Faraday Technology Corporation — Interim / Quarterly Report 2021

Nov 10, 2021

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

Address: No. 5 Li-Hsin Road III, Hsinchu Science Park, Hsinchu City, Taiwan, R.O.C. Telephone: 886-3-578-7888

Notice to Readers

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in thousands of New Taiwan Dollars) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 2021, December 31, 2020 and September 30, 2020 (September 30, 2021 and 2020 are unaudited)

		As of
Assets	Note	September 30, 2021	December 31, 2020	September 30, 2020
Current assets
Cash and cash equivalents	6(1)	\$ 4,278,901	\$ 3,048,331	\$ 2,844,811
Financial assets at fair value through profit or loss, current	6(2)	25,373	23,497	23,192
Contract assets, current	6(15), 6(16), 7	116,385	137,475	131,383
Notes receivable, net	6(16)	3,622	1,360	3,552
Accounts receivable, net	6(4), 6(16)	686,747	559,524	806,817
Accounts receivable - related parties, net	6(4), 6(16), 7	96,246	130,254	79,262
Other receivables, net		82,761	113,986	100,579
Inventories, net	6(5)	1,004,609	500,634	692,510
Other current assets	6(6), 7	210,531	181,234	317,432
Costs to fulfill a contract, current	6(15)	31,465	5,961	7,937
Total current assets		6,536,640	4,702,256	5,007,475
Non-current assets
Financial assets at fair value through other comprehensive income, non-current	6(3)	2,864,742	2,245,962	1,584,649
Financial assets measured at amortized cost, non-current	8	15,564	16,433	16,448
Property, plant and equipment	6(8)	508,636	539,322	549,139
Right-of-use assets	6(17)	218,230	234,275	246,885
Intangible assets	6(9), 7	541,861	259,256	334,895
Deferred tax assets	4	27,818	48,775	45,754
Refundable deposits		56,581	11,430	11,619
Other non-current assets	6(10)	158,787	141,447	-
Total non-current assets		4,392,219	3,496,900	2,789,389
Total assets		\$ 10,928,859	\$ 8,199,156	\$ 7,796,864

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 2021, December 31, 2020 and September 30, 2020 (September 30, 2021 and 2020 are unaudited) (Expressed in thousands of New Taiwan Dollars)

		As of
Liabilities and Equity	Note	September 30, 2021	December 31, 2020	September 30, 2020
Current liabilities
Financial liabilities at fair value through profit or loss, current	6(2)	\$ 1,378	\$ 1,504	\$ -
Contract liabilities, current	6(15), 7	1,096,919	476,604	211,263
Notes payable		3	3	3
Accounts payable		916,516	481,775	769,599
Accounts payable - related parties	7	219,363	162,940	385,824
Payables on equipment		9,328	-	-
Other payables	6(12)	603,279	392,146	361,515
Current tax liabilities	4	99,937	50,343	60,893
Lease liabilities, current	6(17)	24,198	32,575	38,551
Other current liabilities		7,675	16,195	21,459
Total current liabilities		2,978,596	1,614,085	1,849,107
Non-current liabilities
Deferred tax liabilities	4	9,062	6,810	8,754
Lease liabilities, non-current	6(17)	202,601	209,836	217,114
Long-term payables	6(12)	183,546	16,321	40,974
Long-term deferred revenue		1,185	2,715	3,190
Defined benefit liabilities, non-current	4	6,330	8,395	23,817
Total non-current liabilities		402,724	244,077	293,849
Total liabilities		3,381,320	1,858,162	2,142,956
Equity attributable to the parent company
Capital	6(14)
Common stock		2,485,503	2,485,503	2,485,503
Additional paid-in capital	6(14)	731,112	724,574	724,281
Retained earnings	6(14)
Legal reserve		1,551,782	1,510,216	1,510,216
Special reserve		-	369,710	369,710
Unappropriated earnings		1,247,801	491,085	454,608
Other components of equity		1,319,765	712,849	62,106
Equity attributable to the parent company	6(14)	7,335,963	6,293,937	5,606,424
Non-controlling interests	6(14)	211,576	47,057	47,484
Total equity		7,547,539	6,340,994	5,653,908
Total liabilities and equity		\$ 10,928,859	\$ 8,199,156	\$ 7,796,864

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three-month and nine-month periods ended September 30, 2021 and 2020 (Expressed in thousands of New Taiwan Dollars, except for earnings per share)

			For the three-month periods ended September 30,		For the nine-month periods ended September 30,
	Note	2021	2020	2021	2020
Net sales	6(15), 7	\$ 2,217,822	\$ 1,493,492	\$ 5,440,649	\$ 4,065,189
Operating costs	6(5), 6(18), 7	(1,073,226)	(792,201)	(2,708,823)	(2,134,481)
Gross profit		1,144,596	701,291	2,731,826	1,930,708
Operating expenses	6(9), 6(18)
Selling expenses		(97,706)	(79,552)	(257,520)	(207,125)
Administrative expenses		(98,701)	(83,358)	(258,671)	(217,244)
Research and development expenses	7	(507,674)	(470,099)	(1,482,164)	(1,387,628)
Expected credit gains	6(16)	8,982	7,477	75,415	6,100
Total operating expenses		(695,099)	(625,532)	(1,922,940)	(1,805,897)
Operating income		449,497	75,759	808,886	124,811
Non-operating income and expenses
Interest income	6(19)	2,704	2,162	9,309	8,487
Other income	6(19)	4,618	14,959	85,436	24,819
Other gains and losses	6(19)	(2,123)	(10,735)	(12,774)	162,299
Finance costs	6(19)	(1,456)	(1,633)	(4,440)	(5,056)
Share of profit or loss of associates and joint ventures	6(7)	-	-	-	(23,591)
Total non-operating income and expenses		3,743	4,753	77,531	166,958
Income from continuing operations before income tax		453,240	80,512	886,417	291,769
Income tax expense	4, 6(21)	(64,433)	(20,559)	(125,721)	(58,253)
Net income		388,807	59,953	760,696	233,516
Other comprehensive income	6(20)
Item that will not be reclassified subsequently to profit or loss:
Unrealized gains or losses from equity instruments investments measured at fair value through other comprehensive income		359,166	470,878	618,780	449,379
Item that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		(281)	1,286	(12,242)	(18,156)
Other comprehensive income (net of income tax)		358,885	472,164	606,538	431,223
Total comprehensive income		\$ 747,692	\$ 532,117	\$ 1,367,234	\$ 664,739
Net income attributable to:
Stockholders of the parent	6(22)	\$ 326,805 62,002	\$ 62,193 (2,240)	\$ 677,122 83,574	\$ 244,912 (11,396)
Non-controlling interests	6(14)	\$ 388,807	\$ 59,953	\$ 760,696	\$ 233,516
Comprehensive income (loss) attributable to:
Stockholders of the parent		\$ 685,699	\$ 533,446	\$ 1,284,038	\$ 676,727
Non-controlling interests		61,993	(1,329)	83,196	(11,988)
		\$ 747,692	\$ 532,117	\$ 1,367,234	\$ 664,739
Earnings per share (NTD)	6(22)
Earnings per share-basic		\$ 1.31	\$ 0.25	\$ 2.72	\$ 0.99
Earnings per share-diluted		\$ 1.31	\$ 0.25	\$ 2.71	\$ 0.98

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Expressed in thousands of New Taiwan Dollars) For the nine-month periods ended September 30, 2021 and 2020

					Equity Attributable to the Parent Company
				Retained Earnings		Other Components of Equity
							Unrealized Gain or Loss on Financial
							Assets Measured at
						Exchange	Fair Value through
	Common	Additional	Legal	Special	Unappropriated	Differences on Translation of	Other Comprehensive		Non-Controlling
	Stock	Paid-in Capital	Reserve	Reserve	Earnings	Foreign Operations	Income	Total	Interests	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	\$ 59,024	\$ 5,262,740
Appropriation and distribution of 2019 retained earnings
Legal reserve	-	-	36,538	-	(36,538)	-	-	-	-	-
Cash dividends	-	-	-	-	(273,405)	-	-	(273,405)	-	(273,405)
Special reserved	-	-	-	(142,500)	142,500	-	-	-	-	-
Net income for the nine-month ended September 30, 2020	-	-	-	-	244,912	-	-	244,912	(11,396)	233,516
Other comprehensive income for the nine-month ended September 30, 2020	-	-	-	-	-	(17,564)	449,379	431,815	(592)	431,223
Total comprehensive income for the nine-month ended September 30, 2020	-	-	-	-	244,912	(17,564)	449,379	676,727	(11,988)	664,739
Disposal of investments accounted for using equity method	-	(1,531)	-	-	-	-	-	(1,531)	-	(1,531)
Change in subsidiaries' ownership	-	917	-	-	-	-	-	917	448	1,365
Balance as of September 30, 2020	\$ 2,485,503	\$ 724,281	\$ 1,510,216	\$ 369,710	\$ 454,608	\$ (103,101) \$	165,207	\$ 5,606,424	\$ 47,484	\$ 5,653,908
Balance as of January 1, 2021	\$ 2,485,503	\$ 724,574	\$ 1,510,216	\$ 369,710	\$ 491,085	\$ (113,671) \$	826,520	\$ 6,293,937	\$ 47,057	\$ 6,340,994
Appropriation and distribution of 2020 retained earnings
Legal reserve	-	-	41,566	-	(41,566)	-	-	-	-	-
Cash dividends	-	-	-	-	(248,550)	-	-	(248,550)	-	(248,550)
Special reserved	-	-	-	(369,710)	369,710	-	-	-	-	-
Net income for the nine-month ended September 30, 2021	-	-	-	-	677,122	-	-	677,122	83,574	760,696
Other comprehensive income for the nine-month ended September 30, 2021	-	-	-	-	-	(11,864)	618,780	606,916	(378)	606,538
Total comprehensive income for the nine-month ended September 30, 2021	-	-	-	-	677,122	(11,864)	618,780	1,284,038	83,196	1,367,234
Change in subsidiaries' ownership	-	6,538	-	-	-	-	-	6,538	81,323	87,861
Balance as of September 30, 2021	\$ 2,485,503	\$ 731,112	\$ 1,551,782	\$ -	\$ 1,247,801	\$ (125,535) \$	1,445,300	\$ 7,335,963	\$ 211,576	\$ 7,547,539

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine-month periods ended September 30, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars)

