ESMT — Audit Report / Information 2021

Nov 30, 2021

ELITE SEMICONDUCTOR MICROELECTRONICS TECHNOLOGY INC.

Parent Company Only Financial Statements and

Independent Auditors’ Report December 31, 2021 and 2020 (Stock Code: 3006)

(English Translation of a Report Originally Issued in Chinese)

Company Address: No.23, Industry E Rd. IV Science-Based Industrial Park, Hsinchu 300, Taiwan, R.O.C.

Tel: +886-3-578-1970

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Elite Semiconductor Microelectronics Technology Inc.

Parent Company Only Financial Statements and Independent Auditors’ Report for

December 31, 2021 and 2020

Table of Contents

		Items	Page
I.	Cover		1
II.	Table of Contents		2 ~ 3
III.	Independent Auditors’ Report		4 ~ 8
IV.	Parent Company Only Balance Sheets		9 ~ 10
V.	Parent Company Only Statements of Comprehensive Income		11
VI.	Parent Company Only Statements of Changes in Equity		12
VII.	Parent Company Only Statements of Cash Flows		13 ~ 14
VIII.	Notes to the Parent Company Only Financial Statements		15 ~ 66
	1.	History and Organization	15
	2.	The Date of Authorization for Issuance of the Parent Company Only
		Financial Statements and Procedures for Authorization	15
	3.	Application of New Standards, Amendments and Interpretations	15 ~ 16
	4.	Summary of Significant Accounting Policies	17 ~ 28
	5.	Critical Accounting Judgments, Estimates and Key Sources of
		Assumption Uncertainty	28
	6.	Details of Significant Accounts	29 ~ 53
	7.	Related-Party Transactions	53 ~ 54
	8.	Pledged Assets	55
	9.	Significant Contingent Liabilities and Unrecognized Contractual
		Commitments	55
	10.	Significant Disaster Losses	55
	11.	Significant Events after the End of the Balance Sheet Date	55
	12.	Others	55 ~ 65
	13.	Supplementary Disclosures	66

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	Items	Page
IX.	Statement of Significant Accounts
	Statement of Cash and Cash Equivalents	Statement 1
	Statement of Accounts Receivable	Statement 2
	Statement of Inventory	Statement 3
	Movement Statement of Investment Accounted for Under the Equity Method	Statement 4
	Movement Statement of Property, Plant and Equipment	Statement 5
	Movement Statement of Accumulated Depreciation of Property, Plant and
	Equipment	Statement 6
	Statement of Accounts Payable	Statement 7
	Statement of Operating Revenue	Statement 8
	Statement of Operating Costs	Statement 9
	Statement of Manufacturing Overheads	Statement 10
	Statement of Selling Expenses	Statement 11
	Statement of Administrative Expenses	Statement 12
	Statement of Research and Development Expenses	Statement 13
	Summary of Employee Benefit, Depreciation and Amortization charges by
	Function	Statement 14

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Independent Auditors’ Report

(2022) Finance-Audit-Letter No.21003672

To the Board of Directors and Shareholders of Elite Semiconductor Microelectronics Technology Inc.

Opinion

We have audited the accompanying parent company only balance sheets of Elite Semiconductor Microelectronics Technology Inc. as at December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of Elite Semiconductor Microelectronics Technology Inc. as at December 31, 2021 and 2020, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and Generally Accepted Auditing Standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of Elite Semiconductor Microelectronics Technology Inc. in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

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

Key audit matters for Elite Semiconductor Microelectronics Technology Inc. parent company only financial statements of the current period are stated as follows: Evaluation of inventories

Description

Refer to Note 4 (13) for the accounting policies on the evaluation of inventories, Note 5 (2) for the uncertainty of accounting estimations and assumptions for evaluation of inventories, Note 6 (5) for the Details of inventory. As at December 31,2021, the inventory and allowance for inventory valuation loss amounted to NT$5,388,195 thousand and NT$24,886 thousand.

Elite Semiconductor Microelectronics Technology Inc is primarily engaged in research, development, production, manufacture, and sales of integrated circuit. Elite Semiconductor Microelectronics Technology Inc evaluates inventories stated at lower of cost and net realizable value. Since the evaluation of net realizable value of the inventories exceed specific period and obsolete inventories is subject to management’s judgment and uncertainty of estimations. Consequently, we consider the evaluation of inventories as a key audit matter.

How our audit addressed the matter

We have performed primary audit procedures for the above key audit matter included assessed the rationality of policy and procedure on allowance for inventory valuation loss based on our understanding of Elite Semiconductor Microelectronics Technology Inc.’s operations and industry, the historical data of product marginalization in the market and judged the rationality of obsolete inventories. We inspected the appropriateness of inventory aging report to confirm the consistency of report and policy, selected samples to compare the historical data of product marginalization in the market which determine the net realizable value of the obsolete inventories and net realizable value of the obsolete inventories to assessed the rationality of the allowance for inventory valuation loss.

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Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including audit committee, are responsible for overseeing Elite Semiconductor Microelectronics Technology Inc.’s financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

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

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As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

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

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

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1. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Elite Semiconductor Microelectronics Technology Inc. to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of parent company only audit. We remain solely responsible for our audit opinion.

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

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

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

Cheng, Ya-Huei

Li, Tien-Yi

for and on behalf of PricewaterhouseCoopers, Taiwan February 25, 2022

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Elite Semiconductor Microelectronics Technology Inc. Parent Company Only Balance Sheets December 31, 2021 and 2020

Assets	Note 6(1) 6(2) 6(4) 7(2) 6(5) 6(3) 6(6) 6(7) 6(8) 6(9) 6(10) (11) 6(27) 6(12) 8	December 31, 2021 Amount % $ 8,749,239 43 173,513 1 110,720 1 1,910,845 9 115,503 1 5,363,309 27 60,776 - 170 - 16,484,075 82 17,697 - 1,385,929 7 1,237,536 6 69,562 - 16,731 - 83,825 1 3,116 - 857,372 4 3,671,768 18 $ 20,155,843 100	Unit: NT$ thousand December 31, 2020 Amount % $ 2,719,155 21 168,548 1 136,704 1 1,505,780 12 94,611 1 5,969,644 46 23,477 - 5,183 - 10,623,102 82 32,418 - 1,291,337 10 776,013 6 72,090 - 17,701 - 111,688 1 3,813 - 77,055 1 2,382,115 18 $ 13,005,217 100
		Amount $ 8,749,239 173,513 110,720 1,910,845 115,503 5,363,309 60,776 170 16,484,075 17,697 1,385,929 1,237,536 69,562 16,731 83,825 3,116 857,372 3,671,768 $ 20,155,843	Amount $ 2,719,155 168,548 136,704 1,505,780 94,611 5,969,644 23,477 5,183 10,623,102 32,418 1,291,337 776,013 72,090 17,701 111,688 3,813 77,055 2,382,115 $ 13,005,217
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortized cost - current 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non-current 1550 Investment accounted for under the 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 Total non-current assets 1XXX Total assets

(Continued)

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Elite Semiconductor Microelectronics Technology Inc. Parent Company Only Balance Sheets December 31, 2021 and 2020

Liabilities and equity

Unit: NT$ thousand December 31,2021 December 31,2020 Note Amount % Amount % 6(13) $ 1,700,000 8 $ 1,340,000 10 - - 149,756 1 6(20) 21,399 - 5,336 - 2,205 - 2,115 - 2,799,845 14 2,281,658 18 7(2) 52,939 - - - 6(14) 1,830,027 9 688,630 5 904,582 5 147,677 1 7,509 - 6,368 - 5,611 - 9,250 - 7,324,117 36 4,630,790 35 18,040 - 16,495 - 6(27) 15,455 - 12,442 - 63,328 1 66,561 1 6(15) 13,488 - 14,886 - 110,311 1 110,384 1 7,434,428 37 4,741,174 36 6(17) 2,861,570 14 2,857,589 22 6(18) 181,329 1 109,677 1 6(19) 1,516,762 8 1,409,039 11 - - 8,524 - 8,323,076 41 4,019,327 31 ( 23,906) - 5,536 - 6(17) ( 137,416) ( 1) ( 145,649) ( 1 ) 12,721,415 63 8,264,043 64 9 11 $ 20,155,843 100 $ 13,005,217 100

Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable-related party 2200 Other payables 2230 Current income tax liabilities 2280 Lease liabilities - current 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2550 Provisions - non-current 2570 Deferred income tax liabilities 2580 Lease liabilities – non-current 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury shares 3XXX Total equity Significant Contingent Liabilities and Unrecognized Contractual Commitments Significant Events after the End of the Balance Sheet Date 3X2X Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

Chairman: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Technology Inc. Parent Company Only Statements of Comprehensive Income Years ended December 31, 2021 and 2020

Items

Unit: NT$ thousand (Except earnings per share) 2021 2020 Notes 金 額 % 金 額 % 6(20)7(2) $ 23,844,898 100 $ 15,252,723 100 6(5)(25)(26)7(2) ( 15,165,773 ) ( 63)( 12,675,087) ( 83 ) 8,679,125 37 2,577,636 17 8,679,125 37 2,577,636 17 6(25)(26) 7(2) ( 486,325 ) ( 2) ( 273,154) ( 2 ) ( 563,666 ) ( 2) ( 276,844) ( 2 ) 7(2) ( 1,777,702 ) ( 8) ( 935,087) ( 6 ) 12(2) 5,713 - 8,582 - ( 2,821,980 ) ( 12)( 1,476,503) ( 10 ) 5,857,145 25 1,101,133 7 6(21) 27,254 - 17,540 - 6(22)7(2) 56,853 - 64,940 - 6(23) ( 75,268 ) - ( 35,218) - 6(24) ( 20,341 ) - ( 11,308) - 6(6) 63,540 - 106,002 1 52,038 - 141,956 1 5,909,183 25 1,243,089 8 6(27) ( 932,972 ) ( 4)( 166,663) ( 1 ) $ 4,976,211 21 $ 1,076,426 7 6(15) ( $ 949 ) - $ 812 - 6(3) ( 14,721 ) - 7,030 - ( 14,721 ) - 7,030 - ($ 30,391 ) - $ 14,872 - $ 4,945,820 21 $ 1,091,298 7 6(28) $ 17.76 $ 3.85 6(28) $ 17.63 $ 3.83

4000 Operating revenue 5000 Operating costs 5900 Gross profit 5950 Gross profit - net Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains or losses 7050 Financial costs 7070 Share of profit (loss) of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expenses 8200 Profit for the period Other comprehensive income (loss) - net Items not reclassified to profit or loss 8311 (Loss)Gain on remeasurements of defined benefit plans 8316 Unrealized gain (loss) on valuation of equity instruments at fair value through other comprehensive income 8330 Share of other comprehensive income (loss) of associates and joint ventures accounted for under equity method - items not reclassified to profit or loss 8300 Other comprehensive income (loss) - net 8500 Total comprehensive income for the period Basic earnings per share 9750 Basic earnings per share Diluted earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

Chairman: Hsing-Hai Chen Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Technology Inc. Parent Company Only Statements of Changes in Equity Years ended December 31, 2021 and 2020

