EDT - Interim / Quarterly Report 2020

Stock Code:3038

(English Translation of Financial Report Originally Issued in Chinese)

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

For the six months ended June 30, 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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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 estimation
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
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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 June 30, 2020 and 2019, and the related consolidated statements of comprehensive income for the three months and the six months ended June 30, 2020 and 2019, and changes in equity and cash flows for the six months ended June 30, 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 with the 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 $207,986 thousand and $268,783 thousand, constituting 5.70% and 7.96% of consolidated total assets as of June 30, 2020 and 2019, respectively, total liabilities amounting to $74,892 thousand and $77,951 thousand, constituting 4.23% and 5.09% of consolidated total liabilities as of June 30, 2020 and 2019, respectively, and total comprehensive income amounting to loss $37,368 thousand, profit $13,350 thousand, loss $34,609 thousand and profit $11,732 thousand, constituting 44.40%, 13.30%, 30.45% and 7.11% of consolidated total comprehensive income for the three months and the six months ended June 30, 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 June 30, 2020 and 2019, and of its consolidated financial performance and its consolidated cash flows for the six months ended June 30, 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) August 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

June 30, 2020, December 31, 2019, and June 30, 2019

(Expressed in thousands of New Taiwan Dollars)

(Reviewed, not audited)

June 30,2020 Amount ％ $ 1,196,253 33 110,827 3 177,791 5 664,847 18 12,695 - 192 - 838,765 23 28,480 1	December 31,2019 Amount ％ 1,368,252 38 54,094 1 109,554 3 537,591 15 18,684 - 95 - 803,035 22 59,389 2	June 30,2019 Amount ％ 953,282 28 56,026 2 160,320 5 613,706 18 13,931 - 78 - 788,821 24 66,253 2 2,652,417 79 163,028 5 438,937 13 83,420 2 - - 2,028 - 28,165 1 - - 7,837 - 723,415 21 3,375,832 100 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	June 30,2020 Amount ％ $ 320,000 9 463 - 971 - 533,885 15 439,711 12 41,773 1 8,370 - 239,889 7 35,795 1	December 31,2019 Amount ％ 400,000 11 994 - 307 - 431,437 12 283,605 8 57,038 2 11,907 - 319,555 9 23,398 -	June 30,2019 Amount ％ 150,000 5 574 - 1,394 - 451,748 13 301,462 9 31,519 1 11,826 - - - 21,826 1
		Amount
		953,282 56,026 160,320 613,706 13,931 78 788,821 66,253
			1,620,857 45	1,528,241 42	970,349 29
3,029,850 83	2,950,694 81	2,652,417	- - 282 - 62,640 2 87,174 2 580 - 832 -	- - - - 66,575 2 88,546 2 587 - 936 -	399,221 12 932 - 72,313 2 86,908 3 266 - 1,039 -
104,565 3 339,736 9 69,351 2 57,729 2 4,537 - 32,804 1 2,976 - 7,556 -	140,762 4 365,955 10 77,207 2 57,834 2 3,777 - 33,003 1 - - 7,634 -	163,028 438,937 83,420 - 2,028 28,165 - 7,837
			151,508 4	156,644 4	560,679 17
			1,772,365 49	1,684,885 46	1,531,028 46
			1,624,076 44 4,397 - 500,502 14 (123,706) (3) (173,021) (5)	1,624,076 45 4,397 - 539,266 15 (102,612) (3) (173,021) (5)	1,624,076 48 - - 413,468 12 (89,233) (3) (173,021) (5)
619,254 17 $ 3,649,104 100	686,172 19 3,636,866 100	723,415 3,375,832
			1,832,248 50 44,491 1	1,892,106 52 59,875 2	1,775,290 52 69,514 2
			1,876,739 51	1,951,981 54	1,844,804 54
			$ 3,649,104 100	3,636,866 100	3,375,832 100

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 and the six months ended June 30, 2020 and 2019

(Expressed in thousands of New Taiwan dollars, Except Earnings Per Share)

(Reviewed, not audited)

For the three months ended June 30 2020 2019 Amount ％ Amount ％ $ 1,058,443 100 1,012,590 100 798,051 75 813,952 80	For the three months ended June 30 2020 2019 Amount ％ Amount ％ $ 1,058,443 100 1,012,590 100 798,051 75 813,952 80	For the three months ended June 30 2020 2019 Amount ％ Amount ％ $ 1,058,443 100 1,012,590 100 798,051 75 813,952 80	For the three months ended June 30 2020 2019 Amount ％ Amount ％ $ 1,058,443 100 1,012,590 100 798,051 75 813,952 80	For the six months ended June	For the six months ended June	For the six months ended June	30 ％ 100 81
	％ 100 75	2019		2020	％ 100 79	2019
Amount $ 1,058,443 798,051		Amount	％ 100 80	Amount 1,873,407 1,472,278		Amount
		1,012,590 813,952				1,903,571 1,547,076
260,392	25	198,638	20	401,129	21	356,495	19
59,474 33,941 32,198 128	6 3 3 -	57,893 34,376 25,668 (4)	6 3 3 -	107,853 65,569 56,885 669	6 3 3 -	112,754 64,262 50,747 (1,125)	6 3 3 -
125,741	12	117,933	12	230,976	12	226,638	12
1,019	-	-	-	2,077	-	-	-
135,670	13	80,705	8	172,230	9	129,857	7
3,916 (15,552) (2,572)	- (1) -	5,446 14,130 (3,554)	1 1 -	12,879 (7,050) (5,775)	- - -	10,123 26,478 (7,241)	1 1 -
(14,208)	(1)	16,022	2	54	-	29,360	2
121,462 20,856	12 2	96,727 15,098	10 1	172,284 27,825	9 1	159,217 24,972	9 1
100,606	10	81,629	9	144,459	8	134,245	8
(12,897) 57	(2) -	19,056 - 19,056	2 -	(26,436) 282	(2) -	27,926 -	1 -
(12,954)	(2)		2	(26,718)	(2)	27,926	1
(3,488) -	- -	(317) -	- -	(4,094) - (4,094)	- -	2,916 -	- -
(3,488)	-	(317)	-		-	2,916	-
(16,442)	(2)	18,739	2	(30,812)	(2)	30,842	1
$ 84,164	8	100,368	11	113,647	6	165,087	9
$ 100,635 (29)	10 -	81,696 (67)	9 -	144,513 (54)	8 -	134,317 (72)	8 -
$ 100,606	10	81,629	9	144,459	8	134,245	8

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 Comprehensive Income For the three months and the six months ended June 30, 2020 and 2019

(Expressed in thousands of New Taiwan dollars, Except Earnings Per Share)

(Reviewed, not audited)

For the three months ended June 30 2020 2019 Amount ％ Amount ％ $ 102,442 10 94,845 10 (18,278) (2) 5,523 1	For the three months ended June 30 2020 2019 Amount ％ Amount ％ $ 102,442 10 94,845 10 (18,278) (2) 5,523 1	For the three months ended June 30 2020 2019 Amount ％ Amount ％ $ 102,442 10 94,845 10 (18,278) (2) 5,523 1	For the three months ended June 30 2020 2019 Amount ％ Amount ％ $ 102,442 10 94,845 10 (18,278) (2) 5,523 1	For the six months ended June	For the six months ended June	For the six months ended June	30 ％ 9 -
	％ 10 (2)	2019		2020	％ 7 (1)	2019
Amount $ 102,442 (18,278)		Amount 94,845 5,523	％	Amount 129,031 (15,384)		Amount 162,502 2,585
			10 1
$ 84,164	8	100,368	11	113,647	6	165,087	9
$	0.68		0.55		0.97		0.90
$	0.68		0.55		0.97		0.90

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 six months ended June 30, 2020 and 2019

