Stock Symbol: 3481

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InnoLux Corporation

Handbook for 2017 General Shareholders' Meeting

June 20, 2017

INDEX

I.	MeetingProcedures…………………………………………………………………………………………….	1
II.	MeetingAgenda………………………………………………………………………………………………….	2
	1.ReportingItems………………………………………………………………...................................	3
	2.AdoptingItems………………………………………………………………………………………………..	4
	3.Discussion Items……………………………………………………………………………………………….	6
	4.ExtemporaryMotions…………………………………………………………...............................	15
III.	Attachments………………………………………………………………………………………………………..	16
	1. 2016 OperatingReport…..………………………………………………………………………………..	16
	2. Audit Committee’s Review Report.…………………………………………………………………..	19
	3. CPA Auditor’s Report and Financial Statements….……………………………………………	20
	4. 2016 Profit Distribution Table…………………………………………………………………………..	43
	5. Comparative table for Amendment to Articles of Incorporations of the Company……………………………………………………………………………………………………………..	44
	6. Comparative table for Amendment to the Operating Procedure Governing the Acquisition and Disposal of Assets of the Company……………………………………………..	45
	7. Regulations related to Issuance and Conversion of Private Placement of Foreign or Domestic Corporate Bonds（Prescribed Temporarily）………….........	53
IV.	Appendices………………………………………………………………………………………………………….	55
	1. Rules for Shareholders’ Meeting……………………………………………...........................	55
	2. Articles of Incorporation of the Company…………………………………………………………	61
	3. Shareholdingtable of all Directors……………………………………………………………………	67
	4. Impact of instant gratuitous allocation of shares on Company’s operating performance and earning per share……………………………………………......................	68

INNOLUX CORPORATION Procedures of 2017Annual General Shareholders Meeting

Report of Number of Shares Represented by Attendees
Call the Meeting to Order
Chairperson Remarks
Reporting Items
Adopting Items
Discussion Items
Extemporary Motions
Adjournment

INNOLUX CORPORATION Agenda of 2017Annual General Shareholders Meeting

Time & Date：9:00 a.m. on June 20 2017

Location：3F, No.36 Ke Yan Rd., Zhunan Township, Miaoli County

The assembly hall of the Administrative Service Center of

Zhunan Park, Hsinchu Science Park

Chairperson Remarks
Reporting Items:
(1) Operating report of the year of 2016.
(2) Audit Committee’s Review Report.
(3) To report in relation to the compensation distributed to the employees and directors of year 2016.
(4) To report the issuance of securities in private placement.
Adopting Items
(1) Adoption of the Operating Report and Financial Statements for the year of 2016.
(2) Adoption of the Proposal for Distribution of 2016 Profits.
Discussion Items
(1) Amendment to the Articles of Incorporations of the Company.
(2) Amendment to Operating Procedure Governing the Acquisition and Disposal of Assets of the Company.
(3) Proposal to process domestic capital increase by cash to issue common shares, to issue new shares as a result of cash capital increase for sponsoring issuance of GDR.
(4) Proposal to process capital increase in cash to conduct private placement of ordinary shares/preferred shares or private placement of foreign or domestic convertible corporate bonds.
Extemporary Motions
Adjournment

Reporting Items

Operating Report of the year of 2016. Review is respectfully requested.
Explanation: 2016 Operating Report is attached hereto as Attachment 1(page 16~18)
Audit Committee’s Review Report. Review is respectfully requested. Explanation: Audit Committee’s Review Report is attached hereto as Attachment 2 (page 19)
Report in relation to the compensation distributed to the employees and directors of year 2016.
Explanation: The meeting of board of directors of the Company dated May 10, 2017 has resolved to distribute compensation at the amount of NTD 231,338,386 to employees and NTD 3,855,639 to directors in cash.
Report the issuance of securities in private placement. Explanation:
(1) It has been approved by the Annual General Shareholders’ Meeting held on 24 June, 2016 to authorize the Board of Directors, within the limit of 950,000,000 common shares, depending on the market conditions and the Company’s capital needs, to choose appropriate timing and one or more fund raising instruments to process capital increase in cash to conduct private placement of ordinary shares/preferred shares or private placement of foreign or domestic convertible corporate bonds in accordance with the applicable laws and regulations.
(2) For private placements of securities conducted pursuant to Securities and Exchange Act, the private placement may be carried out by installments within one year of the date of the resolution of the shareholders meeting.
(3) In consideration of the capital market situation, the Company will not continue with the above private placement.

Adopting Items

(Proposed by the Board of Directors)

Proposal 1 : 2016 Operating Report and the Financial Statement of the Company. Adoption is respectfully requested.
Explanation : 1. 2016 financial statements of the Company had been duly audited by CPA Wu, Han-Chi and CPA Sheng-Chung Hsu of Pricewaterhousecoopers.
The Operating report and finance statements are attached hereto as Attachment 1&3 (page 16~18 and 20~42).

Resolution :

(Proposed by the Board of Directors)

Proposal 2 : Distribution of 2016 Profits. Adoption is respectfully requested.
Explanation : 1. The profit distribution table of 2016 is attached hereto as Attachment 4 (page 43).
Proposed cash dividend distributed to shareholders is NT$ 995,204,078 (NT$0.1 per share). In the event that, before the distribution record date, the proposed dividend distribution ratio is affected and is required to be adjusted due to capital variations affecting the number of outstanding shares, it is proposed that the Chairman be fully authorized to handle such distribution.
The cash dividend shall be calculated according to the distribution proportion under NT$ 1, for amount less than NT$ 1 shall be truncated. For the total add-up amount of distributed amount for less than NT$ 1, it is proposed that the Chairman be authorized to conduct adjustment.
Upon the approval of the shareholders’ meeting, it is proposed that the Chairman be authorized to resolve the distribution record date and other relevant matters.

Resolution :

Discussion Items

(Proposed by the Board of Directors)

Proposal 1 : Amendment to the Articles of Incorporations of the Company. Review and discussion is respectfully requested.
Explanation : 1. In order to accompany in reference to the operation plan of the Company, it is proposed to amend part of the clauses of Articles of Incorporations of the Company.
The revised comparative table are attached hereto as Attachment 5 （Page 44）.

Resolution :

(Proposed by the Board of Directors)

Proposal 2 : Amendment to Operating Procedure Governing the Acquisition and Disposal of Assets of the Company. Review and discussion is respectfully requested.
Explanation : 1. To accompany SFC announced the amendment “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” on Feburay 9, 2017. It is proposed to amend “Operating Procedure Governing the Acquisition and Disposal of Assets” of the Company.
The comparative table of the amended provisions is attached hereto as Attachment 6 (page 45~52).
Resolution :

(Proposed by the Board of Directors)

Proposal 3: Proposal to process domestic capital increase by cash to issue common shares, to issue new shares as a result of cash capital increase for sponsoring issuance of GDR. Approval is respectfully requested.
Explanation: To respond to the change of whole operation environment in the future, to enrich working capital, to repay bank loans, to intensify the Company’s financial structure, to purchase material overseas, and to satisfy the Company’s capital requirements for the long-term development, the Company proposes to conduct the fund-raising proposal within the limit of 0.95 billion (950,000,000) new shares through domestic capital increase by cash, offering of new shares by way of capital increase by cash for sponsoring issuance of GDR or by way of next proposal of capital increase by cash through private placement of ordinary shares/preferred shares or private placement of foreign or domestic convertible corporate bonds (the number of shares shall be calculated from beginning conversion price). It is proposed that the board of directors be authorized by the shareholders’ meeting to conduct the forgoing fundraising at suitable time by selection of one or collocation of two or more projects, and in one or in several installments according to market situations and capital requirement status of the Company, and in accordance with Articles of Incorporation, the related laws & regulations and the handling principles set forth as below. The main contents are described as follows:
The offering price: The offering price of domestic capital increase by cash through public fund raising will be decided according to the “Autonomy Rules Governing Underwriter Members for Guidance of Offering and Issuance of Securities by Issuing Company” of Taiwan Securities Association, and shall authorize the Chairman to decide with the underwriter together according to the market condition at the time of issuance. The offering price shall be submitted to the authority for records before issuance. The offering price shall be set by no less than the closing price of the Company’s ordinary shares on Taiwan Stock Exchange Corporation on price determination date, 90% of the simple average closing price of the ordinary shares of the Company for either the one, three, or five business days before price determination date, after adjustment for any distribution of stock dividends and cash dividends. However, due to stock price fluctuation and security market change causing the actual price of each share lower than the face value, in order to raise fund smoothly and to improve long-term steady growth of the Company, it is necessary to decide such price. If the price of each share is lower than the face value, it is anticipated to cause the reduction of the capital reserve of the book or retain earning of the Company and will be made up according to actual operation situation in the future. Also, the offering price will be set according to the rules of the authority, after the effect of capital increase appears, the financial structure of the Company will be improved effectively and will benefit the Company’s longterm development, and there shall be no unfavorable impact to the shareholders’ interest.

Subscription ratio of employees and original shareholders: Except for 10% ~ 15% of new shares issued after capital increase reserved for subscription by employees of the Company based on the offering price in accordance with Article 267 the of Company Act, it is proposed that the shareholders’ meeting to agree that the original shareholders will forfeit their right to subscription to the remaining new shares in accordance with Article 28-1 of Securities and Exchange Act, and all of the remaining new shares will be made public offering (domestic capital increase by cash) or/and to be offered to the public as the original securities for sponsoring issuance of GDR. The portion which employees had forfeited their rights to subscription or the portion left unsubscribed is proposed to authorize the Chairperson to negotiate with specific person(s) to subscribe or to be included in the original securities for sponsoring issuance of GDR based on market requirements.
The sales method of the public offering of domestic capital increase by cash: it is proposed to authorize the board of directors to select by either method of book-building or public subscription.
Impact to the interest of the original shareholders: In relation to this domestic capital increase by cash and issuance of new shares by means of capital increase by cash for sponsoring issuance of GDR, the price determination method shall be conducted according to the relevant laws and regulations within the country and issuance market practice, therefore, the price determination method shall be deemed reasonable and will not cause major impact to the interest of the original shareholders. For common shares to be issued, if calculated under the limit of 0.95 billion shares, it is estimated that the new shares will be 9.55% of the common shares already issued by the Company and will not cause major dilution to the original shareholders’ interest.
The reason and reasonability of issuing the share lower than par value due to the change of market rather than adopting other methods to raise the funds: In consideration of the steady operation and the safety of the financial structure of the Company, it is more appropriate to use the fundraising vehicle in relation to share rather than pure debt. By raising fund through domestic capital increase by cash, offering of new shares by way of capital increase by cash for sponsoring issuance of GDR, not only there will be no expense on interest, it also may reduce the financial risk, improve the financial structure, increase the flexibility of the Company’s financial deploy, and benefits the long-term development of the Company. Also, there should be no adverse effect to the interest of the shareholders. Therefore, such fundraising vehicle in relation to shares should have its reasonability.
The funds raised from capital increase by cash is proposed to be used enrich working capital, to repay bank loans, to intensify the Company’s financial structure, to purchase material overseas, and to satisfy the Company’s capital requirements for the long-term development, in one or several purposes for replenishing the operational funds and repayment of bank loans, and it is expected to be performed completely within three years after the accomplishment of the fund-raising, the implementation of this plan can

intensify the competitiveness of the Company, promote the operation efficiency, and then will have positive support to shareholders’ equity.
It is proposed that shareholders’ meeting to authorize the board of directors to adjust, make and deal with the major contents of plans in relation to the capital increase by cash, including actual number of issued shares, actual subscription proportion reserved for the employees, actual offering price, record date, offering conditions, plan items, amount of fund-raising, fund usage and scheduled progress, the anticipated and possible efficiency accrued and other matters related to offering procedures. In future if it is necessary to make change due to change of laws and regulations, requirement to revision from the competent authority, operation assessment or objective environment, the chairperson will be granted the full authorization to dispose of such matters.
Other than the above scope of authorization, it is proposed that the shareholders’ meeting authorize the Chairperson or his designated person to approve and represent the Company to execute, negotiate, and change any and all related matters in relation to the issuance of securities.

