Faraday — Annual Report 2021

Nov 10, 2021

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese As of December 31, 2021 and December 31, 2020 PARENT COMPANY ONLY BALANCE SHEETS FARADAY TECHNOLOGY CORPORATION (Expressed in thousands of New Taiwan Dollars)

			As of					As of
		December 31,	December 31,				December 31,	December 31,
Assets	Note	2021		2020	Liabilities and Equity	Note	2021	2020
Current assets					Current liabilities
Cash and cash equivalents	4, 6(1)	\$ 1,885,398	\$		1,244,061 Financial liabilities at fair value through profit or loss, current	4, 6(2)	\$ -	\$ 1,504
Financial assets at fair value through profit or loss, current	4, 6(2)	1,424		-	Contract liabilities, current	4, 6(14), 7	472,744	100,939
Contract assets, current	4, 6(14), 6(15), 7	75,630			315,431 Accounts payable		836,084	524,377
Notes receivable, net	6(15)	4,030			1,360 Accounts payable - related parties	7	487,166	217,535
Accounts receivable, net	4, 6(4), 6(15)	349,213			291,649 Payables on equipment		553	5,644
Accounts receivable - related parties, net	4, 6(4), 6(15), 7	635,549			415,584 Other payables	6(11), 7	524,795	317,487
Other receivables, net	7	71,415			150,616 Current tax liabilities	4, 6(20)	132,979	31,182
Inventories, net	4, 5, 6(5)	1,208,411			457,603 Lease liabilities, current	4, 6(16), 12	5,972	5,432
Other current assets	6(6), 7	168,232			132,365 Other current liabilities		8,112	11,428
Costs to fulfil a contract, current	6(14)	20,820		1,975	Total current liabilities		2,468,405	1,215,528
Total current assets		4,420,122		3,010,644
					Non-current liabilities
Non-current assets					Deferred tax liabilities	4, 6(20)	8,475	6,133
Financial assets at fair value through other comprehensive income, 4, 6(3)		2,775,807			2,012,742 Lease liabilities, non-current	4, 6(16), 12	190,900	194,087
non-current					Long-term payables	6(11)	161,247	16,321
Financial assets measured at amortized cost, non-current	8	15,050			15,028 Defined benefit liabilities, non-current	4, 6(12)	5,088	8,395
Investments accounted for using the equity method	4, 6(7)	2,089,256		1,560,664	Total non-current liabilities		365,710	224,936
Property, plant and equipment	4, 6(8)	494,527		521,190	Total liabilities		2,834,115	1,440,464
Right-of-use assets	4, 6(16)	191,222		195,650
Intangible assets	4, 6(9)	441,312		233,937	Equity attributable to the parent company
Deferred tax assets	4, 6(20)	17,243			41,676 Capital	6(13)
Refundable deposits		67,034		1,423	Common stock		2,485,503	2,485,503
Other non-current assets		162,514			141,447 Additional paid-in capital	6(13)	705,700	724,574
Total non-current assets		6,253,965			4,723,757 Retained earnings	6(13)
					Legal reserve		1,551,782	1,510,216
					Special reserve		-	369,710
					Unappropriated earnings		1,727,050	491,085
					Other components of equity		1,369,937	712,849
					Equity attributable to the parent company		7,839,972	6,293,937
Total assets		\$ 10,674,087	\$	7,734,401	Total liabilities and equity		\$ 10,674,087	\$ 7,734,401

FARADAY TECHNOLOGY CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars, except for earnings per share)

		For the years ended December 31,
	Note	2021	2020
Net sales	4, 6(14), 7	\$ 6,710,159	\$ 4,925,300
Operating costs	6(5), 6(17), 7	(3,875,526)	(2,814,580)
Gross profit		2,834,633	2,110,720
Unrealized gross profit on sales		(994)	(3,772)
Gross profit, net		2,833,639	2,106,948
Operating expenses	6(9), 6(17), 7
Selling expenses		(151,186)	(130,004)
Administrative expenses		(294,891)	(224,244)
Research and development expenses		(1,671,155)	(1,587,471)
Expected credit gain	6(15)	6,355	39,408
Total operating expenses		(2,110,877)	(1,902,311)
Operating income		722,762	204,637
Non-operating income and expenses
Interest income	6(18)	2,824	3,679
Other income	6(18)	75,993	7,346
Other gains and losses	6(18)	(7,027)	(18,747)
Finance costs	6(18)	(4,496)	(4,585)
Share of profit or loss of subsidiaries, associates and joint ventures	6(7)
accounted for using equity method		532,382	104,123
Total non-operating income and expenses		599,676	91,816
Income from continuing operations before income tax		1,322,438	296,453
Income tax expense	4, 6(20)	(166,508)	(28,007)
Net income		\$ 1,155,930	\$ 268,446
Other comprehensive income	4, 6(19)
Item that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plans		551	16,178
Unrealized gain from equity investment measured at fair value
through other comprehensive income		763,065	1,117,032
Share of other comprehensive income of subsidiaries, associates
and joint ventures accounted for using the equity method that
will not be reclassified to profit or loss		(93,589)	(6,340)
Income tax relating to items that will not be reclassified to profit or loss		(110)	(3,235)
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		(12,388)	(28,134)
Other comprehensive income (net of income tax)		657,529	1,095,501
Total comprehensive income		\$ 1,813,459	\$ 1,363,947
Earnings per share (NTD)	6(21)
Earnings per share-basic
Earnings per share-basic		\$ 4.65	\$ 1.08
Earnings per share-diluted
Earnings per share-diluted		\$ 4.64	\$ 1.08

(Expressed in thousands of New Taiwan Dollars) FARADAY TECHNOLOGY CORPORATION PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2021 and 2020

				Retained Earnings					Other Equity
	Common Stock		Additional Paid-in Capital		Legal Reserve		Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gain or Loss on Financial Assets Measured at Fair Value through Other Comprehensive Income		Total Equity
Balance as of January 1, 2020	\$ 2,485,503	\$	724,895	\$	1,473,678	\$	512,210	\$ 377,139	\$ (85,537)	\$ (284,172)	\$	5,203,716
Appropriation and distribution of 2019 retained earnings
Legal reserve	-		-		36,538		-	(36,538)	-	-		-
Cash dividends	-		-		-		-	(273,405)	-	-		(273,405)
Special reserved	-		-		-		(142,500)	142,500	-	-		-
Net income in 2020	-		-		-		-	268,446	-	-		268,446
Other comprehensive income (loss) in 2020	-		-		-		-	12,943	(28,134)	1,110,692		1,095,501
Total comprehensive income (loss) in 2020	-		-		-		-	281,389	(28,134)	1,110,692		1,363,947
Change in subsidiaries' ownership	-		(321)		-		-	-	-	-		(321)
Balance as of December 31, 2020	\$ 2,485,503	\$	724,574	\$	1,510,216	\$	369,710	\$ 491,085	\$ (113,671)	\$ 826,520	\$	6,293,937
Balance as of January 1, 2021 Appropriation and distribution of 2020 retained earnings	\$ 2,485,503	\$	724,574	\$	1,510,216	\$	369,710	\$ 491,085	\$ (113,671)	\$ 826,520	\$	6,293,937
Legal reserve	-		-		41,566		-	(41,566)	-	-		-
Cash dividends	-		-		-		-	(248,550)	-	-		(248,550)
Special reserved	-		-		-		(369,710)	369,710	-	-		-
Net income in 2021	-		-		-		-	1,155,930	-	-		1,155,930
Other comprehensive income (loss) in 2021	-		-		-		-	441	(12,388)	669,476		657,529
Total comprehensive income (loss) in 2021	-		-		-		-	1,156,371	(12,388)	669,476		1,813,459
Change in subsidiaries' ownership	-		(18,874)		-		-	-	-	-		(18,874)
Balance as of December 31, 2021	\$ 2,485,503	\$	705,700	\$	1,551,782	\$	-	\$ 1,727,050	\$ (126,059)	\$ 1,495,996	\$	7,839,972

FARADAY TECHNOLOGY CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars)

	For the years ended December 31,					For the years ended December 31,
Description	2021		2020	Description		2021	2020
Cash flows from operating activities:				Cash flows from investing activities:
Net income before tax	\$ 1,322,438	\$	296,453	Acquisition of financial assets measured at amortized cost	\$	(22) \$	-
Adjustments for non-cash gain or loss:				Proceeds from principal of financial assets measured at amortized cost upon maturity		-	15,237
Depreciation	63,174		67,543	Acquisition of investments accounted for using equity method		(149,596)	-
Amortization	249,553		317,467	Proceeds from capital return of investments accounted for using the equity method		-	290,000
Expected credit gain	(6,355)			(39,408) Acquisition of property, plant and equipment		(33,908)	(16,981)
(Gain) loss on financial assets and liabilities at fair value through profit or loss	(2,928)		1,708	Disposal of property, plant and equipment		63	-
Interest expense	4,496		4,585	Refundable deposits		(65,611)	217
Interest income	(2,824)			(3,679) Acquisition of intangible assets		(222,695)	(269,686)
Dividend income	(69,730)		-	Net cash (used in) provide by investing activities		(471,769)	18,787
Share of gain of subsidiaries, associates and joint ventures accounted	(532,382)		(104,123)
for using equity method
Changes in operating assets and liabilities:				Cash flows form financing activities:
Contract assets	245,897		105,603	Cash payments for principal portion of the lease liabilities		(5,976)	(6,563)
Notes receivable	(2,670)		386	Cash dividends		(248,550)	(273,405)
Accounts receivable	(57,305)		29,275	Net cash used in financing activities		(254,526)	(279,968)
Accounts receivable - related parties	(219,965)		38,820	Effect of exchange rate changes on cash and cash equivalents		8,510	4,617
Other receivables	79,354		(33,816)
Inventories	(750,808)		159,992	Net increase in cash and cash equivalents		641,337	27,692
Prepayment for purchases	(58,306)			(162,379) Cash and cash equivalents at beginning of period		1,244,061	1,216,369
Other current assets	1,372			(1,904) Cash and cash equivalents at end of period	\$	1,885,398	\$ 1,244,061
Cost to fulfill a contract	(18,845)		(1,975)
Contract liabilities	371,805		(7,017)
Accounts payable	311,707		(293,028)
Accounts payable - related parties Other payables	269,631 109,489		3,021 (43,531)
Other current liabilities	2,561		4,418
Defined benefit liabilities	(2,866)		(281)
Cash generated from operations	1,306,493		338,130
Interest received	2,671		4,360
Dividend received	92,390		-
Interest paid	(4,496)		(4,585)
Income tax paid	(37,936)		(53,649)
Net cash provided by operating activities	\$ 1,359,122	\$	284,256

1. History and Organization

Faraday Technology Corporation (the "Company") was incorporated on June 10, 1993. The Company is a leading fabless ASIC vendor and silicon intellectual property and system platform provider, with products and services of ASIC/SoC Design Services, ASIC/SoC Production Turnkey Services, and ASIC EDA tools.

The Company's shares are listed on the Taiwan Stock Exchange. The address of its registered office and principal place of business is No. 5, Li-Hsin III Road, Hsinchu Science Park, Taiwan.

2. Date and Procedures of Authorization of Financial Statements for Issue

The parent company only financial statements for the years ended December 31, 2021 and 2020 were authorized for issue in accordance with a resolution of the Board of Directors' meeting on February 22, 2022.

3. Newly Issued or Revised Standards and Interpretations

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Company applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission ("FSC") and become effective for annual periods beginning on or after January 1, 2021. The adoption of these new standards and amendments had no material impact on the Company.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board ("IASB") which are endorsed by FSC, but not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date
		issued by IASB
a	Narrow-scope amendments of IFRS, including Amendments	January 1, 2022
	to IFRS 3, Amendments to IAS 16, Amendments to IAS 37
	and the Annual Improvements

The above-mentioned amendments that are applicable for annual periods beginning on or after January 1, 2022. have no material impact on the Company.

(3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date
		issued by IASB
a	IFRS 10 "Consolidated Financial Statements" and IAS 28	To be determined
	"Investments in Associates and Joint Ventures" – Sale or	by IASB
	Contribution of Assets between an Investor and its Associate
	or Joint Ventures
b	IFRS 17 "Insurance Contracts"	January 1, 2023
c	Classification of Liabilities as Current or Non-current –	January 1, 2023
	Amendments to IAS 1
d	Disclosure Initiative - Accounting Policies – Amendments to	January 1, 2023
	IAS 1
e	Definition of Accounting Estimates – Amendments to IAS 8	January 1, 2023
f	Deferred Tax related to Assets and Liabilities arising from a	January 1, 2023
	Single Transaction – Amendments to IAS 12

The above-mentioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company's financial statements were authorized for issue, and the local effective dates are to be determined by FSC. The above-mentioned standards and interpretations have no material impact on the Company.

4. Summary of Significant Accounting Policies

(1) Statement of Compliance

The parent company only financial statements of the Company for the years ended December 31, 2021 and 2020 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers ("the Regulations").

(2) Basis of Preparation

According to article 21 of the Regulations, the profit or loss and other comprehensive income presented in the parent company only financial reports will be the same as the allocations of profit or loss and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports will be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis. Therefore, the investments in subsidiaries will be disclosed under "Investments accounted for using the equity method" in the parent company only financial report and change in value will be adjusted.

The parent company only financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The parent company only financial statements are expressed in thousands of New Taiwan Dollars ("NT\$") unless otherwise stated.

(3) Foreign currency transactions

The Company's parent company only financial statements are presented in New Taiwan Dollars (NTD).

Transactions in foreign currencies are initially recorded by the Company at its functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as of the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

• (a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
• (b) Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.

