AUO - AGM Information 2019 | FinancialReports.eu

TSE：2409

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NYSE：AUO

AU OPTRONICS CORP.

Meeting Minutes Of 2019 Annual General Shareholders’ Meeting

(Translation)

Time and date of the Meeting: June 14, 2019 at 9:30 A.M. (Local time) Venue of the Meeting: No. 2, Jhongke Rd., Situn District, Taichung City, Taiwan R.O.C. Total shares represented by shareholders present:7,570,210,456 shares (including 4,909,683,733 shares casted electronically) Percentage of shares held by shareholders present: 78.65% of total outstanding shares

(The translated document is prepared in accordance with the Chinese version and is for reference only. In the event of any inconsistency between the English version and the Chinese version, the Chinese version shall prevail.)

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Resolution Notice

Dear Shareholders:

We are pleased to inform you that the following items were approved or acted as proposed at our 2019 Annual General Shareholders’ Meeting held on June 14, 2019.

Truly yours,

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Shuang-Lang (Paul) Peng, Chair

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AU Optronics Corp.

2019 Annual General Shareholders’ Meeting Minutes

Time: 9:30 a.m., June 14, 2019

Place: No. 2, Jhongke Rd., Situn District, Taichung City, Taiwan R.O.C. (Meeting Room in the Central Taiwan Science Park Administration)

Total AUO outstanding shares: 9,624,245,115 shares

Total shares represented by shareholders present in person or by proxy:7,570,210,456 shares

(including 4,909,683,733 shares casted electronically)

Percentage of shares held by shareholders present in person or by proxy: 78.65 %

Attendees: Kuo-Hsin (Michael) Tsai, Director, President and Chief Operation Officer

Vivien Huey-Juan Hsieh, Independent Director, Chair of the Audit Committee and member of the Remuneration Committee

Chin-Bing (Philip) Peng, Independent Director, Chair of the Remuneration Committee and member of the Audit Committee

Ding-Yuan Yang, Independent Director, member of the Audit Committee and member of the Remuneration Committee

Mei-Yueh Ho, Independent Director and member of the Audit Committee

Yen-Shiang Shih, Independent Director and member of the Audit Committee

Jang-Lin (John) Chen, Candidate of Independent Director

Wei, Shing-Hai, Certified Public Accountant of KPMG Taiwan

Lu, Chien-Hui, Certified Public Accountant of KPMG Taiwan

Bo-Sen Von, Attorney

Chair: Shuang-Lang (Paul) Peng, Chairman Recorder: Benjamin Tseng

1. Commencement (The aggregate shareholding of the shareholders present in person or by

proxy constituted a quorum. The Chair called the meeting to order.)

2. Chair’s Address (omitted)

3. Report Items

(1) To report the business of 2018 (omitted)
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(2) Audit Committee’s Review Report (omitted)
(3) To report the distribution of employees’ and directors’ remuneration of 2018 (omitted)
(4) To report the indirect investments in China in 2018 (omitted)
(5) To report the issuance of securities in private placement (omitted)
Chair：Each shareholder is hereby informed of the said report.

4. Election Item

To elect nine directors (including five independent directors) being the ninth-term directors. (proposed by the Board of Directors)

Explanation:

(1) The term of the office of the eighth-term directors will be expired on June 15, 2019. Thus, it is proposed to elect nine directors (including five independent directors) at the 2019 Annual General Shareholders’ Meeting. The term of the office of the new directors (including independent directors) is three years from the date on which the completion of the 2019 Annual General Shareholders’ Meeting. The eighth-term directors will leave their office on the date the new directors are elected.
(2) According to the Company’s Article of Incorporation, directors shall be elected by adopting candidate nomination system and nomination and election of the directors shall be conducted in accordance with the applicable laws and regulations. Shareholders shall elect the directors from the nominated candidates. The academic background, experience, reason of continuing nomination and relevant information of the nominated candidates are attached hereto as Attachment 3 (pages 16-20).

Election Result: Nine directors (including five independent directors) were elected by the

shareholders present. The term of the office of the elected ninth-term is three years commencing on June 14, 2019 and expiring on June 13, 2022. The list of the newly elected directors with indication of votes received by each was as listed below:

Title	Shareholder Name or Name	Votes Received
Director	Shuang-Lang (Paul)Peng	6,462,820,789
Director	Kuen-Yao(K.Y.)Lee	6,107,222,491
Director	Kuo-Hsin (Michael) Tsai, Representative of AUO Foundation	6,212,747,799
Director	Peter Chen, Representative of BenQ Foundation	5,681,137,962
Independent Director	Mei-Yueh Ho	6,212,292,248
Independent Director	Chin-Bing (Philip)Peng	6,074,903,141
Independent Director	Yen-ShiangShih	6,282,345,733
Independent Director	Yen-Hsueh Su	6,245,274,932
Independent Director	Jang-Lin(John)Chen	6,314,641,614

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5. Recognition and Discussion Items

1. To accept 2018 Business Report and Financial Statements (proposed by the Board of Directors)

Explanation:

(1) The 2018 Financial Statements were audited by the independent auditors, Wei, Shing-Hai and Lu, Chien-Hui of KPMG.
(2) For the 2018 Business Report, Independent Auditors’ Report, and the 2018 Financial Statements, please refer to Attachments 1 and 4-5 (pages 12-14 and pages 21-38).

Voting Results: 7,480,884,686 shares were represented at the time of voting (including 4,820,368,043 shares casted electronically)

Voting Result	Voting rights	% of the total represented at the time of voting
Votes in favor	6,680,636,041	89.30
Votes against	2,931,129	0.04
Votes abstained	797,317,516	10.66

RESOLVED, that the above proposal be and hereby was accepted as proposed.

2. To accept the proposal for the distribution of 2018 earnings (proposed by the Board of Directors)

Explanation:

(1) The proposed distribution is allocated from the 2018 earnings available for distribution. For the Proposal for 2018 Earnings Distribution, please refer to Attachment 6 (page 39).
(2) If the dividend distribution ratio is adjusted due to change of the Company's total number of outstanding common shares it is proposed that the Chairman of Board of Directors is authorized to adjust the ratio of dividend to be distributed to each common share based on the total amount approved by the 2019 Annual General Shareholders’ Meeting to be distributed and the actual number of common shares outstanding on the record date for distribution.
(3) The calculation of dividends is based on the roster of shareholders and the number of shares held by each shareholder as recorded in the roster as of the record date for distribution. The cash dividend distribution to each shareholder will be paid to the rounded-down full NT dollar. Amounts less than one whole NT dollar are rounded-down to the nearest NT dollar. The aggregate unpaid cash dividend resulting from the above rounded-down, will be distributed to shareholders in the descending order of decimal point and the ascending order of shareholder account numbers, until the total amount of the approved cash dividend has been fully distributed.

Voting Results: 7,480,884,686 shares were represented at the time of voting (including 4,820,368,043 shares casted electronically)

Voting Result	Voting rights	% of the total represented at the time of voting
Votes in favor	6,751,383,776	90.25
Votes against	3,804,812	0.05
Votes abstained	725,696,098	9.70

RESOLVED, that the above proposal be and hereby was accepted as proposed.

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3. To approve issuance of new common shares for cash to sponsor issuance of the overseas depositary shares ("DR Offering") and/or issuance of new common shares for cash in public offering and/or issuance of new common shares for cash in private placement ("Private Placement Shares") and/or issuance of overseas or domestic convertible bonds in private placement ("Private Placement CB") (proposed by the Board of Directors)

Explanation:

(1) Fund raising purpose and size:

In order to invest in equipment and technology of high-end products, enrich working capital, have sound financial structure and/or support the Company’s funding needs for long term development, it is hereby proposed that the shareholders meeting to authorize the Board of Directors ("Board"), within the limit of 950,000,000 common shares, depending on the market conditions and the Company’s capital needs, to choose appropriate timing and fund raising instrument(s), to issue new common shares for cash to sponsor DR Offering and/or issue new common shares for cash in public offering and/or issue Private Placement Shares and/or issue Private Placement CB, in accordance with the applicable laws and regulations and the following fund raising principles. For issuance of Private Placement CB, the number of common shares to be converted within the limit of 950,000,000 common shares shall be calculated in accordance with the conversion price determined at the time of issuance of Private Placement CB.

(2) Fund raising method(s) and handling principles:
I. Issuance of new common shares for cash to sponsor DR Offering:
(i) The issue price of the new common shares will be decided with reference to (a) the closing price of the Company’s common shares or American Depositary Shares (" ADSs") on the pricing date or (b) the average of the closing price of the Company’s common shares or ADSs for 1, 3 or 5 trading days prior to the pricing date (each of (a) and (b) is referred to hereinafter as the "reference price"). The Chairman of the Company is authorized to coordinate with the foreign lead-underwriter(s) of the DR Offering to determine the actual issue price in accordance with market conditions, provided that, the actual issue price shall not be less than 90% of the reference price after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends.
- The reference price and the actual issue price will be decided in accordance with market practice and applicable law and regulations. In addition, assuming that the Company issues 950,000,000 common shares which is approximately 9.87% of the Company’s total outstanding common shares on the record date for the Company’s 2019 annual shareholders meeting, as the actual issue price shall be no less than 90% of the reference price after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends, it is unlikely that such issuance will have a material dilutive effect on the holding of the current existing shareholders. Thus, determination of the issue price of the new common shares to be issued in connection with the DR Offering should be reasonable and should not have a material adverse effect on the rights and benefits of the current existing shareholders.
(ii) Except for 10% to 15% of the new common shares shall be allocated for the employees'
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subscription in accordance with the applicable law, it is proposed for the shareholders meeting to approve the rights to subscribe to the remaining shares to be waived by the shareholders and such remaining shares should be offered to the public under Article 28-1 of the Securities and Exchange Act as the underlying shares of the global depositary shares to be sold in the DR Offering. Any new common shares not subscribed by employees of the Company shall be determined by the Chairman of the Company, depending on the market needs, to be allocated as underlying shares of the global depositary shares or to be subscribed by the designated person(s).

II. Issuance of new common shares for cash in public offering:
(i) The par value of the new common shares to be issued per share is NT$10. It is proposed to authorize the Chairman of the Company to coordinate with the underwriter(s) of the public offering to determine the actual issue price in accordance with the Taiwan Securities Association's Self-regulatory Rules Governing the Provision of Advisory Services by Underwriter Members to Issuing Companies for Offering and Issuing Securities and the market conditions and the issue price shall be reported to, and accepted by the regulatory authority before issuance.
(ii) It is proposed to authorize the Board to choose either of the following methods to sell the new shares in the public offering through the underwriter(s)：
- (a) Except for 10% to 15% of the new shares must be offered to employees in accordance with Article 267, Paragraph I of the Company Act, it is proposed for the shareholders meeting to approve the pre-emptive rights to subscribe to the remaining shares to be waived by the shareholders in accordance with Article 28-1 of the Securities and Exchange Act and such remaining shares will be offered to the public via book building. It is proposed that any new common shares not subscribed by employees of the Company will be sold to the person(s) designated by the Chairman of the Company at the issue price.
- (b) Except for 10% to 15% of the new shares must be offered to employees in accordance with Article 267, Paragraph I of the Company Act, it is proposed that 10% of the new shares to be sold to the public through the underwriter(s) in accordance with Article 28-1, Paragraph 2 of the Securities and Exchange Act and the remaining shares will be subscribed to by the existing shareholders of the Company in accordance with their shareholding. It is proposed that any new common shares not subscribed by employees and shareholders of the Company will be sold to the person(s) designated by the Chairman of the Company at the issue price.

III. Issuance of Private Placement Shares and/or Private Placement CB:

(i) Basis and reasonableness for determination of the subscription price of the Private Placement Shares and issue price of Private Placement CB:
(a) The higher of (x) the simple average closing price of the Company’s common shares for either 1, 3 or 5 trading days prior to the pricing date, and (y) the simple average closing price of the Company’s common shares for 30 trading days prior to the pricing date, after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends, as the reference price
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of the Private Placement Shares.

(b) The issue price of the Private Placement Shares shall be no less than 80% of the reference price. It is proposed to authorize the Board to decide the actual issue price within the range approved by the shareholders meeting, depending on the status of finding specific investor(s) and market conditions.

The issue price of the Private Placement CB shall be no less than 80% of the theoretical price.

