ENNOSTAR — Audit Report / Information 2022

Dec 29, 2022

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2022 AND 2021

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

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ENNOSTAR Inc.

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2022, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the company that is required to be included in the consolidated financial statements of affiliates, is the same as the company required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard No. 10. Also, if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

ENNOSTAR Inc.

Representative: Biing-Jye Lee

February 23, 2023

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INDEPENDENT AUDITORS’ REPORT

PWCR22000392

To the Board of Directors and Shareholders of ENNOSTAR Inc.

Opinion

We have audited the accompanying consolidated balance sheets of ENNOSTAR Inc. and subsidiaries (the “Group”) as at December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent auditors, as described in the other matters section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

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

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Key audit matters

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

Key audit matters in relation to the consolidated financial statements for the year ended December 31, 2022 are outlined as follows:

Evaluation of Inventories

Description

Please refer to Note 4(14) of the consolidated financial statements for the accounting policy on inventory valuation, Note 5(2) for the accounting estimates and assumptions in relation to inventory valuation, Note 6(6) for the explanations regarding inventory valuation. As of December 31, 2022, the balances of inventories and the allowance for valuation loss were NT$5,687,552 thousand and NT$862,507 thousand, respectively.

The Group is primarily engaged in manufacturing and sales of LED wafers, chips, packages and modules. Due to rapid technological developments, short product lifespans and frequent fluctuations of market prices, the risk of decline in market value and obsolescence for inventories is high. The Group evaluates net realized values for inventories which aged over a specific period of time and specific obsolete inventories in order to provide allowance for valuation loss. Since the identification of the above obsolete inventories and their respective net realizable values are subject to management’s judgment, it was identified as one of the key audit matters.

How our audit addressed the matter

Our key audit procedures performed in respect of the above included the following:

1. Obtained an understanding of the Group’s operations and the nature of its industry and interviewed with management to understand the probability of future sales for those out-of-date inventories and to evaluate the reasonableness of allowance for valuation loss.

2. Obtained and validated the accuracy of the detailed listings of inventories aged over a specific period of time and specific obsolete inventories. Validated information of historical sales and discounts for those obsolete inventories to assess the reasonableness of policies in providing allowance for inventory valuation loss.

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Emphasis of matter

We draw attention to Note 1 to the consolidated financial statements, which describes that ENNOSTAR Inc. used 0.5 ordinary share in exchange for 1 ordinary share of Epistar Corporation to acquire a 100% equity interest of Epistar Corporation. The aforementioned share exchange pertains to a reorganization of entities under common control. In substance, ENNOSTAR Inc. is the successor company of Epistar Corporation. Thus, ENNOSTAR Inc., in its consolidated financial statements, accounted for the relevant assets and liabilities received using the book values in the financial statements of Epistar Corporation. Also, ENNOSTAR Inc. restated the prior period consolidated financial statements as if Epistar Corporation had always been consolidated since the beginning.

Other matter – Audit by Other Independent Auditors

We did not audit the financial statements of certain consolidated subsidiaries. Those financial statements were audited by other independent auditors, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the financial statements and the information on the consolidated subsidiaries disclosed in Note 13 was based solely on the reports of other independent auditors. Total assets of those consolidated subsidiaries amounted to NT$268,634 thousand and NT$273,986 thousand, constituting 0.37% and 0.36% of the consolidated total assets as at December 31, 2022 and 2021, respectively, and total operating revenues were both NT$0 thousand for the years then ended, constituting 0% of the consolidated total operating revenues as at December 31, 2022 and 2021, respectively. Furthermore, we did not audit the 2022 and 2021 financial statements of certain equity investments accounted for under the equity method. Those financial statements were audited by other independent auditors whose reports thereon were furnished to us and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements and certain information disclosed in Note 13 relative to these investments, is based solely on the reports of the other independent auditors. These equity investments amounted to NT$1,781,200 thousand and NT$1,046,503 thousand, representing 2.44% and 1.36% of the consolidated total assets as of December 31, 2022 and 2021, respectively, and their comprehensive (loss) income (including share of loss of associates and joint ventures accounted for under equity method and share of other comprehensive (loss)/income of associates and joint ventures accounted for under equity method) amounted to NT$(144,437) thousand and NT$7,403 thousand, representing 40.08% and 0.47% of the consolidated comprehensive (loss) income for the years then ended.

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Other matter – Parent company only financial reports

We have also expressed an unmodified opinion on the parent company only financial statements of ENNOSTAR Inc. as at and for the year ended December 31, 2022 and 2021.

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

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

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

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

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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As part of an audit in accordance with Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

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

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

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

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

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

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

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.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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.

Li, Tien-Yi[Chou, Chien-Hung ]

For and on behalf of PricewaterhouseCoopers, Taiwan February 23, 2023

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

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

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ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 7 6(5) 7 7 6(6) 6(2) 6(3) 6(4) 6(7) 6(8) 6(9) 6(10) 6(33)	December 31, 2022 AMOUNT % $ 16,127,132 22 164,066 - 647,408 1 1,872,810 3 10,285 - 7,544,597 10 425,969 1 127,695 - 135,418 - 4,825,045 7 761,976 1 20,627 - 32,663,028 45 90,007 - 4,445,317 6 180,137 - 3,608,999 5 22,037,075 30 1,905,157 3 692,498 1 4,907,583 7 1,717,418 2 796,251 1 40,380,442 55 $ 73,043,470 100	December 31, 2021	December 31, 2021
		AMOUNT $ 16,127,132 164,066 647,408 1,872,810 10,285 7,544,597 425,969 127,695 135,418 4,825,045 761,976 20,627 32,663,028 90,007 4,445,317 180,137 3,608,999 22,037,075 1,905,157 692,498 4,907,583 1,717,418 796,251 40,380,442 $ 73,043,470	AMOUNT $ 12,336,039 225,284 150,756 1,622,419 - 11,653,001 1,075,710 162,252 15,821 5,688,379 1,637,188 36,680 34,603,529 112,284 4,686,605 243,662 3,272,047 24,299,352 1,915,756 685,575 4,941,663 1,785,253 343,456 42,285,653 $ 76,889,182	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1160 Notes receivable due from related parties, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties, net 1200 Other receivables 1210 Other receivables - related parties 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Current Assets Non-current assets 1510 Non-current financial assets at fair value through profit or loss 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				16 - - 2 - 15 2 - - 8 2 -
				45
				- 6 - 4 32 3 1 6 2 1
				55
				100

(Continued)

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ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2022 December 31, 2021 Notes AMOUNT % AMOUNT % 6(13) and 8 $ 1,203,495 2 $ 3,479,177 5 6(15) and 8 775,294 1 877,011 1 6(14) 2,214 - 12 - 243,332 - 45,455 - 2,195,394 3 4,396,401 6 7 266,478 - 319,572 - 6(16) and 7 4,619,754 6 5,843,445 8 30,804 - 30,370 - 108,817 - 107,868 - 6(17) and 8 426,518 1 131,683 - 440,276 1 533,353 1 10,312,376 14 15,764,347 21 6(17) and 8 3,691,498 5 4,007,482 5 6(33) 421,272 - 429,338 - 1,476,370 2 1,449,261 2 6(20) 480,958 1 633,711 1 6,070,098 8 6,519,792 8 16,382,474 22 22,284,139 29 6(21) 7,547,840 11 6,852,514 9 6(22) 46,421,664 64 43,830,638 57 6(23) 216,945 - - - 290,598 - - - 147,022 - 2,169,446 3 6(24) 75,010 - ( 235,543) - 6(21) ( 294,810) - ( 294,810) ( 1 ) 54,404,269 75 52,322,245 68 2,256,727 3 2,282,798 3 56,660,996 78 54,605,043 71 $ 73,043,470 100 $ 76,889,182 100

Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities - others 21XX Current Liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Non-current liabilities 2XXX Total Liabilities Equity attributable to owners of parent company Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity 3X2X Total liabilities and equity

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

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items

Year ended December 31 2022 2021 Notes AMOUNT % AMOUNT % 6(25) and 7 $ 28,878,250 100 $ 36,424,760 100 6(6) and 7 ( 23,896,688) ( 83) ( 28,807,881) ( 79) 4,981,562 17 7,616,879 21 26 - 41 - ( 41) - 1,589 - 4,981,547 17 7,618,509 21 6(31)(32) ( 883,849) ( 3) ( 884,563) ( 3) ( 1,985,724) ( 7) ( 2,005,479) ( 6) ( 2,723,055) ( 9) ( 2,656,848) ( 7) 58,783 - ( 133,422) - ( 5,533,845) ( 19) ( 5,680,312) ( 16) 6(26) 86,700 - 171,933 1 ( 465,598) ( 2) 2,110,130 6 6(27) 104,600 - 45,090 - 6(28) 515,509 2 493,075 1 6(29) and 7 217,015 1 76,939 - 6(30) ( 131,602) - ( 121,117) - ( 9,807) - ( 57,836) - ( 713,585) ( 3) ( 182,973) ( 1) ( 17,870) - 253,178 - ( 483,468) ( 2) 2,363,308 6 6(33) ( 82,915) - ( 464,834) ( 1) ($ 566,383) ( 2) $ 1,898,474 5

4000 Sales revenue 5000 Operating costs 5900 Operating margin 5910 Unrealized loss from sales 5920 Realized (loss) profit from sales 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit profit (loss) 6000 Total operating expenses 6500 Other income and expenses - net 6900 Operating (loss) profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7055 Expected credit losses 7060 Share of loss of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 (Loss) profit before income tax 7950 Income tax expense 8200 (Loss) profit for the year

(Continued)

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Items

Year ended December 31 2022 2021 Notes AMOUNT % AMOUNT % 6(18) $ 19,277 - ($ 336) - 6(3) ( 244,257) ( 1) 250,820 - ( 6,876) - - - 6(33) ( 39,989) - ( 122,992) - ( 271,845) ( 1) 127,492 - 175,385 1 ( 248,407) ( 1) 302,943 1 - - 6(33) ( 428) - ( 194,616) - 477,900 2 ( 443,023) ( 1) $ 206,055 1 ($ 315,531) ( 1) ($ 360,328) ( 1) $ 1,582,943 4 $ 38,024 - $ 2,178,349 6 ($ 604,407) ( 2) ($ 279,875) ( 1) $ 207,398 1 $ 1,935,456 5 ($ 567,726) ( 2) ($ 352,513) ( 1) 6(34) $ 0.05 $ 3.21 6(34) $ 0.05 $ 3.20

Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gain (loss) on remeasurements of defined benefit plans 8316 Unrealised (losses) gains from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive loss that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive (loss) income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Cumulative translation differences of foreign operations 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive income (loss) 8500 Total comprehensive (loss) income Profit (loss) attributable to: 8610 Equity holders of the parent company 8620 Non-controlling interest Comprehensive income (loss) attributable to: 8710 Equity holders of the parent company 8720 Non-controlling interest Earnings per share (NT$) 9750 Total basic earnings per share 9850 Total diluted earnings per share

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

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ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

2021 Balance at January 1, 2021 Profit (loss) for the year Other comprehensive income(loss) for the year Total comprehensive income(loss) Issuance of ordinary shares under business combination Changes in ownership interests in subsidiaries accounted fo using equity method Difference between consideration and carrying amount of subsidiaries acquired and disposed Distribution to subsidiaries' employee compensation Proceeds from treasury shares transferred to employees Proceeds from disposal of financial assets at fair value through other comprehensive income Non-controlling interests Net change in equity of associates and joint ventures Expiration of restricted employee stock Effect of joint share exchange Balance at December 31, 2021 2022 Balance at January 1, 2022 Profit (loss) for the year Other comprehensive income(loss) for the year Total comprehensive income(loss) Appropriation of 2021 earnings Legal reserve Special reserve Cash dividends Proceeds from issurance of share capital Changes in ownership interests in subsidiaries accounted fo using equity method Net change in equity of associates and joint ventures Difference between consideration and carrying amount of subsidiaries acquired and disposed Non-controlling interests Proceeds from disposal of financial assets at fair value through other comprehensive income Expiration of restricted employee stock Balance at December 31, 2022	Notes								Equityattribu	ta	ble to owners of thep	are	nt	nt	nt						Non-controlling interest		Total
			Share capital - common stock		Capital surplus				Retained Earnings				Other equityinterest			Treasurystocks			Total
							Legal reserve		Special reserve		Unappropriated retained earnings		Cumulative translation differences of foreign operations		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(23) 6(24) r 6(22) 6(22) 6(22) 6(22) 6(22) 6(23) 6(24) r 6(22) 6(22) 6(24) 6(24) 6(22)		$ 10,887,014 - - - 1,416,020 - - - - - - - ( 7,013 ) ( 5,443,507 ) $ 6,852,514 $ 6,852,514 - - - - - - 700,000 - - - - - ( 4,674 ) $ 7,547,840		$ 36,115,456 - - - 10,308,626 574,746 ( 7,754 ) 195,791 115,823 - - ( 12,616 ) 7,013 ( 3,466,447 ) $ 43,830,638 $ 43,830,638 - - - - - - 2,927,400 ( 257,645 ) 104,634 ( 188,037 ) - - 4,674 $ 46,421,664		$ - - - - - - - - - - - - - - $ - $ - - - - 216,945 - - - - - - - - - $ 216,945		$ - - - - - - - - - - - - - - $ - $ - - - - - 290,598 - - - - - - - - $ 290,598		($ 7,908,188 ) 2,178,349 71 2,178,420 - - - - - ( 8,974 ) - - - 7,908,188 $ 2,169,446 $ 2,169,446 38,024 19,477 57,501 ( 216,945 ) ( 290,598 ) ( 1,365,881 ) - - - ( 45,848 ) - ( 160,653 ) - $ 147,022		($ 730,022 ) - ( 404,982 ) ( 404,982 ) - - ( 1,553 ) - - - - - - 730,022 ($ 406,535 ) ($ 406,535 ) - 442,615 442,615 - - - - - - 3 - - - $ 36,083		($ 271,742 ) - 162,018 162,018 - - - - - 8,974 - - - 271,742 $ 170,992 $ 170,992 - ( 292,718 ) ( 292,718 ) - - - - - - - - 160,653 - $ 38,927		( $ 485,137 ) - - - - - - - 190,327 - - - - - ( $ 294,810 ) ( $ 294,810 ) - - - - - - - - - - - - - ( $ 294,810 )		$ 37,607,381 2,178,349 ( 242,893 ) 1,935,456 11,724,646 574,746 ( 9,307 ) 195,791 306,150 - - ( 12,616 ) - ( 2 ) $ 52,322,245 $ 52,322,245 38,024 169,374 207,398 - - ( 1,365,881 ) 3,627,400 ( 257,645 ) 104,634 ( 233,882 ) - - - $ 54,404,269		$ 2,103,915 ( 279,875 ) ( 72,638 ) ( 352,513 ) 239,900 - - - - - 291,496 - - - $ 2,282,798 $ 2,282,798 ( 604,407 ) 36,681 ( 567,726 ) - - - - - - - 541,655 - - $ 2,256,727		$ 39,711,296 1,898,474 ( 315,531 ) 1,582,943 11,964,546 574,746 ( 9,307 ) 195,791 306,150 - 291,496 ( 12,616 ) - ( 2 ) $ 54,605,043 $ 54,605,043 ( 566,383 ) 206,055 ( 360,328 ) - - ( 1,365,881 ) 3,627,400 ( 257,645 ) 104,634 ( 233,882 ) 541,655 - - $ 56,660,996

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

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES (Loss) profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortization Expected credit (profit) loss Gain on disposal of investments Net loss (gain) on financial assets at fair value through profit or loss Interest expense Interest income Dividend revenue Share of loss of associates and joint ventures accounted for under the equity method (Gain) loss on disposal of property, plant and equipment Loss on disposal of intangible assets Impairment loss on non-financial assets Unrealized loss from sales Realized loss (profit) from sales Other income from recognition of long-term deferred revenues Property, plant and equipment transferred to expense Gain on disposal of non-current assets held for sale Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Other non-current assets Changes in operating liabilities Financial liabilities at fair value through profit or loss - current Notes payable Accounts payable Other payables Other current liabilities Other non-current liabilities Cash inflow generated from operations Interest received Interest paid Income tax paid Dividend received Net cash flows from operating activities

Year ended December 31 Notes 2022 2021 ( $ 483,468 ) $ 2,363,308 6(8)(9)(31) 4,952,508 5,036,375 6(10)(31) 257,757 232,935 ( 48,976 ) 191,258 6(29) ( 72,090 ) ( 254,040 ) 6(29) 285,929 ( 17,537 ) 6(30) 131,602 121,117 6(27) ( 104,600 ) ( 45,090 ) 6(28) ( 44,296 ) ( 105,228 ) 6(7) 713,585 182,973 6(29) ( 42,014 ) 5,664 6(29) 2,932 11,223 6(11) 13,312 114,693 ( 26 ) ( 41 ) 41 ( 1,589 ) 6(20) ( 77,630 ) ( 131,295 ) 2,827 4,474 - ( 179,204 ) ( 146,522 ) ( 10,006 ) ( 273,957 ) ( 542,948 ) 4,888,612 ( 3,556,983 ) ( 4,911 ) ( 27,168 ) 867,140 ( 1,447,254 ) 809,993 ( 488,679 ) 16,145 337,228 43,498 499,681 ( 131,956 ) 1,633 55,616 34,418 ( 2,253,017 ) 573,986 ( 1,180,492 ) 1,239,536 ( 257,961 ) 70,198 ( 30,366 ) 173,460 7,889,215 4,387,098 86,565 47,401 ( 41,226 ) ( 115,775 ) ( 54,153 ) ( 97,802 ) 78,641 131,666 7,959,042 4,352,588

(Continued)

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Increase in current financial assets at amortised cost Acquisition of investments accounted for under the equity method Proceeds from disposal of investments accounted for under the equity method Cash refund from investments accounted for under the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Proceeds from disposal of intangible assets (Increase) decrease in refundable deposits Effect on initial consolidation of subsidiaries Cash refund from financial assets capital reduction Decrease in other financial assets Proceeds from disposal of non-current assets held for sale Proceeds from disposal of subsidiaries Decrease in changes of consolidated entities Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term loans Decrease in short-term notes and bill payable Proceeds from long-term loans Repayment of long-term loans (Decrease) increase in guarantee deposits received Repayment of principal portion of lease liabilities Cash dividends paid Proceeds from issurance of share capital Proceeds from treasury shares transferred to employees Increase in cash paid for acquisition of non-controlling interests Net cash flows from financing activities Effects of foreign currency exchange Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2022 2021 ( $ 188,173 ) ( $ 765,140 ) 186,823 695,324 ( 433,127 ) - ( 365,338 ) ( 1,018,523 ) - 818,718 - 87,283 6(36) ( 4,320,230 ) ( 4,732,066 ) 6(36) 389,592 235,179 6(36) ( 130,200 ) ( 117,588 ) 6,089 4,205 ( 49,462 ) 717 - 3,763,629 - 66,929 391,869 312,664 - 430,000 6(36) 88,100 - ( 275,343 ) - ( 4,699,400 ) ( 218,669 ) 6(37) ( 2,295,709 ) 1,947,559 6(37) ( 112,938 ) - 6(37) 12,760 1,836,127 6(37) ( 33,909 ) ( 1,035,106 ) 6(37) ( 108,264 ) 24,360 6(37) ( 127,584 ) ( 155,101 ) 6(23) ( 1,365,881 ) - 6(21) 3,627,400 - 6(21) - 306,150 700,000 625,645 295,875 3,549,634 235,576 ( 575,525 ) 3,791,093 7,108,028 12,336,039 5,228,011 $ 16,127,132 $ 12,336,039

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

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ENNOSTAR INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

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

1. HISTORY AND ORGANIZATION

ENNOSTAR Inc. (the “Company”) was incorporated on January 6, 2021. The Company’s share have been traded on the Taiwan Stock Exchange in the Republic of China since the date of its incorporation. The share exchange transaction, wherein the Company was established by Epistar Corporation ( “Epistar”) and acquired all issued and outstanding ordinary shares of Epistar and Lextar Electronics Corporation (“ Lextar”) by way of share exchange, has been approved both at Epistar’s board meeting on June 18, 2020 and special shareholders’ meeting on August 7, 2020. The share exchange was conducted at an exchange ratio of 1 ordinary share of Epistar and Lextar for 0.5 and 0.275 ordinary share of the Company, respectively. As a result, Epistar and Lextar became wholly-owned subsidiaries of the Company on January 6, 2021, and both of Epistar’s and Lextar’s ordinary shares have been delisted while the ordinary shares of the Company were listed starting from the same date under the symbol “3714”. The Company and its subsidiaries (collectively referred herein as the “Group”) are engaged in the research and development, design, manufacturing and sales of EPI wafers and chips of A1GaInP, AlGaAs and InGaN and light-emitting diode packages and modules.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on February 23, 2023.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) came into effect as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by FSC and became effective from 2022 are as follows:

are as follows:
	Effective date by
	International Accounting
New Standards, Interpretations and Amendments	StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment:	January 1, 2022
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a contract’	January 1, 2022
Annual improvements to IFRS Standards 2018–2020	January 1, 2022
The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.