	For the nine-month periods ended				For the nine-month periods ended
	September 30,				September 30,
Description	2021	2020	Description		2021	2020
Cash flows from operating activities:			Cash flows from investing activities:
Net income before tax	\$ 886,417	\$ 291,769	Proceeds from principal of financial assets measured at amortized cost upon maturity	\$	869	\$ 15,318
Adjustments for non-cash gain or loss:			Proceeds from disposal of investments accounted for using equity method		24,203	209,489
Depreciation	74,795		77,128 Acquisition of property, plant and equipment		(6,524)	(27,211)
Amortization	233,924		258,124 Disposal of property, plant and equipment		144	-
Expected credit gains	(75,415)		(6,100) Refundable deposits		(45,151)	(4,197)
Gain on financial assets and liabilities at fair value through profit or loss	(2,002)		(1,176) Acquisition of intangible assets		(203,424)	(216,872)
Interest expense	4,440	5,056	Net cash used in investing activities		(229,883)	(23,473)
Interest income	(9,309)	(8,270)
Dividend income	(69,730)		- Cash flows form financing activities:
Share-based payment expenses	-		1,365 Cash payments for the principal portion of the lease liability		(28,290)	(26,624)
Share of loss of associates and joint ventures accounted for using equity method	-		23,591 Cash dividends		(248,550)	(273,405)
Loss on disposal of property, plant and equipment	-		624 Change in non-controlling interests (increase in subsidiary's capital by cash)		87,861	-
Gains on disposal of investments	-	(172,487)	Net cash used in financing activities		(188,979)	(300,029)
Others	(64)		(1,594) Effect of exchange rate changes on cash and cash equivalents		(8,708)	(22,898)
Changes in operating assets and liabilities:
Contract assets	21,090		385,984 Net increase in cash and cash equivalents		1,230,570	68,756
Notes receivable	(2,262)		888 Cash and cash equivalents at beginning of period		3,048,331	2,776,055
Accounts receivable	(51,808)		(118,525) Cash and cash equivalents at end of period	\$	4,278,901	\$ 2,844,811
Accounts receivable - related parties	34,008	91,663
Other receivables	7,376	(23,123)
Inventories	(503,975)	(57,956)
Prepayments	(58,845)	(125,729)
Other current assets	(108)	(31,279)
Cost to fulfill a contract	(25,504)	(7,937)
Contract liabilities	620,315	(91,761)
Notes Payables	-	(1)
Accounts payable	434,741	(52,889)
Accounts payable - related parties	56,423	127,392
Other payables	62,105	(89,671)
Other current liabilities	(8,520)	6,941
Defined benefit liabilities	(2,065)	2,198
Other operating liabilities	(1,530)	(1,566)
Cash generated from operations	1,624,497	482,659
Interest received	8,955	8,823
Dividend received	69,730	-
Interest paid	(4,440)	(5,056)
Income tax paid	(40,602)	(71,270)
Net cash provided by operating activities	\$ 1,658,140	\$ 415,156

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 consolidated financial statements of the Company and its subsidiaries (the "Group") for the nine-month periods ended September 30, 2021 and 2020 were authorized for issue in accordance with a resolution of the Board of Directors' meeting on October 26, 2021.

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 Group 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 Group.

(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 Group 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

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (a) Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements
• A. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3) The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential "day 2" gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.
• B. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

• C. Onerous Contracts Cost of Fulfilling a Contract (Amendments to IAS 37) The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
• D. Annual Improvements to IFRS Standards 2018 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee's leasehold improvements.

Amendment to IAS 41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

The abovementioned amendments that are applicable for annual periods beginning on or after January 1, 2022 have no material impact on the Group.

(3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Group 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

(a) IFRS 10 "Consolidated Financial Statements" and IAS 28 "Investments in Associates and Joint Ventures" — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 "Consolidated Financial Statements" and "IAS 28 Investments in Associates and Joint Ventures", in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors' interests in the associate or joint venture.

(b) IFRS 17 Insurance Contracts

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in June 2020. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after January 1, 2023 (from the original effective date of January 1, 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after January 1, 2023.

(c) Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

(d) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

(e) Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

(f) Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The above-mentioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group'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 Group.

4. Summary of Significant Accounting Policies

(1) Statement of Compliance

The consolidated financial statements of the Group for the nine-month periods ended September 30, 2021 and 2020 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers ("the Regulations") and IAS 34 Interim Financial Reporting as endorsed and became effective by the FSC.

(2) Basis of Preparation

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

(3) Basis of consolidation

Preparation principle of consolidated financial statements

Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if and only if the Company has:

• (a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
• (b) exposure, or rights, to variable returns from its involvement with the investee, and
• (c) the ability to use its power over the investee to affect its returns

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• (a) the contractual arrangement with the other vote holders of the investee
• (b) rights arising from other contractual arrangements
• (c) the Company voting rights and potential voting rights

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Company loses control of a subsidiary, it:

• (a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;
• (b) derecognizes the carrying amount of any non-controlling interest;
• (c) recognizes the fair value of the consideration received;
• (d) recognizes the fair value of any investment retained;
• (e) recognizes any surplus or deficit in profit or loss; and
• (f) reclassifies the parent's share of components previously recognized in other comprehensive income to profit or loss.

The consolidated entities are listed as follows:

			Percentage of ownership (%)
				As of
Investor	Subsidiary	Main businesses	September 30, 2021	December 31, 2020	September 30, 2020
	The Company Faraday Technology Corporation (USA)	Sales representative in America	100.00%	100.00%	100.00%
	The Company Faraday Technology Japan Corporation	Sales representative in Japan	99.95%	99.95%	99.95%
	The Company Faraday Technology-B.V.I. (B.V.I.)	General investing	100.00%	100.00%	100.00%
	The Company Faraday Technology Vietnam Company Limited	IC designing service	100.00%	100.00%	100.00%
	The Company Chih-Hung Investment Corporation (Chih-Hung)	General investing	100.00%	100.00%	100.00%
	The Company Sheng Bang Investment Corporation (Sheng Bang)	General investing	100.00%	100.00%	100.00%
Chih-Hung	Grain Media Inc.	IC designing, marketing and customer service	19.42%	19.42%	19.42%
Chih-Hung	Innopower Technology Corporation (Innopower)	Silicon Intellectual Property designing	100.00%	100.00%	100.00%
Chih-Hung	FaradayTek Solutions India Private Limited	IC designing service	1.00%	1.00%	1.00%

				Percentage of ownership (%)
				As of
			September 30,	December 31,	September 30,
Investor	Subsidiary	Main businesses	2021	2020	2020
Sheng Bang	Grain Media Inc.	IC designing, marketing	80.58%	80.58%	80.58%
		and customer service
Sheng Bang	FaradayTek Solutions India Private Limited	IC designing service	99.00%	99.00%	99.00%
Innopower	Bright Capital Group Limited (BCGL)	General investing	100.00%	100.00%	100.00%
BCGL	Faraday Technology Corporation (Suzhou)	IC designing, marketing and customer service	100.00%	100.00%	100.00%
B.V.I.	Faraday Technology Corporation -Mauritius (Mauritius)	General investing	100.00%	100.00%	100.00%
B.V.I.	GrainTech Electronics Limited	IC designing, marketing and customer service	100.00%	100.00%	100.00%
B.V.I.	Faraday Technology Corporation (Samoa)	General investing	100.00%	100.00%	100.00%
B.V.I.	Artery Technology Corporation (Cayman)	General investing	66.42%	67.20%	67.20%
Samoa	United Business Service Corporation	IC designing, marketing and customer service	100.00%	100.00%	100.00%
Cayman	Artery Technology Corporation, Ltd.	IC designing, marketing and customer service	100.00%	100.00%	100.00%
Mauritius	Faraday Technology China Corporation	IC designing, marketing and customer service	100.00%	100.00%	100.00%
Mauritius	Grain Media Technology (Shenzhen) Co., Ltd. (Note)	IC designing, marketing and customer service	100.00%	100.00%	100.00%
Cayman	Artery Technology Company	IC designing, marketing and customer service	100.00%	100.00%	100.00%
United Business Service Corporation	United Creative Solution Corporation	IC designing, marketing and customer service	100.00%	100.00%	100.00%
United Business Service	Innopower Technology Corporation (Chongqing)	IC designing, marketing and customer service	100.00%	100.00%	100.00%

Corporation

We did not review the financial statements of certain subsidiaries, whose statements reflect total assets of NT\$3,439,520 thousand and NT\$1,941,664 thousand as of September 30, 2021 and September 30, 2020, respectively, and total liabilities of NT\$807,337 thousand and NT\$277,133 thousand as of September 30, 2021 and 2020, respectively, total comprehensive income of NT\$198,017 thousand and NT\$(43,475) thousand for the three-month periods ended September 30, 2021 and 2020, respectively, and total comprehensive income of NT\$375,950 thousand and NT\$64,009 thousand for the nine-month periods ended September 30, 2021 and 2020, respectively.

Notes: Grain Media Technology (Shenzhen) Co., Ltd. filed for liquidation during the year ended December 31, 2018. The liquidation procedures are still in progress as of the report date.

• (4) Except for the accounting policies listed under Note 4(5) ~ (6), the same accounting policies have been followed in the consolidated financial statements for the nine-month periods ended September 30, 2021 as were applied in the preparation of the Company's consolidated financial statements for the year ended December 31, 2020. For the summary of other significant accounting policies, please refer to the consolidated financial statements for the year ended December 31, 2020.
• (5) Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted and disclosed for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.
• (6) Interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. The estimated average annual effective income tax rate only includes current income tax. The recognition and measurement of deferred tax follows annual financial reporting requirements in accordance with IAS 12. The Group recognizes the effect of change in tax rate for deferred taxes in full if the new tax rate is enacted by the end of the interim reporting period, by charging to profit or loss, other comprehensive income, or directly to equity.

5. Significant Accounting Judgments, Estimates and Assumptions

The same significant accounting judgments, estimates and assumptions have been followed in the consolidated financial statements for the nine-month periods ended September 30, 2021 and 2020 as were applied in the preparation of the Company's consolidated financial statements for the year ended December 31, 2020. Please refer to the consolidated financial statements for the year ended December 31, 2020.