Unit: NT$ thousand

																	Unit: NT$ thousan
2020 Balance at January 1, 2020 Profit for the period Other comprehensive income for the period Comprehensive income for the period Distribution of 2019 earnings Legal reserve appropriated Cash dividends of ordinary share Special reserve appropriated Acquisition of company's share by subsidiary recognized as treasury share Recognition of effects from change in ownership interests in subsidiaries - cash dividends distribution from subsidiaries Adjustment of capital reserve due to cash dividends that subsidiaries received from parent Recognition of effects from change in ownership interests in subsidiaries - subsidiary acquired non controlling interests Expired cash dividends transferred to capital surplus Balance at December 31, 2020 2021 Balance at January 1, 2021 Profit for the period Other comprehensive income for the period Comprehensive income for the period Distribution of 2020 earnings Legal reserve appropriated Cash dividends of ordinary share Reversal of special reserve Disposal of company's share by subsidiary recognized as treasury share Recognition of effects from change in ownership interests in subsidiaries - cash dividends distribution from subsidiaries Adjustment of capital reserve due to cash dividends that subsidiaries received from parent Recognition of effects from change in ownership interests in subsidiaries - subsidiary acquired non controlling interests Difference between consideration and carrying amount of subsidiaries acquired or disposed Issue new shares due to employee stock options exercised Expired cash dividends transferred to capital surplus Balance at December 31, 2021	Note		Common stock		Capital surplus				Retained earnings			Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income			Treasuryshare		Total equity
							Legal reserve		Special reserve		Unappropriated retained earnings
	6(19) 6(18) 6(18) - 6(18) 6(18) 6(19) 6(18) 6(18) 6(18) - 6(18) 6(18) 6(16) (17) (18) 6(18)		$ 2,857,589 - - - - - - - - - - - $ 2,857,589 $ 2,857,589 - - - - - - - - - - - 3,981 - $ 2,861,570		$ 104,305 - - - - - - - 1,146 5,925 ( 1,781 ) 82 $ 109,677 $ 109,677 - - - - - - 40,089 1,146 11,739 ( 27 ) ( 311 ) 18,946 70 $ 181,329		$ 1,359,235 - - - 49,804 - - - - - - - $ 1,409,039 $ 1,409,039 - - - 107,723 - - - - - - - - - $ 1,516,762		$ - - - - - - 8,524 - - - - - $ 8,524 $ 8,524 - - - - - ( 8,524 ) - - - - - - - $ -		$ 3,286,176 1,076,426 812 1,077,238 ( 49,804 ) ( 285,759 ) ( 8,524 ) - - - - - $ 4,019,327 $ 4,019,327 4,976,211 ( 949 ) 4,975,262 ( 107,723 ) ( 572,314 ) 8,524 - - - - - - - $ 8,323,076		($ 8,524 ) - 14,060 14,060 - - - - - - - - $ 5,536 $ 5,536 - ( 29,442 ) ( 29,442 ) - - - - - - - - - - ($ 23,906 )		($ 137,321 ) - - - - - - ( 8,328 ) - - - - ($ 145,649 ) ($ 145,649 ) - - - - - - 8,233 - - - - - - ($ 137,416 )		$ 7,461,460 1,076,426 14,872 1,091,298 - ( 285,759 ) - ( 8,328 ) 1,146 5,925 ( 1,781 ) 82 $ 8,264,043 $ 8,264,043 4,976,211 ( 30,391 ) 4,945,820 - ( 572,314 ) - 48,322 1,146 11,739 ( 27 ) ( 311 ) 22,927 70 $ 12,721,415

The accompanying notes are an integral part of these parent company only financial statements.

Manager: Ming-Chien Chang

Chairman: Hsing-Hai Chen

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Technology Inc. Parent Company Only Statements of Cash Flows Years ended December 31, 2021 and 2020

Cash flows from operating activities Profit before income tax for the period Adjustments Income and expenses having no effect on cash flows Depreciation Amortization Expected credit impairment gain Net gain on financial assets at fair value through profit or loss Interest expenses Interest income Dividend income Impairment loss Share of (loss) profit of associates and joint ventures accounted for under equity method Gains arising from lease modifications Changes in assets/liabilities relating to operating activities Net changes in assets relating to operating activities Financial assets at fair value through profit and loss Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Inventories Prepayments Other current assets Net changes in liabilities relating to operating activities Notes payable Accounts payable Accounts payable - related parties Contract liabilities Other payables Other current liabilities Other non-current liabilities Cash inflow (outflow) generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities

Unit: NT$ thousand Notes 2021 2020 $ 5,909,183 $ 1,243,089 6(7) (8) (9) (25) 401,657 306,407 6(10) (25) 116,866 111,401 12(2) ( 5,713 ) ( 8,582 ) 6(2) (23) ( 52,007 ) ( 17,707 ) 6(24) 20,341 11,308 6(21) ( 27,254 ) ( 17,540 ) 6(22) ( 3,155 ) ( 3,473 ) 6(10) (11) (23) 18,302 25,352 ( 63,540 ) ( 106,002 ) 6(23) ( 4 ) ( 91 ) 47,042 - - 34 ( 400,325 ) ( 337,025 ) 973 - ( 17,200 ) ( 15,468 ) 606,335 ( 1,001,120 ) ( 37,299 ) ( 1,614 ) 5,013 ( 2,550 ) 90 225 518,187 146,978 52,939 - 16,063 1,387 1,193,033 148,355 ( 3,639 ) 4,925 ( 2,049 ) 386 8,293,839 488,675 23,562 18,142 ( 19,246 ) ( 10,093 ) ( 172,357 ) ( 50,874 ) 8,125,798 445,850

(Continued)

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Elite Semiconductor Microelectronics Technology Inc. Parent Company Only Statements of Cash Flows Years ended December 31, 2021 and 2020

Cash flows from investing activities Acquisition of financial assets at amortized cost Disposal of financial assets at amortized cost Proceeds from capital withdrawal from liquidation of subsidiaries Acquisition of property, plant and equipment Acquisition of intangible assets Increase in guarantee deposit paid Dividends received Net cash flows from investing activities Cash flows from financing activities Increase in short-term borrowings Increase (decrease) in short-term notes and bills payable Lease principal repayment Decrease in guarantee deposit received Employee exercised stock options Cash dividends paid Expired cash dividends Net cash flows from (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Unit: NT$ thousand Notes 2021 2020 ( $ 144,324 ) ( $ 140,157 ) 170,308 144,359 - 19,408 6(29) ( 850,539 ) ( 354,365 ) 6(29) ( 106,876 ) ( 167,264 ) ( 836,550 ) ( 56 ) 18,250 27,760 ( 1,749,731 ) ( 470,315 ) 6(29) 360,000 1,070,000 6(29) ( 148,869 ) 150,476 6(29) ( 7,499 ) ( 5,320 ) 6(29) ( 298 ) ( 3,236 ) 22,927 - 6(19) ( 572,314 ) ( 285,759 ) 6(18) 70 82 ( 345,983 ) 926,243 6,030,084 901,778 6(1) 2,719,155 1,817,377 6(1) $ 8,749,239 $ 2,719,155

The accompanying notes are an integral part of these parent company only financial statements.

Chairman: Hsing-Hai Chen

Manager: Ming-Chien Chang

Accounting Manager: Candy Chu

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Elite Semiconductor Microelectronics Techno logy Inc. Notes to the Parent Company Only Financial Statements Years Ended December 31, 2021 and 2020

Unit: NT$ thousand (Unless otherwise indicated)

1. History and Organization

Elite Semiconductor Microelectronics Technology Inc. (the Company) was founded in May 1998 and started operation in December of the same year. The core business of the Company include research, development, production, manufacture, and sales of dynamic and static random access memory, flash memory, analog integrated circuit, analog and digital mixed integrated circuit. The Company also provides technical services related to product design and R&D.

The Company merged with Ji Xin Technology Co., Ltd. On December 5, 2005, and merged with Eon Silicon Solution Inc. on June 8, 2016, and the Company is the surviving company.

1. The Date of Authorization for Issuance of the Parent Company Only Financial Statements and Procedures for Authorization

The parent company only financial statements were reported to the Board of Directors on February 25, 2022.

3. Application of New Standards, Amendments and Interpretations

• (1) Effect of the adoption of new issuance of or amendments to International Financial Reporting Standards ( “IFRS”) as endorsed by the Financial Supervisory Commission ( “FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

	Effective Date by
	International Accounting
New Standards,AmendmentsandInterpretations	StandardsBoard(“IASB”)
Amendments to IFRS 4, “Extension of the temporary exemption from applying IFRS 9”	January 1, 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, “Interest Rate Benchmark Reform— Phase 2”	January 1, 2021

Amendment to IFRS 16, “Covid-19-related rent concessions April 1, 2021(Note) beyond 30 June 2021”

Note ： Earlier application from January 1, 2021 is allowed by FSC.

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

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(2) Effect of New Issuances of or Amendments to IFRSs as Endorsed by the FSC but not yet Adopted by the Company

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

	Effective Date
New Standards, Amendments and Interpretations	by IASB
Amendments to IFRS 3, “Reference to the conceptual framework”	January 1, 2022
Amendments to IAS 16, “Property, plant and equipment: proceeds before	January 1, 2022
intended use”
Amendments to IAS 37, “Onerous contracts— cost of fulfilling a contract”January 1, 2022
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

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

(3) Effects of 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:

New Standards, Amendments and Interpretations	Effective Date by IASB
Amendments to IFRS 10 and IAS 28, “Sale or Contribution of	To be determined by
Assets between an Investor and its Associate or Joint Venture”	IASB
IFRS 17, “Insurance Contracts”	January 1, 2023
Amendments to IFRS 17, “Insurance Contracts”	January 1, 2023
Amendments to IFRS 17, “Initial application of IFRS 17 and	January 1, 2023
IFRS 9 –
comparative information”
Amendments to IAS 1, “Classification of Liabilities as Current	January 1, 2023
or Non-current”
Amendments to IAS 1, “Disclosure of accounting policies”	January 1, 2023
Amendments to IAS 8, “Definition of accounting estimates”	January 1, 2023
Amendments to IAS 12, “Deferred tax related to assets and	January 1, 2023
liabilities arising from a single transaction”

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

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4. Summary of Significant Accounting Policies

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

• (1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

• (2) Basis of preparation

• A. Except for the following items, these parent company only financial statements have been prepared under the historica l cost convention:

  • (a) Financial assets (including derivatives 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 p ension fund assets less present value of defined benefit obligations.

• B. The preparation of financial statements in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers ”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”), requires the use of certain critical accounting estimates. It also requires management to exer cise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are estimates are significant to the parent company only financial statements are disclosed in Note 5.

• (3) Foreign currency translation

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

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.

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

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

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

• A. Assets that meet one of the following criteria are classified as current asse ts; 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 settle liabilities more than twelve months after the balance sheet date.

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

  • (a) Liabilities that are expected to be settled within the normal oper ating 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.

• (5) 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.

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• (6) 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 amortized cost or fair value through other comprehensive income.

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

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

• D. The Company recognizes the dividend income 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.

• (7) 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 recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

  • (a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

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

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

• C. At initial recognition, the Company measures the financ ial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognized 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 recognized 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.

(8) Financial assets at amortized cost

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

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

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

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• B. On a regular way purchase or sale basis, financial assets at amortized cost are recognized and derecognized using trade date accounting.

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

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

• (9) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company 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 amortized cost, at each reporting date, the Company recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taki ng into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognizes the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

• (12) Operating leases(lessee)

Rental income under an operating lease (net of any incentives received from the lessor) are recognized 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 comprises raw materials, direct labor, other direct costs and related production overheads. 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.

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(14) Investments accounted for using equity method / subsidiaries and associates

• A. Subsidiaries are entities controlled by the Company (including structured entities). The Company controls the entity when the Company 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.

• B. All unrealized profit or loss resulting from transactions between the Company and its subsidiaries have been eliminated in full. Accounting policies of subsidiaries have been adjusted when necessary in order to be consistent with those of the Company.

• C. The Company’s share of profit or loss in subsidiaries after acquisition is recognized in profit or loss, whereas its share of other comprehensive income in subsidiaries after acquisition is recognized in other comprehensive income. If the Company’s share of loss in a subsidiary exceeds its share of equity in such a subsidiary, the Company continues to recognize losses in its shareholding percentage.

• D. If a change in shareholding in a subsidiary does not result in a loss o f control (i.e. transactions with non-controlling interests), such a change is accounted for as an equity transaction, that is, a transaction with owners in their capacity as owners. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

• E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has signif icant 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.

• F. The Company’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 Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• H. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’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 Company.

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• I. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’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 Company’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.

• J. Upon loss of significant influence over an associate, the Company 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.

• K. When the Company disposes its investment in an associate and 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 ass ets or liabilities were disposed of. If it retains significant influence over this associate, 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.

• L. According to Regulations Governing the Preparation of Financial Reports by Securities Issuers, the profit or loss of the period and other comprehensive income presented in parent company only financial statements shall be t he same as the allocations of profit or loss of the period and of other comprehensive income attributable to owners of the parent presented in the financial statements prepared on a consolidated basis, and the owners' equity presented in the parent company only financial statements shall be the same as the equity attributable to owners of the parent presented in the financial statements prepared on a consolidated basis.

• (15) 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 Company 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.

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• 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 3~20 years Machinery and equipment 3~8 years Testing equipment 3~8 years Other 3~10 years

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

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

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of Fixed payments, less any lease incentives receivable. The Company subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term.

Starting from the lease date, the Company assesses whether it can reasonably determine its option to extend the lease or purchase the underlying asset, or not to terminate the lease. The Company considers all relevant facts and circumstances that will generate economic incentives to exercise or not exercise the options. Such circumstances include all expected changes in facts and situations from the start of the lease to the day when the op tion is exercised. Main factors to consider include contractual terms and conditions within the period of options and the importance of the underlying asset to the lessee’s operations, etc. The lease term will be reassessed if a significant change or a major change in circumstances occurs within the Company's control range.

The lease liability is remeasured and the amount of remeasurement is recognized 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. The cost is the amount of the initial measurement of lease liability. 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 recognized as an adjustment to the right -of-use asset.

