ENNOSTAR - Interim / Quarterly Report 2021

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT SEPTEMBER 30, 2021 AND 2020

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

PWCR 21000139

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 September 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three-month and nine-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the nine-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$7,685,038 thousand and NT$8,485,907 thousand, constituting 9.84% and 14.13% of the consolidated total assets as at September 30, 2021 and 2020, respectively, total liabilities amounted to NT$2,322,565 thousand and NT$1,690,331 thousand, constituting 9.64% and 10.70% of the consolidated total liabilities as at September 30, 2021 and 2020 respectively, and the total comprehensive loss amounted to NT$274,651 thousand, NT$298,367 thousand, NT$ 750,198 thousand and NT$1,147,013 thousand, constituting (23.88%), 36.43%, (47.49%) and 31.27% of the consolidated total comprehensive income for the three-month and nine-month periods then ended, respectively. The balance of these investments accounted for under the equity method amounting to NT$1,498,926 thousand and NT$644,447 thousand, respectively, and the comprehensive (loss) income recognized from associates and joint ventures accounted for under the equity method amounting to NT($36,029) thousand, NT$824 thousand, NT($84,732) thousand and NT$5,065 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 September 30, 2021 and 2020, and its consolidated financial performance for the three-month and nine-month periods then ended and its consolidated cash flows for the nine-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 successor company of Epistar Corporation. Thus, Ennostar Inc., in its consolidated financial statements, accounted for the relevant assets and liabilities received using the book values in the financial statements of Epistar Corporation. Also, Ennostar Inc. restated the prior period consolidated financial statements as if Epistar Corporation had always been consolidated since the beginning.

Li, Tien-Yi

Chou, Chien-Hung

For and on behalf of PricewaterhouseCoopers, Taiwan November 10, 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 independent auditors' review report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic[of China, and their applications in practice.]

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2021, DECEMBER 31, 2020 AND SEPTEMBER 30, 2020

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30, 2021 and 2020 are reviewed, not audited)

Assets	Notes	September 30, 2021 AMOUNT % `$` `11,332,333` `15` `209,169` `-` `1,303,301` `2` `11,956,070` `15` `824,622` `1` `244,534` `-` `29,896` `-` `5,807,885` `7` `1,419,486` `2` `519,165` `1` `33,646,461` `43` `65,371` `-` `4,902,464` `6` `2,662,877` `4` `24,462,416` `31` `1,952,370` `3` `693,616` `1` `4,848,465` `6` `4,080,082` `5` `806,253` `1` `44,473,914` `57` `$` `78,120,375` `100` (Continued)	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`	September 30, 2020	September 30, 2020
		AMOUNT `$` `11,332,333` `209,169` `1,303,301` `11,956,070` `824,622` `244,534` `29,896` `5,807,885` `1,419,486` `519,165` `33,646,461` `65,371` `4,902,464` `2,662,877` `24,462,416` `1,952,370` `693,616` `4,848,465` `4,080,082` `806,253` `44,473,914` `$` `78,120,375` (Continued)	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 `$` `6,511,825` `189,630` `1,340,481` `5,947,942` `238,354` `290,595` `2,133` `3,016,426` `1,006,308` `479,045` `19,022,739` `155,946` `4,110,006` `1,657,215` `21,786,208` `1,509,037` `-` `7,362,182` `3,948,721` `486,482` `41,015,797` `$` `60,038,536`	%
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 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) 8 6(2) 6(3) 6(6) 6(7) 6(8) 6(9) 6(31)				`11` `-` `2` `10` `-` `1` `-` `5` `2` `1`
					`32`
					`-` `7` `3` `36` `2` `-` `12` `7` `1`
					`68`
					`100`

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2021, DECEMBER 31, 2020 AND SEPTEMBER 30, 2020

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of September 30, 2021 and 2020 are reviewed, not audited)

					September 30, 2021	September 30, 2021			December 31, 2020	December 31, 2020			September 30, 2020	September 30, 2020
	Liabilities andEquity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(12) and 8		`$`	`4,722,870`		`6`	`$`	`1,537,574`		`3`	`$`	`1,400,324`	`2`
2110	Short-term notes and bills	6(13) and 8
	payable				`796,300`		`1`		`568,519`		`1`		`552,312`	`1`
2120	Financial liabilities at fair value
	through profit or loss - current				`951`		`-`		`-`		`-`		`-`	`-`
2150	Notes payable				`10,246`		`-`		`11,002`		`-`		`10,913`	`-`
2170	Accounts payable				`4,058,201`		`5`		`1,998,922`		`4`		`1,539,968`	`3`
2180	Accounts payable - related	7
	parties				`448,782`		`1`		`174,250`		`-`		`275,285`	`-`
2200	Other payables	6(14) and 7			`5,266,917`		`7`		`4,387,779`		`8`		`4,365,828`	`7`
2230	Current income tax liabilities				`72,835`		`-`		`14,004`		`-`		`4,480`	`-`
2280	Current lease liabilities				`112,666`		`-`		`113,241`		`-`		`115,045`	`-`
2320	Long-term liabilities, current	6(15) and 8
	portion				`131,684`		`-`		`137,419`		`-`		`727,820`	`1`
2399	Other current liabilities - others				`504,260`		`1`		`201,452`		`-`		`346,322`	`1`
21XX	Current Liabilities				`16,125,712`	`21`			`9,144,162`	`16`			`9,338,297`	`15`
	Non-current liabilities
2540	Long-term borrowings	6(15) and 8			`3,977,350`		`5`		`3,200,725`		`6`		`3,011,647`	`5`
2570	Deferred income tax liabilities	6(31)			`1,867,426`		`2`		`1,736,775`		`3`		`1,668,295`	`3`
2580	Non-current lease liabilities				`1,470,937`		`2`		`1,173,065`		`2`		`1,211,896`	`2`
2600	Other non-current liabilities	6(18)			`642,750`		`1`		`562,985`		`1`		`564,645`	`1`
25XX	Non-current liabilities				`7,958,463`	`10`			`6,673,550`	`12`			`6,456,483`	`11`
2XXX	Total Liabilities				`24,084,175`	`31`			`15,817,712`	`28`			`15,794,780`	`26`
	Equity attributable to owners of
	parent company
	Share capital	6(19)
3110	Share capital - common stock				`6,852,514`		`9`		`10,887,014`	`20`			`10,887,014`	`18`
	Capital surplus	6(20)
3200	Capital surplus				`43,237,747`	`55`			`36,115,456`	`65`			`36,048,813`	`60`
	Retained earnings	6(21)
3350	Unappropriated retained
	earnings (accumulated deficit)				`1,727,013`		`2 (`		`7,908,188) (`	`14) (`			`3,292,119) (`	`5 )`
	Other equity interest	6(22)
3400	Other equity interest				`89,629`		`- (`		`1,001,764) (`		`2) (`		`1,389,090) (`	`2 )`
3500	Treasury stocks	6(19)	`(`		`294,810 )`		`- (`		`485,137) (`		`1) (`		`325,490) (`	`1 )`
31XX	Equity attributable to
	owners of the parent				`51,612,093`	`66`			`37,607,381`	`68`			`41,929,128`	`70`
36XX	Non-controlling interest				`2,424,107`		`3`		`2,103,915`		`4`		`2,314,628`	`4`
3XXX	Total equity				`54,036,200`	`69`			`39,711,296`	`72`			`44,243,756`	`74`
3X2X	Total liabilities and equity			`$`	`78,120,375`	`100`		`$`	`55,529,008`	`100`		`$`	`60,038,536`	`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 AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

Items	Notes	Threemonths ended September30	Threemonths ended September30
		2021	2020
4000 Sales revenue 5000 Operating costs 5900 Operating margin (loss) 5910 Unrealized (profit) loss from sales 5920 Realized profit (loss) from sales 5950 Net operating margin (loss) Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit profit (loss) 6000 Total operating expenses 6500 Other income and expenses - net 6900 Operating profit (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) gain of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit (loss) before income tax 7950 Income tax expense 8200 Profit (loss) for the period

(Continued)

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

Items	Notes	Threemonths ended September30	Threemonths ended September30
		2021	2020
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 (loss) from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive loss that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income (loss) 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 loss that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive income (loss) 8500 Total comprehensive income (loss) Profit (loss) attributable to: 8610 Equity holders of the parent company 8620 Non-controlling interest Comprehensive income (loss) attributable to: 8710 Equity holders of the parent company 8720 Non-controlling interest Earnings (loss) per share (in dollars) 9750 Total basic earnings (loss) per share 9850 Total diluted earnings (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

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

Notes				Equityattributable to owners of th	Equityattributable to owners of th	Equityattributable to owners of th	parent	parent				Non-controlling interest	Total equity
	Share capital - common stock	Capital surplus		Retained earnings			Otherequityinterest		Treasurystocks		Total
			Legal reserve	Special reserve	Unappropriated retained earnings(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(20) 6(20) 6(22) 6(21) 6(22) 6(21) 6(20) 6(20) 6(19)	`$` `10,887,014` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `10,887,014` `$` `10,887,014` `-` `-` `-` `1,416,020` `-` `-` `-` `-` `-` `-` `(` `7,013 )` `(` `5,443,507 )` `$` `6,852,514`	`$` `39,212,772` `-` `-` `-` `-` `-` `(` `3,269,622 )` `-` `(` `18,325 )` `5,704` `116,619` `1,665` `-` `-` `$` `36,048,813` `$` `36,115,456` `-` `-` `-` `10,308,626` `274,076` `(` `7,754 )` `-` `-` `-` `6,777` `7,013` `(` `3,466,447 )` `$` `43,237,747`	`$` `161,423` `-` `-` `-` `(` `161,423` `)` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-` `$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-`	`$ 318,465` `-` `-` `-` `-` `(` `318,465` `)` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-` `$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-`		`($` `3,749,510` `)` `(` `3,504,573` `)` `-` `(` `3,504,573` `)` `161,423` `318,465` `3,269,622` `-` `-` `-` `-` `-` `212,454` `-` `($` `3,292,119` `)` `($` `7,908,188` `)` `1,736,600` `(` `856` `)` `1,735,744` `-` `-` `-` `-` `-` `(` `8,731` `)` `-` `-` `7,908,188` `$` `1,727,013`	`($ 785,337 )` `-` `(` `76,763 )` `(` `76,763 )` `-` `-` `-` `-` `-` `(` `7,415 )` `-` `-` `1,011` `-` `($ 868,504 )` `($ 730,022 )` `-` `(` `155,856 )` `(` `155,856 )` `-` `-` `(` `6,697 )` `-` `-` `-` `-` `-` `730,022` `($ 162,553 )`	`($` `500,148 )` `-` `192,016` `192,016` `-` `-` `-` `-` `-` `-` `-` `-` `(` `212,454 )` `-` `($` `520,586 )` `($` `271,742 )` `-` `254,484` `254,484` `-` `-` `-` `-` `-` `(` `2,302 )` `-` `-` `271,742` `$` `252,182`		`($ 325,490 )` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `($ 325,490 )` `($ 485,137 )` `-` `-` `-` `-` `-` `-` `190,327` `-` `-` `-` `-` `-` `($ 294,810 )`	`$` `45,219,189` `(` `3,504,573 )` `115,253` `(` `3,389,320 )` `-` `-` `-` `-` `(` `18,325 )` `(` `1,711 )` `116,619` `1,665` `1,011` `-` `$` `41,929,128` `$` `37,607,381` `1,736,600` `97,772` `1,834,372` `11,724,646` `274,076` `(` `14,451 )` `190,327` `-` `(` `11,033 )` `6,777` `-` `(` `2 )` `$` `51,612,093`	`$ 1,976,169` `(` `266,713` `)` `(` `12,074` `)` `(` `278,787` `)` `-` `-` `-` `(` `8,400` `)` `-` `-` `533,348` `92,406` `-` `(` `108` `)` `$ 2,314,628` `$ 2,103,915` `(` `248,301` `)` `(` `6,432` `)` `(` `254,733` `)` `239,900` `-` `-` `-` `335,025` `-` `-` `-` `-` `$ 2,424,107`	`$` `47,195,358` `(` `3,771,286 )` `103,179` `(` `3,668,107 )` `-` `-` `-` `(` `8,400 )` `(` `18,325 )` `(` `1,711 )` `649,967` `94,071` `1,011` `(` `108 )` `$` `44,243,756` `$` `39,711,296` `1,488,299` `91,340` `1,579,639` `11,964,546` `274,076` `(` `14,451 )` `190,327` `335,025` `(` `11,033 )` `6,777` `-` `(` `2 )` `$` `54,036,200`

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

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit (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 loss (gain) of associates and joint ventures
accounted for under the equity method

Loss on disposal of property, plant and equipment

Gain on disposal of intangible assets

Gain on disposal of non-current assets held for sale

Gain on disposal of investments
Impairment loss on non-financial assets
Unrealized loss (profit) from sales
Realized (profit) loss from sales
Other income from recognition of long-term deferred
revenues

Expense transferred to property, plant and equipment
Property, plant and equipment transferred to expense
Expenses transferred to intangible assetts
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Changes in operating liabilities
Financial liabilities at fair value through profit or loss -
current
Notes payable
Accounts payable
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Dividend received
Interest paid
Income tax paid
Net cash flows from operating activities Nine months ended September 30
Notes
2021
2020
$
1,609,572 ( $
3,727,133 )
6(7)(29)
3,751,845
3,241,552
6(9)(29)
175,728
186,752
184,438
413,035
6(27)
24,221
173,340
6(28)
104,842
104,703
6(25)
(
31,669 ) (
60,522 )
6(26)
(
103,090 ) (
16,896 )
6(6)
198,870 (
8,243 )
6(26)
17,895
41,831
6(27)
- (
140 )
6(11)
(
179,204 )
-
(
250,697 ) (
45,654 )
35,178
-
1,327 (
4,129 )
(
1,589 )
4,266
6(18)
(
101,212 ) (
105,877 )
- (
65 )
17,687
10,566
(
6,519 ) (
10,578 )
(
28,198 ) (
48,563 )
(
235,255 )
548,800
(
3,604,478 )
674,766
(
129,025 ) (
145,987 )
(
1,580,112 )
225,502
(
273,978 ) (
65,621 )
315,414 (
1,853 )
118,968
39,253
1,793
-
(
727 ) (
379,428 )
368,683
131,225
742,524
260,727
43,563
187,198
146,788
30,059
1,333,583
1,652,886
35,152
60,331
104,055
60,285
(
87,837 ) (
82,283 )
(
148,394 ) (
16,687 )
1,236,559
1,674,532

(Continued)

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other
comprehensive income
Proceeds from disposal of financial assets at fair value through
other comprehensive income
Acquisition of investments accounted for under the equity
method
Proceeds from disposal of investments accounted for under the
equity method
Proceeds from disposal of non-current assets held for sale

Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and equipment

(Increase) decrease in refundable deposits
Acquisition of intangible assets

Proceeds from disposal of intangible assets
Effect on initial consolidation of subsidiaries
Decrease (increase) in other financial assets
Proceeds from liquidation of investments accounted for using
equity method
Cash refund from financial assets capital reduction
Net cash flows from (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term loans

(Decrease) increase in short-term notes and bill payable

Proceeds from long-term loans

Repayment of long-term loans

Increase in guarantee deposits received

Repayment of principal portion of lease liabilities

Proceeds from treasury shares transferred to employees
Increase in cash paid for acquisition of non-controlling interests
Cash investments from subsidiaries establishing non-controlling
interest
Cash dividends distributed to non-controlling interest
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 Nine months ended September 30
Notes
2021
2020
( $
765,140 ) ( $
7,216 )
342,501
1,253
(
112,285 ) (
558,136 )
7,306
288,223
6(11)
430,000
-
6(34)
(
3,715,607 ) (
3,409,000 )
6(34)
160,115
345,397
(
626 )
91
6(34)
(
24,197 ) (
76,308 )
12,310
140
3,763,629
-
195,000 (
193,476 )
-
14,105
66,929
-
359,935 (
3,594,927 )
6(35)
3,194,389 (
268,989 )
6(35)
(
74,910 )
208,362
6(35)
1,764,223
4,189,400
6(35)
(
993,333 ) (
1,578,491 )
6(35)
33,462
32,893
6(35)
(
114,750 ) (
80,070 )
190,327
-
625,645
649,967
-
94,071
- (
8,400 )
4,625,053
3,238,743
(
117,225 ) (
59,346 )
6,104,322
1,259,002
5,228,011
5,252,823
$
11,332,333 $
6,511,825

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

~11~

ENNOSTAR INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (Reviewed, not audited)

1. HISTORY AND ORGANIZATION

Ennostar Inc. (the “Company”) was incorporated on January 6, 2021. The Company’s share have been traded on the Taiwan Stock Exchange in the Republic of China since the date of its incorporation. The share exchange transaction, wherein the Company was established by Epistar Corporation( “Epistar”) and acquired all issued and outstanding ordinary shares of Epistar and Lextar Electronics Corporation (“ Lextar”) by way of share exchange, has been approved both at Epistar’s board meeting on June 18, 2020 and special shareholders’ meeting on August 7, 2020. The share exchange was conducted at an exchange ratio of 1 ordinary share of Epistar and Lextar for 0.5 and 0.275 ordinary share of the Company respectively. As a result, Epistar and Lextar became wholly-owned subsidiaries of the Company on January 6, 2021, and both of Epistar’s and Lextar’s ordinary shares have been delisted while the ordinary shares of the Company were listed starting from the same date under the symbol “3714”.

The Company and its subsidiaries (collectively referred herein as the “Group”) are engaged in the research and development, design, manufacturing and sales of EPI wafers and chips of A1GaInP, AlGaAs and InGaN and light-emitting diode packages and modules.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on November 10, 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”)

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 4, ‘Extension of the temporary exemption from January 1, 2021 applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest January 1, 2021 Rate Benchmark Reform— Phase 2’ Amendment to IFRS 16, ‘Covid-19-related rent concessions beyond 30 April 1, 2021(Note) June, 2021’ Note ： Earlier application from January 1, 2021 is allowed by FSC. The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

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

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 3, ‘Reference to the conceptual framework’ January 1, 2022

~12~

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

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

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

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

==> picture [483 x 49] intentionally omitted <==

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

New standards, interpretations and amendments issued by IASB but not endorsed by the FSC are as follows: New Standards,Interpretations and Amendments	yet included in the IFRSs as Effective date by International Accounting Standards Board
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 non-	January 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 liabilities	January 1, 2023
arising from a single transaction’

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

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.

