INX — Annual Report 2020

Dec 29, 2020

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT

DECEMBER 31, 2020 AND 2019

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INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders of Innolux Corporation:

Opinion

We have audited the accompanying consolidated balance sheets of Innolux corporation and its subsidiaries (the “Group”) as at December 31, 2020 and 2019, 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 consolidated 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 Group as at December 31, 2020 and 2019, 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 the 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. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of The Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 Group’s 2020 consolidated financial statements. 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.

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The key audit matters in relation to the consolidated financial statements of the Group for the year ended December 31, 2020 are outlined as follows:

Inventory valuation

Description

The industry is characterized in its significant fluctuations closely in connection with the economic environment. As the technology evolves rapidly, the launch of new products may cause major changes in consumer demand or due to the update of production approach, the existing products may become obsolete or no longer meet market needs. The Group has evaluated the inventory by taking into account of allowance, obsoleteness or trivial sales amount and the cost has been written down to the net realizable value. The abovementioned allowance for inventory valuation losses mainly arose from the excess of the cost of inventory over the net realizable value of inventory. For details of inventory, please refer to Note 6(7). 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 prices of related products may have significant fluctuations because of market demand; we consider inventory valuation a key audit matter.

How our audit addressed the matter

We compared financial statements to ascertain the provision policy on allowance for inventory valuation losses has been consistently applied and assessed the reasonableness of the provision policy; 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; sampled individual inventory item numbers and checked them against historical data on inventory clearance and discount 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(9) and 6(12).

The Group measures the recoverable amount of the cash generating unit to determine whether goodwill and property, plant and equipment may be impaired based on future cash flows with appropriate discount rates, and future cash flows are estimated based on how assets are utilized, duration years of assets and

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projected income and expenses in the future. As these estimates, which are uncertain and dependent upon significant judgement from management, involve several assumptions such as determination of discount rates, expected growth rate and future financial projections, we consider management’s assessment of impairment of goodwill and property, plant and equipment a key audit matter.

How our audit addressed the matter

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

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, 2020 and 2019.

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 the 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.

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Auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the Republic of China 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 the generally accepted auditing standards in the Republic of China, 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.

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• 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 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 for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ 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 4, 2021

------------------------------------------------------------------------------------------------------------------------------------------------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.

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 7 6(2) 6(7) 8 6(2) 6(3) 6(8) 6(9), 7 and 8 6(10) 6(11) 6(12) and 8 6(30) 6(9) and 8	December 31, 2020 $ 26,532,083 706,299 42,687,746 49,897,758 2,224,157 2,980,756 30,865,270 3,119,861 148,377 159,162,307 3,480,182 4,887,681 1,246,234 178,901,675 5,547,909 499,444 17,506,984 7,121,962 1,205,459 220,397,530 $ 379,559,837	December 31, 2019
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			$ 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

(Continued)

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

Notes December 31, 2020 December 31, 2019 6(2) $ 3,222,134 $ 345,463 45,839,540 47,656,235 7 1,720,931 3,784,991 6(13) and 7 25,677,541 28,622,732 1,581,635 2,311,481 6(18) and 9 6,152,983 6,775,927 201,073 453,848 6(14)(15) 19,367,206 16,022,013 5,407,605 4,845,455 109,170,648 110,818,145 6(14) 5,374,293 97,018 6(15) 20,384,502 19,604,768 6(30) 1,608,990 1,465,526 4,894,091 4,977,024 6(16) 560,267 691,836 32,822,143 26,836,172 141,992,791 137,654,317 6(19) 97,110,720 97,110,720 2,293,612 - 6(20) 99,707,996 100,362,379 6(21) 7,870,713 7,870,713 7,325,437 4,663,463 29,120,853 29,864,446 6(22) ( 6,059,671) ( 7,325,437 ) 6(19) - ( 618,580 ) 237,369,660 231,927,704 197,386 182,325 237,567,046 232,110,029 $ 379,559,837 $ 369,764,346

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 Share capital 3110 Share capital - common stock 3130 Certificates of entitlement to new shares from convertible bonds 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.

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Items

Notes 2020 2019 6(23) and 7 $ 269,911,051 $ 251,971,209 6(7)(28) and 7 ( 246,077,953) ( 248,957,129) 23,833,098 3,014,080 6(28) ( 3,383,316) ( 3,676,803) ( 6,488,472) ( 6,806,373) ( 12,149,513) ( 12,464,800) ( 22,021,301) ( 22,947,976) 1,811,797 ( 19,933,896) 6(24) 383,137 1,030,073 6(25) 2,714,290 2,226,786 6(26) ( 1,502,138) 876,046 6(27) ( 1,026,516) ( 1,031,733) 6(8) 176,561 307,296 745,334 3,408,468 2,557,131 ( 16,525,428) 6(30) ( 917,307) ( 914,844) $ 1,639,824 ( $ 17,440,272)

4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit (loss) Non-operating income and expenses 7100 Interest income 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 Profit (loss) before income tax 7950 Income tax expense 8200 Profit (loss) for the year

(Continued)

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Items	Notes 6(16) 6(22) 6(30) ( 6(22) 6(8)(22) ( 6(31)	2020 2019 $ 57,639 ( $ 58,246) 881,733 299,431 9,886) 86,781 929,486 327,966 681,556 ( 2,951,930) 62,442) ( 85,365) 619,114 ( 3,037,295) $ 1,548,600 ( $ 2,709,329) $ 3,188,424 ( $ 20,149,601) $ 1,636,144 ( $ 17,442,990) $ 3,680 $ 2,718 $ 3,184,147 ( $ 20,151,561) $ 4,277 $ 1,960 $ 0.17 ( $ 1.77) $ 0.17 ( $ 1.77)
Other comprehensive income (loss) (net) Components of other comprehensive income that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit plans 8316 Unrealized gains on financial assets at fair value through other comprehensive income 8349 Income tax (expense) benefit related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8370 Share of other comprehensive loss of associates and joint ventures accounted for under equity method 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive income (loss) for the year, net of tax 8500 Total comprehensive income (loss) for the year Profit (loss) attributable to: 8610 Owners of the parent 8620 Non-controlling interest Other comprehensive income (loss) attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings (loss) per share (in dollars) 9750 Basic earnings (loss) per share 9850 Diluted earnings (loss) per share

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

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INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

2019 Balance at January 1 (Loss) profit 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 Group's ownership Recognition of changes in ownership interests in subsidiaries Purchase of treasury shares Cancellation of treasury shares Increase in non-controlling interests Others Balance at December 31 2020 Balance at January 1 Profit for the year Other comprehensive income for the year Total comprehensive income Appropriation of 2019 earnings: Special reserve Cash dividends from capital surplus Recognition of change in equity of associates in proportion to the Group's ownership Conversion of convertible bonds Recognition of changes in ownership interests in subsidiaries Disposal of investments in equity instruments measured at fair value through other comprehensive income Treasury shares transferred to employees Decrease in non-controlling interests Others Balance at December 31	Notes				Equityattributable to	Equityattributable to	owners of theparen	t	t		Total	Non-controlling interests	Total
		Share c	apital Certificate of entitlement to new shares from convertible bond	Capital surplus		Retained Earnings	Unappropriated earnings	Other EquityInterest Financial statements translation differences of foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income		Treasuryshares $ - - - - - - - - - ( 2,299,624) 1,681,044 - - ( $ 618,580) ( $ 618,580) - - - - - - - - - 618,580 - - $ -
		Common stock $ 99,520,720 - - - - - - - - - ( 2,410,000) - - $ 97,110,720 $ 97,110,720 - - - - - - - - - - - - $ 97,110,720			Legal reserve	Special reserve		Financial statements translation differences of foreign operations
	6(22) 6(21) 6(20) 6(20) 6(19) 6(19)(20) 6(32) 6(20) 6(22) 6(21) 6(20) 6(20) 6(19)(20) 6(20) 6(3) 6(19)(20) 6(20)		$ - - - - - - - - - - - - - $ - $ - - - - - - - 2,293,612 - - - - - $ 2,293,612	$ 99,648,115 - - - - - - ( 14,755 ) 24 - 728,956 - 39 $ 100,362,379 $ 100,362,379 - - - - ( 963,107 ) 21,005 243,805 38 - 42,182 - 1,694 $ 99,707,996	$ 7,648,437 - - - 222,276 - - - - - - - - $ 7,870,713 $ 7,870,713 - - - - - - - - - - - - $ 7,870,713	$ 1,090,721 - - - - 3,572,742 - - - - - - - $ 4,663,463 $ 4,663,463 - - - 2,661,974 - - - - - - - - $ 7,325,437	$ 51,746,175 ( 17,442,990) ( 46,597) ( 17,489,587) ( 222,276) ( 3,572,742) ( 597,124) - - - - - - $ 29,864,446 $ 29,864,446 1,636,144 46,111 1,682,255 ( 2,661,974) - - - - 236,126 - - - $ 29,120,853	($ 6,461,149 ) - ( 3,036,537 ) ( 3,036,537 ) - - - - - - - - - ($ 9,497,686 ) ($ 9,497,686 ) - 618,517 618,517 - - - - - - - - - ($ 8,879,169 )	$ 1,797,686 - 374,563 374,563 - - - - - - - - - $ 2,172,249 $ 2,172,249 - 883,375 883,375 - - - - - ( 236,126 ) - - - $ 2,819,498		$ 254,990,705 ( 17,442,990) ( 2,708,571) ( 20,151,561) - - ( 597,124) ( 14,755) 24 ( 2,299,624) - - 39 $ 231,927,704 $ 231,927,704 1,636,144 1,548,003 3,184,147 - ( 963,107) 21,005 2,537,417 38 - 660,762 - 1,694 $ 237,369,660	$ - 2,718 ( 758) 1,960 - - - - 14 - - 180,351 - $ 182,325 $ 182,325 3,680 597 4,277 - - - - 14,031 - - ( 3,247) - $ 197,386	$ 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 $ 232,110,029 1,639,824 1,548,600 3,188,424 - ( 963,107) 21,005 2,537,417 14,069 - 660,762 ( 3,247) 1,694 $ 237,567,046

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

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit (loss) before tax Adjustments Adjustments to reconcile profit (loss) Depreciation and amortization Net gain on financial assets or liabilities at fair value through profit or loss Compensation cost of share-based payments Share of profit of associates and joint ventures accounted for under equity method Gain from disposal of investments (Gain) loss on disposal of property, plant and equipment Gain on lease modification Interest expense Interest income Dividend income Unrealized foreign exchange (gain) 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 2020 2019 $ 2,557,131 ($ 16,525,428 ) 6(28) 35,568,103 35,129,951 ( 267,827 ) ( 1,340,458 ) 6(17) 395,669 - 6(8) ( 176,561 ) ( 307,296 ) 6(26) - ( 21,069 ) 6(26) ( 7,709 ) 219,607 - ( 951 ) 6(27) 1,026,516 1,031,733 6(24) ( 383,137 ) ( 1,030,073 ) 6(25) ( 198,526 ) ( 123,952 ) ( 250,864 ) 60,811 ( 754,282 ) 436,671 ( 10,230,321 ) 5,182,421 264,362 1,972,618 659,865 582,673 ( 426,194 ) 417,698 218,974 ( 2,773,889 ) ( 33,856 ) 34,906 ( 1,594,325 ) ( 4,695,964 ) ( 2,064,060 ) 1,132,690 ( 225,269 ) ( 2,467,509 ) ( 622,944 ) ( 6,987 ) 562,150 573,285 ( 49,414 ) ( 3,285 ) 23,967,481 17,478,203 ( 1,563,328 ) ( 3,642,821 ) 22,404,153 13,835,382

(Continued)

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets or liabilities 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 measured at fair value through other comprehensive income (Increase) decrease in financial assets at amortized cost - current (Increase) decrease in refundable deposits Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Net cash inflows from business combination Interest received Dividends received Net cash flows (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from issuance of bonds Interest paid Repayment of the principal portion of lease liabilities Cash paid from capital surplus Cash dividends paid Cash dividends paid to non-controlling interests Treasury shares transferred to employees Payments to acquire treasury shares Others Net cash flows from (used in) financing activities Effect of changes in foreign currency exchange Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Notes 2020 2019 ($ 447,862 ) ($ 148,874 ) 6(2) 1,307,261 35,585 ( 7,328 ) ( 147,364 ) 6(3) 277,836 1,500 ( 22,988,048 ) 31,659,162 ( 447,386 ) 55,552 6(33) ( 20,673,368 ) ( 24,804,629 ) 258,342 38,597 6(12) ( 26,076 ) ( 49,825 ) 6(33) - 330,546 391,537 1,095,236 420,986 693,976 ( 41,934,106 ) 8,759,462 20,000,000 500,000 ( 16,046,000 ) ( 16,227,000 ) 6(34) 8,900,934 - ( 676,496 ) ( 985,651 ) ( 308,894 ) ( 463,805 ) 6(21) ( 963,107 ) - 6(21) - ( 597,124 ) ( 3,247 ) - 279,162 - 6(19) - ( 2,299,624 ) 6(20) 1,694 39 11,184,046 ( 20,073,165 ) 145,015 ( 1,636,032 ) ( 8,200,892 ) 885,647 34,732,975 33,847,328 $ 26,532,083 $ 34,732,975

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

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INNOLUX CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2020 AND 2019

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

1. HISTORY AND ORGANIZATION

• (1) Innolux Corporation (the “Company”) was organized on January 14, 2003 under the Act for Establishment and Administration of Science Parks in the Republic of China (R.O.C.). The Company was listed on the Taiwan Stock Exchange Corporation (the “TSEC”) in October 2006. The Company merged with TPO Displays Corporation and Chi Mei Optoelectronics Corporation on March 18, 2010, with the Company as the surviving entity.

• (2) The Company and its subsidiaries (the “Group”) engage in the research, development, design, manufacture and sales of TFT-LCD panels, modules and monitors of LCD, color filter, and low temperature poly-silicon TFT-LCD.

• THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on February 4, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC effective from 2020 are as follows:

	Effective date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of	January 1, 2020
material’
Amendments to IFRS 3, ‘Definition of a business’	January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS7 ,‘Interest rate benchmark	January 1, 2020
reform’
Amendment to IFRS 16, ‘Covid-19-related rent concessions’	June 1, 2020 (Note)
Note：Earlier application from January 1, 2020 is allowed by FSC.
The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

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	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from	January 1, 2021
applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,	January 1, 2021
‘Interest Rate Benchmark Reform— Phase 2’

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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New standards, interpretations and amendments issued by IASB but not endorsed by the FSC are as follows: New Standards, Interpretations and Amendments	yet included in the IFRSs as Effective date by International Accounting Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2023
current’
Amendments to IAS 16, ‘Property, plant and equipment:proceeds	January 1, 2022
before intended use’
Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a	January 1, 2022
contract’
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. Amendments to IAS 1, ‘Classification of liabilities as current or non-current’

The amendments clarify that classification of liabilities depends on the rights that exist at the end of the reporting period. An entity shall classify a liability as current when it does not have a right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. Also, the amendments define ‘settlement’ as the extinguishment of a liability with cash, other economic resources or an entity’s own equity instruments.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

• The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligations.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Significant inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

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• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary would be reclassified to profit or loss when the related assets or liabilities are disposed of.