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(17) Investment property

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

• (18) Intangible assets

• A. Patent and technical skill, customer relationship

Separately acquired patent is stated at historical cost. Patent and technical skill, customer relationship acquired in a business combination are recognized at fair value at the acquisition date and amortiz ed on a straightline basis over their estimated useful lives of 3 years.

• B. Goodwill

  • Goodwill arises in a business combination accounted for by applying the acquisition method.

• C. Other intangible assets, mainly computer software, are stated at cost and amortized on a straight-line basis over their estimated useful lives of 1 ~ 3 years.

• (19) Impairment of non- financial assets

• A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are imp aired. 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 historica l cost would have been if the impairment had not been recognized.

• B. The recoverable amount of goodwill is evaluated periodically. An impairment loss is recognized for the amount by which the asset ’s carrying amount exceeds its recoverable amount. Impairme nt loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

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

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(20) Borrowings

Borrowings are 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 (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

(21) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. However, for short-term accounts payable without bearing interest, as the effect of discounting is insignificant, they are measured subsequently at original invoice amount.

(22) Derecognition of financial liabilities

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

(23) Provisions

Provisions of decommissioning are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pretax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage o f time is recognized as interest expense. Provisions are not recognized for future operating losses.

(24) 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 expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

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

• (b) Defined benefit plans

• I. Net obligation under a defined benefit plan is defined a s the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company 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

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benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit 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 government bonds at the balance sheet date of a currency and term consistent with the currency and term of the employment benefit obligations.

• II. Remeasurements arising on defined benefit plans are recog nized in other comprehensive income in the period in which they arise and are recorded as other equity.

• III. Past service costs are recognized immediately in profit or loss.

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

Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

- (25) Employee share based payment

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 non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

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

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

• D. Deferred 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 tax assets are reassessed.

• E. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

• F. If a change in tax rate is enacted, the Company recognizes the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognized outside profit or loss is recognized in other comprehensive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss.

(27) Share capital

• A. Ordinary shares are classified as equity. Incremental cost s 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.

(28) 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; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

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(29) Revenue recognition

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

• B. The Company accepts sales orders from customers. Sales revenue is recognized according to the contract price, and the Company transfers the promised goods or services to customers. Since the customer's payment period does not exceed one year, the Company has not adjusted the monetary time value of the transaction price.

• C. A receivable is recognized when the goods are delivered as this is th e point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are c ontinually 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; an d the related information is addressed below:

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

None.

• (2) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company 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 December 31, 2021, the carrying amount of inventories was 。 $5,363,309

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6. Details of Significant Accounts

(1) Cash and cash equivalents

Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December31,2021 December31,2020 $ 115 $ 115 747,543 879,139 8,001,581 1,839,901 $ 8,749,239 $ 2,719,155	December31,2021 December31,2020 $ 115 $ 115 747,543 879,139 8,001,581 1,839,901 $ 8,749,239 $ 2,719,155
		$ 115 747,543 8,001,581 $ 8,749,239

• A. The Company associates with a variety of financial instit utions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. Details of the Company's cash and cash equivalents pledged to others as collateral are provided in Note 8.

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

Item December 31, 2021 December 31, 2020 Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stock $ 286 $ 286 Emerging stocks 69,438 115,673 Beneficiary certificates 45,465 45,465 Bonds 31,226 31,226 Subtotal 146,415 192,650 Valuation adjustment 27,098 ( 24,102) Total $ 173,513 $ 168,548	Item December 31, 2021 December 31, 2020 Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stock $ 286 $ 286 Emerging stocks 69,438 115,673 Beneficiary certificates 45,465 45,465 Bonds 31,226 31,226 Subtotal 146,415 192,650 Valuation adjustment 27,098 ( 24,102) Total $ 173,513 $ 168,548
Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stock Emerging stocks Beneficiary certificates Bonds Subtotal Valuation adjustment Total	$ 286 69,438 45,465 31,226 146,415 27,098 $ 173,513

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

Financial assets mandatorily measured at fair value through profit or loss Equity instruments Debt instruments Beneficiary certificates Total		YearendedDecember31, 2021 2020 $ 52,087 $ 9,300 1,504 2,991 ( 1,584) 5,416 $ 52,007 $ 17,707
		2021
		$ 52,087 1,504 ( 1,584) $ 52,007

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

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

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

Item December31,2021 December31,2020 Non-current items: Equity instruments Unlisted stock $ 29,650 $ 29,650 Valuation adjustment ( 11,953) 2,768 $ 17,697 $ 32,418	Item December31,2021 December31,2020 Non-current items: Equity instruments Unlisted stock $ 29,650 $ 29,650 Valuation adjustment ( 11,953) 2,768 $ 17,697 $ 32,418	Item December31,2021 December31,2020 Non-current items: Equity instruments Unlisted stock $ 29,650 $ 29,650 Valuation adjustment ( 11,953) 2,768 $ 17,697 $ 32,418
Non-current items: Equity instruments Unlisted stock Valuation adjustment	(	$ 29,650 11,953) $ 17,697

The Company has elected to classify equity investments that are considered to strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $ 17,697 and $32,418 as at December 31, 2021, and 2020, respectively.

(4) Accounts receivable

Accounts receivable - general customers Accounts receivable - related parties Less: Allowance for losses	December 31, 2021 December 31, 2020 $ 1,910,845 $ 1,510,520 - 973 1,910,845 1,511,493 - ( 5,713) $ 1,910,845 $ 1,505,780	December 31, 2021 December 31, 2020 $ 1,910,845 $ 1,510,520 - 973 1,910,845 1,511,493 - ( 5,713) $ 1,910,845 $ 1,505,780	December 31, 2021 December 31, 2020 $ 1,910,845 $ 1,510,520 - 973 1,910,845 1,511,493 - ( 5,713) $ 1,910,845 $ 1,505,780
			$ 1,910,845 - 1,910,845 - $ 1,910,845

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

Not past due Past due-within 30 days Past due-31-90 days Past due-91-180 days Past due-over 181 days	December 31, 2021 December 31, 2020 $ 1,910,504 $ 1,505,780 341 - - - - - - 5,713 $ 1,910,845 $ 1,511,493	December 31, 2021 December 31, 2020 $ 1,910,504 $ 1,505,780 341 - - - - - - 5,713 $ 1,910,845 $ 1,511,493	December 31, 2021 December 31, 2020 $ 1,910,504 $ 1,505,780 341 - - - - - - 5,713 $ 1,910,845 $ 1,511,493	December 31, 2021 December 31, 2020 $ 1,910,504 $ 1,505,780 341 - - - - - - 5,713 $ 1,910,845 $ 1,511,493
			$ 1,910,504 341 - - - $ 1,910,845

The above aging analysis was based on past due date.

• B. As at December 31, 2021 and 2020, without taking into account any collateral held or other credit enhancements, the maximum hedge to credit risk in respect of the amount that best represents the Company’s accounts receivable were $1,910,845 and $1,505,780.

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• C. The collaterals and fair value held by the Company as guarantee for accounts receivable are as follows:

receivable are as follows:
Bank guarantee Pledged certificate of deposit Guarantee deposits received (shown as “other non-current liabilities”) Letters of credit Company promissory note/check	December 31, 2021 December 31, 2020 $ 55,304 $ 33,044 17,992 4,272 5,106 5,526 935,013 760,162 667,065 555,221 $ 1,680,480 $ 1,358,225
		$ 55,304 17,992 5,106 935,013 667,065 $ 1,680,480

• D. Information relating to credit risk is provided in Note 12(2).

• E. As at December 31, 2021 and 2020, accounts receivable were all from contracts with customers. As at January 1, 2020, the balance of receivables from contracts with customers amounted to $$1,160,173.

• F. The Company has no accounts receivable pledged to others as collateral.

• (5) Inventories

Raw materials Work in progress Finished goods Inventory in transit Raw materials Work in progress Finished goods Inventory in transit		December31,2021	December31,2021	Bookvalue $ 57,558 3,685,275 1,600,324 20,152 $ 5,363,309 Bookvalue $ 127,378 4,704,280 1,131,505 6,481 $ 5,969,644
		Cost Allowance for valuation loss
		$ 58,400 ($ 842) 3,688,463 ( 3,188) 1,621,180 ( 20,856) 20,152 - $ 5,388,195 ($ 24,886) December31,2020
		Cost	Allowance for valuation loss
		$ 138,104 4,724,546 1,199,284 6,481 $ 6,068,415	($ 10,726) ( 20,266) ( 67,779) - ($ 98,771)

~31~

The Company recognized as expense or loss:

Cost of goods sold Reversal of allowance on market value decline and obsolete and slow-moving inventories		Year ended December 31, 2021 2020 $ 15,239,658 $ 12,745,078 ( 73,885) ( 69,991) $ 15,165,773 $ 12,675,087
		2021
		$ 15,239,658 ( 73,885) $ 15,165,773

The reversal of allowance were recognized due to sale of certain inventories which were previously provided with allowance for price decline.

(6) Investments accounted for under the equity method

	December 31, 2021	December 31, 2020
Subsidiaries:
Elite Investment Services Ltd.	$ 612,100	$ 620,500
Charng Feng Investment Ltd.	566,029	511,029
Jie Yong Investment Ltd.	188,931	136,983
Elite Semiconductor Memory Technology Inc.	20,551	24,236
Eon Silicon Solution Inc. USA	( 1,682)	( 1,411)
	$ 1,385,929	$ 1,291,337

Information about subsidiaries of the Company is provided in Note 4(3) in 202 1 consolidated financial statements.

• (7) Property, plant and equipment

At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Additions Transfer (Note) Depreciation charge At December 31 At December 31,2021 Cost Accumulated depreciation and impairment At December 31,2021			Land	Buildings and structures Machinery equipment Testing equipment	Buildings and structures Machinery equipment Testing equipment	Buildings and structures Machinery equipment Testing equipment		Others	Total $2,928,895 ( 2,152,882) $ 776,013 $ 776,013 797,419 56,851 ( 392,747) $1,237,536 $3,783,165 ( 2,545,629) $1,237,536
			~32~ $ 9,023 $636,446 - ( 398,943) $ 9,023 $237,503 $ 9,023 $237,503 159,745 23,581 - 7,308 - ( 34,918) $168,768 $233,474 $168,768 $667,335 - ( 433,861) $168,768 $233,474		$518,018 ( 375,047) $142,971 $142,971 157,570 24,850 ( 38,437) $286,954 $700,438 ( 413,484) $286,954	$284,731 ( 165,365)
						$119,366
						$119,366 20,516 24,693 ( 28,888)
						$135,687		$ 412,653 $1,916,684 ( 1,504,031) $ 412,653
						$329,940 ( 194,253)
						$135,687

At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Additions Transfer (Note) Depreciation charge At December 31 At December 31,2020 Cost Accumulated depreciation and impairment			Land	Buildings and structures Machinery equipment Testing equipment	Buildings and structures Machinery equipment Testing equipment	Buildings and structures Machinery equipment Testing equipment	Others
			$ 9,023 -	$635,941 ( 364,888) $271,053 $271,053 505 - ( 34,055) $237,503 $636,446 ( 398,943) $237,503	$429,694 ( 352,538) $ 77,156 $ 77,156 85,605 2,719 ( 22,509) $142,971 $518,018 ( 375,047) $142,971	$250,644 ( 148,491)	$1,228,482 ( 992,800)
			$ 9,023			$102,153 $102,153 38,091 1,455 ( 22,333)	$ 235,682
			$ 9,023 - - -				$ 235,682 252,195 - ( 220,727)
			$ 9,023			$119,366 $284,731 ( 165,365) $119,366	$ 267,150
			$ 9,023 -				$1,480,677 ( 1,213,527) $ 267,150
			$ 9,023

Note: Transferred from prepayments for equipment (shown as “other noncurrent assets”).

• A. For the years ended December 31, 2021 and 2020 no interest expense was capitalized on property, plant and equipment in the Company.

• B. The Company has no property, plant and equipment pledged to others.

• (8) Leasing arrangements- lessee

• A. The Company leases various assets including land, buildings and structures, business vehicles, printers. Rental contracts are typically made for periods of 2 to 20 years. Lease terms are negotiated on an individua l basis and contain a wide range of different terms and conditions. Short -term leases with a lease term of 12 months or less comprise business vehicles and staff dormitory.

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

as follows:
Land Buildings and structures Business vehicles Printers	December 31, 2021 December 31, 2020 Book value $ 58,801 $ 62,221 5,079 6,496 2,565 3,083 3,117 290 $ 69,562 $ 72,090
		$ 58,801 5,079 2,565 3,117 $ 69,562

~33~

Land Buildings and structures Business vehicles Printers		YearendedDecember31, 2021 2020 Depreciationcharge $ 3,420 $ 3,420 1,417 986 2,480 711 623 696 $ 7,940 $ 5,813
		2021
		Depreciation
		$ 3,420 1,417 2,480 623 $ 7,940

• C. For the years ended December 31, 2021 and 2020, the additions to right -ofuse assets were $5,702 and $10,410, respectively.