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

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IAS 1, ‘Disclosure of accounting policies’ January 1, 2023 Amendments to IAS 8, ‘Definition of accounting estimates’ January 1, 2023 Amendments to IAS 12, ‘Deferred tax related to assets and liabilities January 1, 2023 arising from a single transaction’

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

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

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

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

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

New standards, interpretations and amendments issued by IASB but not endorsed by the FSC are as follows: New Standards,Interpretations andAmendments	yet included in the IFRSs as Effective date by International Accounting StandardsBoard
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information'
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2024
current’

Amendments to IAS 1, ‘Non-current liabilities with covenants’

January 1, 2024

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

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

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(2) Basis of preparation

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

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

  • (b) Financial assets at fair value through other comprehensive income.

  • (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

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

• (3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

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

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

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

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

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

• B. Subsidiaries included in the consolidated financial statements:

  • On January 6, 2021, the Company became the ultimate parent company of the Group through a share exchange transaction with Epistar and Lextar. Epistar, Lextar and their subsidiaries were consolidated in the financial statements thereafter.

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Name of Investor	Name ofSubsidiary	Main Business Activities		December 31, 2022 December 31, 2021 100% 100% 100% 100% 100% 100% 100% 100% 75.96% 58.59% 17.99% - 100% - 100% - 100% - 16.65% - 4.29% - 4.29% - 100% 100% Ownership	Note
				December 31, 2022
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Harvestar Investment Corp. Precistar Investment Corp. Praistar Investment Corp. Epistar Corporation	Epistar Corporation Lextar Electronics Corp. Harvestar Investment Corp. Calystar Investment Corp. Amengine Corporation Unikorn Semiconductor Corporation Precistar Investment Corp. Praistar Investment Corp. Manastar Investment Corp. Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation Lighting Investment Corporation	Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers, chips, packages and modules Professional investment Professional investment Developing and sales of medical optical sensor modules OEM manufacturing of iii-v semiconductors Professional investment Professional investment Professional investment OEM manufacturing of iii-v semiconductors OEM manufacturing of iii-v semiconductors OEM manufacturing of iii-v semiconductors Professional investment		100% 100% 100% 100% 75.96% 17.99% 100% 100% 100% 16.65% 4.29% 4.29% 100%	Note 9 Note 9 Note 5 Note 5 Note 10 Note 2 Note 6 Note 6 Note 6 Note 2 Note 2 Note 2

~19~

Name of Investor	Name ofSubsidiary	Main Business Activities		December 31, 2022 December 31, 2021 Ownership 100% 100% 49.00% 49.00% 100% 100% 12.80% 53.29% 64.32% 64.32% 3.53% 3.53% - 100% 82.41% 82.41% 74.86% 74.86% 100% 100% 100% 100% 85.26% 85.26% 100% 100% 93.38% 93.38%	Note
				December 31, 2022
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation GaN Force Corporation Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. Lite Star JV Holding (BVI) Co., Ltd. Epicrystal (Hong Kong) Co., Limited	Epistar JV Holding (BVI) Co., Ltd. SH Co.,Ltd. Full Star Enterprises Limited Unikorn Semiconductor Corporation GaN Force Corporation Can Yang Investments Limited GV Semiconductor Inc. Lite Star JV Holding (BVI) Co., Ltd. United LED Corporation (Hong Kong) Limited Episky (Hong Kong) Limited HUGA Holding (SAMOA) Limited Can Yang Investments Limited Epicrystal (Hong Kong) Co., Limited Epicrystal Corporation (Changzhou) Ltd.	Professional investment Sales of LED chips Professional investment OEM manufacturing of iii-v semiconductors Design, manfacturing and sales of semiconductor materials and modules Professional investment R&D and sales of electronic components Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Manufacturing and sales of LED wafers and chips		100% 49.00% 100% 12.80% 64.32% 3.53% - 82.41% 74.86% 100% 100% 85.26% 100% 93.38%	Note 1 Note 2 Note 8

~20~

Name of Investor	Name ofSubsidiary	Main Business Activities		December 31, 2022 December 31, 2021 Ownership 100% 100% 100% 100% 3.31% 3.31% 9.70% 12.12% 100% 100% 100% 100% 83.39% 81.43% 100% 100% 6.87% 6.87% - 14.69% 35.68% 35.68% 100% 100% 100% 100%	Note
				December 31, 2022
United LED Corporation (Hong Kong) Limited Episky (Hong Kong) Limited Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen)Ltd. Episky Corporation (Xiamen) Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Ltd. Lighting Investment Ltd.	United LED Shan Dong Corporation Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Lighting Investment Ltd. GaNrich Semiconductor Corporation Yenrich Opto (Hong Kong) Limited Can Yang Investments Limited ProLight Opto Technology Corporation GaN Force Corporation Luxlite (Hong Kong) Corporation Limited Epistar (Hong Kong) Limited	Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED chips Manufacturing and sales of LED wafers and chips Developing, manufacturing and sales of LED packages, modules and related applications Sales of LED chips Professional investment Design and technology service of LED lighting Sales of LED lighting products Professional investment Manufacturing and sales of LED packages Design, manfacturing and sales of semiconductor materials and modules Professional investment Professional investment		100% 100% 3.31% 9.70% 100% 100% 83.39% 100% 6.87% - 35.68% 100% 100%	Note 7 Note 11 Note 11 Note 4

~21~

Name of Investor	Name ofSubsidiary	Main Business Activities		December 31, 2022 December 31, 2021 Ownership 100% 100% - 100% 2.68% 2.68% 33.63% 37.88% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 90.50% 90.50%	Note
				December 31, 2022
Can Yang Investments Limited Luxlite (Hong Kong) Corporation Limited Yenrich Technology Corporation Yenrich Technology Corporation ProLight Opto Technology Corporation ProLight Opto Holding Corporation ProLight Opto Technology Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation	Jiangsu Canyang Optoelectronics Ltd. Luxlite (Shenzhen) Corporation Limited ProLight Opto Technology Corporation LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. ProLight Opto Holding Corporation ProLight Opto Technology Corporation Shanghai Welight Electronic Co., LTD Lextar (Singapore) Pte. Ltd. Liang Li Venture Corp. Wellypower Optronics Corporation Apower Optronics Corporation Wellybond Corporation Wellybond Optronics (H.K.) Limited Trendylite Corporation	Manufacturing and sales of LED wafers and chips Sales of LED chips Manufacturing and sales of LED packages Developing, manufacturing and sales of LED packages, modules and related applications Professional investment Professional investment Wholesale and export and import of LED and related products Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Sales of products		100% - 2.68% 33.63% 100% 100% 100% 100% 100% 100% 100% 100% 100% 90.50%	Note 12 Note 11 Note 7 Note 11 Note 11 Note 11 Note 11

~22~

Name of Investor	Name ofSubsidiary	Main Business Activities		December 31, 2022 December 31, 2021 Ownership 31.81% 31.69% 100% 100% 9.55% - 100% 100% 100% 100% 100% 100% 9.09% 9.09% 50.00% 50.00% 29.84% 24.70% 31.81% 31.68% 86.96% 90.91%	Note
				December 31, 2022
Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar (Singapore) Pte. Ltd., Wellypower Optronics Corporation and Apower Optronics Corporation Lextar (Singapore) Pte. Ltd. Lextar (Singapore) Pte. Ltd. Liang Li Venture Corp. Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation	Hexawave, Inc. Yenrich Technology Corporation ProLight Opto Technology Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics (Xiamen) Co., Ltd. Lextar Electronics Korea Ltd. ProLight Opto Technology Corporation VOGITO INNOVATION CO., LTD. ProLight Opto Technology Corporation Hexawave, Inc. WellyHertz Electronics Corp.	Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of LED packages Manufacturing and sales of LED packages Manufacturing and sales of LED wafers, chips, packages and modules Manufacturing and sales of LED lighting and modules Sale of LED and after-sales service Manufacturing and sales of LED packages Design of lighting Manufacturing and sales of LED packages Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of switching power supply module		31.81% 100% 9.55% 100% 100% 100% 9.09% 50.00% 29.84% 31.81% 86.96%	Note 11 Note 11 Note 11 Note 11

~23~

Name of Investor	Name ofSubsidiary	Main Business Activities		December 31, 2022 December 31, 2021 Ownership 100% 100% 49.00% 100%	Note
				December 31, 2022
Lextar Electronics (Suzhou) Corp. Hexawave, Inc.	Lextar Electronics (Chuzhou) Corp. WellyWave Semiconductors Inc.	Manufacturing and sales of LED wafers, chips, packages and modules Manufacturing and sales of compound semiconductor materials and modules		100% 49.00%	Note 3 Note 5

• Note 1: Due to the control over the entity’s financial and operational policies, this company is included in the consolidated financial statements.

• Note 2: ENNOSTAR Inc. and Harvestar Investment Corp. had participated in the capital increase of Unikorn in the first quarter of 2022, and acquired part of shares of Unikorn from Epistar due to the reorganization in the second quarter of 2022. ENNOSTAR Inc., Harvestar Investment Corp., Precistar Investment Corp., and Praistar Investment Corp. had participated in the capital increase of Unikorn in the fourth quarter of 2022, therefore, ENNOSTAR, Harvestar, Precistar, Praistar and Epistar’s shareholding ratios were 17.99%, 16.65%, 4.29%, 4.29% and 12.80% on December 31, 2022, respectively.

• Note 3: Due to changes in equity, it has not been included in the consolidated entity since March, 2022.

• Note 4: Acquiring an additional 35.68% of ordinary share from non-controlling interest in December, 2021.

• Note 5: Newly invested or established companies in 2021.

• Note 6: Newly invested or established companies in 2022.

• Note 7: Because of the changes of control power, it was not consolidated in the entity since January 2022.

• Note 8: The liquidation was completed on January, 2022, as the company will not continue its operation.

• Note 9: On January 6, 2021, Epistar and Lextar became subsidiaries through a share exchange transaction with the parent company. Epistar, Lextar and their subsidiaries were consolidated in the financial statements thereafter.

• Note 10: Amengine Corporation was originally held by Yenrich Technology Corporation and subsequently held by ENNOSTAR Inc. in the third quarter of 2021 as a result of reorganization.

• Note 11: Yenrich Technology Corporation and ProLight Opto Technology Corporation were originally held by Epistar and subsequently held by Lextar in the third quarter of 2021 as a result of reorganization. Also, investees of Yenrich Technology Corporation and ProLight Opto Technology Corporation were held by Lextar.

• Note 12: Luxlite (Shenzhen) Corporation Limited has applied for liquidation in 2022.

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

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

• E. Significant restrictions: None.

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

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(4) Foreign currency translation

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

• A. Foreign currency transactions and balances

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

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

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

• (d) Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within “interest income or finance costs”. All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within “other gains and losses”.

• B. Translation of foreign operations

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

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

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

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

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

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

~25~

  - (d) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

• (5) Classification of current and non-current items

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

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

  • (b) Assets held mainly for trading purposes;

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

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

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

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

  • (b) Liabilities arising mainly from trading activities;

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

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

• (6) Cash equivalents

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

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

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

• B. On a regular way purchase or sale basis, the derivative financial assets are recognised and derecognised using trade date accounting, the beneficiary certificates are recognised and derecognised using settlement date accounting.

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

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

• (8) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

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

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the

~26~

derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (9) Financial assets at amortised cost

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

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

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

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

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

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

• (10) Accounts and notes receivable

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

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

• (11) Impairment of financial assets

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

• (12) Derecognition of financial assets

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

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

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

• C. The Group neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

• －

• (13) Leasing arrangements (lessor) operating leases

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

• (14) Inventories

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

• (15) Non-current assets held for sale

• Non-current assets are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use, and a sale is considered

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highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.

(16) Investments accounted for using the equity method - associates

• A. Associates are all entities over which the Group has significant influence but no control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity that are not recognized in profit or loss or other comprehensive income of the associate and such changes does not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.

• G. When the Group disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• H. When the Group disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over this associate, then the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

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(17) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

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

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

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

The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures	20 ~ 50 years
Plant and construction	2 ~ 15 years
Machinery	2 ~ 20 years
Office equipment	2 ~ 20 years
Leasehold improvements	3 ~ 15 years
Other equipment	2 ~ 20 years

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

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

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

  • (a) Fixed payments, less any lease incentives receivable;

  • (b) Variable lease payments that depend on an index or a rate; and

  • (c) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

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

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

• (c) Any initial direct costs incurred by the lessee; and

• (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying

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asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

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

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

(19) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 20 ~ 50 years.

(20) Intangible assets

• A. Patents

Patents are stated at cost and amortized on a straight-line basis over their legal terms or economic service lives, whichever is shorter.

• B. Technology know-how

• Technology know-how is stated at cost and amortized on a straight-line basis over their economic service lives.

• C. Computer software

Computer software is stated at cost and amortized on a straight-line basis over their estimated useful lives of 2 ~ 10 years.

• D. Goodwill

• Goodwill arising from a business combination is accounted for by applying the acquisition method.

• E. Other intangible assets

Other intangible assets, mainly electricity facilities, are stated at cost and amortized using the straight-line method over 3 to 5 years.

• (21) Impairment of non-financial assets

• A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

• B. The recoverable amounts of goodwill and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

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(22) Borrowings

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

• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawn-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

• (23) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

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

• (24) Financial liabilities at fair value through profit or loss

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

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

• C. If the credit risk results in fair value changes in financial liabilities designated as at fair value through profit or loss, they are recognised in other comprehensive income in the circumstances other than avoiding accounting mismatch or recognising in profit or loss for loan commitments or financial guarantee contracts.

• (25) Derecognition of financial liabilities

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

(26) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no

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deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.

     - ii. Remeasurement arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

     - iii. Past service costs are recognized immediately in profit or loss.

• C. Termination benefits

  • Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

• D. Employees’ compensation and directors’ remuneration

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

• (27) Employee share based payment

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

• B. Treasury stocks transferred to employees:

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

  • (b) For treasury stocks where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must compensate the Group for the difference between the fair value of the equity instruments and their payments on the stocks.

• C. Restricted stocks:

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

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

  • (c) For restricted stocks where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must return the stocks to the Group and the Group must refund their payments on the stocks, the Group recognises the payments from the employees who are expected to resign during the vesting period as liabilities at the grant date, and recognises the payments from the employees who are expected to be eventually vested with the stocks in ’capital surplus – others’.

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(28) Income tax

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

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

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

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

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

• F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

(29) Share capital

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

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

(30) Dividends

• Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s Board of Directors. Cash dividends are recorded as liabilities.

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(31) Revenue recognition

• A. Sales of goods:

• (a) The Group is engaged in the research, development and sale of EPI wafers and chips of AlGaInP, AlGaAs and InGaN and light-emitting diode packages and modules. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the wholesaler 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 wholesaler, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• (b) Sales revenue is recognised on the net amount of contract price after deduction of sales discounts and allowances. The sales discounts and allowances were offered to customers based on aggregate sales over a 12-month period. Accumulated experience is used to estimate and provide for the sales discounts and allowances, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are made with a credit term less than 1 year, which is consistent with market practice.

• (c) The Group’s obligation to provide a repair refund for faulty products under the standard warranty terms is recognised as a provision.

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

• B. Revenue from licencing intellectual property

• (a) The Group entered into a contract with a customer to grant a licence of patents and intellectual property to the customer. Given the licence is distinct from other promised goods or services in the contract, the Group recognises the revenue from licencing when the licence transfer to a customer either at a point in time or over time based on the nature of the licence granted. The nature of the Group’s promise in granting a licence is a promise to provide a right to access the Group’s intellectual property if the Group undertakes activities that significantly affect the patents and intellectual property to which the customer has rights, the customer is affected by the Group’s activities and those activities do not result in the transfer of a good or a service to the customer as they occur. The royalties are recognised as revenue on a straight-line basis throughout the licencing period. In case the abovementioned conditions are not met, the nature of the Group’s promise in granting a licence is a promise to provide a right to use the Group’s intellectual property and therefore the revenue is recognised when transferring the licence to a customer at a point in time.

• (b) Some contracts require a sales-based royalty in exchange for a licence of intellectual property. The Group recognises revenue when the performance obligation has been satisfied and the subsequent sale occurs.

• C. Incremental costs of obtaining a contract

• Given that the contractual period lasts less than one year, the Group recognises the incremental costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

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(32) Government grants

• Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognized as non-current liabilities and are amortized to profit or loss over the estimated useful lives of the related assets using the straight-line method.

(33) Business combinations

• A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

• B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

• (34) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Chief Operating Decision-Maker is responsible for allocating resources and assessing performance of the operating segments.

1. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

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

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

• None.

• (2) Critical accounting estimates and assumptions

• Evaluation of inventories

• As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally based on the demand for the products

~35~

within the specified period in the future. Therefore, there might be material changes to the evaluation. As of December 31, 2022, the carrying amount of inventories was $4,825,045.

1. DETAILS OF SIGNIFICANT ACCOUNTS

2. (1) Cash and cash equivalents

As of December 31, 2022, the carrying amount of inventories was $4,825,045. TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
December 31, 2022 Cash on hand and petty cash 1,451 $ Checking accounts and demand deposits 2,838,714 Time deposits 12,415,967 Bonds sold under repurchase agreement 871,000 16,127,132 $	December31,2021
	918 $ 3,816,612 7,289,316 1,229,193 12,336,039 $

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

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

Financial assets at fair value through profit or loss
Items		December	31,2022		December	31,2021
Current items:
Financial assets mandatorily measured at fair value
through profit or loss
Beneficiary certificates		$	45,181		$	69,150
Listed stocks			193,438			193,439
Derivatives			22,415			17,814
			261,034			280,403
Valuation adjustment	(		96,968)	(		55,119)
			164,066			225,284
Non-current items:
Financial assets mandatorily measured at fair value
through profit or loss
Unlisted stocks			298,308			321,358
Valuation adjustments	(		208,301)	(		209,074)
			90,007			112,284
		$	254,073		$	337,568

• A. The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed below:

December 31, 2022

Notional principal (in Financial instruments thousands) Currency Maturity date Forward foreign exchange contract - sell USD 68,000 USD to NTD 2023.01.05~2023.04.20 Forward foreign exchange contract - sell USD 81 USD to JPY 2023.01.04~2023.03.24 Forward foreign exchange contract - sell USD 8,000 USD to RMB 2023.02.24~2023.04.25

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December 31, 2021

Notional principal (in Financial instruments thousands) Currency Maturity date Forward foreign exchange contract - sell USD 66,700 USD to NTD 2022.01.03~2022.04.08 Forward foreign exchange contract - sell USD 50 USD to JPY 2022.01.24~2022.02.24 Forward foreign exchange contract - sell USD 29,000 USD to RMB 2022.01.25~2022.06.24

The Group entered into forward foreign exchange contracts to hedge exchange rate risk of export and import proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• B. The net (loss) gain recognized by the Group amounted to ($285,929) and $17,537 for the years ended December 31, 2022 and 2021, respectively.

• C. Information on credit risk of financial assets at fair value through profit or loss is provided in Notes 12(2) and (3).

• (3) Financial assets at fair value through other comprehensive income

	Items	December 31, 2022	December 31, 2022		December31,2021	December31,2021
Non-current items:
Equity instruments
Listed stocks		$	1,170,038		$	714,661
Unlisted stocks			3,564,502			4,121,556
			4,734,540			4,836,217
Valuation adjustment	(		289,223)	(		149,612)
		$	4,445,317		$	4,686,605

• A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $4,445,317 and $4,686,605 as at December 31, 2022 and 2021, respectively.

• B. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below: Equity instruments at fair value through other Year ended Year ended

Equity instruments at fair value through other		Year ended		Year ended
comprehensiveincome	December31,2022		December31,2021
Fair value change recognised in other comprehensive
income	($	244,257)	$	250,820
Dividend income recognized in profit or loss held at
end of period	$	44,296	$	105,228

• C. As of December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was $4,445,317 and $4,686,605, respectively.

• D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Notes 12(2) and (3).

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(4) Financial assets at amortised cost

==> picture [487 x 160] intentionally omitted <==

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

Items December 31, 2022 December 31, 2021
Current items:
Others $ 647,408 $ 150,756
Non-current items:
Others $ 180,137 $ 243,662
A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed
below:
Year ended Year ended
December 31, 2022 December 31, 2021
Interest income $ 4,860 $ 3,583
----- End of picture text -----

• B. As of December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group was $827,545 and $394,418, respectively.

• C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

• D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Group’s investments in certificates of deposits are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote.

• (5) Notes and accounts receivable

Notes and accounts receivable
		December31,2022			December31,2021
Notes receivable		$	2,756,798		$	2,506,407
Less: Allowance for uncollectible accounts	(		883,988)	(		883,988)
		$	1,872,810		$	1,622,419
Accounts receivable		$	7,597,170		$	11,695,601
Less: Allowance for uncollectible accounts	(		52,573)	(		42,600)
		$	7,544,597		$	11,653,001

• A. The ageing analysis of accounts receivable and notes receivable is as follows:

		December	31,2022	31,2022		December	31,2021	31,2021
	Accountsreceivable		Notesreceivable		Accountsreceivable		Notesreceivable
Not past due	$	7,168,484	$	1,872,810	$	11,217,706	$	1,622,419
Up to 30 days		255,017		-		239,277		-
31 to 90 days		45,268		-		83,745		-
91 to 180 days		26,347		-		22,863		-
Over 180 days		102,054		883,988		132,010		883,988
	$	7,597,170	$	2,756,798	$	11,695,601	$	2,506,407

The above ageing analysis was based on past due date.