• B. Subsidiaries included in the consolidated financial statements:

Main Business Name of Investor Name ofSubsidiary Activities Innolux Corporation Innolux Holding Limited Investment holdings Keyway Investment Management Limited Investment holdings Landmark International Ltd. Investment holdings Toppoly Optoelectronics (B.V.I.) Ltd. Investment holdings Innolux Hong Kong Holding Limited Investment holdings Leadtek Global Group Limited Distribution company Yuan Chi Investment Co., Ltd. Investment company InnoJoy Investment Corporation Investment company Innolux Japan Co., Ltd. Investment, R&D and distribution company Innolux Singapore Holding Pte. Ltd. Investment holdings CarUX Technology Inc. R&D, manufacturing and distribution company InnoCare Optoelectronics Corporation Investment, R&D, manufacturing and distribution company GIO Optoelectronics Corp. Investment, R&D, manufacturing and distribution company Innolux Holding Limited Rockets Holding Limited Investment holdings Suns Holding Ltd Investment holdings Lakers Trading Limited Distribution company Keyway Investment Management Limited Foshan Innolux Logistics Ltd. Warehousing company

December December 31,2020 31,2019 Description 100 100 - 100 100 - 100 100 - 100 100 - 100 100 - 100 100 - 100 100 - 100 100 - 54 54 - 100 100 - - 100 (a) 100 100 - 63 63 - 100 100 - 100 100 - 100 100 - 100 100 - Ownership (%)

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

Main Ownership (%)
Business December December
Name of Investor Name of Subsidiary Activities 31, 2020 31, 2019 Description
----- End of picture text -----

Name of Investor	Name ofSubsidiary	Business Activities	December 31,2020	December 31,2019	Description
Landmark	Ningbo Innolux	Processing company	100	100	-
International Ltd.	Optoelectronics Ltd.
	Foshan Innolux	Processing company	100	100	-
	Optoelectronics Ltd.
	Ningbo Innolux Display Ltd.	Processing company	100	100	-
Toppoly	Toppoly Optoelectronics	Investment holdings	100	100	-
Optoelectronics	(Cayman) Ltd.
(B.V.I.) Ltd.
Innolux Hong Kong	Innolux Optoelectronics	Investment holdings	-	100	(a)
Holding Limited	Hong Kong Holding Limited
	Innolux Hong Kong Limited	Distribution	100	100	-
		company
	Innolux Europe B.V.	Investment,	-	100	(a)
		distribution, and
		R&D testing
		company
	Innolux Japan Co., Ltd.	Investment, R&D	46	46	-
		and distribution
		company
	CarUX Holding Limited	Investment holdings	100	100	-
Innolux Japan Co.,	Innolux USA, Inc.	Distribution	100	100	-
Ltd.		company
Innolux Singapore	Innolux Optoelectronics	Distribution	100	100	-
Holding Pte. Ltd.	India Private Limited	company
	Innolux Optoelectronics	Manufacturing and	100	100	-
	Philippines Corp.	distribution company
	Innolux Optoelectronics	Manufacturing and	100	100	-
	Malaysia SDN. BHD.	distribution company
Rockets Holding	Stanford Developments	Investment holdings	100	100	-
Limited	Limited
	Nets Trading Ltd.	Investment company	100	100	-
Suns Holding Ltd	Warriors Technology	Investment company	100	100	-
	Investments Ltd
Toppoly	Nanjing Innolux Technology	Distribution	100	100	-
Optoelectronics	Ltd.	company
(Cayman) Ltd.
	Nanjing Innolux	Processing company	100	100	-
	Optoelectronics Ltd.
CarUX Holding	CARUX TECHNOLOGY	Investment and	100	100	-
Limited	PTE. LTD.	distribution company
CARUX	Innolux Optoelectronics	Investment holdings	100	-	(a)
TECHNOLOGY	Hong Kong Holding Limited
PTE. LTD.

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Main Ownership (%)
Business December December
Name of Investor Name of Subsidiary Activities 31, 2020 31, 2019 Description
----- End of picture text -----

Name of Investor	Name ofSubsidiary	Business Activities	December 31,2020	December 31,2019	Description
CARUX	Innolux Europe B.V.	Investment,	100	-	(a)
TECHNOLOGY		distribution, and
PTE. LTD.		R&D testing
		company
	CarUX Technology Inc.	R&D, manufacturing	100	-	(a)
		and distribution
		company
Innolux	Shanghai Innolux	Processing company	100	100	-
Optoelectronics Hong	Optoelectronics Ltd.
Kong Holding
Limited
Innolux Europe B.V.	Innolux Technology	Testing and	100	100	-
	Germany GmbH	maintenance
		company
Stanford	Innocom Technology	Processing company	100	100	-
Developments	(Shenzhen) Co., Ltd.
Limited
Ningbo Innolux	Ningbo Innolux Electornics	Distribution	-	100	(d)
Display Ltd.	Ltd.	company
Ningbo Innolux	Ningbo Innolux Flent	Distribution	-	100	(b)
Optoelectronics Ltd.	Electornics Ltd.	company
Foshan Innolux	Foshan Innolux Flent	Distribution	-	100	(b)
Optoelectronics Ltd.	Electornics Ltd.	company
Innocom Technology	Shenzhen PixinLED	R&D and	100	100	-
(Shenzhen) Co.,	Technology Co., LTD.	distribution company
	Innolux Automations and	R&D and	-	100	(c)
	Intelligence Systems	distribution company
	(ShenZhen) Co., Ltd.
InnoCare	InnoCare Optoelectronics	Distribution	100	100	-
Optoelectronics	Japan Co., Ltd.	company
Corporation
	InnoCare Optoelectronics	Distribution	100	100	-
	USA, INC.	company
	Ningbo Innolux Electornics	Distribution	100	-	(d)
	Ltd.	company
GIO Optoelectronics	Double Star Inc.	Investment holdings	100	100	-
Corp.
	GIO (Maanshan)	Processing company	100	100	-
	Optoelectronics Co., Ltd.

(a) In the first quarter of 2020, CarUX Technology Pte. Ltd. obtained 100% equity interest in Innolux Optoelectronics Hong Kong Holding Limited, Innolux Europe B.V. and CarUX Technology Inc. as the Group adjusted the investment structure.

• (b) In the second quarter of 2020, Ningbo Innolux Flent Electornics Ltd. and Foshan Innolux Flent Electornics Ltd. had completed liquidation and dissolution.

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  - (c) In the fourth quarter of 2020, Innolux Automations and Intelligence Systems (ShenZhen) Co., Ltd. had completed liquidation and dissolution.

  - (d) In the fourth quarter of 2020, InnoCare Optoelectronics Corporation obtained 100% equity interest in Ningbo Innolux Electornics Ltd. as the Group adjusted the investment structure.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. The restrictions on fund remittance from subsidiaries to the parent company: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

• (4) Foreign currency translation

• Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

  • (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

  • (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

  • (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

  • (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

  • (a) The operating results and financial position of all the group entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

    • i. Assets and liabilities for each balance sheet presented are translated at the spot exchange rate at the date of that balance sheet;

    • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

    • iii. All resulting exchange differences are recognized in other comprehensive income.

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• (b) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group retains partial interest in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.

• (c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realized within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

• Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.

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• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

• D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (8) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (9) Financial assets at amortized cost

• A. Financial assets at amortized cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortized cost are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.

• D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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• C. The Group’s operating pattern of accounts receivable that are expected to be factored is for the purpose of receiving contract cash flow and selling, and the accounts receivable are subsequently measured at fair value, with any changes in fair value recognized in other comprehensive income.

• (11) Impairment of financial assets

• For accounts receivable that have a significant financing component, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

• (12) Derecognition of financial assets

• The Group derecognizes a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.

(13) Operating leases (lessor)

Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term.

• (14) Inventories

• Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(15) Investments accounted for using equity method / associates

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

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• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• (16) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

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Buildings and structures 2~51 years Machinery and equipment 5~11 years Other equipment 2~6 years

• (17) Leasing arrangements (lessee) - right-of-use assets / lease liabilities

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

  • (a) Fixed payments, less any lease incentives receivable; and

  • (b) Variable lease payments that depend on an index or a rate.

  • The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

  • (a) The amount of the initial measurement of lease liability; and

  • (b) Any lease payments made at or before the commencement date.

  • The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 25 ~ 50 years.

(19) Intangible assets

• A. Goodwill arises in a business combination accounted for by applying the acquisition method.

• B. Patent, royalties and other intangible assets are amortized on a straight-line basis over their estimated useful lives of 2 ~ 10 years.

• (20) Impairment of non-financial assets

• A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer

~25~

exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

• B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(21) Borrowings

• A. Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.

• (22) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (23) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.

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(24) Convertible bonds payable

Convertible bonds which are compound financial instruments

• A. Convertible bonds issued by the Group contain conversion options (that is, the bondholders have the right to convert the bonds into the Group’s common shares by exchanging a fixed amount of cash for a fixed number of common shares). The Group classifies the bonds payable upon issuance as a financial liability or an equity instrument in accordance with the contract terms. They are accounted for as follows:

• (a) The host contracts of bonds are initially recognized at fair value. Any difference between the initial recognition and the redemption value is accounted for as the premium or discount on bonds payable and is subsequently amortized in profit or loss as an adjustment to ‘finance costs’ over the period of circulation using the effective interest method.

• (b) The embedded conversion options which meet the definition of an equity instrument are initially recognized in ‘capital surplus—share options’ at the residual amount of total issue price less the amount of bonds payable as stated above. Conversion options are not subsequently remeasured.

• (c) Any transaction costs directly attributable to the issuance are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.

• (d) When bondholders exercise conversion options, the liability component of the bonds (including bonds payable) shall be remeasured on the conversion date. The issuance cost of converted common shares is the total book value of the abovementioned liability component and ‘capital surplus—share options’.

Convertible bonds which are hybrid financial instruments

• B. Convertible bonds issued by the Company contain conversion options (that is, the bondholders have the right to convert the bonds into the Company’s common shares, but not exchanging a fixed amount of cash for a fixed number of common shares), call options and put options. The Group classifies the bonds payable upon issuance as a financial liability or an equity instrument in accordance with the contract terms. They are accounted for as follows:

• (a) The embedded conversion options, call options and put options are recognized initially at net fair value as ‘financial assets or financial liabilities at fair value through profit or loss’. They are subsequently remeasured and stated at fair value on each balance sheet date; the gain or loss is recognized as ‘gain or loss on valuation of financial assets or financial liabilities at fair value through profit or loss’.

• (b) The host contracts of bonds are initially recognized at the residual value of total issue price less the amount of ‘financial assets or financial liabilities at fair value through profit or loss’ as stated above. Any difference between the initial recognition and the redemption value is accounted for as the premium or discount on bonds payable and subsequently is amortized in profit or loss as an adjustment to the ‘finance costs’ over the period of circulation using the effective interest method.

~27~

• (c) Any transaction costs directly attributable to the issuance are allocated to each liability component in proportion to the initial carrying amount of each abovementioned item.

• (d) When bondholders exercise conversion options, the liability component of the bonds (including bonds payable and ‘financial assets or financial liabilities at fair value through profit or loss’ ) shall be remeasured on the conversion date. The issuance cost of converted common shares is the total book value of the abovementioned liability component.

(25) Derecognition of financial liabilities

A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires.

• (26) Provisions

Provisions (including warranties, litigation, etc.) are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

• (27) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

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     - ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• C. Employees’ compensation and directors’ remuneration

  • Employees’ compensation and directors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

• (28) Employee share based payment

• For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and nonmarket vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

• (29) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

• D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

• E. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from research and development expenditures to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

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(30) Treasury shares

• Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs, is included in equity attributable to the Company’s equity holders.

• (31) Revenue recognition

• A. The Group is primarily engaged in manufacture and sale of TFT-LCD panel products. The Group recognizes revenue when the right of control is transferred to the customer when the products are delivered to customer and the Group has no unperformed obligation that could affect customer acceptance of the product. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• B. Sales revenue is calculated based on the contract price, net of volume discounts and sales returns and discounts. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated volume discounts/ sales discounts and allowances. Accumulated experience is used to estimate and provide for the volume discounts, sales discounts and allowances, using the expected value method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognized for expected volume discounts, sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are made, which is consistent with market practice.

• C. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(32) Business combinations

• A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognized amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

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• B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognized and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognized directly in profit or loss on the acquisition date.

• (33) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgments in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. For the information of critical accounting judgments, estimates and key sources of assumption uncertainty is addressed below:

• (1) Critical accounting estimates and assumptions

The Group makes estimates and assumptions based on the expectation of future events that are believed to be reasonable under the circumstances at the end of the reporting period. The resulting accounting estimates might be different from the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

• A. Impairment assessment of goodwill

• The impairment assessment of goodwill relies on the Group’s subjective judgment, including identifying cash-generating units, allocating assets and liabilities as well as goodwill to related cash-generating units, and determining the recoverable amounts of related cash-generating units. Please refer to Note 6(12) for the information of goodwill impairment.

• B. Impairment assessment of tangible and intangible assets (excluding goodwill) The Group assesses impairment based on its subjective judgment and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilized and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future. Please refer to Notes 6(9) and 6(12) for the information of impairment assessment impairment.

• C. Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgments and estimates. Due

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to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand, checking accounts and demand deposits Time deposits	December 31, 2020 December 31, 2019 21,461,990 $ 21,959,679 $ 5,070,093 12,773,296 26,532,083 $ 34,732,975 $

• A. The Group associates with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. The above time deposits expire in 3 months and risks of changes in their values are remote.

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

Assets Current items Financial assets mandatorily measured at fair value through profit or loss Forward foreign exchange contracts Non-current items Financial assets mandatorily measured at fair value through profit or loss Listed stocks Unlisted stocks Convertible bonds Liabilities Current items Financial liabilities held for trading Convertible bonds derivative instruments Forward foreign exchange contracts	December 31,2020 706,299 $ 1,037,782 $ 2,442,400 - 3,480,182 $ December 31,2020 3,208,560 $ 13,574 3,222,134 $	December 31,2019
		283,906 $ 548,180 $ 2,463,055 33,521 3,044,756 $ December 31,2019
		- $ 345,463 345,463 $

A. The Group sold $$2,566,352 of stocks at fair value during the year ended December 31, 2020 and

the amount of receivables (shown as other receivables) outstanding as of December 31, 2020 was $1,259,091.

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• B. The Company entered into a ‘Share Issuance and Asset Purchase Agreement’ with Nanjing Huadong Electronic Information & Technology Co., Ltd (Huadong Electronic) during the year ended December 31, 2020. Refer to Note 9(2) for relevant information.

• C. The non-hedging derivative financial assets and liabilities transaction information are as follows:

Contract Period Current items TWD (sell) 4,034,150 $ 2020/11-2021/02 JPY (buy) 15,000,000 2020/11-2021/02 USD (sell) 170,000 2020/11-2021/02 JPY (buy) 17,711,370 2020/11-2021/02 USD (sell) 1,207,000 2020/10-2021/04 RMB (buy) 8,012,265 2020/10-2021/04 USD(sell) 140,000 2020/12-2021/01 TWD(buy) 3,924,200 2020/12-2021/01 Forward foreign exchange contracts December 31,2020 Contract Amount Derivative financial assets and liabilities (Notional Principal) (in thousands) Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts	December 31,2019	December 31,2019
	Contract Amount (Notional Principal) (in thousands)	Contract Period
	TWD (sell) 11,287,592 $ JPY (buy) 39,900,000 USD (sell) 37,000 JPY (buy) 4,040,505 USD (sell) 905,000 RMB (buy) 6,379,751 HKD (sell) 646,350 USD (buy) 82,500 EUR (sell) 35,000 HKD (buy) 304,588 JPY (sell) 21,548 USD (buy) 200 USD (sell) 30,000 TWD (buy) 896,400	2019/09-2020/04 2019/09-2020/04 2019/12-2020/01 2019/12-2020/01 2019/10-2020/04 2019/10-2020/04 2019/11-2020/03 2019/11-2020/03 2019/12-2020/03 2019/12-2020/03 2019/11-2020/02 2019/11-2020/02 2019/12-2020/01 2019/12-2020/01

The Group entered into forward foreign exchange contracts to hedge exchange rate risk of import and export proceeds in foreign currency. However, these contracts are not accounted for using hedge accounting.

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

Non-current items Equity instruments Listed stocks Unlisted stocks	December 31,2020 3,853,042 $ 1,034,639 4,887,681 $	December 31,2019
		3,214,251 $ 1,054,234 4,268,485 $

• A. The Group has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income.

• B. The Group sold $283,212 of listed stocks at fair value resulting in cumulative gains amounting to $236,126 on disposal which were recognized in unappropriated retained earnings during the year ended December 31, 2020.