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

follows:
Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts		YearendedDecember31,
		2021	2020
		$ 1,074 $ 533	$ 1,046
			$ 1,436

• E. For years ended December 31, 2021 and 2020, the Company’s total cash outflow for leases were $9,106and $7,802, respectively.

• (9) Investment property

Investment property
At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Depreciation charge At December 31 At December 31, 2021 Cost Accumulated depreciation and impairment		Buildings and structures $ 20,369 ( 2,668) $ 17,701 $ 17,701 ( 970) $ 16,731 $ 20,369 ( 3,638) $ 16,731

~34~

At January 1, 2020 Cost Accumulated depreciation and impairment At January 1 Depreciation charge At December 31 At January 1 At December 31, 2020 Cost Accumulated depreciation and impairment		Buildings and structures
		$ 20,369 ( 1,698)
		$ 18,671
		$ 18,671 ( 970)
		$ 17,701
		$ 20,369 ( 2,668)
		$ 17,701

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

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period		Year ended December 31, 2021 2020 $ 2,562 $ 2,470 $ 970 $ 970
		2021
		$ 2,562 $ 970

• B. The fair value of the investment property held by the Company as at December 31, 2021 and 2020 was $8,130 and $10,516, respectively, which was valued by income approach. Key assumptions are as follows:

Rate of net return on capital (Note)	December31,2021 December31,2020	December31,2021 December31,2020	December31,2021 December31,2020
		18.57%	13.29%

Note: Calculated based on the weighted average capital cost of the issuer.

• C. For the years ended December 31, 2021 and 2020 no interest expense was capitalized on investment property in the Company.

• D. The Company has no investment property pledged to others.

~35~

(10) Intangible assets

At January 1, 2021 Cost Accumulated depreciation and impairment 2021 At January 1 Additions Transfer (Note) Amortization charge Impairment loss At December 31 At December 31, 2021 Cost Accumulated depreciation and impairment Note: Transferred from current assets”).	Patents and Customer Technical skill Relationship	Goodwill	Others
	$ 34,478 ( 30,654) $ 3,824 $ 3,824 - - ( 3,824) - $- $ 34,478 ( 34,478) $- prepayments

current assets”).
At January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Additions Amortization charge Impairment loss At December 31 At December 31, 2020 Cost Accumulated depreciation and impairment	Patents and Customer Technical skill Relationship			Goodwill	Others	Total $ 494,080 ( 412,903) $ 81,177 $ 81,177 167,264 ( 111,401) ( 25,352) $ 111,688 $ 661,344 ( 549,656) $ 111,688
		$ 34,478 ( 25,556) $ 8,922 $ 8,922 - ( 5,098) - $ 3,824 $ 34,478 ( 30,654) $ 3,824	$ 11,000 ( 11,000) $- $ - - - - $- $ 11,000 ( 11,000) $-	$ 80,758 ( 37,104) $ 43,654 $ 43,654 - - ( 25,352) $ 18,302 $ 80,758 ( 62,456) $ 18,302	$ 367,844 ( 339,243) $ 28,601 $ 28,601 167,264 ( 106,303) - $ 89,562 $ 535,108 ( 445,546) $ 89,562

~36~

A. Details of amortization on intangible assets are as follows:

Operating costs Selling expenses Administrative expenses Research and development expenses		Year ended December 31, 2021 2020 $ 3,824 $ 5,098 372 21 1,864 909 110,806 105,373 $ 116,866 $ 111,401
		2021
		$ 3,824 372 1,864 110,806 $ 116,866

• B. For the years ended December 31, 2021 and 2020 no interest expense was capitalized on intangible assets in the Company.

• C. Impairment information about the intangible assets is provided in 6(11).

• D. The Company has no intangible assets pledged to others.

(11) Impairment of non- financial assets

The Company performs impairment tests on the recoverable amount of goodwill on the balance sheet date. The recoverable amount of cashgenerating units has been determined based on value-in-use calculations. These calculations use cash flow projections approved by the management covering a five-year period as the basis for estimation. The relevant discount rates for 2021 and 2020 were 18.57% and 13.29%, respectively. The value - in-use used by the Company to calculate cash-generating units is derived from historical information on estimated future revenue growth rates, gross profit margins, and operating expense ratios, with reference to future industrial economic trends. The recoverable amount calculated based on the above key assumptions is lower than the book value of goodwill. Thus, the Company recognized impairment losses of $18,302 and $25,352 in 2021 and 2020, respectively.

(12) Other non-current assets

Guarantee deposit paid Prepayments for equipment Pledged time deposits	December 31, 2021 December 31, 2020 $ 841,101 $ 4,551 12,302 68,535 3,969 3,969 $ 857,372 $ 77,055	December 31, 2021 December 31, 2020 $ 841,101 $ 4,551 12,302 68,535 3,969 3,969 $ 857,372 $ 77,055
		$ 841,101 12,302 3,969 $ 857,372

(13) Short -term borrowings

Type ofborrowings	December31,2021 Interest raterange Collateral
Bank borrowings Credit loans	$ 1,700,000 0.70%～0.86% None

~37~

Collateral

Type of borrowings December 31, 2020 Interest rate range Bank borrowings Credit loans $ 1,340,000 0.75% ～ 1.05% None

Interest expense recognized in profit or loss amounted to $16,8 29 and $8,122 for the years end December 31,2021 and 2020, respectively.

(14) Other payables

Salary and bonus payables Payable on employees and director remuneration Payable on equipment Others	December 31, 2021 December 31, 2020 $ 1,255,968 $ 376,625 377,182 79,349 94,831 146,904 102,046 85,752 $ 1,830,027 $ 688,630	December 31, 2021 December 31, 2020 $ 1,255,968 $ 376,625 377,182 79,349 94,831 146,904 102,046 85,752 $ 1,830,027 $ 688,630
		$ 1,255,968 377,182 94,831 102,046 $ 1,830,027

(15) Pensions

• A.(a) The Company have a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standards Ac t. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contribute monthly an amount equal to 2% of the employees ’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

~38~

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

Present value of defined benefit obligations Fair value of plan assets Unadjusted amount for the period Net liability recognized in the balance sheet		December 31, 2021	December 31, 2020
		$ 8,474 ( 117) 8,357 ( 1,402) $ 6,955	$ 14,033 ( 2,663)
			11,370 ( 850)
			$ 10,520

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

2021 At January 1 Current service cost Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Unadjusted amount for the period At December 31		Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability
		($ 14,033) ( 333) ( 42) ( 14,408) - ( 9) 382 537 910 - 5,024 - ($ 8,474)	$ 2,663 - 7 2,670 39 - - - 39 2,432 ( 5,024) - $ 117	($ 11,370) ( 333) ( 35)
				( 11,738)
				39 ( 9) 382 537
				949
				2,432 - 1,402 ($ 6,955)

~39~

2020 At January 1 Current service cost Interest (expense) income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Unadjusted amount for the period At December 31		Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability
		($ 12,739) ( 314) ( 88) ( 13,141) - ( 524) ( 368) ( 892) - - ($ 14,033)	$ 2,409 - 18 2,427 80 - - 80 156 - $ 2,663	($ 10,330) ( 314) ( 70) ( 10,714) 80 ( 524) ( 368)
				( 812)
				156 850 ($ 10,520)

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company have no right to participate in managing and operating that fund and hence the Company are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

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

Discount rate Future salary increases		YearendedDecember31,	YearendedDecember31,
		2021	2020
		0.70% 3.00%	0.30% 3.00%

Assumptions regarding future mortality experience are set based on the sixth and fifth life experience table in Taiwan for the years ended 2021 and 2020.

~40~

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

defined benefit obligation is affected. The analysis was as fo llows:	obligation is affected. The analysis was as fo llows:	obligation is affected. The analysis was as fo llows:	obligation is affected. The analysis was as fo llows:	obligation is affected. The analysis was as fo llows:	obligation is affected. The analysis was as fo llows:
Discount rate Future salaryincreases Increase 0.25%Decrease 0.25%Increase 0.25%Decrease 0.25% December 31, 2021 Effect on present value of defined benefit obligation ($ 223) $ 230 $ 204 ($ 199) December 31, 2020 Effect on present value of defined benefit obligation ($ 330) $ 341 $ 296 ($ 289)	Discount rate Future salaryincreases
	Increase 0.25%Decrease 0.25%Increase 0.25%Decrease 0.25%
		($ 223) ($ 330)	$ 230 $ 341	$ 204 $ 296	($ 199)
					($ 289)

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

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

• (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2022 amount to $131.

in the balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2022 amount to $131.	in the balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2022 amount to $131.
(g) As of December 31, 2021, the weighted average duration of the
retirement plan is 11 years. The analysis of timing of the future pension
payment was as follows:
Within 1 year	$ -
1-2 years	-
2-5 years	642
Over 5 years	8,496
	$ 9,138

• B.(a) Effective July 1, 2005, the Company 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 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 pension costs under defined contribution pension plans of the Company for the years ended December 31, 2021 and 2020, were $32,440 and $30,121, respectively.

~41~

(16) Share- based payment

• A. For the years ended December 31, 2021 and 2020, the Company’s sharebased payment arrangements were as follows:

			Contract	Vesting
Type of arrangement	Grant date	Quantity granted	period	condition
Succeed to 2010 Eon	August 10, 2010,	4,000 thousand shares	10 years	Note 1
Silicon Solution Inc.’s	October 15, 2010 and	(Note 2)
employee stock options	January 13, 2011
Succeed to 2013 Eon	August 19, 2013	7,500 thousand shares	10 years	Note 1
Silicon Solution Inc.’s		(Note 2)
employee stock options

• Note 1: The accumulative proportion of the new shares that can be obtained after the two-year, three-year and four-year service expirations are 50%, 75% and 100%, respectively.

• Note 2: The number of grants given by the Company to the Eon Silicon Solution Inc. employee stock option plan is the amount given on the original plan grant date. After the merger, Eon Silicon Solution Inc.'s 2010 and 2013 employee stock option plans have 219 thousand shares and 688 thousand shares in circulation.

• Among the share-based payment arrangements above are settled by equity.

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

• Succeed to Eon Silicon Solution Inc. ’s employee stock options:

Options outstanding at January 1 Options forfeited Options exercised Options expired Options outstanding at December 31 Options exercisable at December 31		2021	2020
		Weighted-average No. of options exercise price (in dollars)	Weighted-average No. of options exercise price (in dollars)
		518 $ 57.6~217.4 - - ( 398) 57.6 ( 106) 217.4 14 $ 57.6 14	543 $ 59.2~303.4 ( 4) 217.4 - - ( 21) 241.2~295.4 518 $ 57.6~217.4 518

• C. The weighted-average stock price of stock options at exercise dates for the years ended December 31, 2021 was $85.2. No options exer cised for the years ended December 31, 2021.

• D. As of December 31, 2021 and 2020, the range of exercise prices of stock options outstanding was $57.6 and $57.6~$217.4 (in dollars), respectively; the weighted-average remaining contractual period was 1.64 ye ars and 2.64 years, respectively.

• E. Expenses incurred on share-based payment transactions for the years ended December 31, 2021 and 2020, were all $0.

~42~

(17) Share capital

• A. As of December 31, 2021, the Company’s authorized capital was $3,500,000, consisting of 350,000 thousand shares of ordinary stock (including 20,000 thousand shares reserved for employee stock options), and the paid-in capital was $2,861,570 with a par value of $10 (in dollars) per share.

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

Shares: thousand shares

are as follows:		Shares: thousand shares
Shares outstanding at January 1 Employee stock options exercised Acquisition of company's share by subsidiary recognized as treasury share Disposal of company's share by subsidiary recognized as treasury share Shares outstanding at December 31 Treasury shares at the end of the period Shares issued at December 31		2021 2020 271,605 272,320 398 - - ( 715) 800 - 272,803 271,605 13,354 14,154 286,157 285,759

B. Treasury shares

The Company's shares held by the Company's subsidiary, Jie Young Investment Ltd., as of December 31, 2021 and 2020 due to the parent company's business strategy, were 13,354 thousand shares and 14,154 thousand shares, with carrying amounts of $328,276 and $347,942, respectively; the average book value per share were all $24.58, and the fair value per share were $165.00 and $64.70, respectively.

