Stock Code: 3481

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InnoLux Corporation

Handbook for 2020 General Shareholders' Meeting

June 19, 2020

INDEX

	INDEX
I.	Meeting Procedures	1
II.	Meeting Agenda	2
	1.Reporting Items	3
	2.Adopting Items	5
	3.Discussion and Election Items	7
	4.Extemporary Motions	12
III.	Attachments	13
	1. 2019 Operating Report	13
	2. Audit Committee’s Review Report	17
	3. Comparative table for Amendment to “Regulations Share Repurchase and Transfer to Employees”	18
	4. CPA Auditor’s Report and Financial Statements	21
	5. Table of Losses Offsetting of Year 2019	44
	6. Comparative table for Amendment to Procedures for Engaging in Derivatives Trading	45
	7. Comparative table for Amendment to the Rules of Shareholders’ Meeting	47
	8. Name list of directors candidate	50
IV.	Appendices	51
	1. Rules for Shareholders’ Meeting	51
	2. Articles of Incorporation of the Company	57
	3. Election Rules of Directors of the Company	63
	4. Shareholding table of all Directors	65
	5. Impact of instant gratuitous allocation of shares on Company’s operating performance and earning per share	66

INNOLUX CORPORATION

Procedures of 2020 Annual General Shareholders Meeting

Report of Number of Shares Represented by Attendees
Call the Meeting to Order
Chairperson Remarks
Reporting Items
Adopting Items
Discussion and Election Items
Extemporary Motions
Adjournment
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INNOLUX CORPORATION Agenda of 2020 Annual General Shareholders Meeting

Time & Date：9:00 a.m. on June 19 2020

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 2019.
(2) Audit Committee’s Review Report.

(3) Enactment and amendment of Regulations for Share Repurchase of the Company

(4)The Status of Treasury Stocks Transferring.
(5) Issue of overseas unsecured and convertible Corporate Bonds.
Adopting Items

(1) Adoption of the Operating Report and Financial Statements for the year of 2019.

(2) Adoption of the Proposal for profit & loss for the year of 2019.

Discussion and Election Items
(1) The Proposal of cash distribution from capital surplus.

(2) The proposal of transferring shares bought back to employees at a price lower than the average price of the actually purchased shares is hereby submitted for consideration.

(3) Amendment to the Procedures for Engaging in Derivatives Trading of the Company.

(4) Amendment to the Rules of Shareholders’ Meeting of the Company.

(5) By-election of the directors of the Company.
Extemporary Motions
Adjournment
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Reporting Items

Operating Report of the year of 2019. Review is respectfully requested.
Explanation: 20198 Operating Report is attached hereto as Attachment 1(page 13~16)
Audit Committee’s Review Report. Review is respectfully requested.
Explanation: Audit Committee’s Review Report is attached hereto as Attachment 2 (page 17)
Formulation and amendment of Regulations for Share Repurchase of the Company Explanation:The Regulations for Share Repurchase and revised comparative table are attached hereto as Attachment 3（Page 18-20）.
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The Status of Treasury Stocks Transferring. Explanation: The Status of Treasury Stocks Transferring.

Treasury stocks: Batch Order	01thBatch	02thBatch
Purpose of buy-back	transferring shares to its employees	maintain the company's credit and shareholders' rights and interests
Timeframe of buy-back	2019/07/16~2019/09/14	2019/08/20~2019/10/21
Price range	NT$5.08~ NT$11.00	NT$4.93~ NT$10.47
Class,quantity of shares bought back	80,000,000 shares	241,000,000 shares
Value of shares bought- back(in NT$thousands)	NT$ 618,580	NT$ 1,681,043
Shares sold/transferred	－	241,000,000 shares
Accumulated number of companyshares held	80,000,000 shares	80,000,000 shares
Percentage of total companyshares held(%)	0.82%	0.82%

Issue of overseas unsecured and convertible Corporate Bonds. Explanation: In order to pay the overseas purchases, the Company issued overseas unsecured ordinary corporate bonds, Details as follows:

Unit: USD

	Unit: USD
Tranche/Type	The 1 st Tranche of Unsecured Ordinary Corporate Bonds,2019
Date of Approval	January15,2020
Date of Issuance	January22,2020
Date of Expire	January22,2025
Total Issuance Amount	300,000,000
Face value	200,000
Issue Price	$100(at Par)
Issue Location	Singapore
Conversionprice	NT$10.72
Term	2020.04.23～~2024.12.23
Coupon Rate(fixed rate)	0%
Principal Payment	100%principal repayment upon maturity
Trustee	BNY Mellon
Debt Service Agency	BNY Mellon
Exercise of the Issuance	Fullyexercised inQ1 2020

Adopting Items

(Proposed by the Board of Directors)

Proposal 1 : 2019 Operating Report and the Financial Statement of the Company. Adoption is respectfully requested.
Explanation : 1. 2019 financial statements of the Company had been duly audited by CPA Wu, HanChi and CPA Liang Hua-Ling of Pricewaterhousecoopers.
The Operating report and finance statements are attached hereto as Attachment 1&4 (page 13~16 and 21~43).
Resolution :
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(Proposed by the Board of Directors)

Proposal 2 : The Proposal for making up losses for the year of 2019. Adoption is respectfully requested.
Explanation : 1. The Company's undistributed earnings at the beginning of 2019 was NT$47,354,032,180. After deducting the retained earnings adjustment of NT$46,596,037, the after-tax net loss of the current period of NT$17,442,990,310 and the special earnings reserve of NT$2,661,974,482, the Company's undistributed earnings at the end of 2019 was NT$27,202,471,351.
Table of Losses Offsetting of Year re attached hereto as Attachment 5(page 44)。
Resolution :
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Discussion and Election Items

(Proposed by the Board of Directors)

Proposal 1 : Proposal of cash distribution from capital surplus. Approval is respectfuly requested.
Explanation : 1. Pursuant to Artice 241 of the Company Act, the Company will distribute the capital reserve of income derived from the issuance of new shares at a premium at the amount of NT$ 963,107,198. The distribution will be made according to shareholders and the shares held by the shareholders registered on the shareholders' roster on the distribution record date. Each share will receive the distribution in cash at the amount of NT$0.1. The distribution by cash shall be calculated until NT$1. For the amount less than NT$1 shall be completely round down. It is proposed to authorize the Chairman to seek certain person to fully handle the remainder of the distribution less than NT$1.
In the event that there is change in capital of the Company affecting the outstanding shares of the Company, causing the distribution ratio shall be changed and adjusted, it is proposed that the Chairman be authorized to handle this situation.
It is proposed that the Chairman be authorized to decide the distribution record date, the distribution date, and other related matters after this proposal is resovled by the shareholders’ meeting.

Resolution :

(Proposed by the Board of Directors)

Proposal 2 : The proposal of transferring shares bought back to employees at a price lower than the average price of the actually purchased shares is hereby submitted for consideration., Approval is respectfuly requested.
Explanation : 80,000,000 shares of the Company were bought back in the first trench by the Company. In order to stimulate the employees and improve their loyalty, the Company plans to transfer the shares to employees at an average price of NT$7.73 which is lower than the actual price of the shares bought back. According to Article 10-1 of the Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies, the Company will transfer the shares to employees at an average price lower than the actual price of the shares bought back, and the following is to be stated:
(1) Transfer Price, Discount Ratio, Calculation Basis and Reasonableness: The actual transfer price is NT$3.50, which is 45.28% of the average price of NT$7.73. The discount rate is reasonable according to the current economic situation and the future operation of the Company.
(2) Number of Shares Transferred, Purpose and Reasonableness:
1. Number of shares transferred: 80,000,000.
2. Purpose: To stimulate employees and improve their loyalty.
3. Reasonableness: It is estimated that 80,000,000 shares will be transferred to
  - employees, accounting for 0.82% of the issued shares; this is in line with the relevant laws and regulations. It is also reasonable that the purpose of transfer is to stimulate employees and talents.
(3) Qualifications of the Subscribing Employees and Number of Shares That May Be Subscribed to:
- Qualification of employees: In accordance with Article 4 of the Company's Measures for Buyback of Shares for Transfer to Employees.
- Number of shares that may be subscribed to: To be handled in accordance with Article 5 of the Company's Measures for Buyback of Shares for Transfer to Employees.
(4) Impact on Shareholders' Rights:
1. Amount of possible expensed funds and dilution of earnings per share: Based on the closing price of NT$6.27 and the transfer price of NT$3.50 on the day before the 8th board of directors’ meeting of the Company (May 5, 2020), the possible amount of expensed funds is about NT$221,600 thousand (to be calculated separately according to the actual transfer base date); the dilution of per-share earnings shall be the amount of possible expensed funds divided by the number of the Company’s shares issued and outstanding, which is 0.0228%.
2. State the financial burden on the Company caused by the share transfer to employee at a price lower than the average price of the actually purchased shares: The average price of the treasury shares bought back by the Company is NT$7.73 per share, and totally 80,000,000 shares were bought back with an amount of NT$618,580,223. The cash outflow calculated by transferring 80,000,000 shares to employees at NT$3.50 per share is NT$338,979 thousand.

Resolution :

(Proposed by the Board of Directors)

Proposal 3 : Amendments to “ Procedures for Engaging in Derivatives Trading” of the Company. Approval is respectfully requested.