(c) Exchange differences arising on a monetary item that forms part of a reporting entity's net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(4) Translation of financial statements in foreign currency

Each foreign operation of the Company determines its function currency upon its primary economic environment and items included in the financial statements of each operation are measured using that functional currency. The assets and liabilities of foreign operations are translated into New Taiwan Dollars at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. On the partial disposal of foreign operations that result in a loss of control, loss of significant influence or joint control but retain partial equity is considering as disposal.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or joint venture that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(5) Current and non-current distinction

An asset is classified as current when:

• (a) The Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
• (b) The Company holds the asset primarily for the purpose of trading
• (c) The Company expects to realize the asset within twelve months after the reporting period
• (d) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

• (a) The Company expects to settle the liability in its normal operating cycle
• (b) The Company holds the liability primarily for the purpose of trading
• (c) The liability is due to be settled within twelve months after the reporting period
• (d) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

(6) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and 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 (including time deposits with original maturities of six months or less).

(7) Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

A. Financial instruments: Recognition and Measurement

The Company accounts for regular way purchase or sales of financial assets on the trade date.

The Company classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

• (1) the Company's business model for managing the financial assets and
• (2) the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as notes receivable, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

• (1) the financial asset is held within a business model whose objective is to hold financial /.assets in order to collect contractual cash flows and
• (2) the contractual terms of the financial asset give rise on specified dates to cash flows that ..are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

(1) purchased or originated credit-impaired financial assets. For those financial assets, the ..Company applies the credit-adjusted effective interest rate to the amortized cost of the ..financial asset from initial recognition.

(2) financial assets that are not purchased or originated credit-impaired financial assets but ..subsequently have become credit-impaired financial assets. For those financial assets, ..the Company applies the effective interest rate to the amortized cost of the financial asset ..in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

• (1) the financial asset is held within a business model whose objective is achieved by both ..collecting contractual cash flows and selling financial assets and
• (2) the contractual terms of the financial asset give rise on specified dates to cash flows that ..are solely payments of principal and interest on the principal amount outstanding.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

• (1) A gain or loss on a financial asset measured at fair value through other comprehensive ..income recognized in other comprehensive income, except for impairment gains or ..losses and foreign exchange gains and losses, until the financial asset is derecognized or ..reclassified.
• (2) When the financial asset is derecognized the cumulative gain or loss previously ..recognized in other comprehensive income is reclassified from equity to profit or loss as ..a reclassification adjustment.
• (3) Interest revenue is calculated by using the effective interest method. This is calculated /.by applying the effective interest rate to the gross carrying amount of a financial asset /.except for:
• (i) Purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
• (ii) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Company made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

B. Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

The Company measures expected credit losses of a financial instrument in a way that reflects:

• (a) an unbiased and probability-weighted amount that is determined by evaluating a range /.of possible outcomes;
• (b) the time value of money; and
• (c) reasonable and supportable information that is available without undue cost or effort at /.the reporting date about past events, current conditions and forecasts of future economic /.conditions.

The loss allowance is measures as follow:

• (a) At an amount equal to 12-month expected credit losses: the credit risk on a financial /.asset has not increased significantly since initial recognition or the financial asset is /.determined to have low credit risk at the reporting date. In addition, the Company /.measures the loss allowance at an amount equal to lifetime expected credit losses in the /.previous reporting period, but determines at the current reporting date that the credit risk /.on a financial asset has increased significantly since initial recognition is no longer met.
• (b) At an amount equal to the lifetime expected credit losses: the credit risk on a financial /.asset has increased significantly since initial recognition or financial asset that is /.purchased or originated credit-impaired financial asset.
• (c) For trade receivables or contract assets arising from transactions within the scope of /.IFRS 15, the Company measures the loss allowance at an amount equal to lifetime /.expected credit losses.
• (d) For lease receivables arising from transactions within the scope of IFRS 16, the /.Company measures the loss allowance at an amount equal to lifetime expected credit /.losses.

At each reporting date, the Company needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

C. Derecognition of financial assets

A financial asset is derecognized when:

• i. The rights to receive cash flows from the asset have expired
• ii. The Company has transferred the asset and substantially all the risks and rewards of the asset have been transferred
• iii.The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

D. Financial liabilities and equity

Classification between liabilities or equity

The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

A financial liability is classified as held for trading if:

• i. it is acquired or incurred principally for the purpose of selling or repurchasing it in the //// near term;
• ii. on initial recognition it is part of a portfolio of identified financial instruments that are /././.managed together and for which there is evidence of a recent actual pattern of short-term /././.profit-taking; or
• iii. it is a derivative (except for a derivative that is a financial guarantee contract or a /././..designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

• i. it eliminates or significantly reduces a measurement or recognition inconsistency; or
• ii. a group of financial liabilities or financial assets and financial liabilities is managed and/ /././.its performance is evaluated on a fair value basis, in accordance with a documented risk /././.management or investment strategy, and information about the Company is provided /././.internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

E. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(8) Derivative financial instrument

The Company uses derivative instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as financial assets or liabilities at fair value through profit or loss (held for trading) except for derivatives that are designated effective hedging instruments which are classified as derivative financial assets or liabilities for hedging.

Derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges and hedges of net investments in foreign operations, which is recognized in equity.

(9) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• (a) In the principal market for the asset or liability, or
• (b) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(10) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Raw materials — Actual purchase cost on weighted-average cost basis.

Finished goods and work in progress — Cost of direct materials and manufacturing overheads on weighted-average cost basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Rendering of service is accounted in accordance with IFRS15 and not within the scope of inventories.

(11) Investments accounted for using equity method

According to article 21 of the Regulations, the investments in subsidiaries will be disclosed under "Investments accounted for using the equity method" and change in value will be adjusted to comply. The profit or loss and other comprehensive income presented in parent company only financial reports will be the same as the allocations of profit or loss and other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports will be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis. The difference of the accounting treatment between the parent company only basis and the consolidated basis are adjusted under "investments accounted for using the equity method," "share of profit of subsidiaries and associates accounted for using the equity method" and "share of other comprehensive income of subsidiaries and associates accounted for using the equity method."

The Company's investment in associates is accounted for using equity method. An associate is an equity over which the Company has significant influence.

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Company's share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the Company's related interest in the associate or joint venture.

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Company's percentage of ownership interests in the associate or joint venture, the Company recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a prorata basis.

When the associate or joint venture issues new stock, and the Company's interest in an associate or a joint venture is reduced or increased as the Company fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in Additional Paid in Capital and Investment accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a prorata basis when the Company disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

The Company determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures. If this is the case the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint

venture and its carrying value and recognizes the amount in the 'share of profit or loss of an associate' in the statement of comprehensive income in accordance with IAS 36 "Impairment of Assets". In determining the value in use of the investment, the Company estimates:

• (1) Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
• (2) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36"Impairment of Assets".

Upon loss of significant influence over the associate or joint venture, the Company measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(12) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. 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 is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Company recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 "Property, plant and equipment". When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings and facilities	6 - 51	Years (including buildings 51 years, facilities 6-16 years)
Machinery	6	Years
Computer equipment	4	Years
Office furniture and fixtures	6	Years
Miscellaneous equipment	4	Years

After initial recognition, an item of property, plant and equipment and any significant component is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets' residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate, and such changes are treated as changes in accounting estimates.

(13) Leases

The Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether, throughout the period of use, has both of the following:

• (a) the right to obtain substantially all of the economic benefits from use of the identified asset; and
• (b) the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the nonlease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximising the use of observable information.

Company as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Company recognizes right-of-use asset and lease liabilities for all leases which the Company is the lessee of those lease contracts.

At the commencement date, the Company measures the lease liabilities at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liabilities comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

• (a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• (b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
• (c) amounts expected to be payable by the lessee under residual value guarantees;
• (d) the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
• (e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Company measures the lease liabilities on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liabilities by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

• (a) the amount of the initial measurement of the lease liabilities;
• (b) any lease payments made at or before the commencement date, less any lease incentives received;
• (c) any initial direct costs incurred by the lessee; and
• (d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Company measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Company applies IAS 36 "Impairment of Assets" to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Company accounted for as short-term leases or leases of lowvalue assets, the Company presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Company elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

(14) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

A summary of the policies applied to the Company's intangible assets is as follows:

	Computer software
Useful lives	2~3 years
Amortization method used	Amortized on a straight-line basis over the estimated useful life
Internally generated or acquired	Acquired externally

(15) Impairment of non-financial assets

The Company assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 "Impairment of Assets" may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cashgenerating unit's ("CGU") fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset's or cash-generating unit's recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(16) Revenue recognition

The Company's revenue arising from contracts with customers are primarily related to sale of goods, rendering of services and silicon intellectual property license. The accounting policies are explained as follow:

Sale of goods

The Company outsource its manufacturing and sells goods. Sales are recognized when the goods are delivered to the customers and control of the goods is transferred to the customer. The main product of the Company is Application Specific Integrated Circuit (ASIC) and revenue is recognized based on the consideration stated in the contract.

The credit period for the Company's sale of goods is from 30 to 60 days. For most of the contracts, when the Company transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Company usually collects the payments shortly; therefore, there is no significant financing component to the contract. For some of the contracts, part of the consideration was received from customers before transferring a promised good to a customer, and the Company has the obligation to transfer the goods subsequently. Accordingly, the Company recognized the consideration received in advance from customers under contract liabilities.

Rendering of services

The Company provides design services, and recognized by reference to the stage of completion in accordance with contracts with customers.

Most of the contractual considerations of the Company are collected throughout the contract periods. When the Company has performed the services to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. The Company measures the loss allowance of its contract assets at an amount equal to lifetime expected credit losses according to IFRS9. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Company has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component is aroused.

Silicon intellectual property license

Revenue from silicon intellectual property license is recognized by reference to its nature. When the nature of silicon intellectual property license provides a right to access the Company's intellectual property as it exist throughout the license period, the Company uses straight-line method to recognize revenue during the license period. If the nature of license is not abovementioned, the license provides a right to use the Company's intellectual property as it existed at a point in time at which the license was granted. Accordingly, the Company recognizes revenue when the license is granted.

Some royalties are determined based on sales of goods. Because the license is a necessary part of goods, the license and goods are combined as a performance obligation. Since the license is the predominant item to which the royalty relates, revenue is recognized when sales of goods occur.

For some silicon intellectual property license contracts, part of the consideration is received from customers upon signing the contract, and the Company has the obligation to provide the services to access or use the Company's intellectual property subsequently. Accordingly, the Company recognizes payments received in advance as contract liabilities.

(17) Post-employment benefits

All regular employees of the Company are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee's name in the specific bank account and hence, not associated with the Company. Therefore fund assets are not included in the Company's financial statements.

For the defined contribution plan, the Company will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Remeasurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

• (a) the date of the plan amendment or curtailment, and
• (b) the date that the Company recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(18) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The surtax on undistributed retained earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders' meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

• i. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
• ii. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

• i. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
• ii. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

5. Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Company's parent company only financial statements require management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Inventories

Estimates of net realisable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 (5) for more details.

6. Contents of Significant Accounts

(1) Cash and cash equivalents

		As of
	December 31, 2021	December 31, 2020
Cash
Cash on hand	\$200	\$200
Checking and savings	1,075,498	112,531
Time deposits	809,700	1,061,330
Cash equivalents-Commercial paper with	-	70,000
repurchase agreements
Total	\$1,885,398	\$1,244,061

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

		As of
	December 31, 2021	December 31, 2020
Financial assets mandatorily measured at fair value through profit or loss: Derivatives not designated as hedging
instruments	\$1,424	\$-
Current	\$1,424	\$-
		As of
	December 31, 2021	December 31, 2020
Financial liabilities mandatorily measured at fair value through profit or loss:
Derivatives not designated as hedging instruments	\$-	\$1,504
Current	\$-	\$1,504

Financial assets at fair value through profit or loss were not pledged.

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

		As of
	December 31, 2021	December 31, 2020
Equity instrument investments measured at fair value
through other comprehensive income – Non
current:
Unlisted companies stocks	\$2,775,807	\$2,012,742

The Company classified certain of its financial assets as financial assets at fair value through other comprehensive income which were not pledged.

For equity instrument investments measured at fair value through other comprehensive income, the Company recognized dividend income in the amount of NT\$69,730 thousand for the year ended December 31, 2021, which was all related to investments held at the end of the reporting period.

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Accounts receivable, net and accounts receivable - related parties, net

		As of
	December 31, 2021	December 31, 2020
Accounts receivable	\$353,606	\$296,301
Subtotal (gross carrying amount)	353,606	296,301
Less:Allowance for doubtful accounts	(4,393)	(4,652)
Subtotal	349,213	291,649
Accounts receivable - related parties, net	635,549	415,584
Subtotal (gross carrying amount)	635,549	415,584
Total	\$984,762	\$707,233

Accounts receivable were not pledged.

Accounts receivable are generally on 30 - 60 day terms from the date of monthly closing. The gross carrying amount of accounts receivable was amounted to NT\$989,155 thousand, and NT\$711,885 thousand as of December 31, 2021 and 2020, respectively. Please refer to Note 6(15) for more details on impairment of accounts receivable, and Note 12 for credit risk disclosures.

(5) Inventories

December 31, 2021	December 31, 2020
\$740,270	\$343,751
468,141	113,852
\$1,208,411	\$457,603
	As of

The cost of inventories recognized in expenses amounted to NT\$3,875,526 thousand and NT\$2,814,580 thousand for the years ended December 31, 2021 and 2020, respectively, including the reversal gain (loss) of NT\$2,860 thousand and NT\$(6,863) thousand, and loss on scrap of inventories of NT\$5,689 thousand and NT\$20,337 thousand for the years ended December 31, 2021 and 2020, respectively.

No inventories were pledged.

(6) Other current assets

	As of
	December 31, 2021	December 31, 2020
Prepayments	\$147,103	\$109,864
Prepaid expenses	17,236	21,200
Others	3,893	1,301
Total	\$168,232	\$132,365

The prepayments were primarily attributable to several agreements which the Company entered into for certain software license and silicon intellectual property license.

