SUNPLUS - Audit Report / Information 2022

Sunplus Technology Company Limited

Financial Statements for the Years Ended December 31, 2022 and 2021 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Sunplus Technology Company Limited

Opinion

We have audited the accompanying financial statements of Sunplus Technology Company Limited, which comprise the balance sheets as of December 31, 2022 and 2021, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Sunplus Technology Company Limited as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of Sunplus Technology Company Limited in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter identified in Sunplus Technology Company Limited’s financial statements for the year ended December 31, 2022 is as follows:

Occurrence of Revenue from Specific Customers

Integrated circuit chip sales accounted for 94% of Sunplus Technology Company Limited’s total revenue. Among them revenue declined in 2022, some of the customers whose revenue has grown significantly and significant amount carry a higher risk related to the occurrence of sales revenue. Therefore, we considered the occurrence of revenue as a key audit matter. For detailed disclosure of revenue, refer to Notes 4 and 21 to the accompanying consolidated financial statements.

Our audit procedures performed in respect of the above key audit matter included the following:

We obtained an understanding of the related internal control and operating procedures in Sunplus Technology Company Limited’s sales transaction cycle, and we evaluated and confirmed the operating effectiveness of the related internal control and operating procedures.
We selected samples from the sales details, and we examined customers’ original orders, sales electronic orders, delivery orders, logistics receipt documents or export declaration, and sales invoices for any abnormalities and confirmed that sales revenue did occur.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

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

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

Those charged with governance (including members of the audit committee) are responsible for overseeing Sunplus Technology Company Limited’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Sunplus Technology Company Limited’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Sunplus Technology Company Limited’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the
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related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause Sunplus Technology Company Limited to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within Sunplus Technology Company Limited to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2022 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Tung-Hui Yeh and Ya-Yun Chang.

Deloitte & Touche Taipei, Taiwan Republic of China

March 15, 2023

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and the financial statements shall prevail.

SUNPLUS TECHNOLOGY COMPANY LIMITED

BALANCE SHEETS DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss (FVTPL) - current (Notes 4 and 7) Trade receivables, net (Notes 4, 5, 8, 21 and 29) Other receivables (Notes 4, 23 and 29) Inventories (Notes 4 and 9) Non-current assets held for sale (Notes 4 and 10) Other financial assets - current (Notes 15 and 25) Other current assets (Note 15) Total current assets NON-CURRENT ASSETS Financial assets at FVTPL - non-current (Notes 4 and 7) Investments accounted for using the equity method (Notes 4, 10 and 11) Property, plant and equipment (Notes 4, 12, 29 and 30) Right-of-use assets (Notes 4 and 13) Intangible assets (Notes 4 and 14) Deferred tax assets (Notes 4 and 23) Net defined benefit assets - non-current (Notes 4 and 19) Other financial assets- non-current (Notes 15 and 30) Other non-current assets (Note 15) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Contract liabilities - current (Note 21) Accounts payable (Note 17 and 29) Lease liabilities - current (Notes 4 and 13) Current portion of long-term bank borrowings (Note 16) Other current liabilities (Notes 11, 18 and 29) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 16) Lease liabilities - non-current (Notes 4 and 13) Guarantee deposits Other liabilities (Note 18) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital (Notes 4 and 20) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Equity directly associated with non-current assets held for sale Other equity Treasury shares Total equity TOTAL		2022 Amount % $ 247,016 2 15,480 - 184,390 2 83,819 1 973,340 9 - - 43,610 - 53,505 1 1,601,160 15 276,006 3 7,971,850 72 744,972 7 163,350 1 187,370 2 2,485 - 31,993 - 10,500 - 9,095 - 9,397,621 85 $ 10,998,781 100 $ 14,027 - 172,086 2 5,169 - - - 327,805 3 519,087 5 1,000,000 9 165,077 2 46,820 - 5,709 - 1,217,606 11 1,736,693 16 5,919,949 54 1,197,373 11 1,870,234 17 239,203 2 279,413 3 2,388,850 22 - - (180,683) (2) (63,401) (1) 9,262,088 84 $ 10,998,781 100		2021
				Amount % $ 570,964 5 153,633 1 268,597 2 32,111 - 534,231 5 108,504 1 25,940 - 87,962 1 1,781,942 15 515,261 5 8,222,020 70 726,737 6 165,563 2 244,238 2 2,485 - 4,553 - 8,350 - 7,973 - 9,897,180 85 $ 11,679,122 100 $ 11,094 - 294,804 3 4,074 - 46,000 - 590,373 5 946,345 8 384,000 3 166,801 1 53,649 1 9,990 - 614,440 5 1,560,785 13 5,919,949 51 1,223,544 11 1,745,279 15 261,078 2 1,249,574 11 3,255,931 28 21,517 - (239,203) (2) (63,401) (1) 10,118,337 87 $ 11,679,122 100

The accompanying notes are an integral part of the financial statements.

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

NET OPERATING REVENUE (Notes 4, 21 and 29) OPERATING COSTS (Notes 9, 22 and 29) GROSS PROFIT OPERATING EXPENSES (Notes 22 and 29) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 4, 11, 22, 25 and 29) Interest income Other income Other gains and losses Finance costs Share of profit or loss of subsidiaries and associates Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 23) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE (LOSS) INCOME Items that will not be reclassified subsequently to profit or loss (Notes 4 and 19): Remeasurement of defined benefit plans Share of other comprehensive (loss) income of subsidiaries and associates accounted for using equity method		2022 Amount % $ 1,374,542 100 918,272 67 456,270 33 98,693 7 210,047 15 1,034,676 75 1,343,416 97 (887,146) (64) 1,585 - 183,754 13 362,436 26 (13,975) (1) 569,439 42 1,103,239 80 216,093 16 194 - 215,899 16 27,762 2 (29,155) (2)		2021
				Amount % $ 1,520,142 100 867,208 57 652,934 43 234,095 15 202,318 13 829,631 55 1,266,044 83 (613,110) (40) 955 - 183,753 12 252,070 17 (9,338) (1) 1,368,888 90 1,796,328 118 1,183,218 78 433 - 1,182,785 78 430 - 118,678 8 (Continued)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss (Notes 4 and 20): Exchange differences on translation of the financial statements of foreign operations Share of other comprehensive income (loss) of subsidiaries and associates accounted for using the equity method Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 24) Basic earnings per share Diluted earnings per share		2022 Amount % $ 81,686 6 29,332 2 109,625 8 $ 325,524 24 $ 0.37 $ 0.37		2021
				Amount % $ (18,998) (1) (12,491) (1) 87,619 6 $ 1,270,404 84 $ 2.01 $ 2.01

The accompanying notes are an integral part of the financial statements.

(Concluded)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Share Capital Issued		Retained Earnings	Other Equity Exchange Differences on Translating Unrealized Losses the Financial from Investments Statements of in Equity Instruments Foreign Operations at FVTOCI $ (228,023 ) $ (33,055 ) - - - - - - - - - 1,022 - - - - (31,489) 117,920 (31,489) 117,920 - - - - - (65,578) (259,512 ) 20,309 - - - - - - - - - - 12,017 - - - - - - - 111,018 (27,927) 111,018 (27,927) - - - (36,588) $ (136,477) $ (44,206)
			Exchange Differences on Translating the Financial Statements of i Foreign Operations $ (228,023 ) - - - - - - - (31,489) (31,489) - - - (259,512 ) - - - - - 12,017 - - - 111,018 111,018 - - $ (136,477)
	Legal Reserve $ 1,712,390 32,889 - - - - - - - - - - - 1,745,279 124,955 - - - - - - - - - - - - $ 1,870,234	Special Reserve $ 276,189 - (15,111 ) - - - - - - - - - - 261,078 - (21,875 ) - - - - - - - - - - - $ 239,203
Share (Thousands) 591,995 - - - - - - - - - - - - 591,995 - - - - - - - - - - - - - 591,995

The accompanying notes are an integral part of the financial statements.

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expense Amortization expense Net loss (gain) on the fair value change of financial assets at FVTPL Financial costs Interest income Dividend income Share of profit of subsidiaries and associates Gain on disposal of subsidiaries Gain on disposal of associates Impairment loss recognized on financial assets Impairment loss recognized on non-financial assets Unrealized (gain) loss on the transactions with subsidiaries and associates Net (gain) loss on foreign currency exchange Changes in operating assets and liabilities: Decrease (increase) in trade receivables Increase in other receivables Increase in inventories Decrease (increase) in other current assets Increase in net defined benefit assets - non-current Increase in contract liabilities (Decrease) increase in trade payables (Decrease) increase in other current liabilities Increase in net defined benefit liabilities - non-current Cash used in operations Interest received Dividends received Interest paid Income tax paid Net cash (used in) generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the sale of financial assets at FVTOCI Purchase of financial assets at FVTPL Proceeds from the sale of financial assets at FVTPL Acquisition of Investments accounted for using equity method Proceeds from disposal of subsidiaries Proceeds from disposal of associates Payments for property, plant and equipment Increase in refundable deposits Decrease in refundable deposits	2022 $ 216,093 159,068 96,271 176,260 13,975 (1,585) (75,900) (569,439) (73,962) (449,000) 6,826 457 (1,387) (8,090) 80,598 (6,983) (439,109) 20,108 (27,440) 2,933 (122,442) (197,570) 27,762 (1,172,556) 1,589 991,848 (13,124) (194) (192,437) 33,539 (82,393) 197,611 (19,294) 86,000 535,987 (205,872) (1,180) 57	2021 $ 1,183,218 85,476 90,302 (221,022) 9,338 (955) (67,142) (1,368,888) - - - - 1,096 1,492 (97,519) (18,754) (233,501) (51,531) (113) 5,505 190,674 257,288 430 (234,606) 1,092 517,746 (9,214) (433) 274,585 - (40,000) 118,577 (372,116) - - (54,273) (59) 32 (Continued)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

Payments for intangible assets Increase in other financial assets Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from guarantee deposits received Refund of guarantee deposits received Repayment of the principal portion of lease liabilities Cash dividends paid Partial disposal of interests in subsidiaries without a loss of control Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2022 $ (44,516) (19,820) 480,119 - 1,000,000 (430,000) - (11,071) (4,408) (1,183,990) - (629,469) 17,839 (323,948) 570,964 $ 247,016	2021 $ (63,398) (28,190) (439,427) (28,480) 400,000 (200,000) 590 (783) (4,020) (311,093) 108,953 (34,833) (3,386) (203,061) 774,025 $ 570,964

The accompanying notes are an integral part of the financial statements.

(Concluded)

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NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

SUNPLUS TECHNOLOGY COMPANY LIMITED

1. GENERAL INFORMATION

Sunplus Technology Company Limited (the “Company”) was established in August 1990. It researches, develops, designs, tests and sells high quality, high value-added consumer integrated circuits (ICs). Its products are based on core technologies in such areas as multimedia audio/video, single-chip microcontrollers and digital signal processors. These technologies are used to develop hundreds of products including various ICs: Liquid crystal display, microcontroller, multimedia, voice/music, and application-specific devices. The Company’s shares have been listed on the Taiwan Stock Exchange since January 2000. Some of its shares have been issued in the form of global depositary receipts (GDRs), which have been listed on the London Stock Exchange since March 2001. The procedures for terminating GDRs were completed on November 10, 2022(refer to Note 20).

The parent financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The parent company only financial statements were approved by the board of directors and authorized for issue on March 15, 2023.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies.

b. The IFRSs endorsed by the FSC for application starting from 2023

New, Amended and Revised Standards and Interpretations Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Announced by International Accounting Standards Board (IASB)
	January 1, 2023 (Note 1) January 1, 2023 (Note 2) January 1, 2023 (Note 3)

Note 1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
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Note 2: The amendments will be applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 3: Except for deferred taxes that were recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments were applied prospectively to transactions that occur on or after January 1, 2022.

1) Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Company should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;
The Company may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and
Not all accounting policy information relating to material transactions, other events or conditions is itself material.

The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

a) The Company changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;
b) The Company chose the accounting policy from options permitted by the standards;
c) The accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;
d) The accounting policy relates to an area for which the Company is required to make significant judgements or assumptions in applying an accounting policy, and the Company discloses those judgements or assumptions; or
e) The accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.

2) Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Company may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Company uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

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c. The IFRSs in issue but not yet endorsed and issued into effect by the FSC

Effective Date New, Amended and Revised Standards and Interpretations Announced by IASB (Note 1)

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” January 1, 2024 (Note 2) IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - January 1, 2023 Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2024 Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants” January 1, 2024

Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.
1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

The amendments stipulate that, when the Company sells or contributes assets that constitute a business (as defined in IFRS 3) to an associate or joint venture, the gain or loss resulting from the transaction is recognized in full. Also, when the Company loses control of a subsidiary that contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized in full.

Conversely, when the Company sells or contributes assets that do not constitute a business to an associate or joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Company’s interest as an unrelated investor in the associate or joint venture, i.e., the Company’s share of the gain or loss is eliminated. Also, when the Company loses control of a subsidiary that does not contain a business but retains significant influence or joint control over an associate or a joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Company’s interest as an unrelated investor in the associate or joint venture, i.e., the Company’s share of the gain or loss is eliminated.

2) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” (referred to as the “2020 amendments”) and “Non-current Liabilities with Covenants” (referred to as the “2022 amendments”)

The 2020 amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right.

The 2020 amendments also stipulate that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date. The 2022 amendments further clarify that only covenants with which an entity is required to comply on or before the reporting date should affect the classification of a liability as current or non-current. Although the covenants to be complied with within twelve months after the reporting period do not affect the

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classification of a liability, the Company shall disclose information that enables users of financial statements to understand the risk of the Company that may have difficulty complying with the covenants and repay its liabilities within twelve months after the reporting period.

The 2020 amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Company’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32 “Financial Instruments: Presentation”, the aforementioned terms would not affect the classification of the liability.

3) Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback”

The amendments clarify that the liability that arises from a sale and leaseback transaction - that satisfies the requirements in IFRS 15 to be accounted for as a sale - is a lease liability to which IFRS 16 applies. However, if the lease in a leaseback that includes variable lease payments that do not depend on an index or rate, the seller-lessee shall measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. Seller-lessee subsequently recognizes in profit or loss the difference between the payments made for the lease and the lease payments that reduce the carrying amount of the lease liability.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of Compliance

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

b. Basis for Preparation

The financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.

When preparing these parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only

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financial statements to be the same with the amounts attributable to the owners of the Company in its financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries and associates, the share of other comprehensive income of subsidiaries and associates and the related equity items, as appropriate, in these parent company only financial statements.

c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within twelve months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within twelve months after the reporting period
3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

d. Foreign currencies

In preparing the Company’s financial statements, transactions in currencies other than the Company’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary item denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

e. Inventories

Inventories consist of raw materials, supplies, finished goods and work in progress and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

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f. Investments accounted for using the equity method
1) Investment in subsidiaries

The Company uses the equity method to account for investments in subsidiaries.

Subsidiaries are the entities controlled by the Company.

Under the equity method, the investment is initially recognized at cost and the carrying amount is increased or decreased to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary after the date of acquisition. Besides, the Company also recognizes the Company’s share of the change in other equity of the subsidiary.

Changes in the Company’s ownership interest in a subsidiary that do not result in the Company losing control of the subsidiary are accounted for as equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

When the Company’s share of loss of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further loss, if any.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business over the cost of acquisition is recognized immediately in profit or loss.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

When the Company loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides this, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Company directly disposed of the related assets or liabilities.

Profit or loss resulting from downstream transactions is eliminated in full only in the parent company only financial statements. Profit and loss resulting from upstream transactions and transactions between subsidiaries is recognized only in the parent company only financial statements and only to the extent of interests in the subsidiaries that are not related to the Company.

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2) Investments in associates

An associate is an entity over which the Company has significant influence and which is not a subsidiary.

The Company uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. The Company also recognizes the changes in the Company’s share of the equity of associates and joint ventures attributable to the Company.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When the Company subscribes for additional new shares of the associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by the equity method is insufficient, the shortage is debited to retained earnings.

When the Company’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for by the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. Additional loss if any. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required had that associate directly disposed of the related assets or liabilities.

When the Company transacts with its associate (profits and losses resulting from the transactions with the associate are recognized in the Company’s parent company only financial statements only to the extent of interests in the associate and the jointly controlled entity that are not related to the Company.

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g. Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

The depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

h. Intangible assets
1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life.

2) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

i. Impairment of property, plant and equipment, right-of-use asset and intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of Property, plant and equipment and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets maybe impaired.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

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j. Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, and the sale should be expected to qualify for recognition as a completed sale within 1 year from the date of classification.

When the Company is committed to a sale plan involving the disposal of an investment or a portion of an investment in an associate or a joint venture, only the investment or the portion of the investment that will be disposed of is classified as held for sale when the classification criteria are met, and the Company discontinues the use of the equity method in relation to the portion that is classified as held for sale. Any retained portion of an investment in an associate or a joint venture that has not been classified as held for sale continues to be accounted for using the equity method. If the Company ceases to have significant influence or joint control over the investment after the disposal takes place, the Company accounts for any retained interest that has not been classified as held for sale in accordance with the accounting policies for financial instruments.

k. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are attributed to the original acquisition cost.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

a) Measurement category

Financial assets are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost.

i. Financial assets at FVTPL

Financial assets is classified as at FVTPL when such a financial asset is mandatorily classified or it is designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends or interest earned on such financial assets are recognized in other income, respectively; any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 28: Financial Instruments.

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ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

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

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, other financial assets, trade receivables, other receivables and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.

Cash equivalents include time deposits with original maturities within 12 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

b) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

c) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

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On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity, and its carrying amounts are calculated based on weighted average by share types. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

3) Financial liabilities
a) Subsequent measurement

All the financial liabilities are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

l. Revenue recognition

The Company identifies a contract with a customer, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

Unearned receipts for merchandise sales would be recognized as contract liabilities before the company fulfills its performance obligations.

Revenue from the sale of goods

Revenue from the sale of goods comes from the sale of ICs. Sales of ICs are recognized as revenue when the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and the price to sell the goods, has the primary responsibility for sales to future customers, and bears the risks of obsolescence. Trade receivables are recognized concurrently.

The Company does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

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Other income

Other income mainly comes from software development and royalties.

m. Leases

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

1) The Company as lessor

All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

2) The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheet.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. The Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

The Company requested the lessor for rent subsidy as a direct subsidy of the Covid-19 to change the lease payments. There is no substantive change to other terms and conditions. The Company elects to apply the practical expedient to all of the rent subsidy, and, therefore, does not assess whether the rent subsidy are lease modifications. Instead, the Company recognizes the reduction in lease payment in profit or loss as a deduction of expenses of variable lease payments.

n. Borrowing costs

Borrowing costs are recognized in profit or loss in the period in which they are incurred.

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o. Government grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized in other income on a systematic basis over the periods in which the Company recognizes as expenses the related costs that the grants intend to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in profit or loss in the period in which they are received.

p. Employee benefits
1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and past service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur, or when the plan amendment or curtailment occurs. Remeasurement, comprising actuarial gains and losses, and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

q. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

According to the Income Tax Law, an additional tax of inappropriate earnings is provided for as income tax in the year the shareholders approve to retain the earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

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Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

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

3) Current and deferred tax for the period

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions on the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Company considers the possible impact of the recent development of the COVID-19 in Taiwan and its economic environment implications when making its critical accounting estimates on cash flow projections, growth rate, discount rate, profitability, etc. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Key Sources of Estimation Uncertainty

Estimated impairment of financial assets

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company’s historical experience, existing market conditions as

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well as forward looking estimates as of the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

6. CASH AND CASH EQUIVALENTS

Cash on hand Demand deposits Cash equivalents Time deposits		December 31	December 31
		2022 $ 355 246,661 - $ 247,016	2021 $ 377 310,587 260,000 $ 570,964

The market rate intervals of cash in bank and bank overdrafts at the end of the reporting period were as follows:

The market rate intervals of cash in bank and bank overdrafts at the follows:	end of the reporting period were as
Bank balance	December 31
	2022 2021 0.001%-1.050% 0.001%-0.350%

7. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit of loss (FVTPL)-current Financial assets classified as at FVTPL Non-derivative financial assets Listed shares Mutual funds Financial liabilities at FVTPL-non-current Financial assets classified as at FVTPL Non-derivative financial assets Unlisted shares Limited partnership		December 31	December 31
		2022 $ 15,480 - $ 15,480 $ 269,823 6,183 $ 276,006	2021 $ 66,000 87,633 $ 153,633 $ 515,261 - $ 515,261

8. TRADE RECEIVABLE, NET

Trade receivables At amortized cost Gross carrying amount		December 31	December 31
		2022 $ 184,390	2021 $ 268,597

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Trade receivables

The average credit period on sales of goods was 30 to 60 days without interest. The Company’s exposure to credit risk and external credit ratings are continuously monitored. In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Company’s credit risk was significantly reduced.

The Company measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix approach considering the past default experience of the customer, the customer’s current financial position, economic condition of the industry in which the customer operates, as well as the industry outlook. As the Company’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Company’s different customer base.

The Company writes off a trade receivable when there is evidence indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The Company’s current credit risk grading framework is shown in the following table:

December 31, 2022

Not Overdue Expected credit loss rate - Gross carrying amount $ 184,390 Loss allowance (Lifetime ECLs) - Amortized cost $ 184,390 December 31, 2021 Not Overdue Expected credit loss rate - Gross carrying amount $ 268,597 Loss allowance (Lifetime ECLs) - Amortized cost $ 268,597	Overdue 1- 60 days - $ - - $ - Overdue 1- 60 days - $ - - $ -	Overdue 61-90 days - $ - - $ - Overdue 61-90 days - $ - - $ -	Overdue 91-120 days Overdue 120 days or More - - $ - $ - - - $ - $ - Overdue 91-120 days Overdue 120 days or More - - $ - $ - - - $ - $ -	Total - $ 184,390 -
				$ 184,390
				Total - $ 268,597 -
				$ 268,597

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 and December 31	2022 $ -	2021 $ -

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9. INVENTORIES

Finished goods Work in progress Raw materials		December 31	December 31
		2022 $ 313,529 327,833 331,978 $ 973,340	2021 $ 123,892 195,671 214,668 $ 534,231

The costs of inventories recognized as cost of goods sold for the years ended December 31, 2022 and 2021 were $918,272 thousand and $867,208 thousand, respectively.

The costs of inventories recognized as costs of goods sold for the years ended December 31, 2022 and 2021 were as follows:

Inventory (write-downs) reversed Income from scrap sales	For the Year Ended	For the Year Ended	December 31
		2022 $ (137,768) 106 $ (137,662)	2021 $ 7,109 55 $ 7,164

10. NON-CURRENT ASSETS HELD FOR SALE

	December 31,
	2021
Non-current assets held for sale	$ 108,504

In December 2021, the Company’s board of directors resolved to dispose of 8,000,000 shares of the associate company - iCatch Technology Co., Ltd. and entered into the “shares should be sold contract” agreement. The disposal was completed in January 2022.

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries Investments in associates		December 31	December 31
		2022 $ 7,213,915 757,935 $ 7,971,850	2021 $ 7,433,243 788,777 $ 8,222,020

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a. Investments in subsidiaries

Listed companies Sunplus Innovation Technology Inc. (“Sunplus Innovation Technology”) Generalplus Technology Inc. (“Generalplus Technology”) Non-listed companies Ventureplus Group Inc. (“Ventureplus Group”) Sunplus Venture Capital Co., Ltd. (“Sunplus Venture Capital”) Russell Holdings Limited (“Russell”) Lin Shin Investment Co., Ltd. (“Lin Shin Investment”) Award Glory Limited. (“Award Glory”) Sunext Technology Co., Ltd. (“Sunext Technology”) Wei-Young Investment Inc. (“Wei-Young Investment”) Sunplus mMobile Inc. (“Sunplus mMobile”) Sunplus mMedia Inc. (“Sunplus mMedia”) Jumplux Technology Co., Ltd. (“Jumplux Technology”) Sunplus Management Consulting Inc. (“Sunplus Management Consulting”) Sunplus Technology (H.K.) Co., Ltd. (“Sunplus Technology (H.K.)”) Magic Sky Limited (“Magic Sky”) Investment impairment using equity method (accounted for current liability) Jumplux Technology		December 31	December 31
		2022 $ 1,165,423 847,758 1,678,364 1,103,338 890,371 814,218 368,974 248,972 38,159 29,043 22,667 3,407 3,193 28 - $ 7,213,915 $ -	2021 $ 1,286,616 848,020 1,594,626 1,068,483 698,927 1,057,567 465,117 254,472 102,854 29,226 23,259 - 3,383 25 668 $ 7,433,243 $ 18,737

Except for Sunplus Management Consulting, investments were accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on financial statements which have been audited. Management believes there is no material impact on the equity method of accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements of Sunplus Management Consulting which have not been audited.

Sunplus mMobile considered its business’ future development and concluded that it has no plan to continue operation. The board of directors resolved to dispose dissolution on January 19, 2022 and completed the dissolution on February 28, 2022.

The disposal of Magic Sky was completed on June 22, 2022.

Refer to Note 32 for the detail list of investments in subsidiaries.

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The percentage subsidiaries’ ownerships and voting right held by the Company:

Listed companies Sunplus Innovation Technology Generalplus Technology Non-listed companies Ventureplus Group Sunplus Venture Capital Russell Lin Shin Investment Award Glory Sunext Technology Wei-Young Investment Sunplus mMobile Sunplus mMedia Jumplux Technology Sunplus Management Consulting Sunplus Technology (H.K.) Magic Sky	December 31
	2022 2021 50% 51% 34% 34% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 93% 100% 100% 100% 100% 90% 90% 55% 55% 100% 100% 100% 100% - 100%

b. Investments in associates

Associates Global View Co., Ltd. iCatch Technology Inc. (“iCatch Technology”) AkiraNet Co., Ltd. Name of Associate Global View Co., Ltd. iCatch Technology AkiraNet Co., Ltd.		December 31
	2022 2021 $ 318,969 $ 342,742 282,913 251,001 156,053 195,034 $ 757,935 $ 788,777 Proportion of Ownership and Voting Rights
	December 31
	2022 2021 13% 13% 13% 15% 26% 35%

Refer to Table 6 “Information on Investees” for the nature of activities, principal places of business and countries of incorporation of the associates.

Fair values (Level 1) of investments in associates with available published price quotations are summarized as follows:

Global View Co., Ltd. iCatch Technology		December 31	December 31
		2022 $ 241,535 $ 509,382	2021 $ 313,131 $ 1,103,576

All the associates are accounted for using the equity method.

29 -

The summarized financial information of the Company’s associates is set out below:

Total assets Total liabilities Revenue (Loss) profit for the year Other comprehensive (loss) income for the year Share of (loss) profit of associates accounted for using the equity method		December 31	December 31
	2022 2021 $ 4,222,750 $ 4,121,497 $ 427,086 $ 612,850 For the Year Ended December 31
		2022 $ 1,249,011 $ (46,906) $ (122,070) $ (14,355)	2021 $ 1,379,578 $ 129,792 $ 431,519 $ 29,747

The investments accounted for by using the equity method and the share of profit or loss and other comprehensive income of those investments were based on the associates’ audited financial statements audited by the auditors.

