EDT — Interim / Quarterly Report 2020

Nov 3, 2020

Stock Code:3038

(English Translation of Financial Report Originally Issued in Chinese)

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

For the three months ended March 31, 2020 and 2019 (With Independent Auditors’ Review Report Thereon)

Address: No. 5, Central 1st Rd., Kaohsiung Export Processing Zone, Kaohsiung, Taiwan, R.O.C. Telephone: 886-7-812-4832

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Table of contents

Contents 1、Cover page 2、Table of contents 3、Independent auditors’ review report 4、Consolidated balance sheets 5、Consolidated statements of comprehensive income 6、Consolidated statements of changes in equity 7、Consolidated statements of cash flows 8、Notes to consolidated financial statements (1) Organization and business scope (2) Financial statements authorization date and authorization process (3)Application of New and Revised International Financial Reporting Standards and Interpretations (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimates uncertainty (6) Explanation of significant accounts (7) Transactions with Related Parties (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disaster (11) Significant subsequent events (12) Other (13) Supplementary Disclosure Requirements (a) Information on significant transactions (b) Information on investees (c) Information on investments in Mainland China (d) Major shareholders (14) Segment information

Page

1 2 3 4 5 6 7 8 8 8 9~10 10 10~37 37 38 38 38 38 38 38~41 41 42~43 43 43~44

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Independent Auditors’ Review Report

The Board of Director’s Emerging Display Technologies Corp

Introduction

We have reviewed the accompanying consolidated balance sheets of Emerging Display Technologies Corp. (the Company) and subsidiaries as of March 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2020 and 2019, 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 withthe Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed issued into effectand 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 reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standards 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.

Basis for Qualified Conclusion

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent accountants. These financial statements reflect total assets amounting to $248,892 thousand and $234,717 thousand, constituting 7.51% and 7.00% of consolidated total assets as of March 31, 2020 and 2019, respectively, total liabilities amounting to $58,643 thousand and $79,705 thousand, constituting 4.40% and 5.20%of consolidated total liabilities as of March 31, 2020 and 2019, respectively, and total comprehensive gain (loss) amounting to gain $2,759 thousand and loss $1,618 thousand, constituting 9.36% and 2.5% of consolidated total comprehensive loss for the three months ended March 31, 2020 and 2019, respectively.

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Qualified Conclusion

Based on our reviews,except for the effects of the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent accountants, 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 Emerging Display Technologies Corp. and subsidiaries as of March 31, 2020 and 2019, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2020 and 2019 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the audit resulting in this independent auditors’ review report are Po Jen, Yang and Yen Ta,Su

KPMG

Taipei, Taiwan (Republic of China)

May 5, 2020

Notes to Readers

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

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.

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(English Translation of Financial Statements and Report Originally Issued in Chinese)

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2020,December 31,2019 ,and March 31, 2019

(Expressed in thousands of New Taiwan Dollars)

(Reviewed, not audited)

Assets Current assets： Cash and cash equivalents (Note 6(a)) Financial assets at fair value through profit or loss, current (Note 6(b)) Financial assets at fair value through other comprehensive income, current(Note 6(c)) Accounts receivable, net (Note 6(d) and (u)) Other receivables (Notes 6(e) and 6 (y)) Income tax assets Inventories (Note 6(f)) Other current assets (Notes 6(g) and 8) Total current assets Non-current assets: Financial assets at fair value through other comprehensive income, non-current (Note 6(c)) Property, plant and equipment (Notes 6(i) ,8 and 9) Right-of-use assets (Notes 6(j)) Investment property (Notes 6(k)) Intangible assets (Note 6(l)) Deferred income tax assets Prepayments for business facilities Other non-current financial assets (Notes 6(g) and 8) Total non-current assets Total assets	March 31, 2020 Amount ％ $ 966,115 29 104,330 3 186,922 6 540,521 17 10,804 - 45 - 790,506 24 38,660 1 2,637,903 80 146,480 4 352,515 11 72,887 2 59,063 2 4,834 - 32,988 1 268 - 7,622 - 676,657 20 $ 3,314,560 100	December 31,2019	March 31, 2019 Amount ％ 980,028 29 75,962 2 187,963 6 531,053 16 15,342 - 87 - 798,167 24 51,234 1
		Amount ％ 1,368,252 38 54,094 1 109,554 3 537,591 15 18,684 - 95 - 803,035 22 59,389 2
		2,950,694 81	2,639,836 78
		140,762 4 365,955 10 77,207 2 57,834 2 3,777 - 33,003 1 - - 7,634 -	147,750 5 442,080 13 86,915 3 - - 2,295 - 28,157 1 - - 7,851 -
		686,172 19	715,048 22
		3,636,866 100	3,354,884 100

Liabilities and Equity Current liabilities： Short-term loans (Note 6(m)) Financial liability at fair value through profit and loss (Note 6(b)) Notes payable Accounts payable Other payables Income tax liabilities Lease liabilities,current (Notes 6(o)) Long-term loans, current portion (Notes 6(n) and 8) Other current liabilities (Notes 6(u)) Total current liabilities Non-current liabilities： Long-term loans (Notes 6(n) and 8) Deferred income tax liabilities Lease liabilities, non-current (Notes 6(o)) Net defined benefit liabilities, non-current Guarantee deposits received Other non-current liabilities－other Total non-current liabilities Total liabilities Equity attributable to owners of parent (Note 6(c) and (s))： Capital stock Capital surplus Retained earnings Other equity interest Treasury stock Total equity attributable to shareholders of the parent Non-controlling interests(Note 6(h)) Total equity Total liabilities and equity	March 31, 2020 Amount ％ $ 233,000 7 - - 1,772 - 394,093 12 203,243 6 63,339 2 10,687 - 239,722 7 33,953 1 1,179,809 35 - - 225 - 63,691 2 87,896 3 591 - 884 - 153,287 5 1,333,096 40 1,624,076 49 4,397 - 583,144 18 (119,901) (4) (173,021) (5) 1,918,695 58 62,769 2 1,981,464 60 $ 3,314,560 100	December 31,2019	December 31,2019	March 31, 2019 Amount ％ 300,000 9 - - 1,568 - 418,340 12 195,535 6 21,889 1 11,919 - - - 18,242 1 967,493 29 399,054 12 932 - 75,375 2 87,587 3 264 - 1,039 - 564,251 17 1,531,744 46 1,744,076 52 28,226 1 410,643 12 (99,849) (3) (323,947) (10) 1,759,149 52 63,991 2 1,823,140 54 3,354,884 100	March 31, 2019 Amount ％ 300,000 9 - - 1,568 - 418,340 12 195,535 6 21,889 1 11,919 - - - 18,242 1 967,493 29 399,054 12 932 - 75,375 2 87,587 3 264 - 1,039 - 564,251 17 1,531,744 46 1,744,076 52 28,226 1 410,643 12 (99,849) (3) (323,947) (10) 1,759,149 52 63,991 2 1,823,140 54 3,354,884 100
		Amount 400,000 994 307 431,437 283,605 57,038 11,907 319,555 23,398	％	Amount 300,000 - 1,568 418,340 195,535 21,889 11,919 - 18,242
			11 - - 12 8 2 - 9 -
		1,528,241	42	967,493	29
		- - 66,575 88,546 587 936	- - 2 2 - -	399,054 932 75,375 87,587 264 1,039	12 - 2 3 - -
		156,644	4	564,251	17
		1,684,885	46	1,531,744	46
		1,624,076 4,397 539,266 (102,612) (173,021)	45 - 15 (3) (5)	1,744,076 28,226 410,643 (99,849) (323,947)	52 1 12 (3) (10)
		1,892,106 59,875	52 2	1,759,149 63,991	52 2
		1,951,981	54	1,823,140	54
		3,636,866	100	3,354,884	100

See accompanying notes to financial statements.

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(English Translation of Financial Statements and Report Originally Issued in Chinese) EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income For the three months ended March 31, 2020 and 2019

(Expressed in thousands of New Taiwan dollars, Except Earnings Per Share) (Reviewed, not audited)

Operating revenue (Note 6(u)) Operating cost (Notes 6(f, q and v) and 12 ) Gross profit Operating expenses (Notes 6(d, q and v) and 12)： Selling expenses General and administrative expenses Research and development expenses Expected credit impairment gain Total operating expenses Net other income (Note 6(w)) Net operating income Non-operating income and expenses(Notes 6(x))： Other income Other gains and losses Finance costs Total Non-operating income and expenses Profit (loss) before income tax Less:Income tax expense (Note 6(r)) Profit(Loss) Other comprehensive income： Items that will not be reclassified subsequently to profit or loss Unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive income(Note 6(s)) Less：Income tax related to items that will not be reclassified subsequently (Note 6(r)) Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign financialstatements (Note 6(s)) Less: Income tax related to items that will be reclassified subsequently (Note 6(r)) Other comprehensive income, net Comprehensive income Profit (loss) attributable to Shareholders of the parent Non-controlling interests Net Profit (loss) Comprehensive income attributable to： Shareholders of the parent Non-controlling interests Total comprehensive income Earnings per share (Note 6(t))(expressed in New Taiwan dollars)： Basic earnings per share Diluted earnings per share		For the three months	For the three months	For the three months	For the three months	ended March	31 ％ 100 82 18 6 3 3 - 12 - 6 1 1 - 2 8 1 7 1 - 1 - - - 1 8 7 - 7 8 - 8 0.35
		2020		％ 100 83 17 6 4 3 - 13 - 4 1 1 - 2 6 1 5 (2) - (2) - - - (2) 3 5 - 5 3 - 3 0.30		2019
		Amount				Amount 890,981 733,124
		$ 814,964 674,227
		140,737				157,857
		48,379 31,628 24,687 541				54,861 29,886 25,079 (1,121)
		105,235				108,705
		1,058				-
		36,560				49,152
		8,963 8,502 (3,203)				4,677 12,348 (3,687)
		14,262				13,338
		50,822 6,969				62,490 9,874
		43,853				52,616
		(13,539) 225				8,870 -
		(13,764)				8,870
		(606) -				3,233 -
		(606)				3,233
		(14,370)				12,103
		$ 29,483				64,719
		$ 43,878 (25)				52,621 (5)
		$ 43,853				52,616
		$ 26,589 2,894				67,657 (2,938)
		$ 29,483				64,719
			$
			$	0.29			0.35

See accompanying notes to consolidated financial statements.

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(English Translation of Financial Statements and Report Originally Issued in Chinese)

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Consolidated Statements of Changes in Stockholders’ Equity For the three months ended March 31, 2020 and 2019

(Expressed in thousands of New Taiwan dollars) (Reviewed, not audited)

Equity attributable to shareholders of parent

Other equity interest

Balance at January 1, 2019 Profit Other comprehensive income Total comprehensive income Purchase of treasury stock Disposal of investments in equity instruments at fair value through other comprehensive income Balance as of March 31, 2019 Balance at January 1, 2020 Profit Other comprehensive income Total comprehensive income Balance as of March 31, 2020	Capital stock	Capital surplus 28,226 - - - - - 28,226 4,397 - - - 4,397	Legal capital reserve 45,822 - - - - - 45,822 57,015 - - - 57,015	Retained earning	s	Exchangedifferenc es on translation of foreign financial statements (8,271) - 3,116 3,116 - - (5,155) (14,111) - (562) (562) (14,673)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (104,299)	Treasury stock (273,209)	Total equity attributable to shareholders of parent	Non-controlling interests 66,929	Total Equity 1,809,159 52,616 12,103 64,719 (50,738) - 1,823,140 1,951,981 43,853 (14,370) 29,483 1,981,464
				Special capital reserve 109,212 - - - - - 109,212 151,307 - - - 151,307	Unappropriated earnings 200,673 52,621 - 52,621 - 2,315 255,609 330,944 43,878 - 43,878 374,822
	$ 1,744,076 - - - - - $ 1,744,076 $ 1,624,076 - - - $ 1,624,076								1,742,230
							- 11,920	- -	52,621 15,036	(5) (2,933)
							11,920	-	67,657	(2,938)
							- (2,315)	(50,738) -	(50,738) -	- -
							(94,694)	(323,947)	1,759,149	63,991
							(88,501)	(173,021)	1,892,106	59,875
							- (16,727)	- -	43,878 (17,289)	(25) 2,919
							(16,727)	-	26,589	2,894
							(105,228)	(173,021)	1,918,695	62,769

See accompanying notes to consolidated financial statements.