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

Equity attributable to shareholders of parent

Capital stock	Capital surplus	Retained earnings	Retained earnings	Retained earnings	Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Treasury stock (8,271) (104,299) (273,209) - - - 2,852 25,333 - 2,852 25,333 - - - - - - - - - - - - (50,738) - - 150,926 - (4,848) - (5,419) (83,814) (173,021) (14,111) (88,501) (173,021) - - - (3,983) (11,499) - (3,983) (11,499) - - - - - - - - - - - (5,612) - (18,094) (105,612) (173,021)	Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Treasury stock (8,271) (104,299) (273,209) - - - 2,852 25,333 - 2,852 25,333 - - - - - - - - - - - - (50,738) - - 150,926 - (4,848) - (5,419) (83,814) (173,021) (14,111) (88,501) (173,021) - - - (3,983) (11,499) - (3,983) (11,499) - - - - - - - - - - - (5,612) - (18,094) (105,612) (173,021)	Total equity attributable to shareholders of parent 1,742,230	Non-controlling interests	Total Equity 1,809,159
		Legal capital reserve	Special capital reserve	Unappropriated Earnings 200,673 134,317 - 134,317 (11,193) (78,704) (42,095) - (2,700) 4,848 205,146 330,944 144,513 - 144,513 (25,733) (188,889) 48,695 5,612 315,142
$ 1,744,076	28,226	45,822	109,212					66,929
- -	- -	- -	- -		- 2,852	- - 25,333 -	134,317 28,185	(72) 2,657	134,245 30,842
-	-	-	-		2,852	25,333 -	162,502	2,585	165,087
- - - - (120,000) -	- - - - (28,226) -	11,193 - - - - -	- - 42,095 - - -		- - - - - -	- - - - - - - (50,738) - 150,926 (4,848) -	- (78,704) - (50,738) - -	- - - - - -	- (78,704) - (50,738) - -
$ 1,624,076	-	57,015	151,307		(5,419)	(83,814) (173,021)	1,775,290	69,514	1,844,804
$ 1,624,076	4,397	57,015	151,307		(14,111)	(88,501) (173,021)	1,892,106	59,875	1,951,981
- -	- -	- -	- -		- (3,983)	- - (11,499) -	144,513 (15,482)	(54) (15,330)	144,459 (30,812)
-	-	-	-		(3,983)	(11,499) -	129,031	(15,384)	113,647
- - - -	- - - -	25,733 - - -	- - (48,695) -		- - - -	- - - - - - (5,612) -	- (188,889) - -	- - - -	- (188,889) - -
$ 1,624,076	4,397	82,748	102,612		(18,094)	(105,612) (173,021)	1,832,248	44,491	1,876,739

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 June 30, 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 Dividend income Gain on disposal of property, plant and equipment Unrealized foreign exchange loss (gain) Total adjustments to reconcile profit Changes in operating assets and liabilities Changes in operating assets: Increase in accounts receivable Decrease in other accounts receivable Decrease (increase) in inventories Decrease (increase) in other current assets Total net changes in operating assets Changes in operating liabilities`：` Increase in notes payable Increase (decrease) in accounts payable Decrease in other payable Increase in other current liabilities Decrease in net defined benefit liability Increase (decrease) 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 Interest paid Income taxes 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 Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of Investment property Decrease (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 the principal portion 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 six months ended June 30 2020 2019 $ 172,284 159,217 39,286 42,034 764 582 669 (1,125) 3,087 (6,333) 5,775 7,241 (6,748) (9,730) (2,730) - - (560) 14,458 (6,531) 54,561 25,578 (133,971) (142,613) 332 2,240 (36,773) 56,909 30,998 (10,851) (139,414) (94,315) 664 674 108,371 (8,396) (27,982) (14,554) 11,353 6,859 (1,372) (1,318) (104) 1,039 90,930 (15,696) (48,484) (110,011) 6,077 (84,433) 178,361 74,784 7,910 9,399 (5,521) (6,918) (42,949) (7,149) 137,801 70,116 (101,461) - 50,203 63,712 (60,350) (64,260) - 141,601 (11,880) (17,091) - 560 (1,525) (140) (900) - (45) 301 (2,976) - (128,934) 124,683 (80,000) (220,000) (80,000) - - (50,738) (5,253) (6,394) (165,253) (277,132) (15,613) 6,502 (171,999) (75,831) 1,368,252 1,029,113 $ 1,196,253 953,282	For the six months ended June 30 2020 2019 $ 172,284 159,217 39,286 42,034 764 582 669 (1,125) 3,087 (6,333) 5,775 7,241 (6,748) (9,730) (2,730) - - (560) 14,458 (6,531) 54,561 25,578 (133,971) (142,613) 332 2,240 (36,773) 56,909 30,998 (10,851) (139,414) (94,315) 664 674 108,371 (8,396) (27,982) (14,554) 11,353 6,859 (1,372) (1,318) (104) 1,039 90,930 (15,696) (48,484) (110,011) 6,077 (84,433) 178,361 74,784 7,910 9,399 (5,521) (6,918) (42,949) (7,149) 137,801 70,116 (101,461) - 50,203 63,712 (60,350) (64,260) - 141,601 (11,880) (17,091) - 560 (1,525) (140) (900) - (45) 301 (2,976) - (128,934) 124,683 (80,000) (220,000) (80,000) - - (50,738) (5,253) (6,394) (165,253) (277,132) (15,613) 6,502 (171,999) (75,831) 1,368,252 1,029,113 $ 1,196,253 953,282	For the six months ended June 30 2020 2019 $ 172,284 159,217 39,286 42,034 764 582 669 (1,125) 3,087 (6,333) 5,775 7,241 (6,748) (9,730) (2,730) - - (560) 14,458 (6,531) 54,561 25,578 (133,971) (142,613) 332 2,240 (36,773) 56,909 30,998 (10,851) (139,414) (94,315) 664 674 108,371 (8,396) (27,982) (14,554) 11,353 6,859 (1,372) (1,318) (104) 1,039 90,930 (15,696) (48,484) (110,011) 6,077 (84,433) 178,361 74,784 7,910 9,399 (5,521) (6,918) (42,949) (7,149) 137,801 70,116 (101,461) - 50,203 63,712 (60,350) (64,260) - 141,601 (11,880) (17,091) - 560 (1,525) (140) (900) - (45) 301 (2,976) - (128,934) 124,683 (80,000) (220,000) (80,000) - - (50,738) (5,253) (6,394) (165,253) (277,132) (15,613) 6,502 (171,999) (75,831) 1,368,252 1,029,113 $ 1,196,253 953,282


			42,034 582 (1,125) (6,333) 7,241 (9,730) - (560) (6,531)
			25,578
			(142,613) 2,240 56,909 (10,851)
			(94,315)
			674 (8,396) (14,554) 6,859 (1,318) 1,039
			(15,696)
			(110,011)
			(84,433)
			74,784 9,399 (6,918) (7,149)
			70,116
			- 63,712 (64,260) 141,601 (17,091) 560 (140) - 301 -
			124,683
			(220,000) - (50,738) (6,394)
			(277,132)
			6,502
			(75,831) 1,029,113
			953,282

See accompanying notes to financial statements.

～ 7 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

For the six months ended June 30, 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 August 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” Amendments to IFRS 16 “COVID-19-Related Rent Concessions”	Effective date per IASB
	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020

Except for the following items, the Group believes that the adoption of the above IFRSs would not have any material impact on its consolidated financial statements. The extent and impact of significant changes are as follows :

Amendments to IFRS 16 “COVID-19-Related Rent Concessions”

As a practical expedient, a lessee may elect not to assess whether a rent concession that meets conditions is a lease modification and the change in lease liability is recognized in profit or loss. The amendments have been endorsed by the FSC in July 2020, earlier application from January 1,2020 is permitted. Related accounting policy is explained in Note 4(c).

The Group has elected to apply the practical expedient for all rent concessions that meet the criteria beginning January 1,2020, with early adoption. No adjustment was made upon the initial application of the amendments. The amounts recognized in profit or loss for the three months and the six months ended June 30,2020 were 116 thousand and 1,181 thousand, respectively.

～ 8 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to 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`：`
	Effective date per
New, Revised or Amended Standards and Interpretations	IASB
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets	Effective date to be
Between an Investor and Its Associate or Joint Venture”	determined by IASB
IFRS 17 “Insurance Contracts”	January 1, 2023
Amendments to IAS 1 “Classification of Liabilities as Current or Non-
current”	January 1, 2022
Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before
Intended Use”	January 1, 2022
Amendments to IAS 37 “Onerous Contracts–Cost of Fulfilling a Contract”	January 1, 2022
Annual Improvements to IFRS Standards 2018–2020	January 1, 2022
Amendments to IFRS 17 “Insurance Contracts”	January 1, 2023

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.

(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.