(18) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid -in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

~43~

At January 1 Disposal of company's share by subsidiary recognized as treasury share Recognition of effects from change in ownership interests in subsidiaries - cash dividends distribution from subsidiaries Adjustment of capital reserve due to cash dividends that subsidiaries received from parent Recognition of effects from change in ownership interests in subsidiaries - subsidiary acquired non- controlling interests Difference between consideration and carrying amount of subsidiaries acquired or disposed Issue new shares due to employee stock options exercised Expired cash dividends transferred to capital surplus At December 31					2021			Total $109,677 40,089 1,146 11,739 ( 27) ( 311) 18,946 70 $181,329
		Treasury Share share premium transactions			Changes in ownership interests in subsidiaries	Employee stock options	Others
			$ - - - - - - 20,162 - $ 20,162	$ 1,661 40,089 - - - - - -	$ 100,239 - 1,146 11,739 ( 27) ( 311) - - $ 112,786	$ 3,913 - - - - - ( 1,216) - $ 2,697	$ 3,864 - - - - - - 70 $ 3,934
				$ 41,750

~44~

2020 Treasury Changes in Employee share ownership interests stock transactions in subsidiaries options At January 1 $ 1,661 $ 94,949 $ 3,913 Recognition of effects from change in ownership interests in subsidiaries - cash dividends distribution from subsidiaries - 1,146 - Adjustment of capital reserve due to cash dividends that subsidiaries received from parent - 5,925 - Recognition of effects from change in ownership interests in subsidiaries - subsidiary acquired non-controlling interests - ( 1,781) - Expired cash dividends transferred to capital surplus - - - At December 31 $ 1,661 $100,239 $ 3,913	2020	2020	2020	2020		Total $104,305 1,146 5,925 ( 1,781) 82 $109,677
	Treasury Changes in share ownership interests transactions in subsidiaries			Employee stock options	Others
		$ 1,661 - - - - $ 1,661	$ 94,949 1,146 5,925 ( 1,781) - $100,239	$ 3,913 - - - -	$ 3,782 - - - 82 $ 3,864
				$ 3,913

(19) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall be appropriated in the following order:

• (a) Payment of all taxes and dues.

• (b) Offset against prior years’ operating losses, if any.

• (c) Set aside 10% of remaining amount as legal reserve.

• (d) Setting aside a special reserve when necessary.

• (e) The remainder shall be stockholders’ bonus, which will be appropriated in proportion or be retained shall be resolved by the stockholders at the stockholders’ meeting.

• B. Dividend policy

The Company is still in the growth stage, the appropriation of stockholders’ bonus will be appropriated as cash, the remainder will be appropriated as shares when over 5%.

• 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 t he portion in excess of 25% of the Company’s paid-in capital.

~45~

• 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 reversed amount could be included in the distributable earnings.

• E. As approved by Board of Directors on March 20, 2020, the appropriations of 2019 earnings would be legal reserve $49,804 and cash dividend $285,759, constituting $1(in dollars) per share. Aforementioned appropriations had been approved by stockholders’ meeting on June 15, 2020.

• F. As approved by Board of Directors on February 26, 2021, the appropriations of 2020 earnings would be legal reserve $107,724 and cash dividend $2(in dollars) per share. Aforementioned appropriations had been approved by stockholders’ meeting on July 12, 2021.

• G. As approved by Board of Directors on February 25, 2022, the appropriations of 2021 earnings would be legal reserve $497,526 and cash dividend $8(in dollars) per share. Aforementioned appropriations had not yet been approved by stockholders’ meeting.

• (20) Operating revenue

Revenue from contracts with customers		Year ended December 31, 2021 2020 $ 23,844,898 $ 15,252,723
		2021
		$ 23,844,898

• A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods at a point in time in the following geographical regions:

Years ended December 31,2021 Integrated circuits Years ended December 31,2020 Integrated circuits			Domestic		Asia		Others	Total $23,844,898 Total $15,252,723
			$11,523,346		$12,196,154		$ 125,398
			Domestic		Asia		Others
			$6,133,005		$9,061,325		$ 58,393

1. Contract liabilities

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

December 31, 2021 December 31, 2020 January 1,2020

Contract liabilities- advance sales receipts $ 21,399 Revenue recognised that was included the beginning of the period:	$ 5,336 $ 3,949 in the contract liability balance at

the beginning of the period:
Contract liabilities- advance sales receipts		Year ended December 31,
		2021	2020
		$ 5,276	$ 3,888

~46~

(21) Interest revenue

st revenue
Interest income from bank deposits Interest income from financial assets at amortized cost Other interest income		Year ended December 31,
		2021	2020
		$ 26,740 249 265 $ 27,254	$ 15,722 1,207 611
			$ 17,540

(22) Other income

r income
Rent income Dividend income Other income, others		Year ended December 31, 2021 2020 $ 5,669 $ 6,341 3,155 3,473 48,029 55,126 $ 56,853 $ 64,940
		2021
		$ 5,669 3,155 48,029 $ 56,853

(23) Other gains and losses

r gains and losses
Gains arising from lease modifications Foreign exchange losses Gains on financial assets at fair value through profit or loss Impairment loss Miscellaneous disbursements		Year ended December 31, 2021 2020 $ 4 $ 91 ( 108,007) ( 26,694) 52,007 17,707 ( 18,302) ( 25,352) ( 970) ( 970) ($ 75,268) ($ 35,218)
		2021
		$ 4 ( 108,007) 52,007 ( 18,302) ( 970) ( ($ 75,268)

(24) Financial costs

ncial costs		($ 75,268) ($ 35,218)
Interest expense: Bank borrowings Provisions for liabilities - unwinding of discount Lease liability Total of interest expense Others		Year ended December 31, 2021 2020 $ 16,829 $ 8,122 1,545 1,412 1,074 1,046 19,448 10,580 893 728 $ 20,341 $ 11,308
		2021
		$ 16,829 1,545 1,074 19,448 893 $ 20,341

~47~

(25) Expenses by nature

(26)	Employee benefit expense Depreciation charges on property, plant and equipment Depreciation charges on right-of-use assets Depreciation charges on investment property Amortization charges on intangible assets Employee benefit expense		YearendedDecember31, 2021 2020 $ 2,424,794 $ 1,085,436 $ 392,747 $ 299,624 $ 7,940 $ 5,813 $ 970 $ 970 $ 116,866 $ 111,401
			2021
			$ 2,424,794 $ 392,747 $ 7,940 $ 970 $ 116,866

Wages and salaries Labor and health insurance fees Pension costs Director remuneration Other personnel expenses		YearendedDecember31,	YearendedDecember31,
		2021	2020
		$ 2,247,037 57,726 32,820 70,264 16,947 $ 2,424,794	$ 975,203 48,483 30,662 15,938 15,150
			$ 1,085,436

• A. In accordance with the Articles of Incorporation of the Company, the profit before income tax of the current year, before covering employees ’ compensation and directors’ remuneration, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 5% for employees’ compensation and 1% for directors’ remuneration.

• B. For the years ended December 31, 2021 and 2020, employees’ compensation was accrued at $314,318 and $66,124, respectively; while directors’ remuneration was accrued at $62,864 and $13,225, respectively. The aforementioned amounts were recognized in salary expenses.

The employees’ compensation and directors’ remuneration were estimated and accrued based on 5% and 1% of distributable profit for the years ended December 31, 2021.

• C. The employees’ compensation and directors’ remuneration of 2020 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2020 financial stateme nts.

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

~48~

(27) Income tax

A. Income tax expense

• (a) Components of income tax expense:

ome tax expense Components of income tax expense:
Current tax: Current tax on profits for the period Prior year income tax (over) underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense		Year ended December 31,
		2021	2020
		$ 931,043 ( 1,781) 929,262 3,710 $ 932,972	$ 151,804 6,787
			158,591
			8,072
			$ 166,663

• (b) The income tax charge relating to components of other comprehensive income: None.

• (c) The income tax charged to equity during the period: None.

• B. Reconciliation between income tax expense and accounting profit:

Tax calculated based on profit before tax and statutory tax rate (note) Tax exempt income by tax regulation Prior year income tax (over) underestimation Temporary differences not recognized as deferred tax assets Effect from investment tax credits Income tax expense		Year ended December 31, 2021 2020 $ 1,181,837 $ 248,618 ( 9,680) ( 16,824) ( 1,781) 6,787 ( 13,247) ( 6,859) ( 224,157) ( 65,059) $ 932,972 $ 166,663
		2021
		$ 1,181,837 ( 9,680) ( 1,781) ( 13,247) ( 224,157) $ 932,972

~49~

• C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

Deferred tax assets: - Temporary differences: Bad debt expense Unrealized exchange loss Loss on market value decline and obsolete and slow-moving inventories Pension liability Others Subtotal -Deferred tax liabilities: Unrealized exchange gain Others Subtotal Total Deferred tax assets: - Temporary differences: Bad debt expense Unrealized exchange loss Loss on market value decline and obsolete and slow-moving inventories Pension liability Others Subtotal -Deferred tax liabilities: Unrealized exchange gain Others Subtotal Total		2021 Recognized in Recognized in other January 1 profit or loss comprehensive income December 31 $ 48 $ - $ - $ 48 348 168 - 516 988 ( 739) - 249 81 - - 81 2,348 ( 126) - 2,222 3,813 ( 697) - 3,116 ( 7,933) 2,879 - ( 5,054) ( 4,509) ( 5,892) - ( 10,401) ( 12,442) ( 3,013) - ( 15,455) ($ 8,629) ($ 3,710) $- ($ 12,339) 2020	2021 Recognized in Recognized in other January 1 profit or loss comprehensive income December 31 $ 48 $ - $ - $ 48 348 168 - 516 988 ( 739) - 249 81 - - 81 2,348 ( 126) - 2,222 3,813 ( 697) - 3,116 ( 7,933) 2,879 - ( 5,054) ( 4,509) ( 5,892) - ( 10,401) ( 12,442) ( 3,013) - ( 15,455) ($ 8,629) ($ 3,710) $- ($ 12,339) 2020	2021 Recognized in Recognized in other January 1 profit or loss comprehensive income December 31 $ 48 $ - $ - $ 48 348 168 - 516 988 ( 739) - 249 81 - - 81 2,348 ( 126) - 2,222 3,813 ( 697) - 3,116 ( 7,933) 2,879 - ( 5,054) ( 4,509) ( 5,892) - ( 10,401) ( 12,442) ( 3,013) - ( 15,455) ($ 8,629) ($ 3,710) $- ($ 12,339) 2020	2021 Recognized in Recognized in other January 1 profit or loss comprehensive income December 31 $ 48 $ - $ - $ 48 348 168 - 516 988 ( 739) - 249 81 - - 81 2,348 ( 126) - 2,222 3,813 ( 697) - 3,116 ( 7,933) 2,879 - ( 5,054) ( 4,509) ( 5,892) - ( 10,401) ( 12,442) ( 3,013) - ( 15,455) ($ 8,629) ($ 3,710) $- ($ 12,339) 2020
		$ 48 348 988 81 2,348 3,813 ( 7,933) ( 4,509) ( 12,442) ($ 8,629)	$ - $ - 168 - ( 739) - - - ( 126) - ( 697) - 2,879 - ( 5,892) - ( 3,013) - ($ 3,710) $- 2020
					3,116 ( 5,054) ( 10,401)
					( 15,455)
					($ 12,339)
		Recognized in Recognized in other January 1 profit or loss comprehensive income December 31
		$ 48 153 1,688 61 2,224 4,174 ( 4,731) - ( 4,731) ($ 557)	$ - 195 ( 700) 20 124 ( 361) ( 3,202) ( 4,509) ( 7,711) ($ 8,072)	$ - - - - - - - - - $-	$ 48 348 988 81 2,348
					3,813
					( 7,933) ( 4,509)
					( 12,442)
					($ 8,629)

• D. The amounts of deductible temporary difference that are not recognized as deferred tax assets are as follows:

Deductible temporary differences	December31,2021 December31,2020	December31,2021 December31,2020
	$ 295,986	$ 362,221

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

~50~

(28) Earnings per share

	Year	endedDecember31,2021	endedDecember31,2021
		Weighted average
		number of ordinary	Earnings per
	Amount	shares outstanding	share
	after tax	(sharein thousands)	(in	dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent	$4,976,211	280,221		$ 17.76
Assumed conversion of all dilutive
potential ordinary shares
Employee stock options		8
Employees’ compensation		2,019
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary shares	$4,976,211	282,248		$ 17.63
	Year	ended December 31, 2020
		Weighted average
		number of ordinary	Earnings per
	Amount	shares outstanding	share
	after tax	(share in thousands)	(in	dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent	$1,076,426	279,909		$ 3.85
Assumed conversion of all dilutive
potential ordinary shares (Note)
Employees’ compensation		1,295
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent plus
assumed conversion of all
dilutive potential ordinary shares	$1,076,426	281,204		$ 3.83
Note: The employee stock options not calculat e for years ended December
31, 2020 due to the effect of anti-dilution.