Resolution:

(Proposed by the Board of Directors)

Proposal 4: Proposal to process capital increase in cash to conduct private placement of ordinary shares/preferred shares or private placement of foreign or domestic convertible corporate bonds. Approval is respectfully requested.
Explanation: To respond to the change of whole operation environment in the future, to enrich working capital, to repay bank loans, to intensify the Company’s financial structure, to purchase material overseas, and to satisfy the Company’s capital requirements for the long-term development, the Company proposes to conduct the fund-raising proposal within the limit of 0.95 billion (950,000,000) new shares through private placement of ordinary share/preferred share capital increase by cash or private placement of foreign or domestic convertible corporate bonds(the number of shares shall be calculated from beginning conversion price) or by way of previors proposal of capital increase by cash through domestic capital increase by cash, offering of new shares by way of capital increase by cash for sponsoring issuance of GDR. It is proposed that the board of directors be authorized by the shareholders’ meeting to conduct the forgoing fundraising at suitable time by selection of one or collocation of two or more projects, and in one or in several installments according to market situations and capital requirement status of the Company, and in accordance with Articles of Incorporation, the related laws & regulations and the handling principles set forth as below. The main contents are described as follows:
The ground and reasonableness for setting the private placement price
- (1) The price per share fixed for privately placed ordinary shares issued this time shall not be lower than 80 percent of the reference price. The issuance price fixed for privately placed preferred shares, foreign or domestic convertible corporate bonds may not be lower than 80 percent of the theoretical price.
- (2) The reference price of this private placement of ordinary share or private placement of foreign or domestic convertible corporate bonds used in calculation and actual convert price shall be the simple average closing price of the common shares of the Company for either the 1, 3, or 5 business days before the price determination date or the simple average closing price of the common shares of the Company for the 30 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction, whichever is higher. The price set for this private placement of convertible corporate price shall not lower than 80% of the reference price. The actual price is proposed that the shareholders’ meeting to authorize the board of director to prescribe according to relevant laws and regulations.
- (3) Within the scope of actual price determination date and actual private placement price not lower than percentage resolved by the shareholders’ meeting, the board of directors shall be authorized to decide according to the above price decision principle and depend on the situation of subscription by specific person or persons through negotiation and market situation.

(4) The private placement pricing method is based on the rules prescribed under “Directions for Public Companies Conducting Private Placements of Securities”, and under the consideration of company’s future development and strict limitation on transfer timing, object, amount, cannot be public listed within 3 years, poor liquidity, and other reasons, the pricing of this private placement is reasonable and shall not cause major effect to shareholders’ right. However, due to stock price fluctuation and security market change causing the actual price of each share lower than the face value, in order to raise fund smoothly and to improve long-term steady growth of the Company, it is necessary to decide such price. If the price of each share is lower than the face value, it is anticipated to cause the reduction of the capital reserve of the book or retain earning of the Company and will be made up according to actual operation situation in the future. Also, the offering price will be set according to the rules of the authority, after the effect of capital increase appears, the financial structure of the Company will be improved effectively and will benefit the Company’s long-term development, and there shall be no unfavorable impact to the shareholders’ interest.
Methods for selecting specific person for private placement
(1) The private placement shall be conducted according to related rules set forth under Article 43-6 of the Securities and Exchange Act and shall be limited only to strategic investors.
(2) The placee will be strategic investors
- A.Method and purpose of choosing placee: For the needs of long term operation and business development of the Company, we will choose strategic investor who is able to assist our company in expanding business and product market, strengthening customer relationship, or promoting product development integration efficiency, or promoting our technology.
- B.Necessity: Strategic investors may promote our company’s long term
  - competitiveness and operation effectiveness, therefore, the necessity exists.
- C.Expected effectiveness: Through strategic investors’ experience, product technology, knowledge, brand reputation, marketing channel and other advantages, via strategic cooperation, product co-development, market integration, or business development cooperation and other methods, it is estimated to assist our company in reducing cost, enhancing products skills, enlarging sales market, and to promote our company’s future operation and benefit.
(3) Currently, we have not contact and negotiate with any specific place.
Reasons necessary to conduct private placement:
(1) Reasons for not to adopt public fund raising: Considering the condition of capital market, issuing cost, timeliness and feasibility of fund raising through private placement, private placed securities shall not be transferred within 3 years, and

other factors, it may ensure and strengthen a tighter long term cooperation relationship between strategic partners, therefore, it is necessary to adopt private placement for the capital increase this time.

(2) Use of funds and estimated purpose of conducting private placement: This private placement of securities shall be conducted in three times separately within one year from the date of the resolution of the shareholders’ meeting, the use of funds and estimated purpose of conducting private placement of each separate private placement are stated as below:

Anticipated number of closings	Shares (Thousand)	Use of the funds	Anticipated benefits
1st	318,000	Established good corporate and strategic partnership with domestic / foreign partner and replenish operating capital for long term operation requirement	To reduce operational risk, enhance financial structures and improve operational performance
2nd	316,000
3rd	316,000
Within the limit of 950,000,000 new shares cash offering by private placement in one or in several installments.

There was no major change to management right within one year before the Board of Directors’ resolved to conduct this private placement. Also, if the amount of private placement of ordinary shares/preferred shares or private placement of foreign or domestic convertible corporate bonds (the number of shares shall be calculated from beginning conversion price) is within the limit of 0.95 billion (950,000,000) new shares, it is estimated that the new shares will be 9.55% of the ordinary shares already issued by the Company, and the place is limited to only strategic investors, it will positively assist our company’s business development and will not cause major change to our company’s management right.
Other items to be stated:
(1) For this private placement of securities, the board of directors shall be authorized, upon 3 years after the delivery date of private placement, to apply to TWSE for the issuance of consent letter conforming to the listing criteria, and continue to report to the authority for retroactive handling of public issuance and to apply for public listing and transaction.
(2) For the issuance condition of the private placement preferred shares, please refer to the Articles of Incorporation of the Company.
(3) For the Regulations related to Issuance and Conversion of Private Placement of Foreign or Domestic Corporate Bonds (Prescribed Temporarily), please refer to attachment 7 of this handbook (page 53~54).
(4) It is proposed that shareholders’ meeting to authorize the board of directors to adjust, make and deal with the major contents of plans in relation to this private placement, including actual number of issued shares of private placement, selection of placees, record date, offering conditions, plan items, amount of fundraising, fund usage and scheduled progress, the anticipated and possible efficiency

accrued and other matters related to offering procedures. In future if it is necessary to make change due to change of laws and regulations, requirement to revision from the competent authority, operation assessment or objective environment, the board of directors will be granted the full authorization to dispose of such matters.

(5) Other than the above scope of authorization, it is proposed that the shareholders’ meeting authorize the Chairperson or his designated person to approve and represent the Company to execute, negotiate, and change any and all related matters in relation to the issuance of securities of this private placement.

Resolution:

Extemporary Motion

Attachment 1

INNOLUX CORPORATION

2016 Operating Report

1. 2016 Operating Report

The political and economic environment changed drastically worldwide in 2016, including the crisis in the Middle East triggering the influx of refugees that affected the Middle East and then extended to the European continent and the world, the United Kingdom's European Union membership referendum, and Mr. Donald Trump’s winning the US presidential election in November that had caused changes to the Trans-Pacific Strategic Economic Partnership Agreement (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). The terminal consumer market experienced an economic downturn in 2016; however, the economic activity will be accelerated in 2017 and 2018, especially in emerging markets and developing economies. If the policy stimulus efforts of the United States or China can be greater than expected, the accelerated development of global economic activity will be enhanced. However, the global economy has faced a number of possible negative risk factors, including: turning to a closed economic policy and protectionism, worse deflation of the global financial environment than expected, the interaction of balance sheets arising from weak economies in the Euro zone and emerging markets, geopolitical tensions intensified, and significant decline of economic growth in China.

As for the product application market, LCD TV remains the mainstream TV specification on the market, and specifications and technology will be improved continuously; also, the large size of driver products, high-resolution (4K2K), and penetration rate improvement will help activate the momentum of sales. In terms of information products, this includes Notebook computers and computer display screens with the specifications upgraded continuously towards the trend of thin, high-resolution, wide viewing angle, and narrow frame, combined with the customer’s machine innovation, emphasizing the thin and light features of portable computers, as well as high-performance features to activate the demand for information product replacement. In terms of smart phone products, although facing the challenge from the AMOLED (organic light display) technology, the LCD technology has stable yield rate and constant product specifications refinement; therefore, both LTPS (low temperature polysilicon) and a-Si (amorphous silicon)

technologies will continue to take up high market share with advanced and moderate specifications.

In this competitive industry, facing such difficulty of the macroeconomic environment and uncertainty of the market, we not only worked accurately and reacted quickly but also made maximum use of resources and created high adding value. Due to the earthquake Feb.2016 the H1 2016 achievement was not good, but under the full effort of our management team, we reached to a good result. In 2016 our consolidated revenue was NT$ 287.1 billion, gross profit was NT$26.1 billion, net operating income was NT$6.4 billion, annual profit after tax was NT$1.87 billion, and the annual earnings per share is NT$0.19.

In view of the future, our operation team and all of our employees will continue to endeavor, to concentrate, and to innovate for the best interest of our shareholders.

2. Results of operation scheme

In 2016 our consolidated revenue was NT$ 287,089,277 thousands, which decreased NT$77,043,707 thousands or 21% by compared with the 2015 yearly revenue of NT$ 364,132,984 thousands. In 2016 our annual profit after tax which belonged to parent company was NT$1,870,687 thousands, and the annual earnings per share is NT$0.19

3. Budget Performance

Since we did not disclosure the financial forecast in 2016, we don’t have to disclose our budget performances.

4. Analysis of financial operation and profitability

	Item	2015	2016
Finacial structure analysis (%)	Debt ratio (%)	40.05	39.16
	Long term funds to real estates, factories and equipments (%)	138.84	126.79
~~D~~ebt-paying ~~a~~bility	Current ratio (%)	125.70	109.32
	Quick ratio (%)	97.37	87.84
	Interest guarantee (times)	9.68	6.71
Profitability	Return on total assets (%)	2.81	0.68
	Return on total shareholders’ equity (%)	4.69	0.82
	Operating income to capital (%)	22.54	6.44
	Pre-tax income to capital (%)	14.93	5.02
	Net income to sales (%)	2.97	0.65
	Earnings per share (NT$)	1.09	0.19

5. Research development situation

Our R&D in display technology will continue to help our clients improve competitiveness, meet market demand, and be friendly to the environment. We believe the developing directions, including eco-friendly materials, low power consumption, high pixel, high saturation, ultra thin, narrow border, good dynamic performances, touch, wide viewing angle and service integration in all aspects, will achieve remarkable results.

To enhance our overall competitiveness, we proactively developed new technique and new products such as high flexible IGZO AMOLED panel, MicroLED, touch point integration technique; wide color gamut monitor, middle-and-large-sized touch panel and we’ve obtained substantial results. This helps us to stand out and keep our leading position in the keen competitive industry environment.

President: Manager： Chief Accountant：

Attachment 2

Audit Committee Review Report

The Board of Directors has duly submitted the 2016 operating report, financial statements, and table of profit distribution. The financial statements has been duly reviewed and approved by CPAs of PwC Taiwan with the issuance of Auditor’s Report.

The Audit Committee of the Company, have completed the audit and review, and had found nothing inconsistent with any of the above operating report, financial statements, and table of profit distribution. Therefore, I issue this audit report for acknowledgment in accordance with the Securities and Exchange Act and the Company Act.

To

General Shareholders Meeting of the Company in 2017

Chairman of the Audit Committee

Chi-Chia Hsieh

Date: May 10, 2017

Attachment 3

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Innolux Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Innolux Corporation (the “Company”) and its subsidiaries as at December 31, 2016 and 2015, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as at December 31, 2016 and 2015, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

Valuation and impairment of goodwill and property, plant and equipment

Description

For details of the impairment valuation of goodwill and property, plant and equipment, please refer to Note 6(11). As of December 31, 2016, goodwill and property, plant and equipment amounted to NT$17,096,628 thousand and NT$201,360,858 thousand, respectively.

Innolux Corporation estimates future cash flows based on appropriate discount rates. In determining whether goodwill and property, plant and equipment may be impaired, the recoverable amount of the cash generating unit is measured based on how assets are utilized, duration years of assets and projected income and expenses in the future. The estimate involves several assumptions such as determination of discount rates, expected growth rate and future financial projections. As these estimates are dependent upon significant management judgement, we consider management’s assessment of impairment of goodwill and property, plant and equipment a key audit matter.

How our audit addressed the matter

We assessed the key assumptions used by management in estimating expected future cash flows, including the reasonableness of expected operating revenue, gross profit, changes in expenses, and the basic assumptions applied in expected future cash flows. We also examined the parameters of discount rates, including the risk-free rate of return on equity capital, the risk factor of the industry and the rate of return on similar investments in the market.

Additions to property, plant and equipment

Description

The Company’s capital expenditures increased with its operational growth. In 2016, property, plant and equipment increased by NT$43,518,455 thousand, which was 12% of total assets of the Company. For details of property, plant and equipment, please refer to Notes 6(9) and (28). As the amount of property, plant and equipment is material, we identified the additions to property, plant and equipment a key audit matter.

How our audit addressed the matter

We assessed and tested the effectiveness of internal controls related to additions to property, plant and equipment, including sampling and checking purchase orders and invoices as to whether the transactions have been approved appropriately and the correctness of the recorded amounts. We also checked the related receipts or acceptance documents to ensure that additions are recognized in appropriate period. In addition, through sampling method, we conducted physical inspection of certain assets to confirm that the purchased items exist.

Estimation of significant disaster insurance claim

Description

As described in Note 10, some of the Company’s inventory, building and equipment were damaged during the earthquake in Kaohsiung, Taiwan on February 6, 2016. The Company is in the process of claiming insurance for the damages. The determination of the claim amount involves critical accounting judgements and estimates by the management, including the list of losses incurred which are covered by insurance and evaluation of replacement cost. Given the significance of the claim, we consider the estimation of disaster insurance claim a key audit matter.