6. Contents of Significant Accounts

(1) Cash and cash equivalents

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Cash
Cash on hand	\$473	\$431	\$459
Checking and savings	1,846,093	1,636,071	1,427,721
Time deposits	2,432,335	1,341,829	1,416,631
Cash equivalents-Commercial
paper with repurchase
agreements	-	70,000	-
Total	\$4,278,901	\$3,048,331	\$2,844,811

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

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Financial assets mandatorily
measured at fair value through
profit or loss:
Derivatives not designated as
hedging instruments	\$-	\$-	\$129
Funds	25,373	23,497	23,063
Total	\$25,373	\$23,497	\$23,192
Current	\$25,373	\$23,497	\$23,192

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Financial liabilities mandatorily
measured at fair value through
profit or loss:
Derivatives not designated as
hedging instruments	\$1,378	\$1,504	\$-
Current	\$1,378	\$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
	September 30, 2021	December 31, 2020	September 30, 2020
Equity instrument investments measured at fair value through other comprehensive income – Non-current:
Unlisted companies stocks	\$2,864,742	\$2,245,962	\$1,584,649

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

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

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Accounts receivable	\$712,734	\$666,989	\$882,150
Subtotal (gross carrying amount)	\$712,734	666,989	882,150
Less:Allowance for doubtful
accounts	(25,987)	(107,465)	(75,333)
Subtotal	686,747	559,524	806,817
Accounts receivable - related
parties, net	96,246	130,254	79,262
Subtotal (gross carrying amount)	96,246	130,254	79,262
Total	\$782,993	\$689,778	\$886,079

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 is amounted to NT\$808,980 thousand, NT\$797,243 thousand, and NT\$961,412 thousand for September 30, 2021, December 31, 2020, and September 30, 2020, respectively. Please refer to Note 6(16) for more details on impairment of account receivable, and Note 12 for credit risk disclosure.

(5) Inventories

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Work in process	\$773,069	\$351,411	\$274,578
Finished goods	231,540	149,223	417,932
Total	\$1,004,609	\$500,634	\$692,510

The cost of inventories recognized in expenses amounted to NT\$1,073,226 thousand and NT\$792,201 thousand for the three-month periods ended September 30, 2021 and 2020, respectively, including the reversal gain (loss) of NT\$931 thousand and NT\$(9,940) thousand for the three -month periods ended September 30, 2021 and 2020. The gain from reversal of allowance for decline in market value and obsolescence was recognized due to the sales of the Company's previously written-down inventories during the three-month period ended September 30, 2021.

The cost of inventories recognized in expenses amounted to NT\$2,708,823 thousand and NT\$2,134,481 thousand for the nine-month periods ended September 30, 2021 and 2020, respectively, including the loss of NT\$4,904 thousand and NT\$17,268 thousand for the nine -month periods ended September 30, 2021 and 2020.

No inventories were pledged.

(6) Other current assets

		As of
	September 30, 2021	December 31, 2020	September 30, 2020
Prepayments	\$151,369	\$109,864	\$214,661
Prepaid expenses	41,960	50,844	79,521
Other	17,202	20,526	23,250
Total	\$210,531	\$181,234	\$317,432

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

(7) Investments accounted for using equity method

There were no investments accounted for using equity method as of September 30, 2021, December 31, 2020, and September 30, 2020.

The Group's disposed shares of Fresco Logic Inc. with proceeds amounting to NT\$235,479 thousand (recognized as other receivables NT\$25,990 thousand) and recognized a gain on disposal of investment in the amount of NT\$172,487 thousand during the three-month period ended June 30, 2020. The Group received NT\$24,203 thousand and recognized foreign exchange loss in the amount of NT\$1,787 thousand during the three-month period ended June 30, 2021.

The Group's investment in Fresco Logic Inc. was not individually material. The aggregated financial information based on the Group's share of Fresco Logic Inc. is as follows:

	Three-month periods ended September 30		Nine-month periods ended September 30
	2021	2020	2021	2020
Net loss from continuing
operations	\$-	\$-	\$-	\$(23,591)
Other comprehensive income
(post-tax)	-	-	-	-
Total comprehensive income	\$-	\$-	\$-	\$(23,591)

(8) Property, plant and equipment

	As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Property, plant and equipment
for own-use	\$508,636	\$539,322	\$549,139

					Office
		Buildings		Computer	furniture and	Miscellaneous
	Land	and facilities	Machinery	equipment	fixtures	equipment	Total
Cost:
As of January 1, 2021	\$33,576	\$580,809	\$40,676	\$164,811	\$22,133	\$1,555	\$843,560
Additions	-	970	6,434	7,335	1,113	-	15,852
Disposals	-	-	-	-	(608)	(84)	(692)
Exchange effect	-	(700)	-	228	(323)	(8)	(803)
As of September 30, 2021	\$33,576	\$581,079	\$47,110	\$172,374	\$22,315	\$1,463	\$857,917
As of January 1, 2020	\$33,576	\$577,055	\$40,858	\$177,244	\$24,179	\$1,615	\$854,527
Additions	-	8,033	-	14,654	959	-	23,646
Disposals	-	(4,087)	-	-	(2,943)	-	(7,030)
Exchange effect	-	(211)	-	(347)	(290)	(34)	(882)
As of September 30, 2020	\$33,576	\$580,790	\$40,858	\$191,551	\$21,905	\$1,581	\$870,261
Depreciation and impairment:
As of January 1, 2021	\$-	\$181,473	\$15,262	\$88,710	\$17,874	\$919	\$304,238
Additions	-	10,860	5,575	27,940	1,548	160	46,083
Disposals	-	-	-	-	(548)	-	(548)
Exchange effect	-	(112)	-	(619)	246	(7)	(492)
As of September 30, 2021	\$-	\$192,221	\$20,837	\$116,031	\$19,120	\$1,072	\$349,281
As of January 1, 2020	\$-	\$170,775	\$14,187	\$74,093	\$17,957	\$707	\$277,719
Additions	-	10,893	5,162	32,182	1,998	197	50,432
Disposals	-	(3,846)	-	-	(2,560)	-	(6,406)
Exchange effect	-	(66)	-	(314)	(216)	(27)	(623)
As of September 30, 2020	\$-	\$177,756	\$19,349	\$105,961	\$17,179	\$877	\$321,122
Net carrying amount as of:
September 30, 2021	\$33,576	\$388,858	\$26,273	\$56,343	\$3,195	\$391	\$508,636
December 31, 2020	\$33,576	\$399,336	\$25,414	\$76,101	\$4,259	\$636	\$539,322
September 30, 2020	\$33,576	\$403,034	\$21,509	\$85,590	\$4,726	\$704	\$549,139

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.

(9) Intangible assets

	Software
	Nine-month period ended	Nine-month period ended
	September 30, 2021	September 30, 2020
Cost
Beginning balance	\$964,196	\$1,143,349
Addition-acquired separately	519,677	44,506
Decrease-derecognition	(606,246)	(204,132)
Exchange differences	(3,926)	(4,281)
Ending balance	\$873,701	\$979,442
Accumulated Amortization
Beginning balance	\$704,940	\$592,782
Amortization	233,924	258,124
Decrease-derecognition	(606,246)	(204,132)
Exchange differences	(778)	(2,227)
Ending balance	\$331,840	\$644,547
Net carrying amount as of:
September 30, 2021	\$541,861
December 31, 2020	\$259,256
September 30, 2020	\$334,895

The amortization expenses of intangible assets are as follows:

	Three-month periods ended		Nine-month periods ended
	September 30			September 30
	2021	2020	2021	2020
Administrative expenses	\$41	\$23	\$94	\$62
Research and development expenses	71,564	74,661	233,830	258,062
Total	\$71,605	\$74,684	\$233,924	\$258,124

(10) Other non-current assets

	As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Long term prepayments	\$158,787	\$141,447	\$-

The other non-current assets were primarily attributable to several agreements which the Group entered into for certain silicon intellectual property license.

(11) Short-term loans

The Group's credit limit from short-term loans was NT\$1,156,800 thousand, NT\$1,302,250 thousand and NT\$1,123,750 thousand as of September 30, 2021, December 31, 2020, and September 30, 2020, respectively, and all of which was unused.

(12) Long-term payables

The payables were primarily attributable to several agreements which the Group entered into for certain software license. As of September 30, 2021, December 31, 2020, and September 30, 2020, future payments for other long-term payables were as follows:

	As of
	September 30,	December 31,	September 30,
Year of payment	2021	2020	2020
2020	\$-	\$-	\$84,901
2021	10,189	93,154	47,268
2022	215,835	15,810	30,885
2023	108,881	511	350
2024	45,614	-	-
Subtotal	380,519	109,475	163,404
Less: Current portion (Recognized
as other payables)	(196,973)	(93,154)	(122,430)
Total	\$183,546	\$16,321	\$40,974

(13)Post-employment benefits

Defined contribution plan

Expenses under the defined contribution plan for the three-month periods ended September 30, 2021 and 2020 are NT\$10,858 thousand and NT\$11,613 thousand, respectively, and expenses under the defined contribution plan for the nine-month periods ended September 30, 2021 and 2020 are NT\$34,084 thousand and NT\$36,199 thousand, respectively.

Defined benefit plan

Expenses under the defined benefit plan for the three-month periods ended September 30, 2021 and 2020 are NT\$198 thousand and NT\$1,671 thousand, respectively, and expenses under the defined benefit plan for the nine-month periods ended September 30, 2021 and 2020 are NT\$592 thousand and NT\$5,013 thousand, respectively.

(14)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), respectively, as of September 30, 2021, December 31, 2020, and September 30, 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 September 30, 2021, December 31, 2020, and September 30, 2020. Each share has one voting right and a right to receive dividends.

B. Additional paid-in capital

	As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Premiums in excess of par	\$594,782	\$594,782	\$594,782
Change in subsidiaries' ownership	133,764	127,226	126,933
Employee stock option and others	2,566	2,566	2,566
Total	\$731,112	\$724,574	\$724,281

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-1090150022, 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 2020 and 2019 earnings distribution and dividends per share as resolved by the shareholders' meeting on July 7, 2021 and May 28, 2020, respectively, are as follows:

	Appropriation of earnings		Dividend per share (NT\$)
	2020	2019	2020	2019
Legal reserve	\$41,566	\$36,538	\$-	\$-
Reversal of special reserve	369,710	142,500	-	-
Common stock-cash dividend	248,550	273,405	1.0	1.1

Please refer to Note 6(18) for more details on employees' compensations and the remunerations to directors and supervisors.