12. PROPERTY, PLANT AND EQUIPMENT

Assets used by the Company

2022 Cost Balance at January 1, 2022 Additions Reductions Reclassified Balance at December 31, 2022 Accumulated depreciation Balance at January 1, 2022 Depreciation expense Reductions Balance at December 31, 2022 Carrying amount at December 31, 2022 2021 Cost Balance at January 1, 2021 Additions Reductions Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Depreciation expense Reductions Balance at December 31, 2021 Carrying amount at December 31, 2021	Buildings $ 969,645 - - - $ 969,645 $ 401,840 19,730 - $ 421,570 $ 548,075 $ 969,645 - - $ 969,645 $ 382,111 19,729 - $ 401,840 $ 567,805	Auxiliary Equipment $ 22,689 3,001 (1,577 ) - $ 24,113 $ 11,593 3,206 (1,577) $ 13,222 $ 10,891 $ 27,733 2,200 (7,244) $ 22,689 $ 15,336 3,501 (7,244) $ 11,593 $ 11,096	Machinery and Equipment $ 3,500 2,395 - 5,845 $ 11,740 $ 2,407 2,672 - $ 5,079 $ 6,661 $ 4,644 - (1,144) $ 3,500 $ 2,628 923 (1,144) $ 2,407 $ 1,093	Testing Equipment $ 128,347 115,880 (42,984 ) 31,547 $ 232,790 $ 70,101 99,311 (42,874) $ 126,428 $ 106,362 $ 136,722 43,274 (51,649) $ 128,347 $ 87,956 33,794 (51,649) $ 70,101 $ 58,246	Furniture and Fixtures $ 101,284 26,971 (9,695 ) 5,130 $ 123,690 $ 39,216 28,157 (9,695) $ 57,678 $ 66,012 $ 69,286 34,074 (2,076) $ 101,284 $ 19,445 21,847 (2,076) $ 39,216 $ 62,068	Construction in Process $ 26,429 23,064 - (42,522) $ 6,971 $ - - - $ - $ 6,971 $ - 26,429 - $ 26,429 $ - - - $ - $ 26,429	Total $ 1,251,894 171,311 (54,256 ) - $ 1,368,949 $ 525,157 153,076 (54,256) $ 623,977 $ 744,972 $ 1,208,030 105,977 (62,113) $ 1,251,894 $ 507,476 79,794 (62,113) $ 525,157 $ 726,737

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The above items of property, plant and equipment are depreciated on a straight-line basis over the following estimated useful lives as follows:

Buildings 35-56 years Auxiliary equipment 4-11 years Machinery and equipment 4 years Testing equipment 1-4 years Furniture and fixtures 2-5 years

Refer to Note 30 for the carrying amounts of property, plant and equipment that had been pledged by the Company to secure borrowings.

13. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Transportation equipment Depreciation charge for right-of-use assets Land Transportation equipment		December 31	December 31
	2022 $ 160,660 2,690 $ 163,350 For the Year Ended		2021 $ 165,563 - $ 165,563 December 31
		2022 $ 5,656 336 $ 5,992	2021 $ 5,682 - $ 5,682

Except for the aforementioned addition and recognized depreciation, the Company did not have significant sublease or impairment of right-of-use assets during the year ended December 31, 2022 and 2021.

b. Lease liabilities

Carrying amount Current Non-current		December 31	December 31
		2022 $ 5,169 $ 165,077	2021 $ 4,074 $ 166,801

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Range of discount rates for lease liabilities was as follows:

Land Transportation equipment	December 31
	2022 2021 2.390% 2.390% 1.625% -

c. Material lease-in activities and terms

The Company leases land and buildings located in the ROC for the use of plants and offices has a lease terms of 20 years. The lease agreement specifies that lease payments will be adjusted on the basis of changes in the announced land value prices. The Company does not have bargain purchase options to acquire the leasehold land at the end of the lease terms.

The Company did not enter into significant lease contracts for the years ended December 31, 2022 and 2021.

d. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	2022 $ 1,536 $ 425 $ 10,493	2021 $ 5,200
		$ 425
		$ 13,794

The Company leases certain transportation equipment and other leases which qualify as short-term leases. The Company has elected to apply the recognition exemption and therefore did not recognize right-of-use assets and lease liabilities for these leases.

14. INTANGIBLE ASSETS

Cost Balance at January 1, 2022 Additions Reductions Balance at December 31, 2022 Accumulated amortization Balance at January 1, 2022 Amortization expense Reductions Balance at December 31, 2022	Technology License Fees $ 570,268 35,263 (41,705) $ 563,826 $ 221,939 93,082 (41,705) $ 273,316	Software $ 9,601 4,597 - $ 14,198 $ 2,556 3,189 - $ 5,745	Patents $ 97,099 - - $ 97,099 $ 75,522 - - $ 75,522	Total $ 676,968 39,860 (41,705) $ 675,123 $ 300,017 96,271 (41,705) $ 354,583 (Continued)

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Technology
License Fees
Software
Patents

Accumulated impairment
Balance at January 1, 2022
$ 111,136 $ - $ 21,577
Impairment loss

457

-

-

Balance at December 31, 2022
$ 111,593
$ -
$ 21,577

Net Balance at December 31, 2022$ 178,917
$ 8,453
$ -

Cost
Balance at January 1, 2021
$ 497,620 $ 5,802 $ 97,099
Additions

84,184
6,886
-
Reductions

(11,536)

(3,087)

-

Balance at December 31, 2021
$ 570,268
$ 9,601
$ 97,099

Accumulated amortization
Balance at January 1, 2021
$ 145,457 $ 3,359 $ 75,522
Amortization expense

88,018
2,284
-
Reductions

(11,536)

(3,087)

-

Balance at December 31, 2021
$ 221,939
$ 2,556
$ 75,522

Accumulated deficit
Balance at January 1 and
December 31, 2021
$ 111,136
$ -
$ 21,577

Net Balance at December 31, 2021$ 237,193
$ 7,045
$ -

Other intangible assets are amortized on a straight-line basis over their estimated useful lives
Technology license fees
Software
Patents
An analysis of the amortization by function:

Total
$ 132,713

457
$ 133,170
$ 187,370
$ 600,521

91,070

(14,623)
$ 676,968
$ 224,338

90,302

(14,623)
$ 300,017
$ 132,713
$ 244,238
as follows:
2-10 years
3 years
18 years

Operating costs General and administrative expenses Research and development expenses		December	31
		2022 $ 165 1,403 94,703 $ 96,271	2021 $ 24 1,477 88,801 $ 90,302

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15. OTHER ASSETS

Current Other financial assets Restricted assets (a) Other assets Prepayments for EDA tools Prepaid technical licensing fee Prepaid materials Others Non-current Other financial assets Pledged time deposits (b) Other assets Refundable deposits Others		December	31
		2022 $ 43,610 $ 16,481 13,168 9,493 14,363 $ 53,505 $ 10,500 $ 1,295 7,800 $ 9,095	2021 $ 25,940 $ 16,622 7,636 38,613 25,091 $ 87,962 $ 8,350 $ 173 7,800 $ 7,973

a. Refer to Note 25 for information on restricted assets.

b. Refer to Note 30 for information on pledged time deposits.

16. BORROWINGS

Long term borrowings

The borrowings of the Company were as follows:

Loans on credit Less: Current portion Long-term borrowings - non-current		December 31	December 31
		2022 $ 1,000,000 - $ 1,000,000	2021 $ 430,000 (46,000) $ 384,000

The intervals of effective borrowing rate as of December 31, 2022 and 2021 was 1.875% and 1.220%-1.250%.

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In addition, in accordance with the provisions of the loan contract, the Company’s consolidated financial statements for semiannual and annual are subject to current ratio, debt ratio, interest coverage ratio., but they are not included in the examination of default items. The Company’s financial ratios are in compliance with the contract requirements.

17. ACCOUNTS PAYABLE

Accounts payable Payable - operating		December 31	December 31
		2022 $ 172,086	2021 $ 294,804

The average credit period on purchases of certain goods was 30-60 days. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

18. OTHER LIABILITIES

Current Other liabilities Payables for salaries or bonuses Refund liabilities (Note 21) Payables for royalties Other payables to related party Payables for purchases of intangible assets Payables on machinery and equipment Labor/health insurance Payables for employees’ compensation and remuneration of directors Credit balance of investments accounted for using equity method Others Non-current Payables for purchases of intangible assets Payables on machinery and equipment		December 31	December 31
		2022 $ 117,567 62,690 23,886 23,453 17,614 10,115 9,822 5,541 - 57,117 $ 327,805 $ 3,839 1,870 $ 5,709	2021 $ 119,128 9,849 251,042 14,658 14,715 61,579 9,605 30,339 18,737 60,721 $ 590,373 $ 6,920 3,070 $ 9,990

19. RETIREMENT BENEFIT PLANS

Defined contribution plan

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Company makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

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Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Act is operated by the government of the ROC. Under this plan, employees should receive either a series of pension payments with a defined annuity or a lump sum that is payable immediately on retirement and is equivalent to 2 base units for each of the first 15 years of service and 1 base unit for each year of service thereafter. The total retirement benefit is subject to a maximum of 45 units. The pension benefits are calculated on the basis of the length of service and average monthly salaries of the six month before retirement. In addition, the Company makes monthly contributions, equal to 2% of salaries, to a pension fund, which is administered by a fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name and are managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy. According to the letter of Zhuhuanzi No. 1110001802 issued by the Hsinchu Science Park Administration of the Ministry of Science and Technology, the Company ceased its retirement fund contribution temporarily from January 1, 2022 to December 31, 2022.

The amounts included in the balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of funded defined benefit obligation Fair value of plan assets Net defined benefit assets		December 31	December 31
		2022 $ 136,396 (168,389) $ (31,993)	2021 $ 162,318 (166,871) $ (4,553)

Movements in net defined benefit assets were as follows:

	Present Value of		Net Assets	Net Assets
	Funded Defined		Arising from
	Benefit	Fair Value of	Defined Benefit
	Obligation	Plan Assets	Obligation
Balance at January 1, 2021	$ 166,657	$ 171,097	$	(4,440)
Service cost
Current service cost	350	-		350
Interest expense (income)	1,250	1,283		(33)
Recognized in profit or loss	1,600	1,283		317
Remeasurement
Return on plan assets	-	1,759		(1,759)
Actuarial loss-changes in financial assumptions	4,154	-		4,154
Adjustment on actuarial gain-experience
adjustment	(2,825)	-		(2,825)
Recognized in other comprehensive income	1,329	1,759		(430)
Contributions from employer	-	-		-
Benefits paid	(7,268)	(7,268)		-
Balance at December 31, 2021	$ 162,318	$ 166,871	$	(4,553)
				(Continued)

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	Present Value of		Net Assets	Net Assets
	Funded Defined		Arising from
	Benefit	Fair Value of	Defined Benefit
	Obligation	Plan Assets	Obligation
Balance at January 1, 2022	$ 162,318	$ 166,871	$	(4,553)
Service cost
Current service cost	346	-		346
Interest expense (income)	811	835		(24)
Recognized in profit or loss	1,157	835		322
Remeasurement
Return on plan assets	-	13,475		(13,475)
Actuarial gain-changes in financial
assumptions	(9,552)	-		(9,552)
Adjustment on actuarial gain-experience
adjustment	(4,735)	-		(4,735)
Recognized in other comprehensive income	(14,287)	13,475		(27,762)
Contributions from employer	-	-		-
Benefits paid	(12,792)	(12,792)		-
Balance at December 31, 2022	$ 136,396	$ 168,389	$	(31,993)
				(Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the benefit plans is as follows:

Operating costs Selling and marketing expenses General and administrative expenses Research and development expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 53 9 99 161 $ 322	2021 $ 49 8 100 160 $ 317

Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

a. Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
b. Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
c. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.
37 -

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase Resignation rate	December 31
	2022 2021 1.25% 0.50% 4.00% 4.00% 0%-28% 0%-28%

If possible reasonable change in each of the significant actuarial assumptions occur and all other assumptions remain constant, the present value of the defined benefit obligation will increase (decrease) as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 1% increase 1% decrease		December	31
		2022 $ (3,077) $ 3,184 $ 13,213 $ (11,783)	2021 $ (4,154) $ 4,315 $ 17,682 $ (15,554)

The above sensitivity analysis may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions will occur in isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
		2022 $ - 11 years	2021 $ - 12 years

20. EQUITY

a. Share capital

1) Ordinary shares:

Shares authorized (in thousands of shares) Value of authorized shares Shares issued and fully paid (in thousands of shares) Shares issued and fully paid		December 31	December 31
		2022 1,200,000 $ 12,000,000 591,995 $ 5,919,949	2021 1,200,000 $ 12,000,000 591,995 $ 5,919,949

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and a right to dividends.

Of the Company’s authorized shares, 80,000 thousand shares have been reserved for the issuance of subscription warrants, preferred shares with warrants, or corporate bonds with warrants.

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2) Global depositary receipts

In March 2001, the Company issued 20,000 thousand units of global depositary receipts (GDRs), representing 40,000 thousand ordinary shares that consisted of newly issued and originally outstanding shares. The GDRs are listed on the London Stock Exchange (ticker: SUPD) with an issuance price of US$9.57 per unit. As of December 31, 2022, the outstanding 175 thousand units of GDRs represented 350 thousand ordinary shares.

On August 12, 2022, the board of directors proposed to cease the trading of Company’s issued ordinary shares on the London Stock Exchange in the form of GDRs. The termination agreement was completed on November 10, 2022, and the GDRs termination listing procedure was completed on the London Stock Exchange.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) From the issuance of ordinary shares From the business combinations The difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition May only be used to offset a deficit From treasury share transactions Changes in percentage of ownership interests in subsidiaries (2) Changes in net equity of associates accounted for using the equity method		December 31	December 31
		2022 $ - 138,032 297,845 55,298 475,546 230,652 $ 1,197,373	2021 $ 18,497 157,423 298,767 48,178 497,906 202,773 $ 1,223,544

1) When the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year).
2) Such capital surplus arises from the effects of changes in ownership interests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions or from changes in capital surplus of subsidiaries accounted for using the equity method.

c. Retained earnings and dividends policy

The shareholders’ meeting resolved the Company's Articles of Association on June 8, 2022. Under the dividends policy as set forth in the amended Articles, when the Company makes a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit. Through this limitation is not applicable when the legal reserve has reached the total capital, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. However, the ratio of earnings to provide distribution and the ratio of shareholders’ cash dividends may

39 -

depend on the current year. The actual profit and capital status shall be adjusted by the resolution of the shareholders’ meeting. The total number of shareholders’ dividends based on the annual surplus shall be distributed at the rate of not less than 10% of the newly added distributable surplus for the year, but shall not be distributed when the annual surplus is less than 1% of the paid-in capital. The aforementioned cash dividends shall not be less than 10% of the total dividends to be distributed to shareholders.

