160,000	Not yet paid	Tehchang Leather Products Co., Ltd.	None	-	-	-	-	Professional valuation report	Required for company operations	Payments are expected to be made after fulfilling contract conditions

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

2. Buying/selling products with the dollar amount reaches $100 million or 20% or more of paid-in capital:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Relationship		Transaction details	Transaction details		Reasons why and description of how the transaction conditions differ from general transactions	Reasons why and description of how the transaction conditions differ from general transactions	Account/note receivable (payable)	Account/note receivable (payable)	Notes
			Purchase /Sale	Amount	Percentage of total purchases /sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts/notes receivable (payable)
Elite Material Co., Ltd. Elite Electronic Material (Kunshan) Co., Ltd. Elite Material Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd. Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd.	Elite Electronic Material (Kunshan) Co., Ltd. Elite Material Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. Elite Material Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd.	Investee company on equity method by the Company � � � Actual related party � � � �	Sale Purchase Sale Purchase Sale Purchase Sale Purchase Sale	(537,594) 537,594 (443,710) 443,710 (113,116) 113,116 (2,803,250) 2,803,250 (1,935,891)	% (6) % 4 % (5) % 5 % (1) % 1 % (58) % 23 % (40)	Depends on subsidiaries' financial condition � � � � � � � �	- - - - - - - - -		115,050 (115,050) 195,374 (195,374) 93,616 (93,616) 958,953 (958,953) 539,590	% 4 % (3) % 7 % (8) % 2 % (4) % 61 % (26) % 34

� 49 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

Name of company	Counter-party	Relationship	Transaction details	Transaction details	Transaction details	Transaction details	Reasons why and description of how the transaction conditions differ from general transactions	Reasons why and description of how the transaction conditions differ from general transactions	Account/note receivable (payable)	Account/note receivable (payable)	Notes
			Purchase /Sale	Amount	Percentage of total purchases /sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts/notes receivable (payable)
Elite Electronic Material (Zhongshan) Co., Ltd.	Elite Electronic Material (Huangshi) Co., Ltd.	Actual related party	Purchase	1,935,891	% 23	Depends on subsidiaries' financial condition	-		(539,590)	% (21)

1. Accounts receivable from related parties for which the dollar amount reaches $100 million or 20% or more of paid-in capital:

(In Thousands of New Taiwan Dollars)

Name of related party	Counter-party	Relationship	Balance of receivables from related party	Turnover days	Past-due re relate	ceivables from d party	Subsequently received amount of receivables from related party	Allowances for bad debts
					Amount	Action taken
Elite Material Co., Ltd. Elite Material Co., Ltd. (note 1) Elite Material Co., Ltd. Elite Material Co., Ltd. (note 1) Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Kunshan) Co., Ltd. (Note 1) Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Kunshan) Co., Ltd. (note 1) Elite Electronic Material (Zhongshan) Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. (Note 1) Elite Electronic Material (Huangshi) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd.	Elite Electronic Material (Kunshan) Co., Ltd. � Elite Electronic Material (Zhongshan) Co., Ltd. � Elite Material Co., Ltd. � Elite Electronic Material (Huangshi) Co., Ltd. � � � Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd.	Investee company on equity method by the Company � � � Investcc company on equity method by the Company � Actual related party � � � � �	115,050 123,316 195,374 52,059 53,379 449,977 48,728 1,196,290 4,437 815,519 958,953 539,590	4.47 Not applicable 2.56 Not applicable 2.50 Not applicable 2.98 Not applicable 3.31 Not applicable 3.96 3.72	- - - - - - - - - - - -		69,398 123,316 144,858 52,059 4,041 108,267 36,155 - 4,395 - 647,195 345,145	- - - - - - - - - - - -

Note 1: Account for other receivable due from related parties.

