ENNOSTAR — Interim / Quarterly Report 2021

Dec 30, 2021

ENNOSTAR INC. AND SUBSIDIARIES

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

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

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INDEPENDENT AUDITORS’ REVIEW REPORT

PWCR20000574

To the Board of Directors and Shareholders of Ennostar Inc.

Introduction

We have reviewed the accompanying consolidated balance sheets of Ennostar Inc. and subsidiaries (the “Group”) as at March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three-month periods then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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Basis for qualified conclusion

As explained in Note 4(3), the financial statements of certain insignificant consolidated subsidiaries and information disclosed in Note 13 were not reviewed by independent auditors. Total assets of these subsidiaries amounted to NT$8,605,101 thousand and NT$8,191,252 thousand, constituting 12.00% and 14.06% of the consolidated total assets as at March 31, 2021 and 2020, respectively, total liabilities amounted to NT$4,208,278 thousand and NT$1,643,677 thousand, constituting 20.92% and 13.36% of the consolidated total liabilities as at March 31, 2021 and 2020 respectively, and the total comprehensive income amounted to NT$355,705 thousand and NT$530,348 thousand, constituting 162.41% and 32.77% of the consolidated total comprehensive income for the three-month periods then ended, respectively. The balance of these investments accounted for under the equity method amounting to NT$1,026,758 thousand and NT$719,636 thousand, respectively, and the comprehensive income (loss) recognized from associates and joint ventures accounted for under the equity method amounting to NT$(21,577) thousand and NT$10,000 thousand were included.

Qualified conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries been reviewed by independent auditors as described in the basis for qualified conclusion section above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three-month periods then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

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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 reorganisation of entities under common control. In substance, Ennostar Inc. is the extension 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.

Li, Tien-Yi Chou, Chien-Hung

For and on behalf of PricewaterhouseCoopers, Taiwan May 13, 2021

------------------------------------------------------------------------------------------------------------------------------------------------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 report of independent accountants 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.

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ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2021, DECEMBER 31, 2020 AND MARCH 31, 2020

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

Assets	Notes	March 31, 2021 AMOUNT % $ 7,100,070 10 203,555 - 1,218,813 2 8,702,804 12 662,558 1 286,736 - 33,622 - 5,691,665 8 1,166,085 2 - - 814,608 1 25,880,516 36 83,987 - 5,253,464 7 1,939,245 3 25,599,635 36 2,029,802 3 717,520 1 5,196,037 7 4,016,553 6 986,066 1 45,822,309 64 $ 71,702,825 100	December 31, 2020 AMOUNT % $ 5,228,011 10 170,770 - 1,086,061 2 6,288,351 11 215,223 - 163,487 - 8,556 - 3,167,004 6 987,233 2 - - 531,435 1 17,846,131 32 179,275 - 4,384,300 8 1,645,575 3 21,085,475 38 1,664,289 3 216,341 - 4,132,191 8 3,949,334 7 426,097 1 37,682,877 68 $ 55,529,008 100	March 31, 2020	March 31, 2020
		AMOUNT $ 7,100,070 203,555 1,218,813 8,702,804 662,558 286,736 33,622 5,691,665 1,166,085 - 814,608 25,880,516 83,987 5,253,464 1,939,245 25,599,635 2,029,802 717,520 5,196,037 4,016,553 986,066 45,822,309 $ 71,702,825	AMOUNT $ 5,228,011 170,770 1,086,061 6,288,351 215,223 163,487 8,556 3,167,004 987,233 - 531,435 17,846,131 179,275 4,384,300 1,645,575 21,085,475 1,664,289 216,341 4,132,191 3,949,334 426,097 37,682,877 $ 55,529,008	AMOUNT $ 6,048,049 805,289 1,867,990 6,268,036 200,239 205,351 203 3,477,776 992,082 1,083 335,862 20,201,960 156,137 3,753,157 719,636 19,998,864 1,565,437 - 7,440,321 3,965,345 478,025 38,076,922 $ 58,278,882	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties, net 1200 Other receivables 1210 Other receivables - related parties 130X Inventories 1410 Prepayments 1460 Non-current assets held for sale - net 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 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	6(1) 6(2) 6(4) 6(4) 7 7 6(5) 6(11) 8 6(2) 6(3) 6(6) 6(7) 6(8) 6(9) 6(31)				11 1 3 11 - - - 6 2 - 1
					35
					- 6 1 34 3 - 13 7 1
					65
					100

(Continued)

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ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

MARCH 31, 2021, DECEMBER 31, 2020 AND MARCH 31, 2020

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of March 31, 2021 and 2020 are reviewed, not audited)

					March 31, 2021				December 31, 2020	December 31, 2020			March 31, 2020
	Liabilities andEquity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(12) and 8		$	1,559,335		2	$	1,537,574		3	$	1,387,553	3
2110	Short-term notes and bills	6(13) and 8
	payable				891,471		1		568,519		1		596,513	1
2120	Financial liabilities at fair value
	through profit or loss - current				8,811		-		-		-		-	-
2150	Notes payable				9,618		-		11,002		-		8,660	-
2170	Accounts payable				4,177,024		6		1,998,922		4		1,634,452	3
2180	Accounts payable - related	7
	parties				259,050		-		174,250		-		217,754	-
2200	Other payables	6(14) and 7			4,663,182		7		4,387,779		8		2,646,708	5
2230	Current income tax liabilities				25,594		-		14,004		-		2,713	-
2280	Current lease liabilities				109,138		-		113,241		-		108,340	-
2320	Long-term liabilities, current	6(15) and 8
	portion				640,569		1		137,419		-		119,717	-
2399	Other current liabilities - others				342,816		1		201,452		-		127,515	-
21XX	Current Liabilities				12,686,608	18			9,144,162	16			6,849,925	12
	Non-current liabilities
2540	Long-term borrowings	6(15) and 8			3,628,987		5		3,200,725		6		1,941,930	3
2570	Deferred income tax liabilities	6(31)			1,706,486		2		1,736,775		3		1,611,382	3
2580	Non-current lease liabilities				1,563,230		2		1,173,065		2		1,269,508	2
2600	Other non-current liabilities	6(18)			527,332		1		562,985		1		629,090	1
25XX	Non-current liabilities				7,426,035	10			6,673,550	12			5,451,910	9
2XXX	Total Liabilities				20,112,643	28			15,817,712	28			12,301,835	21
	Equity attributable to owners of
	parent company
	Share capital	6(19)
3110	Share capital - common stock				6,859,527	10			10,887,014	20			10,887,014	19
	Capital surplus	6(20)
3200	Capital surplus				42,916,979	60			36,115,456	65			39,334,084	67
	Retained earnings	6(21)
3310	Legal reserve				-		-		-		-		161,423	-
3320	Special reserve				-		-		-		-		318,465	1
3350	Accumulated deficit		(		260,786 )		- (		7,908,188) (	14) (			5,242,310) (	9 )
	Other equity interest	6(22)
3400	Other equity interest				158,586		- (		1,001,764) (		2) (		1,320,560) (	2 )
3500	Treasury stocks	6(19)	(		492,150 ) (		1) (		485,137) (		1) (		325,490) (	1 )
31XX	Equity attributable to
	owners of the parent				49,182,156	69			37,607,381	68			43,812,626	75
36XX	Non-controlling interest				2,408,026		3		2,103,915		4		2,164,421	4
3XXX	Total equity				51,590,182	72			39,711,296	72			45,977,047	79
3X2X	Total liabilities and equity			$	71,702,825	100		$	55,529,008	100		$	58,278,882	100

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 THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

(UNAUDITED)

Items

Three months ended March 31 2021 2020 Notes AMOUNT % AMOUNT % 6(23) and 7 $ 6,878,859 100 $ 3,387,728 100 6(5) and 7 ( 5,941,451) ( 86) ( 3,389,897) ( 100) 937,408 14 ( 2,169) - 277 - 3,277 - 1,589 - ( 4,266) - 939,274 14 ( 3,158) - 6(29) ( 196,167 ) ( 3) ( 69,348) ( 2 ) ( 467,282 ) ( 7) ( 293,091) ( 9 ) ( 634,277 ) ( 9) ( 472,032) ( 14 ) ( 25,336) - ( 461,830) ( 13) ( 1,323,062) ( 19) ( 1,296,301) ( 38) 6(24) 54,435 - 58,949 2 ( 329,353) ( 5) ( 1,240,510) ( 36) 6(25) 34,065 - 30,444 1 6(26) 123,295 2 63,972 2 6(27) and 7 ( 114,286 ) ( 2) ( 430,377) ( 13 ) 6(28) ( 32,642 ) - ( 30,033) ( 1 ) - - ( 9,246) - ( 25,427) - 10,000 - ( 14,995) - ( 365,240) ( 11) ( 344,348 ) ( 5) ( 1,605,750) ( 47 ) 6(31) ( 22,008 ) - 37,400 1 ( $ 366,356 ) ( 5) ($ 1,568,350) ( 46 )

4000 Sales revenue 5000 Operating costs 5900 Operating margin 5910 Unrealized loss from sales 5920 Realized profit (loss) from sales 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit losses 6000 Total operating expenses 6500 Other income and expenses - net 6900 Operating loss 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 before income tax 7950 Income tax (expense) benefit 8200 Loss

(Continued)

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

(UNAUDITED)

Items

Three months ended March 31 2021 2020 Notes AMOUNT % AMOUNT % 6(16) ( $ 1,351 ) - $ - - 6(3) 150,652 2 106,483 3 6(6) - - ( 32,337) ( 1 ) 6(31) 38,245 - ( 40,164) ( 1 ) 187,546 2 33,982 1 ( 50,539 ) - ( 97,427) ( 3 ) 6(6) ( 933 ) - ( 3,780) - 6(31) 11,265 - 17,264 - ( 40,207 ) - ( 83,943) ( 3 ) $ 147,339 2 ($ 49,961) ( 2 ) ( $ 219,017 ) ( 3) ($ 1,618,311) ( 48 ) ( $ 259,930 ) ( 3) ($ 1,492,800) ( 44 ) ($ 106,426 ) ( 2) ($ 75,550) ( 2 ) ( $ 102,200 ) ( 1) ($ 1,527,875) ( 45 ) ( $ 116,817 ) ( 2) ($ 90,436) ( 3 ) 6(32) ( $ 0.38) ($ 2.77) 6(32) ( $ 0.38) ($ 2.77)

Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Loss on remeasurements of defined benefit plans 8316 Unrealised 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 income 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 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 loss that will be reclassified to profit or loss 8300 Other comprehensive income (loss) 8500 Total comprehensive loss Loss attributable to: 8610 Equity holders of the parent company 8620 Non-controlling interest Comprehensive loss attributable to: 8710 Equity holders of the parent company 8720 Non-controlling interest 9750 Total basic loss per share 9850 Total diluted loss 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 THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

2020 Balance at January 1, 2020 Loss Other comprehensive income(loss) Total comprehensive income(loss) Changes in ownership interests in subsidiaries accounted for using equity method Balance at March 31, 2020 2021 Balance at January 1, 2021 Loss Other comprehensive income(loss) Total comprehensive income(loss) Issuance of ordinary shares under business combination Net change in equity of associates and joint ventures Expiration of restricted employee stock Non-controlling interests Effect of joint share exchange Balance at March 31, 2021	Notes								Equity attributableto owners of	Equity attributableto owners of	the parent	the parent				Non-controlling interest		Total
			Share capital - common stock		Capital surplus			R	etained earnings		Otherequityinterest		Treasury stocks		Total
							Legal reserve		Special reserve	Accumulated deficit	Cumulative translation differences of foreign operations	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(21) 6(22) 6(20) 6(21) 6(22) 6(21)	$ 10,887,014 - - - - $ 10,887,014 $ 10,887,014 - - - 1,416,020 - - - ( 5,443,507 ) $ 6,859,527		$ 39,212,772 - - - 121,312 $ 39,334,084 $ 36,115,456 - - - 10,308,626 ( 47,669 ) 7,013 - ( 3,466,447 ) $ 42,916,979			$ 161,423 - - - - $ 161,423 $ - - - - - - - - - $ -		$ 318,465 - - - - $ 318,465 $ - - - - - - - - - $ -	($ 3,749,510 ) ( 1,492,800 ) - ( 1,492,800 ) - ($ 5,242,310 ) ($ 7,908,188 ) ( 259,930 ) ( 856 ) ( 260,786 ) - - - - 7,908,188 ($ 260,786 )	($ 785,337 ) - ( 69,057 ) ( 69,057 ) - ($ 854,394 ) ($ 730,022 ) - ( 30,311 ) ( 30,311 ) - - - - 730,022 ($ 30,311 )	($ 500,148 ) - 33,982 33,982 - ($ 466,166 ) ($ 271,742 ) - 188,897 188,897 - - - - 271,742 $ 188,897	($ 325,490 ) - - - - ($ 325,490 ) ($ 485,137 ) - - - - - ( 7,013 ) - - ($ 492,150 )	$ 45,219,189 ( 1,492,800 ) ( 35,075 ) ( 1,527,875 ) 121,312 $ 43,812,626 $ 37,607,381 ( 259,930 ) 157,730 ( 102,200 ) 11,724,646 ( 47,669 ) - - ( 2 ) $ 49,182,156		$ 1,976,169 ( 75,550 ) ( 14,886 ) ( 90,436 ) 278,688 $ 2,164,421 $ 2,103,915 ( 106,426 ) ( 10,391 ) ( 116,817 ) 239,900 - - 181,028 - $ 2,408,026	$ 47,195,358 ( 1,568,350 ) ( 49,961 ) ( 1,618,311 ) 400,000 $ 45,977,047 $ 39,711,296 ( 366,356 ) 147,339 ( 219,017 ) 11,964,546 ( 47,669 ) - 181,028 ( 2 ) $ 51,590,182

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

THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortization (long-term prepaid rents) Expected credit losses Net loss on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Share of (gain) loss of associates and joint ventures accounted for under the equity method Loss(gain) on disposal of property, plant and equipment Gain on disposal of intangible assets Loss on disposal of investments Unrealized loss from sales Realized loss (profit) from sales Other income from recognition of long-term deferred revenues Expense transferred to property, plant and equipment 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 (outflow) inflow generated from operations Interest received Dividend received Interest paid Income tax refunded (paid) Net cash flows (used in) from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Cash refund from financial assets capital reduction Acquisition of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of investments accounted for under the equity method Proceeds from disposal of investments accounted for under the equity method Decrease (increase) in refundable deposits paid Acquisition of intangible assets Proceeds from disposal of intangible assets Effect on initial consolidation of subsidiaries Decrease (increase) in other financial assets Net cash flows from (used in) investing activities

Three months ended March 31 Notes 2021 2020 ( $ 344,348 ) ( $ 1,605,750 ) 6(7)(29) 1,199,086 1,123,975 6(9)(29) 62,517 66,093 12(2) 25,336 471,076 6(27) 34,238 345,905 6(28) 32,641 30,033 6(25) ( 12,842 ) ( 16,157 ) 6(26) ( 38,246 ) ( 8,144 ) 6(6) 25,427 ( 10,000 ) 6(26) 3,462 ( 3,662 ) 6(27) - ( 88 ) 4,058 - ( 277 ) ( 3,277 ) ( 1,589 ) 4,266 6(18) ( 35,874 ) ( 34,754 ) ( 3,192 ) ( 2,312 ) ( 195,041 ) 36,118 ( 124,823 ) 19,265 ( 53,691 ) 331,056 ( 66,495 ) ( 64,184 ) ( 1,379,539 ) ( 241,997 ) 30,507 ( 52,763 ) 12,572 ( 3,350 ) 259,249 16,950 369 - ( 1,384 ) ( 386,171 ) ( 17,789 ) 169,409 15,956 44,315 ( 120,421 ) ( 32,382 ) ( 3,763 ) 7,470 ( 693,896 ) 200,940 14,059 13,617 38,246 8,144 ( 27,177 ) ( 22,757 ) 36,903 ( 9,094 ) ( 631,865 ) 190,850 66,929 - ( 1,099,573 ) ( 7,216 ) 6(34) ( 1,735,667 ) ( 641,421 ) 6(34) 16,167 10,688 ( 27,437 ) - 5,637 - 273 ( 371 ) 6(34) ( 12,384 ) ( 14,820 ) 1,025 88 3,763,629 - 112,642 ( 50,444 ) 1,091,241 ( 703,496 )

(Continued)

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ENNOSTAR Inc. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loans Increase 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 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 period Cash and cash equivalents at end of period

Three months ended March 31 Notes 2021 2020 6(35) $ 25,131 ( $ 280,614 ) 6(35) 322,952 257,366 6(35) 941,700 950,000 6(35) ( 10,288 ) ( 16,911 ) 6(35) ( 521 ) 25,620 6(35) ( 35,904 ) ( 38,361 ) - 400,000 1,243,070 1,297,100 169,613 10,772 1,872,059 795,226 5,228,011 5,252,823 $ 7,100,070 $ 6,048,049

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 THREE MONTHS ENDED MARCH 31, 2021 AND 2020

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

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, which the Company was established by Epistar Corporation( “Epistar”) and the acquired all issued and outstanding ordinary shares of Epistar and Lextar Electronics Corporation (“ Lextar”) in the 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 May 13 , 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

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

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

None.