Under the dividends policy as set forth before amended Articles, when the Company makes a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit . However, this limitation is not applicable when the legal reserve has reached the total capital. Setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. However, the ratio of the distribution of surplus and the ratio of shareholders' cash dividends may be adjusted by the resolution of the shareholders' meeting depending on the actual profit and capital situation of the current year. The Company’s policy is that cash dividends should be at least 10% of total dividends distributed. However, cash dividends will not be distributed if these dividends are less than NT$0.5 per share.

Under the regulations promulgated, a special reserve equivalent to the debit balance of any account shown in the shareholders’ equity section of the balance sheet should be allocated from unappropriated retained earnings. For the policies on the distribution of employees’ compensation and remuneration to directors and supervisors before and after amendment, refer to Note 22-g.

Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of earnings for 2021 and 2020 approved in the shareholders’ meeting on June 8, 2022 and July 20, 2021, as follows:

	For Year 2021	For	Year 2020
Legal reserve	$ 124,955	$	32,889
Special reserve reversed	$ 21,875	$	15,111
Cash dividend	$ 1,146,102	$	311,093
Cash dividend per share (NT$)	$ 1.9360	$	0.5255

The Company’s shareholders also proposed in the shareholders’ meeting on June 8, 2022 to issue cash dividends from capital surplus of $37,888 thousand.

The earnings distribution proposal for 2022 in the board of directors meeting proposed on March 15, 2023 as follows:

	For	the Year
		2022
Legal reserve	$	27,902
Special reserve reversed	$	58,521
Cash dividend	$	309,613
Cash dividend per share (NT$)	$	0.5230

40 -

The appropriation of earnings was proposed by the Corporation’s board of directors on March 15, 2023 to proposed cash dividends from capital surplus of $45,584 thousand.

The appropriation of earnings for 2022 is subject to resolution in the shareholders’ meeting to be held on June 13, 2023.

d. Special reserve

Beginning at January 1 Special reserve reversed Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ 261,078 (21,875) $ 239,203	2021 $ 276,189 (15,111) $ 261,078

e. Other equity items
1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Recognized for the year Exchange differences on translating the financial statements of foreign operations Share of exchange differences of associates accounted for using the equity method Reclassification adjustments Disposal of foreign operations Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ (259,512) 81,686 29,332 12,017 $ (136,477)	2021 $ (228,023) (18,998) (12,491) - $ (259,512)

2) Unrealized valuation gain (loss) on financial assets at FVTOCI:

Balance at January 1 Recognized for the year Share from subsidiaries accounted for using the equity method Share from associates accounted for using the equity method Cumulative unrealized (loss) gain of equity instruments transferred to retained earnings due to disposal Disposal of partial interests in subsidiaries Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2022 $ 20,309 (5,975) (21,952) (36,588) - $ (44,206)	2021 $ (33,055) 89,977 27,943 (65,578) 1,022 $ 20,309

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f. Treasury shares

	Shares
	Transferred to		Shares Held by
	Employees		Subsidiaries			Total
	(In Thousands		(In	Thousands	(In Thousands
Purpose of Buy-back	of Shares)		of Shares)		of Shares)
Number of shares as of January 1, 2022		-		3,560		3,560
Decrease		-		-		-
Number of shares as December 31, 2022		-		3,560		3,560
Number of shares as of January 1, 2021		-		3,560		3,560
Decrease		-		-		-
Number of shares as December 31, 2021		-		3,560		3,560

The Company’s shares held by its subsidiaries at the end of the reporting periods were as follows:

Number of Shares Held (In Thousand) December 31, 2022 Lin Shin Investment 3,560 December 31, 2021 Lin Shin Investment 3,560	Carrying Amount Market Price $ 63,401 $ 79,744 $ 63,401 $ 138,306

Under the Securities and Exchange Act, The Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends and to vote.

21. REVENUE

Revenue from the sale of goods Other	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 1,287,716 86,826 $ 1,374,542	2021 $ 1,449,034 71,108 $ 1,520,142

a. Contract information

Revenue from the sale of goods

IC products are sold to agents and customers. The Company determines the sales price of products based on orders. It takes into consideration the past purchases of agents and customers in order to estimate the most likely discount amount and return rate. Based on the determination of revenue, the Company recognizes the amount and the liabilities for refunds (accounted for as other current liabilities).

42 -

Other

Other income mainly comes from software development and royalties.

b. Contract balances

December 31, 2022 December 31, 2021 Trade receivables (Note 8) $ 184,390 $ 268,597 Contract liabilities - current $ 14,027 $ 11,094	January 1, 2021 $ 172,035 $ 5,589

The changes in the balance of contract liabilities primarily result from the timing difference between the Company’s performance and the respective customer’s payment.

c. Disaggregation of revenue

Primary geographical markets Asia Taiwan Others Timing of revenue recognition Satisfied at a point in time Satisfied over time		Reportable Segments	Reportable Segments
		Direct Sales
		2022 $ 1,083,272 248,675 42,595 $ 1,374,542 $ 1,371,864 2,678 $ 1,374,542	2021 $ 1,243,478 231,604 45,060 $ 1,520,142 $ 1,516,210 3,932 $ 1,520,142

22. NET PROFIT

Net profit included the following items:

a. Interest income

Bank deposits Other	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 1,570 15 $ 1,585	2021 $ 940 15 $ 955

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b. Other income

For the Year Ended	For the Year Ended	December 31
2022 $ 75,900 43,624 38,025 26,025 $ 183,754 For the Year Ended		2021 $ 67,142 70,121 34,541 11,949 $ 183,753 December 31
2022 $ 449,000 73,962 26,201 (457) (3,184) (6,826) (176,260) $ 362,436 For the Year Ended		2021 $ - - 33,598 - (2,550) - 221,022 $ 252,070 December 31
2022 $ 9,684 4,119 172 $ 13,975 For the Year Ended		2021 $ 4,958 4,173 207 $ 9,338 December 31
	2022 $ 4,837 154,231 $ 159,068 $ 165 96,106 $ 96,271	2021 $ 3,215 82,261 $ 85,476 $ 24 90,278 $ 90,302

44 -
f. Employee benefit expense

Short-term benefits Post-employment benefits Defined contribution plans Defined benefit plans (Note 19) Other employee benefits Total employee benefit expense An analysis of employee benefit expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2022 $ 580,183 22,739 322 23,061 16,297 $ 619,541 $ 34,643 584,898 $ 619,541	2021 $ 538,743 21,945 317 22,262 14,872 $ 575,877 $ 35,643 540,234 $ 575,877

g. Employees’ compensation and remuneration of directors

The Company resolved amendments to its Articles of Incorporation to distribute employees’ compensation and remuneration to directors at rates of no less than 1% and no higher than 1.5%, respectively, of net profit before income tax, employees’ compensation, and remuneration to directors. The employees’ compensation and remuneration of directors for the years ended December 31, 2022 and 2021, which have been approved by the Company’s board of directors on March 15, 2023 and March 29, 2022, respectively, are as follows:

Accrual rate

Employees’ compensation Remuneration of directors Amount	For the Year Ended December 31
	2022 2021 1.00% 1.00% 1.50% 1.50%

Employees’ compensation Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2022 Cash Shares $ 2,216 $ - 3,325 -	2021
		Cash Shares
		$ 12,136 $ -
		18,203 -

If there is a change in the amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of compensation of employees and remuneration of directors and supervisors paid and the amounts recognized in the parent financial statements for the years ended December 31, 2021 and 2020.

45 -

Information on compensation of employees and remuneration of directors resolved by the Sunplus’ board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

h. Gain or loss on exchange rate changes

Exchange rate gains Exchange rate losses Net loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 48,383 (51,567) $ (3,184)	2021 $ 12,624 (15,174) $ (2,550)

23. INCOME TAXES

a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

Current tax In respect of the current year Deferred tax In respect of the current year Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 194 - $ 194	2021 $ 433 - $ 433

A reconciliation of accounting profit and current income tax expenses is as follows:

Profit before tax Income tax expense calculated at the statutory rate Tax effect of adjusting items: Nondeductible expenses Non-taxable gains Tax-exempt income Temporary differences Effects of consolidated income tax filing Current income tax expense Unrecognized investment credit Foreign income tax expense Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 216,093 $ 43,219 - (219,109) (15,180) 85,492 - (105,578) 105,578 194 $ 194	2021 $ 1,183,218 $ 236,644 21,311 (275,532) (13,428) (49,983) (36) (81,024) 81,024 433 $ 433

46 -

b. Current tax assets and liabilities

Current tax assets Tax refund receivable (classified as other receivables)		December	31
		2022 $ -	2021 $ 7

c. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2022

Deferred Tax Assets Temporary differences Depreciation expense Exchange (losses) gains Others	Opening Balance Recognized in Profit or Loss Closing Balance $ 1,409 $ 5,834 $ 7,243 1,237 891 2,128 (161) (6,725) (6,886) $ 2,485 $ - $ 2,485

For the year ended December 31, 2021

Deferred Tax Assets Temporary differences Depreciation expense Exchange (losses) gains Others	Opening Balance Recognized in Profit or Loss Closing Balance $ 2,880 $ (1,471) $ 1,409 (712) 1,949 1,237 317 (478) (161) $ 2,485 $ - $ 2,485

d. Deductible temporary differences, unused loss carryforwards and unused investment credits for which no deferred tax assets have been recognized in the parent company only balance sheets

Loss carryforwards Expiry in 2022 Expiry in 2023 Expiry in 2027 Expiry in 2029 Expiry in 2030 Expiry in 2031 Deductible temporary differences		December 31	December 31
		2022 $ - 1,144,831 10,909 329,899 48,825 5,675 $ 1,540,139 $ 147,757	2021 $ 394,894 1,144,831 10,909 329,899 57,825 4,766 $ 1,943,124 $ 64,832

47 -
e. Unused loss carryforwards and tax exemptions

Loss carryforwards as of December 31, 2022:

Unused Amount	Expiry Year
$ 1,144,831	2023
10,909	2027
329,899	2029
48,825	2030
5,675	2031
$ 1,540,139

f. Income tax assessments

The income tax returns of the Company before 2021 have been assessed by the tax authorities.

24. EARNINGS PER SHARE

Basic gain per share Diluted earnings per share	Unit: NT$ Per Share For the Year Ended December 31	Unit: NT$ Per Share For the Year Ended December 31	Unit: NT$ Per Share For the Year Ended December 31
		2022 $ 0.37 $ 0.37	2021 $ 2.01 $ 2.01

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net profit for the year

Profit for the year attributable to owners of the Company Effect of potentially dilutive ordinary shares Bonuses for employees Earnings used in the computation of diluted EPS from continuing operations Weighted average number of ordinary shares outstanding (in thousand	For the Year Ended December 31	For the Year Ended December 31
	2022 $ 215,899 - $ 215,899 shares):	2021 $ 1,182,785 - $ 1,182,785

Weighted average number of ordinary shares used in the computation of basic earnings per shares Effect of dilutive potential ordinary shares: Employee bonuses Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended	For the Year Ended	December 31
		2022 588,435 184 588,619	2021 588,435 340 588,775

48 -

The Company may settle the compensation of employees in cash or shares; therefore, the Company assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

25. GOVERNMENT GRANTS

The Company applied for the AI on Chip R&D subsidy program from the Ministry of Economic Affairs, and the “Shared Intelligent Computing Chiplet Architecture R&D Program” was reviewed and approved on November 20, 2020. The approved subsidy amounted to $115,356 thousand. As of December 31, 2022 and 2021, the accumulated subsidies received were $113,706 thousand and $70,139 thousand, respectively. The amounts of the recognized subsidy income were $43,516 thousand and $70,121 thousand. In addition, the Company has a special account for subsidies in accordance with regulations. The monthly withdrawal amount shall be withdrawn according to the monthly expenditure summary statement, and the withdrawal amount shall not be higher than the expenditure amount.

26. DISPOSAL OF SUBSIDIARIES - WITH LOSS OF CONTROL

The Company completed the disposal and liquidation on June 20, June 22, August 30 and September 5, 2022 respectively, on which dates control of its subsidiary passed to the acquirer. For details about the disposal of GenKi Tek Technology Co., Ltd. and Magic Sky, and liquidation of Jsilicon Technology, Co., Ltd. Giant Kingdom Ltd. and Giant Best Ltd., refer to Note 30 to the Company’s consolidated financial statements for the year ended December, 2022.

27. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Company (comprising issued capital, reserves, retained earnings and other equity) attributable to owners of the Company.

The Company is not subject to any externally imposed capital requirements.

28. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

The management of the Company considers that the fair values of financial assets and financial liabilities that are not measured at fair value approximate their fair values.

49 -
b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2022 Financial assets at FVTPL Domestic/foreign unlisted shares Domestic listed shares December 31, 2021 Financial assets at FVTPL Mutual funds Domestic unlisted shares Domestic listed shares	Level 1 $ - 15,480 $ 15,480 Level 1 $ 87,633 - 66,000 $ 153,633	Level 2 $ - - $ - Level 2 $ - - - $ -	Level 3 $ 276,006 - $ 276,006 Level 3 $ - 515,261 - $ 515,261	Total $ 276,006 15,480
				$ 291,486
				Total $ 87,633 515,261 66,000
				$ 668,894

There were no transfers between Levels 1 and 2 in the current and prior periods.