～9～

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

(b) Basis of consolidation

(i) Subsidiaries included in the consolidated financial statements were 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
			June 30,2020 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%	June 30,2019
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 Subsidiary 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.

～ 10 ～

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

(c) Leases

The Group elects to apply the practical expedient to all of these rent concessions, and therefore, does not assess whether the rent concessions are lease modifications:

(I) The rent concessions occurring as a direct consequence of the COVID-19 pandemic.
(II) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change.
(III) Any reduction in lease payments affects only payments originally due on or before 30 June,2021; and
(IV) There is no substantive change to other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

(d) Government grant

The grant without any term can be recognized gain at the time the Company acquires.

The grant relating to assets is recognized only when there is reasonable assurance that the group will comply with any conditions attached to the grant and the grant will be received. And the grant will be presented as deferred income at fair value.

The grant is related to depreciable assets, the grant is recognized over the useful life of the assets, on a systematic basis.

The government grant is recognized as income over the period necessary to match them with the related cost, for which they are intended to compensate, on a systematic basis.

(e) 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.

(f) 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.

～ 11 ～

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

(5) Significant accounting assumptions and judgement, and major sources of estimation 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 Demand deposits Check deposits Time deposits Repurchase agreement Total	June 30,2020 $ 378 345,146 95 522,513 328,121	December 31,2019	June 30,2019 499 345,427 1,090 574,519 31,747 953,282
		366 272,823 15 1,063,943 31,105
	$ 1,196,253	1,368,252

(b) Financial assets and liabilities 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	June 30,2020 $ 110,827 -	December 31,2019	June 30,2019 56,026 - 56,026 574
		54,018 76 54,094 994
	$ 110,827
	$ 463

～ 12 ～

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

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		June 30,2020

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

～ 13 ～

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. Coasia Microelectronics Corp. E.SUN Financial Holding Co., Ltd. Far Eastern New Century Corp. 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 Preferred stocks listed on domestic markets-non current: Fubon Financial Holding Co., Ltd Total	June 30,2020 $ 9,062 13,170 - - 27,406 - 13,566 13,824 5,386 19,460 27,900 33,065 773	December 31,2019	June 30,2019 8,408 13,755 26,000 15,197 17,862 15,249 16,506 11,599 4,000 - - 31,020 724 160,320 - 160,320 15,509 146,650 162,159 869 163,028
		9,555 13,920 - - 17,175 - 15,288 14,775 5,055 - - 33,064 722
	163,612	109,554
	14,179	-
	$ 177,791	109,554
	$ 17,008 86,660	15,832 124,040
	103,668	139,872
	897	890
	$ 104,565	140,762

～ 14 ～

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

For the three months and six months ended June 30, 2020 and 2019, the Group has recognized dividend income $2,730, $0, $2,730and $0 from the abovementioned equity instruments designated at fair value through other comprehensive income, respectively.

For the six months ended June 30, 2020 and 2019, the Group with the objective of investment and financial management had sold financial assets at fair value of $42,985 and $63,712, and accumulated gain on disposal of investments were $5,612 and $4,848, which had been reclassified from other equity interest to retained earnings, respectively. The Group did not dispose any long term strategic investments from January 1 to June 30, 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 had not been derecognized. As of June 30,2020, December 31, 2019 and June 30, 2019, the carrying amount of the listed stocks which were entrusted to financial institutions for security lending amounted to $9,062, $9,555and $34,408, respectively.

(d) Accounts receivable

Accounts receivable
Accounts receivables-measured at amortized cost Allowance for impairment	June 30,2020 $ 684,283 (19,436)	December 31,2019	June 30,2019 632,914 (19,208) 613,706
		556,362 (18,771)
	$ 664,847	537,591

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 ：

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		June 30,2020
	Carrying amount of Accounts Receivable $ 574,061 91,417 2 32 - 18,771 $ 684,283	Weighted-average expected credit loss rate 0.10% 0.10% 0.09% 0.10% - 100.00%	Loss allowance for lifetime expected credit losses
				574 91 - - - 18,771 19,436

～ 15 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

	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% June 30,2019	Loss allowance for lifetime expected credit losses
			- - - - - 18,771 18,771
Carrying amount of Accounts Receivable $ 523,593 86,148 4,393 - 9 18,771 $ 632,914	Weighted-average expected credit loss rate 0.02% 0.36% 0.10% - 100.00% 100.00%	Loss allowance for lifetime expected credit losses
			116 308 4 - 9 18,771 19,208

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

		For the six months	For the six months	ended June	30
			2020	2019
Balance at January 1		$	18,771		20,327
Impairment loss recognized (reversed)			669	(1,125)
Effect of changes in foreign currency exchange		rates	(4)		6
Ending balance		$	19,436		19,208
The abovementioned financial assets were	not pledged as collateral.
Please refer to Note 6(y) for credit risk.
Other receivables
		June	December	June
		30,2020	31,2019	30,2019
Loans to employee	$	8,494	8,834		12,175
Receivable resulting from selling equity
investments at fair value through other		-	7,218	-
comprehensive income
Dividend receivables		2,730	-	-
Others		1,471	2,632		1,756
Allowance for impairment		-	-	-
	$	12,695	18,684		13,931

(e) Other receivables

～ 16 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

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

(f) Inventories

Inventories
Raw materials and supplies Work in process Finished goods Inventories in transit	June 30,2020 $ 300,161 311,790 220,591 6,223	December 31,2019	June 30,2019 243,505 264,082 275,186 6,048 788,821
		246,804 293,737 251,522 10,972
	$ 838,765	803,035

The details of the cost of sales were as follows:

Reclassification to cost of goods sold Gain on reversal of inventories Unallocated production overheads Loss on scrap Others	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
	$ 779,722 (7,669) 3,410 22,619 (31)	788,180 (2,009) 4,470 23,462 (151)	$ 1,431,000 (6,581) 9,745 38,182 (68)	1,490,637 (4,598) 10,795 50,585 (343)
	$ 798,051	813,952	$ 1,472,278	1,547,076

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 were 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	June 30,2020 $ 2,063 10,667 6,372 3,469 2,096 7,009 4,360	December 31,2019	June 30,2019 2,756 50,488 4,361 3,248 1,808 7,264 4,165 74,090 66,253 7,837 74,090
		2,659 39,259 5,374 6,438 2,096 7,080 4,117
	$ 36,036	67,023
	$ 28,480 7,556	59,389 7,634
	$ 36,036	67,023

～ 17 ～

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

The above mentioned restricted time deposits as collateral for loan was disclosed in Note 8.

(h) Non-controlling interests' share of subsidiaries

Significant to the Group of the non-controlling interest subsidiaries were 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 June 30,2020 December 31,2019 June 30,2019 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. was as follows:

June $ $ $ April to June, 2020	June $	30,2020 10,071 74,280 (30)	30,2020 10,071 74,280 (30)	Dec.31.2019 10,102 106,320 (50)

	$	84,321		116,372
	$	40,053		55,277

$ -			- (5) 11,880 11,875 (2) 5,640 January t 2020 $ - -	-
$ 2 (38,280)				(10) (32,040)
$ (38,278)				(32,050)
$ 1				(5) (15,224)
$ (18,182)
				o June, (30)
			$	(30)

～ 18 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

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

2020.6.30 2019.12.31 $ 146,129 149,362 18,516 22,731 (58,981) (61,550) - (1,068) $ 105,664 109,475 $ 4,438 4,598 April to June, 2020 April to June, 2019 January t June, 202	2020.6.30 $ 146,129 18,516 (58,981) -	2020.6.30 $ 146,129 18,516 (58,981) -	2019.12.31 149,362 22,731 (61,550) (1,068)

	$	105,664	109,475 4,598 January t June, 202
	$	4,438
				o 0
$	52,606	59,410	86,388
$	(724) (1,572)	(1,551) (1,264)	(1,180) (2,631)
$	(2,296)	(2,815)	(3,811)
$	(30)	(65)	(49)
$	(96)	(117)	(160)

～ 19 ～

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

(i) Property, plant and equipment

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

Land	Building and construction	Machinery and equipment	Office equipment	Other
$ 25,201 - - - (294) $ 24,907	1,047,550 115 272 - (1,527)	2,384,197 1,780 1,080 - (5,147)	28,331 - - (19) (155)	133,476 6,048 (1,352) (84) (160)
	1,046,410	2,381,910	28,157	137,928
$ 74,709 - - - 839
$ 75,548
$ - - - -
$ -
$ - - - -
$ -
$ 25,201
$ 24,907
$ 74,709
$ 75,548