(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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Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 3, ‘Reference to the conceptual framework’ January 1, 2022 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 IFRS 17, ‘Insurance contracts’ January 1, 2023 Amendments to IFRS 17, 'Insurance contracts' January 1, 2023 Amendments to IAS 1, ‘Classification of liabilities as current or nonJanuary 1, 2023 current’ 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 January 1, 2023 liabilities arising from a single transaction’ Amendments to IAS 16, ‘Property, plant and equipment:proceeds before January 1, 2022 intended use’

Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a contract January 1, 2022 Annual improvements to IFRS Standards 2018–2020 January 1, 2022

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” and the International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.

• (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.

~13~

(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:

Name of Investor	Name of Subsidiary	Main Business Activities			Ownership	March 31, 2020 - - 100% 100% 100%	Note
				March 31, 2021	December 31,2020
ENNOSTAR Inc. ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epistar Corporation	Epistar corporation Lextar Electronics Corp. Lighting Investment Corporation Epistar JV Holding (B.V.I.) Co., Ltd. Yen- Rich Technology Corporation	Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers strips and modules Professional investment Professional investment Manufacturing and sales of LED wafers and chips		100% 100% 100% 100% 100%	- - 100% 100% 100%		Note12 Note12 Note 10 Note 9 Note 10

~14~

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Ownership
Name of Main Business March 31, December March 31,
Investor Name of Subsidiary Activities 2021 31, 2020 2020 Note
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Name of Investor	Name ofSubsidiary	Main Business Activities	March 31, 2021	December 31,2020 Ownership	March 31, 2020	Note
Epistar Corporation	GaN Ventures	Investment holding;	-	-	50.92%	Note 3
	Co., Limited	sales of electronic				Note 9
		components				Note 10
Epistar Corporation	SH Optotech Co.,Ltd.	Manufacturing and	49%	49%	49%	Note 1
		sales of LED wafers				Note 9
		and chips				Note 10
Epistar Corporation	Full Star Enterprises	Professional	100%	100%	100%	Note 9
	Limited	investment				Note 10
Epistar Corporation	iReach Corporation	Manufacturing,	100%	100%	100%	Note 9
		sales, packaging and				Note 10
		module design of
		semiconductor light
		emitting devices
Epistar Corporation	Unikorn	OEM manufacturing	63.94%	63.94%	63.94%	Note 2
	Semiconductor	of iii-v				Note 9
	Corporation	semiconductors				Note 10
Epistar Corporation	ProLight Opto	Manufacturing and	8.52%	8.52%	8.52%	Note 9
	Technology	sales of LED wafers				Note 10
	corporation	and chips
Epistar Corporation	GaN Force	Design manfacturing	64.32%	64.32%	64.31%	Note 9
	Corporation	and sales of LED				Note 10
Epistar corporation	Can Yang Investments	Professional	3.53%	-	-
	Limited	investment
GaN Force	GV Semiconductor	Manufacturing and	100%	100%	100%	Note 9
Corporation	Inc.	sales of LED wafers				Note 10
		and chips
Epistar JV Holding	LiteStar JV Holding	Professional	82.41%	82.41%	82.41%
(BVI) Co., Ltd.	(BVI) Co., Ltd.	investment
Epistar JV Holding	United LED	Professional	74.86%	74.86%	74.86%	Note 9
(B.V.I) Co., Ltd.	Corporation (Hong	investment				Note 10
	Kong) Limited
Epistar JV Holding	Episky Hong Kong	Professional	100%	100%	100%
(BVI) Co., Ltd.	Co., Limited	investment
Epistar JV Holding	HUGA Holding	Professional	100%	100%	100%	Note 9
(BVI) Co., Ltd.	(SAMOA) Limited	investment				Note 10
Epistar JV	Crystal Light	Professional	-	100%	100%	Note 9
Holding(BVI)	Enterprises Group	investment				Note 10
Co., Ltd	Limited					Note 11
Epistar JV	Can Yang Investments	Professional	80.10%	80.10%	80.10%	Note 9
Holding(BVI)	Limited	investment				Note 10
Co., Ltd

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Ownership
Name of Main Business March 31, December March 31,
Investor Name of Subsidiary Activities 2021 31, 2020 2020 Note
----- End of picture text -----

Name of Investor	Name ofSubsidiary	Main Business Activities	March 31, 2021	December 31,2020 Ownership	March 31, 2020	Note
LiteStar JV	Epicrystal (Hong	Professional	100%	100%	100%
Holding	Kong) Co., Limited	investment
Epicrystal (Hong	Epicrystal	Manufacturing and	93.38%	93.38%	93.38%
Kong) Co., Limited	Corporation	sales of LED wafers
	(Changzhou) Ltd.	and chips
United LED	United LED	Manufacturing and	100%	100%	100%	Note 9
Corporation (Hong	Corporation	sales of LED wafers				Note 10
Kong) Limited	(Shandong)	and chips
	Limited
Episky (Hong	Episky Corporation	Manufacturing and	100%	100%	100%
Kong) Limited	(Xiamen) Ltd.	sales of LED wafers
Episky Corporation	Epicrystal	Manufacturing and	3.31%	3.31%	3.31%
(Xiamen) Ltd.	Corporation	sales of LED wafers
	(Changzhou) Ltd.	and chips
Episky Coporation	LEADSTAR Micro-	Developing,	15.32%	20.80%	-	Note 6
(Xiamen)Ltd.	Crystal Display	manufacturing and				Note 9
	Corporation (JiangSu)	sales of LED				Note 10
	Ltd.	packages, modules
		and related
		applications.
Episky Corporation	SHENZHEN	Sales of LED wafers	100%	100%	-	Note 6
(Xiamen) Ltd.	EPIKYLIN	and chips				Note 9
	OPTOELECTRONIC					Note 10
	S CO.,LTD
Crystal Light	Ningbo Formosa	Trading of LED	-	-	100%	Note 4
Enterprise Group	Epitaxy Incorporation	epitaxy and chips				Note 9
Limited						Note 10
Lighting Investment	Lighting Investment	Professional	100%	100%	100%	Note 10
Corporation	Ltd.	investment
Lighting Investment	GaNrich	Manufacturing and	100%	100%	100%	Note 5
Corporation	Semiconductor	sales of LED wafers				Note 9
	Corporation	and chips				Note 10
Lighting	Crystaluxx SARL	Professional	-	-	100%	Note 7
Investment		investment				Note 9
Corporation.
Lighting	Yen-Rich Opto (Hong	Sales of LED	100%	100%	100%	Note 9
Investment	Kong) Limited	lighting products				Note 10
Corporation.
Lighting	Can Yang Investments	Professional	6.87%	6.87%	6.87%	Note 9
Investment	Limited	investment				Note 10
Corporation.

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Ownership
Name of Main Business March 31, December March 31,
Investor Name of Subsidiary Activities 2021 31, 2020 2020 Note
----- End of picture text -----

Name of Investor	Name ofSubsidiary	Main Business Activities	March 31, 2021	December 31,2020 Ownership	March 31, 2020	Note
Lighting	ProLight Opto	Manufacturing and	40.46%	40.46%	40.46%	Note 9
Investment	Technology	sales of LED wafers				Note 10
Corporation.	corporation	and chips
Lighting Investment	Luxlite (Hong Kong)	Professional	100%	100%	75%	Note 8
Ltd.	Corporation Limited	investment
Lighting Investment	Epistar (Hong Kong)	Professional	100%	100%	100%	Note 9
Ltd.	Limited	investment				Note 10
Lighting Investment	GaN Ventures	Investment holding;	-	-	4.92%	Note 3
Ltd.	Co., Limited	sales of electronic				Note 9
		components
Can Yang	Jiangsu Canyang	Manufacturing and	100%	100%	100%	Note 9
Investments Limited	Optoelectronics Ltd.	sales of LED wafers				Note 10
		and chips
Luxlite (Hong	Luxlite (Shenzhen)	Sales of LED chips	100%	100%	100%
Kong) Corporation	Corporation Limited	and LED lighting
Limited		facilities
Yen-Rich	ProLight Opto	Manufacturing and	2.68%	3.62%	3.62%	Note 9
Technology	Technology	sales of LED wafers				Note 10
Corporation	corporation	and chips
Yen-Rich	LEADSTAR Micro-	Developing,	21.53%	29.20%	-	Note 6
Technology	Crystal Display	manufacturing and				Note 9
Corporation	Corporation (JiangSu)	sales of LED				Note 10
	Ltd.	packages, modules
		and related
		applications.
Yen-Rich	Amengine	Developing and	58.59%	40.80%	-	Note 1
Technology	Corporation	sales of medical				Note 6
Corporation		optical sensor				Note9
		modules.				Note10
Prolight Opto	ProLight Opto	Professional	100%	100%	100%	Note 9
Technology	Holding	investment				Note 10
Corporation	corporation
Prolight Opto	ProLight Opto	Professional	100%	100%	100%	Note 9
Holding	Technology	investment				Note 10
Corporation	corporation
Prolight Opto	Shanghai Welight	Wholesale and	100%	100%	100%	Note 9
Technology	Electronic Co., LTD	export and import of				Note 10
Corporation		LED and related
Lextar Electronics	Lextar (Singapore)	Professional	100%	100%	100%
Corporation	Pte. Ltd.	investment
Lextar Electronics	Liang Li Investment	Professional	100%	100%	100%	Note 9
Corporation	Co., Ltd.	investment				Note 10

~17~

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Ownership
Name of Main Business March 31, December March 31,
Investor Name of Subsidiary Activities 2021 31, 2020 2020 Note
----- End of picture text -----

Name of Investor	Name ofSubsidiary	Main Business Activities	March 31, 2021	December 31,2020 Ownership	March 31, 2020	Note
Lextar Electronics	Wellypower	Professional	100%	100%	100%	Note 9
Corporation	Optronics Corp.	investment				Note 10
Lextar Electronics	Apower Optronics	Professional	100%	100%	100%	Note 9
Corporation	Corp.	investment				Note 10
Lextar Electronics	Wellybond	Professional	100%	100%	100%	Note 9
Corporation	Corporation	investment				Note 10
Lextar Electronics	WELLYBOND	Professional	100%	100%	100%	Note 9
Corporation	OPTRONICS (H.K.)	investment				Note 10
	Limited
Lextar Electronics	Trendylite	Sales of products	90.50%	90.50%	90.50%	Note 9
Corporation	Corporation					Note 10
Lextar Electronics	First Vertical Laser	Design and	22.99%	22.99%	22.99%	Note 9
Corporation	Inc.	manufacturing				Note 10
		VCSEL Lei chip
Lextar Electronics	HEXAWAVE INC.	Manufacturing and	31.69%	31.69%	31.69%	Note 9
Corporation		sales of compound				Note 10
		semiconductor
		materials and
		modules
Lextar (Singapore)	Lextar Electronics	Manufacturing of	100%	100%	100%
Pte. Ltd,	(Suzhou) Co., Ltd.	light-emitting diodes
Wellypower		(wafers, light bars,
Optronics Corp. and		modules)
Apower Optronics
Corp.
Lextar (Singapore)	Lextar Electronics	Manufacturing of	100%	100%	100%	Note 9
Pte. Ltd.	(Xiamen) Co., Ltd.	light-emitting diodes				Note 10
Lextar (Singapore)	Lextar Electronics	Sale of light-	100%	100%	100%	Note 9
Pte. Ltd.	Korea Ltd.	emitting diodes and				Note 10
		after-sales service
Liang Li Investment	First Vertical Laser	Design and	3.83%	3.83%	3.83%	Note 9
Co., Ltd.	Inc.	manufacturing				Note 10
		VCSEL Lei chip
Wellybond	VOGITO	Design of lighting	50%	50%	50%	Note 9
Corporation	INNOVATION CO.,					Note 10
	LTD.

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Ownership
Name of Main Business March 31, December March 31,
Investor Name of Subsidiary Activities 2021 31, 2020 2020 Note
----- End of picture text -----

Name of Investor	Name ofSubsidiary	Main Business Activities	March 31, 2021	December 31,2020 Ownership	March 31, 2020	Note
Wellybond	First Vertical Laser	Design and	29.37%	29.37%	27.75%	Note 9
Corporation	Inc.	manufacturing				Note 10
		VCSEL Lei chip
Wellybond	HEXAWAVE INC.	Manufacturing and	31.68%	31.68%	31.68%	Note 9
Corporation		sales of compound				Note 10
		semiconductor
		materials and
		modules
Wellybond	WellyHertz	Manufacturing and	90.91%	90.91%	-	Note 10
Corporation	Electronics Corp.	sales of switching				Note 14
		power supply
		module
Lextar Electronics	Lextar Electronics	Manufacturing of	100%	100%	100%
(Suzhou) Co., Ltd.	(Chuzhou) Corp.	light-emitting diodes
		(wafers, light bars,
		modules)

• 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: On October 1, 2018, the parent company established the Unikorn Semiconductor Corporation due to the spin-off and transfer of its operation for iii-v semiconductors OEM business. On February 20, 2019, and January 31, 2020, the Board of Directors of Unikorn Semiconductor Corporation during their meeting resolved to increase its capital in the amount of $164,000 and $400,000, respectively. The parent company did not participate in the capital increases, therefore, the parent company’s shareholding ratio was decreased to 63.94%.

• Note 3: The liquidation was completed on June, 2020, as the company will not continue its operation.

• Note 4: The liquidation was completed on December, 2020, as the company will not continue its operation

• Note 5: On January, 2020, allureLux Corporation has been renamed as GaNrich Semiconductor Corporation.

• Note 6: Newly invested or established companies in 2020.

• Note 7: The liquidation was completed on July, 2020, as the company will not continue its operation.

• Note 8: Acquiring an additional 25% of ordinary share from non-controlling interest in October 2020.

• Note 9: The financial statements of the entity as of and for the three months ended March 31, 2020 were not reviewed by independent auditors as the entity did not meet the definition of significant subsidiary.

• Note 10: The financial statements of the entity as of and for the three months ended March 31, 2021 were not reviewed by independent auditors as the entity did not meet the definition of significant subsidiary.

• Note 11:The liquidation was completed on March, 2021, as the company will not continue its operation.

• Note 12: On January 6, 2021, Epistar and Lextar became subsidiaries through a share exchange transaction with the parent company. Epistar, Lextar and their subsidiaries were

~19~

consolidated in the financial statements thereafter.

  - Note 13: Since acquiring the new shares in August 2020, the Group’s shareholding ratio to the company changed.

  - Note 14: Since acquiring the new shares in November 2020, the Group obtained control over the company.

• 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.

• (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

~20~

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.

  - (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

~21~

which are not held for trading, and for which the Company 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 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 Company and the amount of the dividend can be measured reliably.

• (9) 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.

• (10) 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.

• (11) 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.

• －

• (12) Leasing arrangements (lessor) operating leases

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

• (13) 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.

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

• (15) 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

~22~

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.

• (16) 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.

~23~

• 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 and equipment	2 ~ 20 years
Office equipment	2 ~ 20 years
Leasehold improvements	3 ~ 15 years
Other equipment	2 ~ 20 years

(17) 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 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.

(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model.

~24~

Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 20 ~ 50 years.

• (19) 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.

• (20) 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.

• (21) 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.

• (22) Notes and accounts payable

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

~25~

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.

• (23) 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.

• (24) Derecognition of financial liabilities

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

• (25) 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 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.

  • iv. Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly.

• C. Termination benefits

• Termination benefits are employee benefits provided in exchange for the termination of

~26~

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’ and supervisors’ remuneration

  • Employees’ compensation and directors’ and supervisors’ 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.

• (26) 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’.

• (27) 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

~27~

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. The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

• G. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognises the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognised outside profit or loss is recognised in other comprehensive income or equity while the effect of the change on items recognised in profit or loss is recognised in profit or loss.

• (28) 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.

• (29) Dividends

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

• (30) Revenue recognition

• A. Sales of goods:

  • (a) The Group is engaged in the research, development and sale of EPI wafers and chips of

~28~

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 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.

• (31) 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.

~29~

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.

• (32) 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 acquire 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.

• (33) 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.

• 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

  • A. Impairment valuation of goodwill, property, plant and equipment In assessing assets impairment valuation, the Group estimates useful lives of assets and possible income and expenses in the future based on the Group’s subjective judgement, any changes in economic condition and strategy of the Group will affect the recoverable amount, please refer to Note 6(10).

As of March 31, 2021, the Group recognised impaired property, plant and equipment of $25,599,635 and goodwill of $3,854,266.

• B. 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

~30~

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 within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of March 31, 2021, the carrying amount of inventories was $5,691,665.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand and petty cash Checking accounts and demand deposits Time deposits Bonds sold under repurchase agreement	March 31, 2021 1,749 $ 2,918,248 2,745,367 1,434,706 7,100,070 $	December 31, 2020 March 31, 2020 1,171 $ 1,193 $ 2,210,413 2,201,557 1,326,081 3,242,308 1,690,346 602,991 5,228,011 $ 6,048,049 $

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

==> picture [498 x 264] intentionally omitted <==

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

Items March 31, 2021 December 31, 2020 March 31, 2020
Current items:
Financial assets mandatorily measured
at fair value through profit or loss
Beneficiary certificates $ 54,151 $ 40,150 $ 5,151
Listed stocks 193,439 427,775 1,287,390
Derivatives 13,244 - -
260,834 467,925 1,292,541
Valuation adjustment ( 57,279) ( 297,155) ( 487,252)
203,555 170,770 805,289
Non-current items:
Financial assets mandatorily measured
at fair value through profit or loss
Unlisted stocks 275,249 342,178 342,178
Valuation adjustments ( 191,262) ( 162,903) ( 186,041)
83,987 179,275 156,137
$ 287,542 $ 350,045 $ 961,426
----- End of picture text -----

• A. The net loss recognized by the Company amounted to $34,238 and $345,905 for the three months ended March 31,2021 and 2020.