• B. As of December 31, 2022 and 2021, the Group had outstanding discounted notes receivable amounting to $193,017 and $209,538, respectively. The Group has payment obligations when the drawers of the notes refuse to pay for the notes at maturity. However, the credit rating of the aforesaid acceptance bank is extremely high, and the Group judges that the discounted notes receivable meets the requirements for delisting financial assets and will be deducted from notes receivable directly.

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• C. Details of the Group’s notes receivable pledged to others as collateral are provided in Note 8.

• D. The Group holds collateral including commercial papers, financial assets, patents as well as machinery and equipment as security for accounts receivable.

• E. As of December 31 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the notes receivable held by the Group was $1,872,810 and $1,622,419; the maximum exposure to credit risk in respect of the amount that best represents the accounts receivable held by the Group was $7,544,597 and $11,653,001, respectively.

• F. Information on credit risk of accounts receivable and notes receivable is provided in Note 12(2).

• (6) Inventories

Inventories
Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods		December31,2022
	Allowance for Cost valuation loss 1,283,725 $ 116,182) ($ 1,861,632 273,819) ( 2,542,195 472,506) ( 5,687,552 $ 862,507) ($ December31,2021		Bookvalue
			1,167,543 $ 1,587,813 2,069,689
			4,825,045 $
	Allowance for Cost valuation loss 1,794,492 $ 144,064) ($ 2,385,262 273,969) ( 2,185,755 259,097) ( 6,365,509 $ 677,130) ($		Bookvalue
			1,650,428 $ 2,111,293 1,926,658
			5,688,379 $

The cost of inventories recognised as expense for the years ended December 31, 2022 and 2021:

			Year ended			Year ended
		December31,2022			December31,2021
Cost of goods sold		$	21,166,872		$	28,423,693
Scrap loss			39,617			84,112
Loss on market price decline (recovery benefits
in market value)			359,310	(		334,996)
Loss on idle capacity			2,386,793			658,955
Other	(		55,904)	(		23,883)
		$	23,896,688		$	28,807,881

For the year ended December 31, 2021, the gain on reversal of decline in market value was caused by the decrease in the cost of inventories arising from the increase in the utilization rate of the Group.

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(7) Investments accounted for using the equity method

Associates: Aurora International Lighting Corporation Limited LEDAZ Co., Ltd. LEDOLUX Sp. Zo.O. Interelight Optotech (HK) Co., Limited LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. GCS Holdings, Inc. Changzhou Chemsemi Co., Ltd. Joint Power Exponent, Ltd. iReach Corporation Chuzhou Bwin Technology Corp. Tyntek Corporation WellyWave Semiconductors Inc. TE Opto Corporation Domi-Star Optoelectronics Corporation

December31,2022 December31,2021 - $ 180,789 $ 42,912 9,292) ( 11,310 11,453 10,941 11,663 441,348 - 1,090,517 1,199,915 791,206 853,118 54,095 31,076 50,413 40,881 76,339 115,080 939,581 793,756 55,925 - 44,069 43,223 343 385 3,608,999 $ 3,272,047 $

• A. The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarised below:

As of December 31, 2022 and 2021, the carrying amount of the Group’s individually immaterial associates amounted to $3,608,999 and $3,272,047, respectively.

			Year ended			Year ended
	December 31, 2022				December31,2021
Loss for the period from continuing operations	($		713,585)	($		182,973)
Other comprehensive income			296,067			-
Total comprehensive loss	($		417,518)	($		182,973)
The fair value of the Group’s material associates	with	quoted market prices			is as	follows:
		December31,2022			December31,2021
GCS Holdings, Inc.		$	957,879		$	1,205,945
Tyntek Corporation			653,891			806,407
		$	1,611,770		$	2,012,352

• B. The fair value of the Group’s material associates with quoted market prices is as follows:

• C. On July 2, 2021, the Group obtained significant influence over Tyntek Corporation as the Group owned three board seats through the re-election of the regular shareholders’ meeting. Therefore, the Group reclassified it from financial asset at fair value through other comprehensive income into investment in associate in accordance with IFRSs.

• D. In the first quarter of 2022, due to changes in control of LEADSTAR micro-crystal display corporation (JiangSu) Ltd., the Group lost control over the company and therefore reclassified it into investments accounted for using the equity method at the same period.

~40~

E. In the first quarter of 2022, the Group disposed part of its shares of WellyWave Semiconductors Inc. and lost control over the entities. Therefore, the Group reclassified it into investments accounted for using the equity method at the same period.

(8) Property, plant and equipment

At January 1, 2022 Cost Accumulated depreciation and impairment 2022 Opening net book amount at January 1 Additions Transfer Disposals Reclassifications Reclassified to investment property Depreciation charge Impairment loss Disposals of subsidiary Net exchange differences Closing net book amount at December 31 At December 31, 2022 Cost Accumulated depreciation and impairment	Land 1,558,195 $ - 1,558,195 $ 1,558,195 $ - - - - - - - - - 1,558,195 $ 1,558,195 $ - 1,558,195 $	Buildings and Office structures Machinery equipment 17,347,652 $ 47,907,326 $ 516,930 $ 9,156,255) ( 35,274,900) ( 409,162) ( 8,191,397 $ 12,632,426 $ 107,768 $ 8,191,397 $ 12,632,426 $ 107,768 $ 8,280 251,877 13,748 1,328,963 1,536,649 40,974 10,380) ( 323,756) ( 193) ( 20,362) ( 15,314 - 4,906 - - 911,507) ( 3,655,684) ( 64,806) ( 9,118) ( 4,194) ( - - 545,435) ( 7,092) ( 30,054) ( 85,033 1,025 8,552,125 $ 9,992,230 $ 91,424 $ 18,091,812 $ 45,433,185 $ 542,033 $ 9,539,687) ( 35,440,955) ( 450,609) ( 8,552,125 $ 9,992,230 $ 91,424 $	Leasehold improvements Others 365,056 $ 1,700,988 $ 259,314) ( 1,285,825) ( 105,742 $ 415,163 $ 105,742 $ 415,163 $ 4,005 44,009 10,234 121,253 5,999) ( 47,299) ( 16 - - - 26,117) ( 132,988) ( - - 412) ( 29,692) ( 274 1,785 87,743 $ 372,231 $ 346,373 $ 1,734,085 $ 258,630) ( 1,361,854) ( 87,743 $ 372,231 $	Construction in progress and equipment to be inspected Total 1,288,661 $ 70,684,808 $ - 46,385,456) ( 1,288,661 $ 24,299,352 $ 1,288,661 $ 24,299,352 $ 3,295,514 3,617,433 3,038,073) ( - - 387,627) ( 6,701 1,669 - 4,906 - 4,791,102) ( - 13,312) ( 173,884) ( 756,515) ( 4,208 62,271 1,383,127 $ 22,037,075 $ 1,383,127 $ 69,088,810 $ - 47,051,735) ( 1,383,127 $ 22,037,075 $	Total
					22,037,075 $

~41~

Land At January 1, 2021 Cost 511,997 $ Accumulated depreciation and impairment - 511,997 $ 2021 Opening net book amount at January 1 511,997 $ Additions - Transfer - Acquired from business combinations 1,170,859 Disposals - Reclassified to non- current assets held for sale 124,661) ( Reclassifications - Reclassified to investment property - Depreciation charge - Impairment loss - Disposals of subsidiary - Net exchange differences - Closing net book amount at December 31 1,558,195 $ At December 31, 2021 Cost 1,558,195 $ Accumulated depreciation and impairment - 1,558,195 $	Buildings and Office structures Machinery equipment 15,382,224 $ 41,914,660 $ 415,371 $ 8,580,667) ( 32,186,143) ( 315,015) ( 6,801,557 $ 9,728,517 $ 100,356 $ 6,801,557 $ 9,728,517 $ 100,356 $ 1,754 497,227 9,097 747,678 5,619,005 57,496 1,732,781 1,372,887 9,941 30,225) ( 141,894) ( 265) ( 124,885) ( 541) ( 709) ( 914 88,961) ( 1,139 30,472) ( - - 896,360) ( 3,718,628) ( 67,985) ( 4,592) ( 30,250) ( - 4,929) ( 102,723) ( 718) ( 1,824) ( 502,213) ( 584) ( 8,191,397 $ 12,632,426 $ 107,768 $ 17,347,652 $ 47,907,326 $ 516,930 $ 9,156,255) ( 35,274,900) ( 409,162) ( 8,191,397 $ 12,632,426 $ 107,768 $	Leasehold improvements Others 175,629 $ 620,231 $ 90,976) ( 478,260) ( 84,653 $ 141,971 $ 84,653 $ 141,971 $ 7,602 82,525 45,078 65,779 1,513 392,619 523) ( 8,034) ( - - 1,083 303 - - 23,538) ( 157,966) ( 1,106) ( - 8,849) ( 24,836) ( 171) ( 77,198) ( 105,742 $ 415,163 $ 365,056 $ 1,700,988 $ 259,314) ( 1,285,825) ( 105,742 $ 415,163 $	Construction in progress and equipment to be inspected Total 3,716,424 $ 62,736,536 $ - 41,651,061) ( 3,716,424 $ 21,085,475 $ 3,716,424 $ 21,085,475 $ 3,351,466 3,949,671 6,535,036) ( - 205,059 4,885,659 59,915) ( 240,856) ( - 250,796) ( 17,215) ( 102,737) ( - 30,472) ( - 4,864,477) ( - 35,948) ( 2,035) ( 144,090) ( 629,913 47,923 1,288,661 $ 24,299,352 $ 1,288,661 $ 70,684,808 $ - 46,385,456) ( 1,288,661 $ 24,299,352 $	Total
				24,299,352 $

Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

－ (9) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings, machinery, transportation equipment and office equipment. Rental contracts are typically made for periods of 2 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise of buildings, transportation equipment and office equipment. Low-value assets comprise of office equipment.

~42~

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

Land Buildings Machinery Transportation equipment Office equipment Land Buildings Machinery Transportation equipment Office equipment Other equipment	December31,2022 December31,2021 Carryingamount Carryingamount $ 1,670,856 $ 1,504,759 54,399 186,835 126,084 174,428 16,610 9,478 37,208 40,256 1,905,157 $ 1,915,756 $ Year ended Year ended December31,2022 December31,2021 Depreciationcharge Depreciation charge 63,166 $ 54,506 $ 19,477 - 57,165 39,990 7,707 57,619 13,891 5,362 - 14,421 161,406 $ 171,898 $	December31,2021
		Carryingamount
		$ 1,504,759 186,835 174,428 9,478 40,256
		1,915,756 $
		Year ended December31,2021 Depreciation charge

• D. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were $338,279 and $61,220, respectively.

• E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Year ended December31,2022 $ 21,409 21,235 6,668	Year ended December31,2021
		$ 28,707 44,747 4,730

• F. For the years ended December 31, 2022 and 2021, the Group’s total cash outflow for leases were $172,782 and $189,463, respectively.

~43~

(10) Intangible assets

Intangible assets
		Patents		Goodwill		Software		Others		Total
At January 1, 2022
Cost	$	2,750,991	$	7,087,692	$	513,660	$	128,843	$	10,481,186
Accumulated amortisation
and impairment	(	1,828,302)	(	3,191,092)	(	410,601)	(	109,528)	(	5,539,523)
	$	922,689	$	3,896,600	$	103,059	$	19,315	$	4,941,663
2022
Opening net book amount
as at January 1	$	922,689	$	3,896,600	$	103,059	$	19,315	$	4,941,663
Additions－acquired
separately		167,091		-		47,614		3,015		217,720
Disposals	(	2,969)		-	(	67)		-	(	3,036)
Reclassifications		8,456		-		2,849		-		11,305
Amortisation charge	(	190,387)		-	(	59,358)	(	8,012)	(	257,757)
Disposals of subsidiary		-		-	(	3,291)		-	(	3,291)
Net exchange differences		783		-		196		-		979
Closing net book amount as
at December 31	$	905,663	$	3,896,600	$	91,002	$	14,318	$	4,907,583
At December 31, 2022
Cost	$	2,935,957	$	7,087,692	$	560,309	$	131,859	$	10,715,817
Accumulated amortisation
and impairment	(	2,030,294)	(	3,191,092)	(	469,307)	(	117,541)	(	5,808,234)
	$	905,663	$	3,896,600	$	91,002	$	14,318	$	4,907,583

~44~

		Patents		Goodwill		Software	Others	Others		Total
At January 1, 2021
Cost	$	2,416,238	$	6,324,659	$	454,064	$	112,073	$	9,307,034
Accumulated amortisation
and impairment	(	1,544,653)	(	3,182,323)	(	353,042)	(	94,825)	(	5,174,843)
	$	871,585	$	3,142,336	$	101,022	$	17,248	$	4,132,191
2021
Opening net book amount
as at January 1	$	871,585	$	3,142,336	$	101,022	$	17,248	$	4,132,191
Additions－acquired
separately		2,704		-		57,433		3,015		63,152
Additions－acquired through
business combinations		348,360		754,264		3,598		74,294		1,180,516
Disposals	(	15,390)		-	(	38)		-	(	15,428)
Reclassifications	(	45,454)		-		2,660		-	(	42,794)
Amortisation charge	(	158,286)		-	(	58,814)	(	15,835)	(	232,935)
Impairment loss	(	78,745)		-		-		-	(	78,745)
Disposals of subsidiary	(	202)		-	(	3,807)	(	59,407)	(	63,416)
Net exchange differences	(	1,883)		-		1,005		-	(	878)
Closing net book amount as
at December 31	$	922,689	$	3,896,600	$	103,059	$	19,315	$	4,941,663
At December 31, 2021
Cost	$	2,750,991	$	7,087,692	$	513,660	$	128,843	$	10,481,186
Accumulated amortisation
and impairment	(	1,828,302)	(	3,191,092)	(	410,601)	(	109,528)	(	5,539,523)
	$	922,689	$	3,896,600	$	103,059	$	19,315	$	4,941,663
Details of amortisation on intangible assets			are as follows:
						Year ended		Year		ended
					December31,		2022	December31,2021
Operating costs					$	88,857		$		121,103
Selling expenses							463			858
Administrative expenses						111,290				53,368
Research and development expenses						57,147				57,606
					$	257,757		$		232,935

~45~

(11) Impairment of non-financial assets

• A. The Group assessed that production line adjustments and configurations resulted in idling or impairment of certain property, plant and equipment. The Group wrote down the carrying amount of the assets based on the recoverable amount and recognised impairment losses of $13,312 and $35,948 for the years ended December 31, 2022 and 2021, respectively. The recoverable amount is the assets’ fair value less costs of disposal. The fair value is classified as a level 3 fair value. Details of impairment are as follows:

Details of impairment are as follows:
Impairment loss－buildings and structure Impairment loss－machinery Impairment loss－leasehold improvements	Year ended December31,2022 Recognised in profit or loss 9,118 $ 4,194 - 13,312 $	Year ended December31,2021
		Recognised in profit or loss 4,592 $ 30,250 1,106
		35,948 $

• B. The carrying amount of patents had been adjusted based on the recoverable amount because certain patents will be sold under assessment. Accordingly, the Group recognised impairment loss amounting to $0 and $78,745 for the years ended December 31, 2022 and 2021, respectively.

(12) Non-current assets held for sale

The Group sold the land and plant of the Longtan plant in Taoyuan in the amount of $430,000, and thus transferred it to disposal group held for sale. The sales and purchase agreement was signed in May 2021. The transaction was completed in the third quarter of 2021, which was recognized as gain on disposal of $179,204 by the Group.

(13) Short-term borrowings

gain on disposal of $179,204 by the Group. Short-term borrowings
Bank borrowings Unsecurred borrowings Interest rate range-NTD Interest rate range-foreign currency	December 31, 2022 1,203,495 $ 1.86% 1.80%~6.08%	December31,2021
		3,479,177 $
		0.81%~1.25%
		0.69%~3.79%

As of December 31, 2022 and 2021, the Group has endorsements to Episky Corporation (Xiamen) Ltd., Jiangsu Canyang Optoelectronics Ltd., Unikorn Semiconductor Corporation and Yenrich Technology Corporation totalling $981,000 and $2,035,760, respectively.

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

Financial liabilities at fair value through profit or loss
Items Current items: Derivative instruments	December31,2022 2,214 $	December31,2021
		12 $

The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting, please refer to Note 6(2) for details.

~46~

(15) Short-term notes and bills payable

Payables for bankers’ acceptance Payables for bankers’ acceptance	Rate(%) - Rate (%) -	Amount Name of bank 775,294 $ BANK OF COMMUNICATIONS BANK OF CHINA Amount Name of bank 877,011 $ BANK OF COMMUNICATIONS BANK OF JIANGSU BANK OF CHINA BANK OF NINGBO December31,2022 December 31, 2021	Collaterals Note 8 Collaterals
			Note 8

(16) Other payables

==> picture [480 x 235] intentionally omitted <==

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

Items December 31, 2022 December 31, 2021
Payables on wages, salaries and bonus $ 1,137,583 $ 1,274,884
Compensation due to employees, directors and supervisors 210,682 480,086
Payables on personnel expense 275,106 309,406
Payables on machinery and equipment 948,327 1,210,113
Payables on consumable goods and equipment repair expense 440,272 682,452
Payables on processing fees 612,444 1,060,702
Payables on reticle expense 17,952 23,542
Payables on gas expense 63,484 82,339
-
Payables on dividend 4,359
Payables on insurance expense 3,537 28,995
Payables on intangible assets 51,133 4,898
Others 859,234 681,669
$ 4,619,754 $ 5,843,445
----- End of picture text -----

~47~

- (17) Long term borrowings

Borrowing period and repayment termpayment termayment termyment termment term

Type of borrowings repayment termpayment termayment termyment termment term December 31, 2022 Bank borrowings Unsecured borrowings Before September 15, 2025 $ 658,440 Unsecured borrowings Before May 15, 2026 135,900 Unsecured borrowings Before September 15, 2025 592,800 Unsecured borrowings Before November 15, 2025 544,800 Unsecured borrowings Before September 15, 2025 400,000 Unsecured borrowings Before September 15, 2025 507,500 Unsecured borrowings Before November 5, 2024 173,334 Unsecured borrowings Before February 15, 2026 455,242 Unsecured borrowings Before September 15, 2025 200,000 Unsecured borrowings Before April 15, 2027 150,000 Unsecured borrowings Before February 15, 2026 50,000 Secured borrowings Before June 15, 2026 150,000 Secured borrowings Before March 15, 2028 100,000 4,118,016 Less: Current portion of long-term borrowings ( 426,518) $ 3,691,498 Interest rate range 0.68%~1.91% Borrowing period and Type of borrowings repayment term December 31, 2021 Bank borrowings Unsecured borrowings Before September 15, 2025 $ 666,000 Unsecured borrowings Before May 15, 2026 135,900 Unsecured borrowings Before September 15, 2025 592,800 Unsecured borrowings Before November 15, 2025 544,800 Unsecured borrowings Before September 15, 2025 400,000 Unsecured borrowings Before September 15, 2025 507,500 Unsecured borrowings Before November 5, 2024 260,000 Unsecured borrowings Before February 15, 2026 464,400 Unsecured borrowings Before February 15, 2026 46,100 Unsecured borrowings Before April 26, 2027 3,100 Secured borrowings Before June 15, 2026 92,050 Secured borrowings Before March 15, 2028 100,000 Secured borrowings Before April 12, 2026 243,698 Secured borrowings Before December 13, 2024 82,817 4,139,165 Less: Current portion of long-term borrowings ( 131,683) $ 4,007,482 0.05%~4.99%

Interest rate range

~48~

Pursuant to the bank loan agreements with KGI Bank and Mega Bank, the Company and its subsidiaries should meet certain financial covenants which are calculated based on each of their annual audited consolidated financial statements or semi-annual reviewed consolidated financial statements. The Company and its subsidiaries agreed to maintain the current ratio, debt ratio, debt service coverage ratio and tangible net worth (shareholders’ equity - intangible assets) as defined in financial covenants.

(18) Pensions

• A. (a) The Company and its domestic subsidiaries have defined benefit pension plans in accordance with the Labor Standards Law, covering all regular employees for services provided prior to July 1, 2005, and employees who choose to remain in the defined benefit pension plan subsequent to the enforcement of the Labor Pension Act on July 1, 2005. Under the defined benefit pension plan, employees are entitled to two base points for every year of service for the first 15 years and one base point for each additional year thereafter, up to a maximum of 45 base points. The pension payment to employees is computed based on years of service and average salaries or wages of the last nine months prior to approved retirement. The Company contributes an amount equal to 2% of salaries and wages paid each month to a pension fund. The pension fund is administered by a pension fund monitoring committee and deposited under the Committee’s name in the Bank of Taiwan.

  • Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit by next March.