~13~

B. The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
(3) Basis of consolidation
A. Basis for preparation of consolidated financial statements:
- (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
- (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
- (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
- (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
- (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

~14~

B. Subsidiaries included in the consolidated financial statements:

The Company is the Group’s ultimate parent company due to converting stocks into shares with Epistar and Lextar on January 6, 2021. Accordingly, Epistar, Lextar and their subsidiaries were included in the consolidated financial statements thereafter.

Name of Investor	Name of Subsidiary	Main Business Activities			Ownership	September 30,2020 - - - - 100% 100% 100% 49% 100% 100% 63.94% 8.52% 64.32% - 100%	Note
				September 30,2021	December 31,2020
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation GaN Force Corporation	Epistar Corporation Lextar Electronics Corp. Harvestar Investment Corp. Amengine Corporation Lighting Investment Corporation Epistar JV Holding (BVI) Co., Ltd. Yenrich Technology Corporation SH Co.,Ltd. Full Star Enterprises Limited iReach Corporation Unikorn Semiconductor Corporation Prolight Opto Technology Corporation GaN Force Corporation Can Yang Investments Limited GV Semiconductor Inc.	Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers, chips, packages and modules Professional investment Developing and sales of medical optical sensor modules Professional investment Professional investment Manufacturing and sales of LED packages Manufacturing and sales of LED wafers and chips Professional investment Manufacturing, sales, packaging and module design of semiconductor light emitting devices OEM manufacturing of iii-v semiconductors Manufacturing and sales of LED packages Design, manfacturing and sales of LED Professional investment Manufacturing and sales of LED wafers and chips		100% 100% 100% 58.59% 100% 100% - 49% 100% 39.09% 53.29% - 64.32% 3.53% 100%	- - - - 100% 100% 100% 49% 100% 100% 63.94% 8.52% 64.32% - 100%		Note 12 Note 12 Note 10 Note 15 Note 1 Note 10 Note 17 Note 10 Note 9 Note 16 Note 1 Note 9 Note 10 Note 9 Note 10 Note 3 Note 9 Note 10 Note 2 Note 9 Note 10 Note 18 Note 9 Note 16 Note 9 Note 10 Note 10 Note 9 Note 10

~15~

Name of Investor	Name ofSubsidiary	Main Business Activities			Ownership	September 30,2020 82.41% 74.86% 100% 100% 100% 80.10% 100% 93.38% 100% 100% 3.31% 20.80% - 100% 100% 100%	Note
				September 30,2021	December 31,2020
Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding(BVI) Co., Ltd Epistar JV Holding(BVI) Co., Ltd Lite Star JV Holding (BVI) Co., Ltd Epicrystal (Hong Kong) Co., Limited United LED Corporation (Hong Kong) Limited Episky (Hong Kong) Limited Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen)Ltd. Episky Corporation (Xiamen) Ltd. Crystal Light Enterprise Group Limited Lighting Investment Corporation Lighting Investment Corporation	Lite Star JV Holding (BVI) Co., Ltd. United LED Corporation (Hong Kong) Limited Episky (Hong Kong) Limited HUGA Holding (SAMOA) Limited Crystal Light Enterprises Group Limited Can Yang Investments Limited Epicrystal (Hong Kong) Co., Limited Epicrystal Corporation (Changzhou) Ltd. United LED Shan Dong Corporation Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONIC S CO.,LTD Ningbo Formosa Epitaxy Incorporation Lighting Investment Ltd. GaNrich Semiconductor Corporation	Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED chips Manufacturing and sales of LED wafers and chips Developing, manufacturing and sales of LED packages, modules and related applications Sales of LED chips Sales of LED chips Professional investment Design and technology service of LED lighting product		82.41% 74.86% 100% 100% - 85.26% 100% 93.38% 100% 100% 3.31% 12.12% 100% - 100% 100%	82.41% 74.86% 100% 100% 100% 80.10% 100% 93.38% 100% 100% 3.31% 20.80% 100% - 100% 100%		Note 9 Note 10 Note 9 Note 10 Note 9 Note 10 Note 9 Note 10 Note 9 Note 11 Note 9 Note 10 Note 9 Note 10 Note 9 Note 10 Note 6 Note 9 Note 10 Note 6 Note 4 Note 9 Note 10 Note 5 Note 9 Note 10

~16~

Name of Investor	Name ofSubsidiary	Main Business Activities			Ownership	September 30,2020 100% 6.87% 40.46% 75% 100% 100% 100% 3.62% 29.20% 40.80% 100% 100% 100% 100% 100%	Note
				September 30,2021	December 31,2020
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Ltd. Lighting Investment Ltd. Can Yang Investments Limited Luxlite (Hong Kong) Corporation Limited Yenrich Technology Corporation Yenrich Technology Corporation Yenrich Technology Corporation Prolight Opto Technology Corporation Prolight Opto Holding Corporation Prolight Opto Technology Corporation Lextar Electronics Corporation Lextar Electronics Corporation	Yenrich Opto (Hong Kong) Limited Can Yang Investments Limited Prolight Opto Technology Corporation Luxlite (Hong Kong) Corporation Limited Epistar (Hong Kong) Limited Jiangsu Canyang Optoelectronics Ltd. Luxlite (Shenzhen) Corporation Limited Prolight Opto Technology Corporation LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. Amengine Corporation Prolight Opto Holding Corporation Prolight Opto Holding Corporation Shanghai Welight Electronic Co., LTD Lextar (Singapore) Pte. Ltd. Liang Li Venture Corp.	Sales of LED lighting products Professional investment Manufacturing and sales of LED packages Professional investment Professional investment Manufacturing and sales of LED wafers and chips Sales of LED chips Manufacturing and sales of LED packages Developing, manufacturing and sales of LED packages, modules and related applications Developing and sales of medical optical sensor modules Professional investment Professional investment Wholesale and export and import of LED and related products Professional investment Professional investment		100% 6.87% 30.85% 100% 100% 100% 100% 2.68% 37.88% - 100% 100% 100% 100% 100%	100% 6.87% 40.46% 100% 100% 100% 100% 3.62% 29.20% 40.80% 100% 100% 100% 100% 100%		Note 9 Note 10 Note 9 Note 10 Note 9 Note 10 Note 16 Note 8 Note 9 Note 10 Note 9 Note 10 Note 9 Note 9 Note 10 Note 16 Note 6 Note 9 Note 10 Note 16 Note 1 Note 6 Note9 Note17 Note 9 Note 10 Note 16 Note 9 Note 10 Note 16 Note 9 Note 10 Note 16 Note 9 Note 10

~17~

Name of Investor	Name ofSubsidiary	Main Business Activities			Ownership	September 30,2020 100% 100% 100% 100% 90.50% 22.99% 31.69% - 100% 100% 100% 3.83% - 50% 29.37%	Note
				September 30,2021	December 31,2020
Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar (Singapore) Pte. Ltd, Wellypower Optronics Corporation and Apower Optronics Corporation Lextar (Singapore) Pte. Ltd. Lextar (Singapore) Pte. Ltd. Liang Li Venture Corp. Liang Li Venture Corp. Wellybond Corporation Wellybond Corporation	Wellypower Optronics Corporation Apower Optronics Corporation Wellybond Corporation Wellybond Optronics (H.K.) Limited Trendylite Corporation best Epitaxy Manufacturing Company Ltd. HEXAWAVE INC. Yenrich Technology Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics (Xiamen) Co., Ltd. Lextar Electronics Korea Ltd. best Epitaxy Manufacturing Company Ltd. Prolight Opto Technology Corporation VOGITO INNOVATION CO., LTD. best Epitaxy Manufacturing Company Ltd.	Professional investment Professional investment Professional investment Professional investment Sales of products Design and manufacturing VCSEL Lei chip Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of LED packages Manufacturing and sales of LED wafers, chips, packages and modules Manufacturing and sales of LED lighting and modules Sale of LED and after-sales service Design and manufacturing VCSEL Lei chip Manufacturing and sales of LED packages Design of lighting Design and manufacturing VCSEL Lei chip		100% 100% 100% 100% 90.50% 21.30% 31.69% 100% 100% 100% 100% 3.81% 9.09% 50% -	100% 100% 100% 100% 90.50% 22.99% 31.69% - 100% 100% 100% 3.83% - 50% 29.37%		Note 9 Note 10 Note 9 Note 10 Note 9 Note 10 Note 9 Note 10 Note 9 Note 10 Note 3 Note 9 Note 10 Note 9 Note 10 Note 10 Note 16 Note 9 Note 10 Note 9 Note 10 Note 3 Note 9 Note 10 Note 10 Note 16 Note 9 Note 10 Note 3 Note 9

~18~

Name of Investor	Name ofSubsidiary	Main Business Activities			Ownership	September 30,2020 - 31.68% - 100% -	Note
				September 30,2021	December 31,2020
Wellybond Corporation Wellybond Corporation Wellybond Corporation Lextar Electronics (Suzhou) Corp. HEXAWAVE INC.	Prolight Opto Technology Corporation HEXAWAVE INC. WellyHertz Electronics Corp. Lextar Electronics (Chuzhou) Corp. WellyWave Semiconductors Inc.	Manufacturing and sales of LED packages Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of switching power supply module Manufacturing and sales of LED wafers, chips, packages and modules Manufacturing and sales of compound semiconductor materials and modules		8.54% 31.68% 90.91% 100% 100%	- 31.68% 90.91% 100% -		Note 10 Note 16 Note 9 Note 10 Note 10 Note 14 Note 10 Note 15

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 amounts 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: Due to changes in equity, it has not been included in the consolidated entity since June, 2021.
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 nine months ended September 30, 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 nine months ended September 30, 2021 were not reviewed by independent auditors as the entity did not meet the definition of significant subsidiary.

~19~

  - 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 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.

  - Note 15: Newly invested or established companies in 2021.

  - Note 16: Yenrich Technology Corporation and Prolight Opto Technology Corporation were originally held by Epistar and subsequently held by Lextar in the third quarter of 2021 as a result of reorganization. Also, investees of Yenrich Technology Corporation and Prolight Opto Technology Corporation were held by Lextar.

  - Note 17: Amengine Corporation was originally held by Yenrich Technology Corporation and subsequently held by ENNOSTAR INC. in the third quarter of 2021 as a result of reorganization.

  - Note 18: The Company increased its capital by cash in the amount of $500,000 as resolved by the Board of Directors on April 19, 2021. The company’s parent company did not participate in the cash capital increase proportionately, therefore, the parent company’s shareholding ratio to the company decreased to 53.29%.

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.

~20~

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

B. Translation of foreign operations
- (a) The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
  - i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
  - ii. Income and expenses for each statement of comprehensive income are translated at average exchange rate of that period; and
  - iii. All resulting exchange differences are recognized in other comprehensive income.
- (b) When the foreign operation partially disposed of or sold is an associate or jointly controlled entity, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group still retains partial interest in the former foreign associate or jointly controlled entity after losing significant influence over the former foreign associate, or losing joint control of the former jointly controlled entity, such transactions should be accounted for as disposal of all interest in these foreign operations.
- (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.
- (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.

~21~

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.
(7) Financial assets at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, the derivative financial assets are recognised and derecognised using trade date accounting, the beneficiary certificates are recognised and derecognised using settlement date accounting.
C. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(8) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the 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.

~22~

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 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.

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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.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

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

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

(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

~24~

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. 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

~25~

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 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.

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  - (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 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.

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  - (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 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

~28~

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 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.

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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. 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 acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

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(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.

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

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

(1) Critical 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 September 30, 2021, the Group recognised impaired property, plant and equipment of $24,462,416 and goodwill of $3,683,114.
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 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 September 30, 2021, the carrying amount of inventories was $5,807,885.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and petty cash Checking accounts and demand deposits Time deposits Bonds sold under repurchase agreement	September 30,2021 1,213 $ 4,214,550 5,642,364 1,474,206 11,332,333 $	December 31,2020 1,171 $ 2,210,413 1,326,081 1,690,346 5,228,011 $	September 30,2020
			1,365 $ 2,420,064 2,298,979 1,791,417
			6,511,825 $

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.

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

Items

September 30, 2021 December 31, 2020 September 30, 2020

Financial assets at fair value through profit or loss Items September	Financial assets at fair value through profit or loss Items September	30,2021 December	30,2021 December	31,2020 September	30,2020
Current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates $ Listed stocks Derivatives Valuation adjustment ( Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks Valuation adjustments ( $		87,150 $ 193,439 1,566 282,155 72,986) ( 209,169 275,248 209,877) ( 65,371 274,540 $		40,150 $ 427,775 - 467,925 297,155) ( 170,770 342,178 162,903) ( 179,275 350,045 $	116,139 427,775 - 543,914 354,284) 189,630 342,178 186,232) 155,946 345,576
			$
	$

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

for under hedge accounting. The information is listed below:	for under hedge accounting. The information is listed below:
December 31,2020 and September 30,2020: None. Financial instruments Notional principal (in thousands) Currency Forward foreign exchange contract - sell USD 26,500 USD to NTD Forward foreign exchange contract - sell USD 73 USD to JPY Forward foreign exchange contract - sell USD 22,000 USD to RMB September 30,2021		Maturitydate
	USD to NTD USD to JPY USD to RMB	2021.10.12~2022.02.10 2021.10.22~2021.12.24 2021.10.26~2022.03.24

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

B. The net gain (loss) recognized by the Group amounted to $33,231 、 $4,929 、 ($24,221) and
($173,340) for the three months and the nine months ended September 30, 2021 and 2020.
C. Information on credit risk of financial assets at fair value through profit or loss is provided in Notes 12(2) and (3).

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

Items Non-current items: Equity instruments Listed stocks Unlisted stocks Valuation adjustment	September 30,2021 December 31,2020 September 30,2020 910,454 $ 724,909 $ 724,909 $ 3,990,744 3,933,096 3,934,091 4,901,198 4,658,005 4,659,000 1,266 273,705) ( 548,994) ( 4,902,464 $ 4,384,300 $ 4,110,006 $

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A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $4,902,464, $4,384,300 and $4,110,006 as at September 30, 2021, December 31, 2020 and September 30, 2020, respectively.

A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $4,902,464, $4,384,300 and $4,110,006 as at September 30, 2021, December 31, 2020 and September 30, 2020, respectively.	A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $4,902,464, $4,384,300 and $4,110,006 as at September 30, 2021, December 31, 2020 and September 30, 2020, respectively.	A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $4,902,464, $4,384,300 and $4,110,006 as at September 30, 2021, December 31, 2020 and September 30, 2020, respectively.	A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $4,902,464, $4,384,300 and $4,110,006 as at September 30, 2021, December 31, 2020 and September 30, 2020, respectively.	A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $4,902,464, $4,384,300 and $4,110,006 as at September 30, 2021, December 31, 2020 and September 30, 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	September 30,2021		September 30,2020
Fair value change recognised in other	$	15,430	$	394,060
comprehensive income
Dividend income recognized in profit or loss Held at end of period	$	37,554	$	8,584
Equity instruments at fair value through other		Nine months ended		Nine months ended
comprehensive income	September 30,2021		September 30, 2020
Fair value change recognised in other	$	317,325	$	239,263
comprehensive income
Dividend income recognized in profit or loss Held at end of period	$	103,090	$	16,896

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

Notes and accounts receivable
	September 30,2021		December 31,2020		September 30, 2020
Notes receivable	$	2,187,289	$	1,926,257	$	1,750,428
Less: Allowance for uncollectible accounts	(	883,988)	(	840,196)	(	409,947)
	$	1,303,301	$	1,086,061	$	1,340,481
Accounts receivable	$	11,989,356	$	6,306,903	$	5,951,792
Less: Allowance for uncollectible accounts	(	33,286)	(	18,552)	(	3,850)
	$	11,956,070	$	6,288,351	$	5,947,942

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

Accounts receivable Notes receivable 11,637,321 $ 1,303,301 $ 167,550 - 34,538 - 93,582 - 56,365 883,988 11,989,356 $ 2,187,289 $ September 30,2021	December 31,2020	December 31,2020
Accounts receivable 11,637,321 $ 167,550 34,538 93,582 56,365 11,989,356 $	Accounts receivable 5,790,012 $ 307,622 101,702 106,124 1,443 6,306,903 $	Notes receivable
		1,089,903 $ 13,448 70,065 752,841 -
		1,926,257 $

~33~

		September	30,2020	30,2020
	Accounts	receivable	Notes receivable
Not past due	$	5,425,075	$	997,074
Up to 30 days		218,764		39,220
31 to 90 days		144,070		714,134
91 to 180 days		113,444		-
Over 180 days		50,439		-
	$	5,951,792	$	1,750,428

The above ageing analysis was based on past due date.