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

~31~

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

Items March 31, 2021 December 31, 2020 March 31, 2020

Items	Ma	rch 31,2021	Dece	mber 31,2020	Ma	rch 31,2020
Non-current items:
Equity instruments
Listed stocks	$	1,504,354	$	724,909	$	724,909
Unlisted stocks		3,924,325		3,933,096		3,710,348
		5,428,679		4,658,005		4,435,257
Valuation adjustment	(	175,215)	(	273,705)	(	682,100)
	$	5,253,464	$	4,384,300	$	3,753,157

• 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 $5,253,464, $4,384,300 and $3,753,157 as at March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

31, 2020 and March 31, 2020, respectively.	31, 2020 and March 31, 2020, 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	Three months ended	Three months ended
comprehensive income	March 31, 2021		March 31,2020
Fair value change recognised in other	150,652 $	$	106,483
comprehensive income
Dividend income recognized in profit or loss Held at end of period	38,246 $	$	8,144

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

• (4) Notes and accounts receivable

					March 31,2021	March 31,2021	December 31, 2020	December 31, 2020	March 31,2020	March 31,2020
Notes receivable					$	2,059,009	$	1,926,257	$	2,277,937
Less: Allowance for	uncollectible accounts			(		840,196)	(	840,196)	(	409,947)
					$	1,218,813	$	1,086,061	$	1,867,990
Accounts receivable					$	8,759,659	$	6,306,903	$	6,329,851
Less: Allowance for	uncollectible accounts			(		56,855)	(	18,552)	(	61,815)
					$	8,702,804	$	6,288,351	$	6,268,036
A. The ageing analysis of accounts receivable and notes receivable is as follows:
		March 31,		2021				December 31,	2020
	Accounts receivable		Notes			receivable Accounts receivable Notes				receivable
Not past due	$	7,999,554		$		1,175,021 $		5,790,012 $		1,089,903
Up to 30 days		412,100				14,543		307,622		13,448
31 to 90 days		268,379				33,090		101,702		70,065
91 to 180 days		29,899				83,514		106,124		752,841
Over 180 days		49,727				752,841		1,443		-
	$	8,759,659		$		2,059,009 $		6,306,903 $		1,926,257

~32~

Accounts receivable Not past due 5,441,345 $ Up to 30 days 367,716 31 to 90 days 377,542 91 to 180 days 27,652 Over 180 days 115,596 6,329,851 $ March 31,	Notes receivable 2,277,937 $ - - - - 2020
	2,277,937 $

The above ageing analysis was based on past due date.

• B. As of March 31, 2021, December 31, 2020 and March 31, 2020, the Group had outstanding discounted notes receivable amounting to $418,686, $410,310 and $439,795, respectively. The Group has no payment obligations when the drawers of the notes refuse to pay for the notes at maturity. Those discounted notes receivable were presented as a deduction item to notes receivable. Those discounted notes receivable were deducted from notes receivable directly.

• 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 at March 31,2021, December 31,2020 and March 31,2020, 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 $1,218,813, $1,086,061 and $1,867,990; the maximum exposure to credit risk in respect of the amount that best represents the accounts receivables held by the Group was $8,702,804, $6,288,351 and $6,268,036, respectively.

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

• (5) Inventories

Inventories
Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods		March 31, 2021
	Allowance for Cost valuation loss 1,660,494 $ 88,944) ($ 2,402,961 692,326) ( 2,926,755 517,275) ( 6,990,210 $ 1,298,545) ($ December 31,2020		Book value
			1,571,550 $ 1,710,635 2,409,480
			5,691,665 $
	Allowance for Cost valuation loss 846,389 $ 68,147) ($ 1,523,436 491,771) ( 1,819,253 462,156) ( 4,189,078 $ 1,022,074) ($		Book value
			778,242 $ 1,031,665 1,357,097
			3,167,004 $

~33~

							March 31,2020
							Allowance for
			Cost				valuation loss			Book value
	Raw materials	$	876,532			($	66,860)		$	809,672
	Work in progress		1,418,105			(	293,031)			1,125,074
	Finished goods		2,003,741			(	460,711)			1,543,030
		$	4,298,378			($	820,602)		$	3,477,776
	The cost of inventories recognised as expense for the three						months ended March			31,2021 and 2020:
					Three months ended			Three months ended
						March 31, 2021				March 31, 2020
	Cost of goods sold			$			5,625,034	$		3,026,202
	Scrap loss						53,470			9,607
	Loss on decline in market value						108,148			32,242
	Loss on idle capacity						156,213			314,091
	Other			(			1,414)			7,755
				$			5,941,451	$		3,389,897
(6)	Investments accounted for using	the equity method
			March 31,	2021		December 31,2020				March 31,2020
	Associates:
	Nan Ya Photonics Incorporation	$		-		$	-	$		460,849
	Tekcore Co., Ltd.			27,692			26,926			31,331
	TE Opto Corporation			43,540			43,804			47,725
	Country Lighting (BVI) Co., Ltd.			87,265			87,097			92,472
	LEDOLUX Sp. Zo.O.			12,303			13,077			12,906
	Interelight Optotech (Hong Kong) Ltd.			11,857			11,886			12,534
	ES-LEDRU LLC			-			-			1,792
	LEDAZ Co., Ltd.			55,948			71,668			60,027
	Changzhou Chemsemi Co., Ltd		454,075				471,471			-
	GCS Holdings, Inc.		912,487				919,646			-
	JOINT POWER EXPONENT, LTD.			39,773			-			-
	Chuzhou Bwin		108,120				-			-
	Aurora International Lighting
	Corporation
	Limited		186,185				-			-
		$	1,939,245			$	1,645,575	$		719,636

Note: In August 2020, Changzhou NEO-EPISKY Co., Ltd. has been renamed as Changzhou Chemsemi Co., Ltd.

• 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 March 31,2021, December 31,2020 and March 31,2020, the carrying amount of the Group’s

~34~

individually immaterial associates amounted to $1,939,245, $1,645,575 and $719,636, respectively.

respectively.
				Three months ended	Three months ended
				March 31,2021			March 31,2020
Profit (loss) for the period from			25,427) ($		$		10,000
continuing operations
Other comprehensive loss			(	933)	(		36,117)
Total comprehensive loss			26,360) ($		($		26,117)
The fair value of the Group’s material associates			with quoted market prices			is	as follows:
		March 31,2021		December 31,2020			March 31,2020
Tekcore Co. Ltd.	$	145,329	$	136,217		$	67,020
GCS Holdings, Inc.		963,067		903,548			-
	$	1,108,396	$	1,039,765		$	67,020

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

• C. On June 5, 2020, the Group obtained significant influence over GCS Holdings, Inc. as the Group owned two board seats through the re-election of the regular shareholders’ meeting. Therefore, the Group reclassified it from financial asset at fair value through profit and loss into investment in associate and recognised gain on disposal of investment amounting to $31,414 in accordance with IFRSs.

• D. On September 2, 2020, the Group disposed part of its share of NanYa Photonics Incorporation and lost significant influence as its shares owned by the Group were less than 20%. Therefore, the Group reclassified it into financial asset at fair value through other comprehensive income and recognised gain on disposal of investment amounting to $38,546 in accordance with IFRSs.

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(7) Property, plant and equipment

																	Construction	Construction
																in progress and
				Buildings and						Office			Leasehold				equipment to
		Land			structures		Machinery		equipment			improvements			Others			be inspected		Total
At January 1, 2021
Cost	$	511,997	$		15,382,224	$	41,914,660	$		415,371	$		175,629	$	620,231	$		3,716,424	$	62,736,536
Accumulated
depreciation and
impairment		-	(		8,580,667)	(	32,186,143)	(		315,015)	(		90,976)	(	478,260)			-	(	41,651,061)
	$	511,997	$		6,801,557	$	9,728,517	$		100,356	$		84,653	$	141,971	$		3,716,424	$	21,085,475
2021
Opening net book	$	511,997	$		6,801,557	$	9,728,517	$		100,356	$		84,653	$	141,971	$		3,716,424	$	21,085,475
amount at January 1
Additions		-			2,926		51,205			983			-		4,216			1,032,995		1,092,325
Transfer		-			40,460		1,595,239			3,622			3,184		31,781	(		1,674,286)		-
Acquired from
business		1,170,859			1,732,781		1,201,735			9,941			1,513		392,619			205,059		4,714,507
Disposals		-	(		1,210)	(	5,508)	(		12)			-		-			-	(	6,730)
Reclassifications		-	(		18,447)	(	82,429)	(		11)			-		-			854	(	100,033)
Reclassified to
investment property		-	(		42,062)		-			-			-		-			-	(	42,062)
Depreciation charge		-	(		214,694)	(	874,168)	(		15,905)	(		4,652)	(	43,032)			-	(	1,152,451)
Net exchange
differences		-			34,381	(	18,411)	(		362)	(		153)	(	652)	(		6,199)		8,604
Closing net book
amount at March 31	$	1,682,856	$		8,335,692	$	11,596,180	$		98,612	$		84,545	$	526,903	$		3,274,847	$	25,599,635
At March 31, 2021
Cost	$	1,682,856	$		17,470,049	$	53,235,165	$		481,635	$		351,163	$	3,183,467	$		3,274,847	$	79,679,182
Accumulated
depreciation and
impairment		-	(		9,134,357)	(	41,638,985)	(		383,023)	(		266,618)	(	2,656,564)			-	(	54,079,547)
	$	1,682,856	$		8,335,692	$	11,596,180	$		98,612	$		84,545	$	526,903	$		3,274,847	$	25,599,635

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At January 1, 2020 Cost Accumulated depreciation and impairment 2020 Opening net book amount at January 1 Additions Transfer Disposals Reclassifications Depreciation charge Net exchange differences Closing net book amount at March 31 At March 31, 2020 Cost Accumulated depreciation and impairment	Land 650,521 $ - 650,521 $ 650,521 $ - - - - - - 650,521 $ 650,521 $ - 650,521 $	Buildings and Office structures Machinery equipment 16,213,192 $ 41,452,304 $ 402,533 $ 8,510,028) ( 30,883,443) ( 272,598) ( 7,703,164 $ 10,568,861 $ 129,935 $ 7,703,164 $ 10,568,861 $ 129,935 $ 134 4,110 503 66,494 146,101 3,458 126) ( 6,127) ( - 400 478 27 221,606) ( 846,837) ( 14,342) ( 17,145) ( 32,410) ( 906) ( 7,531,315 $ 9,834,176 $ 118,675 $ 16,232,819 $ 40,019,605 $ 397,497 $ 8,701,504) ( 30,185,429) ( 278,822) ( 7,531,315 $ 9,834,176 $ 118,675 $	Leasehold improvements Others 161,373 $ 591,882 $ 122,853) ( 438,311) ( 38,520 $ 153,571 $ 38,520 $ 153,571 $ 383 1,452 9,861 954 559) ( 214) ( - - 3,366) ( 14,029) ( 290) ( 1,053) ( 44,549 $ 140,681 $ 124,267 $ 588,594 $ 79,718) ( 447,913) ( 44,549 $ 140,681 $	Construction in progress and equipment to be inspected Total 1,332,534 $ 60,804,339 $ - 40,227,233) ( 1,332,534 $ 20,577,106 $ 1,332,534 $ 20,577,106 $ 578,335 584,917 226,868) ( - - 7,026) ( - 905 - 1,100,180) ( 5,054) ( 56,858) ( 1,678,947 $ 19,998,864 $ 1,678,947 $ 59,692,250 $ - 39,693,386) ( 1,678,947 $ 19,998,864 $	Total
					60,804,339 $ 40,227,233) (
					20,577,106 $
					19,998,864 $
					59,692,250 $ 39,693,386) (
					19,998,864 $

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

－ (8) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings, machinery and equipment, 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.

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

Land Land use right Buildings Machinery and equipment Transportation equipment Office equipment		March 31,2021 Carryingamount $ 1,286,587 227,838 244,314 215,277 10,810 44,976 2,029,802 $	December 31, 2020	March 31,2020 Carryingamount $ 1,207,664 229,112 56,335 42,852 4,399 25,075 1,565,437 $
			Carryingamount $ 1,097,002 231,140 50,902 230,394 12,517 42,334 1,664,289 $

~37~

	Three months ended	Three months ended		Three months ended
		March 31,2021		March 31,2020
	Depreciation charge			Depreciation charge
Land	$	13,943	$	12,543
Buildings		12,588		4,671
Machinery and equipment		14,862		2,337
Transportation equipment		1,707		1,673
Office equipment		3,535		2,571
	$	46,635	$	23,795

• D. For the three months ended March 31, 2021 and 2020, the additions to right-of-use assets were $26,757 and $38,697, respectively.

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

	Three months ended	Three months ended
	March 31,2021	March 31, 2020
Items affecting profit or loss
Interest expense on lease liabilities	$ 5,697 $ 6,739
Expense on short-term lease contracts	2,623	3,419
Expense on leases of low-value assets	921	871
F. For the three months ended March 31, 2021	and 2020, the Group’s total cash outflow for leases
were $58,478 and $42,820, respectively.

(9) Intangible assets

Intangible assets
			Patents			Goodwill			Software			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			148			-			91			-			239
Additions－acquired through
business combinations			353,123			711,930			-			74,294			1,139,347
Reclassifications	(		15,481)			-			2,660			-	(		12,821)
Amortisation charge	(		39,592)			-	(		16,157)	(		6,768)	(		62,517)
Net exchange differences	(		248)			-	(		154)			-	(		402)
Closing net book amount as at
March 31	$		1,169,535	$		3,854,266	$		87,462	$		84,774	$		5,196,037
At March 31, 2021
Cost		$	2,774,813		$	7,036,589		$	456,253		$	189,366		$	10,457,021
Accumulated amortisation and
impairment	(		1,605,278)	(		3,182,323)	(		368,791)	(		104,592)	(		5,260,984)
	$		1,169,535	$		3,854,266	$		87,462	$		84,774	$		5,196,037

~38~

Patents At January 1, 2020 Cost 2,406,242 $ Accumulated amortisation and impairment 1,372,947) ( 1,033,295 $ 2020 Opening net book amount as at January 1 1,033,295 $ Additions－acquired separately 100 Reclassifications 1,884 Amortisation charge 48,018) ( Net exchange differences 182 Closing net book amount as at March 31 987,443 $ At March 31, 2020 Cost 2,411,700 $ Accumulated amortisation and impairment 1,424,257) ( 987,443 $	Goodwill Software Others Total 6,324,659 $ 422,203 $ 99,476 $ 9,252,580 $ - 286,367) ( 91,468) ( 1,750,782 ( 6,324,659 $ 135,836 $ 8,008 $ 7,501,798 $ 6,324,659 $ 135,836 $ 8,008 $ 7,501,798 $ - 2,755 - 2,855 - - - 1,884 - 17,237) ( 838) ( 66,093 ( - 305) ( - 123 ( 6,324,659 $ 121,049 $ 7,170 $ 7,440,321 $ 6,324,659 $ 423,549 $ 99,476 $ 9,259,384 $ - 302,500) ( 92,306) ( 1,819,063 ( 6,324,659 $ 121,049 $ 7,170 $ 7,440,321 $	Total
		7,440,321 $

Details of amortisation on intangible assets are as follows:

Details of amortisation on intangible assets are as follows: Cost 2,411,700 $ 6,324,659 $ 423,549 $ $ Accumulated amortisation and impairment 1,424,257) ( - 302,500) ( ( 987,443 $ 6,324,659 $ 121,049 $ $	99,476 9,259,384 $ 92,306) 1,819,063 ( 7,170 7,440,321 $
Three months ended March 31, 2021 Operating costs 32,072 $ Selling expenses 282 Administrative expenses 15,284 Research and development expenses 14,879 62,517 $	Three months ended March 31,2020
	30,206 $ 470 16,748 18,669
	66,093 $

(10) Impairment of non-financial assets

Goodwill is allocated to the Group’s cash-generating units identified according to operating segment. The recoverable amount of all cash-generating units has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by the management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below.

The recoverable amount of all cash-generating units calculated using the value-in-use was less than their carrying amount, therefore an impairment loss of $3,182,323 was recognized for the goodwill. The key assumptions used for value-in-use calculations are as follows:

• (a) Revenue growth rate: Estimation refers to relevant market information and relevant operating and sales plan.

• (b) Gross margin rate: Estimation refers to historical data and relevant operating and sales plan.

• (c) Discount rate: The rate before tax and reflecting specific risk of relevant operating segment. The discount rate for 2020 was 10.50%

(11) Non-current assets held for sale

Property, plant and equipment	March31,2021 - $	December31,2020 - $	March31,2020 1,083 $

~39~

(12) Short-term borrowings

March 31, 2021 December 31, 2020 March 31, 2020

Bank borrowings Unsecurred borrowings Interest rate range-NTD Interest rate range-foreign currency	1,559,335 $ 1,537,574 $ 1,387,553 $ 0.75%~1.24% 0.75%~1.24% 0.95% 3.80%~4.05% 3.40%~4.05% 2.93%~4.57%

As of March 31,2021, December 31,2020 and March 31,2020, the Group has endorsements to Episky Corporation (Xiamen) Ltd., Jiangsu Canyang Optoelectronics Ltd., Unikorn Semiconductor Corporation., Limited and Yen-Rich Technology Corporation of $3,818,150, $4,084,960 and $3,582,950, respectively.