� 50 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

1. Derivative transactions: None.

2. (b) Information on investees:

For the years ended December 31, 2021, the following was the information on investees (excluding investees in Mainland China) :

				(Amounts Expressed in Thousands	(Amounts Expressed in Thousands	(Amounts Expressed in Thousands	(Amounts Expressed in Thousands	of New Taiwan Dollars, Except for Share Data)	of New Taiwan Dollars, Except for Share Data)	of New Taiwan Dollars, Except for Share Data)	of New Taiwan Dollars, Except for Share Data)
Name of investor	Name of investee	Location	Major operations	Initial investm	ent (Amount)		Ending balanc	e	Net income (loss) of the investee	Investment income (losses)	Note
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
Elite Material Co., Ltd. � � � EMC OVERSEAS HOLDING INCORPORATED � � Grand Zhuhai Incorporated � EMC INTERNATIONAL HOLDING INCORPORATED � EMC SPECIAL APPLICATION INCORPORATED EMC USA HOLDING INCORPORATED	EMC OVERSEAS HOLDING INCORPORATED Grand Wahan Incorporated EMC INTERNATIONAL HOLDING INCORPORATED Li Cheng Tech Co., Ltd. Grand Zhuhai Incorporated TECHNICA USA Li Cheng Tech Co., Ltd. Grand Shanghai Incorporated Grand Zhongshan Incorporated EMC SPECIAL APPLICATION INCORPORATED EMC USA HOLDING INCORPORATED EMD SPECIALTY MATERIALS,LLC TECHNICA USA	British Virgin Islands Cayman Islands � Taiwan Cayman Islands USA Taiwan British Virgin Islands British Virgin Islands Cayman Islands Cayman Islands USA USA	Investment business Import / export business and investment business Investment business Electronics, Telecommunications equipment, Wholesale, Retails, Batteries, Power generation and Distribution machinery manufacturing business Import / export business and investment business Import/export business Electronics, Telecommunications equipment, Wholesale, Retails, Batteries, Power generation and Distribution machinery manufacturing business Import / export business and investment business Import / export business and investment business Investment business Investment business Copper clad laminate and prepreg business Import/export business	1,179,111 602,440 761,482 173,694 935,551 - 7,311 914,313 454,976 726,738 - 725,136 16,608	1,179,111 602,440 761,482 173,694 935,551 16,608 7,311 914,313 454,976 726,738 - 725,136 -	36,256,950 20,020,000 26,310,000 16,412,918 33,798,821 - 250,000 18,161,515 16,437,000 26,255,000 - - 600,000	% 100.00 % 100.00 % 100.00 % 33.50 % 100.00 % - % 1.53 % 99.79 % 100.00 % 100.00 % 100.00 % 100.00 % 30.00	16,367,691 714,679 754,212 - 16,313,311 - - 9,929,227 6,382,743 752,951 - 751,659 -	5,243,183 95,217 26,847 - 5,226,638 (33,146) - 3,281,452 1,952,464 29,389 (2,279) 43,580 (33,146)	5,243,183 95,217 26,847 - 5,226,638 (7,665) - 3,274,513 1,952,464 29,389 (2,279) 43,580 (2,279)	Subsidiaries Subsidiaries Subsidiaries Note 5 Sub-subsidiaries Note 3, 4 Note 5 Third-tier subsidiary � Sub-subsidiaries Third-tier subsidiary Third-tier subsidiary Note 3, 4

Note 1:The amounts of book value recognized using the equity method include investment income(losses) and the exchange differences on translation of foreign statements.

Note 2: The amount above is evaluated based on the independent audit report of the investee under equity method .

Note 3:On October 27, 2021, the Company's Board of Directors resolved to adjust the investment structure. The initial investment of $16,608 that was invested in Technica USA through EMC Overseas Holding Incorporated was adjusted to be invested in Technica USA through EMC USA Holding Incorporated.

• Note 4: Because other shareholders hold more than 70% of the shares and the Company only accounts for 30%, the Company has no control. Note 5: The investment value had been impaired, the Company recognized all losses and the book value was offset to zero.