(c) As aforementioned, subscription price of the Private Placement Shares and issue price of Private Placement CB will be determined with reference to the price of the Company’s common shares and the theoretical price in accordance with the Regulations Governing Public Companies Issuing Securities in Private Placement, thus, the price should be reasonable.
(ii) The method, purpose, necessity and projected benefits to determine specific investor(s):

The investors to subscribe to the Private Placement Shares and/or Private Placement CB must meet the qualifications listed in Article 43-6 of the Securities and Exchange Act and are limited to strategic investor(s). Priority will be given to the investor(s) who could benefit the Company's long term development, competitiveness, and existing shareholders' rights. The Board is fully authorized to determine the specific investor(s). The purpose, necessity and projected benefits for choosing strategic investor(s) are to accommodate the Company’s operation and development needs to have the strategic investor(s) to assist the Company, directly or indirectly, in its finance, business, manufacturing, technology, procurement, management, and strategy development, etc. so to strengthen the Company’s competitiveness and enhance its operational efficiency and long term development.

(iii) The necessity of issuance of Private Placement Shares and/or Private Placement CB:

Considering the effectiveness and convenience for issuance of the Private Placement Shares/Private Placement CB and accommodating the Company’s development planning, including inviting the strategic investor(s), it would be necessary to issue the Private Placement Shares and/or Private Placement CB.

(iv) For the Private Placement Shares and/or the new common shares to be issued upon conversion of Private Placement CB, after expiration of three years following delivery date of the Private Placement Shares/Private Placement CB, the Board is authorized to apply for approval from the Taiwan Stock Exchange ("TSE") acknowledging that the Private Placement Shares /new common shares to be issued upon conversion of Private Placement CB meet the requirements for TSE listing before the Company submitting application with the Financial Supervisory Commission for retroactive handling of public issuance of such shares and submitting application with TSE for listing such shares on TSE.
(v) The tentative terms and conditions of the Private Placement CB ("Offering Plan") are shown in Attachment 7 (pages 40-42).
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(3) Use of proceeds, the schedule and the projected benefits:

The Company plans to use the funds raised from the DR Offering and/or issuance of the new common shares in public offering and/or issuance of the Private Placement Shares and/or Private Placement CB to invest in equipment and technology of high-end product, enrich working capital, strengthen financial structure and/or support the Company’s funding needs for long term development and plans to use such funds within three years after completing the fund raising and it is expected that use of such funds will strengthen the Company’s competitiveness and improve operational efficiency.

(4) The new common shares to be issued to sponsor the DR Offering, the new common shares to be issued in public offering, Private Placement Shares and the new common shares to be issued upon conversion of Private Placement CB will be issued in the scriptless form. Except that the Private Placement Shares and the new common shares to be issued upon conversion of Private Placement CB are subject to the selling restrictions within three years after the delivery date of the Private Placement Shares/Private Placement CB under Article 43-8 of the Securities and Exchange Act, the new common shares to be issued to sponsor the DR Offering, the new common shares to be issued in public offering, the Private Placement Shares and the new common shares to be issued upon conversion of Private Placement CB will have the same rights and obligations as the Company’s existing issued and outstanding common shares.
(5) Under the situation where the issue price of the new common shares to be issued to sponsor the DR Offering, the new common shares to be issued in public offering, Private Placement Shares and the conversion price for the Private Placement CB is set at a price less than the par value due to the market change, the reason for the Company not adopt other fund raising method and the reasonableness for such determination:

This is mainly based on considerations of the sound operation of the Company and the security of its financial structure and issuing equity related securities for fund raising is more appropriate than pure debt financing. If the Company decides to use the fund raising methods, such as issuing new shares for cash to sponsor the DR Offering, issuing new shares for cash in public offering, and issuing Private Placement Shares, etc. the Company would not incur any interest of the debt in such case not only the Company's financial risk could be reduced, the Company's financial structure could be improved and the flexibility of the Company’s treasury management would also be increased. For issuance of Private Placement CB, if investor converts Private Placement CB into the common shares, such would improve the Company’s financial structure and would benefit the Company’s long term development. Thus, it should be reasonable for the Company to issue the equity related securities. If the issue price and the conversion price is less than the par value, such would be expected to cause decrease of the Company’s capital surplus and retained earnings in which case the Company will, depending on the actual operating conditions in the future, make up for the losses. As the issue price and the conversion price will be determined in accordance with the relevant regulations, thus, after realization of the benefits of the capital increase, the Company's financial structure will be effectively improved which would be favorable to the Company’s long-term development and would not have adverse impact on the rights and benefits of the shareholders.

(6) After the shareholders meeting approves issuance of new common shares to sponsor the DR Offering, new common shares in public offering, the Private Placement Shares and the Private
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Placement CB, it is proposed for the shareholders meeting to authorize the Board to determine and amend, at the Board’s sole discretion, the terms and condition of the new common shares to be issued for the DR Offering and/or in public offering and/or terms and condition of the Private Placement Shares and/or Offering Plan of the Private Placement CB, the plan for the use of proceeds, the schedule and projected benefits and all matters in connection therewith, in accordance with the Company’s actual needs, market conditions and relevant regulations and if any amendment thereto is required due to any change of the regulations or as requested by the regulator’s order or based on the Company’s operation evaluation or change of the market conditions, the Board is authorized to make the required amendments at the Board’s sole discretion.

(7) To complete the fund raising, the Chairman or the Chairman's designee is authorized, on behalf of the Company, to handle all matters relating to, and sign all agreements and documents in connection with, issuance of the new common shares to sponsor the DR Offering, issuance of new common shares in public offering and issuance of the Private Placement Shares and/or Private Placement CB.
(8) The Board is authorized to handle all matters at the Board’s sole discretion which are not addressed herein in accordance with the applicable laws and regulations.

Voting Results: 7,480,884,686 shares were represented at the time of voting (including 4,820,368,043 shares casted electronically)

Voting Result	Voting rights	% of the total represented at the time of voting
Votes in favor	6,670,755,037	89.17
Votes against	12,837,157	0.17
Votes abstained	797,292,492	10.66

RESOLVED, that the above proposal be and hereby was accepted as proposed.

4. To approve the amendment to Articles of Incorporation (proposed by the Board of Directors) Explanation:

(1) To comply with the amendment to the Company Act in 2018, it is proposed to amend the Articles of Incorporation.
(2) A comparison table for the Articles of Incorporation before and after the amendments is attached hereto as Attachment 8 (pages 43-45).

Voting Results: 7,480,884,686 shares were represented at the time of voting (including 4,820,368,043 shares casted electronically)

Voting Result	Voting rights	% of the total represented at the time of voting
Votes in favor	6,751,228,687	90.25
Votes against	3,873,745	0.05
Votes abstained	725,782,254	9.70

RESOLVED, that the above proposal be and hereby was accepted as proposed.

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5. To approve the amendment to Handling Procedures for Acquisition or Disposal of Assets, Handling Procedures for Conducting Derivative Transactions, Handling Procedures for Capital Lending, Handling Procedures for Providing Endorsements and Guarantees for Third Parties (proposed by the Board of Directors)

Explanation:

(1) To comply with Regulations Governing the Acquisition and Disposal of Assets by Public Companies and Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, it is proposed to amend Handling Procedures for Acquisition or Disposal of Assets, Handling Procedures for Conducting Derivative Transactions, Handling Procedures for Capital Lending, and Handling Procedures for Providing Endorsements and Guarantees for Third Parties.
(2) Comparison tables for before and after the amendments are attached hereto as Attachment 9 (pages 46-61).

Voting Results: 7,480,884,686 shares were represented at the time of voting (including 4,820,368,043 shares casted electronically)

Voting Result	Voting rights	% of the total represented at the time of voting
Votes in favor	6,751,183,498	90.25
Votes against	3,856,935	0.05
Votes abstained	725,844,253	9.70

RESOLVED, that the above proposal be and hereby was accepted as proposed.

6. To lift non-competition restrictions on board members (proposed by the Board of Directors)

Explanation:

(1) According to Article 209 of the Company Act, any Director conducting business for himself/herself/itself or on another’s behalf, the scope of which business is within the scope of the Company’s business, shall explain at the Shareholders’ Meeting the essential contents of such conduct, and obtain approval from shareholders in the Meeting.
(2) It is proposed for the 2019 annual shareholders meeting to approve lifting non-competition restrictions on newly elected directors. The list of non-competition restrictions proposed to be lifted by the Company on each Director Candidate is attached hereto as Attachment 10 (page 62).

Voting Results: 7,480,884,686 shares were represented at the time of voting (including 4,820,368,043 shares casted electronically)

Voting Result	Voting rights	% of the total represented at the time of voting
Votes in favor	6,656,941,783	88.99
Votes against	7,984,130	0.11
Votes abstained	815,958,773	10.90

RESOLVED, that the above proposal be and hereby was accepted as proposed.

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6. Extraordinary Motions

There being no extraordinary motions, and the Chair announced the meeting was adjourned.

7. Meeting Adjourn

The meeting was adjourned at 10:30 a.m.

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Attachment 1 2018 Business Report

The overall business environment experienced a reversal in 2018, and the demand for display panels dropped precipitously since mid-2018. As new production capacity from China increased, the market anticipated an oversupply, which in turn led to a decline in display panel prices. Fortunately, AU Optronics Corp. (hereinafter "AUO") has shown positive results for its value transformation strategy. AUO has increased its proportion of revenue derived from non-commodity and high-end products, and has continued to optimize its product mix. Consequently, AUO’s revenues experienced relatively less fluctuation in comparison with industry peers, as AUO has demonstrated robust operating performance and maintained profitability for six consecutive years. Consolidated revenue in 2018 amounted to NT$307.63 billion, a decline of 9.8% from 2017. Net operating profit was NT$6.67 billion, and net profit attributable to the parent company was NT$10.16 billion equating to basic earnings per share (EPS) of NT$1.06.

Looking back on 2018, AUO has achieved the following results owing to its cutting edge technological advancements:

AUO launched its bezel-less ALCD TV display integrating high contrast quantum dot (QD) wide color gamut and industry-leading Gate on Array technology. AUO continued to be a pioneer by launching the world’s largest 85-inch 8K4K ultra-high resolution bezel-less ALCD TV display with curved design (Note), a product that simultaneously boasts perfect viewing quality and a fashionable design. The product has immediately become the optimal choice among established TV brands around the world.
To rapidly grow High Spec Gaming displays, AUO integrated a high refresh rate, large screen size, ultra-high definition, QD, curved and a bezel-less design to build a comprehensive product line dedicated exclusively to gaming. AUO continues to maintain its leadership position (Note) for display panels for gaming monitors and gaming notebook PCs. In addition, AUO has launched a series of mini LED backlight gaming displays as well as the supersized 65-inch UHD 4K HDR gaming display with a 144Hz refresh rate. This product clearly possesses precise and fluent screen details allowing gamers to feel immersed in the game scenes.
AUO’s Low Temperature Poly-Silicon (LTPS) technology has advantages including high picture quality, ultra-thin bezel, lightweight form, and energy-efficiency. Aside from a continued dedication to high-end mobile phone displays, AUO also leads the industry in the introduction of this technology to UHD 4K high-end notebook PC displays. AUO successfully launched the world's first (Note) 13.3-inch UHD 4K narrow border LTPS LCD supporting the use of stylus, allowing users to enjoy the highest mobility possible. In addition to integrating a touch function into the panel production process, AUO has gradually introduced LTPS technology to high-end automotive, industrial, and commercial use display panels to enhance product value.
Top automotive brands now recognize AUO as one of the leaders in the industry. This was achieved by integrating AUO’s core technology with its rich experience in R&D to produce high-end automotive displays. This fusion of technologies gives AUO a comprehensive customer portfolio. Moreover, AUO has demonstrated the world's first (Note) 13.2-inch free-form automotive display with a gate circuit in its active area to allow for free-form laser-cutting at the side of the panel, which creates more room and flexibility for product design. AUO has also achieved promising results in a
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variety of automotive display applications including clusters, central information display, entertainment systems, and rear-view mirrors.
AUO has successfully developed the world's highest resolution (Note) full-color TFT driven 8-inch micro LED display, and was recognized by the Society for Information Display in 2018 by receiving the “Best in Show” award. This provided further evidence of AUO's innovation strengths which is attributed to years of long-term strategic commitments to advancing display technologies.
As for solar products, AUO focused on the manufacturing and R&D of high-efficiency module products. By utilizing multi-busbar technology, AUO has developed solar modules with stable, long-term power transmission and high energy-efficiency. In particular, products adding the feature of salt and humidity resistance were recognized by the Ministry of Economic Affairs by receiving the “Taiwan Excellent PV” award in 2018.

