AUO - Interim / Quarterly Report 2021

Stock Code:2409

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Six Months Ended June 30, 2021 and 2020

The independent auditors’ review 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 independent auditors’ review report and consolidated financial statements, the Chinese version shall prevail.

Independent Auditors’ Review Report

To the Board of Directors of AU Optronics Corp.:

Introduction

We have reviewed the accompanying consolidated balance sheets of AU Optronics Corp. and its subsidiaries (“ the Company” ) as of June 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and six months ended June 30, 2021 and 2020, as well as the changes in equity and cash flows for the six months ended June 30, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our review.

Scope of Review

We conducted our reviews in accordance with Statement on Auditing Standard No. 65, “Review of Financial Information Performed by the Independent Auditor of the Entity” . A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2021 and 2020, and its consolidated financial performance for the three months and six months ended June 30, 2021 and 2020, as well as its consolidated cash flows for the six months ended June 30, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the review resulting in this independent auditors’ review report are Yu, Chi-Lung and Yu, Wan-Yuan.

KPMG

Hsinchu, Taiwan (Republic of China) July 28, 2021

Notes 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 Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of June 30, 2021 and 2020 AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2021, December 31, 2020, and June 30, 2020

(Expressed in thousands of New Taiwan dollars)

June 30, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(1)) $ 99,551,438 22 1110 Financial assets at fair value through profit or loss`－` current (Note 6(2)) 75,127 - 1136 Financial assets at amortized cost`－`current (Note 6(4)) 10,000,000 2 1170 Notes and accounts receivable, net (Note 6(5)) 60,320,210 14 1180 Accounts receivable from related parties, net (Notes 6(5)&7) 2,441,818 1 1210 Other receivables from related parties (Note 7) 709,766 - 1220 Current tax assets 147,789 - 130X Inventories (Note 6(6)) 31,412,570 7 1476 Other current financial assets (Notes 6(5),(21)&8) 875,661 - 1460 Noncurrent assets held for sale (Note 6(10)) 171,768 - 1479 Other current assets (Note 6(14)) 4,007,623 1 209,713,770 47 Noncurrent assets: 1517 Financial assets at fair value through other comprehensive income`－`noncurrent (Note 6(3)) 651,471 - 1550 Investments in equity-accounted investees (Notes 6(7)&7) 22,403,993 5 1600 Property, plant and equipment (Notes 6(10),7&8) 176,099,505 40 1755 Right-of-use assets (Notes 6(11)&8) 10,925,558 3 1760 Investment property (Note 6(12)) 1,462,784 - 1780 Intangible assets (Notes 6(9)&(13)) 12,807,781 3 1840 Deferred tax assets 6,020,831 1 1900 Other noncurrent assets (Notes 6(4),(14)&8) 3,582,623 1 233,954,546 53 Total Assets $ 443,668,316 100	December 31, 2020 Amount % 90,274,687 22 668,058 - - - 44,718,800 11 2,076,156 - 21,929 - 60,541 - 26,753,401 7 564,222 - 3,931 - 3,175,948 1 168,317,673 41 622,824 - 19,464,078 5 185,480,116 46 11,277,353 3 1,522,391 - 12,801,358 3 6,005,346 2 1,779,156 - 238,952,622 59 407,270,295 100	June 30, 2020 Amount % 72,155,424 19 976,939 - - - 35,061,525 9 1,909,167 1 332,248 - 168,756 - 26,659,600 7 1,679,384 - - - 3,615,559 1 142,558,602 37 6,283,804 2 8,262,622 2 194,924,725 51 11,648,278 3 1,508,850 - 12,915,921 3 5,222,143 1 2,092,172 1 242,858,515 63 385,417,117 100 June 30, 2021 Liabilities and Equity Amount % Current liabilities: 2100 Short-term borrowings (Note 6(15)) $ 52,000 - 2120 Financial liabilities at fair value through profit or loss`－`current (Note 6(2)) 189,667 - 2170 Accounts payable 48,702,088 11 2180 Accounts payable to related parties (Note 7) 8,013,417 2 2213 Equipment and construction payable (Note 7) 3,281,801 1 2220 Other payables to related parties (Note 7) 46,820 - 2230 Current tax liabilities 2,813,077 1 2250 Provisions`－`current (Note 6(17)) 772,565 - 2280 Lease liabilities`－`current (Note 6(11)) 523,689 - 2399 Other current liabilities (Notes 6(10),(19),(21)& (22)) 27,896,404 6 2322 Current installments of long-term borrowings (Notes 6(16)&8) 19,835,308 4 112,126,836 25 Noncurrent liabilities: 2527 Contract liabilities`－`nonccurrent (Note 6(21)) 9,989,990 2 2540 Long-term borrowings, excluding current installments (Notes 6(16)&8) 84,215,436 19 2550 Provisions`－`noncurrent (Note 6(17)) 988,789 - 2570 Deferred tax liabilities 3,051,967 1 2580 Lease liabilities`－`noncurrent (Note 6(11)) 9,436,470 2 2600 Other noncurrent liabilities 2,016,134 1 109,698,786 25 Total liabilities 221,825,622 50 Equity(Note 6(19)): Equity attributable to shareholders of AU Optronics Corp. : 3100 Common stock 96,242,451 22 3200 Capital surplus 60,387,991 13 3300 Retained earnings 58,360,974 13 3400 Other components of equity (4,244,665) (1) 3500 Treasury shares (981,164) - 209,765,587 47 Non-controlling interests 36XX Non-controlling interests 12,077,107 3 Total equity 221,842,694 50 Total Liabilities and Equity $ 443,668,316 100	December 31, 2020 Amount % 200,000 - 170,956 - 47,508,933 12 7,302,792 2 3,706,652 1 22,101 - 1,325,068 - 744,654 - 553,120 - 20,032,462 5 16,771,441 4 98,338,179 24 - - 99,823,528 25 1,041,102 - 3,213,326 1 9,744,152 2 1,319,643 - 115,141,751 28 213,479,930 52 96,242,451 24 60,587,684 15 30,258,282 7 (3,270,303) (1) (1,013,423) - 182,804,691 45 10,985,674 3 193,790,365 48 407,270,295 100	June 30, 2020 Amount % 939,715 - 106,629 - 41,588,795 11 6,595,527 2 4,184,077 1 47,155 - 1,338,167 - 701,473 - 576,971 - 18,047,389 5 14,152,119 4 88,278,017 23 - - 105,049,833 27 1,004,566 - 3,000,196 1 10,023,873 3 1,756,499 - 120,834,967 31 209,112,984 54 96,242,451 25 60,568,217 15 14,951,238 4 (4,464,574) (1) (1,013,423) - 166,283,909 43 10,020,224 3 176,304,133 46 385,417,117 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan dollars, except for Earnings (loss) per share)

4110 Revenue 4190 Less: sales return and discount Net revenue(Notes 6(21)&7) 5000 Cost of sales(Notes 6(6),(11),(18),(22),(23)&7) Gross profit Operating expenses(Notes 6(9),(11),(18),(20),(22), (23)&7): 6100 Selling and distribution expenses 6200 General and administrative expenses 6300 Research and development expenses Total operating expenses Profit (loss) from operations Non-operating income and expenses: 7100 Interest income (Note 6(24)) 7010 Other income (Notes 6(24)&7) 7020 Other gains and losses (Notes 6(24)&7) 7050 Finance costs (Notes 6(10)&(24)) 7060 Share of profit of equity-accounted investees (Note 6(7)) Total non-operating income and expenses 7900 Profit (loss) before income tax 7950 Less: income tax expense(Note 6(25)) 8200 Profit (loss) for the period 8300 Other comprehensive income(Notes 6(7),(19)&(25)): 8310 Items that will never be reclassified to profit or loss 8316 Unrealized gain (loss) on equity investments at fair value through other comprehensive income 8320 Equity-accounted investees – share of other comprehensive income 8360 Items that are or may be reclassified subsequently to profit or loss 8361 Foreign operations – foreign currency translation differences 8370 Equity-accounted investees – share of other comprehensive income 8399 Related tax 8300 Other comprehensive income (loss), net of tax 8500 Total comprehensive income (loss) for the period Profit (loss) attributable to: 8610 Shareholders of AU Optronics Corp. 8620 Non-controlling interests Total comprehensive income (loss) attributable to: 8710 Shareholders of AU Optronics Corp. 8720 Non-controlling interests Earnings (loss) per share(NT$, Note 6(26)) 9750 Basic earnings (loss) per share 9850 Diluted earnings (loss) per share	Three Months Ended June 30, 2021 2020 Amount % Amount % $ 96,162,225 100 63,553,616 100 506,725 - 53,435 - 95,655,500 100 63,500,181 100 68,166,356 71 61,785,026 97 27,489,144 29 1,715,155 3 1,367,306 1 843,325 1 2,467,976 3 1,699,177 3 3,368,755 4 2,576,751 4 7,204,037 8 5,119,253 8 20,285,107 21 (3,404,098) (5) 125,197 - 149,445 - 276,002 - 946,170 2 (93,753) - 15,418 - (617,037) - (736,344) (2) 852,753 1 33,405 - 543,162 1 408,094 - 20,828,269 22 (2,996,004) (5) 965,813 1 206,467 - 19,862,456 21 (3,202,471) (5) (10,083) - 984,321 2 (275,558) - 1,789 - (285,641) - 986,110 2 (821,835) (1) (1,190,974) (2) (89,171) - (28,197) - 142,508 - 212,137 - (768,498) (1) (1,007,034) (2) (1,054,139) (1) (20,924) - $ 18,808,317 20 (3,223,395) (5) $ 19,530,948 21 (2,961,029) (5) 331,508 - (241,442) - $ 19,862,456 21 (3,202,471) (5) $ 18,565,680 20 (2,832,045) (4) 242,637 - (391,350) (1) $ 18,808,317 20 (3,223,395) (5) $ 2.06 (0.31) $ 2.04 (0.31)	Six Months Ended June 30, 2021 2020 Amount % Amount % 179,502,338 101 117,492,753 100 906,219 1 302,389 - 178,596,119 100 117,190,364 100 132,844,142 74 115,829,818 99 45,751,977 26 1,360,546 1 2,467,294 1 1,699,349 2 4,723,528 3 3,439,881 3 6,257,823 4 5,071,966 4 13,448,645 8 10,211,196 9 32,303,332 18 (8,850,650) (8) 230,779 - 302,848 - 578,774 1 1,247,762 1 476,833 - 102,589 - (1,286,207) (1) (1,530,022) (1) 1,155,556 1 77,243 - 1,155,735 1 200,420 - 33,459,067 19 (8,650,230) (8) 1,755,096 1 330,338 - 31,703,971 18 (8,980,568) (8) (23,520) - (1,260,621) (1) 45,980 - 730 - 22,460 - (1,259,891) (1) (1,446,526) (1) (1,745,869) (1) 37,939 - (30,483) - 233,468 - 320,453 - (1,175,119) (1) (1,455,899) (1) (1,152,659) (1) (2,715,790) (2) 30,551,312 17 (11,696,358) (10) 31,365,039 18 (7,952,522) (7) 338,932 - (1,028,046) (1) 31,703,971 18 (8,980,568) (8) 30,380,804 17 (10,411,674) (9) 170,508 - (1,284,684) (1) 30,551,312 17 (11,696,358) (10) 3.30 (0.84) 3.25 (0.84)
	2021 Amount % $ 96,162,225 100 506,725 - 95,655,500 100 68,166,356 71 27,489,144 29 1,367,306 1 2,467,976 3 3,368,755 4 7,204,037 8 20,285,107 21 125,197 - 276,002 - (93,753) - (617,037) - 852,753 1 543,162 1 20,828,269 22 965,813 1 19,862,456 21 (10,083) - (275,558) - (285,641) - (821,835) (1) (89,171) - 142,508 - (768,498) (1) (1,054,139) (1) $ 18,808,317 20 $ 19,530,948 21 331,508 - $ 19,862,456 21 $ 18,565,680 20 242,637 - $ 18,808,317 20 $ 2.06 $ 2.04	2021 Amount % 179,502,338 101 906,219 1 178,596,119 100 132,844,142 74 45,751,977 26 2,467,294 1 4,723,528 3 6,257,823 4 13,448,645 8 32,303,332 18 230,779 - 578,774 1 476,833 - (1,286,207) (1) 1,155,556 1 1,155,735 1 33,459,067 19 1,755,096 1 31,703,971 18 (23,520) - 45,980 - 22,460 - (1,446,526) (1) 37,939 - 233,468 - (1,175,119) (1) (1,152,659) (1) 30,551,312 17 31,365,039 18 338,932 - 31,703,971 18 30,380,804 17 170,508 - 30,551,312 17 3.30 3.25

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the Six Months Ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

		Equity Attributable to Shareholders of AU Optronics Corp.	Equity Attributable to Shareholders of AU Optronics Corp.	Equity Attributable to Shareholders of AU Optronics Corp.	Equity Attributable to Shareholders of AU Optronics Corp.	Equity Attributable to Shareholders of AU Optronics Corp.
Capital Surplus 60,544,474 - - - - (28) 23,771 - - 60,568,217 60,587,684 - - - - - - (39) (238,690) 39,036 - - 60,387,991		Retained Earnings		Subtotal 22,903,722 - (7,952,522) 52 (7,952,470) - - - (14) 14,951,238 30,258,282 - - (2,850,967) 31,365,039 (8,030) 31,357,009 - (401,507) - (1,843) - 58,360,974	Other	Components of Equity Unrealized Gains (Losses) on Financial Assets at Fair Value through Other Comprehensive Income Subtotal 1,124,598 (2,005,384) - - - - (1,259,943) (2,459,204) (1,259,943) (2,459,204) - - - - - - 14 14 (135,331) (4,464,574) (63,783) (3,270,303) - - - - - - - - 30,490 (976,205) 30,490 (976,205) - - - - - - 1,843 1,843 - - (31,450) (4,244,665)	Treasury Shares (1,013,423) - - - - - - - - (1,013,423) (1,013,423) - - - - - - - - 32,259 - - (981,164)
					Cumulative Translation Differences (3,129,982) - - (1,199,261) (1,199,261) - - - - (4,329,243) (3,206,520) - - - - (1,006,695) (1,006,695) - - - - - (4,213,215)	Unrealized Gains (Losses) on Financial Assets at Fair Value through Other Comprehensive Income 1,124,598 - - (1,259,943) (1,259,943) - - - 14 (135,331) (63,783) - - - - 30,490 30,490 - - - 1,843 - (31,450)
	Legal Reserve 7,691,688 - - - - - - - - 7,691,688 7,691,688 735,456 - - - - - - - - - - 8,427,144	Special Reserve 847,770 1,157,614 - - - - - - - 2,005,384 2,005,384 - 1,264,919 - - - - - - - - - 3,270,303	Unappropriated Earnings 14,364,264 (1,157,614) (7,952,522) 52 (7,952,470) - - - (14) 5,254,166 20,561,210 (735,456) (1,264,919) (2,850,967) 31,365,039 (8,030) 31,357,009 - (401,507) - (1,843) - 46,663,527

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

Cash flows from operating activities: Profit (loss) before income tax Adjustments for: - depreciation - amortization - losses on financial instruments at fair value through profit or loss - interest expense - interest income - compensation cost of share-based payments - share of profit of equity-accounted investees - gains on disposals of property, plant and equipment, net - gains on disposals of investments and financial assets, net - unrealized foreign currency exchange losses - others Changes in operating assets and liabilities: - notes and accounts receivable - receivables from related parties - inventories - other operating assets - contract liabilities - notes and accounts payable - payables to related parties - net defined benefit liability - provisions - other operating liabilities Cash generated from (used in) operations Interest received Dividends received Interest paid Income taxes paid Net cash provided by (used in) operating activities	Six Months Ended June 30, 2021 2020 $ 33,459,067 (8,650,230) 16,954,435 17,776,578 104,433 156,198 54,929 80,826 1,241,618 1,488,772 (230,779) (302,848) 39,929 - (1,155,556) (77,243) (27,142) (34,857) (886,589) (162) 393,143 71,774 144,385 41,132 (14,101,794) (4,270,179) (347,260) (171,959) (4,661,917) (3,236,643) (1,850,994) 319,240 10,629,800 (38,857) (223,390) (3,303,618) 726,688 (348,730) (19,068) (53,889) (23,383) (49,011) 3,392,808 (911,268) 43,613,363 (1,514,974) 219,880 337,380 - 55,060 (1,235,986) (1,478,225) (331,660) (574,016) 42,265,597 (3,174,775)
	2021 $ 33,459,067 16,954,435 104,433 54,929 1,241,618 (230,779) 39,929 (1,155,556) (27,142) (886,589) 393,143 144,385 (14,101,794) (347,260) (4,661,917) (1,850,994) 10,629,800 (223,390) 726,688 (19,068) (23,383) 3,392,808 43,613,363 219,880 - (1,235,986) (331,660) 42,265,597

Cash flows from operating activities:
Profit (loss) before income tax
Adjustments for:
- depreciation
- amortization
- losses on financial instruments at fair value through profit or loss
- interest expense
- interest income
- compensation cost of share-based payments
- share of profit of equity-accounted investees
- gains on disposals of property, plant and equipment, net
- gains on disposals of investments and financial assets, net
- unrealized foreign currency exchange losses
- others
Changes in operating assets and liabilities:
- notes and accounts receivable
- receivables from related parties
- inventories
- other operating assets
- contract liabilities
- notes and accounts payable
- payables to related parties
- net defined benefit liability
- provisions
- other operating liabilities
Cash generated from (used in) operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

Six Months Ended June 30,
2021
2020
$ 33,459,067
(8,650,230)
16,954,435
17,776,578
104,433
156,198
54,929
80,826
1,241,618
1,488,772
(230,779)
(302,848)
39,929
-
(1,155,556)
(77,243)
(27,142)
(34,857)
(886,589)
(162)
393,143
71,774
144,385
41,132
(14,101,794)
(4,270,179)
(347,260)
(171,959)
(4,661,917)
(3,236,643)
(1,850,994)
319,240
10,629,800
(38,857)
(223,390)
(3,303,618)
726,688
(348,730)
(19,068)
(53,889)
(23,383)
(49,011)
3,392,808
(911,268)
43,613,363
(1,514,974)
219,880
337,380
-
55,060
(1,235,986)
(1,478,225)
(331,660)
(574,016)
42,265,597
(3,174,775)

2021
$ 33,459,067
16,954,435
104,433
54,929
1,241,618
(230,779)
39,929
(1,155,556)
(27,142)
(886,589)
393,143
144,385
(14,101,794)
(347,260)
(4,661,917)
(1,850,994)
10,629,800
(223,390)
726,688
(19,068)
(23,383)
3,392,808
43,613,363
219,880
-
(1,235,986)
(331,660)
42,265,597

(Continued)

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the Six Months Ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

		Six Months Ended	June 30,
		2021	2020
Cash flows from investing activities:
Acquisitions of financial assets at fair value through profit or loss		-	(942,069)
Disposals of financial assets at fair value through profit or loss		553,391	1,493,904
Acquisitions of financial assets at fair value through other		(313,116)	-
comprehensive income
Disposals of financial assets at fair value through other comprehensive		-	5,551
income
Acquisitions of financial assets at amortized cost		(10,258,552)	-
Acquisitions of equity-accounted investees		(2,409,512)	(2,534,341)
Disposals of equity-accounted investees		61,422	83,506
Proceeds from disposal of subsidiaries		5,335	-
Acquisitions of property, plant and equipment		(6,531,131)	(9,036,777)
Disposals of property, plant and equipment		116,970	70,371
Increase in receipts in advance due to disposal of assets		464,000	-
Decrease in refundable deposits		79,929	92,685
Acquisitions of intangible assets		(38,000)	-
Decrease (increase) in other financial assets		(30,497)	21,514
Net cash inflow arising from acquisition of subsidiaries		227,701	-
Net cash outflow arising from acquisition of business		-	(188,956)
Net cash used in investing activities		(18,072,060)	(10,934,612)
Cash flows from financing activities:
Proceeds from short-term borrowings		952,776	1,597,092
Repayments of short-term borrowings		(1,100,776)	(2,348,620)
Proceeds from long-term borrowings		1,910,544	13,750,400
Repayments of long-term borrowings		(15,309,904)	(5,982,096)
Payment of lease liabilities		(285,410)	(338,017)
Guarantee deposits received (refunded)		(31,746)	3,752
Treasury shares sold to employees		32,162	-
Net change of non-controlling interests and others		32,961	(29)
Net cash generated from (provided by) financing activities		(13,799,393)	6,682,482
Effect of exchange rate change on cash and cash equivalents		(1,117,393)	(867,443)
Net increase (decrease) in cash and cash equivalents		9,276,751	(8,294,348)
Cash and cash equivalents at January 1		90,274,687	80,449,772
Cash and cash equivalents at June 30	$	99,551,438	72,155,424

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards as of June 30, 2021 and 2020 AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the Six Months Ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

1. Organization

AU Optronics Corp. (“AUO”) was founded on August 12, 1996 and is located in Hsinchu Science Park, the Republic of China (“ROC”). AUO’s main activities are the research, development, production and sale of thin film transistor liquid crystal displays (“TFT-LCDs”) and other flat panel displays used in a wide variety of applications. AUO also engages in the production and sale of solar modules and systems. AUO’s common shares have been publicly listed on the Taiwan Stock Exchange since September 2000, and its American Depositary Shares (“ADSs”) have been listed on the New York Stock Exchange (“NYSE”) since May 2002. On and from October 1, 2019, AUO’s ADSs has delisted from the NYSE and begun trading on the over-the-counter (“OTC”) market. Further on January 27, 2021, AUO’s ADSs and underlying ordinary shares was officially cancelled from the registration of the United States Securities and Exchange Commission and its reporting obligations under the U.S. Securities Exchange Act was terminated.

On September 1, 2001, October 1, 2006 and October 1, 2016, Unipac Optoelectronics Corp. (“Unipac”), Quanta Display Inc. (“ QDI” ) and Taiwan CFI Co., Ltd. (“ CFI” ) were merged with and into AUO, respectively. AUO is the surviving Company, whereas Unipac, QDI and CFI were dissolved.

In order to advance AUO’s value transformation strategy, to accelerate the extension of the value chain and enhance the overall operating performance, upon the resolution of the shareholders’ meeting held on June 17, 2020, AUO demerged and transferred the business of the General Display and the Public Information Display, including assets, liabilities and the operations, to its wholly-owned subsidiary, AUO Display Plus Corporation (“ ADP” ). ADP issued new shares to AUO as the consideration. The effective date of the demerger was set on January 1, 2021.

The consolidated financial statements comprise AUO and its subsidiaries (collectively as “the Company”).

2. The Authorization of Financial Statements

These consolidated financial statements were approved and authorized for issue by the Board of Directors of AUO on July 28, 2021.

3. Application of New and Revised Standards, Amendments and Interpretations:

(1) Impact of adoption of new, revised or amended standards and interpretations endorsed by the Financial Supervisory Commission, ROC (“FSC”)

The Company has adopted the amendments to the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations (collectively, “IFRSs”) with effective date from January 1, 2021. The adoption does not have a material impact on the Company’s consolidated financial statements.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(2) Impact of the IFRSs that have been endorsed by the FSC but not yet in effect

The Company assessed that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a material impact on its consolidated financial statements.