(7) Investments accounted for using the equity method

	As of
		December 31, 2021		December 31, 2020
		Percentage of		Percentage of
		Ownership or		Ownership or
Investee company	Amount	Voting Rights	Amount	Voting Rights
Faraday Technology Corporation	\$437,715	100.00%	\$412,413	100.00%
(USA)
Faraday Technology-B.V.I.	781,052	100.00%	308,279	100.00%
Faraday Technology Japan	97,586	99.95%	82,740	99.95%
Corporation
Chih-Hung Investment Corporation	557,452	100.00%	552,815	100.00%
Sheng Bang Investment Corporation	201,710	100.00%	192,188	100.00%
Faraday Technology Vietnam	13,741	100.00%	12,229	100.00%
Company Limited
Total	\$2,089,256		\$1,560,664

• 1. The investments in subsidiaries are presented as investments accounted for using the equity method in the parent company only financial report with necessary adjustments.
• 1. The Company increased its investment in Faraday B.V.I by acquiring its shares with NT\$149,596 thousand during the year ended December 31, 2021.
• 1. The Company received cash dividend amounted to NT\$22,660 thousand from Chih-Hung Investment Corporation during the year ended December 31, 2021.

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(8) Property, plant and equipment

					As of
				December 31, 2021		December 31, 2020
Property, plant and equipment for own use					\$494,527	\$521,190
					Office
		Buildings		Computer	furniture and	Miscellaneous
	Land	and facilities	Machinery	equipment	fixtures	equipment	Total
Cost:
As of January 1, 2021	\$33,576	\$562,550	\$40,676	\$152,262	\$261	\$675	\$790,000
Additions	-	1,605	22,095	4,817	-	300	28,817
Disposals	-	-	-,	(70)	-.	-.	(70)
As of December 31, 2021	\$33,576	\$564,155	\$62,771	\$157,009	\$261	\$975	\$818,747
As of January 1, 2020	\$33,576	\$562,550	\$40,858	\$165,478	\$261	\$675	\$803,398
Additions	-	-	5,375	13,685	-	-	19,060
Disposals	-	-	(5,557)	(26,901)	-	-	(32,458)
As of December 31, 2020	\$33,576	\$562,550	\$40,676	\$152,262	\$261	\$675	\$790,000
Depreciation and impairment:
As of January 1, 2021	\$-	\$175,027	\$15,262	\$78,266	\$58	\$197	\$268,810
Additions	-	11,686	7,792	35,727	43	169	55,417
Disposals	-	-	-.	(7)	-.	-.	(7)
As of December 31, 2021	\$-	\$186,713	\$23,054	\$113,986	\$101	\$366	\$324,220
As of January 1, 2020	\$-	\$163,256	\$14,187	\$64,009	\$15	\$28	\$241,495
Additions	-	11,771	6,632	41,158	43	169	59,773
Disposals	-	-.	(5,557)	(26,901)	-.	-	(32,458)
As of December 31, 2020	\$-	\$175,027	\$15,262	\$78,266	\$58	\$197	\$268,810
Net carrying amount as of:
December 31, 2021	\$33,576	\$377,442	\$39,717	\$43,023	\$160	\$609	\$494,527
December 31, 2020	\$33,576	\$387,523	\$25,414	\$73,996	\$203	\$478	\$521,190

Note:

• (1) Significant components of buildings are main building structure, air conditioning units and elevators, which are depreciated based on their useful lives over 51 years, 8 years, and 6~16 years, respectively.
• (2) Property, plant and equipment were not pledged.

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(9) Intangible assets

	Software
	For the year ended	For the year ended
	December 31, 2021	December 31, 2020
Cost
Beginning balance	\$848,445	\$1,032,005
Addition-acquired separately	465,439	37,812
Decrease-derecognition	(637,830)	(216,755)
Exchange effect	(8,511)	(4,617)
Ending balance	\$667,543	\$848,445.
Accumulated Amortization
Beginning balance	\$614,508	\$513,796
Amortization	249,553	317,467
Decrease-derecognition	(637,830)	(216,755)
Ending balance	\$226,231.	\$614,508.
Net carrying amount as of:
December 31, 2021	\$441,312
December 31, 2020	\$233,937

The amortization expenses of intangible assets are as follows:

	For the years ended December 31,
	2021 2020
Research and development expenses	\$249,553.	\$317,467

(10) Short-term payables

The Company's credit limit from short-term loans was NT\$891,750 thousand and NT\$1,302,250 thousand as of December 31, 2021 and 2020, respectively, and all of which was unused.

(11) Long-term payables

The payables were primarily attributable to several agreements which the Company entered into for certain software license. As of December 31, 2021 and 2020, payments for future years are as follows:

	As of
Year of payment	December 31, 2021	December 31, 2020
2021	\$-	\$93,154
2022	323,396	15,810
2023	115,715	511
2024	45,532	-
Subtotal	484,643	109,475
Less: Current portion (recognized as
other payables)	(323,396)	(93,154)
Total	\$161,247	\$16,321

(12) Post-employment benefits

Defined contribution plan

The Company adopted a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company would make monthly contributions to the employees' individual pension accounts at the amounts not less than 6% of the employees' monthly wages. The Company have made monthly contributions of 6% of each individual employee's salaries or wages to employees' pension accounts.

Expenses under the defined contribution plan for the years ended December 31, 2021 and 2020 were NT\$42,849 thousand and NT\$45,218 thousand, respectively.

Defined benefit plan

The Company and its domestic subsidiaries adopted a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company and its domestic subsidiaries contribute an amount equivalent to 2% of the employees' total salaries

and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company and its domestic subsidiaries assess the balance in the designated labor pension fund. If the amount is insufficient to cover pension benefit calculated for employees eligible to retire in the next year, the Company and its domestic subsidiaries would make up the difference in one appropriation before the end of March the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under mandation, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Company expects to contribute NT\$3,549 thousand to its defined benefit plan during the 12 months beginning after December 31, 2021.

The average duration of the defined benefits plan obligation as of December 31, 2021 and 2020, are 12 years and 13 years, respectively.

The summarization of defined benefit plan reflected in profit or loss is as follows:

	For the years ended December 31,
	2021	2020
Current period service costs	\$763	\$6,540
Net interest expense	26	145
Total	\$789	\$6,685

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Changes in the defined benefit obligation and fair value of plan assets are as follows:

	As of
	December 31, December 31, January 1,
	2021	2020	2020
Defined benefit obligation	\$139,999	\$138,912	\$143,847
Plan assets at fair value	(134,911)	(130,517)	(122,228)
Non-current liabilities -Defined benefit liabilities
recognized on the balance sheets	\$5,088	\$8,395	\$21,619

Reconciliation of liability (asset) of the defined benefit plan is as follows:

	Defined benefit	Fair value of	Benefit liability
	obligation	plan assets	(asset)
As of January 1, 2020	\$143,847	\$(122,228)	\$21,619
Current period service costs	6,540	-	6,540
Net interest expense (income)	1,069	(924)	145
Subtotal	151,456	(123,152)	28,304
Remeasurements of the net defined benefit
liability (asset):
Actuarial gains and losses arising from
changes in financial assumptions	9,886	-	9,886
Experience adjustments	(22,430)	-	(22,430)
Remeasurements of defined benefit asset	- .	(3,634)	(3,634)
Subtotal	(12,544)	(3,634)	(16,178)
Contributions by employer	-	(3,731)	(3,731)
As of December 31, 2020	\$138,912	\$(130,517)	\$8,395
Current period service costs	763	-	763
Net interest expense (income)	533	(507)	26
Subtotal	140,208	(131,024)	9,184
Remeasurements of the net defined benefit
liability (asset):
Actuarial gains and losses arising from
changes in financial assumptions	474	-	474
Experience adjustments	1,357.	-	1,357.
Remeasurements of defined benefit asset	-.	(2,382)	(2,382)
Subtotal	1,831	(2,382)	(551)
Benefits paid	(2,040)	2,040	-.
Contributions by employer	-.	(3,545)	(3,545)
As of December 31, 2021	\$139,999	\$(134,911)	\$5,088

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The following significant actuarial assumptions are used to determine the present value of the defined benefit obligation:

	As of
	December 31, 2021	December 31, 2020
Discount rate	0.5010%	0.3833%
Expected rate of salary increases	3.00%	3.00%

A sensitivity analysis for significant assumption as of December 31, 2021 and 2020 is as shown below:

	Effect on the defined benefit obligation
		2021		2020
	Increase	Decrease		Decrease
	defined	defined	defined	defined
	benefit	benefit	benefit	benefit
	obligation	obligation	obligation	obligation
Discount rate increase by 0.25%	\$-	\$4,020	\$-	\$4,218
Discount rate decrease by 0.25%	4,177	-	4,389	-
Expected rate of salary increase by 0.5%	8,152	-	8,565	-
Expected rate of salary decrease by 0.5%	-	7,637	-	8,006

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

(13) Equity

A..Capital stock

The Company's authorized capital was NT\$6,000,000 thousand, divided into 600,000 thousand shares (including 55,000 thousand shares reserved for exercise of employee stock options), as of December 31, 2021 and 2020. Each at a par value of NT\$10.

The Company's issued capital was NT\$2,485,503 thousand, divided into 248,550 thousand shares, as of December 31, 2021 and 2020. Each share has one voting right and a right to receive dividends.

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Additional paid-in capital

As of
December 31,	December 31,
2021	2020
\$594,782	\$594,782
108,352	127,226
2,566	2,566
\$705,700	\$724,574

According to the Company Act, the additional paid-in capital shall not be used except for offsetting deficit of the company. When a company does not have deficit, it may distribute the additional paid-in capital derived from the issuance of new shares at premiums in excess of par or income from endowments received by the Company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

C. Retained earnings and dividend policies

According to the Company's Articles of Incorporation, current year's earnings, if any, shall be distributed in the following order:

• a. Reserve for tax payments;
• b. Offset accumulated losses in previous years, if any;
• c. Legal reserve, which is 10% of leftover profits.
• d. Allocation or reverse of special reserves as required by law or government authorities;
• e. The remaining net profits and the retained earnings from previous years will be allocated as shareholders' dividend. The Board of Directors will prepare a distribution proposal and submit the same to the shareholders' meeting for review and approval by a resolution.

The policy of dividend distribution should reflect factors such as the current and future investment environment, fund requirements, domestic and international competition and capital budgets; as well as the interest of the shareholders, share bonus equilibrium and long-term financial planning etc. The Board of Directors shall make the distribution proposal annually and present it at the shareholders' meeting. The Company is in the growth stage, in order to plan for future funding requirement and long-term financial planning, and to satisfy shareholders' need for cash dividend, cash dividends shall not be less than 10% of total dividends for distribution.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to offset the deficit of the Company. When the Company does not have deficit, it may distribute the portion of legal reserve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to "other net deductions from shareholders" equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders' equity. For any subsequent reversal of other net deductions from shareholders' equity, the amount reversed may be distributed from the special reserve.

The FSC on March 31, 2021 issued Order No. Financial-Supervisory-Securities-Corporate-090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

Details of the 2021 and 2020 earnings distribution and dividends per share as approved and resolved by the board of directors' meeting and shareholders' meeting on February 22, 2022 and July 7, 2021, respectively, are as follows:

		Appropriation of earnings		Dividend per share (NT\$)
	2021	2020	2021	2020
Legal reserve	\$115,637	\$41,566	\$-	\$-
Reversal of special reserve	-	369,710	-	-
Common stock-cash dividend	820,216	248,550	3.3	1.0

Please refer to Note 6(17) for more details on employees' compensations and the remunerations to directors and supervisors.

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(14) Sales revenue

Analysis of revenue from contracts with customers for the years ended December 31, 2021 and 2020 is as follows:

(1) Disaggregation of revenue

	For the years ended December 31,
	2021	2020
Sale of goods	\$4,729,306	\$3,433,120
Rendering of services	1,341,146	1,068,993
Silicon intellectual property license	639,707	423,187
Total	\$6,710,159	\$4,925,300
Revenue recognition point:
At a point in time	\$5,312,782	\$3,804,854
Over time	1,397,377	1,120,446
Total	\$6,710,159	\$4,925,300

(2) Contract balances

A. Contract assets – current

		As of
	December 31,	December 31,	January 1,
	2021	2020	2020
Rendering of services	\$75,630	\$315,431	\$421,034

The significant changes in the Company's balances of contract assets for the years ended December 31, 2021 and 2020 are as follows:

	For the years ended December 31,
	2021	2020
The opening balance transferred to accounts
receivable	\$315,431	\$221,927
Change in the progress of completion	54,852	135,366
Exchange rate changes	14,682	(19,042)
Reversal of impairment	6,096	-,

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Contract liabilities – current

		As of
	December 31,	December 31,	January 1,
	2021	2020	2020
Sales of goods	\$317,543	\$95,839	\$107,608
Rendering of services	154,966	2,874	86
Silicon intellectual property license	235	2,226	262
Total	\$472,744	\$100,939	\$107,956

The significant changes in the Company's balances of contract liabilities for the years ended December 31, 2021 and 2020 are as follows:

	For the years ended
	December 31,
	2021	2020
The opening balance transferred to revenue	\$99,740	\$20,704
Increase in receipts in advance during the period
(deducting the amount incurred and transferred to
revenue during the period)	471,545	13,687

C. Transaction price allocated to unsatisfied performance obligations

As of December 31, 2021 and December 31, 2020, there is no need to provide relevant information of the unsatisfied performance obligations as the contract terms with customers about the sales of goods are all shorter than one year. Besides, the summarized amount of transaction price allocated to unsatisfied performance obligations about rendering of services and silicon intellectual property license is NT\$2,433,263 thousand and NT\$1,405,177 thousand, respectively. The Company will recognize revenue based on the stage of completion of the contracts. Those contracts are expected to complete within the next 1 to 1.5 years.

D. Assets recognized from costs to fulfill a contract

		For the years ended December 31,
	2021	2020
Costs to fulfill a contract, current	\$20,820	\$1,975

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The costs to fulfill a contract are the costs incurred by the Company for non-recurring engineering projects, and will be recognized as operating costs when the performance obligations are satisfied.

For the years ended December 31, 2021 and 2020, amortization expenses amounted to NT\$7,855 thousand and NT\$6,827 thousand are recognized as operating costs, respectively.