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(English Translation of Financial Statements and Report Originally Issued in Chinese) EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows For the years ended March 31, 2020 and 2019

(expressed in thousands of New Taiwan Dollars) (Reviewed, not audited)

Cash flows from (used in) operating activities： Profit(Loss) before tax Adjustments： Adjustments to reconcile profit (loss)： Depreciation expense Amortization expense Expected credit impairment loss (gain) Net (gains) losses on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Unrealized foreign exchange loss (gain) Total adjustments to reconcile profit Changes in operating assets and liabilities Changes in operating assets: Decrease (increase) in accounts receivable Decrease in other accounts receivable Decrease in inventories Decrease in other current assets Total net changes in operating assets Changes in operating liabilities： Increase in notes payable Decrease in accounts payable Decrease in other payable Increase in other current liabilities Decrease in net defined benefit liability Increase (dcrease) in other non-current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Net cash flows(used in) from operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Acquisition of intangible assets Acquisition of Investment property Increase in other financial assets Increase in prepayments on purchase of equipment Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Decrease in short-termloans Repayments of long-termloans Payments to acquire treasury stock Repayments of lease liabilities Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the three months ended March 31 2020 2019 $ 50,822 62,490 20,344 21,291 381 264 541 (1,121) 9,121 (6,060) 3,203 3,687 (4,195) (4,465) 1,654 (6,454) 31,049 7,142 190 (59,709) 152 120 12,766 47,389 21,984 4,347 35,092 (7,853) 1,465 848 (37,675) (41,440) (83,170) (38,843) 9,429 3,285 (650) (639) (52) 1,039 (110,653) (75,750) (75,561) (83,603) (44,512) (76,461) 6,310 (13,971) 4,715 4,842 (3,117) (3,484) (608) (1,689) 7,300 (14,302) (88,953) - 7,218 32,289 (60,350) (32,870) - 89,427 (7,819) (6,611) (1,439) (87) (903) - (45) (6) (268) - (152,559) 82,142 (167,000) (70,000) (80,000) - - (50,738) (3,218) (3,178) (250,218) (123,916) (6,660) 6,991 (402,137) (49,085) 1,368,252 1,029,113 $ 966,115 980,028	For the three months ended March 31 2020 2019 $ 50,822 62,490 20,344 21,291 381 264 541 (1,121) 9,121 (6,060) 3,203 3,687 (4,195) (4,465) 1,654 (6,454) 31,049 7,142 190 (59,709) 152 120 12,766 47,389 21,984 4,347 35,092 (7,853) 1,465 848 (37,675) (41,440) (83,170) (38,843) 9,429 3,285 (650) (639) (52) 1,039 (110,653) (75,750) (75,561) (83,603) (44,512) (76,461) 6,310 (13,971) 4,715 4,842 (3,117) (3,484) (608) (1,689) 7,300 (14,302) (88,953) - 7,218 32,289 (60,350) (32,870) - 89,427 (7,819) (6,611) (1,439) (87) (903) - (45) (6) (268) - (152,559) 82,142 (167,000) (70,000) (80,000) - - (50,738) (3,218) (3,178) (250,218) (123,916) (6,660) 6,991 (402,137) (49,085) 1,368,252 1,029,113 $ 966,115 980,028
	2020 $ 50,822
	20,344 381 541 9,121 3,203 (4,195) 1,654	21,291 264 (1,121) (6,060) 3,687 (4,465) (6,454)
	31,049	7,142
	190 152 12,766 21,984	(59,709) 120 47,389 4,347
	35,092	(7,853)
	1,465 (37,675) (83,170) 9,429 (650) (52)	848 (41,440) (38,843) 3,285 (639) 1,039
	(110,653)	(75,750)
	(75,561)	(83,603)
	(44,512)	(76,461)
	6,310 4,715 (3,117) (608)	(13,971) 4,842 (3,484) (1,689)
	7,300	(14,302)
	(88,953) 7,218 (60,350) - (7,819) (1,439) (903) (45) (268)	- 32,289 (32,870) 89,427 (6,611) (87) - (6) -
	(152,559)	82,142
	(167,000) (80,000) - (3,218)	(70,000) - (50,738) (3,178)
	(250,218)	(123,916)
	(6,660)	6,991
	(402,137) 1,368,252	(49,085) 1,029,113
	$ 966,115	980,028

See accompanying notes to financial statements.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

For the three months ended March 31, 2020 and 2019

(All amounts expressed in thousands of New Taiwan dollars, unless otherwise specified) (Reviewed, not audited)

(1) Organization and Business Scope

Emerging Display Technologies Corp. (the Company) and its subsidiaries was incorporated as a limited liability Group under the laws of the Republic of China (ROC) on September 23, 1994. The address of its registered office and principal place of business is No.5, Central 1st Rd, Kaohsiung Economic Processing Zone, Kaohsiung City, Taiwan. The Consolidated financial statements comprise Emerging Display Technologies Corp. and its subsidiaries (jointly referred to as the Group). The Group is engaged in the manufacture and sale of Capacity Touch Panel and liquid crystal displays (LCDs).

(2) Financial Statements Authorization Date and Authorization Process

The consolidated financial statements were authorized for issuance by the Board of Directors on March 5, 2020.

• (3) Application of New and Revised International Financial Reporting Standards and Interpretations

• (a) The impact of new and revised International Financial Reporting Standards and Interpretations endorsed by the Financial Supervisory Commission, R.O.C. ("FSC")

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2020 ：

New, Revised or Amended Standards and Interpretations Amendments to IFRS 3 “Definition of a Business” Amendments to IFRS 9, IAS 39, and IFRS 7 "Interest Rate Benchmark Reform " Amendments to IAS 1 and IAS 8 “Definition of Material”	Effective date per IASB
	January 1, 2020 January 1, 2020 January 1, 2020

The Group believes that the adoption of the above IFRSs would not have any material impact on its consolidated financial statements.

• (b) Newly released or amended standards and interpretations not yet endorsed by the FSC

A summary of the new standards and amendments issued by the IASB but have yet to be endorsed by the FSC ：

New, Revised or Amended Standards and Interpretations 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” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”	Effective date per IASB
	Effective date to be determined by IASB January 1, 2021 January 1, 2022

The Group is evaluating the impact on its financial position and financial performance upon its initial adoption of the above mentioned standards or interpretations. The results, thereof, will be disclosed when the Group completes its evaluation.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(4) Summary of Significant Accounting Policies

(a) Statement of compliance

The consolidated financial statements have been prepared in conforming with the Regulation Governing the Preparation of Financial Reports by Securities Issuers and IAS 34, “Interim Financial Reporting,” endorsed by FSC. These consolidated financial statements do not include all of the information required by the Regulations and by the IFRS endorsed by the FSC for full annual consolidated financial statements.

Except as described below, the significant accounting policies for the consolidated financial statement applied in these consolidated financial statements is consistent with those applied in the consolidated financial statements for the year ended December 31, 2019. Please refer to Note 4 of 2019 consolidated financial statement for detail information.

(b) Basis of consolidation

(i) Subsidiaries included in the consolidated financial statements are as follows:

Name of investor	Name of the subsidiary	Business Activity Sale of CTP and LCDs Investment holding Customer service and business support Trading Business support Customer service and business support Investment Investment Investment Investment holding Investment holding Manufacturing of CTP and LCDs	Percentage ownership	Percentage ownership	Percentage ownership	Remarks
			March 31,2020 100.00% 78.49% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 52.50% 5.90% 11.41% 100.00%	December 31,2019 100.00% 78.49% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 52.50% 5.90% 11.41% 100.00%	March 31,2019
The Company The Company The Company The Company The Company The Company The Company The Company The Company YingDar Investment Development Corp. Bae Haw Investment Development Corp. Emerging Display International (Samoa) Corp.	Emerging Display Technologies Corp., U.S.A Emerging Display International (Samoa) Corp. EDT-Europe ApS Tremendous Explore Corp. Emerging Display Technologies Korea EDT-Japan Corp. Ying Dar Investment Development Corp. Bae Haw Investment Development Corp. Ying Cheng Investment Corp. Emerging Display International (Samoa) Corp. Emerging Display International (Samoa) Corp. Dong Guan Emerging Display Limited				100.00% 78.49% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 52.50% 5.90% 11.41% 100.00%	Major Subsidiar Note Note Note Note Note Note Note Note Note Note Note

Note: Quarterly financial reports are unaudited for non-major subsidiaries.

• (ii) Subsidiaries which are not included in the consolidated financial statements: None.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

• (c) Income tax

The Group prepared income tax in conforming with interim income tax measurement and disclosure of paragraph B12 of IAS 34 “Interim Financial Reporting”.

Income tax expense is calculated based on an interim period’s pre-tax income multiplied by best estimation of the annual income tax rate expected for the full financial year and recognized as current income tax expense. Current income tax expense and deferred tax expense are recognized based on the prorated estimated annual current income tax expense and deferred tax.

Income tax expense is directly recognized in equity items or other comprehensive items which is the temporary difference between book value of assets and liabilities at reporting date and tax basis to measure by using appropriate tax of expected realize assets and settle the liabilities.

(d) Employee benefit

Interim defined benefit pension is calculated on a year-to-date basis using the actuarially determined pension cost rate adjusted for significant market fluctuations, curtailments, settlement or other one-time events.

(5) Critical Accounting Judgement and Key Sources of Estimation and Uncertainty

Management team prepared quarterly consolidated financial statements in conforming with IAS 34, “Interim Financial Reporting,”, and make judgement, estimation and assumption and the reporting amount will be affected by accounting policies, assets, liabilities, revenue and expense. The actual outcome might be different from the estimation.

In preparing the consolidated financial statements, critical accounting judgments and key sources of estimation 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, 2019.

(6) Explanation of significant accounting items

The explanation of significant accounting items of this quarterly consolidated financial statements had no significant difference compared with the Group consolidated financial statements for the year ended December 31, 2019. Please refer to Note 6 of 2019 consolidated financial statements.

(a) Cash and cash equivalents

Cash and cash equivalents
Cash and cash equivalents Demand deposits Check deposits Time deposits Repurchase agreement Total	March 31,2020 $ 380 316,796 249 496,245 152,445	December 31,2019	March 31,2019 216 280,651 3,311 664,583 31,267
		366 272,823 15 1,063,943 31,105
	$ 966,115	1,368,252	980,028

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(b) Financial assets at fair value through profit or loss

Current financial assets mandatorily measured at fair value through profit or loss： Open-end mutual funds Swap Contract Total Current financial liabilities measured at fair value through profit or loss： Swap Contract	March 31,2020 $ 103,962 368	December 31,2019	March 31,2019 75,176 786
		54,018 76
	$ 104,330	54,094	75,962
	$ -	994	-

Please refer to Note 6(x) for the recognition of gain or loss at fair value.

The abovementioned financial assets were not pledged as collateral.

The Group entered into derivative instruments to manage exposure to currency risk arising from operating activities and doesn’t applicable to hedge accounting. ， The Group’s derivative instruments were as follows presented under financial assets mandatorily measured at FVTPL and financial liabilities measured at FVTPL; presented under financial assets held for trading:

Forward exchange contract ：

Swap contract Swap contract Swap contract	March 31,2020

Please refer to Note 6(y) for credit risk and market risk.