(13) Short-term notes and bills payable

Payables for bankers’ acceptance Payables for bankers’ acceptance Payables for bankers’ acceptance			March31,2021
	Rate (%) -	Amount Name ofbank 891,471 $ BANK OF COMMUNICATIONS BANK OF CHINA BANK OF NINGBO December 31, 2020		Collaterals
				Note 8
	Rate(%) -	Amount Name of bank 568,519 $ BANK OF COMMUNICATIONS March 31, 2020		Collaterals
				Note 8
	Rate(%) -	Amount Name of bank 596,513 $ BANK OF COMMUNICATIONS		Collaterals
				Note 8

(14) Other payables

Items Payables on wages, salaries and bonus Compensation due to employees, directors and supervisors Payables on personnel expense Payables on machinery and equipment Payables on consumable goods and equipment repair expense Payables on processing fees Payables on reticle expense Payables on gas expense Payables on insurance expense Payable on intangible assets Others	March31,2021 779,228 $ 70,835 359,221 1,416,033 411,992 569,837 19,248 77,950 10,419 85,055 863,364 4,663,182 $	December31,2020 635,768 $ 69,641 200,259 2,068,473 358,304 377,051 22,319 64,551 8,980 46,122 536,311 4,387,779 $	March31,2020 501,027 $ 69,641 189,668 649,528 339,092 345,284 17,237 69,093 8,635 46,616 410,887 2,646,708 $

~40~

- (15) Long term borrowings

Long-term borrowings
	Borrowing period and
Type of borrowings	repayment term	March31,2021
Bank borrowings
Unsecured borrowings	Before September 15, 2025	$	609,700
Unsecured borrowings	February 17,2022 Repay fully at maturity		500,000
Unsecured borrowings	Before September 15, 2025		529,300
Unsecured borrowings	Before November 15, 2025		366,900
Unsecured borrowings	Before September 15, 2025		400,000
Unsecured borrowings	Before September 15, 2025		496,300
Unsecured borrowings	July 21,2022 Repay fully at maturity		450,000
Unsecured borrowings	Before November 5, 2024		346,666
Unsecured borrowings	Before February 15,2026		310,400
Secured borrowings	Before October 30, 2025		149,490
Unsecured borrowings	Before February 15,2026		10,800
Secured borrowings	Before March 15, 2028		100,000
			4,269,556
Less: Current portion of long-term borrowings (			640,569)
		$	3,628,987
Interest rate range			0.05%~1.43%
	Borrowing period and
Type of borrowings	repayment term	December31,2020
Bank borrowings
Unsecured borrowings	Before September 15, 2025	$	383,400
Unsecured borrowings	February 17,2022 Repay fully at maturity		500,000
Unsecured borrowings	Before September 15, 2025		489,900
Unsecured borrowings	Before November 15, 2025		231,100
Unsecured borrowings	Before September 15, 2025		400,000
Unsecured borrowings	Before September 15, 2025		377,300
Unsecured borrowings	July 21,2022 Repay fully at maturity		450,000
Unsecured borrowings	Before November 5, 2024		346,667
Secured borrowings	Before December 13, 2024		159,777
			3,338,144
Less: Current portion of long-term borrowings (			137,419)
	$		3,200,725
Interest rate range			0.50%~1.43%

Interest rate range

~41~

	Borrowing period and
Type of borrowings	repayment term		March31,2020
Bank borrowings
Secured borrowings	Before October 29, 2022	$	91,001
Unsecured borrowings	November 2,2021 Repay fully at maturity		500,000
Unsecured borrowings	Before November 5, 2024		390,000
Unsecured borrowings	February 17,2022 Repay fully at maturity		450,000
Unsecured borrowings	February 17,2022 Repay fully at maturity		500,000
Secured borrowings	Before December 13, 2024		130,646
			2,061,647
Less: Current portion of	long-term borrowings	(	119,717)
		$	1,941,930
Interest rate range			1.20%~1.43%

Interest rate range

Pursuant to the bank loans agreements with Taipei Fubon Bank, CTBC Bank and KGI 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.

(16) Pensions

• A. (a) The Company has a 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 six 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 (the “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) For the aforementioned pension plan, the Group recognised pension costs of $399 and $636 for the three months ended March 31, 2021 and 2020 respectively.

• (c) Expected contributions to the defined benefit pension plans of the Group for the year ending March 31, 2021 amount to $14,269.

• 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

~42~

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, these companies do not have further obligations.

  - (c) The pension costs under the defined contribution pension plans of the Group for the three months ended March 31,2021 and 2020 were $71,258 and $38,423, respectively.

• (17) Share-based payment

• A. Restricted stocks to employees.

For the three months ended March 31, 2021, 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	2019.03.20	8,500	3 years	Note 2
to employees
(Note1)

• Note 1: The remaining shares of Lextar in the original plan were transferred to the shares of the Company in accordance 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.

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

results and employees’ performance. Details of the share-based payment arrangements	are as follows:
		2021
Outstanding at January 1		5,950
Expired	(	2,550)
Outstanding at March 31		3,400
Exercisable at March 31(Note)		3,400

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

B. Employee stock options:

For the three months ended March 31,2021 and 2020, the share-based payment arrangements of

the Company ’ s subsidiary, United LED Corporation (Hong Kong) Limited, are as follows:

Type of arrangement	Grant date	Quantity granted (thousand shares)	Vestingconditions
Employee stock option	2010.8.1	1,500,000	Note 1

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

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

~43~

(18)	Long-term deferred revenue (shown under“Other non-current liabilities”) No.of shares Weighted-average exercise price No.of shares Weighted-average exercise price (in US dollars) (in US dollars) Options outstanding from beginning to the end of the period 1,048,700 0.0001 $ 1,048,700 0.0001 $ Options exercisable at end of the period 1,048,700 1,048,700 2021 2020 March 31,2021 December 31,2020 March 31,2020 Government grants revenue 313,243 $ 351,230 $ 406,928 $ Deferred technical services revenue 10,410 10,790 18,728 323,653 $ 362,020 $ 425,656 $	Long-term deferred revenue (shown under“Other non-current liabilities”) No.of shares Weighted-average exercise price No.of shares Weighted-average exercise price (in US dollars) (in US dollars) Options outstanding from beginning to the end of the period 1,048,700 0.0001 $ 1,048,700 0.0001 $ Options exercisable at end of the period 1,048,700 1,048,700 2021 2020 March 31,2021 December 31,2020 March 31,2020 Government grants revenue 313,243 $ 351,230 $ 406,928 $ Deferred technical services revenue 10,410 10,790 18,728 323,653 $ 362,020 $ 425,656 $
	March 31,2021 Government grants revenue 313,243 $ Deferred technical services revenue 10,410 323,653 $
		406,928 $ 18,728
		425,656 $

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 three months ended March 31,2021 and 2020 were $51,451 and $34,374 (shown under “Other revenue”), respectively.

• (19) Share capital

A. As of March 31, 2021, 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 $6,859,527 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):
2021 At January 1 1,074,649 Issue new shares 141,602 Effect of the joint share exchange 537,325) ( Expiration of restricted employee stock 701) ( At March 31 678,225	2020
	1,078,336 - - -
	1,078,336

~44~

• B. Epistar had completed the procedures for terminating the GDRs issued on September 22, 2009 and traded on the Luxembourg Stock Exchange in accordance with the requirements of the depository deed and custody deed ； 30,115 ordinary shares of Epistar had also been redeemed or delivered in accordance with relevant regulations.

• C. Treasury shares

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

Thousand shares/Thousand

Reason for reacquisition Held by subsidiaries Redemption shares held by objecting shareholders	At January1 10,365 3,687	Increase Decrease (Note) At March 31 701 ( 5,183) 5,883 - ( 1,843) 1,844 2021	Book value
			332,503 $ 159,647

Note ： Influence of conversion under joint share conversion agreement.

2020 Reason for reacquisition At January 1 Increase Decrease At March 31 Book value Held by subsidiaries 10,365 - - 10,365 $ 325,490

• (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 as follows:

Lighting Investment Corporation Book value Fair value Epistar Corporation Book value Fair value	March 31,2021 1,282 thousand shares 135,163 $ 105,283 $ 5,744 thousand shares 349,974 $ 471,541 $	December 31,2020 2,565 thousand shares 135,163 $ 106,181 $	March 31,2020
			2,565 thousand shares
			135,163 $ 66,171 $

Retirements of restricted

Retirements of restricted
employee stock Book value Fair value	701 thousand shares
	7,013 $ 57,573 $

~45~

(20) 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.

Share premium At January 1, 2021 35,015,440 $ Issue of new shares 10,308,626 Changes in interests in associates accounted for using equity method 47,669) ( Expiration of restricted employee stock 7,013 Effect of the joint share exchange 2,366,431) ( At March 31, 2021 42,916,979 $	Treasury share Changes in ownership interests in Difference between consideration and carrying amount of subsidiaries acquired Change in net equity of associates and joint ventures accounted for under equity transactions subsidiaries or disposed method - $ 978,202 $ 64,570 $ 57,244 $ - - - - - - - - - 978,202) ( 64,570) ( 57,244) ( - $ - $ - $ - $	Treasury share Changes in ownership interests in Difference between consideration and carrying amount of subsidiaries acquired Change in net equity of associates and joint ventures accounted for under equity transactions subsidiaries or disposed method - $ 978,202 $ 64,570 $ 57,244 $ - - - - - - - - - 978,202) ( 64,570) ( 57,244) ( - $ - $ - $ - $
		- $

(21)

Unappropriated retained earnings (Accumulated deficit) Treasury share Changes in ownership interests in Difference between consideration and carrying amount of subsidiaries acquired or Change in net equity of associates and joint ventures accounted for under equity Sharepremium transactions subsidiaries disposed method At January 1, 2020 37,984,477 $ 195,387 $ 854,214 $ 105,198 $ 73,496 $ Changes in interests in associates accounted for using equity method - - 121,312 - - At March 31, 2020 37,984,477 $ 195,387 $ 975,526 $ 105,198 $ 73,496 $ 2021 2020 At January 1 7,908,188) ($ 3,269,622) ($ Effect of the joint share exchange 7,908,188 - Loss for the period 259,930) ( 1,492,800) ( Remeasurement of defined benefit obligations 856) ( - At March 31 260,786) ($ 4,762,422) ($

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

~46~

  - unappropriated earnings are considered as distributable earnings, and shall be retained and appropriated in proportion to the number of shares held by each shareholder accordingly.

• 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.

• (22) Other equity items

		Unrealized gain or loss		Currencytranslation	Currencytranslation		Total
At January 1, 2021	($	271,742)	($		730,022)	($	1,001,764)
Effect of the joint share exchange		271,742			730,022		1,001,764
Revaluation - gross		150,652			-		150,652
Revaluation - tax		38,245			-		38,245
Currency translation
–Group		-	(		41,576)	(	41,576)
–Tax on Group		-			11,265		11,265
At March 31, 2021	$	188,897	($		30,311)	$	158,586
		Unrealizedgain or loss		Currency translation			Total
At January 1, 2020	($	500,148)	($		785,337)	($	1,285,485)
Revaluation - gross		74,146			-		74,146
Revaluation - tax	(	40,164)			-	(	40,164)
Currency translation
–Group		-	(		82,541)	(	82,541)
–Tax on Group		-			16,508		16,508
–Associates		-	(		3,780)	(	3,780)
–Tax on associates		-			756		756
At March 31, 2020	($	466,166)	($		854,394)	($	1,320,560)
Operating revenue
		Three	months ended		Three	months ended
		March		31,2021	March		31,2020
Revenue from contracts with	customers:
Sales revenue		$		6,810,661	$		3,310,818
Services revenue				30,956			71,476
Other operating revenue				37,242			5,434
		$		6,878,859	$		3,387,728

(23) Operating revenue

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:

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Other income and expenses–net Interest income Other income Three months ended March 31,2021 Epi/Chip Packages/ Modules Other Total Sales revenue 4,415,111 $ 2,357,456 $ 38,094 $ 6,810,661 $ Services revenue - - 30,956 30,956 Other operating revenue - - 37,242 37,242 6,878,859 $ Three months ended March 31, 2020 Epi/Chip Other Total Sales revenue 3,118,088 $ 192,730 $ 3,310,818 $ Services revenue - 71,476 71,476 Other operating revenue - 5,434 5,434 3,387,728 $ Three months ended Three months ended March 31,2021 March 31,2020 Other income Royalty and technical income 2,984 $ 7,267 $ Government grants revenue 51,451 51,682 Total 54,435 $ 58,949 $ Three months ended Three months ended March 31,2021 March 31, 2020 Interest income from bank deposits 11,159 $ 15,336 $ Other interest income 1,684 14,287 Net currency exchange gains 21,222 821 34,065 $ 30,444 $ Three months ended Three months ended March 31,2021 March 31,2020 Rental revenue 36,596 $ 33,301 $ Dividend income 38,246 8,144 Miscellaneous income 48,453 22,527 Total 123,295 $ 63,972 $	Other income and expenses–net Interest income Other income Three months ended March 31,2021 Epi/Chip Packages/ Modules Other Total Sales revenue 4,415,111 $ 2,357,456 $ 38,094 $ 6,810,661 $ Services revenue - - 30,956 30,956 Other operating revenue - - 37,242 37,242 6,878,859 $ Three months ended March 31, 2020 Epi/Chip Other Total Sales revenue 3,118,088 $ 192,730 $ 3,310,818 $ Services revenue - 71,476 71,476 Other operating revenue - 5,434 5,434 3,387,728 $ Three months ended Three months ended March 31,2021 March 31,2020 Other income Royalty and technical income 2,984 $ 7,267 $ Government grants revenue 51,451 51,682 Total 54,435 $ 58,949 $ Three months ended Three months ended March 31,2021 March 31, 2020 Interest income from bank deposits 11,159 $ 15,336 $ Other interest income 1,684 14,287 Net currency exchange gains 21,222 821 34,065 $ 30,444 $ Three months ended Three months ended March 31,2021 March 31,2020 Rental revenue 36,596 $ 33,301 $ Dividend income 38,246 8,144 Miscellaneous income 48,453 22,527 Total 123,295 $ 63,972 $	Other income and expenses–net Interest income Other income Three months ended March 31,2021 Epi/Chip Packages/ Modules Other Total Sales revenue 4,415,111 $ 2,357,456 $ 38,094 $ 6,810,661 $ Services revenue - - 30,956 30,956 Other operating revenue - - 37,242 37,242 6,878,859 $ Three months ended March 31, 2020 Epi/Chip Other Total Sales revenue 3,118,088 $ 192,730 $ 3,310,818 $ Services revenue - 71,476 71,476 Other operating revenue - 5,434 5,434 3,387,728 $ Three months ended Three months ended March 31,2021 March 31,2020 Other income Royalty and technical income 2,984 $ 7,267 $ Government grants revenue 51,451 51,682 Total 54,435 $ 58,949 $ Three months ended Three months ended March 31,2021 March 31, 2020 Interest income from bank deposits 11,159 $ 15,336 $ Other interest income 1,684 14,287 Net currency exchange gains 21,222 821 34,065 $ 30,444 $ Three months ended Three months ended March 31,2021 March 31,2020 Rental revenue 36,596 $ 33,301 $ Dividend income 38,246 8,144 Miscellaneous income 48,453 22,527 Total 123,295 $ 63,972 $
	15,336 $ 14,287 821
	30,444 $
		Three months ended March 31,2020 33,301 $ 8,144 22,527 63,972 $

(24) Other income and expenses– net

(25) Interest income

(26) Other income

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(27) Other gains and losses

(27)	Other gains and losses	Other gains and losses
(28) (29)	Finance costs Expenses by nature Three months ended Three months ended March 31,2021 March 31,2020 (Losses) gain on disposal of property, plant and 3,462) ($ 3,662 $ equipment Gains on disposal of intangible assets - 88 Losses on disposal of investments 4,058) ( - Net currency exchange (losses) gains 33,016) ( 8,240 Net losses on financial assets at fair value through profit or loss 34,238) ( 345,905) ( Miscellaneous losses 39,512) ( 96,462) ( Total 114,286) ($ 430,377) ($ Three months ended Three months ended March 31, 2021 March 31, 2020 Interest expense 24,500 $ 22,967 $ Other interest expense 8,142 7,066 32,642 $ 30,033 $ Three months ended Three months ended March 31,2021 March 31, 2020 Employee benefit expenses 1,944,256 $ 1,130,713 $ Depreciation charges on property, plant and equipment (Note) 1,199,086 $ 1,123,975 $ Amortisation charges on intangible assets 62,517 $ 66,093 $
		Three months ended March 31, 2020
		22,967 $ 7,066
		30,033 $
		Three months ended March 31, 2020
		1,130,713 $
		1,123,975 $
		66,093 $

Note: Depreciation amounting to $39,555 and $52,141 were recognized as other expenses for the three months ended March 31,2021 and 2020, respectively.

(30)	Employee benefit expenses Wages and salaries Labor and health insurance expenses Pension costs Other personnel expenses	Three months ended March 31,2021 1,660,784 $ 117,918 71,657 93,897 1,944,256 $	Three months ended March 31, 2020
			962,073 $ 73,212 39,059 56,369
			1,130,713 $

• A. According to the Articles of Incorporation of the Company, the Company shall distribute employees’ compensation and directors’ remuneration based on 10%~20% and 2% of the distributable profit of the current year, respectively. If the Company has accumulated deficit, earnings should be reserved to cover losses.

• B. The aforementioned amounts were recognised in salary expenses. For the three months ended March 31,2021 and 2020, the Company incurred loss and thus did not accrue employees’ compensation and directors’ and supervisors’ remuneration. Information about employees’ compensation and directors’ and supervisors’ 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

~49~

Taiwan Stock Exchange.