(15) Expected credit gain

		For the years ended December 31,
	2021	2020
Operating expenses – Expected credit gain
Contract assets	\$6,096	\$-
Accounts receivable	259	39,408
Total	\$6,355	\$39,408

Please refer to Note 12 for more details on credit risk.

The Company measures the loss allowance of its contract assets and trade receivables (including notes receivable and accounts receivable) at an amount equal to lifetime expected credit losses. The assessments of the Company's loss allowance as of December 31, 2021 and 2020 are as follows:

i. the loss allowance of contract assets is measured at an amount equal to lifetime expected credit losses, details are as follow:

	As of
	December 31, December 31,
	2021	2020
Gross carrying amount	\$78,673	\$324,570
Expected credit loss rates	0%~100%	0%~100%
Loss allowance	(3,043)	(9,139)
Carry amount	\$75,630	\$315,431

ii. the Company considers the grouping of trade receivables by counterparties' credit rating, by geographical region and by industry sector, and its loss allowance is measured by using a provision matrix, details are as follow:

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

2021.12.31

	Not yet due			Overdue
	(note)	<=30 days	31-60 days	61-90 days	91-120 days	>=121 days	Total
Gross carrying
amount	\$904,735	\$7,076	\$30,643	\$46,342	\$4	\$4,385	\$993,185
Expected credit loss
rates	-%	-%	0%~2%	0%~10%	0%~50%	0%~100%
Lifetime expected
credit losses	-	-	2	6	-	4,385	4,393
Subtotal	\$904,735	\$7,076	\$30,641	\$46,336	\$4	\$-	\$988,792
2020.12.31
	Not yet due			Overdue
	(note)	<=30 days	31-60 days	61-90 days	91-120 days	>=121 days	Total
Gross carrying
amount	\$606,975	\$6,081	\$28,280	\$31,748	\$35,543	\$4,618	\$713,245
Expected credit loss
rates	-%	-%	0%~2%	0%~10%	0%~50%	10%~100%
Lifetime expected
credit losses	-	-	34	-	-	4,618	4,652
Subtotal	\$606,975	\$6,081	\$28,246	\$31,748	\$35,543	\$-	\$708,593

Note: All of the Company's notes receivable are not yet due.

iii. The gross carrying amount of other receivables - related parties are NT\$32,084 thousand and NT\$124,613 thousand as of December 31, 2021 and 2020, respectively. The amount of allowance for doubtful accounts are NT\$0 thousand as of December 31, 2021 and 2020, respectively, by considering counterparties' credit rating, geographical region and industry, etc.

The movements in the provision for impairment of contract assets, accounts receivable and other receivables - related parties during the years ended December 31, 2021 and 2020 are as follows:

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

		Accounts receivable and
	Contract	other receivables - related
	assets	parties
As of January 1, 2021	\$9,139	\$4,652
Reversal for the current period	(6,096)	(259)
As of December 31, 2021	\$3,043	\$4,393
As of January 1, 2020	\$9,139	\$47,757
Reversal for the current period	-	(39,408)
Write-off due to uncollectibility	-	(3,697)
As of December 31, 2020	\$9,139	\$4,652

(16) Leases

The Company as lessee

The Company leases various properties, including real estate (such as land and buildings) , transportation equipment and office equipment. These leases have terms between 2 and 38 years.

The effect that leases have on the financial position, financial performance and cash flows of the Company are as follows:

A. Amounts recognized in the balance sheet

(a) Right-of-use asset

The carrying amount of right-of-use assets

	As of
	December 31, 2021	December 31, 2020
Land	\$186,208	\$191,528
Buildings and facilities	2,247	3,419
Transportation equipment	2,758	583
Office equipment	9	120
Total	\$191,222	\$195,650

The additions to right-of-use assets of the company amounted to NT\$3,329 thousand during the year ended December 31, 2021.

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Lease liabilities

	As of
	December 31, 2021	December 31, 2020
Lease liabilities	\$196,872	\$199,519
Lease liabilities-current	\$5,972	\$5,432
Lease liabilities-noncurrent	190,900	194,087
Total	\$196,872	\$199,519

Please refer to Note 6 (18) for the interest on lease liabilities recognized during the years ended December 31, 2021 and 2020 and refer to Note 12 (5) for the maturity analysis for lease liabilities.

B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

	For the years ended December 31
	2021	2020
Land	\$5,320	\$5,320
Buildings and facilities	1,172	1,172
Transportation equipment	1,154	1,166
Office equipment	111	112
Total	\$7,757	\$7,770

C. Cash outflow relating to leasing activities

During the years ended December 31, 2021 and 2020, the Company's total cash outflow for leases amounted to NT\$10,472 thousand and NT\$11,148 thousand, respectively.

D. Other information relating to leasing activities

Extension option

Some of the Company's property rental agreement contain extension options. In determining the lease terms, the non-cancellable period for which the Company has the right to use an underlying asset, together with period covered by an option to extend the lease if the

Company is reasonably certain to exercise that option. The options are used to maximize operational flexibility in terms of managing contracts. The majority of extension options held are exercisable only by the Company. After the commencement date, the Company reassesses the lease term upon the occurrence of a significant event or a significant change in circumstances that is within the control of the lessee and affects whether the Company is reasonably certain to exercise an option not previously included in its determination of the lease term, or not to exercise an option previously included in its determination of the lease term.

(17) Summary statement of employee benefits, depreciation and amortization expenses by function during the years ended December 31, 2021 and 2020:

		For the years ended December 31
		2021			2020
	Operating	Operating		Operating	Operating
	costs	expenses	Total	costs	expenses	Total
Employee benefits expense
Salaries	\$53,998	\$1,220,765	\$1,274,763	\$42,436	\$990,675	\$1,033,111
Labor and health insurance	3,645	64,667	68,312	3,249	63,690	66,939
Pension	2,147	41,491	43,638	2,371	49,532	51,903
Remuneration to directors	-	9,283	9,283	-	6,523	6,523
Others	1,106	20,429	21,535	1,066	21,965	23,031
Depreciation	1,035	62,139	63,174	913	66,630	67,543
Amortization	-	249,553	249,553	-	317,467	317,467

• (1) The average number of employees of the Company was 584 and 629 for the years ended December 31, 2021 and 2020, respectively, including 5 non-employee directors for years ended December 31, 2021 and 2020.
• (2). Listed companies need to disclose the following additional information:
• A. The average employee benefits expense for the current year was NT\$2,432 thousand, and the average employee benefits expense for the previous year was NT\$1,883 thousand.
  • B. The average employee salaries for the current year was NT\$2,202 thousand, and the average employee salaries for the previous year was NT\$1,656 thousand.
  • C. The Company's average salary expense adjustment increased by 33%.

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• D. The Company has established the Audit Committee in replace of supervisors and therefore the supervisors' remuneration for the years ended December 31, 2021 and 2020 were both nil.
• E. The Company set the directors' compensation policy in its Article of Incorporation in Article 27-1: The Company shall allocate no more than 2% of profit as directors' compensation for each profitable fiscal year after offsetting any cumulative losses. According to Article 16 of the Company's Article of Incorporation, the Board of Directors will calculate the directors' remuneration regardless in the profit or loss by referencing individual's involvement in operations and contributions with benchmarking to market compensation surveys.

The compensation of the executives of the Company is guided in accordance with Performance Management Policy. Executives' compensation packages are calculated by taking into consideration these individuals' achievements in the key performance indicators and contributions to the Company's overall operations, bench-marking industry averages. The Compensation Committee shall review the proposals prepared by Human Resources and subsequently reward the Executives with the approval of the Board of Directors.

Compensation and Remuneration Policy of the Company is based on individuals' competency, contributions, and performance results, which is positively related to the Company's overall performance. The compensation and remuneration are primarily the combination of base salary, incentive & profit sharing, and benefits. Base salary is determined by roles & responsibilities, competency in the market, and policy of the Company. Incentives & profit sharing are in relation to individual contribution, departmental achievements or the Company's performance. Benefits are designed not only in accordance with laws and government regulations but also to meet individual's need, providing all employees with mutual welfare conditions.

According to the Company's Article of Incorporation, no less than 10% of profit of the current year is distributable as employees' compensation and no more than 2% of profit of the current year is distributable as remuneration to directors and supervisors. However, before distributing employees' compensation and remuneration to directors and supervisors, the Company's profit should offset its accumulated losses, if any. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders' meeting. Information on the Board of Directors' resolution regarding the employees' compensation and remuneration to directors and supervisors can be obtained from the "Market Observation Post System" on the website of the TWSE.

Based on profit of the year ended December 31, 2021, the Company estimated the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$173,361 thousand and NT\$1,290 thousand, respectively, which were recognized as payroll expenses. The Company recognized the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$173,361 thousand and NT\$1,290 thousand, respectively, for the year ended December 31, 2021.

Actual employees' compensation and remuneration to directors for the year ended December 31, 2020 was NT\$39,970 thousand and NT\$248 thousand, respectively, and there were no material differences between the aforementioned amounts and the amounts charged against earnings in 2020.

(18) Non-operating income and expenses

A. Interest income

	For the years ended
	December 31,
	2021	2020
Interest income
Financial assets measured at amortized cost	\$2,824	\$3,679

B. Other income

	For the years ended December 31,
	2021	2020
Rental income	\$1,079	\$857
Dividend income	69,730	-
Others	5,184	6,489
Total	\$75,993	\$7,346

C. Other gains and losses

	For the years ended
	December 31,
	2021	2020
Foreign exchange gains (losses)	\$7,339)	\$(6,679)
Gains (losses) on financial assets at fair value through profit or loss	2,928)	(1,708)
Others	(17,294)	(10,360)
Total	\$(7,027)	\$(18,747)

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

D. Finance costs

	For the years ended
	December 31,
	2021	2020
Interest expense on lease liabilities	\$4,496	\$4,585

(19) Components of other comprehensive income

				Income tax
				relating to
		Reclassification	Other	components of	Other
		adjustments	comprehensive	other	comprehensive
	Arising during	during the	income, before	comprehensive	income, net of
	the period	period	tax	income	tax
Items that will not to be reclassified
subsequently to profit or loss:
Remeasurements of defined benefit
plans	\$551	\$-	\$551	\$(110)	\$441
Unrealized gains from equity
instruments investments measured
at fair value through other
comprehensive income	763,065	-	763,065	-	763,065
Share of other comprehensive income
of subsidiaries, associates and joint
ventures accounted for using the
equity method	(93,589)	-	(93,589)	-	(93,589)
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on translation
of foreign operations	(12,388)	-	(12,388)	-	(12,388)
Total of other comprehensive
income	\$ 657,639	\$-	\$ 657,639	\$(110)	\$657,529

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

				Income tax
				relating to
		Reclassification	Other	components of	Other
		adjustments	comprehensive	other	comprehensive
	Arising during	during the	income, before	comprehensive	income, net of
	the period	period	tax	income	tax
Items that will not to be reclassified
subsequently to profit or loss:
Remeasurements of defined benefit
plans	\$16,178	\$-	\$16,178	\$(3,235)	\$12,943
Unrealized gains from equity
instruments investments measured
at fair value through other
comprehensive income	1,117,032	-	1,117,032	-	1,117,032)
Share of other comprehensive income
of subsidiaries, associates and joint
ventures accounted for using the
equity method	(6,340)	-	(6,340)	-	(6,340)
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on translation
of foreign operations	(28,134)	-	(28,134)	-	(28,134)
Total of other comprehensive
income	\$1,098,736)	\$-	\$1,098,736)	\$(3,235)	\$1,095,501)

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(20) Income tax

The major components of income tax expense are as follows:

Income tax expense recognized in profit or loss

	For the years ended
	December 31
	2021	2020
Current income tax expense:
Current income tax payable	\$138,269	\$41,958
Adjustments in respect of current income tax of prior periods	1,574	(4,389)
Deferred tax expense (income):
Deferred tax income (expense) related to origination and
reversal of temporary differences	26,665	(9,562)
Total income tax expense	(\$166,508	\$28,007

Income tax relating to components of other comprehensive income

	For the years ended
	December 31
	2021	2020
Deferred tax expense:
Remeasurements of defined benefit plans	\$110	\$3,235

Reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

	For the years ended
	December 31
	2021	2020
Accounting profit before tax from continuing operations	\$1,322,438	\$296,453
Tax at the statutory rates applicable to profits in the perspective tax
jurisdictions	\$264,488	\$59,291
Tax effect of revenues exempted from taxation	(34,816)	(30,192)
Tax effect of deferred tax assets/liabilities	(66,541)	(3,290)
Surtax on undistributed retained earnings	-	6,315
Tax effect of withholding tax under other tax jurisdiction	11,520	-
Adjustments in respect of current income tax of prior periods	1,574	(4,389)
Tax credits	(11,000)	-
Others	1,283	272
Total income tax expense recognized in profit or loss	\$166,508	\$28,007

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Deferred tax assets (liabilities) relate to the following:

			Deferred tax
			income
		Deferred tax	(expense)
	Beginning	income	recognized in		Ending
	balance as of	(expense)	other		balance as of
	January 1,	recognized in	comprehensive	Exchange	December 31,
	2021	profit or loss	income	differences	2021
Temporary differences
Unrealized exchange loss	\$5,048	\$(4,423)	\$-	\$-	\$625
Unrealized exchange gain	(6,133)	(1,859)	-	-	(7,992)
Unrealized allowance for inventory
valuation and obsolescence losses	11,203	(572)	-	-	10,631
Revaluations of financial assets
(liabilities) at fair value through
profit or loss	301	(586)	-	-	(285)
Defined benefit liabilities , non				-
current	1,679	(552)	(110)		1,017
Unrealized asset impairment losses	2,970	-	-	-	2,970
Unrealized loss from sales	755	(953)	-	-	(198)
Unrealized bad debt expense	19,720	(17,720)	-	-	2,000
Deferred tax expense		\$(26,665)	\$(110)	\$-
Net deferred tax assets/(liabilities)	\$35,543				\$8,768
Reflected in balance sheet as follows:
Deferred tax assets	\$41,676				\$17,243
Deferred tax liabilities	\$6,133				\$8,475

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

			Deferred tax
		Deferred tax	income
		income	(expense)
	Beginning	(expense)	recognized in		Ending
	balance as of	recognized	other		balance as of
	January 1,	in profit or	comprehensive	Exchange	December 31,
	2020	loss	income	differences	2020
Temporary differences
Unrealized exchange loss	\$2,626	\$2,422	\$-	\$-	\$5,048
Unrealized exchange gain	(5,132)	(1,001)	-	-	(6,133)
Unrealized allowance for inventory
valuation and obsolescence losses	9,830	1,373	-	-	11,203
Revaluations of financial assets
(liabilities) at fair value through
profit or loss	(41)	342	-	-	301
Defined benefit liabilities , non
current	4,324	590	(3,235)	-	1,679
Unrealized asset impairment losses	2,970	-	-	-	2,970
Unrealized loss from sales	122	633	-	-	755
Unrealized bad debt expense	14,517	5,203	-	-	19,720
Deferred tax expense		\$9,562	\$(3,235)	\$-
Net deferred tax assets/(liabilities)	\$29,216				\$35,543
Reflected in balance sheet as follows:
Deferred tax assets	\$34,389				\$41,676
Deferred tax liabilities	\$5,173				\$6,133

Unrecognized deferred tax assets

As of December 31, 2021 and 2020, deferred tax assets that were not recognized amounted to NT\$14,944 thousand and NT\$84,602 thousand, respectively.