How our audit addressed the matter

Our procedures in relation to estimation of disaster insurance claim included:

A. Checking assets insurance contracts with the insurance company, and confirming whether the inventory, building and equipment damaged during the earthquake are covered by insurance;
B. Obtaining the claims list, damaged inventory, building and equipment lists, and verifying the damaged inventory and building list, selecting samples and cross comparing the data for completeness and accuracy and checking the accuracy of accounting records and amount of disaster loss;
C. Assessing the reasonableness of replacement cost of inventory, building and equipment which were estimated by management, selecting samples and verifying the estimates against original documents; and
D. Assessing the reasonableness of claim amount which was estimated by the management based on losses list and replacement cost.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Innolux Co., Ltd. as at and for the years ended December 31, 2016 and 2015.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

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

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

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

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

PricewaterhouseCoopers, Taiwan

February 10, 2017

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 and 2015

Assets	(Expressed in thousands of New Taiwan dollars) December 31, 2016 Notes AMOUNT 6(1) $ 35,384,839 6(2) 64,241 6(5)(6) 52,855,632 7 11,599,359 7 2,034,427 6(7) 23,401,728 1,552,373 6(1) and 8 6,724 98,808 126,998,131 6(2) 250,101 6(3) 5,840,929 6(8) 1,517,418 6(9), 7 and 8 201,360,858 6(10) 573,425 6(11) and 8 18,446,321 6(26) 14,698,143 6(9) and 8 1,794,222 244,481,417 $ 371,479,548	December 31, 2015
		AMOUNT
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 130X Inventory 1410 Prepayments 1476 Other financial assets - current 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non- current 1523 Available-for-sale financial assets - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets		$ 52,522,790 120,036 48,189,791 2,632,853 2,024,204 30,198,432 1,107,869 1,979,467 91,545
		138,866,987
		281,922 7,123,034 1,610,586 199,482,740 680,503 19,342,856 15,888,467 4,165,241
		248,575,349
		$ 387,442,336

(Continued)

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 and 2015

Liabilities and Equity	(Expressed in thousands of New Taiwan dollars) December 31, 2016 Notes AMOUNT 6(12) $ 11,583,750 6(2) 1,190,148 51,875,305 7 5,120,235 7 22,916,097 1,912,797 6(16) and 9 3,765,234 6(13) 16,381,686 1,420,652 116,165,904 6(13) 28,128,467 6(26) 672,971 6(14) 505,843 29,307,281 145,473,185 6(17) 99,521,488 6(18) 99,647,810 6(19) 3,758,507 26,497,362 6(20) ( 3,418,804) 226,006,363 226,006,363 $ 371,479,548	December 31, 2015
		AMOUNT
Current Liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2250 Provisions - current 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of the parent 3110 Share capital - common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3350 Unappropriated retained earnings 3400 Other equity interest 31XX Equity attributable to owners of the parent 3XXX Total equity 3X2X Total liabilities and equity		$ - 265,525 57,069,951 3,359,933 24,912,360 1,819,368 5,551,759 16,361,238 1,131,329
		110,471,463
		43,629,968 514,094 562,088
		44,706,150
		155,177,613
		99,532,372 99,643,564 2,676,947 27,661,503 2,750,337
		232,264,723
		232,264,723
		$ 387,442,336

The accompanying notes are an integral part of these consolidated financial statements

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

(Expressed in thousands of New Taiwan dollars)

					Year ended December 31	Year ended December 31
					2016		2015
	Items	Notes			AMOUNT		AMOUNT
4000	Sales revenue	7		$	287,089,277	$	364,132,984
5000	Operating costs	6(7)(24) and 7	(		261,000,786) (		317,492,879)
5900	Net operating margin				26,088,491		46,640,105
	Operating expenses	6(24)
6100	Selling expenses		(		2,301,561) (		3,204,824)
6200	General and administrative
	expenses		(		6,241,602) (		6,600,082)
6300	Research and development
	expenses		(		11,132,079) (		14,404,490)
6000	Total operating expenses		(		19,675,242) (		24,209,396)
6900	Operating profit				6,413,249		22,430,709
	Non-operating income and
	expenses
7010	Other income	6(21)			2,388,895		2,313,182
7020	Other gains and losses	6(22)	(		3,103,952) (		8,683,203)
7050	Finance costs	6(23)	(		893,526) (		1,415,088)
7060	Share of profit of associates and	6(8)
	joint ventures accounted for
	under equity method				187,454		213,587
7000	Total non-operating income
	and expenses		(		1,421,129) (		7,571,522)
7900	Profit before income tax				4,992,120		14,859,187
7950	Income tax expense	6(26)	(		3,121,433) (		4,045,046)
8200	Profit for the period			$	1,870,687	$	10,814,141

(Continued)

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

(Expressed in thousands of New Taiwan dollars)

Items	Year ended December 31 2016 2015 Notes AMOUNT AMOUNT 6(14) $ 44,027 ($ 195,939) 6(26) ( 7,485) 33,309 36,542 ( 162,630) ( 5,708,026) ( 1,421,828) ( 339,384) 2,266,346 6(4) - ( 297,675) 6(20) ( 27,676) 4,432 6(26) ( 113,457) 118,551 ( 6,188,543) 669,826 ($ 6,152,001) $ 507,196 ($ 4,281,314) $ 11,321,337 $ 1,870,687 $ 10,815,594 - ( 1,453) $ 1,870,687 $ 10,814,141 ($ 4,281,314) $ 11,352,532 - ( 31,195) ($ 4,281,314) $ 11,321,337 6(27) $ 0.19 $ 1.09 $ 0.19 $ 1.07
Other comprehensive (loss) income (net) Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit obligations 8349 Income tax relating to the components of other comprehensive income that will not be reclassified 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive (loss) income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8362 Unrealized (loss) gain on valuation of available-for-sale financial assets 8363 Cash flow hedges 8370 Share of other comprehensive (loss) income of associates and joint ventures accounted for under equity method 8399 Income tax relating to the components of other comprehensive income that will be reclassified 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive (loss) income for the year, net of tax 8500 Total comprehensive (loss) income for the year Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Total Other comprehensive (loss) income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Total Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

Items

Year ended December 31
2016
2015
Notes
AMOUNT
AMOUNT
6(14)
$ 44,027
($ 195,939)
6(26)
(
7,485)
33,309
36,542
(
162,630)
(
5,708,026) (
1,421,828)
(
339,384)
2,266,346
6(4)
-
(
297,675)
6(20)
(
27,676)
4,432
6(26)
(
113,457)
118,551
(
6,188,543)
669,826
($ 6,152,001)
$ 507,196
($ 4,281,314)
$ 11,321,337
$ 1,870,687
$ 10,815,594
-
(
1,453)
$ 1,870,687
$ 10,814,141
($ 4,281,314)
$ 11,352,532
-
(
31,195)
($ 4,281,314)
$ 11,321,337
6(27)
$ 0.19
$ 1.09
$ 0.19
$ 1.07

Other comprehensive (loss)
income (net)
Components of other
comprehensive income that will
not be reclassified to profit or loss
8311
Remeasurement of defined
benefit obligations
8349
Income tax relating to the
components of other
comprehensive income that will
not be reclassified
8310
Components of other
comprehensive income (loss)
that will not be reclassified to
profit or loss
Components of other
comprehensive (loss) income that
will be reclassified to profit or loss
8361
Financial statements translation
differences of foreign operations
8362
Unrealized (loss) gain on
valuation of available-for-sale
financial assets
8363
Cash flow hedges
8370
Share of other comprehensive
(loss) income of associates and
joint ventures accounted for
under equity method
8399
Income tax relating to the
components of other
comprehensive income that will
be reclassified
8360
Components of other
comprehensive income that
will be reclassified to profit or
loss
8300
Other comprehensive (loss)
income for the year, net of tax
8500
Total comprehensive (loss) income
for the year
Profit attributable to:
8610
Owners of the parent
8620
Non-controlling interest
Total
Other comprehensive (loss)
income attributable to:
8710
Owners of the parent
8720
Non-controlling interest
Total
Earnings per share (in dollars)
9750
Basic earnings per share
9850
Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements. 28

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

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

Notes	Equity attributabl	o owners of the parent	o owners of the parent									Non- controlling interest	Total
	Common stock	Capital surplus		R	etainedEarnings			Otherequityi	nterest		Total
			Legal reserve		Special reserve	Unappropriate d earnings	Financial statements translation differences of foreign operations	Unrealized gain (loss) on available-for- sale financial assets	Changes in gain (loss) on cash flow hedge	Employee unearned compensation
6(19) 6(15) 6(20) 6(19) 6(15) 6(20)	$ 99,545,364 - - - ( 12,992 ) - - - - - - $99,532,372 $ 99,532,372 - - ( 10,884 ) - - - - - $99,521,488	$ 99,584,369 - - - 12,992 ( 3,760 ) 22,740 27,185 38 - - $99,643,564 $ 99,643,564 - - 10,884 ( 4,068 ) - ( 2,570 ) - - $99,647,810	$ 509,272 2,167,675 - - - - - - - - - $2,676,947 $ 2,676,947 1,081,560 - - - - - - - $3,758,507		$ 1,144,229 - ( 1,144,229 ) - - - - - - - - $ - $ - - - - - - - - - $ -	$ 24,979,173 ( 2,167,675 ) 1,144,229 ( 6,947,188 ) - - - - - 10,815,594 ( 162,630 ) $27,661,503 $ 27,661,503 ( 1,081,560 ) ( 1,989,810 ) - - - - 1,870,687 36,542 $26,497,362	$ 3,082,948 - - - - - - - - - ( 1,387,654 ) $1,695,294 $ 1,695,294 - - - - - - - ( 5,735,702 ) ($4,040,408 )	($ 1,259,847 ) - - - - - - - - - 2,334,292 $ 1,074,445 $ 1,074,445 - - - - - - - ( 452,841 ) $ 621,604	$ 247,070 - - - - - - - - - ( 247,070 ) $ - $ - - - - - - - - - $ -	($ 142,515 ) - - - - 2,411 120,702 - - - - ($ 19,402 ) ($ 19,402 ) - - - 4,142 15,260 - - - $ -	$ 227,690,063 - - ( 6,947,188 ) - ( 1,349 ) 143,442 27,185 38 10,815,594 536,938 $232,264,723 $ 232,264,723 - ( 1,989,810 ) - 74 15,260 ( 2,570 ) 1,870,687 ( 6,152,001 ) $226,006,363	$ 1,481,373 - - - - - - - ( 1,450,178 ) ( 1,453 ) ( 29,742 ) $ - $ - - - - - - - - - $ -	$ 229,171,436 - - ( 6,947,188 ) - ( 1,349 ) 143,442 27,185 ( 1,450,140 ) 10,814,141 507,196 $232,264,723 $ 232,264,723 - ( 1,989,810 ) - 74 15,260 ( 2,570 ) 1,870,687 ( 6,152,001 ) $226,006,363

The accompanying notes are an integral part of these consolidated financial statements. 29

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the year
Adjustments
Adjustments to reconcile profit (loss)
Depreciation and amortization
Compensation related to share-based payment
Share of profit of associates and joint ventures
accounted for under equity method
Loss on disposal of investments
Loss on disposal of property, plant and equipment
Impairment loss
Interest expense
Interest income
Dividend income
Unrealized foreign exchange loss (gain)
Changes in operating assets and liabilities
Changes in operating assets
Financial assets /liabilities at fair value through
profit or loss
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Derivative financial liabilities for hedging
Accounts payable
Accounts payable - related parties
Other payables
Provisions - current
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Cash paid for income tax
Net cash flows from operating activities

Notes
2016
2015
$ 4,992,120
$ 14,859,187
6(24)
41,418,534
53,571,172
6(24)
15,260
143,442
6(8)
(
187,454 )
(
213,587 )
6(22)
23,258
47,583
6(22)
163,659
180,829
6(22)
502,857
589,911
6(23)
874,879
1,712,758
6(21)
(
291,240 )
(
484,873 )
6(21)
(
177,880 )
(
224,441 )
4,725
(
225,917 )
1,012,239
(
83,841 )
(
4,665,841 )
22,786,214
(
8,966,506 )
3,479,547
1,648,507
849,827
5,864,361
3,589,410
(
444,504 )
333,734
(
7,263 )
57,524
-
(
299,026 )
(
5,194,646 )
(
17,884,488 )
1,760,302
(
1,893,013 )
(
1,636,830 )
(
713,699 )
(
1,786,525 )
2,418,270
289,323
(
821,001 )
(
12,343 )
6,891
35,198,992
81,782,413
(
1,799,745 )
(
718,120 )
33,399,247
81,064,293

(Continued)

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of available-for-sale financial
assets
Proceeds from capital reduction of available-for-sale
financial assets
Decrease in other financial assets
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Proceeds from disposal of intangible assets
Decrease (increase) in other non-current assets
Interest received
Dividends received
Proceeds from capital reduction and return of investments
accounted for under equity method
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings
Increase in long-term borrowings
Payment of long-term borrowings
Repurchase from issuance of restricted stock to
employees
Changes in non-controlling interests
Interest paid
Cash dividends paid
Net cash flows used in financing activities
Effect of changes in foreign currency exchange
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes
2016
2015
$ 222,372
$ 450,057
159,335
-
2,091,694
783,662
6(28)
(
44,152,843 )
(
24,511,490 )
42,268
1,798,359
(
22,251 )
(
16,392 )
-
856
38,230
(
4,453 )
326,610
449,038
404,576
247,612
23,680
-
(
40,866,329 )
(
20,802,751 )
11,579,025
(
22,449,868 )
822,702
68,100,131
(
16,440,000 )
(
116,527,861 )
(
1,372 )
(
3,676 )
-
(
50 )
(
747,143 )
(
1,628,841 )
6(19)
(
1,989,810 )
(
6,947,188 )
(
6,776,598 )
(
79,457,353 )
(
2,894,271 )
728,860
(
17,137,951 )
(
18,466,951 )
52,522,790
70,989,741
$ 35,384,839
$ 52,522,790

The accompanying notes are an integral part of these consolidated financial statements.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Innolux Co., Ltd.