~51~

(29) Supplemental cash flow information

A. Investing activities with partial cash payments:

Purchase of property, plant and equipment (including amount of transfer) Add: Ending balance of prepayments for equipment Add: Opening balance of prepayments for equipment transferred to intangible assets Less: Opening balance of prepayments for equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the period Purchase of intangible assets (including amount of transfer) Less: Opening balance of prepayments for equipment transferred to intangible assets Cash paid during the period		Year ended December 31, 2021 2020 $ 854,270 $ 380,570 12,302 68,535 429 - ( 68,535) ( 5,862) 146,904 58,026 ( 94,831) ( 146,904) $ 850,539 $ 354,365 Year ended December 31, 2021 2020 $ 107,305 $ 167,264 ( 429) - $ 106,876 $ 167,264
		2021
		2021
		$ 107,305 ( 429) $ 106,876

B. Changes in liabilities from financing activities:

At January 1, 2021 Changes in cash flow from financing activities Interest paid Interest expense Changes in other non-cash items Changes from lease modifications At December 31, 2021		Short-term borrowings	Short-term notes and bills payable	Lease liabilities	Guarantee deposits received	Liabilities from financing activities-gross $ 1,569,516 203,334 ( 1,074) 1,074 4,815 ( 295) $ 1,777,370
		$ 1,340,000 360,000 - - - -	$ 149,756 ( 148,869) - - ( 887) - $-	$ 72,929 ( 7,499) ( 1,074) 1,074 5,702 ( 295) $ 70,837	$ 6,831 ( 298) - - - -
		$ 1,700,000			$ 6,533

~52~

At January 1, 2020 Changes in cash flow from financing activities Interest paid Interest expense Changes in other non-cash items Changes from lease modifications At December 31, 2020		Short-term borrowings Short-term notes and bills payable	Short-term borrowings Short-term notes and bills payable	Lease liabilities	Guarantee deposits received Liabilities from financing activities-gross	Guarantee deposits received Liabilities from financing activities-gross
		$ 270,000 1,070,000 - - - - $ 1,340,000	$ - 150,476 - - ( 720) - $ 149,756	$ 73,235 ( 5,320) ( 1,046) 1,046 10,410 ( 5,396) $ 72,929	$ 10,067 ( 3,236) - - - - $ 6,831	$ 353,302 1,211,920 ( 1,046) 1,046 9,690 ( 5,396)
						$ 1,569,516

7. Related Party Transactions

(30) Names of related parties and relationship

Names of related parties	Relationship with the Company
Elite Semiconductor Memory Technology Inc.	Subsidiary
CML Inc. (Note 1)	＂
Charng Feng Investment Ltd.	＂
Jie Yong Investment Ltd.	＂
Elite Investment Services Ltd.	＂
Elite Semiconductor (B.V.I.) Ltd.(Note 2)	＂
Eon Silicon Solutions Inc. USA	＂
Elite Memory Technology Inc.	Sub-subsidiary
Elite Silicon Technology Inc.	＂
Elite Innovation Japan Ltd.	＂
Elite Semiconductor Microelectronics Technology (shenzhen) Inc.	＂
Elite Innovation (B.V.I.) Ltd. (Note 3)	＂
Elite Semiconductor Microelectronics (Shanghai) Technology Inc.	＂
CHI Microelectronics Limited (Note 4)	＂
HHHtech Co., Ltd. (Note 5)	＂
Arima Lasers Corporation	The Company’s subsidiary is this
	company’s director
Canyon Semiconductor Inc.	Investee indirectly accounted for
	under equity method

Note 1: This company had been liquidated in May 2020. Note 2:This company had been liquidated in February 2021. Note 3: This company had been liquidated in March 2020. Note 4: This company had been established on August 31, 2020.

Note 5:This company’s stockholders’ meeting had been approved to execute liquidation process on June 2021.

~53~

(31) Significant transactions and balances with related parties

A. Operating revenue Sales of goods: -Associates Goods are sold based on the price available to third parties.		YearendedDecember31, 2021 2020 $ 6,556 $ 6,021 lists in force and terms that would be
		2021

B. Purchases
	YearendedDecember31,
	2021	2020
Purchases of goods:
-Subsidiaries	$ 129,842	$ 3,828
Goods are purchased from subsidiaries on normal		commercial terms and
conditions.

conditions.
C. Payables to related parties Accounts payable: -Subsidiaries D. Others Other income-support service -Subsidiaries Research and development expenses: -Subsidiaries Selling expenses: -Subsidiaries Key management compensation Salaries and other short-term employee benefits Post-employment benefits		December 31, 2021 December 31, 2020 $ 52,939 $- Year ended December 31, 2021 2020 $ 30,000 $ 48,178 $ 54,314 $ 76,375 $ 57,263 $ 46,797 YearendedDecember31, 2021 2020 $ 193,066 $ 54,409 432 432 $ 193,498 $ 54,841
					2021
					2021
				$	193,066 432 193,498
				$

(3) Key management compensation

~54~

8. Pledged Assets

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

Book value

	Book value	Book value	Book value
Assets item Time deposits (shown as “other non-current assets ”)	December 31, 2021 December 31, 2020 Purpose
		$ 3,969	$ 3,969 Guarantee deposits for lease of land

9. Significant Contingent Liabilities and Unrecognized Contract Commitments

The Company entered into capacity reservation contracts with suppliers. According to the contracts, the supplier shall provide agreed production capacity with the Company after prepayment by the Company.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

Information about the appropriations of earnings of the Company which had been approved by Board of Directors on February 25, 2022 is provided in Note 6(19).

12. Others

(1) Capital management

Considering the industrial characteristics, future development, and changes in the environment, the Company plans the demand of working capital, research and development expenses and dividends to safeguard the Company’s ability to continue as a going concern, to provide returns for shareholders, to take care of the benefit of other related parties, and to maintain an optimal capit al structure, so as to promote shareholder value in the long-term.

To maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares or pay cash to shareholders, or repurchase shares.

The gearing ratios at December 31, 2021 and 2020 were as follows:

Total assets Total liabilities Total equity Equity to assets ratio	December 31, 2021 December 31, 2020 $ 20,155,843 $ 13,005,217 ( 7,434,428) ( 4,741,174) $ 12,721,415 $ 8,264,043 63% 64%	December 31, 2021 December 31, 2020 $ 20,155,843 $ 13,005,217 ( 7,434,428) ( 4,741,174) $ 12,721,415 $ 8,264,043 63% 64%	December 31, 2021 December 31, 2020 $ 20,155,843 $ 13,005,217 ( 7,434,428) ( 4,741,174) $ 12,721,415 $ 8,264,043 63% 64%
		$ 20,155,843 ( 7,434,428) $ 12,721,415 63%

~55~

(2) 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 amortized cost Cash and cash equivalents Financial assets at amortized cost - current Accounts receivable Other receivables Time deposits (shown as “other non-current assets”) Guarantee deposits paid (shown as “other non-current assets”) Financial liabilities Financial liabilities at amortized cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Accounts payable -related party Other accounts payable Guarantee deposits received (shown as “other non-current liabilities”) Lease liability	December 31, 2021 December 31, 2020 $ 173,513 $ 168,548 $ 17,697 $ 32,418 $ 8,749,239 $ 2,719,155 110,720 136,704 1,910,845 1,505,780 115,503 94,611 3,969 3,969 841,101 4,551 $ 11,731,377 $ 4,464,770 $ 1,700,000 $ 1,340,000 - 149,756 2,205 2,115 2,799,845 2,281,658 52,939 - 1,830,027 688,630 6,533 6,831 $ 6,391,549 $ 4,468,990 $ 70,837 $ 72,929	December 31, 2021 December 31, 2020 $ 173,513 $ 168,548 $ 17,697 $ 32,418 $ 8,749,239 $ 2,719,155 110,720 136,704 1,910,845 1,505,780 115,503 94,611 3,969 3,969 841,101 4,551 $ 11,731,377 $ 4,464,770 $ 1,700,000 $ 1,340,000 - 149,756 2,205 2,115 2,799,845 2,281,658 52,939 - 1,830,027 688,630 6,533 6,831 $ 6,391,549 $ 4,468,990 $ 70,837 $ 72,929
		$ 173,513 $ 17,697 $ 8,749,239 110,720 1,910,845 115,503 3,969 841,101 $ 11,731,377 $ 1,700,000 - 2,205 2,799,845 52,939 1,830,027 6,533 $ 6,391,549 $ 70,837

B. Financial risk management policies

(a) The Company adopt comprehensive system of risk management and control to identify, measure and control all categories of risk, including market risk, credit risk, liquidity risk, and risk of cash flow, to make sure management is able to control and measure market risk, credit risk, liquidity risk, and risk of cash flow effectively.

~56~

• (b) In order to control all management objectives of market risk effectively, achieve optimal level of risk, maintain appropriate level of liquidity and collectively manage all market risks, the Company will take factors such as consideration for the overall economic environment, status of competition and market value risks.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• I. The Company operates internationally and is exposed to foreign exchange risk arising from the various currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities.

• II.Management has set up a policy to require the Company to manage their foreign exchange risk against their functional currency. The Company is required to hedge the entire foreign exchange risk exposure with the Company treasury. The Company adopt forward foreign exchange contracts through the Company treasury to manage the foreign exchange risk from future commercial transactions and recognized assets and liabilities. The foreign exchange risk will exist when future commercial transactions and recognized assets and liabilities use the currency different from the functional currency of the companies.

• III. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD	December 31, 2021 Foreign currency amount (In thousands) Exchange rate Book value (NTD in thousands) $ 368,999 27.680 $ 10,213,892 139,387 4.344 605,497 $ 73,314 27.680 $ 2,029,332

~57~

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD JPY:NTD	December31,2020
	Foreign currency amount (In thousands) Exchange rate Book value (NTD in thousands)
	$ 132,416 28.480 $ 3,771,208 125,949 4.377 551,279 $ 47,030 28.480 $ 1,339,414 62,800 0.276 17,352

• IV. The total exchange losses, including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2021 and 2020, amounted to $108,007 and $$26,694, respectively.

• V. Analysis of foreign currency market risk arising from significant foreign exchange variation:

Analysis of foreign currency foreign exchange variation:	market risk arising from significant
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD	YearendedDecember31,2021
	Sensitivity analysis
	Degree of variation Effect on profitor loss Effect on other comprehensive income
	1% $ 102,139 $ - 1% 6,055 - 1% ($ 20,293) $ -

~58~

Year ended December 31,2020

	YearendedDecember31,2020
(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Monetary items USD:NTD JPY:NTD	Sensitivity analysis
	Degree of variation Effect on profitor loss Effect on other comprehensive income
	1% $ 37,712$ - 1% 5,513- 1% ($ 13,394)$ - 1% ( 174)-

Price risk

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

• II. The Company’s investments in equity securities comprise shares and open-end funds issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2021 and 2020 would have increased/decreased by $17,351 and $16,855, 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 $1,770 and $3,242, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value Interest rate risk

The Company’s main interest rate risk arises from short -term borrowings and short-term notes and bills payable. Borrowings with floating rates expose the Company to cash flow interest rate risk, but the majority of risk offset by cash and cash equivalents with floating rates. Borrowings with fixed rates expose the Company to fair value interest rate risk. The Company doesn’t have significant risk of change of interest rate due to borrowings with floating rates are all shorter than one year.

~59~

(b) Credit risk

• I. Credit risk refers to the risk of financial loss to the Company 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 financial instruments stated at amortized cost and debt instruments at fair value through profit or loss.

• II. The Company manages their credit risk taking into consideration the entire company’s concern. For banks and financial institutions, only these with high rating are accepted. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, considering their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilization of credit limits is regularly monitored.

• III. The Company adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.

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

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

• V. The following indicators are used to determine whether the cred it 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.

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

~60~

• VII. The financial assets at amortized cost including time deposits and restricted time deposits. The banks are with high rating and don’t past due before. In addition to the above, the whole economic environment doesn’t change significant, so the risk of credit risk is low and the effect to financial statement is insignificant.

• VIII. The information about ageing analysis and collaterals of accounts receivable is provide in Note6(4). The Company request significant clients provide collaterals and other right of guarantee, therefore, the Company classifies customer’s accounts receivable in accordance with the nature of collaterals. The applies the simplified approach using loss rate methodology to estimate expected credit loss. In summary, the allowance for losses which the Company should recognize is minor at December 31, 2021 and 2020.