Unrecognized deferred tax liabilities relating to the investment in subsidiaries

The Company did not recognize any deferred tax liability for taxes that would be payable on the unremitted earnings of the Company's overseas subsidiaries, as the Company has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future. As of December 31, 2021 and 2020, the taxable temporary differences associated with investment in subsidiaries, for which deferred tax liabilities have not been recognized, aggregated to NT\$76,243 thousand and NT\$58,928 thousand, respectively.

As of December 31, 2021, the assessment of the income tax of the Company is assessed and approved up to 2019.

(21)Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted-average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity by the weighted-average number of ordinary shares outstanding during the year plus the weighted-average number of ordinary shares that would be issued assuming all the dilutive potential ordinary shares were converted into ordinary shares.

	For the years ended December 31
	2021	2020
(a) Basic earnings per share
Profit attributable to ordinary equity owners of the parent
(in thousand NT\$)	\$1,155,930	\$268,446
Weighted average number of ordinary shares outstanding
for basic earnings per share (in thousands)	248,550	248,550
Basic earnings per share (NT\$)	\$4.65	\$1.08

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	For the years ended December 31
	2021	2020
(b) Diluted earnings per share
Profit attributable to ordinary equity owners of the parent
(in thousand NT\$)	\$1,155,930	\$268,446
Weighted average number of ordinary shares outstanding
for basic earnings per share (in thousands)	248,550	248,550
Effect of dilution:
Employee compensation (in thousands)	827	886
Weighted-average number of ordinary shares outstanding
after dilution (in thousands)	249,377	249,436
Diluted earnings per share (NT\$)	\$4.64	\$1.08

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date the financial statements were authorized for issue.

7. Related Party Transactions

Information of the related parties that had transactions with the Company during the financial reporting years is as follows:

Name of the related parties	Nature of relationship of the related parties
United Microelectronics Corporation	Entity with joint control or
	significant influence over the
	Company
Fresco Logic Inc. (Note)	Subsidiaries' associates
HeJian Technology (Suzhou) Co., Ltd.	Other related parties
Wavetek Microelectronics Corporation	Other related parties
United Semiconductor (Xiamen) Co., Ltd.	Other related parties
United Semiconductor Japan Co., Ltd.	Other related parties
Faraday Technology Corporation (USA)	Subsidiaries
Faraday Technology Japan Corporation	Subsidiaries
FaradayTek Solutions India Private Limited	Subsidiaries
Faraday Technology Vietnam Company Limited	Subsidiaries
GrainTech Electronics Limited	Subsidiaries
Faraday Technology China Corporation	Subsidiaries
Innopower Technology Corporation (Innopower)	Subsidiaries

Name and nature of relationship of the related parties

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	Nature of relationship
Name of the related parties	of the related parties
United Creative Solution Corporation	Subsidiaries
Faraday Technology Corporation (Suzhou)	Subsidiaries
Artery Technology Corporation, Ltd.	Subsidiaries
United Business Service Corporation	Subsidiaries
Artery Technology Company	Subsidiaries

Name and nature of relationship of the related parties

Note:The Company disposed of Fresco Logic Inc. in June 2020, which ceased to be a related party since that day.

Significant transactions with the related parties

(1).Sales

For the years ended December 31
2021	2020
\$581,422	\$583,729
739,108	413,182
569,144	391,760
439,079	93,592
418,255	164,608
54,110	849,163
432,906	156,682
-	15,158
46,038	36,196
\$3,280,062	\$2,704,070

The Company's sales terms were 30~60 days from the date of monthly closing for non-related parties, while 60 days for related-parties. Selling prices for related parties were different from each other and a direct comparison was impractical since the products or services were customized based on each order.

(2).Purchases

	For the years ended December 31
	2021	2020
United Microelectronics Corporation	\$1,894,680	\$1,222,521
United Semiconductor (Xiamen) Co., Ltd.	514,389	117,022
HeJian Technology (Suzhou) Co., Ltd.	71,933	600,515
Other related parties	6,381	6,780
Total	\$2,487,383	\$1,946,838

The purchase price to the related parties above was determined through mutual agreement based on the market rates. The payment terms from the related party suppliers are 45~60 days.

(3).Expense and Income

		For the years ended
		December 31
	Items	2021	2020
Subsidiaries	Research and development expenses	\$136,795	\$131,674
Other related parties	Research and development /expenses	5,742	-
United Microelectronics Corporation	Research and development expenses	71	1,502
United Microelectronics Corporation	Testing expenses	3,957	2,484
Other related parties	Testing expenses	288	798
Subsidiaries	Other income	4,109	-
Subsidiaries	Management Fees	999	-
Total		\$151,961	\$136,458

(4).Contract assets-current

	As of
	December 31,	December 31,
	2021	2020
Faraday Technology China Corporation	\$21,118	\$201,412
Faraday Technology Japan Corporation	15,827	-
United Creative Solution Corporation	13,202	41,862
Total	\$50,147	\$243,274

(5).Accounts receivables - related parties, net

	As of
	December 31, December 31,
	2021	2020
United Microelectronics Corporation	\$153,291	\$129,703
Innopower	84,331	72,612
Faraday Technology Japan Corporation	92,366	33,249
Faraday Technology Corporation (USA)	90,469	127,124
Faraday Technology China Corporation	-	15,387
Subsidiaries	215,092	37,509
Total	\$635,549	\$415,584

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(6).Other receivables

	As of
	December 31, December 31,
	2021	2020
Innopower	\$31,154	\$29,894
Faraday Technology China Corporation	\$598	\$54,347
Faraday Technology Corporation (USA)	331	38,904
Subsidiaries	-	1,468
Total	\$32,083	\$124,613

(7).Other current assets

		As of
	December 31,	December 31,
	2021	2020
Subsidiaries	\$10,305	\$-
Other related parties	250	-
Total	\$10,555	\$-

(8).Contract liabilities-current

	As of
	December 31,	December 31,
	2021	2020
Subsidiaries	\$75,677	\$234
Entity with joint control or significant influence over the
Company	-	427
Total	\$75,677	\$661

(9).Accounts payable - related parties

	As of
	December 31, December 31,
	2021	2020
United Microelectronics Corporation	\$259,900	\$113,330
United Semiconductor (Xiamen) Co., Ltd.	200,717	18,027
Faraday Technology Corporation (USA)	5,641	77,197
Subsidiaries	8,987	8,128
Other related parties	11,921	853
Total	\$487,166	\$217,535

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(10) .Other payables

	As of
	December 31,	December 31,
	2021	2020
Subsidiaries	\$5,832	\$302

(11) .Key management personnel compensation

		For the years ended December 31
	2021	2020
Short-term employee benefits	\$105,875	\$77,747
Post-employment benefits	1,323	1,307
Total	\$107,198	\$79,054

8. Assets Pledged As Collateral

The Company's assets pledged as collateral were as follows:

		Carrying amount
Assets pledged for security	2021.12.31	2020.12.31	Secured liabilities
Financial assets measured at			Custom clearance deposit
amortized cost	\$15,050	\$15,028

9. Commitments and contingencies

None.

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

12. Others

(1) .Categories of financial instruments

Financial assets

As of
December 31,	December 31,
2021	2020
\$1,424	\$-
2,775,807	2,012,742
3,027,489	2,119,521
\$5,804,720	\$4,132,263

..Financial liabilities

	As of
	December 31,	December 31,
	2021	2020
Financial liabilities at fair value through profit or loss:
Financial assets mandatorily measured at fair value through
profit or loss	\$-	\$1,504
Financial liabilities at amortized cost:
Payables (including related parties)	1,323,250	747,556
Other payables	525,348	317,487
Long-term payables	161,247	16,321
Lease liabilities	196,872	199,519
Total	\$2,206,717	\$1,282,387

Note : Including cash and cash equivalents (exclude cash on hand), notes receivable, accounts receivable, other receivables, refundable deposit and financial assets measured at amortized cost, non-current.

(2) Financial risk management objectives and policies

The Company's principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Company identifies measures and manages the aforementioned risks based on the Company's policy and risk exposures.

The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity instruments).

In practice, it is rarely the case that a single risk variable will change independently from other risk variables; there are usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense are denominated in a different currency from the Company's functional currency) and the Company's net investments in foreign subsidiaries.

The Company has certain foreign currency receivables denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is achieved. The Company also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Company.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company's profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Company's foreign currency risk is mainly related to the volatility in the exchange rates for USD. The information of the sensitivity analysis is as follows:

When NTD strengthens/weakens against USD by 10%, the profit for the years ended December 31, 2021 and 2020 would decrease /increase by NT\$48,574 thousand and NT\$18,417 thousand, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's short-term deposits at variable interest rates. Therefore, interest rate risk is low.

Equity price risk and other investment risk

The Company's unlisted equity securities and other investments are susceptible to market price risk arising from uncertainties about future values of the investment objectives. The Company's unlisted equity securities and other investment are classified under financial assets measured at fair value through other comprehensive income. The Company manages the equity price risk through diversification. Reports on the equity portfolio are submitted to the Company's top management for reviews and approvals on a regular basis.

Please refer to Note 12(9) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from operating activities (primarily for contract assets, accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to credit risk management. Credit limits are established for all trading partners based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Company's internal rating criteria and etc. Certain trading partners' credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment.

As of December 31, 2021, and 2020, top ten customers represented 71% and 75% of the contract assets and accounts receivable of the Company, respectively. The credit concentration risk of other contract assets and accounts receivable is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Company's treasury in accordance with the Company's policy. The Company only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counter parties.

The Company adopted IFRS 9 to assess the expected credit losses. The measurement indicators of the Company are described as follows:

				Carrying amount
				As of
		Measurement
		method for expected		December 31,	December 31,
Level of credit risk	Indicator	credit losses	Loss rate	2021	2020
Simplified method	Not	Lifetime expected credit
(Note)	applicable	losses	0%~100%	\$1,071,858	\$1,037,815

Note: The Company adopted simplified method (lifetime expected credit loss) to measure credit risk. It includes contract assets, notes receivable and accounts receivable.

(5) Liquidity risk management

The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, and bank borrowings. The table below summarizes the maturity profile of the Company's financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amounts include the contractual interest.

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Non-derivative financial instruments

	Less than 1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of December 31, 2021
Payables (including
related parties)	\$1,323,250	\$-	\$-	\$-	\$1,323,250
Other payables	525,348	-	-	-	525,348
Long-term payables	-	161,247	-	-	161,247
Lease liabilities	10,361	18,693	15,909	238,634	283,597
As of December 31, 2020
Payables (including
related parties)	\$747,556	\$-	\$-	\$-	\$747,556
Other payables	317,487	-	-	-	317,487
Long-term payables	-	16,321	-	-	16,321
Lease liabilities	9,888	18,262	15,909	246,589	290,648

Derivative financial instruments

	Less than 1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of December 31, 2021
Inflows	\$69,831	\$-	\$-	\$-	\$69,831.
Outflows	.(68,407)	-	-	-	(68,407)
Net	\$1,424	\$-	\$-	\$-	\$1,424
As of December 31, 2020
Inflows	\$21,494	\$-	\$-	\$-	\$21,494
Outflows	(22,998)	-	-	-	(22,998)
Net	\$(1,504)	\$-	\$-	\$-	.\$(1,504)

The table above contains the undiscounted net cash flows of derivative financial instruments.

FARADAY TECHNOLOGY CORPORATION NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for year ended December 31, 2021:

	Lease liabilities
As of January 1, 2021	\$199,519
Additions	3,329
Cash flows	(5,976)
As of December 31, 2021	\$196,872

Reconciliation of liabilities for year ended December 31, 2020:

	Lease liabilities
As of January 1, 2020	\$206,082
Cash flows	(6,563)
As of December 31, 2020	\$199,519

• (7) Fair values of financial instruments
• (a) The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Company to measure or disclose the fair values of financial assets and financial liabilities:

• i. The carrying amount of cash and cash equivalents, notes receivables and accounts receivable, other receivables, accounts payable and other payables approximate their fair value due to their short maturities.
• ii. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities and funds) at the reporting date.
• iii. Fair value of equity instruments (including unlisted equity securities) without active market and market quotations cannot be reliably measured. Its amount is measured by cost net of impairment loss.
• iv. The financial assets measured at amortized cost, long-term payables and lease liabilities are determined by discounted cash flow analysis. The Company estimates the fair value based on book value due to the insignificant difference between the fair value from discounted cash flow analysis and carrying amount.

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• v. The fair value of derivative financial instrument is based on market quotations. For unquoted derivatives that are not options, the fair value is determined based on discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using the option pricing model.
• (b) Fair value measurement hierarchy for financial instruments

Please refer to Note 12(9) for fair value measurement hierarchy for financial instruments of the Company.