●Annual Improvements to IFRSs 2018 – 2020 Cycle
●Amendments to IFRS 3, Reference to the Conceptual Framework
－
●Amendments to IAS 16, Property, Plant and Equipment Proceeds before Intended Use
－
●Amendments to IAS 37, Onerous Contracts Cost of Fulfilling a Contract
(3) The IFRSs issued by International Accounting Standards Board (“IASB”) but not yet endorsed by the FSC

Standards and interpretations issued by the IASB but not yet endorsed by the FSC are listed below:

●Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture
●IFRS 17, Insurance Contracts and amendments to IFRS 17
●Amendments to IAS 1, Classification of Liabilities as Current or Noncurrent
●Amendments to IAS 1, Disclosure of Accounting Policies
●Amendments to IAS 8, Definition of Accounting Estimates
●Amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction

4. Summary of Significant Accounting Policies

(1) Statement of compliance

The accompanying consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and IAS 34, Interim Financial Reporting, as endorsed and issued into effect by the FSC. The consolidated financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements prepared under the IFRSs endorsed by the FSC with effective dates.

Except as described below, the significant accounting policies applied in the consolidated financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2020, and have been applied consistently to all periods presented in the consolidated financial statements. Refer to Note 4 of the consolidated financial statements for the year ended December 31, 2020 for the details.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(2) Basis of consolidation

Principles of preparation of the consolidated financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2020. Refer to Note 4(3) of the consolidated financial statements for the year ended December 31, 2020 for the details.

List of subsidiaries in the consolidated financial statements was as follows:

Name of Investor	Name of Subsidiary	Main Activities and Location Holding company (Malaysia) Investment (Taiwan ROC) Investment (Taiwan ROC) Sales and leasing activities (Taiwan ROC) Construction project and related project management (Taiwan ROC) Holding company (Israel) Sales and sales support activities (Netherlands) Manufacturing and sales company (Taiwan ROC) Research and development and sales activities (Taiwan ROC) Renewable energy power generation (Taiwan ROC) Manufacturing, development and sales company (Taiwan ROC) Holding company (Samoa) Intelligent health care services (Taiwan ROC) Investment (Taiwan ROC) Holding company (Samoa) Manufacturing and sales company (Taiwan ROC) Leasing and service company (Taiwan ROC) Holding company (Singapore) Management consulting (PRC)	Percentage of Ownership (%)	Percentage of Ownership (%)
			June 30, 2021	December 31, 2020 June 30, 2020 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 (1) 100.00 (1) - 100.00 (1) - 100.00 (1) - - - - - 100.00 (1) - 41.05 (3) 41.05 (3) 100.00 (1) - 100.00 (1) - 100.00 (1) -
AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO and Konly AUO and ADCM AUO, Konly and Ronly Konly ADHLD ADSG	AU Optronics (L) Corp. (AULB) Konly Venture Corp. (Konly) Ronly Venture Corp. (Ronly) Space Money Inc. (SMI) AUO Envirotech Inc. (AETW, formerly U-Fresh Technology Inc. (UTI)) ComQi Ltd. (CQIL) AU Optronics Europe B.V. (AUNL) AUO Crystal Corp. (ACTW) AUO Display Plus Corporation (ADP) Da Ping Green Energy Corporation (DPGE) AUO Health Corporation (AHTW) AUO Digitech (CAYMAN) Limited (ADCM) AUO Care Inc. (ACareTW) Star River Energy Corp. (SREC) AUO Digitech Holding Limited (ADHLD) Darwin Precisions Corporation (DPTW) AUO Education Service Corp. (AUES) AU Digitech Pte. Ltd. (ADSG) AUO Digitech (Suzhou) Co., Ltd. (ADSZ)		100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 (1) 33.51 (2) 100.00 41.05 (3) 100.00 100.00 100.00

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of Investor	Name of Subsidiary	Main Activities and Location Design, Sales and consulting (Taiwan ROC) Holding company (Taiwan ROC) Manufacturing and sales company (Malaysia) Manufacturing and sales company (Japan) Sales and sales support activities (United States) Sales support activities (Japan) Sales support activities (South Korea) Holding company and sales support activities (Singapore) Assembly activities (Czech Republic) Sales support activities (PRC) Manufacturing and sales company (PRC) Manufacturing and sales company (PRC) Manufacturing and leasing activities (PRC) Repairing activities (Slovakia Republic) Manufacturing company (Singapore) Manufacturing and sales company (PRC) Research and development and IP related business (United States) Holding company (Malaysia) Solar power generation (Taiwan ROC) Solar power generation (Taiwan ROC) Sales support activities (United States) Introduction of smart field construction and other solutions (Taiwan ROC)	Percentage of Ownership (%)	Percentage of Ownership (%)
			June 30, 2021	December 31, 2020 June 30, 2020 - - 100.00 100.00 100.00 100.00 99.9991 99.9991 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 51.00 51.00 100.00 100.00 100.00 100.00 - - - - 100.00 100.00 - -
ADSG ACTW ACTW SDMC AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB and DPTW SREC SREC AUSG ADP	AUO Digitech Taiwan Inc. (ADTW) Sanda Materials Corporation (SDMC) AUO Crystal (Malaysia) Sdn. Bhd. (ACMK)(4) M.Setek Co., Ltd. (M.Setek) AU Optronics Corporation America (AUUS) AU Optronics Corporation Japan (AUJP) AU Optronics Korea Ltd. (AUKR) AU Optronics Singapore Pte. Ltd. (AUSG) AU Optronics (Czech) s.r.o. (AUCZ)(4) AU Optronics (Shanghai) Co., Ltd. (AUSH) AU Optronics (Xiamen) Corp. (AUXM) AU Optronics (Suzhou) Corp., Ltd. (AUSZ) AU Optronics Manufacturing (Shanghai) Corp. (AUSJ) AU Optronics (Slovakia) s.r.o. (AUSK) AFPD Pte., Ltd. (AUST) AU Optronics (Kunshan) Co., Ltd. (AUKS) a.u. Vista Inc. (AUVI) BriView (L) Corp. (BVLB) Sungen Power Corporation (SGPC) Evergen Power Corporation (EGPC) AUO Green Energy America Corp. (AEUS) Jector Digital Corporation (Jector)		100.00 (1) 100.00 100.00 99.9991 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 51.00 100.00 100.00 100.00 (2) 100.00 (2) 100.00 78.43 (1)

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of Investor	Name of Subsidiary	Main Activities and Location Holding, sales and sales support activities (Netherlands) Sales and sales support activities (PRC) Sales and sales support activities (United States) Sales support activities (Japan) Manufacturing and sales company (PRC) Intelligent health care services (PRC) Construction project and related project management (PRC) Sales of software and hardware and consulting services (PRC) Integration service of software and hardware (PRC) Development and licensing of software (PRC) Construction project and related project management (PRC) Holding company (United Kingdom) Sales support activities (United Kingdom) Sales company (United States) Research and development activities (Canada) Development and sales activities (United Kingdom)	Percentage of Ownership (%)	Percentage of Ownership (%)
			June 30, 2021	December 31, 2020 June 30, 2020 100.00 100.00 - - 100.00 (1) - 100.00 (1) - 100.00 100.00 100.00 100.00 100.00 100.00 - - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
ADP and AUSG ADP ADPNL ADPNL AUXM AUSH AUSH ADSZ ADSZ and AUSH ADSZ and AUSH AESZ CQIL CQHLD CQHLD CQHLD CQUS	AUO Display Plus Netherlands B.V. (ADPNL, formerly AUO Green Energy Europe B.V. (AENL))(5) AUO Display Plus Technology (Suzhou) Co., Ltd. (ADPSZ) AUO Display Plus America Corp. (ADPUS) AUO Display Plus Japan Corp. (ADPJP) BriView (Xiamen) Corp. (BVXM) AUO Care Information Tech. (Suzhou) Co., Ltd. (ACareSZ) AUO Envirotech (Suzhou) Co., Ltd. (AESZ, formerly U-Fresh Technology (Suzhou) Co., Ltd. (UFSZ)) AUO Megainsight (Xiamen) Co., Ltd. (MISXM) Edgetech Data Technologies (Suzhou) Corp., Ltd. (EDT)(6) AUO MegaInsight Smart Manufacturing (Suzhou) Corp., Ltd. (MIS, formerly Mega Insight Smart Manufacturing (Suzhou) Corp., Ltd.)(6) AUO Envirotech (Shandong) Co., Ltd. (AESD, formerly U-Fresh Environmental Technology (Shandong) Co., Ltd. (UFSD)) ComQi Holdings Ltd. (CQHLD) ComQi UK Ltd. (CQUK) ComQi Inc. (CQUS) ComQi Canada Inc. (CQCA) JohnRyan Limited (JRUK)		100.00 100.00 (1) 100.00 100.00 100.00 100.00 100.00 100.00 (1) 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of Investor	Name of Subsidiary	Main Activities and Location Development and sales activities (United States) Holding company (Malaysia) Holding company (BVI) Holding company (Mauritius) Holding company (Mauritius) Holding company (Samoa) Holding company (Samoa) Manufacturing and sales company (PRC) Manufacturing and sales company (PRC) Manufacturing, sales and trading company (PRC) Manufacturing and sales company (PRC) Holding company (Hong Kong) Manufacturing and sales company (Slovakia Republic) Manufacturing and sales company (PRC) Manufacturing and sales company (PRC) Manufacturing and sales company (PRC)	Percentage of Ownership (%)	Percentage of Ownership (%)
			June 30, 2021	December 31, 2020 June 30, 2020 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
CQUS DPTW DPTW DPTW FHVI FHVI FHVI FFMI FTMI FWSA and FTMI PMSA DPLB DPLB DPHK DPHK BVLB	JohnRyan Inc. (JRUS) Darwin Precisions (L) Corp. (DPLB) Forhouse International Holding Ltd. (FHVI) Forefront Corporation (FFMI) Fortech International Corp. (FTMI) Forward Optronics International Corp. (FWSA) Prime Forward International Ltd. (PMSA) Forhouse Electronics (Suzhou) Co., Ltd. (FHWJ) Fortech Electronics (Suzhou) Co., Ltd. (FTWJ) Suzhou Forplax Optronics Co., Ltd. (FPWJ) Fortech Electronics (Kunshan) Co., Ltd. (FTKS)(4) Darwin Precisions (Hong Kong) Limited (DPHK) Darwin Precisions (Slovakia) s.r.o. (DPSK)(4) Darwin Precisions (Suzhou) Corp. (DPSZ) Darwin Precisions (Xiamen) Corp. (DPXM) BriView (Hefei) Co., Ltd. (BVHF)		100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Note 1: ADP was incorporated in May 2020. DPGE, ADCM and ADHLD were incorporated in August 2020. AHTW was incorporated in September 2020. ADSG and ADPUS were incorporated in October 2020. ADPJP was incorporated in November 2020. AUES and ADSZ were incorporated in December 2020. ACareTW and ADPSZ were incorporated in February 2021. ADTW was incorporated in March 2021. Jector and MISXM were incorporated in April 2021.
Note 2: The Company re-assessed the investment of SREC and considered that it has control over the main operating activities of SREC; consequently, SREC and its subsidiaries were included in the Company’s consolidated financial statements from January 2021. Refer to Note 6(8) for the relevant information.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Note 3: Although the Company did not own more than 50% of the DPTW’s ownership interests, it was considered to have de facto control over the main operating policies of DPTW. As a result, DPTW was accounted for as a subsidiary of the Company.
Note 4: As of June 30, 2021, the liquidation of ACMK, AUCZ, DPSK and FTKS is still in process. AUCZ completed its liquidation in July 2021.
Note 5: As part of a business restructuring, AUSG sold all its shareholdings in ADPNL to ADP in January 2021.
Note 6: As part of a business restructuring, AUSH sold all its shareholdings in EDT and MIS to ADSZ in January 2021.

(3) Employee benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuariallydetermined pension cost rate at the end of prior fiscal year, adjusted for significant market fluctuations subsequent to the end of prior fiscal year and for significant curtailments, settlements, or other significant one-time events.

(4) Income taxes

The Company measures and discloses interim period income tax expense in accordance with paragraph B12 of IAS 34, Interim Financial Reporting.

Income tax expense for the period is best estimated by multiplying pre-tax income of the interim period by a projected annual effective tax rate, and is recognized as current tax expense.

For a change in the statutory tax rate during the interim period, the effect on deferred taxes is recognized immediately during the interim reporting period in which the change in tax rate occurs.

Income taxes that are recognized directly in equity or other comprehensive income are measured in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding tax bases at the tax rates that are expected to be applied in the year in which the asset is realized or the liability is settled.

(5) Noncurrent assets held for sale

Noncurrent assets are classified as held for sale when their carrying amounts are expected to be recovered primarily through sale rather than through continuing use. Such noncurrent assets must be available for immediate sale in their present condition and the sale is highly probable within one year. When classified as held for sale, the assets are measured at the lower of their carrying amount and fair value less costs to sell. Impairment losses on initial classification as held for sale and subsequent gains or losses on re-measurement are recognized in profit or loss. However, subsequent gains are not recognized in excess of the cumulative impairment loss that has been recognized.

When property, plant and equipment are classified as held for sale, they are no longer depreciated.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

5. Critical Accounting Judgments and Key Sources of Estimations and Assumptions Uncertainty

The preparation of the consolidated financial statements in conformity with the Regulations and IAS 34, Interim Financial Reporting, as endorsed and issued into effect by the FSC requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing the consolidated financial statements, critical accounting judgments and key sources of estimations and assumptions uncertainty used by management in the application of accounting policies are consistent with those described in Note 5 of the consolidated financial statements for the year ended December 31, 2020.

6. Description of Significant Accounts

Except as described below, the description of significant accounts in the accompanying consolidated financial statements is not materially different from those described in Note 6 of the consolidated financial statements for the year ended December 31, 2020.

(1) Cash and Cash Equivalents

June 30, 2021 Cash on hand, demand deposits and checking accounts $ 66,928,348 Time deposits 32,623,090 $ 99,551,438	December 31, 2020 43,921,304 46,353,383 90,274,687	June 30, 2020
		31,153,866 41,001,558
		72,155,424

Refer to Note 6(29) for the disclosure of currency risk and sensitivity analysis of the financial instruments of the Company.

As at June 30, 2021, December 31, 2020, and June 30, 2020, no cash and cash equivalents were pledged with banks as collaterals.

(2) Financial Assets and Liabilities at Fair Value through Profit or Loss (“FVTPL”)

June 30, 2021 Financial assets mandatorily measured at FVTPL: Foreign currency forward contracts $ 75,127 Structured deposits - $ 75,127 Financial liabilities held for trading: Foreign currency forward contracts $ 189,667	December 31, 2020 112,319 555,739 668,058 170,956	June 30, 2020
		27,143 949,796
		976,939
		106,629

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The Company entered into derivative contracts to manage the exposure to currency risk arising from operating activities.

As at June 30, 2021, December 31, 2020, and June 30, 2020, the Company’s outstanding foreign currency forward contracts were as follows:

	June 30, 2021
Contract item Sell USD / Buy NTD Sell USD / Buy JPY Sell USD / Buy CNY Sell USD / Buy SGD Sell CNY / Buy USD Sell EUR / Buy JPY Sell NTD / Buy JPY	Maturity date Contract amount Jul. 2021~Sep. 2021 USD 1,269,400 / NTD 35,237,706 Jul. 2021~Aug. 2021 USD 66,000 / JPY 7,266,992 Jul. 2021~Dec. 2021 USD 114,500 / CNY 744,525 Aug. 2021 USD 25,139 / SGD 33,520 Aug. 2021~Nov. 2021 CNY 1,370,956 / USD 211,802 Jul. 2021~Sep. 2021 EUR 11,000 / JPY 1,466,135 Jul. 2021 NTD 50,525 / JPY 200,000

	December 31, 2020
Contract item Sell USD / Buy NTD Sell USD / Buy JPY Sell USD / Buy EUR Sell USD / Buy CNY Sell USD / Buy SGD Sell CNY / Buy USD Sell EUR / Buy JPY Sell HKD / Buy USD	Maturity date Contract amount Jan. 2021~Feb. 2021 USD 522,200 / NTD 14,751,599 Jan. 2021~Mar. 2021 USD 122,935 / JPY 12,752,953 Jan. 2021 USD 2,398 / EUR 2,000 Jan. 2021~Aug. 2021 USD 131,500 / CNY 879,713 Jan. 2021~Feb. 2021 USD 28,349 / SGD 38,020 Feb. 2021~Mar. 2021 CNY 1,400,000 / USD 212,882 Jan. 2021~Feb. 2021 EUR 10,000 / JPY 1,253,050 Jan. 2021 HKD 500 / USD 64

	June 30, 2020
Contract item Sell USD / Buy NTD Sell USD / Buy JPY Sell USD / Buy CNY Sell USD / Buy SGD Sell USD / Buy MYR Sell CNY / Buy USD Sell EUR / Buy JPY Sell HKD / Buy USD Sell NTD / Buy JPY	Maturity date Contract amount Jul. 2020 USD 247,000 / NTD 7,317,792 Jul. 2020~Sep. 2020 USD 82,779 / JPY 8,898,799 Jul. 2020~Jan. 2021 USD 79,000 / CNY 559,690 Jul. 2020~Aug. 2020 USD 26,247 / SGD 37,163 Jul. 2020~ Sep. 2020 USD 558 / MYR 2,393 Jul. 2020~Aug. 2020 CNY 1,793,514 / USD 252,193 Jul. 2020~Aug. 2020 EUR 11,000 / JPY 1,292,735 Jul. 2020~Aug. 2020 HKD 244,000 / USD 31,477 Jul. 2020 NTD 2,498,800 / JPY 9,000,000

June 30, 2020

Contract item
Sell USD / Buy NTD
Sell USD / Buy JPY
Sell USD / Buy CNY
Sell USD / Buy SGD
Sell USD / Buy MYR
Sell CNY / Buy USD
Sell EUR / Buy JPY
Sell HKD / Buy USD
Sell NTD / Buy JPY

Maturity date
Contract amount
Jul. 2020
USD 247,000 / NTD 7,317,792
Jul. 2020~Sep. 2020
USD 82,779 / JPY 8,898,799
Jul. 2020~Jan. 2021
USD 79,000 / CNY 559,690
Jul. 2020~Aug. 2020
USD 26,247 / SGD 37,163
Jul. 2020~ Sep. 2020
USD 558 / MYR 2,393
Jul. 2020~Aug. 2020
CNY 1,793,514 / USD 252,193
Jul. 2020~Aug. 2020
EUR 11,000 / JPY 1,292,735
Jul. 2020~Aug. 2020
HKD 244,000 / USD 31,477
Jul. 2020
NTD 2,498,800 / JPY 9,000,000

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(3) Financial Assets at Fair Value through Other Comprehensive Income (“FVTOCI”)

Investments in equity instruments at FVTOCI: Equity securities – listed stocks $ Equity securities – non-listed stocks $	June 30, 2021 122,009 529,462 651,471	December 31, 2020 294,668 328,156 622,824	June 30, 2020
			6,095,879 187,925
			6,283,804

The purpose that the Company invests in the abovementioned equity securities is for long-term strategies, but rather for trading purpose. Therefore, those equity securities are designated as financial assets at FVTOCI.

Upon the re-assessment, the Company considers that it has significant influence over Qisda Corporation (“Qisda”); consequently, at the end of December 2020 the equity investment in Qisda previously classified as financial assets at FVTOCI was reclassified as investments accounted for using the equity method. Refer to Note 6(7) for the relevant information.

(4) Financial Assets at Amortized Cost

Financial Assets at Amortized Cost
June 30, 2021 Domestic and foreign time deposits $ 10,262,008 Less: current (10,000,000) Noncurrent (recognized in other noncurrent assets) $ 262,008	December 31, 2020 - - -	June 30, 2020
		- -
		-

The Company has assessed that these financial assets are held-to-maturity to collect contractual cash flows, which consist solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets at amortized cost.

As at June 30, 2021, none of the Company’s domestic and foreign time deposits was pledged as collateral.

(5) Notes and Accounts Receivable, net (Including Related and Unrelated Parties)

June 30, 2021 Notes receivable $ 114,934 Accounts receivable 62,664,095 Less: loss allowance (17,001) $ 62,762,028 Notes and accounts receivable, net $ 60,320,210 Accounts receivable from related parties, net $ 2,441,818	December 31, 2020 179,411 46,635,061 (19,516) 46,794,956 44,718,800 2,076,156	June 30, 2020 143,232 36,847,142 (19,682) 36,970,692 35,061,525 1,909,167

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The Company measures loss allowance for notes and accounts receivable using the simplified approach under IFRS 9 with the lifetime expected credit losses. Analysis of expected credit losses which was measured based on the aforementioned method, was as follows:

	June 30, 2021
Carrying amount of notes and accounts receivable Weighted- average loss rate $ 59,394,113 0.00% 3,235,440 0.01% 129,724 0.00% 3,093 0.00% $ 62,762,370 December 31, 2020		Loss allowance for lifetime expected credit losses
		105 231 6 -
		342

Carrying amount of notes and accounts receivable $ 45,814,603 961,549 17,189 4,176 $ 46,797,517	Weighted- average loss rate 0.00% 0.01% 0.00% 56.54% June 30, 2020	Loss allowance for lifetime expected credit losses
		88 112 - 2,361
		2,561

Carrying amount of notes and accounts receivable $ 35,994,175 917,041 58,657 88 $ 36,969,961	Weighted- average loss rate 0.00% 0.00% 1.15% 70.45%	Loss allowance for lifetime expected credit losses
		2 2 672 62
		738

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

In addition, the Company expected that upon objective evidence, some notes and accounts receivable would not be recovered in total for which amounted to $16,659 thousand, $16,955 thousand and $20,413 thousand as of June 30, 2021, December 31, 2020, and June 30, 2020, respectively. Consequently, the Company recognized a loss allowance of $16,659 thousand, $16,955 thousand and $18,944 thousand, respectively.

The movement of the loss allowance for notes and accounts receivable was as follows:

Balance at beginning of the period Provisions (reversals) charged to (against) expense Effect of changes in foreign currency exchange rates Balance at end of the period	Six Months Ended June 30, 2021 2020 $ 19,516 17,738 (2,438) 2,071 (77) (127) $ 17,001 19,682
	2021 $ 19,516 (2,438) (77) $ 17,001

The payment terms granted to customers are generally 25 to 60 days from the end of the month during which the invoice is issued. This term is consistent with practices in our industry, and thus, no financing components involved.

As at June 30, 2021 and December 31, 2020, the Company did not sell its accounts receivables to banks. As at June 30, 2020, the Company’ s accounts receivables sold and derecognized were as follows:

June 30, 2020

Underwriting bank Taipei Fubon Bank E.Sun Bank DBS Bank	Factoring limit (in thousands) USD 120,000 USD 50,000 USD 120,000	Amount sold and derecognized (in thousands) USD 37,790 USD 14,799 USD 23,055	Amount advanced (in thousands) Principal terms USD 34,000 See Notes(a)~(d) USD 13,300 See Notes(a)~(d) NTD 600,000 See Notes(a)~(d)

Note (a): Under these facilities, the Company transferred accounts receivable to the respective underwriting banks, which are without recourse subject to the underwriting consents.

Note (b): The Company informed its customers pursuant to the respective facilities to make payment directly to the respective underwriting banks.

Note (c): As of June 30, 2020, total outstanding receivables after the above transactions, net of fees charged by underwriting banks, of $240,684 thousand was recognized under other current financial assets. In addition, interest rate for the balance of advanced amount as of June 30, 2020 was ranging from 0.93% to 1.05%.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Note (d): To the extent of the amount transferred to the underwriting banks, risks of non-collection or potential payment default by customers in the event of insolvency are borne by respective banks. The Company is not responsible for the collection of receivables subject to these facilities, or for any legal proceedings and costs thereof in collecting these receivables. In case any commercial dispute between the Company and customers or other reasons results in the Company’ s failure to perform the obligation under these facilities, the banks have requested the Company to issue promissory notes in the amounts equal to 10 percent of respective facilities or to transfer receivables in the amounts equal to 10 percent of respective facilities. Other than such arrangements, no collaterals were provided by the Company.