～ 20 ～

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

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 which were recognized in right-of-usd assets were as follows ：

Right-of-use assets cost`：` Balance at January 1, 2020 Reduction Effect of movements in exchange rates Balance at June 30, 2020 Balance at January 1, 2019 Additions Reduction Effect of movements in exchange rates Balance at June 30, 2019 Depreciation`：` Balance at January 1, 2020 Depreciation for the year Effect of movements in exchange rates Balance atJune 30, 2020 Balance at January 1, 2019 Depreciation for the year Disposals Effect of movements in exchange rates Balance atJune 30, 2019 Carrying amounts: Balance at January 1, 2020 Balance atJune 30, 2020 Balance at January 1, 2019 Balance atJune 30, 2019	Land $ 67,226 (817) - $ 66,409 $ 67,226 - - - $ 67,226 $ 2,757 1,364 - $ 4,121 $ - 1,378 - - $ 1,378 $ 64,469 $ 62,288 $ 67,226 $ 65,848	Building and construction	Transportation equipment	Total 90,949 (817) (495) 89,637 90,510 118 (711) (103) 89,814 13,742 6,826 (282) 20,286 - 7,114 (711) (9) 6,394 77,207 69,351 90,510 83,420
		23,509 - (492)	214 - 3 211 219 - - 2 221 128 64 (2) 190
		23,017
		23,065 118 (711) (105)
		22,367
		10,857 5,398 (280) 15,975
		- 5,670 (711) (9)	- 66 - - 66
		4,950 12,652 7,042 23,065 17,417
			86 21 219 155

～ 21 ～

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

(k) Investment property

Investment property which assets owned by the Group such as office buildings leased to third party. 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. Based on original lease terms of investment property, non-cancellable lease term is four years and the lessee has the right to extend lease term upon expiry. Subsequent lease term will consult with the lessee and didn't charge contingent rental. 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 June 30, 2020 Balance at January 1, 2019 Balance at June 30, 2019 Depreciation: Balance at January 1, 2020 Depreciation for the year Effect of changes in foreign exchange rates Balance at June 30, 2020 Balance at January 1, 2019 Balance at June 30, 2019 Carrying amounts: Balance at January 1, 2020 Balance at June 30, 2020 Balance at January 1, 2019 Balance at June 30, 2019	Land $ 47,720 - (557)	Building and construction 15,418 900 (192)	Total 63,138 900 (749) 63,289 - - 5,304 322 (66) 5,560 - - 57,834 57,729 - -
	$ 47,163	16,126
	$ -	-
	$ -	-
	$ - - - $ - $ - $ - $ 47,720	5,304 322 (66)
		5,560
		-
		-
		10,114
	$ 47,163	10,566 -
	$ - $ -
		-

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.

～ 22 ～

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

(l) Intangible assets

Carrying amounts: Balance at January 1, 2020 Balance at June 30, 2020 Balance at January 1, 2019 Balance at June 30, 2019	Patent $ 1,420 $ 1,437 $ 1,703 $ 1,586	Computer software cost 2,357 3,100 768 442		Total
				3,777 4,537 2,471 2,028

There was no significant increase for acquisition, disposal, reversal or write-down of impairment loss of intangible assets for the six months ended June,2020 and 2019. Please refer to 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	June 30,2020 $ 320,000	December 31,2019	June 30,2019 150,000 1,461,225 1.019%~1.047%
		400,000
	$ 1,408,327	1,272,106
	0.80%~0.95%	0.95%~1.04%

Short-term loans were not pledged as collateral.

As of June 30, 2020, December 31, 2019 and June 30, 2019, the Group’s acceptance credit for purchases of raw materials amounted to $2,205, $1,659 and $2,960, respectively.

Please refer to note 6(y) for the interest rate risk, foreign exchange 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	June 30,2020 $ 240,000 (111)	December 31,2019	June 30,2019 400,000 (779) 399,221
		320,000 (445)
	$ 239,889	319,555

～ 23 ～

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	June 30,2020 $ 239,889 -		December 31,2019	June 30,2019 - 339,221 339,221 400,000 1.8085%
			319,555 -
	$ 239,889		319,555
	$ 240,000		320,000
	1.7895%		1.8085%

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 on 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 thousand in February 2020, which is earlier than the maturity date.

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

On May 15, 2020, the Group entered into a syndicated loan agreement with seven banks leaded by E.SUN Bank, total amount is $800,000 thousand. For the period from the date of first borrowing to the five-year term with cycle use lines of credit.

According to the loan agreement, first borrowing should repay the syndicated loan in full first which made on November 17, 2016.

Besides, if line of credit is unused within nine months, the date of first borrowing will still be after nine months since signed date. And base on the date to calculate cycle use line of credit.

As of June 30,2020, the lines of credit were unused.

(o) Lease liabilities

The details of lease liabilities were as follows ：

Current Non-Current	June 30,2020 $ 8,370	December 31,2019	June 30,2019 11,826 72,313
		11,907
	$ 62,640	66,575

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

～ 24 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

The amounts recognized in profit or loss were as follows ：

April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
$ 655	813 274	1,342	1,666 595
$ 430		992
$ 65	80	123	195
$ 116	-	1,181	-

The amounts recognized in the statement of cash flows for the Group were as follow ：

Total cash outflow for leases	For the six months ended June 30 2020 2019 $ 7,486 9,039

(i) Lease of land, building and construction

As of June 30, 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 equipments 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 six months ended June 30, 2020. Please refer to Note 6(p) of the 2019 consolidated financial statements.

～ 25 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES Notes to 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 of 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 ：

Operating cost Selling expenses General and administrative expenses Research and development expenses	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
	$ 288 16 44 35	330 15 47 38	575 30 91 69	662 29 94 76
	$ 383	430	765	861

(ii) Defined Contribtion Plan

Cost recognized in expense was as below ：

Operating cost Selling expenses General and administrative expenses Research and development expenses	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
	$ 4,489 1,270 329 691	5,755 1,299 539 648	9,931 2,570 817 1,374	11,310 2,546 1,056 1,256
	$ 6,779	8,241	14,692	16,168

(r) Income tax

Income tax expense for the period was 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 ：

April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
$ 20,677	15,101	27,629	25,000
179	(3)	196	(28)
$ 20,856	15,098	27,825	24,972

～ 26 ～

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

For the six months ended June 30,2020 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	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
	$ 57	-	282	-

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 six months ended June 30, 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 June 30, 2020, December 31 and June 30, 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 were 162,408 thousand shares. Excluding shares of treasury stock that had been purchased by the Company and shares of stock held by the subsidiaries, outstanding shares of stock were 148,613thousand shares.

(ii) Capital surplus

Capital surplus was as follows ：

Treasury stock	June 30,2020 $ 4,397	December 31,2019 4,397	June 30,2019 -

(iii) Earnings distribution

The appropriations of earnings for 2019 and 2018 had been approved in the shareholders’ meeting held on June 12, 2020 and June 4, 2019, respectively. The appropriation and dividend per share were as follows ：

Cash dividend to shareholders (TWD) Cash	2019 $ 1.2	2018 0.5

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

(iv) Other equity

Foreign exchange differences arising from foreign operation	Unrealized gains (losses) on financial assets measured at FVOCI (88,501) (11,499) (5,612)	Total
$ (14,111) (3,983) - $ (18,094)		(102,612) 15,482 (5,612)
	(105,612)	(123,706)
Foreign exchange differences arising from foreign operation $ (8,271) 2,852 - $ (5,419)	Unrealized gains (losses) on financial assets measured at FVOCI (104,299) 25,333 (4,848)	Total (112,570) 28,185 (4,848)
	(83,814)	(89,233)

(v) Treasury stock

The changes of treasury stocks were as follows ：

(Expressed in thousand of shares)

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

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

The Company's Board of Directors approved resolutions to retire treasury stocks amounting to 12,000 thousand shares on March 8, 2019. The related registration procedures had been completed. As of June 30, 2020, December 31 and June 30, 2019, the cost of treasury stocks amounted to $50,739.