Further development trends in the display panel industry:

Display panel makers in China continue to expand their production capacities, which has had a significant impact on panel supply. In general, oversupply is expected to become “the norm” for the foreseeable future. However, capacity is no longer the sole factor indicating competitive advantage in the TFT-LCD industry. Technological enhancement, operational efficiency, and client management have all become more critical elements allowing panel makers to succeed over their competition.
The global technology industry has continued to be driven by developments in the Internet of Things (IoT), artificial intelligence, and interdisciplinary application products. A corresponding need for human machine interfaces arising from these field applications has brought new business opportunities for display panels.
As the consumer product market becomes increasingly saturated, the demand for display panels is predicted to become more diversified in the future. Innovative applications for flexible panels are beginning to take off, and the demand for customized products is fast increasing. AUO will utilize its solid technological foundation and comprehensive product lines to take advantage of these emerging trends.

Facing rapid changes within the industry, regional trade conflicts, and instabilities in the global economy—AUO has prepared itself to thrive in this uncertain environment by insisting on a value creation strategy in 2019.

I. Sustain financial health: For the past few years, AUO has focused on value-added businesses and has improved its financial strength. Initiatives like disposal of idle assets, eliminating impaired assets with no useful value, rigorous inventory control, and a reduction of the net debt ratio to a healthy level have all worked to significantly improve AUO’s capital structure. In the future, AUO’s expansion will be based on appropriate investment focusing on competitive and high quality capacity. The management team will ensure AUO has sufficient financial resources to undertake value transformation and retain flexibility to quickly respond to fluctuations in the industry.
II. Enhance product value: AUO has actively planned for value transformation. While continuing to optimize its product mix and focus on high value-added products, AUO will launch software and hardware
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integrated solutions for all kinds of venues, and extend its value chain from panels to downstream applications.

III. Continuous innovation: AUO has long been focusing on the research and development of display technologies. Outstanding technological competency and a comprehensive patent portfolio will continue to form the backbone for AUO’s value transformation strategy as AUO seeks further growth opportunities by exploring new areas including healthcare, smart retail, and the circular economy.

Green and sustainable operations have always been our core commitment, as AUO strives to realize a sustainable philosophy of "Go Beyond CSR, Create Shared Values." In terms of the implementation of CSR (Corporate Social Responsibilities), AUO has already reaped rewards in 2018: AUO has been named to the Dow Jones Sustainability World Index (DJSI World) for nine consecutive years and has been named to the MSCI World ESG Leaders Index, and is a key constituent stock in the FTSE4Good Emerging Indexes. AUO also ranks in the top 5% of the Taiwan Stock Exchange's Corporate Governance Evaluation. In addition, AUO has achieved a stellar performance in six key areas, including corporate governance, corporate commitment, science education, cultural preservation, social caring, and environmental sustainability. This has helped AUO win recognition from several esteemed organizations, including the Corporate Social Responsibility Awards sponsored by Commonwealth Magazine, the Corporate Social Responsibility & Social Enterprise Awards sponsored by Global Views Magazine, and the Taiwan Corporate Sustainability Award. As for providing a friendly workplace environment, AUO has been named one of the "Best Companies to Work for in Asia" by HR Asia Magazine. AUO is also the only company in Taiwan to be named to the Bloomberg Gender-Equality Index (GEI).

Looking to the year ahead, the continued imbalance of the industry’s supply-demand and uncertainties from global economic fluctuations have become even more challenging. Utilizing its healthy financial status and technological strengths, AUO will persist in its value creation strategy by actively applying its expertise to downstream applications, total solutions, and new applications. While continuing to enhance operating efficiency and maintaining profitability for its shareholders is critical, AUO will make the same efforts to fulfill CSR with real actions, to create more values to benefit the society as well. All of these goals can be achieved through the continued implementation of AUO’s philosophy of green and sustainable operations.

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Shuang-Lang (Paul) Peng, Kuo-Hsin (Michael) Tsai, Chairman President

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Benjamin Tseng, Chief Financial Officer and Chief Accounting Officer

Note: Refers to the market data collected by AUO as of Dec 31, 2018.
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Attachment 2:

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s Business Report, Financial Statements, and Earnings Distribution Proposal for the year of 2018. Wei, Shing-Hai and Lu, Chien-Hui, Certified Public Accountants of KPMG, have audited the Financial Statements. The 2018 Business Report, Financial Statements, and Earnings Distribution Proposal have been reviewed and determined to be correct and accurate by the Audit Committee of AU Optronics Corp. I, as the Chair of the Audit Committee, hereby submit this report according to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

AU Optronics Corp.

Chair of the Audit Committee

Vivien Huey-Juan Hsieh

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March 22, 2019

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Attachment 3:

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List of Director Candidates

(Nominated by the Company’s Board of Directors)

No.	Types of Nominee	Name	Gender	Shareholding (Note)	Major Education & Experience	Major Current Positions
1	Director	Shuang-Lang (Paul) Peng	Male	5,630,551 shares	- M.B.A., Heriot-Watt University, U.K. - President, AU Optronics Corp.	- Chairman and Chief Executive Officer, AU Optronics Corp. - Director, Darwin Precisions Corporation - Director, Qisda Corp.
2	Director	Kuen-Yao (K.Y.) Lee	Male	10,512,153 shares	- M.B.A., International Institute for Management Development, Switzerland - Chairman, AU Optronics Corp. - Chairman, Qisda Corp.	- Director, AU Optronics Corp. - Director, Qisda Corp. - Director, Darfon Electronics Corp. - Director, BenQ Materials Corp.
3	Director	Kuo-Hsin (Michael) Tsai, Representative of AUO Foundation	Male	312,000 shares	- Executive M.B.A., National Chiao Tung University - Senior Vice President and the General Manager of Video Solutions Business Group, AU Optronics Corp. - Director, Qisda Corp.	- Director, President and Chief Operation Officer, AU Optronics Corp. - Director, Lextar Electronics Corp. - Director, Daxin Materials Corporation
4	Director	Peter Chen, Representative of BenQ Foundation	Male	100,000 shares	- Technology Management Program, National Chengchi University - EMBA, Thunderbird American Graduate School, U.S.A. - B.S., Electrical Engineering, National Cheng Kung University - Executive Vice President of TechnologyProduct	- Director, AU Optronics Corp. - Chairman and President, Qisda Corp. - Chairman, BenQ Medical Technology Corporation - Chairman, Partner Tech Corp. - Chairman, DFI Inc. - Director, Alpha Networks Inc. - Director, Darfon Electronics Corp.

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No.	Types of Nominee	Name	Gender	Shareholding (Note)	Major Education & Experience	Major Current Positions
					Center, BenQ Corp.	- Director, BenQ Materials Corp.
5	Independent Director	Mei-Yueh Ho	Female	0 share	- B.S., Agricultural Chemistry, National Taiwan University - Minister, Ministry of Economic Affairs, R.O.C. - Council Minister, Council for Economic Planning and Development, R.O.C.	- Independent Director, AU Optronics Corp. - Independent Director and member of Remuneration Committee, Bank of Kaohsiung, Ltd. - Independent Director and member of Remuneration Committee, Kinpo Electronics, Inc. - Independent Director, ASE Technology Holding Co., Ltd.
6	Independent Director	Chin-Bing (Philip) Peng	Male	96,670 shares	- M.B.A., National Chengchi University - Senior Vice President and CFO, ACER Incorporated	-Independent Director and member of Remuneration Committee, AU Optronics Corp. -Independent Director and member of Remuneration Committee, Apacer Technology Inc. -Director, Wistron Corporation - Director and President, iD SoftCapital - Director, ACER Incorporated - Director, Wistron NeWeb Corporation - Director, AOPEN Inc. - Director, Wistron Information Technology & Services Corp.
7	Independent Director	Yen-Shiang Shih	Male	0 share	- Ph.D., Chemistry, Massachusetts Institute of Technology, U.S.A.	-Independent Director, AU Optronics Corp. -Independent Director and member of

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No.	Types of Nominee	Name	Gender	Shareholding (Note)	Major Education & Experience	Major Current Positions
					- Chief of Chemical Engineering, National Taiwan University of Science and Technology - Professor of Chemical Engineering, National Taiwan University of Science and Technology - Director General, Small and Medium Enterprise Administration, Ministry of Economic Affairs, R.O.C. - Director General, Taiwan Tobacco & Wine Bureau - Director General, Industrial Development Bureau, Ministry of Economic Affairs, R.O.C. - Vice Minister, Ministry of Economic Affairs, R.O.C. - Deputy Minister, Ministry of Economic Affairs, R.O.C. - Chairman, CPC Corporation, Taiwan - Minister, Ministry of Economic Affairs, R.O.C. - National Policy Advisors, Office of the President, R.O.C. - Chairman, Sinotech Engineering Consultants, Inc. - Supreme Advisor, Commerce	Remuneration Committee, Formosa Plastics Corporation -Independent Director and member of Nomination Committee, Remuneration Committee, CTCI Corporation - Director, Taiwan Research Institute - Director, Taiwan Institute of Economic Research - Chair Professor, Chung Yuan Christian University - Policy Advisor, Taiwan Electrical and Electronic Manufacturer’s Association -Chairman, Sustainable & Circular Economy Development Association

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No.	Types of Nominee	Name	Gender	Shareholding (Note)	Major Education & Experience	Major Current Positions
					Development Research Institute
8	Independent Director	Yen-Hsueh Su	Female	0 share	- Master in Industrial Management of Carnegie Mellon University, U.S.A. -Managing Director, and Head of Asia Technology Hardware Research, UBS - Chief Investment Officer, ASUSTEK Computer Inc. - Chief Investment Officer, Pegatron Corporation	- Director, KINSUS Interconnect Technology Corp. - Independent Director and member of Remuneration Committee, TXC Corporation - Independent Director and member of Remuneration Committee, Zhong Yang Technology Co.,Ltd
9	Independent Director	Jang-Lin (John) Chen	Male	0 share	- Stanford Executive Program, Stanford University, Graduate School of Business - Ph.D. in Polymer Material, NYU/Polytechnic University, New York - Master in Chemistry, National Taiwan University - B.S., Chemistry, National Tsing Hua University - ITRI Fellow, Electronics & Optoelectronics System Research Lab - VP and DTC General Director, Display Technology Center, ITRI - Adjunct Professor, Department of Photonics, National Chiao-Tung University - CTO, Kodak LCD Polarizer Films Business - Kodak Research Fellow, Eastman Kodak Company Honors: - Honorary Chair Professor, National Chiao-Tung University - Gold Panel Awards, Taiwan DisplayUnion	- ITRI Research Fellow, Electronics & Optoelectronics System Research Lab and Industry, Science and Technology International Strategy Center - SID Taipei Chapter Director - Chairman of Board, Taiwan Display Material & Devices Association - Vice Chairman of Board, Taiwan Display Union Association - Director, Taiwan TFT LCD Association

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No.	Types of Nominee	Name	Gender	Shareholding (Note)	Major Education & Experience	Major Current Positions
					Association (2015, 2016, 2017) - SID Fellow (2014) - SID Special Recognition Awards (2012) - The second National Industrial Innovation Award, (2012) - The 18thTECO Award (2011) - R&D 100 Awards (2010, 2011) - Wall Street Journal Technology Innovation Awards (2010,2011)

Note ： The collective shareholdings were shown as of April 16, 2019, the first date of local book-close period for the 2019 Annual Shareholders’ Meeting.

Reason of continuing to nominate Ms. Mei-Yueh Ho who has served consecutively as independent director for three consecutive terms as independent director of the Company:

In response to the panel industry cycle and the challenges of the rapidly changing of new applications, the members of the Board of Directors need to have both experience and appropriate rotation. The Company evaluates that under the Board structure with the independent directors exceeding one-half of the total director seats, the turnover of the independent directors of each term should not exceed half seats. Ms. Mei-Yueh Ho is familiar with the development trends of domestic and foreign industries, and has rich and cross-sector industrial backgrounds, which will fully contribute to the Company’s future transformation and development. In order to meet the Company’s strategic transformation, long-term development needs and the overall diversification of the members of the Board of Directors, it is proposed to nominate Ms. Ho as an independent director to continue to provide supervision and professional advice to the Board of Directors. At the same time, the Company will review the independence of independent directors each year under the premise that independent directors exceed one-half of the total director seats to enhance the independence and professional judgments of the overall Board of Directors.