2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2022

Financial Assets
Financial Assets
at FVTPL
Financial Assets
at FVTOCI
Balance at January 1, 2022
$ 515,261
$ -

Recognized in profit or loss
(214,483)
-

Purchases
82,392
-
Sales
(107,164)

-

Balance at December 31, 2022
$ 276,006
$ -

For the year ended December 31, 2021
Financial Assets
Financial Assets
at FVTPL
Financial Assets
at FVTOCI
Balance at January 1, 2021
$ 311,021
$ -

Recognized in profit or loss

204,240

-

Balance at December 31, 2021
$ 515,261
$ -

Total
$ 515,261
(214,483)
82,392
(107,164)
$ 276,006
Total
$ 311,021
204,240
$ 515,261

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3) Valuation techniques and inpats applied for Level 3 fair value measurement

The fair values of unlisted shares and limited partnership were determined using the asset-based approach. The Company assesses that the amount of its net assets attributable to its investment approaches the fair value of the equity investment. The Company assesses the total value of the individual assets and liabilities covered by the target to reflect the overall value of the business.

c. Categories of financial instruments

Financial assets Fair value through profit or loss (FVTPL) Financial assets at amortized cost (i) Financial liabilities Measured at amortized cost (ii)	December 31
	2022 2021 $ 291,486 $ 668,894 570,630 906,135 1,218,906 778,453

i) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, trade receivables, other receivables, other financial assets and refundable deposits.
ii) The balances include financial liabilities at amortized cost, which comprise accounts payable, current portion of long-term bank borrowings, long-term borrowings and guarantee deposits.
d. Financial risk management objectives and policies

The Company’s major financial instruments included mutual funds, equity and debt investments, trade receivables, accounts payable, borrowings and lease liability. The Company’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Corporate Treasury function reported quarterly to the Company's risk management committee.

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Company entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

a) Foreign currency risk

A part of the Company’s cash flows is in foreign currency, and the use by management of derivative financial instruments is for hedging adverse changes in exchange rates, not for profit.

For exchange risk management, each foreign-currency item of net assets and liabilities is reviewed regularly. In addition, before obtaining foreign loans, the Company considers the cost of the hedging instrument and the hedging period.

The carrying amounts of the Company’s foreign currency-denominated monetary assets and monetary liabilities at the end of the reporting period, please refers to Note 31.

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Sensitivity analysis

The Company was mainly exposed to the USD and RMB.

The following table details the Company sensitivity to a US$1.00 and RMB1.00 increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currencies. The sensitivity analysis considers the currencies of USD and RMB in circulation, and adjusts the end-of-term conversion to exchange rate change of $1.00. The sensitivity analysis covers cash and cash equivalents, notes and accounts receivable, other receivables, other financial assets, long-term and short-term loans, accounts payable, other accounts payable and deposit margins. A positive (negative) amount below indicates an increase (decrease) in pre-tax profit (loss) when the NTD strengthened (weakened) by 1% against the relevant currency at the end of the reporting period.

Profit or loss Profit or loss	USD Impact
	For the Year Ended December 31
	2022 2021 $ (6,470) $ 5,311 RMB Impact
	For the Year Ended December 31
	2022 2021 $ 10,836 $ 3,441

b) Interest rate risk

The Company was exposed to interest rate risk because entities in the Company borrowed funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate borrowings, and using interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

The carrying amounts of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31 2022 2021 $ 10,500 $ 268,350 170,246 170,875 290,271 336,527 1,000,000 430,000

Sensitivity analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. Basis points of 0.125% increase or decrease was used when reporting interest rate risk internally to key

52 -

management personnel and represents management's assessment of the reasonably possible change in interest rates.

If interest rates increased/decreased by 0.125% and all other variables held constant, the Company’s post-tax profit for the years ended December 31, 2022 and 2021 would have decreased/increased by $887 thousand and $117 thousand, respectively.

c) Other price risk

The Company was exposed to price risk through its investments in financial assets at FVTPL and FVTOCI. The Company does not actively trade these investments.

The sensitivity analyses below was determined based on the exposure to price risks of financial assets at FVTPL and FVTOCI at the end of the reporting period.

If the prices of financial assets at FVTPL had been 1% higher/lower, the post-tax other comprehensive income for the years ended December 31, 2022 and 2021 would have increased/decreased by $2,915 and $6,689 thousand, respectively.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. At the end of the reporting period, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Group, could be equal to the total of the following:

In order to minimize credit risk, the management of the Company has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Company’s credit risk was significantly reduced.

The credit risk on liquid funds and derivatives was limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.

Trade receivables consisted of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of trade receivables and, where appropriate, credit guarantee insurance cover is purchased.

The Company’s concentration of credit risk of 94% and 91% in total trade receivables as of December 31, 2022 and 2021, respectively, was related to the five largest customers within the property construction business segment.

3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

53 -

The Company relies on bank borrowings as a significant source of liquidity. As of December 31, 2022 and 2021, the Company had available unutilized overdraft and financing facilities refer to the following instruction.

a) Liquidity and interest rate risk tables

The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed upon repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The tables included both interest and principal cash flows.

December 31, 2022

On Demand
or Less than
1 Month
1-3 Months
More than 3
Months to 1
Year
Over 1 Year
to 5 Years
Non-derivative financial
liabilities

Non-interest bearing
$ 205,479 $ 48,658 $ 48 $ -
Lease liabilities

771
1,541
6,935
34,467
Variable intersest rate
liabilities
1,072
-
- 1,000,000
Fixed interest rate liabilities
-

-

-

3,826

$ 207,322
$ 50,199
$ 6,983
$1,038,293

5+ Years
$ -
197,427

-

42,994

$ 240,421

Additional information about the maturity analysis for lease liabilities:

Less than 1 Year 1-5 Years 5-10 Years 10-15 Years 15-20 Years Lease liabilities $ 9,247 $ 34,467 $ 40,831 $ 40,155 $ 30,690 December 31, 2021 On Demand or Less than 1 Month 1-3 Months More than 3 Months to 1 Year Over 1 Year to 5 Years Non-derivative financial liabilities Non-interest bearing $ 225,209 $ 124,223 $ 997 $ - Lease liabilities 678 1,355 6,098 32,522 Variable intersest rate liabilities 221 - 46,000 384,000 Fixed interest rate liabilities - - - 3,826 $ 226,108 $ 125,578 $ 53,095 $ 420,348 Additional information about the maturity analysis for lease liabilities: Less than 1 Year 1-5 Years 5-10 Years 10-15 Years 15-20 Years Lease liabilities $ 8,131 $ 32,522 $ 40,652 $ 40,652 $ 31,901	20+ Years $ 85,751 5+ Years $ - 204,690 - 49,823	20+ Years $ 85,751
	$ 254,513
		20+ Years $ 91,485

54 -

b) Financing facilities

Unsecured bank overdraft facility, reviewed annually and payable on demand: Amount used Amount unused		December 31	December 31
		2022 $ 1,043,567 1,548,835 $ 2,592,402	2021 $ 455,938 1,956,078 $ 2,412,016

29. TRANSACTIONS WITH RELATED PARTIES

a. Name and relationship of related parties

Related Party Name iCatch Technology Jumplux Technology Generalplus Technology Sunext Technology Sunplus Innovation Technology Genki Tek Technology Co., Ltd. Chongqing CQPlus1 Technology Co., Ltd. (“Chongqing CQPlus1”) Sunplus Pro-tek (shenzhen) Co., Ltd. SunMedia Technology Co., Ltd.	Related Party Category
	Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary (the settlement was completed on June 20, 2022, and classified into non-related party) Subsidiary Subsidiary Subsidiary

b. Sales of goods

Account Item Related Party Type Sales of goods Subsidiaries Associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 14,769 3,270 $ 18,039	2021 $ 12,042 12,973 $ 25,015

Sales price to related parties is based on cost and market price. The sales terms to related parties were similar to those with external customers.

c. Purchases of goods

Accounted Item Related Party Purchases of goods Subsidiaries Chongqing CQPlus1	For the Year Ended	For the Year Ended	December 31
		2022 $ 158,275	2021 $ 16,681

Purchases were made at market prices and discounted to reflect the quantity of goods purchased and the relationships between the parties.

55 -
d. Receivables from related parties (excluding loans to related parties)

Account Item Related Party Trade receivables Subsidiaries Associates Other receivables Subsidiaries Associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 951 352 $ 1,303 $ 2,725 535 $ 3,260	2021 $ 3,153 1,112 $ 4,265 $ 2,711 529 $ 3,240

The outstanding trade receivables from related parties are unsecured. For the years ended December 31, 2022 and 2021, no impairment losses were recognized for trade receivables from related parties.

e. Payables from related parties

Account Item Related Party Accounts payable Subsidiaries Other payables Subsidiaries Prepaid materials Subsidiaries	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 15,580 $ 23,453 $ 9,292	2021 $ - $ 14,658 $ 38,613

f. Acquisition of property, plant and equipment

Related Party Subsidiaries Other transactions with related parties Account Item Related Party Type Manufacturing expenses Subsidiaries Operating expenses Subsidiaries Non-operating income Subsidiaries and expenses Associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2022 2021 $ 199 $ 43 For the Year Ended December 31
		2022 $ 10,575 $ 82,004 $ 12,260 12,934 $ 25,194	2021 $ 22,292 $ 13,174 $ 20,753 9,489 $ 30,242

g. Other transactions with related parties

Miscellaneous expenses between the Company and the related parties were negotiated and were thus not comparable with those in the market.

Technical support services price between the Company and the related parties were negotiated and were thus not comparable with those in the market.

56 -

Administrative support services price and support services price between the Company and the related parties were negotiated and were thus not comparable with those in the market.

The pricing and the payment terms of the lease contract between the Company and the related parties were similar to those with external customers.

h. Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2022 $ 30,262 269 $ 30,531	2021 $ 16,892 269 $ 17,161

Compensation of directors and other key management personnel was decided by the Compensation Committee in accordance with individual performance and market trends.

30. PLEDGED OR MORTGAGED ASSETS

The following assets were mortgaged or pledged as collateral for bank borrowings and leased land:

Buildings, net Pledged time deposits (classified to other financial assets - non-current)		December 31	December 31
		2022 $ 537,529 10,500 $ 548,029	2021 $ 556,931 8,350 $ 565,281

31. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Company’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies of the entities in the Company and the related exchange rates between the foreign currencies and the respective functional currencies were as follows:

December 31, 2022

		Foreign
	Currency			Carrying
	(In Thousands)		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	12,369	30.71	$ 379,852
CNY		72	4.408	317
JPY		153	0.232	35
GBP		3	37.090	111
HKD		8	3.938	32
				(Continued)

57 -

		Foreign
	Currency			Carrying
	(In Thousands)		Exchange Rate	Amount
Nonmonetary items
Investment subsidiaries accounted for using
equity method
USD	$	28,993	30.71	$ 890,375
HKD		7	3.938	28
Financial liabilities
Monetary items
USD		5,899	30.71	181,158
CNY		10,908	4.408	48,082
				(Concluded)
December 31, 2021
		Foreign
	Currency			Carrying
	(In Thousands)		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	13,793	27.680	$ 381,790
CNY		416	4.344	1,807
JPY		188	0.241	45
GBP		3	37.300	112
HKD		9	3.549	32
Nonmonetary items
Investment subsidiaries accounted for using
equity method
USD		25,274	27.680	699,584
HKD		7	3.549	25
Financial liabilities
Monetary items
USD		19,104	27.680	528,799
CNY		3,857	4.344	16,755

For the years ended December 31, 2022 and 2021, (realized and unrealized) net foreign exchange losses were NT$3,184 thousand and NT$2,550 thousand, respectively. It is impractical to disclose net foreign exchange losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the entities in the Company.

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32. ADDITIONAL DISCLOSURES

a. Information about significant transactions and investees and b. Information on investees:
1) Financings provided: Table 1
2) Endorsement/guarantee provided: Table 2
3) Marketable securities held: Table 3
4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: Table 4
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: No.
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: No.
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 5
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: No.
9) Trading in derivative instruments: No.
b. Information on investees:
1) Information on investee: Table 6
c. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 7)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (Table 8)
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year.
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year.
- c) The amount of property transactions and the amount of the resultant gains or losses.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes.
59 -
e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.
d. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 9)

Except for Table 1 to Table 9, there’s no further information about other significant transactions.

60 -

TABLE 1

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

FINANCINGS PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limit
													Item	Value
1 2 3 4 5	Sunplus Shanghai Sunplus Shanghai Russell Sunplus Venture Capital Lin Shin Investment	Chongqing CQPlus1 Sun Media Sun Media Sun Media Sun Media	Receivables from related parties Receivables from related parties Receivables from related parties Receivables from related parties Receivables from related parties	Yes Yes Yes Yes Yes	$ 60,816 298,862 243,313 50,969 163,460	$ - 294,014 - 50,672 110,556	$ - 294,014 - 50,672 110,556	1.80% 1.80% - 3.80% 3.80%	Note 1 Note 1 Note 1 Note 1 Note 1	$ - - - - -	Note 2 Note 3 Note 4 Note 5 Note 6	$ - - - - -	- - - - -	$ - - - - -	$ 425,085 (Note 7) 425,085 (Note 7) 712,296 (Note 8) 441,335 (Note 9) 357,585 (Note 10)	$ 425,085 (Note 7) 425,085 (Note 7) 712,296 (Note 8) 441,335 (Note 9) 357,585 (Note 10)

Note 1: Short-term financing.
Note 2: Sunplus Shanghai provided funds for the operating needs of Chongqing CQPlus 1.
Note 3: Sunplus Shanghai provided funds for the operating needs of SunMedia.
Note 4: Russell provided funds for the operating needs of SunMedia.
Note 5: Sunplus Venture Capital provided funds for the operating needs of SunMedia.
Note 6: Lin Shin Investment provided funds for the operating needs of SunMedia.
Note 7: Sunplus Shanghai and the loans are all foreign companies whose parent company directly and indirectly holds 100% of the voting shares. When the short-term financing funds need to be engaged in capital lending, the capital loan and the individual amount and total amount should not exceed the capital loan. The enterprise's net worth should not exceed to 60%, and its period should not exceed more than 2 years.
Note 8: Russell and the loans are all foreign companies whose parent company directly and indirectly holds 100% of the voting shares. When the short-term financing funds need to be engaged in capital lending, the capital loan and the individual amount and total amount should not exceed the capital loan. The enterprise's net worth should not exceed to 80%, and its period should not exceed more than 2 years.
Note 9:
The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 40% of Sunplus Venture Capital’s net equity as of its latest financial statements.
Note 10: The total amount of all guarantees issued and the individual amount of each guarantee should not exceed 40% of Lin Shin Investment’s net equity as of its latest financial statements.
61 -

TABLE 2

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Endorser/ Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Balance for the Period	Ending Balance	Actual Borrowing Amount	Value of Collateral Property, Plant, or Equipment	Percentage of Accumulated Amount of Collateral to Net Equity as of the Latest Financial Statements	Maximum Collateral/Gua rantee Amounts Allowable	Provided by the Company	Guarantee Provided by the Subsidiary	Guarantee Provided to a Subsidiary Located in Mainland China
		Name	Nature of Relationship
0 (Note 1) 1 (Note 2)	Sunplus Russell	Chongqing CQPlus1 SunMedia	3 (Note 3) 3 (Note 3)	$ 926,209 (Note 4) 534,222 (Note 6)	$ 67,590 59,440	$ - -	$ - -	$ - -	- -	$1,852,418 (Note 5) 534,222 (Note 6)	Yes No	No No	Yes Yes

Note 1: Issuer.