D. Non-controlling interests

	Nine-month periods ended
	September 30
	2021	2020
Beginning balance	\$47,057	\$59,024
Gains (losses) attributable to non-controlling
interests	83,574	(11,396)
Other comprehensive income (losses) attributable
to non-controlling interests, net of tax:
Exchange differences on translation of foreign
operations	(378)	(592)
Change in subsidiaries' ownership	-	448
Non-controlling interests (increase in subsidiary's
capital by cash )	81,323	-
Ending balance	\$211,576	\$47,484

(15)Sales revenue

Analysis of revenue from contracts with customers for the nine-month periods ended September 30, 2021 and 2020 is as follows:

(1) Disaggregation of revenue

	Three-month periods ended		Nine-month periods ended
		September 30	September 30
	2021	2020	2021	2020
Sale of goods	\$1,645,839	\$1,046,310	\$3,603,086	\$2,628,225
Rendering of services	389,792	318,324	1,319,101	1,100,603
Silicon intellectual
property license	182,191	128,858	518,462	336,361
Total	\$2,217,822	\$1,493,492	\$5,440,649	\$4,065,189

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	Three-month periods ended		Nine-month periods ended
		September 30	September 30
	2021	2020	2021	2020
Revenue recognition point:
At a point in time	\$1,815,015	\$1,161,192	\$4,075,531	\$2,926,825
Over time	402,807	332,300	1,365,118	1,138,364
Total	\$2,217,822	\$1,493,492	\$5,440,649	\$4,065,189

(2) Contract balances

A. Contract assets – current

	As of
	September 30,	December 31,	September 30,	January 1,
	2021	2020	2020	2020
Rendering of services	\$116,385	\$137,475	\$131,383	\$517,367

The significant changes in the Group's balances of contract assets for the nine-month periods ended September 30, 2021 and 2020 are as follows:

	Nine-month periods ended September 30
	2021	2020
The opening balance transferred to accounts
receivable	\$135,644	\$481,567
Change in the progress of completion	102,928	103,010
Exchange rate changes	17,689	(7,427)
Impairment	(6,063)	-

B. Contract liabilities – current

	As of
	September 30,	December 31,	September 30,	January 1,
	2021	2020	2020	2020
Sales of goods	\$862,604	\$296,266	\$143,204	\$161,139
Rendering of services	210,358	177,463	63,605	141,623
Silicon intellectual
property license	23,957	2,875	4,454	262
Total	\$1,096,919	\$476,604	\$211,263	\$303,024

The significant changes in the Group's balances of contract liabilities for the nine-month periods ended September 30, 2021 and 2020 are as follows:

	Nine-month periods ended September 30
	2021	2020
The opening balance transferred to revenue	\$441,885	\$276,609
Increase in receipts in advance during the period
(netting the amount incurred and transferred to
revenue during the same period)	1,062,200	184,848

(3) Transaction price allocated to unsatisfied performance obligations

As of September 30, 2021 and September 30, 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\$1,070,972 thousand and NT\$1,366,825 thousand, respectively. The Group 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.

(4) Assets recognized from costs to fulfill a contract

	As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Costs to fulfill a contract, current	\$31,465	\$5,961	\$7,937

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

For the three-month periods ended September 30, 2021 and 2020, amortization expenses amounted to NT\$5,109 thousand and NT\$0 thousand are recognized as operating costs, respectively, and for the nine-month periods ended September 30, 2021 and 2020, amortization expenses amounted to NT\$8,790 thousand and NT\$5,869 thousand are recognized as operating costs, respectively.

(16)Expected credit gains (losses)

	Three-month periods ended September 30		Nine-month periods ended September 30
	2021	2020	2021	2020
Operating expenses –
Expected credit gains (losses)
Contract assets	\$(6,063)	\$-	\$(6,063)	\$-
Account receivables	15,045	7,477	81,478	6,100
Total	\$8,982	\$7,477	\$75,415	\$6,100

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

The Group measures the loss allowance of its contract assets and trade receivables (including note receivables and account receivables) at an amount equal to lifetime expected credit losses. The assessment of the Group's loss allowance as of September 30, 2021, December 31, 2020, and September 30, 2020 is 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
	September 30,	December 31,	September 30,
	2021	2020	2020
Gross carrying amount	\$131,587	\$146,614	\$140,522
Expected credit loss rates	0%~100%	0%~100%	0%~100%
Loss allowance	(15,202)	(9,139)	(9,139)
Carry amount	\$116,385	\$137,475	\$131,383

ii. the Group 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:

2021.09.30

Group 1	Not yet due				Overdue
	(note)	<=30 days	31-60 days		61-90 days	91-120 days		>=121 days	Total
Gross carrying amount	\$634,568	\$73,972	\$19,744		\$60	\$-		\$25,587	\$753,931
Expected credit loss
rates	-%	-%		2%	10%	50%		100%
Lifetime expected credit losses	-	-		394	6	-		25,587	25,987
Subtotal	\$634,568	\$73,972	\$19,350		\$54	\$-		\$-	\$727,944
Group 2					Overdue
	Not yet due (note)	<=120 days	121-150 days	151-180 days		181-270 271-300 days days		>=301 days	Total
Gross carrying
amount Expected credit loss	\$28,989	\$29,682	\$-	\$-		\$-	\$-	\$-	\$58,671
rates	-%	-%	2%	10%		50%	80%	100%
Lifetime expected credit losses	-	-	-		-	-	-	-	-
Subtotal	\$28,989	\$29,682	\$-	\$-		\$-	\$-	\$-	\$58,671
Carrying amount									\$786,615
2020.12.31
Group 1	Not yet due				Overdue
	(note)	<=30 days	31-60 days		61-90 days	91-120 days		>=121 days	Total
Gross carrying amount	\$529,047	\$78,439	\$7,389		\$-	\$6,592		\$92,137	\$713,604
Expected credit loss rates	-%	-%		2%	10%	50%		100%
Lifetime expected
credit losses	-	-		147	-	3,296		92,137	95,580
Subtotal	\$529,047	\$78,439	\$7,242		\$-	\$3,296		\$-	\$618,024

Group 2	Overdue
	Not yet due	<=120	121-150	151-180		181-270	271-300		>=301
	(note)	days	days	days		days	days		days	Total
Gross carrying
amount	\$24,256	\$19,511	\$-	\$21,827	\$19,405			\$-	\$-	\$84,999
Expected credit loss
rates	-%	-%	2%	10%		50%		80%	100%
Lifetime expected
credit losses	-	-	-	2,183		9,702		-	-	11,885
Subtotal	\$24,256	\$19,511	\$-	\$19,644		\$9,703		\$-	\$-	\$73,114
Carrying amount										\$691,138
2020.09.30
	Not yet due				Overdue
	(note)	<=30 days	31-60 days	61-90 days		91-120 days			>=121 days	Total
Gross carrying
amount	\$710,227	\$111,665	\$16,346	\$37,152			\$14,342		\$75,232	\$964,964
Expected credit loss
rates	-%	-%	0%~2%	0%~10%			2%~50%		10%~100%
Lifetime expected
credit losses	-	-	330	1,595			7,171		66,237	75,333
Subtotal	\$710,227	\$111,665	\$16,016	\$35,557			\$7,171		\$8,995	\$889,631

Note: All of the Group's note receivables are not yet due.

The movement in the provision for impairment of accounts receivables for the nine-month periods ended September 30, 2021 and 2020 is as follows:

	Contract	Accounts
	assets	receivables
As of January 1, 2021	\$9,139	\$107,465
Increase (reversal) for the current period	6,063	(81,478)
As of September 30, 2021	\$15,202	\$25,987
As of January 1, 2020	\$9,139	\$81,433
Reversal for the current period	-	(6,100)
As of September 30, 2020	\$9,139	\$75,333

(17)Leases

A. The Group as lessee

The Group 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 Group 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
	September 30,	December 31,	September 30,
	2021	2020	2020
Land	\$187,537	\$191,527	\$192,857
Buildings and facilities	27,612	42,044	53,005
Transportation equipment	3,044	583	875
Office equipment	37	121	148
Total	\$218,230	\$234,275	\$246,885

During the nine-month periods ended September 30, 2021 and 2020, the additions to right-of-use assets of the Group amounted to NT\$ 13,063 thousand and NT\$19,905 thousand, respectively.

(b) Lease liability

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Lease liability	\$226,799	\$242,411	\$255,665
Lease liability-current	\$24,198	\$32,575	\$38,551
Lease liability-noncurrent	202,601	209,836	217,114
Total	\$226,799	\$242,411	\$255,665

Please refer to Note 6 (19) for the interest on lease liability recognized during the nine-month periods ended September 30, 2021 and 2020, and refer to Note 12 (5) for the maturity analysis for lease liabilities as of September 30, 2021, December 31, 2020 and September 30, 2020.

b. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

	Three-month periods ended		Nine-month periods ended
	September 30		September 30
	2021	2020	2021	2020
Land	\$1,330	\$1,330	\$3,990	\$3,990
Buildings and facilities	8,330	7,762	23,770	21,748
Transportation equipment	285	292	868	875
Office equipment	28	27	84	83
Total	\$9,973	\$9,411	\$28,712	\$26,696

c. Income and costs relating to leasing activities

	Three-month periods ended		Nine-month periods ended
	September 30		September 30
	2021	2020	2021	2020
The expense relating to
short-term leases	\$770	\$1,835	\$1,618	\$4,139

For the rent concession arising as a direct consequence of covid-19 pandemic, the Group recognized as reduction in rental expenses for the three-month period ended September 30, 2020 and the nine-month period ended September 30, 2020 were NT\$0 thousand and NT\$1,594 thousand, respectively, to reflect changes in lease payments that arise from such rent concessions to which the Group has applied the practical expedient.

d. Cash outflow relating to leasing activities

During the nine-month periods ended September 30, 2021 and 2020, the Group's total cash outflow for leases amounted to NT\$33,972 thousand and NT\$35,722 thousand, respectively.