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Attachment 4:

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Independent Auditors’ Report

To the Board of Directors of AU Optronics Corp.:

Opinion

We have audited the parent company only financial statements of AU Optronics Corp. (“the Company”), which comprise the balance sheets as of December 31, 2018 and 2017, the statements of comprehensive income, the statements of changes in equity, and the statements of cash flows for the years ended December 31, 2018 and 2017, and notes to the parent company only financial statements including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and its financial performance and its cash flows for each of the years then ended, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. 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 parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Impairment of long-term non-financial assets (including goodwill)

Refer to Note 4(16) “Impairment – non-financial assets”, Note 5(2) and Note 5(3) “Critical accounting judgments and key sources of estimation and assumption uncertainty”, Note 6(9) “Property, plant and equipment”, and Note 6(11) “Intangible assets” to the parent company only financial statements.

Description of key audit matter:

The Company operates in an industry with high investment costs, has goodwill through the acquisition of subsidiaries, and may experience volatility in response to changes in the external market; hence, it is important to assess the impairment of its long-term non-financial assets (including goodwill). The impairment assessment includes identifying cash-generating units, determining a valuation model, determining significant assumptions, and computing recoverable amounts. With the complexity of the impairment assessment process and the involvement of significant management judgment regarding assumptions used, this is one of the key areas our audit focused on.

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How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included understanding and testing the Company’s controls surrounding the impairment assessment and testing process; assessing whether there are impairment indications for the identified cash-generating units of the Company and its related assets; understanding and assessing the appropriateness of the valuation model used by the management in the impairment assessment and the significant assumptions used to determine related assets’ future cash flows projection, useful lives, and weighted-average cost of capital; retrospectively reviewing the accuracy of assumptions used in prior-period estimates and performing a sensitivity analysis of key assumptions and results; in addition to the above audit procedures, appointing specialists to evaluate the appropriateness of the weighted-average cost of capital used and related assumptions; performing an inquiry of the management and identifying any event after the balance sheet date if able to affect the results of the impairment assessment; and assessing the adequacy of the Company’s disclosures of its policy on impairment of noncurrent non-financial assets and other related disclosures.

Recognition of deferred tax assets

Refer to Note 4(21) “Income taxes”, Note 5(5) “Critical accounting judgments and key sources of estimation and assumption uncertainty”, and Note 6(26) “Income taxes” to the parent company only financial statements.

Description of key audit matter:

The recognition of deferred tax assets for the related unused tax losses, unused tax credits, and deductible temporary differences is based on management estimates of its future available taxable profits and the probability that the related deferred tax assets will be realized. This is one of the key areas our audit focused on.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included understanding and testing the controls surrounding the Company’s assessment process for recognition of deferred tax assets; understanding the components of the Company’s deferred tax assets and assessing the management estimates for assumptions used in the future cash flow projection and future taxable profits calculation; retrospectively reviewing the accuracy of assumptions used in prior-period estimates of future cash flow projection and assessing whether there are any other matters that will affect the recognition of deferred tax assets; and assessing the adequacy of the Company’s disclosures regarding its deferred tax asset recognition policy and other related disclosures.

Revenue recognition

Refer to Note 4(18) “Revenue from contracts with customers (policy applicable from January 1, 2018)”, Note 4(19) “Revenue recognition”, Note 6(19) “Revenue from contracts with customers”, and Note 6(20) “Revenue” to the parent company only financial statements.

Description of key audit matter:

Revenue is recognized when the control over a product has been transferred to the customer as specified in each individual contract with customers. The Company recognizes revenue depending on the various sales terms in each individual contract with customers to ensure the performance obligation has been satisfied by transferring control over a product to a customer. In addition, the Company operates in an industry in which sales revenue is easily influenced by various external factors such as supply and demand of the market, and this may impact the recognition of revenue. Consequently, this is one of the key areas our audit focused on.

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How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included understanding and testing the Company’s controls surrounding revenue recognition; assessing whether appropriate revenue recognition policies are applied through comparison with accounting standards and understanding the Company’s main revenue types, its related sales agreements, and sales terms; on a sample basis, inspecting contracts with customers or customers’ orders and assessing whether the accounting treatment of the related contracts (including sales terms) is applied appropriately; performing a test of details of sales revenue and understanding the rationale for any identified significant sales fluctuations and any significant reversals of revenue through sales discounts and sales returns which incurred within a certain period before or after the balance sheet date; and assessing the adequacy of the Company’s disclosures of its revenue recognition policy and other related disclosures.

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

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

In preparing the parent company only financial statements, management is responsible for assessing the Company’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 the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (inclusive of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 auditing standards generally accepted in 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 parent company only financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercised professional judgment and maintained professional skepticism throughout the audit. We also:

Identified and assessed the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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Concluded 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 the Company’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 related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluated the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtained sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicated 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 identified during our audit.

We also provided those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicated 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 determined those matters that were of most significance in the audit of the parent company only financial statements of the current period 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 audit resulting in this independent auditors’ report are Wei, Shing-Hai and Lu, Chien-Hui.

KPMG Hsinchu, Taiwan (Republic of China) January 28, 2019

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance, and cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The standards, procedures and practices to audit such financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language auditors’ report and financial statements, the Chinese version shall prevail.

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(Continued)

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Attachment 5:

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Independent Auditors’ Report

To the Board of Directors of AU Optronics Corp.:

Opinion

We have audited the consolidated financial statements of AU Optronics Corp. and its subsidiaries (“the Company”), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, the consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years ended December 31, 2018 and 2017, and notes to the consolidated financial statements including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for each of the years then ended, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRS”), International Accounting Standards (“IAS”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. 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 consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Impairment of long-term non-financial assets (including goodwill)

Refer to Note 4(17) “Impairment – non-financial assets”, Note 5(2) and Note 5(3) “Critical accounting judgments and key sources of estimation and assumption uncertainty”, Note 6(13) “Property, plant and equipment”, and Note 6(15) “Intangible assets” to the consolidated financial statements.

Description of key audit matter:

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How the matter was addressed in our audit:

Recognition of deferred tax assets

Refer to Note 4(23) “Income taxes”, Note 5(5) “Critical accounting judgments and key sources of estimation and assumption uncertainty”, and Note 6(31) “Income taxes” to the consolidated financial statements.

Description of key audit matter:

The recognition of deferred tax assets for the related unused tax losses, unused tax credits, and deductible temporary differences arising from operating entities located in other areas is based on management estimates of its future available taxable profits and the probability that the related deferred tax assets will be realized. This is one of the key areas our audit focused on.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included understanding and testing the controls surrounding the Company’s assessment process for recognition of deferred tax assets; understanding the Company’s significant operating entities for which deferred tax assets are recognized and assessing the management estimates for assumptions used in the future cash flow projection and future taxable profits calculation; retrospectively reviewing the accuracy of assumptions used in prior-period estimates of future cash flow projection and assessing whether there are any other matters that will affect the recognition of deferred tax assets; and assessing the adequacy of the Company’s disclosures regarding its deferred tax asset recognition policy and other related disclosures.

Revenue recognition

Refer to Note 4(19) “Revenue from contracts with customers (policy applicable from January 1, 2018)”, Note 4(20) “Revenue recognition”, Note 6(24) “Revenue from contracts with customers”, and Note 6(25) “Revenue” to the consolidated financial statements.

Description of key audit matter:

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How the matter was addressed in our audit:

Other Matters

AU Optronics Corp. has additionally prepared its parent-company-only financial statements as of and for the years ended December 31, 2018 and 2017, on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRS, IAS, IFRIC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’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 the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (inclusive of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 auditing standards generally accepted in 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 consolidated financial statements.

Identified and assessed the risks of material misstatement of the consolidated 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.
Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
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Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Concluded 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 the Company’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 related disclosures in the consolidated 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 the Company to cease to continue as a going concern.
Evaluated the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtained sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determined those matters that were of most significance in the audit of the consolidated financial statements of the current period 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 audit resulting in this independent auditors’ report are Wei, Shing-Hai and Lu, Chien-Hui.

KPMG

Hsinchu, Taiwan (Republic of China) January 28, 2019

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance, and cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards, International Accounting Standards, interpretations as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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Attachment 6:

2018 Earnings Distribution Proposal

Amount in NT$	Amount in NT$
Items	Amount
Net income of 2018	10,160,598,437
Add:
Adjustments to the first-time adoption of International Financial ReportingStandards	73,020,243
Adjustments arising from investments in equity-accounted investees in 2018	158,248
Less:
Change in remeasurement of defined benefitplan in 2018	16,862,194
Disposal of equity investments at fair value through other comprehensive income	50,084,458
Appropriation of special reserve(Note)	847,769,701
Provisioned as legal reserve	1,016,059,844
Retained earnings in 2018 available for distribution	8,303,000,731
Plus:
Unappropriated retained earnings frompreviousyears	30,003,533,253
Retained earnings available for distribution as of December 31, 2018	38,306,533,984
Distribution item:
Cash dividends to common shareholders (NT$0.5 per common share, i.e., NT$ 500 for every 1,000 common shares)	4,812,122,558
Unappropriated retained earnings after earnings distribution	33,494,411,426

Note ： The special reserve is set aside based on the balance of the other components of equity as of December 31, 2018.

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Attachment 7:

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AU Optronics Corp. Terms and Conditions for Issuance of Overseas or Domestic Convertible Bonds in Private Placement (Tentative)

1. Issuer

AU Optronics Corp. (“Issuer” or “AUO”).

2. Issuance Size

The Board of Directors (“Board”) is authorized, within the limit of 950,000,000 common shares, to issue new common shares for cash to sponsor issuance of the overseas depositary shares (“DRs”) and/or issue new common shares for cash in public offering and/or issue new common shares in private placement and/or issue overseas or domestic convertible bonds in private placement (“Private Placement CB”). For issuance of Private Placement CB, the number of common shares to be converted within the limit of 950,000,000 common shares shall be calculated in accordance with the conversion price determined at the time of issuance of Private Placement CB.

3. Issuance Date

The Private Placement CB will be issued in one tranche within one year after the 2019 annual general shareholders’ meeting.

4. Issuance Method

The Private Placement CB will be issued in accordance with Article 43-6 of the Securities and Exchange Act and the regulations of the jurisdiction where the Private Placement CB is issued.

The investors subscribing to the Private Placement CB must meet the qualifications listed in Article 43-6 of the Securities and Exchange Act and are limited to strategic investor(s). Priority will be given to the investor(s) who could benefit the Company's long term development, competitiveness, and existing shareholders' rights. The Board is fully authorized to determine the specific investor(s). The purpose, necessity and projected benefits for having strategic investor(s) are to accommodate the Company’s operation and development needs to have the strategic investor(s) to assist the Company, directly or indirectly, in its finance, business, manufacturing, technology, procurement, management, and strategy development, etc. so to strengthen the Company’s competitiveness and enhance its operational efficiency and long term development.

5. Form, Denomination and Issuance Price

The Private Placement CB will be issued in registered form in denomination of US$10,000 or multiples thereof or NT$100,000 or multiples thereof and the issue price shall be no less than 80% of the theoretical price.

6. Coupon Rate

To be determined by the Board.

7. Term

The term of the Private Placement CB shall not exceed seven years.

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8. Redemption

Unless previously redeemed, converted, or purchased and cancelled, the Private Placement CB will be redeemed by the Issuer at the maturity date in cash at a price equal to the par value or the par value plus interest.

9. Conversion Securities

The Private Placement CB will be convertible into AUO’s common shares or the DRs representing AUO’s common shares.

10. Conversion

(1) Conversion Period:

Unless previously redeemed, purchased, cancelled or converted, except during the closed period the holders are not permitted to convert under the Indenture, a holder of the Private Placement CB may request the Issuer to convert the Private Placement CB into AUO’s common shares or the DRs at any time after a designated period of time following the issuance date of the Private Placement CB and until certain days prior to the maturity date in accordance with applicable rules and regulations and terms of the Indenture.