Note 2: Investee.

Note 3: Sunplus and its subsidiaries jointly hold more than 50% of the ordinary shares of the endorsee.

Note 4: For each transaction entity, the guarantee amount should not exceed 10% of the endorsement/guarantee provider’s net equity based on the provider’s latest financial statements.

Note 5: The guarantee amount should not exceed 20% of the endorsement/guarantee provider’s net equity based on the provider’s latest financial statements.

Note 6: Russell and the endorsement guaranty object are the parent company which holds 100% voting rights directly or indirectly. For each transaction entity, the guarantee amount should not exceed 60% of the endorsement/guarantee provider’s net equity.
62 -

TABLE 3

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

MARKETABLE SECURITIES HELD FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Security	Relationship with the Holding Company	Financial Statement Account		December 31, 2022	December 31, 2022		Note
				Shares or Units (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Market Value or Net Asset Value
Sunplus Lin Shin Investment Russell	Evergreen Steel Co., Ltd. Triknight Capital Corporation Marvest Series 1 Fund Vertex Growth II (SG) L.P. AMED Ventures II, L.P. Arizon RFID Technology Co., Ltd. A-Spine Asia Co., Ltd. Enterex International Limited - Convertible Bonds Evergreen Aviation Technologies Corporation Genius Vision Digital Inc. Lead Sun Corporation AI3 Co. GEMFOR Leading Financial Solution Provider Fund Sunplus Prine Rich International Co., Ltd. Synerchip Inc. OZ Optics Limited Ortega InfoSystem, Inc. Innobrige International Inc. Ether Precision Inc. Intudo Istimewa I, LLC	- - - - - ~~-~~ - - - - - - - Parent company - - - - - - -	Financial assets at FVTPL - current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL – non-current Financial assets at FVTPL – non-current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current	300 40,842 2 - - 370 65 30 1,050 300 1,000 33 1 3,560 33 6,452 1,000 2,557 4,000 1,250 -	$ 15,480 269,823 - 3,644 2,539 28,701 2,130 - 85,218 - 34,407 431 - 79,744 2,860 - - - - - 15,355	- 5 5 - - - - - - 1 11 1 - 1 - 12 8 - 15 1 14	$ 15,480 269,823 - 3,644 2,539 28,701 2,130 - 85,218 - 34,407 431 - 79,744 2,860 - - - - - 15,355	Note 2 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1

(Continued)

63 -

Holding Company Name	Type and Name of Marketable Security	Relationship with the Holding Company	Financial Statement Account		December 31, 2022	December 31, 2022		Note
				Shares or Units (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Market Value or Net Asset Value
Russell Sunplus Venture Capital	Asia B2B on Line Inc. AMED Ventures I, L.P. Intudo Ventures II, L.P. Intudo Ventures III, L.P. AMED Ventures II, L.P. Intudo Istimewa II, LLC GeneOne Diagnostics Corporation eYs3d Microelectronics, Inc. Jih Sun Vietnam Opportunity Fund Fuyou Venture Capital Limited Partnership (private placement) eWave System, Inc. Book4u Company Limited TGVest Capital Limited Partnership Simple Act Inc. Genius Vision Digital Co., Ltd. Intelligo Technology Inc. Grand Fortune Venture Capital Co., Ltd. Huijia Health Life Technology San Neng Group Holding Co., Ltd. Raynergy Tek Inc. Fuyou Venture Capital Limited Partnership CDIB Capital Growth Partners L.P. TIEF Fund, L.P. Pacific 8 Ventures Fund II, L.P.	- - - - - - - - - - - - - - - - - - - - - - - -	Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTPL - current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current	1,000 - - - - - 1,710 1,190 500 - 1,833 9 - 1,900 375 337 4,000 1,049 900 5,691 5,000 - - -	# - 15,863 191,335 21,386 3,384 15,355 2,369 15,172 3,570 19,727 - - 51,922 - - 40,380 46,864 1,470 33,390 37,330 50,622 100,765 44,905 5,519	3 2 6 1 - 7 13 2 - 5 22 - 5 10 1 1 7 5 1 12 10 2 7 2	# - 15,863 191,335 21,386 3,384 15,355 2,369 15,172 3,570 19,727 - - 51,922 - - 40,380 46,864 1,470 33,390 37,330 50,622 100,765 44,905 5,519	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 3 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1 Note 1 Note 1 Note 1

(Continued)

64 -

Holding Company Name	Type and Name of Marketable Security	Relationship with the Holding Company	Financial Statement Account		December 31, 2022	December 31, 2022		Note
				Shares or Units (In Thousands)	Carrying Amount	Percentage of Ownership (%)	Market Value or Net Asset Value
Sunplus Venture Capital Wei-Young Investment Sunplus Shanghai Generalplus Technology Sunplus Innovation Technology Chongqing CQPLus1 Giant Rock Inc. Sunext Technology	Cerulean Asset Management Co., Ltd. CSVI Ventures, L.P. Intudo Ventures I, L.P. Promise Technology Inc. Feature Integration Technology Inc. Innorich Venture Capital Corp. Neuchips Inc. - Preference shares Neuchips Inc. Protect Life International Biomedical Inc. Feedback Technology Corp. Ready Sun Investment Group Fund Xiamen Xm-plus Technology Co., Ltd. Yuanta De-Li Money Market Fund Yuata De-Bao Money Market Fund Advanced Silicon SA Advanced NuMicro System, Inc. PointGrab Ltd. Vicoretek Co., Ltd. Xiamen Xm-plus Technology Co., Ltd. Evergreen Steel Co., Ltd. Taiwan Semiconductor Manufacturing Co., Ltd. MediaTek Inc. SinoPac ESG Global Digital Infrastructure Fund	- - - - - - - - - - - - - - - - - - - - - - -	Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTPL - current Financial assets at FVTPL - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTPL - non-current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current	- - - 962 602 3,000 585 2,100 1,564 50 - 2,200 12,855 23,108 1,000 2,000 453 - 8,950 200 50 10 500	$ 15,011 29,139 111,827 4,340 28,957 20,518 17,397 62,449 1,610 4,320 41,012 63,349 213,002 281,956 17,953 - - 121,930 258,214 10,320 22,425 6,250 4,645	16 2 8 1 2 6 3 3 4 - 16 3 - - 10 8 1 8 11 - - - -	$ 15,011 29,139 111,827 4,340 28,957 20,518 17,397 62,449 1,610 4,320 41,012 63,349 213,002 281,956 17,953 - - 121,930 258,214 10,320 22,425 6,250 4,645	Note 1 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1 Note 3 Note 3 Note 1 Note 1 Note 1 Note 1 Note 1 Note 2 Note 2 Note 2 Note 3

Note 1: The market value was based on the carrying amount as of December 31 2022.

Note 2: The market value was based on the closing price as of December 31, 2022.

Note 3: The market value was based on the net asset value of the fund as of December 31, 2022.

(Concluded)

65 -

TABLE 4

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type and Name of Marketable Securities (Note 1)	Financial Statement Account	Counterparty (Note 2)	Relationship (Note 2)	Beginning Balance	Beginning Balance	Acquisition (Note 3)	Acquisition (Note 3)		Disposal (Note 3)	Disposal (Note 3)		Ending	Balance
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal (Note 4)	Number of Shares	Amount
Sunplus Generalplus Technology Sunplus Innovation Technology	iCatch Technology Yuanta De-Li Money Market Fund Taishin Ta Chong Money Market Fund	Non-current assets held for sale Financial assets at FVTPL - current Financial assets at FVTPL - current	Egis Technology Inc. - -	- - -	8,000 4,684 9,765	$ 108,504 77,149 140,136	- 32,472 -	$ - 536,000 -	8,000 24,301 9,765	$ 535,987 401,000 140,365	$ 108,504 400,500 140,000	$ 449,000 500 365	- 12,855 -	$ - 213,002 -

Note 1: Marketable Securities in this table include shares, bonds, beneficiary certificates and derivative products.

Note 2: Fill in the two columns if marketable securities are accounted for using equity method.

Note 3: The accumulated amount of acquisition/disposal were calculated at costs or prices of at least NT$300 million or 20% of the paid-in capital separately.
Note 4: Gain(loss) on disposal include gain(loss) on disposal of equity transfers directly related to non-current assets held for sale.
Note 5: Paid-in capital is the paid-in capital of the parent company Shares of issuers without par value or not NT$10 per share are calculated according to 10% of total equity attributable to owners of the Company regarding the regulation on transaction amount of 20% of paid-in capital.
66 -

TABLE 5

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchases/ Sales	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
Sunplus	Chongqing CQPlus1	Subsidiary	Purchases	$ 158,275	16.16	Based on contract	Based on contract	Based on contract	$ (15,580)	9.05	-

67 -

TABLE 6

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCES DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of December 31, 2022	Balance as of December 31, 2022	Balance as of December 31, 2022	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2022	December 31, 2021	Shares (In Thousands)	Percentage of Ownership (%)	Carrying Amount
Sunplus Lin Shin Investment Sunplus Venture Capital Russell Ventureplus Group Ventureplus Mauritius Inc. Generalplus Technology Generalplus International (Samoa) Inc. Generalplus (Mauritius) Inc.	Ventureplus Group Award Glory Ltd. Global View Co., Ltd. Lin Shin Investment Generalplus Technology Sunplus Venture Capital Sunplus Innovation Technology Russell iCatch Technology Sunext Technology Sunplus mMedia Sunplus Management Consulting Sunplus Technology (H.K.) Magic Sky Sunplus mMobile Wei-Young Investment Jumplux Technology AkiraNet Co., Ltd. Generalplus Technology Sunplus Innovation Technology iCatch Technology Sunplus mMedia GlintMed Innovation Jumplux Technology. Sunplus Innovation Technology iCatch Technology Sunplus mMedia GenkiTek Technology GlintMed Innovation Autosys Co., Ltd. Ventureplus Mauritius Inc. Ventureplus Cayman Inc. Generalplus International (Samoa) Inc. Generalplus (Mauritius) Inc. Generalplus Technology (Hong Kong) Co., Inc.	Belize Belize New Taipei, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Cayman Islands, British West Indies Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Kowloon Bay, Hong Kong Samoa Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Taipei, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Hsinchu, Taiwan Taipei, Taiwan Hsinchu, Taiwan Cayman Islands, British West Indies Mauritius Cayman Islands, British West Indies Samoa Mauritius Hong Kong	Investment Investment Consumer electronics, components and rental of buildings Investment Design of ICs Investment Design of ICs Investment Design of ICs Design of ICs Design of ICs Management International trade Investment Design of ICs Investment Design of ICs Information software service Design of ICs Design of ICs Design of ICs Design of ICs Investment management consultant Design of ICs Design of ICs Design of ICs Design of ICs Software development Investment management consultant Investment Investment Investment Investment Investment Sales	$ 2,458,183 ( US$ 74,605 RMB$ 37,900 ) 291,676 ( US$ 7,072 RMB$ 16,900 ) 315,658 699,988 281,001 829,982 273,941 926,981 ( US$ 30,185 ) 127,345 1,002,531 407,565 5,000 43,613 ( HK$ 11,075 ) - 2,596,792 70,157 132,000 174,000 86,256 15,701 9,645 19,408 1,250 101,000 60,588 33,439 44,878 - 1,250 76,775 ( US$ 2,500 ) 2,458,183 ( US$ 74,605 RMB$ 37,900 ) 2,458,183 ( US$ 74,605 RMB$ 37,900 ) 586,254 ( US$ 19,090 ) 586,254 ( US$ 19,090 ) 11,977 ( US$ 390 )	$ 2,458,183 ( US$ 74,605 RMB$ 37,900 ) 291,676 ( US$ 7,072 RMB$ 16,900 ) 315,658 699,988 281,001 829,982 374,161 926,981 ( US$ 30,185 ) 127,345 983,237 407,565 5,000 43,613 ( HK$ 11,075 ) 317,541 ( US$ 10,340 ) 2,596,792 70,157 132,000 174,000 86,256 15,701 9,645 19,408 1,250 101,000 60,588 33,439 44,878 20,000 1,250 76,775 ( US$ 2,500 ) 2,458,183 ( US$ 74,605 RMB$ 37,900 ) 2,458,183 ( US$ 74,605 RMB$ 37,900 ) 586,254 ( US$ 19,090 ) 586,254 ( US$ 19,090 ) 11,977 ( US$ 390 )	- 9,567 8,229 70,000 37,324 83,000 29,266 30,185 12,735 63,487 22,441 500 11,075 - 16,240 5,400 13,200 17,400 14,892 1,075 965 650 125 10,100 2,924 3,332 1,909 - 125 5,000 - - 19,090 19,090 -	100 100 13 100 34 100 50 100 13 100 90 100 100 - 100 100 55 26 14 2 1 3 13 42 5 4 8 - 13 16 100 100 100 100 100	$ 1,678,364 368,974 318,969 814,218 847,758 1,103,338 1,165,423 890,371 282,913 248,972 22,667 3,193 28 - 29,043 38,159 3,407 156,053 339,468 40,570 23,230 5,321 591 2,607 117,414 80,242 375 - 591 70,200 1,712,958 1,712,936 532,120 539,489 11,565	$ 66,904 (96,941 ) 100,898 61,819 579,378 105,174 373,317 111,666 69,940 (25,890 ) (660 ) (190 ) - (655 ) (183 ) (21,214 ) 40,261 (132,473 ) 579,378 373,317 69,640 (660 ) (1,726 ) 40,261 373,317 69,640 (660 ) (5,602 ) (1,726 ) (25,646 ) 66,904 66,902 17,470 17,470 (267 )	$ 43,992 (96,941 ) 13,180 54,699 198,729 105,174 191,037 111,666 8,740 (23,872 ) (592 ) (190 ) - (655 ) (183 ) (21,214 ) 22,144 (36,275 ) 79,292 7,015 821 (17 ) (216 ) 16,942 19,084 2,835 (50 ) (3,501 ) (216 ) (4,167 ) 66,904 66,902 17,470 17,470 (267 )	Subsidiary Subsidiary Investee Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Investee Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary (Note 4) Subsidiary (Note 6) Subsidiary Subsidiary Investee Subsidiary Subsidiary Investee Subsidiary Investee Subsidiary Subsidiary Investee Subsidiary Subsidiary (Note 3) Investee Investee Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