(6) Inventories

June 30, 2021 Finished goods $ 9,788,172 Work-in-progress 12,723,448 Raw materials 8,900,950 $ 31,412,570		December 31, 2020 8,903,882 11,259,938 6,589,581 26,753,401	June 30, 2020 9,259,691 12,243,224 5,156,685
			26,659,600

For the three months and six months ended June 30, 2021 and 2020, the amounts recognized as cost of sales in relation to inventories were $68,166,356 thousand, $61,785,026 thousand, $132,844,142 thousand and $115,829,818 thousand, respectively. The net of provisions (reversals) for inventories written down (increased) to net realizable value, which were also included in cost of sales, amounted to $119,125 thousand in provisions, $33,691 thousand in reversals, $331,923 thousand in provisions and $672,121 thousand in reversals for the three months and six months ended June 30, 2021 and 2020, respectively.

As at June 30, 2021, December 31, 2020 and June 30, 2020, none of the Company’s inventories was pledged as collateral.

(7) Investments in Equity-accounted Investees

Investments in Equity-accounted Investees
June 30, 2021 Associates $ 22,210,760 Joint ventures 193,233 $ 22,403,993	December 31, 2020 19,180,565 283,513 19,464,078	June 30, 2020
		7,976,978 285,644
		8,262,622

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

a. Associates

			Principal			June 30,	2021		December	December	31, 2020	June 30, 2020	June 30, 2020
Name of			place of				Ownership				Ownership		Ownership
associate	Principal activities		business		Amount		interest	%	Amount		interest %	Amount	interest
Qisda	Manufacturing and sales of LCD		Taiwan ROC	$	11,218,413			20	10,220,729		18	-		-
	products and projectors;
	providing medical services
Ennostar Inc.(“Ennostar”)	Holding company		Taiwan ROC		4,609,643			8	-		-	-		-
ADLINK Technology Inc.	Manufacturing and sales of		Taiwan ROC		2,510,382			22	2,336,445		20	2,343,385		20
(“ADLINK”)	hardware, software and
	peripheral devices of industrial
	computers
Star Shining Energy	Investment		Taiwan ROC		1,710,707			33	1,689,192		33	1,013,669		33
Corporation. (“SSEC”)
Raydium Semiconductor	IC design		Taiwan ROC		1,256,314			18	809,137		17	702,392		17
Corporation
(“Raydium”)
Daxin Materials Corp.	Research, manufacturing, and		Taiwan ROC			797,878		25	717,953		25	642,510		25
(“Daxin”)	sales of display and
	semiconductor related chemicals
Lextar Electronics Corp.	Design, manufacturing, and		Taiwan ROC			-	-		2,853,386		28	2,825,476		27
(“Lextar”)	sales of InGaN epi wafers and
	chips, and light emitting diode
	packages and modules
SREC	Investment		Taiwan ROC			-	-		447,171		34	428,849		34
Others						107,423			106,552			20,697
				$	22,210,760				19,180,565			7,976,978
			Three		Months		Ended				Six Months Ended
					June 30,						June 30,
			2021				2020				2021	2020
The Company’s share of
associates’:
Profit		$	847,168				33,317			1,148,059			75,230
Other comprehensive income
(loss)			(364,729)				(26,408)				83,919	(29,753)
Total comprehensive income
(loss)		$	482,439					6,909		1,231,978			45,477

On February 5, 2020, AUO’ s Board of Directors resolved to acquire common shares of ADLINK through tender offer. As of June 30, 2021, the Company holds a total of 46,803 thousand common shares of ADLINK for totaling of 22% equity interest in ADLINK.

Lextar, upon the resolution of its Board of Directors on June 18, 2020, carried out a joint share exchange with Epistar Corporation (“Epistar”) for a newly incorporated company, Ennostar. Such plan was also approved by Lextar’s and Epistar’s special shareholders’ meetings held on August 7, 2020. In November 2020, Lextar received a written decision on anti-monopoly examination of the business operators’ concentration from the Antitrust authority in China wherein the authority approved and decided not to prohibit the concentration. On the record date, January 6, 2021, Ennostar’ s shares have been publicly listed on the Taiwan Stock Exchange. In the meanwhile, Lextar’s and Epistar’s listing and public offering were terminated. Upon completion of the share exchange, the Company still remains significant influence over Ennostar.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

When the share exchange took place on January 6, 2021, the Company deemed the conversion of shares of Lextar as disposal. The fair value at disposal was $3,577,076 thousand and the gain on disposal was $888,925 thousand.

In consideration of the Company’ s operational strategy, the Company has increased its shareholdings in Qisda since November 2020. Upon the re-assessment, the Company considers that it has obtained the ability to exercise significant influence over Qisda; consequently, at the end of December 2020 the Company derecognized the investment in Qisda previously classified as financial assets at FVTOCI, and further recognized an investment accounted for using the equity method at fair value. The related cumulative gain that was previously recognized in other comprehensive income under items never be reclassified in profit or loss was reclassified to retained earnings.

In connection with the Company’s operational strategy, the Company, in addition to acquiring ADLINK’ s common shares through tender offer, continually increased its shareholdings in Qisda, Ennostar, ADLINK and Raydium with total investments of $2,409,512 thousand and $2,534,341 thousand for the six months ended June 30, 2021 and 2020, respectively.

b. Joint ventures

None of the joint ventures is considered individually material to the Company. The following table summarized the amount recognized by the Company at its share of those joint ventures.

Three Months Ended June 30, 2021 2020 $ 5,585 88 - - $ 5,585 88	Six Months Ended June 30,	Six Months Ended June 30,
2021 $ 5,585 - $ 5,585	2021 7,497 - 7,497	2020
		2,013 -
		2,013

As at June 30, 2021, December 31, 2020 and June 30, 2020, none of the Company’s investments in equity-accounted investees was pledged as collateral.

(8) Acquisition of subsidiaries

The Company is the sole largest shareholder of SREC with 33.51% of its voting shares. Upon the amendment to the joint venture agreement in January 2021, the Company re-assessed the investment of SREC and considered that it has control over the main operating activities of SREC. Consequently, SREC and its subsidiaries were included in the Company’ s consolidated financial statements from January 2021.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Consideration transferred: Investments in equity-accounted investees Non-controlling interests (measured by the fair value of identifiable net assets in proportion to non-controlling interests) Fair value of identifiable assets acquired and liabilities assumed: Cash and cash equivalents Property, plant and equipment Other assets Total liabilities	Amount $ 447,171 887,129 $ 1,334,300 Fair value $ 227,701 2,107,168 222,774 (1,223,343) $ 1,334,300

(9) Acquisition of Business

In February 2020, the Company acquired the business of integration service of content management system and hardware from John Ryan International Inc., John Ryan Technology, Inc., Cutler holdings Inc. and their subsidiaries (hereinafter referred to as “John Ryan”). Through the acquisition of the business, the Company expects to extend the relevant business to the financial industry.

If the acquisition had taken place on January 1, 2020, management estimated that the Company’s consolidated revenue and consolidated net loss for the six months ended June 30, 2020 would have been $117,204,243 thousand and $8,989,021 thousand, respectively. In determining these amounts, management had assumed that the fair value adjustments, determined provisionally, that arose on the acquisition date would have been the same if the acquisition had taken place on January 1, 2020. The aforementioned pro-forma information is presented for illustrative purposes only and is not necessarily an indication of consolidated revenue and results of operations of the Company that would have been achieved had the acquisition been completed on January 1, 2020, nor is it intended to be a projection of future results.

Acquisition-related costs of $4,701 thousand on legal fees and due diligence fees were expensed and recognized in operating expenses in the consolidated statement of comprehensive income for the year ended December 31, 2020.

The following table summarized each major class of consideration transferred, the assets acquired and liabilities assumed at the acquisition date and the amount of goodwill recognized.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

a. Consideration transferred (translated at the exchange rates on June 30, 2020)

Cash Contingent consideration	Amounts
	$ 212,684 44,261 $ 256,945

In accordance with the terms of the contingent consideration, in the event that the annual revenue and the annual recurring revenue rendered from the acquired business for the year ended December 31, 2020 are either greater than the agreed revenue targets or hit the agreed goals specified in the agreement, or in the event that John Ryan assists in acquiring specific business within the period specified in the agreement, the Company will pay additional consideration of USD 750 thousand and USD 1,492 thousand, respectively, to John Ryan. Under the arrangement of the contingent consideration, the potential undiscounted amount of the contingent payment that the Company may have to pay in the future is between USD 0 thousand and USD 2,242 thousand.

The fair value of the contingent consideration estimated using Monte Carlo simulation and expected value was $44,261 thousand. The fair value measurement was based on the significant unobservable inputs in the market and categorised as a Level 3 fair value under IFRS 13. The significant inputs in the valuation technique used are discount rate of 5.2% and revenue volatility rate of 12.8%.

Notwithstanding that the annual revenue and the annual recurring revenue rendered from the acquired business for the year ended December 31, 2020 were neither greater than the agreed revenue targets nor hit the agreed goals specified in the agreement, John Ryan assisted in acquiring specific business within the period specified in the agreement. Therefore, based on the agreement, the Company has paid USD 1,492 thousand to John Ryan from a trust account as agreed. The remeasurement of the fair value of the aforementioned contingent consideration agreement is consistent with the amount estimated and recorded.

b. Identifiable assets acquired and liabilities assumed

The following table summarized the fair value of identifiable assets acquired and liabilities assumed recognized at the acquisition date (translated at the exchange rates on June 30, 2020):

Accounts receivable and other current assets Property, plant and equipment Intangible assets Accounts payable and other current liabilities	Fair value $ 24,555 2,212 127,219 (38,512) $ 115,474

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

c. Goodwill arising from the acquisition for which is attributable mainly to the synergies expected to be achieved from integrating the acquired business into the Company’s existing business has been recognized as follows (translated at the exchange rates on June 30, 2020):

Consideration transferred Less: Fair value of identifiable net assets	Amounts
	$ 256,945 (115,474) $ 141,471

(10) Property, Plant and Equipment

	Six Months Ended June 30, 2021	Six Months Ended June 30, 2021	Six Months Ended June 30, 2021
Balance, Beginning of Period $ 8,858,167 120,107,200 834,855,721 38,159,878 1,001,980,966 42,027,956 745,962,397 30,065,978 818,056,331 1,555,481 $ 185,480,116	Effect of change in consolidated entities - - 2,107,168 - 2,107,168 - - - - -	Additions - 6,439 484,410 1,993,114 2,483,963 1,434,520 12,266,543 2,898,244 16,599,307 3,720,891	Reclassification, effect of change in exchange rate and others (85,468) (1,970,886) (4,332,709) (2,284,920) (8,673,983) (1,543,610) (5,946,118) (2,681,206) (10,170,934) (2,590,277)	Balance, End of Period 8,772,699 118,142,753 833,114,590 37,868,072
				997,898,114
				41,918,866 752,282,822 30,283,016
				824,484,704
				2,686,095
				176,099,505

	Six Months Ended June 30, 2020	Six Months Ended June 30, 2020
Balance, Beginning of Period $ 8,858,648 119,697,249 841,581,837 35,834,437 1,005,972,171 39,170,748 737,292,828 27,646,410 804,109,986 4,872,358 $ 206,734,543	Additions - 9,978 826,484 2,370,070 3,206,532 1,439,288 12,929,382 2,999,022 17,367,692 3,742,187	Reclassification, effect of change in exchange rate and others (1,928) (343,936) (2,471,280) (678,303) (3,495,447) (221,865) (6,356,452) (1,908,990) (8,487,307) (6,382,705)	Balance, End of Period
			8,856,720 119,363,291 839,937,041 37,526,204
			1,005,683,256
			40,388,171 743,865,758 28,736,442
			812,990,371
			2,231,840
			194,924,725

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AUO and ACTW decided to dispose part of their plants and related appendages pursuant to the resolution of their respective Board of Directors’ meeting held on April 28, 2021 and March 16, 2021. The aforementioned assets have been reclassified as noncurrent assets held for sale. The relevant procedures are expected to be completed within twelve months. As of June 30, 2021, the consideration of the transactions received in advance were $415,000 thousand and $49,000 thousand, respectively (recognized in other current liabilities).

DPSZ decided to dispose part of its right-of-use assets, plants and related appendages pursuant to the resolution of its Board of Directors’ meeting held on June 29, 2021. The relevant procedures are expected to be completed within twelve months. However, as production activities were still ongoing at the aforementioned plants as of June 30, 2021, and those assets did not meet the requirements for the transfer of noncurrent assets held for sale, therefore, those assets were still classified as right-ofuse assets and property, plant and equipment, respectively.

Except for the aforementioned transactions, there was no significant change in the Company’ s property, plant and equipment for the six months ended June 30, 2021 and 2020. Refer to Note 6(8) of the consolidated financial statements for the year ended December 31, 2020 for the related disclosures.

The following table summarized the Company’ s capitalized borrowing costs and the interest rate range applied for the capitalization:

Three Months Ended June 30, 2021 2020 $ 6,836 10,649	Six Months Ended June 30,	Six Months Ended June 30,
2021 $ 6,836	2021 11,652 0.80%~ 1.63%	2020
		26,343
		0.88%~ 1.77%

Certain property, plant and equipment were pledged as collateral, see Note 8.

(11) Lease Arrangements

a. Lessee

(i) Right-of-use assets

June 30, 2021 Carrying amount of right-of-use assets Land $ 10,599,192 Buildings 307,899 Other equipment 18,467 $ 10,925,558	December 31, 2020 10,891,245 364,442 21,666 11,277,353	June 30, 2020
		11,144,360 477,138 26,780
		11,648,278

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Three Months Ended June 30, Six Months Ended June 30, *2021() 2020 2021 2020 Additions to right-of-use assets $ (418) 76,650 45,458 106,588 Depreciation charge for right-of-use assets Land $ 135,800 136,386 272,297 276,266 Buildings 35,360 44,004 80,083 97,097 Other equipment 1,298 17,902 2,748 35,523 $ 172,458 198,292 355,128 408,886** () Including the effect of exchange rate conversion. Lease liabilities June 30, 2021 Future minimum lease payments Interests Present value of minimum lease payments Less than one year $ 701,394 177,706 523,688 Between one and five years 2,684,896 611,188 2,073,708 More than five years 8,513,627 1,150,864 7,362,763 $ 11,899,917 1,939,758 9,960,159 Lease liabilities`－`current $ 523,689 Lease liabilities`－`noncurrent $ 9,436,470 December 31, 2020 Future minimum lease payments Interests Present value of minimum lease payments Less than one year $ 735,828 182,708 553,120 Between one and five years 2,738,621 633,115 2,105,506 More than five years 8,859,869 1,221,223 7,638,646 $ 12,334,318 2,037,046 10,297,272 Lease liabilities`－`current $ 553,120 Lease liabilities`－`noncurrent $ 9,744,152*	Three Months Ended June 30, Six Months Ended June 30, *2021() 2020 2021 2020 Additions to right-of-use assets $ (418) 76,650 45,458 106,588 Depreciation charge for right-of-use assets Land $ 135,800 136,386 272,297 276,266 Buildings 35,360 44,004 80,083 97,097 Other equipment 1,298 17,902 2,748 35,523 $ 172,458 198,292 355,128 408,886** () Including the effect of exchange rate conversion. Lease liabilities June 30, 2021 Future minimum lease payments Interests Present value of minimum lease payments Less than one year $ 701,394 177,706 523,688 Between one and five years 2,684,896 611,188 2,073,708 More than five years 8,513,627 1,150,864 7,362,763 $ 11,899,917 1,939,758 9,960,159 Lease liabilities`－`current $ 523,689 Lease liabilities`－`noncurrent $ 9,436,470 December 31, 2020 Future minimum lease payments Interests Present value of minimum lease payments Less than one year $ 735,828 182,708 553,120 Between one and five years 2,738,621 633,115 2,105,506 More than five years 8,859,869 1,221,223 7,638,646 $ 12,334,318 2,037,046 10,297,272 Lease liabilities`－`current $ 553,120 Lease liabilities`－`noncurrent $ 9,744,152*	Three Months Ended June 30, Six Months Ended June 30, *2021() 2020 2021 2020 Additions to right-of-use assets $ (418) 76,650 45,458 106,588 Depreciation charge for right-of-use assets Land $ 135,800 136,386 272,297 276,266 Buildings 35,360 44,004 80,083 97,097 Other equipment 1,298 17,902 2,748 35,523 $ 172,458 198,292 355,128 408,886** () Including the effect of exchange rate conversion. Lease liabilities June 30, 2021 Future minimum lease payments Interests Present value of minimum lease payments Less than one year $ 701,394 177,706 523,688 Between one and five years 2,684,896 611,188 2,073,708 More than five years 8,513,627 1,150,864 7,362,763 $ 11,899,917 1,939,758 9,960,159 Lease liabilities`－`current $ 523,689 Lease liabilities`－`noncurrent $ 9,436,470 December 31, 2020 Future minimum lease payments Interests Present value of minimum lease payments Less than one year $ 735,828 182,708 553,120 Between one and five years 2,738,621 633,115 2,105,506 More than five years 8,859,869 1,221,223 7,638,646 $ 12,334,318 2,037,046 10,297,272 Lease liabilities`－`current $ 553,120 Lease liabilities`－`noncurrent $ 9,744,152*
Future minimum lease payments Interests Present value of minimum lease payments $ 701,394 177,706 523,688 2,684,896 611,188 2,073,708 8,513,627 1,150,864 7,362,763 $ 11,899,917 1,939,758 9,960,159 $ 523,689 $ 9,436,470 December 31, 2020		Present value of minimum lease payments
		523,688 2,073,708 7,362,763
		9,960,159

	Interests Present value of minimum lease payments 182,708 553,120 633,115 2,105,506 1,221,223 7,638,646 2,037,046 10,297,272 $ 553,120 $ 9,744,152	Present value of minimum lease payments
		553,120 2,105,506 7,638,646
		10,297,272

(ii) Lease liabilities

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

	June 30, 2020
Future minimum lease payments $ 765,390 2,809,106 9,157,404 $ 12,731,900	Interests Present value of minimum lease payments 188,419 576,971 651,214 2,157,892 1,291,423 7,865,981 2,131,056 10,600,844 $ 576,971 $ 10,023,873	Present value of minimum lease payments
		576,971 2,157,892 7,865,981
		10,600,844

(iii) Significant lease agreements

AUO has entered into various land lease agreements with Hsinchu Science Park Bureau, Central Science Park Administration Bureau and Southern Taiwan Science Park Bureau, respectively, for the construction of plant for operations.

(iv) Sublease of right-of-use assets

The Company subleased part of its right-of-use assets under operating leases. For the three months and six months ended June 30, 2021 and 2020, income from sublease were $1,138 thousand, $2,868 thousand, $2,382 thousand and $3,689 thousand, respectively. Right-of-use assets that meet the definition of investment properties are reclassified to investment properties. Refer to Note 6(10) of the consolidated financial statements for the year ended December 31, 2020 for further information on investment properties.

(v) Additional lease information

The Company applies the recognition exemption to account for short-term leases and leases of low-value assets, primarily for some leases of office buildings and other sporadic leasing. The amounts recognized in profit or loss during the lease term were as follows:

Three Months Ended June 30, 2021 2020 $ 8,738 1,694 $ 105 300	Six Months Ended June 30,	Six Months Ended June 30,
2021 $ 8,738 $ 105	2021 25,825 236	2020
		4,549
		430

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Three Months Ended June 30, 2021 2020 $ 966 138 $ (5) -	Six Months Ended June 30,	Six Months Ended June 30,
2021 $ 966 $ (5)	2021 2,213 743	2020
		281
		-

Total cash outflow for the Company’ s leases in which it acts as a lessee for the six months ended June 30, 2021 and 2020 were $406,189 thousand and $430,710 thousand, respectively.

b. Lessor

There was no significant addition in the Company’s operating lease contracts for the six months ended June 30, 2021 and 2020. Refer to Note 6(9) of the consolidated financial statements for the year ended December 31, 2020 for the relevant information.

(12) Investment Property

June 30, 2021 Land $ 704,958 Buildings 733,666 Right-of-use assets 24,160 $ 1,462,784	December 31, 2020 729,163 767,769 25,459 1,522,391	June 30, 2020
		727,733 755,889 25,228
		1,508,850

There was no significant change in the Company’s investment property for the six months ended June 30, 2021 and 2020. For other relevant information, refer to Note 6(10) of the consolidated financial statements for the year ended December 31, 2020.

The fair value of the Company’ s investment property was not materially different from those disclosed in Note 6(10) of the consolidated financial statements for the year ended December 31, 2020.

As at June 30, 2021, December 31, 2020 and June 30, 2020, there was no investment property that was pledged as collateral.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(13) Intangible Assets

June 30, 2021 Goodwill $ 12,016,069 Patent and technology fee 576,583 Others 215,129 $ 12,807,781	December 31, 2020 12,016,993 671,906 112,459 12,801,358	June 30, 2020
		12,022,390 768,766 124,765
		12,915,921

The Company acquired goodwill and other intangible assets from the acquisition of business in February 2020. See Note 6(9) for further details. Except for the aforementioned transaction, there was no significant change in the Company’s intangible assets for the six months ended June 30, 2021 and 2020. Information on amortization for the periods presented is disclosed in Note 6(23). For other relevant information, refer to Note 6(11) of the consolidated financial statements for the year ended December 31, 2020.

(14) Other Current Assets and Other Noncurrent Assets

June 30, 2021 Refundable and overpaid business tax $ 1,742,490 Refundable deposits 323,570 Prepayments for equipment 403,751 Prepayments for purchases 1,217,380 Others 3,903,055 7,590,246 Less: current (4,007,623) Noncurrent $ 3,582,623	December 31, 2020 1,051,994 432,202 458,707 145,468 2,866,733 4,955,104 (3,175,948) 1,779,156	June 30, 2020 1,072,180 568,225 435,290 90,319 3,541,717 5,707,731 (3,615,559) 2,092,172

(15) Short-term Borrowings

June 30, 2021 Unsecured borrowings $ 52,000 Unused credit facilities $ 27,104,263 Interest rate range 0.95%~ 1.35%	December 31, 2020 200,000 29,045,922 0.97%~ 1.40%	June 30, 2020
		939,715
		33,645,459
		1.14%~ 2.07%

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

In January 2021, the Company entered into an agreement with financial institutions for offsetting financial assets and financial liabilities. The agreement meets the offsetting criteria of IAS 32, whereby the financial assets and financial liabilities were offset and reported on a net basis in the balance sheet. Details of the offset as of June 30, 2021 were as follows:

June 30, 2021

	June 30, 2021
Description Bank deposits / bank loans	Gross amount of recognized financial assets and liabilities $ 3,448,842	Gross amount of recognized financial assets and liabilities offset in the balance sheet 3,448,842	Net amount of financial assets and liabilities presented in the balance sheet
			-

(16) Long-term Borrowings

Bank or agent bank Syndicated loans: Bank of Taiwan and others Bank of Taiwan and others Bank of Taiwan and others Bank of China and others Unsecured loans Secured loans Less: transaction costs Less: current portion Unused credit facilities Interest rate range	Durations June 30, 2021 From Feb. 2019 to Feb. 2024 $ 42,000,000 From Mar. 2019 to Apr. 2023 19,550,000 From May 2017 to Apr. 2021 - From Nov. 2015 to Nov. 2023 13,055,890 From Apr. 2017 to Oct. 2025 9,682,538 From Apr. 2017 to Apr. 2032 20,034,132 104,322,560 (271,816) 104,050,744 (19,835,308) $ 84,215,436 $ 53,467,151 0.75%~ 5.15%	December 31, 2020 42,000,000 23,000,000 6,000,000 15,988,750 11,004,462 18,915,341 116,908,553 (313,584) 116,594,969 (16,771,441) 99,823,528 54,131,575 0.75%~ 5.15%	June 30, 2020 42,000,000 23,000,000 8,000,000 18,392,496 11,432,386 16,725,047
			119,549,929 (347,977)
			119,201,952 (14,152,119)
			105,049,833
			52,720,575
			0.75%~ 5.15%

These credit facilities contain covenants that require the Company to maintain certain financial ratios, calculating based on the Company’ s annual audited consolidated financial statements prepared in accordance with IFRSs endorsed and issued into effect by the FSC, such as current ratio, leverage ratio, interest coverage ratio, tangible net worth and others as specified in the loan agreements. As of June 30, 2021, December 31, 2020, and June 30, 2020, the Company complied with all financial covenants required under each of the loan agreements.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Refer to Note 8 for assets pledged as collateral to secure the aforementioned long-term borrowings. For other relevant information, refer to Note 6(14) of the consolidated financial statements for the year ended December 31, 2020.