Opinion

We have audited the accompanying parent company only balance sheets of Innolux Corporation (the “Company”) as at December 31, 2016 and 2015, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2016 and 2015, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Valuation and impairment of goodwill and property, plant and equipment

Description

How our audit addressed the matter

Additions to property, plant and equipment

Description

The Company’s capital expenditures increased with its operational growth. In 2016, property, plant and equipment increased by NT$41,145,085 thousand, which was 11% of total assets of the Company. For details of property, plant and equipment, please refer to Notes 6(9) and (28). As the amount of property, plant and equipment is material, we identified the additions to property, plant and equipment a key audit matter.

How our audit addressed the matter

Estimation of significant disaster insurance claim

Description

How our audit addressed the matter

Our procedures in relation to estimation of disaster insurance claim included:

A. Checking assets insurance contracts with the insurance company, and confirming whether the inventory, building and equipment damaged during the earthquake were covered by insurance;
B. Obtaining the claims list and damaged inventory, building and equipment list, and verifying the damaged inventory and building list, selecting samples and cross comparing the data for completeness and accuracy and checking the accuracy of accounting records and amount of disaster loss;
C. Assessing the reasonableness of replacement cost of inventory, building and equipment which were estimated by management, selecting samples and verifying the estimates against original documents; and
D. Assessing the reasonableness of claim amount which was estimated by the management based on losses list and replacement cost.

Responsibilities of management and those charged with governance for the parent company only financial statements

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

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance, including audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

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

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

PricewaterhouseCoopers, Taiwan February 10, 2017

The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

INNOLUX CORPORATION

Assets	PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2016 AND 2015 (Expressed in thousands of New Taiwan dollars) December 31, 2016 Notes AMOUNT 6(1) $ 20,927,609 6(2) 64,241 6(5)(6) 50,693,511 7 10,199,014 1,184,141 7 123,091 6(7) 18,897,916 878,510 6(1) and 8 - 35,797 103,003,830 6(3) 1,647,983 6(8) 79,845,787 6(9), 7 and 8 170,150,592 6(10) 573,425 6(11) and 8 18,375,538 6(26) 14,561,523 6(9) and 8 935,611 286,090,459 $ 389,094,289 (Continued)	December 31, 2015
		AMOUNT
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1410 Prepayments 1476 Other financial assets - current 1479 Other current assets 11XX Total current assets Non-current assets 1523 Available-for-sale financial assets - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets		$ 35,279,610 81,858 45,755,129 2,904,753 872,255 377,364 24,546,126 705,456 1,400,856 3,001
		111,926,408
		1,944,917 81,315,320 163,921,697 680,503 19,264,025 15,722,814 3,263,937
		286,113,213
		$ 398,039,621

			INNOLUX CORPORATION	INNOLUX CORPORATION
		PARENT COMPANY		ONLY BALANCE SHEETS
			DECEMBER 31, 2016 AND 2015
		(Expressed in thousands of New Taiwan dollars)
				December 31, 2016			December 31,	2015
	Liabilities and Equity		Notes	AMOUNT			AMOUNT
	Current liabilities
2100	Short-term borrowings	6(12)		$	11,583,750	$		-
2120	Financial liabilities at fair value	6(2)
	through profit or loss - current				734,915			53,921
2170	Accounts payable				29,250,025			27,731,035
2180	Accounts payable - related parties	7			50,320,414			45,433,862
2200	Other payables	7			20,188,656			24,387,687
2230	Current income tax liabilities	6(26)			577,254			902,134
2250	Provisions - current	6(16)	and 9		3,765,234			5,551,759
2320	Long-term liabilities, current	6(13)
	portion				16,381,686			16,361,238
2399	Other current liabilities				1,124,978			835,806
21XX	Total current liabilities				133,926,912		121,257,442
	Non-current liabilities
2540	Long-term borrowings	6(13)			28,128,467			43,629,968
2570	Deferred income tax liabilities	6(26)			672,971			514,094
2670	Other non-current liabilities	6(14)			359,576			373,394
25XX	Total non-current liabilities				29,161,014			44,517,456
2XXX	Total liabilities				163,087,926		165,774,898
	Equity
3110	Share capital - common stock	6(17)			99,521,488			99,532,372
3200	Capital surplus	6(18)			99,647,810			99,643,564
	Retained earnings	6(19)
3310	Legal reserve				3,758,507			2,676,947
3350	Unappropriated retained
	earnings				26,497,362			27,661,503
3400	Other equity interest	6(20)		(	3,418,804)			2,750,337
3XXX	Total equity				226,006,363		232,264,723
3X2X	Total liabilities and equity			$	389,094,289	$	398,039,621

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

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

(Expressed in thousands of New Taiwan dollars, except for earning per share amonuts)

Items	Notes 7 6(7)(24) and 7 6(24) 6(21) 6(22) 6(23) 6(26) 6(14) 6(26) 6(4) 6(20) 6(26) 6(27)	YearendedDecember31 2016 2015 AMOUNT AMOUNT $ 285,695,113 $ 360,638,133 ( 270,841,149) ( 326,925,887) 14,853,964 33,712,246 ( 943,819) ( 1,167,637) ( 3,052,097) ( 3,183,374) ( 10,344,969) ( 13,534,326) ( 14,340,885) ( 17,885,337) 513,079 15,826,909 1,905,334 1,301,865 ( 3,078,900) ( 7,842,919) ( 850,007) ( 1,310,112) 5,171,418 5,833,198 3,147,845 ( 2,017,968) 3,660,924 13,808,941 ( 1,790,237) ( 2,993,347) $ 1,870,687 $ 10,815,594 $ 44,027 ($ 195,939) ( 7,485) 33,309 36,542 ( 162,630) ( 5,708,026) ( 1,392,086) 355,619 ( 1,149,260) - ( 297,675) ( 722,679) 3,420,038 ( 113,457) 118,551 ( 6,188,543) 699,568 ($ 6,152,001) $ 536,938 ($ 4,281,314) $ 11,352,532 $ 0.19 $ 1.09 $ 0.19 $ 1.07
4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of subsidiaries, associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive (loss) income (net) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit obligations 8349 Income tax relating to the components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive (loss) income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8362 Unrealized gain (loss) on valuation of available-for-sale financial assets 8363 Cash flow hedges 8380 Share of other comprehensive (loss) income of subsidiaries, associates and joint ventures accounted for under equity method 8399 Income tax relating to the components of other comprehensive income that will be reclassified 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Other comprehensive (loss) income for the year, net of tax 8500 Total comprehensive (loss) income for the year Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

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

2015 Balance at January 1, 2015 Appropriations of 2014 earnings (Note 1): Legal reserve Special reserve Cash dividends Cancellation of restricted stock to employees Changes in restricted stock to employees Compensation related to share-based payment Changes in net equity of long-term equity investments Changes in non-controlling interests Profit for the year Other comprehensive income for the year Balance at December 31, 2015 2016 Balance at January 1, 2016 Appropriations of 2015 earnings (Note 2): Legal reserve Cash dividends Cancellation of restricted stock to employees Changes in restricted stock to employees Compensation related to share-based payment Changes in net equity of long-term equity investments Profit for the year Other comprehensive loss for the year Balance at December 31, 2016	Notes		Common stock		Capital surplus			R	etainedEarnings	etainedEarnings					Otherequityi	Otherequityi	nterest			Total
							Legal reserve		Special reserve		Unappropriate d earnings		Financial statements translation differences of foreign operations		Unrealized gain (loss) on available-for- sale financial assets		Changes in gain (loss) on cash flow hedges		Employee unearned compensation
	6(19) 6(15) 6(20) 6(19) 6(15) 6(20)		$ 99,545,364 - - - ( 12,992 ) - - - - - - $99,532,372 $ 99,532,372 - - ( 10,884 ) - - - - - $99,521,488		$ 99,584,369 - - - 12,992 ( 3,760 ) 22,740 27,185 38 - - $99,643,564 $ 99,643,564 - - 10,884 ( 4,068 ) - ( 2,570 ) - - $99,647,810		$ 509,272 2,167,675 - - - - - - - - - $2,676,947 $ 2,676,947 1,081,560 - - - - - - - $3,758,507		$ 1,144,229 - ( 1,144,229 ) - - - - - - - - $ - $ - - - - - - - - - $ -		$ 24,979,173 ( 2,167,675 ) 1,144,229 ( 6,947,188 ) - - - - - 10,815,594 ( 162,630 ) $27,661,503 $ 27,661,503 ( 1,081,560 ) ( 1,989,810 ) - - - - 1,870,687 36,542 $26,497,362		$ 3,082,948 - - - - - - - - - ( 1,387,654 ) $1,695,294 $ 1,695,294 - - - - - - - ( 5,735,702 ) ($4,040,408 )		($ 1,259,847 ) - - - - - - - - - 2,334,292 $ 1,074,445 $ 1,074,445 - - - - - - - ( 452,841 ) $ 621,604		$ 247,070 - - - - - - - - - ( 247,070 ) $ - $ - - - - - - - - - $ -		($ 142,515 ) - - - - 2,411 120,702 - - - - ($ 19,402 ) ($ 19,402 ) - - - 4,142 15,260 - - - $ -	$ 227,690,063 - - ( 6,947,188 ) - ( 1,349 ) 143,442 27,185 38 10,815,594 536,938 $232,264,723 $ 232,264,723 - ( 1,989,810 ) - 74 15,260 ( 2,570 ) 1,870,687 ( 6,152,001 ) $226,006,363

Note 1: Employees' bonus accrued at $1,436,187 had been deducted from the statement of comprehensive income for the year ended December 31, 2014. Note 2: Employee's compensation and directors' and supervisors' remuneration accrued at $734,524 and $5,000 had been deducted from the statement of comprehensive income for the year ended December 31, 2015, respectively.

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

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the year
Adjustments
Adjustments to reconcile profit (loss)
Depreciation and amortization
Compensation related to share-based payment
Share of profit of subsidiaries and associates
accounted for under equity method
Loss on disposal of investments
Loss on disposal of property, plant and equipment
Impairment loss
Interest income
Dividend income
Interest expense
Unrealized foreign exchange loss (gain)
Changes in operating assets and liabilities
Changes in operating assets
Financial assets/liabilities at fair value through
profit or loss
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Derivative financial liabilities for hedging
Accounts payable
Accounts payable - related parties
Other payables
Provisions - current
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Cash paid for income tax
Net cash flows from operating activities

Notes
2016
2015
$ 3,660,924
$ 13,808,941
6(24)
37,605,732
49,383,090
6(24)
15,260
143,442
(
5,171,418 )
(
5,833,198 )
6(22)
-
112,058
6(22)
35,222
100,841
6(22)
500,000
-
6(21)
(
131,151 )
(
144,282 )
6(21)
(
28,593 )
(
117,882 )
6(23)
831,360
1,607,782
4,725
(
148,786 )
698,611
(
580,500 )
(
4,938,382 )
23,103,020
(
7,294,261 )
3,162,905
1,378,266
(
178,584 )
4,715,867
3,392,039
(
173,054 )
(
143,809 )
(
32,796 )
9,541
-
(
299,026 )
1,518,990
(
6,000,745 )
4,886,552
(
39,736,875 )
(
3,435,134 )
4,001,150
(
1,786,525 )
2,418,270
289,172
(
577,572 )
(
5,678 )
(
17,734 )
33,143,689
47,464,086
(
915,890 )
(
38,833 )
32,227,799
47,425,253

(Continued)

INNOLUX CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in other receivables - related parties
Proceeds from disposal of available-for-sale financial
assets
Proceeds from capital reduction of available-for sale
financal assets
Acquisition of investment accounted for under equity
method
Proceeds from capital reduction of investments accounted
for under equity method
Acquisition of property, plant and equipment
Decrease in other financial assets
Proceeds from disposal of property, plant and equipment
Decrease in other non-current assets
Interest received
Dividends received
Cash inflow from incorporation of subsidiary
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings
Increase in long-term borrowings
Payment of long-term borrowings
Cash dividends paid
Repurchase from issuance of restricted stock to
employees
Acquisition of subsidiary stock
Interest paid
Net cash flows used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes
2016
2015
$ 254,273
$ 225,689
-
231,275
159,335
-
(
77,808 )
(
623,249 )
23,680
531,696
6(28)
(
42,155,612 )
(
21,096,240 )
1,519,807
810,198
7,778
42,240
31,437
329
135,099
138,837
255,289
141,053
-
11,874
(
39,846,722 )
(
19,586,298 )
11,579,025
(
1,300,000 )
822,702
68,100,131
(
16,440,000 )
(
106,427,892 )
6(19)
(
1,989,810 )
(
6,947,188 )
(
1,372 )
(
3,676 )
-
(
50 )
(
703,623 )
(
1,523,865 )
(
6,733,078 )
(
48,102,540 )
(
14,352,001 )
(
20,263,585 )
35,279,610
55,543,195
$ 20,927,609
$ 35,279,610

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

Attachment 4

INNOLUX CORPORATION

2016 Profit Distribution Table

Unit: NT$

		Unit: NT$
Item	Amount	Explanation
Accumulated retained earning at the start of the year Adjusted retained earnings of year 2016 Adjusted undistributed retained earnings Profit after tax of Year 2016 Minus Legal reserve (10%) Special reserve Profit distributable Distribution Item Cash dividends to shareholders Subtotal of dividends to shareholders Unappropriated retained earnings to date	24,590,133,392 36,542,136 24,626,675,528 1,870,687,092 (187,068,709) (3,418,804,701) 22,891,489,210 995,204,078 995,204,078 21,896,285,132	Note 1 Note 2 To distribute NT$ 0.1 per share

Note 1: The number of adjusted retained earnings of year 2016 is the defined retirement benefit plan actuarial loss.