(31) Income tax

• A. Income tax expense (benefit)

• (a) Components of income tax expense (benefit):

		Three months ended	Three months ended		Three months ended	Three months ended
			March 31,2021			March 31,2020
Current tax:
Current tax on profits for the year	$		23,008	$		3,360
Prior year income tax overestimation	(		1,273)	(		1,065)
Total current tax			21,735			2,295
Deferred tax:
Origination and reversal of temporary
differences			273	(		39,695)
Total deferred tax			273	(		39,695)
Income tax expense (benefit)	$		22,008	($		37,400)
(b) The income tax (charge)/credit relating to components of other comprehensive income is as
follows:
		Three months ended			Three months ended
			March 31,2021			March 31,2020
Change in fair value of financial assets	($		38,245)	$		40,164
at fair value through other
comprehensive income
Currency translation differences	(		10,595)	(		16,508)
Share of other comprehensive income
of associates	(		670)	(		756)
Total	($		49,510)	$		22,900

B. As the Company was established on January 6, 2021, no income tax returns were filed before. The income tax returns through 2018 of both of the Company’s significant subsidiaries, Epistar and Lextar, have been assessed and approved by the Tax Authority.

(32) Losses per share

Losses per share
		Three	months ended March 31,	2021
			Weighted average
			number of outstanding
			ordinary shares		Losses per share
		Amount after tax	(share in thousands)		(in dollars)
Basic losses per share
Losses attributable to the parent	($	259,930)	677,290	($	0.38)
		Three	months ended March 31,	2020
			Weighted average
			number of outstanding
			ordinary shares		Losses per share
		Amount after tax	(share in thousands)		(in dollars)
Basic losses per share
Losses attributable to the parent	($	1,492,800)	539,168	($	2.77)

~50~

(33) Business combinations

• A. The Company acquired 100% ordinary shares of Lextar, primarily involved in manufacturing LED wafers, chips 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:

controlling interest at the acquisition date:
Purchase consideration Equity instruments Fair value of the non-controlling interest Fair value of the identifiable assets acquired and liabilities assumed Cash Financial assets at fair value through profit or loss - current Notes and accounts receivable (including related parties) Other financial assets-current Inventories Other current assets Financial assets at fair value through other comprehensive income- current Non-current financial assets at amortised cost Investments accounted for under equity method Property, plant and equipment Right-of-use assets Investment property Intangible assets Deferred income tax asset Other non-current asset Financial liabilities at fair value through profit or loss - current Notes and accounts receivable (including related parties) Payables on equipment Current lease liabilities Other current liabilities Non-current lease liabilities Other non-current liabilities Deferred income tax liabilities Total net assets Goodwill		January6,2021
	11,724,646 $ 239,900 11,964,546 3,763,629 20,629 2,817,398 456,787 1,088,852 210,038 116,471 39,340 270,320 4,714,507 384,837 463,943 427,417 52,158 505,036 4,894) ( 2,284,242) ( 174,620) ( 26,532) ( 1,176,593) ( 387,498) ( 7,731) ( 16,636) ( 11,252,616 711,930 $

• C. The fair value of property and plant is recorded $4,714,507 as the first estimate and is provisional pending receipt of the final valuations for those assets.

• D. The operating revenue included in the consolidated statement of comprehensive income since January 6,2021 contributed by Lextar Electronics Corp. was $2,315,564. Lextar Electronics Corp. also contributed profit before income tax of $77,217 over the same period. Had Lextar

~51~

Electronics Corp. been consolidated from January 1, 2021, the consolidated statement of comprehensive income would show operating revenue of $2,315,564 and loss before income tax of $77,217.

• (34) Supplemental cash flow information

• A. Investing activities with partial cash payments

	Three months ended	Three months ended		Three months ended	Three months ended
		March 31,2021			March 31,2020
Purchase of property, plant and equipment	$	1,092,325	$		584,917
Add: Opening balance of payable
on equipment		2,068,474			545,544
Add: Ending balance of prepayment
for equipment		281,286			304,667
Less: Ending balance of payable
on equipment	(	1,416,033)	(		649,528)
Less: Opening balance of prepayment
for equipment	(	265,386)	(		144,179)
Acquired from business combinations	(	24,999)			-
Cash paid during the period	$	1,735,667	$		641,421
Intangible assets:
	Three months ended			Three months ended
		March 31, 2021			March 31, 2020
Purchase of intangible assets	$	239	$		2,855
Add: Opening balance of payables (including current portion)		46,122			94,525
Less: Ending balance of payables (including current portion)	(	33,977)	(		82,560)
Cash paid during the period	$	12,384	$		14,820
B. Partial cash investing activities
	Three months ended			Three months ended
		March 31,2021			March 31,2020
Sale of property, plant and equipment	$	16,167	$		10,688
Add: Opening balance of receivables		2,000			2,000
Less: Ending balance of receivables	(	2,000)	(		2,000)
Cash collected during the period	$	16,167	$		10,688

~52~

C. Cash received from disposal of ownership interests in subsidiaries

	Three months ended	Three months ended	Three months ended	Three months ended
		March 31,2021		March 31, 2020
Disposal proceeds	$	-	$	-
Add: Opening balance of receivables		17,093		17,093
Less: Ending balance of receivables	(	17,093)	(	17,093)
Net cash provided by disposal of subsidiaries	$	-	$	-

(35) Changes in liabilities from financing activities

Short-term borrowing At January 1, 2021 1,537,574 $ Acquired from business combinations - Changes in cash flow from financing activities 25,131 Effect of interest - Additions - Effect of exchange rate 3,370) ( At March 31, 2021 1,559,335 $ Short-term borrowing At January 1, 2020 1,683,783 $ Changes in cash flow from financing activities 280,614) ( Effect of interest - Additions - Effect of exchange rate 15,616) ( At March 31, 2020 1,387,553 $	Long-term Short-term notes and bills borrowing payable 3,338,144 $ 568,519 $ - - 931,412 25,327) ( - - - 352,387 - 4,108) ( 4,269,556 $ 891,471 $ Long-term Short-term notes and bills borrowing payable 1,128,558 $ 346,318 $ 933,089 257,366 - - - - - 7,171) ( 2,061,647 $ 596,513 $	Lease Guarantee deposits Liabilities from financing activities liabilities received gross 1,286,306 $ 115,408 $ 6,845,951 $ 414,030 2,894 416,924 35,904) ( 521) ( 894,791 5,697 - 5,697 - - 352,387 2,239 766) ( 6,005) ( 1,672,368 $ 117,015 $ 8,509,745 $ Lease Guarantee deposits Liabilities from financing activities liabilities received gross 1,371,449 $ 62,370 $ 4,592,478 $ 38,361) ( 25,620 897,100 6,739 - 6,739 38,697 - 38,697 676) ( 997) ( 24,460) ( 1,377,848 $ 86,993 $ 5,510,554 $	Lease Guarantee deposits Liabilities from financing activities liabilities received gross 1,286,306 $ 115,408 $ 6,845,951 $ 414,030 2,894 416,924 35,904) ( 521) ( 894,791 5,697 - 5,697 - - 352,387 2,239 766) ( 6,005) ( 1,672,368 $ 117,015 $ 8,509,745 $ Lease Guarantee deposits Liabilities from financing activities liabilities received gross 1,371,449 $ 62,370 $ 4,592,478 $ 38,361) ( 25,620 897,100 6,739 - 6,739 38,697 - 38,697 676) ( 997) ( 24,460) ( 1,377,848 $ 86,993 $ 5,510,554 $
			5,510,554 $

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Group Country Lighting(BVI) Co., Ltd. Associates ES -LEDRU LLC. Associates Seoul Semiconductor Co., Ltd. Other related parties Seoul Viosys Co. ,Ltd. Other related parties LEDOLUX Sp. Zo. O. Associates LEDAZ Co., Ltd. Associates Interlight Optotech (HK) CO., Limited Associates Tekcore Co., Ltd. Associates TE Opto Corporation Associates Changzhou Chemsemi Co., Ltd. Associates GCS Holdings, Inc. Associates Leyard Optoelectronic Co., Ltd. Other related parties Leyard TV Technology Co., Ltd. Other related parties Shenzhen Leyard Opto-Electronic Co., Other related parties Leyard (HongKong) Co., Limited Other related parties LEYARD EUROPE s.r.o. Other related parties Jojnt Power eXponent, Ltd. Associates Chuzhou Bwin Other related parties CREELED HONG KONG LTD. Other related parties CreeLED, Inc. Other related parties Cree International S.à.r.l Other related parties Wellysun Automotive Optoelectric (Chuzhou) Co., Ltd. Other related parties Wellysun Inc. Other related parties Cree Venture LED Company Limited Other related parties AU Optronics Corp. Other related parties AU Optronics (Suzhou) Corp Ltd. Other related parties AU Optronics (Xiamen) Corp. Other related parties Darwin Precision’s (Suzhou) Co., Ltd. Other related parties Darwin Precision’s (Xiamen) Co., Ltd. Other related parties Darwin Precision’s Co., Ltd. Other related parties AUO Crystal Corp. Other related parties Briview Electronics (Hefei) co. ltd. Other related parties AU Optronics (Kunshan) Co., Ltd. Other related parties Fortech Electronics (Suzhou) Co., Ltd Other related parties Fortech Electronics (Kunshan) Co., Ltd Other related parties U-FRESH TECHNOLOGY INC. Other related parties

~54~

(2) Significant related party transactions and balances

A. Operating revenue:

gnificant related party transactions and balances Operating revenue:
Three months ended March 31,2021 Other related parties 592,622 $ Associates 180,385 Total 773,007 $	Three months ended March 31,2020
	210 $ 132,412
	132,622 $

All other sales prices to related parties are the same as those to third parties.

B. Purchases:

Purchases:
Other related parties	Three months ended March 31,2021 76,908 $	Three months ended March 31,2020
		50 $

Due to the product variety, the purchase price from the above related parties was not comparable to other suppliers while other products have no difference with market price. The payment terms to related parties are the same as those to third parties.

C. Receivables from related parties:

Others Associates Total	March 31,2021 446,542 $ 216,016 662,558 $	December 31,2020 279 $ 214,944 215,223 $	March 31,2020
			- $ 200,239
			200,239 $

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:
The other receivables from related parties arise and patent licensing transactions. Payables from related parties: March 31,2021 Others 31,181 $ Associates 2,441 Total 33,622 $ March 31,2021 Associates 162,145 $ Others 96,905 Total 259,050 $	mainly from sales of machinery and equipme December 31,2020 March 31,2020 8,556 $ 203 $ - - 8,556 $ 203 $ December 31,2020 March 31,2020 174,250 $ 217,754 $ - - 174,250 $ 217,754 $	March 31,2020
		203 $ - 203 $
		217,754 $ -
		217,754 $

The other receivables from related parties arise mainly from sales of machinery and equipment and patent licensing transactions.

E. Payables from related parties:

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

~55~

(3) Key management compensation

Key management compensation
Three months ended March 31,2021 Salaries and other short-term employee benefits 54,305 $ Post-employment benefits 940 Termination benefits - Total 55,245 $	Three months ended March 31,2020
	28,961 $ 677 17 29,655 $

8. PLEDGED ASSETS

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

Pledgrd assets Bank deposits (shown in "Other assets- other") Time deposits (Shown in "Other assets- other") Notes receivable Land, building and structures Machinery and office equipment	March 31, 2021 279,997 $ 499,252 207,373 554,646 169,269 1,710,537 $	December 31,2020 330,295 $ 162,885 197,396 270,683 63,111 1,024,370 $ Book value	March 31,2020 Purpose 183,345 $ Payables for bankers’ acceptance 120,896 Lease deposit, performance bond, security for provisional attachment, customer deposit, collateral deposits for provisional seizure 344,983 773,496 Long-term borrowings 74,460 Long-term borrowings 1,497,180 $

1. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

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

March 31, 2021 December 31, 2020 March 31, 2020

Contracted but not provided Property, plant and equipment $ 1,688,961 $ 1,135,090 $ 3,223,880

10. SIGNIFICANT DISASTER LOSS

None.

1. 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.

~56~

(2) Financial instruments

A Financial instruments by category

March 31, 2021 December 31, 2020 March 31, 2020

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 Notes receivable Accounts receivable Accounts receivable due from related parties Other receivables Other receivables due from related parties Guarantee deposits paid Other financial assets 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)	287,542 $ 5,253,464 7,100,070 1,218,813 8,702,804 662,558 286,736 33,622 41,720 400,157 23,987,486 $ 8,811 $ 1,559,335 891,471 9,618 4,177,024 259,050 4,663,182 4,269,556 - 117,014 15,955,061 $ 1,672,368 $	350,045 $ 4,384,300 5,228,011 1,086,061 6,288,351 215,223 163,487 8,556 12,320 504,783 18,241,137 $ - $ 1,537,574 568,519 11,002 1,998,922 174,250 4,387,779 3,338,145 - 115,408 12,131,599 $ 1,286,306 $	961,426 $ 3,753,157 6,048,049 1,867,990 6,268,036 200,239 205,351 203 12,342 330,552
			19,647,345 $
			- $ 1,387,553 596,513 8,660 1,634,452 217,754 2,646,708 2,061,647 35,944 86,993
			8,676,224 $
			1,377,848 $

~57~

• 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 Company under policies approved by the Board of Directors. Treasury and finance departments of the Company 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 Company 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 and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

==> picture [427 x 62] intentionally omitted <==

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

March 31, 2021
Foreign currency
amount Book value
(in Thousands) Exchange rate (in Thousands of NTD)
----- End of picture text -----

(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	$	347,837	28.535	$	9,925,529
RMB:NTD		486,016	4.344		2,111,254
Non-monetary items
USD:NTD		100,494	28.535		2,867,596
Financial liabilities
Monetary items
USD:NTD		113,087	28.535		3,226,938
RMB:NTD		232,053	4.344		1,008,038

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(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 (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	Foreign currency amount (in Thousands) 220,340 $ 464,597 97,092 89,698 246,593	Book value Exchange rate (in Thousands of NTD) 28.480 6,275,280 $ 4.377 2,033,543 28.480 2,769,539 28.480 2,554,596 4.377 1,079,338 December 31,2020 March 31,2020
	Foreign currency amount (in Thousands) 181,678 $ 539,289 103,103 54,378 247,707	Book value Exchange rate (in Thousands of NTD) 30.225 5,491,218 $ 4.2550 2,294,677 30.225 3,116,276 30.225 1,643,573 4.2550 1,053,993

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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. Three months ended March 31, 2021

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Unrealized exchange gain (loss)
Foreign currency
amount Book value
(in Thousands) Exchange rate (in Thousands of NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD $ - 28.535 ($ 3,760)
RMB:NTD - 4.344 ( 10,865)
Financial liabilities
Monetary items
USD:NTD - 28.535 ( 959)
RMB:NTD - 4.344 5,282
Three months ended March 31, 2020
Unrealized exchange gain (loss)
Foreign currency
amount Book value
(in Thousands) Exchange rate (in Thousands of NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD $ - 30.225 ($ 10,976)
RMB:NTD - 4.2550 ( 55,833)
Financial liabilities
Monetary items
USD:NTD - 30.225 5,926
RMB:NTD - 4.2550 15,535
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• v. Analysis of foreign currency market risk arising from significant foreign exchange variation:

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Three months ended March 31, 2021
Sensitivity analysis
Effect on profit Effect on other
Degree of variation or loss comprehensive income
(Foreign currency:
functional currency)
Financial assets
Monetary items
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(Foreign currency: functional currency) Financial assets Monetary items	Degree of variation or loss comprehensive income	Degree of variation or loss comprehensive income	Degree of variation or loss comprehensive income
USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD RMB:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD RMB:NTD	1% 99,255 $ - $ 1% 21,113 - 1% 32,269 - 1% 10,080 - Degree of variation Effect on profit or loss Effect on other comprehensive income 1% 54,912 $ - $ 1% 22,947 - 1% 16,436 - 1% 10,540 - Three months ended March 31,2020 Sensitivityanalysis
	Degree of variation 1% 1% 1% 1%	Effect on profit or loss
		54,912 $ 22,947 16,436 10,540	- $ - - -

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 three months ended March 31, 2021 and 2020 would have increased/decreased by $17,479 and $96,143, 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 $537,503 and $375,316, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

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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 $1,271 and $1,002 for the three months ended March 31, 2021 and 2020, respectively. The simulation is done on a quarterly basis to ensure that the potential maximum loss is within the limit set by the management.

• (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 March 31,2021, December 31,2020 and March 31,2020, the Group’s written-off financial assets that are still under recourse procedures all amounted to $16,753.