(17) Provisions

Balance at January 1, 2021 Additions (Reversals) Usage Effect of change in consolidated entities Effect of change in exchange rate Balance at June 30, 2021 Less: current Noncurrent Balance at January 1, 2020 Additions (Reversals) Usage Effect of change in exchange rate Balance at June 30, 2020 Less: current Noncurrent Current Noncurrent Balance at December 31, 2020	Warranties(i) $ 1,375,327 318,754 (341,400) - (637) 1,352,044 (600,764) $ 751,280 $ 1,292,246 152,927 (169,846) (84) 1,275,243 (514,336) $ 760,907 $ 568,411 806,916 $ 1,375,327	Litigation, claims and others 410,429 - (737) 8,555 (8,937) 409,310 (171,801) 237,509 469,312 - (32,092) (6,424) 430,796 (187,137) 243,659 176,243 234,186 410,429	Total 1,785,756 318,754 (342,137) 8,555 (9,574) 1,761,354 (772,565) 988,789 1,761,558 152,927 (201,938) (6,508) 1,706,039 (701,473) 1,004,566 744,654 1,041,102 1,785,756

(i) The provisions for warranties were estimated based on historical experience of warranty claims rate associated with similar products and services. The Company expects most warranty claims will be made within two years from the date of the sale of the product.

(18) Employee Benefits
a. Defined benefit plans

Subsequent to December 31, 2020, there was no significant market volatility, significant curtailment, reimbursement and settlement or other significant one-time events. Therefore, the pension cost in the consolidated interim financial statements was measured and disclosed by the Company according to the pension cost valued by actuary as of December 31, 2020 and 2019.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

For the three months and six months ended June 30, 2021 and 2020, the Company set aside $1,647 thousand, $2,179 thousand, $3,323 thousand and $4,354 thousand, respectively, of the pension costs under the defined benefit plans.

b. Defined contribution plans

AUO and its subsidiaries in the ROC have set up defined contribution plans in accordance with the ROC Labor Pension Act. For the three months and six months ended June 30, 2021 and 2020, these companies set aside $238,526 thousand, $234,370 thousand, $473,290 thousand and $468,207 thousand, respectively, of the pension costs under the pension plan to the ROC Bureau of the Labour Insurance. Except for the aforementioned companies, other foreign subsidiaries recognized pension expenses of $199,675 thousand, $129,284 thousand, $397,675 thousand and $270,536 thousand for the three months and six months ended June 30, 2021 and 2020, respectively, for the defined contribution plans based on their respective local government regulations.

(19) Capital and Other Components of Equity

a. Common stock

AUO’ s authorized common stock, with par value of $10 per share, all amounted to $100,000,000 thousand as at June 30, 2021, December 31, 2020 and June 30, 2020.

AUO’s issued common stock, with par value of $10 per share, all amounted to $96,242,451 thousand as at June 30, 2021, December 31, 2020 and June 30, 2020.

As of June 30, 2021, AUO has issued 25,309 thousand ADSs, which were trading on the OTC market and represented 253,089 thousand shares of its common stock.

b. Capital surplus

The components of capital surplus were as follows:

The components of capital surplus were as follows:
June 30, 2021 From common stock $ 52,756,091 From convertible bonds 6,049,862 From others 1,582,038 $ 60,387,991	December 31, 2020 52,756,091 6,049,862 1,781,731 60,587,684	June 30, 2020
		52,756,091 6,049,862 1,762,264
		60,568,217

According to the ROC Company Act, capital surplus, including premium from stock issuing and donations received, may be used to offset a deficit. When a company has no deficit, such capital surplus may be distributed by issuing common stock as stock dividends or by cash according to the proportion of shareholdings. Pursuant to the ROC Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the total sum of capital surplus capitalized per annum shall not exceed 10 percent of the paid-in capital.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

c. Retained earnings and dividend policy

The amendments to AUO’ s Articles of Incorporation had been approved by AUO’ s shareholders in its meeting held on June 14, 2019. Pursuant to the amendments, the distribution of earnings by way of cash dividends should be approved by AUO’s Board of Directors and reported to AUO’s shareholders in its meeting.

In accordance with AUO’ s Articles of Incorporation, after payment of income taxes and offsetting accumulated deficits, the legal reserve shall be set aside until the accumulated legal reserve equals AUO’ s paid-in capital. In addition, a special reserve in accordance with applicable laws and regulations shall also be set aside or reversed. The remaining current-year earnings together with accumulated undistributed earnings from preceding years can be distributed according to relevant laws and AUO’s Articles of Incorporation.

Legal reserve may be used to offset a deficit. When the Company incurs no loss, it may distribute its legal reserve by issuing new shares or by cash in accordance with the proportion of shareholdings for the portion in excess of 25% of the paid-in capital.

AUO’s dividend policy is to pay dividends from surplus considering factors such as AUO’s current and future investment environment, cash requirements, domestic and overseas competitive conditions and capital budget requirements, while taking into account shareholders’ interest, maintenance of balanced dividend and AUO’s long-term financial plan. If the current-year retained earnings available for distribution reach 2% of the paid-in capital of AUO, dividend to be distributed shall be no less than 20% of the current-year retained earnings available for distribution. If the current-year retained earnings available for distribution do not reach 2% of the paid-in capital of AUO, AUO may decide not to distribute dividend. The cash portion of the dividend, which may be in the form of cash and stock, shall not be less than 10% of the total dividend distributed during the year. The dividend distribution ratio aforementioned could be adjusted after taking into consideration factors such as finance, business and operations, etc.

Pursuant to relevant laws or regulations or as requested by the local authority, total net debit balance of the other components of equity shall be set aside from current earnings as special reserve, and not for distribution. Subsequent decrease pertaining to items that are accounted for as a reduction to the other components of equity shall be reclassified from special reserve to undistributed earnings.

AUO’ s annual shareholders’ meeting held on June 17, 2020 resolved to set aside a special reserve of $1,157,614 thousand and not to distribute dividends for 2019.

The aforementioned appropriation of earnings for 2019 was consistent with the resolutions of the Board of Directors’ meeting held on March 20, 2020.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The appropriations of 2020 earnings have been approved by AUO’s Board of Directors in its meeting. The appropriations and cash dividends per share were as follows:

Resolution date of Board of Directors Legal reserve Special reserve Cash dividends to shareholders Cash dividends per share (NT$)	March 16, 2021
	$ 735,456 $ 1,264,919 $ 2,850,967 $ 0.30

Cash dividends to shareholders in the appropriations of 2020 earnings have been approved by AUO’s Board of Directors in its meeting held on March 16, 2021. Other appropriation items, based on the voting result by way of electronic transmission, have reached the legal resolution threshold as of June 30, 2021, and are to be presented for approval in AUO’s shareholders’ meeting to be held on August 19, 2021.

Information on the approval of Board of Directors and shareholders for AUO’s appropriations of earnings are available at the Market Observation Post System website.

d. Treasury shares

AUO repurchased 125,000 thousand shares as treasury shares transferred to employees in accordance with Securities and Exchange Act requirements. The related information on treasury share transactions was as follows (shares in thousands):

Six Months Ended June 30, 2021	Six Months Ended June 30, 2021	Six Months Ended June 30, 2021	Six Months Ended June 30, 2021
Reason for reacquisition Number of shares, Beginning of Period Additions Transfer Number of shares, End of Period Transferring to employees 125,000 - 3,978 121,022 Six Months Ended June 30, 2020
Reason for reacquisition Transferring to employees	Number of shares, Beginning of Period 125,000	Additions -	Transfer Number of shares, End of Period - 125,000

In accordance with the Securities and Exchange Act, treasury shares held by AUO shall not be pledged, and do not hold any shareholder rights before their transfer.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

e. Other components of equity

Balance at January 1, 2021 Foreign operations – foreign currency translation differences Net change in fair value of financial assets at FVTOCI Equity-accounted investees – share of other comprehensive income Cumulative unrealized loss of equity instruments transferred to retained earnings due to disposal Related tax Balance at June 30, 2021 Balance at January 1, 2020 Foreign operations – foreign currency translation differences Net change in fair value of financial assets at FVTOCI Equity-accounted investees – share of other comprehensive income Cumulative unrealized loss of equity instruments transferred to retained earnings due to disposal Related tax Balance at June 30, 2020	Cumulative translation differences $ (3,206,520) (1,259,170) - 37,939 - 214,536 $ (4,213,215) $ (3,129,982) (1,455,896) - (30,483) - 287,118 $ (4,329,243)	Unrealized gains (losses) on financial assets at FVTOCI (63,783) - (23,520) 54,010 1,843 - (31,450) 1,124,598 - (1,260,621) 678 14 - (135,331)	Total (3,270,303) (1,259,170) (23,520) 91,949 1,843 214,536 (4,244,665) (2,005,384) (1,455,896) (1,260,621) (29,805) 14 287,118 (4,464,574)

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

f. Non-controlling interests, net of tax

Balance at beginning of the period Equity attributable to non-controlling interests: Profit (loss) for the period Foreign currency translation differences, net of tax Acquisition of subsidiaries Proceeds from subsidiaries capital increase and others Balance at end of the period	Six Months Ended June 30, 2021 2020 $ 10,985,674 11,304,909 338,932 (1,028,046) (168,424) (256,638) 887,129 - 33,796 (1) $ 12,077,107 10,020,224
	2021 $ 10,985,674 338,932 (168,424) 887,129 33,796 $ 12,077,107

(20) Share-based Payments
a. Treasury shares plan for employees

AUO granted the treasury shares to employees of AUO and its subsidiaries who meet specific conditions in accordance with the relevant plan. The key terms and conditions related to the grants were disclosed as follows:

Grant date Total shares granted Contract term Grant object Vesting conditions	Treasury shares transferring to employees
	February 18, 2021 3,978 thousand shares - Employees Vest immediately

The fair value of the share based payments granted by AUO was measured at the date of grant using the Black Scholes option pricing model. The related compensation cost recognized for the abovementioned plan was $39,133 thousand for the six months ended June 30, 2021.

b. Restricted stock plan for employees

As of June 30, 2021, information about the share-based payment rewards plan that ADHLD, a subsidiary of AUO, granted to its subsidiary employees was as follows:

Plan Employee restricted stock plan	Grant date April 1, 2021	Granted units Vesting conditions 850,000 Note

Note: Employees are granted restricted stocks without consideration, and are eligible to vest 100% of 250,000 units when they provide two years of service subsequent to the grant date. Further employees who provide two years and five years of service, respectively, subsequent to the grant date as well as fulfill specific performance conditions are eligible to vest 40% and 60% of 600,000 units, respectively.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

ADCM’s special shares without voting right which are held by AUO are the subject for the execution of the aforementioned plan. According to the relevant plan, one special share without voting right of ADCM represents one common share right of ADHLD.

The weighted average fair value per share estimated using the income approach for the abovementioned payment plan was USD1.105. The weighted average cost of capital which is the principal parameter was between 18.1% and 20.1%. For the three months ended Jun 30, 2021, the compensation cost recognized for the abovementioned plan amounted to $796 thousand.

(21) Revenue from Contracts with Customers
a. Disaggregation of revenue

Three Months Ended June 30, 2021 Display segment Energy segment Total segments $ 31,057,424 191,164 31,248,588 30,089,018 1,649,171 31,738,189 16,272,740 - 16,272,740 6,118,946 61,287 6,180,233 9,495,526 720,224 10,215,750 $ 93,033,654 2,621,846 95,655,500 $ 25,357,540 - 25,357,540 16,327,750 - 16,327,750 26,940,816 - 26,940,816 7,297,640 - 7,297,640 11,504,097 - 11,504,097 5,605,811 2,621,846 8,227,657 $ 93,033,654 2,621,846 95,655,500 $ 9,988,696 - 9,988,696 83,044,958 2,621,846 85,666,804 $ 93,033,654 2,621,846 95,655,500	Three Months Ended June 30, 2021 Display segment Energy segment Total segments $ 31,057,424 191,164 31,248,588 30,089,018 1,649,171 31,738,189 16,272,740 - 16,272,740 6,118,946 61,287 6,180,233 9,495,526 720,224 10,215,750 $ 93,033,654 2,621,846 95,655,500 $ 25,357,540 - 25,357,540 16,327,750 - 16,327,750 26,940,816 - 26,940,816 7,297,640 - 7,297,640 11,504,097 - 11,504,097 5,605,811 2,621,846 8,227,657 $ 93,033,654 2,621,846 95,655,500 $ 9,988,696 - 9,988,696 83,044,958 2,621,846 85,666,804 $ 93,033,654 2,621,846 95,655,500	Three Months Ended June 30,	Three Months Ended June 30,	Three Months Ended June 30,
	2021		2020
Display segment $ 31,057,424 30,089,018 16,272,740 6,118,946 9,495,526 $ 93,033,654 $ 25,357,540 16,327,750 26,940,816 7,297,640 11,504,097 5,605,811 $ 93,033,654 $ 9,988,696 83,044,958 $ 93,033,654	Energy segment 191,164 1,649,171 - 61,287 720,224 2,621,846 - - - - - 2,621,846 2,621,846 - 2,621,846 2,621,846	Display segment 19,918,109 19,997,920 11,926,783 4,225,230 5,514,660 61,582,702 15,694,978 9,896,433 19,867,274 3,995,518 9,044,302 3,084,197 61,582,702 8,090,603 53,492,099 61,582,702	Energy segment 38,812 1,023,709 - 189,163 665,795 1,917,479 - - - - - 1,917,479 1,917,479 - 1,917,479 1,917,479	Total segments
				19,956,921 21,021,629 11,926,783 4,414,393 6,180,455
				63,500,181
				15,694,978 9,896,433 19,867,274 3,995,518 9,044,302 5,001,676
				63,500,181
				8,090,603 55,409,578
				63,500,181

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Six Months Ended June 30, 2021 Display segment Energy segment Total segments $ 59,147,262 307,907 59,455,169 55,194,447 3,297,832 58,492,279 29,369,901 1,845 29,371,746 11,205,964 134,782 11,340,746 18,520,145 1,416,034 19,936,179 $ 173,437,719 5,158,400 178,596,119 $ 47,934,087 - 47,934,087 30,698,485 - 30,698,485 49,690,004 - 49,690,004 13,958,653 - 13,958,653 20,897,179 - 20,897,179 10,259,311 5,158,400 15,417,711 $ 173,437,719 5,158,400 178,596,119 $ 18,027,968 - 18,027,968 155,409,751 5,158,400 160,568,151 $ 173,437,719 5,158,400 178,596,119	Six Months Ended June 30, 2021 Display segment Energy segment Total segments $ 59,147,262 307,907 59,455,169 55,194,447 3,297,832 58,492,279 29,369,901 1,845 29,371,746 11,205,964 134,782 11,340,746 18,520,145 1,416,034 19,936,179 $ 173,437,719 5,158,400 178,596,119 $ 47,934,087 - 47,934,087 30,698,485 - 30,698,485 49,690,004 - 49,690,004 13,958,653 - 13,958,653 20,897,179 - 20,897,179 10,259,311 5,158,400 15,417,711 $ 173,437,719 5,158,400 178,596,119 $ 18,027,968 - 18,027,968 155,409,751 5,158,400 160,568,151 $ 173,437,719 5,158,400 178,596,119	Six Months Ended June 30, 2020	Six Months Ended June 30, 2020	Six Months Ended June 30, 2020
	2021		2020
Display segment $ 59,147,262 55,194,447 29,369,901 11,205,964 18,520,145 $ 173,437,719 $ 47,934,087 30,698,485 49,690,004 13,958,653 20,897,179 10,259,311 $ 173,437,719 $ 18,027,968 155,409,751 $ 173,437,719	Energy segment 307,907 3,297,832 1,845 134,782 1,416,034 5,158,400 - - - - - 5,158,400 5,158,400 - 5,158,400 5,158,400	Display segment 36,982,597 37,740,282 19,059,512 8,259,675 10,901,462 112,943,528 30,207,239 16,924,070 33,415,974 9,829,060 17,117,831 5,449,354 112,943,528 15,992,263 96,951,265 112,943,528	Energy segment 58,883 2,365,322 - 302,833 1,519,798 4,246,836 - - - - - 4,246,836 4,246,836 - 4,246,836 4,246,836	Total segments
				37,041,480 40,105,604 19,059,512 8,562,508 12,421,260
				117,190,364
				30,207,239 16,924,070 33,415,974 9,829,060 17,117,831 9,696,190
				117,190,364
				15,992,263 101,198,101
				117,190,364

(i) Displays for public information that previously included in products for televisions were reclassified to products for PID and general display.

(ii) Including displays for public information and general utilization.

(iii) Including sales of solar-related products, raw materials and components and from products for other applications and service charges.

b. Contract balances

June 30, 2021 Contract assets`－`current (recorded in other current financial assets) $ 653,160	December 31, 2020 145,558	June 30, 2020
		102,755

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

June 30, 2021 Contract liabilities`－`current (recorded in other current liabilities) $ 1,095,361 Contract liabilities`－`noncurrent 9,989,990 $ 11,085,351		December 31, 2020 455,551 - 455,551	June 30, 2020
			513,936 -
			513,936

The amounts of revenue recognized for the three months and six months ended June 30, 2021 and 2020 that previously included in the contract liability balance at the beginning of the period were $27,107 thousand, $12,820 thousand, $253,571 thousand and $458,900 thousand, respectively. Additionally, in the first quarter of 2021, AUO entered into long-term sales agreements with customers and received payments in advance. Under the agreements, the customers should fulfill the requirement of minimum order quantity and AUO should fulfill the obligation of relevant delivery quantity as agreed. AUO accounted for such obligation as contract liabilities.

(22) Remuneration to Employees and Directors

According to AUO’s Articles of Incorporation, AUO should distribute remuneration to employees and directors no less than 5% and no more than 1% of annual profits before income tax, respectively, after offsetting accumulated deficits, if any. Only employees, including employees of affiliate companies that meet certain conditions are entitled to the abovementioned remuneration which to be distributed in stock or cash. The said conditions and distribution method are decided by Board of Directors or the personnel authorized by Board of Directors.

AUO accrued remuneration to employees based on the profit before income tax excluding the remuneration to employees and directors for the period, multiplied by the percentage resolved by Board of Directors. For the three months and six months ended June 30, 2021, AUO estimated the remuneration to employees amounting to $2,015,080 thousand and $3,253,826 thousand, respectively. Remuneration to directors was estimated based on the amount expected to pay and recognized together with the remuneration to employees as cost of sales or operating expenses. AUO did not accrue remuneration to employees and directors due to the loss position for the three months and six months ended June 30, 2020. If remuneration to employees is resolved to be distributed in stock, the number of shares is determined by dividing the amount of remuneration by the closing price of the shares (ignoring ex-dividend effect) on the day preceding the Board of Directors’ meeting. If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the differences are accounted for as a change in accounting estimate and adjusted prospectively to next year’s profit or loss.

Remuneration to employees and directors for 2020 in the amounts of $253,493 thousand and $8,275 thousand, respectively, in cash for payment had been approved in the meeting of Board of Directors held on March 16, 2021. The aforementioned approved amounts are the same as the amounts charged against earnings of 2020.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

The information about AUO’s remuneration to employees and directors is available at the Market Observation Post System website.

(23) Additional Information of Expenses by Nature

	Three Months Ended June 30,	Three Months Ended June 30,	Three Months Ended June 30,	Three Months Ended June 30,
	2021			2020
Recognized in cost of sales $ 8,058,454 356,390 336,885 873,830 7,281,152 48,080				Recognized in operating expenses Total 1,909,073 7,517,633 120,263 456,797 88,674 365,833 136,055 937,687 1,205,147 8,797,923 2,485 76,302
	2021	Total 21,625,161 983,207 874,288 2,231,144 16,954,435 104,433		2020
Recognized in cost of sales $15,101,011 713,468 671,890 1,883,736 14,652,423 95,994	Recognized in operating expenses 6,524,150 269,739 202,398 347,408 2,302,012 8,439		Recognized in cost of sales 11,501,591 681,735 566,698 1,525,950 15,432,445 153,713	Recognized in operating expenses Total 3,807,796 15,309,387 241,457 923,192 176,399 743,097 258,935 1,784,885 2,344,133 17,776,578 2,485 156,198

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(24) Non-Operating Income and Expenses

a. Interest income

Interest income on bank deposits Interest income on government bonds with reverse repurchase agreements and others Other income Rental income, net Grants Others Other gains and losses Foreign exchange losses, net Gains (losses) on valuation of financial instruments at FVTPL, net Gains on disposals of property, plant and equipment, net Gains on disposals of investments and financial assets, net Others	Three Months Ended June 30, 2021 2020 $ 125,782 138,774 (585) 10,671 $ 125,197 149,445 Three Months Ended June 30, 2021 2020 $ 145,007 111,497 50,854 632,763 80,141 201,910 $ 276,002 946,170 Three Months Ended June 30, 2021 2020 $ (239,586) (53,771) 182,130 69,841 27,642 6,381 6 - (63,945) (7,033) $ (93,753) 15,418	Six Months Ended June 30, 2021 2020 230,749 291,810 30 11,038 230,779 302,848 Six Months Ended June 30, 2021 2020 274,776 226,223 106,480 713,831 197,518 307,708 578,774 1,247,762 Six Months Ended June 30, 2021 2020 (67,274) (180,160) (281,215) 265,814 27,142 34,857 886,589 162 (88,409) (18,084) 476,833 102,589
		2021 (67,274) (281,215) 27,142 886,589 (88,409) 476,833

b. Other income

c. Other gains and losses

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

d. Finance costs

Three Months Ended June 30, 2021 2020 $ 529,157 657,599 45,467 37,244 16,403 23,120 26,010 18,381 $ 617,037 736,344	Six Months Ended June 30,	Six Months Ended June 30,
2021 $ 529,157 45,467 16,403 26,010 $ 617,037	2021 1,117,003 92,505 32,110 44,589 1,286,207	2020
		1,357,654 87,433 43,685 41,250
		1,530,022

(25) Income Taxes

The Company cannot file a consolidated tax return under local regulations. Therefore, AUO and its subsidiaries calculate their income taxes liabilities individually on a stand-alone basis using the enacted tax rates in their respective tax jurisdictions.