Explanation : 1. In conformity with the amendments of laws & regulations , it is proposed to amend
- “ Procedures for Engaging in Derivatives Trading” of the Company.
The comparative table of the amended provisions is attached hereto as Attachment 6 (page 45~46).

Resolution :

(Proposed by the Board of Directors)

Proposal 4 : Amendments to “Rules of Shareholders’ Meeting” of the Company. Approval is respectfully requested.

Explanation : 1. In conformity with the amendments of laws & regulations , it is proposed to amend “Rules of Shareholders’ Meeting” of the Company.
The comparative table of the amended provisions is attached hereto as Attachment 7 (page 47~49).

Resolution :

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(Proposed by the Board of Directors)

Proposal 5 : Proposal to by-election of directors. Approval is respectfully requested.

Explanation : 1. The 8th director of the company is missing a seat, and it is planned to conduct a byelection according to the company
One director shall be elected this time, the term of office from the date of election to June 30, 2022.
The number of nominated directors is prescribed under the Articles of Incorporation; the candidate nomination system is adopted in accordance with Articles of Incorporation. Shareholders shall elect the directors and supervisors from the list of the candidates. For the educational background, experience, and other related information of the candidates, please refer to Attachment 8 (page 50)
It is proposed to submit for election.

Election Results:

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Extemporary Motion

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Attachment 1

INNOLUX CORPORATION

2019 Operating Report

1. 2019 Operating Report

In 2019, the global economy fell into a synchronous slowdown. According to the statistics of the International Monetary Fund, the economic growth rate was only 3%, which is the lowest since the global financial crisis, and represents the most serious decline since the synchronous global economic recovery to an annual growth rate of 3.8% in 2017. However, the sluggish economic growth this time is mainly due to the uncertainty caused by global tariff barriers and fierce trade conflicts, resulting in the decline of both capital investment and demand for goods, and the slowdown of global economic growth.

Due to the continuous new panel capacity in mainland China, the oversupply of the panel market, the continuous decline of the panel price, and the impact of the tariff increase due to the Sino-US trade war, the overall operation and growth of the Company has been severely challenged. The consolidated revenue in 2019 was NT$252 billion, a decline of 9.8%, with an after-tax net loss of NT$17.4 billion and a loss per share of NT$1.77. However, owing to the hard work of the Company's business team, the business continues to generate a positive cash flow with an annual EBITDA of 6.0%; the overall financial status is still stable.

After a whole year of refinement, and with the promulgation of automobile emission standards, the finalization of the 5G telecommunication license requirement, and the easing of Sino-US trade conflicts, the supply chain of the panel industry has made competitive and cooperative adjustments; some of the industry peers have stopped production and even closed down, which greatly improved the market supply and demand situation. In the fourth quarter, although various economic data have shown a gradually better trend, there are still tense geopolitics and oil and raw material price fluctuations, as well as the chain effect caused by the COVID-19 pandemic. The Company will continue to adjust its business strategy, improve its technology, develop new applications, tap on products with high-end technology, develop emerging markets, and create maximum benefits for the Company and its shareholders through the improvement of technical quality.

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 2019 our consolidated revenue was NT$ 251,971,209 thousands, which decrease NT$27,404,906 thousands or 9.8% by compared with the 2018 yearly revenue of NT$ 279,376,115 thousands. In 2019 our annual profit after tax which belonged to mother company was NT$17,442,990 thousands, and the annual loss per share is NT$0.22.

3. Budget Performance

Since we did not disclosure the financial forecast in 2019, we don’t have to disclose our budget performances.

4. Analysis of financial operation and profitability

	Item	2018	2019
Finacial structure analysis (%)	Debt ratio (%)	38.10	37.23
	Long term funds to real estates, factories and equipments(%)	141.15	129.16
Debt-paying	Current ratio (%)	141.12	120.12

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	Item	2018	2019
ability	Quick ratio (%)	113.81	88.51
	Interestguarantee (times)	12.59	(15.02)
Profitability	Return on total assets (%)	0.64	(4.25)
	Return on total shareholders’ equity(%)	0.86	(7.16)
	Operatingincome to capital (%)	4.86	(20.53)
	Pre-tax income to capital (%)	6.60	(17.02)
	Net income to sales (%)	0.80	(6.92)
	Earnings per share (NT$)	0.22	(1.77)

5. Research development situation

In terms of TV panels, the Company initiated the 8.6 generation panel production line planning and expanded the 50 inch panel production capacity. Subsequently, a number of new panel manufacturers followed the Company's footsteps to invest in more than four 8.6 generation panel factories, successfully pushing the 50 inch specification to the mainstream market position to become the main product for TV-brand oriented customers. These newcomers jointly develop high-quality and high-value-added products with the Company, and jointly grasp business opportunities and share achievements with the Company.

Since 2018, the Company's TV panel products have also been extended from the original OC (open-cell) and panel modules to TV sets, covering all the major sizes of 24"/32"/40"/50"/65", and expanded product exports. Compared with OC products of the same size, TV set products can not only create more than 2 to 2.5 times of revenue, but also extend the related technology to high-level and large-scale products, among which the most representative one is the world's largest 120 inch 8K highspecification TV. Moreover, in addition to entering the market of TV sets, the Company also plans to enter the public display (PID) market, which has not only a high gross profit margin, but also a more than 20% annual growth potential in the future.

In the aspect of notebook panel, the Company cooperates with major brand customers and leads the world in introducing LTPS (low temperature polycrystalline silicon)/IGZO advanced process technology into privacy displays, and also developed products with a new aspect ratio of 3:2/16:10, and leads the world in launching the 16.1 inch FHD to be exclusively provided to world-class customers. In addition, the Company has developed products with a high contrast ratio of 3000:1 (compared with the industry peers’ 800 ~ 1000:1) and narrow-border products to greatly improve the display quality. The Company has also integrated various advanced technological breakthroughs to promote the performance of TFT-LCD panels in cost structure, quality reliability and other key factors to surpass OLED panels.

In terms of small and medium-sized panels, the Company is making a diversified development in sizes ranging from 1.4 inches to 10 inches for wide applications in mobile devices and consumer electronic products, including smart phones, functional phones, tablets, home appliances, smart speakers, smart watches, VR head-mounted displays (HMDs), digital cameras, multi-function printers, entertainment game machines and automotive electronic displays. On technology, we will continue to expand the penetration of low-temperature polycrystalline silicon (LTPS) and IPS technology to meet the market demand of high resolution and wide perspective, while providing lighter, thinner, powersaving, embedded integrated touch, free form and full screens products to enhance the value; we will effectively combine the Company's advanced technology and large-scale production capacity, and closely cooperate with major global customers to achieve a win-win situation.

With the application of touch technology in various mobile devices, the Company is actively

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developing an integrated touch solution to successfully improve the optical and integrated functions of touch panel. The Company leads the industry in introducing the TOD (Touch on Display) touch solution, which is widely used in mobile phones, tablets and notebook products. With the development of embedded integrated touch technology and the mature supply chain, we have also developed the TID (Touch in Display) touch solution, making the product appearance simpler and lighter. At this stage, we are trying to inject 3D touch DST (Deep Sensing Technology) technology and the active stylus solution under our existing TID (Touch in Display) architecture, and continuously develop new technologies and actively apply them to mobile phones, tablet computers, consumer electronics, automotive and IT products to provide customers and consumers with better product experience, with the goal of becoming a comprehensive touch integrated solution provider covering displays, touch screens and protective glasses.

6. Digital Transformation of the Company

The Company believes that industry 4.0 will change the manufacturing mode and upgrade it from touch-control one-stop production line automation 3.0 in 2012 to "zero touch" light-off factory in 2019; through AI engineering key technology, the automatic manufacturing technology will gradually improve, and extend upward to the glass supply chain’s supply and demand management and downward to intelligent logistics on the consumer end, and from manufacturing, quality and supply chain management to intelligent office; through AI human-machine cooperation, the talent value will be improved to replace repetitive routine work to show the effect of AI intelligent interconnection, solid management and doubled yield in quality. AI intelligent factory will drive the trend of high quality and high specification, which is the main axis of value-added strategy of Innolux Corporation.

The Company uses big data to connect the intelligent factory, supply chain, intelligent office and management intelligence of the front-end TFT LCD factory and the back-end LCM module to achieve intelligent manufacturing and flexible decision-making to achieve win-win through interconnection, and solve production problems quickly with intelligent manufacturing.

The Company's digital transformation comes three stages:

Industry 4.0 promotion: combining big data and AI to connect the front and back end intelligent factories
Front end: introducing process intelligence (such as intelligent error proofing, intelligent quality, etc.), equipment intelligence (such as intelligent image of automatic equipment plus non- landing production, intelligent warehousing and logistics, etc.), management intelligence (such as intelligent planning and scheduling, intelligent factory security, etc.) to multiply the benefits of intelligent factory. Through AI big data and actual process monitoring and management, the quality yield is greatly improved, and the number of major abnormal cases (AERB) is decreasing year by year.
Back end: combining automation and AI Artificial Intelligence, and using cross-plant costructuring and parallel implementation to reduce the manpower demand for cumbersome process by handling, assembling and testing robots to decrease the number of employees from 100,000 in 2015 to 55,000, saving up to NT$7 billion in HR cost.
Intelligent management office: introducing the intelligent management office to make improvements from the three aspects of technology, product and brand to promote the technology platform; the products have the advantages of specification priority, cost differentiation and quality differentiation; achieve the promotion of the Company's brand value and customer support through commercial development.
Double-track transformation for innovation: The Company is building its strength in the panel industry, focuses on technology and manufacturing, and devotes itself to transformation to develop and provide one-stop customized production, and combine research and development, system, manufacturing and sales to provide an all-round panel product solution and becomes the best strategic partner of customers.
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In the future, based on "playing a one-stop, building big data, sharing smart finance and creating a win-win situation", the Company outlines Taiwan's supply chain layout strategy and vision for the world's factories, and joins hands with the supply chain to upgrade to the world's leading intelligent factory with years of automation manufacturing strength.