• e. Other information relating to leasing activities
• Extension option

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

(18)Summary statement of employee benefits, depreciation and amortization expenses by function during the three-month periods and nine-month periods ended September 30, 2021 and 2020:

		Three-month periods ended September 30
		2021		2020
	Operating	Operating		Operating	Operating	Total
	costs	expenses	Total	costs	expenses
Employee benefits expense
Salaries	\$14,793	\$392,732	\$407,525	\$11,720	\$371,581	\$383,301
Labor and health insurance	903	28,145	29,048	812	24,665	25,477
Pension	694	10,362	11,056	592	12,692	13,284
Others	284	6,871	7,155	270	5,942	6,212
Depreciation	267	25,021	25,288	225	25,776	26,001
Amortization	-	71,605	71,605	-	74,684	74,684

		Nine-month periods ended September 30
		2021		2020
	Operating	Operating Total		Operating	Operating
	costs	expenses		costs	expenses	Total
Employee benefits expense
Salaries	\$38,373	\$1,146,516	\$1,184,889	\$32,331	\$1,029,606	\$1,061,937
Labor and health insurance	2,639	85,689	88,328	2,417	73,039	75,456
Pension	1,567	33,109	34,676	1,772	39,440	41,212
Others	807	21,137	21,944	790	17,659	18,449
Depreciation	767	74,028	74,795	670	76,458	77,128
Amortization	-	233,924	233,924	-	258,124	258,124

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 twothirds 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 nine-month period ended September 30, 2021, the Company estimated the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$100,214 thousand and NT\$0 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\$47,917 thousand and NT\$0 thousand for the three-month periods ended September 30, 2021, respectively. The Company recognized the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$100,214 thousand and NT\$0 thousand for the nine-month periods ended September 30, 2021, respectively. Based on profit of the nine-month period ended September 30, 2020, the Company estimated the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$36,572 thousand and NT\$0 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\$10,073 thousand and NT\$0 thousand for the three-month period ended September 30, 2020, respectively. The Company recognized the amounts of the employees' compensation and remuneration to directors and supervisors to be NT\$36,572 thousand and NT\$0 thousand for the nine-month period ended September 30, 2020, respectively.

A resolution was approved in a meeting of the Board of Directors held on February 23, 2021 to distribute NT\$ 39,970 thousand and NT\$ 248 thousand in cash as employees' compensation and remuneration to directors, respectively. There were no differences between the aforementioned approved amounts and the amounts charged against earnings in 2020.

A resolution was approved in a meeting of the Board of Directors held on February 13, 2020 to distribute NT\$51,662 thousand and NT\$216 thousand in cash as employees' compensation and remuneration to directors, respectively. There were no differences between the aforementioned approved amounts and the amounts charged against earnings in 2019.

(19)Non-operating income and expenses

A. Interest income

	Three-month	periods ended		Nine-month periods ended
	September 30		September 30
	2021	2020	2021	2020
Interest income
Financial assets measured
at amortized cost	\$2,704	\$2,162	\$9,309	\$8,487

B. Other income

	Three-month	periods ended	Nine-month periods ended
	September 30		September 30
	2021	2020	2021	2020
Dividend income	\$-	\$-	\$69,730	\$-
Other income-other	4,618	14,959	15,706	24,819
Total	\$4,618	\$14,959	\$85,436	\$24,819

C. Other gains and losses

	Three-month	periods ended	Nine-month periods ended
		September 30 September 30
	2021	2020	2021	2020
Losses on disposal of property,
plant and equipment	\$-	\$(240)	\$-	\$(624)
Gains on disposal of investments	-	-	-	172,487
Foreign exchange gains	4,745	3,948	8,314	5,103
(Losses) gains on financial assets
at fair value through profit or
loss	(5,201)	(4,662)	2,002	1,176
Others	(1,667)	(9,781)	(23,090)	(15,843)
Total	\$(2,123)	\$(10,735)	\$(12,774)	\$162,299

D. Finance costs

	Three-month periods ended		Nine-month periods ended
	September 30			September 30
	2021	2020	2021	2020
Interest expenses on lease
liabilities	\$1,456	\$1,633	\$4,440	\$5,056

(20)Components of other comprehensive income

For the three-month period ended September 30, 2021

				Income tax relating to	Other
		Reclassification	Other	components	comprehensive
	Arising during the	adjustments	comprehensive	of other	income,
	period	during the period	income, before tax	comprehensive income	net of tax
Items that will not to be reclassified
subsequently to profit or loss:
Unrealized gains or losses from
valuation on equity instruments
measured at fair value through
other comprehensive income	\$359,166	\$-	\$359,166	\$-	\$359,166
Items that may be reclassified
subsequently to profit or loss:
Exchange differences resulting from
translating the financial statements
of a foreign operation	(281)	-	(281)	-	(281)
Total of other comprehensive income	\$358,885	\$-	\$358,885	\$-	\$358,885

For the three-month period ended September 30, 2020

				Income tax relating to	Other
		Reclassification	Other	components	comprehensive
	Arising during the	adjustments	comprehensive	of other	income,
	period	during the period	income, before tax	comprehensive income	net of tax
Items that will not to be reclassified
subsequently to profit or loss:
Unrealized gains or losses from
valuation on equity instruments
measured at fair value through
other comprehensive income	\$470,878	\$-	\$470,878	\$-	\$470,878
Items that may be reclassified
subsequently to profit or loss:
Exchange differences resulting from
translating the financial statements
of a foreign operation	1,286	-	1,286	-	1,286
Total of other comprehensive income	\$472,164	\$-	\$472,164	\$-	\$472,164

For the nine-month period ended September 30, 2021

				Income tax relating to	Other
		Reclassification	Other	components	comprehensive
	Arising during	adjustments	comprehensive	of other	income,
	the period	during the period	income, before tax	comprehensive income	net of tax
Items that will not to be reclassified
subsequently to profit or loss:
Unrealized gains or losses from
valuation on equity instruments
measured at fair value through
other comprehensive income	\$618,780	\$-	\$618,780	\$-	\$618,780
Items that may be reclassified
subsequently to profit or loss:
Exchange differences resulting from
translating the financial statements
of a foreign operation	(12,242)	-	(12,242)	-	(12,242)
Total of other comprehensive income	\$606,538	\$-	\$606,538	\$-	\$606,538

For the nine-month period ended September 30, 2020

				Income tax relating to	Other
		Reclassification	Other	components	comprehensive
	Arising during	adjustments	comprehensive	of other	income,
	the period	during the period	income, before tax	comprehensive income	net of tax
Items that will not to be reclassified
subsequently to profit or loss:
Unrealized gains or losses from
valuation on equity instruments
measured at fair value through
other comprehensive income	\$449,379	\$-	\$449,379	\$-	\$449,379
Items that may be reclassified
subsequently to profit or loss:
Exchange differences resulting from
translating the financial statements
of a foreign operation	(18,156)	-	(18,156)	-	(18,156)
Total of other comprehensive income	\$431,223	\$-	\$431,223	\$-	\$431,223

(21)Income tax

The major components of income tax expense are as follows:

Income tax expense (income) recognized in profit or loss

	Three-month periods ended		Nine-month periods ended
		September 30	September 30
	2021	2020	2021	2020
Current income tax expense:
Current income tax payable	\$59,388	\$18,823	\$102,589	\$58,158
Adjustments in respect of
current income tax of
prior periods	-	702	(77)	790
Deferred tax expense (income):
Deferred tax expense relating
to origination and reversal
of temporary differences	5,045	1,034	23,209	(695)
Total income tax expense	\$64,433	\$20,559	\$125,721	\$58,253

The assessment of income tax returns

As of September 30, 2021, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

	The assessment of income tax returns
The Company	Assessed and approved up to 2018
Chih Hung Investment Co.	Assessed and approved up to 2019
Sheng Bang Investment Co.	Assessed and approved up to 2019
Grain Media Inc.	Assessed and approved up to 2019
Innopower Technology Corporation	Assessed and approved up to 2019
Artery Technology Company	Assessed and approved up to 2019

(22)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.

	Three-month	periods ended		Nine-month periods ended
	September 30		September 30
	2021	2020	2021	2020
(a) Basic earnings per share Profit attributable to ordinary equity owners of the parent (in thousand NT\$)	\$326,805	\$62,193	\$677,122	\$244,912
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands)	248,550	248,550	248,550	248,550
Basic earnings per share
(NT\$)	\$1.31	\$0.25	\$2.72	\$0.99
(b) Diluted earnings per share Profit attributable to ordinary equity owners of the
parent (in thousand NT\$)	\$326,805	\$62,193	\$677,122	\$244,912
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands)	248,550	248,550	248,550	248,550
Effect of dilution:
Employee compensation (in thousands)	871	834	1,006	968
Weighted-average number of ordinary shares outstanding after
dilution (in thousands)	249,421	249,384	249,556	249,518
Diluted earnings per share	\$1.31	\$0.25	\$2.71	\$0.98

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 Group 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)	Associates
United Semiconductor Japan Co., Ltd.	Other related parties
HeJian Technology (Suzhou) Co., Ltd.	Other related parties
Wavetek Microelectronics Corporation	Other related parties
United Semiconductor (Xiamen) Co., Ltd.	Other related parties

Name and nature of relationship of the related parties

Note: The Group 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

	Three-month periods ended		Nine-month periods ended
	September 30 September 30
	2021	2020	2021	2020
United Microelectronics
Corporation	\$134,730	\$126,050	\$429,090	\$429,857
Other related parties	11,665	-	29,317	15,158
Associates	-	9,299	-	28,338
Total	\$146,395	\$135,349	\$458,407	\$473,353

The Group'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

	Three-month	periods ended		Nine-month periods ended
		September 30		September 30
	2021	2020	2021	2020
United Microelectronics
Corporation	\$536,530	\$278,429	\$1,407,176	\$800,914
United Semiconductor
(Xiamen) Co., Ltd.	105,353	122,638	294,803	172,237
HeJian Technology (Suzhou)
Co., Ltd	5,585	207,068	34,659	584,118
Other related parties	2,320	3,320	3,657	6,638
Total	\$649,788	\$611,455	\$1,740,295	\$1,563,907

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) Research expense, other

	Three-month periods ended September 30		Nine-month periods ended September 30
	2021	2020	2021	2020
Entity with joint control or significant influence over
the Company	\$12,644	\$-	\$14,589	\$11,286
Other related parties	1,713	-	15,171	-
Total	\$14,357	\$-	\$29,760	\$11,286

The payment terms from the related party suppliers are 45~60 days.

(4) Research expense, testing expense

	Three-month periods ended September 30		Nine-month periods ended September 30
	2021	2020	2021	2020
Entity with joint control or significant influence over the Company	\$524	\$-	\$3,370	\$1,824
Other related parties	-	-	288	-
Total	\$524	\$-	\$3,658	\$1,824

The payment terms from the related party suppliers are 45~60 days.