Income tax expense is best estimated by multiplying pre-tax income (loss) of the interim period by a projected annual effective tax rate as forecasted by the management.

The components of income tax expense were as follows:

Three Months Ended June 30, 2021 2020 $ 930,472 207,641 35,341 (1,174) $ 965,813 206,467	Six Months Ended June 30,	Six Months Ended June 30,
2021 $ 930,472 35,341 $ 965,813	2021 1,714,741 40,355 1,755,096	2020
		327,981 2,357
		330,338

Income taxes benefit recognized directly in other comprehensive income were as follows:

Items that are or may be reclassified subsequently to profit or loss: Foreign operations – foreign currency translation differences	Three Months Ended June 30, 2021 2020 $ (142,508) (212,137)	Six Months Ended June 30, 2021 2020 (233,468) (320,453)
	2021 $ (142,508)	2021 (233,468)

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

As of June 30, 2021, the tax authorities have completed the examination of income tax returns of AUO through 2019.

(26) Earnings (loss) per Share

Basic earnings (loss) per share Profit (loss) attributable to AUO’s shareholders Weighted-average number of common shares outstanding during the period Basic earnings (loss) per share (NT$) Diluted earnings (loss) per share Profit (loss) attributable to AUO’s shareholders Weighted-average number of common shares outstanding during the period Effect of employee remuneration in stock Diluted earnings (loss) per share (NT$)	Three Months Ended June 30, 2021 2020 $ 19,530,948 (2,961,029) 9,503,223 9,499,245 $ 2.06 (0.31) $ 19,530,948 (2,961,029) 9,503,223 9,499,245 88,966 - 9,592,189 9,499,245 $ 2.04 (0.31)	Six Months Ended June 30, 2021 2020 31,365,039 (7,952,522) 9,501,619 9,499,245 3.30 (0.84) 31,365,039 (7,952,522) 9,501,619 9,499,245 149,289 - 9,650,908 9,499,245 3.25 (0.84)
	2021 $ 19,530,948 9,503,223 $ 2.06 $ 19,530,948 9,503,223 88,966 9,592,189 $ 2.04	2021 31,365,039 9,501,619 3.30 31,365,039 9,501,619 149,289 9,650,908 3.25

Since AUO incurred net loss for the three months and six months ended June 30, 2020, there were no potential ordinary shares with dilutive effect for the period.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(27) Cash Flow Information

The reconciliation of liabilities to cash flows arising from financing activities was as follows:

Balance at January 1, 2021 Cash flows Non-cash changes: Addition Effect of change in consolidated entities Changes in exchange rate and others Balance at June 30, 2021 Balance at January 1, 2020 Cash flows Non-cash changes: Addition Changes in exchange rate and others Balance at June 30, 2020	Long-term borrowings (including current installments) $ 116,594,969 (13,399,360) - 1,149,806 (294,671) $ 104,050,744 $ 111,968,392 7,768,304 - (534,744) $ 119,201,952	Short-term borrowings 200,000 (148,000) - - - 52,000 1,725,602 (751,528) - (34,359) 939,715	Guarantee deposits 864,868 (31,746) - - (40,191) 792,931 785,456 3,752 - (8,622) 780,586	Lease liabilities 10,297,272 (285,410) 44,213 617 (96,533) 9,960,159 11,091,077 (338,017) 106,588 (258,804) 10,600,844	Total liabilities from financing activities 127,957,109 (13,864,516) 44,213 1,150,423 (431,395)
					114,855,834
					125,570,527 6,682,511 106,588 (836,529)
					131,523,097

(28) Financial Instruments

a. Fair value and carrying amount

The carrying amounts of the Company’s current non-derivative financial instruments, including financial assets and financial liabilities at amortized cost, were considered to approximate their fair value due to their short-term nature. This methodology applies to cash and cash equivalents, receivables or payables (including related parties), other current financial assets, and short-term borrowings.

Disclosures of fair value are not required for the financial instruments abovementioned and lease liabilities. Other than those, the carrying amount and fair value of other financial instruments of the Company as of June 30, 2021, December 31, 2020, and June 30, 2020 were as follows:

Financial assets: Financial assets at FVTPL: Financial assets mandatorily measured at FVTPL Financial assets at FVTOCI	June 30, 2021 Carrying Amount Fair Value $ 75,127 75,127 651,471 651,471	December	31, 2020 Fair Value 668,058 622,824	June 30, 2020
	Carrying Amount $ 75,127 651,471	Carrying Amount 668,058 622,824		Carrying Amount Fair Value 976,939 976,939 6,283,804 6,283,804

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Financial assets at amortized cost: Domestic and foreign time deposits Refundable deposits Financial liabilities: Financial liabilities at FVTPL: Financial liabilities held for trading Financial liabilities at amortized cost: Long-term borrowings (including current installments) Guarantee deposits Long-term payables (including current installments)	June 30, 2021 December 31, 2020 June 30, 2020 Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value 10,262,008 10,262,008 - - - - 323,570 323,570 432,202 432,202 568,225 568,225 189,667 189,667 170,956 170,956 106,629 106,629 104,050,744 104,050,744 116,594,969 116,594,969 119,201,952 119,201,952 792,931 792,931 864,868 864,868 780,586 780,586 1,404,990 1,404,990 309,900 309,900 309,900 309,900	June 30, 2020

b. Valuation techniques and assumptions applied in fair value measurement

The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices. The fair values of other financial assets and financial liabilities without quoted market prices are estimated using valuation approach. The estimates and assumptions used are the same as those used by market participants in the pricing of financial instruments.

Fair value of foreign currency forward contract is measured based on the maturity date of each contract with quoted spot rate and quoted swap points from Reuters quote system.

Fair value of structured investment product is measured based on the discounted future cash flows arising from principal consideration and probable gains estimate to be received.

For domestic and foreign time deposits with fixed interest rates, their fair value approximate to their carrying amount.

Fair value of long-term payable is determined by discounting the expected cash flows at a market interest rate.

The refundable deposits and guarantee deposits are based on carrying amount as there is no fixed maturity.

The fair value of floating-rate long-term borrowings approximates to their carrying value.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

c. Fair value measurements recognized in the consolidated balance sheets

The Company determines fair value based on assumptions that market participants would use in pricing an asset or a liability in the principal market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

(i) Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets.
(ii) Level 2 inputs: Other than quoted prices included within Level 1, inputs are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
(iii) Level 3 inputs: Derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value measurement level of an asset or a liability within their fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

June 30, 2021 Financial assets at FVTPL: Financial assets mandatorily measured at FVTPL Financial assets at FVTOCI Financial assets at amortized cost: Domestic and foreign time deposits Financial liabilities at FVTPL: Financial liabilities held for trading Financial liabilities at amortized cost: Financial liabilities held for trading	Level 1 $ - 122,009 - - -	Level 2 75,127 - 10,262,008 189,667 1,404,990	Level 3 Total - 75,127 529,462 651,471 - 10,262,008 - 189,667 - 1,404,990

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

December 31, 2020 Financial assets at FVTPL: Financial assets mandatorily measured at FVTPL Financial assets at FVTOCI Financial liabilities at FVTPL: Financial liabilities held for trading Financial liabilities at amortized cost: Long-term payables (including current installments) June 30, 2020 Financial assets at FVTPL: Financial assets mandatorily measured at FVTPL Financial assets at FVTOCI Financial liabilities at FVTPL: Financial liabilities held for trading Financial liabilities at amortized cost: Long-term payables (including current installments)	Level 1 $ - 294,668 - - $ - 6,095,879 - -	Level 2 668,058 - 170,956 309,900 976,939 - 106,629 309,900	Level 3 Total - 668,058 328,156 622,824 - 170,956 - 309,900 - 976,939 187,925 6,283,804 - 106,629 - 309,900

There were no transfers between Level 1 and 2 for the three months and six months ended June 30, 2021 and 2020.

d. Reconciliation for fair value measurements categorized within Level 3

Financial assets at FVTOCI`－`equity instruments without active market Balance at beginning of the period Purchases Reclassification Effect of exchange rate change Balance at end of the period	Six Months Ended June 30,	Six Months Ended June 30,	Six Months Ended June 30,
	2021		2020
	$ 328,156 167,586 34,177 (457) $ 529,462

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

e. Description of valuation processes and quantitative disclosures for fair value measurements categorized within Level 3

The Company’s management reviews the policy and procedures of fair value measurements at least once at the end of the annual reporting period, or more frequently as deemed necessary. When a fair value measurement involves one or more significant inputs that are unobservable, the Company monitors the valuation process discreetly and examines whether the inputs are used the most relevant market data available.

Item Financial assets at FVTOCI–equity instruments without active market	Valuation technique Market approach	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement `•`Price-Book ratio (June 30, 2021 at 0.96~2.65, December 31, 2020 at 1.01~2.64 and June 30, 2020 at 0.71~1.59) `•`Price-Earnings ratio (June 30, 2021 at 10.75~22.23, December 31, 2020 at 12.95~24.99 and June 30, 2020 at 12.02~31.87) `•`Discount for lack of marketability (June 30, 2021 at 20%~32% and December 31, 2020 at 20%~30% and June 30, 2020 at 20%~36%) `•`The higher the price- book ratio is, the higher the fair value is. `•`The higher the price- earnings ratio is, the higher the fair value is. `•`The greater degree of lack of marketability is, the lower the fair value is.

(29) Financial Risk Management

Except as described below, both the goals and policies of the Company’s financial risk management and the Company’ s exposure to credit risk, liquidity risk and market risk were not materially different from those disclosed in Note 6(27) of the consolidated financial statements for the year ended December 31, 2020.

Refer to Note 6(5) for the information about credit risk exposure for notes and accounts receivable.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

a. Currency risk

The Company’s significant exposure to foreign currency risk was as follows:

Fi	nancial assets Monetary items USD JPY EUR Non-monetary item	J	une 30, 2021	De	cember 31, 202		June 30, 2020
		Foreign currency amounts $ 2,997,801 17,844,745 33,300 s 12,593 1,709,562 20,370,403 23	Exchange rate 27.8700 0.2509 33.0399 27.8700 27.8700 0.2509 33.0399	Foreign currency amounts 2,380,316 11,404,938 32,931 6,657 1,620,121 20,631,647 51	Exchange rate 28.5070 0.2763 35.0494 28.5070 28.5070 0.2763 35.0494	Foreign currency amounts 1,748,384 7,368,427 31,284 1,694 1,430,637 20,214,030 344	Exchange rate NTD 29.6600 51,857,069 0.2748 2,024,844 33.3111 1,042,104 29.6600 50,244 29.6600 42,432,693 0.2748 5,554,815 33.3111 11,459
Fi
	USD nancial liabilities Monetary items USD JPY EUR

b. Sensitivity analysis

The Company’ s exposure to foreign currency risk arises mainly from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade receivables, loans and borrowings and trade payables that are denominated in foreign currency. Depreciation or appreciation of the NTD by 1% against the USD, EUR and JPY at June 30, 2021 and 2020, while all other variables were remained constant, would have increased or decreased the net profit before tax for the six months ended June 30, 2021 and 2020 as follows:

1% of depreciation 1% of appreciation	Six Months Ended June 30, 2021 2020 $ 363,690 69,251 (363,690) (69,251)

c. Foreign exchange gain (loss) on monetary items

With varieties of functional currencies within the Company, the Company disclosed foreign exchange gain (loss) on monetary items in aggregate. The aggregate of realized and unrealized foreign exchange losses for the three months and six months ended June 30, 2021 and 2020 were $239,586 thousand, $53,771 thousand, $67,274 thousand and $180,160 thousand, respectively.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(30) Capital Management

The objectives, policies and procedures of the Company’s capital management have been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2020. Also, there was no significant change in the Company’s capital management information as disclosed for the year ended December 31, 2020. Refer to Note 6(28) of the consolidated financial statements for the year ended December 31, 2020 for the relevant information.

7. Related-party Transactions

All inter-company transactions and balances between AUO and its subsidiaries have been eliminated upon consolidation, and therefore, are not disclosed in this note. The transactions between the Company and other related parties are set out as follows:

(1) Name and relationship of related parties

The following is a summary of related parties that have had transactions with the Company during the periods presented in the consolidated financial statements.

Name of related party	Relationship with the Company
ENNOSTAR Inc. (“Ennostar”)	Associate
Lextar Electronics Corporation (“Lextar”)	Subsidiary of Ennostar
TRENDYLITE CORPORATION (“TRENDYLITE”)	Subsidiary of Ennostar
Lextar Electronics (Suzhou) Co., Ltd. (“LESZ”)	Subsidiary of Ennostar
Lextar Electronics (Xiamen) Co., Ltd. (“LEXM”)	Subsidiary of Ennostar
Lextar Electronics (Chuzhou) Corp. (“LEXCZ”)	Subsidiary of Ennostar
Wellybond Corporation (“WBC”)	Subsidiary of Ennostar
Epistar Corporation (“Epistar”)	Subsidiary of Ennostar
Yenrich Technology Corporation (“Yenrich”)	Subsidiary of Ennostar
Raydium Semiconductor Corporation (“Raydium”)	Associate
Raydium Semiconductor (Kunshan) Co., Ltd. (“RKS”)	Subsidiary of Raydium
Star River Energy Corp. (“SREC”)	Associate(i)
Sungen Power Corporation (“SGPC”)	Subsidiary of SREC(i)
Evergen Power Corporation (“EGPC”)	Subsidiary of SREC(i)
Star Shining Energy Corporation (“SSEC”)	Associate
Fargen Power Corporation (“FGPC”)	Subsidiary of SSEC
Sheng Li Energy Corporation (“SLEC”)	Subsidiary of SSEC
ChampionGen Power Corporation (“CGPC”)	Subsidiary of SSEC
TronGen Power Corporation (“TGPC”)	Subsidiary of SSEC

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of related party Relationship with the Company Ri Ji Power Corporation (“RJPC”) Subsidiary of SSEC Ri Jing Power Corporation (“RGPC”) Subsidiary of SSEC Mao Zheng Energy Corporation (“MZEC”) Subsidiary of SSEC Mao Xin Energy Corporation (“MXEC”) Subsidiary of SSEC Sheng Feng Power Corporation (“SFPC”) Subsidiary of SSEC Sheng He Power Corporation (“SHPC”) Subsidiary of SSEC Sheng Yao Power Corporation (“SYPC”) Subsidiary of SSEC WishMobile, Inc. (“WMI”) Associate Daxin Materials Corp. (“Daxin”) Associate Darwin Summit Corporation Ltd. (“DSC”) Associate Ubitech Inc. (“Ubitech”) Associate ADLINK Technology Inc. (“ADLINK”) Associate ADLINK Technology (China) Co., Ltd. (“ADLINKCN”) Subsidiary of ADLINK IRIS Optronics Co., Ltd. (“IOC”) Associate Evonik Forhouse Optical Polymers Corp. (“EFOP”) Joint venture ToYou Display (Suzhou) Co., Ltd. (“TYSZ”) AUSZ represented as a director of TYSZ[(iii)] Qisda Corporation (“Qisda”) Associate[(ii)] Qisda Vietnam Co., Ltd (“QVH”) Subsidiary of Qisda BenQ Corporation (“BenQ”) Subsidiary of Qisda BenQ Materials Corp. (“BMC”) Subsidiary of Qisda Qisda (Suzhou) Co., Ltd. (“QCSZ”) Subsidiary of Qisda Qisda Electronics (Suzhou) Co., Ltd. (“QCES”) Subsidiary of Qisda Qisda Optronics (Suzhou) Co., Ltd. (“QCOS”) Subsidiary of Qisda BenQ Europe B.V. (“BQE”) Subsidiary of Qisda BenQ Asia Pacific Corp. (“BQP”) Subsidiary of Qisda BenQ America Corporation (“BQA”) Subsidiary of Qisda Mainteq Europe B.V. (“MQE”) Subsidiary of Qisda BenQ Co., Ltd. (“BQC”) Subsidiary of Qisda BenQ Technology (Shanghai) Co., Ltd. (“BQls”) Subsidiary of Qisda Guru Systems (Suzhou) Co., Ltd. (“GSS”) Subsidiary of Qisda BenQ GURU Corp. (“GST”) Subsidiary of Qisda BenQ Material (Suzhou) Co., Ltd. (“BMS”) Subsidiary of Qisda

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of related party Relationship with the Company BenQ Materials Medical Supplies (Suzhou) Co., Ltd. Subsidiary of Qisda (“BMM”) Suzhou BenQ Hospital Co., Ltd. (“QCHS”) Subsidiary of Qisda DFI Inc. (“DFI”) Subsidiary of Qisda Data Image Corporation (“DIC”) Subsidiary of Qisda Data Image (Suzhou) Corporation (“DICSZ”) Subsidiary of Qisda Partner Tech Corp. (“PTT”) Subsidiary of Qisda Webest Solution Corp. (“WEBEST”) Subsidiary of Qisda AEWIN Technologies Co., Ltd. (“AEW”) Subsidiary of Qisda Sysage Technology Co., Ltd. (“Sysage”) Subsidiary of Qisda ACE Pillar Co., Ltd. (“ACE”) Subsidiary of Qisda Tianjin ACE Pillar Co., Ltd. (“ACETJ”) Subsidiary of Qisda Golden Spirit Co., Ltd. (“GSC”) Subsidiary of Qisda LILY MEDICAL CORPORATION (“LILY”) Subsidiary of Qisda BenQ Medical Technology Corp. (“TMC”) Subsidiary of Qisda HITRON TECHNOLOGIES INC. (“HHC”) Subsidiary of Qisda ADVANCEDTEK INTERNATIONAL CORP. Subsidiary of Qisda (“ADVANCEDTEK”) Daxon Biomedical (Suzhou) Co., Ltd. (“DTB”) Subsidiary of Qisda AUO Foundation Substantive related party BenQ Foundation Substantive related party[(iv)] Jector Digital System Inc. (“JDSI”) The party which co-invests with ADP in Jector

(i) SREC and its subsidiaries were included in the Company’ s consolidated financial statements from January 2021. Refer to Note 6(8) for the relevant information.
(ii) The Company has accounted for the investment in Qisda using the equity method since December 31, 2020. Qisda and its subsidiaries are changed as the Company’s associates from the same date while previously they are categorized as other related parties. See Note 6(7) for the relevant information.
(iii) The Company sold part of its ownership interests in TYSZ in January 2021. After the disposal, the Company assessed and considered that it did not have significant influence over TYSZ; therefore, TYSZ was changed from associate to other related party.
(iv) BenQ Foundation is no longer a related party of the Company starting from the second quarter of 2021.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(2) Compensation to key management personnel

Key management personnel’s compensation comprised:

Three Months Ended June 30, 2021 2020 $ 31,776 29,407 351 583 - - $ 32,127 29,990	Six Months Ended June 30,	Six Months Ended June 30,
2021 $ 31,776 351 - $ 32,127	2021 59,991 840 17,276 78,107	2020
		59,132 1,210 -
		60,342

Please refer to Note 6(20) for further information on share-based payments.

(3) Except for otherwise disclosed in other notes to the consolidated financial statements, the Company’s significant related party transactions and balances were as follows:

a. Sales

Sales	Sales	Sales	Sales
Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 $ 3,448,586 131,998 6,964,843 353,386 - 1,585 - 1,585 260 2,712,542 269 4,714,674 $ 3,448,846 2,846,125 6,965,112 5,069,645 Accounts receivable from related parties June 30, 2021 December 31, 2020 June 30, 2020 $ 2,441,741 2,076,045 107,850 - 111 - 77 - 1,801,317 $ 2,441,818 2,076,156 1,909,167		Six Months Ended June 30,
2021 $ 3,448,586 - 260 $ 3,448,846			2020
			353,386 1,585 4,714,674
			5,069,645
	December 31, 2020 2,076,045 111 - 2,076,156		June 30, 2020
			107,850 - 1,801,317
			1,909,167

The collection terms for sales to related parties were 25 to 55 days from the end of the month during which the invoice is issued. The pricing for sales to related parties were not materially different from those with third parties.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

b. Purchases

Purchases	Purchases	Purchases	Purchases
Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 $ 6,753,307 1,812,201 13,140,670 3,862,024 255,830 139,838 450,916 376,517 8,974 4,228,637 8,974 7,772,234 $ 7,018,111 6,180,676 13,600,560 12,010,775 Accounts payable to related parties June 30, 2021 December 31, 2020 June 30, 2020 $ 7,849,268 7,297,560 2,693,641 153,972 5,232 3,052 10,177 - 3,898,834 $ 8,013,417 7,302,792 6,595,527		Six Months Ended June 30,
2021 $ 6,753,307 255,830 8,974 $ 7,018,111			2020
			3,862,024 376,517 7,772,234
			12,010,775
	December 31, 2020 7,297,560 5,232 - 7,302,792		June 30, 2020
			2,693,641 3,052 3,898,834
			6,595,527

The payment terms for purchases from related parties were 30 to 120 days. The pricing and payment terms with related parties were not materially different from those with third parties.

c. Acquisition of property, plant and equipment

Acquisition prices	Acquisition prices	Acquisition prices
Three Months Ended June 30, 2021 2020 $ 5,319 - - 4,033 $ 5,319 4,033	Six Months Ended June 30,
2021 $ 5,319 - $ 5,319	2021 6,686 - 6,686	2020
		4,400 10,003
		14,403

d. Disposal of property, plant and equipment and others

Proceeds from disposal	Proceeds from disposal	Proceeds from disposal
Three Months Ended June 30, 2021 2020(i) $ - (398)	Six Months Ended June 30,
2021 $ -	2021 -	2020
		34,851

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Gains on disposal Three Months Ended June 30, Six Months Ended June 30, 2021 2020(i) 2021 2020 Others: QCES $ - (334) - 29,305 (i) Including the effect of exchange rate conversion. Other related party transactions Transaction type Type of related party June 30, 2021 December 31, 2020 June 30, 2020 Other receivables due from related parties, including dividends Associates $ 709,766 7,053 288,058 Joint ventures - 4,502 2,745 Others - 10,374 41,445 $ 709,766 21,929 332,248 Other payables due to related parties, Associates $ 48,057 24,254 4,016 including payables for equipment Others 37 66 48,256 $ 48,094 24,320 52,272 Type of Three Months Ended June 30, Six Months Ended June 30, Transaction type related party 2021(i) 2020 2021 2020 Rental income Associates: BMC $ 23,693 - 47,371 - Others 8,130 10,763 17,326 22,797 Joint ventures 1,652 1,653 3,305 3,306 Others BMC - 23,702 - 47,417 Others (18) 1,345 3,731 3,095 $ 33,457 37,463 71,733 76,615	Gains on disposal Three Months Ended June 30, Six Months Ended June 30, 2021 2020(i) 2021 2020 Others: QCES $ - (334) - 29,305 (i) Including the effect of exchange rate conversion. Other related party transactions Transaction type Type of related party June 30, 2021 December 31, 2020 June 30, 2020 Other receivables due from related parties, including dividends Associates $ 709,766 7,053 288,058 Joint ventures - 4,502 2,745 Others - 10,374 41,445 $ 709,766 21,929 332,248 Other payables due to related parties, Associates $ 48,057 24,254 4,016 including payables for equipment Others 37 66 48,256 $ 48,094 24,320 52,272 Type of Three Months Ended June 30, Six Months Ended June 30, Transaction type related party 2021(i) 2020 2021 2020 Rental income Associates: BMC $ 23,693 - 47,371 - Others 8,130 10,763 17,326 22,797 Joint ventures 1,652 1,653 3,305 3,306 Others BMC - 23,702 - 47,417 Others (18) 1,345 3,731 3,095 $ 33,457 37,463 71,733 76,615	Gains on disposal Three Months Ended June 30, Six Months Ended June 30, 2021 2020(i) 2021 2020 Others: QCES $ - (334) - 29,305 (i) Including the effect of exchange rate conversion. Other related party transactions Transaction type Type of related party June 30, 2021 December 31, 2020 June 30, 2020 Other receivables due from related parties, including dividends Associates $ 709,766 7,053 288,058 Joint ventures - 4,502 2,745 Others - 10,374 41,445 $ 709,766 21,929 332,248 Other payables due to related parties, Associates $ 48,057 24,254 4,016 including payables for equipment Others 37 66 48,256 $ 48,094 24,320 52,272 Type of Three Months Ended June 30, Six Months Ended June 30, Transaction type related party 2021(i) 2020 2021 2020 Rental income Associates: BMC $ 23,693 - 47,371 - Others 8,130 10,763 17,326 22,797 Joint ventures 1,652 1,653 3,305 3,306 Others BMC - 23,702 - 47,417 Others (18) 1,345 3,731 3,095 $ 33,457 37,463 71,733 76,615
	2021 47,371 17,326 3,305 - 3,731 71,733	2020
		- 22,797 3,306 47,417 3,095
		76,615

e. Other related party transactions

(i) Including the effect of exchange rate conversion.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Three Months Ended June 30, 2021 2020 $ 4,840 13,224 - 1,286 $ 4,840 14,510 $ 21,706 12,881 33 22,112 $ 21,739 34,993	Six Months Ended June 30,	Six Months Ended June 30,
2021 $ 4,840 - $ 4,840 $ 21,706 33 $ 21,739	2021 6,807 - 6,807 42,902 33 42,935	2020
		15,294 1,917
		17,211
		39,420 35,986
		75,406

The Company leased portion of its facilities to related parties. The collection term was 15 days from quarter-end, and the pricing was not materially different from that with third parties.