(2) Conversion Procedure:

To exercise the relevant conversion rights attached to the Private Placement CB, the holder thereof must deposit with the Issuer a notice of conversion together with the Private Placement CB and any other documents or certificates required by R.O.C. laws.

(3) Conversion Price Determination:

The conversion price of the Private Placement CB shall be no less than 80% of (x) the simple average closing price of the Issuer’s common shares for either 1, 3 or 5 trading days prior to the pricing date, after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends, or (y) the simple average closing price of the Issuer’s common shares for 30 trading days prior to the pricing date, after adjustment for shares issued as stock dividends, shares cancelled in connection with capital reduction and the cash dividends. It is proposed for the shareholders meeting to authorize the Board to determine the actual conversion price in accordance with applicable rules and regulations.

(4) Dividend Entitlement at Conversion

Prior to conversion of the Private Placement CB, holders are not entitled to receive any dividend distribution. Following the conversion of the Private Placement CB, the rights to receive dividend payments will be the same as the other common shareholders of the Issuer.

(5) Rights and Obligations after Conversion

Except that the Private Placement CB is subject to a three-year holding period after the delivery date of the Private Placement CB under Article 43-8 of the Securities and Exchange Act, the new common shares to be issued upon conversion of Private Placement CB will have the same rights and obligations as the common shares.

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11. Early Redemption at the Option of the Issuer

To be determined by the Board.

12. Holders’ Put Option

The Issuer may elect not to grant holders’ put option, or after expiry of a designated period following issuance of the Private Placement CB, holders may require the Issuer to redeem all or part of the Private Placement CB at a price that would result in certain annual yield on the Private Placement CB.

13. Others

The Board is authorized to determine and amend, at its sole discretion, the terms and conditions of the Private Placement CB and other matters which are not addressed herein.

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Attachment 8:

Comparison Table for the Articles of Incorporation Before and After Amendment

Before amendment	After amendment	Reason of amendment
Article 14 After the end of each fiscal year, the Board shall prepare and submit the following documents: (1) business report, (2) financial statements, (3) proposal for allocation of earnings or recovery of loss to the shareholders at the ordinary meeting of shareholders for their acceptance.	Article 14 After the end of each fiscal year, the Board shall prepare and submit the following documents: (1) business report, (2) financial statements, (3) proposal for allocation of earnings or recovery of loss to the shareholders in accordance with applicable laws at the ordinary meeting of shareholders for their acceptance.	To comply with the amendments to the Company Act
Article 15 Where the Company has a profit before tax for each fiscal year, the Company shall first reserve certain amount of the profit to recover losses for preceding years, and then set aside no less than 5% of the remaining profit for distribution to employees as remuneration and no more than 1% of the remaining profit for distribution to directors as remuneration. The Company may allocate employees’ remuneration prescribed in the preceding paragraph in the form of stock or cash to employees of an affiliated company meeting certain conditions. The Board or the person duly designated by the Board is authorized to decide the conditions and allocation method.	Article 15 Where the Company has a profit before tax for each fiscal year, the Company shall first reserve certain amount of the profit to recover losses for preceding years, and then set aside no less than 5% of the remaining profit for distribution to employees as remuneration and no more than 1% of the remaining profit for distribution to directors as remuneration. ~~The Company may allocate employees’~~ ~~remunera~~ ~~tion prescribed in the preceding~~ ~~paragraph in the form of stock or cash to~~ ~~employees of an affiliated company meeting~~ ~~certain conditions. The Board or the person~~ ~~duly designated by the Board is authorized to~~ ~~decide the conditions and allocation method.~~	To accommodate with the amendments to the other Article
Article 15-1 Where the Company has a profit at the end of each fiscal year, the Company shall first allocate the profit to pay taxes and cover accumulated losses, and then 10% of the remaining net earnings shall be allocated as the Company's legal reserve unless and until the accumulated legal reserve reaches the paid in capital. Certain amount shall be further allocated as special reserve or the special reserve shall be reversed in accordance with applicable laws and regulations or as requested by the competent authority. The balance (if any) together with accumulated unappropriated retained earnings can be distributed after the distribution plan proposed by the Board and approved by the shareholders’ meeting. The Company's dividend policy is to pay dividends from surplus considering factors such as the Company's current and future investment environment, cash requirements, domestic and overseas competitive conditions and capital budget requirements, and taking into account the shareholders' interest,maintenance	Article 15-1 Where the Company has a profit at the end of each fiscal year, the Company shall first allocate the profit to pay taxes and cover accumulated losses, and then 10% of the remaining net earnings shall be allocated as the Company's legal reserve unless and until the accumulated legal reserve reaches the paid in capital. Certain amount shall be further allocated as special reserve or the special reserve shall be reversed in accordance with applicable laws and regulations or as requested by the competent authority. The balance (if any) together with accumulated unappropriated retained earnings can be distributed after the distribution plan propose~~d~~ ~~by the Board~~ and approve~~d~~ ~~by the~~ ~~shareholders~~ ~~’ meeting~~ . Dividend distribution in the form of shares (in whole or in part) shall be approved by the shareholders’meeting. Dividend distribution in the form of cash shall be approved by the Board and a report of such distribution shall be submitted to the shareholders’meeting. The Company's dividend policy is to pay	To comply with the amendments to the Company Act

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Before amendment	After amendment	Reason of amendment
of a balanced dividend and the Company's long term financial plan. If the retained earnings available for distribution of the current year reaches 2% of the paid in capital of the Company, no less than 20% of the retained earnings available for distribution of the current year shall be distributed as dividend. If the retained earnings available for distribution of the current year does not reach 2% of the paid in capital of the Company, the Company may distribute no dividend. The cash portion of the dividend shall not be less than 10% of the total dividend in the form of cash and stock. The dividend distribution ratio in the preceding paragraph could be adjusted by the shareholders’ meeting taking into consideration finance, business and operations, etc.	dividends from surplus considering factors such as the Company's current and future investment environment, cash requirements, domestic and overseas competitive conditions and capital budget requirements, and taking into account the shareholders' interest, maintenance of a balanced dividend and the Company's long term financial plan. If the retained earnings available for distribution of the current year reaches 2% of the paid in capital of the Company, no less than 20% of the retained earnings available for distribution of the current year shall be distributed as dividend. If the retained earnings available for distribution of the current year does not reach 2% of the paid in capital of the Company, the Company may distribute no dividend. The cash portion of the dividend shall not be less than 10% of the total dividend in the form of cash and stock. The dividend distribution ratio in the preceding paragraph could be adjusted~~by the~~ ~~shareholders~~ ~~’ meeting~~ taking into consideration finance,business and operations,etc.
	Article 15-2 Where the Company incurs no loss, the Company may distribute the portion of legal reserve which exceeds 25% of the Company’s paid-in capital and the capital reserves permitted for distribution under the Company Act, in whole or in part, in the form of cash, to the shareholders in proportion to their shareholdings by the resolution adopted by the Board and a report of such distribution shall be submitted to the shareholders’meeting.	To comply with the amendments to the Company Act
	Article 15-3 The employees who are entitled to employees remunerations in the form of shares or cash, employee stock option, restricted employee stock, the bought back shares to be transferred by the Company and the new shares reserved for employees subscription in the Company’s share offering include employees of subsidiaries of the Company meeting certain specific qualifications and the Board or the person duly designated by the Board is authorized to decide such qualifications and allocation.	To comply with the amendments to the Company Act
Article 17 These Articles of Incorporation were enacted by the incorporators in the incorporators meeting held on July 18, 1996 and were effectively approved by the competent authority. The first amendment was made on	Article 17 These Articles of Incorporation were enacted by the incorporators in the incorporators meeting held on July 18, 1996 and were effectively approved by the competent authority.The first amendment was made on	To add the amendment date

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Before amendment		After amendment	Reason of amendment
September 18, 1996. ….(omitted)….The twentieth amendment was made on June 15, 2017.		September 18, 1996. ….(omitted)….The twentieth amendment was made on June 15, 2017. The twenty-first amendment was made on June 14, 2019.

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Attachment 9:

Comparison Table for the Handling Procedures for Acquisition or Disposal of Assets Before and After Amendment

	Before amendment		After amendment	Reason of amendment
	Article 2 Scope of Application (1) Long term and short term investments such as stock, government bonds, corporate bonds, financial debentures, securities representing interest in a fund, depositary receipts, call/put warrants, beneficial certificates, and asset-backed securities; (2) Real property (including land, houses and buildings, investment property, and rights to use land) and equipment; (3) Certificates of membership; (4) Intangible assets such as patents, copyright, trademarks and franchises; (5) Derivative products; (6) Assets acquired or disposed of in merger, spin-off, acquisition or share transfer in accordance with the relevant laws and regulations; and (7) Other important assets.		Article 2 Scope of Application (1) Long term and short term investments such as stock, government bonds, corporate bonds, financial debentures, securities representing interest in a fund, depositary receipts, call/put warrants, beneficial certificates, and asset-backed securities; (2) Real property (including land, houses and buildings,and investment propert~~y, and~~ ~~rights to use land~~ ) and equipment; (3) Certificates of membership; (4) Intangible assets such as patents, copyright, trademarks and franchises; (5) Right-of-use assets; (6 ~~5~~ ) Derivative products; (7 ~~6~~ ) Assets acquired or disposed of in merger, spin-off, acquisition or share transfer in accordance with the relevant laws and regulations; and (8 ~~7~~ ) Other important assets.	To comply with the amendments to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies
	Article 4 Information Disclosure (1) If the Company or the Company’s subsidiary acquires or disposes of the following assets, the Company shall make a public announcement and file the necessary report(s) in the format prescribed by the FSC within two days from occurrence of the relevant event: (i) acquisition or disposal of real property from any related party or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20% or more of the Company’s paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more, except for trading in government bonds, bond trading with repurchase and/or reverse purchase arrangement, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises; (ii) conducting merger, spin-off, acquisition or share transfer; (iii) the acquired and/or disposed assets are equipments which are for business use and the transaction counterparties are not related parties, and the transaction amounts reach any of the following, (a)NT$500 million or more if the		Article 4 Information Disclosure (1) If the Company or the Company’s subsidiary acquires or disposes of the following assets, the Company shall make a public announcement and file the necessary report(s) in the format prescribed by the FSC within two days from occurrence of the relevant event: (i) acquisition or disposal of real property or right-of-use assets thereof from any related party or acquisition or disposal of assets other than real property or right-of-use assets thereof from or to a related party where the transaction amount reaches 20% or more of the Company’s paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more, except for trading in domestic government bonds, bond trading with repurchase and/or reverse purchase arrangement, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises; (ii) conducting merger, spin-off, acquisition or share transfer; (iii) the acquired and/or disposed assets are equipmentsor right-of-use assets thereof which are for business use and the transaction counterparties are not	To comply with the amendments to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies

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Before amendment		After amendment	Reason of amendment
Company’s paid-in capital does not reach NT$10 billion, (b) NT$1 billion or more if the Company’s paid-in capital reaches NT$10 billion or more. (iv) the real property was acquired by ways of mandating others to build on the Company’s own land, or mandating others to build on the rented land, joint construction with others to share the buildings, joint construction with others to acquire certain proportion of ownership of the buildings, or joint construction with others to separately sell the buildings, and the proposed investment amount to be contributed by the Company reaches NT$500 million or more. (v) except for any of those referred to in the preceding four subparagraphs or investing in Mainland China, the transaction amount reaches 20 % or more of the Company’s paid-in capital or NT$300 million or more; provided, this shall not apply to the following circumstances: (a) trading in government bonds; (b) bond trading with repurchase and/or reverse purchase arrangement, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. (2) The transaction amounts in the preceding paragraph shall be calculated as follows, (i) the amount of any individual transaction (ii)the cumulative transaction amount of acquisitions or disposals, of the same type of underlying asset with the same trading counterparty within one year (iii)the cumulative transaction amount of real property acquisitions or disposals (acquisitions and disposals are accumulated separately) within the same development plan within one year (iv)the cumulative transaction amount of acquisitions or disposals (acquisitions and disposals are accumulated separately) of the same securities within one year. (omitted)	related parties, and the transaction amounts reach any of the following, (a) NT$500 million or more if the Company’s paid-in capital does not reach NT$10 billion, (b) NT$1 billion or more if the Company’s paid-in capital reaches NT$10 billion or more. (iv) the real property was acquired by ways of mandating others to build on the Company’s own land, or mandating others to build on the rented land, joint construction with others to share the buildings, joint construction with others to acquire certain proportion of ownership of the buildings, or joint construction with others to separately sell the buildings,and the transaction counterparty is not a related party, and the proposed investment amount to be contributed by the Company reaches NT$500 million or more. (v) except for any of those referred to in the preceding four subparagraphs or investing in Mainland China, the transaction amount reaches 20 % or more of the Company’s paid-in capital or NT$300 million or more; provided, this shall not apply to the following circumstances: (a) trading indomestic government bonds; (b) bond trading with repurchase and/or reverse purchase arrangement, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. (2) The transaction amounts in the preceding paragraph shall be calculated as follows, (i) the amount of any individual transaction (ii)the cumulative transaction amount of acquisitions or disposals, of the same type of underlying asset with the same trading counterparty within one year (iii)the cumulative transaction amount of real property or right-of-use assets thereof acquisitions or disposals (acquisitions and disposals are accumulated separately) within the same development plan within one year (iv)the cumulative transaction amount of acquisitions or disposals (acquisitions and disposals are accumulated separately) of the same securities within one year. (omitted)