～ 11 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

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

Equity instruments at fair value through other comprehensive income-current: Common stocks listed on domestic markets-current: Innolux Corp. Fubon Financial Holding Co., Ltd Radiant Opto Electronics Corp. Taiwan Cement Corp., Ltd. Synnex Technology International Co. , Ltd. King Yuan Electronics Co., Ltd. Nan Ya Plastics Corporation Pegatron Co., Ltd. Mega Financial Holding Co., Ltd Coasia Microelectronics Corp. E.SUN Financial Holding Co., Ltd. Far Eastern New Century Corp. Quanta Computer Inc. Shian Yih Electronic Co., Ltd. AGV Products Corporation Total Common stocks listed on foreign markets-current: Becton, Dickinson and Company Total Equity instruments at fair value through other comprehensive income-noncurrent: Common stocks unlisted on domestic markets -non current: Ascendax Venture Capital Corp. Chenfeng Optronics Corp. Total Preference stocks listed on domestic markets-non current: Fubon Financial Holding Co., Ltd Total	March 31,2020 $ 5,999 11,265 - 7,900 24,445 - 11,487 12,528 - 3,744 16,975 18,040 29,498 30,456 695	December 31,2019	March 31,2019 11,471 13,800 24,650 13,612 16,946 28,061 16,569 11,513 15,568 4,300 - - - 30,738 735
		9,555 13,920 - - 17,175 - 15,288 14,775 - 5,055 - - - 33,064 722
	173,032	109,554	187,963
	13,890	-	-
	$ 186,922	109,554	187,963
	$ 14,318 131,320	15,832 124,040	14,088 132,790
	145,638	139,872	146,878
	842	890	872
	$ 146,480	140,762	147,750

～ 12 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

With the objective of investment and financial management, the Group has sold partial of equity instruments designated as FVOCI totaled $32,289 from January 1 to March 31, 2019, and accumulated gain on disposal of investments was $2,315, which had been reclassified from other equity interest to retained earnings. The Group did not disposal any long term strategies investments from January 1 to March 31, 2020. During the time, the accumulated gain and losses were not transferred within the equity

Please refer to Note 6(y) for market risk.

The abovementioned financial assets were not pledged as collateral.

For the purpose of increasing investment profits, the Group entrusts partial listed companies as the beneficiary. According to the terms of the contract, the Group does not transfer risk and remuneration of these financial assets, and they are had not been derecognized. As of March 31,2020, December 31, 2019 and March 31, 2019, the carrying amount of the listed stocks which were entrusted to financial institutions for security lending amounted to $5,999,$9,555and $36,121, respectively.

(d) Accounts receivable

Accounts receivable
Accounts receivables-measured at amortized cost Allowance for impairment	March 31,2020 $ 559,833 (19,312)	December 31,2019	March 31,2019
		556,362 (18,771)	550,261 (19,208)
	$ 540,521	537,591	531,053

The Group applies the simplified approach to provide for the loss allowance used for expected credit losses, which permit the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, accounts receivables have been grouped based on past default experience of the customers and shared credit risk characteristics, as well as incorporate forward looking information, including macroeconomic and relevant industry information. The loss allowance provision was determined as follows ：

Not over due Overdue less than 90 days Overdue 91~180 days Overdue 181~270 days Overdue 271~365 days Overdue over 365 days				March 31,2020
			Carrying amount of Accounts Receivable $ 372,577 168,435 50 - - 18,771 $ 559,833	Weighted-average expected credit loss rate 0.10% 0.10% 0.10% - - 100.00%	Loss allowance for lifetime expected credit losses
						372 169 - - - 18,771 19,312

～ 13 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

Not over due Overdue less than 90 days Overdue 91~180 days Overdue 181~270 days Overdue 271~365 days Overdue over 365 days Not over due Overdue less than 90 days Overdue 91~180 days Overdue 181~270 days Overdue 271~365 days Overdue over 365 days				December 31,2019
			Carrying amount of Accounts Receivable $ 392,384 144,425 782 - - 18,771 $ 556,362	Weighted-average expected credit loss rate - - - - - 100.00% March 31,2020	Loss allowance for lifetime expected credit losses
						- - - - - 18,771 18,771
			Carrying amount of Accounts Receivable $ 454,974 67,199 9,308 8 1 18,771 $ 550,261	Weighted-average expected credit loss rate 0.03% 0.41% - 100.00% 100.00% 100.00%	Loss allowance for lifetime expected credit losses
						154 274 - 8 1 18,771 19,208

The movement in the provision for impairment loss with respect to trade receivables was as follows ：

Balance at January 1 Reversal of impairment loss Effect of changes in foreign currency exchange rates Ending balance	For the three months ended March 31 2020 2019 $ 18,771 20,327 541 (1,121) - 2 $ 19,312 19,208	For the three months ended March 31 2020 2019 $ 18,771 20,327 541 (1,121) - 2 $ 19,312 19,208
	$ 19,312	19,208

The abovementioned financial assets were not pledged as collateral.

Please refer to Note 6(y) for credit risk.

(e) Other receivables

Other receivables
Loans to employee Receivable resulting from selling equity investments at fair value through other comprehensive income Others Allowance for impairment	March 31,2020 $ 8,664 - 2,140 -	December 31,2019	March 31,2019
		8,834 7,218 2,632 -	14,295 - 1,047 -
	$ 10,804	18,684	15,342

～ 14 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

Please refer to Note 6(y) for credit risk.

(f) Inventories

Raw materials and supplies Work in process Finished goods Inventories in transit	March 31,2020 $ 255,215 300,460 233,166 1,665	December 31,2019	March 31,2019 272,390 264,326 253,656 7,795
		246,804 293,737 251,522 10,972
	$ 790,506	803,035	798,167

The details of the cost of sales were as follows:

Reclassification to cost of sales and expenses Loss on valuation (gain on reversal) of inventories Unallocated production overheads Loss on scrap Others		For the three months ended March 31	For the three months ended March 31	For the three months ended March 31
		2020		2019
		$ 651,278 1,088 6,335 15,563 (37) $ 674,227		702,457 (2,589) 6,325 27,123 (192) 733,124

The above gain from price recovery of inventory was due to the previous write-down inventories had been sold, therefore, the net realizable value of inventories lowered than cost was no longer existed, the reversal was recorded as operating costs.

Inventories were not pledged as collaterals.

(g) Other current assets

The details of other current assets are as follows:

Income tax refund receivable Prepayment for purchases Prepaid expense Prepaid sales tax Restricted time deposits Refundable deposits Others Book as : Other current assets Other financial assets－non-current	March 31,2020 $ 2,002 17,981 6,818 6,939 2,107 7,064 3,371	December 31,2019	March 31,2019 2,366 26,855 6,628 10,150 2,110 7,283 3,693
		- 39,259 5,374 6,438 2,096 7,080 6,776
	$ 46,282	67,023	59,085
	$ 38,660 7,622	59,389 7,634	51,234 7,851
	$ 46,282	67,023	59,085

～ 15 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

The abovementioned other financial assets pledged were restricted time deposits as collateral for

loans were disclosed in Note 8.

(h) Non-controlling interests' share of subsidiaries

Significant to the Group of the non-controlling interest subsidiaries are as follows:

Name of subsidiaries Ying Cheng Investment Corp. Emerging Display International (Samoa) Corp.	Principal place of business Taiwan Samoa	Proportion of non-controlling interest voting equity March 31,2020 December 31,2019 March 31,2019 47.5% 47.5% 47.5% 4.2% 4.2% 4.2%

Summarize above subsidiaries financial information as below which had prepared based on International Financial Reporting Standards endorsed by FSC. The below financial information was prior to the offset amount with the Group.

Summarized financial information for Ying Cheng Investment Corp. is as follows:

March 31,2020 December 31,2019 March 31,2019 Current asset $ 10,090 10,102 10,200 Non-current asset 112,560 106,320 113,820 Current liability (50) (50) (50) Net asset $ 122,600 116,372 123,970 Non-controlling equity closing book amount $ 58,235 55,277 58,885 For the three months ended March 31 2020 2019 Operating revenue $ - - Net profit(loss) $ (12) (6) Other comprehensive income 6,240 (6,420) Comprehensive income $ 6,228 (6,426) Profit attributable to non-controlling interest $ (6) (3) Comprehensive income attributable to non-controlling interest $ 2,958 (3,052) For the three months ended March 31 2020 2019 Cash flow from operating activities $ (12) (12) Cash flow from investing activities - - Cash flow from financing activities - - Net increase(decrease) in cash and cash equivalents $ (12) (12)	March 31,2020 $ 10,090 112,560 (50)	March 31,2020 $ 10,090 112,560 (50)	December 31,2019	December 31,2019	March 31,2019 10,200 113,820 (50)
			10,102 106,320 (50)
	$ 122,600		116,372		123,970
	$	58,235	55,277		58,885
		For the three months ended March 31 2020 2019 $ - - $ (12) (6) 6,240 (6,420) $ 6,228 (6,426) $ (6) (3) $ 2,958 (3,052) For the three months ended March 31 2020 2019 $ (12) (12) - - - - $ (12) (12)
		$ (12)		(12)

～ 16 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

Summarized financial information for Emerging Display International (Samoa) Corp. is as follows:

March 31,2020 December 31,2019 March 31,2019 Current asset $ 133,338 149,362 130,970 Non-current asset 20,865 22,731 25,227 Current liability (46,243) (61,550) (28,540) Net asset - (1,068) (6,101) Non-controlling equity closing book amount $ 107,960 109,475 121,556 Current asset $ 4,534 4,598 5,106 For the three months ended March 31 2020 2019 Operating revenue $ 33,782 44,452 Net profit(loss) $ (456) (50) Other comprehensive income (1,059) 2,788 Comprehensive income $ (1,515) 2,738 Profit attributable to non-controlling interest $ (19) (2) Comprehensive income attributable to non-controlling interest $ (64) 114 For the three months ended March 31 2020 2019 Cash flow from operating activities $ 9,317 6,916 Cash flow from investing activities (488) (169) Cash flow from financing activities (1,509) - Effects of changes in foreign exchange rates (219) 179 Net increase(decrease) in cash and cash equivalents $ 7,101 6,926	March 31,2020 $ 133,338 20,865 (46,243) -	March 31,2020 $ 133,338 20,865 (46,243) -	December 31,2019	December 31,2019	March 31,2019 130,970 25,227 (28,540) (6,101)
			149,362 22,731 (61,550) (1,068)
	$ 107,960		109,475		121,556
	$	4,534	4,598		5,106
		For the three months ended March 31
		2020		2019
		$ 33,782		44,452
		$ (456) (1,059)		(50) 2,788
		$ (1,515)		2,738
		$ (19)		(2)
		$ (64)		114
		$ 7,101		6,926

(i) Property, plant and equipment

The cost and depreciationof the property, plant and equipment of the Group were as follows:

Cost or deemed cost: Balance at January 1, 2020 Additions Reclassification Effect of movements in exchange rates Balance at March 31, 2020	Land	Building and construction	Machinery and equipment	Office equipment	Other	Total
	$ 25,201 - - 206	1,047,550 65 275 (400)	2,384,197 486 64 (2,258)	28,331 - - (10)	133,476 2,564 (339) (66)	3,618,755 3,115 - (2,528)
	$ 25,407	1,047,490	2,382,489	28,321	135,635	3,619,342

～ 17 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

Balance at January 1, 2019 Additions Reclassification Disposals Effect of movements in exchange rates Balance at March 31, 2019 Depreciation: Balance at January 1, 2020 Depreciation for the year Effect of movements in exchange rates Balance at March 31, 2020 Balance at January 1, 2019 Depreciation for the year Disposals Effect of movements in exchange rates Balance at March 31, 2019 Carrying amounts: Balance at January 1, 2020 Balance at March 31, 2020 Balance at January 1, 2019 Balance at March 31, 2019	Land	Building and construction 1,026,177 152 10,034 - 1,314 1,037,677 800,136 4,477 (481) 804,132 790,562 3,868 - 1,102 795,532 247,414 243,358 235,615 242,145	Machinery and equipment 2,398,090 573 - (19,969) 5,172 2,383,866 2,330,684 5,540 (2,182) 2,334,042 2,332,102 6,643 (19,969) 5,078 2,323,854 53,513 48,447 65,988 60,012	Office equipment	Other	Total 3,676,071 3,369 - (20,600) 6,979
	$ 74,709 - - - 256			28,164 92 - (248) 107	148,931 2,552 (10,034) (383) 130
	$ 74,965			28,115	141,196	3,665,819
	$ - - -			26,927 198 (17)	95,053 6,544 (52)	3,252,800 16,759 (2,732)
	$ -			27,108	101,545	3,266,827
	$ - - - -			26,642 179 (248) 106	70,927 7,044 (383) 86	3,220,233 17,734 (20,600) 6,372
	$ -			26,679	77,674	3,223,739
	$ 25,201			1,404	38,423	365,955
	$ 25,407			1,213	34,090	352,515
	$ 74,709			1,522	78,004	455,838
	$ 74,965			1,436	63,522	442,080

Property, plant and equipment pledged as collateral for long-term loans and finance were disclosed in note 8.