President: Manager： Chief Accountant：

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Attachment 2

Audit Committee Review Report

The Board of Directors has duly submitted the 2019 operating report, financial statements, and table of losses off-setting. 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 losses off-setting. Therefore, I issue this audit report for acknowledgment in accordance with the Securities and Exchange Act and the Company Act.

General Shareholders Meeting of the Company in 2020

Chairman of the Audit Committee

Chi-Chia Hsieh

Date: May 5, 2020

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Attachment 3

Innolux Corporation

Regulations Share Repurchase and Transfer to Employees

Enactment date：July 15, 2019

Article 1 For the purpose of encouraging our employees and to build cohesion among the employees, the Company hereby, pursuant to Article 28-2, Paragraph 1, Subparagraph 1 of the “Securities and Exchange Act” and the “Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies” issued by Financial Supervisory Commission R.O.C., establishes the “Plan of Share Repurchase and Transferring to the Employees” (the “Plan”). Except otherwise provided in relevant laws or regulations, all share repurchase and transferring to the employees of the Company shall be implemented in compliance with the Plan. Article 2 Type of transfer of shares, content of rights and restrictions on rights The shares to be transferred to the employees are ordinary shares. Except as otherwise provided in relevant laws or regulations or in this Plan, the rights and obligations embedded thereon are the same with other ordinary shares of the Company. Article 3 Transfer period The repurchased shares can be transferred to employees in one time or several times, such subscription day(s) shall be set within 5 years from the date of share-repurchase. Article 4 Transferee’s eligibility

All employees of the company and the company who directly or indirectly hold more than 50% of the voting shares of the same invested company if they have served three months before the subscription base date or have made special contributions to the company with the approval of the chairman of the report Full-time employees of the company (including overseas subsidiaries) may be eligible for subscription according to the subscription amount set in Article 5 of these Measures. Article 5 Numbers of shares to be subscribed by employees The Chairman shall decide the number of shares to be subscribed by considering certain factors, such as the employees’ level, seniority or special contribution to the Company, together with the number of treasury shares held by the Company as of the record date of subscription and the maximum number of shares that can be subscribed by an individual employee, etc.

Failure to subscribe and make the payment for the shares before the due date shall be deemed as giving up the right to subscribe. The chairman is authorized to have other employees to subscribe the remaining shares that are not fully subscribed. Article 6 The transfer procedure of this share repurchase program is described as follows:

(1) In accordance with the resolution of the board of directors, announce, declare and buy back the shares of the company within the execution period
(2) Board of Directors authorizes the Chairman to set and announce the number of shares transferred in several stages employees' subscription date, the standards for numbers
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of shares to which employees may subscribe, the period for payment or subscriptions, rights, and limitations, etc.

(3) To calculate the actual share subscription with payment received, and transfer the shares accordingly.
Article 7 The transfer price of the shares The transfer price of the repurchase shares shall be the average price of the actual
repurchase. If the number of the Company’s issued and outstanding ordinary shares increases or decreases prior to the transfer, the transfer price shall be adjusted proportionately. Or, in accordance with the provisions of the company's articles of association, the employee who transfers to the employee at an average price lower than the actual purchase price shall, prior to the transfer, submit the attendance of the majority of the shareholders of the most recent shareholder's issued shares, and attend the voting rights of the shareholders. The consent of two or more shall be dealt with in the matters stipulated in Article 10 of the “Proposal for the Company to buy back the shares of the company” in the convening of the shareholders' meeting.
- Adjustment formula of the transfer price:

Adjusted Exercise Price = (the average price of the actual repurchase × number of issued and outstanding ordinary shares as of the time of

reporting repurchase shares) / (number of total issued and outstanding shares before transferring the repurchase shares to the employees)

Article 8 Rights and obligations of shares after transfer After the repurchased shares are being transferred and registered under employees’ names, unless otherwise specified, the rights and obligations associated with the shares are the same as the original associated with the common shares.

Article 9 Other related company and employee rights and obligations (1) The taxes and fees incurred in the transfer of shares in accordance with these Measures shall be handled in accordance with the laws and regulations at the time of the transfer and the relevant operations of the company.
(2) The company may reserve the right to adjust or stop the implementation according to the overall profitability of the operation, and the employees subject to the obligation to maintain confidentiality.

Article 10 This Plan shall take affect after being affirmatively resolved by the Board of Directors and may be amended by a resolution of the Board of Directors.

Article 11 The enactment and any amendment of this Plan shall be reported to the shareholders meeting.

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Comparative table for Amendments to

Regulations Share Repurchase and Transfer to Employees

Article No.	The current Article	The Amended Article	Reasons for Amendment
Article 4	Transferee’s eligibility Any employee of the Company who has made a special contribution to the company before the date of the subscription or has made a special contribution to the company and has submitted the approval of the chairman of the board of directors and employees of domestic and foreign control or subordinate companies that meet certain conditions may be determined in accordance with Article 5 of these Measures. The subscription amount is eligible for subscription.	Transferee’s eligibility All employees of the company and the company who directly or indirectly hold more than 50% of the voting shares of the same invested company if they have served three months before the subscription base date or have made special contributions to the company with the approval of the chairman of the report Full-time employees of the company (including overseas subsidiaries) may be eligible for subscription according to the subscription amount set in Article 5 of these Measures.	Express transferee’s eligibility
Article 9	Other related company and employee rights and obligations (1~~)The company's share~~ ~~-~~ ~~purchase~~ ~~shares are transferred to~~ ~~employees and may not be~~ ~~transferred within two years.~~ (2)The taxes and fees incurred in the transfer of shares in accordance with these Measures shall be handled in accordance with the laws and regulations at the time of the transfer and the relevant operations of the company. (3)The company may reserve the right to adjust or stop the implementation according to the overall profitability of the operation, and the employees subject to the obligation to maintain confidentiality.	Other related company and employee rights and obligations (1~~)The company's share~~ ~~-~~ ~~purcha~~ ~~se~~ ~~shares are transferred to~~ ~~employees and may not be~~ ~~transferred within two years.~~ (2)The taxes and fees incurred in the transfer of shares in accordance with these Measures shall be handled in accordance with the laws and regulations at the time of the transfer and the relevant operations of the company. (3)The company may reserve the right to adjust or stop the implementation according to the overall profitability of the operation, and the employees subject to the obligation to maintain confidentiality.	Remove transfer restrictions and adjust the item

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Attachment 4

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Innolux Corporation:

Opinion

We have audited the accompanying consolidated balance sheets of Innolux Corporation (the “Company”) and its subsidiaries as at December 31, 2019 and 2018, 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, 2019 and 2018, 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 Consolidated 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 consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

The key audit matters in relation to the consolidated financial statements of the Company and its

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subsidiaries for the year ended December 31, 2019 are outlined as follows:

Inventory valuation

Description

The industry is characterized by the significant fluctuations closely in connection with the economic environment. As the technology evolves rapidly, the Group’s existing products may become obsolete when the customers demand for new products or the Group fails to compete with the evolutionary production approach. The Group evaluates the inventory by taking into account of allowance, obsolescence or trivial sales amount and the cost has been written down to the net realizable value. The abovementioned allowance for inventory valuation losses mainly arise from the excess of the cost of inventory over the net realizable value of inventory. For details of inventory, please refer to Note 6(6). There is a risk of the excess of the cost of inventory over the net realizable value of inventory as a result of that the amounts of inventories are material and the sales of related products may have significant fluctuations; we consider inventory valuation a key audit matter.

How our audit addressed the matter

We obtained the net realizable value report of inventory used by management for evaluation. And obtained an understanding of sales price basis adopted by management for abovementioned inventory along with the related supporting documents to assess the reasonableness of net realizable value and the appropriateness of valuation basis.

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 Notes 6(8) and 6(11).

The Group 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

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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.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Innolux Corporation as at and for the years ended December 31, 2019 and 2018.

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

23 -

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:

A. 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.
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 Group’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 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.
E. 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.
F. 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
24 -

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 13, 2020

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.