(5) Contract Assets, current

		As of
	September 30, 2021	December 31, 2020	September 30, 2020
Entity with joint control or
significant influence over
the Company	\$9,396	\$-	\$-

(6) Accounts receivable - related parties, net

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
United Microelectronics
Corporation	\$96,246	\$130,254	\$77,699
Other related parties	-	-	1,563
Total	\$96,246	\$130,254	\$79,262

(7) Other current assets

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Entity with joint control or
significant influence over
the Company	\$256	\$263	\$45
Other related parties	834	3,679	246
Total	\$1,090	\$3,942	\$291

(8) Intangible assets

		As of
	September 30, 2021	December 31, 2020	September 30, 2020
Entity with joint control or significant influence over
the Company	\$-	\$-	\$679

(9) Contract liabilities, current

As of
September 30,	December 31,	September 30,
2021	2020	2020
\$-	\$427	\$3,832

(10)Accounts payable - related parties

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
United Microelectronics
Corporation	\$183,612	\$113,330	\$148,789
United Semiconductor (Xiamen)
Co., Ltd.	29,980	49,094	105,432
HeJian Technology (Suzhou) Co.,
Ltd.,	4,472	132	128,806
Other related parties	1,299	384	2,797
Total	\$219,363	\$162,940	\$385,824

(11)Key management personnel compensation

	Three-month	periods ended	Nine-month periods ended
		September 30		September 30
	2021	2020	2021	2020
Short-term employee benefits	\$16,021	\$20,686	\$71,820	\$63,307
Post-employment benefits	324	324	972	983
Total	\$16,345	\$21,010	\$72,792	\$64,290

8. Assets Pledged as Collateral

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

		Carrying amount
Assets pledged for security	2021.09.30	2020.12.31	2020.09.30	Secured liabilities
Financial assets measured at				Custom clearance
amortized cost	\$15,028	\$15,028	\$15,000	deposit
Financial assets measured at				Office rental deposit
amortized cost	536	1,405	1,448
Total	\$15,564	\$16,433	\$16,448

9. Commitments and contingencies

None.

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

12. Others

(1) Categories of financial instruments

Financial assets

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Financial assets at fair value
through profit or loss:
Financial assets mandatorily
measured at fair value
through profit or loss	\$25,373	\$23,497	\$23,192
Financial assets at fair value
through other comprehensive
income	2,864,742	2,245,962	1,584,649
Financial assets measured at
amortized cost (Note)	5,219,949	3,880,887	3,862,629
Total	\$8,110,064	\$6,150,346	\$5,470,470

Financial liabilities

		As of
	September 30,	December 31,	September 30,
	2021	2020	2020
Financial liabilities at fair value
through profit or loss:
Financial liabilities mandatorily
measured at fair value
through profit or loss	\$1,378	\$1,504	\$-
Financial liabilities at amortized
cost:
Payables (including related
parties)	1,135,882	644,718	1,155,426
Other payables	603,279	392,146	361,515
Long-term payables	183,546	16,321	40,974
Lease liabilities	226,799	242,411	255,665
Total	\$2,150,884	\$1,297,100	\$1,813,580

• Note : Including cash and cash equivalents (exclude cash on hand), notes receivable, accounts receivable, other receivable, refundable deposit and financial assets measured at amortized cost, non-current.
• (2) Financial risk management objectives and policies

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

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

The Group has certain foreign currency receivables denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is achieved. The Group 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 Group.

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

When NTD strengthens/weakens against USD by 10%, the profit for the nine-month periods ended September 30, 2021 and 2020 would decrease / increase by NT\$26,681 thousand and NT\$19,482 thousand, respectively.

When NTD strengthens/weakens against RMB by 10%, the profit for the nine-month periods ended September 30, 2021 and 2020 would decrease / increase by NT\$178,781 thousand and NT\$124,401 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 Group's exposure to the risk of changes in market interest rates relates primarily to the Group's short-term deposits at variable interest rates. Therefore, interest rate risk is low.

Equity price risk and other investment risk

The Group's listed and unlisted equity securities and other investments are susceptible to market price risk arising from uncertainties about future values of the investment objectives. The Group's listed equity securities, unlisted equity securities and other investment are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income. The Group manages the equity price risk through diversification. Reports on the equity portfolio are submitted to the Group'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 Group 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 Group'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 Group'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 September 30, 2021, December 31, 2020 and September 30, 2020, accounts receivable from top ten customers represented 45%, 58% and 59% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivable is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group's treasury in accordance with the Group's policy. The Group 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 Group adopted IFRS 9 to assess the expected credit losses. The measurement indicators of the Group are described as follows:

	Measurement			Carrying amount
		method for			As of
Level of		expected credit		September 30,	December 31,	September 30,
credit risk	Indicator	losses	Loss rate	2021	2020	2020
		Lifetime
Simplified	Not	expected credit
method (Note)	applicable	losses	0%~100%	\$944,189	\$945,217	\$1,105,486

Note: The Group adopted simplified method (lifetime expected credit loss) to measure credit risk. It includes contract asset, notes receivables and account receivables.

(5) Liquidity risk management

The Group'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 Group's financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amounts include the contractual interest.

Non-derivative financial instruments

	Less than
	1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of September 30, 2021
Payables (including
related parties)	\$1,135,882	\$-	\$-	\$-	\$1,135,882
Other payables	603,279	-	-	-	603,279
Long-term payables	-	183,546	-	-	183,546
Lease liabilities	24,559	27,795	16,235	240,623	309,212
As of December 31, 2020
Payables (including
related parties)	\$644,718	\$-	\$-	\$-	\$644,718
Other payables	392,146	-	-	-	392,146
Long-term payables	-	16,321	-	-	16,321
Lease liabilities	33,240	30,865	19,152	246,589	329,846
As of September 30, 2020
Payables (including
related parties)	\$1,155,426	\$-	\$-	\$-	\$1,155,426
Other payables	361,515	-	-	-	361,515
Long-term payables	-	40,974	-	-	40,974
Lease liabilities	43,989	37,032	20,443	248,578	350,042

Derivative financial instruments

	Less than
	1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of September 30, 2021
Inflows	\$42,909	\$-	\$-	\$-	\$42,909
Outflows	(44,287)	-	-	-	(44,287)
Net	\$(1,378)	\$-	\$-	\$-	\$(1,378)
As of December 31, 2020
Inflows	\$21,494	\$-	\$-	\$-	\$21,494
Outflows	(22,998)	-	-	-	(22,998)
Net	\$(1,504)	\$-	\$-	\$-	\$(1,504)
As of September 30, 2020
Inflows	\$106,881	\$-	\$-	\$-	\$106,881
Outflows	(106,752)	-	-		- (106,752)
Net	\$129	\$-	\$-	\$-	\$129

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

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for nine-month period ended September 30, 2021:

	Lease liabilities
As of January 1, 2021	\$242,411
Additions	13,063
Cash flows	(28,290)
Revision of lease contracts	377
Exchange rate changes	(762)
As of September 30, 2021	\$226,799

Reconciliation of liabilities for nine-month period ended September 30, 2020:

	Lease liabilities
As of January 1, 2020	\$265,341
Additions	19,488
Cash flows	(26,624)
Rent concessions	(1,594)
Exchange rate changes	(946)
As of September 30, 2020	\$255,665

(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 Group 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 receivables, other receivables, payables 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 Group 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.

English Translation of Consolidated Financial Statements Originally Issued in Chinese FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED 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 Group.

(8) Derivative financial instruments

The Group'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 September 30, 2021, December 31, 2020, and September 30, 2020 is as follows:

Forward currency contracts

The Group 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 September 30, 2021
Forward currency contract	Sell foreign currency	From 2021.09.15 to
	USD 10,000 thousand	2021.10.27
Forward currency contract	Sell foreign currency	From 2021.09.01 to
	RMB 10,000 thousand	2021.10.08
As of December 31, 2020
Forward currency contract	Sell foreign currency	From 2020.12.07 to
	USD 5,000 thousand	2021.01.25
Forward currency contract	Sell foreign currency	From 2020.12.23 to
	RMB 5,000 thousand	2021.01.28
As of September 30, 2020
Forward currency contract	Sell foreign currency	From 2020.09.21 to
	USD 3,000 thousand	2020.10.21
Forward currency contract	Sell foreign currency	From 2020.09.09 to
	RMB 25,000 thousand	2020.10.13

• (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:

• 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 Group 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 Group's assets and liabilities

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

As of September 30, 2021:
	Level 1	Level 2	Level 3	Total
Financial assets at fair value:
Financial assets at fair value
through profit or loss
Funds	\$-	\$-	\$25,373	\$25,373
Financial assets at fair value
through other comprehensive
income
Equity instruments measured
at fair value through other
comprehensive income	-	-	2,864,742	2,864,742

	Level 1	Level 2	Level 3	Total
Financial liabilities at fair value:
Financial liabilities at fair value
through profit or loss
Forward currency contract	\$-	\$1,378	\$-	\$1,378
As of December 31, 2020:
	Level 1	Level 2	Level 3	Total
Financial assets at fair value:
Financial assets at fair value
through profit or loss
Funds	\$-	\$-	\$23,497	\$23,497
Financial assets at fair value
through other comprehensive
income
Equity instruments measured
at fair value through other
comprehensive income	-	-	2,245,962	2,245,962
Financial liabilities at fair value:
Financial liabilities at fair value through profit or loss
Forward currency contract	\$-	\$1,504	\$-	\$1,504
As of September 30, 2020:
	Level 1	Level 2	Level 3	Total
Financial assets at fair value:
Financial assets at fair value
through profit or loss
Forward currency contract	\$-	\$129	\$-	\$129
Funds	-	-	23,063	23,063
Financial assets at fair value
through other comprehensive
income
Equity instruments measured
at fair value through other
comprehensive income	-	-	1,584,649	1,584,649

Transfers between Level 1 and Level 2 during the period

During the nine-month periods ended September 30, 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 period is as follows:

		Assets
			At fair value through other
	At fair value through		comprehensive
	profit or loss		income
	Stocks	Funds	Stocks	Total
As of January 1, 2021	\$-	\$23,497	\$2,245,962	\$2,269,459
Total gains and losses
recognized for the nine
month period ended
September 30, 2021:
Amount recognized in
profit or loss ("other
gains and losses")	-	1,876	-	1,876
Amount recognized in
other comprehensive
income ("Unrealized
gains (losses) from
equity instruments
investments measured at
fair value through other
comprehensive income)	-	-	618,780	618,780
As of September 30, 2021	\$-	\$25,373	\$2,864,742	\$2,890,115

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

		Assets
			At fair value
			through other
	At fair value through		comprehensive
	profit or loss		income
	Stocks	Funds	Stocks	Total
As of January 1, 2020	\$-	\$21,812	\$1,135,270	\$1,157,082
Total gains and losses
recognized for the nine
month period ended
September 30, 2020:
Amount recognized in
profit or loss ("other
gains and losses")	-	1,250	-	1,250
Amount recognized in
other comprehensive
income ("Unrealized
gains (losses) from
equity instruments
investments measured at
fair value through other
comprehensive income)	-	-	449,379	449,379
As of September 30, 2020	\$-	\$23,062	\$1,584,649	\$1,607,711

Recognized as profit (loss) above, the profit (loss) from financial assets still held by the Group as of September 30, 2021 and September 30, 2020 was NT\$1,876 thousand and NT\$1,250 thousand, respectively.