• IX. Movements in relation to the Company applying the modified approach to provide loss allowance for accounts receivable is as follows:

At January 1 Reversal of impairment At December 31		2021	2020 $ 14,295 ( 8,582) $ 5,713
		$ 5,713 ( 5,713) $-

• (c) Liquidity risk

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

• II. Surplus cash held by the operating entities over and above balance required for working capital management should invest surplus cash in interest bearing current accounts, time deposit s and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

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

~61~

Non-derivative financial liabilities:

December 31,2021 Short-term borrowings Notes payable Accounts payable Accounts payable-related party Other payables Lease liability Guarantee deposits received Derivative financial liabilities:None.	Less than 1 year Between 1 and 5 years Over 5 years $ 1,700,000 $ - $ - 2,205 - - 2,799,845 - - 52,939 - - 1,830,027 - - 8,496 22,592 48,666 - - 6,533

Non-derivative financial liabilities:

December 31,2020 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liability Guarantee deposits received Derivative financial liabilities:None.	Less than 1 year Between 1 and 5 years Over 5 years $ 1,340,000 $ - $ - 149,756 - - 2,115 - - 2,281,658 - - 688,630 - - 7,405 22,554 52,635 - - 6,831

(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 Company’s investment in listed stocks and emerging stocks, beneficiary certificates and debt securities is included in Level 1.

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

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

• B. Fair value information of investment property at cost is provided in Note 6(9).

~62~

• C. Financial instruments not measured at fair value of the Company including cash and cash equivalents, time deposit (over 3 months), notes receivable, accounts receivable, other receivables, guarantee deposits paid, short -term borrowings, short-term notes and bills payable, notes payable, accounts payable, other payables, lease liabilities (current and non-current) and guarantee deposits received. Their carrying amounts are approximate to their fair values.

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

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

follows:
December 31,2021 Assets Recurring fair value measurements			Level 1	Level 2	Level 3	Total
			$ 77,602 57,320 38,591 - $ 173,513 Level 1	$ - - - - $- Level 2	$ - - - 17,697 $ 17,697 Level 3	$ 77,602 57,320 38,591 17,697
Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Debt securities Financial assets at fair value through other comprehensive income Equity securities Financial liabilities: None. December 31,2020 Assets Recurring fair value measurements
						$ 191,210
						Total
			$ 72,557 58,904 37,087 - $ 168,548	$ - - - - $-	$ - - - 32,418 $ 32,418	$ 72,557 58,904 37,087 32,418
Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Debt securities Financial assets at fair value through other comprehensive income Equity securities Financial liabilities: None.
						$ 200,966

~63~

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

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

Listed shares Open-end fund Market quoted 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 parent company only balance sheet date.

• III. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’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 Company’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 parent company only balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

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

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

December 31, 2021 and 2020:
At January 1 Valuation adjustment At December 31	Equity securities
	2021	2020
	$ 32,418 ( 14,721) $ 17,697	$ 25,388 7,030 $ 32,418

~64~

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

• H. 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:

Fair value at		Significant
December 31,	Valuation	unobservable	Range		Relationship of inputs
2021	technique	input	(weighted average)		to fair value
Non-derivative equity instrument:
Unlisted shares $ 17,697	Market -	Discount for	45%	the higher the discount
	comparable	lack of			for lack of
	companies	marketability			marketability, the
					lower the fair value
Fair value at		Significant
December 31,	Valuation	unobservable	Range		Relationship of inputs
2020	technique	input	(weighted average)		to fair value
Non-derivative equity instrument:
Unlisted shares $ 32,418	Market -	Discount for	40%	the higher the discount
	comparable	lack of			for lack of
	companies	marketability			marketability, the
					lower the fair value

(4) Others

As of the reported date, the Company has assessed that COVID-19 has no adverse impact on the Company’s overall operating activities and financial statements for the years ended December 31, 2021. However, the Company will continue to pay attention to the development of the COVID-19 and its impact on the overall economic environment.

~65~

13. Supplementary Disclosures

(1) Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 1.

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

• E. Acquisition of real estate reaching $300 million or 20% of paid -in capital

  • or more: None.

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

• G. Purchases or sales of goods from or to related parties reaching $100

  • million or 20% of paid-in capital or more: None.

• H. Receivables from related parties reaching $100 million or 20% of paid -in

  • capital or more: None.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: None.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 2.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 3.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

(4) Major shareholders information

As of December 31, 2021, the Company did not have any shareholders with a shareholding ratio more than 5%.

~66~

Elite Semiconductor Microelectronics Technology Inc. Statement of Cash and Cash Equivalents December 31, 2021

(Expressed in thousands of New Taiwan dollars)

Statement 1

Item Petty cash Bank deposits Demand deposits - New Taiwan Dollar - Foreign currency Checking accounts deposits - New Taiwan Dollar Time deposits - Foreign currency Total	Description USD 25,042exchange rate27.68 EUR 1exchange rate31.32 RMB 284exchange rate4.344 USD 267,354exchange rate27.68 RMB 138,400exchange rate4.344	Amount $ 115 53,121 693,163 19 1,233 7 7,400,371 601,210 $ 8,749,239

Elite Semiconductor Microelectronics Technology Inc. Statement of Accounts Receivable December 31, 2021

Statement 2 Customer name General customer: AA company BB company CC company DD company Others Less: Allowance for bad debt	(Expressed in thousands of New Description Amount $ 455,447 257,298 114,646 103,787 979,667 1,910,845 - $ 1,910,845	(Expressed in thousands of New	(Expressed in thousands of New	(Expressed in thousands of New	Taiwan dollars) Note
				Amount $ 455,447 257,298 114,646 103,787 979,667 1,910,845 - $ 1,910,845
					The balance of each customer has not exceeded 5% of the accounts receivable. The accounts receivable past due over one year amounted to $0.

Elite Semiconductor Microelectronics Technology Inc. Statement of Inventory

December 31, 2021

(Expressed in thousands of New Taiwan dollars)

Statement 3

Item Description		Amount Note Cost Net realizable value	Amount Note Cost Net realizable value
Raw materials Work in progress Finished goods Inventory in transit Less: Allowance on market value decline and obsolete and slow-moving inventories		$ 58,400 3,688,463 1,621,180 20,152	$ 61,594 The net realizable value is net market value. 4,167,239 ＂ 2,340,842 ＂ - The replacement cost is net market value. $ 6,569,675
	(	5,388,195 24,886) $ 5,363,309

Elite Semiconductor Microelectronics Technology Inc. Movement Statement of Investment Accounted for Under the Equity Method Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars)

Statement 4

Name	Beginning balance Increase (Note 1) Decrease (Note 1) Ending balance	Beginning balance Increase (Note 1) Decrease (Note 1) Ending balance	Beginning balance Increase (Note 1) Decrease (Note 1) Ending balance	Beginning balance Increase (Note 1) Decrease (Note 1) Ending balance	Beginning balance Increase (Note 1) Decrease (Note 1) Ending balance	Beginning balance Increase (Note 1) Decrease (Note 1) Ending balance	Beginning balance Increase (Note 1) Decrease (Note 1) Ending balance	Market value or net equity value Basis of valuation For collateralized or pledge Note Amount Unit price Total price
	Number of shares		Amount Number of shares		Amount Number of shares	Amount Number of shares Ownership
Elite Semiconductor Memory Technology Inc. Charng Feng Investment Ltd. Elite Investment Services Ltd. Jie Yong Investment Ltd. Eon Silicon Solutions Inc. USA	100,000 50,000,000 15 3,600,000 200,000 (		$ 24,236 511,029 620,500 136,983 1,411) $ 1,291,337	- - - - -	$ - 55,000 - 51,948 - $ 106,948	- ($ 3,685) 100,000 100% - - 50,000,000 100% - ( 8,400) 15 100% - - 3,600,000 41.86% -( 271) 200,000 100%( ($ 12,356)		$ 20,551 $ 206 $ 20,551 Equity method None 566,029 11 566,029 ＂ ＂ 612,100 40,806,667 612,100 ＂ ＂ 188,931 52 188,931 ＂ ＂ 1,682)( 8) ( 1,682) ＂ ＂ $ 1,385,929 $ 1,385,929

Note 1: The amount increased and decreased in the period comprise cumulative translation adjustments, valuation adjustment on financial assets and subsidiary own the Company’s share.

Elite Semiconductor Microelectronics Technology Inc. Movement Statement of Property, Plant and Equipment Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars)

Statement 5

Item	Beginning balance	Beginning balance	Increase	Decrease	Transfer Ending balance For collateralized or pledge Note	Transfer Ending balance For collateralized or pledge Note
Land Buildings and structures Machinery equipment Testing equipment Other equipment		$ 9,023 636,446 518,018 284,731 1,480,677	$ 159,745 23,581 157,570 20,516 436,007	$ - - - - -	$ - 7,308 24,850 24,693 -	$ 168,768 None 667,335 ＂ 700,438 ＂ 329,940 ＂ 1,916,684 ＂ $ 3,783,165
		$ 2,928,895	$ 797,419	$-	$ 56,851

Elite Semiconductor Microelectronics Technology Inc. Movement Statement of Accumulated Depreciation of Property, Plant and Equipment Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars)

Statement 6

Item	Beginning balance	Beginning balance	Increase	Decrease	Transfer Ending balance Note
Buildings and structures Machinery equipment Testing equipment Other equipment	($ 398,943) ( 375,047) ( 165,365) (1,213,527)		($ 34,918) ( 38,437) ( 28,888) (290,504)	$ - - - -	$ - ($ 433,861) - ( 413,484) - ( 194,253) - (1,504,031) $- ($ 2,545,629)
		($ 2,152,882)	($ 392,747)	$-	$-

Elite Semiconductor Microelectronics Technology Inc. Statement of Accounts Payable December 31, 2021

(Expressed in thousands of New Taiwan dollars)

Statement 7 Customer name General customer: A company B company C company D company Others	Description		Amount $1,527,058 405,772 218,636 157,428 490,951 $2,799,845	Note
				The balance of each customer has not exceeded 5% of the accounts payable.

Elite Semiconductor Microelectronics Technology Inc. Statement of Operating Revenue Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars)

Statement 8

Item Sales revenue Less: sales returns and discounts Net sales revenue	Quantities 2,215,544 thousands 1,368 thousands	Amount $ 23,869,777 (24,879) $ 23,844,898	Note

Elite Semiconductor Microelectronics Technology Inc. Statement of Operating Costs Year ended December 31, 2021

(Expressed in thousands of New Taiwan dollars)

Statement of Operating Costs Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars)
Statement 9 Item Direct material Raw material at beginning Add: material purchased for the year Less: transferred to expenses Raw material at the end Direct material Raw material consumed Direct labor Manufacturing overheads Manufacturing cost Work in progress at the beginning Add: work in progress purchased Less: transferred to expenses Work in progress at the end Cost of finished goods Add: finished goods at the beginning Finished goods purchased Transferred from expenses Less: transferred to expenses Finished goods at the end Others Total cost of goods sold Employees’ performance bonus Employees’ compensation Scrapped raw material Reversal of allowance on market value decline and obsolete and slow- moving inventories Total operating costs	Amount $ 138,104 4,049,152 ( 161) ( 58,400) (16,871) 4,111,824 34,731 3,209,551 7,356,106 4,724,546 7,015,333 ( 34,316) ( 3,688,463) 15,373,206 1,199,284 25,848 95,627 ( 7,254) ( 1,621,180) (1,304) 15,064,227 115,656 42,904 16,871 ( 73,885) $ 15,165,773

Elite Semiconductor Microelectronics Technology Inc. Statement of Manufacturing Overheads Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars) Statement 10

Item Description		Amount Note
Processing fee Depreciation charge Other expenses Total		$ 2,682,412 291,654 235,485 The balance of each customer has not exceeded 5% of the manufacturing overheads. $ 3,209,551

Elite Semiconductor Microelectronics Technology Inc. Statement of Selling Expenses Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars)

Statement 11

Item Description		Amount Note $ 304,107 63,540 44,471 74,207 The balance of each customer has not exceeded 5% of the selling expenses. $ 486,325
Salaries and wages Labor fee fee of import and export Other expenses Total

Elite Semiconductor Microelectronics Technology Inc. Statement of Administrative Expenses Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars)

Statement 12

Item Description		Amount Note
Salaries and wages Other expenses Total		$ 473,156 90,510 The balance of each customer has not exceeded 5% of the administrative expenses. $ 563,666

Elite Semiconductor Microelectronics Technology Inc. Statement of Research and Development Expenses Year ended December 31, 2021 (Expressed in thousands of New Taiwan dollars) Statement 13

Item Description Amount Note Salaries and wages $ 1,266,683 Amortization charge 110,807 The balance of each customer has not exceeded 5% of the research Other expenses 400,212 and development expenses. Total $ 1,777,702

Elite Semiconductor Microelectronics Technology Inc. Summary of Employee Benefit, Depreciation and Amortization charges by Function Year ended December 31, 2021 and 2020 (Expressed in thousands of New Taiwan dollars)

Statement 14

Function Nature	2021	2021	2021	2020	2020	2020
	Classified as operating costs	Classified as operating expenses	Total	Classified as operating costs	Classified as operating expenses	Total
Employee benefitexpense
Wagesand salaries	273,354	1,973,683	2,247,037	134,384	840,819	975,203
Labor and health insurance fees	8,857	48,869	57,726	7,346	41,137	48,483
Pension costs	4,457	28,363	32,820	4,296	26,366	30,662
Director remuneration	-	70,264	70,264	-	15,938	15,938
Otheremployee benefitexpense	2,951	13,996	16,947	2,694	12,456	15,150
Depreciationcharges	291,654	110,003	401,657	225,295	81,112	306,407
Amortizationcharges	3,824	113,042	116,866	5,098	106,303	111,401

Note:

1. As at December 31, 2021 and 2020, the number of the Company’s employee were 493 and 465, including 5 and 4 non-employee directors.