• (b) The amounts recognised in the balance sheet are as follows:

	December	31,2022	December	31,2021
Present value of defined benefit obligations	($	380,754)	($	410,316)
Fair value of plan assets		401,674		362,088
Net defined benefit liability	$	20,920	($	48,228)

~49~

(c) Movements in net defined benefit liabilities are as follows:

Movements in net defined benefit liabilities are as follows:
Present value of defined benefit obligations At January 1 410,316) ($ Current service cost 841) ( Interest (expense) income 2,991) ( Settlement profit or loss 117 414,031) ( Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in demographic assumptions 151) ( Change in financial assumptions 12,388) ( Experience adjustments 27,112 Liquidation gain 16,527 31,100 Pension fund contribution - Paid pension 2,177 Settlement returns to the company - At December 31 380,754) ($	Fair value of plan assets 2022	Net defined benefit liability
	362,088 $ - 2,745 117) ( 364,716 27,692 - - - 9,349) ( 18,343 19,178 - 563) ( 401,674 $	48,228) ($ 841) ( 246) ( - 49,315) ( 27,692 151) ( 12,388) ( 27,112 7,178 49,443 19,178 2,177 563) ( 20,920 $

~50~

At January 1 Current service cost Interest (expense) income Settlement profit or loss Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Liquidation gain Pension fund contribution Paid pension At December 31		2021
	Present value of defined benefit obligations	Fair value of plan assets	Net defined benefitliability
	400,469) ($ 1,446) ( 1,544) ( 7,961 395,498) ( - 1,662) ( 17,139 39,239) ( 133 23,629) ( - 8,811 410,316) ($	358,006 $ - 1,393 7,961) ( 351,438 4,873 - - - - 4,873 12,399 6,622) ( 362,088 $	42,463) ($ 1,446) ( 151) ( - 44,060) ( 4,873 1,662) ( 17,139 39,239) ( 133 18,756) ( 12,399 2,189 48,228) ($

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31,2022 and 2021 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	Year ended December31,2022 1.35%~1.40% 2.00%~4.00%	Year ended December31,2021
		0.75%
		2.00%~4.00%

~51~

The assumptions about future mortality experience in 2022 and 2021 are set based on actuarial advice in sixth empirical life tables of the life insurance industry in Taiwan, respectively.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

==> picture [449 x 178] intentionally omitted <==

     - The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

  - (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2022 amount to $10,545.

  - (g) As of December 31, 2022, the weighted average duration of the retirement plan is 12 years.

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

  • (b) The Group’s mainland China subsidiaries have funded defined contribution plans. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage stipulated by the government. Other than the monthly contributions, the Group does not have further obligations.

  • (c) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2022 and 2021 were $367,051 and $290,794, respectively.

• (19) Share-based payment

• A. Restricted stocks to employees.

  • (a) For the year ended December 31, 2022, the Group’s restricted stocks to employees arrangement was as follows:

Type of Quantity granted Vesting arrangement Grant date (thousand shares) Contract period condition Restricted stocks to 2019.3.20 8,500 3 years Note 2 employees (Note 1) (Note 3)

~52~

• Note 1: The remaining shares of Lextar in the original plan were converted to the shares of the Company in accordance with the exchange rate on the reference date of the merger.

• Note 2:The employees could vest 30%, 30% and 40% of the restricted stock, respectively, if they continue to provide service to Lextar for the first year, second year and third year. However, the actual granted units should consider the situation of Lextar’s operating results and employees’ performance.

• Note 3: All were vested or eliminated in March 2022.

• (b) Details of the share-based payment arrangements are as follows (expressed in thousand of shares):

shares):
		2022			2021
Outstanding at January 1			3,400			5,950
Vested in the period	(		1,700)			-
Expired	(		1,700)	(		2,550)
Outstanding at December 31			-			3,400
Exercisable at December 31(Note)			-			3,400

Note: Transferred into 935 thousand shares of the Company using the exchange ratio of 0.275.

(c) The fair value of stock options relevant information is as follows (expressed in NTD):

			Exercise	Exercise	Fair value per
Type ofarrangement	Grant date	Stockprice		price	unit
Restricted stocks to employees	2019.3.20	$ 18	$	-	18 $
ployee stock options:
For the ended December 31, 2022, the share-based payment arrangements are					as follows:
		Quantity granted
Type ofarrangement	Grant date	(thousand shares)		Vesting conditions
Employee stock option-	2010.08.01	1,500			Note 1
United LED Corporation
(Hong Kong) Limited
Employee stock option-	2022.05.06	9,518			Note 2
Unikorn Semiconductor
Corporation
Employee stock option-	2022.08.10	3,000			Note 3
Hexawave, Inc.

• B. Employee stock options:

• (a) For the ended December 31, 2022, the share-based payment arrangements are as follows:

  • Note 1: 30% upon completion of 1 year’s service; 60% upon completion of 2 years’ service; 100% upon completion of 3 years’ service.

  • Note 2: For 1 and 2 years from the date of issuance of stock options, the employees could exercise the stock options of 50% and 50% of the shares, respectively, which was based on the employees’ individual performance indicators.

  • Note 3: Employees were able to exercise 30%, 30% and 40% of their stock options after 1 year, 2 years and 3 years from the grant date, respectively.

~53~

(b) Details of the share-based payment arrangements are as follows:

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2022 2021
Weighted-average Weighted-average
No.of shares exercise price No.of shares exercise price
(in thousands) (in US dollars) (in thousands) (in US dollars)
Options outstanding from
beginning to the end of
the period -
United LED Corporation
(Hong Kong) Limited 1,049 $ 0.0001 1,049 $ 0.0001
Options exercisable at end
of the period -
United LED Corporation
(Hong Kong) Limited 1,049 1,049
----- End of picture text -----

				2022	2022	2022
					Weighted-average
		No.of shares				exercise price
		(in thousands)				(in NTD)
Options outstanding from beginning of the
period - Unikorn Semiconductor Corporation				-
Options granted - Unikorn Semiconductor
Corporation		9,518			$	5
Options forfeited - Unikorn Semiconductor
Corporation	(		382)
Options outstanding at end of the period -
Unikorn Semiconductor Corporation		9,136				5
Options exercisable at end of the period -
Unikorn Semiconductor Corporation				-
				2022
					Weighted-average
		No.of shares				exercise price
		(in thousands)				(in NTD)
Options outstanding from beginning of the
period - Hexawave, Inc.				-
Options granted - Hexawave, Inc.		3,000			$	10
Options outstanding at end of the period -
Hexawave, Inc.		3,000				10
Options exercisable at end of the period -
Hexawave, Inc.				-
C. Expenses incurred on share-based payment	transactions are shown below:
	Year	ended				Year ended
	December31,2022			December31,2021
Equity-settled	($	24,091)		$		20,996

~54~

(20) Long-term deferred revenue (shown under “Other non-current liabilities”)

Deferred government grants revenue Deferred technical services revenue	December31,2022 December31,2021 167,229 $ 223,716 $ 7,926 9,959 175,155 $ 233,675 $

The Company and subsidiaries obtained government grants for acquisitions of equipment, technology investments and research projects and recognized such grants as revenue over the economic lives of those assets. Government grants revenue recognized for the years ended December 31, 2022 and 2021 were $151,147 and $159,789 (shown under “Other income and expenses – net” and “Other income”), respectively.

(21) Share capital

A. As of December 31, 2022, the Company’s authorized capital was $15,000,000, consisting of 1,500,000 thousand shares of ordinary stock (including 50,000 thousand shares reserved for employee stock options), and the paid-in capital was $7,547,840 with a par value of $10 (in dollars) per share. In accordance with Article 31 of Business Mergers and Acquisitions Act, the Company issued new shares in exchange for the stocks of Epistar and Lextrar. The procedure of share exchange was completed on January 6, 2021.

Movements of the Company’s outstanding ordinary shares are as follows (expressed in thousands of shares):

of shares):
		2022		2021
At January 1		682,125		1,074,649
Issuance of ordinary shares		-		141,602
Issuance of ordinary shares - private placement		70,000		-
Effect of the joint share exchange		-	(	537,325)
Proceeds from treasury shares transferred to		-		3,900
employees
Expiration of restricted employee stock	(	467)	(	701)
At December 31		751,658		682,125

B. The stockholders at their annual stockholders’ meeting on May 31, 2022 adopted a resolution to raise additional cash through private placement with the effective date set on July 8, 2022, which will be used for capital expenditure of constructing/building a 6-inch wafer plant for Micro LEDs and purchasing the equipment related to epitaxy and LED chips, etc. The resolution issue 70,000 thousand shares of ordinary shares at a price of NT$51.82 per share for a total amount of $3,627,400 through private placement and had been registered. Pursuant to the Securities and Exchange Act of the ROC, the common shares raised through the private placement are subject to certain transfer restrictions and cannot be listed on the stock exchange until three years after they have been issued and have applied for retroactive handling of public issuance procedures. Other than these restrictions, the rights and obligations of the ordinary shares raised through the private placement are the same as other issued common shares.

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• C. Treasury shares

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

(Unit: share in thousands/ dollars in thousands)

2022

Reason for reacquisition At January1 Increase Decrease At December 31 Held by subsidiaries 1,282 - - 1,282 $ Redemption of shares held by objecting shareholders 1,844 - - 1,844 Reason for reacquisition AtJanuary1 Issuance of ordinary shares under business combination Increase Decrease (Note) At December31 Held by subsidiaries - 10,365 701 ( 9,784) 1,282 Redemption of shares held by objecting shareholders - 3,687 - ( 1,843) 1,844 2021		Book value
		135,163 159,647 Bookvalue
		135,163 $ 159,647

Note ： Effect of conversion under joint share conversion agreement.

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

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

• (d) Pursuant to the rules governing share repurchase by the Group, treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

• D. Information of the Company’s shares held by subsidiaries is as follows:

Lighting Investment Corporation Book value Fair value Epistar Corporation Book value Fair value	December31,2022 1,282thousand shares 135,163 $ 57,386 $ 1,844thousand shares 159,647 $ 82,497 $	December31,2021
		1,282thousand shares
		135,163 $ 98,358 $ 1,844thousand shares
		159,647 $ 141,396 $

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(22) Capital surplus

Pursuant to the Company Act, capital surplus, including additional paid-in capital in excess of par and donation, shall be exclusively used to cover accumulated deficit or to issue new stock or cash to shareholders in proportion to their ownership when the Company has no accumulated deficit. However, pursuant to the R.O.C. Securities and Exchange Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stock and donations can be capitalized once a year, provided that the Company has no accumulated deficit and the amount to be capitalized does not exceed 10% of the paid-in capital.

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Changes in ownership Change in net equity of
interests in subsidiaries associates and joint
Treasury share accounted for using ventures accounted for
Share premium transactions equity method under equity method
----- End of picture text -----

At January 1, 2022 Issuance of ordinary shares - private placement Change in equity of associates and joint ventures accounted for under equity method Difference between consideration and carrying amount of subsidiaries acquired and disposed Changes in ownership interests in subsidiaries accounted for using equity method Expiration of restricted employee stock At December 31, 2022	42,894,615 $ 115,823 $ 770,537 $ 2,927,400 - - - - - 7,754 - 195,791) ( 42,848 947) ( 299,546) ( 4,674 - - 45,877,291 $ 114,876 $ 275,200 $	49,663 $ - 104,634 - - - 154,297 $

~57~

								Changes in
								ownership			Difference between	Change in net equity
								interests in			consideration and		of associates and
								subsidiaries			carrying amount of		joint ventures
				Treasury share			accounted for using			subsidiaries acquired			accounted for
		Sharepremium		transactions				equitymethod			or disposed	under equitymethod
At January 1, 2021		$	35,015,440	$	-		$	978,202		$	64,570	$	57,244
Issuance of new shares			10,308,626					-			-		-
Change in equity of
associates and joint ventures
accounted for under equity
method	(		62,279)					-			-		49,663
Difference between
consideration and carrying
amount of subsidiaries
acquired and disposed	(		7,754)		-			-			-		-
Changes in ownership
interests in subsidiaries
accounted for using
equity method			-		115,823			574,746			-		-
Expiration of restricted
employee stock			7,013		-			-			-		-
Distribution to subsidiaries'
empioyee compensation			-		-			-			195,791		-
Effect of the joint share
exchange	(		2,366,431)		-	(		978,202)	(		64,570)	(	57,244)
At December 31, 2021		$	42,894,615	$	115,823		$	574,746		$	195,791	$	49,663

(23) Retained earnings

• A. In accordance with the Company’s Articles of Incorporation, 10% of current year’s earnings, after paying all taxes and dues and covering prior years’ losses, shall be appropriated as legal reserve until the total equals the issued share capital. Special reserve shall be appropriated or reversed when needed. The remaining earnings along with the prior years’ accumulated unappropriated earnings are considered as distributable earnings, and shall be distributed by the Board of Directors. When issuing new shares, the distribution shall be submitted to the resolution of the Shareholders’ Meeting. If it is in cash, it shall be resolved by the Board of Directors. The distribution shall be based on the proportion of shares held by each shareholder.

• B. The Company appropriates earnings based on the factors such as current and future investment environment, capital needs, domestic and overseas competition and capital budget, along with the consideration of shareholders’ interest and capital adequacy. The appropriation of cash dividends shall not be lower than 10% of the total dividend appropriated to shareholders.

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

• D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the special reserve is reversed accordingly and could be included in the distributable earnings.

• E. The appropriations of 2022 earnings had been resolved at the Board of Directors on February 23, 2023, and decided not to distribute cash dividends.

~58~

• F. The appropriations of 2021 earnings as resolved by the shareholders at their meeting on May 31, 2022 are as follows:

2022 are as follows:
		2021
			Dividends per share
		Amount		(indollars)
Legal reserve appropriated	$	216,945
Special reserve appropriated	$	290,598
Cash dividends distributed	$	1,365,881	$	2

The abovementioned distribution of earnings for the year of 2021 was in agreement with those amounts proposed by the Board of Directors on February 24, 2022.

(24) Other equity items

Other equity items
At January 1 Revaluation - gross Revaluation - tax Difference on carrying amounts of subsidiaries acquired and disposed Disposal of investments in equity instruments designated at fair value through other comprehensive income Currency translation –Group –Tax on Group At December 31 At January 1 Effect of the joint share exchange Revaluation - gross Revaluation - tax Difference on carrying amounts of subsidiaries acquired and disposed Disposal of investments in equity instruments designated at fair value through other comprehensive income Currency translation –Group –Tax on Group At December 31	Currencytranslation		Unrealizedgain or loss Total 170,992 $ 235,543) ($ 256,584) ( 256,584) ( 36,134) ( 36,134) ( - 3 160,653 160,653 - 443,043 - 428) ( 38,927 $ 75,010 $ 2022 Unrealizedgain or loss Total 271,742) ($ 1,001,764) ($ 271,742 1,001,764 285,303 285,303 123,285) ( 123,285) ( - 1,553) ( 8,974 8,974 - 210,366) ( - 194,616) ( 170,992 $ 235,543) ($ 2021
	406,535) ($ - - 3 - 443,043 428) ( 36,083 $ Currencytranslation
		Currencytranslation
	730,022) ($ 730,022 - - 1,553) ( - 210,366) ( 194,616) ( 406,535) ($

~59~

(25) Operating revenue

Operating revenue
		Year ended		Year ended
	December 31, 2022		December 31, 2021
Revenue from contracts with customers:
Sales revenue	$	28,660,443	$	36,119,775
Services revenue		95,467		117,961
Other operating revenue		122,340		187,024
	$	28,878,250	$	36,424,760

Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services at a point in time in the following major product lines and geographical regions:

Year ended December 31,2022 Sales revenue Services revenue Other operating revenue Year ended December 31,2021 Sales revenue Services revenue Other operating revenue	Epi/Chip 20,965,987 $ - - Epi/Chip 24,903,022 $ - -	Packages/ Modules 6,977,759 $ - - Packages/ Modules 9,955,600 $ - -	Other 716,697 $ 95,467 122,340 Other 1,261,153 $ 117,961 187,024	Total
				28,660,443 $ 95,467 122,340
				28,878,250 $
				Total
				36,119,775 $ 117,961 187,024
				36,424,760 $

(26) Other income and expenses– net

Other income and expenses–net		36,424,760 $
Interest income Other income Royalty income Government grants revenue Total Interest income from bank deposits Other interest income	Year ended December31,2022 13,977 $ 72,723 86,700 $ Year ended December31,2022 97,173 $ 7,427 104,600 $	Year ended December31,2021
		12,144 $ 159,789
		171,933 $
		Year ended December31,2021
		41,469 $ 3,621
		45,090 $

(27) Interest income

~60~

(28) Other income

(29) (30) (31)

Other gains and losses Finance costs Expenses by nature Year ended Year ended December 31, 2022 December 31, 2021 Rental income 212,932 $ 152,404 $ Dividend income 44,296 105,228 Government grant revenues 78,424 - Other income-other 179,857 235,443 515,509 $ 493,075 $ Year ended Year ended December31,2022 December 31, 2021 Gain (loss) on disposal of property, plant and equipment 42,014 $ 5,664) ($ Loss on disposal of intangible assets 2,932) ( 11,223) ( Gain on disposal of investments 72,090 254,040 Gain on disposal of non-current assets held for sale - 178,123 Net currency exchange gain (loss) 526,415 139,782) ( Net (loss) gain on financial assets at fair value through profit or loss 285,929) ( 17,537 Impairment loss on property, plant and equipment 13,312) ( 35,948) ( Impairment loss on intangible assets - 78,745) ( Miscellaneous losses 121,331) ( 101,399) ( 217,015 $ 76,939 $ Year ended Year ended December31,2022 December 31, 2021 Interest expense 67,037 $ 86,861 $ Other interest expense 64,565 34,256 131,602 $ 121,117 $ Year ended Year ended December31,2022 December31,2021 Employee benefit expenses 7,808,368 $ 8,624,345 $ Depreciation charges on property, plant and equipment (Note) 4,952,508 $ 5,036,375 $ Amortisation charges on intangible assets 257,757 $ 232,935 $

Note: Depreciation amounting to $102,232 and $131,986 were recognized as miscellaneous expenses for the years ended December 31, 2022 and 2021, respectively.

~61~

(32) Employee benefit expenses

Employee benefit expenses
		Year ended		Year ended
	December 31, 2022		December 31, 2021
Wages and salaries	$	6,540,144	$	7,388,792
Labor and health insurance expenses		489,163		467,799
Pension costs		376,519		340,390
Other personnel expenses		402,542		427,364
	$	7,808,368	$	8,624,345

• A. According to the Articles of Incorporation of the Company, the Company shall distribute employees’ compensation and directors’ remuneration based on 0.1%~15% and no higher than 2% of the distributable profit of the current year, respectively. If the Company has accumulated deficit, earnings should be reserved to cover losses.

• B. For the years ended December 31, 2022 and 2021, employees’ compensation was accrued at $3,952 and $244,739, respectively. For the years ended December 31, 2022 and 2021, the directors’ remuneration was accrued at $790 and $24,474, respectively.

• C. On February 23, 2023, the board of directors of the company approved the distribution of directors’ remuneration as $0 in 2022, and the difference of $790 between the directors’ remuneration account and the proposed distribution will be listed as profit and loss in 2023.