From January to June 2021, the Company participated in WMI’s capital increase by $15,000 thousand. For the six months ended June 30, 2021 and 2020, the Company entitled for cash dividends declared by related parties of $705,359 thousand and $341,936 thousand, respectively. As of June 30, 2021, December 31, 2020 and June 30, 2020, total outstanding dividend receivables classified under abovementioned other receivables due from related parties, amounted to $705,359 thousand, nil and $286,876 thousand, respectively.

8. Pledged Assets

The carrying amounts of the assets which the Company pledged as collateral were as follows:

Pledged assets Restricted cash in banks(i) Land and buildings Machinery and equipment Right-of-use assets	Pledged to secure June 30, 2021 Customs duties and guarantee for warranties $ 103,823 Long-term borrowings limit 50,526,461 Long-term borrowings limit 38,925,568 Long-term borrowings limit 79,452 $ 89,635,304	December 31, 2020 28,345 48,286,874 45,407,718 - 93,722,937	June 30, 2020
			14,294 32,859,832 40,610,252 -
			73,484,378

(i) Classified as other current financial assets and other noncurrent assets by its liquidity.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

9. Significant Contingent Liabilities and Unrecognized Commitments

The significant commitments and contingencies of the Company as of June 30, 2021, in addition to those disclosed in other notes to the consolidated financial statements, were as follows:

(1) Outstanding letters of credit

As at June 30, 2021, the Company had the following outstanding letters of credit for the purpose of purchasing machinery and equipment and materials:

		June 30, 2021
	Currency	(in thousands)
USD		10,418
JPY		5,125,000

(2) Technology licensing agreements

Starting in 1998, AUO has entered into technical collaboration, patent licensing, and/or patent cross licensing agreements with Fujitsu Display Technologies Corp. (subsequently assumed by Fujitsu Limited), Toppan Printing Co., Ltd. (“Toppan Printing”), Semiconductor Energy Laboratory Co., Ltd., Japan Display Inc. (formerly Japan Display East Inc./Hitachi Displays, Ltd.), Panasonic Liquid Crystal Display Co., Ltd. (formerly IPS Alpha Technology, Ltd.), LG Display Co., Ltd., Sharp Corporation, Samsung Electronics Co., Ltd., Hydis Technologies Co., Ltd., Sanyo Electronic Co., Ltd., Seiko Epson Corporation and others. AUO believes that it is in compliance with the terms and conditions of the aforementioned agreements.

(3) Purchase commitments

Starting from 2006, DPTW has entered into a long-term materials supply agreement with Evonik Forhouse Optical Polymers Corp. (“EFOP”), a joint venture of the Company. Under the agreement, DPTW and EFOP agreed on the supply of certain optical-grade molding compounds at agreed prices and quantities.

As at June 30, 2021, significant outstanding purchase commitments for construction in progress, property, plant and equipment totaled $14,407,749 thousand.

(4) Litigation

Antitrust civil actions lawsuits in the United States and other jurisdictions

In May 2014, LG Electronics Nanjing Display Co., Ltd. and seven of its affiliates filed a lawsuit in Seoul Central District Court against certain LCD manufacturers including AUO, alleging overcharge and claiming damages. AUO does not believe service has been properly made, but in order to protect its rights, AUO has retained counsel to handle the related matter, and at this stage, the final outcome of these matters is uncertain. AUO has been reviewing the merits of this lawsuit on an on-going basis.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

In September 2018, AUUS received a complaint filed by the Government of Puerto Rico on its own behalf and on behalf of all consumers and governmental agencies of Puerto Rico against certain LCD manufacturers including AUO and AUUS in the Superior Court of San Juan, Court of First Instance alleging unjust enrichment and claiming unspecified monetary damages. AUO has retained counsel to handle the related matter and intends to defend this lawsuit vigorously, and at this stage, the final outcome of these matters is uncertain. AUO is reviewing the merits of this lawsuit on an on-going basis.

As of July 28, 2021, the Company has made certain provisions with respect to certain of the above lawsuits as the management deems appropriate, considering factors such as the nature of the litigation or claims, the materiality of the amount of possible loss, the progress of the cases and the opinions or views of legal counsel and other advisors. Management will reassess all litigation and claims at each reporting date based on the facts and circumstances that exist at that time, and will make additional provisions or adjustments to previous provisions. The ultimate amount cannot be ascertained until the relevant cases are closed. The ultimate resolution of the legal proceedings and/or lawsuits cannot be predicted with certainty. While management intends to defend certain of the lawsuits described above vigorously, there is a possibility that one or more legal proceedings or lawsuits may result in an unfavorable outcome to the Company. In addition to the matters described above, the Company is also a party to other litigations or proceedings that arise during the ordinary course of business. Except as mentioned above, the Company, to its knowledge, is not involved as a defendant in any material litigation or proceeding which could be expected to have a material adverse effect on the Company’s business or results of operations.

(5) Agreement for equity acquisition

AUO, upon the resolution of its Board of Directors on April 28, 2021, intends to purchase all shareholdings held by the other shareholder of AUKS with total consideration of RMB 3.995 billion. This investment is to be approved by the Investment Commission, Ministry of Economic Affairs.

10. Significant Disaster Losses: None

11. Subsequent Event: None

12. Others

(1) Seasonality of operations

The Company’s operations are not materially influenced by seasonality or cyclicality.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(2) Since 2010, there have been environmental proceedings relating to the development project of the Central Taiwan Science Park in Houli, Taichung, which AUO’s second 8.5-generation fab is located at (the “Project”). The Environmental Protection Administration (“EPA”) of the Executive Yuan of Taiwan issued the environmental assessment and development approval in 2010. On October 24, 2019, the Appeal Review Committee of the Executive Yuan rejected the administrative appeal filed by five local residents. On December 24, 2019, the residents have proceeded to file an administrative action for invalidating the environmental assessment again. The matter is still under review by the court. Management does not believe that this event will have a material adverse effect on the Company’s operation and will continue to monitor the development of this event.

13. Additional Disclosures

(1) Information on significant transactions:

Following are the additional disclosures required by the Regulations for the Company for the six months ended June 30, 2021.

a. Financings provided: Please see Table 1 attached.
b. Endorsements/guarantees provided: Please see Table 2 attached.
c. Marketable securities held (excluding investment in subsidiaries, associates and joint ventures): Please see Table 3 attached.
d. Individual marketable securities acquired or disposed of with costs or prices exceeding NT$300 million or 20% of the paid-in capital: Please see Table 4 attached.
e. Acquisition of individual real estate with costs exceeding NT$300 million or 20% of the paidin capital: None
f. Disposal of individual real estate with prices exceeding NT$300 million or 20% of the paid-in capital: Please see Table 5 attached.
g. Purchases from or sales to related parties with amounts exceeding NT$100 million or 20% of the paid-in capital: Please see Table 6 attached.
h. Receivables from related parties with amounts exceeding NT$100 million or 20% of the paid-in capital: Please see Table 7 attached.
i. Information about trading in derivative instruments: Please see Note 6(2).
j. Business relationship and significant intercompany transactions: Please see Table 8 attached.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(2) Information on investees (excluding information on investment in Mainland China): Please see Table 9 attached.
(3) Information on investment in Mainland China:
a. The related information on investment in Mainland China: Please see Table 10.1 and 10.2 attached.
b. Upper limit on investment in Mainland China: Please see Table 10.1 and 10.2 attached.
c. Significant transactions:

Significant direct or indirect transactions with the investees in Mainland China for the six months ended June 30, 2021, for which intercompany transactions were eliminated upon consolidation, are disclosed in “Information on significant transactions”.

(4) Major shareholders:

Major Shareholder	Shares	Shares
	Total Shares Owned	Ownership Percentage
Qisda	663,598,620	% 6.89

14. Segment Information

Operating segment information

The Company has two operating segments: display and energy. The display segment generally is engaged in the research, development, design, manufacturing and sale of flat panel displays and most of our products are TFT-LCD panels. The energy segment primarily is engaged in the design, manufacturing and sale of ingots, solar wafers and solar modules, as well as providing technical engineering services and maintenance services for solar system projects.

Segment results are excluding non-operating income and expenses and income tax expense (benefit). There are no differences between the consolidated financial statements for the six months ended June 30, 2021 and 2020 with the financial results received by the Company’ s chief operating decision maker. The accounting policies for the operating segments are the same as those used in preparation of the consolidated financial statements of the Company. The Company uses the net revenue, profit (loss) from operations and segment profit (loss) excluding depreciation and amortization as the basis of segment performance assessment.

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Net revenue from external customers
Segment profit (loss)
Net non-operating income and expenses
Consolidated net profit (loss) before income tax
Segment profit (loss) excluding depreciation and
amortization
Segment assets
Net revenue from external customers
Segment profit (loss)
Net non-operating income and expenses
Consolidated profit (loss) before income tax
Segment profit (loss) excluding depreciation and
amortization
Segment assets
Net revenue from external customers
Segment profit (loss)
Net non-operating income and expenses
Consolidated net profit (loss) before income tax
Segment profit (loss) excluding depreciation and
amortization
Segment assets

Three Months Ended June

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

Net revenue from external customers Segment profit (loss) Net non-operating income and expenses Consolidated profit (loss) before income tax Segment profit (loss) excluding depreciation and amortization Segment assets	Six Months Ended June 30, 2020 Display segment Energy segment Total segments $ 112,943,528 4,246,836 117,190,364 $ (8,737,795) (112,855) (8,850,650) 200,420 $ (8,650,230) $ 8,902,590 179,536 9,082,126 $ 385,417,117
	Display segment $ 112,943,528 $ (8,737,795) $ 8,902,590

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Financings Provided

For the six months ended June 30, 2021

(Amount in thousands of New Taiwan Dollars)

Table 1

No.	Financing Company	Borrowing Company	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Notes 1 and 2)	Amount Actually Drawn Down (Notes 1 and 4)	Interest Rate	Nature of Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Notes 1 and 5)	Limits on Financing Company’s Total Financing Amount (Notes 1 and 5)
													Item	Value
0	AUO	ACTW	Other	Yes	2,000,000	2,000,000	1,600,000	Markup rate on	Needs for	-	Operating	-	-	-	20,976,559	83,906,235
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
0	AUO	AUKS	Other	Yes	4,342,000	4,309,200	-	Markup rate on	Needs for	-	Operating	-	-	-	20,976,559	83,906,235
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
0	AUO	AETW	Other	Yes	200,000	200,000	100,000	Markup rate on	Needs for	-	Operating	-	-	-	20,976,559	83,906,235
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
0	AUO	SMI	Other	Yes	30,000	30,000	-	Markup rate on	Needs for	-	Operating	-	-	-	20,976,559	83,906,235
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
1	AULB	AUKS	Other	Yes	15,963,280	13,358,520	3,662,820	Markup rate on	Needs for	-	Operating	-	-	-	22,724,959	22,724,959
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
2	AUXM	AUKS	Other	Yes	5,210,400	5,171,040	2,370,060	Markup rate on	Needs for	-	Operating	-	-	-	5,880,154	5,880,154
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
3	BVXM	AUKS	Other	Yes	440,780	430,920	-	Markup rate on	Needs for	-	Operating	-	-	-	520,149	520,149
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties

No.	Financing Company	Borrowing Company	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Notes 1 and 2)	Amount Actually Drawn Down (Notes 1 and 4)	Interest Rate	Nature of Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Notes 1 and 5)	Limits on Financing Company’s Total Financing Amount (Notes 1 and 5)
													Item	Value
4	AUSJ	AESZ	Other	Yes	174,212	86,184	34,474	Markup rate on	Needs for	-	Operating	-	-	-	3,973,847	3,973,847
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
4	AUSJ	AUKS	Other	Yes	1,454,574	1,422,036	991,116	Markup rate on	Needs for	-	Operating	-	-	-	1,589,539	1,589,539
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
4	AUSJ	AESD	Other	Yes	220,390	-	-	Markup rate on	Needs for	-	Operating	-	-	-	3,973,847	3,973,847
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
4	AUSJ	EDT	Other	Yes	43,553	43,092	-	Markup rate on	Needs for	-	Operating	-	-	-	3,973,847	3,973,847
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
4	AUSJ	MIS	Other	Yes	65,330	64,638	21,546	Markup rate on	Needs for	-	Operating	-	-	-	3,973,847	3,973,847
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
4	AUSJ	ACareSZ	Other	Yes	95,817	94,802	4,309	Markup rate on	Needs for	-	Operating	-	-	-	3,973,847	3,973,847
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
5	AUSZ	AUKS	Other	Yes	6,295,900	6,248,340	5,171,040	Markup rate on	Needs for	-	Operating	-	-	-	6,731,024	6,731,024
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
6	BVHF	AUKS	Other	Yes	308,546	301,644	301,644	Markup rate on	Needs for	-	Operating	-	-	-	326,955	326,955
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
7	DPSZ	AUKS	Other	Yes	438,240	-	-	Adjusted by	Needs for	-	Operating	-	-	-	484,828	484,828
			receivables					base lending	short-term		capital
			from related					rate of People’s	financing
			parties					Bank of China

No.	Financing Company	Borrowing Company	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Notes 1 and 2)	Amount Actually Drawn Down (Notes 1 and 4)	Interest Rate	Nature of Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Notes 1 and 5)	Limits on Financing Company’s Total Financing Amount (Notes 1 and 5)
													Item	Value
8	DPTW	DPSK	Other	Yes	52,574	49,560	-	Adjusted by	Needs for	-	Operating	-	-	-	2,303,466	3,685,545
			receivables					short-term	short-term		capital
			from related					average lending	financing
			parties					rate
9	FTWJ	FHWJ	Other	Yes	87,106	43,092	43,092	Adjusted by	Needs for	-	Operating	-	-	-	1,571,628	1,571,628
			receivables					base lending	short-term		capital
			from related					rate of People’s	financing
			parties					Bank of China

Note 1: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date. Note 2: The ending balance represents the amounts approved by the Board of Directors.

Note 3: The maximum balance for the period represents the highest amount in New Taiwan Dollars announced or occurred during the period.

Note 4: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

Note 5: The policy for the limit on total financing amount and the financing limit for any individual entity are prescribed as follows:

a. AUO: The total amount available for lending purposes shall not exceed 40% of AUO’s net worth as stated in its latest financial statement. The total amount for lending to a company shall not exceed 10% of AUO’s net worth as stated in its latest financial statement.
b. AULB, AUSZ, AUXM, AUSJ, BVXM and BVHF: The total amount available for lending purposes shall not exceed 40% of the net worth of the lending company as stated in its latest financial statement. The total amount for lending to a company shall not exceed 40% of the net worth of the lending company as stated in its latest financial statement.
c. In the event that the financing is between foreign subsidiaries whose voting shares are 100% owned, directly or indirectly, by AUO, the aggregate amount available for lending to such borrowers and total amount lendable to a company both shall not exceed the net worth of the lending company as stated in its latest financial statement.
d. DPTW: The total amount available for lending purposes shall not exceed 40% of DPTW’s net worth as stated in its latest financial statement. The total amount for lending to a company shall not exceed 25% of DPTW’s net worth as stated in its latest financial statement.
e. DPSZ and FTWJ: The total amount available for lending purposes shall not exceed 40% of the net worth of the lending company. The total amount for lending to a company shall not exceed 40% of the net worth of the lending company.
f. In the event that the financing is between foreign subsidiaries whose voting shares are 100% owned, directly and indirectly, by DPTW, the aggregate amount available for lending to such borrowers and the total amount lendable to each of such borrowers shall not exceed the net worth of the lending company.

AU OPTRONICS CORP. AND SUBSIDIARIES

Endorsements/Guarantees Provided

For the six months ended June 30, 2021

(Amount in thousands of New Taiwan Dollars)

Table 2

No.	Endorser/ Guarantor	Guaranteed Party	Guaranteed Party	Limits on Endorsement/ Guarantee Amount Provided for Each Party (Notes 4 and 5)	Maximum Endorsement/ Guarantee Balance for the Period (Note 2)	Ending Balance (Notes 3 and 4)	Amount Actually Drawn Down (Note 4)	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Worth per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowable (Notes 4 and 5)	Endorsement/ Guarantee Provided by Parent Company to Subsidiary	Endorsement/ Guarantee Provided by Subsidiary to Parent Company	Endorsement/ Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of Relationship (Note 1)
0	AUO	AUKS	2	104,882,793	14,406,477	14,102,154	7,158,655	-	6.72%	209,765,587	Yes	No	Yes
1	AUXM	AUO	3	14,700,386	6,391,310	6,248,340	-	-	42.50%	14,700,386	No	Yes	No
2	AUSZ	AUO	3	16,827,561	4,495,956	4,395,384	-	-	26.12%	16,827,561	No	Yes	No
3	DPXM	DPTW	3	1,581,924	440,780	430,920	-	-	10.90%	1,581,924	No	No	No

Note 1: The relationship between the endorser/guarantor and the guaranteed party:

A company with which it does business.
A company in which the Company directly and indirectly holds more than 50% of the voting shares.
A company that directly and indirectly holds more than 50% of the voting shares in the Company.
Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares.
A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

Note 2: The maximum endorsement/guarantee balance for the period represents the highest amount in New Taiwan Dollars announced or occurred during the period. Note 3: The ending balance represents the amounts approved by the Board of Directors.

Note 4: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.

Note 5: The policy for the limit of total endorsement/guarantee amount and the limit on endorsement/guarantee amount provided to each party are prescribed as follows:

a. AUO: The total endorsement/guarantee amount provided shall not exceed the net worth of AUO as stated in its latest financial statement. The aggregate amount of endorsement/guarantee provided to each guaranteed party shall not exceed 50% of AUO’s net worth as stated in its latest financial statement.
b. AUSZ and AUXM: The total endorsement/guarantee amount provided and the aggregate amount of endorsement/guarantee provided to each guaranteed party both shall not exceed the net worth of the endorser/guarantor as stated in its latest financial statement.
c. DPXM: The total endorsement/guarantee amount provided and the aggregate amount of endorsement/guarantee provided to each guaranteed party both shall not exceed 40% of DPXM’s net worth as stated in its latest financial statement.

AU OPTRONICS CORP. AND SUBSIDIARIES

Marketable Securities Held (Excluding Investment in Subsidiaries, Associates and Joint Ventures)

June 30, 2021

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

Table 3

Name of Holder	Type and Name of Marketable Securities	Relationship with the Securities Issuer	Financial Statement Account		June 30, 2021	June 30, 2021
				Shares	Carrying Amount	Percentage of Ownership	Fair Value
AUO	BenQ ESCO Corp.’s stock	Related party	Financial assets at FVTPL－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTPL－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTPL－noncurrent Financial assets at FVTPL－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTPL－noncurrent	1,700	-	17.00%	-
AUO	SINTRONES Technology Corp.’s stock	-		1,299	75,212	7.06%	75,212
AULB	Abakus Solar AG’s stock	-		3	-	2.22%	-
AUSH	T-powertek Optronics Co., Ltd.’s stock	-		1,293	CNY 6,250	1.58%	CNY 6,250
AUSZ	ToYou Display (Suzhou) Co., Ltd.’s stock	Related party		-	CNY 7,931	18.00%	CNY 7,931
Konly	PlayNitride Inc.’s stock	Related party		1,827	281,226	4.04%	281,226
Konly	SnapBizz CloudTech Pte. Ltd.’s stock	-		13	-	4.61%	-
Konly	Azotek Co., Ltd.’s stock	-		2,407	7,345	3.98%	7,345
Konly	Chenfeng Optronics Corporation’s stock	-		1,500	-	2.21%	-
Konly	a2peak power Co., Ltd.’s stock	-		4,000	-	10.87%	-
Konly	SINTRONES Technology Corp.’s stock	-		556	32,192	3.02%	32,192
Konly	GCS Holdings, Inc.’s stock	-		326	14,605	0.36%	14,605
DPTW	D8AI Holdings Corporation’s stock	-		7,000	8,649	4.59%	8,649
DPTW	Disign Incorporated’s stock	-		2	10,714	19.89%	10,714
DPTW	Evertrust Technology Ltd.’s stock	-		150	1,500	16.13%	1,500
DPTW	HUAI I Precision Technology Co., Ltd.’s	-		2,914	34,968	10.00%	34,968
	stock
DPTW	WiBASE Industrial Solutions Inc.’s stock	Related party		3,536	42,432	9.11%	42,432
Ronly	PlayNitride Inc.’s stock	Related party		359	71,517	0.79%	71,517
Ronly	Exploit Technology Co., Ltd.’s stock	-		41	-	0.49%	-
Ronly	Profet AI Technology Co., Ltd.’s stock	-	Financial assets at FVTOCI－noncurrent	511	10,002	10.16%	10,002

AU OPTRONICS CORP. AND SUBSIDIARIES

Individual Marketable Securities Acquired or Disposed of with Costs or Prices Exceeding NT$300 Million or 20% of the Paid-in Capital For the six months ended June 30, 2021

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

Table 4

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal	Disposal	Ending Balance	Ending Balance	Note
					Shares	Amount	Shares	Amount	Shares	Amount	Carrying Amount	Gain/Loss on Disposal	Shares	Amount
AUO	Ennostar’s stock	Investments in	-	-	-	-	4,654	390,820	-	-	-	-	26,319	2,190,181	Note 1
		equity-accounted
		investees
AUO	Konly’s stock Ronly’s stock Structured deposit Qisda’s stock	Investments in	-	-	299,764	5,471,340	40,000	400,000	-	-	-	-	339,764	6,325,245	Note 2 Note 2 Note 3 Note 1
		equity-accounted
		investees
AUO		Investments in	-	-	185,576	2,277,770	100,000	1,000,000	-	-	-	-	285,576	3,360,074
		equity-accounted
		investees
FTKS		Financial assets	-	-	-	CNY 72,585	-	-	-	CNY 72,697	CNY 72,697	-	-	-
		at FVTPL－
		current
Konly		Investments in	-	-	17,817	515,805	32,328	925,606	-	-	-	-	50,145	1,431,882
		equity-accounted
		investees
Ronly	Ennostar’s stock	Investments in	-	-	-	-	7,543	632,321	-	-	-	-	16,986	1,415,069
		equity-accounted
		investees

Note 1: a. Acquisition was made on the open market.

b.The ending balance and number of shares include the recognition of investment gain (loss) and other related adjustments under the equity method, and include the converted amount and number of shares arising from the joint share exchange plan carried out by Lextar and Epistar for a newly incorporated company, Ennostar, on January 6, 2021 as well. See Note 6(7) for the relevant information.