(j) Right-of-use assets

The movements in the cost and depreciation of the leased land, buildings, transportation equipment were as follows ：

Right-of-use assets cost： Balance at January 1, 2020 Reduction Effect of movements in exchange rates Balance at March 31, 2020 Balance at January 1, 2019 Effect of movements in exchange rates Balance at March 31, 2019 Depreciation： Balance at January 1, 2020 Depreciation for the year Effect of movements in exchange rates Balance at March 31, 2020	Land	Building and construction 23,509 ) - (131)	Transportation equipment 214 - 2	Total 90,949 (817) (129)
	$ 67,226 (817 -
	$ 66,409	23,378	216	90,003
	$ 67,226 -	23,065 (37)	219 1	90,510 (36)
	$ 67,226	23,028	220	90,474
	$ 2,757 683 -	10,857 2,720 (63) 13,514	128 33 1	13,742 3,436 (62)
	$ 3,440		162	17,116

～ 18 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

Balance at January 1, 2019 Depreciation for the year Effect of movements in exchange rates Balance at March 31, 2019 Carrying amounts: Balance at January 1, 2020 Balance at March 31, 2020 Balance at January 1, 2019 Balance at March 31, 2019	Land	Building and construction	Transportation equipment - 33 -	Total - 3,557 2
	$ - 689 -	- 2,835 2
	$ 689	2,837	33	3,559
	$ 64,469	12,652	86	77,207
	$ 62,969	9,864	54	72,887
	$ 67,226	23,065	219	90,510
	$ 66,537	20,191	187	86,915

(k) Investment property

Investment property includes assets owned by the Group and operating leasing such as office buildings leased to third party. Based on original lease terms of investment property, non-cancellable lease term is four years and the lessee has the right to upon expiry. Subsequent lease term will consult with the lessee and didn't charge contingent rental. Please refer to Note 6(w) for information of the rental income.

Rental income of leased investment property has a fixed amount.

Investment property cost and depreciation of the Group were as follows:

Cost or deemed cost: Balance at January 1, 2020 Additions Effect of changes in foreign exchange rates Balance at March 31, 2020 Balance at January 1, 2019 Balance at March 31, 2019 Depreciation: Balance at January 1, 2020 Depreciation for the year Effect of changes in foreign exchange rates Balance at March 31, 2020 Balance at January 1, 2019 Balance at March 31, 2019 Carrying amounts: Balance at January 1, 2020 Balance at March 31, 2020 Balance at January 1, 2019 Balance at March 31, 2019	Land $ 47,720 - 390	Building and construction 15,418 903 129	Total 63,138 903 519
	$ 48,110	16,450	64,560
	$ -	-	-
	$ -	-	-
	$ - - -	5,304 149 44	5,304 149 44
	$ -	5,497	5,497
	$ -	-	-
	$ -	-	-
	$ 47,720	10,114	57,834
	$ 48,110	10,953	59,063
	$ -	-	-
	$ -	-	-

～ 19 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

The Group signed a lease contract in August 2019 to lease original office building of the USA subsidiary to a third party since October 2019.

There was no significant differences of the Group’s fair value of investment property which compared with the consolidated financial statements Note 6(k) for the year ended December 31,2019.

The investment property was not pledged as collateral.

(l) Intangible assets

Initial cost and accumulated amortization for intangible assets were as follows ：

Balance at January 1, 2020 Balance at March 31, 2020 Balance at January 1, 2019 Balance at March 31, 2019	Patent $ 1,420 $ 1,420 $ 1,703 $ 1,695	Computer software cost 2,357 3,414 768 600		Total
				3,777 4,834 2,471 2,295

There was no significant increase for acquisition, disposal, reversal or write-down of impairment loss of intangible assets for the three months ended March, 2020 and 2019. Please refer Note 12(a) for amortization amount. Other related information, please refer to Note 6(l) of 2019 consolidated financial statements.

Intangible assets were not pledged as collateral.

(m) Short-term loans

The details of short-term loans were as follows:

Unsecured bank loans Unused lines of credit Range of interest rates	March 31,2020 $ 233,000	December 31,2019	March 31,2019 300,000
		400,000
	$ 1,492,698	1,272,106	1,389,292
	0.98%~1.03%	0.95%~1.04%	0.95%~1.05%

Short-term loanswere not pledged as collateral.

As of March 31, 2020, December 31, 2019 and March 31, 2019, the Group’s acceptance credit for purchases of raw materials amounted to $2,008, $1,659 and $3,034, respectively.

Please refer to note 6(y) for the interest rate risk and sensitivity analysis of the financial liabilities of the Group.

(n) Long-term loans

The details of long-term loans were as follows:

Secured bank loans Less: discount on long-term loans Total	March 31,2020 $ 240,000 (278)	December 31,2019	March 31,2019 400,000 (946)
		320,000 (445)
	$ 239,722	319,555	399,054

～ 20 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

Recognized in: Long-term loans, current portion Long-term loans Total Unused long-term credit lines Range of interest rates	March 31,2020 $ 239,722 -	December 31,2019	March 31,2019
		319,555 -	- 399,054
	$ 239,722	319,555	399,054
	$ 240,000	320,000	400,000
	1.8083%	1.8085%	1.8044%

On November 17, 2016, the Group entered into a syndicated loan agreement with eight banks leaded by Tai Shin Bank for the period from the date of first borrowing to the three-year term with cycle use lines of credit. The credit line will decrease every 6 months since two years after the first appropriation date. The first and second phase will decrease by 20% of the effective credit line, and the third phase will decrease by 60%. The Company will repay the total borrowing upon maturity. The Company borrowed $400,000 thousand at August 15, 2017. For the related information and concerned restricted terms, please refer to Note 6(n) of 2019 consolidated financial statements.

For working capital management purpose, the Group repaid $80,000 in February 2020, which is earlier than the maturity date.

Assets pledged as collateral for long-term loans are disclosed in Note 8.

(o) Lease liabilities

The details of lease liabilities were as follows ：

Current Non-Current	March 31,2020 $ 10,687	December 31,2019	March 31,2019
		11,907	11,919
	$ 63,691	66,575	75,375

For maturity analysis, please refer to Note 6 (y) Financial Instruments.

The amounts recognized in profit or loss were as follows ：

	For the three months ended March	For the three months ended March	31
	2020	2019
Interest on lease liabilities	$	687	853
Expenses relating to short-term leases	$	562	321
Expenses relating to leases of low-value assets,
excluding short-term leases of low-value assets	$	58	79
The amounts recognized in the statement of cash flows	for the Group were as follow：
	For the three months ended March 31
	2020	2019
Total cash outflow for leases	$	4,835 4,431

～ 21 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

(i) Lease of land, building and construction

As of March 31, 2020, the Group leases land and buildings for its office use. The leases of land and buildings run for approximately 2 to 10 years, and the lease period of office premises is usually 2 to 3 years. Part of the lease includes an option to extend the same period of the original contract at the end of the lease term.

Lease payments for certain contracts are subject to changes in the local price index, which usually occur once a year.

The lease agreements for some of the equipment include the option to extend the lease or terminate the lease, which are managed separately by each region, and therefore the individual terms and conditions agreed upon are different within the Group. These options are only for the Group to have enforceable rights and the lessor does not have this right. In the event that it is not possible to reasonably determined the period of the extended lease that will be exercisable, the related payments over the period covered by the option are not included in the lease liability.

(ii)Other leases

The lease period for the Group leased transportation equipment is one to two years.

In addition, the lease term of the Group leased machinery and equipment is one to three years. These leases are short-term or low-value leases. The Group chooses to apply the exemption recognition requirement without recognizing its related right-of-use assets and lease liabilities.

(p) Operating lease

There was no increase for operating lease for the three months ended March 31, 2020. Please refer to Note 6(p) of the 2019 consolidated financial statements.

(q) Employee benefits

(i) Defined benefit plan

There were no significant market fluctuations, curtailments, settlement or other one-time events after the end the previous financial year, the pension cost measurement and disclosure of interim pension cost were calculated based on actuarial adopted on December 31, 2019 and 2018.

Cost recognized in expense was as below ：

December 31, 2019 and 2018. Cost recognized in expense was as below：
Operating cost Selling expenses General and administrative expenses Research and development expenses	For the three months ended March 31
	2020	2019
	$ 287 14 47 34	332 14 47 38
	$ 382	431

～ 22 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(ii) Defined Contribtion Plan

Cost recognized in expense was as below ：

Operating cost Selling expenses General and administrative expenses Research and development expenses	For the three months ended March 31	For the three months ended March 31
	2020	2019
	$ 5,442 1,300 488 683	5,555 1,247 517 608
	$ 7,913	7,927

(r) Income tax

Income tax expense for the period is best estimated by multiplying pretax income for the interim reporting period with the effective annual tax rate as forecasted by management. The amounts of income tax expense (benefit) were as follows ：

Current tax expense Current Deferred tax expense(benefit) Origination and reversal of temporary differences Income tax expense	For the three months ended March 31	For the three months ended March 31
	2020	2019
	$ 6,952	9,899
	17	(25)
	$ 6,969	9,874

For the three months ended March 31,2020 and 2019, no income tax was recognized directly in equity.

The amount of income tax benefit recognized in other comprehensive income (loss) were as follows:

Items that will not be reclassified subsequently to profit or loss: Unrealized gains or losses from investments in equity instruments measured at FVOCI	For the three months ended March 31	For the three months ended March 31
	2020	2019
	$ 225	-

Approval of income tax

The Company’s income tax returns for all fiscal years up to 2018 have been examined and approved by the R.O.C. tax authority.

(s) Share capital and other equity

The Group had no share capital change for the three months ended March 31, 2020 and 2019 except below statement. Please refer to Note 6(s) of 2019 consolidated financial statements for detail information.

(i) Capital Stock

As of March 31, 2020, December 31 and March 31, 2019, the authorized share capital of the Company amounted to $3,500,000 comprising 350,000 thousand shares with a par value of TWD10 per share, outstanding shares of stock are 162,408,162,408 and 174,408 thousand shares, respectively. Excluding shares of treasury stock that had been purchased by the Company and shares of stock held by the subsidiaries, outstanding shares of stock are 148,613thousand shares.