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	Before amendment		After amendment	Reason of amendment
	Article 5 Evaluation Procedures (1) Except for the assets which are dealing with a government authority or by ways of mandating others to build on the Company’s own land or on the land rented by the Company or equipments which are to be acquired for business use, any acquisition or disposal of real property or equipment the transaction amount of which reaches 20% of the Company’s paid-in capital or NT$300,000,000 or more, shall be subject to obtaining the evaluation report issued by the professional appraisers prior to occurrence of the event and compliance with the following provisions: i) If a limited price, a specified price or a special price is used as a reference for determination of the transactional price due to special reason, such transaction shall be submitted to the Board of Directors for prior approval. The same procedure shall apply to amendments to the transaction terms. (omitted) (3) If the transaction amount of any acquisition or disposal of the certificate of membership or intangible asset reaches 20% of the Company’s paid-in capital or NT$300,000,000 or more, except for the assets which are dealing with a government authority, a certificated public accountant shall be retained to issue a fairness opinion on the transaction price prior to occurrence of the event. The certificated public accountant shall issue such fairness opinion in accordance with the Statements of Auditing Standards No. 20 issued by Accounting Research and Development Foundation of the Republic of China. (4) The calculation of the transaction amounts referred to in the preceding three paragraphs shall be made in accordance with Article 4, paragraph (1), item (iii) herein, and "within one year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount. (5) The professional appraisers (and its personnel), the certified public accountants, the attorneys or the securities underwriters who issue evaluation report or opinions with respect to anytransaction		Article 5 Evaluation Procedures (1) Except for the assets which are dealing with a domestic government authority or by ways of mandating others to build on the Company’s own land or on the land rented by the Company or equipments or right-of-use assets thereof which are to be acquired for business use, any acquisition or disposal of real property, ~~or~~ equipment or right-of-use assets thereof the transaction amount of which reaches 20% of the Company’s paid-in capital or NT$300,000,000 or more, shall be subject to obtaining the evaluation report issued by the professional appraisers prior to occurrence of the event and compliance with the following provisions: i) If a limited price, a specified price or a special price is used as a reference for determination of the transactional price due to special reason, such transaction shall be submitted to the Board of Directors for prior approval. The same procedure shall also be followed whenever there is any subsequent change ~~apply to amendments~~ to the transaction terms. (omitted) (3) If the transaction amount of any acquisition or disposal of~~the certificate of membership~~ ~~or~~ intangible asset or right-of-use assets thereof or certificate of membership reaches 20% of the Company’s paid-in capital or NT$300,000,000 or more, except for the assets which are dealing with a domestic government authority, a certificated public accountant shall be retained to issue a fairness opinion on the transaction price prior to occurrence of the event. The certificated public accountant shall issue such fairness opinion in accordance with the Statements of Auditing Standards No. 20 issued by Accounting Research and Development Foundation of the Republic of China. (4) The calculation of the transaction amounts referred to in the preceding three paragraphs shall be made in accordance with Article 4, paragraph (11) ~~(1), item (iii)~~ herein, and "within one year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.	To comply with the amendments to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies

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Before amendment	After amendment	After amendment
shall not be the related parties to the parties of subject transaction. (6) The certificate issued by the court may be substituted for the appraisal report or the fairness opinion issued by the certified public accountant, if the assets are acquired or disposed of through an auction procedure by the court.	(5) The professional appraisers (and its personnel), the certified public accountants, the attorneys or the securities underwriters who issue evaluation report or opinions with respect to any transaction shal~~l~~ ~~not be the~~ ~~related parties to the parties of subject~~ ~~transaction.~~ meet the following requirements: i) May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Securities and Exchange Act, the Company Act, the Banking Act, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this requirement does not apply if 3 years have already passed since the completion of service of the sentence, the expiration of the period of a suspended sentence, or a pardon was received. ii) May not be a related party or de facto related party of any party to the transaction. iii) If the Company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other. (6) When issuing an appraisal report or opinion, the personnel referred to in the preceding paragraph shall comply with the following: i) Prior to accepting a case, they shall prudently assess their own professional capabilities, practical experience, and independence. ii) When examining a case, they shall appropriately plan and execute
	~~a~~ (6)
		i) ii)
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Before amendment		Reason of amendment
	adequate operation procedures, in order to produce a conclusion and use the conclusion as the basis for issuing the report or opinion. The related operation procedures, data collected, and conclusion shall be fully and accurately specified in the case working papers. iii) They shall undertake an item-by-item evaluation of the comprehensiveness, accuracy, and reasonableness of the sources of data used, the parameters, and the information, as the basis for issuance of the appraisal report or the opinion. iv) They shall issue a statement attesting to the professional competence and independence of the personnel who prepared the report or opinion, and that they have evaluated and found that the information used is reasonable and accurate, and that they have complied with applicable laws and regulations. (7 ~~6~~ ) The certificate issued by the court may be substituted for the appraisal report or the fairness opinion issued by the certified public accountant, if the assets are acquired or disposed of through an auction procedure by the court.
Article 6 Related Party Transactions (1) When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised as provided in Article 5 and this Article, if the transaction amount reaches 10% or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in accordance with Article 5. The calculation of the transaction amount shall be made in accordance with Article 5, paragraph (4) herein. (2) When the Company intends to acquire or dispose of real property from or to a relatedparty,or when it intends to acquire	Article 6 Related Party Transactions (1) When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised as provided in Article 5 and this Article, if the transaction amount reaches 10% or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in accordance with Article 5. The calculation of the transaction amount shall be made in accordance with Article 5, paragraph (4) herein. (2) When the Company intends to acquire or dispose of real property or right-of-use assets thereof from or to a relatedparty,or	To comply with the amendments to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies
	(1) (2)

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Before amendment		After amendment	Reason of amendment
or dispose of assets other than real property from or to a related party and the transaction amount reaches 20% or more of the Company’s paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more, except for trading in government bonds, bond trading with repurchase and/or reverse purchase arrangement, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract and make a payment until the following matters have been approved by the audit committee and the board of directors: i) the purpose and necessity of such acquisition or disposal of assets and the estimated effect thereon; ii) the reason to choose such related party as the transaction counterparty; iii) with respect to the acquisition of real property from a related party, the relevant information required for evaluation of the reasonableness of the proposed transaction terms in accordance with Paragraph (3), Paragraph (4), Paragraph (5), and Paragraph (6) of this Article; iv) the date, price and transaction counterparty of the acquisition by the related party of such real property, and the relationship between the related party and such counterparty and the relationship between the Company and such counterparty; v) the forecast of cash flow for each month of the coming year from the month during which the acquisition contract is to be executed and the evaluation of the transaction necessity, and the evaluation of reasonableness of the use of proceeds; and vi) an appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding item vii) the restrictive terms and conditions and other material terms of such subject transaction. The calculation of the transaction amount shall be made in accordance with Article 4, paragraph (1), item (iii) herein and "within one year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the audit committee and the board of directors need not be counted toward the transaction amount.	when it intends to acquire or dispose of assets other than real property or right-of-use assets thereof from or to a related party and the transaction amount reaches 20% or more of the Company’s paid-in capital, 10% or more of the Company's total assets, or NT$300 million or more, except for trading in domestic government bonds, bond trading with repurchase and/or reverse purchase arrangement, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract and make a payment until the following matters have been approved by the audit committee and the board of directors: i) the purpose and necessity of such acquisition or disposal of assets and the estimated effect thereon; ii) the reason to choose such related party as the transaction counterparty; iii) with respect to the acquisition of real property or right-of-use assets thereof from a related party, the relevant information required for evaluation of the reasonableness of the proposed transaction terms in accordance with Paragraph (3), Paragraph (4), and Paragraph (5)~~, and Paragraph (6)~~ of this Article; iv) the date, price and transaction counterparty of the acquisition by the related party of such real property, and the relationship between the related party and such counterparty and the relationship between the Company and such counterparty; v) the forecast of cash flow for each month of the coming year from the month during which the acquisition contract is to be executed and the evaluation of the transaction necessity, and the evaluation of reasonableness of the use of proceeds; and vi) an appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding item vii) the restrictive terms and conditions and other material terms of such subject transaction. The calculation of the transaction amount shall be made in accordance with Article 4, paragraph (11) ~~(1), item (iii)~~ herein and "within one year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been

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Before amendment	After amendment	Reason of amendment
(3) Acquisition of real property from related party shall be subject to the evaluation of reasonableness of the transaction costs in accordance with the following methods and shall retain a certified public accountant to (i) check the reasonableness of the transaction costs made by the Company and (ii) issue the specific opinion thereon: i) the reasonableness of the transaction costs may be evaluated based on (i) the transaction price of the subject real property acquired by the related party plus interest required for funding and (ii) the costs to be borne by the buyer in accordance with the applicable law (the "interest required for funding" shall be calculated based on the weighted average interest rate of the funds borrowed by the Company in the year during which the subject assets are acquired by the Company, provided that such interest rate shall not exceed the interest rate ceiling for non-financial institutions published by the Ministry of Finance); or ii) if the subject assets have been mortgaged to the relevant financial institution as collateral for borrowing, the total value for such assets evaluated by such financial institution for the purpose of extending a loan (“evaluated value for loan purpose”) may be used as a reference to evaluate the reasonableness of the transaction costs, provided that the actual aggregate amount of the loans extended by such financial institution with respect to the subject assets must reach 70% or more of the evaluated value for loan purpose and the loan period must be more than one year. The above provision shall not apply, if the financial institution is the related party of either party of the subject transaction. If the Company is to acquire both land and building, the transaction costs for such land and building may be evaluated, respectively, in accordance with any of the above methods (4) Under any of the following circumstances, acquisition of real property from related party shall be conducted in accordance with Paragraph (2) of this Article, and Paragraph (3) of this Article shall not apply: i) the subject real property was acquired by related party by way of inheritance or gift; ii) the execution date of the relevant contract for the relatedpartyto acquire	approved by the audit committee and the board of directors need not be counted toward the transaction amount. (3) Acquisition of real property or right-of-use assets thereof from related party shall be subject to the evaluation of reasonableness of the transaction costs in accordance with the following methods and shall retain a certified public accountant to (i) check the reasonableness of the transaction costs made by the Company and (ii) issue the specific opinion thereon: i) the reasonableness of the transaction costs may be evaluated based on (i) the transaction price of the subject real property acquired by the related party plus interest required for funding and (ii) the costs to be borne by the buyer in accordance with the applicable law (the "interest required for funding" shall be calculated based on the weighted average interest rate of the funds borrowed by the Company in the year during which the subject assets are acquired by the Company, provided that such interest rate shall not exceed the interest rate ceiling for non-financial institutions published by the Ministry of Finance); or ii) if the subject assets have been mortgaged to the relevant financial institution as collateral for borrowing, the total value for such assets evaluated by such financial institution for the purpose of extending a loan (“evaluated value for loan purpose”) may be used as a reference to evaluate the reasonableness of the transaction costs, provided that the actual aggregate amount of the loans extended by such financial institution with respect to the subject assets must reach 70% or more of the evaluated value for loan purpose and the loan period must be more than one year. The above provision shall not apply, if the financial institution is the related party of either party of the subject transaction. If the Company is to acquireor to rent both land and building, the transaction costs for such land and building may be evaluated, respectively, in accordance with any of the above methods (4) Under any of the following circumstances, acquisition of real property or right-of-use assets thereof from related party shall be conducted in accordance with Paragraph (2) of this Article,and Paragraph(3)of this