(8) Derivative financial instruments

The Company's derivative financial instruments include forward currency contracts. The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as of December 31, 2021 and 2020 is as follows:

Forward currency contracts

The Company entered into forward currency contracts to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to forward currency contracts:

Items (by contract)	Notional Amount	Contract Period
As of December 31, 2021
Forward currency contract	Sell foreign currency USD 12,000 thousand	From 2021.11.30 to
		2022.01.20
	Sell foreign currency RMB 8,000 thousand	From 2021.12.07 to
Forward currency contract		2022.01.18
As of December 31, 2020
	Sell foreign currency USD 5,000 thousand	From 2020.12.07 to
Forward currency contract		2021.01.25
	Sell foreign currency RMB 5,000 thousand	From 2020.12.23 to
Forward currency contract		2021.01.28

(9) Fair values measurement hierarchy

(a) Fair value measurement hierarchy

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date
• 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

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

(b) Fair value measurement hierarchy of the Company's assets and liabilities

The Company does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Company's assets and liabilities measured at fair value on a recurring basis is as follows

As of December 31, 2021:

	Level 1	Level 2	Level 3	Total
Financial assets at fair value:
Financial assets at fair value
through profit or loss
Forward currency contract	\$-	\$1,424	\$-	\$1,424
Financial assets at fair value
through other comprehensive income
Equity instruments measured
at fair value through other
comprehensive income	-	-	\$2,775,807	\$2,775,807
As of December 31, 2020:
	Level 1	Level 2	Level 3	Total
Financial assets at fair value:
Financial assets at fair value
through other comprehensive income
Equity instruments measured
at fair value through other
comprehensive income	\$-	\$-	\$2,012,742	\$2,012,742
Financial liabilities at fair value:
Financial liabilities at fair value
through profit or loss
Forward currency contract	\$-	\$1,504	\$-	\$1,504

Transfers between Level 1 and Level 2 during the period

During the years ended December 31, 2021 and 2020, there were no transfers between Level 1 and Level 2 fair value measurements.

Movements of fair value measurement in Level 3 on recurring basis

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the year is as follows:

	Assets
	At fair value through other
	comprehensive income
	Stocks	Total
As of January 1, 2021	\$2,012,742	\$2,012,742
Total gains and losses recognized for the year ended
December 31, 2021:
Amount recognized in other comprehensive income
("Unrealized gains (losses) from equity
instruments investments measured at fair value
through other comprehensive income)	763,065	763,065
As of December 31, 2021	\$2,775,807	\$2,775,807
	Assets
	At fair value through other
	comprehensive income
	Stocks	Total
As of January 1, 2020	\$895,710	\$895,710
Total gains and losses recognized for the year ended
December 31, 2020:
Amount recognized in other comprehensive income
("Unrealized gains (losses) from equity
instruments investments measured at fair value
through other comprehensive income)	1,117,032	1,117,032

Recognized as profit (loss) above, the gain or loss from financial assets still held by the Company as of December 31, 2021 and 2020 was both NT\$0 thousand.

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of December 31, 2021

				Relationship
	Valuation	Significant	Quantitative	between inputs	Sensitivity of the input to
	techniques	unobservable inputs	information	and fair value	fair value
Stocks and others	Asset approach	Discount for lack of	10%	The higher the	10% increase (decrease) in
		marketability and		discount for lack	the discount for lack of
		non-controlling		of marketability,	marketability and non
		interest		the lower the fair	controlling interest would
				value of the stocks	result in decrease/ increase in
					the Company's equity by
					NT\$277,581 thousand

As of December 31, 2020

				Relationship
	Valuation	Significant	Quantitative	between inputs	Sensitivity of the input to
	techniques	unobservable inputs	information	and fair value	fair value
Stocks and others	Asset approach	Discount for lack of	10%	The higher the	10% increase (decrease) in
		marketability and		discount for lack	the discount for lack of
		non-controlling		of marketability,	marketability and non
		interest		the lower the fair	controlling interest would
				value of the stocks	result in decrease/ increase in
					the Company's equity by
					NT\$201,274 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Company's Financial Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Company analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company's accounting policies at each reporting date.

(c) Fair value measurement hierarchy of the Company's assets and liabilities not measured at fair value but for which the fair value is disclosed

As of December 31, 2021:

None

As of December 31, 2020:

None

(10) Information regarding the significant assets and liabilities denominated in foreign currencies is listed below (amounts in thousands):

As of December 31, 2021
	Foreign currencies	Foreign exchange rate
Financial assets
Monetary items:
USD	\$51,978	27.67	\$1,438,240
Non-monetary items:
USD	16,174	27.67	447,549
Financial liabilities
Monetary items:
USD	34,424	27.67	952,503

FARADAY TECHNOLOGY CORPORATION

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

		As of December 31, 2020
	Foreign currencies	Foreign exchange rate	NTD
Financial assets
Monetary items:
USD	\$29,944	28.09	\$841,121
Non-monetary items:
USD	15,378	28.09	431,961
Financial liabilities
Monetary items:
USD	23,387	28.09	656,949

The above information is disclosed based on the carrying amount of foreign currency (after conversion to functional currency).

Because there are several types of foreign currency transactions within the Company, it is not practical to disclose the exchange gains and losses of monetary financial assets and liabilities by each significant asset and liability denominated in foreign currencies. The foreign exchange gain (loss) was NT\$7,339 thousand and NT\$(6,679) thousand for the years ended December 31, 2021 and 2020, respectively.

(11) Capital management

The primary objective of the Company's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

11.Other disclosure

(1) Information related to significant transactions

Additional disclosures for information of the Company for the year ended December 31, 2021:

• (a) Financing provided to others for the year ended December 31, 2021: None.
• (b) Endorsement/Guarantee provided to others for the year ended December 31, 2021: None.
• (c) Securities held as of December 31, 2021: Please refer to Attachment 1.
• (d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT\$300 million or 20 percent of the capital stock for the year ended December 31, 2021: None.
• (e) Acquisition of individual real estate with amount exceeding the lower of NT\$300 million or 20 percent of the capital stock for the year ended December 31, 2021: None.
• (f) Disposal of individual real estate with amount exceeding the lower of NT\$300 million or 20 percent of the capital stock for the year ended December 31, 2021: None.
• (g) Related party transactions for purchases and sales amounts exceeding the lower of NT\$100 million or 20 percent of the capital stock for the year ended December 31, 2021: Please refer to Attachment 2.
• (h) Receivables from related parties with amount exceeding the lower of NT\$100 million or 20 percent of the capital stock for the year ended December 31, 2021: Please refer to Attachment 3.
• (i) Financial instruments and derivative transactions: Please refer to Note 12.
• (j) Other: Significant intercompany transactions between consolidated entities: Please refer to Attachment 4.
• (2) Information on investees

Information on investees which significant influenced or controlled by the Company: Please refer to Attachment 5.

• (3) Information on investments in Mainland China
• (a) Investee company name, main business and products, total amount of capital, method of investment, accumulated inflow and outflow of investments from Taiwan, percentage of ownership, investment income (loss), carrying amount of investments, cumulated inward remittance of earnings and limits on investment in Mainland China: Please refer to Attachment 6.
• (b) Significant transaction to investee Company in Mainland China for the year ended December 31, 2021:
  • i. Purchases amount and percentage, and related ending balance and percentage of payables: None.
  • ii. Sales amount and percentage, and related ending balance and related ending balance and percentage of receivables: Please refer to Attachment 4.
  • iii. Property transaction amount and occurred gain (loss): None.
  • iv. Ending balance and purpose of endorsement/guarantee provided for notes or collateral: None.
  • v. Highest balance, ending balance, interest rate interval and total interest amount in current period of financing: None.
  • vi. Other transactions with significant influence on current period income or financial position: Please refer to Attachment 4.
• (4) Major shareholder information

Please refer to Attachment 7.

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 1 (Securities held as of December 31, 2021) (Excluding subsidiaries and associates)

Faraday Technology Corporation

				As of December 31, 2021
					Carrying amount	Percentage of	Fair value/
Type of securities	Name of securities	Relationship	Financial statement account	Units/shares	(thousand)	ownership (%)	Net assets value	Note
Common Stock	SHIEH YONG Investment Co., Ltd.	-	Financial assets at fair value through other comprehensive income, non-current	194,944,689	\$2,670,986	12.12%	\$2,670,986	-
Common Stock	Unitech Capital Inc.	-	Financial assets at fair value through other comprehensive income, non-current	2,500,000	104,821	5.00%	104,821	-

Chih-Hung Investment Corporation

			As of December 31, 2021
Type of securities	Name of securities	Relationship	Financial statement account Units/shares		Carrying amount (thousand)	Percentage of ownership (%)	Fair value/ Net assets value	Note
Preferred stock	Aviacomm Ltd.	-	Financial assets at fair value through profit or	14,600,000	\$-	12.60%	\$-	-
Common Stock			loss, non-current	1,714,285
Common Stock	Innostor Technology Corporation	-	Financial assets at fair value through profit or loss, non-current	59,167	-	0.70%	-	-
Common Stock	apm Communication, Inc.	-	Financial assets at fair value through profit or loss, non-current	12,600	-	0.13%	-	-
Common Stock	Storm Semiconductors, Inc.	-	Financial assets at fair value through profit or loss, non-current	2,115,000	-	8.01%	-	-
Common Stock	SanJet Technology Corporation	-	Financial assets at fair value through other comprehensive income, non-current	3,000,000	28,140	9.53%	28,140	-
Preferred stock	Gear Radio Limited	-	Financial assets at fair value through other comprehensive income, non-current	1,200,000	7,969	4.64%	7,969	-
Preferred stock	NeuroSky	-	Financial assets at fair value through other comprehensive income, non-current	44,312,575	-	7.76%	-	-
Preferred stock	Floadia	-	Financial assets at fair value through other comprehensive income, non-current	1,818	-	8.70%	-	-
Common Stock	Hsun Chieh Capital Corp.	-	Financial assets at fair value through other comprehensive income, non-current	3,000,000	69,692	15.00%	69,692	-

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 1 (Securities held as of December 31, 2021) (Excluding subsidiaries and associates)

Sheng Bang Investment Corporation

Type of securities	Name of securities	Relationship	Financial statement account	Units/shares	Carrying amount (thousand)	Percentage of ownership (%)	Fair value/ Net assets value	Note
Fund	IB FUND SPC -RCM Auto Parts Industry Fund Segregated Portfolio	-	Financial assets at fair value through profit or loss, current	10,000	\$24,872	-	\$24,872	-
Common Stock	Storm Semiconductors, Inc.	-	Financial assets at fair value through profit or loss, current	641,000	-	2.43%	-	-
Common Stock	Sifotonics Technology Co., Ltd.	-	Financial assets at fair value through other comprehensive income, non-current	800,000	-	1.52%	-	-
Common Stock	Ascent Venture Capital	-	Financial assets at fair value through other comprehensive income, non-current	3,000,000	23,722	19.67%	23,722	-
Capital	Jian Rui Venture Capital (translated from Chinese)	-	Financial assets at fair value through other comprehensive income, non-current	-	10,108	8.50%	10,108	-

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 2 ( Related party transactions for purchases and sales amounts exceeding the lower of NT\$100 million or 20 percent of capital stock for the year ended December 31, 2021)

Faraday Technology Corporation

		Transactions					Details of non-arm's length transaction	Notes and accounts receivable (payable)
Counter-party	Relationship	Purchases (Sales)	Amount	Percentage of total purchases (sales)	Term	Unit Price	Payment Term	Balance	Percentage of total receivables (payable)	Note
Faraday Technology Corporation (USA)	Subsidiary	Sales	\$739,108	11.01%	Month-end 60 days	Note 1	Note3	\$90,469	9.15%	-
Faraday Technology Japan Corporation	Subsidiary	Sales	569,144	8.48%	Month-end 60 days	Note 1	Note3	92,366	9.34%	-
United Creative Solution Corporation	Subsidiary	Sales	439,079	6.54%	Month-end 60 days	Note 1	Note3	45,051	4.56%	-
Artery Technology Corporation, Ltd.	Subsidiary	Sales	418,255	6.23%	Month-end 60 days	Note 1	Note3	55,175	5.58%	-
Innopower Technology Corporation	Subsidiary	Sales	222,273	3.31%	Month-end 60 days	Note 2	Note 2	84,331	8.53%	-
Artery Technology Company	Subsidiary	Sales	120,447	1.79%	Month-end 60 days	Note 1	Note3	27,284	2.76%	-
United Microelectronics Corporation	Entity with joint control or significant influence over the Company	Purchases	1,894,680	68.42%	Month-end 60 days	Note 4	Note 4	259,900	19.64%	-
United Microelectronics Corporation	Entity with joint control or significant influence over the Company	Sales	581,422	8.66%	Month-end 60 days	Note 2	Note 2	153,291	15.50%	-
United Semiconductor (Xiamen) Co., Ltd.	Other related parties	Purchases	514,389	18.58%	Month-end 60 days	Note 4	Note 4	200,717	15.17%	-

Note 1: The sales price to the above related parties was determined through mutual agreement in reference to resale price.

Note 2: Selling prices for related parties were different from each other and a direct comparison was impractical since the products or services were customized based on each order.

Note 3: The Company's sales terms were 30~60 days from the date of monthly closing for non-related parties, while 60 days for related-parties.

Note 4: The purchase price to the related parties above was determined through mutual agreement based on the market rates. The payment terms from the related party suppliers are 60 days.

FARADAY TECHNOLOGY CORPORATION FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 3 ( Related party transactions for receivables of NT\$100 million or 20 percent of capital stock for the year ended December 31, 2021)

Faraday Technology Corporation

					Overdue
Counter-party	Relationship	Ending Balance of Notes/Trade Receivables from Related Party (Note1)	Turnover Rate	Amount	Action Taken	Amount Received in Subsequent Period	Allowance for Doubtful Debts
United Microelectronics Corporation	Entity with joint control or significant influence over the Company	Accounts receivable \$153,291	4.11	\$-	\$-	\$114,653	\$-
Innopower Technology Corporation	Subsidiary	Accounts receivable 84,331 Other receivables 31,154	2.04	-	-	-	-

Note 1: Please fill in accounts receivable from related parties, notes receivable, other receivables, respectively. Note 2: The capital stock is the parent's capital stock.