～ 23 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(ii) Capital surplus

Capital surplus was as follows ：

Treasury stock	March 31,2020 $ 4,397	December 31,2019	March 31,2019 28,226
		4,397

(iii) Earnings distribution

The appropriations of earnings for 2019 have been approved in the meeting of the board of directors held on March 10, 2020. And the appropriations of earnings for 2018 had been approved in the shareholders’ meeting held on June 4, 2019. The appropriation and dividend per share were as follows ：

Cash dividend to shareholders (TWD) Cash v) Other equity Balance at January 1, 2020 －Changes of the Group Balance at March 31, 2020 Balance at January 1, 2019 －Changes of the Group －Disposal of investments in equity instrument at FVOCI Balance at March 31, 2019	2019(Estimated) $ 1.2 Foreign exchange differences arising from foreign operation Unrealized gains (losses) on financial assets measured at FVOCI $ (14,111) (88,501) (562) (16,727)	2019(Estimated) $ 1.2	2019(Estimated) $ 1.2		2018(Actual) 0.5
					Total
	$ (14,111) (562)				(102,612) (17,289)
	$ (14,673)		(105,228)		(119,901)
	Foreign exchange differences arising from foreign operation $ (8,271) 3,116 - $ (5,155)		Unrealized gains (losses) on financial assets measured at FVOCI (104,299) 11,920 (2,315)		Total (112,570) 15,036 (2,315)
			(94,694)		(99,849)

(iv) Other equity

(v) Treasury stock

The changes of treasury stocks were as follows ：

(Expressed in thousand of shares)

Reason to buy back January to March, 2020 Transfer to employees January to March, 2019 Transfer to employees		Beginning Shares 5,000 12,000	Increase shares -		Decrease shares -		Ending share 5,000
			5,000		-		17,000

The Board of Directors has resolved during the board meeting held on January 8, 2019,for the Company to repurchase its share as treasury stocks.

～ 24 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

The Company ‘s board of directors had resolved during the board meeting held on March 24, 2020, for the Company was scheduled to repurchase its own common stocks as treasury stocks and transferred to employees,of which number was 7,000 thousand stocks,in order to motivate its employees morale and improve the operating performance. As of March 31, 2020, the Company has not been executed yet.

As of March 31, 2020, December 31 and March 31, 2019, the cost of treasury stocks amounted to $50,739, $50,739 and $201,665, respectively.

In accordance with the requirements under section 28(2) of the Securities and Exchange Act, the number of shares repurchased should not exceed 10 percent of all common stocks issued. Also, the value of repurchased shares should not exceed the sum of the Company’s retained earnings, share premium, and realized capital reserves. The above amount did not exceed the statutory limit.

In accordance with Securities and Exchange Act requirements, treasury stocks held by the Company should not be pledged, and do not hold shareholder rights before their transfer.

Ying Dar Corp. and Bae Haw Corp., 100%-owned subsidiaries of the Company, held the Company’s common stock. For the three months ended March 31, 2020 and 2019, Ying Dar Corp. and Bae Haw Corp. did not purchase or dispose any of the Company’s shares. As of March 31, 2020, December 31, 2019 and March 31, 2019, Ying Dar Corp. and Bae Haw Corp. together held 8,794 thousand shares of the Company’s common stock, The cost was $122,282 which was recognized in treasury stocks. As of March 31, 2020, December 31 and March 31, 2019, their market values amounted to $140,710, $154,781and $132,356, respectively.

(t) Earnings per share

The calculation of basic earnings per share and diluted earnings per share were as follows ：

Basic earnings per share Profit attributable to owners of parent Weighted-average number of ordinary shares at end of year (expressed in thousands of shares) Expressed in New Taiwan dollars Diluted earnings per share Profit attributable to owners of parent Weighted-average number of ordinary shares (expressed in thousands of shares) Effect of potentially dilutive ordinary stock: －Employee bonus (expressed in thousands of shares) Weighted-average number of ordinary shares- diluted (expressed in thousands of shares) Expressed in New Taiwan dollars	For the three months ended March 31	For the three months ended March 31
	2020	2019
	$ 43,878	52,621
	148,613	149,566
	$ 0.30	0.35
	$ 43,878	52,621
	148,613 987	149,566 604
	149,600	150,170
	$ 0.29	0.35

In computing above basic earnings (loss) per share of ordinary stock for the three months ended March 31, 2020 and 2019, the weighted-average numbers of shares of common stock outstanding excluded 8,794 thousand shares of common stock held by the Company’s subsidiaries as treasury stock.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(u) Revenue from Contracts with Customers

• (i) Disaggregation of revenue

For the three months ended March 31

2020 Domestic North America Other operating department Primary geographical markets: Europe $ 470,350 36 90 USA - 156,322 - Others 140,835 47,032 299 Total $ 611,185 203,390 389 Major products: Liquid crystal display modules $ 172,995 105,671 - Capacitive touch panel and capacitive touch panel module 433,337 89,818 - Others 4,853 7,901 389 Total $ 611,185 203,390 389 For the three months ended March 2019 Domestic North America Other operating department Primary geographical markets: Europe $ 428,933 2,146 146 USA - 254,342 - Others 128,309 77,064 41 Total $ 557,242 333,552 187 Major products: Liquid crystal display modules$ 322,605 130,399 - Capacitive touch panel and capacitive touch panel module 227,583 201,734 - Others 7,054 1,419 187 Total $ 557,242 333,552 187 (ii) Contract balance March 31,2020 December 31,2019 Accounts receivable (including related parties) $ 559,833 556,362 Less: allowance for impairment (19,312) (18,771) Total $ 540,521 537,591	Domestic $ 470,350 - 140,835	Domestic $ 470,350 - 140,835	2020	2020	2020	2020	Total 470,476 156,322 188,166
			North America 36 156,322 47,032		Other operating department 90 - 299
	$ 611,185		203,390		389		814,964
	$ 172,995 433,337 4,853		105,671 89,818 7,901		- - 389		278,666 523,155 13,143
	$ 611,185		203,390		389		814,964
							31 Total 431,225 254,342 205,414
			2019
			North America 2,146 254,342 77,064		Other operating department 146 - 41
	$ 557,242		333,552		187		890,981
	$ 322,605 227,583 7,054		130,399 201,734 1,419		- - 187		453,004 429,317 8,660
	$ 557,242		333,552		187		890,981
							March 31,2019
				556,362 (18,771)			550,261 (19,208)
		$ 540,521		537,591			531,053

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

Contract liability－Unearned revenue (recognized in other current liabilities) Please refer to Note 6(d) for accounts	March 31,2020 $ 24,225	December 31,2019	March 31,2019 7,833
		13,031

The amount of revenue recognized for the three months ended March 31, 2020 and 2019, that was included in the contract liability balance at the beginning of the period were $1,676 and $1,561 respectively.

(v) Employee’sremuneration, and directors’ and supervisors’ remuneration

According to the Company’s articles of association, the Company should contribute no less than 5% of the profit as employee remuneration and a maximum of 3% as directors’ and supervisors’ remuneration when there is profit for the year. However, certain amounts of the earnings should be reserved if there is an accumulated loss from operations in previous years in advance of the appropriation of the employee bonuses. The aforementioned employee bonuses will be distributed in cash or stock to employees who satisfy certain specifications of the Group and its affiliates.

The Company accrued the remunerationof employees amounted and the remuneration of directors' and supervisors' amountedwere as follows ：

Employee’s remuneration Directors’ and supervisors’ remuneration	For the three months ended March 31	For the three months ended March 31
	2020	2019
	$ 2,810	3,371
	$ 1,686	2,023

The above amount were estimated as the Company’s net income before tax, excluding remuneration of employees and remuneration of directors and supervisors, multiplied by the appropriate percentage in compliance with the Company’s articles. These expenses were recognized in operating costs and operating expenses for the respective period. In case the variances between actual and estimated expenses occur during next year, the variances concerned will be recognized in next year’s profit. If the Company’s Board of Directors resolve to issue its stocks as the remuneration of employees, it will be calculated based on the closing price of its stock on the day before the approval by of Directors. The accrued compensation of employees amounted to $16,362 and $6,704 for 2019 and 2018, respectively, and the accrued remuneration of directors’ and supervisor’s amounted to $9,817 and $4,023 respectively. Actual distribution had no difference with accrued amounts. The previous distribution of compensation to employees, remuneration of directors and supervisors approved by Board of Directors for related information, please go to website:

http://emops.twse.com.tw.

(w) Other operating income and expenses

Other operating income and expenses were rental revenue.

(x) Non-operating income and expenses

(i) Other income

Details of other income were as follows ：

Interest income Bank deposits Other loans and receivables Others	For the three months ended March 31	For the three months ended March 31
	2020	2019
	$ 4,195 30 4,738	4,465 51 161
	$ 8,963	4,677

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

• (ii) Other gains and losses

Details of other gains and losses were as follows ：

Other gains and losses Details of other gains and losses were as follows：
Foreign exchange gains, net Net gains on disposal of financial assets at fair value through profit or loss Others	For the three months ended March 31
	2020	2019
	$ 18,257 (9,749) (6)	5,602 6,889 (143)
	$ 8,502	12,348

• (iii) Finance costs

Details of finance costs were as follows ：

Interest expenses Bank loans Lease liability Management fee of syndicated loan	For the three months ended March 31	For the three months ended March 31
	2020	2019
	$ 2,454 687 62	2,772 853 62
	$ 3,203	3,687

(y) Financial instruments

There was no significant change of the Group’s fair value of financial instruments, exposure to credit risk, liquidity risk and market risk except below statements. Please refer to Note 6(y) of 2019 consolidated financial statements.

• (i) Credit risk

1) Exposure to credit risk

The Group’s maximum exposure to credit risk is the carrying amount of financial assets and contract assets.

2) Concentration of credit risk

The Group has no significant concentration of its accounts receivable as of March 31, 2020, December 31, and March 31, 2019.

3) Accounts receivable of credit risk

Please refer to Note 6(d) for accounts receivable and notes receivable of credit risk exposure.

Other financial assets measured at amortized cost including other accounts receivable, refundable deposits, and certificate deposit recognized as debt instrument without active market. All of these financial assets are considered to be low risk, and thus the impairment provision recognized during the period was limited to 12 months expected credit losses.None of the expected credit losses that should be included in the assessment. Please refer to Note 6(e).

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(ii) Liquidity risk

Details of financial liabilities categorized by due dates were as follows. The amounts include interest expenses but exclude the impacts of negotiated net amounts.

March 31, 2020 Non-derivative financial liabilities Secured loans (floating rate) Unsecured loans (floating rate) Accounts payable(non-interest bearing) Notes payable (non-interest bearing) Other payable (non-interest bearing) Lease liability (fixed interest rate) Guarantee deposits received (non-interest bearing ) December 31, 2019 Non-derivative financial liabilities Secured loans (floating rate) Unsecured loans (floating rate) Accounts payable(non-interest bearing) Notes payable (non-interest bearing) Other payable (non-interest bearing) Lease liability (fixed interest rate) Guarantee deposits received (non-interest bearing ) Derivative financial liabilities Swap Contract： Cash in Cash out March 31, 2019 Non-derivative financial liabilities Secured loans (floating rate) Unsecured loans (floating rate) Accounts payable(non-interest bearing) Notes payable (non-interest bearing) Other payable (non-interest bearing) Lease liability (fixed interest rate) Guarantee deposits received (non-interest bearing )	Carrying amount $ 239,722 233,000 394,093 1,772 203,243 74,378 591	Contracted cash flows (241,617) (233,135) (394,093) (1,772) (203,243) (109,301) (591)	Due within 6 months (241,617) (233,135) (394,093) (1,772) (203,243) (7,298) -	Due in 6-12months - - - - - (5,751) -	Due in 1-2years - - - - - (5,536) (34)	Due in 2-5years - - - - - (11,918) (557)	Due in over 5 years - - - - - (78,798) -
	$ 1,146,799	(1,183,752)	(1,081,158)	(5,751)	(5,570)	(12,475)	(78,798)
	$ 319,555 400,000 431,437 307 109,644 78,482 587 994 - -	(323,599) (400,534) (431,437) (307) (109,644) (114,543) (587) - 89,940 (91,191)	(2,886) (400,534) (431,437) (307) (109,644) (7,843) - - 89,940 (91,191)	(320,713) - - - - (6,602) - - - -	- - - - - (7,224) (34) - - -	- - - - - (12,070) (553) - - -	- - - - - (80,804) - - - -
	$ 1,341,006	(1,381,902)	(953,902)	(327,315)	(7,258)	(12,623)	(80,804)
	$ 399,054 300,000 418,340 1,568 103,730 87,294 264	(409,610) (300,130) (418,340) (1,568) (103,730) (125,696) (264)	(3,302) (300,130) (418,340) (1,568) (103,730) (7,580) -	(3,619) - - - - (7,357) -	(402,689) - - - - (13,257) (264)	- - - - - (13,681) -	- - - - - (83,821) -
	$ 1,310,250	(1,359,338)	(834,650)	(10,976)	(416,210)	(13,681)	(83,821)

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

The Group does not expect that the cash flows could occur significantly earlier or at significantly different amount.