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Before amendment	After amendment	Reason of amendment
the subject real property is more than five years prior to the contract execution date of the subject transaction; or iii) the real property is acquired by entering into a joint construction contract with the related party, or through engaging the related party to build real property, either on the Company’s land or on rented land. (5) If the transaction cost evaluated under all the methods provided for in Paragraph (3) of this Article is less than the transaction price, acquisition of real property from related parties shall be handled in accordance with Paragraph (6) of this Article; provided, that, if in any of the following circumstances, objective evidence is provided and the Company obtains reasonable opinion on the transaction price from a real property professional appraiser and the certified public accountant, such acquisition of real property from a related party will not be subject to Paragraph (6) of this Article: i) if the related party purchased or rented a piece of undeveloped land for construction and the related party provides evidence to prove any of the following conditions: (a) the aggregate value of the undeveloped land evaluated in accordance with the methods provided for in this Article and of the building calculated based on the related party's construction cost plus reasonable construction profit is more than the actual transaction price (the term "reasonable construction profit" shall mean the lower of the average operating gross margin percentage of the related party’s construction department for the most recent 3 years or the most recent gross margin percentage for the construction industry published by the Ministry of Finance); (b) if, for a purchase transaction, based on an evaluation of the price difference done in accordance with general real estate purchase/sale business practice, the terms of the target floor or area are similar to the terms of a similar transaction done by an unrelated party within the previous one year for similar size property in the same building or the neighborhood area where the targetpropertyis located;	Article shall not apply: i) the subject real property or right-of-use assets thereof was acquired by related party by way of inheritance or gift; ii) the execution date of the relevant contract for the related party to acquire the subject real property or right-of-use assets thereof is more than five years prior to the contract execution date of the subject transaction; or iii) the real property is acquired by entering into a joint construction contract with the related party, or through engaging the related party to build real property, either on the Company’s land or on rented land. (5) If the transaction cost evaluated under all the methods provided for in Paragraph (3) of this Article is less than the transaction price, acquisition of real property from related parties shall be handled in accordance with Paragraph (6) of this Article; provided, that, if in any of the following circumstances, objective evidence is provided and the Company obtains reasonable opinion on the transaction price from a real property professional appraiser and the certified public accountant, such acquisition of real property from a related party will not be subject to Paragraph (6) of this Article: i) if the related party purchased or rented a piece of undeveloped land for construction and the related party provides evidence to prove any of the following conditions: (a) the aggregate value of the undeveloped land evaluated in accordance with the methods provided for in this Article and of the building calculated based on the related party's construction cost plus reasonable construction profit is more than the actual transaction price (the term "reasonable construction profit" shall mean the lower of the average operating gross margin percentage of the related party’s construction department for the most recent 3 years or the most recent gross margin percentage for the construction industry published by the Ministry of Finance); (b) if, for a purchase transaction, based on an evaluation of the price difference done in accordance with general real estate purchase/sale/leasing business practice,the terms of the target floor

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Before amendment

(c) if, for a lease transaction, based on an evaluation of the price difference done in accordance with general real estate lease business practice, the lease terms for the target floor are similar to the lease terms for a similar transaction done for another floor in the same building by an unrelated party within the previous one year; ii) the Company may provides evidence to prove that the terms of the target real property are similar to the terms of a similar transaction done by an unrelated party within the previous one year for similar size property in the neighborhood where the target property is located.

The term “similar transaction done for the property in the neighborhood” used in the above Paragraph means in principle the property which is the subject matter of such transactions (“Reference Property”) and the subject real property are on the same street or a nearby block within a distance of less than 500 meters; or the Government Announced Current Value of the subject property is similar to the Government Announced Current Value of the Reference Property. The term "similar size" means in principle that size of the target property for such transaction done by non-related party is not less than 50% of the size of the subject real property. The term "within the previous one year" means within the one-year period prior to the date on which acquisition of the subject real property occurs. (6) If the transaction cost evaluated under all the methods provided for in this Article is less than the transaction price, the Company shall conduct the following for acquisition of real property from the related party:

i) allocate the difference between the transaction price of the subject real property and the evaluated transaction costs as special reserves in accordance with Paragraph 1, Article 41 of the Securities and Exchange Law which special reserves are not permitted to be distributed as dividend or recapitalized; In addition, if any shareholder’s investment in the Company shall be evaluated by equity method and such shareholder is a public company, such shareholder shall set aside a corresponding amount in proportion to its holding in the Company as special reserves in accordance with Paragraph 1,

Reason of After amendment amendment or area are similar to the terms of a similar transaction ~~done~~ by an unrelated party transaction within the previous one year for similar size property in the same building or the neighborhood area where the target property is located; ~~or~~

~~(c) if, for a lease transaction, based on an evaluation of the price difference done in accordance with general real estate lease business practice, the lease terms for the target floor are similar to the lease terms for a similar transaction done for another floor in the same building by an unrelated party within the previous one year;~~ ii) the Company may provides evidence to prove that the terms of the target real property or obtaining real property right-of-use assets through leasing are similar to the terms of a similar transaction ~~done~~ by an unrelated party transaction within the previous one year for similar size property in the neighborhood where the target property is located. The term “similar transaction ~~done~~ for the property in the neighborhood” used in the above Paragraph means in principle the property which is the subject matter of such transactions (“Reference Property”) and the subject real property are on the same street or a nearby block within a distance of less than 500 meters; or the Government Announced Current Value of the subject property is similar to the Government Announced Current Value of the Reference Property. The term "similar size" means in principle that size of the target property for such transaction ~~done~~ by non-related party transaction is not less than 50% of the size of the subject real property. The term "within the previous one year" means within the one-year period prior to the date on which acquisition of the subject real property or right-of-use assets thereof occurs.

(6) If the transaction cost evaluated under all the methods provided for in this Article is less than the transaction price, the Company shall conduct the following for acquisition of real property or right-of-use assets thereof from the related party:
i) allocate the difference between the transaction price of the subject real property or right-of-use assets thereof and the evaluated transaction costs as special reserves in accordance with Paragraph 1, Article 41 of the Securities and Exchange Law which special reserves
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	Before amendment		After amendment	Reason of amendment
	Article 41 of the Securities and Exchange Law; ii) Audit Committee shall handle the subject matter pursuant to Article 218 of the Company Law; iii) the Company shall report how it handle Item (i) and Item (ii) above to the shareholders’ meeting and disclose the details of the subject transaction in the annual report and prospectus. If a special reserve is required to be set aside under this Article, such special reserve may not be utilized until the Company has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo has been restored, or there is other evidence confirming that there was noting unreasonable about the transaction, and the FSC has grant its consent. When the Company acquires real property from a related party, it shall also comply with this Article, if there is other evidence indicating that the acquisition was not an arms length transaction.		are not permitted to be distributed as dividend or recapitalized; In addition, if any shareholder’s investment in the Company shall be evaluated by equity method and such shareholder is a public company, such shareholder shall set aside a corresponding amount in proportion to its holding in the Company as special reserves in accordance with Paragraph 1, Article 41 of the Securities and Exchange Law; ii) Audit Committee shall handle the subject matter pursuant to Article 218 of the Company Law; iii) the Company shall report how it handle the preceding two Items ~~(i) and Item (ii)~~ ~~above~~ to the shareholders’ meeting and disclose the details of the subject transaction in the annual report and prospectus. If a special reserve is required to be set aside under this Article, such special reserve may not be utilized until the Company has recognized a loss on decline in market value of the assets it purchased or leased at a premium, or they have been disposed of, or the leasing contract has been terminated, or adequate compensation has been made, or the status quo has been restored, or there is other evidence confirming that there was noting unreasonable about the transaction, and the FSC has grant its consent. When the Company acquires real property or right-of-use assets thereof from a related party, it shall also comply with the preceding two paragraphs ~~this Article~~ , if there is other evidence indicating that the acquisition was not an arms length transaction.
	Article 11 Miscellaneous (omitted) (3) For the calculation of 10 percent of total assets as used in the Handling Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparing of Financial Reports by Securities Issuers shall be used. Where the subsidiary is subject to the information disclosure requirement in connection with 20% of the paid-in capital or 10% of the total assets as provided in Paragraph (1) of Article 4 hereof, such requirement is based on the Company’s paid-in capital or total assets. (omitted)		Article 11 Miscellaneous (omitted) (3) For the calculation of 10 percent of total assets as used in the Handling Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparing of Financial Reports by Securities Issuers shall be used. Where the subsidiary is subject to the information disclosure requirement in connection with~~20% of~~ the paid-in capital or~~10% of~~ the total assets as provided in Paragraph (1) of Article 4 hereof, such requirement is based on the Company’s paid-in capital or total assets.	To comply with the amendments to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies

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Before amendment	After amendment	Reason of amendment
(6) In the case of a company whose shares have no par value or the par value is not NT$10 per share, for the calculation of transaction amounts of 20% of the paid-in capital shall mean 10% of equity attributable to owners of the parent company. (omitted)	(omitted) (6) In the case of a company whose shares have no par value or the par value is not NT$10 per share, for the calculation of transaction amounts of 20% of the paid-in capital shall mean 10% of equity attributable to owners of the parent companyand for the calculation of transaction amounts of NT$10 billion or more of the paid-in capital shall mean NT$20 billion of equity attributable to owners of the parent company. (omitted)
Article 13 The Board of Directors is authorized to set the aggregate limit on securities investment, the individual limit on the securities investment and the aggregate limit on real property investment for the purpose rather than business use. Such limits should be appended to the Handling Procedures as shown in the Attachment, namely, “Authorization Schedule for Acquisition or Disposal of Assets and the Limits on Securities Investment”.	Article 13 The Board of Directors is authorized to set the aggregate limit on securities investment, the individual limit on the securities investment and the aggregate limit on real property or right-of-use assets thereof investment for the purpose rather than business use. Such limits should be appended to the Handling Procedures as shown in the Attachment, namely, “Authorization Schedule for Acquisition or Disposal of Assets and the Limits on Securities Investment”.	To comply with the amendments to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies
Article 14 The Handling Procedures were enacted on October 9, 1998; the first amendment was made on November 10, 1999; …(omitted)…, and the seventh amendment was made on June 15, 2017.	Article 14 The Handling Procedures were enacted on October 9, 1998; the first amendment was made on November 10, 1999; …(omitted)…, ~~and~~ the seventh amendment was made on June 15, 2017, and the eighth amendment was made on June 14, 2019 .	To add the amendment date
Appendix “Authorization Schedule for Acquisition or Disposal of Assets and the Limits on Securities Investment” Asset Item Realpropertynot for business use	Appendix “Authorization Schedule for Acquisition or Disposal of Assets and the Limits on Securities Investment” Asset Item Real property or right-of-use assets thereof not for business use	To comply with the amendments to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies

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Comparison Table for the Handling Procedures for Conducting Derivative Transactions Before and After Amendment

	Before amendment		After amendment	Reason of amendment
	Article 2 Scope of Application 1.The derivative transactions referred to in the Handing Procedures are forward contracts, options contracts, futures contracts, leverage contracts, and swap contracts, and compound contracts combining the above products, whose value is derives from assets, interest rates, exchange rates, indexes or other interests. The term “forward contracts” does not include insurance contracts, performance contracts, after-sales service contracts, long term leasing contracts, or long-term purchase (sales) agreements. (omitted)		Article 2 Scope of Application 1.The derivative transactions referred to in the Handing Procedures are forward contracts, options contracts, futures contracts, leverage contracts, and swap contracts,~~and compound~~ ~~contracts combining the above products,~~ whose value is derived from a specified interest rate, financial instrument price, commodity price~~,~~ ~~assets, interest rates,~~ foreign exchange rates, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. ~~indexes or other interests.~~ The term “forward contracts” does not include insurance contracts, performance contracts, after-sales service contracts, long term leasing contracts, or long-term purchase (sales) contracts ~~agreements~~ . (omitted)	To comply with the amendments to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies
	Article 17 The course of change and development The Handling Procedures were enacted on October 9, 1998; the first amendment was made on February 19, 2001;…(omitted)…, and the seventh amendment was made on June 6, 2014.		Article 17	To add the amendment date