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

(33) Income tax

• A. Income tax expense

• (a) Components of income tax expense :

website of the Taiwan Stock Exchange. e tax ome tax expense Components of income tax expense :
Year ended December31,2022 Current tax: Current tax on profits for the period 248,706 $ Tax withheld at source from foreign income - Prior year income tax underestimation 17,514 Tax on undistributed surplus earnings 14,801 Total current tax 281,021 Deferred tax: Origination and reversal of temporary differences 18,582 Effect from loss deductible income tax 216,688) ( Total deferred tax 198,106) ( Income tax expense 82,915 $	Year ended December31,2021
	70,320 $ 17,329 744 -
	88,393
	71,492 304,949
	376,441
	464,834 $

~62~

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

		Year ended			Year ended
	December 31, 2022			December 31, 2021
Change in fair value of financial assets	$	36,629		$	123,285
at fair value through other comprehensive
income Currency translation differences		168			191,996
Share of other comprehensive income of
associates	(	235)			2,620
Remeasurement of defined benefit obligations		3,855	(		293)
Total	$	40,417		$	317,608
Reconciliation between income tax expense and accounting profit
		Year ended			Year ended
	December31,2022			December31,2021
Tax calculated based on profit before tax	$	74,208		$	982,667
and statutory tax rate
Tax withheld at source from foreign income		-			17,329
Expenses disallowed & tax exempt income by tax		59,227			981
regulation
Temporary differences not recognised as deferred	(	19,509)	(		858,816)
tax assets
Change in assessment of realisation of deferred		18,582			71,491
tax assets
Effect from taxable loss	(	81,908)			250,438
Prior year income tax underestimation		17,514			744
Tax on undistributed surplus earnings		14,801			-
Income tax expense	$	82,915		$	464,834

B. Reconciliation between income tax expense and accounting profit

~63~

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

investment tax credits are as	follows:
Deferred tax assets: －Temporary differences: Unrealized loss on inventory Unrealized exchange loss Unrealized sales returns and discounts Allowance overrun Unrealized loss of sales Investment loss under equity method Loss on valuation of financial assets Impairment loss for financial assets Deferred revenue Currency translation differences Unrealized pension Others Tax losses Subtotal Deferred tax liabilities: Property, plant and equipment Unrealized exchange gain Unrealized sales returns and discounts Unrealized gross profit of sales Investment gain under equity method Gain on valuation of financial assets Currency translation differences Others Subtotal Total			2022
	January1	Recognised in profit or loss	Recognised in other comprehensive income		December31
	111,708 $ 204) ( 17,782 - 2,200 784 20,025 4,099 43,221 83 19,575 129,554 1,436,426 1,785,253 212,321) ( 1,647) ( - - 451) ( 159,054) ( 4,017) ( 51,848) ( 429,338) ( 1,355,915 $	36,952 $ 18,337 2,317) ( 1,049 191 22,110 - - 2,106 - 2,039) ( 49,621) ( 70,640) ( 43,872) ( 28,992 272) ( 1,659) ( 8,343) ( 1,330) ( - - 9,409 26,797 17,075) ($	- $ - - - - - 20,025) ( - - 83) ( 3,855) ( - - 23,963) ( - - - - - 16,712) ( 2,019) ( - 18,731) ( 42,694) ($	148,660 $ 18,133 15,465 1,049 2,391 22,894 - 4,099 45,327 - 13,681 79,933 1,365,786 1,717,418 183,329) ( 1,919) ( 1,659) ( 8,343) ( 1,781) ( 175,766) ( 6,036) ( 42,439) ( 421,272) ( 1,296,146 $

~64~

Deferred tax assets: －Temporary differences: Unrealized loss on inventory Unrealized exchange loss Unrealized sales returns and discounts Allowance overrun Unrealized loss of sales Investment loss under equity method Impairment loss for non-financial assets Loss on valuation of financial assets Impairment loss for financial assets Deferred revenue Currency translation differences Unrealized pension Others Tax losses Investment tax credit Subtotal Deferred tax liabilities: Property, plant and equipment Unrealized exchange gain Unrealized gross profit of sales Bargain purchase gain Investment gain under equity method Gain on valuation of financial assets Currency translation differences Others Subtotal Total				2021
		January1	Recognised in profit or loss	Recognised in other comprehensive income		Bussiness combination	December31
	37,705 $ 6,019 6,864 1,042 - 842,509 43,101 89,969 4,099 55,845 919,975 25,676 120,864 1,777,411 18,255 3,949,334 - - 1,726) ( 2,375) ( 541,029) ( 105,877) ( 691,727) ( 394,041) ( 1,736,775) ( 2,212,559 $		74,003 $ 6,223) ( 10,918 1,042) ( 2,200 841,725) ( 43,101) ( - - 12,624) ( 37,284) ( 6,394) ( 8,690 340,985) ( 18,255) ( 1,211,822) ( - 1,647) ( 1,726 2,375 540,578 - - 342,193 885,225 326,597) ($	- $ - - - - - - 69,944) ( - - 882,608) ( 293 - - - 952,259) ( - - - - - 53,177) ( 687,710 - 634,533 317,726) ($	- $ - - - - - - - - - - - - - - - 212,321) ( - - - - - - - 212,321) ( 212,321) ($		111,708 $ 204) ( 17,782 - 2,200 784 - 20,025 4,099 43,221 83 19,575 129,554 1,436,426 - 1,785,253 212,321) ( 1,647) ( - - 451) ( 159,054) ( 4,017) ( 51,848) ( 429,338) ( 1,355,915 $

~65~

• D. Details of the amount the Company is entitled as investment tax credit and unrecognised deferred tax assets are as follows:

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December 31, 2022
Unrecognised
Unused tax deferred tax
Qualifying items credits assets Expiry year
----- End of picture text -----

tax assets are as follows: Qualifyingitems Unused tax credits December 31,2022	tax assets are as follows: Qualifyingitems Unused tax credits December 31,2022	Unrecognised deferred tax assets	Expiry year
Investment tax credits for industrial innovation 637,989 $ Investment tax credits for industrial innovation 607,539 Investment tax credits for industrial innovation 1,000,000 Investment tax credits for industrial innovation 727,411 December 31,2021		637,989 $ 607,539 1,000,000 727,411	2022 2023 2022 2023
Qualifyingitems	Unused tax credits	Unrecognised deferred tax assets	Expiry year
Investment credit for stockholder Investment tax credits for industrial innovation Investment tax credits for industrial innovation Investment tax credits for industrial innovation Investment tax credits for industrial innovation	100,000 $ 782,902 731,712 404,324 1,000,000	8,725 $ 782,902 731,712 404,324 1,000,000	2021 2021 2022 2021 2022

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

Unutilized tax loss from the Company is as follows ： None.

~66~

Unutilized tax loss from the Subsidiary is as follows: December 31, 2022

Year incurred	Amount filed/ assessed	Unused amount	Unrecognised deferred tax assets	Expiry year
2012 2013 2014 2015 2016 2017 2018 2019 2019 2020 2020 2020 2021 2021			79,718 $ 8,487 2,035,867 1,059,174 3,560,309 670,675 347,618 531,925 600,859 389,475 5,010 1,877,293 74,491 1,117,083	2022 2023 2024 2025 2026 2027 2028 2024 2029 2025 2030 2030 2026 2031

Year incurred	Amount filed/ assessed	Unused amount	Unrecognised deferred taxassets	Expiry year
2011 2012 2013 2014 2015 2016 2016 2017 2018 2018 2019 2019 2020 2020	Assessed Assessed Assessed Assessed Assessed Assessed Amount filed Assessed Assessed Amount filed Assessed Amount filed Amount filed Amount filed	51,805 $ 80,912 8,487 3,969,234 1,059,174 3,690,898 595,557 837,032 570,533 302,987 4,103,745 1,062,667 411,338 4,985,902	51,805 $ 80,912 8,487 20,889 10,907 1,159,665 595,557 837,032 154,616 302,987 3,367,611 1,062,667 411,338 4,985,902	2021 2022 2023 2024 2025 2026 2021 2027 2028 2023 2029 2024 2025 2030

• F. As of December 31, 2022 and 2021, the amounts of deductible temporary difference that are not recognised as deferred tax assets were $97,543 and $7,831,942, respectively.

~67~

• G. The Company was established on January 6, 2021, and had filed profit-seeking enterprise income tax in June 2022. Currently, the Company’s income tax returns have not been assessed and approved by the Tax Authority. Income tax returns of the Company’s significant subsidiaries, Epistar and Lextar through 2020 have been assessed and approved by the Tax Authority, respectively.

(34) Earnings per share

respectively. Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees' compensation Employee restricted shares Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year ended December31,2022
	Weighted average number of outstanding ordinary shares Earnings per share Amount after tax (share in thousands) (in dollars) 38,024 $ 715,603 0.05 $ 38,024 $ 715,603 - 496 38,024 $ 716,099 0.05 $ Year ended December31,2021		Earnings per share (in dollars)
			0.05 $
			0.05 $
	Amount after tax 2,178,349 $ 2,178,349 $ - - 2,178,349 $	Weighted average number of outstanding ordinary shares (share in thousands) 678,590 678,590 3,191 91 681,872	Earnings per share (in dollars)
			3.21 $
			3.20 $

(35) Business combinations

A. The Company acquired 100% ordinary shares of Lextar, primarily involved in manufacturing LED wafers, chips, packages and modules, in the way of share exchange. The Company expects to strengthen the strategic cooperative relationship after the acquisition.

B. The following table summarises the consideration paid for Lextar and the fair values of the assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the noncontrolling interest at the acquisition date:

~68~

			January 6,2021
Purchase consideration
Equity instruments		$	11,724,646
Fair value of the non-controlling interest			239,900
			11,964,546
Fair value of the identifiable assets acquired and liabilities assumed
Cash			3,763,629
Financial assets at fair value through profit or loss - current			20,629
Notes and accounts receivable (including related parties)			2,817,398
Other financial assets-current			456,787
Inventories			1,088,852
Other current assets			210,038
Financial assets at fair value through other comprehensive income-
current			116,471
Non-current financial assets at amortised cost			39,340
Investments accounted for under equity method			270,320
Property, plant and equipment			4,885,659
Right-of-use assets			384,837
Investment property			463,943
Intangible assets			426,252
Deferred income tax asset			52,158
Other non-current asset			505,036
Financial liabilities at fair value through profit or loss - current	(		4,894)
Notes and accounts payables (including related parties)	(		2,284,242)
Payables on equipment	(		174,620)
Current lease liabilities	(		26,532)
Other current liabilities	(		1,176,593)
Non-current lease liabilities	(		387,498)
Other non-current liabilities	(		7,731)
Deferred income tax liabilities	(		228,957)
Total identifiable net assets			11,210,282
Goodwill		$	754,264

C. The operating revenue included in the consolidated statement of comprehensive income since January 6, 2021 contributed by Lextar was $11,324,594. Lextar also contributed profit before income tax of $335,806 over the same period. Had Lextar been consolidated from January 1, 2021, the consolidated statement of comprehensive income would show operating revenue of $11,324,594 and profit before income tax of $335,806.

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(36) Supplemental cash flow information

A. Investing activities with partial cash payments

Supplemental cash flow information A. Investing activities with partial cash payments
			Year ended			Year ended
		December31,2022			December31,2021
Purchase of property, plant and equipment		$	3,617,433		$	3,949,671
Add: Opening balance of payable
on equipment			1,210,113			2,068,474
Add: Ending balance of prepayment
for equipment			630,431			189,420
Less: Ending balance of payable
on equipment	(		948,327)	(		1,210,113)
Less: Opening balance of prepayment
for equipment	(		189,420)	(		265,386)
Cash paid during the period		$	4,320,230		$	4,732,066
			Year ended			Year ended
		December31,2022			December31,2021
Purchase of intangible assets		$	217,720		$	76,364
Add: Opening balance of payables
(including non-current portion)			4,898			46,122
Less: Ending balance of payables
(including non-current portion)	(		92,418)	(		4,898)
Cash paid during the period		$	130,200		$	117,588
B. Investing activities with partial cash received
			Year ended			Year ended
		December 31, 2022			December31,2021
Sale of property, plant and equipment		$	387,627		$	235,192
Add: Opening balance of receivables			2,013			2,000
Less: Ending balance of receivables	(		48)	(		2,013)
Cash collected during the period		$	389,592		$	235,179
C. Cash received from disposal of ownership interests	in subsidiaries and associates
			Year ended			Year ended
		December31,2022			December31,2021
Disposal proceeds	$		88,100	$		-
Add: Opening balance of receivables			-			-
Less: Ending balance of receivables			-			-
Net cash provided by disposal of subsidiaries and
associates	$		88,100	$		-

~70~

(37) Changes in liabilities from financing activities

Changes in liabilities from financing activities	Changes in liabilities from financing activities
Short-term Long-term Short-term notes and bills borrowing borrowing payable At January 1, 2022 3,479,177 $ 4,139,165 $ 877,011 $ Changes in cash flow from financing activities 2,295,709) ( 21,149) ( 112,938) ( Effect of interest - - - Cash in other non-cash items - - - Impact of changes in foreign exchange rate 20,027 - 11,221 At December 31, 2022 1,203,495 $ 4,118,016 $ 775,294 $ Short-term Long-term Short-term notes and bills borrowing borrowing payable At January 1, 2021 1,537,574 $ 3,338,144 $ 568,519 $ Acquired from business combinations - - 312,628 Changes in cash flow from financing activities 1,947,559 801,021 - Effect of interest - - - Impact of changes in foreign exchange rate 5,956) ( - 4,136) ( At December 31, 2021 3,479,177 $ 4,139,165 $ 877,011 $		Lease	Guarantee deposits	Liabilities from financing activities gross
	payable	liabilities	received
				7,733,209 $
				Liabilities from financing activities gross
	payable	liabilities	received
		1,286,306 $ 414,030 155,101) ( 28,707 16,813) ( 1,557,129 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties LEDAZ Co., Ltd. best Epitaxy Manufacturing Company Ltd. LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. GCS Holdings, Inc. Changzhou Chemsemi Co., Ltd. Joint Power Exponent, Ltd. iReach Corporation Chuzhou Bwin Technology Corp. Tyntek Corporation CreeLED Hong Kong LTD. CreeLED, Inc. D-Tech Optoelectronics, Inc. Global Communication Semiconductors, LLC LEYARD EUROPE s.r.o. Seoul Semiconductor Co., Ltd. AU Optronics (Kunshan) Co., Ltd.

Relationship with the Group Associates Associates (Note 2) Associates (Note 4) Associates Associates Associates Associates (Note 3) Associates Associates Other related parties (Note 1) Other related parties (Note 1) Other related parties Other related parties Other related parties Other related parties Other related parties

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Names of related parties

Relationship with the Group

AUO Corporation Other related parties AU Optronics (Xiamen) Corp. Other related parties AUO (Suzhou) Corp Ltd. Other related parties AUO Envirotech Inc. Other related parties Beijing Leyard Equipment Technology Co., Ltd. Other related parties Leyard Optoelectronic Co., Ltd. Other related parties Leyard TV Technology Co., Ltd. Other related parties Intermate Co., Ltd. (Suzhou) Other related parties PlayNitride Inc. Other related parties D-TECH OPTOELECTRONICS Other related parties (TAIWAN) CORPORATION Shenzhen Leyard Opto-Electronic Co., Other related parties KAISTAR Lighting (Xiamen) Co., Ltd. Other related parties FormoLight Technologies, Inc. Other related parties Darwin Precisions Corporation Other related parties Darwin Precision (Xiamen) Corporation Other related parties AUO Display Plus Corporation Other related parties Fortech Electronics (Kunshan) Co., Ltd. Other related parties Fortech Electronics (Suzhou) Co., Ltd. Other related parties PlayNitride Display Co., Ltd. Other related parties

Note 1: It is no longer the Company’s other related party beginning on April, 2021

• Note 2: It is no longer the Company’s subsidiary in June 2021, and thus transferred the entities from consolidated entities to related parties, and it is no longer the Company’s other related party beginning on November, 2021.

• Note 3: It is no longer the Company’s subsidiary in June 2021, and thus transferred the entities from consolidated entities to related parties.

• Note 4: It is no longer the Company’s subsidiary in January 2022, and thus transferred the entities from consolidated entities to related parties.

(2) Significant related party transactions and balances

• A. Operating revenue:

from consolidated entities to related parties. gnificant related party transactions and balances Operating revenue:
Other related parties Associates Total	Year ended December31,2022 757,811 $ 594,736 1,352,547 $	Year ended December31,2021
		2,356,293 $ 796,755
		3,153,048 $

All product sales prices have no significant difference between related parties and third parties. B. Purchases:

Purchases:
Other related parties Associates Total	Year ended December31,2022 5,277 $ 324,710 329,987 $	Year ended December31,2021
		139,963 $ 334,899
		474,862 $

~72~

All product purchases prices have no significant difference between related parties and third parties.

• C. Receivables from related parties (Notes receivable and accounts receivable):

Other related parties Associates Total	December31,2022 199,761 $ 236,493 436,254 $	December31,2021
		749,273 $ 326,437 1,075,710 $

The receivables from related parties arise mainly from sale transactions. The receivables are unsecured in nature and bear no interest.

• D. Other receivables from related parties:

unsecured in nature and bear no interest. Other receivables from related parties:	unsecured in nature and bear no interest. Other receivables from related parties:
December31,2022		December	31,2021
Other related parties $	24,012	$	3,869
Associates	111,406		11,952
Total $	135,418	$	15,821
The other receivables from related parties arise mainly from rent and service.
Payables from related parties:
December31,2022		December	31,2021
Other related parties $	1,242	$	32,681
Associates	265,236		286,891
Total $	266,478	$	319,572

• E. Payables from related parties:

The payables to related parties arise mainly from purchase transactions. The payables bear no interest.

F. Property transactions:

(a) Acquisition of property, plant and equipment:

(b) Disposal of property, plant and equipment: Key management compensation Acquisition proceeds Accrued payable Acquisition proceeds Accrued payable Other related parties 308,956 $ 4,821 $ 12,311 $ 4,328 $ Associates 3,602 - - - 312,558 $ 4,821 $ 12,311 $ 4,328 $ Year ended December 31,2022 Year ended December 31,2021 Acquisition proceeds Gain (loss) on disposal Acquisition proceeds Gain (loss) on disposal Associates 4,026 $ 676 $ 12,815 $ 1,166 $ Year ended December 31,2022 Year ended December 31,2021 Year ended Year ended December31,2022 December31,2021 Salaries and other short-term employee benefits 229,936 $ 197,070 $ Post-employment benefits 883 980 Termination benefits 1,611 2,322 Share-based payment 13,768) ( 10,869) ( Total 218,662 $ 189,503 $		Year ended December 31,2022	Year ended December 31,2022	Year ended December 31,2022		Year ended December 31,2021	Year ended December 31,2021	Year ended December 31,2021
		Acquisition proceeds		Accrued payable		Acquisition proceeds		Accrued payable
		Acquisition proceeds		Gain (loss) on disposal		Acquisition proceeds	Gain (loss) on disposal
				$

(3) Key management compensation

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8. PLEDGED ASSETS

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

==> picture [518 x 294] intentionally omitted <==

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

Book value
Pledgred assets December 31, 2022 December 31, 2021 Purpose
Bank deposits $ 478,405 $ 81,085 Payables for bankers’
(shown in "Current financial acceptance
assets at amortised cost and
non-current financial assets at
amortised cost")
Time deposits 331,816 281,558 Lease deposit, performance
(Shown in "Current financial bond, security for provisional
assets at amortised cost, attachment, customer deposit,
non-current financial assets at collateral deposits for
amortised cost and other provisional seizure
non-current assets")
Notes receivable 270,620 588,105 Short-term borrowings
Land, building and structures 549,585 332,163 Long-term borrowings
Machinery Long-term borrowings and
and office equipment 286,775 95,663 short-term borrowings
$ 1,917,201 $ 1,378,574
9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT
COMMITMENTS
----- End of picture text -----

Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

Property, plant and equipment

December 31, 2022 1,305,258 $	December31,2021
	1,219,671 $

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital risk management

The Group’s capital management policy is established taking into account the industry characteristics, the Group’s future development and changes in external environments. The Group plans the working capital, capital expenditures, investments and dividends required for the future based on the capital management policy, makes financial analysis, and examines its capital structure periodically and makes appropriate adjustments to ensure that every company within the Group may grow and operate indefinitely.

~74~

(2) Financial instruments

A. Financial instruments by category

nancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Notes receivable - due from related parties Accounts receivable Accounts receivable - due from related parties Other receivables Other receivables - due from related parties Guarantee deposits paid Financial liabilities Financial liabilities at fair value through profit and loss Financial liabilities held for trading Financial liabilities at amortised cost Short-term borrowings Short-term notes payable Notes payable Accounts payable Accounts payable to related parties Other payables Long-term borrowings (including current portion) Long-term accounts payable Guarantee deposits received Lease liabilities (including current portion)	December31,2022 254,073 $ 4,445,317 16,127,132 827,545 1,872,810 10,285 7,544,597 425,969 127,695 135,418 79,650 31,850,491 $ 2,214 $ 1,203,495 775,294 243,332 2,195,394 266,478 4,619,754 4,118,016 41,285 51,217 13,516,479 $ 1,585,187 $	December31,2021
		337,568 $ 4,686,605 12,336,039 394,418 1,622,419 - 11,653,001 1,075,710 162,252 15,821 30,844
		32,314,677 $
		12 $ 3,479,177 877,011 45,455 4,396,401 319,572 5,843,445 4,139,165 - 157,282
		19,257,520 $
		1,557,129 $

~75~

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The purpose of risk management is to minimise potential adverse effects arising from uncertainty on the Group’s financial performance.

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

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

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

• ii. Management has set up a policy to require the Group to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury.