• (iii) Market Risk

• 1) Exchange rate risk

Significant financial assets and liabilities exposed to foreign currency risk were as follows ：

March 31, 2020 Foreign currency Exchange rate TWD amount Financial assets Monetary items USD $ 53,360 30.225 1,612,810 JPY 15,608 0.2788 4.351 CNY 2,017 4.255 8,581 EUR 32 33.24 1,053 Non-monetary items USD 4,909 30.225 148,302 Financial liabilities Monetary items USD 11,250 30.225 340,036 JPY 25,026 0.2788 6,977 EUR - 33.24 - TWD - - - Non-monetary items USD - - -	December 31, 2019 Foreign currency Exchange rate TWD amount 69,372 29.98 2,079,789 18,491 0.276 5,104 176 4.305 757 7 33.59 225 3,802 29.98 113,978 14,135 29.98 423,768 40,745 0.276 11,246 11 33.59 386 - - - 3,000 29.98 89,940	December 31, 2019 Foreign currency Exchange rate TWD amount 69,372 29.98 2,079,789 18,491 0.276 5,104 176 4.305 757 7 33.59 225 3,802 29.98 113,978 14,135 29.98 423,768 40,745 0.276 11,246 11 33.59 386 - - - 3,000 29.98 89,940	March 31, 2019 Foreign currency Exchange rate TWD amount 51,257 30.82 1,579,740 29,559 0.2783 8,226 284 4.58 1,301 71 34.61 2,464 1,877 30.82 57,851 9,006 30.82 277,558 23,115 0.2783 6,433 41 34.61 1,419 2,480 1 2,480 - - -	March 31, 2019 Foreign currency Exchange rate TWD amount 51,257 30.82 1,579,740 29,559 0.2783 8,226 284 4.58 1,301 71 34.61 2,464 1,877 30.82 57,851 9,006 30.82 277,558 23,115 0.2783 6,433 41 34.61 1,419 2,480 1 2,480 - - -
	Foreign currency 69,372 18,491 176 7 3,802 14,135 40,745 11 - 3,000	Exchange rate 29.98 0.276 4.305 33.59 29.98 29.98 0.276 33.59 - 29.98	Foreign currency 51,257 29,559 284 71 1,877 9,006 23,115 41 2,480 -	Exchange rate 30.82 0.2783 4.58 34.61 30.82 30.82 0.2783 34.61 1 -

The foreign currency risk was mainly incurred from the translation of cash and cash equivalents, accounts receivable, other receivables, financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income, accounts payable, and other payables. As of March 31, 2020 and 2019, the exchange rate of the TWD versus the USD, CNY, JPY, and EUR increases or decreases by 1%, given no changes in other factors, profit after tax will increase or decrease by $9,087 and $10,738, respectively. The analysis assumes that all other variables remain constant.

The Group has variety kinds of functional currencies; hence we use summarized method to disclose exchange gain (loss) of monetary items. For the three months ended March 31, 2020 and 2019, foreign exchange gain (including realized and unrealized) amounted to gain $18,257 and gain$5,602, respectively.

• 2) Interest rate analysis

Please refer to liquidity risk management for the detail of the Group’s financial liabilities’ interest exposure.

The sensitivity analysis of interest was made based on the interest rate of derivative and non-derivative instruments at the reporting date. The analysis of liabilities bearing floating interest rates was prepared based on the assumption that the outstanding amount at the reporting date had existed for the whole year.

When internal report to the Group’s top management regarding the interest rate change, they use 1% increase or decrease of interest rate assumption as the interest rate change which also represents this is the reasonable interest rate range assessed by the top management.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

If interest rates on loans had increased or decreased by 0.25% with all other variables held constantly. The impact on the Group will be as follows ：

For the three months ended March 31

2020 Increase 0.25% Decrease 0.25% After-taxprofit After-taxprofit $ 946 946	2019 Increase 0.25% Decrease 0.25% After-tax loss After-tax loss 1,400 1,400	2019 Increase 0.25% Decrease 0.25% After-tax loss After-tax loss 1,400 1,400
Increase 0.25% After-taxprofit $ 946		Decrease 0.25%
		After-tax loss
		1,400

The above-mentioned variables attribute to the Group’s change of interest rate on loan. 3) Other price risk

If the prices of financial instrument change at reporting date, with all other variables held constant, the influences were as follows ：

For the three months ended March 31

Equity price at reporting date Increase 3% Decrease 3%	2020 Other comprehensive income after tax Netprofit(loss) $ 9,919 2,675 $ (9,919) (2,675)	2019 Other comprehensive income after tax Netprofit(loss) 5,665 1,913 (5,665) (1,913)	2019 Other comprehensive income after tax Netprofit(loss) 5,665 1,913 (5,665) (1,913)
			Netprofit(loss) 1,913 (1,913)

(iv) Fair value

1) Categories and fair values of financial instruments

The fair value of financial assets and liabilities at fair value through profit or loss, and financial assets at fair value through other comprehensive income,are measured on a recurring basis. The following table shows the carrying amount and fair value of financial assets and fianacial liabilities, including their levels in the fair value hierarchy. It does not include fair value information on financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value and on investments in equity instruments which do not have any quoted price in an active market and lease liability.

Financial assets at FVTPL Derivative financial assets Debt instrument with quoted market prices Subtotal Financial assets at FVOCI Equity instrument with quoted market prices Equity instrument at fair value without quoted market prices Subtotal Financial assets at amortized cost Cash and cash equivalent Account receivables Other account receivables Restricted deposit Refundable deposits (recognized in other assets - noncurrent) Subtotal Total			March 31, 2020	March 31, 2020	March 31, 2020	Amount 368 103,962 187,764 145,638 - - - - -
	Carrying Amount $ 368 103,962			Fai	r value
			Level 1 - 103,962 187,764 - - - - - -	Level 2	Level 3 - - - 145,638 - - - - -
				368 - - - - - - - -
	104,330
	187,764 145,638
	333,402
	966,115 540,521 10,804 2,107 7,064
	1,526,611
	$ 1,964,343

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

March 31, 2020

Financial liabilities at amortized cost Bank loans Notes payable Account payable Other payable Lease liability Guarantee deposits received Total	Carrying Amount $ 472,722 1,772 394,093 203,243 74,378 591	Level 1 - - - - - -	Fair Level 2 - - - - - -	value Level 3 - - - - - -	Amount
					- - - - - -
	$ 1,146,799

Financial assets at FVTPL Derivative financial assets Debt instrument with quoted market prices Subtotal Financial assets at FVOCI Equity instrument with quoted market prices Equity instrument at fair value without quoted market prices Subtotal Financial assets at amortized cost Cash and cash equivalent Account receivables Other account receivables Restricted deposit Refundable deposits (recognized in other assets - noncurrent) Subtotal Total Financial liabilities at FVTPL Derivative financial liabilities Financial liabilities at amortized cost Bank loans Notes payable Accounts payable Other payable Lease liabilities Guarantee deposits Subtotal Total financial liabilities			December 31, 2019	December 31, 2019	December 31, 2019
	Carrying Amount $ 76 54,018			Fair	value
			Level 1 - 54,018 110,444 - - - - - - - - - - - - -	Level 2 76 - - - - - - - - 994 - - - - - -	Level 3 - - - 139,872 - - - - - - - - - - - -	Amount
						76 54,018 110,444 139,872 - - - - - 994 - - - - -
	54,094
	110,444 139,872
	250,316
	1,368,252 537,591 18,684 2,096 7,080
	1,933,703
	$ 2,238,113
	$ 994
	719,555 307 431,437 109,644 78,482 587
	1,340,012
	$ 1,341,006

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

March 31, 2019

Financial assets at FVTPL Derivative financial assets Debt instrument with quoted market prices Subtotal Financial assets at FVOCI Equity instrument with quoted market prices Equity instrument at fair value without quoted market prices Subtotal Financial assets at amortized cost Cash and cash equivalent Account receivables Other account receivables Restricted deposit Refundable deposits (recognized in other assets - noncurrent) Subtotal Total Financial liabilities at amortized cost Bank loans Notes payable Account payable Other payable Lease liability Guarantee deposits received Total	Carrying Amount $ 786 75,176			Fair	value	Amount 786 75,176 188,835 146,878 - - - - - - - - - - -
			Level 1 - 75,176 188,835 - - - - - - - - - - - -	Level 2 786 - - - - - - - - - - - - - -	Level 3 - - - 146,878 - - - - - - - - - - -
	75,962
	188,835 146,878
	335,713
	980,028 531,053 15,342 2,110 7,283
	1,535,816
	$ 1,947,491
	$ 699,054 1,568 418,340 103,730 87,294 264
	$ 1,310,250

The Group measures its assets and liabilities use input observable market data. The fair value hierarchy categorizes the inputs used in valuation techniques are as follows:

• Level 1: quoted prices (unadjusted) in the active markets for identified assets or liabilities.

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

• 2) Valuation techniques and assumptions unused in fair value determination

• A. Financial assets measured at amortized cost

If the quoted prices in active markets are available, the market price is established as the fair value. However, if quoted prices in active markets are not available, the fair value will be estimated by valuation technique or the prices quoted by competitors.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

B. Financial assets and financial liabilities measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

• 3) Valuation techniques and assumptions used in fair value determination

Non-derivative instruments

If a financial instrument has a quoted price in an active market, the quoted price is used as fair value. Quoted prices of major stock exchanges and quoted prices of government bonds are the basis for measuring the fair value of stocks listed on an exchange, stocks listed on the OTC, and debt instruments with quoted prices in an active market.

The fair values of the Group’s listed securities and open-end funds with standard terms and conditions and traded in active markets are determined by the quoted market prices.

Measurements of fair value of financial instruments without active market are based on valuation technique or quoted price from competitor. Fair value measured by valuation technique can be extrapolated from similar financial instruments, discounted cash flow method or other valuation technique. Using discounted cash flow method to calculate fair value, the main assumption is to reflect monetary time value and return of invest risk to discount and measure based on investee’s estimated future cash flow.

Derivative instruments

The fair value of Swap contracts is based on quoted prices from the counterparty.

• 4) Transfer between level 1 and level 2

There was no transfer between the fair value hierarchy levels for the year ended March 31, 2020 and 2019.

• 5) Movement of financial assets through other comprehensive income categorized within Level 3.

Balance at January 1, 2020 Recognized in other comprehensive income Balance at March 31, 2020 Balance at January 1, 2019 Prepaid investment Recognized in other comprehensive income Balance at March 31, 2019	Financial assets at fair value through other comprehensive income Unquoted equity instruments $ 139,872 5,766
	$ 145,638
	$ 151,668 2,700 (7,490)
	$ 146,878

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

• 6) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

• The Group’s financial instruments that use Level 3 inputs to measure fair value include financial assets measured at fair value through other comprehensive income– equity investments.