• C. For information on other comprehensive income for fair value change recognized by the Group for the years ended December 31, 2020 and 2019, please refer to Note 6(22) “Other equity”.

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(4) Financial assets at amortized cost

December 31,2020 December 31,2019
Current items
Time deposits with maturity over three months 42,687,746 $ 19,704,149 $
The Group recognized $164,623 and $404,178 of interest income arising from the financial assets at
amortized cost for the years ended December 31, 2020 and 2019, respectively.

(5) Notes receivable and accounts receivable

Notes receivable and accounts receivable
			December 31, 2020			December 31, 2019
Notes receivable	$		239,644	$		45,906
Accounts receivable			49,867,533			40,053,319
			50,107,177			40,099,225
Less: Allowance for uncollectible accounts	( $		209,419) 49,897,758	( $		209,418) 39,889,807
A. The aging analysis of accounts receivable and notes receivable is as follows:
		December 31,2020			December 31,2019
Not past due	$		49,489,308	$		39,390,359
Up to 60 days			401,369			566,949
61 to 180 days			129,369			117,563
Over 180 days			87,131			24,354
	$		50,107,177	$		40,099,225

A. The aging analysis of accounts receivable and notes receivable is as follows:

The above aging analysis was based on past due date.

• B. As of December 31, 2020 and 2019, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2019, the balance of receivables from contracts with customers amounted to $45,273,886.

• C. Information relating to credit risk of accounts receivable is provided in Note 12(2).

(6) Transfer of financial assets

• A. Transferred financial assets that are derecognized in their entirety

The Group entered into a factoring agreement with financial institutions to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable, but is liable for the losses incurred on any business dispute. The Group does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognized the transferred accounts receivable. As of December 31, 2020, the transferred accounts receivable had all been collected.

• B. The Group has no transfer of financial assets on December 31, 2019.

(7) Inventories

Inventories
Raw materials and supplies Work in progress Finished goods	December 31,2020 5,782,404 $ 13,670,471 11,412,395 30,865,270 $	December 31,2019
		4,192,118 $ 14,704,830 11,542,128 30,439,076 $

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For the years ended December 31, 2020 and 2019, the Group recognized cost of goods sold for inventories that have been sold at $246,024,010 and $248,756,734 and recognized net inventory loss at $53,944 and $200,395 due to write down (reversal) of cost of scrap inventories to net realizable value, respectively.

(8) Investments accounted for under the equity method

value, respectively. nvestments accounted for under the equity method
Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd. Others	December 31, 2020 834,982 $ 377,751 33,501 1,246,234 $	December 31, 2019
		865,362 $ 427,338 40,870 1,333,570 $

The operating results of the Group’s share in all individually immaterial associates are summarized below:

Profit for the year from continuing operations Other comprehensive loss - net of tax ( Total comprehensive income	2020 2019 176,561 $ 307,296 $ 62,442) 85,365) ( 114,119 $ 221,931 $ Years ended December 31,

(9) Property, plant and equipment

Property, plant and equipment	quipment
Transfer, net exchange differences AtJanuary1 Additions Disposals and others At December31 Cost: Land 4,093,726 $ - $ - $ - $ 4,093,726 $ Buildings 202,292,552 380,614 394,478) ( 1,659,592 203,938,280 Machinery and equipment 519,719,206 2,325,506 7,203,510) ( 11,805,492 526,646,694 Other equipment 47,114,625 129,623 1,692,237) ( 4,179,316 49,731,327 773,220,109 2,835,743 9,290,225) ( 17,644,400 784,410,027 Accumulated depreciation and impairment: Buildings 130,770,638) ( 8,490,978) ( 389,459 453,268) ( 139,325,425) ( Machinery and equipment 421,695,341) ( 21,667,679) ( 6,974,077 404,815) ( 436,793,758) ( Other equipment 39,800,737) ( 4,674,102) ( 1,676,056 5,326) ( 42,804,109) ( 592,266,716) ( 34,832,759) ( 9,039,592 863,409) ( 618,923,292) ( Unfinished construction and equipment under acceptance 13,429,043 15,124,459 - 15,138,562) ( 13,414,940 194,382,436 $ 178,901,675 $ 2020			2020
					At December31

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2019

														Transfer, net
								Acquired						exchange
								from business						differences
		AtJanuary1			Additions			combinations			Disposals			and others		At	December31
Cost:
Land	$	3,852,792		$	-		$	240,934		$	-		$	-		$	4,093,726
Buildings		199,521,281			429,071			214,129	(		79,778)			2,207,849			202,292,552
Machinery and
equipment		510,649,778			2,554,763			184,682	(		2,734,356)			9,064,339			519,719,206
Other equipment		43,298,695			103,415			505,875	(		2,975,898)			6,182,538			47,114,625
		757,322,546			3,087,249			1,145,620	(		5,790,032)			17,454,726			773,220,109
Accumulated depreciation
and impairment:
Buildings	(	122,903,947)	(		8,341,511)	(		139,922)			76,102			538,640	(		130,770,638)
Machinery and
equipment	(	403,140,224)	(		21,419,437)	(		183,618)			2,566,464			481,474	(		421,695,341)
Other equipment	(	36,348,744)	(		4,570,350)	(		488,367)			2,889,263	(		1,282,539)	(		39,800,737)
	(	562,392,915)	(		34,331,298)	(		811,907)			5,531,829	(		262,425)	(		592,266,716)
Unfinished construction
and equipment under
acceptance		11,688,329			20,197,482			-			-	(		18,456,768)			13,429,043
	$	206,617,960														$	194,382,436

• A. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

• B. As of December 31, 2020 and 2019, the prepayments for business facilities which have not yet entered the factory (shown as ‘other non-current assets’) amounted to $242,041 and $1,503,720, respectively.

• －

• (10) Leasing arrangements lessee

• A. The Group leases various assets including land, offices and business vehicles. Rental contracts are typically made for periods of 2 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise office, dormitory and equipment. Low-value assets comprise computer equipment.

• C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings (Office) Transportation equipment (Business vehicles)	December31,2020 Carrying amount 5,521,852 $ 22,904 3,153 5,547,909 $	December31,2019
		Carrying amount
		6,049,963 $ 41,171 4,217
		6,095,351 $

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Land Buildings (Office) Transportation equipment (Business vehicles)	Year ended December31,2020 Depreciationcharge 483,648 $ 23,475 1,260 508,383 $	Year ended December31,2019
		Depreciationcharge
		500,943 $ 22,147 1,282
		524,372 $

• D. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $5,245 and $25,336, respectively.

• E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on variable lease payments Expense on short-term lease contracts Expense on leases of low-value assets	Year ended Year ended December 31,2020 December 31, 2019 94,596 $ 106,351 $ 186,729 146,882 89,631 112,975 37,510 37,983

• F. For the years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases were $687,179 and $867,996, respectively.

• (11) Investment property

Investment property
Cost: Land Buildings Accumulated depreciation: Buildings ( Cost: Land Buildings Accumulated depreciation: Buildings (		2020
	At January1 188,247 $ 439,228 627,475 100,243) ( 527,232 $ (
	At January1 188,247 $ 439,228 627,475 75,505) ( 551,970 $ (	Additions - $ - - 24,738) ( 24,738) $

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The fair value of the investment property held by the Group as at December 31, 2020 and 2019 was $2,035,178 and $1,906,827, respectively. The amounts mentioned above represent valuation results of comparative method based on market trading information categorized within Level 3 in the fair value hierarchy.

(12) Intangible assets

• A. Intangible assets are goodwill, payments for TFT-LCD related technology and royalty. Details of intangible assets are as follows:

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2020
Transfer, net
exchange
differences
At January 1 Additions Disposals and others At December 31
Cost:
Patents and royalty $ 8,158,285 $ - $ - $ 26,151 $ 8,184,436
Goodwill - - -
17,117,339 17,117,339
Others 5,309,115 26,076 ( 27,892) 60,955 5,368,254
30,584,739 26,076 ( 27,892) 87,106 30,670,029
Accumulated amortization
and impairment:
Patents and royalty ( 8,151,571) ( 5,144) - - ( 8,156,715)
Others ( 4,855,524) ( 194,029) 27,892 15,331 ( 5,006,330)
( 13,007,095) ( 199,173) 27,892 15,331 ( 13,163,045)
$ 17,577,644 ($ 173,097) $ - $ 102,437 $ 17,506,984
2019
Transfer, net
Acquired exchange
from business differences
At January 1 Additions combinations Disposals and others At December 31
Cost:
Patents and royalty $ 8,154,685 $ - $ - $ - $ 3,600 $ 8,158,285
Goodwill 17,096,628 - 20,711 - - 17,117,339
Others 5,247,197 49,825 - ( 38,684) 50,777 5,309,115
30,498,510 49,825 20,711 ( 38,684) 54,377 30,584,739
Accumulated amortization
and impairment:
Patents and royalty ( 8,147,367) ( 4,204) - - - ( 8,151,571)
Others ( 4,669,658) ( 245,339) - 38,684 20,789 ( 4,855,524)
-
( 12,817,025) ( 249,543) 38,684 20,789 ( 13,007,095)
$ 17,681,485 ($ 199,718) $ 20,711 $ - $ 75,166 $ 17,577,644
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B. Details of amortization of intangible assets are as follows:

Operating costs Operating expenses	Years ended December 31,	Years ended December 31,
	2020 69,559 $ 129,614 199,173 $	2019
		93,186 $ 156,357 249,543 $

• C. The Company is primarily engaged in the manufacture of TFT-LCD products, which is a single cash-generating unit. The Group performed impairment analysis for recoverable amount of the goodwill at each reporting date and used the value in use as the basis for calculation of the recoverable amount. The value in use was calculated based on the estimated present value of future cash flows for five years, which was discounted at the discount rate of 12.07% and 12.51% , respectively, for the years ended December 31, 2020 and 2019, to reflect the specific risks of the related cash generating units. The future cash flows were estimated based on the future revenue, gross profit, and other operating costs each year. Based on the evaluation above, the Group did not recognize impairment loss on goodwill for the years ended December 31, 2020 and 2019, respectively.

(13) Other payables

respectively. Other payables
Other personnel expenses Payable on machinery and equipment Repairs and maintenance expense payable Utilities expense payable Other payables	December 31,2020 8,460,510 $ 3,749,913 2,808,420 1,137,259 9,521,439 25,677,541 $	December 31, 2019
		8,695,902 $ 6,463,079 2,617,884 1,125,275 9,720,592
		28,622,732 $

(14) Bonds payable

Bonds payable
		December31,2020		December	31,2019
Bonds payable		$	6,331,424	$	100,000
Less: Discount on bonds payable	(		858,420)	(	2,982)
Less: Current portion of bonds payable	(		98,711)		-
		$	5,374,293	$	97,018

• A. The issuance of unsecured overseas convertible bonds by the Company in 2019

• The terms of the first unsecured overseas convertible bonds issued by the Company in 2019 are as follows

• (a) The Company issued USD 300 million, 0% first unsecured overseas convertible bonds, as approved by the regulatory authority on January 15. The bonds mature 5 years from the issue date (January 22, 2020 ~ January 22, 2025) and will be redeemed in cash at face value at the maturity date.

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• (b) The bondholders have the right to ask for conversion of the bonds into common shares of the Company during the period from the date after three months of the bonds issue to 30 days before the maturity date, except for the stop transfer period as specified in the terms of the bonds or the laws/regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

• (c) The conversion price of the bonds is adjusted based on the pricing model in the terms of the bonds. As of December 31, 2020, the conversion price was $10.59 (in dollars) (using the exchange rate 1 USD: 29.913 NTD).

• (d) The bondholders have the right to require the Company to redeem bonds at the price of the bonds’ face value in whole or partially on the date of three years after the bond issuance.

• (e) Under the terms of the bonds, all bonds repurchased (including from secondary market), early redeemed and matured by the Company, or converted and sold back by the bondholder will be cancelled and not to be reissued.

• (f) As of December 31, 2020, some convertible bonds were calculated at the conversion price at the time of conversion. Refer to Note 6(19) for relevant information.

• B. Regarding the issuance of convertible bonds, the non-equity conversion options, redeem options and put options were separated from their host contracts and were recognized in ‘financial assets or liabilities at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts.

• C. The issuance of domestic convertible bonds by the Group’s subsidiary GIO Optoelectronics Corp. (referred herein as “GIO Company”)

• The terms of the first domestic secured convertible bonds issued by GIO Company are as follows:

• (a) GIO Company issued $100,000, 0% first domestic secured convertible bonds, as approved by the regulatory authority. The bonds mature 3 years from the issue date (October 1, 2018 ~ October 1, 2021) and will be redeemed in cash at face value at the maturity date.

• (b) The bondholders have the right to ask for conversion of the bonds into common shares of GIO Company during the period from the date after three months of the bonds issue to 10 days before the maturity date, except for the stop transfer period as specified in the terms of the bonds or the laws/regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

• (c) The conversion price of the bonds is set up based on the pricing model in the terms of the bonds, and is subject to adjustments if the condition of the anti-dilution provisions occurs subsequently. The conversion price was $10.7 (in dollars) per share upon issuance.

• (d) Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are cancelled and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

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• D. Regarding the issuance of convertible bonds, the equity conversion options of GIO company amounting to $4,778 were separated from the liability component and were recognized in ‘capital surplus—share options’ in accordance with IAS 32.

- (15) Long term borrowings

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Type of loans Period December 31, 2020 December 31, 2019
Syndicated bank loans 2016/12/6 $ 39,750,000 $ 35,730,000
~2024/4/15
Secured borrowings 2016/7/29
~2022/7/28 54,500 120,500
Less:
Administrative expenses
charged by syndicated banks ( 151,503) ( 223,719)
Current portion (includes
administrative expenses) ( 19,268,495) ( 16,022,013)
$ 20,384,502 $ 19,604,768
Range of interest rates 1.45%~2.07% 1.79%~2.07%
----- End of picture text -----

Range of interest rates

• A. Please refer to Note 8 for the information on assets pledged as collateral for long-term borrowings.

• B. The syndicated loan agreements specified that the Company shall meet covenants on current ratio, liability ratio, interest coverage, and tangible net equity, based on the Company’s annual consolidated financial statements audited by independent auditors. The Company’s financial ratios on the consolidated financial statements for the years ended December 31, 2020 and 2019 are in compliance with the covenants on the syndicated loan agreement.

• C. For repayment of borrowings from financial institutions and financing mid-term working capital fund, the Board of Directors approved the signing of a syndicated loan with financial institution in the amount of $37.5 billion on May 5, 2020. As of December 31, 2020, the loan has yet to be drawn down.

(16) Pensions

• A. Defined benefit pension plan

• (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who choose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name

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of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March.

• (b) The amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligations Fair value of plan assets ( Net defined benefit liability	December 31, 2020 December31,2019 2,127,700 $ 2,128,296 $ 1,970,661) 1,835,192) ( 157,039 $ 293,104 $

• (c) Movements in net defined benefit liabilities are as follows:

Present value of defined benefit obligations Year ended December 31, 2020 Balance at January 1 2,128,296 $ Current service cost 5,756 Interest expense / income 18,071 23,827 Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in financial assumptions 148,100 Experience adjustments 158,528) ( Benefits paid 13,995) ( ( 24,423) ( Contribution for the year - Balance at December 31 2,127,700 $

Fair value Net defined ofplan assets benefit liability 1,835,192 $ 293,104 $ - 5,756 15,959 2,112 15,959 7,868 47,211 47,211) ( - 148,100 - 158,528) ( 13,995) - 33,216 57,639) ( 86,294 86,294) ( 1,970,661 $ 157,039 $

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Present value of defined benefit obligations Year ended December 31, 2019 Balance at January 1 2,000,113 $ Current service cost 6,039 Interest expense / income 24,926 30,965 Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in demographic assumptions 3,324) ( Change in financial assumptions 121,231 Experience adjustments 5,923) ( Benefits paid 14,766) ( ( 97,218 Contribution for the year - Balance at December 31 2,128,296 $	Fair value Net defined ofplan assets benefit liability 1,686,545 $ 313,568 $ - 6,039 21,572 3,354 21,572 9,393 53,738 53,738) ( - 3,324) ( - 121,231 - 5,923) ( 14,766) - 38,972 58,246 88,103 88,103) ( 1,835,192 $ 293,104 $	Net defined benefit liability

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

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(e) The principal actuarial assumptions used were as follows:

	Years ended December 31,
	2020 2019
Discount rate	0.40% 0.85%
Future salary increases	1.50% 1.50%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31, 2020 Effect on present value of defined benefit obligation ( December 31, 2019 Effect on present value of defined benefit obligation (	Increase Decrease 0.25% 0.25% 83,849) $ 87,979 $ Increase Decrease 0.25% 0.25% 76,642) $ 80,299 $ Discountrate Discountrate	Increase Decrease 0.25% 0.25% 81,342 $ 78,113) ($ Increase Decrease 0.25% 0.25% 79,573 $ 76,346) ($ Future salaryincreases Future salaryincreases
	Increase 0.25% 76,642) $

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) As of December 31, 2020, the weighted average duration of the retirement plan is 16 years.