Note 2: The acquisition amount refers to the participation in the investees’ capital increase. The ending balance includes the recognition of investment gain (loss) and other related adjustments under the equity method.

Note 3: a. Acquisition was made on the open market.

b.The ending balance includes the recognition of investment gain (loss) and other related adjustments under the equity method.

AU OPTRONICS CORP. AND SUBSIDIARIES

Disposal of Individual Real Estate with Costs Exceeding NT$300 Million or 20% of the Paid-in Capital For the six months ended June 30, 2021

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 5

Company Name	Property	Date of the Event	Date of Original Acquisition	Carrying Amount	Transaction Amount	Status of Proceeds Collection	Gain (Loss) on Disposal	Counterparty	Relationship	Purpose of Disposal	Pricing Reference	Other Terms	Note
ACTW AUO	Plant Plant	March 2021 April 2021	November 2011 October 2000, November 2001	134,801 20,189	482,000 790,476	48,200	- -	Phoenix Silicon	Non-related party Non-related party	Activating assets Activating assets	A report on the appraisal price of a real estate appraiser A report on the appraisal price of a real estate appraiser	None None	Note 1
								International
								Corporation
						395,238		Vanguard					Note 1
								International
								Semiconductor
								Corporation
DPSZ	Land and buildings	June 2021	December 2006	CNY 79,262	CNY 219,048	-	-	Suzhou Xinsheng	Non-related party	Activating assets and enhancing the efficient use of working capital	A report on the appraisal price of a real estate appraiser	None	Note 1
								Real Estate Co.

Note 1: This transaction has not been completed, and the relevant transaction costs and taxes have not yet been determined. See Note 6(10).

AU OPTRONICS CORP. AND SUBSIDIARIES

Purchases from or Sales to Related Parties with Amounts Exceeding NT$100 Million or 20% of the Paid-in Capital For the six months ended June 30, 2021

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 6

Company Name	Counterparty	Relationship	Transaction Details	Transaction Details	Transaction Details		Transactions with Terms Different from Others	Transactions with Terms Different from Others	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)
			Purchases /Sales	Amount (Note 2)	Percentage of Total Purchases /Sales	Credit Terms	Unit Price (Note 1)	Credit Terms (Note 1)	Ending Balance (Note 2)	Percentage of Total Notes /Accounts Receivable (Payable)
AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO	AUKS AUST AUSZ AUXM Qisda BMC Raydium Daxin DPTW AUSZ AUUS AUXM DICSZ QCSZ BenQ SLEC ADP	Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Associate Subsidiary of Qisda Associate Associate Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of Qisda Subsidiary of Qisda Subsidiary of Qisda Subsidiary of SSEC Subsidiary of AUO	Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales Sales Sales	11,809,569 1,712,863 16,231,827 15,221,097 4,286,183 1,854,295 719,353 1,108,285 1,633,032 (5,350,015) (189,430) (1,740,303) (177,148) (4,027,162) (1,752,552) (441,104) (7,046,119)	12%	EOM 30 days EOM 45 days EOM 45 days EOM 45 days EOM 45 days EOM 90 days EOM 120 days EOM 120 days EOM 60 days EOM 45 days EOM 75 days EOM 45 days EOM 45 days EOM 55 days EOM 55 days EOM 25 days EOM 45 days	- - - - - - - - - - - - - - - - -		(4,283,738) (604,013) (9,416,488) (9,660,910) (1,680,189) (1,069,774) (553,216) (744,998) (685,380) - 156,700 - 74,181 1,055,806 813,371 303,644 2,935,554	(8)%
					2%					(1)%
					17%					(18)%
					16%					(18)%
					4%					(3)%
					2%					(2)%
					1%					(1)%
					1%					(1)%
					2%					(1)%
					(3)%					-
					-					-
					(1)%					-
					-					-
					(3)%					2%
					(1)%					1%
					-					1%
					(4)%					5%
ADPNL	ADP	Subsidiary of AUO	Purchases	USD 24,869	100%	EOM 45 days	-		USD (9,727)	(100)%

Company Name	Counterparty	Relationship	Transaction Details	Transaction Details	Transaction Details		Transactions with Terms Different from Others	Transactions with Terms Different from Others	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)
			Purchases /Sales	Amount (Note 2)	Percentage of Total Purchases /Sales	Credit Terms	Unit Price (Note 1)	Credit Terms (Note 1)	Ending Balance (Note 2)	Percentage of Total Notes /Accounts Receivable (Payable)
AUKS AUKS AUKS AUST AUSZ AUSZ AUSZ AUSZ AUSZ AUSZ AUSZ AUSZ AUUS AUXM AUXM AUXM AUXM AUXM AUXM AUXM DPSZ DPXM DPXM FPWJ	AUSZ AUO AUXM AUO AUO Qisda BMC Raydium DPTW AUO AUKS ADP AUO AUO AUKS BMC Raydium DPTW AUO ADP DPTW DPTW DPTW DPTW	Subsidiary of AUO Ultimate parent company Subsidiary of AUO Ultimate parent company Ultimate parent company Associate Subsidiary of Qisda Associate Subsidiary of AUO Ultimate parent company Subsidiary of AUO Subsidiary of AUO Ultimate parent company Ultimate parent company Subsidiary of AUO Subsidiary of Qisda Associate Subsidiary of AUO Ultimate parent company Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO	Purchases Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Purchases Sales Purchases	CNY 128,153 CNY (2,732,813) CNY (84,164) USD (61,625) CNY 1,269,126 CNY 234,428 CNY 124,296 CNY 306,202 CNY 93,582 CNY (3,760,191) CNY (128,153) CNY (2,119,730) USD 6,750 CNY 428,242 CNY 70,368 CNY 90,629 CNY 313,375 CNY 133,132 CNY (3,530,640) CNY (173,224) CNY (52,971) CNY 34,008 CNY (218,385) CNY 43,998	9%	EOM 60 days EOM 30 days EOM 30 days EOM 45 days EOM 45 days EOM 120 days EOM 90 days EOM 120 days EOM 120 days EOM 45 days EOM 60 days EOM 45 days EOM 75 days EOM 45 days EOM 30 days EOM 90 days EOM 120 days EOM 120 days EOM 45 days EOM 45 days EOM 90 days EOM 60 days EOM 90 days EOM 60 days	- - - - - - - - - - - - - - - - - - - - - - - -		CNY (70,471) CNY 995,305 CNY 35,106 USD 21,673 - CNY (172,779) CNY (84,617) CNY (242,574) CNY (72,794) CNY 2,185,983 CNY 70,471 CNY 762,655 USD (5,616) - CNY (19,682) CNY (58,062) CNY (232,690) CNY (97,262) CNY 2,247,135 CNY 56,285 CNY 32,574 CNY (48,351) CNY 199,766 CNY (17,607)	(7)%
					(97)%					97%
					(3)%					3%
					(100)%					100%
					24%					-
					5%					(6)%
					2%					(3)%
					6%					(8)%
					2%					(2)%
					(63)%					72%
					(2)%					2%
					(35)%					25%
					100%					(100)%
					13%					-
					2%					(1)%
					3%					(3)%
					9%					(11)%
					4%					(5)%
					(87)%					88%
					(4)%					2%
					(73)%					67%
					3%					(9)%
					(17)%					55%
					100%					(100)%
FTWJ	Lextar	Subsidiary of Ennostar	Purchases	CNY 30,280	10%	EOM 120 days	-		CNY (23,945)	(4)%

Company Name	Counterparty	Relationship	Transaction Details	Transaction Details	Transaction Details		Transactions with Terms Different from Others	Transactions with Terms Different from Others	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)
			Purchases /Sales	Amount (Note 2)	Percentage of Total Purchases /Sales	Credit Terms	Unit Price (Note 1)	Credit Terms (Note 1)	Ending Balance (Note 2)	Percentage of Total Notes /Accounts Receivable (Payable)
FTWJ M.Setek ACTW ADP ADP ADP ADP ADP DPTW DPTW DPTW DPTW DPTW DPTW DPTW DPTW	DPTW ACTW M.Setek AUO AUSZ AUXM ADPNL QCOS DPSZ DPXM FTWJ RFOP AUO AUSZ AUXM DPXM	Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Ultimate parent company Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of Qisda Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Joint Venture Ultimate parent company Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO	Sales Sales Purchases Purchases Purchases Purchases Sales Sales Purchases Purchases Purchases Purchases Sales Sales Sales Sales	CNY (440,943) JPY (1,843,188) 489,519 7,052,925 9,192,372 745,809 (689,510) (169,372) 229,849 949,157 1,917,754 450,916 (1,765,992) (404,976) (575,379) (147,794)	(98)%	EOM 90 days EOM 45 days EOM 45 days EOM 45 days EOM 45 days EOM 45 days EOM 45 days EOM 55 days EOM 90 days EOM 90 days EOM 90 days EOM 45 days EOM 60 days EOM 120 days EOM 120 days EOM 60 days	- - - - - - - - - - - - - - - -		CNY 734,350 JPY 1,513,955 (379,851) (2,936,028) (3,289,257) (242,821) 270,960 70,228 (140,530) (668,046) (1,298,299) (153,972) 635,923 314,048 419,605 80,166	100%
					(97)%					99%
					35%					(60)%
					42%					(45)%
					54%					(51)%
					4%					(4)%
					(3)%					4%
					(1)%					1%
					5%					(5)%
					20%					(25)%
					41%					(49)%
					10%					(6)%
					(35)%					27%
					(8)%					13%
					(11)%					18%
					(3)%					3%
DPTW	FPWJ	Subsidiary of AUO	Sales	(190,667)	(4)%	EOM 60 days	-		75,961	3%

Note 1: Transaction terms with related parties were similar to those with third parties, except for particular transactions with no similar transactions to compare with. For those transactions, transaction terms were determined in accordance with mutual agreements. Note 2: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

AU OPTRONICS CORP. AND SUBSIDIARIES

Receivables from Related Parties with Amounts Exceeding NT$100 Million or 20% of the Paid-in Capital June 30, 2021

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 7

Table 7
					Overdue Receivables		Amounts
Company			Ending Balance of	Turnover	Amount	Action Taken	Received in	Allowance
	Counterparty	Relationship	Receivables				Subsequent	for Bad
Name				Rate
			(Note 3)				Period	Debts
							(Note 1)
AUO	AUUS	Subsidiary of AUO	156,700	3.44	471	Will be collected in next period	-	-
AUO	QCSZ Qisda AETW ACTW BenQ SLEC ADP AUO AUXM AUKS AUKS AUO AUO AUKS ADP AUO AUKS ADP	Subsidiary of Qisda	1,055,806	7.46	155	Will be collected in next period	-	-
AUO		Associate	506,059	(Note 2)	820	Will be collected in next period	-	-
AUO		Subsidiary of AUO	101,941	(Note 2)	-	-	-	-
AUO		Subsidiary of AUO	1,609,274	(Note 2)	-	-	-	-
AUO		Subsidiary of Qisda	813,371	4.85	91	Will be collected in next period	-	-
AUO		Subsidiary of SSEC	303,644	5.81	-	-	-	-
AUO		Subsidiary of AUO	3,050,621	(Note 2)	567,666	Will be collected in next period	-	-
AUKS		Ultimate parent company	CNY 995,305	5.90	CNY 31,119	Collected in subsequent period	CNY 513,096	-
AUKS		Subsidiary of AUO	CNY 35,106	8.64	CNY 3,496	Will be collected in next period	-	-
AULB		Subsidiary of AUO	USD 133,299	(Note 2)	-	-	-	-
AUSJ		Subsidiary of AUO	CNY 234,486	(Note 2)	-	-	-	-
AUST		Ultimate parent company	USD 21,673	5.43	-	-	-	-
AUSZ		Ultimate parent company	CNY 2,185,983	3.08	CNY 91,510	Collected in subsequent period	CNY 1,469,067	-
AUSZ		Subsidiary of AUO	CNY 1,291,532	(Note 2)	CNY 13,206	Collected in subsequent period	CNY 24,116	-
AUSZ		Subsidiary of AUO	CNY 762,655	11.12	CNY 22,446	Collected in subsequent period	CNY 398,558	-
AUXM		Ultimate parent company	CNY 2,247,135	3.25	CNY 37,908	Collected in subsequent period	CNY 198,009	-
AUXM		Subsidiary of AUO	CNY 563,282	(Note 2)	CNY 12	Will be collected in next period	-	-
AUXM		Subsidiary of AUO	CNY 56,285	12.31	CNY 262	Will be collected in next period	-	-
BVHF	AUKS	Subsidiary of AUO	CNY 71,946	(Note 2)	-	-	-	-

					Overdue Receivables	Overdue Receivables	Amounts
Company			Ending Balance of	Turnover	Amount	Action Taken	Received in	Allowance
	Counterparty	Relationship	Receivables				Subsequent	for Bad
Name				Rate
			(Note 3)				Period	Debts
							(Note 1)
DPSZ	DPTW	Subsidiary of AUO	CNY 32,574	2.71	-	-	-	-
DPXM	DPTW DPTW ACTW M.Setek Raydium ADPNL AUO AUSZ AUXM DPXM	Subsidiary of AUO	CNY 199,766	1.79	-	-	-	-
FTWJ		Subsidiary of AUO	CNY 734,350	1.30	-	-	CNY 155,042	-
M.Setek		Subsidiary of AUO	JPY 1,514,003	(Note 2)	JPY 397,790	Will be collected in next period	-	-
ACTW		Subsidiary of AUO	380,973	0.02	-	-	-	-
Konly		Associate	120,272	(Note 2)	-	-	-	-
ADP		Subsidiary of AUO	270,960	10.18	-	-	93,669	-
DPTW		Ultimate parent company	636,183	(Note 2)	24,096	Will be collected in next period	-	-
DPTW		Subsidiary of AUO	314,048	2.74	-	-	-	-
DPTW		Subsidiary of AUO	419,605	2.98	-	-	-	-
DPTW		Subsidiary of AUO	214,937	(Note 2)	-	-	-	-
DPTW	FTWJ	Subsidiary of AUO	1,386,605	(Note 2)	-	-	-	-

Note 1: Until the end of July 2021. Note 2: The ending balance includes other receivables from transactions not related to ordinary sales. Note 3: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

AU OPTRONICS CORP. AND SUBSIDIARIES

Business Relationship and Significant Intercompany Transactions For the six months ended June 30, 2021

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 8

						Inter-company Transactions
N			Nt f Rltihi				Percentage of
	Company			Financial
		Ctt
o.	Name	ounerpary	aure o eaonsp	Statement	Amount	Trading Terms	Consolidated
							Net Revenue or
				Account			Total Assets

0	AUKS	AUO	Subsidiary to parent	Net revenue	CNY 2,732,813	The prices of inter-company sales are not comparable with	7%
						those of third parties. The credit term is EOM 30 days
0	AUKS	AUO	Subsidiary to parent	Receivables from	CNY 995,305	-	1%
				related parties
1	AULB	AUKS	Subsidiary to subsidiary	Receivables from	USD 133,299	-	1%
				related parties
2	AUST	AUO	Subsidiary to parent	Net revenue	USD 61,625	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 45 days
3	AUSZ	AUO	Subsidiary to parent	Net revenue	CNY 3,760,191	The prices of inter-company sales are not comparable with	9%
						those of third parties. The credit term is EOM 45 days
3	AUSZ	AUO	Subsidiary to parent	Receivables from	CNY 2,185,983	-	2%
				related parties
3	AUSZ	AUKS	Subsidiary to subsidiary	Receivables from	CNY 1,291,532	-	1%
				related parties
3	AUSZ	ADP	Subsidiary to subsidiary	Net revenue	CNY 2,119,730	The prices of inter-company sales are not comparable with	5%
						those of third parties. The credit term is EOM 45 days
3	AUSZ	ADP	Subsidiary to subsidiary	Receivables from	CNY 762,655	-	1%
				related parties
4	AUXM	AUO	Subsidiary to parent	Net revenue	CNY 3,530,640	The prices of inter-company sales are not comparable with	9%
						those of third parties. The credit term is EOM 45 days
4	AUXM	AUO	Subsidiary to parent	Receivables from	CNY 2,247,135	-	2%
				related parties

						Inter-company Transactions
N			Nt f Rltihi				Percentage of
	Company			Financial
		Ctt
o.	Name	ounerpary	aure o eaonsp	Statement	Amount	Trading Terms	Consolidated
							Net Revenue or
				Account			Total Assets

4	AUXM	AUKS	Subsidiary to subsidiary	Receivables from	CNY 563,282	-	1%
				related parties
5	DPXM	DPTW	Subsidiary to subsidiary	Net revenue	CNY 218,385	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 90 days
6	FTWJ	DPTW	Subsidiary to subsidiary	Net revenue	CNY 440,943	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 90 days
6	FTWJ	DPTW	Subsidiary to subsidiary	Receivables from	CNY 734,350	-	1%
				related parties
7	AUO	AUSZ	Parent to subsidiary	Net revenue	5,350,015	The prices of inter-company sales are not comparable with	3%
						those of third parties. The credit term is EOM 45 days
7	AUO	AUXM	Parent to subsidiary	Net revenue	1,740,303	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 45 days
7	AUO	ADP	Parent to subsidiary	Net revenue	7,046,119	The prices of inter-company sales are not comparable with	4%
						those of third parties. The credit term is EOM 45 days
7	AUO	ADP	Parent to subsidiary	Receivables from	3,050,621	-	1%
				related parties
8	DPTW	AUO	Subsidiary to parent	Net revenue	1,765,992	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 60 days

Note 1: This table discloses the information on inter-company sales and receivables which are accounted for 1% or more of the consolidated net revenue or the consolidated total assets, respectively. The information of the corresponding inter-company purchases and payables is no more disclosed herein. Note 2: All inter-company transactions have been eliminated in the consolidated financial statements.

AU OPTRONICS CORP. AND SUBSIDIARIES

Information on Investees (Excluding Information on Investment in Mainland China) For the six months ended June 30, 2021

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

Table 9

Table 9
Investor	Investee	Lti	Mi Atiiti	Original Investment Amount		June 30, 2021 Percentage Carrying			Net Income L f	Investor’s Share of Profit L	Nt
Company	Company	ocaon	an cves	June 30, 2021	December 31, 2020	Shares	of Ownership	Amount (Notes 1 and 2)	(oss) o Investee	(oss) of Investee (Notes 1 and 2)	oe
AUO	AULB	Malaysia	Holding company	59,058,698	59,058,698	1,882,189	100.00%	56,812,397	1,894,329	1,894,329	Subsidiary
AUO	AUNL	Netherlands	Sales and sales support of TFT-LCD Panels	24,275	24,275	50	100.00%	60,633	(2,146)	(2,146)	Subsidiary
AUO	Konly	Taiwan ROC	Investment	4,627,070	4,227,070	339,764	100.00%	6,325,245	575,138	575,138	Subsidiary
AUO	Ronly	Taiwan ROC	Investment	3,078,682	2,078,682	285,576	100.00%	3,360,074	190,702	190,702	Subsidiary
AUO	DPTW	Taiwan ROC	Design, manufacturing, and sales of TFT-	3,569,155	3,569,155	190,108	28.56%	2,631,831	(585,916)	(167,360)	Subsidiary
			LCD modules, backlight modules, TV set
			and related parts
AUO	ACTW	Taiwan ROC	Manufacturing and sale of ingots and solar	15,687,921	15,687,921	418,583	100.00%	2,669,048	168,632	168,632	Subsidiary
			wafers
AUO	Lextar	Taiwan ROC	Design, manufacturing, and sales of InGaN	-	889,227	-	-	-	-	-	Associate
			epi wafers and chips, and light emitting								(Note 5)
			diode packages and modules
AUO	Qisda	Taiwan ROC	Manufacturing and sales of communication	9,505,477	9,505,477	335,231	17.04%	9,786,530	5,916,934	697,135	Associate
			products; manufacturing, sales and service
			of products related to intelligent solutions;
			medical equipment and services; research
			and development, manufacturing and sales
			of network communication products
AUO	SMI	Taiwan ROC	Sales and leasing of content management	30,000	30,000	3,000	100.00%	7,770	(6,464)	(6,464)	Subsidiary
			system and hardware
AUO	AETW	Taiwan ROC	Planning, design and development of	200,000	200,000	20,000	100.00%	105,300	(26,725)	(26,725)	Subsidiary
			construction project for environmental
			protection and related project management
AUO	SSEC	Taiwan ROC	Investment	1,550,000	1,550,000	155,000	31.00%	1,607,028	65,195	20,211	Associate
AUO	CQIL	Israel	Holding company	1,182,621	1,182,621	39,974	100.00%	890,889	11,257	11,257	Subsidiary
AUO	ADLINK	Taiwan ROC	Manufacturing and sales of hardware,	2,411,693	2,411,693	42,310	19.45%	2,284,027	68,976	(24,965)	Associate
			software and peripheral devices of industrial
			computers

Investor	Investee	Lti	Mi Atiiti	Original Investment Amount	Original Investment Amount	June 30, 2021 Percentage Carrying	June 30, 2021 Percentage Carrying	June 30, 2021 Percentage Carrying	Net Income L f	Investor’s Share of Profit L	Nt
Company	Company	ocaon	an cves	June 30, 2021	December 31, 2020	Shares	of Ownership	Amount (Notes 1 and 2)	(oss) o Investee	(oss) of Investee (Notes 1 and 2)	oe
AUO	DPGE	Taiwan ROC	Renewable energy power generation	7,000	7,000	700	100.00%	6,979	(6)	(6)	Subsidiary
AUO	ADHLD	Caymen	Holding company	178,353	-	6,300	70.00%	150,969	(32,618)	(22,832)	Subsidiary
AUO	ADCM	Caymen	Holding company	76,437	-	2,700	100.00%	64,702	(9,785)	(9,785)	Subsidiary
AUO	AHTW	Taiwan ROC	Manufacturing, development and sales of	5,000	5,000	500	100.00%	4,396	(589)	(589)	Subsidiary
			medical equipments
AUO	ADP	Taiwan ROC	Research, development and sales of TFT-	369,555	1,000	36,956	100.00%	3,123,878	2,756,036	2,756,036	Subsidiary
			LCD panels
AUO	SREC	Taiwan ROC	Investment	379,040	379,040	37,904	32.01%	446,832	61,460	19,676	Subsidiary
AUO	ENNOSTAR	Taiwan ROC	Holding company	1,280,047	-	26,319	3.88%	2,190,181	440,229	(12,287)	Associate
AUO	ACareTW	Taiwan ROC	Design, development and sales of software	30,000	-	3,000	100.00%	27,243	(2,757)	(2,757)	Subsidiary
			and hardware for health care industry
Konly	DPTW	Taiwan ROC	Design, manufacturing, and sales of TFT-	703,795	703,795	42,598	6.40%	589,723	(585,916)	(37,501)	Subsidiary
			LCD modules, backlight modules, TV set
			and related parts
Konly	Raydium	Taiwan ROC	IC Design	175,857	175,857	11,454	17.11%	1,014,569	1,832,851	313,638	Associate
Konly	Daxin	Taiwan ROC	Research, manufacturing and sales of	154,748	154,748	19,114	18.61%	599,801	322,884	60,083	Associate
			display and semiconductor related
			chemicals
Konly	Lextar	Taiwan ROC	Design, manufacturing, and sales of InGaN	-	565,616	-	-	-	-	-	Associate
			epi wafers and chips, and light emitting								(Note 5)
			diode packages and modules
Konly	Qisda	Taiwan ROC	Manufacturing and sales of communication	1,363,481	437,875	50,145	2.55%	1,431,882	5,916,934	103,189	Associate
			products; manufacturing, sales and service
			of products related to intelligent solutions;
			medical equipment and services; research
			and development, manufacturing and sales
			of network communication products
Konly	Ubitech Inc.	Taiwan ROC	Development and sales of software for POS	27,000	27,000	357	23.28%	-	(6,260)	(1,332)	Associate
			system
Konly	SSEC	Taiwan ROC	Investment	100,000	100,000	10,000	2.00%	103,679	65,195	1,304	Associate
Konly	WishMobile,	Taiwan ROC	Developing and providing CRM APP; LINE	30,000	15,000	8,625	14.38%	20,836	(65)	(8)	Associate
	Inc.		software developer
Konly	SkyREC Ltd.	BVI	Data consulting service for retail	46,016	46,016	188	16.12%	399	(11,152)	(1,798)	Associate
Konly	ADLINK	Taiwan ROC	Manufacturing and sales of hardware,	257,349	80,542	4,054	1.86%	198,911	68,976	(2,824)	Associate
			software and peripheral devices of industrial
			computers