• The Group’s equity investments without active market in Level 3 have more than one significant unobservable input. The significant unobservable inputs of equity investments without active market are individually independent, and there is no correlation between them. －

• The Group’s major equity investment without active market CHENFENG OPTRONICS CORPORATION’s quantified information of significant unobservable inputs was as follows ：

Inter-relationship between significant unobservable inputs and fair value Significant measurement Item Valuation technique unobservable inputs Financial assets at Discounted Cash ‧ Continuing growth rate ‧ If the continuing growth FVOCI - equity Flow Method (as of March 31,2020, rate was higher, the investments without an December 31,2019 and estimated fair value active market March 31, 2019 ranged would increase. from 2.10% 、 2.10% and 1.96% respectively) ‧ Weighted average cost ‧ If WACC were higher, of capital (as of March the estimated fair value 31,2020, December would decrease. 31,2019 and March 31, 2019 ranged from 8.87% 、 9.47% and 11.76% respectively) ‧ Market illiquidity ‧ If the market illiquidity discount rate (as of discount rate was March 31,2020, higher, the estimated December 31,2019 and fair value would March 31, 2019 ranged decrease. from 40.22% 、 37.21% and 41.92% respectively) ‧ Non-controlling ‧ If the non-controlling interests discount rate interests discount rate (as of March 31,2020, was higher, the December 31,2019 and estimated fair value March 31, 2019 were would decrease. 29.87%)

• 7) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Group’s measurement on the fair value of financial instruments is deemed reasonable despite different valuation models or assumptions may lead to different results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on other comprehensive income ：

Inputs March 31, 2020 Continuing growth rate 2.10% Weighted average cost of capital 8.87% Market illiquidity discount rate 40.22% Non-controlling interests discount rate 29.87%	Changes in fairvalue reflected inOCI Fluctuation in inputs Favorable Unfavorable 0.1% $ 2,170 2,100 0.5% 2,660 2,660 1% 2,170 2,170 1% 1,890 1,890	Changes in fairvalue reflected inOCI	Changes in fairvalue reflected inOCI
			Unfavorable
			2,100 2,660 2,170 1,890

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

Inputs December 31, 2019 Continuing growth rate2.10% Weighted average cost of capital9.47% Market illiquidity discount rate37.21% Non-controlling interests discount rate 29.87% Inputs March 31, 2019 Continuing growth rate1.96% Weighted average cost of capital11.76% Market illiquidity discount rate41.92% Non-controlling interests discount rate 29.87%	Changes in fair value reflected in OCI Fluctuation in inputs Favorable Unfavorable 0.1% $ 1,890 1,750 0.5% 2,380 2,240 1% 1,960 1,960 1% 1,750 1,750 Changes in fair value reflected in OCI Fluctuation in inputs Favorable Unfavorable 0.1% $ 1,470 1,400 0.5% 10,430 9,310 1% 2,310 2,310 1% 1,890 1,890	Changes in fair value reflected in OCI	Changes in fair value reflected in OCI
			Unfavorable
			Unfavorable
			1,400 9,310 2,310 1,890

The favorable and unfavorable effects represented the changes in fair value, and fair value was based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflected the effects of changes in a single input, and it did not include the interrelationships and variances with another input.

(z) Financial risk management

There was no significant change of the Group’s financial risk management objectives and policy as disclosed in 2019 consolidated report. Please refer to Note 6(z) of 2019 consolidated financial statements.

(aa) Capital management

The Group’s capital management objectives, policies and procedures were compliance with 2019 consolidated financial statements. Further, there was no significant change of the summary quantitative information as disclosed in 2019 consolidated financial statements. Please refer to Note 6(aa) of 2019 consolidated financial statements.

(ab) Financing activities of non-cash transaction

The Group’s investing and financing activities which did not affect the current cash flow were as

follows:

(i) Please refer to Note 6(j) for right of use assets.

• (ii) Reconciliation of liabilities arising from financing activities were as follows：

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

January 1, 2020 Cash flows Short-term loans $ 400,000 (167,000) Long-term loans (including long term loans, current portion) 319,555 (80,000) Lease liabilities 78,482 (3,218) Guarantee deposits 587 - Total liabilities from financing activities $ 798,624 (250,218) Note: Reduce the right-of-use assets January 1, 2019 Cash flows Short-term loans $ 370,000 (70,000) Long-term loans (including long term loans, current portion) 398,888 - Lease liabilities 90,510 (3,178) Total liabilities from financing activities $ 859,398 (73,178)	Cash flows (167,000) (80,000) (3,218) -	Non-cash changes Foreign exchange movement Amortized Other - - - - 167 - (69) - (817)(Note) 4 - - (65) 167 (817) Non-cash changes Foreign exchange movement Amortized Other - - - - 166 - (38) - - (38) 166 -	March 31, 2020 233,000 239,722 74,378 591
	(250,218)		547,691
			March 31, 2019 300,000 399,054 87,294
			786,348

(7) Transactions with Related Parties

Compensation of key management personnel

The information on key management personnel compensation was as follows ：

Short-term employee benefits Post-employment benefits Termination benefits Other long-term benefits Share-based payments	For the three months ended March 31	For the three months ended March 31
	2020	2019
	$ 5,962 174 - - -	6,865 127 - - -
	$ 6,136	6,992

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

(8) Pledged Assets

The details and carrying values of pledged assets were as follows ：

Pledged Assets Purpose Restricted time deposits-current Guarantee for customs Restricted time deposits-non-current Performance guarantee Property, plant and equipment－ buildings Guarantee for long-term loans	March 31,2020 $ 1,549 558 221,353	December 31,2019	March 31,2019 1,542 568 208,536
		1,543 553 225,474
	$ 223,460	227,570	210,646

(9) Commitments and Contingencies

• (a) As of March 31, 2020, December 31, 2019 and March 31, 2019, the Group’s unused letters of credit for purchases of raw materials, machinery and equipment amounted to $14,093, $16,074 and $5,054, respectively.

• (b) As of March 31, 2020, December 31, 2019 and March 31, 2019, the Group has signed contracts for the purchase of equipments. The unrecognized contingencies of contracts for the purchase of equipments amounted to $595, $806 and $4,590, respectively.

(10) Losses Due to Major Disasters: None

(11) Significant Subsequent Events:

In order to repay bank loans and enrich the medium-term working capital, the Board of Directors has resolved during the board meeting held on April 23, 2020, to conduct a medium-term syndicated loans with credit of $800,000 thousand (with the range 20% increase or decrease of total credit amount), and authorized the Chairman to decide and proceed the relevant matters of this loan.

(12) Other

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(a) The details of the Group’s employee benefits, depreciation, and amortization were as follows ：
By function For the three months ended March 31
2020 2019
Recorded as Recorded as Total Recorded as Recorded as Total
operating operating operating operating
By item cost expenses cost expenses
Employee benefits 108,614 60,321 168,935 116,399 56,097 172,496
Depreciation 16,974 3,370 20,344 18,055 3,236 21,291
Amortization 86 295 381 143 121 264
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• (b) Seasonal operation ：

The operation of the Group hadn’t been affected by either seasonal or periodical factors.

(13) Supplementary Disclosure Requirements

(a) Information on significant transactions:

In accordance with the ROC “Guidelines Governing the Preparation of Financial Reports by Securities Issuers”, the required disclosures for the three months ended March 31, 2020 were as follows ：

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(i) Loans extended to other parties ：

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----- Start of picture text -----

No Lender Counter- Financial Related Maximum Ending Actual Interest Nature of Amount of Reason forLoss Collateral Limit of Limit of Remar
. party statement Party balance balance amount rate Financing sales to financing allowance financing total
account for the provide (purchases amount financing
period d from) for amount
counter individual
-party counter-
Item Item
(Note1) (Note1) (Note1) party
0 The Emerging Other Yes 43,826 - - 3.96% The need for - Working - - - 191,870 767,478 (Note
Company Display receivable (USD short-term capital (Note 2) (Note 2) 3)
Technologies -related 1,450,000) financing
Corp., U.S.A. parties
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Note1: It used the rate of exchange at March 31, 2020.

Note2: Limit of financing amount for individual counter-party shall not exceed 10% of the lender's net assets value as of the period. Limit of total financing amount shall not exceed 40% of the Company’s net asset value.

Note 3: It was eliminated in the consolidation. (ii) Guarantees provided to other parties: None

(iii) Securities owned as of March 31, 2020 (subsidiaries, associates and joint ventures not included):

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Relationship March 31,2020
Name of security holder Name of security and type between issuer of security and the Financial statement account Units Carrying Percentage of Fair value Remarks
security holder (shares) Value ownership
The Company Ascendax Venture Capital - Financial assets at FVOCI － noncurrent 1,470,000 14,318 5.25% 14,318 -
Corp. stock
The Company Chenfeng Optronics Corp. - Financial assets at FVOCI － noncurrent 1,000,000 18,760 1.64% 18,760 -
stock
The Company Fubon Financial Holding - Financial assets at FVOCI － noncurrent 13,845 842 - 842 -
Co., Ltd.Preferred Shares B
The Company Innolux Corp. stock - Financial assets at FVOCI － current 1,147,089 5,999 0.01% 5,999 -
The Company Fubon Financial Holding - Financial assets at FVOCI － current 300,000 11,265 - 11,265 -
Co., Ltd. stock
The Company E.SUN Financial Holding - Financial assets at FVOCI － current 700,000 16,975 0.01% 16,975 -
Co., Ltd.
The Company Far Eastern New Century - Financial assets at FVOCI － current 800,000 18,040 0.01% 18,040 -
Corp.
The Company Quanta Computer Inc. - Financial assets at FVOCI － current 490,000 29,498 0.01% 29,498 -
The Company Synnex Technology - Financial assets at FVOCI － current 658,000 24,445 0.04% 24,445 -
International Co. , Ltd. stock
The Company Taiwan Cement Corp., Ltd. - Financial assets at FVOCI － current 200,000 7,800 - 7,900 -
stock
The Company Nan Ya Plastics Corporation - Financial assets at FVOCI － current 210,000 11,487 - 11,487 -
stock
The Company Pegatron Co., Ltd. stock - Financial assets at FVOCI － current 216,000 12,528 0.01% 12,528 -
The Company Coasia Microelectronics - Financial assets at FVOCI － current 441,508 3,744 0.32% 3,744 -
Corp. stock
The Company Shian Yih Electronic Co., - Financial assets at FVOCI － current 480,000 10,368 0.78% 10,368 -
Ltd. stock
The Company Becton, Dickinson and - Financial assets at FVOCI － current 2,000 13,890 0.01% 13,890 -
Company
The Company Edmond de Rothschild Fund - Financial assets at FVTPL － current 8,468.12 21,960 - 21,960 -
– Europe
Convertibles(A)-USD
The Company JPMorgan Multiple Income - Financial assets at FVTPL － current 10,053.08 52,002 - 52,002 -
Fund (USD)
The Company Yuanta Taiwan High-yield - Financial assets at FVTPL － current 3,000,000 30,000 - 30,000 -
Leading Company Fund A
Ying Dar Investment Shian Yih Electronic Co., - Financial assets at FVOCI － current 550,000 11,880 0.90% 11,880 -
Development Corp Ltd. stock
Ying Dar Investment AGV Products Corporation - Financial assets at FVOCI － current 101,500 695 0.02% 695 -
Development Corp stock
Ying Dar Investment The Company’s stock The Company Financial assets at FVOCI － noncurrent 5,346,672 85,547 3.29% 85,547 (Note)
Development Corp
Bae Haw Investment Everest Technology Inc. - Financial assets at FVOCI － noncurrent 1,000,000 - 1.47% - -
Development Corp
Bae Haw Investment Shian Yih Electronic Co., - Financial assets at FVOCI － current 380,000 8,208 0.62% 8,208 -
Development Corp Ltd. stock
Bae Haw Investment The Company’s stock The Company Financial assets at FVOCI － noncurrent 3,447,716 55,163 2.12% 55,163 (Note)
Development Corp
Ying Cheng Investment Chenfeng Optronics Corp. - Financial assets at FVOCI － noncurrent 6,000,000 112,560 9.83% 112,560 -
Corp. stock
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Note: It was eliminated in the consolidation

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

• (iv) Accumulated trading amount of a single security in excess of $300 million or 20% of the Group’s issued share capital: None

• (v) Acquisition of property, plant and equipment in excess of $300 million or 20% of issued share capital: None.