25 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 7 7 6(6) 8 6(2) 6(3) 6(7) 6(8)(30), 7 and 8 6(9) 6(10) 6(11)(30) and 8 6(28) 6(8) and 8	December31,2019 $ 34,732,975 283,906 19,704,149 39,889,807 2,488,519 848,402 30,439,076 4,597,608 133,807 133,118,249 3,044,756 4,268,485 1,333,570 194,382,436 6,095,351 527,232 17,577,644 7,349,810 2,066,813 236,646,097 $ 369,764,346	December31,2018
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortized cost - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 130X Inventory 1410 Prepayments 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 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			$ 33,847,328 398,913 51,426,053 45,064,157 4,449,977 1,489,260 30,856,552 1,993,152 208,724
			169,734,116
			1,599,869 3,834,376 1,802,921 206,617,960 - 551,970 17,681,485 7,223,864 2,873,043
			242,185,488
			$ 411,919,604

(Continued)

26 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

Liabilities andEquity	Notes December31,2019 December31,2018 6(2) $ 345,463 $ 23,779 47,656,235 52,350,845 7 3,784,991 2,652,127 6(12) and 7 28,622,732 32,581,609 2,311,481 5,593,063 6(17) and 9 6,775,927 6,782,914 453,848 - 6(14) 16,022,013 16,194,486 4,845,455 4,095,853 110,818,145 120,274,676 6(13) 97,018 - 6(14) 19,604,768 35,142,090 6(28) 1,465,526 880,013 4,977,024 - 6(15) 691,836 632,120 26,836,172 36,654,223 137,654,317 156,928,899 6(18) 97,110,720 99,520,720 6(19) 100,362,379 99,648,115 6(20) 7,870,713 7,648,437 4,663,463 1,090,721 29,864,446 51,746,175 6(21) ( 7,325,437) ( 4,663,463) 6(18) ( 618,580) - 231,927,704 254,990,705 182,325 - 232,110,029 254,990,705 $ 369,764,346 $ 411,919,604
Current Liabilities 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 2280 Lease liabilities - current 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 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 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury shares 31XX Equity attributable to owners of the parent 36XX Non-controlling interests 3XXX Total equity 3X2X Total liabilities and equity

Liabilities andEquity

Notes
December31,2019
December31,2018
6(2)
$ 345,463
$ 23,779
47,656,235
52,350,845
7
3,784,991
2,652,127
6(12) and 7
28,622,732
32,581,609
2,311,481
5,593,063
6(17) and 9
6,775,927
6,782,914
453,848
-
6(14)
16,022,013
16,194,486
4,845,455
4,095,853
110,818,145
120,274,676
6(13)
97,018
-
6(14)
19,604,768
35,142,090
6(28)
1,465,526
880,013
4,977,024
-
6(15)
691,836
632,120
26,836,172
36,654,223
137,654,317
156,928,899
6(18)
97,110,720
99,520,720
6(19)
100,362,379
99,648,115
6(20)
7,870,713
7,648,437
4,663,463
1,090,721
29,864,446
51,746,175
6(21)
(
7,325,437) (
4,663,463)
6(18)
(
618,580)
-
231,927,704
254,990,705
182,325
-
232,110,029
254,990,705
$ 369,764,346
$ 411,919,604

Current Liabilities
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
2280
Lease liabilities - current
2320
Long-term liabilities, current portion
2399
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2530
Corporate bonds payable
2540
Long-term borrowings
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
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
3320
Special reserve
3350
Unappropriated retained earnings
3400
Other equity interest
3500
Treasury shares
31XX
Equity attributable to owners of
the parent
36XX
Non-controlling interests
3XXX
Total equity
3X2X
Total liabilities and equity

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

27 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items	Notes 2019 2018 6(22) and 7 $ 251,971,209 $ 279,376,115 6(6)(26) and 7 ( 248,957,129)( 252,562,557) 3,014,080 26,813,558 6(26) ( 3,676,803)( 3,071,282) ( 6,806,373)( 6,771,502) ( 12,464,800)( 12,135,478) ( 22,947,976)( 21,978,262) ( 19,933,896) 4,835,296 6(23) 3,256,859 3,025,467 6(24) 876,046 ( 1,168,235) 6(25) ( 1,031,733)( 566,967) 6(7) 307,296 443,869 3,408,468 1,734,134 ( 16,525,428) 6,569,430 6(28) ( 914,844)( 4,346,668) ($ 17,440,272) $ 2,222,762
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 (loss) profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 (Loss) profit before income tax 7950 Income tax expense 8200 (Loss) profit for the year

Items

Notes
2019
2018
6(22) and 7
$ 251,971,209
$ 279,376,115
6(6)(26) and 7
(
248,957,129)(
252,562,557)
3,014,080
26,813,558
6(26)
(
3,676,803)(
3,071,282)
(
6,806,373)(
6,771,502)
(
12,464,800)(
12,135,478)
(
22,947,976)(
21,978,262)
(
19,933,896)
4,835,296
6(23)
3,256,859
3,025,467
6(24)
876,046 (
1,168,235)
6(25)
(
1,031,733)(
566,967)
6(7)
307,296
443,869
3,408,468
1,734,134
(
16,525,428)
6,569,430
6(28)
(
914,844)(
4,346,668)
($ 17,440,272) $ 2,222,762

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 (loss) profit
Non-operating income and
expenses
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Share of profit of associates and
joint ventures accounted for
under equity method
7000
Total non-operating income
and expenses
7900
(Loss) profit before income tax
7950
Income tax expense
8200
(Loss) profit for the year

(Continued)

28 -

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items	Notes 2019 2018 6(15) ($ 58,246)($ 29,878) 6(21) 299,431 ( 2,828,816) 6(28) 86,781 5,976 327,966 ( 2,852,718) 6(21) ( 2,951,930)( 828,563) 6(21) ( 85,365) 84,637 ( 3,037,295)( 743,926) ($ 2,709,329)($ 3,596,644) ($ 20,149,601)($ 1,373,882) ($ 17,442,990) $ 2,222,762 $ 2,718 $ - ($ 20,151,561)($ 1,373,882) $ 1,960 $ - 6(29) ($ 1.77) $ 0.22 ($ 1.77) $ 0.22
Other comprehensive income (loss) (net) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit plans 8316 Unrealized gains (losses) on financial assets at fair value through other comprehensive income 8349 Income tax related to 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 that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8370 Share of other comprehensive (loss) income of associates and joint ventures accounted for under equity method 8360 Components of other comprehensive loss that will be reclassified to profit or loss 8300 Other comprehensive loss for the year, net of tax 8500 Total comprehensive loss for the year (Loss) profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Other comprehensive (loss) income attributable to: 8710 Owners of the parent 8720 Non-controlling interest (Loss) earnings per share (in dollars) 9750 Basic (loss) earnings per share 9850 Diluted (loss) earnings per share

Items

Notes
2019
2018

6(15)
($ 58,246)($ 29,878)
6(21)
299,431 (
2,828,816)

6(28)
86,781
5,976
327,966 (
2,852,718)
6(21)
(
2,951,930)(
828,563)
6(21)
(
85,365)
84,637
(
3,037,295)(
743,926)
($ 2,709,329)($ 3,596,644)
($ 20,149,601)($ 1,373,882)
($ 17,442,990) $ 2,222,762
$ 2,718
$ -
($ 20,151,561)($ 1,373,882)
$ 1,960
$ -
6(29)
($ 1.77) $ 0.22
($ 1.77) $ 0.22

Other comprehensive income
(loss) (net)
Components of other
comprehensive income (loss) that
will not be reclassified to profit or
loss
8311
Remeasurement of defined
benefit plans
8316
Unrealized gains (losses) on
financial assets at fair value
through other comprehensive
income
8349
Income tax related to 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 that will be
reclassified to profit or loss
8361
Financial statements translation
differences of foreign operations
8370
Share of other comprehensive
(loss) income of associates and
joint ventures accounted for
under equity method
8360
Components of other
comprehensive loss that will
be reclassified to profit or loss
8300
Other comprehensive loss for the
year, net of tax
8500
Total comprehensive loss for the
year
(Loss) profit attributable to:
8610
Owners of the parent
8620
Non-controlling interest
Other comprehensive (loss)
income attributable to:
8710
Owners of the parent
8720
Non-controlling interest
(Loss) earnings per share (in
dollars)
9750
Basic (loss) earnings per share
9850
Diluted (loss) earnings per
share

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

29 -

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

			Equity attributable to	Equity attributable to	owners ofthe pare	nt					Total
Common stock	Capital surplus $ 99,646,919 - 99,646,919 - - - - - - 1,196 $ 99,648,115 $99,648,115 - - - - - - ( 14,755) 24 - 728,956 - 39 $ 100,362,379		RetainedEarnings	Unappropriated earnings		Other EquityIntere	st	Unrealized gain (loss) on available-for-sale financial assets $ 4,626,502 ( 4,626,502) - - - - - - - - $ - $ - - - - - - - - - - - - - $ -	Treasuryshares	Total
		Legal reserve $ 3,945,576 - 3,945,576 - - - 3,702,861 - - - $ 7,648,437 $7,648,437 - - - 222,276 - - - - - - - - $ 7,870,713	Special reserve $ 3,418,804 - 3,418,804 - - - - ( 2,328,083) - - $ 1,090,721 $1,090,721 - - - - 3,572,742 - - - - - - - $ 4,663,463		Financial statements translation differences of foreign operations	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
$ 99,520,720 - 99,520,720 - - - - - - - $ 99,520,720 $99,520,720 - - - - - - - - - ( 2,410,000 ) - - $ 97,110,720				$ 58,883,750 - 58,883,750 2,222,762 ( 23,902 ) 2,198,860 ( 3,702,861 ) 2,328,083 ( 7,961,657 ) - $ 51,746,175 $51,746,175 ( 17,442,990 ) ( 46,597 ) ( 17,489,587 ) ( 222,276 ) ( 3,572,742 ) ( 597,124 ) - - - - - - $ 29,864,446	($ 5,717,223) - ( 5,717,223) - ( 743,926) ( 743,926) - - - - ($ 6,461,149) ($6,461,149) - ( 3,036,537) ( 3,036,537) - - - - - - - - - ($ 9,497,686)	$ - 4,626,502 4,626,502 - ( 2,828,816) ( 2,828,816) - - - - $ 1,797,686 $1,797,686 - 374,563 374,563 - - - - - - - - - $ 2,172,249			$ - - - - - - - - - - $ - $ - - - - - - - - - ( 2,299,624) 1,681,044 - - ($ 618,580)	$ 264,325,048 - 264,325,048 2,222,762 ( 3,596,644) ( 1,373,882) - - ( 7,961,657) 1,196 $ 254,990,705 $254,990,705 ( 17,442,990) ( 2,708,571) ( 20,151,561) - - ( 597,124) ( 14,755) 24 ( 2,299,624) - - 39 $ 231,927,704	$ 264,325,048 - 264,325,048 2,222,762 ( 3,596,644) ( 1,373,882) - - ( 7,961,657) 1,196 $ 254,990,705 $254,990,705 ( 17,440,272) ( 2,709,329) ( 20,149,601) - - ( 597,124) ( 14,755) 38 ( 2,299,624) - 180,351 39 $ 232,110,029