• 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 March 31,2021, December 31,2020 and March 31,2020 the provision matrix, loss rate methodology is as follows:

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Up to 30 days 31~90 days 91~180 days Over 180 days
Not past due past due past due past due past due Total
March 31, 2021
Expected loss rate 0~5% 0~5% 0~86% 0~100% 0~100%
Total book value $ 10,103,117 $ 439,655 $ 309,772 $ 120,212 $ 871,309 $ 11,844,065
Loss allowance $ 1,219 $ 1,312 $ 12,056 $ 99,262 $ 825,683 $ 939,532
Up to 30 days 31~90 days 91~180 days Over 180 days
Not past due past due past due past due past due Total
December 31, 2020
Expected loss rate 0~5% 0~5% 0~56% 0~100% 0~100%
Total book value $ 7,225,686 $ 326,702 $ 176,962 $ 869,951 $ 63,606 $ 8,662,907
Loss allowance $ 4,591 $ 13,490 $ 71,546 $ 766,225 $ 45,377 $ 901,229
Up to 30 days 31~90 days 91~180 days Over 180 days
Not past due past due past due past due past due Total
March 31, 2020
Expected loss rate 0.01%~5% 0.01%~5% 0.01%~56% 0.01%~100% 0.01%~100%
Total book value $ 8,032,790 $ 398,270 $ 413,886 $ 35,022 $ 165,985 $ 9,045,953
Loss allowance $ 410,674 $ 171 $ 8,337 $ 2,601 $ 82,351 $ 504,134
Individual provision Group provision Total
March 31, 2021
Expected loss rate 86.45%~100% 0%~100%
Total book value $ 883,753 $ 10,949,128 $ 11,832,881
Loss allowance $ 883,753 $ 55,779 $ 939,532
Individual provision Group provision Total
December 31, 2020
Expected loss rate 19.10%~100% 0%~100%
Total book value $ 869,582 $ 7,793,325 $ 8,662,907
Loss allowance $ 869,582 $ 31,647 $ 901,229
Individual provision Group provision Total
March 31, 2020
Expected loss rate 61.57%~100% 0.01%~100%
Total book value $ 58,226 $ 8,987,727 $ 9,045,953
Loss allowance $ 468,174 $ 35,960 $ 504,134
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vii. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable, and other receivables are as follows:

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2021
Accounts receivable
(including notes
receivable) Other receivables
At January 1 $ 858,748 $ 42,481
-
Acquired from business combination 13,071
-
Provision for impairment 31,720
-
Reversal of impairment ( 6,384)
-
Effect of exchange rate changes ( 104)
At March 31 $ 897,051 $ 42,481
2020
Accounts receivable
(including notes
receivable) Other receivables
At January 1 $ 10,672 $ 23,125
Provision for impairment 461,831 9,246
Write-offs ( 571) -
Effect of exchange rate changes ( 169) -
At March 31 $ 471,763 $ 32,371
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(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.

• 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 March 31,2021, December 31,2020 and March 31,2020, the Group held money market position of $7,182,058, $5,398,781 and $6,853,338, respectively, and those are expected to readily generate cash inflows for managing liquidity risk.

• iii. 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.

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Non-derivative financial liabilities: March 31, 2021 Short-term borrowings Short-term notes and bills payable Financial assets at fair value through profit or loss Notes payable Accounts payable (including related parties) Other payables	Less than 1year 1,559,335 $ 891,471 8,811 9,618 4,436,074 4,663,182 109,138 640,569 117,014 Less than 1year 1,537,574 $ 568,519 11,002 2,173,172 4,387,779 128,977 138,316 114,742 Less than 1year 1,387,553 $ 596,513 8,660 1,852,206 2,471,543 107,244 120,582 - 86,460	Between 1 and5 years - $ - - - - - 447,195 3,628,987 - Between 1 and5 years - $ - - - - 280,152 3,271,280 - Between 1 and5 years - $ - - - 175,165 316,962 1,990,312 35,943 -	Between5and 7years - $ - - - - - 1,116,035 - - Between 5 and 7 years - $ - - - - 116,566 - 666 Between5and 7years - $ - - - - 122,065 - - 533	Over 7years
				- $ - - - - - - - - Over 7 years
Lease liabilities
Long-term borrowings (including current portion) Deposit received Non-derivative financial liabilities: December 31, 2020 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other payables Lease liabilities Long-term accounts payable (including current portion) Deposit received Non-derivative financial liabilities: March 31, 2020 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable - related ( including related parties) Other payables Lease liabilities Long-term borrowings (including current portion) Long-term accounts payable (including current portion) Deposit received
				- $ - - - - 1,088,058 - - Over 7years
				- $ - - - - 121,741 - - -

• iv. 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.

(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.

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• 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.

received are approximate to their	fair values.
Financial liabilities: Long-term borrowings (including current portion) Financial liabilities: Long-term borrowings (including current portion) Financial liabilities: Long-term borrowings (including current portion)	Book value 4,269,556 $ Book value 3,338,145 $ Book value 2,061,647 $	Level 1 Level 2 - $ 4,302,069 $ Fair value March 31,2021 December 31,2020 Fair value		Level 3
				- $
		Level 1 Level 2 - $ 3,379,079 $ March 31,2020 Fair value		Level 3
				- $
		Level 1 - $	Level 2 2,091,192 $	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.

• 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 March 31, 2021 , December 31, 2020 and March 31, 2020 is as follows:

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

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March 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 Liabiliries Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Total March 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 136,040 $ 54,271 - 1,464,452 1,654,763 $ - $ Level 1 130,533 $ 40,237 460,640 631,410 $ Level 1 800,110 $ 5,179 223,508 1,028,797 $	Level 2 - $ - - - - $ - $ Level 2 - $ - - - $ Level 2 - $ - - - $	Level 3 83,987 $ - 13,244 3,789,012 3,886,243 $ 8,811 $ Level 3 179,275 $ - 3,923,660 4,102,935 $ Level 3 156,137 $ - 3,529,649 3,685,786 $	Total 220,027 $ 54,271 13,244 5,253,464
				5,541,006 $
				8,811 $
				Total
				309,808 $ 40,237 4,384,300
				4,734,345 $
				Total
				956,247 $ 5,179 3,753,157
				4,714,583 $

(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 three months ended March 31,2021 and 2020:

2020:
			2021			2020
		Finantial instruments			Finantial instruments
At January 1	$		4,102,935	$		3,465,868
Loss recognised in profit or loss	(		30,291)	(		1,625)
(Loss) gain recognised in other
comprehensive	(		129,718)			171,590
income
Disposals	(		43,525)			-
Additions			-			7,216
Acquired from business combination			8,811			-
Transfers into level 3	(		21,084)			42,648
Effect of foreign exchange	(		885)			89
At March 31	$		3,886,243	$		3,685,786

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

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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:

Unlisted shares Unlisted shares Unlisted shares Unlisted shares De-an Venture Capoital Co., Ltd. Non-derivative equity	Significant Fair value at Valuation unobservable March31,2021 technique input 2,819,374 $ Market comparable companies Price to book ratio multiple Discount for lack of marketability 8,510 Market comparable companies Enterprise value to operating income ratio multiple Discount for lack of marketability 276,561 Market comparable companies Price to earnings ratio multiple Discount for lack of marketability 762,594 Market comparable companies Enterprise value to EBITDA ratio multiple Discount for lack of marketability 19,204 Net asset value N/A instrument:	Range Relationship of (weighted average) inputs to fairvalue 1.10~6.95 The higher the multiple, the higher the fair value. 20%~30% The higher the discount for lack of marketability, the lower the fair value. 3.55 The higher the multiple, the higher the fair value. 20% The higher the discount for lack of marketability, the lower the fair value. 15.68~22.52 The higher the multiple, the higher the fair value. 20% The higher the discount for lack of marketability, the lower the fair value. 15.76~16.12 The higher the multiple, the higher the fair value. 30% The higher the discount for lack of marketability, the lower the fair value. - N/A	Relationship of inputs to fairvalue

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							Significant
		Fair value at			Valuation		unobservable	Range	Relationship of
		December31,2020			technique		input	(weighted average)	inputs to fairvalue
Non-derivative equity		instrument:
Unlisted shares		$	3,085,933		Market		Price to book ratio	0.99~5.45	The higher the multiple,
					comparable		multiple		the higher the fair value.
					companies
							Discount for lack of	20%~30%	The higher the discount
							marketability		for lack of marketability,
									the lower the fair value.
Unlisted shares			13,002		Market		Enterprise value to	3.06	The higher the multiple,
					comparable		operating income ratio		the higher the fair value.
					companies		multiple
							Discount for lack of	20%	The higher the discount
							marketability		for lack of marketability,
									the lower the fair value.
Unlisted shares			239,906		Market		Price to earnings ratio	14.61~21.77	The higher the multiple ,
					comparable		multiple		the higher the fair value.
					companies
							Discount for lack of	20%	The higher the discount
							marketability		for lack of marketability,
									the lower the fair value.
Unlisted shares			744,094		Market		Enterprise value to	18.19~19.46	The higher the multiple,
					comparable		EBIRDA ratio		the higher the fair value.
					companies		multiple
							Discount for lack of	30%	The higher the discount
							marketability		for lack of marketability,
									the lower the fair value.
De-an Venture			20,000		Net asset value		N/A	-	N/A
Capoital Co., Ltd.
							Significant
		Fair value at			Valuation		unobservable	Range	Relationship of
		March31,	2020		technique		input	(weighted average)	inputs to fairvalue
Non-derivative equity	instrument:
Unlisted shares	$	2,730,449		Market		Price to book ratio		0.83~3.30	The higher the multiple,
				comparable		multiple			the higher the fair value.
				companies
						Discount for lack of		20%~30%	The higher the discount
						marketability			for lack of marketability,
									the lower the fair value.
Unlisted shares			8,981	Market		Enterprise value to		2.55	The higher the multiple,
				comparable		EBITDA ratio			the higher the fair value.
				companies		multiple
						Discount for lack of		20%	The higher the discount
						marketability			for lack of marketability,
									the lower the fair value.
Unlisted shares			928,345	Market		Price to earnings ratio		19.23~21.02	The higher the multiple
				comparable		multiple			the higher the fair value.
				companies
						Discount for lack of		20%	The higher the discount
						marketability			for lack of marketability,
									the lower the fair value.
De-an Venture			18,011	Net asset value		N/A		-	N/A
Capoital 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

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have changed:

have changed:
Financial assets Equity instrument Financial assets Equity instrument Financial assets Equity instrument	Input Multiple Input Multiple Input Multiple	Change ±1% Change ±1% Change ±1%	Favourable Unfavourable Favourable Unfavourable change change change change 840 $ 840) ($ 37,890 $ 37,890) ($ March 31,2021 Recognised in profit Recognised in other or loss comprehensive income Favourable Unfavourable Favourable Unfavourable change change change change 1,793 $ 1,793) ($ 39,237 $ 39,237) ($ December 31,2020 Recognised in profit Recognised in other or loss comprehensive income Favourable Unfavourable Favourable Unfavourable change change change change 1,561 $ 1,561) ($ 35,296 $ 35,296) ($ March 31, 2020 Recognised in profit Recognised in other or loss comprehensive income
			Favourable Unfavourable change change 1,561 $ 1,561) ($ Recognised in profit or loss

(4) For the three months ended March 31, 2021, the impact of COVID-19 on the Group’s business

operations.

Except for certain countries, the COVID-19 pandemic has slowed down in the first quarter. In addition to actively cooperating with local governments’ epidemic precautions policies, the Group also holds higher standards in protecting its employees in order to prevent the production and sales of the Group from being severely affected by the pandemic. During the first quarter, although it was the traditional off-season with less workdays than the previous quarter, sales increased compared to the last quarter due to the strong demand for LED backlight, automotive LED and sensors, as well as sales of Mini LED increasing month by month. As a whole, the impact of COVID-19 on the operation of the Group is immaterial. The Group will continue to monitor the trend of the coronavirus COVID-19 pandemic and adjust its strategies in a timely manner.

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: None.

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

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

• 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 4.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 5.

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

• J. Significant inter-company transactions during the reporting periods: Please refer to table 6.

• (2) Information on investees

• Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 9.

(4) Major shareholders information

Major shareholders information: None.

14. SEGMENT INFORMATION

• (1) General information:

The Group operates business only in a single industry, primarily engaged in developing, manufacturing and sale of AlInGaP, aluminum gallium arsenide and indium gallium nitride and other epi-wafer chip and die. The Chief Operating Decision-Maker who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

• (2) 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.

• (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:

Three months ended March 31, 2021

segments and reconciliations is as follows: Three months ended March 31, 2021	s follows: 1
Epistar Group Revenues from external customers 4,563,295 $ Segment income (loss) 361,806) ( Segment assets 56,723,604 Three months ended March 31, 2020 Epistar Group Revenues from external customers 3,387,728 $ Segment income (loss) 1,568,350) ( Segment assets 58,278,882	Epistar Group	Lextar Group 2,315,564 $ 9,108) ( 14,043,329 Lextar Group - $ - -	Others - $ 4,558 341,697 Others - $ - -	Adjustments and Elimination Consolidated - $ 6,878,859 $ - 366,356) ( 594,195 71,702,825 Adjustments and Elimination Consolidated - $ 3,387,728 $ - 1,568,350) ( - 58,278,882
	3,387,728 $ 1,568,350) ( 58,278,882

~72~

ENNOSTAR INC. AND SUBSIDIARIES Loans to others THREE MONTHS ENDED March 31, 2021

No. Table 1	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended 31-Mar-21	Balance at 31-Mar-21	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 Expressed in thousands of NTD (Except as otherwise indicated)	Ceiling on total loansgranted Footnote Expressed in thousands of NTD (Except as otherwise indicated)
													Item	Value
1 1 1 2 2 3 4 5 6	Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Yenrich Technology Corporation Lextar Electronics Corp. Lextar Electronics (Suzhou) Corp. LEXTAR (SINGAPORE)Pte Ltd.	Jiangsu Canyang Optoelectronics Ltd Unikorn Semiconductor Corporation ENNOSTAR Inc. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Jiangsu Canyang Optoelectronics Ltd iReach Corporation ENNOSTAR Inc. 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 Other receivables- related parties Other receivables- related parties Other receivables- related parties	Y Y Y Y Y Y Y Y Y	438,400 $ 300,000 400,000 218,250 349,200 20,000 100,000 526,080 128,408	434,400 $ 300,000 400,000 217,200 347,520 20,000 100,000 521,280 128,408	130,320 $ - 250,000 - - 11,000 50,000 173,760 128,408	4.14% 1.56% 1.25% 4.35% 4.35% 1.56% 1.25% 1.00% 1.50%	Short- term financing 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 Working capital	- $ - - - - - - - -	Promissory Note Promissory Note Promissory Note None None Promissory Note/Equip ments None None None	434,400 $ 300,000 400,000 - - 39,181 - - -	3,797,862 $ 3,797,862 3,797,862 843,634 843,634 280,347 1,012,224 1,012,224 1,012,224	11,393,586 $ 11,393,586 11,393,586 1,265,451 1,265,451 280,347 4,048,896 2,652,121 1,939,998	Note 1 Note 1 Note 1 Note 2 Note 2 Note 3 Note 4 Note 5 Note 6

Table 1-1

• Note 1: 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 2: In accordance with Epicrystal (Changzhou) Co., 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 3: In accordance with Yen-Rich Technology Corporation Procedures for Provision of Loans: the limit on loans granted to a single party is 40% of its net equity, and the ceiling on total loans granted is 40% of its net equity.

• Note 4: In accordance with Lextar Electronics Corp. 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 5: In accordance with Lextar Electronics (SuZhou) Co., 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 Corp., 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 Corp.

• Note 6: 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 Corp., 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 Corp.

Table 1-1

ENNOSTAR INC. AND SUBSIDIARIES Provision of endorsements and guarantees to others THREE MONTHS ENDED March 31, 2021

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 March31,2021	Outstanding endorsement/ guarantee amount at March31,2021	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 Mainland China	Footnote
1 1 1 1 2	Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Episky Corporation (Xiamen) Ltd.	Episky Corp.(Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd Unikorn Semiconductor Corporation Yen-Rich Technology Corporation. SHENZHEN EPIKYLIN OPTOELECTRONI CS CO.,LTD	2 2 2 2 2	3,797,862 $ 3,797,862 3,797,862 3,797,862 482,599	1,540,890 $ 513,630 1,620,955 142,675 434,400	1,540,890 $ 513,630 1,620,955 142,675 434,400	353,581 $ - 527,050 - -	- $ - - - -	3.13 1.04 3.30 0.29 0.88	7,595,724 $ 7,595,724 7,595,724 7,595,724 772,159	N N N N N	N N N N 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 six 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.