• iii. The Group’s businesses involve some non-functional currency operations (the functional currency of the Company and certain subsidiaries is NTD while that of other subsidiaries are USD, RMB and JPY). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

as follows:
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD RMB:NTD		December31,2022
	Foreign currency amount (in thousands) 226,968 $ 380,410 105,940 97,279 184,438	Exchange rate 30.7100 4.4080 30.7100 30.7100 4.4080	Book value (in thousands ofNTD)
			6,970,187 $ 1,676,847 3,253,417 2,987,438 813,003

~76~

			December31,2021	December31,2021
	Foreign currency
		amount			Book value
		(inthousands)	Exchangerate	(inthousands ofNTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	$	415,649	27.6800	$	11,505,164
RMB:NTD		411,414	4.3440		1,787,182
Non-monetary items
USD:NTD		104,289	27.6800		2,886,720
Financial liabilities
Monetary items
USD:NTD		233,675	27.6800		6,468,124
RMB:NTD		205,295	4.3440		891,801
JPY:NTD		628,391	0.2405		151,128
iv. Please refer to the following table for the details of unrealized exchange gain (loss) arising
from significant foreign exchange variation on the monetary items				held	by the Group.
		YearendedDecember		31,2022
		Unrealized exchange gain(loss)
	Foreign currency
		amount			Book value
		(inthousands)	Exchange rate	(in	thousands ofNTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	$	-	30.7100	($	56,987)
RMB:NTD		-	4.4080	(	646)
Financial liabilities
Monetary items
USD:NTD		-	30.7100	(	18,557)
RMB:NTD		-	4.4080	(	904)
JPY:NTD		-	0.2324		3,074

~77~

v. Analysis of foreign currency market risk arising from significant foreign exchange variation: Foreign currency amount Book value (inthousands) Exchangerate (inthousands ofNTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD - $ 27.6800 50,373) ($ RMB:NTD - 4.3440 3,745) ( Financial liabilities Monetary items USD:NTD - 27.6800 49,055 RMB:NTD - 4.3440 1,306) ( JPY:NTD - 0.2405 5,993 YearendedDecember31,2021 Unrealized exchange gain(loss) Degree ofvariation Effect on profit or loss Effect on other comprehensiveincome (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 1% 69,702 $ - $ RMB:NTD 1% 16,768 - Non-monetary items USD:NTD 1% - 32,534 Financial liabilities Monetary items USD:NTD 1% 29,874) ( - RMB:NTD 1% 8,130) ( - YearendedDecember31,2022 Sensitivity analysis	v. Analysis of foreign currency market risk arising from significant foreign exchange variation: Foreign currency amount Book value (inthousands) Exchangerate (inthousands ofNTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD - $ 27.6800 50,373) ($ RMB:NTD - 4.3440 3,745) ( Financial liabilities Monetary items USD:NTD - 27.6800 49,055 RMB:NTD - 4.3440 1,306) ( JPY:NTD - 0.2405 5,993 YearendedDecember31,2021 Unrealized exchange gain(loss) Degree ofvariation Effect on profit or loss Effect on other comprehensiveincome (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 1% 69,702 $ - $ RMB:NTD 1% 16,768 - Non-monetary items USD:NTD 1% - 32,534 Financial liabilities Monetary items USD:NTD 1% 29,874) ( - RMB:NTD 1% 8,130) ( - YearendedDecember31,2022 Sensitivity analysis	v. Analysis of foreign currency market risk arising from significant foreign exchange variation: Foreign currency amount Book value (inthousands) Exchangerate (inthousands ofNTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD - $ 27.6800 50,373) ($ RMB:NTD - 4.3440 3,745) ( Financial liabilities Monetary items USD:NTD - 27.6800 49,055 RMB:NTD - 4.3440 1,306) ( JPY:NTD - 0.2405 5,993 YearendedDecember31,2021 Unrealized exchange gain(loss) Degree ofvariation Effect on profit or loss Effect on other comprehensiveincome (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 1% 69,702 $ - $ RMB:NTD 1% 16,768 - Non-monetary items USD:NTD 1% - 32,534 Financial liabilities Monetary items USD:NTD 1% 29,874) ( - RMB:NTD 1% 8,130) ( - YearendedDecember31,2022 Sensitivity analysis	v. Analysis of foreign currency market risk arising from significant foreign exchange variation: Foreign currency amount Book value (inthousands) Exchangerate (inthousands ofNTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD - $ 27.6800 50,373) ($ RMB:NTD - 4.3440 3,745) ( Financial liabilities Monetary items USD:NTD - 27.6800 49,055 RMB:NTD - 4.3440 1,306) ( JPY:NTD - 0.2405 5,993 YearendedDecember31,2021 Unrealized exchange gain(loss) Degree ofvariation Effect on profit or loss Effect on other comprehensiveincome (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 1% 69,702 $ - $ RMB:NTD 1% 16,768 - Non-monetary items USD:NTD 1% - 32,534 Financial liabilities Monetary items USD:NTD 1% 29,874) ( - RMB:NTD 1% 8,130) ( - YearendedDecember31,2022 Sensitivity analysis
	Degree ofvariation 1% 1% 1% 1% 1%	Effect on profit or loss
		69,702 $ 16,768 - 29,874) ( 8,130) (	- $ - 32,534 - -

~78~

	Year	ended December	ended December	31,	2021
		Sensitivity analysis
		Effect on profit			Effect on other
	Degree ofvariation		or loss	comprehensive income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	1%	$	115,052	$	-
RMB:NTD	1%		17,872		-
Non-monetary items
USD:NTD	1%		-		28,867
Financial liabilities
Monetary items
USD:NTD	1%	(	64,681)		-
RMB:NTD	1%	(	8,918)		-
JPY:NTD	1%	(	1,511)		-

Price risk

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

• ii. The Group’s investments in equity securities comprise shares and open-end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2022 and 2021 would have increased/decreased by $25,186 and $33,756, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $444,532 and $468,661, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and interest rate risk

• i. The Group’s interest rate risk arises from bank deposits and long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group’s borrowings at variable rate were denominated in the USD, RMB and NTD.

• ii. Based on the simulations performed on sensitivity analysis for interest rate risk, the maximum impact on post-tax profit of a 0.1% shift would be increased/decreased of $10,806 and $4,718 for the years ended December 31, 2022 and 2021, respectively. The simulation is done on a quarterly basis to ensure that the potential maximum loss is within the limit set by the management.

~79~

(b) Credit risk

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

• ii. The Group adopts the assumptions that the default occurs when the contract payments are past due over a certain number of days.

• iii. The Group adopts the following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over a certain number of days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

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

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

• (ii) The disappearance of an active market for that financial asset because of financial difficulties;

• (iii) Default or delinquency in interest or principal repayments;

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

• v. The Group classifies customers’ accounts receivable in accordance with credit rating of customer. The Group applies the simplified approach using provision matrix, loss rate methodology to estimate expected credit loss under the provision matrix basis.

• vi. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. As of December 31, 2022 and 2021, the Group’s written-off financial assets that are still under recourse procedures all amounted to $18,623 and $18,628, respectively.

• vii. The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable and other receivables. As of December 31, 2022 and 2021, the provision matrix, loss rate methodology is as follows:

December 31, 2022	Not past due 0%~5% 9,653,353 $ 280 $ Not past due 0%~5% 13,860,746 $ 1,976 $	Up to 30 days past due 0%~6% 281,782 $ 254 $ Up to 30 days past due 0%~15% 416,021 $ 501 $	31~90 days past due 0%~60% 71,497 $ 2,909 $ 31~90 days past due 0%~86% 173,365 $ 34,823 $	91~180 days past due 0%~100% 36,458 $ 6,131 $ 91~180 days past due 0%~100% 62,856 $ 46,320 $	Over 180 days past due 0%~100% 1,120,368 $ 1,037,110 $ Over 180 days past due 0%~100% 1,111,807 $ 1,011,972 $	Total
						11,163,458 $
Expected loss rate Total book value Loss allowance December 31, 2021
						1,046,684 $
						Total
						15,624,795 $
Expected loss rate Total book value Loss allowance
						1,095,592 $

~80~

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

Individual provision Group provision Total
December 31, 2022
Expected loss rate 100% 0%~100%
Total book value $ 991,358 $ 10,172,100 $ 11,163,458
Loss allowance $ 991,294 $ 55,390 $ 1,046,684
December 31, 2021
Expected loss rate 45.4%~100% 0%~100%
Total book value $ 1,079,258 $ 14,545,537 $ 15,624,795
Loss allowance $ 1,067,601 $ 27,991 $ 1,095,592
----- End of picture text -----

vii. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable, and other receivables are as follows:

At January 1 Provision for impairment Reversal of impairment Write-offs Effect of exchange rate changes At December 31 At January 1 Acquired from business combination Provision for impairment Reversal of impairment Disposal of subsidiaries Effect of exchange rate changes At December 31	Accounts receivable (including notes receivable) Other receivables 995,276 $ 100,316 $ 166,657 19,651 225,440) ( 9,844) ( 206) ( - 274 - 936,561 $ 110,123 $ 2022 Accounts receivable (including notes receivable) Other receivables 858,748 $ 42,481 $ 13,071 - 133,422 57,835 7,199) ( - 2,704) ( - 62) ( - 995,276 $ 100,316 $ 2021

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and external regulatory or legal requirements.

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• ii. Surplus cash are invested in interest bearing current accounts, time deposits, money market deposits and marketable securities, with appropriate maturities or sufficient liquidity to provide sufficient headroom and meet the above-mentioned forecasts. As of December 31, 2022 and 2021, the Group held money market position of $16,291,198 and $12,561,323, respectively, and those are expected to readily generate cash inflows for managing liquidity risk.

iii. The Group has the following undrawn borrowing facilities:

Floating rate: Expiring within one year Expiring beyond one year	December31,2022 December 31, 2021 11,487,018 $ 6,342,480 $ 15,426,259 1,112,992 26,913,277 $ 7,455,472 $

• iv. The table below shows analysis of the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

undiscounted cash flows. Non-derivative financial liabilities:
December 31, 2022 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other payables	Less than 1year 1,203,495 $ 775,294 243,332 2,461,872 4,619,754 127,845 431,263 - 50,551 Less than 1year 3,479,177 $ 12 45,455 4,715,973 5,843,445 129,599 132,337 154,232	Between 1 and5 years - $ - - - - 364,128 3,778,482 41,285 666 Between 1 and5 years - $ - - - - 422,762 4,049,438 3,050	Between5and 7years - $ - - - - 143,926 6,466 - - Between5and 7years - $ - - - - 335,550 41,315 -	Over 7years
				- $ - - - - 1,187,997 - - - Over 7years
Lease liabilities
Long-term borrowings (including current portion) Long-term payables (including current portion) Guarantee deposits received Non-derivative financial liabilities: December 31, 2021 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other payables Lease liabilities Long-term borrowings (including current portion) Guarantee deposits received
				- $ - - - - 1,031,016 - -

• v. The Group does not expect the timing of the estimated cash outflows through the maturity date analysis will be significantly earlier, or expect the actual cash flow amount will be significantly different.

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(3) Fair value information

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

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

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in convertible bonds and most derivative instruments is included in Level 2.

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

• B. Financial instruments not measured at fair value

• (a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, refundable deposits, other financial assets, short-term borrowings, short-term notes and bills payable, notes payable, accounts payable, other payables, lease liabilities, long-term accounts payable and guarantee deposits received are approximate to their fair values.

Financial liabilities: Long-term borrowings (including current portion) Financial liabilities: Long-term borrowings (including current portion)		December	31,2022
	Bookvalue 4,118,016 $		Fair value
		Level 1 - $ December	Level 2 4,117,506 $ 31, 2021	Level3
				- $
	Bookvalue 4,139,165 $		Fairvalue
		Level 1 - $	Level 2 4,141,818 $	Level 3
				- $

• (b) The methods and assumptions of fair value estimate are as follows: Long-term borrowings: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date.

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• C. The related information of financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2022 and 2021 is as follows:

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

December 31, 2022 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Derivatives Financial assets at fair value through other comprehensive income Equity securities Total Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives December 31, 2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Derivatives Financial assets at fair value through other comprehensive income Equity securities Total Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives	Level 1 96,301 $ 45,350 - 1,186,718 1,328,369 $ - $ Level 1 142,971 $ 69,382 - 553,860 766,213 $ - $	Level 2 - $ - 22,415 - 22,415 $ 2,214 $ Level 2 - $ - 12,931 - 12,931 $ 12 $	Level3 90,007 $ - - 3,258,599 3,348,606 $ - $ Level3 112,284 $ - - 4,132,745 4,245,029 $ - $	Total
				186,308 $ 45,350 22,415 4,445,317
				4,699,390 $
				2,214 $
				Total
				255,255 $ 69,382 12,931 4,686,605
				5,024,173 $
				12 $

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

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

Listed shares Closed-end fund Open-end fund Market quoted price Closing price Closing price Net asset value

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• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market and foreign exchange swap contracts, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• iv. For high-complexity financial instruments, the fair value is measured by using selfdeveloped valuation model based on the valuation method and technique widely used within the same industry. The valuation model is normally applied to derivative financial instruments, debt instruments with embedded derivatives or securitised instruments. Certain inputs used in the valuation model are not observable at market, and the Group must make reasonable estimates based on its assumptions. The effect of unobservable inputs to the valuation of financial instruments is provided in Note 12(3)5.

• v. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• (c) The following chart is the movement of Level 3 for the years ended December 31, 2022 and 2021:

2021:
			2022			2021
		Financial instruments			Financial instruments
At January 1		$	4,245,029		$	4,102,935
Gains (losses) recognised in profit or loss			774	(		46,172)
(Losses) gains recognised in other
comprehensive income	(		321,885)			39,508
Additions			188,200			277,327
Disposals	(		303,530)	(		171,895)
Acquired from business combination			-			17,040
Transfers into level 3			-			46,110
Transfers into investments accounted	(		464,627)	(		21,084)
for under the equity method
Effect of exchange rate changes			4,645			1,260
At December 31		$	3,348,606		$	4,245,029

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

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

Significant Fair value at Valuation unobservable December 31,2022 technique input Unlisted shares 3,053,691 $ Market comparable companies Price to book ratio multiple Discount for lack of marketability Unlisted shares 213,364 Market comparable companies Enterprise value to EBITDA ratio multiple Discount for lack of marketability Unlisted shares 36,480 Market comparable companies Equity value multiple (P/B ratio) on December 31, 2022 Liquidity discount ratio on December 31, 2022 Unlisted shares 25,559 Net asset value N/A De-an Venture Capital Co., Ltd. 19,512 Net asset value N/A Non-derivative equity instrument:	Range Relationship of (weighted average) inputs to fair value NA The higher the multiple, the higher the fair value. 20% ~30% The higher the discount for lack of marketability, the lower the fair value. NA The higher the multiple, the higher the fair value. 25.08% The higher the discount for lack of marketability, the lower the fair value. 1.29 The higher the equity value multiple, the higher the fair value. 30.00% The higher the liquidity discount ratio, the lower the fair value. - N/A - N/A	Relationship of inputs to fair value

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Significant Fair value at Valuation unobservable December 31,2021 technique input Unlisted shares 3,728,982 $ Market comparable companies Price to book ratio multiple Discount for lack of marketability Unlisted shares 5,258 Market comparable companies Enterprise value to operating income ratio multiple Discount for lack of marketability Unlisted shares 241,709 Market comparable companies Enterprise value to EBITDA ratio multiple Discount for lack of marketability Unlisted shares 44,376 Market comparable companies Equity value multiple (P/B ratio) on December 31, 2021 Liquidity discount ratio on December 31, 2021 Unlisted shares 203,994 Net asset value N/A De-an Venture Capital 20,710 Net asset value N/A Non-derivative equity instrument:	Range Relationship of (weighted average) inputs to fair value NA The higher the multiple, the higher the fair value. 20% ~30% The higher the discount for lack of marketability, the lower the fair value. 2.94 The higher the multiple, the higher the fair value. 20% The higher the discount for lack of marketability, the lower the fair value. NA The higher the multiple, the higher the fair value. 30% The higher the discount for lack of marketability, the lower the fair value. 1.59 The higher the equity value multiple, the higher the fair value. 30.00% The higher the liquidity discount ratio, the lower the fair value. - N/A - N/A	Relationship of inputs to fair value

Co., Ltd.

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

have changed:
Financial assets Equity instrument Financial assets Equity instrument	Input Multiple Input Multiple	Change ±1% Change ±1%	December	31, 2022
			Favourable Unfavourable change change 900 $ 900) ($ December Recognised in profit or loss	Recognised in other comprehensive income
				Favourable Unfavourable change change 32,586 $ 32,586) ($ 31,2021	Unfavourable change
			Favourable Unfavourable change change 1,123 $ 1,123) ($ Recognised in profit or loss	Recognised in other comprehensive income
				Favourable Unfavourable change change 41,327 $ 41,327) ($	Unfavourable change

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• ’

• (4) Impact of COVID 19 on the Group s business operations for the year ended December 31, 2022. Except for actively following the pandemic prevention policies of each local government, the Group protected employees with high standard prevention measures and encouraged employees to get vaccinated. The Group enhanced the manpower and the material management in response to this situation, and it did not significantly affect the Group's product sales. The Group will continuously monitor the development of the pandemic and timely adjust response strategies and coordinate with other resources to ensure that the daily operation will not be affected.

13. SUPPLEMENTARY DISCLOSURES

• (1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding NT $300 million or 20% paid-in capital or more: Please refer to table 4.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 5.

• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 6.

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to table 7.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 8.

• I. Trading in derivative instruments undertaken during the reporting periods: please refer to Notes 6(2) and 12(3).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 9.

• (2) Information on investees

• Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 10.

• (3) Information on investments in Mainland China

• A. Basic information: Please refer to table 11.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 12.

(4) Major shareholders information

Major shareholders information: Please refer to table 13.

14. SEGMENT INFORMATION

(1) General information:

The Group is engaged in the research and development, design, manufacturing and sales of EPI wafers and chips of A1GaInP, AlGaAs and InGaN and LED packages and modules. The Chief Operating Decision-Maker assesses performance by each operating result of each sub-group within the consolidated report.

(2) Segment information

The accounting policy of operating segments is provided in Note 4. The Chief Operating DecisionMaker assesses the performance of the operating segments based on the financial statements of operating segments. The measurement of profit is based on the income from continuing operations.

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

The segment information provided to the Chief Operating Decision-Maker for the reportable segments and reconciliations is as follows:

Year ended December 31, 2022

EpistarGroup Revenues from external customers 20,656,462 $ Segment income 757,527 Segment income (loss) including : Interest income 60,771 Interest expense 120,871 Depreciation and amortisation 4,449,790 Investment loss under equity method 268,941 Income tax expense (benefit) 108,217 Segment assets 53,849,830 Year ended December 31, 2021 Epistar Group Revenues from external customers 25,100,001 $ Segment income 1,558,521 Segment income (loss) including : Interest income 35,713 Interest expense 109,960 Depreciation and amortisation 4,667,829 Investment (loss) profit under equity method 178,484 Income tax (expense) benefit 446,296 Segment assets 57,848,500

LextarGroup Others Consolidated 7,917,729 $ 304,059 $ 28,878,250 $ 338,290) ( 985,620) ( 566,383) ( 38,350 5,479 104,600 8,672 2,059 131,602 590,105 170,370 5,210,265 400,822 43,822 713,585 33,039) ( 7,737 82,915 13,136,814 6,056,826 73,043,470 LextarGroup Others Consolidated 11,324,594 $ 165 $ 36,424,760 $ 317,267 22,686 1,898,474 17,039 602) ( 52,150 10,966 191 121,117 747,206 145,725) ( 5,269,310 15,483 10,994) ( 182,973 18,539 1) ( 464,834 16,467,934 2,572,748 76,889,182

(4) Information on products and services Please refer to Note 6 (25) for the related information.

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(5) Geographical information

Geographical information for the years ended December 31, 2022 and 2021 is as follows:

Revenue Non-current assets Taiwan 2,258,507 $ 24,526,710 $ China 12,891,953 5,781,725 Hong Kong 1,522,528 105,790 Korea 680,315 1,464 Malaysia 2,132,841 - Japan 7,403,290 - Singapore 680,140 - Others 1,308,676 12,881 28,878,250 $ 30,428,570 $ Year ended December31,2022	Revenue Non-current assets 3,126,618 $ 25,818,568 $ 17,733,618 6,139,571 2,138,234 114,160 1,257,421 1,165 2,139,015 - 7,595,774 - 978,999 - 1,455,081 15,715 36,424,760 $ 32,089,179 $ Year ended December31,2021

(6) Major customer information

Major customer information of the Group for the years ended December 31, 2022 and 2021 is as follows:

ollows:
C B D	Year ended December31,2022 Revenue 7,001,287 $ 2,660,661 1,786,146	Year ended December31,2021
		Revenue
		7,067,535 $ 2,215,756 1,821,164

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ENNOSTAR INC. AND SUBSIDIARIES Loans to others Year ended December 31, 2022

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended 31-Dec-22	Balance at 31-Dec-22	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
0 1 1 2 2 3 3 4	ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Ltd. Epicrystal (Changzhou) Ltd. EPISTAR JV HOLDING (BVI) CO., LTD. EPISTAR JV HOLDING (BVI) CO., LTD. Lighting Investment Ltd.	Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation ENNOSTAR Inc. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation EPISTAR JV HOLDING (BVI) CO., LTD.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Y Y Y Y Y Y Y Y	500,000 $ 300,000 1,000,000 218,350 360,480 70,294 547,655 209,398	500,000 $ - - - 352,640 68,765 522,070 199,615	350,000 $ - - - - 68,765 522,070 184,260	1.70% 0.00% 0.00% 0.00% 3.75% 2.86% 3.11%~ 3.93% 3.59%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- $ - - - - - - -	Working capital Working capital Working capital Working capital Working capital Working capital Working capital Working capital	- $ - - - - - - -	Promissory Note None None None None Promissory Note Promissory Note Promissory Note	500,000 $ - - - - 68,765 522,070 199,615	5,440,427 $ 3,993,548 3,993,548 926,812 926,812 3,931,983 3,931,983 295,722	16,321,281 $ 11,980,644 11,980,644 1,390,218 1,390,218 3,931,983 3,931,983 295,722	Note 1 Note 2 Note 2 Note 3 Note 3 Note 4 Note 4 Note 5

Table 1-1

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended 31-Dec-22	Balance at 31-Dec-22	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
5 6 6 6 7 8	Luxlite (HK) Corporation Limited Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar (Singapore) Pte. Ltd.	EPISTAR JV HOLDING (BVI) CO., LTD. ENNOSTAR Inc. Yenrich Technology Corporation Unikorn Semiconductor Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Y Y Y Y Y Y	144,968 $ 800,000 500,000 500,000 540,720 132,638	138,195 $ - 250,000 500,000 - -	138,195 $ - - 350,000 - -	3.93% 0.00% 1.41% 1.41% 0.00% 0.00%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- $ - - - - -	Working capital Working capital Working capital Working capital Working capital Working capital	- $ - - - - -	Promissory Note None None Promissory Note None None	138,195 $ - - 500,000 - -	280,138 $ 977,255 977,255 977,255 977,255 977,255	280,138 $ 3,909,020 3,909,020 3,909,020 2,894,644 2,003,251	Note 6 Note 7 Note 7 Note 7 Note 8 Note 9

Note 1: In accordance with ENNOSTAR Inc.’s Procedures for Provision of Loans: the limit on loans granted to a single party is 10% of its net equity, and the ceiling on total loans granted is 30% of its net equity. Note 2: In accordance with Epistar Corporation’s Procedures for Provision of Loans: the limit on loans granted to a single party is 10% of its net equity, and the ceiling on total loans granted is 30% of its net equity. Note 3: In accordance with Epicrystal (Changzhou) Ltd. Procedures for Provision of Loans: the limit on loans granted to a single party is 20% of its net equity, and the ceiling on total loans granted is 30% of its net equity. Note 4: Limit on loans granted by the subsidiary of Epistar, Epistar JV, limit on total loans is 40% of the Company’s net asset, and to a single party is 40% of the Epistar JV's net asset.