B. As of September 30, 2021, December 31, 2020 and September 30, 2020, the Group had outstanding discounted notes receivable amounting to $495,300, $410,310 and $695,206, 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 September 30,2021, December 31,2020 and September 30,2020, 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 $1,303,301, $1,086,061 and $1,340,481; the maximum exposure to credit risk in respect of the amount that best represents the accounts receivable held by the Group was $11,956,070, $6,288,351 and $5,947,942, 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		September 30, 2021
	Allowance for Cost valuation loss 1,703,396 $ 114,202) ($ 2,625,147 275,876) ( 2,151,049 281,628) ( 6,479,592 $ 671,706) ($ December 31,2020		Book value
			1,589,195 $ 2,349,270 1,869,420
			5,807,885 $

	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 $

~34~

						September 30,2020	September 30,2020
							Allowance for
		Cost					valuation loss			Book value
Raw materials	$	849,109			($		65,583)		$	783,526
Work in progress		1,461,840			(		487,075)			974,765
Finished goods		1,565,183			(		307,048)			1,258,135
	$	3,876,132			($		859,706)		$	3,016,426
The cost of inventories recognised		as expense for	the			three months and		the nine months ended
September 30,2021 and 2020:
				Three months ended					Three months ended
				September 30,2021					September 30,2020
Cost of goods sold			$				7,610,217		$	3,630,726
Scrap loss							14,961			8,514
(Recovery benefits in market value) loss on market price decline			(				17,047)			106,759
Loss on idle capacity							158,271			336,782
Other			(				1,306)			-
			$				7,765,096		$	4,082,781
					Nine months ended				Nine months ended
				September 30,2021					September 30,2020
Cost of goods sold			$				20,828,300		$	9,516,678
Scrap loss							75,662			27,669
(Recovery benefits in market value) loss on market price decline			(				424,041)			71,257
Loss on idle capacity							485,839			1,301,299
Other			(				23,088)	(		48,242)
			$				20,942,672		$	10,868,661
Due to the increase in the utilization rate of the Group,						the net realizable value of inventories has
recovered, which is recognized as a decrease in the cost of goods sold.
(6) Investments accounted for using the		equity method
	September 30,2021				December 31,2020				September 30,2020
Associates:
Tekcore Co., Ltd.	$		-		$		26,926		$	27,128
TE Opto Corporation		43,431					43,804			43,389
Country Lighting (BVI)		85,077					87,097			88,996
Co., Ltd.
LEDOLUX Sp. Zo.O.		11,728					13,077			13,085
Interelight Optotech (Hong		11,655					11,886			12,017
Kong) Ltd.
ES-LEDRU LLC			-				-			1,683
LEDAZ Co., Ltd.		34,133					71,668			60,648

~35~

Changzhou Chemsemi Co., Ltd (NOTE) GCS Holdings, Inc. Joint Power Exponent, Ltd. Chuzhou Bwin Technology Corp. Aurora International Lighting Corporation Limited best Epitaxy Manufacturing Company Ltd. iReach Corporation Domi-Star Optoelectronics Corporation Tyntek Corporation	September 30,2021 508,979 866,140 33,505 117,311 `182,938` 32,257 30,139 412 705,172 2,662,877 $	December 31,2020 471,471 919,646 - - - - - - - 1,645,575 $	September 30,2020
			468,018 942,251 - - - - - - -
			1,657,215 $

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 September 30,2021, December 31,2020 and September 30,2020, the carrying amount of the Group’s individually immaterial associates amounted to $2,662,877, $1,645,575 and $ 1,657,215, respectively.

respectively.
			Three months ended		Three months ended
			September 30,2021		September 30,2020
Loss for the period from			($	121,531)	($	3,101)
continuing operations
Other comprehensive loss				-	(	72,794)
Total comprehensive loss			($	121,531)	($	75,895)
			Nine months ended		Nine	months ended
			September 30,2021		September 30,2020
Loss for the period from			($	198,870)	$	8,243
continuing operations
Other comprehensive loss				-	(	11,328)
Total comprehensive loss			($	198,870)	($	3,085)
B. The fair value of the Group’s	material	associates with quoted market prices is as follows:
	September 30,2021		December 31,2020		September 30,2020
Tekcore Co. Ltd.	$	-	$	136,217	$	54,669
GCS Holdings, Inc.		864,219		903,548		875,619
Tyntek Corporation		657,301		-		-
	$	1,521,520	$	1,039,765	$	930,288

~36~

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 some 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.
E. In the second quarter of 2021, the Group disposed part of its share of best Epitaxy Manufacturing Company Ltd. and iReach Corporation and lost control over the entities. Therefore, the Group reclassified it into investments accounted for using the equity method and recognised gain on disposal of investment amounting to $57,527 in accordance with IFRSs.
F. On July 2, 2021, the Group obtained significant influence over Tyntek Corporation as the Group owned three board seats through the re-election of the regular shareholders’ meeting. Therefore, the Group reclassified it from financial asset at fair value through other comprehensive income into investment in associate and recognised loss on disposal of investment amounting to $94,037 in accordance with IFRSs.

(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		-			1,659		391,482			5,789			294		39,493			2,386,386		2,825,103
Transfer		-			723,917		4,436,652			46,760			41,044		61,537	(		5,309,910)		-
Acquired from business		1,170,859			1,732,781		1,372,887			9,941			1,513		392,619			205,059		4,885,659
combinations
Disposals		-	(		30,018)	(	128,232)	(		167)			-	(	3,370)			-	(	161,787)
Reclassified to non-	(	124,661)	(		124,885)	(	541)	(		709)			-		-			-	(	250,796)
current assets held for
sale
Reclassifications		-			759	(	92,021)			1,139			-		-	(		19,921)	(	110,044)
Reclassified to		-	(		33,279)		-			-			-		-			-	(	33,279)
investment property
Depreciation charge		-	(		672,010)	(	2,757,704)	(		50,049)	(		15,098)	(	125,217)			-	(	3,620,078)
Impairment loss		-			-	(	23,585)			-			-		-			-	(	23,585)
Disposals of Subsidiary		-	(		4,929)	(	98,778)	(		673)	(		8,849)	(	24,647)	(		758)	(	138,634)
Net exchange differences		-	(		7,461)	(	278,265)	(		1,012)	(		325)	(	73,253)			364,698		4,382
Closing net book
amount at September 30	$	1,558,195	$		8,388,091	$	12,550,412	$		111,375	$		103,232	$	409,133	$		1,341,978	$	24,462,416
At September 30, 2021
Cost	$	1,558,195	$		17,307,859	$	47,887,439	$		516,980	$		378,473	$	1,854,322	$		1,341,978	$	70,845,246
Accumulated
depreciation and
impairment		-	(		8,919,768)	(	35,337,027)	(		405,605)	(		275,241)	(	1,445,189)			-	(	46,382,830)
	$	1,558,195	$		8,388,091	$	12,550,412	$		111,375	$		103,232	$	409,133	$		1,341,978	$	24,462,416

~37~

																	Construction	Construction
																in progress and
				Buildings and						Office			Leasehold				equipment to
		Land			structures		Machinery		equipment			improvements			Others			be inspected		Total
At January 1, 2020
Cost	$	650,521	$		16,213,192	$	41,452,304	$		402,533	$		161,373	$	591,882	$		1,332,534	$	60,804,339
Accumulated
depreciation and
impairment		-	(		8,510,028)	(	30,883,443)	(		272,598)	(		122,853)	(	438,311)			-	(	40,227,233)
	$	650,521	$		7,703,164	$	10,568,861	$		129,935	$		38,520	$	153,571	$		1,332,534	$	20,577,106
2020
Opening net book	$	650,521	$		7,703,164	$	10,568,861	$		129,935	$		38,520	$	153,571	$		1,332,534	$	20,577,106
amount at January 1
Additions		-			3,315		72,526			1,596			10,524		7,019			4,733,053		4,828,033
Transfer		-			327,024		1,232,824			13,829			13,086		11,589	(		1,598,352)		-
Disposals	(	138,524)	(		224,062)	(	34,495)	(		13)	(		1,626)	(	229)			-	(	398,949)
Reclassifications		-	(		2,508)	(	1,351)			220			-		94	(		5,147)	(	8,692)
Depreciation charge		-	(		652,635)	(	2,422,489)	(		42,235)	(		10,531)	(	41,403)			-	(	3,169,293)
Net exchange
differences		-	(		12,797)	(	25,117)	(		787)	(		134)	(	72)	(		3,090)	(	41,997)
Closing net book
amount at September 30	$	511,997	$		7,141,501	$	9,390,759	$		102,545	$		49,839	$	130,569	$		4,458,998	$	21,786,208
At September 30, 2020
Cost	$	511,997	$		15,622,879	$	40,508,614	$		403,204	$		135,363	$	604,778	$		4,458,998	$	62,245,833
Accumulated
depreciation and
impairment		-	(		8,481,378)	(	31,117,855)	(		300,659)	(		85,524)	(	474,209)			-	(	40,459,625)
	$	511,997	$		7,141,501	$	9,390,759	$		102,545	$		49,839	$	130,569	$		4,458,998	$	21,786,208

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

`－` (8) Leasing arrangements lessee

A. The Group leases various assets including land, buildings, machinery, transportation equipment and office equipment. Rental contracts are typically made for periods of 2 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. Short-term leases with a lease term of 12 months or less comprise of buildings, transportation equipment and office equipment. Low-value assets comprise of office equipment.
C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Land use right Buildings Machinery Transportation equipment Office equipment	September 30,2021 Carryingamount $ 1,259,510 263,007 189,004 187,819 10,678 42,352 1,952,370 $	December 31,2020 Carryingamount $ 1,097,002 231,140 50,902 230,394 12,517 42,334 1,664,289 $	September 30,2020
			Carryingamount
			$ 1,134,377 226,913 55,487 38,342 11,148 42,770
			1,509,037 $

~38~

Land Buildings Machinery Transportation equipment Office equipment Land Buildings Machinery Transportation equipment Office equipment	Three months ended September 30,2021 Depreciation charge $ 13,902 9,067 14,614 1,234 3,613 42,430 $ Nine months ended September 30, 2021 Depreciation charge $ 41,756 30,891 44,060 4,162 10,898 131,767 $	Three months ended September 30,2020
		Depreciation charge
		$ 12,474 3,137 2,316 2,092 3,867 23,886 $ Nine months ended September 30,2020
		Depreciation charge
		$ 37,194 12,985 6,949 5,914 9,217
		72,259 $

D. For the three months and the nine months ended September 30, 2021 and 2020, the additions to right-of-use assets were $6,560, $10,961, $39,266 and $52,548, respectively.
E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Three months ended September 30, 2021 $ 7,187 8,282 1,217 Nine months ended September 30,2021 $ 21,631 39,343 3,358	Three months ended September 30,2020
		$ 6,483 3,002 880 Nine months ended September 30,2020
		$ 19,944 9,618 2,679

F. For the three months and the nine months ended September 30, 2021 and 2020, the Group’s total cash outflow for leases were $37,052, $31,516, $144,400 and $93,079, respectively.

~39~

(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			363			-			30,144			3,015			33,522
Additions`－`acquired through
business combinations			340,215			540,778			3,598			83,604			968,195
Reclassifications	(		35,426)			-			2,660			-	(		32,766)
Amortisation charge	(		117,947)			-	(		43,811)	(		13,970)	(		175,728)
Impairment loss	(		11,593)			-			-			-	(		11,593)
Disposals of subsidiary	(		202)			-	(		3,776)	(		59,407)	(		63,385)
Net exchange differences	(		2,779)			-			808			-	(		1,971)
Closing net book amount
as at September 30	$		1,044,216	$		3,683,114	$		90,645	$		30,490	$		4,848,465
At September 30, 2021
Cost		$	2,799,107		$	6,874,206		$	485,962		$	138,844		$	10,298,119
Accumulated amortisation and
impairment	(		1,754,891)	(		3,191,092)	(		395,317)	(		108,354)	(		5,449,654)
	$		1,044,216	$		3,683,114	$		90,645	$		30,490	$		4,848,465
			Patents			Goodwill			Software			Others			Total
At January 1, 2020
Cost		$	2,406,242		$	6,324,659		$	422,203		$	99,476		$	9,252,580
Accumulated amortisation and
impairment	(		1,372,947)			-	(		286,367)	(		91,468)	(		1,750,782)
	$		1,033,295	$		6,324,659	$		135,836	$		8,008	$		7,501,798
2020
Opening net book amount
as at January 1		$	1,033,295		$	6,324,659		$	135,836		$	8,008		$	7,501,798
Additions`－`acquired separately			1,685			-			25,769			12,596			40,050
Reclassifications			10,101			-			477			-			10,578
Amortisation charge	(		132,890)			-	(		51,331)	(		2,531)	(		186,752)
Net exchange differences	(		3,233)			-	(		259)			-	(		3,492)
Closing net book amount
as at September 30	$		908,958	$		6,324,659	$		110,492	$		18,073	$		7,362,182
At September 30, 2020
Cost		$	2,415,902		$	6,324,659		$	447,003		$	112,073		$	9,299,637
Accumulated amortisation and
impairment	(		1,506,944)			-	(		336,511)	(		94,000)	(		1,937,455)
	$		908,958	$		6,324,659	$		110,492	$		18,073	$		7,362,182

~40~

Details of amortisation on intangible assets are as follows:

Operating costs Selling expenses Administrative expenses Research and development expenses Operating costs Selling expenses Administrative expenses Research and development expenses	Three months ended September 30,2021 30,046 $ 184 11,151 14,425 55,806 $ Nine months ended September 30,2021 91,520 $ 731 39,657 43,820 175,728 $	Three months ended September 30,2020 30,967 $ 463 11,787 15,252 58,469 $ Nine months ended September 30,2020 90,946 $ 1,400 42,609 51,797
		186,752 $

(10) Impairment of non-financial assets

A. The Group assessed that production line adjustments and configurations resulted in idling or impairment of certain property, plant and equipment. The Group wrote down the carrying amount of the assets based on the recoverable amount and recognised impairment losses of $($29,824), $0, $23,585 and $0 for the three months and the nine months ended September 30, 2021 and 2020, respectively. The recoverable amount is the assets’ fair value less costs of disposal. The fair value is classified as a level 3 fair value. Details of impairment are as follows:

Impairment loss`－`buildings and structure Impairment loss`－`machinery Impairment loss`－`buildings and structure Impairment loss`－`machinery	Three months ended September 30, 2021	Three months ended September 30, 2021		Three months ended September 30,2020
	26,488) ($ 3,336) ( 29,824) ($ Nine months ended September 30,2021			- $ - - $ Nine months ended September 30,2020
		- $ 23,585 23,585 $		- $ - - $

B. 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 fiveyear period are extrapolated using the estimated growth rates stated below.

~41~

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 $3,191,092 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%.
C. The carrying amount of patents had been adjusted based on the recoverable amount because certain patents will be sold under assessment. Accordingly, the Group recognised impairment loss amounting to $11,593, $0, $11,593 and $0 for the three months and nine months ended September 30, 2021 and 2020, respectively.

(11) Non-current assets held for sale

September 30, 2021 December 31, 2020 September 30, 2020 - - - Property, plant and equipment $ $ $ The Group intended to sell land and plants located in Taoyuan Longtan plant amounting to $430,000 in 2021, and the land and plant were reclassified to disposal groups classified as held for sale. The sale contract for this transaction had been signed in May 2021. In addition, the transaction was completed, and the Group recognised gain on disposal amounting to $179,204 in the third quarter of 2021.

(12) Short-term borrowings

September 30, 2021 December 31, 2020 September 30, 2020

of 2021. Short-term borrowings	September 30,2021	December 31, 2020	September 30,2020
Bank borrowings Unsecurred borrowings Interest rate range-NTD Interest rate range-foreign currency	4,722,870 $ 0.70%~1.34% 0.62%~3.72%	1,537,574 $ 0.75%~1.24% 3.40%~4.05%	1,400,324 $
			0.68%~1.15%
			3.30%~4.50%

As of September 30,2021, December 31,2020 and September 30,2020, the Group has endorsements to Episky Corporation (Xiamen) Ltd., Jiangsu Canyang Optoelectronics Ltd., Unikorn Semiconductor Corporation., Limited and Yenrich Technology Corporation totalling $3,556,500, $4,084,960 and $ 3,958,400, respectively.

(13) Short-term notes and bills payable


Rate(%) -	Amount Name of bank 796,300 $ BANK OF COMMUNICATIONS BANK OF JIANGSU BANK OF CHINA BANK OF NINGBO December31,2020	Collaterals
		Note 8
Rate(%) -	Amount Name of bank 568,519 $ BANK OF COMMUNICATIONS September30,2020	Collaterals
		Note 8
Rate(%) -	Amount Name of bank 552,312 $ BANK OF COMMUNICATIONS	Collaterals
		Note 8

~42~

(14) Other payables

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Items September 30, 2021 December 31, 2020 September 30, 2020
Payables on wages, salaries and bonus $ 777,310 $ 635,768 $ 606,004
Compensation due to employees, directors 310,192 69,641 69,641
and supervisors
Payables on personnel expense 566,865 200,259 192,909
Payables on machinery and equipment 1,134,051 2,068,473 2,150,889
Payables on consumable goods and 444,768 358,304 331,802
equipment repair expense
Payables on processing fees 939,110 377,051 340,163
Payables on reticle expense 20,240 22,319 25,711
Payables on gas expense 77,780 64,551 70,239
Payables on insurance expense 8,510 8,980 51,048
Payables on intangible assets 9,610 46,122 46,978
Others 978,481 536,311 480,444
$ 5,266,917 $ 4,387,779 $ 4,365,828
----- End of picture text -----

- (15) Long term borrowings

Long-term borrowings
	Borrowing period and
Type of borrowings	repayment term	September30,2021
Bank borrowings
Unsecured borrowings	Before September 15, 2025	$	666,000
Unsecured borrowings	Before May 15, 2026		135,900
Unsecured borrowings	Before September 15, 2025		592,800
Unsecured borrowings	Before November 15, 2025		544,800
Unsecured borrowings	Before September 15, 2025		400,000
Unsecured borrowings	Before September 15, 2025		507,500
Unsecured borrowings	Before November 5, 2024		303,334
Unsecured borrowings	Before February 15,2026		464,400
Unsecured borrowings	Before February 15,2026		46,100
Unsecured borrowings	Before April 26, 2027		62,470
Secured borrowings	Before June 15, 2026		3,100
Secured borrowings	Before March 15, 2028		100,000
Secured borrowings	Before April 12, 2026		188,559
Secured borrowings	Before December 13,2024		94,071
			4,109,034
Less: Current portion of	long-term borrowings	(	131,684)
		$	3,977,350
Interest rate range			0.05%~4.99%

Interest rate range

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	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%
	Borrowing period and
Type of borrowings	repayment term	September 30, 2020
Bank borrowings
Unsecured borrowings	Before September 15, 2025		$	321,800
Unsecured borrowings	November 2,2021 Repay fully at maturity			500,000
Unsecured borrowings	Before November 5, 2024			390,000
Unsecured borrowings	July 21,2022 Repay fully at maturity			450,000
Unsecured borrowings	Before September 15, 2025			400,000
Unsecured borrowings	Before September 15, 2025			210,200
Unsecured borrowings	Before September 15, 2025			257,400
Unsecured borrowings	February 17,2022 Repay fully at maturity			500,000
Unsecured borrowings	July 24,2021 Repay fully at maturity			600,000
Secured borrowings	Before December 13, 2024			110,067
				3,739,467
Less: Current portion of	long-term borrowings	(		727,820)
		$		3,011,647
Interest rate range				0.50%~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 and its domestic subsidiaries have 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

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average salaries or wages of the last nine months prior to approved retirement. The Company contributes an amount equal to 2% of salaries and wages paid each month to a pension fund. The pension fund is administered by a pension fund monitoring committee and deposited under the Committee’s name in the Bank of Taiwan.