Note3: 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. 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) March 31, 2021

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 March 31,	2021		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Tyntek Corporation.(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)	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	8,935 140 120,000 1,000 92,523 1,339,235 2,868,402	256,435 $ 2,143 1,748 148 48,902 170,082 83,987	2.97 17.07 7.50 10.00 7.39 12.24 12.57	256,435 $ 2,143 1,748 148 48,902 170,082 83,987

Table 3-1

.Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of March 31,	2021		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd.	Dominant Opto Technologies Sdn. Bhd. (Stock) Crystalwise Technology Inc. (Stock) XENIO CORPORATION (stock) Edison Opto Corp. (Stock) PlayNitride Inc. (Stock) OSTENDO TECHNOLOGIES,INC. (Stock) Nan Ya Photonics Incorporation (Stock) Everlight electronic(Fujian) Co.,Ltd. (Stock)	None 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 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	11,000,000 2,664,355 7,878 9,424,000 4,568,669 67,500 9,173,000 Cash USD 2,500,000	762,594 $ 84,513 - 219,108 450,475 - 276,561 60,807	10.00 3.06 0.06 7.69 10.67 4.50 19.90 10.00	762,594 $ 84,513 - 219,108 450,475 - 276,561 60,807

Table 3-2

As of March 31, 2021

					As of March 31,	2021
.Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Epistar JV Holding (BVI) Co.,Ltd. Episky Corp.(Xiamen) Ltd. Episky Corp.(Xiamen) Ltd. Episky Corp.(Xiamen) Ltd. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp.	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) XENIO CORPORATION (Stock)	None 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 financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss	Cash USD 48,000,000 Cash RMB 7,500,000 4,678,240 8,064,516 79,407 266,892 795,000 16,462	1,447,784 $ 22,177 45,472 21,474 - - - -	17.65 15.00 1.14 4.08 5.00 8.99 0.42 0.13	1,447,784 $ Not listed. No market value available. Not listed. No market value available. Not listed. No market value available. - - - -

Table 3-3

As of March 31, 2021

					As of March 31,	2021
.Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp.	FormoLight Technologies Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Edison Opto Corp. (Stock) Rigidtech Microelectronics Cops. (Stock) Le Dimond Opto Corporation (Stock) LEDLITEK Co., Ltd. (Stock) De-an Venture Capoital Co., Ltd. (Stock) iReach Corporation (Stock)	None None None None None None None Investee company accounted for under the equity method of Epistar	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 Non-current investments in equity instruments at fair value through other comprehensive income	2,038,230 562,018 10,705,000 1,550,253 1,100,000 50,000 2,000,000 370,000	14,621 $ 71,376 248,891 16,873 8,667 60,751 19,204 1,891	10 5.14 8.73 2.17 16.92 6.20 10.77 4.11	14,621 $ 71,376 248,891 16,873 8,667 60,751 19,204 1,891

Table 3-4

As of March 31, 2021

					As of March 31,	2021
.Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Corp. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd.	Tyntek corporation.(Stock) Edison Opto Corp. (Stock) ENNOSTAR Inc. (Stock) Taishin 1699 Money Market Fund (Beneficiary certificates) LEDLITEK Co.,LTD. (Stock) Verticle Inc. (Stock) Achrolux Inc. (Stock) PlayNitride Inc. (Stock) Advanced Photoelectronic Technology Limited.(Stock)	None None Parent company None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss 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 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	10,000 5,851,182 1,282,377 3,974,358 41,500 582,983 987,500 778,541 200,000	287 $ 136,040 105,283 54,271 50,424 - - 76,765 25,400	- $ 4.77 0.19 N/A 5.15 3.00 6.91 1.82 1.83	287 $ 136,040 105,283 54,271 50,424 - - 76,765 25,400	Note 1

Table 3-5

As of March 31, 2021

					As of March 31,	2021
.Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Full Star Enterprises Limited HUGA Holding (SAMOA) Ltd. HUGA Holding (SAMOA) Ltd. Epistar corporation Epistar corporation Epistar corporation Epistar corporation Epistar corporation	PlayNitride Inc. (Stock) China Crystal Technologies Co.,Ltd.(Stock) OEPIC SEMICONDUCTORS,INC.(Stock) Phecda Technology Co.,Ltd. Elit Fine Ceramics Co.,Ltd. Nanocrystal Technology Inc. Tyntek corporation. (Stock) ENNOSTAR Inc. (Stock)	None None None None None None None Parent company	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 investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	600,000 17,741,935 377,358 600,000 2,200,000 6,000,000 10,218,000 5,743,500	59,161 $ 47,243 8,510 - - - 293,257 471,541	1.40 8.97 8.93 2.11 4.68 11.11 3.40 0.84	59,161 $ 47,243 8,510 - - - 293,257 471,541	Note 1

Table 3-6

As of March 31, 2021

					As of March 31,	2021
.Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Lextar Electronics Corp. Jhong Wei Corporation Lextar Electronics Corp. China Electric Mfg.Corp. Lextar Electronics Corp. Tyntek corporation.(Stock) Wellybond Corporation China Electric Mfg.Corp. Wellybond Corporation Tyntek corporation.(Stock) Wellybond Corporation Wellysun Inc. First Vertical Laser Inc. CoreOptics Technology Inc. Note 1: Transferred from the Epistar’s stocks held as treasury stocks. Note 2: The company registrations had been canceled.		None None None None None Wellybond is a director of WELLYSUN INC. 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 investments in equity instruments at fair value through other comprehensive income	106,000 5,265,000 9,423,000 1,862,640 10,000 2,400,000 300,000	- $ 67,392 270,440 23,842 287 14,760 3,000	0.00 1.63 3.13 0.58 0.00 7.84 6.00	- $ 67,392 270,440 23,842 287 14,760 3,000	Note 2

Table 3-7

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

Three months ended March 31, 2021

Table 4

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. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd.	SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD LEDAZ Co., Ltd Cree Hong Kong LTD SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Sales Sales Sales	($ 575,863) ( 111,729) ( 139,276) ( 230,350) ( 229,265) ( 119,484) ( 126,246)	53 3 4 6 6 3 16	90 days after month- end closing 90 days after month- end closing 90 days after month- end closing 180 days after month- end closing	N/A N/A N/A N/A N/A N/A N/A	Normal Normal Normal Normal Normal Normal Normal	$ 646,144 137,782 74,356 228,590 420,015 120,349 168,311	35 2 1 3 6 2 8
	Episky Corporation (Xiamen) Ltd.					180 days after next month-end closing
	Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd.					90 days after month- end closing 90 days after month- end closing

Table 4-1

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)
Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. Epistar corporation ProLight Opto Technology Corporation	Epistar corporation Episky Corp.(Xiamen) Ltd. Epistar corporation Episky Corporation (Xiamen) Ltd. Leyard TV Technology Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Shanghai Welight Electronic Co., LTD	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Sales Sales Sales	($ 369,965) ( 363,266) ( 299,353) ( 216,178) ( 100,247) ( 65,850) ( 51,746)	47 46 52 37 92 2 24	150 days after month- end closing 90 days after month- end closing 30 days after month- end closing 90 days after month- end closing 30% after signing the contract, 30%: 7 days after shipment, 40%: 7days after acceptance 180 days after month- end closing 120 days after month- end closing	N/A N/A N/A N/A N/A N/A N/A	Normal Normal Normal Normal Normal Normal Normal	$ 563,608 994,112 105,843 256,336 - 223,203 115,408	25 45 14 35 - 3 47

Table 4-2

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)
Lextar Electronics Corp. Lextar Electronics (Chuzhou) Corp Lextar Electronics (Chuzhou) Corp Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar corporation Epistar corporation	Cree Hong Kong LTD Lextar Electronics Corp. Lextar Electronics (Suzhou) Corp. Jiangsu Canyang Optoelectronics Ltd. Epistar corporation Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epicrystal (Changzhou) Co., Ltd.	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Purchases Purchases Purchases Purchases Purchases	($ 173,532) ( 1,019,901) ( 208,582) 216,178 229,265 363,266 299,353 369,965	11 58 12 21 23 36 10 13	OA 60 days OA 90 days~ OA 120days OA 90 days~ OA120days 90 days after month- end closing	Note 3 Note 3 Note 2 N/A N/A N/A N/A N/A	Note 3 Note 3 Note 2 Normal Normal Normal Normal Normal	$ 90,728 1,067,161 447,831 ( 256,336) ( 420,015) ( 994,112) ( 105,843) ( 563,608)	8 46 19 16 25 60 4 22
						180 days after next month-end closing
						90 days after month- end closing 30 days after month- end closing 150 days after month- end closing

Table 4-3

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)
Epicrystal (Changzhou) Co., Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Shanghai Welight Electronic Co., LTD Lextar Electronics Corp. Lextar Electronics (Suzhou) Corp.	Epistar corporation Epistar corporation Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Epistar corporation ProLight Opto Technology Corporation Lextar Electronics (Chuzhou) Corp Lextar Electronics (Chuzhou) Corp	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	$ 119,484 230,350 575,863 126,246 65,850 51,746 1,019,901 208,582	22 29 71 25 13 99 66 96	90 days after month- end closing 180 days after month- end closing 90 days after month- end closing 90 days after month- end closing 180 days after month- end closing 120 days after month- end closing OA 90 days~ OA 120days OA 90 days~ OA 120days	N/A N/A N/A N/A N/A N/A Note 2 Note 2	Normal Normal Normal Normal Normal Normal Note 2 Note 2	($ 120,349) ( 228,590) ( 646,144) ( 168,311) ( 223,203) ( 115,408) ( 1,067,161) ( 447,831)	28 23 64 36 48 100 67 92

Note 1: Investee company accounted for under the equity method directly and indirectly. Note 2: The purchase price depends on the products. The purchase price and payment terms are not significantly different those of third parties. Note 3: The sales prices and transaction terms were not significantly different with the normal sales.

Table 4-4

ENNOSTAR INC. AND SUBSIDIARIES

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

March 31, 2021

			March 31, 2021	March 31, 2021
Table 5 Creditor	Counterparty	Relationship with the counterparty	Balance as at March 31,2021		Total	Turnover rate	Overdue receivables		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
Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Luxlite (Shenzhen) Corporation Limited LEDAZ Co., Ltd ENNOSTAR Inc. Jiangsu Canyang Optoelectronics Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Luxlite (Shenzhen) Corporation Limited Episky Corporation (Xiamen) Ltd. Unikorn Semiconductor Corporation Epicrystal (Changzhou) Co., Ltd.	Note 2 Note 2 Note 2 Parent company The Company’s indirectly owned subsidiary The Company’s indirectly owned subsidiary The Company’s indirectly owned subsidiary The Company’s indirectly owned subsidiary Subsidiary of the Company The Company’s indirectly owned subsidiary	$ 646,144 129,810 137,782 - 223,203 228,590 243,132 420,015 9,447 120,349	$ - - - 251,166 315,630 247 3 18,876 347,755 40,416	$ 646,144 129,810 137,782 251,166 538,833 228,837 243,135 438,891 357,202 160,765	6.33 - 3.34 0.00 0.47 8.05 0.00 2.21 0.13 2.78	- 16,159 - - 180,845 - 2 17,712 138,312 17,429	- Note 1 - - Note 1 - - - - Note 1	87,339 130,478 - - 43,611 - 85,069 - - 60,468	$ - - - - - - - - - -

Table 5-1

Creditor	Counterparty	Relationship with the counterparty	Balance as at March 31,2021	Balance as at March 31,2021	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
Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Luxlite (Shenzhen) Corporation Limited ProLight Opto Technology Corporation Lextar Electronics Corp. Lextar Electronics Corp. Lextar Electronics (Chuzhou) Corp Lextar Electronics (Chuzhou) Corp	Yen-Rich Technology Corporation Jiangsu Canyang Optoelectronics Ltd. Epistar corporation Episky Corporation (Xiamen) Ltd. Epistar corporation Episky Corporation (Xiamen) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Shanghai Welight Electronic Co., LTD Lextar Electronics (Chuzhou) Corp Fortech Electronics (Suzhou) Co., Ltd. Lextar Electronics Corp. Lextar Electronics (Suzhou) Corp.	Subsidiary of the Company Note 2 The Company’s indirectly owned subsidiary Note 2 The Company’s indirectly owned subsidiary Note 2 Note 2 Note 2 Note 2 Other related Note 2 Note 2	$ 141,159 168,311 563,975 994,112 105,843 256,336 133,571 115,408 599,886 101,419 1,067,161 447,831	$ 92,139 2,965 - - - - - - - - - -	$ 233,298 171,276 563,975 994,112 105,843 256,336 133,571 115,408 599,886 101,419 1,067,161 447,831	1.43 3.13 2.97 1.47 10.72 3.22 0.03 1.93 6.63 2.29 3.57 1.80	- 139 - 559,183 - - - 28,915 56,129 - - 215,529	- - - - - - - Note 1 - - - -	- - 124,056 - 85,736 - - 22,539 - - - -	$ - - - - - - - - - - - -

Note 1: The Company endeavored to purpose the overdue amount. Epistar has received $6,461 and $4,560 from Epicrystal (Changzhou) and Jiangsu Canyang, respectively ; Episky(xiamen) has received $16,159, from Luxlite (Shenzhen); Prolight has received $22,539 from Shanghai Welight.

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

Table 5-2

Table 6

ENNOSTAR INC.AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

Three months ended March 31, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledgeraccount	Amount	Transactionterms	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	Epistar corporation Lextar Electronics Corp. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd.	1 1 3 3 3 3 3 3	Other payable Other payable Sales Sales Sales Cost of goods sold Cost of goods sold Accounts receivable	$ 250,000 50,000 230,350 229,265 119,484 299,353 369,965 223,203	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	0.35 0.07 3.35 3.33 1.74 4.35 5.38 0.31

Table 6-1

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues or total assets(Note 3)
1 1 1 1 1 1 1 1 1	Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar corporation Epistar corporation	SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Luxlite (Shenzhen) Corporation Limited Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epicrystal (Changzhou) Co., Ltd. ENNOSTAR Inc. Jiangsu Canyang Optoelectronics Ltd. Unikorn Semiconductor Corporation	3 3 3 3 3 3 2 3 3	Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts payable Accounts payable Other receivable Other receivable Other receivable	$ 228,590 243,132 420,015 120,349 105,843 563,608 251,166 315,630 347,755	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 Based on contract terms Based on contract terms Based on contract terms	0.32 0.34 0.59 0.17 0.15 0.79 0.35 0.44 0.48

Table 6-2

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues or total assets(Note 3)
2 2 2 2 3 3 3 4 4	Lextar Electronics Corp. Lextar Electronics Corp. Lextar Electronics Corp. Lextar Electronics Corp. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd.	Lextar Electronics (Chuzhou) Corp Lextar Electronics (Chuzhou) Corp Lextar Electronics (Chuzhou) Corp ENNOSTAR Inc. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Luxlite (Shenzhen) Corporation Limited Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd.	3 3 3 2 3 3 3 3 3	Purchase Accounts payable Accounts receivable Other receivable Sales Accounts receivable Accounts receivable Sales Sales	$ 1,019,901 1,067,161 599,886 50,000 575,863 646,144 129,810 126,246 363,266	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 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	14.83 1.49 0.84 0.07 8.37 0.90 0.18 1.84 5.28

Table 6-3

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues or total assets(Note 3)
4 4 5 5 5 6 6 6 7	Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Lextar Electronics (Suzhou) Corp. Lextar Electronics (Suzhou) Corp. Lextar Electronics (Suzhou) Corp. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Luxlite (Shenzhen) Corporation Limited	Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Lextar Electronics (Chuzhou) Corp Lextar Electronics (Chuzhou) Corp Lextar Electronics (Chuzhou) Corp Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD	3 3 3 3 3 3 3 3 3	Accounts receivable Accounts receivable Purchase Accounts payable Other receivable Sales Accounts receivable Other payable Accounts receivable	$ 168,311 994,112 208,582 447,831 173,760 216,178 256,336 113,079 133,571	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 Conducted in the ordinary course of business with terms similar to those with third parties	0.23 1.39 3.03 0.62 0.24 3.14 0.36 0.16 0.19

Table 6-4

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues or total assets(Note 3)
8 9	ProLight Opto Technology Corporation Lextar (Singapore) Pte. Ltd.	Shanghai Welight Electronic Co., LTD Lextar Electronics (Chuzhou) Corp	3 3	Accounts receivable Other receivable	$ 115,408 128,408	Conducted in the ordinary course of business with terms similar to those with third parties Loans granted	0.16 0.18

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 6-5

ENNOSTAR INC. AND SUBSIDIARIES

Information on investees Three months ended March 31, 2021

Table 7

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 March31,2021	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue
Epistar Corporation iReach Corporation Taiwan Packaging, module design, manafacturing and sales of LED Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. British Virgin Islands Professional investment Epistar Corporation Full Star Enterprises Limited Hong Kong Professional investment Epistar Corporation Yen-Rich Technology Corporation. Taiwan Manufacturing and sales of electronic components Epistar Corporation Lighting Investment Corp. Taiwan Professional investment Epistar Corporation Tekcore Co., Ltd. Taiwan Manufacturing and sales of LED chips and LED lighting facilities	$ 70,000 14,960,129 166,785 600,000 2,161,814 1,159,686	$ 70,000 14,960,129 166,785 600,000 2,161,814 1,169,412	7,000,000 48,278 Cash USD$8,660,000 60,000,000 251,478,518 8,749,522	100.00 $ 10,045 100.00 8,529,162 100.00 295,365 100.00 630,108 100.00 2,307,704 20.22 27,692	($ 5,681) 84,224 ( 1,692) ( 83,988) ( 15,608) 4,736	($ 5,681) 60,159 ( 1,692) ( 83,988) ( 45,195) 4,052

Table 7-1

Investor Investee Location Main business activities	Initial investment amount	Initial investment amount	Shares held	as at March31,2021	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue
Epistar Corporation Unikorn Semiconductor Corporation Taiwan OEM manufacturing of iiiv semiconductors Epistar Corporation ProLight Opto Technology Corporation Taiwan Manufacturing and sales of LED wafers and chips Epistar Corporation SH Optotech Co., Ltd. Taiwan Sales of LED chips and LED lighting facilities Epistar Corporation TE Opto Corporation Taiwan Sales of LED chips and LED lighting facilities Epistar Corporation GaN Force Corporation Taiwan Design, manufacturing and sales of LED Epistar corporation Global Communication seiconductors LLC USA OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Epistar corporation Can Yang Investments Limited Hong Kong Professional investment	$ 1,006,350 101,500 31,792 9,200 77,700 277,554 66,745	$ 1,006,350 101,500 31,792 9,200 77,700 277,554 -	101,270,000 5,800,000 3,179,176 920,000 1,118,600 5,180,000 2,679,063	63.94 $ 110,794 8.52 83,837 49 3,225 40 43,540 64.32 ( 4,417) 5.67 248,247 3.53 54,372	($ 210,276) 1,358 ( 76) ( 660) ( 8,616) ( 80,436) 33,326	($ 133,499) ( 136) ( 39) ( 264) ( 5,542) ( 3,445) 1,078	Note 1