Note 2: The minus item of shareholder equity, a certain proportion of its earnings as special reserve.

Chairman: General Manager: Accountant:

Attachment 5

Comparative table for Amendments to Articles of Incorporation

Article No.	The current Article	The Amended Article	Reasons for Amendm ent
Article 21	The distribution of employees' compensation shall not be lower than 5% of and the directors’~~and~~ ~~supervisors’~~ compensation shall not be higher than 0.1% of the current year pre-tax income before deducting the distributable employees’ and directors’,~~and~~ ~~supervisor’~~ compensation of the Company. However, the Company's accumulated losses shall have been covered. The company shall, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form of shares or in cash and have the profit distributable as director’s ~~and supervisors’~~ ~~c~~ompensation in the form of cash; and in addition thereto a report of such distribution shall be submitted to the shareholders' meeting. （Omitted）	The distribution of employees' compensation shall not be lower than 5% of and the directors’ compensation shall not be higher than 0.1% of the current year pre- tax income before deducting the distributable employees’ and directors’ compensation of the Company. However, the Company's accumulated losses shall have been covered. The company shall, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form of shares or in cash and have the profit distributable as director’s compensation in the form of cash; and in addition thereto a report of such distribution shall be submitted to the shareholders' meeting. （Omitted）	Coordinate d with company operation and revised the wording.
Article 26	This Articles of Incorporation was made by all promoters on November 21, 2002. The first amendment was made on March 21, 2003…. (omitted) The fifteenth amendment is on June 8, 2015.The sixteenth amendment is on June 24, 2016.	This Articles of Incorporation was made by all promoters on November 21, 2002. The first amendment was made on March 21, 2003…. (omitted) The fifteenth amendment is on June 8, 2015. The sixteenth amendment is on June 24, 2016.The seventeenth amendment is on June 20, 2017.	To explain the amendme nt history of Articles of Incorporati on

Attachment 6

Comparative table for Amendments to

Operating Procedure Governing the Acquisition and Disposal of Assets

Article No.		The current Article	The Amended Article	Reasons for Amendm ent
Article 7 Section 2 Clause 1	(I) In acquiring or disposing of real property or equipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with ~~a government~~ ~~agency~~ ~~,~~engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: （Omitted）		(I) In acquiring or disposing of real property or equipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the Company, unless transacting withthe competent authority, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions: （Omitted）	Amend in order to accompan y the order no. 10600012 96 of SFC dated Feb 9,2017
Article 9	Operating procedure governing the acquisition and disposal of intangible assets For evaluation of the acquisition and disposal of intangible assets of the Company, the proposed department shall proceed with feasibility evaluation report and to submit and report to the intellectual property department. 1.Operational Procedure The acquisition or disposal of intangible assets, in case the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transacting with~~a government~~ ~~agency~~ ~~,~~the Companyshall also		Operating procedure governing the acquisition and disposal of intangible assets For evaluation of the acquisition and disposal of intangible assets of the Company, the proposed department shall proceed with feasibility evaluation report and to submit and report to the intellectual property department. 1.Operational Procedure The acquisition or disposal of intangible assets, in case the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transacting withthe competent authority,the Companyshall also	Amend in order to accompan y the order no. 10600012 96 of SFC dated Feb 9,2017

Article No.	The current Article	The Amended Article	Reasons for Amendm ent
	engage a certified public accountant to render an opinion on the reasonableness of the transaction price prior to the date of occurrence; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published bythe ARDF.	engage a certified public accountant to render an opinion on the reasonableness of the transaction price prior to the date of occurrence; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published bythe ARDF.
Article 10 Section 2	When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription or ~~redemption~~ of domestic money market funds, the company may not proceed to enter into a transaction contract or make a payment until the following matters have been agreed by more than 1/2 of the members of the Audit Committees and approved by the board of directors, and it shall apply to the rules set forth under Section 2 and Section 3 of Article 16:（Omitted）	When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription or repurchaseof domestic money market fundsissued by a SITE, the company may not proceed to enter into a transaction contract or make a payment until the following matters have been agreed by more than 1/2 of the members of the Audit Committees and approved by the board of directors, and it shall apply to the rules set forth under Section 2 and Section 3 of Article 16:（Omitted）	Amend in order to accompan y the order no. 10600012 96 of SFC dated Feb 9,2017
Article 12	1.Appraisal and Operation Procedure (a) When conducting a merger, demerger, acquisition, or transfer of shares, the Company is better to engage an attorney, Copeland securities underwriter to together discuss and decide on the estimated timetable of	1.Appraisal and Operation Procedure (a) When conducting a merger, demerger, acquisition, or transfer of shares, the Company is better to engage an attorney, Copeland securities underwriter to together discuss and decide on the estimated timetable of	Amend in order to accompan y the order no. 10600012 96 of SFC dated Feb 9,2017

Article No.	The current Article	The Amended Article	Reasons for Amendm ent
	legal procedure and to form special project team to execute according to the legal procedure. Prior to convening the board of directors of the Company to resolve on the merger matter, the Audit Committee will review and decide on the on the fairness and reasonableness of this merger plan and the transaction according to the Securities and Exchange Act and to submit such review result to the board of directors. When the Audit Committee conducting review, it shall engage independent expertise to give opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders. （Omitted） 2.Other Matters Requiring Attention (d) Matters that shall be noted in contract: The followingmatters	legal procedure and to form special project team to execute according to the legal procedure. Prior to convening the board of directors of the Company to resolve on the merger matter, the Audit Committee will review and decide on the on the fairness and reasonableness of this merger plan and the transaction according to the Securities and Exchange Act and to submit such review result to the board of directors. When the Audit Committee conducting review, it shall engage independent expertise to give opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by a public company of a subsidiary in which it directly or indirectly holds 100% of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the public company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital. （Omitted） 2.Other Matters Requiring Attention (d) Matters that shall be noted in contract: The followingmatters

Article No.	The current Article	The Amended Article	Reasons for Amendm ent
	shall be noted in the contract for handling a merger, division, acquisitions or transfer of shares of the participating companies, in addition to the regulations of Article 317 of the Company Act and Article 22 of the Mergers and Acquisitions Act~~.~~ (1) Actions upon event of default. (2) Principles for handling equity- based securities that the merged/divided company previously issued or treasury stocks that have been repurchased. (3) Principles on quantity and disposal of treasury stocks that may be repurchased according to the law by the companies involved after the benchmark day for calculation of share exchange ratio. (4) Processing methods upon event of changes in the entities and their quantities. (5) A preliminary progress schedule for execution of the plan and the anticipated completion date. (6) Procedures for deciding on dates to convene the shareholders’ meeting if the plan hasn’t finished within the time limit.	shall be noted in the contract for handling a merger, division, acquisitions or transfer of shares of the participating companies, in addition to the regulations of Article 317 of the Company Act and Article 22 of the Mergers and Acquisitions Act: (1) Actions upon event of default. (2) Principles for handling equity- based securities that the merged/divided company previously issued or treasury stocks that have been repurchased. (3) Principles on quantity and disposal of treasury stocks that may be repurchased according to the law by the companies involved after the benchmark day for calculation of share exchange ratio. (4) Processing methods upon event of changes in the entities and their quantities. (5) A preliminary progress schedule for execution of the plan and the anticipated completion date. (6) Procedures for deciding on dates to convene the shareholders’ meeting if the plan hasn’t finished within the time limit.
Article 13	2.The Items and Standards Requried for Public Announcement and Report (a) Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20percent or	2.The Items and Standards Requried for Public Announcement and Report (a) Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20percent or	Amend in order to accompan y the order no. 10600012 96 of SFC dated Feb 9,2017

Article No.	The current Article	The Amended Article	Reasons for Amendm ent
	more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase, resale agreements, or subscription or ~~redemption~~ of domestic money market funds. (b) Merger, demerger, Acquisitions or Shares Transfer (c) Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the company. ~~(d)~~ ~~W~~here an asset transaction other than any of those referred to in the preceding ~~three~~ ~~s~~ubparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government Bonds (2) Trading of bonds under repurchase/resale agreements, or subscription or ~~redemption~~ of domestic money market funds. ~~(3)~~ Acquisition or disposal of such assets as equipment for business which does not involve the related party and the transaction amount of which does ~~not~~ reach to above NTD~~500~~ million.	more of paid-in capital, 10 percent or more of the company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase, resale agreements, or subscription orrepurchaseof domestic money market funds issued by SITE (b) Merger, demerger, Acquisitions or Shares Transfer (c) Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the company. (d)Acquisition or disposal of such assets as equipment for business which does not involve the related party and the transaction amount of which reach to above NTD 1000million. (e)Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction reaches NT$500 million. (f)Where an asset transaction other than anyof those referred to in

Article No.	The current Article	The Amended Article	Reasons for Amendm ent
	~~(4)~~ ~~W~~here land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the company expects to invest in the transaction~~less than~~ NT$500 million. ~~(e)~~ ~~T~~he transaction amount prescribed ~~under Paragraph (d)~~ ~~above~~ shall be calculated as below. Also, "within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Regulations need not be counted toward the transaction amount. (1) The amount of any individual transaction. (2) The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. (3) The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within thepreceding year.	the precedingfive subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of government Bonds (2) Trading of bonds under repurchase/resale agreements, or subscription orrepurchase of domestic money market fundissued by SITE (g)The transaction amount prescribed shall be calculated as below. Also, "within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Regulations need not be counted toward the transaction amount. (1) The amount of any individual transaction. (2) The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. (3) The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within thepreceding year.

Article No.	The current Article	The Amended Article	Reasons for Amendm ent
	(4) The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. ~~(f)~~ ~~T~~he transaction amount set forth in Article 7, Article 8, and Article 9 shall be calculated and handled under the preceding Paragraph. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items which obtained appraisal report issued by the professional appraiser or CPA’s opinion according to the Operational Procedure need not be counted toward the transaction amount. 3.Procedures for Announcement (a) The Company shall report related information to the designated website by FSC for announcement. (b) The Company shall report information relating to the prior month’s transactions in derivatives of the Company and subsidiaries to the designated website by FSC for announcement before the 10th of every month. (c) The Company shall report all items according to regulations, and if there are errors or omissions, shall declare and report all items again after makingadditions and	(4) The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. (h)The transaction amount set forth in Article 7, Article 8, and Article 9 shall be calculated and handled under the preceding Paragraph. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items which obtained appraisal report issued by the professional appraiser or CPA’s opinion according to the Operational Procedure need not be counted toward the transaction amount. 3.Procedures for Announcement (a) The Company shall report related information to the designated website by FSC for announcement. (b) The Company shall report information relating to the prior month’s transactions in derivatives of the Company and subsidiaries to the designated website by FSC for announcement before the 10th of every month. (c) The Company shall report all items according to regulations, and if there are errors or omissions, all the items shall be again publicly announced and reported in their entirety within

Article No.	The current Article	The Amended Article	Reasons for Amendm ent
	corrections. （Omitted）	two days counting inclusively from the date of knowingof such error or omission. （Omitted）

Attachment 7

Regulations related to Issuance and Conversion of Private Placement of Foreign or Domestic Corporate Bonds （ Prescribed Temporarily ）

1. Issuing Company:

Innolux Corporation (hereinafter refers to as the “Company” or “Innolux”).