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

  - (b) For the aforementioned pension plan, the Group recognised pension costs of $378, $649, $1,145 and $1,902 for the three months and the nine months ended September 30, 2021 and 2020, respectively.

  - (c) Expected contributions to the defined benefit pension plans of the Company for the year ending September 30, 2021 amount to $11,759.

B. (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
- (b) The Group’s mainland China subsidiaries have funded defined contribution plans. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage stipulated by the government. Other than the monthly contributions, these companies do not have further obligations.
- (c) The pension costs under the defined contribution pension plans of the Group for the three months and the nine months ended September 30, 2021 and 2020 were $89,592, $34,148, $246,578 and $105,081, respectively.
(17) Share-based payment
A. Restricted stocks to employees.

For the nine months ended September 30, 2021, the Group’s restricted stocks to employees arrangement was as follows:

Type of arrangement	Grant date	Quantity granted (thousand shares)	Contractperiod	Vesting condition
Restricted stocks to employees (Note1)	2019.03.20	8,500	3 years	Note 2

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.

~45~

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

	2021
Outstanding at January 1	5,950
Expired	2,550) (
Outstanding at September 30	3,400
Exercisable at September 30(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 nine months ended September 30,2021 and 2020, the share-based payment arrangements of the Company ’ s subsidiary, United LED Corporation (Hong Kong) Limited, are as follows:

Quantity granted Type of arrangement Grant date (thousand shares) Vesting conditions Employee stock 2010.08.01 1,500,000 Note 1 option

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:

	100% upon completion of 3 years’ service. Details of the share-based payment arrangements are as follows:	100% upon completion of 3 years’ service. Details of the share-based payment arrangements are as follows:	100% upon completion of 3 years’ service. Details of the share-based payment arrangements are as follows:
(18)	Long-term deferred revenue (shown under“Other non-current liabilities”) Weighted-average exercise price Weighted-average exercise price No.of shares (in US dollars) No.of shares (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 September 30,2021 December 31,2020 September 30,2020 Deferred government grants revenue 251,758 $ 351,230 $ 369,290 $ Deferred technical services revenue 9,683 10,790 13,436 261,441 $ 362,020 $ 382,726 $
	Deferred government grants revenue Deferred technical services revenue	September 30,2021 251,758 $ 9,683 261,441 $
			369,290 $ 13,436
			382,726 $

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 and the nine months ended September 30,2021 and 2020 were $32,115, $32,938, $101,800 and $97,938 (shown under “Other revenue”), respectively.

(19) Share capital

A. As of September 30, 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 $6,852,514 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.

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

of shares):
		2021	2020
At January 1		1,074,649	1,078,336
Issuance of new shares		141,602	-
Effect of the joint share exchange	(	537,325)	-
Expiration of restricted employee stock	(	701)	-
At September 30		678,225	1,078,336

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			2021
	At January 1 10,365 3,687	Increase 701 -	Decrease (Note) ( 9,784) ( 1,843)	At September 30 1,282 1,844	Book value
					135,163 $ 159,647

Note ： Influence of conversion under joint share conversion agreement.

Reason for reacquisition Held by subsidiaries Held by the company		2020
	AtJanuary1 Increase 2,565 - 7,800 -	Decrease - -	AtSeptember30 2,565 7,800	Bookvalue
				135,163 $ 190,327

(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.

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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	September 30,2021 1,282 thousand shares 135,163 $ 91,049 $ 1,844 thousand shares 159,647 $ 130,888 $	December 31,2020 2,565 thousand shares 135,163 $ 106,181 $	September 30,2020
			2,565 thousand shares
			135,163 $ 90,664 $

(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.

Sharepremium At January 1, 2021 35,015,440 $ Issuance of new shares 10,308,626 Net change in equity of associates and joint ventures 6,777 Difference between consideration and carrying amount of subsidiaries acquired and disposed 7,754) ( Changes in ownership interests in subsidiaries accounted for using equity method - Expiration of restricted employee stock 7,013 Effect of the joint share exchange 2,366,431) ( At September 30, 2021 42,963,671 $	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 $ - - - - - - - - - - - - - 274,076 - - - - - - - 978,202) ( 64,570) ( 57,244) ( - $ 274,076 $ - $ - $	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 $ - - - - - - - - - - - - - 274,076 - - - - - - - 978,202) ( 64,570) ( 57,244) ( - $ 274,076 $ - $ - $
		- $

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(21)	Retained earnings (Accumulated deficit) 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 Sharepremium transactions subsidiaries or disposed method At January 1, 2020 37,984,477 $ 195,387 $ 854,214 $ 105,198 $ 73,496 $ Capital surplus used to cover accumlated deficit 2,969,037) ( 195,387) ( - 105,198) ( - Change in net asset of associates in equity - - - - 18,325) ( Difference between consideration and carrying amount of subsidiaries acquired and disposed - - 5,704 - - Cash investments from subsidiaries not participating in the capital increase of non-controlling interest proportionately - - 116,619 - - Cash investments from subsidiaries establishing non-controlling interest - - 1,665 - - At September 30, 2020 35,015,440 $ - $ 978,202 $ - $ 55,171 $ 2021 2020 At January 1 7,908,188) ($ 3,269,622) ($ Effect of the joint share exchange 7,908,188 - Profit (loss) for the period 1,736,600 3,504,573) ( Financial assets at fair value through other comprehensive income transferred to investments accounted for using equity method 8,731) ( - Capital surplus used to cover accumlated deficit - 3,269,622 Disposal of investments accounted for using equity method - 212,454 Remeasurement of defined benefit obligations 856) ( - At September 30 1,727,013 $ 3,292,119) ($	Retained earnings (Accumulated deficit) 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 Sharepremium transactions subsidiaries or disposed method At January 1, 2020 37,984,477 $ 195,387 $ 854,214 $ 105,198 $ 73,496 $ Capital surplus used to cover accumlated deficit 2,969,037) ( 195,387) ( - 105,198) ( - Change in net asset of associates in equity - - - - 18,325) ( Difference between consideration and carrying amount of subsidiaries acquired and disposed - - 5,704 - - Cash investments from subsidiaries not participating in the capital increase of non-controlling interest proportionately - - 116,619 - - Cash investments from subsidiaries establishing non-controlling interest - - 1,665 - - At September 30, 2020 35,015,440 $ - $ 978,202 $ - $ 55,171 $ 2021 2020 At January 1 7,908,188) ($ 3,269,622) ($ Effect of the joint share exchange 7,908,188 - Profit (loss) for the period 1,736,600 3,504,573) ( Financial assets at fair value through other comprehensive income transferred to investments accounted for using equity method 8,731) ( - Capital surplus used to cover accumlated deficit - 3,269,622 Disposal of investments accounted for using equity method - 212,454 Remeasurement of defined benefit obligations 856) ( - At September 30 1,727,013 $ 3,292,119) ($
		55,171 $
		2020 3,269,622) - 3,504,573) - 3,269,622 212,454 - 3,292,119)

A. In accordance with the Company’s Articles of Incorporation, 10% of current year’s earnings, after paying all taxes and dues and covering prior years’ losses, shall be appropriated as legal reserve until the total equals the issued share capital. Special reserve shall be appropriated or reversed when needed. The remaining earnings along with the prior years’ accumulated unappropriated earnings are considered as distributable earnings, and shall be 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

~49~

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

(23)

Operating revenue
Unrealizedgain or loss
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
317,351

-

317,351
Revaluation - tax
62,867)
(
-

62,867)
(
Difference on carrying amounts of
subsidiaries disposed
-

6,697)
(
6,697)
(
Disposal of investments in equity
instruments designated at fair value
through other comprehensive income
2,302)
(
-
2,302)
(
Currency translation
–Group
-

182,198)
(
182,198)
(
–Tax on Group
-

26,342
26,342
At September 30, 2021
252,182
$ 162,553)
($ 89,629
$ Unrealizedgain or loss
Currencytranslation
Total
At January 1, 2020
500,148)
($ 785,337)
($ 1,285,485)
($ Revaluation - gross
239,263
-
239,263

Revaluation - tax
47,247)
(
-
47,247)
(
Disposal of investments accounted for
using equity method
212,454)
(
-

212,454)
(
Difference on carrying amounts of
subsidiaries disposed
-
6,404)
(
6,404)
(
Currency translation
–Group
-
84,624)
(
84,624)
(
–Tax on Group
-

16,925
16,925
–Associates
-
11,328)
(
11,328)
(
–Tax on associates
-
2,264
2,264
At September 30, 2020
520,586)
($ 868,504)
($ 1,389,090)
($ Three months ended
Three months ended
September 30,2021
September 30,2020
Revenue from contracts with customers:
Sales revenue
10,243,989
$ 3,709,389
$ Services revenue
30,213
14,040
Other operating revenue
54,512
7,756
10,328,714
$ 3,731,185
$

~50~

Nine months ended Nine months ended September 30, 2021 September 30, 2020

	Sept	ember 30,2021	Sept	ember 30,2020
Revenue from contracts with customers:
Sales revenue	$	26,342,069	$	10,109,416
Services revenue		92,372		124,717
Other operating revenue		138,033		15,646
	$	26,572,474	$	10,249,779

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:

Three months ended September 30, 2021 Sales revenue Services revenue Other operating revenue Three months ended September 30, 2020 Sales revenue Services revenue Other operating revenue Nine months ended September 30,2021 Sales revenue Services revenue Other operating revenue Nine months ended September 30,2020 Sales revenue Services revenue Other operating revenue	Epi/Chip Packages/ Modules Other 7,076,253 $ 2,930,881 $ 236,855 $ - - 30,213 - - 54,512 Epi/Chip Other 3,453,683 $ 255,706 $ $ - 14,040 - 7,756 $ Epi/Chip Packages/ Modules Other 17,986,717 $ 8,041,425 $ 313,927 $ - - 92,372 - - 138,033 Epi/Chip Other 9,449,966 $ 659,450 $ $ - 124,717 - 15,646 $	Epi/Chip Packages/ Modules Other 7,076,253 $ 2,930,881 $ 236,855 $ - - 30,213 - - 54,512 Epi/Chip Other 3,453,683 $ 255,706 $ $ - 14,040 - 7,756 $ Epi/Chip Packages/ Modules Other 17,986,717 $ 8,041,425 $ 313,927 $ - - 92,372 - - 138,033 Epi/Chip Other 9,449,966 $ 659,450 $ $ - 124,717 - 15,646 $	Total
			10,243,989 $ 30,213 54,512
			10,328,714 $
			Total 3,709,389 14,040 7,756
		$	3,731,185
			Total
			26,342,069 $ 92,372 138,033
			26,572,474 $
			Total
		$	10,109,416 124,717 15,646
		$	10,249,779

(24) Other income and expenses– net

Other income and expenses–net Sales revenue 9,449,966 $ Services revenue - Other operating revenue -	659,450 $ 124,717 15,646	10,109,416 $ 124,717 15,646 10,249,779 $
Other income Royalty and technical income Government grants revenue Total	Three months ended September 30,2021 1,366 $ 33,484 34,850 $	Three months ended September 30,2020
		6,760 $ 47,211
		53,971 $

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Nine months ended Nine months ended September 30, 2021 September 30, 2020

Other income Royalty and technical income Government grants revenue Total

Other income	Septemb	Septemb	er 30,2021	Septemb	Septemb	er 30,2020
Royalty and technical income	$		9,136	$		20,827
Government grants revenue			120,598			131,945
Total	$		129,734	$		152,772
Interest income
		Three months ended			Three months ended
		September 30,2021			September 30,2020
Interest income from bank deposits	`$`		`7,894`	`$`		`10,732`
Other interest income			`626`			`20,159`
Net currency exchange loss	`(`		`9,403)`	`(`		`19,686)`
	`($`		`883)`	`$`		`11,205`
		Nine months ended			Nine months ended
		September 30,2021			September 30,2020
Interest income from bank deposits	`$`		`28,746`	`$`		`37,679`
Other interest income			`2,923`			`22,843`
Net currency exchange gains (loss)			`8,396`	`(`		`30,613)`
	`$`		`40,065`	`$`		`29,909`
Other income
		Three months ended			Three months ended
		September 30,2021			September 30,2020
Rental revenue	$		37,759	$		34,927
Dividend income			37,554			8,584
Miscellaneous income			56,559			1,518
	$		131,872	$		45,029
		Nine months ended			Nine months ended
		September 30,2021			September 30,2020
Rental revenue	$		110,931	$		103,033
Dividend income			103,090			16,896
Miscellaneous income			176,816			127,139
	$		390,837	$		247,068

(25) Interest income

(26) Other income

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(27) Other gains and losses

Other gains and losses
		Three months ended			Three months ended
		September 30,2021			September 30,2020
Losses on disposal of property, plant and	($		13,381)	($		22,386)
equipment
Gain on disposal of intangible assets			-			-
Gain on disposal of investments			2,925			47,087
Gain on disposal of non-current assets held
for sale			179,204			-
Net currency exchange gains (losses)			12,621	(		13,613)
Net gain on financial assets at fair value through profit or loss			33,231			4,929
Reversal of impairment loss on non-financial
assets			18,231			-
Miscellaneous losses	(		21,314)	(		84,493)
	$		211,517	($		68,476)
		Nine months ended			Nine months ended
		September 30,2021			September 30,2020
Losses on disposal of property, plant and	($		17,895)	($		41,831)
equipment
Gain on disposal of intangible assets			-			140
Gain on disposal of investments			250,697			45,654
Gain on disposal of non-current assets held
for sale			179,204			691
Net currency exchange losses	(		106,355)	(		74,750)
Net losses on financial assets at fair value	(		24,221)	(		173,340)
through profit or loss
Impairment loss on non-financial assets	(		35,178)			-
Miscellaneous losses	(		67,801)	(		260,653)
	$		178,451	($		504,089)
Finance costs
		Three months ended			Three months ended
		September 30,2021			September 30,2020
Interest expense	$		34,628	$		23,790
Other interest expense			8,387			7,365
	$		43,015	$		31,155
		Nine months ended			Nine months ended
		September 30,2021			September 30,2020
Interest expense	$		81,223	$		83,497
Other interest expense			23,619			21,206
	$		104,842	$		104,703

(28) Finance costs

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(29) Expenses by nature

Expenses by nature
Employee benefit expenses Depreciation charges on property, plant and equipment (Note) Amortisation charges on intangible assets Employee benefit expenses Depreciation charges on property, plant and equipment (Note) Amortisation charges on intangible assets	Three months ended September 30,2021 2,243,001 $ 1,287,276 $ 55,806 $ Nine months ended September 30,2021 6,517,904 $ 3,751,845 $ 175,728 $	Three months ended September 30,2020 1,152,167 $ 1,048,187 $ 58,469 $
		Nine months ended September 30,2020
		3,379,828 $
		3,241,552 $
		186,752 $

Note: Depreciation amounting to $24,211, $60,656, $45,558 and $162,402 were recognized as other expenses for the three months and the nine months ended September 30, 2021 and 2020, respectively.

(30) Employee benefit expenses

respectively. Employee benefit expenses
Wages and salaries Labor and health insurance expenses Pension costs Other personnel expenses Wages and salaries Labor and health insurance expenses Pension costs Other personnel expenses	Three months ended September 30,2021 1,890,548 $ 119,471 89,970 143,011 2,243,001 $ Nine months ended September 30,2021 5,585,450 $ 351,115 247,723 333,615 6,517,904 $	Three months ended September 30,2020
		982,684 $ 72,590 34,797 62,096
		1,152,167 $
		Nine months ended September 30,2020
		2,889,313 $ 215,025 106,983 168,507
		3,379,828 $

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. For the three months and the nine months ended September 30, 2021, employees’ compensation and directors’ remuneration were accrued at $116,512, $14,271, $195,124 and $19,512, respectively.

For the three months and the nine months ended September 30, 2020, the Company incurred loss and thus did not accrue employees’ compensation and directors’ and supervisors’ remuneration.

C. 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 Taiwan Stock Exchange.

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(31) Income tax

A. Income tax expense

(a) Components of income tax expense :

ome tax Income tax expense (a) Components of income tax expense :
		Three months ended			Three months ended
		September 30,2021			September 30,2020
Current tax:
Current tax on profits for the period	$		12,421	$		3,463
Prior year income tax (overestimation)
underestimation	(		100)			1,051
Total current tax			12,321			4,514
Deferred tax:
Origination and reversal of temporary
differences			37,028			11,866
Total deferred tax			37,028			11,866
Income tax expense	$		49,349	$		16,380
		Nine months ended			Nine months ended
		September 30,2021			September 30,2020
Current tax:
Current tax on profits for the period	$		79,828	$		14,704
Prior year income tax (overestimation)
underestimation	(		1,246)			166
Total current tax			78,582			14,870
Deferred tax:
Origination and reversal of temporary
differences			42,691			29,283
Total deferred tax			42,691			29,283
Income tax expense	$		121,273	$		44,153
(b) The income tax (charge)/credit relating to components			of other comprehensive			income is as
follows:
		Three months ended			Three months ended
		September 30,2021			September 30,2020
Change in fair value of financial assets	$		44,665	$		67,499
at fair value through other
comprehensive income
Currency translation differences			3,186			24,626
Share of other comprehensive income
of associates	(		1,519)	(		1,296)
Total	$		46,332	$		90,829

~55~

	Nine months ended	Nine months ended	Nine months ended	Nine months ended
	September 30,2021		September 30,2020
Change in fair value of financial assets	$	62,867	$	47,247
at fair value through other
comprehensive income Currency translation differences	(	24,723)	(	16,925)
Share of other comprehensive income
of associates	(	1,619)	(	2,264)
Total	$	36,525	$	28,058

B. As the Company was established on January 6, 2021, no income tax returns were filed before. Income tax returns of the Company’s significant subsidiaries, Epistar and Lextar through 2019 and 2018 have been assessed and approved by the Tax Authority, respectively.