• B. Defined contribution pension plan

• (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The subsidiaries in Mainland China have defined contribution plans. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentages of employees’ monthly salaries and wages.

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• C. The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2020 and 2019 were $1,682,528 and $1,815,665, respectively.

• (17) Share-based payment

• A. For the years ended December 31, 2020 and 2019, the share-based payment arrangements of the Group’s subsidiary were as follows:

Group’s subsidiary were as	follows:
Type of loans arrangement Employee stock options Employee stock options Treasury stock transferred to employees	Grant date 2017/10/01 2020/07/07 2020/08/17	Quantity granted (in thousand units)	Contract period (inyears) 5 1.08；6 -	Vesting conditions
		6,600 7,500 80,000		Note 1 Note 2 Vested immediately

• Note 1: The employees’ stock options of the subsidiary, GIO Company, are exercised based on the issue date. After the date of issuance (2 to 3 years), the employees can exercise their employee stock options in batch at the ratio of 60% and 40%. Stock options that not exercise before the expiry date will be permanently forfeited.

• Note 2: The employees’ stock options of the subsidiary, InnoCare Optoelectronics Corporation (referred herein as “InnoCare Company”), are exercised based on the issue date and the following two plans :(a) for 1 year after the date of issuance, the employees can exercise their employee stock options all at once; and (b) for 2 to 4 years after the date of issuance, the employees can exercise their employee stock options in batch at the ratio of 30%, 30% and 40%. Stock options that not exercise before the expiry date will be permanently forfeited.

• B. Details of the share-based payment arrangements are as follows:

• －

• (a) Employee stock options GIO Company

Options outstanding at the beginning of the year Options forfeited Options outstanding at the end of the year Options exercisable at the end of the year		Quantity Weighted-average (in thousand exercise price units) (indollars) 6,232 9.6 $ 110) 9.6 6,122 9.4 6,122 2020	Quantity Weighted-average (in thousand exercise price units) (indollars) 6,232 9.6 $ 110) 9.6 6,122 9.4 6,122 2020			Weighted-average exercise price (indollars) 2019
		Quantity (in thousand units)			Quantity (in thousand units)
	(	6,232 110) 6,122 6,122	9.6 $ 9.6 9.4	(	6,372 140) 6,232 -	9.8 $ 9.8 9.6

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－ (b) Employee stock options InnoCare Company

Employee stock options－InnoCare Company
Options outstanding at the beginning of the year Options exercised Options outstanding at the end of the year Options exercisable at the end of the year	Quantity Weighted-average (in thousand exercise price units) (in dollars) - - $ 7,500 22.5 7,500 22.5 - 2020
		- $ 22.5 22.5

• C. The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

follows:
Issue date approved 2017.10.1 2020.7.7 Issue date approved 2017.10.1	Expiry date 2022.9.30 2026.7.6 Expirydate 2022.9.30		December 31, 2020
			Quantity Exercise price (inthousand units) (in dollars) 6,122 $ 9.4 7,500 22.5 December 31,2019
			Quantity Exercise price (in thousand units) (in dollars) 6,232 $ 9.6

• D. The fair value of stock options granted is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

Type of loans arrangement Employee stock options Employee stock options	Grant date 2017.10.01 2020.07.07	Price (in dollars) 2.18 23.61	Exercise Price (in dollars) 10 22.5	Expected volatility (%) 48.38~ 48.58 35.59~ 45.98	Expected duration (inyears) 3.5~4 1.04~5	Expected dividends - -	Risk-free Fair value interest per unit rate(%) (in dollars) 0.63~ 0.68 0.0783~ 0.1099 0.26~ 0.37 4.88~ 8.16

• E. The information on fair value of treasury stock transferred to the employees is as follows:

Type of loans arrangement Grant date Treasury stock transferred to employees 2020.08.17	Exercise Price Price (in dollars) (in dollars) 8.27 3.5	Fair value per unit (in dollars)
		4.77

F. For the years ended December 31, 2020 and 2019, the Group recognized expenses on share-based payment transaction (equity settlement) and the cost of employees’ compensation from treasury stock transferred to employees were $395,669 and $28, respectively.

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(18) Provisions-current

Warranty At January 1, 2020 3,965,902 $ Additions during the year 1,295,746 Used (unused amounts reversed) during the year 2,205,050) ( At December 31, 2020 3,056,598 $	Litigation and others 2,810,025 $ 286,360 - ( 3,096,385 $	Total 6,775,927 $ 1,582,106 2,205,050) 6,152,983 $

A. Warranty

The Group provides warranty on TFT-LCD panel products sold. Provision for warranty is estimated based on historical warranty data of TFT-LCD panel products.

B. Litigation and others

Litigation and other provisions for the Group are related to patents of TFT-LCD panel products and anti-trust litigations. For information on estimation of provisions, please refer to Note 9(1).

(19) Share capital

• A. As of December 31, 2020, the Company’s authorized and outstanding capital were $105,000,000 and $97,110,720, with a par value of $10 (in dollars) per share, respectively. All proceeds from shares issued have been collected.

Movements in the number of the Company’s ordinary shares outstanding (including certificate

of entitlement to new shares from convertible bonds) are as follows:

At January 1 Stocks converted from bonds Treasury stock transferred to employees Shares retired At December 31	2020 Number of ordinary shares(in thousand units) 9,631,072 229,361 80,000 - ( 9,940,433	2019 Number of ordinary shares(in thousand units) 9,952,072 - - 321,000) 9,631,072

1. The Company’s bonds totalling USD 81,200 thousand (face value) had been converted into $2,293,612 of ordinary shares (229,361 thousand shares) with a par value of $10 (in dollars) per share during the year ended December 31, 2020, which resulted in ‘capital surplus, additional paid-in capital arising from bond conversion’ of $243,805. As of December 31, 2020, the registration has not yet been completed and therefore the shares were shown as ‘certificate of entitlement to new shares from convertible bonds’.

C. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

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==> picture [449 x 184] intentionally omitted <==

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

2020 2019
Quantity Quantity
(in thousand units) Book value (in thousand units) Book value
- -
At January 1 80,000 $ 618,580 $
Treasury stock
transferred to
- -
employees ( 80,000) ( 618,580)
Retirement for
- -
the year 321,000 2,299,624
Cancellation for
- -
the year ( 241,000) ( 1,681,044)
At December 31 - $ - 80,000 $ 618,580
----- End of picture text -----

In 2019, the Company repurchased shares in order to transfer to employees and maintain the Company’s credit rating and shareholders’ equity. In November 2019, the Company cancelled the treasury shares which used to maintain the Company’s credit rating and shareholders’ equity in accordance with Securities and Exchange Act.

  - (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.

  - (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and the shareholder's rights should not be enjoyed before it is reissued.

  - (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be cancelled.

  - (e) For the year ended December 31, 2020, treasury stocks transferred to employees of the Company and subsidiaries were 80,000 thousand shares, and cost of employees’ compensation and transferred amount were $381,600 and $279,162, respectively. The aforementioned amount is higher than the carrying amount of treasury stock. Thus, the differences were recognized as share capital generated from treasury stock transactions.

• (20) Capital surplus

• Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paidin capital each year. Accumulated deficit shall first be covered by retained earnings before the capital reserve can be used to cover the accumulated deficit.

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2020

					2020
Share premium At January 1 97,202,453 $ Cash dividends from capital surplus 963,107) ( Conversion of convertible bonds 243,805 Recognition of changes in ownership interests in subsidiaries - Recognition of change in equity of associates in proportion to the Group's ownership - Treasury stock transferred to employees - Others 1,694 At December 31 96,484,845 $ Share premium At January 1 99,614,690 $ Cancellation of treasury shares 2,412,276) ( Recognition of changes in ownership interests in subsidiaries - Recognition of change in equity of associates in proportion to the Group's ownership - Others 39 At December 31 97,202,453 $	Share premium 97,202,453 $ 963,107) ( 243,805 - - - 1,694 96,484,845 $			Treasury share transactions 3,141,232 $ - - - - 42,182 - 3,183,414 $	Changes in ownership interests in subsidiaries 24 $ - - 38 - - - 62 $ 2019	Share of profit (loss) of associates accounted for under equitymethod 18,670 $ - - - 21,005 - - 39,675 $	Total 100,362,379 $ 963,107) ( 243,805 38 21,005 42,182 1,694 99,707,996 $
		Share premium 99,614,690 2,412,276) - - 39 97,202,453			Share of profit (loss) Changes of associates in ownership accounted interests in for under subsidiaries equitymethod Total - $ 33,425 $ 99,648,115 $ - - 728,956 24 - 24 - 14,755) ( 14,755) ( - - 39 24 $ 18,670 $ 100,362,379 $		Total
	$

(21) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be offset against prior years’ operating losses, then set aside 10% of the remaining amount as legal reserve (until the legal reserve equals the paid-in capital). Preferred dividend shall be distributed

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after setting aside or reversing a special reserve according to related regulations. The appropriation of the remaining amount along with the unappropriated earnings from previous years shall be proposed by the Board of Directors and resolved by the shareholders. The Company is in an emerging industry which is growing rapidly, and has a capital intensive business. The Company is at the stage of stable growth. In line with the Company’s long-term financial plan in the future, investment environment and business competition situation, the appropriation of dividends shall be proposed by the Board of Directors and resolved by the shareholders, taking into account the future capital expenditure budget and capital requirement of the Company. However, the stock dividends distributed to shareholders shall not exceed twothirds of distributable dividends in current period.

• B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve exceeds 25% of the Company’s paid-in capital.

• C. The details of the 2019 deficit compensation which was approved at the stockholders’ meeting in June 2020 and the appropriation of 2018 net income which was approved at the stockholders’ meeting in June 2019 are as follows:

Legal reserve Provision of special reserve Cash dividends	Years ended December 31,	Years ended December 31,	Years ended December 31,
	Dividends per Amount share (in dollars) - $ 2,661,974 - - $ 2,661,974 $ 2019	2018
		Amount 222,276 $ 3,572,742 597,124 4,392,142 $	Dividends per share(in dollars)
			0.06 $

Further, the stockholders’ meeting in June 2020 approved a resolution to distribute cash dividends amounting to $963,107 at $0.1 (in dollars) per share from capital surplus.

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(22) Other equity items

Other equity items
					2020
					Financial assets at fair
		Currency			value through other
		translation			comprehensive income		Total
At January 1	($	9,497,686)		$	2,172,249	($	7,325,437)
Revaluation - gross		-			881,733		881,733
Disposal of investments in
equity instruments measured
at fair value through other
comprehensive income		-	(		236,126)	(	236,126)
Currency translation differences		680,959			-		680,959
Share of other comprehensive
loss of associates	(	62,442)			-	(	62,442)
Effect of income tax		-			1,642		1,642
At December 31	($	8,879,169)		$	2,819,498	($	6,059,671)
					2019
					Financial assets at fair
		Currency			value through other
		translation			comprehensive income		Total
At January 1	($	6,461,149)	$		1,797,686	($	4,663,463)
Revaluation - gross		-			299,431		299,431
Currency translation differences	(	2,951,172)			-	(	2,951,172)
Share of other comprehensive
loss of associates	(	85,365)			-	(	85,365)
Effect of income tax		-			75,132		75,132
At December 31	($	9,497,686)	$		2,172,249	($	7,325,437)

(23) Operating income

TFT-LCD products

Years ended December 31,	Years ended December 31,
2020 269,911,051 $	2019
	251,971,209 $

The Group derives revenue from the transfer of goods at a point in time.

(24) Interest income

Interest income
Interest income from bank deposits Interest income from financial assets at amortized cost	Years ended December 31,
	2020 218,514 $ 164,623 383,137 $	2019
		625,895 $ 404,178 1,030,073 $

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(25) Other income

Grant revenue Service revenue Compensation income Dividend revenue Rental revenue Other income	2020 2019 585,730 $ 679,192 $ 575,276 457,226 406,492 137,170 198,526 123,952 161,629 185,299 786,637 643,947 2,714,290 $ 2,226,786 $ Years endedDecember31,

(26) Other gains and losses

Other gains and losses
			Years ended	December	31,
			2020		2019
Net gain on financial assets and		$	2,987,483	$	1,284,844
liabilities at fair value through profit or loss
Net currency exchange loss	(		3,113,179)	(	77,541)
Gain on disposal of investments			-		21,069
Gain (loss) on disposal of property, plant and
equipment			7,709	(	219,607)
Other losses	(		1,384,151)	(	132,719)
	($		1,502,138)	$	876,046

(27) Finance costs

Finance costs
Interest expense: Bank borrowings Convertible bonds Others	Years ended December 31,
	2020 668,137 $ 254,379 104,000 1,026,516 $	2019
		924,488 $ - 107,245 1,031,733 $

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(28) Expenses by nature

Expenses by nature
		Years ended	December	31,
		2020		2019
Employee benefit expense:
Salaries and other short-term employee benefits	$	36,063,713	$	36,304,681
Employee stock options		395,669		28
Post-employment benefits		1,690,396		1,825,058
Depreciation		35,368,930		34,880,408
Amortization		199,173		249,543
	$	73,717,881	$	73,259,718

(29) Employees’ compensation and directors’ remuneration

• A. According to the Articles of Incorporation of the Company, a ratio of profit of the current year distributable, after covering accumulated losses, shall be distributed as employees' compensation and directors’ remuneration. The ratio shall not be lower than 5% for employees’ compensation and shall not be higher than 0.1% for directors’ remuneration.

• B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $139,349 and $0, respectively; while directors’ remuneration was accrued at $2,144 and $0, respectively. The aforementioned amounts were recognized in expenses.

• The expenses recognized for 2020 were accrued based on the earnings of current year. The employees’ compensation and directors’ remuneration were $139,349 and $2,144 in the form of cash, respectively, as resolved by the Board of Directors on February 4, 2021. The accrued amounts were in agreement with the amount of recorded expense for the year ended December 31, 2020.

• For the year ended December 31, 2019, the Company incurred net loss and had an accumulated deficit. Thus, there was no distribution of employees' compensation and directors’ remuneration as resolved by the Board of Directors on February 13, 2020.

• Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(30) Income tax

A. Income tax expense

(a)Components of income tax expense:

e tax ome tax expense Components of income tax expense:
			Years ended	December 31,
			2020			2019
Current tax:
Current tax on profit for the year		$	501,205		$	1,308,831
Prior year income tax under (over)
estimation			54,676	(		940,335)
Total current tax			555,881			368,496
Deferred tax:
Origination and reversal of temporary
differences			484,243			526,376
Loss carryforward	(		122,817)			19,972
Income tax expense		$	917,307		$	914,844

(b)The income tax (charge)/credit relating to components of other comprehensive income is as follows:

llows:
		Years ended	December 31,
		2020		2019
Changes in fair value of financial	($	1,642)	($	75,132)
assets at fair value through other
comprehensive income
Remeasurements of defined benefit
obligations		11,528	(	11,649)
	$	9,886	($	86,781)

B. Reconciliation between income tax expense and accounting profit:

Tax calculated based on profit before tax and statutory tax rate Effects from items disallowed by tax regulation Prior year income tax (over) under estimation Separate taxation Change in assessment of realization of deferred tax assets Tax expense	2020 2019 920,239 $ 2,287,051) ($ 134,617 401,482) ( 54,676 940,335) ( 6,193 15,706 198,418) ( 4,528,006 917,307 $ 914,844 $ Years ended December 31,

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• C. Amounts of deferred tax assets or liabilities as a result of temporary differences and loss carryforward are as follows:

carryforward are as follows:
Recognized Recognized in other in profit comprehensive January1 or loss income December 31 Deferred tax assets: -Temporary differences: Sales returns and discount provisions 668,568 $ 33,633) ($ - $ 634,935 $ Accrued royalties and warranty provisions 1,556,050 246,247) ( - 1,309,803 Unrealized loss on financial instruments 659,943 67,469) ( 1,642 594,116 Others 658,073 6,570 11,528) ( 653,115 Loss carryforward 3,807,176 122,817 - 3,929,993 7,349,810 $ 217,962) ($ 9,886) ($ 7,121,962 $ - Deferred tax liabilities: Unrealized exchange gain 227,983) ($ 73,402 $ - $ 154,581) ($ Amortization charges on goodwill 948,863) ( 96,906) ( - 1,045,769) ( Others 288,680) ( 119,960) ( - 408,640) ( 1,465,526) ($ 143,464) ($ - $ 1,608,990) ($ 5,884,284 $ 361,426) ($ 9,886) ($ 5,512,972 $ 2020 Recognized Recognized in other in profit comprehensive January1 or loss income December 31 Deferred tax assets: -Temporary differences: Sales returns and discount provisions 475,725 $ 192,843 $ - $ 668,568 $ Accrued royalties and warranty provisions 1,539,307 16,743 - 1,556,050 Unrealized exchange loss 162,222 162,222) ( - - Unrealized loss on financial instruments 511,246 73,565 75,132 659,943 Prior year expense carryforward 3,592 86) ( - 3,506 Others 704,624 61,706) ( 11,649 654,567 Loss carryforward 3,827,148 19,972) ( - 3,807,176 7,223,864 $ 39,165 $ 86,781 $ 7,349,810 $ - Deferred tax liabilities: Unrealized exchange gain - $ 227,983) ($ - $ 227,983) ($ Amortization charges on goodwill 851,958) ( 96,905) ( - 948,863) ( Others 28,055) ( 260,625) ( - 288,680) ( 880,013) ($ 585,513) ($ - $ 1,465,526) ($ 6,343,851 $ 546,348) ($ 86,781 $ 5,884,284 $ 2019		2020
				December 31
			Recognized in other comprehensive income December 31 - $ 668,568 $ - 1,556,050 - - 75,132 659,943 - 3,506 11,649 654,567 - 3,807,176 86,781 $ 7,349,810 $ - $ 227,983) ($ - 948,863) ( - 288,680) ( - $ 1,465,526) ($ 86,781 $ 5,884,284 $	December 31

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• D. Expiration dates of unused loss carryforward and amounts of unrecognized deferred tax assets are as follows:

December 31, 2020

are as follows: December 31, 2020
Year Amount filed / incurred assessed 2011 Assessed 2012 Assessed 2016 Assessed 2019 Filed December 31, 2019 Amount Year filed / incurred assessed 2011 Assessed 2012 Assessed 2016 Assessed 2019 Estimated	Unused amount 23,790,717 $ 42,430,348 1,051,680 21,206,403 88,479,148 $ Unused amount 24,283,146 $ 42,430,348 1,051,680 22,482,711 90,247,885 $	Unrecognized deferred tax assets 18,507,136 $ 33,007,169 818,117 16,496,761 68,829,183 $ Unrecognized deferred tax assets 19,161,131 $ 33,480,565 829,850 17,740,459 71,212,005 $	Usable until year
			2021 2022 2026 2029 Usable untilyear
Year incurred 2011 2012 2016 2019
			2021 2022 2026 2029

December 31, 2019

• E. The amounts of deductible temporary differences that were not recognized as deferred tax assets are as follows:

Deductible temporary differences	December 31, 2020 1,446,656 $	December31,2019
		2,357,855 $

• F. The Company has not recognized taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2020 and 2019, the amounts of temporary differences unrecognized as deferred tax liabilities were $33,493,308 and $30,463,120, respectively.

• G. The Company’s income tax returns through 2016 have been assessed and approved by the Tax Authority.

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(31) Earnings (loss) per share

Basic earnings (loss) per share Profit (loss) attributable to ordinary shareholders of the parent Weighted average number of ordinary shares outstanding (shares in thousands) Basic earnings (loss) per share (in dollars) Diluted earnings (loss) per share Profit (loss) attributable to ordinary shareholders of the parent Weighted average number of ordinary shares outstanding (shares in thousands) Assumed conversion of all dilutive potential ordinary shares: - Employees’ compensation Diluted earnings (loss) per share (in dollars)

2020 2019 1,636,144 $ 17,442,990) ($ 9,664,728 9,857,385 0.17 $ 1.77) ($ 1,636,144 $ 17,442,990) ($ 9,664,728 9,857,385 9,883 - 9,674,611 9,857,385 0.17 $ 1.77) ($ Years ended December 31,

For the year ended December 31, 2020, the Group’s convertible bonds were not included in the calculation of diluted earnings (loss) per share due to its anti-dilutive effect.

(32) Business combinations

• A. On September 18, 2019, the Group acquired 39 % of the share capital of GIO Company for $192,405, which the ownership change from 24% to 63%, and obtained control over GIO Company. The main business of GIO Company is LCD glass substrate processing, LED lighting and its control power supply. As a result of the acquisition, the Group is expected to increase economic scale and strategic synergy.

• B. The reference date of the consolidation was set on September 18, 2019. Under the principles of IFRS 3, ‘Business Combinations’, details of the acquisition are as follows:

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			GIO Company
Purchase consideration - cash paid		$	192,405
Fair value of equity interest in GIO Company held
before the business combination			117,446
Fair value of the non-controlling interest			180,351
			490,202
Fair value of the identifiable assets acquired and liabilities assumed
Cash			522,951
Notes and accounts receivable and other current assets			62,231
Property, plant and equipment			333,713
Other non-current assets			9,766
Notes and accounts payable and other current liabilities	(		290,131)
Other non-current liabilities	(		169,039)
Total identifiable net assets			469,491
Goodwill		$	20,711

• C. The Group recognized a gain of $10,915 as a result of measuring at fair value its 24% equity interest in GIO Company held before the business combination.

• D. GIO Company and its subsidiaries were consolidated since September 18, 2019. Had GIO Company and its subsidiaries been consolidated from January 1, 2019, the consolidated statement of comprehensive income would show operating revenue of $252,055,779 and loss before income tax of $16,529,694 for the year ended December 31, 2019.

(33) Supplemental cash flow information

• A. Investing activities with partial cash payments:

pplemental cash flow information Investing activities with partial cash payments:
Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment ( Cash paid during the year	2020 2019 17,960,202 $ 23,284,730 $ 6,463,079 7,982,978 3,749,913) 6,463,079) ( 20,673,368 $ 24,804,629 $ Years ended December 31,
	2020 17,960,202 $ 6,463,079 3,749,913) 20,673,368 $

• B. Cash received for the acquisition of business subsidiary:

Total consideration Less: Cash of subsidiary ( Net cash received for the acquisition of business subsidiary (	Year ended December31,2020 192,405 $ 522,951) 330,546) $

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(34) Changes in liabilities from financing activities

For the year ended December 31, 2020, liabilities from financing activities include short-term borrowings, bonds payable, long-term borrowings and lease liabilities. Changes in those items result from cash flow from financing activities, discount, conversion and amortization of bonds payable as well as changes in exchange rate. The summarized significant changes are as follows and other information is provided in the consolidated statements of cash flows.

		2020
		Bonds payable
At January 1	$	97,018
Changes in cash flow from financing activities		8,900,934
Impact of changes in foreign exchange rate	(	346,191)
Conversion of convertible bonds	(	2,010,773)
Convertible bonds derivative instruments on the issue date	(	1,422,363)
Amortization of discounts on convertible bonds		254,379
At December 31	$	5,473,004

7. RELATED PARTY TRANSACTIONS

(1) Names and relationship of related parties

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Names of related parties Relationship with the Group
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Names of relatedparties	Relationship with the Group
Hon Hai Precision Industry Co., Ltd. and its subsidiaries	Other related party
CHENG MEI MATERIALS TECHNOLOGY	Other related party
CORPORATION and its subsidiaries (Note 1)
FI Medical Device Manufacturing Co., Ltd.	Associate
GIO Optoelectronics Corp. (Note 2)	Associate

(Note 1) In May 2020, the Company no longer serves as a director, so it is listed as a non-related party.

(Note 2) GIO Optoelectronics Corp. was included in the consolidated financial statements in the third quarter of 2019. Please refer to Note 4(3).

(2) Significant related party transactions

A. Operating revenue

party. te 2) GIO Optoelectronics Corp. was included in quarter of 2019. Please refer to Note 4(3). nificant related party transactions Operating revenue	the consolidated financial statements in the third	the consolidated financial statements in the third
Sales of goods: Other related parties Associates	Years ended December 31,
	2020 8,158,298 $ 20,974 8,179,272 $	2019
		9,331,791 $ 18,962 9,350,753 $

The collection period was mainly 30~90 days upon shipment or on a monthly-closing basis to related parties. The sales prices and the trading terms to related parties above were not significantly different from those of sales to third parties.

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B. Purchases of goods

Purchases of goods
		Years ended	December	31,
		2020		2019
Purchases of goods:
Other related parties	$	6,214,473	$	9,064,565
Associates		1,047,303		1,541,000
	$	7,261,776	$	10,605,565

The payment term was 30~120 days to related parties after transaction date, and 30~180 days to non-related parties after delivery or on a monthly-closing basis. The purchase prices and the payment terms from related parties above were not materially different from those of purchases from third parties.

C. Receivables from related parties

rom third parties. eceivables from related parties
	December 31, 2020			December 31, 2019
Accounts receivable:
Other related parties	$	2,179,257	$	2,453,195
Associates		44,900		35,324
	$	2,224,157	2,488,519 $

The receivables from related parties arise mainly from sales transactions. The receivables are due 30~90 days after the date of sale. The receivables are unsecured in nature and bear no interest.

D. Payables to related parties

Accounts payable: Other related parties Associates	December 31,2020 1,606,419 $ 114,512 1,720,931 $	December 31,2019 3,647,625 $ 137,366 3,784,991 $

The payables to related parties arise mainly from purchase transactions and are due 30~120 days after the date of purchase. The payables bear no interest.

E. Property transactions

Purchase of property

• (a) Acquisition of property, plant and equipment:

perty transactions hase of property Acquisition of property, plant and equipment:
Other related parties Associates	Years ended December31,
	2020 66,749 $ - 66,749 $	2019
		44,098 $ 3,031 47,129 $

• (b) Period-end balances arising from purchases of property (shown as ‘Other payables’):

Other related parties	December31,2020 51,047 $	December31,2019
		1,127,146 $

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Sale of property

(a) Proceeds from sale of property and (loss) gain on disposal:

Other related parties Associates	Disposal (Loss) gain proceeds on disposal 27,286 $ 2,853) ($ 594 594 27,880 $ 2,259) ($ Year ended December 31,2019

For the year ended December 31, 2020, there was no such transaction as above.

(b) Period-end balances arising from sale of property (shown as ‘other receivables’)

Other related parties

	December 31, 2020	December 31, 2019
$	-	25,524 $

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits (Note) Shared-based payments Post-employment benefits	Years ended December 31,
	2020 59,130 $ 22,096 855 82,081 $	2019
		63,764 $ - 667 64,431 $

Note: For the year ended December 31, 2020, it included estimated effects.

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

DGED ASSETS Group’s assets pledged as	collateral are as follows:
Pledged asset Other current assets -Demand deposits -Time deposits Property, plant and equipment Intangible assets Other non-current assets -Time deposits -Refundable deposits	Book	December 31,2019 Purpose 1,550 $ Long-term loans - Tariff and credit card guarantee 96,026,644 Long-term loans 27 Long-term loans 3,270 Tariff guarantee 359,383 Guarantee for litigation 96,390,874 $ value	Purpose
	December 31,2020 950 $ 1,160 93,284,863 - 3,270 784,601 94,074,844 $

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

• －

• (1) Contingencies Significant Litigations

• A. In March 2019, the Company received a sanction to the Company and the related employees and managers from Brazil Administrative Council for Economic Defense - CADE for the 2006 TFTLCD pricing collaborations involving Chi Mei Optoelectronics Corporation. The fine was paid off on May 8, 2019 and it was confirmed by the representative lawyer of CADE that the Company obeyed the sanction.

• B. The Company’s subsidiary in U.S. received a civil complaint from the government of Puerto Rico in September 2018, claiming that the company, together with other defendants of Taiwan, Japan and South Korea TFT - LCD companies, had unjustified enrichment from the TFT-LCD pricing collaborations in 2006 and requested monetary compensation. The U.S. subsidiary of the company has appointed a lawyer to handle the lawsuit.

• C. Eidos Displays, LLC and Eidos III, LLC (“Eidos”) filed a lawsuit against the Company and American subsidiary with the United States District Court for the Eastern District of Texas on April 25, 2011, alleging infringement of its patent. In December 2013, the magistrate judge granted summary judgment that the Eidos patent is invalid. In January 2014, the presiding judge confirmed the summary judgment.

  • In February 2014, Eidos appealed to the United States Court of Appeals for the Federal Circuit (CAFC). In March 2015, the CAFC reversed the district court’s judgment and remanded the case back to the district court for further proceedings. In June 2017, the jury determined that some products of the Company and American subsidiary directly infringed the patent and awarded damages for Eidos. On March 5, 2018, the district court entered judgment. In January 2020, the Company reached an agreement on the main settlement terms with Eidos during the third mediation. In April 2020, the court granted the judgment that the case shall be closed by mutually performing the settlement terms and the lawsuits have no effect on the Company’s financial position and operations.

• D. On July 10, 2018, Vista Peak Ventures, LLC (VPV) filed four complaints against the Company in the United States District Court for the Eastern District of Texas, alleging the infringement of several of its patents. The Company reached settlements with VPV for the aforementioned lawsuits and acquired relevant patent portfolio licensing in the first quarter of 2019. VPV also dismissed the action and the lawsuits have no effect on the Company’s financial position and operations.

• E. On March 23, 2018, Chongqing HKC Optoelectronics Technology Co., Ltd. (HFC) filed five complaints against the subsidiaries of the Company, Ningbo Innolux Optoelectronics Ltd., Foshan Innolux Optoelectronics Ltd. as well as their customers and terminal distributors of TV products with the Fifth Intermediate People’s Court in Chongqing, alleging the infringement of its patents. Ningbo Innolux Optoelectronics Ltd. submitted a request of patent invalidity to the National

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Intellectual Property Administration, PRC upon the patents asserted in the complaints. As of May 21, 2019, all five patents asserted by HKC were declared invalid by the National Intellectual Property Administration, PRC. The five lawsuits that were previously disclosed were allegedly withdrawn by the Chongqing court on June 18, 2019. Thus, the lawsuits have no effect on the Company’s financial position and results of operations.

• F. On September 1, 2020, Granville Technology Group Limited, VMT Limited and OT Computers Limited (all under liquidation) jointly filed a civil complaint against the Company with the Senior Courts of England and Wales, claiming that the Company, together with other defendants of Taiwan and South Korea TFT - LCD companies, shall be liable for damages incurred from the TFT-LCD pricing collaborations in 2006. The Company has appointed a lawyer to handle the lawsuit.