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

30 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation and amortization
Net (gain) loss on financial assets or liabilities at
fair value through profit or loss
Expected credit loss
Share of loss of associates and joint ventures
accounted for under equity method
Gain from disposal of investments
Loss on disposal of property, plant and
equipment
Gain on lease modification
Interest expense
Interest income
Dividend income
Unrealized foreign exchange loss
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
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
2019
2018
($ 16,525,428 )
$ 6,569,430
6(26)
35,129,951
35,878,131
(
1,340,458 )
301,253
-
100,233
6(7)
(
307,296 ) (
443,869 )
6(24)
(
21,069 ) (
968 )
6(24)
219,607
267,509
(
951 )
-
6(25)
1,031,733
566,967
6(23)
(
1,030,073 ) (
991,116 )
6(23)
(
123,952 ) (
236,574 )
60,811
149,778
436,671
(
22,574 )
5,182,421
(
1,514,778 )
1,972,618
13,277,320
582,673
(
214,028 )
417,698
(
597,531 )
(
2,773,889 ) (
505,320 )
34,906
(
55,873 )
(
4,695,964 )
1,474,345
1,132,690
87,117
(
2,467,509 ) (
1,755,666 )
(
6,987 )
1,322,052
573,285
370,916
(
3,285) (
78,805)
17,478,203
53,947,949
(
3,642,821) (
1,368,330)
13,835,382
52,579,619

(Continued)

31 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through
profit or loss
Proceeds from disposal of financial assets at fair
value through profit or loss
Acquisition of investments in equity instruments
measured at fair value through other comprehensive
income
Proceeds from disposal of financial assets at fair
value through other comprehensive income
Decrease (increase) in financial assets at amortized
cost - current
Increase in investment accounted for under equity
method
Proceeds from disposal of investment accounted for
under equity method
Decrease (increase) in other financial assets
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Net cash flow from acquisition of subsidiaries
(Increase) decrease in other non-current assets
Interest received
Dividends received
Net cash flows from (used in) investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term borrowings
Payment of long-term borrowings
Interest paid
Payment of the principal portion of lease liabilities
Cash dividends paid
Payments to acquire treasury shares
Others
Net cash flows (used in) from financing
activities
Effect of changes in foreign currency exchange
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes
2019
2018
($ 148,874 ) ($ 172,555 )
35,585
-
(
147,364 ) (
1,568,983 )
1,500
-
31,659,162
(
51,592,853 )
-
(
93,443 )
-
28,928
55,870
(
376,107 )
6(31)
(
24,804,629 ) (
46,702,767 )
38,597
32,249
6(11)
(
49,825 ) (
72,614 )
6(31)
330,546
-
(
318 )
6,777
1,095,236
928,781
693,976
545,771
8,759,462
(
99,036,816)
500,000
34,000,000
(
16,227,000 ) (
10,960,000 )
(
985,651 ) (
472,841 )
(
463,805 )
-
6(20)
(
597,124 ) (
7,961,657 )
6(18)
(
2,299,624 )
-
6(19)
39
-
(
20,073,165)
14,605,502
(
1,636,032) (
289,932)
885,647
(
32,141,627 )
33,847,328
65,988,955
$ 34,732,975
$ 33,847,328

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

32 -

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Innolux Corporation:

Opinion

We have audited the accompanying parent company only balance sheets of Innolux Corporation (the “Company”) as at December 31, 2019 and 2018, 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, 2019 and 2018, 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.

33 -

The key audit matters in relation to the financial statements for the year ended December 31, 2019 are outlined as follows:

Inventory valuation

Description

The industry is characterized by the significant fluctuations closely in connection with the economic environment. As the technology evolves rapidly, the Company’s existing products may become obsolete when the customers demand for new products or the Company fails to compete with the evolutionary production approach. The Company evaluates the inventory by taking into account of allowance, obsolescence or trivial sales amount and the cost has been written down to the net realizable value. The abovementioned allowance for inventory valuation losses mainly arise from the excess of the cost of inventory over the net realizable value of inventory. For details of inventory, please refer to Note 6(6). There is a risk of the excess of the cost of inventory over the net realizable value of inventory as a result of that the amounts of inventories are material and the sales of related products may have significant fluctuations; we consider inventory valuation a key audit matter.

How our audit addressed the matter

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 Notes 6(8) and 6(11).

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.

34 -

How our audit addressed the matter

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.

35 -

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.

36 -

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 13, 2020

The accompanying parent company only 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 parent company only 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.

37 -

INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 7 7 6(6) 6(2) 6(3) 6(7) 6(8), 7 and 8 6(9) 6(10) 6(11) and 8 6(26) 6(8) and 8	December31,2019 $ 23,892,085 7,660 17,793,800 31,348,610 8,274,534 620,723 660,155 26,359,099 3,344,555 20,558 112,321,779 2,651,408 965,431 83,068,937 164,083,562 5,350,404 527,232 17,446,858 7,339,101 2,011,704 283,444,637 $ 395,766,416	December31,2018
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortized cost - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1410 Prepayments 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 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			$ 23,269,922 160,172 49,779,150 39,176,537 8,447,974 595,079 393,518 26,805,645 706,270 2,426
			149,336,693
			1,198,417 1,111,388 83,002,481 176,216,141 - 551,970 17,599,664 7,166,754 2,074,099
			288,920,914
			$ 438,257,607

(Continued)

38 -

INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

Liabilities andEquity	Notes December31,2019 December31,2018 6(2) $ 345,003 $ 19,899 25,060,763 26,777,128 7 61,151,192 62,465,508 6(12) and 7 23,314,297 28,693,227 6(26) - 2,634,659 6(15) and 9 6,772,357 6,782,914 430,143 - 6(13) 15,956,013 16,194,486 4,297,573 3,183,671 137,327,341 146,751,492 6(13) 19,550,268 35,142,090 6(26) 1,465,526 880,013 4,959,354 - 6(14) 536,223 493,307 26,511,371 36,515,410 163,838,712 183,266,902 6(16) 97,110,720 99,520,720 6(17) 100,362,379 99,648,115 6(18) 7,870,713 7,648,437 4,663,463 1,090,721 29,864,446 51,746,175 6(19) ( 7,325,437) ( 4,663,463) 6(16) ( 618,580) - 231,927,704 254,990,705 $ 395,766,416 $ 438,257,607
Current liabilities 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 2280 Lease liabilities - 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 2580 Lease liabilities - non-current 2670 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity 3110 Share capital - common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury shares 3XXX Total equity 3X2X Total liabilities and equity

Liabilities andEquity

Notes
December31,2019
December31,2018
6(2)
$ 345,003
$ 19,899
25,060,763
26,777,128
7
61,151,192
62,465,508
6(12) and 7
23,314,297
28,693,227
6(26)
-
2,634,659
6(15) and 9
6,772,357
6,782,914
430,143
-
6(13)
15,956,013
16,194,486
4,297,573
3,183,671
137,327,341
146,751,492
6(13)
19,550,268
35,142,090
6(26)
1,465,526
880,013
4,959,354
-
6(14)
536,223
493,307
26,511,371
36,515,410
163,838,712
183,266,902
6(16)
97,110,720
99,520,720
6(17)
100,362,379
99,648,115
6(18)
7,870,713
7,648,437
4,663,463
1,090,721
29,864,446
51,746,175
6(19)
(
7,325,437) (
4,663,463)
6(16)
(
618,580)
-
231,927,704
254,990,705
$ 395,766,416
$ 438,257,607

Current liabilities
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
2280
Lease liabilities - 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
2580
Lease liabilities - non-current
2670
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
3110
Share capital - common stock
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
3400
Other equity interest
3500
Treasury shares
3XXX
Total equity
3X2X
Total liabilities and equity