� 51 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• (c) Information on investment in Mainland China:

• Information on investment in Mainland China:

(Amounts Expressed in Thousands of New Taiwan Dollars)

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan (R.O.C.)	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan	Net income (loss) of the investee	Percentage of Ownership	Investment Income (Loss) Recognized (Note 2)	Carrying Amount	Accumulated Inward Remittance of Earnings
					Outflow	Inflow
Elite Electronic Material (Kunshan) Co.Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd.	Copper clad laminate and prepreg business � �	1,749,376 559,136 553,600	(2) (2) (2)	650,816 440,613 601,858	- - -	- - -	650,816 440,613 601,858	3,273,474 1,945,565 86,742	% 99.79 % 100.00 % 100.00	3,266,552 1,945,565 86,742	9,922,238 6,376,910 699,881	7,862,841 4,038,934 -

1. Limitation on investment in Mainland China:

Limitation on investment	in Mainland China:
Aggregate investment amount remitted from Taiwan to Mainland China at the end of the period	Approved investment (amount) by Ministry of Economic Affairs Investment Commission	Limitation on investment in Mainland China in accordance with regulations of Ministry of Economic Affairs Investment Commission
1,710,734	4,373,813	11,851,708

Note 1: There are three investment approach of categories:

• (1) Direct Investment in Mainland China.

• (2) Investment in Mainland China by a third party.

• (3) Other approach.

• Note 2: The financial statements were audited by the Certified Public Accountants of the Company.

• Note 3: The difference between the paid-in capital of Elite Electronic Material (Kunshan) Co. Ltd. and the investment amount remitted from Taiwan amounted to USD 6,012, which was invested overseas by the subsidiary, also USD 10,000, and USD 35,000, which were recognized as capital increase out of earnings, respectively.

• Note 4: The difference between the paid-in capital of Elite Electronic Material (Zhongshan) Co. Ltd. and the investment amount remitted from Taiwan amounted to USD 6,255, which was recognized as capital increase out of earnings.

• Note 5: The difference between the paid-in capital and investment amount remitted from Taiwan amounted to USD 110, which was invested overseas by the subsidiary.

• Note 6: The items in the balance sheet and those in the income statements were translated at the exchange rate of 27.6800 and 27.9973, respectively, for the year ended December 31, 2021.

3. Significant transactions�

Please refer to the related disclosures above captioned as “ Related information on material transaction items” for direct or indirect significant transactions between the Company and its investees in Mainland China for the year ended December 31, 2021. (The transactions were eliminated in the consolidated financial statements.)

� 52 �

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ELITE MATERIAL CO., LTD.

For the years ended December 31, 2021 and 2020

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

• (d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Yu Chang Investments Co., Ltd.	25,471,477	% 7.65
New Labor Pension Fund- Taiwan	24,182,700	% 7.26

• Note: (1)The main shareholder information of this table is calculated by the insurance company on the last business day at the end of each quarter. The above information. As for the share capital recorded in the company's financial report and the number of shares actually delivered by the company without physical registration, the calculation basis may be different or different.

• (2)If the information on the Shanghai Stock Exchange is a shareholder's shareholding delivery to the trust, it will be disclosed by the trustee who opened the trust account separately. As for shareholders who handle the declaration of insider equity holding more than 10% of their shares in accordance with the Securities Exchange Act, their shareholdings include their shareholdings plus their delivery of trust and shares with the right to make decisions on trust property, etc. For information on insider equity declaration, please refer to Open Information Observatory.

(14) Segment Information

Please refer to the consolidated financial statements of the year ended 2021.

� 53 �

ELITE MATERIAL CO., LTD.

STATEMENT OF CASH AND CASH EQUIVALENTS

December 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description Amount Cash on hand $ 375 Check account deposits 119 Saving accounts 554,957 Foreign deposits(USD14,998 Thousands of Dollars� CNY5,524 Thousands of Dollars) 439,142 Time deposits 298,120 Sub total 1,292,338 $ 1,292,713
Cash Saving accounts Total

STATMENT OF NOTES RECEIVABLES

Client name	Description	Amount Note $ 42,410 27,552 13,123 8,696 6,304 16,475 Client included in others does not exceed 5% of the account balance. (349) $ 114,211
A Company B Company C Company D Company E Company Others Less: Loss allowance Total	Current portion � � � � �

� 54 �

ELITE MATERIAL CO., LTD.