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 September 30, 2021

	Valuation	Significant	Quantitative	Relationship between inputs	Sensitivity of the input to fair
	techniques	unobservable inputs	information	and fair value	value
Financial assets:
At fair value through
other
comprehensive
income
Stocks	Market	Discount for lack of	15%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$3,164 thousand
Preferred Stocks	Option pricing	Discount for lack of	28%~36%	The higher the discount for	10% increase (decrease) in the
	model	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by NT\$902
					thousand
Stocks and others	Asset	Discount for lack of	10%	The higher the discount for	10% increase (decrease) in the
	approach	marketability and		lack of marketability, the	discount for lack of marketability
		non-controlling		lower the fair value of the	and non-controlling interest would
		interest		stocks	result in decrease/ increase in the
					Group's equity by NT\$272,000
					thousand
Preferred Stocks	Market	Discount for lack of	20%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$10,409 thousand

As of December 31, 2020

	Valuation	Significant	Quantitative	Relationship between inputs	Sensitivity of the input to fair
	techniques	unobservable inputs	information	and fair value	value
Financial assets:
At fair value through
other
comprehensive
income
Stocks	Market	Discount for lack of	15%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$2,471 thousand
Preferred Stocks	Option pricing	Discount for lack of	28%~36%	The higher the discount for	10% increase (decrease) in the
	model	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$1,112 thousand
Stocks and others	Asset	Discount for lack of	10%	The higher the discount for	10% increase (decrease) in the
	approach	marketability and		lack of marketability, the	discount for lack of marketability
		non-controlling		lower the fair value of the	and non-controlling interest
		interest		stocks	would result in decrease/ increase
					in the Group's equity by
					NT\$209,613 thousand
Preferred Stocks	Market	Discount for lack of	20%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$11,400 thousand

As of September 30, 2020

	Valuation	Significant	Quantitative	Relationship between inputs	Sensitivity of the input to fair
	techniques	unobservable inputs	information	and fair value	value
Financial assets:
At fair value through
other
comprehensive
income
Stocks	Market	Discount for lack of	15%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease / increase
				stocks	in the Group's equity by
					NT\$2,870 thousand
Preferred Stocks	Option pricing	Discount for lack of	17%~25%	The higher the discount for	10% increase (decrease) in the
	model	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$1,112 thousand
Stocks and others	Asset	Discount for lack of	10%	The higher the discount for	10% increase (decrease) in the
	approach	marketability and		lack of marketability, the	discount for lack of marketability
		non-controlling		lower the fair value of the	and non-controlling interest would
		interest		stocks	result in decrease/ increase in the
					Group's equity by NT\$146,506
					thousand
Preferred Stocks	Market	Discount for lack of	19%	The higher the discount for	10% increase (decrease) in the
	approach	marketability		lack of marketability, the	discount for lack of marketability
				lower the fair value of the	would result in decrease/ increase
				stocks	in the Group's equity by
					NT\$7,977 thousand

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

The Group'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 Group analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group's accounting policies at each reporting date.

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

September 30, 2021

None.

December 31, 2020

None.

September 30, 2020

None.

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

	As of September 30, 2021
	Foreign	Foreign
	currencies	exchange rate	NTD
Financial assets
Monetary items:
USD	\$43,784	27.84	\$1,218,955
RMB	427,905	4.307	1,842,987
Financial liabilities
Monetary items:
USD	34,200	27.84	952,143
RMB	12,811	4.307	55,179

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

		As of December 31, 2020
	Foreign	Foreign
	currencies	exchange rate	NTD
Financial assets
Monetary items:
USD	\$32,409	28.09	\$910,359
RMB	285,810	4.317	1,233,844
Financial liabilities
Monetary items:
USD	28,596	28.09	803,272
RMB	10,875	4.317	46,949
		As of September 30, 2020
	Foreign	Foreign
	currencies	exchange rate	NTD
Financial assets
Monetary items:
USD	\$40,702	28.95	\$1,178,309
RMB	301,271	4.271	1,286,730
Financial liabilities
Monetary items:
USD	33,972	28.95	983,489

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

Because there are several types of functional currencies within the Group, 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 group foreign exchange gain was NT\$4,745 thousand and NT\$3,948 thousand for the three-month periods ended September 30, 2021 and 2020, respectively, and the foreign exchange gain was NT\$8,314 thousand and NT\$5,103 thousand for the nine-month periods ended September 30, 2021 and 2020, respectively.

(11) Capital management

The primary objective of the Group'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 Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

13. Other disclosure

(1) Information related to significant transactions

Additional disclosures for information of the Group for the nine-month period ended September 30, 2021:

• (a) Financing provided to others for the nine-month period ended September 30, 2021: None.
• (b) Endorsement/Guarantee provided to others for the nine-month period ended September 30, 2021: None.
• (c) Securities held as of September 30, 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 nine-month period ended September 30, 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 nine-month period ended September 30, 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 nine-month period ended September 30, 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 nine-month period ended September 30, 2021: Please refer to Attachment 2.

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

• NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)
• (h) Receivables from related parties with amount exceeding the lower of NT\$100 million or 20 percent of the capital stock for the nine-month period ended September 30, 2021: None.
• (i) Financial instruments and derivative transactions: Please refer to Note 12.
• (j) Other: Significant intercompany transactions between consolidated entities: Please refer to Attachment 3.
• (2) Information on investees

Information on investees which significant influenced or controlled by the Group: Please refer to Attachment 4.

• (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 5.
• (b) Significant transaction to investee company in Mainland China for the nine-month period ended September 30, 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 3.
  • 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 3.

(4) Major shareholder information

Please refer to Attachment 6.

14. Segment information

The products of the Company and its subsidiaries are all related to integrated circuit design products and the chief operating decision maker reviews the Group's operating results as a whole to make decisions about resources to be allocated and assess its performance; therefore, the Group is considered a single segment. The preparation basis of the segment is the same with the preparation of this financial statements, and the policies are the same with those mentioned in Note 4, Summary of Significant Accounting Policies.

English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ATTACHMENT 1 (Securities held as of Septemper 30, 2021) (Excluding subsidiaries and associates)

Faraday Technology Corporation

					As of Septemper 30, 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
			Financial assets at fair value through other
Common Stock	SHIEH YONG Investment Co., Ltd.	-	comprehensive income, non-current	194,944,689	\$2,535,384	12.12%	\$2,535,384	-
			Financial assets at fair value through other
Common Stock	Unitech Capital Inc.	-	comprehensive income, non-current	2,500,000	88,991	5.00%	88,991	-

Chih-Hung Investment Corporation

					As of Septemper 30, 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			Financial assets at fair value through profit or	14,600,000
Common Stock	Aviacomm Ltd.	-	loss, non-current	1,714,285	-	12.60%	-	-
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	31,641	9.53%	31,641	-
Preferred stock	Gear Radio Limited	-	Financial assets at fair value through other comprehensive income, non-current	1,200,000	9,020	4.64%	9,020	-
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	104,085	8.70%	104,085	-
Common Stock	Hsun Chieh Capital Corp.	-	Financial assets at fair value through other comprehensive income, non-current	3,000,000	68,300	15.00%	68,300	-

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

ATTACHMENT 1 (Securities held as of Septemper 30, 2021) (Excluding subsidiaries and associates)

Sheng Bang Investment Corporation

					As of Septemper 30, 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
Fund	IB FUND SPC -RCM Auto Parts Industry Fund Segregated Portfolio	-	Financial assets at fair value through profit or loss, current	10,000	\$25,373	-	\$25,373	-
Common Stock	Storm Semiconductors, Inc.	-	Financial assets at fair value through profit or loss, non-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	15,811	19.67%	15,811	-
Capital	Jian Rui Venture Capital (translated from Chinese)	-	Financial assets at fair value through other comprehensive income, non-current	-	11,510	8.50%	11,510	-

English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 nine-month period ended Septemper 30, 2021)

Faraday Technology Corporation

					Notes and accounts receivable (payable)
Counter-party	Relationship	Purchases (Sales)	Amount	Percentage of total purchases (sales)	Term	Details of non-arm's length transaction	Balance	Percentage of total receivables (payable)	Note
United Microelectronics Corporation	Entity with joint control or significant influence over the Company	Purchases	\$1,405,942	78.61%	Month-end 60 days	-	\$163,867	14.43%	-
United Microelectronics Corporation	Entity with joint control or significant influence over the Company	Sales	428,348	7.87%	Month-end 60 days	-	95,987	12.20%	-
United Semiconductor (Xiamen) Co.,Ltd.	Other related parties	Purchases	249,479	13.95%	Month-end 60 days	-	28,684	2.53%	-

English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ATTACHMENT 3 (Significant intercompany transactions between consolidated entities)

For the nine-month period ended September 30, 2021

						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	\$443,821	Note 4	8.16%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Research expense	53,238	According to the contract	0.98%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Accounts receivable	155,123	Month-end 60 days	1.42%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Other receivable	29,230	Month-end 60 days	0.27%
0	Faraday Technology Corporation	Faraday Technology Corporation (USA)	1	Accounts payables	53,238	Month-end 60 days	0.49%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Sales	324,426	Note 4	5.96%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Accounts receivable	77,821	Month-end 60 days	0.71%
0	Faraday Technology Corporation	Faraday Technology Japan Corporation	1	Contract liabilities	19,839	According to the contract	0.18%
0	Faraday Technology Corporation	FaradayTek Solutions India Private Limited	1	Research expense	16,977	According to the contract	0.31%
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Sales	225,651	Note 5	4.15%
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Other income	194	According to the contract	-
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Accounts receivable	47,715	Month-end 60 days	0.44%
0	Faraday Technology Corporation	Artery Technology Corporation, Ltd.	1	Other receivable	194	Month-end 60 days	-
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Contract assets	18,117	According to the contract	0.17%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Accounts receivable	4,626	Month-end 60 days	0.04%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Other receivable	10,157	Month-end 60 days	0.09%
0	Faraday Technology Corporation	Faraday Technology China Corporation	1	Accounts payables	132	Month-end 60 days	-