2. Issued Total Amount:

To authorize the board of directors, within the limit of 0.95 billion (950,000,000) ordinary shares, by selection of one or collocation of two or more projects of domestic capital increase by cash, issuing ordinary shares by means of capital increase by cash for sponsoring issuance of GDR, private placement of ordinary shares/preferred shares by means of capital increase by cash or private placement of foreign or domestic convertible corporate bonds. When conducting foreign or domestic convertible corporate bonds (these corporate bonds”) through private placement method, the converting value shall be calculated according to the convertible price within the above 0.95 billion limit at the time of private placement.

3. Issuing Date:

The issuance shall be conducted at one time or several times within one year after resolved by general shareholders meeting of year 2017.

4. Issuing Methods:

This corporate bond will be issued according to Article 43-6 of Securities and Exchange Act the local regulations of issuing place.

The object of this private placement shall be conducted according to Article 43-6 of Securities and Exchange Act and shall be limited to only strategic investor. Also, in order to meet the need of long term operation and business development of the Company, we will prefer to choose strategic investor who will help the Company to enlarge the business and product market, to strengthen customer relationship, promote product development and integration benefit, or to level up technology. Strategic investors may promote the Company’s long-term competitiveness and operation benefit. Through strategic investors’ experience, product technology, knowledge, brand reputation, marketing channel and other advantages, via strategic cooperation, product co-development, market integration, or business development cooperation and other methods, it is estimated to assist the Company in reducing cost, enhancing products skills, enlarging sales market, and to promote the Company’s future operation and benefit.

5. Issuing Price, Face Value, and Types of Corporate Bonds:

This corporate bond are registered convertible corporate bonds; the face value is USD 10,000 or its integral multiples, or NTD 100,000 or its integral multiples. The issuance price shall not be lower than 80% of the theoretical price.

6. Coupon Rate and Interest Payment Method of Corporate Bonds:

To authorize the board of directors to decide such coupon rate and payment methods.

7. Issuing Term:

No more than 7 years since the issuing date.

8. Redemption Methods:

Unless the corporate bonds has been converted, sold back, redeemed, or bought back, or bought back and canceled, this corporate bonds shall be redeemed by cash according to

the face value or adding the interest compensation when the times due.

9. Subject of Conversion:

Ordinary shares or sponsoring issuance of GDR which is issued by Innolux.

10. Conversion:

1、The conversion term of this corporate bonds:
Unless earlier redeemed, repurchase, canceled, exercising of conversion right, or during the non-convertible duration prescribed under the issuance agreement, the creditors of this corporate bonds may from time to time, during the duration from certain period after issuance to the due date of this corporate bonds, request our company to convert to ordinary shares or sponsoring issuance of GDR of our company according to related regulations and issuance agreement.
2、Conversion procedure of the corporate bonds:
When the creditors request for conversion, they shall prepare “Conversion Notification Letter” together with the bonds and documents or proofs request according to the laws and regulations of the Republic of China so as to apply for conversion to our company.
3、Adjustment and decision of the conversion price of this corporate bonds: The conversion price shall be no lower than the simple average closing price of the common shares of the 1, 3, or 5 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction; or the 80% of simple average closing price of the common shares of the Company for the 30 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction. The actual price shall be proposed by the shareholders’ meeting to authorize the board of director to decide according to relevant laws and regulations.
4、Year of Conversion relating to the ownership of share dividend:
The corporate bonds owners shall not be entitled to stock dividend or stock benefit before conversion; after conversion, the corporate bonds owner shall have the right to be distributed stock dividend or benefit of the issued company’s ordinary stocks just like the other ordinary share’s shareholder of the Company.
5、Right and Obligation after Conversion：

For this corporate bonds, other than the restriction that it is not allowed to be transferred within 3 years after delivery set forth under Article 43-8 of Securities and Exchange Act, the ordinary shares converted from this corporate bonds owns the same right and obligation as the original ordinary shares.

11. Terms of Early Redemption by the Issuing Company:

To authorized the board of directors to prescribe such term.

12.Repurchase Term of the Corporate Bonds Owners ：

The Company may choose not to provide put right or the corporate bonds owner may, within a certain term after issuance, request the issuing company to redeem all or part of this corporate bonds according to the price calculated from certain rate of return rate of each year.

13. Other important terms:

For the issuing terms and other matters not stated herein, the board of directors shall be authorized to make necessary adjustment and handling at its own discretion.

Appendix 1 Innolux Corporation

Rules of Shareholders’ Meeting

Article 1 : In order to establish the good governance system for the shareholders’ meeting of the Company, to construct supervision function and intensify management efficiency, to draw up this Rules in accordance with Section 5 of Corporate Governance Best-Practice Principles for Listed and OTC Companies for compliance with.
Article 2 : Except as otherwise provided for in laws or Articles of Incorporation, the meeting rules of shareholders meeting of the Company shall be in accordance with these Rules.
Article 3 : (To convene shareholders meeting and meeting notice) A shareholders meeting of the Company shall, unless otherwise provided for in laws and regulations, be convened by the board of directors. The Company shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders meeting or before 15 days before the date of a preferred shareholders meeting. The Company shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15 days before the date of the preferred shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent designated thereby as well as being distributed on-site at the meeting place The cause(s) or subject(s) of a meeting of shareholders to be convened shall be indicated in the individual notice; and the notice may, as an alternative, be given by means of electronic transmission, after obtaining a prior consent from the recipient(s) thereof.
Matters pertaining to election or discharge of directors, alteration of the Articles of Incorporation, and dissolution, merger, spin-off, or any matters as set forth in Paragraph I, Article 185 of the Company Act, Article 26-1 & 43-6 of Securities & Exchange Act hereof shall be itemized in the causes or subjects to be described in the notice to convene a meeting of shareholders, and shall not be brought up as extemporary motions.
Shareholder(s) holding one percent (1%) or more of the total number of outstanding shares of the Company may propose to the Company a proposal for discussion at a regular shareholders' meeting, provided that only one matter shall be allowed in each single proposal, and in case a proposal contains more than one matter, such proposal shall not be included in the agenda.

In case any proposal submitted by shareholders has any of the circumstances provided in Article 172-2, paragraph 4 of the Company Act, the board of directors may exclude the proposal submitted by a shareholder from the list of proposals to be discussed at a regular meeting of shareholders.

Prior to the date on which share transfer registration is suspended before the convention of a regular shareholders' meeting, the Company shall give a public notice announcing the place and the period for shareholders to submit proposals to be discussed at the meeting; and the period for accepting such proposals shall not be less than ten (10) days.

The number of words of a proposal to be submitted by a shareholder shall be limited to not more than three hundred (300) words, and any proposal containing more than 300 words shall not be included in the agenda of the shareholders' meeting. The shareholder who has

		submitted a proposal shall attend, in person or by a proxy, the regular shareholders' meeting where at his/her proposal is to be discussed and shall take part in the discussion of such proposal. The Company shall, prior to preparing and delivering the shareholders' meeting notice, inform, by a notice, all the proposals submitting shareholders of the proposal screening results, and shall list in the shareholders' meeting notice the proposals conforming to the requirements set out in this Article. With regard to the proposals submitted by shareholders but not included in the agenda of the meeting, the cause of exclusion of such proposals and explanation shall be made by the board of directors at the shareholders' meeting to be convened.
Article 4	:	(To appoint a proxy to attend a shareholders' meeting and authorization) A shareholder may appoint a proxy to attend a shareholders' meeting on his/her/its behalf by executing a power of attorney printed by the Company stating therein the scope of power authorized to the proxy. A shareholder may only execute one power of attorney and appoint one proxy only, and shall serve such written proxy to the company no later than five (5) days prior to the meeting date of the shareholders' meeting. In case two or more written proxies are received from one shareholder, the first one received by the Company shall prevail; unless an explicit statement to revoke the previous written proxy is made in the proxy which comes later. After the service of the power of attorney of a proxy to the Company, in case the shareholder intends to attend the shareholders' meeting in person, a proxy rescission notice shall be filed with the Company at least two (2) day prior to the date of the shareholders' meeting as scheduled in the shareholders' meeting notice so as to rescind the proxy at issue, otherwise, the voting power exercised bythe authorizedproxyat the meetingshallprevail.
Article 5	:	(Principle of convention place and time of shareholders’ meeting) The place for convention of shareholders’ meeting shall be within a county or city where the Company is located, or a place where is convenient for attendance by shareholders and appropriate for convention of shareholders’ meeting. The time for commencement of a meetingmaynot be earlier than 9:00 AM or after 3:00 PM.
Article 6	:	(The preparation of Documents) This Company shall specify in its shareholders meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention. The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel assigned to handle the registrations. Attending shareholders or the proxy appointed by a shareholder shall submit their attendance cards in substitution for signing of attendance.The number of attending shares shall be calculated based on the attendance cards submitted. The Company shall submit to attending shareholders the meeting agenda, annual report, attendance card, comment slip, vote and other meeting materials; if there is an election of directors, shall attach separately ballot. The shareholder shall have a register of attendance or other attendance certificate to attend shareholders’ meeting; Proxy solicitor of proxy solicitation shall take along identity certificate for checkup. When a juristic person acts as the proxy to attend a shareholders’ meeting, it can only appoint oneperson to attend the meeting.
Article 7	:	(Chairperson of Shareholders meeting, person as a guest) Where the shareholders’ meeting is convened by the board of directors, the Chairperson of the board of directors shall serve as Chairperson of the meeting. Where the Chairperson is on

		leave or is unable to exercise his/her powers for any cause, the vice chairperson shall act on his behalf. In case there is no vice chairperson, or the vice chairperson is also on leave or absent or unable to exercise his power and authority for any cause, the Chairperson of the board of directors shall designate one of the managing directors, or where there is no managing directors, one of the directors to act on his behalf. In the absence of such a designation, the managing directors or the directors shall elect from among themselves an acting chairperson of the board of directors. Where as for a shareholders' meeting convened by any other person having the convening right, he/she shall act as the Chairperson of that meeting provided, however, that if there are two or more persons having the convening right, the Chairperson of the meeting shall be elected from among themselves. The Company may appoint its attorney, accountant or other related personnel to attend a shareholders’ meeting.
Article 8	:	(Sound or video recording of Shareholders’ meeting procedure) The Company shall make full sound or video recording of the procedure of the shareholders meeting, which shall be preserved for a minimum period of at least one year. However, if a lawsuit has been instituted by any shareholder in accordance with the provisions of Article 189 of the Company Act, the Company shall keep minutes of the shareholders' meeting involved until the legalproceedings of the foregoinglawsuit have been concluded.
Article 9	:	(The calculation of attending shares of shareholders meeting, and the calling for meeting) Attendance of shareholders meeting shall be calculated based on shares. The number of attending shares shall be calculated based on the attendance cards submitted, and the shares exercised in writing or by way of electronic transmission. The Chairperson shall immediately announce the opening of the meeting when the starting time for the meeting arrives. However, where fewer than the number of the shareholders representing more than half of issued shares of the Company are in attendance, the Chairperson may announce that the meeting is postponed, and such postponed may not exceed two (2) times, total time for postponement may not exceed one (1) hour. Where the quorum is still not met after two (2) postponements, but shareholders representing more than one-third of issued shares of the Company attend the meeting, tentative resolution may be passed in accordance with Article 175, Paragraph 1 of the Company Act. A notice of such tentative resolution shall be given to each of the shareholders, and reconvene a Shareholders' meeting within one month. In the event that the number of shareholders representing more than half of issued shares attends before the end of the said meeting, the Chairperson may submit the tentative resolution made for re-voting by the meeting in accordance with Article 174 of the Company Act.
Article10	:	(Discussion of proposals) Where the shareholders meeting is convened by the board of directors, the agenda shall be set by the board of directors. A meeting shall be preceded in accordance with the determined agenda, which may not be altered except by a resolution of the shareholders meeting. The preceding paragraph applies on a mutatis mutandis basis where a shareholders meeting is convened by a person other than the board of directors who has right to convene a meeting. Unless otherwise resolved at the Meeting, the Chairperson cannot announce the adjournment of the meeting before all discussion items (including extempore motions) listed in the agenda are resolved; if the chairperson declares the adjournment of the meeting in a manner in violation of such rules governing the proceedings of meetings, other members of the board of directors shall immediately assist the attending shareholders in accordance with statutory procedures to designate, by a majority of the voting rights represented by the shareholders attendingthe said meeting,oneperson as chairperson to continue the