Investor	Investee	Lti	Mi Atiiti	Original Investment Amount	Original Investment Amount	June 30, 2021 Percentage Carrying	June 30, 2021 Percentage Carrying	June 30, 2021 Percentage Carrying	Net Income L f	Investor’s Share of Profit L	Nt
Company	Company	ocaon	an cves	June 30, 2021	December 31, 2020	Shares	of Ownership	Amount (Notes 1 and 2)	(oss) o Investee	(oss) of Investee (Notes 1 and 2)	oe
Konly	AUES	Taiwan ROC	Services related to educational activities and	4,000	4,000	400	100.00%	3,020	(980)	(980)	Subsidiary
			site rental
Konly	IOC	Taiwan ROC	R&D and design of flexible electronics	20,000	20,000	1,000	5.00%	16,891	(26,377)	(2,593)	Associate
			technology and processing equipment
			development
Konly	SREC	Taiwan ROC	Investment	17,760	17,760	1,776	1.50%	20,936	61,460	922	Subsidiary
											(Note 7)
Konly	ENNOSTAR	Taiwan ROC	Holding company	860,283	-	12,093	1.78%	1,004,393	440,229	(6,340)	Associate
											(Note 5)
Ronly	DPTW	Taiwan ROC	Design, manufacturing, and sales of TFT-	845,510	845,510	40,509	6.09%	560,802	(585,916)	(35,662)	Subsidiary
			LCD modules, backlight modules, TV set
			and related parts
Ronly	Raydium	Taiwan ROC	IC Design	240,647	-	669	1.00%	241,745	1,832,851	711	Associate
Ronly	Daxin	Taiwan ROC	Research, manufacturing and sales of	70,021	70,021	6,312	6.15%	198,077	322,884	19,842	Associate
			display and semiconductor related
			chemicals
Ronly	Lextar	Taiwan ROC	Design, manufacturing, and sales of InGaN	-	323,431	-	-	-	-	-	Associate
			epi wafers and chips, and light emitting								(Note 5)
			diode packages and modules
Ronly	ADLINK	Taiwan ROC	Manufacturing and sales of hardware,	28,311	-	439	0.20%	27,443	68,976	(832)	Associate
			software and peripheral devices of industrial
			computers
Ronly	IOC	Taiwan ROC	R&D and design of flexible electronics	68,400	68,400	3,420	17.10%	57,767	(26,377)	(8,867)	Associate
			technology and processing equipment
			development
Ronly	ENNOSTAR	Taiwan ROC	Holding company	955,753	-	16,986	2.50%	1,415,069	440,229	(7,578)	Associate
											(Note 5)
DPTW	BVLB	Malaysia	Holding company	1,051,289	1,051,289	36,000	29.71%	243,244	11,690	3,473	Subsidiary
DPTW	DPLB	Malaysia	Holding company	4,362,627	4,362,627	92,267	100.00%	5,096,530	(60,551)	(56,366)	Subsidiary
DPTW	FHVI	BVI	Holding company	2,362,321	2,362,321	22,006	100.00%	3,577,975	(210,914)	(205,191)	Subsidiary
DPTW	FFMI	Mauritius	Holding company	274,700	274,700	653	100.00%	98,773	(1,305)	(1,391)	Subsidiary
DPTW	RFOP	Taiwan ROC	Manufacturing and sales of polymer	338,729	338,729	33,873	49.00%	193,233	15,301	7,497	Joint
			plasticized raw materials								Venture
DPTW	Darwin	Thailand	International trade	3,740	3,740	40	40.00%	11,531	3,427	1,371	Associate
	Summit
	Corporation
	Ltd.

Investor	Investee	Lti	Mi Atiiti	Original Investment Amount	Original Investment Amount	June 30, 2021 Percentage Carrying	June 30, 2021 Percentage Carrying	June 30, 2021 Percentage Carrying	Net Income L f	Investor’s Share of Profit L	Nt
Company	Company	ocaon	an cves	June 30, 2021	December 31, 2020	Shares	of Ownership	Amount (Notes 1 and 2)	(oss) o Investee	(oss) of Investee (Notes 1 and 2)	oe
ACTW	ACMK	Malaysia	Manufacturing and sale of solar wafers	449,975	449,975	46,196	100.00%	352,056	(32,737)	(32,737)	Subsidiary
ACTW	SDMC	Taiwan ROC	Holding company	1,988,488	1,988,488	116,836	100.00%	1,834,011	64,823	66,809	Subsidiary
SDMC	M.Setek	Japan	Manufacturing and sale of ingots	23,596,398	23,596,398	11,404,184	99.9991%	1,794,664	65,059	65,059	Subsidiary
ADP	ADPNL	Netherlands	Sales and sales support of TFT-LCD panels	96,733	-	-	100.00%	86,387	(7,408)	(7,408)	Subsidiary
			and holding company								(Note 6)
ADP	Jector	Taiwan ROC	Introduction of smart field construction and	120,000	-	12,000	78.43%	115,736	(5,437)	(4,264)	Subsidiary
			other related software and hardware
			solutions
SREC	SGPC	Taiwan ROC	Solar power generation	896,517	-	56,811	100.00%	937,841	41,323	41,323	Subsidiary
											(Note 7)
SREC	EGPC	Taiwan ROC	Solar power generation	325,686	-	24,500	100.00%	346,284	20,599	20,599	Subsidiary
											(Note 7)
AULB	AUUS	United States	Sales and sales support of TFT-LCD Panels	USD 1,000	USD 1,000	1,000	100.00%	USD 2,747	USD 6	USD 6	Subsidiary
AULB	AUJP	Japan	Sales support of TFT-LCD Panels	USD 276	USD 276	1	100.00%	USD 1,841	USD 37	USD 37	Subsidiary
AULB	AUKR	South Korea	Sales support of TFT-LCD Panels	USD 155	USD 155	-	100.00%	USD 1,094	USD 106	USD 106	Subsidiary
AULB	AUCZ	Czech	Assembly of solar modules	-	USD 20,531	-	100.00%	-	USD 2	USD 2	Subsidiary
		Republic									(Note 8)
AULB	AUSK	Slovakia	Repairing of TFT-LCD modules	USD 1,359	USD 1,359	-	100.00%	USD 24,701	USD 199	USD 199	Subsidiary
		Republic
AULB	AUST	Singapore	Manufacturing TFT-LCD panels based on	USD 241,487	USD 241,487	907,114	100.00%	USD 91,025	USD 1,802	USD 1,802	Subsidiary
			low temperature polysilicon technology
AULB	AUVI	United States	Research and development and IP related	USD 5,000	USD 5,000	5,000	100.00%	USD 6,183	USD 182	USD 182	Subsidiary
			business
AULB	BVLB	Malaysia	Holding company	USD 85,171	USD 85,171	85,171	70.29%	USD 20,649	USD 415	USD 292	Subsidiary
AULB	AUSG	Singapore	Holding company and sales support of TFT-	USD 9,958	USD 9,958	266,268	100.00%	USD 6,822	USD (48)	USD (48)	Subsidiary
			LCD panels
AUSG	AEUS	United States	Sales support of solar-related products	USD 3,510	USD 3,510	3,510	100.00%	USD 2,971	USD (117)	USD (117)	Subsidiary
AUSG	ADPNL	Netherlands	Sales and sales support of TFT-LCD panels	-	USD 3,245	-	-	-	-	-	Subsidiary
			and holding company								(Note 6)
DPLB	DPHK	Hong Kong	Holding company	USD 103,785	USD 103,785	10	100.00%	USD 185,392	USD (1,760)	USD (1,760)	Subsidiary
											(Note 4)
DPLB	DPSK	Slovakia	Manufacturing and sales of automotive	USD 4,216	USD 4,216	-	100.00%	USD 450	USD (389)	USD (389)	Subsidiary
		Republic	parts
FHVI	FTMI	Mauritius	Holding company	USD 6,503	USD 6,503	6,503	100.00%	USD 64,471	USD (8,066)	USD (8,066)	Subsidiary
FHVI	FWSA	Samoa	Holding company	USD 19,000	USD 19,000	19,000	100.00%	USD 16,362	USD 257	USD 257	Subsidiary

Investor	Investee	Lti	Mi Atiiti	Original Investment Amount	Original Investment Amount	June 30, 2021 Percentage Carrying	June 30, 2021 Percentage Carrying	June 30, 2021 Percentage Carrying	Net Income L f	Investor’s Share of Profit L	Nt
Company	Company	ocaon	an cves	June 30, 2021	December 31, 2020	Shares	of Ownership	Amount (Notes 1 and 2)	(oss) o Investee	(oss) of Investee (Notes 1 and 2)	oe
FHVI	PMSA	Samoa	Holding company	USD 39,673	USD 39,673	31,993	100.00%	USD 49,563	USD 324	USD 324	Subsidiary
ADCM	ADHLD	Caymen	Holding company	USD 2,700	-	2,700	30.00%	USD 2,322	USD (1,157)	USD (347)	Subsidiary
ADPNL	ADPUS	United States	Sales and sales support of TFT-LCD Panels	USD 1,500	USD 1,500	1	100.00%	USD 1,524	USD 24	USD 24	Subsidiary
ADPNL	ADPJP	Japan	Sales and sales support of TFT-LCD Panels	USD 508	USD 508	1	100.00%	USD 473	USD 24	USD 24	Subsidiary
ADHLD	ADSG	Singapore	Holding company	USD 7,300	-	7,300	100.00%	USD 6,038	USD (1,158)	USD (1,158)	Subsidiary
ADSG	ADTW	Taiwan ROC	Design and sales of software and hardware	USD 1,080	-	3,000	100.00%	USD 1,069	USD (11)	USD (11)	Subsidiary
			integration system and equipment, software
			development and consulting services
			relating to intelligent manufacturing
M.Setek	Ichijo	Japan	Manufacturing of semiconductor equipment	JPY 5,000	JPY 5,000	-	38.46%	-	-	-	Associate
	Seisakusyo		and related parts								(Note 3)
	Co., Ltd.
CQIL	CQHLD	United	Holding company	USD 26,548	USD 29,118	635,730	100.00%	USD 31,163	USD (11)	USD (11)	Subsidiary
		Kingdom
CQHLD	CQUK	United	Sales and sales support of content	GBP 1,874	GBP 1,874	-	100.00%	GBP 100	GBP (8)	GBP (8)	Subsidiary
		Kingdom	management system
CQHLD	CQUS	United States	Sales of content management system and	GBP 19,948	GBP 19,948	13	100.00%	GBP 10,785	GBP 539	GBP 539	Subsidiary
			hardware
CQHLD	CQCA	Canada	Research and development of content	GBP 798	GBP 798	-	100.00%	GBP 562	GBP 51	GBP 51	Subsidiary
			management system
CQUS	JRUK	United	Development and sales of content	USD 1,500	USD 1,500	1	100.00%	USD 1,645	USD 6	USD 6	Subsidiary
		Kingdom	management system and sales of the related
			hardware
CQUS	JRUS	United States	Development and sales of content	USD 8,000	USD 8,000	18	100.00%	USD 7,405	USD (450)	USD (450)	Subsidiary
			management system and sales of the related
			hardware

Note 1: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements. Note 2: Inclusive of the amortization of differences between the investment cost and the entity’s share of the net value of investee, and the effect of upstream and sidestream transactions.

Note 3: The carrying amount includes accumulated impairment loss. Note 4: The registration of the alteration of DPHK’s common stock has not been completed. Note 5: On January 6, 2021, Lextar carried out a joint share exchange with Epistar for a newly incorporated company, Ennostar. See Note 6(7) for the relevant information. Note 6: As part of a business restructuring, AUSG sold all its shareholdings in ADPNL to ADP in January 2021. Note 7: SREC and its subsidiaries were included in the Company’s consolidated financial statements from January 2021. See Note 6(8) for the relevant information. Note 8: The liquidation process was still in progress as of June 30, 2021, and had been completed in July 2021.

AU OPTRONICS CORP. AND SUBSIDIARIES

Information on Investment in Mainland China

For the six months ended June 30, 2021

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 10

1. AUO `：`

(1) Related information on investment in Mainland China

				Accumulated Outflow of	Investment	Investment	Accumulated Outflow of		%	Investor’s	Carrying Amount of	Accumulated
Investee		Total Amount of Paid-in	Method of	Investment	Flows		Investment	Net Income (Loss) of	Ownership through	Share of	the	Inward Remittance
Company	Main Activities	Capital	Investment	from Taiwan			from Taiwan	Investee	Direct or	Profit (Loss)	Investment	of Earnings	Note
		(Note 2)		as of January 1, 2021	Outflow	Inflow	as of March 31, 2021	(Notes 4 and 5)	Indirect	of Investee (Notes 4 and 5)	as of June 30, 2021	as of June 30,
				(Note 2)					Investment		(Note 2)	2021
							(Note 2)

ACareSZ	Design, development and sales of software and	86,184	(Note 1)	-	-	-	-	(18,567)	100%	(18,567)	22,067	-
	hardware for health care industry
ADSZ	Management consulting and services of	139,350	(Note 1)	-	139,350	-	139,350	(32,331)	100%	(32,331)	104,479	-
	technology promotion and application
AESD	Planning, design and development of	8,618	(Note 1)	-	-	-	-	(6)	100%	(6)	2,375	-
	construction project for environmental
	protection and related project management
AESZ	Planning, design and development of	51,710	(Note 1)	-	-	-	-	(6,096)	100%	(6,096)	25,283	-
	construction project for environmental
	protection and related project management
AUKS	Manufacturing and sales of TFT-LCD panels	26,783,070	(Note 1)	13,659,366	-	-	13,659,366	1,315,582	51%	670,947	5,917,007	-
AUSH	Sales support of TFT-LCD Panels	83,610	(Note 1)	27,870	-	-	27,870	(25,319)	100%	(25,319)	314,947	-
AUSJ	Manufacturing and assembly of TFT-LCD	3,009,960	(Note 1)	2,229,600	-	-	2,229,600	73,017	100%	73,017	3,973,847	-
	modules; leasing
AUSZ	Manufacturing, assembly and sales of TFT-LCD	7,747,860	(Note 1)	5,574,000	-	-	5,574,000	741,053	100%	741,053	16,827,561	-
	modules
AUXM	Manufacturing, assembly and sales of TFT-LCD	6,967,500	(Note 1)	6,967,500	-	-	6,967,500	453,824	100%	453,824	14,700,386	-
	modules
BVHF	Manufacturing and sales of liquid crystal	2,047,052	(Note 1)	-	-	-	-	11,838	100%	11,838	817,387	-
	products and related parts
BVXM	Manufacturing and sales of liquid crystal	2,585,520	(Note 1)	-	-	-	-	12,792	100%	12,792	1,300,374	-
	products and related parts; leasing

				Accumulated Outflow of	Investment	Investment	Accumulated Outflow of		%	Investor’s	Carrying Amount of	Accumulated
Investee		Total Amount of Paid-in	Method of	Investment	Flows		Investment	Net Income (Loss) of	Ownership through	Share of	the	Inward Remittance
Company	Main Activities	Capital	Investment	from Taiwan			from Taiwan	Investee	Direct or	Profit (Loss)	Investment	of Earnings	Note
		(Note 2)		as of January 1, 2021	Outflow	Inflow	as of March 31, 2021	(Notes 4 and 5)	Indirect	of Investee (Notes 4 and 5)	as of June 30, 2021	as of June 30,
				(Note 2)					Investment		(Note 2)	2021
							(Note 2)

EDT	Design and sales of software and hardware	21,546	(Note 1)	-	-	-	-	(3,146)	100%	(3,146)	4,923	-
	integration system and equipment relating to
	intelligent manufacturing
MIS	Development and licensing of software relating	86,184	(Note 1)	-	-	-	-	(32,287)	100%	(32,287)	1,203	-
	to intelligent manufacturing, and related
	consulting services
MISXM	Sales of software and hardware relating to	21,546	(Note 1)	-	-	-	-	(916)	100%	(916)	20,692	-
	intelligent manufacturing, and related
	consulting services

(2) Upper limit on investment in Mainland China

Accumulated Investment in Mainland China as of June 30, 2021 (Note 2)	Investment Amounts Authorized by the Investment Commission, MOEA (Note 2)	Upper Limit on Investment Stipulated by the Investment Commission, MOEA (Note 3)
28,597,686 (USD 1,026,110)	37,672,728 (USD 1,344,003 and HKD 60,000)	133,105,616

Note 1: Indirect investments in Mainland China through companies registered in a third region.
Note 2: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 3: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, AUO’s accumulated investments in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of Economic Affairs (“MOEA”).
Note 4: Amounts were recognized based on the investees’ reviewed financial statements.
Note 5: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rates for the six months ended June 30, 2021.
Note 6: BVHF is 100% owned by BVLB, a jointly-owned subsidiary of AUO and DPTW.

2. DPTW and ADP:

(1) Related information on investment in Mainland China

				Accumulated	Investment	Investment	Accumulated				Carrying
									%			Accumulated
		Total Amount		Outflow of	Flows		Outflow of	Net Income	Ownership	Investor’s	Amount of	Inward
Investee		of Paid-in	Method of	Investment			Investment	(Loss) of	through	Share of	the	Remittance of
Company	Main Activities	Capital	Investment	from Taiwan f J	Outflow	Inflow	from Taiwan f Mh	Investee Nt 2 d	Direct or	Profit (Loss) f It	Investment f J	Earnings as of	Note
		(Note 4)		as o anuary 1, 2021	(Note 4)	(Note 4)	as o arc 31, 2021	(oes an 6)	Indirect	o nvesee (Notes 2 and 6)	as o une 30, 2021	June 30, 2021
									Investment			(Note 4)
				(Note 4)			(Note 4)				(Note 4)

BVHF	Manufacturing and sale of liquid crystal	2,047,052	(Note 1)	445,920	-	-	445,920	11,838	29.71%	11,838	817,387	-	Note 5
	products and related parts
DPSZ	Manufacturing and sale of backlight modules	696,750	(Note 1)	418,050	-	-	418,050	(76,038)	100%	(76,038)	1,212,071	1,280,180	Note 9
	and related parts
DPXM	Manufacturing and sale of backlight modules	1,950,900	(Note 1)	1,950,900	-	-	1,950,900	23,928	100%	23,928	3,954,810	1,752,860
	and related parts
FHWJ	Manufacturing and sale of backlight modules	181,155	(Note 1)	228,534	-	-	228,534	(1,305)	100%	(1,305)	48,813	-
	and related parts
FPWJ	Manufacturing, sales and trading of precision	808,230	(Note 1)	529,530	-	-	529,530	11,054	100%	11,054	681,168	-	Note 8
	plastic parts
FTKS	Manufacturing and sale of backlight modules	1,003,320	(Note 1)	1,003,320	-	-	1,003,320	9,142	100%	9,142	1,381,309	-
	and related parts
FTWJ	Manufacturing and sale of backlight modules	975,450	(Note 1)	181,155	-	-	181,155	(231,110)	100%	(231,110)	1,571,628	392,257	Note 7
	and related parts
ADPSZ	Sales and sales support of TFT-LCD panels	20,903	-	-	20,903	-	20,903	(14,142)	100%	(14,142)	7,179	-

(2) Upper limit on investment in Mainland China

Entity	Accumulated Investment in Mainland China as of June 30, 2021 (Note 4)	Investment Amounts Authorized by the Investment Commission, MOEA (Note 4)	Upper Limit on Investment Stipulated by the Investment Commission, MOEA (Note 3)
DPTW	4,757,409 (USD 170,700)	4,585,765 (USD 164,541)	5,528,318
ADP	20,903 (USD 750)	20,903 (USD 750)	1,893,423

Note 1: Indirect investments in Mainland China through companies registered in a third region.

Note 2: Amounts were recognized based on the investees’ reviewed financial statements.

Note 3: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, DPTW’s and ADP’s accumulated investments in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of Economic Affairs (“MOEA”).

Note 4: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.
Note 5: BVHF is 100% owned by BVLB, a jointly-owned subsidiary of AUO and DPTW. Accordingly, the share of profit (loss) of investee and the carrying amount of the investment as of June 30, 2021 disclosed in the table are presented based on 100% held.
Note 6: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rates for the six months ended June 30, 2021.
Note 7: The amount of paid-in capital includes the capitalization of retained earnings amounting to USD28,500 thousand for the years from 2005 to 2007.
Note 8: The amount of paid-in capital includes the capital injection of USD10,000 thousand from the offshore holding company, which was originally from FTWJ’s appropriation of earnings.
Note 9: The amount of paid-in capital includes the capital injection of USD1,000 thousand from DPLB in 2010 and the capitalization of retained earnings of USD9,000 thousand from DPSZ in 2012.

AI assistant

AUO — Interim / Quarterly Report 2021

52062_rns_2021-12-28_e43678bd-2d79-4d5c-aace-200964455da4.pdf

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Financial Statements

Independent Auditors’ Review Report

Introduction

Scope of Review

Conclusion

KPMG

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of June 30, 2021 and 2020 AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2021, December 31, 2020, and June 30, 2020

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan dollars, except for Earnings (loss) per share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the Six Months Ended June 30, 2021 and 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the Six Months Ended June 30, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

Notes to Consolidated Financial Statements

For the Six Months Ended June 30, 2021 and 2020

1. Organization

2. The Authorization of Financial Statements

3. Application of New and Revised Standards, Amendments and Interpretations:

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

4. Summary of Significant Accounting Policies

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(2) Basis of consolidation

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(3) Employee benefits

(4) Income taxes

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

5. Critical Accounting Judgments and Key Sources of Estimations and Assumptions Uncertainty

6. Description of Significant Accounts

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

a. Associates

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

b. Joint ventures

(8) Acquisition of subsidiaries

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(9) Acquisition of Business

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

b. Identifiable assets acquired and liabilities assumed

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iii) Significant lease agreements

(iv) Sublease of right-of-use assets

(v) Additional lease information

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

b. Lessor

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

(17) Provisions

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

b. Defined contribution plans

a. Common stock

b. Capital surplus

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements

AUO Interim / Quarterly Report 2021