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

39 -

INNOLUX CORPORATION PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items	Notes 2019 2018 6(20) and 7 $ 249,384,126 $ 278,407,555 6(6)(24) and 7 ( 254,797,481) ( 260,401,853) ( 5,413,355) 18,005,702 6(24) and 7 ( 1,226,054) ( 1,654,671) ( 4,708,808) ( 4,700,630) ( 11,543,290) ( 11,294,086) ( 17,478,152) ( 17,649,387) ( 22,891,507) 356,315 6(21) and 7 2,101,340 2,232,724 6(22) 1,344,637 ( 752,123) 6(23) ( 1,027,787) ( 565,881) 2,658,336 2,957,675 5,076,526 3,872,395 ( 17,814,981) 4,228,710 6(26) 371,991 ( 2,005,948) ($ 17,442,990) $ 2,222,762 6(14) ($ 58,246) ($ 29,878) 6(19) ( 145,957) ( 229,701) 6(19) 445,388 ( 2,599,115) 6(26) 86,781 5,976 327,966 ( 2,852,718) 6(19) ( 2,951,172) ( 828,563) 6(19) ( 85,365) 84,637 ( 3,036,537) ( 743,926) ($ 2,708,571) ($ 3,596,644) ($ 20,151,561) ($ 1,373,882) 6(27) ($ 1.77) $ 0.22 ($ 1.77) $ 0.22
4000 Sales revenue 5000 Operating costs 5900 Net operating (loss) margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating (loss) 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 (Loss) profit before income tax 7950 Income tax benefit (expense) 8200 (Loss) 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 plans 8316 Unrealized losses on financial assets at fair value through other comprehensive income 8330 Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for under equity method 8349 Income tax related to 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 that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8380 Share of other comprehensive (loss) income of subsidiaries, associates and joint ventures accounted for under equity method 8360 Components of other comprehensive loss that will be reclassified to profit or loss 8300 Other comprehensive loss for the year, net of tax 8500 Total comprehensive loss for the year (Loss) earnings per share (in dollars) 9750 Basic (loss) earnings per share 9850 Diluted (loss) earnings per share

Items

Notes
2019
2018
6(20) and 7
$ 249,384,126
$ 278,407,555
6(6)(24) and 7
(
254,797,481) (
260,401,853)
(
5,413,355)
18,005,702
6(24) and 7
(
1,226,054) (
1,654,671)
(
4,708,808) (
4,700,630)
(
11,543,290) (
11,294,086)
(
17,478,152) (
17,649,387)
(
22,891,507)
356,315
6(21) and 7
2,101,340
2,232,724
6(22)
1,344,637
(
752,123)
6(23)
(
1,027,787) (
565,881)
2,658,336
2,957,675
5,076,526
3,872,395
(
17,814,981)
4,228,710
6(26)
371,991
(
2,005,948)
($ 17,442,990)
$ 2,222,762
6(14)
($ 58,246) ($ 29,878)
6(19)
(
145,957) (
229,701)
6(19)
445,388
(
2,599,115)

6(26)
86,781
5,976
327,966
(
2,852,718)
6(19)
(
2,951,172) (
828,563)
6(19)
(
85,365)
84,637
(
3,036,537) (
743,926)

($ 2,708,571) ($ 3,596,644)
($ 20,151,561) ($ 1,373,882)
6(27)
($ 1.77)
$ 0.22
($ 1.77)
$ 0.22

4000
Sales revenue
5000
Operating costs
5900
Net operating (loss) margin
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6000
Total operating expenses
6900
Operating (loss) 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
(Loss) profit before income tax
7950
Income tax benefit (expense)
8200
(Loss) 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 plans
8316
Unrealized losses on financial assets at
fair value through other comprehensive
income
8330
Share of other comprehensive income
(loss) of subsidiaries, associates and joint
ventures accounted for under equity
method
8349
Income tax related to 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
that will be reclassified to profit or loss
8361
Financial statements translation
differences of foreign operations
8380
Share of other comprehensive (loss)
income of subsidiaries, associates and
joint ventures accounted for under equity
method
8360
Components of other comprehensive
loss that will be reclassified to profit
or loss
8300
Other comprehensive loss for the year, net
of tax
8500
Total comprehensive loss for the year
(Loss) earnings per share (in dollars)
9750
Basic (loss) earnings per share
9850
Diluted (loss) earnings per share

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

40 -

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

2018 Balance at January 1 Effect of modified retrospective approach under IFRS 9 Balance at January 1 after adjustments Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriation of 2017 earnings: Legal reserve Special reserve Cash dividends Recognition of change in equity of associates in proportion to the Company's ownership Balance at December 31 2019 Balance at January 1 Loss for the year Other comprehensive (loss) income for the year Total comprehensive (loss) income Appropriation of 2018 earnings: Legal reserve Special reserve Cash dividends Recognition of change in equity of associates in proportion to the Company's ownership Recognition of changes in ownership interests in subsidiaries Purchase of treasury shares Cancellation of treasury shares Others Balance at December 31	Notes		Commonstock		Capitalsurplus				RetainedEarnings					Other EquityInterest				Treasury shares		Total
							Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreignoperations		Total Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	U	nrealized gain (loss) on available-for-sale financialassets
	6(19) 6(19) 6(18) 6(17) 6(19) 6(18) 6(17) 6(17) 6(16) 6(16)(17) 6(17)		$ 99,520,720 - 99,520,720 - - - - - - - $99,520,720 $99,520,720 - - - - - - - - - ( 2,410,000 ) - $ 97,110,720		$ 99,646,919 - 99,646,919 - - - - - - 1,196 $ 99,648,115 $ 99,648,115 - - - - - - ( 14,755 ) 24 - 728,956 39 $ 100,362,379		$ 3,945,576 - 3,945,576 - - - 3,702,861 - - - $7,648,437 $7,648,437 - - - 222,276 - - - - - - - $ 7,870,713		$ 3,418,804 - 3,418,804 - - - - ( 2,328,083 ) - - $1,090,721 $1,090,721 - - - - 3,572,742 - - - - - - $ 4,663,463		$ 58,883,750 - 58,883,750 2,222,762 ( 23,902 ) 2,198,860 ( 3,702,861 ) 2,328,083 ( 7,961,657 ) - $51,746,175 $51,746,175 ( 17,442,990 ) ( 46,597 ) ( 17,489,587 ) ( 222,276 ) ( 3,572,742 ) ( 597,124 ) - - - - - $ 29,864,446	($ 5,717,223 ) - ( 5,717,223 ) - ( 743,926 ) ( 743,926 ) - - - - ($6,461,149 ) ($6,461,149 ) - ( 3,036,537 ) ( 3,036,537 ) - - - - - - - - ($ 9,497,686 )		$ - 4,626,502 4,626,502 - ( 2,828,816 ) ( 2,828,816 ) - - - - $ 1,797,686 $ 1,797,686 - 374,563 374,563 - - - - - - - - $ 2,172,249		$ 4,626,502 ( 4,626,502 ) - - - - - - - - $ - $ - - - - - - - - - - - - $ -	$ - - - - - - - - - - $ - $ - - - - - - - - - ( 2,299,624 ) 1,681,044 - ($ 618,580 )			$ 264,325,048 - 264,325,048 2,222,762 ( 3,596,644 ) ( 1,373,882 ) - - ( 7,961,657 ) 1,196 $254,990,705 $254,990,705 ( 17,442,990 ) ( 2,708,571 ) ( 20,151,561 ) - - ( 597,124 ) ( 14,755 ) 24 ( 2,299,624 ) - 39 $ 231,927,704

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

41 -

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation and amortization
Net (gain) loss on financial assets or liabilities at
fair value through profit or loss
Expected credit loss
Share of profit of subsidiaries and associates
accounted for under equity method
(Gain) loss on disposal of investments
Loss on disposal of property, plant and
equipment
Gain on lease modification
Interest income
Dividend income
Interest expense
Unrealized foreign exchange loss
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
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
2019
2018
($ 17,814,981 )
$ 4,228,710
6(24)
30,888,735
31,969,539
(
1,343,327 )
109,790
-
100,000
(
2,658,336 ) (
2,957,675 )
6(22)
(
19,001 )
10,533
6(22)
1,965
18,641
(
951 )
-
6(21)
(
683,012 ) (
775,096 )
6(21)
(
13,301 ) (
5,838 )
6(23)
1,027,787
565,881
60,811
149,778
477,616
(
86,139 )
7,827,927
2,128,692
173,440
1,038,736
(
87,150 )
124,760
446,546
(
1,424,391 )
(
2,821,526 )
344,197
1,714
(
1,539 )
(
1,716,365 ) (
2,246,645 )
(
1,314,316 )
17,605,708
(
3,801,853 ) (
1,751,921 )
(
10,557 )
1,322,052
1,113,902
(
301,082 )
(
19,085) (
83,503)
9,716,682
50,083,188
(
1,762,721) (
159,435)
7,953,961
49,923,753

(Continued)

42 -

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in other receivables - related parties
Acquisition of financial assets at fair value through
profit or loss
Proceeds from disposal of financial assets at fair
value through profit or loss
Acquisition of investments in equity instruments
measured at fair value through other comprehensive
income
Decrease (increase) in financial assets at amortized
cost - current
Increase in investment accounted for under equity
method
Proceeds from capital reduction of investments
accounted for under equity method
Increase in other financial assets
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Increase in other non-current assets
Interest received
Dividends received
Net cash flows from (used in) investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term borrowings
Payment of long-term borrowings
Cash dividends paid
Interest paid
Payment of the principal portion of lease liabilities
Payments to acquire treasury shares
Others
Net cash flows (used in) from financing
activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes
2019
2018
($ 266,637 ) ($ 364,727 )
(
145,249 )
-
35,585
-
-
(
1,341,089 )
31,933,350
(
49,945,950 )
(
592,405 ) (
2,188,258 )
27,397
96,421
(
19,190 ) (
350,449 )
6(29)
(
19,876,808 ) (
41,713,067 )
276,715
34,691
6(11)
(
480 ) (
28,240 )
(
1,154 ) (
177 )
744,541
692,581
583,310
315,020
12,698,975
(
94,793,244)
500,000
34,000,000
(
16,210,000 ) (
10,960,000 )
6(18)
(
597,124 ) (
7,961,657 )
(
982,242 ) (
471,756 )
(
441,822 )
-
6(16)
(
2,299,624 )
-
6(17)
39
-
(
20,030,773)
14,606,587
622,163
(
30,262,904 )
23,269,922
53,532,826
$ 23,892,085
$ 23,269,922

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

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Attachment 5

INNOLUX CORPORATION

Table of Losses Offsetting of Year 2019

Unit: NT$

		Unit: NT$
Item	Amount	Explanation
Accumulated retained earning at the start of the year Adjusted retained earnings of year 2019 Adjusted undistributed retained earnings Net loss after tax of Year 2019 Special reserve Unappropriated retained earnings to date	47,354,032,180 (46,596,037) 47,307,436,143 (17,442,990,310) (2,661,974,482) 27,202,471,351	Note 1 Note 2

Note 1: The number of adjusted retained earnings of year 2019 is the defined retirement benefit plan actuarial loss.