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 six months ended June 30, 2020 and 2019, Ying Dar Corp. and Bae Haw Corp. did not purchase or dispose any of the Company’s shares. As of June 30, 2020, December 31, 2019 and June 30, 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 June 30, 2020, December 31 and June 30, 2019, their market values amounted to $186,441, $154,781and $138,951, respectively.

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

(t) Earnings per share

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

April to June, 2020	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
$ 100,635		81,696 148,613 0.55 81,696 April to June, 2019	144,513 148,613 0.97 144,513 January to June, 2020	134,317
148,613 $ 0.68	148,613			149,087 0.970
$ 100,635				134,317 January to June, 2019
	April to June, 2020
	148,613 300	148,613 331 148,944 0.55	148,613 834 149,447 0.97	149,087 733
148,913 $ 0.68	148,913			149,820 0.90

In computing above basic earnings (loss) per share of ordinary stock for the six months ended June 30, 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

Domestic $ 416,588 536 107,500	April toJune 2020	April toJune 2020
	North America - 441,159 92,477	Other operating department 159 - 24
$ 524,624	533,636	183 - - 183
$ 221,046 294,108 9,470	161,776 370,429 1,431
$ 524,624	533,636	183
Domestic $ 570,153 - 138,197
	April toJune2019
	North America 723 226,187 77,221	Other operating department 87 - 22
$ 708,350	304,131	109
$ 151,308 544,891 12,151	261,814 39,534 2,783	- - 109
$ 708,350	304,131	109

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

Domestic $ 886,938 536 248,335	Domestic $ 886,938 536 248,335	January toJune 2020	January toJune 2020	January toJune 2020
		North America 36 597,481 139,509		Other operating department 249 - 323
$ 1,135,809		737,026		572 - - 572 572
$ 394,041 727,445 14,323		267,447 460,247 9,332
$ 1,135,809		737,026
Domestic $ 999,086 - 266,506
		January to		June2019
		North America 2,869 480,529 154,285		Other operating department 233 - 63
$ 1,265,592		637,683		296 - - 296
$ 473,913 772,474 19,205		392,213 241,268 4,202
$ 1,265,592		637,683
			556,362 (18,771)
	$ 664,847		537,591

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

June 30,2020 December 31,2019 June 30,2019 Contract liability`－`Unearned revenue (recognized in other current liabilities) $ 23,664 13,031 10,504 Please refer to Note 6(d) for accounts receivables and impairment. The amount of revenue recognized for the three months and six months ended June 30, 2020 and 2019, that was included in the contract liability balance at the beginning of the period were $1,069, $16, $2,745 and $1,577 respectively.	June 30,2020 $ 23,664	December 31,2019	June 30,2019 10,504
		13,031

(v) Employee’s remuneration, 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 ：

April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
$ 6,384	5,233	9,194	8,604
$ 3,830	3,140	5,516	5,163

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 income of leased investment property.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(x) Non-operating income and expenses

(i) Other income

Details of other income were as follows ：

Interest income Bank deposits Other loans and receivables Dividend Revenue Others	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
	$ 2,553 30 2,730 (1,397)	5,265 44 - 137	6,748 60 2,730 3,341	9,730 95 - 298
	$ 3,916	5,446	12,879	10,123

(ii) Other gains and losses

Details of other gains and losses were as follows ：

Foreign exchange gains, net Net gains on disposal of financial assets(liabilities) at fair value through profit or loss Net gains on disposal of property, plant and equipment Others	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
	$ (20,883) 5,530 - (199)	11,650 2,059 560 (139)	(2,626) (4,219) - (205)	17,252 8,948 560 (282)
	$ (15,552)	14,130	(7,050)	26,478

(iii) Finance costs

Details of finance costs were as follows ：

Interest expenses Bank loans Lease liability Management fee of syndicated loan	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019
	$ 1,854 655 63	2,678 813 63	4,308 1,342 125	5,450 1,666 125
	$ 2,572	3,554	$ 5,775	7,241

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

(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 June 30, 2020, December 31, and June 30, 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).

(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.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

Carrying amount $ 239,889 320,000 533,885 971 439,711 71,010 580 463	Contracted cash flows (240,529) (320,445) (533,885) (971) (439,711) (105,284) (580) 59,260 (59,568)	Due within 6 months (240,529) (320,445) (533,885) (971) (439,711) (6,468) - 59,260 (59,568) (1,542,317)	Due in 6- 12months - - - - - (4,135) - - -	Due in 1- 2years - - - - - (4,958) (34) - - (4,992)	Due in 2- 5years - - - - - (11,918) (546) - - (12,464)	Due in over 5 years - - - - - (77,805) - - -
$ 1,606,509	(1,641,713)		(4,135)			(77,805)
$ 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)
$ 399,221 150,000 451,748 1,394 178,269 84,139 266 574	(408,130) (150,194) (451,748) (1,394) (178,269) (121,725) (266) 155,271 (155,300)	(3,640) (150,194) (451,748) (1,394) (178,269) (7,330) - 155,271 (155,300)	(3,600) - - - - (7,358) - - -	(400,890) - - - - (11,115) (266) - -	- - - - - (13,107) - - -	- - - - - (82,815) - - -
$ 1,265,611	(1,311,755)	(792,604)	(10,958)	(412,271)	(13,107)	(82,815)

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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 ：

		June 30, 2020	June 30, 2020		December 31, 2019	December 31, 2019	December 31, 2019	June 30, 2019	June 30, 2019
		Foreign	Exchange	TWD	Foreign	Exchange	TWD	Foreign	Exchange	TWD
		currency	rate	amount	currency	rate	amount	currency	rate	amount
Financial	assets
Monetary items
USD	$	68,089	29.63	2,017,487	69,372	29.98	2,079,789	53,081	31.06	1,648,683
JPY		10,341	0.2751	2,845	18,491	0.276	5,104	25,323	0.2886	7,308
CNY		1,863	4.191	7,807	176	4.305	757	360	4.25	1,626
EUR		9	33.27	291	7	33.59	225	67	35.38	2,381
Non-monetary items
USD		3,136	29.63	92,906	3,802	29.98	113,978	1,804	31.06	56,026
Financial	liabilities
Monetary items
USD		16,870	29.63	499,854	14,135	29.98	423,768	11,244	31.06	349,244
JPY		33,305	0.2751	9,162	40,745	0.276	11,246	26,531	0.2886	7,657
EUR		-	-	-	11	33.59	386	148	35.38	5,253
TWD		-	-	-	-	-	-	2,713	1	2,713
Non-monetary items
USD		2,000	29.63	59,260	3,000	29.98	89,940	5,000	31.06	155,300
	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 June 30, 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 $12,812 and $10,200, respectively, and equity							will increase or
	decrease by $113 and $0, 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 or loss of monetary items. For the three months and the six months ended June 30, 2020and 2019, the exchange gains or loss (including realized and unrealized) that resulted from monetary items translated to the functional currency was ($20,883), $11,650, ($2,626) and $17,252, 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 nonderivative 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.

～ 36 ～

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 six months ended June 30

2020 Increase 0.25% Decrease 0.25% After-tax loss After-taxprofit $ 560 560	2019 Increase 0.25% Decrease 0.25% After-taxprofit After-tax loss 550 550	2019 Increase 0.25% Decrease 0.25% After-taxprofit After-tax loss 550 550
		Decrease 0.25% After-tax loss 550

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 six months ended June 30

Equity price at reporting date Increase 3% Decrease 3%	2020 Other comprehensive income after tax Netprofit(loss) $ 8,385 2,853 $ (8,385) (2,853)	2019 Other comprehensive income after tax Netprofit(loss) 9,700 1,345 (9,700) (1,345)

(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.