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 4 (Significant intercompany transactions between consolidated entities)

						Transactions
No. (Note 1)	Related Party	Counterparty	Relationship with the Company (Note 2)	Account	Amount	Term	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Sales	\$739,108	Note 4	9.14%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Research expenses	66,246	According to the contract	0.82%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Accounts receivable	90,469	Month-end 60 days	0.75%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Other receivables	331	Month-end 60 days	-
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Accounts payable	5,641	Month-end 60 days	0.05%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Sales	569,144	Note 4	7.04%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Accounts receivable	92,366	Month-end 60 days	0.77%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Contract assets	15,827	According to the contract	0.13%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Contract liabilities	19,839	According to the contract	0.16%
0	Faraday Technology Corporation	FaradayTek Solutions India Private Limited	1	Research expenses	23,659	According to the contract	0.29%
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Sales	418,255	Note 5	5.17%
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Other income	283	According to the contract	-
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Accounts receivable	55,175	Month-end 60 days	0.46%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Sales	54,110	Note 5	0.67%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Contract assets	21,118	According to the contract	0.18%

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 4 (Significant intercompany transactions between consolidated entities)

						Transactions
No. (Note 1)	Related Party	Counterparty	Relationship with the Company (Note 2)	Account	Amount	Terms	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Other receivables	\$598	Month-end 60 days	-
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Accounts payable	133	Month-end 60 days	-
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Contract liabilities	35,082	According to the contract	0.29%
0	Faraday Technology Corporation	GrainTech Electronics Limited	1	Sales	4,219	Note 5	0.05%
0	Faraday Technology Corporation	GrainTech Electronics Limited	1	Accounts receivable	1,695	Month-end 60 days	0.01%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Sales	439,079	Note 5	5.43%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Administrative expenses	999	According to the contract	0.01%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Contract assets	13,202	According to the contract	0.11%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Accounts receivable	45,051	Month-end 60 days	0.37%
0	Faraday Technology Corporation	Faraday Technology Corporation (Suzhou)	1	Sales	55,292	Note 5	0.68%
0	Faraday Technology Corporation	Faraday Technology Corporation (Suzhou)	1	Accounts receivable	55,207	Month-end 60 days	0.46%
0	Faraday Technology Corporation	Faraday Technology Corporation (Suzhou)	1	Accounts payable	5	Month-end 60 days	-
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Sales	222,273	Note 5	2.75%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Accounts receivable	84,331	Month-end 60 days	0.70%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Other receivables	31,154	Month-end 60 days	0.26%

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 4 (Significant intercompany transactions between consolidated entities)

						Transactions
No. (Note 1)	Related Party	Counterparty	Relationship with the Company (Note 2)	Account	Amount	Terms	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Other payables	\$302	Month-end 60 days	-
0	Faraday Technology Corporation	Artery Technology Company	1	Sales	120,447	Note 5	1.49%
0	Faraday Technology Corporation	Artery Technology Company	1	Other income	3,826	According to the contract	0.05%
0	Faraday Technology Corporation	Artery Technology Company	1	Research expenses	5,533	According to the contract	0.07%
0	Faraday Technology Corporation	Artery Technology Company	1	Accounts receivable	27,284	Month-end 60 days	0.23%
0	Faraday Technology Corporation	Artery Technology Company	1	Other payables	5,533	Month-end 60 days	0.05%
0	Faraday Technology Corporation	Artery Technology Company	1	Contract liabilities	20,756	According to the contract	0.17%
0	Faraday Technology Corporation	United Business Service Corporation	1	Sales	30,675	Note 5	0.38%
0	Faraday Technology Corporation	United Business Service Corporation	1	Accounts receivable	30,680	Month-end 60 days	0.25%
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Research expenses	41,357	According to the contract	0.51%
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Other current assets	10,305	Month-end 60 days	0.09%
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Accounts payable	8,849	Month-end 60 days	0.07%
1	Faraday Technology Corporation (Suzhou)	Faraday Technology China Corporation	3	Sales	22,001	Note 5	0.27%
1	Faraday Technology Corporation (Suzhou)	United Business Service Corporation	3	Sales	25,689	Note 5	0.32%
1	Faraday Technology Corporation (Suzhou)	United Business Service Corporation	3	Accounts receivable	27,174	Month-end 60 days	0.23%

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 4 (Significant intercompany transactions between consolidated entities)

For the year ended December 31, 2021

						Transactions
No. (Note 1)	Related Party	Counterparty	Relationship with the Company (Note 2)	Account	Amount	Terms	Percentage of consolidated operating revenues or consolidated total assets (Note 3)
2	United Business Service Corporation	Faraday Technology China Corporation	3	Sales	\$1,081	Note 5	0.01%
2	United Business Service Corporation	United Creative Solution Corporation	3	Sales	1,905	Note 5	0.02%
3	Artery Technology Corporation, Ltd.	Artery Technology Company	3	Sales	3,386	Note 5	0.04%
3	Artery Technology Corporation, Ltd.	Artery Technology Company	3	Research expenses	752	According to the contract	0.01%

Note 1: Faraday Technology Corporation and its subsidiaries are coded as follows:

1. Faraday Technology Corporation is coded "0".

2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2: Transactions are categorized as follows:

1. The holding company to subsidiary.

2. Subsidiary to holding company.

3. Subsidiary to subsidiary.

Note 3: The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item's balance at period-end. For profit or loss items, cumulative balances are used as basis.

Note 4: The sales price to the above related parties was determined through mutual agreement in reference to resale price.

Note 5: As the sale of product or service is individually designed based on requirement of customers, they could not be compared directly.

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 5 (Related information of investee companies as of December 31, 2021)

Faraday Technology Corporation

			Initial Investment		Investment as of December 31, 2021
Investee company	Address	Main businesses and products	December 31, 2021	December 31, 2020	Number of shares	Percentage of ownership (%)	Carrying amount (Note)	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
Faraday Technology Corporation (USA)	USA	Sales representive in America	\$436,907	\$436,907	Common stock 118,580 thousand shares and preferred stock 2,000 thousand shares	Common stock owned 100.00% and preferred stock owned 100.00%	\$437,715	\$33,617	\$31,841
Faraday Technology - B.V.I	British Virgin Islands	General Investing	855,770	706,792	Common stock 27,489 thousand shares	100.00%	781,052	343,554	343,677
Faraday Technology Japan Corporation	Japan Tokyo	Sales representive in Japan	29,320	29,320	Common stock 2 thousand shares	99.95%	97,586	25,492	25,480
Chih-Hung Investment Corporation	Taiwan	General Investing	620,000	620,000	Common stock 62,000 thousand shares	100.00%	557,452	128,060	128,060
Sheng Bang Investment Corporation	Taiwan	General Investing	222,020	222,020	Common stock 22,202 thousand shares	100.00%	201,710	1,812	1,812
Faraday Technology Vietnam Company Limited	Vietnam	IC design services	9,287	9,287	-	100.00%	13,741	1,512	1,512

Chih-Hung Investment Corporation

				Initial Investment		Investment as of December 31, 2021
Investee company	Address	Main businesses and products	December 31, 2021	December 31, 2020	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount (Note)	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
Grain Media Inc.	Taiwan	IC designing, marketing and customer service	\$1,456		\$1,456 Common stock 146 thousand shares	19.42%	\$1,129	\$(69)	\$(13)
Innopower Technology Corporation	Taiwan	Silicon Intellectual Property designing	80,000	80,000	Common stock 14,942 thousand shares	100.00%	337,206	129,781	129,781
FaradayTek Solutions India Private Limited	India	IC design services	45	45	Common stock 10 thousand shares	1.00%	72	304	3

Sheng Bang Investment Corporation

			Initial Investment		Investment as of December 31, 2021
Investee company	Address	Main businesses and products	December 31, 2021	December 31, 2020	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount (Note)	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
Grain Media Inc.	Taiwan	IC designing, marketing and customer service	\$6,044		\$6,044 Common stock 604 thousand shares	80.58%	\$4,685	\$(69)	\$(56)
FaradayTek Solutions India Private Limited	India	IC design services	4,462		4,462 Common stock 990 thousand shares	99.00%	7,150	304	301

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 5 (Related information of investee companies as of December 31, 2021)

	Innopower Technology Corporation

				Initial Investment			Investment as of December 31, 2021
Investee company	Address	Main businesses and products		December 31, 2021	December 31, 2020	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount (Note)	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
Bright Capital Group Limited	Samoa	General investing		\$68,593	\$68,593	Common stock 2,301 thousand shares	100.00%	\$362,168	\$124,710	\$124,710
Faraday Technology - B.V.I				Initial Investment			Investment as of December 31, 2021
Investee company	Address	Main businesses and products		December 31, 2021	December 31, 2020	Number of shares (thousand)	Percentage of ownership (%)	Carrying amount (Note)	Net income (loss) of investee company (Note)	Investment income (loss) recognized (Note)
Faraday Technology Corporation Mauritius	Mauritius	General investing	USD	\$12,859,205 USD	\$12,859,205	Common stock 12,804 thousand shares	100.00%	\$115,281	\$47,576	\$47,576
GrainTech Electronics Limited	Hong Kong	IC designing, marketing and customer service	USD	100,000 USD	100,000	Common stock 100 thousand shares	100.00%	4,929	(133)	(133)
Faraday Technology Corporation Samoa	Samoa	General investing	USD	4,715,067 USD	4,715,067	Common stock 4,715 thousand shares	100.00%	173,096	34,508	34,508
Artery Technology Corporation Cayman	Cayman	General investing	USD	9,809,000 USD	4,460,000	Common stock 31,149 thousand shares	60.87%	490,517	395,747	261,629
Artery Technology Corporation				Initial Investment			Investment as of December 31, 2021
							Percentage of ownership	Carrying	Net income (loss) of investee company	Investment income (loss) recognized
Investee company Artery Technology Company	Address Taiwan	Main businesses and products IC designing, marketing and customer service		December 31, 2021 \$171,141	December 31, 2020 \$25,897	Number of shares (thousand) Common stock 17,114 thousand shares	(%) 60.87%	amount (Note) \$105,107	(Note) \$4,666	(Note) \$2,510

Note 1: USD are expressed in dollars.

Note 2: The Company owns 100% of Faraday Technology-B.V.I. and Faraday Technology-B.V.I. owns 60.87% in Artery Technology Corporation.The Artery Technology Corporation owns 100% of Artery Technology Company; therefore, the Group's share of profit or loss of Artery Technology Company is 60.87%.

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Unit:New Taiwan Dollars

ATTACHMENT 6 (Investment in Mainland China as of December 31, 2021)

							Investment Flows								in thousands, USD and RMB in dollars
						Accumulated Outflow of Investment from				Accumulated Outflow of Investment from					Accumulated inward remittance of earnings as
			Total Amount of			Taiwan as of				Taiwan as of	Net income (loss) of	Percentage of	Investment income	Carrying Value as of	of
Investee company	Main Businesses and Products		Paid-in Capital	Method of Investment		January 1, 2021	Outflow	Inflow		December 31, 2021	investee company	Ownership	(loss) recognized	December 31, 2021	December 31, 2021
Faraday Technology China Corporation	IC designing, marketing and customer service	(USD	\$166,020 6,000,000)	Note 1 Note 3	(USD	\$166,020 6,000,000)	\$-	\$-	(USD	\$166,020 6,000,000)	\$48,056	100.00%	\$48,056	\$113,238	-
Faraday Technology Corporation (Suzhou)	IC designing, marketing and customer service	(USD	160,486 5,800,000)	Note 4	(USD	160,486 5,800,000)	-		- (USD	160,486 5,800,000)	124,710	100.00%	124,710	362,168	-
Grain Media Technology (Shenzhen) Co., Ltd.	IC designing, marketing and customer service	(USD	110,703 4,000,814)	Note 1 Note 5	(USD	110,703 4,000,814)	-		- (USD	110,703 4,000,814)	(451)	100.00%	(451)	-	-
United Business Service Corporation	IC designing, marketing and customer service	(RMB	130,350 30,000,000)	Note 1 Note 6		130,350 (RMB 30,000,000)	-		- (RMB	130,350 30,000,000)	34,508	100.00%	34,508	173,094	-
Artery Technology Corporation, Ltd.	IC designing, marketing and		330,933	Note 1 Note 7		123,408	42,441		-	165,849	393,940	60.87%	261,000	369,620	-
	customer service	(USD	11,960,000)	Note 8	(USD	4,460,000) (USD	1,533,815) 4,460,000)		(USD	5,993,815)
United Creative Solution Corporation	IC designing, marketing and customer service	(RMB	21,725 5,000,000)	-		-	-		-	-	17,950	100.00%	17,950	42,097	-
Innopower Technology Corporation (Chongqing)	IC designing, marketing and customer service	(RMB	4,345 1,000,000)	-		-	-		-	-	(1)	100.00%	(1)	4,344	-

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 6 (Investment in Mainland China as of December 31, 2021)

Accumulated investment in Mainland China as of	Investment amounts authorized by Investment
December 31, 2021	Commission, MOEA	Upper limit on investment
\$733,523 (Note 2)	\$820,295 (Note 2)
(USD 26,509,696)	(USD 29,645,650)	\$4,703,983

• Note 1: Indirectly investment in Mainland China through subsidiaries of Faraday Technology-B.V.I. (registered in a third region) such as Faraday Technology Corporation-Mauritius, Faraday Technology Corporation- Samoa, and Artery Technology Corporation.
• Note 2: Amounts denominated in foreign currency is translated into New Taiwan Dollars by using exchange rate on December 31, 2021.
• Note 3: As of December 31, 2021, Investment Commission, MOEA approved the total investment amount USD 6,000 thousand. The Company had remitted investment amounted to USD 5,500 thousand, and Faraday Technology Corporation-Mauritius had remitted investment amounted to USD 500 thousand from its owned capital.
• Note 4: On May 19, 2010, Investment Commission, MOEA approved Innopower Technology Corporation acquired the 100% of ownership of Faraday Technology Corporation (Suzhou) (Mainland China company owned by Faraday Technology Corporation- Mauritius, which owned by Faraday Technology- B.V.I.) with USD 602,182 through Brigtht Capital Group Capital Limited. Before the transaction, Investment Commission, MOEA had approved the total investment amount USD 5,800 thousand, and USD 5,800 thousand had been remitted.
• Note 5: As of December 31, 2021, Investment Commission, MOEA approved the total investment amount USD 4,112 thousand , and the Company had remitted USD 4,001 thousand for the investment.
• Note 6: As of December 31, 2021, Investment Commission, MOEA approved the total investment amount RMB 30,000 thousand , and the Company had remitted RMB 30,000 thousand for the investment.
• Note 7: As of December 31, 2021, Investment Commission, MOEA approved the total investment amount USD 7,033 thousand , and the Company had remitted USD 5,994 thousand for the investment.
• Note 8: The Company owns 100% of Faraday Technology-B.V.I. and Faraday Technology-B.V.I. owns 60.87% in Artery Technology Corporation.The Artery Technology Corporation owns 100% of Artery Technology Corporation, Ltd.; therefore, the Group's share of profit or loss of Artery Technology Corporation, Ltd. is 60.87%.