(32) Earnings (losses) per share

Earnings (losses) per share
		Three months ended September 30, 2021
			Weighted average
			number of outstanding
			ordinary shares		Earnings per share
		Amount after tax	(share in thousands)		(in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent	$	1,296,371	677,291	$	1.91
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	$	1,296,371	677,291
Assumed conversion of all dilutive
potential ordinary shares
Employees' compensation		-	2,748
Profit attributable to ordinary shareholders
of the parent plus assumed conversion of
all dilutive potential ordinary shares	$	1,296,371	680,039	$	1.91
		Three months ended September 30,2020
			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 ordinary
shareholders of the parent	($	1,102,644)	539,168	($	2.05)

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Nine months ended September 30, 2021
Weighted average
number of outstanding
ordinary shares Earnings per share
Amount after tax (share in thousands) (in dollars)
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent $ 1,736,600 677,291 $ 2.56
Diluted earnings per share
Profit attributable to ordinary shareholders
$ 1,736,600 677,291
of the parent
Assumed conversion of all dilutive
potential ordinary shares
Employees' compensation - 1,832
Profit attributable to ordinary shareholders
of the parent plus assumed conversion of
all dilutive potential ordinary shares $ 1,736,600 679,123 $ 2.56
Nine months ended September 30, 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 ordinary
shareholders of the parent ($ 3,504,573) 539,168 ($ 6.50)
Business combinations
A. The Company acquired 100% ordinary shares of Lextar, primarily involved in manufacturing
LED wafers, chips, packages and modules, in the way of share exchange. The Company expects
to strengthen the strategic cooperative relationship after the acquisition.
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(33) Business combinations

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		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

~57~

January 6, 2021

		Jan	uary 6,2021
Financial assets at fair value through other comprehensive income-
current			116,471
Non-current financial assets at amortised cost			39,340
Investments accounted for under equity method			270,320
Property, plant and equipment			4,885,659
Right-of-use assets			384,837
Investment property			463,943
Intangible assets			427,417
Deferred income tax asset			52,158
Other non-current asset			505,036
Financial liabilities at fair value through profit or loss - current	(		4,894)
Notes and accounts receivable (including related parties)	(		2,284,242)
Payables on equipment	(		174,620)
Current lease liabilities	(		26,532)
Other current liabilities	(		1,176,593)
Non-current lease liabilities	(		387,498)
Other non-current liabilities	(		7,731)
Deferred income tax liabilities	(		16,636)
Total identifiable net assets			11,423,768
Goodwill		$	540,778

C. The fair value of property and plant is recognised in the amount of $4,885,659 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 $7,989,482. Lextar Electronics Corp. also contributed profit before income tax of $314,871 over the same period. Had Lextar Electronics Corp. been consolidated from January 1, 2021, the consolidated statement of comprehensive income would show operating revenue of $7,989,482 and profit before income tax of $314,871.

(34) Supplemental cash flow information

A. Investing activities with partial cash payments

			Nine months ended			Nine months ended
		September 30,2021			September 30,2020
Purchase of property, plant and equipment	$		2,825,103	$		4,828,033
Add: Opening balance of payable
on equipment			2,068,474			545,544
Add: Ending balance of prepayment
for equipment			221,467			330,491
Less: Ending balance of payable
on equipment	(		1,134,051)	(		2,150,889)
Less: Opening balance of prepayment
for equipment	(		265,386)	(		144,179)
Cash paid during the period	$		3,715,607	$		3,409,000

~58~

			Nine months ended			Nine months ended
		September 30,2021			September 30,2020
Purchase of intangible assets	$		33,522	$		40,050
Add: Opening balance of payables (including non-current portion)			46,122			94,525
Less: Ending balance of payables (including non-current portion)	(		55,447)	(		58,267)
Cash paid during the period	$		24,197	$		76,308
Investing activities with partial cash received
			Nine months ended			Nine months ended
		September 30, 2021			September 30,2020
Sale of property, plant and equipment	$		161,787	$		356,553
Add: Opening balance of receivables			2,000			2,000
Less: Ending balance of receivables	(		3,672)	(		13,156)
Cash collected during the period	$		160,115	$		345,397

B. Investing activities with partial cash received

(35) Changes in liabilities from financing activities

							Short-term			Guarantee	Guarantee		Liabilities from
	Short-term			Long-term	notes and bills				Lease		deposits	financing activities
		borrowing		borrowing			payable		liabilities		received		gross
At January 1, 2021	$	1,537,574	$	3,338,144		$	568,519	$	1,286,306	$	115,408	$	6,845,951
Acquired from business
combinations		-		-			312,628		414,030		2,984		729,642
Changes in cash flow from
financing activities		3,194,389		770,890	(		74,910)	(	114,750)		33,462		3,809,081
Effect of interest		-		-			-		21,631		-		21,631
Effect of exchange rate	(	9,093)		-	(		9,937)	(	23,614)	(	1,988)	(	44,632)
At September 30, 2021	$	4,722,870	$	4,109,034		$	796,300	$	1,583,603	$	149,866	$	11,361,673
							Short-term			Guarantee			Liabilities from
	Short-term			Long-term	notes and bills				Lease		deposits	financing activities
	borrowing			borrowing			payable		liabilities		received		gross
At January 1, 2020	$	1,683,783	$	1,128,558	$		346,318	$	1,371,449	$	62,370	$	4,592,478
Changes in cash flow from
financing activities	(	268,989)		2,610,909			208,362	(	80,070)		32,893		2,503,105
Effect of interest		-		-			-		19,944		-		19,944
Additions		-		-			-		16,048		-		16,048
Effect of exchange rate	(	14,470)		-	(		2,368)	(	430)	(	409)	(	17,677)
At September 30, 2020	$	1,400,324	$	3,739,467	$		552,312	$	1,326,941	$	94,854	$	7,113,898

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 (Note 3) LEDAZ Co., Ltd. Associates LEDOLUX Sp. Zo. O. Associates best Epitaxy Manufacturing Company Ltd. Associates (Note 2) Interlight Optotech (HK) CO., Limited Associates GCS Holdings, Inc. Associates

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Names of related parties Relationship with the Group
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Names of relatedparties	Relationship with theGroup
Tekcore Co., Ltd.	Associates (Note 4)
Changzhou Chemsemi Co., Ltd.	Associates
Joint Power Exponent, Ltd.	Associates
iReach Corporation	Associates (Note 2)
TE Opto Corporation	Associates
Chuzhou Bwin Technology corp.	Associates
Tyntek Corporation	Associates
CreeLED Hong Kong Ltd.	Other related parties (Note 1)
CreeLED, Inc.	Other related parties (Note 1)
LEYARD EUROPE s.r.o.	Other related parties
Seoul Semiconductor Co., Ltd.	Other related parties
Seoul Viosys Co. ,Ltd.	Other related parties
AU Optronics (Kunshan) Co., Ltd.	Other related parties
AU Optronics (Xiamen) Corp.	Other related parties
AU Optronics (Suzhou) Corp Ltd.	Other related parties
AU Optronics Corp.	Other related parties
Leyard Optoelectronic Co., Ltd.	Other related parties
Leyard TV Technology Co., Ltd.	Other related parties
Shenzhen Leyard Opto-Electronic Co.,	Other related parties
Darwin Precision’s (Xiamen) Co., Ltd.	Other related parties
Darwin Precisions Corporation	Other related parties
Fortech Electronics (Kunshan) Co., Ltd.	Other related parties
Fortech Electronics (Suzhou) Co., Ltd.	Other related parties
Beijing Leyard Equipment Technology Co., Ltd.	Other related parties

Note 1: It is no longer the Company’s other related party beginning on April, 2021. Note 2: The Group lost control over best Epitaxy Manufacturing Company Ltd. and iReach Corporation in June 2021, and thus transferred the entities from consolidated entities to related parties.

Note 3: It is no longer the company’s other related party beginning on December, 2020. Note 4: It is no longer the company’s other related party beginning on May, 2021.

(2) Significant related party transactions and balances

A. Operating revenue:

gnificant related party transactions and balances Operating revenue:
Other related parties Associates Total	Three months ended September 30,2021 551,033 $ 219,623 770,656 $	Three months ended September 30,2020
		520 $ 153,490
		154,010 $

~60~

					Nine months ended		Nine months ended	Nine months ended
				September 30,2021		September		30,2020
Other related parties				$	1,560,030	$		894
Associates					608,930			388,081
Total				$	2,168,960	$		388,975
All products sales prices to related parties are the same as those to third						parties.
B. Purchases:
				Three months ended		Three months ended
				September 30,2021		September		30,2020
Other related parties				$	55,048	($		107)
Associates					121,597			-
Total				$	176,645	($		107)
					Nine months ended		Nine months ended
				September 30, 2021		September		30, 2020
Other related parties				$	106,947	$		-
Associates					235,529			197
Total				$	342,476	$		197
All products purchases	prices to related parties are				the same as those to	third parties.
C. Receivables from related parties:
	September 30,		2021	December 31,2020		September		30,2020
Other related parties	$	479,418		$	279	$		513
Associates		345,204			214,944			237,841
Total	$	824,622		$	215,223	$		238,354
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:
	September 30,		2021	December 31,2020		September		30,2020
Other related parties	$		4,999	$	-	$		-
Associates		24,897			8,556			2,133
Total	$	29,896		$	8,556	$		2,133
The other receivables from related parties arise mainly from rent and service.
E. Payables from related parties:
	September 30,		2021	December 31,2020		September		30,2020
Other related parties	$	58,119		$	-	$		-
Associates		390,663			174,250			275,285
Total	$	448,782		$	174,250	$		275,285

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

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(3) Key management compensation

Key management compensation
Three months ended September 30,2021 Salaries and other short-term employee benefits 48,093 $ Post-employment benefits 779 Termination benefits - Share-based payment 2,640 Total 51,512 $ Nine months ended September 30, 2021 Salaries and other short-term employee benefits 139,346 $ Post-employment benefits 2,443 Termination benefits - Share-based payment 13,509) ( Total 128,280 $	Three months ended September 30,2020 27,107 $ 657 - - 27,764 $ Nine months ended September 30, 2020
	77,392 $ 1,892 30 - 79,314 $

8. PLEDGED ASSETS

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

Pledgrd assets Bank deposits (shown in "Other assets- current") Time deposits (Shown in "Other assets- current and other non- current assets") Notes receivable Land, building and structures Machinery and office equipment		Book value	September 30,2020 337,262 $ 160,780 296,894 270,682 67,907 1,133,525 $	Purpose
	September 30,2021 193,355 $ 291,331 394,565 269,489 102,360 1,251,100 $	December 31,2020 330,295 $ 162,885 197,396 270,683 63,111 1,024,370 $
				Payables for bankers’ acceptance Lease deposit, performance bond, security for provisional attachment, customer deposit, collateral deposits for provisional seizure Short-term borrowings Long-term borrowings Long-term borrowings

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

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

September 30, 2021 December 31, 2020 September 30, 2020 Property, plant and equipment $ 1,345,040 $ 1,135,090 $ 1,360,401

~62~

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital risk management

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

(2) Financial instruments

A. Financial instruments by category

grow and operate indefinitely. Financial instruments A. Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Notes receivable Accounts receivable Accounts receivable due from related parties Other receivables Other receivables due from related parties Guarantee deposits paid Other financial assets	September 30,2021 274,540 $ 4,902,464 11,332,333 1,303,301 11,956,070 824,622 244,534 29,896 28,680 518,072 31,414,512 $	December 31,2020 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 $	September 30,2020
			345,576 $ 4,110,006 6,511,825 1,340,481 5,947,942 238,354 290,595 2,133 11,887 475,201
			19,274,000 $

~63~

September 30, 2021 December 31, 2020 September 30, 2020

Financial liabilities

Financial liabilities	September 30,2021	December 31,2020	September 30,2020
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)	951 $ 4,722,870 796,300 10,246 4,058,201 448,782 5,266,917 4,109,034 - 149,866 19,563,167 $ 1,583,603 $	- $ 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 $	- $ 1,400,324 552,312 10,913 1,539,968 275,285 4,365,828 3,739,467 11,289 94,854
			11,990,240 $
			1,326,941 $

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.

~64~

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:

as follows:
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD RMB:NTD JPY: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) 390,183 $ 437,022 97,599 259,339 268,959 543,061	Book value Exchange rate (in Thousands of NTD) 27.850 10,866,597 $ 4.305 1,881,380 27.850 2,718,132 27.850 7,222,591 4.305 1,157,868 0.249 135,222 September 30,2021 December 31,2020
	Foreign currency amount (in Thousands) 220,340 $ 464,597 97,092 89,698 246,593	Exchange rate 28.480 4.377 28.480 28.480 4.377	Book value (in Thousands of NTD)
			6,275,280 $ 2,033,543 2,769,539 2,554,596 1,079,338

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September 30, 2020
Foreign currency
amount Book value
(in Thousands) Exchange rate (in Thousands of NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD $ 208,461 29.100 $ 6,066,207
RMB:NTD 449,512 4.269 1,918,967
Non-monetary items
USD:NTD 103,101 29.100 3,000,252
Financial liabilities
Monetary items
USD:NTD 86,847 29.100 2,527,237
RMB:NTD 213,469 4.269 911,300
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.
Nine months ended September 30, 2021
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 $ - 27.850 ($ 16,453)
RMB:NTD - 4.305 ( 14,433)
Financial liabilities
Monetary items
USD:NTD - 27.850 266
RMB:NTD - 4.305 3,535
JPY:NTD - 0.249 6,678
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~66~

	Nine months ended September 30,2020	Nine months ended September 30,2020	Nine months ended September 30,2020	Nine months ended September 30,2020	Nine months ended September 30,2020
		Unrealized exchangegain(loss)
	Foreign currency
	amount				Book value
	(in Thousands)		Exchange rate		(in Thousands	of NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	$	-		29.100	($	110,474)
RMB:NTD		-		4.269	(	18,190)
Financial liabilities
Monetary items
USD:NTD		-		29.100		36,452
RMB:NTD		-		4.269	(	2,536)
v. Analysis of foreign	currency market	risk arising from significant foreign				exchange
variation:
	Nine months ended September 30, 2021
			Sensitivity analysis
			Effect on profit		Effect on other
	Degree of variation			or loss	comprehensive income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	1%		$	108,666	$	-
RMB:NTD	1%			18,814		-
Non-monetary items
USD:NTD	1%			-		27,181
Financial liabilities
Monetary items
USD:NTD	1%			72,226		-
RMB:NTD	1%			11,579		-
JPY:NTD	1%			1,352		-

~67~

	Nine months	Nine months	ended September	ended September	30,2020
		Sensitivityanalysis
		Effect on profit			Effect on other
	Degree of variation		or loss	comprehensive income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD	1%	$	60,662	$	-
RMB:NTD	1%		19,190		-
Non-monetary items
USD:NTD	1%		-		30,003
Financial liabilities
Monetary items
USD:NTD	1%		25,272		-
RMB:NTD	1%		9,113		-

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 nine months ended September 30, 2021 and 2020 would have increased/decreased by $27,454 and $34,558, 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 $490,246 and $411,001, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

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 $3,390 and $2,909 for the nine months ended September 30, 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.

~68~

(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 September 30,2021, December 31,2020 and September 30,2020, 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 September 30,2021, December 31,2020 and September 30, 2020, the provision matrix, loss rate methodology is as follows:

September 30, 2021	Notpast due 0~5% 14,006,386 $ 3,184 $ Notpast due 0~5% 7,225,686 $ 4,591 $	Up to 30 days past due 0~5% 199,479 $ 2,171 $ Up to 30 days past due 0~5% 326,702 $ 13,490 $	31~90 days past due 0~56% 106,632 $ 71,230 $ 31~90 days past due 0~56% 176,962 $ 71,546 $	91~180 days past due 0~100% 98,964 $ 11,818 $ 91~180 days past due 0~100% 869,951 $ 766,225 $	Over 180 days past due 0~100% 1,036,252 $ 1,000,887 $ Over 180 days past due 0~100% 63,606 $ 45,377 $	Total
						15,447,713 $
Expected loss rate Total book value Loss allowance December 31, 2020
						1,089,290 $
						Total
						8,662,907 $
Expected loss rate Total book value Loss allowance
						901,229 $

~69~

September 30, 2020	Notpast due 0~5% 6,825,531 $ 702 $	Up to 30 days 31~90 days 91~180 days Over 180 days past due past due past due past due Total 0~5% 0~56% 0~100% 0~100% 297,592 $ 915,972 $ 119,734 $ 106,844 $ 8,265,673 $ 68 $ 410,056 $ 1,310 $ 34,032 $ 446,168 $ Individualprovision Group provision Total 27.38%~100% 0%~100% 1,088,124 $ 14,359,589 $ 15,447,713 $ 1,074,411 $ 14,879 $ 1,089,290 $ Individualprovision Group provision Total 19.10%~100% 0%~100% 869,582 $ 7,793,325 $ 8,662,907 $ 869,582 $ 31,647 $ 901,229 $ Individualprovision Group provision Total 61.57%~100% 0.01%~100% 426,585 $ 7,839,088 $ 8,265,673 $ 426,585 $ 19,583 $ 446,168 $	Total
			8,265,673 $
Expected loss rate Total book value Loss allowance September 30, 2021
			446,168 $

Expected loss rate Total book value Loss allowance December 31, 2020
Expected loss rate Total book value Loss allowance September 30, 2020
Expected loss rate Total book value Loss allowance

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

		2021	2021
	Accounts receivable
		(including notes
		receivable)		Other receivables
At January 1	$	858,748	$	42,481
Acquired from business combination		13,071		-
Provision for impairment		171,499		57,835
Reversal of impairment	(	44,896)		-
Write-offs	(	6,519)		-
Disposal of subsidiaries	(	2,704)		-
Effect of exchange rate changes	(	225)		-
At September 30	$	988,974	$	100,316

~70~

2020

Accounts receivable

(including notes

	Accounts receivable (including notes
At January 1 Provision for impairment Reversal of impairment Write-offs Effect of exchange rate changes At September 30	receivable) 10,672 $ 477,169 73,379) ( 565) ( 100) ( 413,797 $	Other receivables
		23,125 $ 9,246 - - -
		32,371 $

(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 September 30,2021, December 31,2020 and September 30,2020, the Group held money market position of $11,541,502, $5,398,781 and $6,701,455, 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.