				June 30, 2020	June 30, 2020
		Carrying			Fair value
		Amount	Level 1	Level 2	Level 3	Amount
Financial assets at FVTPL
Debt instrument with quoted market prices	$	110,827	110,827	-	-	110,827
Financial assets at FVOCI
Equity instrument with quoted market prices		178,688	178,688	-	-	178,688
Equity instrument at fair value without quoted market			-	-
prices		103,668			103,668	103,668
Subtotal		282,356
Financial assets at amortized cost
Cash and cash equivalent		1,196,253	-	-	-	-
Account receivables		664,847	-	-	-	-
Other account receivables		12,695	-	-	-	-
Restricted deposit		2,096	-	-	-	-
Refundable deposits (recognized in other assets -		7,009	-	-	-	-
noncurrent)
Subtotal		1,882,900
Total	$	2,276,083

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

June 30, 2020

Carrying Amount $ 463 $ 559,889 971 533,885 439,711 71,010 580	Carrying Amount $ 463 $ 559,889 971 533,885 439,711 71,010 580		Fair	value
		Level 1 Level 2 Level 3 - 463 - - - - - - - - - - - - - - - - - - - December 31, 2019

1,606,046
$ 1,606,509

	Carrying Amount		Fair	value
		Level 1 - 54,018 110,444 - - - - - - - - - - - - -	Level 2 76 - - - - - - - - 994 - - - - - -	Level 3

	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

～ 38 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

		2019.6.30
Carrying Amount $ 56,026		Fair	value
	Level 1 56,026 161,189 - - - - - - - - - - - - -	Level 2 - - - - - - - - 574 - - - - - -	Level 3 - - 162,159 - - - - - - - - - - - -

161,189 162,159
323,348
953,282 613,706 13,931 1,808 7,264
1,589,991
$ 1,969,365
$ 574
$ 549,221 1,394 451,748 178,269 84,139 266
1,265,037
$ 1,265,611

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.

B. Financial assets and financial liabilities measured at amortized cost

～ 39 ～

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

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 June 30, 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 June 30, 2020 Balance at January 1, 2019 Prepaid investment Recognized in other comprehensive income Balance at June 30, 2019	Financial assets at fair value through other comprehensive income Unquoted equity instruments $ 139,872 (36,204)
	$ 103,668
	$ 151,668 2,700 7,791
	$ 162,159

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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. Quantified information of significant unobservable inputs was as follows ：

Item Financial assets at FVOCI - equity investments without an active market Financial assets at	Valuation technique Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement Discounted Cash Flow Method `‧`Continuing growth rate (as of June 30,2020, December 31,2019 and June 30, 2019 ranged from 2.10%`、`2.10% and 2.14% respectively) `‧`Weighted average cost of capital (as of June 30,2020, December 31,2019 and June 30, 2019 ranged from 9.47%`、`9.47% and 11.40% respectively) `‧`Market illiquidity discount rate (as of June 30,2020, December 31,2019 and June 30, 2019 ranged from 42.12%`、`37.21% and 42.85% respectively) `‧`Non-controlling interests discount rate (as of June 30,2020, December 31,2019 and June 30, 2019 were 29.87%) `‧`If the continuing growth rate was higher, the estimated fair value would increase. `‧`If WACC were higher, the estimated fair value would decrease. `‧`If the market illiquidity discount rate was higher, the estimated fair value would decrease. `‧`If the non-controlling interests discount rate was higher, the estimated fair value would decrease. Net assets value Method `‧`Net assets value `‧`Not applicable	Inter-relationship between significant unobservable inputs and fair value measurement

Financial assets at FVOCI - equity investments without an active market

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 June 30, 2020 Continuing growth rate 2.10% Weighted average cost of capital 9.47% Market illiquidity discount rate 42.12% Non-controlling interests discount rate 29.87%	Changes in fairvalue reflected inOCI Fluctuation in inputs Favorable Unfavorable 0.1% $ 1,330 1,400 0.1% 1,680 1,680 1% 1,470 1,470 1% 1,260 1,260	Changes in fairvalue reflected inOCI	Changes in fairvalue reflected inOCI
				Unfavorable
				1,400 1,680 1,470 1,260

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

	Inputs December 31, 2019 Continuing growth rate 2.10% Weighted average cost of capital 9.47% Market illiquidity discount rate 37.21% Non-controlling interests discount rate 29.87%	Fluctuation in inputs 0.1% 0.1% 1% 1%	Changes in fair value reflected in OCI	Changes in fair value reflected in OCI
			Favorable $ 1,890 2,380 1,960 1,750	Unfavorable
				1,750 2,240 1,960 1,750

	Inputs June 30, 2019 Continuing growth rate 2.14% Weighted average cost of capital 11.40% Market illiquidity discount rate 42.85% Non-controlling interests discount rate 29.87%	Changes in fair value reflected in OCI Fluctuation in inputs Favorable Unfavorable 0.1% $ 1,680 1,610 0.5% 11,760 10,290 1% 2,590 2,590 1% 2,100 2,100	Changes in fair value reflected in OCI	Changes in fair value reflected in OCI
				Unfavorable
				1,610 10,290 2,590 2,100

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：

～ 42 ～

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

Short-term loans Long-term loans (including long term loans, current portion) Lease liabilities Guarantee deposits Total liabilities from financing activities	January 1, 2020 $ 400,000 319,555 78,482 587 $ 798,624	Cash flows (80,000) (80,000) (5,253) - (165,253)				Non-cash changes	Non-cash changes	Non-cash changes		Changes of lease payments - - (1,181) - (1,181)	June 30, 2020 320,000 239,889 71,010 580 631,479
				Foreign exchange movement - - (221) (7)		Amortized - 334 - -		Other - - (817)(Note) -
				(228)		334		(817)

Note: Reduce the right-of-use assets

Short-term loans Long-term loans (including long term loans, current portion) Lease liabilities Guarantee deposits Total liabilities from financing activities	January 1, 2019 $ 370,000 398,888 90,510 264 $ 859,662	Cash flows (220,000) - (6,394) -		Non-cash changes Foreign exchange movement Amortized Other - - - - 333 - 23 - - 2 - - 25 333 -	Non-cash changes Foreign exchange movement Amortized Other - - - - 333 - 23 - - 2 - - 25 333 -	Non-cash changes Foreign exchange movement Amortized Other - - - - 333 - 23 - - 2 - - 25 333 -	Non-cash changes Foreign exchange movement Amortized Other - - - - 333 - 23 - - 2 - - 25 333 -	June 30, 2019 150,000 399,221 84,139 266 633,626
				Foreign exchange movement - - 23 2		Amortized - 333 - -
		(226,394)		25		333

(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	April to June, 2020	April to June, 2019	January to June, 2020	January to June, 2019 13,793 255 - - - 14,048
	$ 7,327 33 - - -	6,928 128 - - -	13,289 207 - - -
	$ 7,360	7,056	13,496

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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	June 30,2020 $ 1,549 547 217,210	December 31,2019	June 30,2019 1,235 573 227,461 229,269
		1,543 553 225,474 227,570
	$ 219,306

(9) Commitments and Contingencies

(a) As of June 30, 2020, December 31, 2019 and June 30, 2019, the Group’s unused letters of credit for purchases of raw materials, machinery and equipment amounted to $6,508, $16,074 and $5,355, respectively.
(b) As of June 30, 2020, December 31, 2019 and June 30, 2019, the Group has signed contracts for the purchase of equipments. The unrecognized contingencies of contracts for the purchase of equipments amounted to $5,902, $806 and $6,166, respectively.

(10) Losses Due to Major Disasters: None

(11) Significant Subsequent Events:

The subsidiary, Tremendous Explore Corp. was dissolved in July,2020. The related liquidation procedures had been completed.

(12) Other

(a) The details of the Group’s employee benefits, depreciation, and amortization were as follows ：

By function By item	April toJune	April toJune	April toJune	April toJune	April toJune	April toJune
	2020			2019
	Recorded as operating cost	Recorded as operating expenses	Total	Recorded as operating cost	Recorded as operating expenses	Total
Employee benefits (NOTE) Depreciation Amortization	125,036 15,923 82	66,249 3,019 301	191,285 18,942 383	114,189 17,559 205	60,307 3,184 113	174,496 20,743 318

By function By item	January toJune
	2020			2019
	Recorded as operating cost	Recorded as operating expenses	Total	Recorded as operating cost	Recorded as operating expenses	Total
Employee benefits (NOTE) Depreciation Amortization	233,650 32,897 168	126,570 6,389 596	360,220 39,286 764	230,588 35,614 348	116,404 6,420 234	346,992 42,034 582

NOTE: The Government subsidy related to COVID-19 for the three months and six months ended June 30, 2020, amounted to $1,249 and $2,059, respectively, and was recognized in decrease of Employee benefits.

(b) Seasonal operation ： The operation of the Group hadn’t been affected by either seasonal or periodical factors.