FARADAY TECHNOLOGY CORPORATION

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 7 (The information of main shareholders )

Number of ordinary shares
Name of major shareholders	Number of shares held (shares)	Percentage of ownership
United Microelectronics Corporation	34,240,213	13.77%
Fubon Life Insurance Co., Ltd.	12,463,000	5.01%

• Explanation: If the Company applies to the Taiwan Depository & Clearing Corporation to obtain the information in this form, the following items may be explained in the note of this form.
• Note 1: The main shareholder information in this table is calculated by the Taiwan Depository & Clearing Corporation on the last business day at the end of each quarter. The total number of ordinary shares and special shares held by the shareholders who have completed the delivery of the Company without physical registration (including treasury shares) is more than 5%. As for the share capital recorded in the Company's financial report and the number of shares actually delivered by the Company without physical registration, the calculation basis may be different or inconsistent.
• Note 2: If the above data is number of trusted shares, it is disclosed by accounts of trustee. The report of shareholders who holding more than 10% ownership according to Securities and Exchange Act, inclueds the shares held by shareholders and trusted assets with right to use. Please refer to Market Observation Post System.

FARADAY TECHNOLOGY CORPORATION 1. STATEMENT OF CASH AND CASH EQUIVALENTS As of December 31, 2021

(Amounts in Thousands of New Taiwan Dollars and Dollars of Foreign Currencies)

Item	Description	Amount	Note
Cash on hand		\$ 200	1. Cash and cash equivalents were not pledged.
Saving			2. Foreign exchange rate as of December 31, 2021
NT Dollars		393,454
Foreign currency	USD 23,967,394.51	663,178	USD1=NTD27.67
	CNY 3,000,066.67	13,035	CNY1=NTD4.345
Checking deposits
Foreign currency	USD 210,727.00	5,831
Time Deposits
NT Dollars		809,700
Total		\$ 1,885,398

FARADAY TECHNOLOGY CORPORATION 2. STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT As of December 31, 2021

(Amounts in Thousands of New Taiwan Dollars and Dollars Foreign Currencies)

Financial Instruments	Contract Amount	Contract Period	Fair Value	Note
Forward currency contract
Forward currency contract	USD 12,000,000	2021/11/30-2022/01/20	\$ 1,335
	CNY 8,000,000	2021/12/07-2022/01/18	89
			\$ 1,424

FARADAY TECHNOLOGY CORPORATION 3. STATEMENT OF ACCOUNTS RECEIVABLES As of December 31, 2021

Client	Description	Amount	Note
Trade receivables			The accounts
Client A		\$ 78,842	receivables were all derived from daily
Client B		35,967	operations.
Client C		35,186
Client D		31,500
Client E	The amount of individual	27,920
Others	client in others does not	144,191
	exceed 5% of the account
	balance.	353,606
Less : Allowance for doubtful accounts		(4,393)
Net amount		\$ 349,213

FARADAY TECHNOLOGY CORPORATION 4. STATEMENT OF INVENTORIES As of December 31, 2021

			Amount
Item	Description	Cost	Fair Value	Note
Work in process		\$ 785,043	\$ 1,346,381	1. Inventories were not
Finished goods		476,523	634,998	pledged.
Total		1,261,566	\$ 1,981,379	2. Inventories are valued at
Less:Allowance for				lower of cost and net realizable value item by item.
inventory valuation losses		(53,155)		In addition, allowance of
Net Amount		\$ 1,208,411		inventory obsolescence is
				reserved for slow moving item.

FARADAY TECHNOLOGY CORPORATION 5. STATEMENT OF OTHER CURRENT ASSETS As of December 31, 2021

Item	Description	Amount	Note
Other prepaid expenses		\$ 164,339
Payment on behalf of others		3,893
Total		\$ 168,232

FARADAY TECHNOLOGY CORPORATION 6. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD For the year ended December 31, 2021

													(Amounts in Thousands of New Taiwan Dollars)	Fair Value /
									Exchange					Net Assets
			Beginning Balance		Acquisition		Disposal	Investment	Differences on			Ending Balance		Value
		Shares		Shares		Shares		Income	Translation of		Shares			Unit
Investee Company	Kind	(Thousands)	Amount	(Thousands)	Amount	(Thousands)	Amount	(Loss)	Foreign Operations	Others	(Thousands)	%	Amount	(dollars)	Collateral	Note
Faraday Technology Corporation (USA)	Common stock	118,580 \$	412,413		- \$ -		- \$	- \$ 31,841 \$	(6,539) \$	-	118,580	100%	\$ 437,715 \$	3.63	None
	Preferred stock	2,000	-	-	-	-	-	-	-	-	2,000	100%	-	-	None
Faraday Technology-B.V.I.	Common stock	22,140	308,279	891	149,596	-	-	343,677	2,996	(23,496)	23,031	100%	781,052	33.91	None	Note(1)
Faraday Technology Japan Corporation	Common stock	2	82,740	-	-	-	-	25,480	(10,634)	-	2	99.95%	97,586	48,793	None
Chih-Hung Investment Corporation	Common stock	62,000	552,815	-	-	-	-	128,060	1,944	(125,367)	62,000	100%	557,452	8.99	None	Note(2)
Sheng Bang Investment Corporation	Common stock	22,202	192,188	-	-	-	-	1,812	(154)	7,864	22,202	100%	201,710	9.09	None	Note(3)
Faraday Technology Vietnam Company Limited	Capital	-	12,229	-	-	-	-	1,512	-	-	-	-	13,741	-	None
The total of investments accounted for using the equity method			\$ 1,560,664		\$ 149,596		\$	- \$ 532,382 \$		(12,387) \$ (140,999)			\$ 2,089,256

Note 1: Others are additional paid-in capital amounted to NT\$(18,874) thousand, and unrealized gross profit on sales to NT\$(4,622) thousand.

Note 2: Others inclued unrealized loss on financial assets measured at fair value through other comprehensive income amounted to NT\$(101,453) thousand, cash dividend amounted to NT\$(22,660) thousand, and unrealized gross profit on sales to NT\$(1,254) thousand.

Note 3: Others inclued unrealized gain on financial assets measured at fair value through other comprehensive income amounted to NT\$7,864 thousand.

FARADAY TECHNOLOGY CORPORATION 7. STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT For the year ended December 31, 2021

(Amounts in Thousands of New Taiwan Dollars)

		Beginning Balance	Acquisition		Disposal		Unrealized gain on financial assets		Ending Balance
							measured at fair value through other
Item	Shares	Fair Value	Shares	Amount	Shares	Amount	comprehensive income	Shares	Fair Value	Collateral	Note
SHIEH YONG Investment Co., Ltd.	92,496,000	\$ 1,925,599	102,448,689	\$ -	-	\$ -	\$ 745,387	194,944,689	\$ 2,670,986	None	Note
Unitech Capital Inc.	2,500,000	87,143	-	-	-	-	17,678	2,500,000	104,821	None	Note
Total		\$ 2,012,742		\$ -		\$ -	\$ 763,065		\$ 2,775,807

1. Statement of property, plant and equipment Please refer to Note6 (8)

Please refer to Note6 (8) 9. Statement of depreciation of property, plant and equipment

FARADAY TECHNOLOGY CORPORATION 10. STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS For the year ended December 31, 2021

(Amounts in Thousands of New Taiwan Dollars)
----------------------------------------------	--	--	--	--

Supplier	Beginning Balance	Acquisition	Disposal	Ending Balance	Note
Cost
Land	\$ 202,168	\$ -	\$ -	\$ 202,168
Buildings and facilities	5,763	-	-	5,763
Transportation equipment	2,915	3,329	-	6,244
Office equipment	343	-	-	343
Total	\$ 211,189	\$ 3,329	\$ -	\$ 214,518
Accumulated Depreciation
Land	\$ 10,640	\$ 5,320	\$ -	\$ 15,960
Buildings and facilities	2,344	1,172	-	3,516
Transportation equipment	2,332	1,154	-	3,486
Office equipment	223	111	-	334
Total	\$ 15,539	\$ 7,757	\$ -	\$ 23,296

1. Statement of Intangible assets

Please refer to Note 6(9)

FARADAY TECHNOLOGY CORPORATION 12. STATEMENT OF ACCOUNTS PAYABLES As of December 31, 2021

Supplier	Description	Amount	Note
Accounts payables			The accounts payable
Siliconware Precision Industries Co., Ltd.		\$ 173,482	was all derived from daily operations.
Advanced Semiconductor Engineering
Inc. Chung-Li Branch		47,127
Others	The amount of individual	615,475
	vendor in others does not
	exceed 5% of the account
	balance.
Total		\$ 836,084

FARADAY TECHNOLOGY CORPORATION 13. STATEMENT OF OTHER PAYABLES As of December 31, 2021

Item	Description	Amount	Note
Accrued salaries		\$ 109,179
Research expense payables	Include EDA Tool and Authorization fee	190,972
Employee compensation payables		122,735
Others	The amount of individual	101,909
	item in others does not
	exceed 5% of the account
	balance.
Total		\$ 524,795

FARADAY TECHNOLOGY CORPORATION 14. STATEMENT OF LEASE LIABILITIES

As of December 31, 2021

Item	Lease Term	Discount rate (year)	Ending Balance	Note
Land	2003/08/01~2056/12/31	2.277%	\$ 191,774
Buildings and facilities	2017/12/01~2023/11/30	1.707%	2,304
Transportation equipment	2018/06/27~2023/06/26	1.707%	2,775
Office equipment	2014/02/01~2022/01/31	1.707%	19
Total			\$ 196,872

FARADAY TECHNOLOGY CORPORATION 15. STATEMENT OF NET SALES For the year ended December 31, 2021

(Amounts in Thousands of New Taiwan Dollars)
----------------------------------------------	--	--	--	--

Item	Description	Amount	Note
Sales of goods		\$ 4,729,306
Rendering of services		1,341,146
Silicon intellectual property license		639,707
Net operating revenues		\$ 6,710,159

FARADAY TECHNOLOGY CORPORATION 16. STATEMENT OF OPERATING COSTS For the year ended December 31, 2021

		(Amounts in Thousands of New Taiwan Dollars)
--	--	----------------------------------------------	--

Item	Description	Amount	Note
Direct material
Beginning of year		\$ -
Add: Raw material purchased		2,769,021
Less: Raw material, end of year		-
Direct material uesd		2,769,021
Direct labor		-
Manufacturing Expenses		1,840,130
Manufacturing Costs		4,609,151
Add: Work in process, beginning of year		386,049
Returns for rework		31,517
Less: Work in process, end of year		(785,042)
Scrap		(4,324)
Cost of Finished Goods		4,237,351
Add: Finished goods, beginning of year		127,569
Others		14,893
Less: Finished goods, ending of year		(476,523)
Sample		(7,571)
Picking for rework		(29,513)
Scrap		(1,365)
Revenue from sales of scrap		(719)
Add: Employee compensation		8,575
Less: Gain on inventory valuation		(2,860)
Add: Loss on scrap of inventories		5,689
Total Operating Costs		\$ 3,875,526

FARADAY TECHNOLOGY CORPORATION 17. STATEMENT OF MANUFACTURING EXPENSES For the year ended December 31, 2021

Item	Description	Amount	Note
Variable manufacturing expenses
C/P		\$ 76,198
ASSY		1,473,348
F/T		214,891
Subtotal		1,764,437
Fixed manufacturing expenses
Wages and salaries		47,570
Grinding expense		9,604
Shipping expense		7,805
Others	The amount of individual	10,714
	item in others does not
	exceed 5% of the account
Subtotal	balance.	75,693
Total		\$ 1,840,130

FARADAY TECHNOLOGY CORPORATION 18. STATEMENT OF SELLING EXPENSES For the year ended December 31, 2021

Item	Description	Amount		Note
Wages and salaries		\$	67,708
Royalty			50,241
Commissions expense			8,581
Shipping expense			8,512
Other expense	The amount of individual		16,144
	item in others does not
	exceed 5% of the account
	balance.
Total		\$	151,186

FARADAY TECHNOLOGY CORPORATION 19. STATEMENT OF ADMINISTRATIVE EXPENSES For the year ended December 31, 2021

Item	Description	Amount	Note
Wages and salaries		\$ 200,476
Other expense	The amount of individual item in others does not exceed 5% of the account	94,415
Total	balance.	\$ 294,891

FARADAY TECHNOLOGY CORPORATION 20. STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES For the year ended December 31, 2021

				(Amounts in Thousands of New Taiwan Dollars)
Item	Summary	Amount		Note
Wages and salaries		\$	1,001,384
Amortization			249,552
Research and design expense			203,019
Other expense	The amount of individual		217,200
	item in others does not
	exceed 5% of the account
	balance.
Total		\$	1,671,155