• G. On December 18, 2020, the claimants, SAMSUNG ELECTRONICS CO. LIMITED, SAMSUNG ELECTRONICS TAIWAN CO. LIMITED, SAMSUNG ELECTRONICS (UK) LIMITED, SAMSUNG SEMICONDUCTOR EUROPE LIMITED and SAMSUNG DISPLAY CO. LMITED, jointly filed a civil complaint against the Company with the Business and Property Courts of England and Wales, claiming that the Company shall have the responsibility to pay equitable and fair share of compensation in terms of the settlement agreement that the first to fourth claimants entered into with the particular UK authorities for the TFT-LCD pricing collaborations in 2006. The Company has appointed a lawyer to handle the lawsuit.

• H. The Company had assessed and recognized related losses and liabilities as shown in ‘provisionscurrent’ for the aforementioned investigation relating to anti-trust laws and patent litigation.

• (2) Commitments

• A. Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

December 31, 2020 December 31, 2019 Property, plant and equipment $ 12,627,041 $ 16,725,390

• B. Outstanding letters of credit

The outstanding letters of credit for the purchase of property, plant and equipment are as follows:

December 31, 2020 December 31, 2019 Outstanding letters of credit $ 63,015 $ 266,384

• C. The Company entered into a conditional ‘Share Issuance and Asset Purchase Agreement’ with Huadong Electronics. Huadong Electronic plans to issue shares to the shareholders of TPV Technology Limited, including the Company, in order to obtain 49% equity interest of TPV Technology Limited. However, the transaction will take effect when all preconditions are met.

• SIGNIFICANT DISASTER LOSS

None.

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11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Company’s objectives are to maintain an optimal capital structure, and constructively reduce the debt ratio and the cost of capital in order to maximize shareholders’ equity.

(2) Financial instruments

• A. Financial instruments by category

• For information of the Group’s financial assets (financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income, financial assets at amortized cost, cash and cash equivalents, accounts receivable (including related parties) and other receivables) and financial liabilities (financial liabilities at fair value through profit or loss, accounts payable (including related parties), other payables, lease liability, corporate bonds payable and long-term borrowings (including current portion)), please refer to Note 6 and consolidated balance sheets.

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial position and financial performance. The Group uses derivative financial instruments to hedge certain risk exposures (see Notes 6(2)).

• (b) Risk management is carried out by the treasury department under policies approved by the board of directors. The Group’s treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides principles for overall risk management, as well as policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and nonderivative financial instruments, and investment by excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Group used in various functional currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The group companies are required to hedge their entire foreign exchange risk exposure via the Company’s treasury

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departments. To manage their foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, entities in the Company use forward foreign exchange contracts. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency.

• iii. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: RMB and USD). Based on the simulations performed, the impact on pre-tax profit of a 1% exchange rate fluctuation would be an increase of $259,928 and $241,844 for the years ended December 31, 2020 and 2019, respectively. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

Foreign Currency Exchange Amount Rate Book Value (In Thousands) (Note) (NTD) Financial assets Monetary items USD 5,686,943 $ 28.48 161,964,137 $ RMB 314,777 4.36 1,372,428 JPY 1,732,338 0.28 485,055 EUR 3,430 35.02 120,119 HKD 13,321 3.67 48,888 Non-monetary items USD 2,852,662 $ 28.48 81,243,814 $ JPY 7,560,763 0.28 2,117,014 HKD 351,054 3.67 1,288,368 USD 4,498,554 $ 28.48 128,118,818 $ JPY 33,061,001 0.28 9,257,080 EUR 8,703 35.02 304,779 HKD 73,107 3.67 268,303 December 31,2020 Financial liabilities Monetary items	December 31,2019	December 31,2019	December 31,2019
	Foreign Currency Amount (In Thousands) 5,308,934 $ 20,244 8,363,083 39,422 658,804 2,621,279 $ 7,456,590 549,225 4,371,165 $ 35,516,290 5,585 122	Exchange Rate (Note) 29.98 4.30 0.28 33.59 3.85 29.98 0.28 3.85 29.98 0.28 33.59 3.85	Book Value (NTD)
			159,161,841 $ 87,049 2,341,663 1,324,185 2,536,395 78,585,944 $ 2,087,845 2,114,516 131,047,527 $ 9,944,561 187,600 470

Note: Exchange rate represents the amount of NT dollars for which one foreign currency could be exchanged.

• iv.Total exchange loss, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2020 and 2019 amounted to $3,113,179 and $77,541, respectively.

Price risk

• i. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive

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income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done by the Group in respect of the targets and stages.

• ii. The Group’s investments in equity securities comprise domestic listed and unlisted stocks. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 20% with all other variables held constant, pre-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $696,036 and $602,247, respectively; other comprehensive gains and losses would have increased/decreased by $977,536 and $853,697, respectively.

Cash flow and fair value interest rate risk

• i. The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. During the years ended December 31, 2020 and 2019, the Group’s borrowings at variable rate were denominated in the NTD.

• ii. The Group analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the Group calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions.

• iii. If the borrowing interest rate of NTD had increased/decreased by 0.25% with all other variables held constant, pre-tax profit for the years ended December 31, 2020 and 2019 would have decreased/increased by $99,511 and $89,626, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortized cost and accounts receivable held by the Group was its carrying amount.

• ii. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the managements. The utilization of credit limits is regularly

~66~

monitored.

• iii. The Group adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments are past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.

• v. The Group classifies customer’s accounts receivable in accordance with credit rating of customer, credit risk on trade and customer types. The Group applies the simplified approach using provision matrix to estimate expected credit loss.

• vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

• (ii) Default or delinquency in interest or principal repayments;

• (iii) Adverse changes in national or regional economic conditions that are expected to cause a default.

• vii. The Group adjusted forward looking information based on historical and timely information to assess the default possibility of accounts receivables. According to abovementioned consideration and information, the Group does not expect any significant default possibility of accounts receivable.

• viii. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

At January 1 Provision for impairment At December 31 At January 1 Reversal ( At December 31	2020 Accountsreceivable 209,418 $ 1 209,419 $ 2019 Accountsreceivable 209,729 $ 311) 209,418 $

• ix. The Group’s financial assets at amortized cost have low credit risk, the Group did not recognize significant loss allowance in accordance with 12 months expected credit losses.

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• (c) Liquidity risk

• i. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and external regulatory or legal requirements.

• ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group’s treasury. Group treasury invests surplus cash in interest bearing savings accounts, time deposits, money market deposits and marketable securities. The Group chooses instruments that are with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. These are expected to readily generate cash inflows for managing liquidity risk.

• iii. The information below analyzes the Group’s non-derivative financial liabilities and netsettled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities

December31,2020 Lease liability (Note) Bonds payable Long-term borrowings (including current portion) December31,2019 Lease liability Bonds payable Long-term borrowings (including current portion)	Less than 1year 236,720 $ 100,000 19,301,000 Less than 1 year 548,688 $ - 16,046,000	Between 1 and3 years 1,376,565 $ 6,231,424 8,203,500 Between 1 and3 years 1,062,615 $ 100,000 19,404,500	Between 3 and5 years 1,136,525 $ - 12,300,000 Between 3 and5 years 1,052,983 $ - 400,000	Over 5 years 2,870,936 $ - - Over 5 years 3,386,241 $ - -	Total
					5,620,746 $ 6,331,424 39,804,500 Total
					6,050,527 $ 100,000 35,850,500

Note: The Company applied a 1-year grace period for land rental payment starting from September 2020. The payment is repayable in 36 equal monthly installments for 3 years.

Except for the above, the non-derivative and derivative financial liabilities of the Group are all due within one year.

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(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in derivative instruments is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market and bonds payable is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(11).

• C. Financial instruments not measured at fair value

• The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, financial assets at amortized cost, accounts payable, other payables, lease liability, corporate bonds payable and long-term borrowings (including current portion) are approximate to their fair values.

• D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

• (a) The related information of natures of the assets and liabilities is as follows:

December 31,2020 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Financial assets at fair value through other comprehensive income Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange contracts Convertible bonds derivative instruments	Level 1 1,037,782 $ - 3,853,042 4,890,824 $ - $ - - $	Level 2 - $ 706,299 - 706,299 $ 13,574 $ - 13,574 $	Level 3 2,442,400 $ - 1,034,639 3,477,039 $ - $ 3,208,560 3,208,560 $	Total
				3,480,182 $ 706,299 4,887,681
				9,074,162 $
				13,574 $ 3,208,560
				3,222,134 $

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==> picture [460 x 240] intentionally omitted <==

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

December 31, 2019 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities $ 548,180 $ - $ 2,463,055 $ 3,011,235
Forward exchange contracts - 283,906 - 283,906
Convertible bonds - - 33,521 33,521
Financial assets at fair value
through other comprehensive income
-
Equity securities 3,214,251 1,054,234 4,268,485
$ 3,762,431 $ 283,906 $ 3,550,810 $ 7,597,147
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
- -
Forward exchange contracts $ $ 345,463 $ $ 345,463
----- End of picture text -----

• (b) The methods and assumptions the Group used to measure fair value are as follows:

• i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

  • Listed shares Emerging stocks Corporate bond

  • Market quoted price Closing price Last transaction price Weighted average quoted price

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. When assessing non-standard and low-complexity financial instruments, for example, foreign exchange swap contracts, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• iv. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts and foreign exchange swap contracts are usually valued based on the current forward exchange rate. Convertible bonds derivative instruments are measured by using appropriate option pricing models (binary tree model for convertible bond pricing).

• v. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial

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instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• vi. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

• E. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

• F. The following table presents the changes in Level 3 instruments for the years ended December 31, 2020 and 2019:

2020

2020
Financial assets at fair value through profit or loss / Financial assets at fair value through other comprehensive income Equitysecurities Hybrid instrument At January 1 3,517,289 $ 33,521 $ Gains and losses recognized in profit or loss 2,251,088 - Gains and losses recognized in other comprehensive income 44,404) ( - Acquired in the year 254,152 - Disposed in the year 2,532,664) ( - Conversion in the period 33,129 33,129) ( Effect on exchange rate changes 1,551) ( 392) ( At December 31 3,477,039 $ - $ Financial liabilities at fair value through profit or loss At January 1 Gains and losses recognized in profit or loss Issued in the year At December 31	Total 3,550,810 $ 2,251,088 44,404) ( 254,152 2,532,664) ( - 1,943) ( 3,477,039 $ 2020 Derivative instruments
		- $ 1,786,197 1,422,363 3,208,560 $

~71~

						2019
			Equitysecurities			Hybrid instrument		Total
At January 1		$	1,516,476		$	35,559	$	1,552,035
Gains and losses recognized
in profit or loss			1,405,475	(		1,224)		1,404,251
Gains and losses recognized
in other comprehensive income	(		259,673)			-	(	259,673)
Acquired in the year			198,768			-		198,768
Disposed in the year	(		1,500)			-	(	1,500)
Proceeds from capital reduction	(		35,585)			-	(	35,585)
Transfers to Level 3			708,132			-		708,132
Effect on exchange rate changes	(		14,804)	(		814)	(	15,618)
At December 31		$	3,517,289		$	33,521	$	3,550,810

• G. Because TPV Technology Limited was delisted since November 2019 due to its privatization and there is insufficient observable market information, therefore, the Company transferred the fair value from Level 1 to Level 3 at the end of the month when the event occurred.

• H. Investment management segment is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. Convertible bonds derivative instruments are evaluated through outsourced appraisal performed by the external valuer.

• Investment management segment set up valuation policies, valuation processes, and rules for measuring fair value of financial instruments and ensure compliance with the related requirements in IFRS.

• I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

~72~

Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment Derivative instrument liabilities: Convertible bond Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment	Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment Derivative instrument liabilities: Convertible bond Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment	Fair value at December 31,2020				Range (weighted average)	Range (weighted average)	Relationship of inputs to fairvalue
		1,273,432 $ 1,988,800 191,460 23,347 3,208,560 Fair value at December 31,2019						The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value The higher the discount for lack of marketability, the lower the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the volatility, the higher the fair value Relationship of inputs to fairvalue
		3,492,198 $ 25,091	Market comparable companies Net asset value	Price to earnings ratio multiple, price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability Not applicable	0.61~ 42.08 (2.84) 30%~70% (31%) Not applicable		The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable

~73~

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Fair value at Range
December Valuation Significant (weighted Relationship of
31, 2019 technique unobservable input average) inputs to fair value
----- End of picture text -----

	31, 2019	technique	unobservable inp	ut average)	inputs to fairvalue
Hybrid instrument:
Convertible bond	33,521	Discounted	Volatility and	1.6%、	The higher the
		cash flow	Discount rate	31.1%	volatility, the higher
		method and		(16.3%)	the fair value; the
		Option			higher the discount
		pricing model			rate, the lower the fair
					value

• J. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

December 31, 2020

					Recognized in other	Recognized in other
			Recognized	inprofit or loss	comprehensive income
			Favourable	Unfavourable Favourable		Unfavourable
Financial assets	Input	Change	change	change	change	change
Equity instrument	$ 3,477,039	± 1%	$ 24,424	($ 24,424) $	10,346	($ 10,346)
Financial liabilities
Derivative instruments	$ 3,208,560	± 1%	$ 32,043	($ 31,780) $	-	$	-
				December 31,2019
					Recognized in other
			Recognized	inprofit or loss	comprehensive income
			Favourable	Unfavourable Favourable		Unfavourable
Financial assets	Input	Change	change	change	change	change
Equity instrument	$ 3,517,289	± 1%	$ 24,631	($ 24,631) $	10,542	($ 10,542)
Hybrid instrument	33,521	± 1%	335	( 335)	-		-

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Please refer to Table 1.

• B. Provision of endorsements and guarantees to others: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to Table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to Table 3.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

~74~

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to Table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to Table 5.

• I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2).

• J. Significant inter-company transactions during the reporting period: Please refer to Table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to Table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to Table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to Table 1, 4, 5 and 6.

(4) Major shareholders information

• Names, number of shares and ownership of shareholders whose equity interest is greater than 5%: None.

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in the research, development, design, manufacture and sales of TFTLCD panels, modules and monitors of LCD, color filter, and low temperature poly-silicon TFT-LCD. The Group operates TFT-LCD business only in a single industry. The chief operating decision-maker who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

The Group’s operating segment information was prepared in accordance with the Group’s accounting policies. The chief operating decision-maker allocated resources and assesses performance of the operating segments primarily based on the operating revenue and profit (loss) before tax and discontinued operations of individual operating segment.

(2) Segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

~75~

Segment revenue Segment income (loss) Depreciation and amortization Capital expenditure-property, plant and equipment Segment assets	2020 2019 TFT LCD TFT LCD 269,911,051 $ 251,971,209 $ 2,557,131 $ 16,525,428) ($ 35,568,103 $ 35,129,951 $ 20,673,368 $ 24,804,629 $ 379,559,837 $ 369,764,346 $ Years ended December 31,

(3) Reconciliation for segment income

In current year, the revenue and income or loss before tax of reportable operating segment are consistent with those of continuing operations.

(4) Information on products

Revenue from external customers is mainly from sale of TFT-LCD products, the sales amount is in agreement with operating revenue.

(5) Geographical information

Geographical information for the years ended December 31, 2020 and 2019 is as follows:

Years ended December 31,

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2020 2019
Revenue Non-current assets Revenue Non-current assets
Taiwan $ 52,975,743 $ 172,239,947 $ 50,060,495 $ 189,612,483
- -
Hong Kong 88,286,363 74,215,947
China 44,620,274 30,464,485 43,603,799 30,502,012
US 31,387,034 553 27,794,735 735
- -
Singapore 17,385,575 15,273,805
Europe 9,939,661 52,675 10,089,112 74,197
Others 25,316,401 115,940 30,933,316 97,396
Total $ 269,911,051 $ 202,873,600 $ 251,971,209 $ 220,286,823
----- End of picture text -----

(6) Major customer information

There are no individual sales to the Group's customers that exceed 10% of the sales in the statements of comprehensive income for the year ended December 31, 2020 and 2019.