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Comparison Table for the Handling Procedures for Capital Lending Before and After Amendment

	Before amendment		After amendment	Reason of amendment
	Article 3 The aggregate amount of capital lending and the maximum amount permitted to a single borrower (1) The aggregate outstanding amount of capital lending shall not exceed forty percent (40%) of the Company’s net worth as shown in the Company’s latest financial statements. (2) The limit on the amount of capital lending to the each individual borrower is as follows: i) If there is any business transaction between the Company and other company or firm which calls for capital lending, the amount of capital lending for each individual company or firm shall not exceed three times the average monthly amount of transactions between the Company and the borrower during the most recent year prior to lending. The term “the amount of the transactions” as used herein means the higher of the purchase amount or sale amount of the business transactions between the Company and such borrower. (ii) The maximum financing amount of capital lending which provides a single borrower, for short-term financing needs, shall not exceed 10 percent of the Company’s net worth as stated in its latest financial statement, and the aggregate outstanding amount of capital lending shall not exceed 40 percent of the Company’s net worth as stated in its latest financial statement. The term “financing amount” as used in the Handling Procedure means the cumulative balance of short-term financing amount for a borrower. (iii) The overseas subsidiaries, whose 100% outstanding voting shares are directly or indirectly held by the Company, loan their funds among others shall not be subject to the limitation of subparagraph 2 of this paragraph. However the Company’s subsidiaries shall set the amount limits and the durations of capital lending in its Handling Procedures. (omitted)		Article 3 The aggregate amount of capital lending and the maximum amount permitted to a single borrower (1) The aggregate outstanding amount of capital lending shall not exceed forty percent (40%) of the Company’s net worth as shown in the Company’s latest financial statements. (2) The limit on the amount of capital lending to the each individual borrower is as follows: i) If there is any business transaction between the Company and other company or firm which calls for capital lending, the amount of capital lending for each individual company or firm shall not exceed three times the average monthly amount of transactions between the Company and the borrower during the most recent year prior to lending. The term “the amount of the transactions” as used herein means the higher of the purchase amount or sale amount of the business transactions between the Company and such borrower. (ii) The maximum financing amount of capital lending which provides a single borrower, for short-term financing needs, shall not exceed 10 percent of the Company’s net worth as stated in its latest financial statement, and the aggregate outstanding amount of capital lending shall not exceed 40 percent of the Company’s net worth as stated in its latest financial statement. The term “financing amount” as used in the Handling Procedure means the cumulative balance of short-term financing amount for a borrower. (iii) The overseas subsidiaries, whose 100% outstanding voting shares are directly or indirectly held by the Company, loan their funds among others, or to the Company, shall not be subject to the limitation of subparagraph 2 of this paragraph. However the Company’s subsidiaries shall set the aggregate limit of capital lending and the maximum limit permitted for a single borrower ~~amount limits~~ and shall stipulate the durations of capital lending in its Handling Procedures. (iv) If the responsible person of the Company violates the provisions of items (i) and (ii) of this paragraph, the responsible person shall bear the joint responsibility for returning the	To comply with the amendments to the Regulations Governing Loaning of Funds and Making of Endorsements /Guarantees by Public Companies

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Before amendment		Reason of amendment
	capital lending with the borrowers; if the Company suffers damage, the responsible person shall also be liable for damages. (omitted)
Article 6 Information Disclosure (omitted) (5) The term “the date of occurrence” as used in the Handling Procedures shall mean the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier; the term “make a public announcement” and “file the necessary report(s)” as used in the Handling Procedures, shall mean information disclosure posted on the website designated bythe FSC.	Article 6 Information Disclosure (omitted) (5) The term “the date of occurrence” as used in the Handling Procedures shall mean the date of contract signing, date of payment, dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of thecapital lending ~~transaction~~ , whichever date is earlier; the term “make a public announcement” and “file the necessary report(s)” as used in the Handling Procedures, shall mean information disclosure posted on the website designated bythe FSC.	To comply with the amendments to the Regulations Governing Loaning of Funds and Making of Endorsements /Guarantees by Public Companies
Article 12 The Handling Procedures were enacted on October 9, 1998; first amendment was made on April 11, 2002; …(omitted)… and the eighth amendment was made on June 6, 2014.	Article 12 The Handling Procedures were enacted on October 9, 1998; first amendment was made on April 11, 2002; …(omitted)…~~and~~ the eighth amendment was made on June 6, 2014, and the ninth amendment was made on June 14, 2019 .	To add the amendment date

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Comparison Table for the Handling Procedures for Providing Endorsements and Guarantees for Third Parties Before and After Amendment

	Before amendment		After amendment	Reason of amendment
	Article 10 Information Disclosure (1) The Company shall make a public announcement and file the necessary report(s), for itself and its subsidiaries, of the outstanding amount of endorsements and/or guarantees as of the end of the previous month prior to the 10th day of each month. (2) If the outstanding amount of endorsements and/or guarantees provided by the Company and the subsidiaries reaches any of the following standards, the Company shall make a public announcement and file the necessary report(s) within two days from the date of occurrence of the subject endorsement or guarantee: i) The aggregate balance of endorsements/guarantees reaches 50% or more of the Company's net worth as stated in its latest financial statement. ii) The balance of endorsements/guarantees for a single enterprise reaches 20% or more of the Company's net worth as stated in its latest financial statement. iii) The balance of endorsements/guarantees for a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for, investment of a long-term nature in, and balance of capital lending to, such enterprise reaches 30% or more of the Company's net worth as stated in its latest financial statement. iv) The amount of new endorsements/guarantees reaches by more than NT$30 million and by 5% or more of the Company's net worth as stated in its latest financial statement. (omitted)		Article 10 Information Disclosure (1) The Company shall make a public announcement and file the necessary report(s), for itself and its subsidiaries, of the outstanding amount of endorsements and/or guarantees as of the end of the previous month prior to the 10th day of each month. (2) If the outstanding amount of endorsements and/or guarantees provided by the Company and the subsidiaries reaches any of the following standards, the Company shall make a public announcement and file the necessary report(s) within two days from the date of occurrence of the subject endorsement or guarantee: i) The aggregate balance of endorsements/guarantees reaches 50% or more of the Company's net worth as stated in its latest financial statement. ii) The balance of endorsements/guarantees for a single enterprise reaches 20% or more of the Company's net worth as stated in its latest financial statement. iii) The balance of endorsements/guarantees for a single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees for,book value of investments in equity-accounted investees ~~investment~~ ~~of a long~~ ~~-~~ ~~term nature~~ in, and balance of capital lending to, such enterprise reaches 30% or more of the Company's net worth as stated in its latest financial statement. iv) The amount of new endorsements/guarantees reaches by more than NT$30 million and by 5% or more of the Company's net worth as stated in its latest financial statement. (omitted)	To comply with the amendments to the Regulations Governing Loaning of Funds and Making of Endorsements /Guarantees by Public Companies
	Article 13 Miscellaneous (omitted) (4) This term "the date of occurrence” as used in the Handling Procedures shall mean the date of contract signing,date ofpayment,		Article 13 Miscellaneous (omitted) (4) This term "the date of occurrence” as used in the Handling Procedures shall mean the date of contract signing,date ofpayment,dates of	To comply with the amendments to the Regulations Governing Loaningof

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	Before amendment		After amendment	Reason of amendment
	dates of boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier; this term “make a public announcement” and “file the necessary report(s)” as used in the Handling Procedures, shall mean information disclosure posted in the website designated bythe FSC.		boards of directors resolutions, or other date that can confirm the counterparty and monetary amount of the endorsements/guarantees ~~tr~~ ~~ansaction~~ , whichever date is earlier; this term “make a public announcement” and “file the necessary report(s)” as used in the Handling Procedures, shall mean information disclosure posted in the website designated bythe FSC.	Funds and Making of Endorsements /Guarantees by Public Companies
	Article 15 The Handling Procedures were enacted on October 9, 1998; the first amendment was made on May 29, 2003; …(omitted)… and the seventh amendment was made on June 19, 2013.		Article 15 The Handling Procedures were enacted on October 9, 1998; the first amendment was made on May 29, 2003; …(omitted)…~~and~~ the seventh amendment was made on June 19, 2013, and the eighth amendment was made on June 14, 2019 .	To add the amendment date

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Attachment 10:

List of non-competition restrictions proposed to be lifted

Name	Released restriction items
Shuang-Lang (Paul) Peng	- Director, Darwin Precisions Corporation - Director, Qisda Corp. - Chairman,AU Optronics(Kunshan)Co., Ltd.
Kuen-Yao (K.Y.) Lee	- Director, Qisda Corp. - Director, Darfon Electronics Corp. - Director, BenQ Materials Corp. - Chairman, BenQ Corporation
Kuo-Hsin (Michael) Tsai	- Director, Lextar Electronics Corp. - Director, Daxin Materials Corporation
BenQ Foundation	- Director, Qisda Corp.
Peter Chen	- Chairman and President, Qisda Corp. - Chairman, BenQ Medical Technology Corporation - Chairman, Partner Tech Corp. - Chairman, DFI Inc. - Director, Darfon Electronics Corp. - Director, BenQ Materials Corp. - Director, BenQ AB DentCare Corp. - Director, BenQ Corporation
Mei-Yueh Ho	- Independent Director, Kinpo Electronics, Inc. - Independent Director, ASE Technology Holding Co., Ltd.
Chin-Bing (Philip) Peng	- Independent Director, Apacer Technology Inc. - Director, Wistron Corporation - Director, ACER Incorporated - Director, Wistron NeWeb Corporation - Director, AOPEN Inc.
Yen-Shiang Shih	-Independent Director, Formosa Plastics Corporation -Independent Director, CTCI Corporation
Yen-Hsueh Su	-Director, KINSUS Interconnect Technology Corp. -Independent Director, TXC Corporation
Jang-Lin(John)Chen	-Consultant, OTI Lumionics, Inc.

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AI assistant

AUO — AGM Information 2019

52062_rns_2019-07-01_2d573875-a0f1-48cb-9c87-4482dd10cbbb.pdf

AU OPTRONICS CORP.

Meeting Minutes Of 2019 Annual General Shareholders’ Meeting

Resolution Notice

AU Optronics Corp.

2019 Annual General Shareholders’ Meeting Minutes

2. Chair’s Address (omitted)

3. Report Items

4. Election Item

Explanation:

Election Result: Nine directors (including five independent directors) were elected by the

5. Recognition and Discussion Items

Explanation:

Explanation:

6. To lift non-competition restrictions on board members (proposed by the Board of Directors)

Explanation:

6. Extraordinary Motions

7. Meeting Adjourn

Attachment 1 2018 Business Report

Audit Committee’s Review Report

AU Optronics Corp.

Chair of the Audit Committee

List of Director Candidates

Independent Auditors’ Report

To the Board of Directors of AU Optronics Corp.:

Opinion

Basis for Opinion

Key Audit Matters

Impairment of long-term non-financial assets (including goodwill)

Description of key audit matter:

How the matter was addressed in our audit:

Recognition of deferred tax assets

Description of key audit matter:

How the matter was addressed in our audit:

Revenue recognition

Description of key audit matter:

How the matter was addressed in our audit:

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

Independent Auditors’ Report

To the Board of Directors of AU Optronics Corp.:

Opinion

Basis for Opinion

Key Audit Matters

Impairment of long-term non-financial assets (including goodwill)

Description of key audit matter:

How the matter was addressed in our audit:

Recognition of deferred tax assets

Description of key audit matter:

How the matter was addressed in our audit:

Revenue recognition

Description of key audit matter:

How the matter was addressed in our audit:

Other Matters

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

KPMG

Notice to Readers

Attachment 6:

2018 Earnings Distribution Proposal

AU Optronics Corp. Terms and Conditions for Issuance of Overseas or Domestic Convertible Bonds in Private Placement (Tentative)

1. Issuer

2. Issuance Size

3. Issuance Date

4. Issuance Method

5. Form, Denomination and Issuance Price

6. Coupon Rate

7. Term

8. Redemption

9. Conversion Securities

10. Conversion

(1) Conversion Period:

(2) Conversion Procedure:

(3) Conversion Price Determination:

(4) Dividend Entitlement at Conversion

(5) Rights and Obligations after Conversion

11. Early Redemption at the Option of the Issuer

AUO AGM Information 2019