Note 5: Limit on loans granted by the subsidiary of Epistar, Lighting Investment, limit on total loans is 40% of the Company’s net asset, and to a single party is 40% of the Epistar JV's net asset. Note 6: As the borrower of the subsidiary of Epistar, Luxlite (HK), was a fellow subsidiary that is 100% controlled by the parent company located ouside Taiwan,

its ceiling on total loans granted and limit on loans granted to a single party are the net asset of the company.

Note 7: In accordance with Lextar Electronics Corporation Procedures for Provision of Loans: the limit on loans granted to a single party is 10% of its net equity, and the ceiling on total loans granted is 40% of its net

equity.The total amount for fund-lending between the subsidiaries whose voting shares are 100% owned, directly and indirectly, by the Company will not be subject to the limit of 40% of the net worth of the

lending subsidiary. However, these subsidiaries shall still prescribe limits on the aggregate amount of such loans and on the amount of such loans permitted to a single borrower, and shall specify limits on the durations of such loans.

Note 8: In accordance with Lextar Electronics (Suzhou) Corp.’s Procedures for Provision of Loans: the ceiling on total loans granted is 80% of its net equity and 40% of the net equity of Lextar Electronics Corporation, and the limit on loans granted to a single party is 80% of its net equity and 10% of the net equity of Lextar Electronics Corporation.

Note 9: In accordance with Lextar (Singapore) Pte. Ltd.’s Procedures for Provision of Loans: the ceiling on total loans granted is 80% of its net equity and 40% of the net equity of Lextar Electronics Corporation, and the limit on loans granted to a single party is 80% of its net equity and 10% of the net equity of Lextar Electronics Corporation.

Table 1-2

ENNOSTAR INC. AND SUBSIDIARIES Provision of endorsements and guarantees to others Year ended December 31, 2022

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Party being endorsed/guaranteed

Number （Note 1）	Endorser/ guarantor	Companyname	Relationship with the endorser/ guarantor (Note 2)	Limit on endorsements/ guarantees provided for a single party (Note3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2022	Outstanding endorsement/ guarantee amount at December 31, 2022	Actual amount drawn down	Amount of endorsements /guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note3)	Provision of endorsements /guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in MainlandChina	Footnote
1 1 1 1 2	Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Episky Corporation (Xiamen) Ltd.	Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Unikorn Semiconductor Corporation ENNOSTAR Inc. Shenzhen Epikylin Optoelectronics Co.,Ltd	2 2 2 3 2	3,993,548 $ 3,993,548 3,993,548 3,993,548 572,999	1,008,900 $ 243,480 1,150,000 3,250,000 443,900	368,520 $ - 300,000 3,250,000 -	- $ - 300,000 - -	- $ - - - -	0.92 - 0.75 8.14 -	7,987,096 $ 7,987,096 7,987,096 7,987,096 916,799	N N N N N	N N N Y N	Y Y N N Y

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

• (1) The Company is ‘0’.

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

• Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to: (1) Having business relationship.

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

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

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

• (5) Mutual guarantee of the trade as required by the construction contract.

• (6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

(7) Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

Table 2-1

Note3: (1) In accordance with the Epistar’s Procedures for Provision of endorsements and guarantees to others: the ceiling on total endorsements/guarantees is 20% of the Company’s net assets, and the limit on endorsements/guarantees to a single party is 10% of its net assets.

• (2) In accordance with the Episky (Xiamen) ’s Procedures for Provision of endorsements and guarantees to others: the ceiling on total endorsements/guarantees is 40% of the Company’s net assets, and the limit on endorsements/guarantees to a single party is 25% of its net assets.

Table 2-1

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2022

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

ENNOSTAR INC. AND SUBSIDIARIES

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2022	As of December 31,2022		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Harvestar Investment Corp. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Amengine Corporation (Preferred stock) E&E Japan Co.Ltd. (Stock) NATEC CORPORATION (Stock) Esleds Co.,Ltd. (Stock) Lynk Labs,Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Chi Lin Optoelectronics Co., Ltd. (Stock) Dominant Opto Technologies Sdn. Bhd. (Stock)	Controlled by the same entity None None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income	500,000 140 120,000 1,000 92,523 1,339,235 2,868,402 35,000,000	2,500 $ 2,143 1,748 148 - 174,310 66,948 583,735	- 17.07 7.50 10.00 7.39 13.68 12.57 10.00	2,500 $ 2,143 1,748 148 - 174,310 66,948 583,735

Table 3-1

As of December 31, 2022

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Crystalwise Technology Inc. (Stock) XENIO CORPORATION (stock) Edison Opto Corp. (Stock) PlayNitride Inc. (Stock) OSTENDO TECHNOLOGIES,INC. (Stock) Nan Ya Photonics Incorporation (Stock) Tekcore co., Ltd. (Stock) ENNOSTAR Inc. (Stock) PHECDA TECHNOLOGY CO., LTD.	None None None None None None None Parent company None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	1,330,951 7,878 6,042,808 9,137,338 67,500 9,173,000 6,009,183 1,843,500 600,000	10,967 $ - 94,570 637,055 - 213,364 75,716 82,497 -	3.03 0.06 4.47 8.53 4.50 19.90 11.64 0.24 2.11	10,967 $ - 94,570 637,055 - 213,364 75,716 82,497 -	Note1

Table 3-2

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2022	As of December 31,2022		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. Episky Corporation(Xiamen) Ltd. Episky Corporation(Xiamen) Ltd. Episky Corporation(Xiamen) Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	ELIT FINE CERAMICS CO., LTD. Nanocrystal Technology Inc. KAISTAR Lighting (Xiamen) Co., Ltd. (Stock) China Firstar Optoelectronic Materials Co., Ltd. (Stock) APT Electronics Co., Ltd.(Stock) China Crystal Technologies Co.,Ltd.(Stock) Oree Advanced Illumination Solutions, Inc. (Stock) Lustrous Technology Ltd. (Stock) TERA XTAL TECHNOLOGY CORPORATION (Stock)	None None None None None None None None None	Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss	2,200,000 6,000,000 cash USD51,060,000 cash RMB7,500,000 4,678,240 8,064,516 79,407 266,892 795,000	- $ - 2,018,014 15,178 41,243 451 - - -	4.68 11.11 18.77 15.00 1.14 4.08 5.00 8.99 0.42	- $ - 2,018,014 15,178 41,243 451 - - -

Table 3-3

As of December 31, 2022

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	XENIO CORPORATION (Stock) FormoLight Technologies, Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Edison Opto Corp. (Stock) Rigidtech Microelectronics Cops. (Stock) Ledimond Opto Corporation (Stock) De-an Venture Capoital Co., Ltd. (Stock) iReach Corporation (Stock) Edison Opto Corp. (Stock)	None None None None None None None Investments accounted for under equity method of Epistar Corporation None	Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Current financial assets at fair value through profit or loss	16,462 2,038,230 562,018 11,257,964 1,550,253 1,100,000 2,000,000 370,000 6,153,424	- $ 7,598 73,150 176,187 11,110 6,959 19,512 1,891 96,301	0.13 10.00 5.74 8.32 2.17 16.92 10.77 1.70 4.55	- $ 7,598 73,150 176,187 11,110 6,959 19,512 1,891 96,301

Table 3-4

As of December 31, 2022

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. HUGA Holding (SAMOA) Ltd. HUGA Holding (SAMOA) Ltd. Jiangsu Canyang Optoelectronics Ltd	ENNOSTAR Inc. (Stock) Taishin 1699 Money Market Fund (Beneficiary certificates) Verticle Inc. (Stock) Achrolux Inc. (Stock) PlayNitride Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) China Crystal Technologies Co.,Ltd.(Stock) OEPIC SEMICONDUCTORS,INC.(Stock) C-Star (Yangzhou) technology Co., Ltd	Parent company of Epistar Corporation None None None None None None None None	Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	1,282,377 3,294,561 582,983 987,500 2,757,082 200,000 17,741,935 377,358 cash RMB5,000,000	57,386 $ 45,350 - - 192,224 26,031 993 - 22,040	0.17 None 3.00 6.91 2.57 2.04 8.97 8.93 5.00	57,386 $ 45,350 - - 192,224 26,031 993 - 22,040	Note1

Table 3-5

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2022	As of December 31,2022		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Lextar Electronics Corporation Jhong Wei Corporation(Stock) Wellybond Corporation Wellysun Inc.(Stock) Lextar Electronics Corporation best Epitaxy Manufacturing Company Ltd. Note 1: Transferred from the Epistar’s stocks held as treasury stocks. Note 2: The company registrations had been canceled.		None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss	106,000 2,400,000 3,135,000	- $ 36,480 23,059	0.00 5.29 6.30	- $ 36,480 23,059	Note 2

Table 3-6

ENNOSTAR INC. AND SUBSIDIARIES

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

Year ended December 31, 2022

Table 4

Expressed in thousands of NTD

Table 4													Expressed in thousands of NTD	Expressed in thousands of NTD
Investor	Marketable securities （Note 1）	General ledger account	Counterparty （Note 2）	Relationship with the investor （Note 2）	Balance as at January1,2022		Addition （Note3）			Disposal （Note3）			Balance as at (Except as otherwise indicated) December31,2022
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Harvestar Investment Corp. Lighting Investment Corporation Epistar Corporation	Epistar Corporation Harvestar Investment Corp. Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation Taishin 1699 Money Market Fund (Beneficiary certificates) Taishin 1699 Money Market Fund (Beneficiary certificates)	Investments accounted for under equity method Investments accounted for under equity method Investments accounted for under equity method Investments accounted for under equity method Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss	Subsidiary Subsidiary Subsidiary Controlled by the same entity - -	Related Related Related Related None None	1,088,701,410 65,000,000 - - 4,559,731 -	$39,027,656 676,611 - - 62,151 -	27,777,778 50,000,000 56,200,000 52,000,000 25,526,655 76,000,836	$1,000,000 500,000 593,132 444,785 350,000 1,042,000	- - - - 26,791,825 76,000,836	$ - - - - 367,500 1,042,733	$ - - - - 366,969 1,042,000	$ - - - - 531 733	1,116,479,188 115,000,000 56,200,000 52,000,000 3,294,561 -	$ 39,769,781 849,744 179,217 162,365 45,350 -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank. Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more. Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 4-1

ENNOSTAR INC. AND SUBSIDIARIES

Aquisition of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2022

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

If the counterparty is a related party,

Transaction information as to the last transfer of data Basis or Reason for acquisition of Real estate date or date Transaction Status of Relationship Relationship Date of the reference used in real estate and status of the Other acquired by Real estate of the event amount payment Counterparty with the seller Owner between the issuer transfer Amount setting the price real estate commitments Epistar Corporation Plant of SAVIOR 2022/3/3 $ 610,000 Installment based SAVIOR LIFETEC None - - - $ - Experts’ appraisal Required by the Company’s None LIFETEC on agreement CORPORATION report and market long-term operation CORPORATION price of nearby trading development target Epistar Corporation Plant of Hsinchu 2022/3/24 710,802 Installment based Lextar Electronics Controlled by AUO Related parties 2010/5/21 883,810 Experts’ appraisal In response to the None Science Park on agreement Corporation the same entity Corporation report and market specialisation and strategical price of nearby trading layout requirements of subtarget group of ENNOSTAR Inc.

Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate aquisition of should be appraised pursuant to the regulations.

Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share,

the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

• Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date

that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Table 5-1

ENNOSTAR INC. AND SUBSIDIARIES

Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more Year ended December 31, 2022

Table 6

Table 6 Expressed in thousands of NTD (Except as otherwise indicated) Transaction Status of Basis or Real estate date or date Date of Book Disposal collection Gain (loss) Relationship Reason for reference used in Other disposed by Real estate of the event acquisition value amount of proceeds on disposal Counterparty with the seller disposal setting the price commitments Lextar Electronics Plant of Hsinchu 2022/3/24 2010/5/21 $ 586,439 $ 710,802 Installment based $ 124,363 Epistar Controlled by In response to the Experts’ appraisal None Corporation Science Park on agreement Corporation the same specialisation and report and market entity strategical layout price of nearby trading requirements of subtarget group of ENNOSTAR Inc.

• Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate disposed of should be appraised pursuant to the regulations. Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

• Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Table 6-1

Table 7

ENNOSTAR INC. AND SUBSIDIARIES

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

Year ended December 31, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd.	Lextar Electronics (Chuzhou) Corp. Shenzhen Epikylin Optoelectronics Co.,Ltd Epistar Corporation LEDAZ Co., Ltd. Yenrich Technology Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Epistar Corporation	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	($ 232,435) ( 1,493,516) ( 253,011) ( 208,849) ( 172,975) ( 549,080) ( 1,415,512) ( 223,855) ( 1,368,266) ( 962,056) ( 1,222,560) ( 356,364)	( 5) ( 31) ( 5) ( 1) ( 1) ( 3) ( 8) ( 1) ( 62) ( 43) ( 55) ( 27)	90 days after month- end closing 90 days after month- end closing 180 days after month- end closing 90 days after month- end closing and 20 days after next monthly billings 90 days after month- end closing 180 days after month- end closing 150 days after next month-end closing 90 days after month- end closing 90 days after month- end closing 90 days after month- end closing 90 days after month- end closing 90 days after month- end closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	$ 60,291 495,316 29,414 49,417 52,057 247,976 708,911 15,064 962,475 309,358 731,952 16,161	3 25 1 1 1 4 11 - 45 14 34 2

Table 7-1

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Yenrich Technology Corporation ProLight Opto Technology Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation	Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. AU Optronics (Xiamen) Corp. AUO (Suzhou) Corp Ltd. Fortech Electronics (Suzhou) Co., Ltd. Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. LEDAZ Co., Ltd. Shanghai Welight Electronic Co., LTD. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd.	Note 1 Note 1 Other related parties Other related parties Other related parties Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Sales Sales Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Purchases	($ 811,520) ( 220,880) ( 109,133) ( 168,442) ( 257,572) ( 2,662,953) ( 898,028) ( 155,691) ( 141,183) 811,520 1,415,512 1,222,560 356,364 253,011 962,056	( 61) ( 16) ( 2) ( 4) ( 6) ( 52) ( 18) ( 39) ( 23) 19 34 29 4 3 12	90 days after month- end closing 90 days after month- end closing 120 days after month- end closing 120 days after month- end closing 120 days after month- end closing OA 90 days~OA 120 days OA 90 days~OA 120 days 90 days after month- end closing and 20 days after next monthly billings 120 days after month- end closing 90 days after month- end closing 150 days after next month-end closing 90 days after month- end closing 90 days after month- end closing 150 days after next month-end closing 90 days after month- end closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	$ 352,892 63,792 36,409 47,114 80,297 461,393 322,353 44,978 65,004 ( 352,892) ( 708,911) ( 731,952) ( 16,161) ( 29,414) ( 309,358)	45 8 4 5 9 35 24 38 44 ( 17) ( 34) ( 35) ( 1) ( 2) ( 21)

Table 7-2

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Jiangsu Canyang Optoelectronics Ltd. Epicrystal (Changzhou) Co., Ltd Epicrystal (Changzhou) Co., Ltd Shenzhen Epikylin Optoelectronics Co.,Ltd Shenzhen Epikylin Optoelectronics Co.,Ltd Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Yenrich Technology Corporation Shanghai Welight Electronic Co., LTD.	Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Epistar Corporation Episky Corporation (Xiamen) Ltd. Lextar Electronics (Chuzhou) Corp. Tyntek Corporation Lextar Electronics (Chuzhou) Corp. Chuzhou Bwin Technology Corp. Episky Corporation (Xiamen) Ltd. Epistar Corporation ProLight Opto Technology Corporation	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	$ 1,368,266 220,880 223,855 549,080 1,493,516 2,662,953 125,619 898,028 178,622 232,435 172,975 141,183	130 16 17 27 73 79 4 93 5 7 67 100	90 days after month- end closing 90 days after month- end closing 90 days after month- end closing 180 days after month- end closing 90 days after month- end closing OA 90 days~OA 120 days OA 120 days OA 90 days~OA 120 days OA 60 days~OA 120 days OA 90 days OA 90 days 120 days after month- end closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	($ 962,475) ( 63,792) ( 15,064) ( 247,976) ( 495,316) ( 461,393) ( 25,726) ( 322,353) ( 20,370) ( 60,291) ( 52,057) ( 65,004)	( 5) ( 29) ( 7) ( 33) ( 67) ( 65) ( 4) ( 95) ( 2) ( 6) ( 78) ( 100)

Note 1: Investee company accounted for under the equity method directly and indirectly.

Table 7-3

ENNOSTAR INC. AND SUBSIDIARIES

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2022

Table 8 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31,2022	Balance as at December 31,2022	Total	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated)
			Accounts receivable	Other receivable			Amount	Action taken
ENNOSTAR Inc. Epistar JV Holding (BVI)Co.,Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Lighting Investment Ltd. Luxlite (HK) Corporation Limited Lextar Electronics Corporation	Unikorn Semiconductor Corporation Epistar Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Jiangsu Canyang Optoelectronics Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Unikorn Semiconductor Corporation Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar JV Holding (BVI)Co.,Ltd. Epistar JV Holding (BVI)Co.,Ltd. Unikorn Semiconductor Corporation	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	$ - - 495,316 16,799 247,976 708,911 39,181 309,358 731,952 352,892 - - -	$ 351,856 529,978 - 249,055 1,529 43,095 256,025 919 - - 187,163 139,975 350,000	$ 351,856 529,978 495,316 265,854 249,505 752,006 295,206 310,277 731,952 352,892 187,163 139,975 350,000	- - 3.00 ( 1.58) 1.64 1.72 0.65 0.10 1.90 2.55 - - -	$ - - 8,843 203 - 99,151 1,030 - 426,758 - - - -		$ 201 - 145,072 2,088 73,665 133,589 33,589 36,302 62,069 6,819 - - -	$ - - - - - - - - - - - -

Table 8-1

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31,2022	Balance as at December 31,2022	Total	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful debts
			Accounts receivable	Other receivable			Amount	Action taken
Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp.	Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp.	Note 2 Note 2	$ 461,393 322,353	$ 2,022 -	$ 463,415 322,353	3.25 2.38	$ - 114,738		$ 143,653 114,211	$ - -

Note 1: The Company endeavored to collect the overdue amount. Epistar has received $203 and $94,208 from Jiangsu Canyang and Episky Corporation (Xiamen). Episky Corporation (Xiamen) has received $8,843 from Shenzhen Epikylin. Epicrystal (Changzhou) has received $44,080 from Episky Corporation (Xiamen). Lextar Electronics (Chuzhou) has received $141,211 from Lextar Electronics (Suzhou).

Note 2: Investee company accounted for under the equity method directly and indirectly.

Table 8-2

ENNOSTAR INC.AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

Year ended December 31, 2022

Table 9

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 0 1 1 1 1 1 1	ENNOSTAR Inc. ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Unikorn Semiconductor Corporation Epistar Corporation Yenrich Technology Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd.	1 1 3 3 3 3 3 3	Other receivable Other operating revenue Sales Sales Sales Sales Cost of goods sold Cost of goods sold	$ 351,856 128,117 172,975 549,080 1,415,512 223,855 356,364 253,011	Based on contract terms Based on contract terms Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.48 0.44 0.60 1.90 4.90 0.78 1.23 0.88

Table 9-1

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
1 1 1 1 1 1 1 2 2	Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd.	Epicrystal (Changzhou) Co., Ltd. Yenrich Technology Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Unikorn Semiconductor Corporation Jiangsu Canyang Optoelectronics Ltd. Lextar Electronics (Chuzhou) Corp. Shenzhen Epikylin Optoelectronics Co.,Ltd	3 3 3 3 3 3 3 3 3	Cost of goods sold Accounts receivable Accounts receivable Accounts receivable Accounts receivable Other receivable Other receivable Sales Sales	$ 962,056 52,057 247,976 708,911 15,064 256,025 249,055 232,435 1,493,516	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Loans granted Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	3.33 0.07 0.34 0.97 0.02 0.35 0.34 0.80 5.17

Table 9-2

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
2 2 2 3 3 3 3 3 4	Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd.	Lextar Electronics (Chuzhou) Corp. Shenzhen Epikylin Optoelectronics Co.,Ltd Epistar Corporation Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd.	3 3 3 3 3 3 3 3 3	Accounts receivable Accounts receivable Accounts receivable Sales Sales Accounts receivable Accounts receivable Accounts receivable Sales	$ 60,291 495,316 29,414 1,368,266 1,222,560 962,475 309,358 731,952 811,520	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.08 0.68 0.04 4.74 4.23 1.32 0.42 1.00 2.81

Table 9-3

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
4 4 4 4 4 5 6 7 8 9 9	Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Luxlite (HK) Corporation Limited Epistar JV Holding (BVI)Co.,Ltd. Lighting Investment Ltd. Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp.	Epicrystal (Changzhou) Co., Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Epistar JV Holding (BVI)Co.,Ltd. Epistar Corporation Epistar JV Holding (BVI)Co.,Ltd. Unikorn Semiconductor Corporation Lextar Electronics Corporation Lextar Electronics Corporation	3 3 3 3 3 3 3 3 3 3 3	Sales Accounts receivable Accounts receivable Accounts receivable Processing fees Other receivable Other receivable Other receivable Other receivable Sales Accounts receivable	$ 220,880 16,161 352,892 63,792 164,824 139,975 529,978 187,163 350,000 2,662,953 461,393	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Loans granted Loans granted Loans granted Loans granted Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.76 0.02 0.48 0.09 0.57 0.19 0.72 0.26 0.48 9.22 0.63

Table 9-4

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
9 9 10	Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. ProLight Opto Technology Corporation	Lextar Electronics (Suzhou) Corp. Lextar Electronics (Suzhou) Corp. Shanghai Welight Electronic Co., LTD	3 3 3	Sales Accounts receivable Sales	$ 898,028 322,353 141,183	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	3.11 0.44 0.49

Note 1: Parent company is ‘0’.The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs

• to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice.