-73 -

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

ATTACHMENT 3 (Significant intercompany transactions between consolidated entities)

For the nine-month period ended September 30, 2021

						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 China Corporation	1	Contract liabilities	\$6,711	According to the contract	0.06%
0	Faraday Technology Corporation	GrainTech Electronics Limited	1	Sales	2,519	Note 5	0.05%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Sales	304,895	Note 5	5.60%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Contract assets	13,171	According to the contract	0.12%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Accounts receivable	41,256	Month-end 60 days	0.38%
0	Faraday Technology Corporation	United Creative Solution Corporation	1	Contract liabilities	2,600	According to the contract	0.02%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Sales	171,169	Note 5	3.15%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Accounts receivable	96,029	Month-end 60 days	0.88%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Other receivable	16,343	Month-end 60 days	0.15%
0	Faraday Technology Corporation	Innopower Technology Corporation	1	Other payables	302	Month-end 60 days	-
0	Faraday Technology Corporation	Artery Technology Company	1	Sales	46,370	Note 5	0.85%
0	Faraday Technology Corporation	Artery Technology Company	1	Accounts receivable	9,822	Month-end 60 days	0.09%
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Research expense	28,918	According to the contract	0.53%
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Accounts payables	10,410	Month-end 60 days	0.10%
0	Faraday Technology Corporation	Faraday Technology Vietnam Company Limited	1	Other current assets	3,720	Month-end 60 days	0.03%
1	Faraday Technology Corporation (Suzhou)	Faraday Technology China Corporation	3	Sales	15,750	Note 5	0.29%

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) English Translation of Consolidated Financial Statements Originally Issued in Chinese

ATTACHMENT 3 (Significant intercompany transactions between consolidated entities)

For the nine-month period ended September 30, 2021

						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)
1	Faraday Technology Corporation (Suzhou)	Faraday Technology China Corporation	3	Accounts receivable	\$16,685	Month-end 60 days	0.15%
2	United Business Service Corporation	United Creative Solution Corporation	3	Sales	1,905	Note 5	0.04%
2	United Business Service Corporation	Faraday Technology China Corporation	3	Sales	1,081	Note 5	0.02%
3	Artery Technology Corporation, Ltd.	Artery Technology Company	3	Research expense	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 AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

ATTACHMENT 4 (Related information of investee companies as of Septemper 30, 2021)

Faraday Technology Corporation

			Initial Investment		Investment as of Septemper 30, 2021
Investee company	Address	Main businesses and products	Septemper 30, 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%	\$433,350	\$26,451	\$24,676
Faraday Technology - B.V.I	British Virgin Islands	General investing	855,770	706,792	Common stock 23,031 thousand shares	100.00%	717,831	255,092	255,191
Faraday Technology Japan Corporation	Japan Tokyo	Sales representive in Japan	29,320	29,320	Common stock 2 thousand shares	99.95%	85,318	9,980	9,975
Chih-Hung Investment Corporation	Taiwan	General Investing	620,000	620,000	Common stock 62,000 thousand shares	100.00%	659,198	100,472	99,379
Sheng Bang Investment Corporation	Taiwan	General Investing	222,020	222,020	Common stock 22,202 thousand shares	100.00%	195,026	1,649	1,649
Faraday Technology Vietnam Company Limited	Vietnam	IC design services	9,287	9,287	-	100.00%	13,229	1,000	1,000

Chih-Hung Investment Corporation			Initial Investment			Investment as of Septemper 30, 2021
Investee company	Address	Main businesses and products	Septemper 30, 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%	\$1,133	\$(49)	\$(10)
Innopower Technology Corporation	Taiwan	Silicon Intellectual Property designing	80,000	80,000	Common stock 14,942 thousand shares	100.00%	307,672	102,073	102,073
FaradayTek Solutions India Private Limited	India	IC design services	45	45	Common stock 10 thousand shares	1.00%	64	(474)	(5)

Sheng Bang Investment Corporation

			Initial Investment			Investment as of Septemper 30, 2021
						Percentage of ownership	Carrying	Net income (loss) of investee company	Investment income (loss) recognized
Investee company	Address	Main businesses and products	Septemper 30, 2021	December 31, 2020	Number of shares (thousand)	(%)	amount (Note)	(Note)	(Note)
Grain Media Inc.	Taiwan	IC designing, marketing and customer service	\$6,044		\$6,044 Common stock 604 thousand shares	80.58%	\$4,701	\$(49)	\$(39)
FaradayTek Solutions India Private Limited	India	IC design services	4,462		4,462 Common stock 990 thousand shares	99.00%	6,367	(474)	(469)

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

ATTACHMENT 4 (Related information of investee companies as of Septemper 30, 2021)

Innopower Technology Corporation

			Initial Investment			Investment as of Septemper 30, 2021
						Percentage of		Net income (loss) of	Investment income
						ownership	Carrying	investee company	(loss) recognized
Investee company	Address	Main businesses and products	Septemper 30, 2021	December 31, 2020	Number of shares (thousand)	(%)	amount (Note)	(Note)	(Note)
Bright Capital Group Limited	Samoa	General investing	\$68,593	\$68,593	Common stock 2,301 thousand shares	100.00%	\$329,410	\$93,777	\$93,777

Faraday Technology - B.V.I

			Initial Investment		Investment as of Septemper 30, 2021
							Percentage of		Net income (loss) of	Investment income
							ownership	Carrying	investee company	(loss) recognized
Investee company	Address	Main businesses and products		Septemper 30, 2021	December 31, 2020	Number of shares (thousand)	(%)	amount (Note)	(Note)	(Note)
Faraday Technology Corporation Mauritius	Mauritius	General investing	USD	\$12,859,205 USD	\$12,859,205	Common stock 12,804 thousand shares	100.00%	\$112,581	\$45,943	\$45,943
GrainTech Electronics Limited	Hong Kong	IC designing, marketing and customer service	USD	100,000 USD	100,000	Common stock 100 thousand shares	100.00%	5,026	(37)	(37)
Faraday Technology Corporation Samoa	Samoa	General investing	USD	4,715,067 USD	4,715,067	Common stock 4,715 thousand shares	100.00%	179,875	42,486	42,486
Artery Technology Company-Cayman	Cayman	General investing	USD	9,809,000 USD	4,460,000	Common stock 5,192 thousand shares	66.42%	418,489	250,289	166,715

Artery Technology Corporation - Cayman

		Initial Investment
					Percentage of		Net income (loss) of	Investment income
					ownership	Carrying	investee company	(loss) recognized
Address	Main businesses and products	Septemper 30, 2021	December 31, 2020	Number of shares (thousand)	(%)	amount (Note)	(Note)	(Note)
Taiwan	IC designing, marketing and	171,141	\$25,897	Common stock 17,114	66.42%	105,867	18,055	11,990
		customer service			thousand shares	Investment as of Septemper 30, 2021 (Note 2)

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 66.42% in Artery Technology Corporation-Cayman.The Artery Technology Corporation-Cayman owns 100% of

Artery Technology Company; therefore, the Group's share of profit or loss of Artery Technology Company is 66.42%.

FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Unit:New Taiwan Dollars in thousands, USD and RMB in

ATTACHMENT 5 (Investment in Mainland China as of Septemper 30, 2021)

							Investment Flows								dollars
Investee company	Main Businesses and Products		Total Amount of Paid-in Capital	Method of Investment		Accumulated Outflow of Investment from Taiwan as of January 1, 2021	Outflow	Inflow		Accumulated Outflow of Investment from Taiwan as of Septemper 30, 2021	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of Septemper 30, 2021	Accumulated inward remittance of earnings as of Septemper 30, 2021
Faraday Technology China	IC designing, marketing and		\$167,040	Note 1		\$167,040	\$-		\$-	\$167,040	\$45,961	100.00%	\$45,961	\$110,080	\$-
Corporation Faraday Technology Corporation (Suzhou)	customer service IC designing, marketing and customer service	(USD (USD	6,000,000) 161,472 5,800,000)	Note 3 Note 4	(USD (USD	6,000,000) 161,472 5,800,000)	-		(USD - (USD	6,000,000) 161,472 5,800,000)	93,777	100.00%	93,777	329,410	-
Grain Media Technology (Shenzhen) Co., Ltd.	IC designing, marketing and customer service	(USD	111,383 4,000,814)	Note 1 Note 5	(USD	111,383 4,000,814)	-		- (USD	111,383 4,000,814)	-	100.00%	-	447	-
United Business Service Corporation	IC designing, marketing and customer service	(RMB	129,210 30,000,000)	Note 1 Note 6		129,210 (RMB 30,000,000)	-		- (RMB	129,210 30,000,000)	42,486	100.00%	42,486	179,874	-
Artery Technology Corporation, Ltd.	IC designing, marketing and customer service		332,966	Note 1 Note 7		124,166	42,702		-	166,868	233,656	66.42%	155,676	294,451	-
United Creative Solution Corporation	IC designing, marketing and customer service	(USD (RMB	11,960,000) 21,535 5,000,000)	Note 8 -	(USD	4,460,000) (USD -	1,533,815) -		(USD -	5,993,815) -	12,005	100.00%	12,005	35,860	-
Innopower Technology Corporation (Chongqing)	IC designing, marketing and customer service	(RMB	4,307 1,000,000)	-		-	-		-	-	(2)	100.00%	(2)	4,305	-

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ATTACHMENT 5 (Investment in Mainland China as of Septemper 30, 2021)

Accumulated investment in Mainland China as of	Investment amounts authorized by Investment
Septemper 30, 2021	Commission, MOEA	Upper limit on investment
\$738,030 (Note 2)	\$825,335 (Note 2)
(USD 26,509,696)	(USD 29,645,650)	\$4,401,578

• 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-Cayman.
• Note 2: Amounts denominated in foreign currency is translated into New Taiwan Dollars by using exchange rate on Septemper 30, 2021.
• Note 3: As of Septemper 30, 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 Septemper 30, 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 Septemper 30, 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 Septemper 30, 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 66.42% in Artery Technology Corporation-Cayman.The Artery Technology Corporation-Cayman owns 100% of Artery Technology Corporation, Ltd; therefore, the Group's share of profit or loss of Artery Technology Corporation, Ltd is 66.42%.

English Translation of Consolidated Financial Statements Originally Issued in Chinese (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified) FARADAY TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ATTACHMENT 6 (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%

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. Explanation:

• 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, includes the shares held by shareholders and trusted assets with right to use. Please refer to Market Observation Post System.