Note 2: The Company shall set aside a special reserve from the net deductions from

shareholders’ equity (including exchange differences from the translation of financial statements of foreign operations, unrealized financial assets profits at fair value through other comprehensive income) for the current fiscal year

Chairman: General Manager: Accountant:

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Attachment 6

Comparative table for Amendments to Procedures for Engaging in Derivatives Trading

Article No.	The current Article	The current Article	The Amended Article	Reasons for Amendment
Enactment date	These Rules was made on June 29, 2010			The enactment date has been included in the history of Article 11, and this article is deleted
Article 2	Statutory Basis ~~1.~~ ~~“Regulations Governing the~~ ~~Acquisition and Disposal of~~ ~~Assets by Public Companies”~~ ~~issued by Financial Supervisory~~ ~~Commission Jin Guan Zheng Fa~~ ~~Ji Order no. 1020053073 on Dec.~~ ~~30 2013.~~ ~~2.~~ ~~In~~ ~~ternational Accounting~~ ~~Standards No. 39 “Financial~~ ~~Instruments: Recognition and~~ ~~Measurement” approved by~~ ~~Financial Supervisory~~ ~~Commission Jin Guan Zheng~~ ~~Shen Ji Order no. 1030010325 on~~ ~~April 3rd 2014.~~ ~~3.~~ ~~International Accounting~~ ~~Standards No. 32 “Financial~~ ~~In~~ ~~struments: Presentation”~~ ~~approved by Financial~~ ~~Supervisory Commission Jin~~ ~~Guan Zheng Shen Ji Order no.~~ ~~1030010325 on April 3rd 2014.~~ ~~4~~ ~~Ittil Fiil Rti~~		Statutory Basis The Company has formulated these procedures in accordance with the regulations of Article 36-1 of the Securities and Exchange Act (hereafter referred as the Act) and the standards for Public Company Acquisition or Disposal of Assets.	Amended with the provisions of the law
	~~.~~	~~nernaona nanca eporng~~ ~~Standards No. 7 “Financial~~ ~~Instruments: Disclosures”~~ ~~approved by Financial~~ ~~Supervisory~~ ~~Commission Jin~~ ~~Guan Zheng Shen Ji Order no.~~ ~~1030010325 on April 3rd 2014.~~
Article 4	Principles and Guidelines 3.Division of Responsibilities (a) Board of Directors: (1) Make decisions concerning formulation and amendment of these procedures. (2) Assign senior executives to supervise and control the risks of derivatives trading		Principles and Guidelines 3.Division of Responsibilities (a) Board of Directors: (1) Make decisions concerning formulation and amendment of these procedures. (2) Assign senior executives to supervise and control the risks of derivatives trading	Amended with the provisions of the law

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Article No.		The current Article	The Amended Article	Reasons for Amendment
		described herein at any time. ~~, and to sign the~~ ~~relevant contracts and~~ ~~handle account matters on~~ ~~behalf of the Company.~~	described herein at any time.
Article 4	Principles and Guidelines 3.Division of Responsibilities (g) Accounting Department: (3) The disclosure of derivative products transactions in financial reports (quarterly, annually) shall be in accordance with~~Paragr~~ ~~aph~~ ~~3 and 4 of~~ Article 2 hereof.		Principles and Guidelines 3.Division of Responsibilities (g) Accounting Department: (3) The disclosure of derivative products transactions in financial reports (quarterly, annually) shall be in accordance with Article 2 hereof.	Amended with the provisions of the law
Article 7	Accounting 2.Items to be disclosed: The relevant regulations and above generally accepted accounting practices shall be followed in deciding which items (such as the items listed in~~Paragraph 3 and 4~~ ~~of~~ Article 2)shall be disclosed.		Accounting 2.Items to be disclosed: The relevant regulations and above generally accepted accounting practices shall be followed in deciding which items (such as the items listed in Article 2) shall be disclosed.	Amended with the provisions of the law
Article 11	These Procedures were made on May 19 2004. The first amendment was made on June 19 2009. The second amendment was made on April 9 2010. The third amendment was made on June 24 2016.		These Procedures were made on May 19 2004. The first amendment was made on June 19 2009. The second amendment was made on June 29 2010. The third amendment was made on June 24 2016. The fourth amendment was made on June 19,2020.	To explain the amendment history of Articles of Incorporation

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Attachment 7

Comparative table for Amendments to Rules of Shareholders’ Meeting

Article No.	The current Article	The Amended Article	Reasons for Amendment
Article 3	(To convene shareholders meeting and meeting notice) The first, second and third items are omitted.	(To convene shareholders meeting and meeting notice) The first, second and third items are omitted.
	Matters pertaining to election or discharge of directors, alteration of the Articles of Incorporation, and	Matters pertaining to election or discharge of directors and supervisors, alteration of the	Amended with the provisions of the law
	dissolution, merger, spin-off, or any	Articles of Incorporation, reduction
	matters as set forth in Paragraph I, Article 185 of the Company Act,	of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, dissolution, merger, spin- off, or any matters as set forth in Paragraph I, Article 185 hereof shall be itemized in the causes or subjects to be described and the essential contents shall be
	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.
		explained in the notice to convene a
		meeting of shareholders, and shall not be brought up as extemporary
		motions; the essential contents may
		be posted on the website designated
		by the competent authority in charge of securities affairs or the
		company, and such website shall be
		indicated in the above notice.
		The convening of the shareholders 'meeting has stated the full re- election of directors and the date of appointment. After the election of the shareholders' meeting is completed, the same meeting shall not change its appointment date by temporarymotion or other means.	Amended with the provisions of the law Update item 5
	Shareholder(s) holding one percent	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 aproposal contains	Amended with the provisions of the law and amend to item 6
	(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 aproposal contains

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Article No.	The current Article	The Amended Article	Reasons for Amendment
	meeting notice the proposals conforming to the requirements set out in this Article. With regard to the proposals submitted by	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	shareholders but not included in the
	agenda of the meeting, the cause of	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.	exclusion of such proposals and explanation shall be made by the board of directors at the shareholders' meeting to be convened.
Article 16	(Meeting minutes and signing items) The first, second items are omitted. 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.	(Meeting minutes and signing items) The first, second items are omitted. 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 voting results (including statistical weights) are recorded. When there are elected directors, the number of votes for each elected person shall be disclosed.The minutes shall be kept persistently throughout the life of the company.	In order to implement the case-by-case voting spirit, refer to the Asian Corporate Governance Association's proposal to amend item 3

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Attachment 8

List of Director Candidates

		List of Director Candidates
Title	Name	Education & Experience	Shareholding (Note)
Director	Jyh-Chau Wang ,	M.S., Materials Engineering, National Tsing-Hua University Chairman & CEO , Innolux Corporation Vice President, Chi Mei Optoelectronics Corporation Vice President, Chi Lin Technology Co., Ltd. Deputy Plant Director, Unipac Optoelectronics Corp. Associate Research Fellow, Material Research laboratories, Industrial Technology Research Institute	89,000

Note：The collective shareholdings were shown as of April 21, 2020, the record date for the 2019 Annual Shareholders’ Meeting.

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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

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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 by the authorized proxy at the meeting shall prevail.

Article 5

Article 6

(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 meeting may not be earlier than 9:00 AM or after 3:00 PM. (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 one person 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

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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 legal proceedings of the foregoing lawsuit 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. Article 10 (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 attending the said meeting, one person 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

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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

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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.

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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.

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 wears badges marked “Disciplinary Officers” for identification purpose.

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.

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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) CB01010 Machinery and Equipment Manufacturing
(11) CE01030 Photographic and Optical Equipment Manufacturing
(12) CQ01010 Die Manufacturing
(13) E603050 Cybernation Equipments Construction
(14) E604010 Machinery Installation Construction
(15) I301010 Software Design Services
(16) C901020 Glass and glass made products manufacturing
(17) C801100 Synthetic Resin & Plastic Manufacturing
(18) C805070 Strengthened Plastic Products Manufacturing
(19) C801990 Other Chemical Materials Manufacturing
(20) 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 16 to 20 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

TFT liquid crystal module automatic assembly equipment
15.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,

57 -

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 eleven 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. The rights, obligations and other main issue conditions regarding the issued registered Class A convertible special/preferred shares are as follows: 1.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.