~76~

Innolux Corporation and Subsidiaries

Table 1

Loans to others

Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31, 2020	Balance as at December 31, 2020	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
1 1 1 1 1 2 3 3 4 4	Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Nanjing Innolux Technology Ltd. Innolux Japan Co., Ltd. Innolux Japan Co., Ltd. Warriors Technology Investments Ltd Warriors Technology Investments Ltd	Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Corporation Lakers Trading Limited Innolux Corporation Lakers Trading Limited	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties	4,365,984 $ 2,182,992 2,401,291 1,790,053 4,365,984 218,299 2,611,670 2,611,670 3,360,640 3,067,312	4,365,984 $ 2,182,992 2,401,291 1,790,053 3,711,087 - 2,611,670 - 3,360,640 -	4,365,984 $ 1,528,094 1,702,734 1,135,156 2,619,591 - 2,611,670 - 3,360,640 -	2.00% 2.00% 2.00% 2.00% 2.00% 0.00% 1.00% 0.00% 0.00% 0.00%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - - - - - - - -	Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support	$ - - - - - - - - - -	- - - - - - - - - -	$ - - - - - - - - - -	23,437,016 23,437,016 23,437,016 23,437,016 23,437,016 1,220,292 7,674,648 7,674,648 12,505,452 12,505,452	23,437,016 23,437,016 23,437,016 23,437,016 23,437,016 1,220,292 7,674,648 7,674,648 12,505,452 12,505,452	A A A A A A A A A A

Note A:

1.For loans obtained for short-term financing, financial limit on loans granted to a single party shall not exceed 10% of the Group’s net equity, based on the most recent audited financial statements of the creditor.

2.The financial limit on loans granted shall not exceed 40% of the creditor’s net equity. If it is for short-term capital needs, the limit shall not exceed 30% of the creditor’s net equity.

• 3.The policy for loans granted to direct or indirect wholly-owned ultimate parent company or overseas subsidiaries is as follows: for short-term capital needs, financial limit is not restricted to the abovementioned two rules, however,

• financial limit on total loans granted and limit on loans granted to a single party for the overseas subsidiaries should not exceed 200% of the creditor’s net equity.

Table 1, Page 1

Innolux Corporation and Subsidiaries

Holding of marketable securities at the end of the year (not including subsidiaries, associates and joint ventures)

December 31, 2020

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2020	As of December 31,2020		Footnote
				Number of shares	Book value	Ownership (%)	Fair value
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoJoy Investment Corporation InnoJoy Investment Corporation InnoJoy Investment Corporation Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd.	Common stock	None None Other related party None None None None None None None None None None None None None	Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss	900,000 60,200,000 14,234,041 57,211,305 1,669,000 1,209 477,142 927,452 1,439,180 315,000 6,964,222 2,887,500 7,347,144 9,049,000 - 30,599,775	$ 6,075 1,289,423 191,460 632,185 191,101 - 40,589 957,222 - 3,480 211,016 41,400 160,902 1,113,027 685,090 158,443	1 3 19 9 - - 12 4 3 - 5 4 7 5 - 8	$ 6,075 1,289,423 191,460 632,185 191,101 - 40,589 957,222 - 3,480 211,016 41,400 160,902 1,113,027 685,090 158,443
	AvanStrate Inc. TPV Technology Limited Chi Lin Optoelectronics Co., Ltd. Cheng Mei Materials Technology Corporation General Interface Solution (GIS) Holding Limited Allied Material Technology Corp. Obsidian Sensors, Inc. VIZIO. Inc. Trillion Science, Inc. Cheng Mei Materials Technology Corporation Advanced Optoelectronic Technology, Inc. eChem solutions Corp. EPILEDS Co., Ltd. Fitipower Integrated Technology Inc. 上海辰岱投資中心(有限合夥) Shenzhen Tiandeyu Electronics Co., Ltd.

Table 2, Page 1

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2020	As of December 31,2020		Footnote
				Number of shares	Book value	Ownership (%)	Fair value
Warriors Technology Investments Ltd Warriors Technology Investments Ltd Warriors Technology Investments Ltd Warriors Technology Investments Ltd Warriors Technology Investments Ltd Warriors Technology Investments Ltd Warriors Technology Investments Ltd Nets trading Ltd.	OED Holding Ltd. Obsidian Sensors, Inc. Kymeta Corporation General Interface Solution (GIS) Holding Limited CJK Associates Co., Ltd. Perinnova Limited KA Imaging Inc. PilotTech Global Fund	None None None None None Other related party Other related party None	Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss	16,000,000 414,136 1,027,371 22,525,000 4,000 1,900 1,819,240 90	$ 12,744 35,229 14,288 2,579,113 4,872 520 16,337 23,347	6 11 - 7 14 19 11 -	$ 12,744 35,229 14,288 2,579,113 4,872 520 16,337 23,347

Table 2, Page 2

Innolux Corporation and Subsidiaries

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

Year ended December 31, 2020

Investor Table 3	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2020(Note 4)	Balance as at January1,2020(Note 4)	Addition(Note 3)	Addition(Note 3)		Disposal(Note 3)	Disposal(Note 3)		Balance as at December 31,2020(Note 5) Expressed in thousands of NTD (Except as otherwise indicated)	Balance as at December 31,2020(Note 5) Expressed in thousands of NTD (Except as otherwise indicated)
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited CarUX Holding Limited CarUX Holding Limited CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Innolux Hong Kong Holding Limited CarUX Holding Limited CARUX TECHNOLOGY PTE. LTD.	Innolux Europe B.V. Innolux Optoelectronics Hong Kong Holding Limited Innolux Europe B.V. Innolux Optoelectronics Hong Kong Holding Limited Innolux Europe B.V. Innolux Optoelectronics Hong Kong Holding Limited CarUX Holding Limited CARUX TECHNOLOGY PTE. LTD. CarUX Technology Inc.	Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method	- - - - - - - - -	- - - - - - - - -	375,810 162,897,802 - - - - 9,500,000 9,400,000 -	$ 377,076 1,598,956 - - - - 285,546 282,539 -	- - 375,810 162,897,802 375,810 162,897,802 39,875,280 39,875,280 140,000,000	$ - - 464,341 1,818,180 464,341 1,818,180 1,195,262 1,195,262 1,400,000	375,810 162,897,802 375,810 162,897,802 - - - - -	$ 464,341 1,818,180 464,341 1,818,180 - - - - -	$ 377,076 1,598,956 464,341 1,818,180 - - - - -	(Note 6) (Note 6) (Note 6) (Note 6) - - - - -	- - - - 375,810 162,897,802 125,231,749 125,131,749 140,000,000	$ - - - - 436,612 1,872,445 3,895,283 3,892,513 1,436,674

Table 3, Page 1

Investor	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2020(Note 4)	Balance as at January1,2020(Note 4)	Addition(Note 3)	Addition(Note 3)		Disposal(Note 3)	Disposal(Note 3)		Balance as at December 31,2020(Note 5)	Balance as at December 31,2020(Note 5)
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Innolux Corporation	TPV Technology Limited	Financial assets at fair value through profit or loss	-	-	150,500,000	$ 2,113,966	-	$ -	( 90,300,000)	$ 2,532,664	$ 2,532,664	(Note 7)	60,200,000	$ 1,289,423

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for using the equity method; otherwise leave the columns blank.

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more. Note 4: The balance at January 1, 2020 includes the investment income (loss) and cumulative translation adjustments.

Note 5: The balance at December 31, 2020 includes the investment income (loss), cumulative translation adjustments, gains (losses) on valuation and shares transferred.

Note 6: There was no income or loss as it was accounted as reorganization.

Note 7: There was no gain or loss on disposal as gains or losses on valuation were recognised under IFRS.

Table 3, Page 2

Innolux Corporation and Subsidiaries

Table 4

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more

Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Innolux USA Inc. Innolux Hong Kong Limited Hongfujin Precision Electronics (Yantai) Co., Ltd. Hon Hai Precision Industry Co., Ltd. CARUX TECHNOLOGY PTE. LTD. Lakers Trading Limited InnoCare Optoelectronics Corporation Foshan Innolux Optoelectronics Ltd. Honfujin Precision Electronics (Chongqing) Co., Ltd. Shenzhen Fugui Precision Industrial Co., LTD FIH (Hong Kong) Limited COMPETITION TEAM IRELAND LIMITED Hongfujin Precision Industry (Wuhan) Co.,Ltd.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. Same major stockholder An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd.	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	18,559,893 $ 5,491,141 3,876,859 2,320,933 2,223,300 1,356,544 952,627 802,468 722,635 324,861 319,345 301,600 101,503	7 2 1 1 1 1 - - - - - - -	60-90 days 60 days 60 days 90 days 60 days 60 days 60-90 days 60 days 45 days 60 days 60 days 45 days 90 days	Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales	No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference	4,358,767 $ - 598,634 1,193,923 1,619,004 - 918,101 58,592 50,130 41,345 99,057 96,519 -	8 - 1 2 3 - 2 - - - - - -

Table 4, Page 1

Differences in transaction

terms compared to third party

							Differences in transaction terms compared to third party	Differences in transaction terms compared to third party
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			transactions		Notes/accounts receivable(payable)		Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd.	Cheng Mei Materials Technology Corporation Hon Hai Precision Industry Co., Ltd. FI Medical Device Manufacturing Co., Ltd. Lakers Trading Limited Innolux Hong Kong Limited Foshan Innolux Optoelectronics Ltd. Leadtek Global Group Limited Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd. Lakers Trading Limited Leadtek Global Group Limited Innolux Hong Kong Limited Lakers Trading Limited Innolux Hong Kong Limited	Other related party Same major stockholder Other related party An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary	Purchases Purchases Purchases Processing expense Processing expense Processing expense Processing expense Processing expense Processing expense Processing revenue Processing revenue Processing revenue Processing revenue Processing revenue	912,669 $ 441,318 197,889 26,356,710 21,442,637 14,691,092 10,510,381 9,749,556 9,042,628 16,194,375 10,563,942 15,354,830 10,446,549 5,631,825	- - - 11 9 6 4 4 4 35 31 100 36 81	90 days after acceptance 90 days 30 days after acceptance 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days	Single purchases target, no basis for comparison Single purchases target, no basis for comparison Single purchases target, no basis for comparison Cost plus Cost plus Cost plus Cost plus Cost plus Cost plus Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions	No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference	- $ 483,523) ( - - 9,038,281) ( 20,055,436) ( - 5,846,718) ( 14,160,794) ( - - 7,751,062 - 1,443,648	- 1 - - 12 28 - 8 19 - - 100 - 75	A

Table 4, Page 2

Differences in transaction

							Differences in transaction	Differences in transaction
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			terms compared to third party transactions		Notes/accounts receivable(payable)		Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Innocom Technology (Shenzhen) Co., LTD CarUX Technology Inc. Innolux Europe B.V. Innolux Japan Co., Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Hong Kong Limited InnoCare Optoelectronics Corporation Ningbo Innolux Display Ltd. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. InnoCare Optoelectronics Corporation	Lakers Trading Limited Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Display Ltd. Nanjing Innolux Technology Ltd. InnoCare Optoelectronics Japan Co., Ltd. Ningbo Innolux Optoelectronics Ltd. InnoCare Optoelectronics USA, INC. Ningbo Innolux Electronics Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. FI Medical Device Manufacturing Co., Ltd.	An indirect wholly-owned subsidiary Ultimate parent company Ultimate parent company Ultimate parent company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder Same major stockholder Other related party	Processing revenue Processing revenue Service revenue Service revenue Sales Sales Sales Sales Sales Sales Purchases Purchases Purchases	225,607 $ 1,388,848 837,822 315,775 6,089,981 4,338,257 1,605,777 1,114,450 704,961 307,105 1,771,118 1,583,931 849,414	100 100 90 71 13 10 70 3 31 13 4 4 43	60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 90 days after goods are shipped 90 days after goods are shipped 30 days after acceptance	Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions	No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference	530,594 $ 442,099 156,065 46,042 1,728,246 1,867,924 352,180 252,859 214,161 49,646 544,023) ( 459,642) ( 114,512) (	100 100 84 86 10 12 50 3 30 7 6 6 10

Table 4, Page 3

Differences in transaction

							Differences in transaction	Differences in transaction
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			terms compared to third party transactions		Notes/accounts receivable(payable)		Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd.	Ningbo Cheng Mei Materials Technology Co., Ltd. Cheng Mei Materials Technology Corporation Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. Ningbo Cheng Mei Materials Technology Co., Ltd. Ningbo Cheng Mei Materials Technology Co., Ltd.	Other related party Other related party Same major stockholder Same major stockholder Other related party Other related party	Purchases Purchases Purchases Purchases Purchases Purchases	487,392 $ 321,661 178,961 164,912 129,233 113,642	1 1 1 - - -	90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped	Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions	No material difference No material difference No material difference No material difference No material difference No material difference	- $ - 18,590) ( 49,354) ( - -	- - - - - -	A A A A

(Note A) It was recognized as a non-related party in May 2020.

Table 4, Page 4

Innolux Corporation and Subsidiaries

Receivables from related parties reaching $100 million or 20% of paid-in capital or more

December 31, 2020

			December 31, 2020
Table 5 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2020 (Note A)	Turnover rate	Overdue receivables		Expressed in thousands of NTD (Except as otherwise indicated) Allowance for doubtful accounts Amount collected subsequent to the balance sheet date
					Amount	Action taken
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Nanjing Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Innolux Hong Kong Limited Ningbo Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innolux Corporation Innolux Corporation	Innolux USA Inc. CARUX TECHNOLOGY PTE. LTD. Hon Hai Precision Industry Co., Ltd. InnoCare Optoelectronics Corporation Hongfujin Precision Electronics (Yantai) Co., Ltd. Innolux Corporation Innolux Corporation Innolux Corporation Innolux Hong Kong Limited Innolux Corporation Nanjing Innolux Technology Ltd. Ningbo Innolux Display Ltd. Innolux Hong Kong Limited Lakers Trading Limited CARUX TECHNOLOGY PTE. LTD. CarUX Technology Inc.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder A subsidiary of the Company An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. Ultimate parent company Ultimate parent company Ultimate parent company An indirect wholly-owned subsidiary Ultimate parent company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary	4,358,767 $ 1,619,004 134,483 (Shown as other receivables) 1,193,923 918,101 598,634 488,643 (Shown as other receivables) 20,055,436 14,160,794 9,038,281 7,751,062 5,846,718 1,867,924 1,728,246 1,443,648 530,594	4.00 2.75 - 1.91 1.22 8.16 - 1.58 1.46 2.34 1.94 3.50 2.75 4.59 4.32 0.53	- $ 402,296 - 23,720 770,445 - 14,545,879 8,772,176 - 3,646,291 2,379,309 - 345,534 - - 463,785	- Subsequent collection - Subsequent collection Subsequent collection - Subsequent collection Subsequent collection - Subsequent collection Subsequent collection - Subsequent collection - - Subsequent collection	2,195,261 $ - 214,984 35,670 376,084 6,043,472 3,605,398 - 2,931,358 3,887,542 582,275 1,190,114 1,049,037 530,594 197,865 -	- $ - - - - - - - - - - - - - - -

Table 5, Page 1

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2020 (Note A)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
CarUX Technology Inc. InnoCare Optoelectronics Corporation Ningbo Innolux Display Ltd. InnoCare Optoelectronics Corporation Innolux Europe B.V. Lakers Trading Limited	Innolux Corporation InnoCare Optoelectronics Japan Co., Ltd. Ningbo Innolux Optoelectronics Ltd. InnoCare Optoelectronics USA, INC. Innolux Corporation Innolux Corporation	Ultimate parent company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Ultimate parent company Ultimate parent company	524,284 $ (Shown as other receivables) 442,099 352,180 252,859 214,161 156,065	- 6.28 4.57 4.39 5.26 6.90	472,813 $ - 143,057 - 112,613 1,189	- Subsequent collection - Subsequent collection - Subsequent collection	524,284 $ 142,445 114,127 146,956 74,473 93,532	- $ - - - - -

Note A ： For the information on receivables of loans to related parties reaching NT$100 million or 20% of paid-in capital or more, please refer to Table 1.