(Continued)

68 -

Investor	Investee	Location	Main Businesses and Products	Investment Amount	Investment Amount	Balance as of December 31, 2022	Balance as of December 31, 2022	Balance as of December 31, 2022	Net Income (Loss) of the Investee	Investment Gain (Loss)	Note
				December 31, 2022	December 31, 2021	Shares (In Thousands)	Percentage of Ownership (%)	Carrying Amount
Award Glory Ltd. Sunny Fancy Ltd.	Sunny Fancy Ltd. Giant Kingdom Ltd. Giant Rock Inc. Worldplus Holdings L.L.C. Giant Best Ltd.	Seychelles Seychelles Anguilla America Seychelles	Investment Investment Investment Investment Investment	$ 291,676 ( US$ 7,072 RMB$ 16,900 ) - 157,412 ( US$ 2,700 RMB$ 16,900 ) 110,556 ( US$ 3,600 ) (Note 2)	$ 291,676 ( US$ 7,072 RMB$ 16,900 ) 23,708 ( US$ 772 ) 157,412 ( US$ 2,700 RMB$ 16,900 ) 110,556 ( US$ 3,600 ) (Note 2)	9,567 - 5,195 - (Note 2)	100 - 100 100 (Note 2)	$ 368,975 - 260,323 108,428 (Note 2)	$ (96,941 ) (50 ) (105,387 ) 8,488 (Note 2)	$ (96,941 ) (50 ) (105,387 ) 8,488 (Note 2)	Subsidiary Subsidiary (Note 5) Subsidiary Subsidiary Subsidiary

Note 1: The initial exchange rate was based on the exchange rate as of December 31, 2022.

Note 2: The cancellation of Giant Best Ltd. was completed on September 5, 2022..

Note 3: The disposed of GenkiTek Technology was completed on June 20, 2022.

Note 4: The disposed of Magic Sky was completed on June 22, 2022.

Note 5: The cancellation of Giant Kingdom Ltd. was completed on September 5, 2022.

Note 6: The dissolution of Sunplus mMobile was completed on February 28, 2022.

(Concluded)

69 -

TABLE 7

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company Name	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital	Investment Type	Accumulated Outflow of Investment from Taiwan as of January 1, 2022	Investment Flows	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2022	% Ownership of Direct or Indirect Investment	Net Income (Loss) of the investee	Investment Loss (Note 2)	Carrying Value as of December 31, 2022	Accumulated Inward Remittance of Earnings as of December 31, 2022
						Outflow		Inflow
Sunplus Shanghai Sunplus Prof-tek (Shenzhen) Co., Ltd. Sun Media Technology Sunplus App Beijing Sunplus EHue Tech JSilicon Technology Worldplus Chongqing CQPlus1	Development of computer software, system integration services and building rental Development of computer software, system integration services and building rental and property management Development of computer software, system integration services and building rental Sale of electronic components and information management and education Development of computer software, system integration services and building rental Development of computer software, IC design Software development, building rental and property management Development of computer software, IC design		$ 528,212 (US$ 17,200) 990,398 (US$ 32,250) 614,200 (US$ 20,000) 171,912 ( RMB$ 39,000) 119,016 (RMB$ 27,000) - 83,924 (RMB$ 19,039) 176,320 (RMB$ 40,000)	Note 1 Note 1 Note 1 Note 1 Note 1 Note 3 Note 5 Note 4	$ 542,185 (US$ 17,655) 990,398 (US$ 32,250) 614,200 (US$ 20,000) 167,868 (US$ 586 RMB$ 34,000) 119,016 ( RMB$ 27,000) - 110,556 (US$ 3,600) -	$	- - - - - - - -	$ - - - - - - - -	$ 542,185 (US$ 17,655) 990,398 (US$ 32,250) 614,200 (US$ 20,000) 167,868 (US$ 586 RMB$ 34,000) 119,016 ( RMB$ 27,000) - 110,556 (US$ 3,600)	100% 100% 100% 97% 100% - 100% 100%	$ 97,155 (16,585) (14,300) (1,394) 995 (146) (9,820) 32,087	$ 97,155 (16,585) (14,300) (1,394) 995 (146) (8,488) 32,087	$ 702,793 732,496 208,955 2,355 52,624 - 108,428 155,604	$ - - - - - - - -

Accumulated Investment in Mainland China as of December 31, 2022 (Note 6)		Investment Amounts Authorized by the Investment Commission, MOEA							Limit on Investment
$ 2,730,132 ( US$ 79,872 RMB 62,900 )		$ 2,731,693 ( US$ 80,052 RMB 62,000 )							$ 5,557,253
Sunplus Venture Capital
Accumulated Investment in Mainland China as of December 31, 2022 (Note 7)		Investment Amounts Authorized by Investment Commission, MOEA							Limit on Investment
$ 94,802 ( US$ 3,087 )		$ 94,802 ( US$ 3,087 )							$ 662,003
Lin Shin Investment
Accumulated Investment in Mainland China as of December 31, 2022 (Note 8)		Investment Amounts Authorized by Investment Commission, MOEA							Limit on Investment
$ 28,591 ( US$ 931 )		$ 28,591 ( US$ 931 )							$ 536,377

(Continued)

70 -

Generalplus Technology (Nature of Relationship: 1)

Investee Company Name	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital	Investment Type (e.g., Direct or Indirect)	Accumulated Outflow of Investment from Taiwan as of January 1, 2022	Investment Flows	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2022	% Ownership of Direct or Indirect Investment	Net Loss of the investee	Investment Loss (Note 2)	Carrying Value as of December 31, 2022	Accumulated Inward Remittance of Earnings as of December 31, 2022
						Outflow		Inflow
Generalplus Shenzhen	Design of ICs, after sales service and marketing research		$ 574,277 (US$ 18,700)	Note 1	$ 574,277 (US$ 18,700)	$	-	$ -	$ 574,277 (US$ 18,700)	100%	$ 17,737	$ 17,737	$ 527,904	$ -

Accumulated Investment in Mainland China as of December 31, 2022		Investment Amount Authorized by the Investment Commission, MOEA							Limit on Investment
$ 574,277 ( US$ 18,700 )		$ 574,277 ( US$ 18,700 )							$ 1,500,071

Note 1: Indirect investment in a company located in mainland China through investment in a company located in a third country.

Note 2: Based on the reviewed financial statements of investees in the same period.

Note 3: Sunplus Shanghai’s direct investment in a company located in mainland China and it was liquidated on August 30, 2022.

Note 4: Sunplus Shanghai and Sunplus pro-tek (Shenzhen) reinvested in a company located in mainland China.

Note 5: It is a company located in mainland China that acquired the investment of the third regional investment company on September 2, 2019.

Note 6: The investment amount approved by the Investment Review Committee of the Ministry of Economic Affairs includes the investment business of Xiamen Xm-plus Technology Co., Ltd. in mainland China, and is included in the financial assets at FVTPL-non-current.

Note 7: The investment amount approved by the Investment Review Committee of the Ministry of Economic Affairs includes the investment business of Sanneng Group Holding Company in mainland China, Sanneng Appliances (Wuxi) Co., Ltd. and CSVI Ventures, L.P., and is included in the financial assets at FVTPL-non-current.

Note 8: The investment amount approved by the Investment Review Committee of the Ministry of Economic Affairs includes the investment business of Arizon RFID Technology Co., Ltd. in mainland China, and is included in the financial assets at FVTPL-current.

Note 9: The original foreign currency was derived from the exchange rate on December 31, 2022.

(Concluded)

71 -

TABLE 8

SUNPLUS TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES

SIGNIFICANT TRANSACTIONS WITH INVESTEE COMPANIES IN MAINLAND CHINA, EITHER DIRECTLY OR INDIRECTLY THROUGH A THIRD PARTY, AND THEIR PRICES, PAYMENT TERMS, AND UNREALIZED GAINS OR LOSSES

FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Investee Company	Transaction Type	Research and Development Expense	Research and Development Expense	Price	Transaction Details	Transaction Details	Notes/Trade Receivables (Payables)	Notes/Trade Receivables (Payables)	Unrealized (Gain) Loss	Note
		Amount	%		Payment Terms	Comparison with Market Transactions	Ending Balance	%
Generalplus Shenzhen	Development and processing services Sales	$ 80,635 19,851	13.83 0.63	Based on contract Based on contract	Based on contract Based on contract	Not comparable with market transactions Not comparable with market transactions	$ 19,370 4,395	86.69 1.15	$ - 1,763	NA NA
Chongqing CQPlus1	Purchases Manufacturing expense	158,275 10,575	16.16 2.77	Based on contract Based on contract	Based on contract Based on contract	Not comparable with market transactions Not comparable with market transactions	(15,580) (1,122)	100.00 4.78	(22,912) -	NA NA
SunMedia	Development and processing services	35,428	2.64	Based on contract	Based on contract	Not comparable with market transactions	(9,829)	41.91	-	NA
Sunplus Prof-tek Technology (Shenzhen)	Processing services	46,576	3.47	Based on contract	Based on contract	Not comparable with market transactions	(12,502)	53.31	-	NA

72 -

TABLE 9

SUNPLUS TECHNOLOGY COMPANY LIMITED INFORMATION OF MAJOR SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2022

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Chou-chye, Huang	92,737,817	15.66

Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preference shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.
Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual truster who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to Market Observation Post System.
73 -

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM

STATEMENT INDEX

MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY STATEMENT OF CASH AND CASH EQUIVALENTS 1 STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE 2 THROUGH PROFIT OR LOSS - CURRENT STATEMENT OF TRADE RECEIVABLES 3 STATEMENT OF INVENTORIES 4 STATEMENT OF CHANGES IN INVESTMENTS 5 ACCOUNTED FOR USING EQUITY METHOD STATEMENT OF CHANGES IN PROPERTY, PLANT AND Note 12 EQUIPMENT STATEMENT OF CHANGES IN ACCUMULATED Note 12 DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS 6 STATEMENT OF CHANGES IN ACCUMULATED 6 DEPRECIATION OF RIGHT-OF-USE ASSETS STATEMENT OF CHANGES IN INTANGIBLE ASSETS Note 14 STATEMENT OF DEFERRED INCOME TAX ASSETS Note 23 STATEMENT OF LONG-TERM BORROWINGS 7 STATEMENT OF ACCOUNTS PAYABLE 8 STATEMENT OF OTHER PAYABLES Note 18 STATEMENT OF LEASE LIABILITIES 9 MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS STATEMENT OF NET REVENUE 10 STATEMENT OF OPERATING COST 11 STATEMENT OF SELLING AND MARKETING EXPENSES 12 STATEMENT OF GENERAL AND ADMINISTRATIVE 12 EXPENSES STATEMENT OF RESEARCH AND DEVELOPMENT 12 EXPENSES STATEMENT OF OPERATING INCOME AND EXPENSES Note 22 STATEMENT OF FINANCE COSTS Note 22 STATEMENT OF LABOR, DEPRECIATION, DEPLETION 13 AND AMORTIZATION BY FUNCTION

74 -

STATEMENT 1

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Cash Cash in banks Currency deposits Time deposits (Note 1) Foreign deposits (Note 2) Cash on hand (Note 3) Less: Restricted assets Total	Amount $ 109,293 10,500 180,978 355 301,126 54,110 $ 247,016

Note 1: NTD$10,500 thousand Time deposits, interest rates at 0.76 %- 1.33 %.
Note 2: Including US$5,882 thousand @30.710, HKD$2 thousand @3.938, GBP$0.3 thousand @37.090, JPY$43 thousand @0.232 and RMB$70 thousand @4.408.
Note 3: Including NTD$100 thousand, HKD$7 thousand @3.938, JPY$110 thousand @0.232, US$3 thousand @30.710, EUR$0.3 thousand @32.720, GBP$2 thousand @37.090 and RMB$2 thousand @4.408.
75 -

STATEMENT 2

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS DECEMBER 31, 2022

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Units Item (Thousand) Cost Domestic unlisted shares Triknight Capital Corporation 40,842 $ 292,850 Domestic listed shares Evergreen Steel Co., Ltd. 300 10,500 Foreign limited partnership Vertex Growth II (SG) L.P. - 3,946 AMED Ventures II, L.P. - 4,821 Less: Current assets	Fair Value Unit Price Amount Note 6.6$ 269,823 Note 1 51.6 15,480 Note 2 - 3,644 Note 1 - 2,539 Note 1 6,183 (15,480) $ 276,006
	Unit Price 6.6 51.6 - -

Note 1: The market value was based on the net carrying amount as of December 31, 2022.