proceedings of the meeting. The shareholders cannot designate another person to server as chairperson and continue the meeting in the same or other place after the meeting is adjourned. The Chairperson shall give full explanations and discussions on proposals and amendments or extempore motions submitted by shareholders, and the Chairperson may announce to end the discussion of any resolution and going into voting if the Chairperson deems it appropriate. Article 11 : (To make a speech by shareholder) When a shareholder present at the meeting wishes to speak, a Speech Note shall be filled out with summary of speech, the shareholder’s number (or the number of attendance card) and the name of the shareholder. The sequence of speeches by shareholders shall be decided by the Chairperson. If any shareholder presents at the meeting submits a Speech Note but does not speak, no speech shall be deemed to have been made by such shareholder. In case the contents of the speech of a shareholder are inconsistent with contents of a Speech Note, the contents of actual speech shall prevail. Unless otherwise permitted by the Chairperson, each shareholder shall not speak more than two times for each discussion item, each time not exceeding five (5) minutes. In case the speech of any shareholder violates the above provision or exceeds the scope of the discussion item, the Chairperson may stop the speech of such shareholder. Unless otherwise permitted by the Chairperson and the shareholder in speaking, no shareholder shall interrupt the speeches of other shareholders; otherwise, the Chairperson may stop such interruption. If a corporate shareholder designates two or more representatives to attend the meeting, only one representative can speak for each discussion item. After the speech of a shareholder, the Chairperson may respond himself/herself or appoint appropriate person to respond. Article 12 : (Calculation of voting shares, avoidance) Voting of shareholders meeting shall be calculated on basis of shares. Resolution of shareholders meeting, the shares held by shareholders having no voting right shall not be counted in the total number of issued shares. A shareholder who has a personal interest in the matter under discussion at a meeting, which may impair the interest of the company, shall not vote nor exercise the voting right on behalf of another shareholder. Shares for which voting right cannot be exercised as provided in the foregoing Paragraph shall not be counted in the number of votes of shareholders present at the meeting. Except for trust enterprises or stock agencies approved by the competent authority, when a person who acts as the proxy for two or more shareholders, the number of voting power represented by him/her shall not exceed 3% of the total number of voting shares of the company, otherwise, the portion of excessive voting power shall not be counted. Article 13 : (Voting of proposals, Voting monitoring and Voting Counting) Shareholder shall have one voting power in respect of each share in his/her/its possession; but the shares shall have no voting power under limitation or provided for in Article 179, Paragraph 2 of the Company Act. When the Company convenes the shareholders’ meeting, the voting power at a shareholders' meeting may be exercised in writing or by way of electronic transmission, provided, however, that the method for exercising the voting power shall be described in the shareholders' meeting notice to be given to the shareholders if the voting power will be exercised in writing or by way of electronic transmission. A shareholder who exercises his/her/its voting power at a shareholders meeting in writing or by way of electronic transmission shall be deemed to have attended the said shareholders' meeting in person, but shall be deemed to have waived his/her/its voting power in respective of any extemporary motion(s) and/or the

amendment(s) to the contents of the original proposal(s) at the said shareholders' meeting. Therefore, the Company will avoid proposing extemporary motion and revision of the original proposal.

Under the foregoing Paragraph, in case a shareholder elects to exercise his/her/its voting power in writing or by way of electronic transmission, his/her/its declaration of intention shall be served to the company no later than two (2) days prior to the scheduled meeting date of the shareholders' meeting, whereas if two or more declarations of the same intention are served to the company, the first declaration of such intention received shall prevail; unless an explicit statement to revoke the previous declaration is made in the declaration which comes later.

A shareholder who exercises his/her voting right through written or electronic methods and in case a shareholder attends the shareholders' meeting in person, he/she/it shall, two (2) day prior to the meeting date of the scheduled shareholders' meeting and in the same manner previously used in exercising his/her/its voting power, serve a separate declaration of intention to rescind his/her/its previous declaration of intention made in exercising the voting power under the preceding Paragraph. In the absence of a timely rescission of the previous declaration of intention, the voting power exercised in writing or by way of electronic transmission shall prevail. In case a shareholder has exercised his/her/its voting power in writing or by way of electronic transmission, and has also authorized a proxy to attend the shareholders' meeting in his/her/its behalf, then the voting power exercised by the authorized proxy for the said shareholder shall prevail.

Resolutions at a shareholders' meeting shall, unless otherwise provided for in Company Act and Articles of Incorporation of the Company, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares. In the process of resolution, the Chairperson or other person designated by the Chairperson shall announce the total number of voting shares of the attending shareholders for each discussion item.

After such announcement is made, the shareholders will vote for each discussion item and the Company will enter the result of consent, objection, and waiving his/her/its right of the shareholders into the MOPS upon the same day of the convening of the shareholders meeting.

If there is amendment to or substitute for a discussion item, the Chairperson shall decide the sequence of voting for such discussion item, the amendment or substitute.

If any one of them has been adopted, the others shall be deemed voted and no further voting is necessary.

The person(s) to check and the person(s) to record the ballots during a vote by casting ballots shall be appointed by the Chairperson. The person(s) checking the ballot shall be a shareholder.

Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

Article 14 : The reporting items and non-proposals shall not be put to discussion or resolution. Article 15 : (Election Items) The election of directors at the shareholders meeting shall be in accordance with the regulations governing the election of directors made by the Company, and shall announce the election results on the spot, including the elected name list of the directors and the elected numbers of votes.

The ballots for the preceding election items shall be sealed and signed by monitoring staff, and shall be kept properly for a minimum period of at least one year. However, if a lawsuit has been instituted by any shareholder in accordance with the provisions of Article 189 of the

Company Act, the company shall keep the minutes of the shareholders’ meeting involved until the legal proceedings of the foregoing lawsuit have been concluded. Article 16 : (Meeting minutes and signing items) Resolutions adopted at a shareholders' meeting shall be recorded in the minutes of the meeting, which shall be affixed with the signature or seal of the chairperson of the meeting and shall be distributed to all shareholders of the company within twenty (20) days after the close of the meeting. The preparation and distribution of the minutes of shareholders' meeting may be effected by means of electronic transmission. With regard to the Company offering its shares to the public, the distribution of the minutes of shareholders' meeting as required in the preceding Paragraph may be effected by means of a public notice through entering into MOPS. The minutes of shareholders' meeting shall record the date and place of the meeting, the name of the chairperson, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. The minutes shall be kept persistently throughout the life of the company. Article 17 : (To make external announcement) The number of shares solicited by Proxy Solicitor and the number of shares entitled to Proxy Agent; the Company shall, on the date of shareholders meeting, compile a statistical statement according to the statutory form, and shall make an express disclosure of the same at the site of the shareholders meeting. If a resolution adopted by shareholders meeting is Material Information provided for in laws & regulations, Taiwan Stock Exchange Corporation, the Company shall within statutory timelimit to inputting the information into MOPS. Article 18 : (To keep order in the Meeting Place) Administrative staff in charge of organizing the shareholders meeting shall wear identification badges. The Chairperson may conduct the disciplinary officers or the security guards to assist in keeping order of the meeting place. Such disciplinary officers or the security guards shall wear “Disciplinary Officers” badges or identification cards. If the meeting place is equipped with amplifier, the Chairperson may restrain shareholder from speaking when he/she make speech by means of other equipment, which is not equipped by the Company. When a shareholder violates these Rules and disobeys the Chairperson’s correction, interferes with the proceeding of the meeting and disobeys after being prohibited, the Chairperson may direct disciplinary officers or the security guards to take the person away from the meeting place. Article 19 : (Intermission, Continuance of Meeting) During the meeting, the Chairperson may, at his/her discretion, set time for intermission. In case of incident of force majeure, the Chairperson may decide to temporarily suspend the meeting and announce, depending on the situation, when the meeting will resume. Before all discussion items (including extempore motions) listed in the agenda are resolved, if the meeting place cannot be continually used, the shareholders meeting may seek for other place to continue the meeting. In accordance with Article 182 of the Company Act, the shareholders meeting may resolve to postpone the meeting for not more than, or to reconvene the meeting within, five days. Article 20 : All matters not fully provided for in these Rules shall be in accordance with the provisions of the Company Act and other related laws and regulations. Article 21 : The Rules shall be enforced by resolution of shareholders’ meeting; the same shall apply to any amendment hereto.

Appendix 2 Articles of Incorporation of Innolux Corporation

Chapter I—General Provisions

Article 1 : The Company is organized under the provisions of company limited by shares in accordance with the Company Act and is named "群創光電股份有限公司". The English name of the Company is Innolux Corporation.
Article 2 : The scope of business of the Company shall be as follows: (1) CC01080 Electronic Parts and Components Manufacturing (2) F401010 International Trade
(3) CC01010Electric Power Supply, Electric Transmission and Power Distribution Machinery Manufacturing
(4) CC01090 Batteries Manufacturing
(5) IG03010 Energy Technical Services
(6) CC01030 Electric Appliance and Audiovisual Electric Products Manufacturing
(7) I501010 Product Designing
(8) F401021 Restrained Telecom Radio Frequency Equipments and Materials Import 【1.Wireless launch manager. 2. Wireless Transmitter-Receive. 3. Wireless Receiver. 4. Industrial, scientific and medical irradiation machines. 5 other machines can be used for the manufacture of wireless radiant energy.】
(9) CF01011 Medical Materials and Equipment Manufacturing
(10)C901020 Glass and glass made products manufacturing
(11)C801100 Synthetic Resin & Plastic Manufacturing
(12)C805070 Strengthened Plastic Products Manufacturing
(13)C801990 Other Chemical Materials Manufacturing

(14)ZZ99999 The Company may conduct business other than those specified ones, as long as such business is not prohibited or restricted by laws or regulations. (No 9 to 13 are limited to done within the Science Park)

【To research, develop, design, manufacture and sell the products as follows:

TFT-LCD panel
LCD module
LTPS TFT-LCD panel and module
OLED panel and module
Touch panel and its parts
LED backlight source
Thin Film Solar Cells, module and system
Wafers, cells and module of Silicon Wafers Solar Cells
Liquid Crystal Display and its system

10.Mobile Display Module 11.Color Filter 12.Low temperature poly-silicon -Si Thin Film Transistors: LTPS TFT LCD 13.Amorphous silicon: a-Si TFT LCD and system 14.The import and export trade business in relation to the above-mentioned products.】 Article 3 : The headquarter of the Company is located in Shinchu Science-based Industrial Park and the Company may establish branch offices within or outside the territory of the Republic of China pursuant to resolution of board of directors’ meeting and the approval of the competent authority, if necessary.

Chapter II—Shares

Article 4 : The registered capital of the Company shall be one hundred and twenty billion (NT$120,000,000,000), divided into twelve billion (12,000,000,000) shares (of which five billion to be reserved for the use of employees’ share subscription warrants), and may issue special shares, with a par value of ten New Taiwan Dollars, to authorize Board of Directors at their discretion to issue separately ordinary shares or special shares.
Article4-1 : The rights, obligations and other main issue conditions regarding the issued registered Class A convertible special/preferred shares are as follows:
The dividend rate is 3.8% per annum which shall be calculated based on the actual issue price and will be distributed in cash once a year, and after the ratification of financial statements by annual shareholders’ meeting, the board of directors will set a record date for the distribution of dividend to be entitled in last year. Dividend entitled in issuance year and buyback year shall be calculated and distributed based on the number of actual issue days.
In the year that the Company has earned surplus after it makes payment of taxes, makes up losses, and set aside legal profit reserve and special reserve, the Class A shareholders of Class A convertible special shares shall have preferential right to distribution of special/preferred shares’ dividends for the remaining sum. In addition to the special/preferred shares’ dividends above, the shareholders of special/preferred shares shall not participate in the allocation of other surplus of the Company.
In the years that the Company has no surplus earnings or the surplus earnings is not sufficient for distribution of all dividends to Class A special shares, undistributed and insufficient dividends of such year shall be made up preferentially based on compound interest in the following year in which the Company has surplus earnings, together with the dividends of that year. But upon the expiration of issuance period, the accumulated outstanding dividends of special/preferred shares shall be made up at a time on the expiration of issuance period.
The issuance period of special/preferred shares is three years, at maturity these special/preferred shares will be redeemed in cash at a time based on issue price plus accumulated outstanding dividends. In case when the expiration date comes the Company is unable to redeem all or partial of special/preferred shares due to objective causes or force majeure, the rights attached to unredeemed special/preferred shares shall be still in accordance with issue conditions of this Issuance Rules until the Company completes all redemption, and the dividends will be calculated upon the original dividend rate during the actual extended period.
The shareholders of special/preferred shares may convert their special/preferred shares into ordinary shares with the same number of shares in accordance with “Issuance and Conversion Rules of Class A Registered Convertible Special Shares” determined by the Board of directors at the time of issue. In that current year that special/preferred shares converted, such shareholder shall not be entitled to participate in the allocation of special/preferred shares’ dividends.
This special/preferred shares’ right to allocation of residual assets shall rank before that of ordinary shares, to the extent that dissolution preference shall not exceed the total issuance amount
The shareholders of special/preferred shares are not entitled to vote or to elect directors in a general meeting of shareholders; but such shareholders can be elected as director.
When the Company capitalizes its capital reserve derived from cash capital increase

of ordinary shares at a premium, the shareholders of special/preferred shares shall not participate in the allocation of such capitalization of capital reserve. But when the Company capitalizes it capital reserve derived from special/preferred shares issued at premium, the shareholders of special/preferred shares may allocate jointly with shareholders of ordinary shares in proportion to their respective shareholding.