For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for

transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

• Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

• Note 4: Disclosure of the transactions over 100 million New Taiwan dollars only and the related party transactions for counterparty are not disclosed.

Table 9-5

ENNOSTAR INC. AND SUBSIDIARIES

Information on investees

Year ended December 31, 2022

Table 10

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2022	Shares held as at December 31,2022	Shares held as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
				Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc.	Epistar Corporation Lextar Electronics Corporation Harvestar Investment Corp. Tyntek Corporation Amengine Corporation GCS Holding Inc. Calystar Investment Corp.	Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands Taiwan	Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers, chips, packages and modules Professional investment Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Developing and sales of medical optical sensor modules OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Professional investment	$ 38,607,380 11,724,646 1,150,000 584,583 40,212 431,990 440,000	$ 37,607,380 11,724,646 650,000 584,583 10,210 431,990 290,000	1,116,479,188 514,916,380 115,000,000 23,799,000 6,922,000 9,028,000 44,000,000	100.00 100.00 100.00 7.92 75.96 8.15 100.00	$ 39,769,781 11,152,889 849,744 594,097 25,747 411,447 409,063	$ 915,860 ( 264,720) ( 200,651) ( 181,505) ( 11,542) ( 939,717) ( 48,708)	$ 958,851 ( 431,257) ( 200,375) ( 16,149) ( 7,576) ( 65,535) ( 48,708)	Note1 Note1

Table 10-1

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Harvestar Investment Corp. Harvestar Investment Corp. Harvestar Investment Corp.	Unikorn Semiconductor Corporation Precistar Investment Corp. Praistar Investment Corp. Manastar Investment Corp. GCS Holding Inc. Tyntek Corporation Unikorn Semiconductor Corporation	Taiwan Taiwan Taiwan Taiwan Cayman Islands Taiwan Taiwan	Original equipment manufacturer of III-V semiconductor Professional investment Professional investment Professional investment OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Original equipment manufacturer of III-V semiconductor	$ 593,132 270,000 270,000 1,000 433,099 209,551 444,785	$ - - - - 433,099 113,931 -	56,200,000 27,000,000 27,000,000 100,000 9,013,000 10,102,000 52,000,000	17.99 100.00 100.00 100.00 8.13 3.36 16.65	$ 179,217 49,004 49,004 981 412,471 245,635 162,365	($ 976,415) ( 17) ( 17) ( 19) ( 939,717) ( 181,505) ( 976,415)	($ 122,088) ( 17) ( 17) ( 19) ( 65,430) ( 4,955) ( 131,230)	Note1 Note1

Table 10-2

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
Calystar Investment Corp. Calystar Investment Corp. Precistar Investment Corp. Praistar Investment Corp. Unikorn Semiconductor Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	GCS Holding Inc. Tyntek Corporation Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation GCS Holding Inc. iReach Corporation Epistar JV Holding (BVI) Co., Ltd. Full Star Enterprises Limited Lighting Investment Corporation	Cayman Islands Taiwan Taiwan Taiwan Cayman Islands Taiwan British Virgin Islands Hong Kong Taiwan	OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Original equipment manufacturer of III-V semiconductor Original equipment manufacturer of III-V semiconductor OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Manufacturing, sales, packaging and module design of semiconductor light emitting devices Professional investment Professional investment Professional investment	$ 265,135 97,787 268,000 268,000 1,051 70,000 14,960,129 166,785 1,561,814	$ 265,135 - - - 1,051 70,000 14,960,129 166,785 2,161,814	6,500,000 5,190,000 13,400,000 13,400,000 20,000 7,000,000 48,278 cash USD8,660,000 191,478,518	5.87 1.73 4.29 4.29 0.02 39.09 100.00 100.00 100.00	$ 236,436 93,362 47,021 47,021 1,125 50,413 9,824,559 271,689 1,453,484	($ 939,717) ( 181,505) ( 976,415) ( 976,415) ( 939,717) 31,974 ( 154,187) 8,927 ( 25,467)	($ 46,489) ( 2,248) - - ( 1) 9,532 ( 115,604) 8,927 ( 23,621)	Note1 Note1 Note1

Table 10-3

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd.	Unikorn Semiconductor Corporation SH Co., Ltd. TE Opto Corporation GaN Force Corporation Tyntek Corporation Can Yang Investments Limited HUGA Holding (SAMOA) Limited LiteStar JV Holding (BVI) Co.,Ltd. United LED Corporation (Hong Kong) Limited Episky (Hong Kong) Limited Can Yang Investments Limited	Taiwan Taiwan Taiwan Taiwan Taiwan Hong Kong SAMOA British Virgin Islands Hong Kong Hong Kong Hong Kong	Original equipment manufacturer of III-V semiconductor Sales of LED chips Sales of LED chips Design, manufacturing and sales of semiconductor materoals and modules Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment	$ 400,000 31,792 9,200 77,700 1,243 66,745 334,967 3,408,835 2,029,760 2,124,096 4,370,156	$ 1,100,000 31,792 9,200 77,700 - 66,745 334,967 3,408,835 2,029,760 2,124,096 4,291,894	40,000,000 3,179,176 920,000 1,118,600 50,000 2,679,063 12,551,035 10,882 67,000,165 cash USD68,000,000 64,793,559	12.80 49.00 40.00 64.32 0.02 3.53 100.00 82.41 74.86 100.00 85.26	$ 140,533 2,400 44,069 230 1,198 58,043 4,231 3,566,786 268,634 2,292,004 1,403,863	($ 976,415) ( 1,494) 5,951 ( 1,899) ( 181,505) 46,497 ( 10) ( 203,142) ( 12,849) ( 44,979) 46,497	($ 262,577) ( 732) 2,380 ( 1,221) ( 41) 1,639 ( 10) ( 167,409) ( 9,619) ( 44,979) 39,643	Note1

Table 10-4

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
GaN Force Corporation Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lite Star JV Holding (BVI) Co.,Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	GV Semiconductor Inc. LEDAZ Co., Ltd. Interlight Optotech (HK) Co.,Limited Epistar (Hong Kong) Limited Luxlite (HK) Corporation Limited Epicrystal (Hong Kong) Co. Ltd. LEDAZ Co., Ltd. Lighting Investment Ltd. Yenrich Opto (Hong Kong) Limited ProLight Opto Technology Corporation Can Yang Investments Limited GaNrich Semiconductor Corporation LEDOLUX Sp.Zo.O.	USA Korea Hong Kong Hong Kong Hong Kong Hong Kong Korea British Virgin Islands Hong Kong Taiwan Hong Kong Taiwan Poland	R&D and sales of electronic components Engineering service of LED Sales of LED packages Professional investment Professional investment Professional investment Engineering service of LED Professional investment Sales of LED lighting products Manufacturing and sales of LED packages Professional investment Design and technology service of LED lighting product Assembling and sales of LED bulbs	$ - 48,166 516 2,556 133,979 4,403,034 23,993 152,701 133,403 - 72,436 67,101 133,455	$ 93,582 48,166 12,806 2,556 133,145 4,403,034 23,993 152,701 133,403 56,322 72,436 64,301 133,455	- 88,460 429,000 82,850 3,800,000 146,600,000 44,065 45,642 4,010,000 - 5,218,605 4,428,000 156,994	- 28.13 30.00 100.00 100.00 100.00 14.01 100.00 100.00 - 6.87 83.39 60.00	$ - 25,818 10,941 ( 245) 280,138 4,327,287 17,094 739,306 75,909 - 113,119 ( 27,420) 11,310	($ 557) 131,992 ( 4,334) ( 34) 5,284 ( 203,069) 131,992 52,613 57 ( 94,172) 46,497 ( 23,623) ( 678)	($ 1,831) 37,129 ( 1,300) ( 34) 5,284 ( 203,069) 16,367 52,613 57 ( 4,365) 3,194 ( 19,609) ( 407)

Table 10-5

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd.	Joint Power Exponent, Ltd. Tyntek Corporation GaN Force Corporation Domi-Star Optoelectronics Corporation Epicrystal (Changzhou) Co., Ltd. Changzhou Chemsemi Co., Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd	Taiwan Taiwan Taiwan Taiwan China China China China	Power IC design and module sales Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Design, manufacturing and sales of semiconductor materoals and modules Design and sales of LED lighting product Manufacturing and sales of LED wafers and chips OEM manufacturing of compound semiconductor RFID wafers and optoelectronic wafers Developing, manufacturing and sales of LED packages, modules and related applications Sales of LED chips	$ 11,599 1,276 641 490 147,472 469,590 122,036 43,770	$ 11,599 258 641 490 147,472 469,590 122,036 43,770	1,757,000 50,000 620,400 49,000 cash USD5,200,000 cash RMB110,000,000 cash RMB29,100,000 cash RMB10,000,000	11.26 0.02 35.68 49.00 3.31 10.44 9.70 100.00	$ 5,587 790 703 343 153,387 791,206 98,800 193,729	($ 28,185) ( 181,505) ( 1,899) ( 87) ( 217,465) ( 1,198,668) ( 359,037) 23,127	($ 3,464) ( 36) ( 261) ( 43) ( 4,656) ( 130,126) ( 23,926) 23,774	Note1 Note1

Table 10-6

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation	Lextar (Singapore) Pte. Ltd. Wellybond Optronics HK Limited Wellypower Optronics Corporation Apower Optronics Corporation Liang Li Venture Corp. Wellybond Corporation Trendylite Corporation Hexawave, Inc. Yenrich Technology Corporation ProLight Opto Technology Corporation Tyntek Corporation	Sinapore Hong Kong British Virgin Islands British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Sales of products Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of LED packages Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade	$ 2,709,310 17,888 44,898 381,638 175,374 746,484 18,100 147,506 980,487 97,031 1,304	$ 2,709,310 17,888 44,898 381,638 175,374 746,484 18,100 147,506 530,487 - -	90,270,000 63,000,000 5,153,061 31,600,000 18,000,000 75,000,000 2,850,750 12,716,000 66,000,000 6,500,000 50,000	100.00 100.00 100.00 100.00 100.00 100.00 90.50 31.81 100.00 9.55 0.02	$ 2,504,064 11,848 165,384 1,188,138 124,839 552,365 37,564 74,062 752,231 86,187 1,126	($ 152,032) 119 3,167 23,452 ( 717) ( 68,360) 2,089 ( 59,224) ( 174,328) ( 94,172) ( 181,505)	($ 152,032) 119 3,167 23,452 ( 717) ( 68,360) 1,890 ( 20,300) ( 174,328) ( 6,154) ( 124)	Note1

Table 10-7

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
Lextar (Singapore) Pte. Ltd. Lextar (Singapore) Pte. Ltd. Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Liang Li Venture Corp.	Lextar Electronics Korea Ltd. Aurora International Lighting Corporation Limited VOGITO INNOVATION CO., LTD. Hexawave, Inc. WellyHertz Electronics Corp. Joint Power Exponent, Ltd. ProLight Opto Technology Corporation Tyntek Corporation ProLight Opto Technology Corporation	Korea Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Sale of LED and aftersales service Sales of lighting Design of lighting Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of switching power supply modules Power IC design and module sales Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Manufacturing and sales of LED packages	$ 3,025 204,136 1,000 147,494 30,000 68,250 303,264 1,288 91,763	$ 3,025 204,136 1,000 147,494 10,000 33,000 251,016 258 91,763	22,000 2,000,000 100,000 12,715,000 20,000,000 4,550,000 20,310,000 50,000 6,185,000	100.00 20.00 50.00 31.81 86.96 29.17 29.84 0.02 9.09	$ 4,642 - 2,437 74,056 16,220 48,508 269,343 1,114 82,025	$ 383 ( 1,051,816) 2,067 ( 59,224) ( 9,753) ( 28,185) ( 94,172) ( 181,505) ( 94,172)	$ 383 ( 197,777) 1,033 ( 20,298) ( 8,605) ( 12,637) ( 26,572) ( 126) ( 8,558)	Note1 Note1

Table 10-8

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
Liang Li Venture Corp. Hexawave, Inc. Yenrich Technology Corporation Yenrich Technology Corporation ProLight Opto Technology Corporation ProLight Opto Holding Corporation	Tyntek Corporation WellyWave Semiconductors Inc. ProLight Opto Technology Corporation Tyntek Corporation ProLight Opto Holding Corporation ProLight Opto Technology Corporation	Taiwan Taiwan Taiwan Taiwan Seychelles Seychelles	Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Professional investment Professional investment	$ 1,293 49,000 27,366 1,324 4,402 4,403	$ - 137,100 27,366 - 4,402 4,403	50,000 6,717,900 1,822,000 50,000 150,000 150,000	0.02 49.00 2.68 0.02 100.00 100.00	$ 1,116 55,925 24,117 1,143 364 391	($ 181,505) ( 47,179) ( 94,172) ( 181,505) 1,228 1,228	($ 123) ( 29,280) ( 2,521) ( 126) 1,228 1,228	Note1 Note1

Table 10-9

Initial investment amount

Shares held as at December 31, 2022

Investor	Investee	Location	Main business activities	Balance as at December 31,2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Footnote
Lextar Electronics (Suzhou) Corp. Lextar Electronics (Suzhou) Corp.	Lextar Electronics (Chuzhou) Corp. Chuzhou Bwin Technology Corp.	China China	Manufacturing and sales of LED wafers, chips, packages, lights, and modules. Developing, manufacturing, sales of metal and plastic technical products.	3,094,825 130,726	3,094,825 130,726	cash RMB700,000,000 cash RMB29,000,000	100.00 48.33	3,488,917 76,339	239,532 ( 85,790)	239,532 ( 40,563)

Note1: The group holds two seats on the Board of Directors, which indicates that the Group has significant influence over the investee. Accordingly, the Group listed the investee as an associate.

Table 10-10

Table 11

ENNOSTAR INC. AND SUBSIDIARIES

Information on investments in Mainland China

Year ended December 31, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2022	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022	Net income of investee for the year ended December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Book value of investments in Mainland China as of December 31,2022	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Episky Corporation (Xiamen) Ltd. United LED Shan Dong Corporation Epicrystal Corporation (Changzhou) Ltd. Luxlite (Shenzhen) Corporation Limited KFESLighting Co., Ltd. APT Electronics Co., Ltd. China Crystal Technologies Co.,Ltd.	Manufacturing and sales of LED chips Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers and chips Sales of LED chips Manufacturing and sales of LED wafers, chips, packages and modules Developing, manufacturing and sale of LED extension and chip, module and light instrument Developing, manufacturing and sale of gallium arsenide unit crystal and chips	$ 2,124,096 2,404,500 4,494,125 96,430 7,785,966 1,854,198 891,131	2 2 2 2 2 3 2	$ 2,124,096 1,824,844 3,423,550 48,687 1,461,593 296,108 96,084	$ - - - - - - -	$ - - - - - - -	$ 2,124,096 1,824,844 3,423,550 48,687 1,461,593 296,108 96,084	($ 44,979) ( 13,777) ( 217,465) 929 - - -	100.00 74.86 76.95 - 18.77 11.69 8.97	($ 44,979) ( 10,313) ( 167,349) 929 - - ( 41,420)	$ 2,291,997 281,390 3,566,116 - 2,018,014 - 993	$ - - - 59,270 - - -	2(3) 2(3) 2(1) 2(1) 2(3) 2(3) 2(3)

Table 11-1

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2022	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022	Net income of investee for the year ended December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Book value of investments in Mainland China as of December 31,2022	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Ufeco Technology Inc. Huarui (Huizhou) Co., Ltd. Ningbo Formosa Epitaxy Incorporation Jiangsu Canyang Optoelectronics Ltd. Lextar Electronics (Suzhou) Corp.	Developing, manufacturing and sale of LED application products Research and development, manufacturing and sale of LED packaging; research and development, manufacturing and sale of backlight module, lighting modules and accessories Sales of LED chips Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers, chips, packages and modules	$ 75,048 479,839 6,754 5,902,624 3,722,205	2 2 2 2 2	$ 7,818 215,687 56,843 2,578,552 3,585,860	$ - - - - -	$ - - - - -	$ 7,818 215,687 56,843 2,578,552 3,585,860	$ - - - 45,772 72,649	- - - 95.66 100.00	$ - - - 44,477 72,649	$ - - - 1,575,026 3,654,883	$ - - - - -	2(3) 2(3) 2(3) 2(3) 2(2)

Table 11-2

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2022	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022	Net income of investee for the year ended December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2022	Book value of investments in Mainland China as of December 31,2022	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Lextar Electronics (Xiamen) Co.,Ltd. LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. Shanghai Welight Electronic Co., LTD.	Manufacturing and sales of LED packages and modules Developing, manufacturing and sales of LED packages, modules and related applications Wholesale and export and import of LED and related electronic products	$ 32,759 1,322,400 4,695	2 1 2	$ 32,759 391,909 4,695	$ - 133,906 -	$ - - -	$ 32,759 525,815 4,695	($ 3,179) ( 359,037) 1,228	100.00 33.63 51.16	($ 3,179) ( 132,149) 1,228	$ 8,992 342,548 364	$ - - -	2(2) 2(3) 2(2)

Table 11-3

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2022	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Epistar Corporation Lextar Electronics Corporation	$ 12,682,757 $ 4,167,894	$ 13,816,621 $ 4,577,180	$ 24,589,144 $ 5,863,530

• Note 1: The investments are classified in three types; they are numbered as follows:

• Direct investment in Mainland China companies;

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

• Note 2: Investment income or loss in this period:

The bases for recognition of investment income or loss are classified into four types; they are numbered as follows:

1. The financial statements that are audited by the international accounting firm which has a cooperative relationship with the R.O.C. accounting firm;

2. The financial statements that are audited by the R.O.C. parent company’s independent auditors;

3. The financial statements that are not audited by the independent auditors;

Note 3: The amount disclosed was based on Investment Commission, MOEA Regulation No. 09704604680 announced on August 29, 2008. Note 4: The numbers in the table shall be expressed in NTD. Foreign currencies shall be translated into NTD at the exchange rate prevailing on the financial reporting date. Note 5: The ‘amounts’ are expressed in thousands of New Taiwan dollars.

• Note 6: The shareholding of LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. has not been deducted due to the part of the disposal in 2023.

According to the MOEA Regulation No. 11200009840 announced on January 30, 2023, the accumulative amount of investment in mainland China can be deducted in USD 2,952,514.59.

Table 11-4

Table 12

Expressed in thousands of NTD

ENNOSTAR INC. AND SUBSIDIARIES

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

Year ended December 31, 2022

(Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Sale(purchase)	Propertytransaction	Propertytransaction	Accounts receivable (payable)	Accounts receivable (payable)	Provision of endorsements/guarantees or collaterals	Provision of endorsements/guarantees or collaterals		Financing	Financing		Others
	Amount	%	Amount	%	Balance at December 31,2022	%	Balance at December 31,2022	Purpose	Maximum balance during the year ended December 31, 2022	Balance at December 31, 2022	Interest rate	Interest during the year ended December 31, 2022
LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Lextar Electronics (Chuzhou) Corp. Jiangsu Canyang Optoelectronics Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Shanghai Welight Electronic Co., LTD Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Lextar Electronics (Chuzhou) Corp.	$ 12,858 48,083 91,927 549,080 1,415,512 223,855 141,183 ( 253,011) ( 962,056) ( 2,662,953)	0.06 0.23 0.43 2.57 6.63 1.05 23.15 (1.18) (4.51) (78.63)	$ - - 238,893 - - - - - - -	- - 14.22 - - - - - - -	$ 28,550 3,738 16,799 247,976 708,911 15,064 65,004 ( 29,414) ( 309,358) ( 461,393)	0.05 0.01 0.03 0.46 1.32 0.03 44.34 (0.05) (0.57) (65.28)	$ - - - - 368,520 - - - - -	- - - - - - - - - -	$ - - - - 70,294 - - - - -	$ - - - - 68,765 - - - - -	- - - - 2.86% - - - - -	$ - - - - 1,905 - - - - -	- - - - - - - - - -

Table12-1

ENNOSTAR INC. AND SUBSIDIARIES

Major Shareholders Information

December 31, 2022

Table 13

MajorShareholders	Shareholding	Shareholding
	NumberofSharesHeld	ShareholdingRatio
AUO Corporation	93,568,898	12.39

AUO Corporation

Table 13-1