Article 4-1

2.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.
3.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.
4.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.
5.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.
6.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.
7.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.
8.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.
9.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
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	other related matters.
Article	For the issuance of employee stock option of the Company at a price less than market price,
4-2	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.
	If the Company transfers the buyback shares to	its employees at a price less than average
	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.
	The Company’s bought-back treasury shares are assigned or transferred to subsidiary
	company employees meeting specific requirements. The Board of Directors are delegated to
	decide such requirements and methods of transfer.
	The Company’s share subscription warrants are entitled to subordinate company employees
	meeting specific requirements. The Board of Directors are delegated to decide such requirements
	and issuance methods.
	When the Company issues new share, the new shares are entitled to subsidiary company
	employees meeting specific requirements. The Board of Directors are delegated to decide such
	requirements and methods of obtaining.
	The Company’s restricted stocks are entitled to	subsidiary company employees meeting
	specific requirements. The Board of Directors are delegated to decide such requirements and
	distribution methods.
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 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.
	2.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
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 a

59 -

prevailing number of votes shall be deemed a director elect. Article Pursuant to Article 14-2 of Securities and Exchange Act, among of the number of directors 12-1 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

To submit the surplus earning distribution or loss off-setting proposals
To submit capital increase or decrease proposal
To compile the important by-laws and organization rules of the Company
The appointment or discharge of general manager
To approve the execution of the important contracts
To check and ratify the purchase and disposal of the important assets of the Company
To establish or dissolve branches
To compile the budget and final accounting
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 liability incurred from and within he/her business scope. Article The remuneration of directors shall be determined by the board of directors according to their 13-1 participation level and contribution value, and shall compare standard of the same industry. However, in no event shall the total payment per month exceed NT$ 500,000. Article In calling a meeting of the board of directors, a notice shall be given to each director no later 13-2 than 7 days prior to the scheduled meeting date in writing, by way of electronic methods or facsimile. In the case of emergency, the meeting may be convened at any time. 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 Company externally. Article The board of directors may institute a position of vice-chairperson who shall be elected from 14-1 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 meeting attended by a majority of 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 meeting of the board of directors in person, 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

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Article 19	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	The fiscal year of the Company shall be from January 1 to December 31 every year.	At	At	the	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:
	1. The operating report
	2. The financial		statements;			and
	3. 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’
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.
	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. The seventeenth

61 -

amendment is on June 20, 2017. The eighteenth amendment is on June 20, 2018. The nineteenth amendment is on June 20, 2019.

62 -

Appendix 3 Election Rules of Directors

Article 1 The election of directors of the Company, unless otherwise provided by the laws or in the Articles of Incorporations, shall in all cases be in conducted in accordance with these Rules.
Article 2 The election of directors shall adopt a single disclosed cumulative voting method, in the process of electing directors, each share represents a weighted number of voting rights equivalent to the number of directors to be elected; such voting rights may be exercised to collectively elect a single candidate or may be distributed among several candidates. The registration of electors’ name may be substituted for the number of attendance card printed on votes.
Article 3 Upon the beginning of the election, the chairperons shall appoint a number of persons to perform the respective duties of vote monitoring and counting personnel.
Article 4 The number of directors of the Company shall be in accordance with the number of available seats prescribed in the Articles of Incorporation of the Company. Those candidates with the greatest numbers of ballots representing voting rights shall be elected as directors in order of number of ballots received. In case two or more persons have received the same number of voting right, and the number of persons would exceed the prescribed number of available seats, the persons with the same number of voting rights shall draw lots to decide election; the Chairman shall draw lots on behalf of any selected person who are not present.
Article 5 The directors’ election of the Company shall conduct according to the candidates’ nomination system and procedure pursuant to Article 192-1 of the Company Act.
Article 6 Non-independent and independent directors shall be elected at the same time, but in separately calculated numbers of independent director, non-independent director and candidate to whom the ballots cast represent a prevailing number of votes shall be in respectively elected in order.
Article 7 The board of directors shall prepare and distribute separate ballots according to the attendance card number; one person shall have one vote, the ballots shall be distributed in numbers corresponding to person to be elected. The number of voting rights of each shareholder shall be specified on each ballot.
Article 8 If the electee is shareholder, the elector shall explicitly specify the selected person’s name on the column of “Electee” of the ballot, the shareholder account number; If not a shareholder, he or she shall explicitly specify the selected person’s name and the ID certificate number.

But if a government or a juristic person shareholder is a candidate to be elected, it is required to write the name of the government or juristic person on the account name of the candidate to be elected on the ballot or may also fill in the name of its representative on behalf of the government or juristic person; if there are numerous representatives, it is required to respectively fill in the names of the representatives.

Article 9 A ballot is invalid under any of the following circumstances:
(1) The ballot was not prepared according to the rules under Article 7.
(2) A ballot is not placed in the ballot box.
(3) A blank ballot not filled in by the voter.
(4) The candidate was filled in for more than two people.
(5) The writing is unclear and indecipherable.
(6) Other words or marks are entered in addition to the candidate's account name (name) and shareholder account number (or identity card number).
(7) The account name (name) of the candidate entered in the ballot is identical to that of another shareholder account name (name), but no shareholder account number (identity card number) is provided in the ballot to identify such individual.
(8) The candidate whose name is entered in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register; the candidate whose name is entered in the ballot is a nonshareholder, and a cross-check shows that the candidate's name and identity card number do not match.

Article 10 The voting rights shall be calculated on site immediately after the end of the poll, and the

63 -

results of the calculation shall be announced by the chairperons on the site.

Article 11 Each director-elect will be awarded respectively election notice by Board of Directors.
Article 12 These Rules and any amendments hereto shall be implemented after approval by a shareholders meeting.
Article 13 These Rules was made on May 19, 2004. The first amendment was made on June 13, 2007. The second amendment was made on June 29, 2012. The third amendment was made on June 8, 2015. The fourth amendment wad made on June 24, 2016.
64 -

Appendix 4

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 21, 2020

Unit: Per share

			Unit: Per share
Title	Requisite Number of Shares Held	Number of Shares Recorded in Shareholders Register	Shareholding Ratio
Director	155,377,151	176,461,219	1.82

2. Shareholding of All Directors:

Record Date: April 21, 2020

Unit: Per share

			Unit: Per share
Title	Name	Number of Shares Recorded in Shareholders Register	Shareholding Ratio
Chairman	Jin-Yang Hung	150,000	－
Director	Hong Yang Venture Capital Ltd. Co., Representative: Chu-Hsiang Yang	176,311,219	1.82
Director	Hong Yang Venture Capital Ltd. Co., Representative: Chin-Lung Ting	176,311,219	1.82
Independent Director	Chi Chia Hsieh	－	－
Independent Director	Zhen-Wei Wnag	－	－
Independent Director	Stanley Yuk Lun Yim	－	－

65 -

Appendix 5

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.

66 -

The current Article	The Amended Article	Reasons for Amendment
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	more than one matter, such proposal shall not be included in the agenda.but a shareholder proposal urging a company to promote public interests or fulfill its social responsibilities may still be included in the list of proposals to be discussed at a regular meeting of shareholders by the board of directors. 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 meetingof shareholders.
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	Prior to the date on which share transfer registration is suspended before the convention of a regular	Amended with the provisions of the law and amend to item 7
	shareholders’ meeting, the company
Company shall give a public notice	shall give a public notice
announcing the place and the period	announcing acceptance of proposal
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.	in writing or by way of electronic transmission, 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	The number of words of a proposal	Amend to item 8
to be submitted by a shareholder shall be limited to not more than	to be submitted by a shareholder shall be limited to not more than
three hundred (300) words, and any	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	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	submitted a proposal shall attend, in
person or by a proxy, the regular shareholders' meeting where at his/her proposal is to be discussed	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	and shall take part in the discussion
of suchproposal.	of suchproposal.
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'	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'	Amend to item 9

AI assistant

INX — AGM Information 2020

52330_rns_2020-07-02_2a3df413-b99c-4f97-a5fb-4f6417c9a9a5.pdf

InnoLux Corporation

Handbook for 2020 General Shareholders' Meeting

INDEX

INNOLUX CORPORATION

Procedures of 2020 Annual General Shareholders Meeting

INNOLUX CORPORATION Agenda of 2020 Annual General Shareholders Meeting

Reporting Items

Adopting Items

Discussion and Election Items

Extemporary Motion

Attachment 1

INNOLUX CORPORATION

2019 Operating Report

1. 2019 Operating Report

2. Results of operation scheme

3. Budget Performance

4. Analysis of financial operation and profitability

5. Research development situation

6. Digital Transformation of the Company

Attachment 2

Attachment 3

Innolux Corporation

Comparative table for Amendments to

Attachment 4

REPORT OF INDEPENDENT ACCOUNTANTS

Opinion

Basis for opinion

Key audit matters

Inventory valuation

Description

How our audit addressed the matter

Valuation and impairment of goodwill and property, plant and equipment

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

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

REPORT OF INDEPENDENT ACCOUNTANTS

Opinion

Basis for opinion

Key audit matters

Inventory valuation

Description

How our audit addressed the matter

Valuation and impairment of goodwill and property, plant and equipment

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

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

INNOLUX CORPORATION

Table of Losses Offsetting of Year 2019

Attachment 6

Comparative table for Amendments to Procedures for Engaging in Derivatives Trading

Attachment 7

Comparative table for Amendments to Rules of Shareholders’ Meeting

Attachment 8

INX AGM Information 2020