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

(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 six months ended June 30, 2020 were as follows ：

(i) Loans extended to other parties ：

No .	Lender	Counter- party	Financial statement account	Related Party	Maximum balance for the period (Note1)	Ending balance (Note1)	Actual amount provide d (Note1)	Interest rate	Nature of Financing	Amount of sales to (purchases from) counter -party	Reason for financing	Loss allowance	Collateral	Collateral	Limit of financing amount for individual counter- party	Limit of total financing amount	Remar
													Item	Item
0	The Company	Emerging Display Technologies Corp., U.S.A.	Other receivable -related parties	Yes	42,964 (USD 1,450,000)	-	-	3.96%	The need for short-term financing	-	Working capital	-	-	-	183,225 (Note 2)	732,899 (Note 2)	(Note 3)

Note1: It used the rate of exchange at June 30, 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

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(iii) Securities owned as of June 30, 2020 (subsidiaries, associates and joint ventures not included):

Name of security holder	Name of security and type	Relationship between issuer of security and the security holder	Financial statement account		June 30,2020	June 30,2020	June 30,2020	Remar ks
				Units (shares)	Carrying Value	Percentage of ownership	Fair value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Ying Dar Investment Development Corp Ying Dar Investment Development Corp Ying Dar Investment Development Corp Bae Haw Investment Development Corp Bae Haw Investment Development Corp Bae Haw Investment Development Corp Ying Cheng Investment Corp.	Ascendax Venture Capital Corp. stock Chenfeng Optronics Corp. stock Fubon Financial Holding Co., Ltd.Preferred Shares B Innolux Corp. stock Fubon Financial Holding Co., Ltd. stock E.SUN Financial Holding Co., Ltd. Far Eastern New Century Corp. Synnex Technology International Co. , Ltd. stock Nan Ya Plastics Corporation stock Pegatron Co., Ltd. stock Coasia Microelectronics Corp. stock Shian Yih Electronic Co., Ltd. stock Becton, Dickinson and Company Edmond de Rothschild Fund – Europe Convertibles(A)- USD JPMorgan Multiple Income Fund (USD) Yuanta Taiwan High-yield Leading Company Fund A Shian Yih Electronic Co., Ltd. stock AGV Products Corporation stock The Company’s stock Everest Technology Inc. Shian Yih Electronic Co., Ltd. stock The Company’s stock Chenfeng Optronics Corp. stock	- - - - - - - - - - - - - - - - - - The Company - - The Company -	Financial assets at FVOCI`－`noncurrent Financial assets at FVOCI`－`noncurrent Financial assets at FVOCI`－`noncurrent Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVTPL`－`current Financial assets at FVTPL`－`current Financial assets at FVTPL`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`current Financial assets at FVOCI`－`noncurrent Financial assets at FVOCI`－`noncurrent Financial assets at FVOCI`－`current Financial assets at FVOCI`－`noncurrent Financial assets at FVOCI`－`noncurrent	1,470,000 1,000,000 13,845 1,147,089 300,000 70,000 1,000,000 658,000 210,000 216,000 441,508 480,000 2,000 8,468.12 10,053.08 3,000,000 550,000 101,500 5,346,672 1,000,000 380,000 3,447,716 6,000,000	17,008 12,380 897 9,062 13,170 19,460 27,900 27,406 13,566 13,824 5,386 11,256 14,179 23,528 55,199 32,100 12,898 773 113,349 - 8,911 73,092 74,280	5.25% 1.56% - 0.01% - 0.01% 0.02% 0.04% - 0.01% 0.32% 0.78% 0.01% - - - 0.90% 0.02% 3.29% 1.47% 0.62% 2.12% 9.38%	17,008 12,380 897 9,062 13,170 19,460 27,900 27,406 13,566 13,824 5,386 11,256 14,179 23,528 55,199 32,100 12,898 773 113,349 - 8,911 73,092 74,280	- - - - - - - - - - - - - - - - - - (Note) - - (Note) -

Note: It was eliminated in the consolidation.

(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.

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(vii) Sales to and purchases from related parties in excess of $100 million or 20% of issued share capital was as follows ：

Purchasing (selling) company	Counter party	Relations hip	Detail of transaction	Detail of transaction	Detail of transaction	Detail of transaction	Circumstances of and reasons for deviation from regular trading conditions	Circumstances of and reasons for deviation from regular trading conditions	Resulting receivables (payables)	Resulting receivables (payables)	Remarks
			Purchase (sale)	Amount	% of net purchase (sales)	Credit line	Unit price	Period for credit	Balance	% of notes and accounts receivable (payable)
The Company Emerging Display Technologies Corp., U.S.A.	Emerging Display Technologies Corp., U.S.A. The Company	Subsidiary of the Company Subsidiary of the Company	Sale Purchase	699,282 699,282	38.13% 100.00%	3 months 3 months	Sales prices offered to Emerging Display Technologies Corp., U.S.A. was not significantly different from those offered to other customers The company is the major supplier for Emerging Display Technologies Corp., U.S.A.	Considering the trading practices in North American market, the company set credit duration as three months for North American market, which is slightly longer than one to three months set in other markets. The company is the major supplier for Emerging Display Technologies Corp., U.S.A.	428,187 428,187	54.50% 100.00%	(Note) (Note)

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 ：

Name of company the has the receivables	Counterparty	Relationsh ip	Balance of amount	Turnover ratio	Overdue	Overdue	Amount collected in the subsequent period	Allowance for doubtful accounts	Remarks
					Amount	Amount
The Company	Emerging Display Technologies Corp., U.S.A.	Subsidiary of the Company	Account receivables of 428,187	3.9	-	-	98,562	-	(Note)

Note: It was eliminated in the consolidation.

(ix) Derivative financial instrument transactions `：`

Please refer to note 6(b).

(x) Significant inter-Group transactions `：`

)	Significant in	ter-Grouptra	nsactions	`：`
No.	Name	Counterparty	Relationship (Note)		Details o	f 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 receivable	699,282 428,187	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.	37.33% 11.73%
0	The Company	Emerging Display Technologies Corp., U.S.A.	1	Selling expenses - Commission Otherpayable	91 90	No non-related-party transaction to compare to.	- -
0	The Company	EDT-Europe ApS	1	Selling expenses - Commission Other payable	29,187 4,495	No non-related-party transaction to compare to.	1.56% 0.12%

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

==> picture [442 x 166] intentionally omitted <==

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

Details of transaction
% of total
consolidated
No. Name Counterparty [Relationship ] Subject Amount Term of trading
(Note) revenue or total
asset
0 The Company Emerging Display 1 Selling expenses - 1,993 No non-related-party 0.11%
Technologies Commission transaction to compare to.
Korea
0 The Company EDT-Japan Corp. 1 Selling expenses - 7,292 No non-related-party 0.39%
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 86,388 No non-related-party 4.61%
Emerging 103,640 transaction to compare to. 2.84%
Display Limited Accounts payable
----- End of picture text -----

Note: Relationship notes as follows ： 1) Parent Group to subsidiary

(b) Information on investees `：`

Relevant information about investees for the six months ended June 30, 2020 was as follows:

Name of investor	Name of investee	Location	Business Scope	Original cost	of investment	Held	at the end of	term	Net income (loss) of the investee	Investment income (less) recognized	Remarks Subsidiary (Note 2)
				June 30, 2020	December 31, 2019	Shares owned	Percentage owned	Carrying value
The Company	Emerging Display Technologies Corp., U.S.A.	USA	Trading	121,656	121,656	3,500,000	100.00%	77,682 (Note 1)	8,792	9,100
The Company	Emerging Display International (Samoa) Corp.	Samoa	Investment holding	180,503	180,503	5,984,071	78.49%	82,936	(1,180)	(926)	Subsidiary (Note 2)
The Company	EDT-Europe ApS	Denmark	Customer service and business support	2,077	2,077	125,000	100.00%	2,673	704	704	Subsidiary (Note 2)
The Company	Tremendous Explore Corp.	BVI	Trading	-	-	50,000	100.00%	- (Note 3)	(65)	(65)	Subsidiary (Note 2)
The Company	Emerging Display Technologies Korea	Korea	Business support	1,677	1,677	58,212,500	100.00%	1,217	106	106	Subsidiary (Note 2)
The Company	EDT-Japan Corp.	Japan	Customer service and business support	17,401	17,401	5,000	100.00%	5,160	791	791	Subsidiary (Note 2)
The Company	Ying Dar Investment Development Corp.	Taiwan	Investment	89,000	89,000	8,900,000	100.00%	19,014	(81)	(81)	Subsidiary (Note 2)
The Company	Bae Haw Investment Development Corp.	Taiwan	Investment	89,000	89,000	8,900,000	100.00%	35,459	(144)	(144)	Subsidiary (Note 2)
The Company	Ying cheng Investment Corp.	Taiwan	Investment	84,000	84,000	8,400,000	52.50%	44,269	(10)	(5)	Subsidiary (Note 2)
Ying Dar Investment Development Corp.	Emerging Display International (Samoa) Corp.	Samoa	Investment holding	13,234	13,234	450,000	5.90%	6,234	(1,180)	(70)	Subsidiary (Note 2)
Bae Haw Investment Development Corp.	Emerging Display International (Samoa) Corp.	Samoa	Investment holding	25,488	25,488	870,000	11.41%	12,056	(1,180)	(135)	Subsidiary (Note 2)

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

Note 1: It was deducted unrealized profit from sales $19,531.