STATEMENT OF ACCOUNT RECEIVABLES

December 31, 2021

(In Thousands of New Taiwan Dollars)

Client name	Description	Amount Note $ 115,050 195,374 34 51,119 361,577 648,309 382,421 276,878 163,608 138,873 712,369 Client included in others does not exceed 5% of the account balance. 2,322,458 2,684,035 (1,048) $ 2,682,987
Related-parties: Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd. TECHNICA USA Sub total Non-related-parties: F Company G Company H Company I Company J Company Others Sub total Total Less: Loss allowance Accounts receivable, net

� 55 �

ELITE MATERIAL CO., LTD. STATEMENT OF INVENTORY

December 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Amount Cost Net Realizable Value Note $ 873,764 (34,253) 839,511 884,214 32,181 32,181 91,829 (6,013) 85,816 101,045 234,707 (12,915) 221,792 324,976 26,973 26,973 $ 1,206,273
	Cost $ 873,764 (34,253) 839,511 32,181 91,829 (6,013) 85,816 234,707 (12,915) 221,792 26,973 $ 1,206,273
Materials Less: Loss allowance Sub total Supplies Work in progress Less: Loss allowance Sub total Finished goods Less: Loss allowance Sub total Inventory in-transit Inventory, net

� 56 �

ELITE MATERIAL CO., LTD.

STATEMENT OF INVESTMENTS ACCOUNTED FOR USING

EQUITY METHOD

For the Year Ended December 31, 2021

(In Thousands of New Taiwan Dollars)

Investee Company EMC OVERSEAS HOLDING INCORPORATED Grand Wuhan Incorporated EMC INTERNATIONAL HOLDING INCORPORATED Licheng Technology (Stock) Company	Beginning Balance Number of shares Amount 36,257 $ 13,423,847 20,020 624,341 26,310 746,382 16,413 - $ 14,794,570	I	ncrease Amount 2,934,534 86,056 7,830 - 3,028,420	D	ecrease Amount - - - - -		Ending Balanc	e Amount 16,358,381 710,397 754,212 - 17,822,990	Mark N	et Price or et Value Total price 16,367,691 714,679 754,212 - 17,836,582	Pledged as collateral Note No No No No
	Number of shares	Number of shares - - - -		Number of shares - - - -		Number of shares 36,257 20,020 26,310 16,413	Proportion of shareholding % 100.00 % 100.00 % 100.00 % 33.50		Unit price - - - -
	36,257 20,020 26,310 16,413

� 57 �

ELITE MATERIAL CO., LTD.

STATEMENT OF SHORT-TERM LOANS

December 31, 2021

(In Thousands of New Taiwan Dollars)

Type of loans Description Financial institution

Short-term loans

Ending Balance Contract Period $ 551,730 2021.09.22~2022.03.31

Range of Loan Collaterals or Interest Rates Commitments Pledged Assets Note 0.49%~0.85% 4,814,800 Guarantee Notes

� 58 �

ELITE MATERIAL CO., LTD.

STATEMTN OF SHORT-TERMS NOTE PAYABLES

December 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Guarantees or acceptances institution Mega Bills Finance CO., LTD International Bills Finance CO., LTD	Contract Period 110.12.30~ 111.02.25 110.12.24~ 111.02.22	Interest Rate		Amount	Balance Amount Note 99,907 Promissory note 99,913 � 199,820
				Issue Amount $ 100,000 100,000 $ 200,000	Discount commercial payable 93 87 180
Commercial paper �			0.58% 0.65%

� 59 �

ELITE MATERIAL CO., LTD.

STATEMENT OF ACCOUNT PAYABLES

December 31, 2021

(In Thousands of New Taiwan Dollars)

Suppliers	Description	Amount Note $ 53,379 9,993 22 63,394 224,767 206,698 206,264 203,316 152,735 124,805 114,462 113,880 793,960 Client included in others does not exceed 5% of the account balance. 2,140,887 $ 2,204,281
related-parties: Elite Electronic Material (Kunshan) Co., Ltd. Elite Electronic Material (Zhongshan) Co., Ltd. Elite Electronic Material (Huangshi) Co., Ltd. Sub total Non-related-parties: A Company B Company C Company D Company E Company F Company G Company H Company Others Sub total Total

� 60 �

ELITE MATERIAL CO., LTD.