Non-derivative financial liabilities:

undiscounted cash flows. Non-derivative financial liabilities:
September 30, 2021 Short-term borrowings Short-term notes and bills payable Financial liabilities at fair value through profit or loss Notes payable Accounts payable (including related parties) Other payables	Less than 1year Between 1 and 5 years 4,722,870 $ - $ 796,300 - 951 - 10,246 - 4,506,983 - 5,266,917 - 120,661 417,530 131,991 4,060,981 146,816 3,050	Between5and 7years - $ - - - - - 341,519 49,458 -	Over 7years
			- $ - - - - - 1,041,180 - -
Lease liabilities
Long-term borrowings (including current portion) Guarantee deposits received

~71~

Non-derivative financial liabilities:

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) Guarantee deposits received Non-derivative financial liabilities: September 30, 2020 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable ( including related parties) Other payables Lease liabilities Long-term borrowings (including current portion) Long-term accounts payable (including current portion) Guarantee deposits received	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 1,400,324 $ 552,312 10,913 1,815,253 4,365,828 130,288 733,492 - 94,188	Between 1 and5 years - $ - - - - 280,152 3,271,280 - Between 1 and5 years - $ - - - - 276,248 3,073,832 11,290 -	Between5and 7years - $ - - - - 116,566 - 666 Between5and 7years - $ - - - - 112,988 - - 666	Over 7years - $ - - - - 1,088,058 - - Over 7years
				- $ - - - - 926,558 - - -

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.
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.

~72~

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 4,109,034 $ Book value 3,338,145 $ Book value 3,739,467 $	Level 1 - $ September Level 1 - $ December Level 1 - $ September	Level 2 4,143,941 $ Fair value 30,2021 Level 2 3,379,079 $ 31,2020 Fair value Level 2 3,772,942 $ 30, 2020 Fair value	Level 3
				- $
				Level 3
				- $
				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 September 30, 2021, December 31, 2020 and September 30, 2020 is as follows:
(a) The related information of natures of the assets and liabilities is as follows:

September 30, 2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Derivatives Financial assets at fair value through other comprehensive income Equity securities Total Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives	Level 1 120,241 $ 87,362 - 583,682 791,285 $ - $	Level 2 - $ - 1,566 - 1,566 $ 951 $	Level 3 65,371 $ - - 4,318,782 4,384,153 $ - $	Total
				185,612 $ 87,362 1,566 4,902,464
				5,177,004 $
				951 $

~73~

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 September 30, 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 1 130,533 $ 40,237 460,640 631,410 $ Level 1 72,891 $ 116,739 293,593 483,223 $	Level 2 - $ - - - $ Level 2 - $ - - - $	Level 3 179,275 $ - 3,923,660 4,102,935 $ Level 3 155,946 $ - 3,816,413 3,972,359 $	Total
				309,808 $ 40,237 4,384,300
				4,734,345 $
				Total
				228,837 $ 116,739 4,110,006
				4,455,582 $

(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

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.

~74~

v. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.
(c) The following chart is the movement of Level 3 for the nine months ended September 30,2021 and 2020:

30,2021 and 2020:
			2021			2020
		Financial instruments			Financial instruments
At January 1	$		4,102,935	$		3,465,868
Loss recognised in profit or loss	(		46,975)	(		1,817)
Gain recognised in other comprehensive income			322,061			225,326
Disposals	(		144,804)	(		1,252)
Additions			155,124			7,216
Acquired from business combination			17,040			-
Transfers into level 3	(		21,084)			277,018
Effect of exchange rate changes	(		144)			-
At September 30	$		4,384,153	$		3,972,359

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

~75~

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 Unlisted shares De-an Venture Capital Co., Ltd. Non-derivative equity	Significant Fair value at Valuation unobservable September30,2021 technique input 2,711,847 $ Market comparable companies Price to book ratio multiple Discount for lack of marketability 30,647 Market comparable companies Enterprise value to operating income ratio multiple Discount for lack of marketability 207,641 Market comparable companies Price to earnings ratio multiple Discount for lack of marketability 1,259,542 Market comparable companies Enterprise value to EBITDA ratio multiple Discount for lack of marketability 154,980 Net asset value N/A 19,496 Net asset value N/A instrument:	Range Relationship of (weighted average) inputs to fairvalue 1.26 ~ 11.53 The higher the multiple, the higher the fair value. 20% ~ 30% The higher the discount for lack of marketability, the lower the fair value. 0.992 ~ 2.85 The higher the multiple, the higher the fair value. 20% ~30% The higher the discount for lack of marketability, the lower the fair value. 13.21 ~ 15.69 The higher the multiple, the higher the fair value. 20% The higher the discount for lack of marketability, the lower the fair value. 15.43 ~ 16.59 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 - N/A	Relationship of inputs to fairvalue

~76~

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

~77~

Unlisted shares Unlisted shares Unlisted shares Unlisted shares De-an Venture Capital Co., Ltd. Non-derivative equity	Significant Fair value at Valuation unobservable September30,2020 technique input 2,766,058 $ Market comparable companies Price to book ratio multiple Discount for lack of marketability 8,875 Market comparable companies Enterprise value to operating income ratio multiple Discount for lack of marketability 268,971 Market comparable companies Price to earnings ratio multiple Discount for lack of marketability 909,759 Market comparable companies Enterprise value to EBITDA ratio multiple Discount for lack of marketability 18,696 Net asset value N/A instrument:	Range Relationship of (weighted average) inputs to fairvalue 0.98 ~ 5.23 The higher the multiple, the higher the fair value. 20% ~ 30% The higher the discount for lack of marketability, the lower the fair value. 2.83 The higher the multiple, the higher the fair value. 20% The higher the discount for lack of marketability, the lower the fair value. 15.9 ~ 22.78 The higher the multiple the higher the fair value. 20% The higher the discount for lack of marketability, the lower the fair value. 17.16 ~ 32.08 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

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

have changed:
Financial assets Equity instrument Financial assets Equity instrument	Input Multiple Input Multiple	Change ±1% Change ±1%	September	30, 2021
			Favourable Unfavourable change change 654 $ 654) ($ Recognised in profit or loss December	Recognised in other comprehensive income
				Favourable Unfavourable change change 43,188 $ 43,188) ($ 31,2020	Unfavourable change

			Favourable Unfavourable change change 1,793 $ 1,793) ($ Recognised in profit or loss	Recognised in other comprehensive income
				Favourable Unfavourable change change 39,237 $ 39,237) ($	Unfavourable change

~78~

(4)	For the nine months ended September 30, Input Change Financial assets Equity instrument Multiple ±1%	September
	operations.

Due to the outbreak of COVID-19 in May, 2021 in Taiwan, in addition to actively cooperating with the local governments’ epidemic precaution policies, the Group held 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 three seasons, overall sales increased significantly compared to the same period last year due to the strong demand for LED backlight, automotive LED and sensors, as well as the mass production of Mini LED in the first half of the year. As a whole, the impact of COVID-19 on the operation of the Group was immaterial. The Group will continue to monitor the trend of the 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: Please refer to table 4.
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: Please refer to table 5.
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 6.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 7.
I. Trading in derivative instruments undertaken during the reporting periods: please refer to Notes 6(2) and 12(3).
J. Significant inter-company transactions during the reporting periods: Please refer to table 8.
(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 9.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 10.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 11.

(4) Major shareholders information

Major shareholders information: None.

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14. SEGMENT INFORMATION

(1) General information:

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

(2) Segment information

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

(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:

Nine months ended September 30, 2021

Revenues from external customers Segment income (loss) Segment assets	Epistar Group	Lextar Group Others 7,989,482 $ - $ 251,856 179,264) ( 16,313,985 1,836,265	Consolidated
	18,582,992 $ 1,415,707 59,970,125		26,572,474 $ 1,488,299 78,120,375

Nine months ended September 30, 2020

Revenues from external customers Segment income (loss) Segment assets	Epistar Group	Lextar Group - $ - -	Others Consolidated - $ 10,249,779 $ - 3,771,286) ( - 60,038,536
	10,249,779 $ 3,771,286) ( 60,038,536

~80~

ENNOSTAR INC. AND SUBSIDIARIES Loans to others Nine months ended September 30, 2021

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the nine months ended 30-Sep-21	Balance at 30-Sep-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
													Item	Value
1 1 1 2 2 3 4 4	Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Ltd. Epicrystal (Changzhou) Ltd. Yenrich Technology Corporation Lextar Electronics Corporation Lextar Electronics Corp.	Jiangsu Canyang Optoelectronics Ltd. Unikorn Semiconductor Corporation ENNOSTAR Inc. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Jiangsu Canyang Optoelectronics Ltd. iReach Corporation ENNOSTAR Inc. Yenrich Technology Corporation	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	438,400 $ 300,000 400,000 218,250 349,200 20,000 100,000 250,000	430,500 $ 300,000 400,000 215,250 344,400 - 100,000 250,000	- $ 150,000 - - 86,100 - - 200,000	4.14% 1.56% 1.25% 4.35% 4.35% 1.56% 1.25% 1.05%	Short- term financing Short- term financing Short- term financing Short- term financing Short- term financing Short- term financing Short- term financing Short- term financing	- $ - - - - - - -	Working capital Working capital Working capital Working capital Working capital Working capital Working capital Working capital	- $ - - - - - - -	Promissory Note Promissory Note Promissory Note None Promissory Note None None Promissory Note	430,500 $ 300,000 400,000 - 344,400 - - 250,000	3,883,836 $ 3,883,836 3,883,836 875,629 875,629 280,347 987,652 987,652	11,651,509 $ 11,651,509 11,651,509 1,313,444 1,313,444 280,347 3,950,608 3,950,608	Note 1 Note 1 Note 1 Note 2 Note 2 Note 3 Note 4 Note 4

Table 1-1

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the nine months ended 30-Sep-21	Balance at 30-Sep-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
													Item	Value
5 6	Lextar Electronics (Suzhou) Corp. Lextar (Singapore) Pte. Ltd.	Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp.	Other receivables- related parties Other receivables- related parties	Y Y	526,080 251,640	516,600 125,325	172,200 -	1%~ 4.45% 1.5%~ 2.25%	Short- term financing Short- term financing	- -	Working capital Working capital	- -	None None	- -	987,652 987,652	2,751,977 1,989,316	Note 5 Note 6

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) 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 Yenrich 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 Corporation Procedures for Provision of Loans: the limit on loans granted to a single party is 10% of its net equity, and the ceiling on total loans granted is 40% of its net equity.The total amount for fund-lending between the subsidiaries whose voting shares are 100% owned, directly and indirectly, by the Company will not be subject to the limit of 40% of the net worth of the lending subsidiary. However, these subsidiaries shall still prescribe limits on the aggregate amount of such loans and on the amount of such loans permitted to a single borrower, and shall specify limits on the durations of such loans.

Note 5: In accordance with Lextar Electronics (Suzhou) Corp.’s Procedures for Provision of Loans: the ceiling on total loans granted is 80% of its net equity and 40% of the net equity of Lextar Electronics Corporation, and the limit on loans granted to a single party is 80% of its net equity and 10% of the net equity of Lextar Electronics Corporation
Note 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 Corporation, and the limit on loans granted to a single party is 80% of its net equity and 10% of the net equity of Lextar Electronics Corporation

Table 1-2

ENNOSTAR INC. AND SUBSIDIARIES Provision of endorsements and guarantees to others Nine months ended September 30, 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 September 30, 2021	Outstanding endorsement/ guarantee amount at September 30, 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 MainlandChina	Footnote
1 1 1 1 2	Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Episky Corporation (Xiamen) Ltd.	Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd Unikorn Semiconductor Corporation Yenrich Technology Corporation SHENZHEN EPIKYLIN OPTOELECTRO NICS CO.,LTD	2 2 2 2 2	3,883,836 $ 3,883,836 3,883,836 3,883,836 548,457	1,540,890 $ 513,630 1,620,955 142,675 434,500	1,503,900 $ 501,300 1,551,300 - 430,500	303,195 $ - 635,939 - -	- $ - - - -	3.87 1.29 3.99 - 19.62	7,767,673 $ 7,767,673 7,767,673 7,767,673 877,531	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 seven categories; fill in the number of category each case belongs to:
(1) Having business relationship.
(2) The endorser/guarantor parent company owns directly or indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3) The endorser/guarantor parent company and its subsidiaries jointly own directly or indirectly more than 50% voting shares of the endorsed/guaranteed company.
(4) The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary.
(5) Mutual guarantee of the trade as required by the construction contract.
(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(7) Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other. Note3: (1) In accordance with the Epistar’s Procedures for Provision of endorsements and guarantees to others: the ceiling on total endorsements/guarantees is 20% of the Company’s net assets, and the limit on endorsements/guarantees to a single party is 10% of its net assets.
(2) In accordance with the Episky (Xiamen) ’s Procedures for Provision of endorsements and guarantees to others: the ceiling on total endorsements/guarantees is 40% of the Company’s net assets, and the limit on endorsements/guarantees to a single party is 25% of its net assets.

Table 2-1

ENNOSTAR INC. AND SUBSIDIARIES Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) September 30, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Table 3

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of September 30,2021	As of September 30,2021		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	E&E Japan Co.Ltd. (Stock) NATEC CORPORATION (Stock) Esleds Co.,Ltd. (Stock) Lynk Labs,Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Chi Lin Optoelectronics Co., Ltd. (Stock) Dominant Opto Technologies Sdn. Bhd. (Stock) Crystalwise Technology Inc. (Stock) XENIO CORPORATION (stock) Edison Opto Corp. (Stock)	None None 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 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	140 120,000 1,000 92,523 1,339,235 2,868,402 11,000,000 2,664,355 7,878 6,784,000	2,143 $ 1,748 148 50,484 190,866 65,371 1,259,542 47,958 - 139,411	17.07 7.50 10.00 7.39 12.24 12.57 10.00 3.02 0.06 5.54	2,143 $ 1,748 148 50,484 190,866 65,371 1,259,542 47,958 - 139,411

Table 3-1

As of September 30, 2021

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Epistar Corporation Epistar Corporation Epistar Corporation Epistat Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. Episky Corporation(Xiamen) Ltd. Episky Corporation(Xiamen) Ltd.	PlayNitride Inc. (Stock) OSTENDO TECHNOLOGIES,INC. (Stock) Nan Ya Photonics Incorporation (Stock) Tekcore co., Ltd. (Stock) Phecda Technology Co., Ltd. (Stock) Elit Fine Ceramics Co., Ltd. (Stock) Nanocrystal Technology Inc. (Stock) ENNOSTAR Inc. (Stock) KAISTAR Lighting (Xiamen) Co., Ltd. (Stock) China Firstar Optoelectronic Materials Co., Ltd. (Stock) APT Electronics Co., Ltd.(Stock)	None None None None None None None Parent company None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current 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 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	4,568,669 67,500 9,173,000 7,690,522 600,000 2,200,000 6,000,000 1,843,500 cash USD48,000,000 cash RMB7,500,000 4,678,240	301,924 $ - 207,641 103,623 - - - 130,889 1,742,305 21,755 54,846	10.09 4.50 19.90 17.77 2.11 4.68 11.11 0.27 17.65 15.00 1.14	301,924 $ - 207,641 103,623 - - - 130,889 1,742,305 Not listed. No market value available. Not listed. No market value available.	Note 1

Table 3-2

As of September 30, 2021

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Episky Corporation(Xiamen) Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	China Crystal Technologies Co.,Ltd.(Stock) Oree Advanced Illumination Solutions, Inc. (Stock) Lustrous Technology Ltd. (Stock) TERA XTAL TECHNOLOGY CORPORATION (Stock) XENIO CORPORATION (Stock) FormoLight Technologies, Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Edison Opto Corp. (Stock) Rigidtech Microelectronics Cops. (Stock) Ledimond Opto Corporation (Stock) LEDLITEK Co., Ltd. (Stock) De-an Venture Capoital Co., Ltd. (Stock)	None None None None None None None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income 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	8,064,516 79,407 266,892 795,000 16,462 2,038,230 562,018 10,705,000 1,550,253 1,100,000 50,000 2,000,000	13,030 $ - - - - 15,067 80,098 219,988 11,367 10,530 - 19,496	4.08 5.00 8.99 0.42 0.13 10.00 5.14 8.74 2.17 16.92 6.20 10.77	Not listed. No market value available. - - - - 15,067 80,098 219,988 11,367 10,530 - 19,496

Table 3-3

As of September 30, 2021

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Full Star Enterprises Limited HUGA Holding (SAMOA) Ltd. HUGA Holding (SAMOA) Ltd.	iReach 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) PlayNitride Inc. (Stock) China Crystal Technologies Co.,Ltd.(Stock) OEPIC SEMICONDUCTORS,INC.(Stock)	Investee company accounted for under the equity method of Epistar Corporation None Parent company None None None 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 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	370,000 5,851,182 1,282,377 4,559,731 41,500 582,983 987,500 778,541 200,000 600,000 17,741,935 377,358	1,891 $ 120,241 91,049 62,336 - - - 51,451 28,504 39,652 28,667 3,287	1.70 4.78 0.19 N/A 5.15 3.00 6.91 1.72 1.83 1.33 8.97 8.93	1,891 $ 120,241 91,049 62,336 - - - 51,451 28,504 39,652 28,667 3,287	Note1

Table 3-4

As of September 30, 2021

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
GaNrich Semiconductor Corporation Lextar Electronics Corporation Lextar Electronics Corporation Wellybond Corporation Wellybond Corporation Lextar Electronics (Suzhou) Corp. Amengine Corporation	Franklin Templeton Sinoam Money Market Fund (beneficiary certificates) Jhong Wei Corporation(Stock) China Electric Mfg.Corp.(Stock) China Electric Mfg.Corp.(Stock) Wellysun Inc.(Stock) Suzhou Hanhua Semiconductor Co., Ltd(Stock) Franklin Templeton Sinoam Money Market Fund (beneficiary certificates)	None None None None Wellybond is a director of Wellysun Inc. None None	Current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Current financial assets at fair value through profit or loss	1,437,208 106,000 5,265,000 1,862,640 2,400,000 - 958,111	15,016 $ - 53,703 18,999 27,360 154,980 10,010	N/A - 1.63 0.58 5.61 3.58 N/A	15,016 $ - 53,703 18,999 27,360 154,980 10,010	Note 2

Note 1: Transferred from the Epistar’s stocks held as treasury stocks. Note 2: The company registrations had been canceled.