Table 5, Page 2

Innolux Corporation and Subsidiaries

Table 6

Expressed in thousands of NTD

Significant inter-company transactions during the reporting period

Year ended December 31, 2020

(Except as otherwise indicated)

Number (Note A)	Companyname	Counterparty	Relationship (Note B)		Transaction(Note D and E)	Transaction(Note D and E)
				General ledger account	Amount	Transaction terms (Note C)	Percentage of consolidated total operatingrevenues or total assets
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1	Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innocom Technology (Shenzhen) Co., LTD Innocom Technology (Shenzhen) Co., LTD	Lakers Trading Limited Lakers Trading Limited Innolux Hong Kong Limited Innolux Hong Kong Limited Innolux Hong Kong Limited Leadtek Global Group Limited Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Innolux USA Inc. Innolux USA Inc. CarUX Technology Inc. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Lakers Trading Limited Lakers Trading Limited	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3	Sales Processing expense Sales Processing expense Accrued expenses Processing expense Processing expense Accrued expenses Sales Processing expense Accrued expenses Processing expense Accrued expenses Sales Accounts receivable Other receivables Sales Accounts receivable Sales Accounts receivable Other receivables Processing revenue Accounts receivable	1,356,544 $ 26,356,710 5,491,141 21,442,637 9,038,281) ( 10,510,381 9,042,628 14,160,794) ( 802,468 14,691,092 20,055,436) ( 9,749,556 5,846,718) ( 18,559,893 4,358,767 488,643 952,627 918,101 2,223,300 1,619,004 134,483 225,607 530,594	- - - - - - - - - - - - - - - - - - - - - - -	1 10 2 8 2 4 3 4 - 5 5 4 2 7 1 - - - 1 - - - -

Table 6, Page 1

Transaction (Note D and E)

Number (Note A)	Companyname	Counterparty	Relationship (Note B)	General ledger account	Amount	Transaction terms (Note C)	Percentage of consolidated total operatingrevenues or total assets
2 2 3 3 4 4 5 5 5 6 7 7 7 8 9 9 10 10 10 10 10 11 11 12	Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Innolux Japan Co., Ltd. CarUX Technology Inc. CarUX Technology Inc. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation Innolux Europe B.V. Innolux Europe B.V. Lakers Trading Limited	Innolux Hong Kong Limited Innolux Hong Kong Limited Nanjing Innolux Technology Ltd. Nanjing Innolux Technology Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Leadtek Global Group Limited Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Lakers Trading Limited Lakers Trading Limited Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Electronics Ltd. InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. InnoCare Optoelectronics USA, INC. Innolux Corporation Innolux Corporation Innolux Corporation	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Processing revenue Accounts receivable Sales Accounts receivable Processing revenue Accounts receivable Processing revenue Sales Accounts receivable Processing revenue Processing revenue Sales Accounts receivable Service revenue Processing revenue Accounts receivable Sales Sales Accounts receivable Sales Accounts receivable Service revenue Accounts receivable Other receivables	15,354,830 $ 7,751,062 4,338,257 1,867,924 5,631,825 1,443,648 10,563,942 6,089,981 1,728,246 16,194,375 10,446,549 1,114,450 252,859 315,775 1,388,848 442,099 307,105 1,605,777 352,180 704,961 214,161 837,822 156,065 524,284	- - - - - - - - - - - - - - - - - - - - - - - -	6 2 2 - 2 - 4 2 - 6 4 - - - 1 - - 1 - - - - - -

Note A: The information of transactions between the Company and the consolidated subsidiaries should be noted in “Number” column.

(1) Number 0 represents the parent company.

(2) The subsidiaries are numbered in order from number 1.

Note B: 1 refers to the parent company to the subsidiary.

3 refers to the subsidiary to the subsidiary.

Note C: Except for no comparable transactions from related parties, sales prices were similar to non-related parties transactions and the collection period was mainly 30~90 days; the purchases from related parties were at market prices and payment term was 30~120 days upon receipt of goods.

Note D: Amount disclosure standard: purchases, sales and receivables from related parties in excess of $100 million or 20% of capital. Note E: For the information on transactions between the Company and the consolidated subsidiaries relating to nature of loan, please refer to Table 1.

Table 6, Page 2

Innolux Corporation and Subsidiaries

Table 7

Information on investees

Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2020	as at December 31,2020	Net profit (loss) of the investee for the year ended December 31, 2020	Investment income (loss) recognized by the Company for the year ended December 31,2020	Footnote
				Balance as at December 31, 2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Book value
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Innolux Holding Limited Keyway Investment Management Limited Landmark International Ltd. Toppoly Optoelectronics (B.V.I.) Ltd. Innolux Hong Kong Holding Limited Innolux Singapore Holding Pte. Ltd. Leadtek Global Group Limited Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoCare Optoelectronics Corporation Innolux Japan Co., Ltd. iZ3D, Inc. GIO Optoelectronics Corp. Ampower Holding Ltd.	Samoa Samoa Samoa BVI Hong Kong Singapore BVI Taiwan Taiwan Taiwan Japan USA Taiwan Cayman	Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Distribution company Investment company Investment company Holdings, R&D, manufacturing and distribution company Holdings, R&D and distribution company Research and development and sale of 3D flat monitor Holdings, R&D, manufacturing and distribution company Investment holdings	$ 6,192,509 62,197 33,438,542 3,674,115 3,231,780 754,943 - 1,217,235 1,674,054 200,000 1,682,751 - 308,993 1,717,714	$ 6,192,509 62,197 33,438,542 3,674,115 3,231,780 754,943 - 1,217,235 1,674,054 200,000 1,682,751 - 308,993 1,717,714	180,568,185 1,656,410 709,450,000 146,847,000 1,158,844,000 25,400,000 50,000,000 - 167,405,392 20,000,000 98 4,333 27,812,188 14,062,500	100 100 100 100 100 100 100 100 100 100 54 35 63 50	$ 18,213,825 93,365 46,506,951 6,051,929 6,857,505 248,673 1,424,059 879,672 2,263,222 429,093 2,089,039 - 314,178 834,982	$ 222,572 3,041 971,588 88,589 855,636 ( 205,278) 61 3,744 99,424 167,269 95,805 - 10,003 62,094	$ 222,572 3,041 971,588 88,589 855,636 ( 205,278) 61 3,744 99,424 167,269 52,156 - 6,305 31,047

Table 7, Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2020	as at December 31,2020	Net profit (loss) of the investee for the year ended December 31, 2020	Investment income (loss) recognized by the Company for the year ended December 31,2020	Footnote
				Balance as at December 31, 2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Book value
Innolux Corporation Innolux Corporation Innolux Holding Limited Innolux Holding Limited Innolux Holding Limited Toppoly Optoelectronics (B.V.I.) Ltd. Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited CarUX Holding Limited CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Innolux Japan Co.,Ltd. Rockets Holding Limited Rockets Holding Limited Suns Holding Ltd Innolux Europe B.V.	FI Medical Device Manufacturing Co., Ltd. eLux, Inc. Rockets Holding Limited Suns Holding Ltd Lakers Trading Limited Toppoly Optoelectronics (Cayman) Ltd. Innolux Hong Kong Limited Innolux Japan Co.,Ltd. CarUX Holding Limited CARUX TECHNOLOGY PTE. LTD. Innolux Optoelectronics Hong Kong Holding Limited Innolux Europe B.V. CarUX Technology Inc. Innolux USA, Inc. Stanford Developments Limited Nets Trading Ltd. Warriors Technology Investments Ltd Innolux Technology Germany GmbH	Taiwan USA Samoa Samoa Samoa Cayman Hong Kong Japan Cayman Singapore Hong Kong Netherlands Taiwan USA Samoa Samoa Samoa Germany	Production and selling of the absorption for medical element R&D of MicroLED technology Investment holdings Investment holdings Distribution company Investment holdings Distribution company Holdings, R&D and distribution company Investment holdings Holdings and distribution company Investment holdings Holding, distribution and R&D testing company R&D, manufacturing and distribution company Distribution company Investment holdings Investment company Investment company Testing and maintenance company	$ 73,500 91,155 5,222,180 555,422 - 3,650,192 - 1,815,603 3,772,473 3,769,371 1,818,180 464,341 1,400,000 369,092 5,391,125 27,477 555,422 33,735	$ 73,500 91,155 5,222,180 555,422 - 3,650,192 - 1,815,603 294,690 291,588 - - - 369,092 5,391,125 27,477 555,422 33,735	7,350,000 300,000 160,504,550 18,177,052 1 146,817,000 35,000,000 82 125,231,749 125,131,749 162,897,802 375,810 140,000,000 12,842 164,000,000 900,001 18,177,052 100,000	49 28 100 100 100 100 100 46 100 100 100 100 100 100 100 100 100 100	$ 377,751 33,501 11,744,047 6,252,728 216,977 6,051,597 1,213,197 1,748,285 3,895,283 3,892,513 1,872,445 436,612 1,436,674 826,092 11,718,556 25,363 6,252,726 17,421	$ 352,801 ( 62,744) 140,264 82,308 - 88,589 434,366 95,805 390,504 390,593 242,705 41,862 32,495 96,636 140,771 ( 507) 82,308 2,748	$ 172,872 ( 27,358) 140,264 82,308 - 88,589 434,366 43,649 390,504 390,593 242,705 41,862 32,495 96,636 140,771 ( 507) 82,308 2,748

Table 7, Page 2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2020	as at December 31,2020	Net profit (loss) of the investee for the year ended December 31, 2020	Investment income (loss) recognized by the Company for the year ended December 31,2020	Footnote
				Balance as at December 31, 2020	Balance as at December 31, 2019	Number of shares	Ownership (%)	Book value
Innolux Singapore Holding Pte. Ltd. Innolux Singapore Holding Pte. Ltd. Innolux Singapore Holding Pte. Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation GIO Optoelectronics Corp.	Innolux Optoelectronics India Private Limited Innolux Optoelectronics Philippines Corp. Innolux Optoelectronics Malaysia SDN. BHD. GIO Optoelectronics Corp. Innolux Optoelectronics India Private Limited InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. Double Star Inc.	India Philippines Malaysia Taiwan India Japan USA Mauritius	Distribution company Manufacturer and distribution company Manufacturer and distribution company Holdings, R&D, manufacturing and distributor company Distribution company Distribution company Distribution company Investment holdings	$ 607,284 28,733 121,179 858 - 87,149 27,963 298,113	$ 302,198 28,733 121,179 858 - 87,149 27,963 298,113	144,095,499 5,000,000 16,000,000 77,235 1 30,010 900,000 10,000,000	100 100 100 - - 100 100 100	$ 100,057 28,074 115,513 872 - 118,528 37,895 99,349	($ 205,675) ( 274) 394 10,003 ( 205,675) 34,426 11,712 ( 2,369)	($ 205,675) ( 274) 394 18 - 34,426 11,712 ( 2,369)

Table 7, Page 3

Innolux Corporation and Subsidiaries

Information on investments in Mainland China

Year ended December 31, 2020

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital (Note A)	Investment method (Note C)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2020	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020	Net income of investee for the year ended December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for year ended December 31, 2020(Note B)	Book value of investments in Mainland China as of December 31,2020	Accumulated amount of investment income remitted back to Taiwan as of December 31,2020	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Innocom Technology (Shenzhen) Co., LTD Guangzhou OED Technologies Co., Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Technology Ltd. Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Foshan Innolux Logistics Ltd. GIO (Maanshan) Optoelectronics Co., Ltd. Ningbo Innolux Electronics Ltd. Shenzhen PixinLED Technology Co.,Ltd.	Manufacturing and selling of LCD backend module and related components Manufacturing and selling of electronic paper Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Purchases and sales of monitor-related components Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Warehousing services Manufacturing R&D, Manufacturing and selling of LCD backend module and related components Development and selling of MINI LED	$ 4,670,720 296,767 8,828,800 10,907,840 4,556,800 59,808 4,442,880 598,080 42,720 284,800 67,087 43,648	2 2 2 2 2 2 2 2 2 2 1 3	$ 3,614,446 56,960 209,757 10,907,840 4,556,800 59,808 4,102,134 - 42,720 284,800 - -	$ - - - - - - - - - - - -	$ - - - - - - - - - - - -	$ 3,614,446 56,960 209,757 10,907,840 4,556,800 59,808 4,102,134 - 42,720 284,800 - -	$ 140,770 160,561 417,233 192,623 359,418 70,601 17,988 242,705 2,998 ( 2,370) 26,528 ( 2,618)	100 4 100 100 100 100 100 100 100 63 100 100	$ 140,770 - 417,233 194,937 359,418 70,601 17,988 242,705 2,998 ( 1,498) 26,528 ( 2,618)	$ 11,718,508 18,948 20,506,150 20,736,609 5,263,115 610,146 5,441,431 1,872,445 88,726 62,628 105,055 39,961	$ 1,056,274 - 4,916,643 - - - - - - - - -	2.1 2.2 2.3 2.3 2.3 2.4 2.4 2.5 2.6 2.7

Table 8, Page 1

Ceiling on investments in Mainland China:

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Innolux Corporation	24,317,045 $	30,850,437 $	(Note D)

Note A: The relevant figures were listed in NT$. Where foreign currencies were involved, the figures were converted to NT$ using exchange rate. Note B: Profit or loss recognized for the year ended December 31, 2020 was audited by independent auditors. Note C: The investment methods are as follows:

1. Directly investing in Mainland China.

2. Through investing in companies in the third area, which then invested in the investee in Mainland China.

3. 2.1. Through investing in Stanford Developments Limited in the third area, which then invested in the investee in Mainland China.

4. 2.2. Through investing in Warriors Technology Investments Ltd in the third area, which then invested in the investee in Mainland China.

5. 2.3. Through investing in Landmark International Ltd. in the third area, which then invested in the investee in Mainland China.

6. 2.4. Through investing in Toppoly Optoelectronics (Cayman) Ltd. in the third area, which then invested in the investee in Mainland China.

7. 2.5. Through investing in Innolux Optoelectronics Hong Kong Holding Limited in the third area, which then invested in the investee in Mainland China.

8. 2.6. Through investing in Keyway Investment Management Limited in the third area, which then invested in the investee in Mainland China.

9. 2.7. Through investing in Double Star Inc. in the third area, which then invested in the investee in Mainland China.

10. Others.

The company invested via the company investment entities in Mainland China to invest in Shenzhen PixinLED Technology Co.,Ltd. Except for the investment via the holding companies in Mainland China, other investments shall not be approved by Investment Commission of the Ministry of Economic Affairs.

Note D: In accordance with “Rules Governing Applications for Investment or Technical Cooperation in Mainland China”, the Company has obtained the certificate of being qualified for operating headquarters, issued by the Industrial Development Bureau of the Ministry of Economic Affairs, the ceiling amount of the investment in Mainland China is not applicable to the Company.

Ⅰ. The amount approved by the Investment Commission of Ministry of Economic Affairs (MOEA) is USD 10,000 thousand, Amlink (Shanghai) Ltd. has finished liquidation in December 2019 but has not yet applied for the cancellation of investment with the Investment Commission of MOEA.

II. The amount approved by the Investment Commission of Ministry of Economic Affairs (MOEA) is USD 34,676 thousand, Interface Technology (ChengDu) Co., Ltd. disposed the equity interest held in its parent company, General Interface Solution (GIS) Holding Limited, on the open market but has not yet applied for the cancellation of investment with the Investment Commission of MOEA.

III. The Group adjusted the investment structure in the fourth quarter of 2020. InnoCare Optoelectronics Corporation acquired 100% of shares in Ningbo Innolux Electronics Ltd. The investment amount of InnoCare Optoelectronics Corporation

to Ningbo Innolux Electronics Ltd. approved by the Investment Commission of Ministry of Economic Affairs (MOEA) is USD 3,172 thousand. However, as of December 31, 2020, the investment amount has not yet been remitted.

Table 8, Page 2