Table 7-2

Initial investment amount

Shares held as at March 31, 2021

Investor Investee Location Main business activities	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
Epistar JV Holding (BVI) Co.,Ltd. Country Lighting (BVI) Co.,Ltd. British Virgin Islands Professional investment Epistar JV Holding (BVI) Co.,Ltd. Crystal Light Enterprise Group Ltd. British Virgin Islands Professional investment Epistar JV Holding (BVI) Co.,Ltd. HUGA Holding (SAMOA) Limited SAMOA Professional investment Epistar JV Holding (BVI) Co.,Ltd. LiteStar JV Holding (BVI) Co.,Ltd. British Virgin Islands Professional investment Epistar JV Holding (BVI) Co.,Ltd. United LED Corporation (Hong Kong) Limited Hong Kong Professional investment Epistar JV Holding (BVI) Co.,Ltd. Episky (Hong Kong) Ltd. Hong Kong Professional investment Epistar JV Holding (BVI) Co.,Ltd. Can Yang Investments Limited Hong Kong Professional investment Epistar JV Holding (BVI) Co.,Ltd. Global Communication seiconductors LLC USA OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics	$ 89,843 6,754 334,967 3,408,835 2,029,760 2,124,096 4,291,894 149,149	$ 89,843 6,754 334,967 3,408,835 2,029,760 2,124,096 4,291,894 149,149	3,060,000 Cash USD200,000 12,551,035 10,882 67,000,165 Cash USD68,000,000 Cash USD141,272,700 2,750,000	36.43 $ 87,265 100 - 100 58,806 82.41 3,272,389 74.86 265,469 100 1,947,690 80.10 1,235,495 3.01 141,389	($ 1) ( 59) ( 10) 31,160 3,697 31,924 33,326 ( 80,436)	$ - ( 59) ( 10) 25,679 2,768 31,924 26,694 ( 2,420)

Table 7-3

Investor Investee Location Main business activities	Initial investment amount	Initial investment amount	Shares held	as at March31,2021	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue
GaN Force Corporation GV Semiconductor Inc. USA R&D and sales of electronic components GaN Force Corporation Joint Power eXponent, Ltd. Taiwan Power IC design and module sales Lighting Investment Ltd. LEDAZ CO., Ltd. Korea Engineering service of LED Lighting Investment Ltd. Interlight OPtotech (HK) Co.,Limited Hong Kong Packaging, manufacturing and sales of LED Lighting Investment Ltd. Epistar (Hong Kong) Limited Hong Kong Professional investment Lighting Investment Ltd. Luxlite (HK) Corporation Limited Hong Kong Professional investment LiteStar JV Holding (BVI) Co.,Ltd. Epicrystal (Hong Kong) Co. Ltd. Hong Kong Professional investment Lighting Investment Corp. LEDAZ CO., Ltd. Korea Engineering service of LED	$ 93,582 2,237 48,166 12,806 2,556 133,145 4,403,034 23,993	$ 93,582 - 48,166 12,806 2,556 133,145 4,403,034 23,993	8,330,000 507,000 88,460 429,000 82,850 38,000,000 146,600,000 44,065	100 ($ 6,306) 3.9 2,171 28.13 34,520 30 11,857 100 ( 182) 100 434,057 100 3,969,880 14.01 21,428	($ 5,871) ( 1,694) ( 35,180) ( 172) - ( 7,100) 31,173 ( 35,180)	($ 5,871) ( 66) ( 9,896) ( 52) - ( 7,100) 31,173 ( 4,406)

Table 7-4

Initial investment amount

Shares held as at March 31, 2021

Investor Investee Location Main business activities	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
Lighting Investment Corp. Lighting Investment Ltd. British Virgin Islands Professional investment Lighting Investment Corp. Yen-Rich Opto (Hong Kong) Limited Hong Kong Sales of LED light components Lighting Investment Corp. ProLight Opto Technology Corporation Taiwan Manufacturing and sales of LED wafers and chips Lighting Investment Corp. Can Yang Investments Limited Hong Kong Professional investment Lighting Investment Corp. GaNrich Semiconductor Corporation Taiwan Development and design services of LED lamps Lighting Investment Corp. LEDOLUX Sp.Zo.O. Poland Assembling and sales of LED bulbs Lighting Investment Corp. Global Communication seiconductors LLC USA OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Lighting Investment Corp. Jojnt Power eXponent, Ltd. Taiwan Power IC design and module sales	$ 152,701 133,433 318,929 72,436 62,370 133,455 148,942 5,515	$ 152,701 133,433 318,929 72,436 62,370 133,455 148,942 -	45,642 4,010,000 27,539,234 5,218,605 4,750,000 156,994 2,748,000 1,250,000	100 $ 703,068 100 157,368 40.46 399,959 6.87 105,966 100 8,181 60.00 12,303 3.01 142,139 9.62 5,352	($ 16,715) ( 2,972) 1,358 30,571 ( 6,172) ( 135) ( 80,436) ( 1,694)	($ 16,715) ( 2,972) ( 646) 2,289 ( 6,172) ( 81) ( 1,828) ( 163)

Table 7-5

Investor Investee Location Main business activities	Initial investment amount	Initial investment amount	Shares held	as at March31,2021	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue
Yen-Rich Technology Corporation. ProLight Opto Technology Corporation Taiwan Manufacturing and sales of LED wafers and chips Episky Corp.(Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. China-Changzhou Manufacturing and sales of LED chips and LED lighting facilities ProLight Opto Technology Corporation Prolight Opto Holding Corporation Seychelles Protessional investment Prolight Opto Holding Corporation ProLight Opto Technology Corporation Seychelles Protessional investment Epicrystal (Changzhou) Co., Ltd. Changzhou Chemsemi Co., Ltd. China-Changzhou OEM manufacturing of compound semiconductor RFID wafers and optoelectronic wafers. Full Star Enterprises Limited Global Communication seiconductors LLC USA OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Yen-Rich Opto (Hong Kong) Limited Global Communication seiconductors LLC USA OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Episky Corporation (Xiamen) Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. China Developing, manufacturing and sales of LED packages, modules and related applications	$ 19,994 147,472 4,402 4,403 469,590 113,896 62,371 122,036	$ 29,372 147,472 4,402 4,403 469,590 113,896 62,371 122,036	1,822,000 Cash USD5,200,000 150,000 150,000 Cash RMB110,000,000 2,100,000 1,150,000 Cash RMB29,100,000	2.68 $ 26,416 3.31 140,719 100 1,726 100 1,752 18.99 454,075 2.3 108,660 1.26 58,206 15.32 118,262	$ 1,358 33,383 813 813 ( 73,397) ( 80,436) 80,436) ( 20,287) (	($ 50) 1,105 813 813 ( 13,939) ( 1,027) 1,211) ( 3,912) (

Table 7-6

Initial investment amount Shares held as at March 31, 2021

Investor Investee Location Main business activities	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
Yen-Rich Technology Corporation Global Communication seiconductors LLC USA OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics GaNrich Semiconductor Corporation Global Communication seiconductors LLC USA OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Yen-Rich Technology Corporation Amengine Corporation Taiwan Developing and sales of medical optical sensor modules. Episky Corporation (Xiamen) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD China Sales of LED chips and LED lighting facilities Unikorn Semiconductor Corporation Global Communication seiconductors LLC USA OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Lextar Electronics Corp. Lextar (Singapore) Pte. Ltd. Singapore Professional investment Lextar Electronics Corp. Liang Li Venture Corp Taiwan Professional investment Lextar Electronics Corp. Wellypower Optronics Corporation British Virgin Islands Professional investment	$ 228,748 54 20,000 43,770 1,051 2,709,310 25,374 44,898	$ 228,748 54 12,050 43,770 - 2,709,310 25,374 44,898	4,113,000 1,000 3,100,000 Cash RMB10,000,000 20,000 90,270 3,000 5,153	4.5 $ 212,743 - 52 58.59 13,215 100 68,883 0.02 1,051 100 2,440,773 100 16,878 100 148,443	($ 80,436) ( 80,436) ( 2,317) 25,623 ( 80,436) 8,935 ( 686) 563	($ 4,344) ( 1) ( 1,020) 25,623 - 8,935 ( 686) 563	Note 2

Table 7-7

Initial investment amount Shares held as at March 31, 2021

Investor Investee Location Main business activities	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
Lextar Electronics Corp. Apower Optronics Corporation British Virgin Islands Professional investment Lextar Electronics Corp. Wellybond Corporation Taiwan Professional investment Lextar Electronics Corp. Wellybond Optronics HK Limited Hong Kong Professional investment Lextar Electronics Corp. Trendylite Corporation Taiwan sales Lextar Electronics Corp. First Vertical Laser Inc. Taiwan Design and manufacturing VCSEL Lei chip Lextar Electronics Corp. HEXAWAVE INC. Taiwan Manufacturing and sales of compound semiconductor materials and modules. Lextar Electronics Corp. VOGITO INNOVATION CO., LTD. Taiwan Design of lighting. Wellybond Corporation First Vertical Laser Inc. Taiwan Design and manufacturing VCSEL Lei chip	$ 381,638 396,484 17,888 18,100 93,616 147,506 1,000 117,905	$ 381,638 396,484 17,888 18,100 93,616 147,506 1,000 117,905	31,600 40,000 63,000 2,715 5,699 12,716 100 7,279	100 $ 1,065,254 100 258,058 100 11,040 90.5 39,610 22.99 46,075 31.69 111,129 50 1,356 29.37 58,747	$ 4,479 ( 15,674) 4 759 ( 14,262) ( 16,525) 46 ( 14,262)	$ 4,479 ( 15,674) 4 687 ( 4,197) ( 5,605) 23 ( 5,350)

Table 7-8

Investor Investee Location Main business activities	Initial investment amount	Initial investment amount	Shares held	as at March31,2021	Net profit (loss) of the investee for the three months ended March 31,2021	Investment income (loss) recognised by the Company for the three months ended March 31, 2021	Footnote
	Balance as at March31,2021	Balance as at December 31, 2020	Number of shares （Note）	Ownership (%) Bookvalue
Wellybond Corporation HEXAWAVE INC. Taiwan Manufacturing and sales of compound semiconductor materials and modules Wellybond Corporation WellyHertz Electronics Corp. Taiwan Manufacturing and sales of switching power supply modules. Wellybond Corporation Jojnt Power eXponent, Ltd. Taiwan IC design Lextar (Singapore) Pte. Ltd. Lextar Electronics Korea Ltd. Korea Sale of light-emitting diodes and after-sales service. Lextar (Singapore) Pte. Ltd. Aurora International Lighting Corporation Limite Hong Kong Sales of lighting. Liang Li Venture Corp First Vertical Laser Inc. Taiwan Design and manufacturing VCSEL Lei chip	$ 147,494 10,000 33,000 3,025 204,136 15,332	$ 147,494 10,000 - 3,025 204,136 15,332	12,715 1,000 2,200 22 2,000 950	31.68 $ 111,120 90.91 9,383 16.92 32,250 100 4,098 20 186,185 3.83 7,521	($ 16,525) ( 679) ( 4,311) 94 ( 7,312) ( 14,262)	($ 5,605) ( 617) ( 750) 94 469 ( 686)

Note1: Preferred stock $6,350 thousands (1,270 thousand shares) were included in the number of shares but excluded in calculating the shareholder’s ownership (%).

Note2: The group holds two seats of 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 7-9

ENNOSTAR INC. AND SUBSIDIARIES

Information on investments in Mainland China

Three months ended March 31, 2021

Table 8

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, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31, 2021	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2021	Net income of investee as of Marchr 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended March 31, 2021 （Note 2）	Book value of investments in Mainland China as of March 31, 2021	Accumulated amount of investment income remitted back to Taiwan as of March 31,2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Episky Corporation (Xiamen) Ltd. United LED Shandong Corporation Epicrystal Corporation (Changzhou) Ltd. Luxlite (Shenzhen) Corporation Limited KAISTAR Lighting (Xiamen) Co., Ltd.	Manufacturing and sales of LED chips and LED lighting facilities Manufacturing and sales of LED chips and LED lighting facilities Manufacturing and sales of LED chips and LED lighting facilities Sales of LED lighting facilities Manufacturing and sales of LED chips and LED lighting facilities	$ 1,940,380 2,396,940 4,479,995 85,605 7,761,486	2 2 2 2 2	$ 1,940,380 1,819,106 3,412,786 48,534 1,456,997	$ - - - - -	$ - - - - -	$ 1,940,380 1,819,106 3,412,786 48,534 1,456,997	$ 31,924 3,788 33,383 ( 7,356) -	100.00 74.86 76.95 100.00 18.77	$ 31,924 2,836 25,690 ( 7,356) -	$ 1,947,683 278,582 3,271,577 304,594 1,447,784	$ - - - 55,073 -	2(3) 2(3) 2(2) 2(2) 2(3)

Table 8-1

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, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31, 2021	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2021	Net income of investee as of Marchr 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended March 31, 2021 （Note 2）	Book value of investments in Mainland China as of March 31, 2021	Accumulated amount of investment income remitted back to Taiwan as of March 31,2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Everlight Electronics (Fujian) Co., Ltd APT Electronics Co., Ltd. China Crystal Technologies Co.,Ltd. Ufeco Technology Inc. Very Optoelectronics (HUI ZHOU) Co., Ltd.	Manufacturing and sales of LED backlight and related parts Developing, manufacture and sale of LED extension and chip, module and light instrument Developing, manufacture and sale of gallium arsenide unit crystal and chips Developing and manufacturing LED application and sales of selfproduct Research and development, manufacturing and sale of LED packaging; research and development, manufacturing and sale of backlight module, lighting modules and accessories	713,375 1,787,536 859,093 71,338 434,400	2 2 2 2 2	71,338 295,177 95,782 7,432 208,880	- - - - -	- - - - -	71,338 295,177 95,782 7,432 208,880	- - - - -	10.00 11.80 8.97 - -	- - ( 13,656) - -	60,807 - 47,243 - -	- - - - -	2(3) 2(3) 2(3) 2(3) 2(3)

Table 8-2

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, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31, 2021	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2021	Net income of investee as of Marchr 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended March 31, 2021 （Note 2）	Book value of investments in Mainland China as of March 31, 2021	Accumulated amount of investment income remitted back to Taiwan as of March 31,2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Ningbo Formosa Epitaxy Incorporation Jiangsu Canyang Optoelectronics Ltd. Shanghai Welight Electronic Co., LTD. LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. Lextar Electronics (Suzhou) Corp. Lextar Electronics (Xiamen) Corp.	Manufacturing and sales of LED chips and LED lighting facilities Manufacturing and sales of LED chips and LED lighting facilities Wholesale and export and import of LED and related electronic products Developing, manufacturing and sales of LED packages, modules and related applications. Manufacturing of LED wafer, light bars and modules. Manufacturing of LED wafer, light bars and modules.	$ 5,707 5,478,720 4,280 825,360 3,722,205 32,759	2 2 2 2 2 2	$ 48,031 2,272,034 4,280 171,630 3,585,860 32,759	- - - - - -	- - - - - -	$ 48,031 2,272,034 4,280 171,630 3,585,860 32,759	($ 59) 33,344 813 ( 20,287) 14,115 ( 1,002)	- 90.50 51.66 21.53 100.00 100.00	($ 59) 30,061 813 ( 5,629) 14,115 ( 1,002)	$ - 1,395,834 1,911 166,200 3,275,666 14,928	- - - - - -	2(3) 2(3) 2(2) 2(3) 2(2) 2(3)

Table 8-3

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, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31, 2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three months ended March 31, 2021	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2021	Net income of investee as of Marchr 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended March 31, 2021 （Note 2）	Book value of investments in Mainland China as of March 31, 2021	Accumulated amount of investment income remitted back to Taiwan as of March 31,2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Chuzhou Bwin Lextar Electronics (Suzhou) Corp.	Developing, manufacturing, sales of metal and plastic technical products. Manufacturing of LED wafer, light bars and modules.	$ 260,640 3,094,825	2 2	$ - -	- -	- -	$ - -	($ 2,463) 50,686	48.33 100.00	($ 1,939) 50,686	$ 108,120 2,959,904	- -	2(3) 2(2)

Table 8-4

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of March31,2021	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	$ 11,703,308 $ 3,633,067	$ 12,689,113 $ 4,044,862	$ 24,097,058 $ 6,101,434

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

1. Direct investment in Mainland China companies;

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

3. Other ways.

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 accountants;

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

4. Others:

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.

Table 8-2

ENNOSTAR INC. AND SUBSIDIARIES

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

Three months ended March 31, 2021

Table 9

Expressed in thousands of NTD

(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 March 31,2021	%	Balance at March 31,2021	Purpose	Maximum balance during the three months ended March 31, 2021	Balance at March 31,2021	Interest rate	Interest during the three months ended March31,2021
LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Shanghai Welight Electronic Co., LTD Lextar Electronics (Chuzhou) Corp Jiangsu Canyang Optoelectronics Ltd. Epicrystal (Changzhou) Co., Ltd. Lextar Electronics (Chuzhou) Corp	$ 104,674 230,350 229,265 119,484 65,850 51,746 - ( 299,353) 369,965) ( 1,019,901) (	2 3 3 2 1 1 - 4) ( 5) ( 15) (	$ - - - 4,225 - - - - - -	- - - - - - - - - -	$ 64,666 228,590 420,015 120,349 223,203 115,408 599,886 105,843) ( 563,608) ( 1,067,161) (	- $ - - - 1 1,540,890 - - - 513,630 - - 1 - ( 0 ) - 1) ( - 1) ( -		- - - - - - - - - -	$ - - - - 438,400 - - - - -	$ - - - - 434,400 - - - - -	- - - - - - - - - -	$ - - - - 1,359 - - - - -

Table 9-1