• (vi) Disposal of property, plant and equipment in excess of $300 million or 20% of issued share capital: None.

• (vii) Sales to and purchases from related parties in excess of $100 million or 20% of issued share

capital was as follows ：

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----- Start of picture text -----

Detail of transaction Circumstances of and reasons for Resulting receivables
deviation from regular trading conditions (payables)
% of notes Remarks
Purchasing Counter Relations Purchase % of net Credit and
company (selling) party hip (sale) Amount purchase (sales) line Unit price Period for credit Balance receivable accounts
(payable)
The Company Emerging Subsidiary Sale 208,004 25.38% 3 months Sales prices offered Considering the 262,780 39.03% (Note)
Display of the to Emerging Display trading practices in
Technologies Company Technologies Corp., North American
Corp., U.S.A. U.S.A. was not market, the company
significantly different set credit duration as
from those offered to three months for
other customers North American
market, which is
slightly longer than
one to three months
set in other markets.
Emerging The Company Subsidiary Purchase 208,004 100.00% 3 months The company is the The company is the 262,780 100.00% (Note)
Display of the major supplier for major supplier for
Technologies Company Emerging Display Emerging Display
Corp., U.S.A. Technologies Corp., Technologies Corp.,
U.S.A. U.S.A.
----- End of picture text -----

Note: It was eliminated in the consolidation.

• (viii) Receivables from related parties in excess of $100 million or 20% of issued share capital were as

follows ：

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----- Start of picture text -----

Overdue
Name of Counterparty Relationsh Balance of Turnover Amount Amount Amount collected Allowance Remarks
company the ip amount ratio in the subsequent for doubtful
has the period accounts
receivables
The Company Emerging Display Subsidiary Account 3.01 - - 72,797 - (Note)
Technologies of the receivables of
Corp., U.S.A. Company 262,780
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Note: It was eliminated in the consolidation.

• (ix) Derivative financial instrument transactions ：

Please refer to note 6(b).

• (x) Significant inter-Group transactions ：

No.	Name	Counterparty	Relationship (Note)		Details	of transaction
				Subject	Amount	Term of trading	% of total consolidated revenue **or total asset **
0	The Company	Emerging Display Technologies Corp., U.S.A.	1	Sales revenue Accounts payable	208,004 262,780	Considering the trading practices in North American market, the Group set credit duration as three months for North American market, which is slightly longer than one to three months set in other markets.	25.52% 7.93%
0	The Company	Emerging Display Technologies Corp., U.S.A.	1	Selling expenses -Commission Otherpayable	46 46	No non-related-party transaction to compare to.	0.01% -
0	The Company	EDT-Europe ApS	1	Selling expenses -Commission Other payable	14,572 3,291	No non-related-party transaction to compare to.	1.79% 0.10%

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

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----- Start of picture text -----

Details of transaction
% of total
No. Name Counterparty [Relationship] (Note) Subject Amount Term of trading revenue or total consolidated
asset
0 The Company Emerging Display 1 Selling expenses 1,030 No non-related-party 0.13%
Technologies -Commission transaction to compare to.
Korea
0 The Company EDT-Japan Corp. 1 Selling expenses 3,662 No non-related-party 0.45%
-Commission transaction to compare to.
0 The Company Emerging Display 1 Interest revenue 103 Adjust by floating interest 0.01%
Technologies Other receivable rate of Bank of America.
Corp., U.S.A.
0 The Company Dong Guan 1 Processing cost 33,782 No non-related-party 4.15%
Emerging transaction to compare to.
Display Limited Other payable 78,969 2.38%
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Note: Relationship notes as follows ： 1) Parent Group to subsidiary

(b) Information on investees ：

Relevant information about investees for the three months ended March 31, 2020 was as follows:

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----- Start of picture text -----

Name of Name of Business Original cost of investment Held at the end of term Net income Investment
investor investee Location Scope March 31, December 31, Shares Percentage Carrying (loss) of the income (less) Remarks
2020 2019 owned owned value investee recognized
The Company Emerging Display USA Trading 121,656 121,656 3,500,000 100.00% 73,755 (4,223) (4,365) Subsidiary
Technologies Corp., U.S.A. (Note1) (Note 2)
The Company Emerging Display Samoa Investment 180,503 180,503 5,984,071 78.49% 84,738 (456) (358) Subsidiary
International (Samoa) Corp. holding (Note 2)
The Company EDT-Europe ApS Denmark Customer 2,077 2,077 125,000 100.00% 1,498 (450) (450) Subsidiary
service and (Note 2)
business
support
The Company Tremendous Explore Corp. BVI Trading - - 50,000 100.00% 262 2 2 Subsidiary
(Note 2)
The Company Emerging Display Korea Business 1,677 1,677 58,212,500 100.00% 1,177 72 72 Subsidiary
Technologies Korea support (Note 2)
The Company EDT-Japan Corp. Japan Customer 17,401 17,401 5,000 100.00% 4,903 452 452 Subsidiary
service and (Note 2)
business
support
The Company Ying Dar Investment Taiwan Investment 89,000 89,000 8,900,000 100.00% 21,059 (39) (39) Subsidiary
Development Corp. (Note 2)
The Company Bae Haw Investment Taiwan Investment 89,000 89,000 8,900,000 100.00% 35,015 (64) (64) Subsidiary
Development Corp. (Note 2)
The Company Ying cheng Investment Taiwan Investment 84,000 84,000 8,400,000 52.50% 64,365 (12) (6) Subsidiary
Corp. (Note 2)
Ying Dar Emerging Display Samoa Investment 13,234 13,234 450,000 5.90% 6,370 (456) (27) Subsidiary
Investment International (Samoa) Corp. holding (Note 2)
Development
Corp.
Bae Haw Emerging Display Samoa Investment 25,488 25,488 870,000 11.41% 12,318 (456) (52) Subsidiary
Investment International (Samoa) Corp. holding (Note 2)
Development
Corp.
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Note 1: It was deducted unrealized profit from sales $12,001.

Note 2: It was eliminated in the consolidation.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(c) Information on investees in Mainland China:

(i) Information on investments in Mainland China ：

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----- Start of picture text -----

Investee Main Received Investment Accumulated Invested Accumulated Net The Investment Book Accumulated
company businesses capital method amount invested capital amount income of Group’s gain (loss) value of investment
and in Mainland remitted from invested investee direct or recognized the income
products China as of Jan. or in Mainland indirect by the investment repatriated
1, 2020 repatriated to China as of investment Group as of March. to Taiwan as
Taiwan March. 31, ratio 31, 2020 of March. 31,
Remitt Repatr 2020 2020
ance iation
Dong Manufactu 248,516 Investing through a 219,225 - - 219,225 (537) 95.80% loss of $515 94,277 -
Guan ring of third country by Based on the
Emerging LCDs and (USD establishing a holding (USD 6,746,936) (USD (Note2)investee’s (Note4)
Display Touch 7,625,300) Group in a third (Note1) 6,746,936) financial
Limited panel country. statements
audited by the
same auditor
as the Group
(Note 3)
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(ii) Limitation on investments in Mainland China:

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----- Start of picture text -----

Accumulated investment Investment amount Limit on investment in
amount remitted from Taiwan approved by the Investment Mainland China set by the
to Mainland China as of Commission, Ministry of Investment Commission,
March 31, 2020 Economic Affairs Ministry of Economic Affairs
209,600(Note 8) 421,691(Note 8) 1,269,288(Note 7)
(US$6,934,668)( Note 5) (US$13,951,732)( Note 6)
----- End of picture text -----

• Note 1: The amount includes $13,234 which was invested by Ying Dar Investment Development Corp. and $25,488 which was invested by Bae Haw Investment Development Corp.

• Note 2: The ratio includes 5.90% which was held by Ying Dar Investment Development Corp. and 11.41% which was held by Bae Haw Investment Development Corp.

• Note 3: The amount includes a loss of $32 which was recognized by Ying Dar Investment Development Corp. and a loss of $61 which was recognized by Bae Haw Investment Development Corp.

• Note 4: The amount includes $5,806 which was invested by Ying Dar Investment Development Corp. and $11,229 which was invested by Bae Haw Investment Development Corp.

• Note 5: The amount includes the remaining capital amounting to US$187,732 of Emerging Technologies Int’l Trading (Shanghai) Co., Ltd. didn’t remit back after it had completed liquidation in 2009 due to net loss.

• Note 6: The approved amount includes US$637,732 obtained from Ying Dar Investment Development Corp. and US$870,000 obtained from Bae Haw Investment Development Corp. The amount obtained from Ying Dar Investment Development Corp. includes the remaining capital amounting to US$187,732 of Emerging Technologies Int’l Trading (Shanghai) Co., Ltd. didn’t remit back after it had completed liquidation in 2009 due to net loss.

• Note 7: The amount includes $63,964 for Ying Dar Investment Development Corp. and $54,107 for Bae Haw Investment Development Corp.

• Note 8: Transactions denominated in foreign currencies were recorded using the rate of exchange at March 31, 2020.

• (iii) Significant transactions:

  • The significant inter-Group transactions with the subsidiary in Mainland China, which were eliminated in the preparation of the consolidated financial statements, was disclosed in “information on significant transactions” for the three months ended March 31, 2020.

～ 42 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

(d) Major shareholders

List of all shareholders with ownership of 5 percent or greater showing the names and the number of

shares and percentage of ownership held by each shareholder:

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----- Start of picture text -----

Shareholding
’ Shares Pereentage
Shareholder s Name
Tseng, Jui-Ming 11,043,723 7%
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(14) Segment Information

Reportable segment information was as follows ：

For the three months ended March 31

Revenue: Sales to customers other than consolidated entities Sales among consolidated entities Total revenue Segment Income			2020	2020
	Domestic $ 611,185 208,004	North America 203,390 46	Mainland China - 33,782	Other operating Department 389 19,263	Adjustments and Eliminations - (261,095)	Total 814,964 -
	$ 819,189	203,436	33,782	19,652	(261,095)	814,964
	$ 54,878	(5,329)	(319)	168	1,424	50,822

For the three months ended March 31

2019

Revenue: Sales to customers other than consolidated entities Sales among consolidated entities Total revenue Segment Income Segment Assets March 31,2020 December 31,2019 March 31,2019 Segment Liabilities March 31,2020 December 31,2019 March 31,2019	Domestic $ 557,242 312,167	North America 333,552 105	Mainland China - 44,878	Other operating Department 187 17,780	Adjustments and Eliminations - (374,930)	Total 890,981 -
	$ 869,409	333,657	44,878	17,967	(374,930)	890,981
	$ 63,637	2,510	(492)	455	(3,620)	62,490
	Domestic $ 3,148,932	North America 358,962	Mainland China 144,903	Other operating Department 19,771	Adjustments and Eliminations (358,008)	Total 3,314,560
	$ 3,465,228	413,535	162,884	24,805	(429,586)	3,636,866
	$ 3,170,015	459,438	159,420	19,357	(453,346)	3,354,884
	$ 1,347,312	273,448	46,243	12,194	(346,101)	1,333,096
	$ 1,544,022	324,510	62,618	17,042	(263,307)	1,684,885
	$ 1,532,533	373,466	67,701	11,854	(453,810)	1,531,744

～ 43 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to consolidated financial statements

The following is the explanation of material reconciliation item ：

• (a) For the three months ended March 31, 2020 and 2019, the operating segments revenue eliminated from the consolidated entities were $261,096 and $374,930, respectively.

• (b) For the three months ended March 31, 2020 and 2019, the operating segments profit and loss eliminated from the consolidated entities were $1,424 and $3,620, respectively.

• (c) As of March 31, 2020, December 31, 2019 and March 31, 2019, the operating segments assets eliminated from the consolidated entities were $358,008, $429,586and $453,346, respectively.

• (d) As of March 31, 2020, December 31, 2019 and March 31, 2019, the operating segments liabilities eliminated from the consolidated entities were $346,101, $263,307 and $453,810, respectively.

～ 44 ～