Note 2: The market value was based on the closing price of December 31, 2022.

76 -

STATEMENT 3

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF TRADE RECEIVABLES, NET DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Client Name Trade receivable from related parties Jumplux Technology Generalplus Technology iCatch Technology Others (Note) Trade receivable from unrelated parties Client A Client B Client C Client D Client E Others (Note) Total	Amount $ 532 404 352 15 1,303 61,017 41,968 40,656 21,148 9,844 8,454 183,087 $ 184,390

Note: The amount of individual clients that is included in others does not exceed 5% of the account balance.

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STATEMENT 4

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF INVENTORIES DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Item Finished goods Work in progress Raw materials Total		Amount
		Cost Net Realizable Value $ 313,529 $ 720,002 327,833 828,910 331,978 636,206 $ 973,340 $2,185,118

78 -

STATEMENT 5

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Global View Co., Ltd. Ventureplus Group Lin Shin Investment Generalplus Technology Sunplus Venture Capital Sunplus Innovation Technology Russell Sunext Technology iCatch Technology Sunplus mMedia Wei-Young Investment AkiraNET Co., Ltd. Sunplus Management Consulting Sunplus Technology (H.K.) Magic Sky Sunplus mMobile Award Glory Jumplux Technology Total	Balance, January 1, 2022 Shares (Thousand) Amount 8,229 $ 342,742 - 1,594,626 70,000 1,057,567 37,324 848,020 83,000 1,068,483 29,266 1,286,616 30,185 698,927 58,778 254,472 12,735 251,001 22,441 23,259 5,400 102,854 17,400 195,034 500 3,383 11,075 25 10,340 668 16,240 29,226 9,567 465,117 13,200 - $ 8,222,020	Additio	ns Amount $ - - - 131 - - - 19,294 1,256 - - - - - - - - - $ 20,681	Decrea	ses Amount $ 16,459 - 307,098 201,550 53,867 292,657 - - - - 43,481 - - - 21 - - - $ 915,133		Increase (Decrease) Amount Eva Equity Method	Increase (Decrease) Amount Eva Equity Method	luated by Transferred Capital Surplus $ - - 8,090 - 3,882 (19,673 ) 696 (922 ) 22,350 - - (2,706 ) - - - - - - $ 11,717	Fair Value Changes of Financial Assets at FVTOCI $ (21,952 ) 16,138 20 - (20,230 ) - (1,903 ) - - - - - - - - - - - $ (27,927)	Actuarial (Loss) Gain $ - - (246 ) (544 ) (104 ) 100 - - (434) - - - - - - - - - $ (1,228)	Credit balance of investments accounted for using equity method (Accounted for Current Liability) $ - - - - - - - - - - - - - - - - - (18,737) $ (38,737)	Balance, December 31, 20	22 Amount $ 318,969 1,678,364 814,218 847,758 1,103,338 1,165,423 890,371 248,972 282,913 22,667 38,159 156,053 3,193 28 - 29,043 368,974 3,407 $ 7,971,850	Net Assets Value Note $ 318,969 Note 1 1,712,961 Note 1 814,218 Notes 1 and 3 847,922 Note 1 1,103,338 Note 1 1,165,423 Note 1 890,371 Note 1 248,972 Note 1 233,237 Note 1 10,005 Note 1 38,159 Note 1 156,053 Note 1 3,193 Note 2 28 Note 1 - Note 1 29,043 Note 1 368,974 Note 1 3,407 Note 1 $ 7,944,273
							Investment (Loss) Gain $ 13,180 43,992 54,699 198,729 105,174 191,037 111,666 (23,872 ) 8,740 (592 ) (21,214 ) (36,275 ) (190 ) - (655 ) (183 ) (96,941 ) 22,144 $ 569,439	Exchange Differences Arising on Translation to the Presentation Currency $ 1,458 23,608 1,186 2,972 - - 80,985 - - - - - - 3 8 - 798 - $ 111,018
	Shares (Thousand) 8,229 - 70,000 37,324 83,000 29,266 30,185 58,778 12,735 22,441 5,400 17,400 500 11,075 10,340 16,240 9,567 13,200	Shares (Thousand) - - - - - - - 4,709 - - - - - - - - - -		Shares (Thousand) - - - - - - - - - - - - - - 10,340 - - -									Shares (Thousand) % 8,229 13 - 100 70,000 100 37,324 34 83,000 100 29,266 50 30,185 100 63,487 100 12,735 13 22,441 90 5,400 100 17,400 26 500 100 11,075 100 - - 16,240 100 9,567 100 13,200 55

Note 1: The gains and losses of the investment and the net equity value are calculated according to the investees’ financial statements which are audited by the accountant.

Note 2: The gains and losses of the investment and the net equity value are calculated according to the investees’ financial statements which are unaudited by the accountant.

Note 3: The carrying amount and net value included deduction of the book value of the parent company's stock held by the subsidiary in the amount of $79,744 thousand.

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STATEMENT 6

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS AND STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF RIGHT-OF-USE ASSETS DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Cost Balance at January 1, 2022 Additions Balance at December 31, 2022 Accumulated depreciation Balance at January 1, 2022 Depreciation Balance at December 31, 2022 Carrying amount at December 31, 2022	Land Transportation Equipment $ 182,215 $ - 753 3,026 183,568 3,026 17,252 - 5,656 336 22,908 336 $ 160,660 $ 2,690	Total $ 182,815 3,779 186,594 17,252 5,992 23,244 $ 163,350

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STATEMENT 7

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF LONG-TERM BORROWINGS FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Creditor
Balance End
of Year
Period
Range of
Interest Rates
(%)
Medium - to long-term credit borrowings
Shanghai Commercial Bank
$ 500,000
2022.11.18-2027.11.18
1.875%

Far Eastern International Bank

500,000
2022.09.02-2025.09.02
1.875%

1,000,000

Less: Current portion

-
$ 1,000,000

Financing
Facilities
Repayment Method
Pledged or
Mortgaged
$ 500,000
The loan is to be repaid quarterly-annually in 16 installments, with the first
installment commencing in the second year after the first drawdown date.
-

500,000
The loan is to be repaid semiannually from September 2024, in 3 installments, 1 &
2 installment repay 20% respectively, and the balance will be paid on final
installment
-
$ 1,000,000

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STATEMENT 8

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Vendor Name Related parties Chongqing CQPlus1 Unrelated parties Supplier A Supplier B Supplier C Supplier D Supplier E Supplier F Supplier G Others (Note) Total	Amount $ 15,580 38,836 21,693 18,710 15,330 14,038 13,982 12,096 21,821 156,056 $ 172,086

Note: The amount of individual vendor in others does not exceed 5% of the account balance.

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STATEMENT 9

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF LEASE LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Lease Term Discount Rate Land 2015.08-2034.12 2.390% Land 2002.06-2041.12 2.390% Land 2021.01-2040.12 2.390% Transportation Equipment 2022.09-2025.08 1.625% Less: Lease liabilities - current Lease liabilities -non-current	Amount $ 77,078 65,404 25,054 2,710 (5,169) $ 165,077

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STATEMENT 10

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF NET REVENUE FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Quantity Unit Multimedia IC 16,188 Thousand Other Sales allowance Sales return	Amount $ 1,583,433 86,826 1,670,259 (208,426) (87,291) $ 1,374,542

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STATEMENT 11

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF COST REVENUE FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Item
Raw material, beginning of year

Raw material purchased
Transferred to expenses
Raw materials, end of year

Raw materials used
Direct labor
Manufacturing expenses

Manufacturing costs

Work in progress, beginning of year
Transferred to expenses
Work in progress, end of year

Cost of finished goods

Finished goods, beginning of year
Finished goods purchased
Transferred to expenses
Finished goods, end of year

Total

Amount
$ 214,668
946,959
(1,629)
(331,978)
828,020
7,953

382,044
1,218,017
195,671
(6,690)
(327,833)
1,079,165
123,892
32,481
(3,737)
(313,529)
$ 918,272

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STATEMENT 12

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2022 (In Thousands of New Taiwan Dollars)

Item Royalty Marketing expense Salary Commission expense Depreciation Professional service fees Amortization Design fee Service fee Others (Note) Total	Selling and Marketing Expenses General and Administrative Expenses Research and Development Expenses $ 68,361 $ - $ 468 10,883 - - 6,753 95,673 402,960 6,444 - - 427 33,910 119,894 1 15,721 640 - 1,403 94,703 - - 89,956 - - 82,004 5,824 63,340 244,051 $ 98,693 $ 210,047 $ 1,034,676

Note: The amount of each item in others does not exceed 5% of the account balance.

86 -

STATEMENT 13

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

Labor cost Salary Labor and health insurance Pension Remuneration of directors Others Total Depreciation Amortization				For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
			2022	Total $ 534,152 40,573 23,061 5,458 16,297 $ 619,541 $ 159,068 $ 96,271			2021
		Classified as Operating Cost $ 28,766 2,967 1,496 - 1,414 $ 34,643 $ 4,837 $ 165	Classified as Operating Expenses $ 505,386 37,606 21,565 5,458 14,883 $ 584,898 $ 154,231 $ 96,106			Classified as Operating Cost $ 29,812 2,915 1,532 - 1,384 $ 35,643 $ 3,215 $ 24	Classified as Operating Expenses $ 451,128 34,333 20,730 20,555 13,488 $ 540,234 $ 82,261 $ 90,278	Total $ 480,940 37,248 22,262 20,555 14,872 $ 575,877 $ 85,476 $ 90,302

Note 1: For the years ended December 31, 2022 and 2021, the Company had 353 and 344 employees on average, respectively, which included 6 directors who did not serve concurrently as employees for both years.

Note 2: Companies whose stocks are listed on the stock exchange or listed on the stock counter trading center should disclose the following information:
1) The average employee welfare expense for the current year is 1,770 thousand (“Total employee welfare expenses for the current year-Total directors’ remuneration”/“Number of employees for the current year-Number of directors who are not concurrent employees”).
- The average employee welfare expense for the current year is 1,643 thousand (“Total employee welfare expenses for the current year-Total directors’ remuneration”/“Number of employees for the current year-Number of directors who are not concurrent employees”).
2) The average employee salary expenses for the current year is 1,539 thousand (the total salary expenses for the current year/“the number of employees in the current year-the number of directors who are not part-time employees”).

The average employee salary expenses for the current year is 1,423 thousand (the total salary expenses for the current year/“the number of employees in the current year-the number of directors who are not part-time employees”).

3) Changes in the average employee salary expense adjustment 8% (“Average employee salary expense for the current year-Average employee salary expense for the previous year”/Average employee salary expense for the previous year).
4) The Company has established an audit committee on 2015, and the remuneration of independent directors has been included in the remuneration of directors.
5) Compensation and Remuneration Policy.
a. Remuneration of directors is paid at prevailing rates according to the “Directors’ Remuneration and Travel Allowance Policy of the Company”. When the Company make a profit, the compensation and remuneration of directors is accrued and reviewed by the compensation committee and the board of directors according to the Company’s compensation and remuneration policy. The compensation arrangement shall be reported in the shareholders’ meeting.
b. The compensation and remuneration of the President and Vice Presidents of the Company is determined in accordance with the Company’s Performance Management Policy. Executives’ compensation packages are based on individual performance and their contribution to the Company’s overall performance with benchmarking to market compensation surveys. The compensation committee shall review the KPIs and measurements, followed by performance appraisal, and consequently reward the executives with the approval of the board of directors.
c. The Company’s remuneration policy takes into account the staff’s professional seniority, work performance, goal achievement, major contributions, etc. The director of the center completes the performance appraisal, which is divided into excellent, good, competent, and qualitative comments for improvement, which are approved by the chief executive officer.
87 -

Carrying amount Land Transportation equipment Depreciation charge for right-of-use assets Land Transportation equipment		December 31	December 31
	2022 $ 160,660 2,690 $ 163,350 For the Year Ended		2021 $ 165,563 - $ 165,563 December 31
		2022 $ 5,656 336 $ 5,992	2021 $ 5,682 - $ 5,682

AI assistant

SUNPLUS — Audit Report / Information 2022

52056_rns_2022-12-15_26aec42c-3986-4568-9ed6-17ecf05bee4f.pdf

Sunplus Technology Company Limited

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Occurrence of Revenue from Specific Customers

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

SUNPLUS TECHNOLOGY COMPANY LIMITED

BALANCE SHEETS DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

SUNPLUS TECHNOLOGY COMPANY LIMITED

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

SUNPLUS TECHNOLOGY COMPANY LIMITED

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

1) Amendments to IAS 1 “Disclosure of Accounting Policies”

2) Amendments to IAS 8 “Definition of Accounting Estimates”

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

b. Basis for Preparation

j. Non-current assets held for sale

k. Financial instruments

i. Financial assets at FVTPL

2) Equity instruments

m. Leases

1) The Company as lessor

2) The Company as lessee

n. Borrowing costs

2) Retirement benefits

1) Current tax

3) Current and deferred tax for the period

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Key Sources of Estimation Uncertainty

Estimated impairment of financial assets

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

8. TRADE RECEIVABLE, NET

Trade receivables

December 31, 2022

9. INVENTORIES

10. NON-CURRENT ASSETS HELD FOR SALE

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

a. Investments in subsidiaries

12. PROPERTY, PLANT AND EQUIPMENT

Assets used by the Company

13. LEASE ARRANGEMENTS

a. Right-of-use assets

b. Lease liabilities

c. Material lease-in activities and terms

d. Other lease information

14. INTANGIBLE ASSETS

15. OTHER ASSETS

16. BORROWINGS

17. ACCOUNTS PAYABLE

18. OTHER LIABILITIES

19. RETIREMENT BENEFIT PLANS

Defined contribution plan

Defined benefit plans

20. EQUITY

1) Ordinary shares:

2) Global depositary receipts

c. Retained earnings and dividends policy

f. Treasury shares

21. REVENUE

Other

b. Contract balances

c. Disaggregation of revenue

22. NET PROFIT

SUNPLUS Audit Report / Information 2022