STATEMENT OF OTHER PAYABLES

December 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description Amount Payables for equipment $ 68,908 Payroll payables and bonuses payable 420,022 Work in progress-outsourced payable 104,312 Employees compensations payable 189,210 Directors' compensations payable 63,040 Pension expenses payable 20,192 Other expenses payable 799,666 $ 1,665,350
Other payables Total

� 61 �

ELITE MATERIAL CO., LTD.

STATEMENT OF LONG-TERM LOAN

December 31, 2021

(In Thousands of New Taiwan Dollars)

Creditor	Description	Loan Amount $ 300,000 100,000 100,000 100,000 100,000 100,000 50,000 850,000 (128,571) $ 721,429	Contract Period 2020.12.25~2023.12.25 2021.09.22~2024.09.22 2021.09.22~2024.09.22 2021.09.22~2024.09.22 2021.12.22~2023.09.22 2021.12.21~2023.08.13 2021.12.22~2023.10.14	Interest % 1.05 % 1.02 % 1.02 % 0.98 % 0.80 % 0.85 % 0.88	Collaterals or Pledged Assets Note None � � � � � �
A Bank B Bank C Bank D Bank D Bank E Bank E Bank Sub total Less: Long-term borrowings, current portion Long-term loans	Financial institution Financial institution Financial institution Financial institution Financial institution Financial institution Financial institution

� 62 �

ELITE MATERIAL CO., LTD.

STATEMENT OF NET REVENUE

For the Year Ended December 31, 2021

(In Thousands of New Taiwan Dollars)

Item Capper clad laminate Prepreg Mass lam foundry Others	Quantity	Amount Note $ 3,553,454 3,605,301 1,058,056 973,128 $ 9,189,939
	6,531,737 25,664,613 6,552,660

� 63 �

ELITE MATERIAL CO., LTD.

STATEMENT OF OPERATING COSTS

For the Year Ended December 31, 2021

(In Thousands of New Taiwan Dollars)

Item Materials, beginning of the year Plus: Purchases Less: Material sold Materials, end of the year Material scraps Transferred to manufacturing expenses Transferred to operating expenses Direct materials Direct labor Manufacturing expenses Total Manufacturing costs Plus: Work-in-process, beginning of the year Purchased work-in-process Less: Work-in-process, end of the year Transferred to manufacturing expenses Transferred to operating expenses Cost of finished goods Plus: Finished goods, beginning of the year Purchased finished goods Less: Finished goods, end of the year Transferred to manufacturing expenses Transferred to operating expenses Inventory scraps Cost of goods sold�Material sold Loss on disposal of scrap Losses on inventory valuation and obsolescence Revenue from sales of scraps Costs of sales

Amount Sub total Total $ 697,578 5,403,318 (417,089) (873,764) (4,211) (83,156) (34,212) 4,688,464 487,219 1,638,994 6,814,677 126,585 2,913 (91,829) (46,434) (90,392) (99,157) 6,715,520 281,550 97,421 (261,680) (6,248) (93,387) (2,155) 15,501 6,731,021 417,089 6,366 2,932 (53,012) $ 7,104,396

� 64 �

ELITE MATERIAL CO., LTD.

STATEMENT OF SELLING EXPENSES

For the Year Ended December 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description	Amount	Note
Payroll expenses	$	41,044
Shipping expenses		96,345
Administrative expenses		45,039
Commission expenses		113,607
Other expenses		43,494	Client included in others
			does not exceed 5% of the
			account balance.
Total	$	339,529
	STATEMENT OF ADMINISTRATIVE
	EXPENSES
Item	Description	Amount	Note
Payroll expenses	$	445,952
Remuneration of directors		63,040
Other expenses		164,884	Client included in others
			does not exceed 5% of the
			account balance.
Total	$	673,876

� 65 �

ELITE MATERIAL CO., LTD.

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES

For the Year Ended December 31, 2021

(In Thousands of New Taiwan Dollars)

Item	Description	Amount Note $ 190,037 88,150 48,960 Client included in others does not exceed 5% of the account balance. $ 327,147
Research and development expenses Payroll expenses Other expenses Total

� 66 