The board of directors is authorized to determine “Issuance and Conversion Rules of Class A Registered Convertible Special Shares” at the time of actual issuance for governing other related matters
Article 4- : For the issuance of employee stock option of the Company at a price less than market price, 2 such issuance shall be in accordance with “Regulations Governing the Offering and Issuance of Securities by Securities Issuers” and shall be adopted by a resolution of shareholders’ meeting
Article 4- : If the Company transfers the buyback shares to its employees at a price less than average 3 price of actual buyback price, such transfer shall be in accordance with related regulations and shall be adopted by a resolution of its latest shareholders’ meeting.
Article 5 : The total amount of investment of the Company shall not be subject to the restrictions of 40% of the amount of its own paid-in capital under Article 13 of the Company Act.
Article 6 : The shares of the Company shall be in registered form, serially numbered, shall be affixed with the signatures or personal seals of three or more directors, and shall be duly certified or authenticated by the competent authority or a certifying institution appointed by the competent authority before issuance thereof. The Company may be exempted from printing any share certificate for the shares issued, but shall appoint a centralized securities custody enterprise/institution to make recordation of the issue of such shares.
Article 7 : The shareholder services of the Company shall be coped with in accordance with “Regulations Governing the Administration of Shareholder Services of Public Companies” proclaimed by the competent authority.

Chapter III: Shareholders’ Meeting

Article 8 : Shareholders' meeting of the Company shall be of the following two kinds: 1. Regular meeting of shareholders: shall be convened within six months after close of each fiscal Year.
1. Special meeting of shareholders: to be held when necessary.
Article 9 : The Chairperson of the Company shall act as the chairperson of the shareholders’ meeting. In case the chairperson of the board of directors is on leave or absent or cannot exercise his/her power and authority for any cause, he/she shall designate one of the directors to act on his/her behalf. In the absence of such a designation by the Chairperson, the directors shall elect from among themselves an acting chairperson of the board of directors.
Article 10 : In case a shareholder is unable to attend shareholders’ meeting for any cause, a shareholder may appoint a proxy to attend a shareholders' meeting on his/her/its behalf by executing a power of attorney printed by the company stating therein the scope of power authorized to the proxy. Unless as prescribed in the Company Act, the rules for the shareholder to appoint a proxy to attend the shareholders' meeting shall be in accordance with “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies”
Article 11 ; Resolutions at a shareholders' meeting shall, unless otherwise provided for in the Company Act, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares.

Chapter IV: Directors, Audit Committee and Managerial Personnel

Chapter IV: Directors, Audit Committee and Managerial Personnel	Chapter IV: Directors, Audit Committee and Managerial Personnel	Chapter IV: Directors, Audit Committee and Managerial Personnel
Article 12	:	The Company shall have five to nine directors for a term of three years. The candidates’ nomination system is adopted by the Company, the directors shall be elected by shareholders’ meeting from the roster of candidates, and he/she may be eligible for re-election. The number of directors shall be decided by the board of directors. In the process of electing directors at a shareholders' meeting, the number of votes exercisable in respect of one share shall be the same as the number of directors to be elected, and the total number of votes per share may be consolidated for election of one candidate or may be split for election of two or more candidates. A candidate to whom the ballots cast represent aprevailingnumber of votes shall be deemed a director elect.
Article 12-1	:	Pursuant to Article 14-2 of Securities and Exchange Act, among of the number of directors above, at least three of which shall be independent directors, and not less than one-fifth of the total number of directors. In case a candidates nomination system is adopted, the shareholders’ meeting shall elect the directors from among the nominees listed in the roster of director candidates.
Article 13	:	The board of directors is organized by directors, having their duties and powers as follows: 1. To compile operating plans 2. To submit the surplus earning distribution or loss off-setting proposals 3. To submit capital increase or decrease proposal 4. To compile the important by-laws and organization rules of the Company 5. The appointment or discharge of general manager and managerial personnel. 6. To approve the execution of the important contracts 7. To check and ratify the purchase and disposal of the important assets of the Company 8. To establish or dissolve branches 9. To compile the budget and final accounting 10. Other authorities under the Company Act or resolutions of shareholders’ meeting. The Company may purchase liability insurance for its directors within the term and the for the compensation liabilityincurred from and within he/her business scope.
Article 13-1	:	The remuneration of directors shall be determined by the board of directors according to their participation level and contribution value, and shall compare standard of the same industry. However,in no event shall the totalpaymentper month exceed NT$500,000.
Article 13-2	:	In calling a meeting of the board of directors, a notice shall be given to each director no later than 7 days prior to the scheduled meeting date in writing, by way of electronic methods or facsimile.
Article 14	:	The board of directors shall elect a chairperson from among the directors by a majority vote at a meeting attended by over two-thirds of the directors. The chairperson represents the Companyexternally.
Article 14-1	:	The board of directors may institute a position of vice-chairperson who shall be elected from among the directors by a majority vote at a meeting attended by over two-thirds of the directors.
Article 15	:	A meeting of board of directors shall, unless otherwise provided for in the Company Act, be convened by the chairperson of the board of directors. Unless otherwise provided for in the Company Act, resolutions of the board of directors shall be adopted by a majority of the directors at a meetingattended bya majorityof the directors.
Article 16	:	The chairperson shall preside the meeting of the board of directors; in case the chairperson of the board of directors is on leave or absent or cannot exercise his/her power and authority for any cause, the chairperson of the board of directors shall designate one of the directors to act on his/her behalf. In the absence of such a designation by the chairperson, the directors shall elect from among themselves an acting chairperson of the board of directors. Each director shall attend the meetingof the board of directors inperson,in case a director is unable to

attend the meeting of the board of directors for any cause, he/she may appoints another director to attend a meeting of the board of directors in his/her behalf. A director may accept the appointment to act as the proxy referred to in the preceding Paragraph of one other director only.

A meeting of the board of directors can be held via visual communication network, and then the directors taking part in such a visual communication meeting shall be deemed to have attended the meeting in person.
Article 17 : The Company establishes audit committee according to Article 14-4 of the Securities and Exchange Act and to shall be composed of the entire number of independent directors. The duty and power of the audit committee and other rules to be followed shall abide by relevant regulations or rules of the company.
Article 18 : The Company may have managerial personnel, the appointment and discharge and the remuneration of the managerial personnel shall be decided in accordance with the provisions of the Company Act.

Chapter V: Accounting

Article 19 : The fiscal year of the Company shall be from January 1 to December 31 every year. At the close of each fiscal year, the Company shall deal with final accounts.
Article 20 : At the close of each fiscal year, the board of directors of the Company shall prepare the following statements and records and forward to general meeting of shareholders according to legal procedure for ratification:
The operating report
The financial statements; and
The surplus earning distribution or loss off-setting proposals
Article 21 : The distribution of employees' compensation shall not be lower than 5% of and the directors’ and supervisors’ compensation shall not be higher than 0.1% of the current year pre-tax income before deducting the distributable employees’, directors’, and supervisor’ compensation of the Company. However, the Company's accumulated losses shall have been covered.
The company shall, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form of shares or in cash and have the profit distributable as director’s and supervisors’ compensation in the form of cash; and in addition thereto a report of such distribution shall be submitted to the shareholders' meeting. The target to be distributed employees’ compensation in the form of shares or cash may include employees of subsidiary companies who conform to certain criteria. Relevant regulations shall be authorized to be prescribed by the board of directors.
Article The annual net profits of final accounts of the Company shall make up for loss first, shall 21-1 secondly appropriate 10% of profit as legal reserve (however, if legal reserve reaches the total capital amount shall not apply), to make an appropriation of another sum as special reserve or make an reversal of special reserve in accordance with laws and regulation, to distribute dividend for special/preferred shares, and to add into the profit not yet distributed before, the allocation proposal shall be prepared by the board of directors and be submitted to and resolved by the shareholders’ meeting.
The Company is an emerging company of growing rapidly, capital intensive business, and is at the stage of stable growth, in order to match up the long-term financial plan of the Company in the future, investment environment and business competition situation, the allocation of dividends shall consider the future capital expenditure budget and capital requirement of the Company, and allocation proposal shall be prepared by the board of director, and then shall be allocated after a resolution adopted by shareholders’ meeting. However, for the allocation

of shareholders’ dividends, the stock dividends shall not exceed two-thirds of distributable dividends in that current year

Article 22 : The allocation of shareholders’ dividends shall be given to shareholders whose name are registered in shareholders’ roster within 5 days prior to the record date fixed for distribution of dividends and bonus.

Chapter VI: Supplementary Provisions

Article 23 : Under the business requirement, the Company may handle external guaranty affairs in accordance with Procedures for Endorsements and Guarantees of the Company
Article 24 : The organization rules of the Company and procedure guidelines of business operation shall be made separately.
Article 25 : In regard to all matters not provided for in this Articles of Incorporation, the Company Act shall govern.
Article 26 : This Articles of Incorporation was made by all promoters on November 21, 2002. The first amendment was made on March 21, 2003, the second amendment was made on May 19, 2004, the third amendment was made on December 10, 2004, the fourth amendment was made on June 28, 2005, and the fifth amendment was made June 16, 2006. The sixth amendment was made on June 13, 2007. The seventh amendment was made on June 13, 2008. The eighth amendment was made on June 19, 2009. The ninth amendment was made on January 6, 2010. The tenth amendment was made on June 29, 2010. The eleventh amendment was made on June 28, 2011. The twelfth amendment was made on June 29, 2012. The thirteenth amendment was made on November 14, 2012. The fourteen amendment was made on June 19, 2014. The fifteenth amendment is on June 8, 2015. The sixteenth amendment is on June 24, 2016.

Appendix 3 Innolux Corporation Shareholding Table of All Directors

Details of the minimum shareholding requirements of all directors:

The minimum shareholding requirements of all directors, and shareholdings recorded on

shareholders register by April 22, 2017

Unit: Per share

			Unit: Per share
Title	Requisite Number of Shares Held	Number of Shares Recorded in Shareholders Register	Shareholding Ratio
Director	159,233,254	215,114,162	2.16%

2. Shareholding of All Directors:

Record Date: April 22, 2017

Unit: Per share

			Unit: Per share
Title	Name	Number of Shares Recorded in Shareholders Register	Shareholding Ratio
Chairman	Jia Lian Investment Ltd. Co., Representative: Jyh-Chau Wang	10,672,661	0.11%
Director	Hong Yang Venture Capital Ltd. Co., Representative: Te-Tsai Huang	176,311,219	1.77%
Director	I-Chen Investment Ltd. Representative: Chuang-Yi Chiu	27,535,972	0.28％
Director	Innolux Education Foundation Representative:Chin-LungTing	594,310	－
Independent Director	Chi Chia Hsieh	－	－
Independent Director	Bo-Bo Wnag	－	－
Independent Director	Stanley Yuk Lun Yim	－	－

Appendix 4

Impact of instant gratuitous allocation of shares on the operating performance and earnings per share and return rate of the shareholders of the Company:

The Company will not allocate gratuitous shares in the current year. Therefore this section does not apply.

AI assistant

INX — AGM Information 2017

52330_rns_2017-07-05_b5992ea4-91b2-4976-be88-b3bba7da191c.pdf

InnoLux Corporation

Handbook for 2017 General Shareholders' Meeting

INDEX

INNOLUX CORPORATION Procedures of 2017Annual General Shareholders Meeting

INNOLUX CORPORATION Agenda of 2017Annual General Shareholders Meeting

Reporting Items

Adopting Items

(Proposed by the Board of Directors)

(Proposed by the Board of Directors)

Discussion Items

(Proposed by the Board of Directors)

(Proposed by the Board of Directors)

(Proposed by the Board of Directors)

(Proposed by the Board of Directors)

Extemporary Motion

Attachment 1

INNOLUX CORPORATION

2016 Operating Report

1. 2016 Operating Report

2. Results of operation scheme

3. Budget Performance

4. Analysis of financial operation and profitability

5. Research development situation

Attachment 2

Audit Committee Review Report

To

Attachment 3

REPORT OF INDEPENDENT ACCOUNTANTS

Opinion

Basis for opinion

Key audit matters

Valuation and impairment of goodwill and property, plant and equipment

Description

How our audit addressed the matter

Additions to property, plant and equipment

Description

How our audit addressed the matter

Estimation of significant disaster insurance claim

Description

How our audit addressed the matter

Other matter – Parent company only financial reports

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

PricewaterhouseCoopers, Taiwan

February 10, 2017

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 and 2015

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 and 2015

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015

REPORT OF INDEPENDENT ACCOUNTANTS

Opinion

Basis for opinion

Key audit matters

Valuation and impairment of goodwill and property, plant and equipment

Description

How our audit addressed the matter

Additions to property, plant and equipment

Description

How our audit addressed the matter

Estimation of significant disaster insurance claim

Description

How our audit addressed the matter

Responsibilities of management and those charged with governance for the parent company only financial statements

Auditor’s responsibilities for the audit of the parent company only financial statements

INNOLUX CORPORATION

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

INNOLUX CORPORATION

INX AGM Information 2017