Table 3-5

ENNOSTAR INC. AND SUBSIDIARIES

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

Nine months ended September 30, 2021

					Nine months ended	Nine months ended	September 30, 2021	September 30, 2021
Table 4 Investor	Marketable securities `（`Note 1`）`	General ledger account	Counterparty `（`Note 2`）`	Relationship with the investor `（`Note 2`）`	Balance as at January1,2021		Addition `（`Note3`）`			Disposal `（`Note3`）`		Balance as at Expressed in thousands of NTD (Except as otherwise indicated) September30,2021
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
ENNOSTAR Inc. ENNOSTAR Inc. Harvestar Investment Corp. Epistar Corporation Epistar Corporation Epistar Corporation Lextar Electronics Corporation	GCS Holding Inc. Tyntek Corporation GCS Holding Inc. Yenrich Technology Corporation. Taishin 1699 Money Market Fund Tyntek Corporation Tyntek Corporation	Investments accounted for under equity method Investments accounted for under equity method Investments accounted for under equity method Investments accounted for under equity method Financial assets at fair value through profit or loss Investments accounted for under equity method Investments accounted for under equity method	- - - Lextar Electronics Corporation - - -	- - - Related - - -	- - - 60,000,000 - - -	$ - - - 600,000 - - -	9,028,000 23,799,000 9,013,000 - 24,452,879 10,218,000 9,423,000	$431,990 584,583 433,099 - 334,000 187,467 196,364	- - - 60,000,000 24,452,879 10,218,000 9,423,000	$ - - - 566,341 334,125 243,699 224,739	$ - - - 534,991 334,000 264,514 241,689	$ - - - - 125 ( 20,815) ( 16,950)	9,028,000 23,799,000 9,013,000 - - - -	$ 431,990 591,908 433,099 - - - -

Table 4-1

Investor	Marketable securities `（`Note 1`）`	General ledger account	Counterparty `（`Note 2`）`	Relationship with the investor `（`Note 2`）`	Balance as at January1,2021	Balance as at January1,2021	Addition `（`Note3`）`	Addition `（`Note3`）`		Disposal `（`Note3`）`	Disposal `（`Note3`）`		Balance as at September30,2021	Balance as at September30,2021
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Lextar Electronics Corporation	Yenrich Technology Corporation	Investments accounted for under equity method	Epistar Corporation	Related	-	$ -	60,000,000	$566,341	-	$ -	$ -	$ -	60,000,000	$ 505,795

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more. Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 4-2

ENNOSTAR INC. AND SUBSIDIARIES

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

Nine months ended September 30, 2021

Table 5 Real estate disposed by	Real estate	Transaction date or date of the event	Date of acquisition	Book value	Disposal amount	Status of collection ofproceeds	Gain (loss) on disposal	Counterparty	Relationship with the seller	Reason for disposal	Basis or reference used in Other settingtheprice commitments Expressed in thousands of NTD (Except as otherwise indicated)	Basis or reference used in Other settingtheprice commitments Expressed in thousands of NTD (Except as otherwise indicated)
Epistar Corporation	Land and plant of the Longtan	2021/5/27	2016/9/29	250,796 $	430,000 $	Installment based on agreement	179,204 $	ARDENTEC CORPORATION	None	Assets activation for reducing cost	Appraisal report	None

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

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

Table 5-1

Table 6

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

Nine months ended September 30, 2021

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)
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd.	SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD	Note 1 Note 1 Note 1 Note 2 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	($ 1,508,810) ( 294,374) ( 320,661) ( 139,276) ( 243,878) ( 191,792) ( 669,800) ( 738,780) ( 364,120) ( 283,711) ( 319,308) ( 1,301,332)	( 45) ( 9) ( 2) ( 1) ( 2) ( 1) ( 4) ( 5) ( 2) ( 2) ( 14) ( 56)	90 days after month- end closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	$ 655,611 88,541 260,340 - 205,993 61,887 437,548 508,217 127,199 133,225 115,559 794,918	35 5 3 - 2 1 4 5 1 1 5 33
	Epistar Corporation					60 days after next month-end closing
	LEDAZ Co., Ltd CreeLED Hong Kong LTD. Jiangsu Canyang Optoelectronics Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Yenrich Technology Corporation Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation					90 days after month- end closing 90 days after month- end closing 180 days after month- end closing 60 days after month- end closing 180 days after month- end closing 180 days after next month-end closing 90 days after month- end closing 120 days after month- end closing 90 days after month- end closing 150 days after month- end closing

Table 6-1

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)
			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. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Lextar Electronics Corporation Lextar Electronics Corporation LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Yenrich Technology Corporation Yenrich Technology Corporation Prolight Opto Technology Corporation Yenrich Technology Corporation	Episky Corporation (Xiamen) Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. CreeLED Hong Kong LTD. Fortech Electronics (Suzhou) Co., Ltd. Leyard TV Technology Co., Ltd. LEYARD EUROPE s.r.o. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. LEDAZ Co., Ltd Shanghai Welight Electronic Co., LTD Epistar Corporation	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 2 Other related parties Other related parties Other related parties Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Purchases	($ 930,195) ( 795,705) ( 668,425) ( 209,084) ( 130,786) ( 3,393,423) ( 723,463) ( 173,532) ( 225,004) ( 448,099) ( 290,729) ( 110,814) ( 194,248) ( 176,086) 283,711	( 40) ( 49) ( 41) ( 13) ( 16) ( 59) ( 13) ( 3) ( 4) ( 60) ( 39) ( 19) ( 33) ( 24) 53	90 days after month- end closing 90 days after month- end closing 90 days after month- end closing 90 days after next month-end closing OA 90 days~OA 120 days OA 90 days~OA 120 days OA 90 days~OA 120 days OA 45 days 120 days after month- end closing 30%: 7 days after signing the contract, 70%: the 15th of the next month after shipment 30%: Prepayments before shipment, 70%: 60 days after shipment 60 days after month- end closing 90 days after month- end closing, paid on the 20th of the next month 120 days after month- end closing 120 days after month- end closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	$ 819,506 76,657 326,918 52,974 20,594 1,383,988 438,727 - 131,466 129,608 77,788 4,831 98,753 139,678 ( 133,225)	34 10 45 7 4 57 18 - 5 62 37 2 49 48 ( 57)

Table 6-2

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)
Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd Epicrystal (Changzhou) Co., Ltd Jiangsu Canyang Optoelectronics Ltd. Shanghai Welight Electronic Co., LTD LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Lextar Electronics Corporation	Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Epistar Corporation Prolight Opto Technology Corporation Yenrich Technology Corporation Epistar Corporation Epistar Corporation Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. LEDAZ Co., Ltd Lextar Electronics (Suzhou) Corp.	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	$ 668,425 738,780 930,195 795,705 294,374 1,301,332 209,084 364,120 243,878 176,086 110,814 191,792 669,800 1,508,810 319,308 - 130,786	23 26 32 10 4 16 12 21 17 99 16 28 31 69 23 - 3	90 days after month- end closing 180 days after next month-end closing 90 days after month- end closing 90 days after month- end closing 60 days after next month-end closing 150 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 60 days after month- end closing 60 days after month- end closing 180 days after month- end closing 90 days after month- end closing 90 days after month- end closing 90 days after month- end closing OA 90 days~OA 120 days	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	($ 326,918) ( 508,217) ( 819,506) ( 76,657) ( 88,541) ( 794,918) ( 52,974) ( 127,199) ( 205,993) ( 139,678) ( 4,831) ( 61,887) ( 437,548) ( 655,611) ( 115,559) ( 262,044) ( 20,594)	( 20) ( 31) ( 50) ( 3) ( 3) ( 27) ( 13) ( 31) ( 56) ( 100) ( 3) ( 39) ( 40) ( 59) ( 32) ( 9) ( 1)

Table 6-3

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)
Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp.	Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Chuzhou Bwin Technology Corp.	Note 1 Note 1 Other related parties	Purchases Purchases Purchases	$ 3,393,423 723,463 184,823	70 91 4	OA 90 days~OA 120 days OA 90 days~OA 120 days OA 60 days~OA 120 days	Normal Normal Normal	Normal Normal Normal	($ 1,383,988) ( 438,727) ( 60,905)	( 72) ( 94) ( 3)

Note 1: Investee company accounted for under the equity method directly and indirectly. Note 2: It is no longer the company’s other related party beginning on April, 2021.

Table 6-4

ENNOSTAR INC. AND SUBSIDIARIES

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

September 30, 2021

Table 7 Creditor	Counterparty	Relationship with the counterparty	Balance as at September 30,2021	Balance as at September 30,2021	Total	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated)
			Accounts receivable	Other receivable			Amount	Action taken
Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd.	SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD LEDAZ Co., Ltd Jiangsu Canyang Optoelectronics Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Episky Corporation (Xiamen) Ltd. Unikorn Semiconductor Corporation Epicrystal (Changzhou) Co., Ltd. Yenrich Technology Corporation Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	$ 655,611 260,340 205,993 437,548 508,217 7,978 127,199 133,225 115,559 794,918	$ - - 37,737 732 4,608 493,026 23,393 97,167 87,047 -	$ 655,611 260,340 243,730 438,280 512,825 501,004 150,592 230,392 202,606 794,918	5.46 2.19 0.80 4.08 2.18 0.12 2.91 0.10 2.41 2.83	$ 28,437 101,569 31,662 1 1,581 - 7,164 - 532 -	Note 1 - Note 1 - - - Note 1 - - -	132,329 - 50,216 71,402 84,043 - 36,107 45,879 - 151,996	$ - 71,700 - - - - - - - -

Table 7-1

Creditor	Counterparty	Relationship with the counterparty	Balance as at September 30,2021	Balance as at September 30,2021	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
Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Luxlite (Shenzhen) Corporation Limited Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Prolight Opto Technology Corporation LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd.	Episky Corporation (Xiamen) Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Lextar Electronics (Chuzhou) Corp. Epistar Corporation Fortech Electronics (Suzhou) Co., Ltd. Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Shanghai Welight Electronic Co., LTD Leyard TV Technology Co., Ltd.	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Other related parties Note 2 Note 2 Note 2 Other related parties	$ 819,506 76,657 326,918 12,825 462,997 431,898 131,466 1,383,988 438,727 139,678 129,608	$ 168 - - - - - - - - - -	$ 819,674 76,657 326,918 12,825 462,997 431,898 131,466 1,383,988 438,727 139,678 129,608	1.38 10.93 2.93 0.06 3.84 0.04 2.56 3.48 2.10 1.97 7.92	388,051 - - 12,623 - - - 82,902 112,106 40,780 -	- - - Note 1 - - - Note 1 Note 1 - -	- 67,959 - 12,623 287,834 24,891 468,025 73,546 26,697 26,244	$ - - - - - - - - - - -

Note 1: The Company endeavored to collect the overdue amount. Epistar has received $30,217 and $6,634 from Jiangsu Canyang and Epicrystal (Changzhou) respectively ;and Episky(Xiamen) has received $28,437 from SHENZHEN EPIKYLIN；Luxlite (Shenzhen) Corporation Limited has received $12,623 from SHENZHEN EPIKYLIN; Lextar(Chuzhou) has received $82,902 and $73,546 from Lextar and Lextar(Suzhou). Note 2: Investee company accounted for under the equity method directly and indirectly.

Table 7-2

Table 8

ENNOSTAR INC.AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

Nine months ended September 30, 2021

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
1 1 1 1 1 1 1 1	Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Jiangsu Canyang Optoelectronics Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Yenrich Technology Corporation Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd.	3 3 3 3 3 3 3 3	Sales Sales Sales Sales Sales Sales Cost of goods sold Cost of goods sold	$ 243,878 191,792 669,800 738,780 364,120 283,711 795,705 294,374	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	0.92 0.72 2.52 2.78 1.37 1.07 2.99 1.11

Table 8-1

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
1 1 1 1 1 1 1 1 2 2	Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd.	Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Yenrich Technology Corporation Epicrystal (Changzhou) Co., Ltd. Unikorn Semiconductor Corporation Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd.	3 3 3 3 3 3 3 3 3 3	Cost of goods sold Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts payable Other receivable Sales Sales	$ 1,301,332 205,993 437,548 508,217 127,199 130,827 794,918 493,026 319,308 930,195	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 Based on contract terms Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	4.90 0.26 0.56 0.65 0.16 0.17 1.02 0.63 1.20 3.50

Table 8-2

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
2 2 3 4 4 5 5 5 5	Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd. Yenrich Technology Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd.	Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd.	3 3 3 3 3 3 3 3 3	Accounts receivable Accounts receivable Sales Sales Accounts receivable Sales Sales Accounts receivable Other payable	$ 115,559 819,506 110,814 1,508,810 655,611 668,425 209,084 326,918 182,847	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 Based on contract terms	0.15 1.05 0.42 5.68 0.84 2.52 0.79 0.42 0.23

Table 8-3

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
5 6 6 7 7 7 7 7 7 8	Jiangsu Canyang Optoelectronics Ltd. Prolight Opto Technology Corporation Prolight Opto Technology Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp.	Epicrystal (Changzhou) Co., Ltd. Shanghai Welight Electronic Co., LTD Shanghai Welight Electronic Co., LTD Lextar Electronics (Suzhou) Corp. Epistar Corporation Yenrich Technology Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp.	3 3 3 3 3 3 3 3 3 3	Processing fee Accounts receivable Sales Accounts receivable Accounts receivable Other receivable Purchases Purchases Accounts payable Other receivable	$ 214,433 139,678 176,086 462,997 431,898 200,000 130,786 3,393,423 1,383,988 172,200	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Loans granted Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Loans granted	0.81 0.18 0.66 0.59 0.55 0.26 0.49 12.77 1.77 0.22

Table 8-4

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
9 9	Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp.	Lextar Electronics (Suzhou) Corp. Lextar Electronics (Suzhou) Corp.	3 3	Sales Accounts receivable	$ 723,463 438,727	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	2.72 0.56

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 8-5

ENNOSTAR INC. AND SUBSIDIARIES

Information on investees

Nine months ended September 30, 2021

Table 9

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as atSeptember30,2021	Shares held as atSeptember30,2021	Shares held as atSeptember30,2021	Net profit (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognised by the Company for the nine months ended September 30,2021	Footnote
				Balance as at September 30, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Harvestar Investment Corp.	Amengine Corporation Epistar Corporation GCS Holding Inc. Harvestar Investment Corp. Lextar Electronics Corporation Tyntek Corporation GCS Holding Inc.	Taiwan Taiwan USA Taiwan Taiwan Taiwan USA	Developing and sales of medical optical sensor modules. Manufacturing and sales of LED wafers and chips OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Professional investment Manufacturing and sales of LED wafers, chips, packages and modules Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import t d OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics	$ 10,210 37,607,380 431,990 650,000 11,724,646 584,583 433,099	$ - - - - - - -	3,100,000 1,088,701,410 9,028,000 65,000,000 514,916,380 23,799,000 9,013,000	58.59 100.00 9.85 100.00 100.00 7.92 9.83	$ 9,746 38,590,611 431,990 650,659 11,395,095 591,908 433,099	($ 8,238) 1,569,911 113,287 659 274,216 209,029 113,287	($ 464) 1,661,350 - 659 239,160 7,301 -	Note 2

Table 9-1

Initial investment amount

Shares held as at September 30, 2021

Investor	Investee	Location	Main business activities	Balance as at September 30, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue	Net profit (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognised by the Company for the nine months ended September 30,2021	Footnote
Harvestar Investment Corp. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Tyntek Corporation iReach Corporation Epistar JV Holding (BVI) Co., Ltd. Full Star Enterprises Limited Yenrich Technology Corporation Lighting Investment Corporation Tekcore Co., Ltd. Unikorn Semiconductor Corporation Prolight Opto Technology Corporation SH Co., Ltd. TE Opto Corporation GaN Force Corporation	Taiwan Taiwan British Virgin Islands Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import t d Manufacturing, sales, packaging and module design of semiconductor light emitting devices Professional investment Professional investment Manufacturing and sales of LED packages Professional investment Manufacturing and sales of LED wafers and chips OEM manufacturing of iii-v semiconductors Manufacturing and sales of LED packages Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers and chips Design, manufacturing and sales of LED	$ 113,931 70,000 14,960,129 166,785 - 2,161,814 - 1,106,350 - 31,792 9,200 77,700	$ - 70,000 14,960,129 166,785 600,000 2,161,814 1,169,412 1,006,350 101,500 31,792 9,200 77,700	4,777,000 7,000,000 48,278 cash USD8,660,000 - 251,478,518 - 111,270,000 - 3,179,176 920,000 1,118,600	0.02 39.09 100.00 100.00 - 100.00 - 53.29 - 49.00 40.00 64.32	$ 112,750 30,139 9,259,812 268,279 - 2,113,787 - 155,638 - 3,119 43,431 397	$ 114,166 1,376 416,889 ( 9,795) ( 167,338) ( 64,388) 23,185 ( 581,814) 12,466 ( 293) 1,576 ( 1,216)	$ 1,173 ( 4,322) 489,506 ( 9,795) ( 167,470) ( 94,514) 4,802 ( 367,068) 810 ( 144) 630 ( 782)	Note 1