Note 2: It was eliminated in the consolidation.

Note 3: As at June 30,2020, Tremendous Explore Corp.’s liquidation is in progress.

(i) Information on investments in Mainland China `：`

Investee company	Main businesses and products	Received capital	Investment method	Accumulated amount invested in Mainland China as of Jan. 1, 2020	Invested capital remitted from or repatriated to Taiwan	Invested capital remitted from or repatriated to Taiwan	Accumulated amount invested in Mainland China as of March. 31, 2020	Net income of investee	The Group’s direct or indirect investment ratio	Investment gain (loss) recognized by the Group	Book value of the investment as of March. 31, 2020	Accumulated investment income repatriated to Taiwan as of March. 31, 2020
					Remitt ance	Repatr iation
Dong Guan Emerging Display Limited	Manufactu ring of LCDs and Touch panel	248,516 (USD 7,625,300)	Investing through a third country by establishing a holding Group in a third country.	219,225 (USD 6,746,936) (Note1)	-	-	219,225 (USD 6,746,936)	(1,115)	95.80% (Note2)	loss of $1,068 Based on the investee’s financial statements audited by the same auditor as the Group (Note 3)	92,217 (Note4)	-

(ii) Limitation on investments in Mainland China:

Accumulated investment amount remitted from Taiwan to Mainland China as of June 30, 2020	Investment amount approved by the Investment Commission, Ministry of Economic Affairs	Limit on investment in Mainland China set by the Investment Commission, Ministry of Economic Affairs
205,474(Note 8) (US$6,934,668)(Note5)	413,390(Note8) (US$13,951,732)(Note6)	1,243,897(Note7)

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 $66 which was recognized by Ying Dar Investment Development Corp. and a loss of $127 which was recognized by Bae Haw Investment Development Corp.
Note 4: The amount includes $5,679 which was invested by Ying Dar Investment Development Corp. and $10,983 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 $79,418 for Ying Dar Investment Development Corp. and $65,130 for Bae Haw Investment Development Corp.
Note 8: Transactions denominated in foreign currencies were recorded using the rate of exchange at June 30, 2020.

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

(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 six months ended June 30, 2020.

(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:

s andpercentage of ownershipheld byeach shareholder:
Shareholding Shareholder’s Name	Shares	Pereentage
Tseng, Jui-Ming	11,043,723	6.8%

(14) Segment Information

Reportable segment information was as follows ：

		Aprilto June, 2020	Aprilto June, 2020
Domestic	North America	Mainland China	Other operating Department	Adjustments and Eliminations	Total
$ 524,624 491,278	533,636 45	- 52,606	183 19,209	- (563,138)	1,058,443 -
$ 1,015,902	533,681	52,606	19,392	(563,138)	1,058,443
$ 110,794	16,424	(227)	1,551	(7,080)	121,462

		Aprilto June, 2019	Aprilto June, 2019
Domestic	North America	Mainland China	Other operating Department	Adjustments and Eliminations	Total
$ 708,350 271,636	304,131 107	- 62,444	109 18,016	- (352,203)	1,012,590 -
$ 979,986	304,238	62,444	18,125	(352,203)	1,012,590
$ 93,460	2,112	1,127	1,162	(1,134)	96,727

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

		January to	June, 2020		Total 1,873,407 -
Domestic	North America	Mainland China	Other operating Department	Adjustments and Eliminations - (824,233)
$ 1,135,809 699,282	737,026 91	- 86,388	572 38,472
$ 1,835,091	737,117	86,388	39,044	(824,233)	1,873,407
$ 165,672	11,095	(546)	1,719	(5,656)	172,284
		January to	June, 2019		Total 1,903,571 -
Domestic	North America	Mainland China	Other operating Department	Adjustments and Eliminations - (727,133)
$ 1,265,592 583,803	637,683 212	- 107,322	296 35,796
$ 1,849,395	637,895	107,322	36,092	(727,133)	1,903,571
$ 157,097	4,622	635	1,617	(4,754)	159,217
Domestic $ 3,476,420	North America 550,420	Mainland China 155,241	Other operating Department 24,865	Adjustments and Eliminations (557,842)	Total 3,649,104
$ 3,465,228	413,535	162,884	24,805	(429,586)	3,636,866
$ 3,200,693	478,549	164,349	22,617	(490,376)	3,375,832
$ 1,782,673	453,751	58,981	15,815	(538,855)	1,772,365
$ 1,544,022	324,510	62,618	17,042	(263,307)	1,684,885
$ 1,540,872	390,240	64,286	13,665	(478,035)	1,531,028

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EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

The following is the explanation of material reconciliation item ：

(a) For the three and six months ended June 30, 2020 and 2019, the operating segments revenue eliminated from the consolidated entities were $563,138, $352,203, $824,233 and $727,133, respectively.
(b) For the three months and six months ended June 30, 2020 and 2019, the operating segments profit and loss eliminated from the consolidated entities were profit $7,080, profit $1,134, profit $5,656 and profit $4,754, respectively.
(c) As of June 30, 2020, December 31, 2019 and June 30, 2019, the operating segments assets eliminated from the consolidated entities were $557,842, $429,586and $490,376, respectively.
(d) As of June 30, 2020, December 31, 2019 and June 30, 2019, the operating segments liabilities eliminated from the consolidated entities were $538,855, $263,307 and $478,053, respectively.

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AI assistant

EDT — Interim / Quarterly Report 2020

52271_rns_2020-11-03_26df0d1c-2b01-410a-92d0-cecc772921bd.pdf

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Table of contents

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notes to Readers

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2020, December 31, 2019, and June 30, 2019

(Expressed in thousands of New Taiwan Dollars)

(Reviewed, not audited)

(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 and the six months ended June 30, 2020 and 2019

(Expressed in thousands of New Taiwan dollars, Except Earnings Per Share)

(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 and the six months ended June 30, 2020 and 2019

(Expressed in thousands of New Taiwan dollars, Except Earnings Per Share)

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

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(Expressed in thousands of New Taiwan dollars)

Equity attributable to shareholders of parent

(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 June 30, 2020 and 2019

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

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

For the six months ended June 30, 2020 and 2019

(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

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

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

(4) Summary of Significant Accounting Policies

(a) Statement of compliance

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

(b) Basis of consolidation

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

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

(c) Leases

(d) Government grant

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

(5) Significant accounting assumptions and judgement, and major sources of estimation uncertainty

(6) Explanation of significant accounting items

(a) Cash and cash equivalents

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

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

Forward exchange contract ：

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

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

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

(d) Accounts receivable

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(e) Other receivables

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(f) Inventories

(g) Other current assets

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

(h) Non-controlling interests' share of subsidiaries

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(i) Property, plant and equipment

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

(j) Right-of-use assets

(k) Investment property

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

(l) Intangible assets

(m) Short-term loans

Short-term loans were not pledged as collateral.

(n) Long-term loans

EMERGING DISPLAY TECHNOLOGIES CORP. AND SUBSIDIARIES

Notes to consolidated financial statements

(o) Lease liabilities

EDT Interim / Quarterly Report 2020

Forward exchange contract `：`