2. For the entity that its shares are listed on Taiwan Stock Exchange or traded in the Taipei Exchange, the following additional disclosures are required:

3. (1) The average employee benefit expense for the current year was $4,825.

(“total employee benefit expense for the current year – total directors’ remuneration”/ “the number of employees in the current year – the number of non- employee directors”).

The average employee benefit expense for the previous year was $2,320.

(“total employee benefit expense for the previous year – total directors’ remuneration”/ “the number of employees in the previous year – the number of non- employee directors”). (Continue)

Elite Semiconductor Microelectronics Technology Inc. Summary of Employee Benefit, Depreciation and Amortization charges by Function Year ended December 31, 2021 and 2020 (Expressed in thousands of New Taiwan dollars)

Statement 14

• (2) The average employee salaries and wages for the current year was $4,605.

(total salaries and wages for the current year/ “the number of employees in the current year – the number of non- employee directors”). The average employee salaries and wages for the previous year was $2,115.

• (total salaries and wages for the previous year/ “the number of employees in the previous year – the number of non- employee directors”)

• (3) The variation in the adjustments of the average employee salaries and wages was 118%.

• (“the average employee salaries and wages for the current year - the average employee salaries and wages for the previous year”/ the average employee salaries and wages for the previous year)

• (4) The Company’s compensation policies (including directors, supervisors, executive officers and employees).

According to the Company’s Articles of Incorporation, the Compensation Committee determine the salary for the directors, taking into account the extent and value of the services provided for the management of the Company and the standards of the industry within the R.O.C. then submitted to the Board of Directors for approval.

The Company could set different salaries between independent directors and general directors. According to the Company’s Articles of independent directors, the salary for the independent directors should on Articles of Incorporation or been approved by stockholders’ meeting, and could set reasonable salaries that different from general directors.

The Company’s compensation policies of executive officers and employees are based on fixed salary of salary structure, including base salary, meal allowance, variable salary (including overtime wage and delay meal allowance), and bonus (including year-end bonus, supplemental wage).

The salary of the position is accordance with the salary standards of the industry, responsibilities in the Company and the services provided for the operational objectives of the Company.

(Continue)

Elite Semiconductor Microelectronics Technology Inc. Summary of Employee Benefit, Depreciation and Amortization charges by Function Year ended December 31, 2021 and 2020 (Expressed in thousands of New Taiwan dollars)

Statement 14

Besides operational performance, future business risk in industry and trend of development, the Company also take personal performance and services provided to the performance of the Company for reference to determine reasonable salary.

The performance assessment and rationality of performance about executive officers are reviewed by Compensation Committee and Board of Directors, and also adjust the system of salary through actual operating conditions and related laws.

In accordance with the Articles of Incorporation of the Company, a ratio of profit of the current year distributable, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 5% for employees’ compensation and 1% for directors’ remuneration.

Elite Semiconductor Microelectronics Technology Inc.

Holding of marketable securities at the end of the period

December 31, 2021

Table 1

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

Securities held by	Name and category of marketable securities	Relationship with the securities issuer	General ledger account	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	Footnote
				Number of shares	Book value (Note 1)	Ownership (%)	Fair value (Note 1)
Elite Semiconductor Microelectronics Technology Inc.	Arima Lasers Corporation stock	Note 2	Financial assets at fair value through profit or loss	2,074,000	$ 77,153	7.36	$ 77,153
Elite Semiconductor Microelectronics Technology Inc.	King Yuan Electronics Corporation stock	None	Financial assets at fair value through profit or loss	10,000	449	0.00	449
Elite Semiconductor Microelectronics Technology Inc.	HSBC FRN PERPETUAL bond	None	Financial assets at fair value through profit or loss	1,000,000	25,744	Not applicable	25,744
Elite Semiconductor Microelectronics Technology Inc.	ANZ FRN PERPETUAL bond	None	Financial assets at fair value through profit or loss	500,000	12,847	Not applicable	12,847
Elite Semiconductor Microelectronics TechnologyInc.	BGF RENMINBI BOND FUND	None	Financial assets at fair value through profit or loss	127,986	57,320	Not applicable	57,320
Elite Semiconductor Microelectronics Technology Inc.	Turning Point Lasers Ltd. preferred stock	None	Financial assets at fair value through other comprehensive income	1,000,000	17,697	8.06	17,697
Elite Investment Services Ltd.	HSBC ALL CHINA BOND FUND - AC (2802)	None	Financial assets at fair value through profit or loss	600,000	32,098	Not applicable	32,098
Charng Feng Investment Ltd.	King Yuan Electronics Corporation stock	None	Financial assets at fair value through profit or loss	10,000	449	0.00	449
Charng Feng Investment Ltd.	Arima Lasers Corporation stock	Note 3	Financial assets at fair value through profit or loss	907,000	33,740	3.22	33,740
Charng Feng Investment Ltd.	M2 Communication Inc. stock	None	Financial assets at fair value through profit or loss	400,000	3,800	4.46	3,800
Charng Feng Investment Ltd.	Powerchip Semiconductor Manufacturing Corporation	None	Financial assets at fair value through profit or loss	1,630,426	116,086	0.05	116,086
Charng Feng Investment Ltd.	Turning Point Lasers Ltd. preferred stock	None	Financial assets at fair value through other comprehensive income	1,000,000	17,697	8.06	17,697
Jie Yong Investment Ltd.	Elite Semiconductor Microelectronics Technology Inc. stock	Parent company	Financial assets at fair value through other comprehensive income	13,354,000	2,203,410	4.67	2,203,410

Note 1: Valuation adjustment of financial assets and cumulative translation differences are included. Note 2: The Company’s subsidiary is this company’s director Note 3: Charng Feng Investment Ltd. is this company’s director

Elite Semiconductor Microelectronics Technology Inc.

Information on investees (exclude investee in Mainland China)

Years ended December 31, 2021

Table 2

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

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2021	Shares held as at December 31,2021	Shares held as at December 31,2021	Net income (loss) of the investee for the years ended December 31,2021	Investment income (loss) recognized by the Company for the years ended December 31, 2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Elite Semiconductor Microelectronics Technology Inc.	Elite Semiconductor Memory Technology Inc.	Taiwan	Research and development, production, sales and related consulting services of integrated circuit	$ 272	$ 272	100,000	100	$ 20,551	$ 5,057	$ 5,057
Elite Semiconductor Microelectronics Technology Inc.	Charng Feng Investment Ltd.	Taiwan	General investment	500,000	500,000	50,000,000	100	566,029	68,958	70,059
Elite Semiconductor Microelectronics Technology Inc.	Elite Investment Services Ltd.	British Virgin Islands	General investment	415,200	415,200	15	100	612,100	( 8,400)	( 8,400)
Elite Semiconductor Microelectronics Technology Inc.	Jie Yong Investment Ltd.	Taiwan	General investment	270,000	270,000	3,600,000	41.86	188,931	116,873	( 2,905)
Elite Semiconductor Microelectronics Technology Inc.	Eon Silicon Solutions, Inc.USA	U.S.A.	Investigation and research of business situation and industrial technology	13,304	13,304	200,000	100	( 1,682)	( 271)	( 271)
Charng Feng Investment Ltd.	Elite Memory Technology Inc.	Taiwan	Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade	69,407	69,407	10,000,000	100	21,612	( 341)	( 341)
Charng Feng Investment Ltd.	Elite Silicon Technology Inc.	Taiwan	Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade	61,229	59,288	7,455,860	98.10	( 91)	( 632)	( 620)
Charng Feng Investment Ltd.	Canyon Semiconductor Inc.	Taiwan	International trade, manufacturing of electronic components, product design and information software services	80,337	80,337	8,350,000	40.93	51,812	43,804	17,929
Charng Feng Investment Ltd.	Elite Innovation Japan Ltd.	Japan	Product design, wholesale and retail of electronic materials, manufacturing of electronic components, information software services and international trade	2,052	2,052	200	100	731	( 1,464)	( 1,464)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31, 2021	Shares held as at December 31, 2021	Shares held as at December 31, 2021	Net income (loss) of the investee for the years ended December 31,2021	Investment income (loss) recognized by the Company for the years ended December 31, 2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Charng Feng Investment Ltd.	CHI Microelectronics Limited	Hong Kong	Trading	$ 355	$ 355	10,000	100	$ 710	$ 343	$ 343
Charng Feng Investment Ltd.	HHHtech Co., Ltd.	Taiwan	Information software services, product design, management consultant and international trade	15,000	-	1,500,000	75	2,233	( 16,607)	( 12,455)	Note 2

Note 1: The foreign investment amount translated at the exchange rate as of December 31, 2021.

Note 2: The Company obtained HHHtech Co., Ltd. share interest by 75% through it increased its capital by issuing new shares on March, 2021. Stockholders’ meeting of HHHtech Co., Ltd. approved to execute liquidation process on June 28, 2021.

Elite Semiconductor Microelectronics Technology Inc.

Information on investments in Mainland China

Years ended December 31, 2021

Table 3

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

Investee in Mainland China	Main business activities	Paid-in capital (Note 4)	Investment method (Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as at January 1, 2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the years ended December 31, 2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the years ended December 31, 2021	Accumulated amount of remittance from Taiwan to Mainland China as at December 31, 2021	Net income (loss) of the investee for the years ended December 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the years ended December 31, 2021 (Note 2)	Book value of investments in Mainland China as at December 31, 2021	Accumulated amount of investment income remittance back to Taiwan as at December 31, 2021	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Elite Semiconductor Microelectronics Technology (shenzhen) Inc.	Trading of goods or technical services, develop and sale products of networking system, storage, and peripherals, technical consulting and services of integrated circuit, and after - sales service	$ 84,133	(1)	$ 2,477	$ 81,656	$ -	$ 84,133	($ 2,990)	100	($ 2,990)	$ 87,951	$ -	Note 5
Elite Semiconductor Microelectronics (Shanghai) Technology Inc.	Product design, wholesale and retail of electronic materials, information software services and international trade	5,536	(1)	5,536	-	-	5,536	377	100	377	7,010	-	Note 6
Company name Accumulated amount of remittance from Taiwan to Mainland China as at December 31, 2021 Investment amount approved by the Investment Commission of MOEA (Note 5) Ceiling of investments in Mainland China imposed by the Investment Commission of MOEA Charng Feng Investment Ltd. $ 89,669 $ 89,669 $ 300,000
Company name	Accumulated amount of remittance from Taiwan to Mainland China as at December 31, 2021		Investment amount approved by the Investment Commission of MOEA (Note 5)		Ceiling of investments in Mainland China imposed by the Investment Commission of MOEA
Charng Feng Investment Ltd.	$ 89,669		$ 89,669		$ 300,000

• Note 1: The methods for engaging in investment in Mainland China include the following:

• (1) Direct investment in Mainland China.

• (2) Indirect investment in Mainland China through companies registered in a third region.

• (3) Other methods.

• Note 2: Investment income (loss) was recognized based on financial statement prepared by each company which were audited by independent auditors.

Note 3: The amount of the statement should show as New Taiwan Dollars.

Note 4: Paid-in capital translated at the exchange rate as of December 31, 2021.

• Note 5: The Company's subsidiary, Charng Feng Investment Ltd., obtained the revised investment amount of USD 39,485.42, USD 2,500,000 and USD 500,000 approved by the Investment Commission, MOEA on February 6, 2020, July 10, 2020 and November 30, 2021.

• Note 6: Elite Semiconductor Microelectronics (Shanghai) Technology Inc. was established on November 27, 2019. The Company's subsidiary, Charng Feng Investment Ltd., obtained the investment amount of USD 200,000 approved by the Investment Commission of MOEA on May 20, 2020.