Table 9-2

Initial investment amount

Shares held as at September 30, 2021

Investor	Investee	Location	Main business activities	Balance as at September 30, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue	Net profit (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognised by the Company for the nine months ended September 30,2021	Footnote
Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. Epistar JV Holding (BVI) Co., Ltd. GaN Force Corporation GaN Force Corporation Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd.	GCS Holding Inc. Can Yang Investments Limited Country Lighting (BVI) Co.,Ltd. Crystal Light Enterprise Group Ltd. HUGA Holding (SAMOA) Limited Lite Star JV Holding (BVI) Co.,Ltd. United LED Corporation (Hong Kong) Limited Episky (Hong Kong) Limited Can Yang Investments Limited GCS Holding Inc. GV Semiconductor Inc. Joint Power Exponent, Ltd. LEDAZ Co., Ltd Interlight Optotech (HK) Co.,Limited Epistar (Hong Kong) Limited Luxlite (HK) Corporation Limited	USA Hong Kong British Virgin Islands British Virgin Islands SAMOA British Virgin Islands Hong Kong Hong Kong Hong Kong USA USA Taiwan Korea Hong Kong Hong Kong Hong Kong	OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics R&D and sales of electronic components Power IC design and module sales Engineering service of LED Manufacturing and sales of LED packages Professional investment Professional investment	$ - 66,745 89,843 - 334,967 3,408,835 2,029,760 2,124,096 4,291,894 - 93,582 - 48,166 12,806 2,556 133,145	$ 277,554 - 89,843 6,754 334,967 3,408,835 2,029,760 2,124,096 4,291,894 149,149 93,582 - 48,166 12,806 2,556 133,145	- 2,679,063 3,060,000 - 12,551,035 10,882 67,000,165 cash USD68,000,000 cash USD64,793,559 - 8,470,000 - 88,460 429,000 82,850 3,800,000	- 3.53 36.43 - 100.00 82.41 74.86 100.00 85.26 - 100.00 - 28.13 30.00 100.00 100.00	$ - 56,121 85,077 - 34,899 3,369,915 268,868 2,193,834 1,357,378 - 1,090 - 19,959 11,655 ( 182) 427,892	($ 239,654) 97,426 ( 257) ( 59) ( 33) 87,636 11,003 292,279 97,426 ( 239,654) ( 2,436) ( 14,784) ( 80,239) 107 - ( 7,362)	($ 14,680) 3,337 ( 94) ( 59) ( 33) 72,221 8,237 292,279 76,106 ( 7,266) ( 2,436) ( 117) ( 22,571) 32 - ( 7,362)	Note 2

Table 9-3

Initial investment amount

Shares held as at September 30, 2021

Investor	Investee	Location	Main business activities	Balance as at September 30, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue	Net profit (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognised by the Company for the nine months ended September 30,2021	Footnote
Lite Star JV Holding (BVI) Co.,Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	Epicrystal (Hong Kong) Co. Ltd. LEDAZ Co., Ltd Lighting Investment Ltd. Yenrich Opto (Hong Kong) Limited Prolight Opto Technology Corporation Can Yang Investments Limited GaNrich Semiconductor Corporation LEDOLUX Sp.Zo.O. GCS Holding Inc. Joint Power Exponent, Ltd.	Hong Kong Korea British Virgin Islands Hong Kong Taiwan Hong Kong Taiwan Poland USA Taiwan	Professional investment Engineering service of LED Professional investment Sales of LED light components Manufacturing and sales of LED packages Professional investment Design and technology service of LED lighting product Assembling and sales of LED bulbs OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Power IC design and module sales	$ 4,403,034 23,993 152,701 133,433 221,911 72,436 62,370 133,455 - 11,599	$ 4,403,034 23,993 152,701 133,433 318,929 72,436 62,370 133,455 148,942 -	146,600,000 44,065 45,643 4,010,000 21,000,000 5,218,605 4,750,000 156,994 - 1,757,000	100.00 14.01 100.00 100.00 30.85 6.87 100.00 60.00 - 13.52	$ 4,088,313 14,174 607,637 148,886 315,843 109,374 ( 5,517) 11,728 - 5,753	$ 87,740 ( 80,239) ( 31,437) ( 6,269) 36,698 97,426 ( 19,870) ( 518) ( 239,654) ( 14,784)	$ 87,740 ( 10,721) ( 31,437) ( 6,269) 12,283 6,693 ( 19,870) ( 311) ( 7,788) ( 1,881)

Table 9-4

Initial investment amount

Shares held as at September 30, 2021

Investor	Investee	Location	Main business activities	Balance as at September 30, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue	Net profit (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognised by the Company for the nine months ended September 30,2021	Footnote
Lighting Investment Corporation Lighting Investment Corporation Yenrich Technology Corporation Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Full Star Enterprises Limited Yenrich Opto (Hong Kong) Limited Episky Corporation (Xiamen) Ltd.	Tyntek Corporation Domi-Star Optoelectronics Corporation Prolight Opto Technology Corporation Epicrystal (Changzhou) Co., Ltd. Changzhou Chemsemi Co., Ltd. GCS Holding Inc. GCS Holding Inc. LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd.	Taiwan Taiwan Taiwan China China USA USA China	Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import t d Development and design services of LED lamps Manufacturing and sales of LED packages Manufacturing and sales of LED wafers and chips OEM manufacturing of compound semiconductor RFID wafers and optoelectronic wafers. OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Developing, manufacturing and sales of LED packages, modules and related applications	$ 258 490 19,994 147,472 469,590 - - 122,036	$ - - 29,372 147,472 469,590 113,896 62,371 122,036	10,000 49,000 1,822,000 cash USD5,200,000 cash RMB110,000,000 - - cash RMB29,100,000	- 49.00 2.68 3.31 16.76 - - 12.12	$ 261 412 27,361 144,917 508,979 - - 125,802	$ 114,166 ( 158) 36,698 93,960 ( 314,432) ( 239,654) ( 239,654) 37,147	$ 4 ( 78) 975 3,110 ( 59,714) ( 5,582) ( 3,500) 4,712	Note 2

Table 9-5

Initial investment amount

Shares held as at September 30, 2021

Investor	Investee	Location	Main business activities	Balance as at September 30, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue	Net profit (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognised by the Company for the nine months ended September 30,2021	Footnote
Yenrich Technology Corporation GaNrich Semiconductor Corporation Yenrich Technology Corporation Episky Corporation (Xiamen) Ltd. Unikorn Semiconductor Corporation Epistar Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation	GCS Holding Inc. GCS Holding Inc. Amengine Corporation SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD GCS Holding Inc. Tyntek Corporation Lextar (Singapore) Pte. Ltd. Wellybond Optronics HK Limited Wellypower Optronics Corporation Apower Optronics Corporation	USA USA Taiwan China USA Taiwan Sinapore Hong Kong British Virgin Islands British Virgin Islands	OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Developing and sales of medical optical sensor modules. Sales of LED chips OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import t d Professional investment Professional investment Professional investment Professional investment	$ - - - 43,770 1,051 - 2,709,310 17,888 44,898 381,638	$ 228,748 54 12,050 43,770 - - 2,709,310 17,888 44,898 381,638	- - - cash RMB10,000,000 20,000 - 90,270,000 63,000,000 5,153,061 31,600,000	- - - 100.00 0.02 - 100.00 100.00 100.00 100.00	$ - - - 145,581 1,051 - 2,486,645 10,687 152,019 1,092,597	($ 239,654) ( 239,654) ( 7,447) 103,265 ( 239,654) 40,359 98,383 ( 84) 6,687 49,868	($ 10,746) ( 3) ( 4,026) 103,265 - 1,372 98,383 ( 84) 6,687 49,868	Note 2

Table 9-6

Initial investment amount Shares held as at September 30, 2021

Investor	Investee	Location	Main business activities	Balance as at September 30, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue	Net profit (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognised by the Company for the nine months ended September 30,2021	Footnote
Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation	Liang Li Venture Corp. Wellybond Corporation Trendylite Corporation best Epitaxy Manufacturing Company Ltd. HEXAWAVE INC. Tyntek Corporation Yenrich Technology Corporation VOGITO INNOVATION CO., LTD. HEXAWAVE INC. WellyHertz Electronics Corp. Joint Power Exponent, Ltd.	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Professional investment Professional investment Sales of products Design and manufacturing VCSEL Lei chip Manufacturing and sales of compound semiconductor materials and modules. Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import t d Manufacturing and sales of LED packages Design of lighting. Manufacturing and sales of compound semiconductor materials and modules. Manufacturing and sales of switching power supply modules. Power IC design and module sales	$ 175,374 746,484 18,100 85,907 147,506 - 530,487 1,000 147,494 10,000 33,000	$ 25,374 396,484 18,100 93,616 147,506 - - 1,000 147,494 10,000 -	3,000,000 40,000,000 2,850,750 5,319,000 12,716,000 - 60,000,000 100,000 12,715,000 1,000,000 2,200,000	100.00 100.00 90.50 21.30 31.69 - 100.00 50.00 31.68 90.91 16.92	$ 123,433 614,937 40,269 27,369 102,194 - 505,795 1,649 102,186 6,831 27,752	($ 2,203) 23,584 6,486 ( 61,330) ( 42,392) 170,550 ( 196,640) 631 ( 42,392) ( 3,487) ( 19,095)	($ 2,203) 23,584 5,870 ( 15,035) ( 14,540) ( 953) ( 29,193) 316 ( 14,539) ( 3,170) ( 5,248)

Table 9-7

Initial investment amount

Shares held as at September 30, 2021

Investor	Investee	Location	Main business activities	Balance as at September 30, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Bookvalue	Net profit (loss) of the investee for the nine months ended September 30, 2021	Investment income (loss) recognised by the Company for the nine months ended September 30,2021	Footnote
Wellybond Corporation Wellybond Corporation Lextar (Singapore) Pte. Ltd. Lextar (Singapore) Pte. Ltd. Liang Li Venture Corp. Liang Li Venture Corp. Prolight Opto Technology Corporation Prolight Opto Holding Corporation	Prolight Opto Technology Corporation Tyntek Corporation Lextar Electronics Korea Ltd. Aurora International Lighting Corporation Limited best Epitaxy Manufacturing Company Ltd. Prolight Opto Technology Corporation Prolight Opto Holding Corporation Prolight Opto Technology Corporation	Taiwan Taiwan Korea Hong Kong Taiwan Taiwan Seychelles Seychelles	Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor, photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import t d Sale of LED and after- sales service Sales of lighting Design and manufacturing VCSEL Lei chip Manufacturing and sales of LED packages Professional investment Professional investment	$ 250 258 3,025 204,136 14,240 89,270 4,402 4,403	$ - - 3,025 204,136 15,332 - 4,402 4,403	5,810,000 10,000 22,000 2,000,000 950,000 6,185,000 `150,000` `150,000`	8.54 - 100.00 20.00 3.81 9.09 100.00 100.00	$ 87,395 253 3,993 182,938 4,888 93,036 ( 5,321) ( 5,294)	$ 36,698 170,550 273 ( 2,612) ( 61,330) 36,698 ( 6,188) ( 6,188)	$ 1,973 ( 4) 273 1,678 ( 2,578) 1,276 ( 6,188) ( 6,188)	Note 2

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 on the Board of Directors, which indicates that the Group has significant influence over the investee. Accordingly, the Group listed the investee as an associate.

Table 9-8

ENNOSTAR INC. AND SUBSIDIARIES

Information on investments in Mainland China

Nine months ended September 30, 2021

Table 10

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 nine months ended September 30,2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine months ended September 30,2021	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2021	Net income of investee for the nine months ended September 30, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine months ended September 30, 2021	Book value of investments in Mainland China as of September 30,2021	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Episky Corporation (Xiamen) Ltd. United LED Shan Dong Corporation Epicrystal Corporation (Changzhou) Ltd. Luxlite (Shenzhen) Corporation Limited KFESLighting Co., Ltd. Everlight Electronics (Fujian) Co., Ltd APT Electronics Co., Ltd.	Manufacturing and sales of LED chips Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers and chips Sales of LED chips Manufacturing and sales of LED wafers, chips, packages and modules Manufacturing and sales of LED backlight and related parts Developing, manufacturing and sale of LED extension and chip, module and light instrument	$ 1,893,800 2,339,400 4,372,450 83,550 7,575,167 696,250 1,771,488	2 2 2 2 2 2 3	$ 1,893,800 1,775,438 3,330,860 47,369 1,422,021 69,625 288,091	$ - - - - - - -	$ - - - - - - -	$ 1,893,800 1,775,438 3,330,860 47,369 1,422,021 69,625 288,091	$ 292,280 11,227 93,960 ( 7,820) - - -	100.00 74.86 76.95 100.00 18.77 - 11.80	$ 292,280 8,405 72,306 ( 7,820) - - -	$ 2,193,828 289,542 3,369,178 301,333 1,742,305 - -	$ - - - 53,751 - - -	2(3) 2(3) 2(1) 2(1) 2(3) 2(3) 2(3)

Table 10-1

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 nine months ended September 30,2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine months ended September 30,2021	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2021	Net income of investee for the nine months ended September 30, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine months ended September 30, 2021	Book value of investments in Mainland China as of September 30,2021	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
China Crystal Technologies Co.,Ltd. Ufeco Technology Inc. Huarui (Huizhou) Co., Ltd. Ningbo Formosa Epitaxy Incorporation Jiangsu Canyang Optoelectronics Ltd. LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd.	Developing, manufacturing and sale of gallium arsenide unit crystal and chips Developing, manufacturing and sale of LED application products Research and development, manufacturing and sale of LED packaging; research and development, manufacturing and sale of backlight module, lighting modules and accessories Sales of LED chips Manufacturing and sales of LED wafers and chips Developing, manufacturing and sales of LED packages, modules and related applications	$ 851,380 69,625 430,500 5,570 5,347,200 817,950	2 2 2 2 2 2	$ 93,482 7,253 203,865 46,878 2,217,493 167,510	$ - - - - 145,385 -	$ - - - - - -	$ 93,482 7,253 203,865 46,878 2,362,878 167,510	$ - - - ( 59) 97,603 37,147	$ 8.97 - - - 95.66 37.88	(26,511) - - ( 59) 93,096 7,678	$ 28,667 - - - 1,522,873 392,806	$ - - - - - -	2(3) 2(3) 2(3) 2(3) 2(3) 2(3)

Table 10-2

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 nine months ended September 30,2021	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine months ended September 30,2021	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2021	Net income of investee for the nine months ended September 30, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine months ended September 30, 2021	Book value of investments in Mainland China as of September 30,2021	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Lextar Electronics (Suzhou) Corp. Lextar Electronics (Xiamen) Co.,Ltd. Chuzhou Bwin Technology Corp. Lextar Electronics (Chuzhou) Corp. Shanghai Welight Electronic Co., LTD.	Manufacturing LED wafers, chips, packages and modules Manufacturing LED wafers, chips, packages and modules Developing, manufacturing, sales of metal and plastic technical products. Manufacturing LED wafers, chips, packages and modules Wholesale and export and import of LED and related electronic products	$ 3,722,205 32,759 258,300 3,094,825 4,178	2 2 2 2 2	$ 3,585,860 32,759 - - 4,178	- - - - -	- - - - -	$ 3,585,860 32,759 - - 4,178	$ 155,797 ( 2,902) 18,960 240,841 ( 6,188)	100.00 100.00 48.33 100.00 51.16	$ 155,797 ( 2,902) 8,422 240,841 ( 6,188)	$ 3,362,210 12,899 117,311 3,122,583 ( 5,267)	- - - - -	2(2) 2(3) 2(3) 2(2) 2(3)

Table 10-3

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of September 30, 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	$ 11,422,363 $ 3,633,067	$ 12,450,631 $ 4,044,862	$ 24,038,866 $ 5,925,913

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

Direct investment in Mainland China companies;
Through investing in an existing company in the third area, which then invested in the investee in Mainland China.
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:

The financial statements that are reviewed by the international accounting firm which has a cooperative relationship with the R.O.C. accounting firm;
The financial statements that are reviewed by the R.O.C. parent company’s independent auditors;
The financial statements that are not reviewed by the independent auditors;
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 10-4

Expressed in thousands of NTD

ENNOSTAR INC. AND SUBSIDIARIES

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

Nine months ended September 30, 2021

Table 11

(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
LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. SHENZHEN EPIKYLIN OPTOELECTRONICS CO.,LTD Epicrystal (Changzhou) Co., Ltd. Shanghai Welight Electronic Co., LTD Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp.	Amount	%	Amount	%	Balance at September 30,2021	%	Balance at September 30,2021	Purpose	Maximum balance during the nine months ended September 30,2021	Balance at September 30, 2021	Interest rate	Interest during the nine months ended September 30, 2021
	$ 414,774 738,928 243,878 669,800 364,120 154,992 ( 795,705) ( 294,374) 1,301,332) ( 130,786) ( 3,393,423) (	1.56 2.78 0.92 2.52 1.37 0.58 ( 2.99) 1.11) ( 4.90) ( 0.49) ( 12.77) (	- 67 - - 4,225 - - - - - -	- 0.01 - - 0.37 - - - - - -	$ 4,831 508,364 205,993 437,548 127,199 - ( 76,657) 88,541) ( 794,918) ( 20,594) ( 1,383,988) (	0.01 0.65 0.26 0.56 0.16 - ( 0.10) ( 0.11) ( 1.02) ( 0.03) ( 1.77)	$ - 1,503,900 501,300 - - - - - - - -	- - - - - - - - - - -	$ 218,250 - 438,400 - - - - - - - -	$ 215,250 - 430,500 - - - - - - - -	4.35% - 4.14% - - - - - - - -	$ - - 3,890 - - - - - - - -

Table11-1

AI assistant

ENNOSTAR — Interim / Quarterly Report 2021

52376_rns_2021-12-30_77d8e6aa-d5f6-4b91-a1ee-19519fb8d649.pdf

ENNOSTAR INC. AND SUBSIDIARIES

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of review

Basis for qualified conclusion

Qualified conclusion

Emphasis of matter

Li, Tien-Yi

Chou, Chien-Hung

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2021, DECEMBER 31, 2020 AND SEPTEMBER 30, 2020

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2021, DECEMBER 31, 2020 AND SEPTEMBER 30, 2020

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

ENNOSTAR INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

1. HISTORY AND ORGANIZATION

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

B. Subsidiaries included in the consolidated financial statements:

(6) Cash equivalents

(24) Derecognition of financial liabilities

(25) Employee benefits

(33) Operating segments

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

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

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(7) Property, plant and equipment

－ (8) Leasing arrangements lessee

(9) Intangible assets

(10) Impairment of non-financial assets

(11) Non-current assets held for sale

(12) Short-term borrowings

(13) Short-term notes and bills payable

(14) Other payables

- (15) Long term borrowings

(16) Pensions

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

(20) Capital surplus

(22) Other equity items

(24) Other income and expenses– net

(25) Interest income

(26) Other income

(27) Other gains and losses

(29) Expenses by nature

(30) Employee benefit expenses

(31) Income tax

A. Income tax expense

(a) Components of income tax expense :

(33) Business combinations

(34) Supplemental cash flow information

(35) Changes in liabilities from financing activities

7. RELATED PARTY TRANSACTIONS

(3) Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

10. SIGNIFICANT DISASTER LOSS

ENNOSTAR Interim / Quarterly Report 2021

`－` (8) Leasing arrangements lessee