INX - Annual Report 2021 | FinancialReports.eu

Stock Code: 3481

Innolux Corporation 2021 Annual Report

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw Innolux Annual Report is available at: http://www.innolux.com Printed on April 30, 2022

A. Spokesperson & Deputy Spokesperson information.

Spokesperson name: Chu-Hsiang Yang Title: President & COO Tel: 886-37-586000 E-mail: [email protected]

Deputy Spokesperson name: Li-Wei Hsu Title: Manager Tel: 886-37-586000 E-mail: [email protected]

B Headquarters, Branches and Plant.

Headquarters: No.160, Kexue Rd., Zhunan Site, Hsinchu Science Park Tel: 886-37- 586000 Branch: No.21 Zidong Rd., Fenghuali, Xinshi District, Tainan City Tel: 886-6- 5889998 Plant Fab T1: No.160, Kexue Rd., Zhunan Township, Miaoli County, Hsinchu Science Park Tel: 886-37- 586000 Fab T2: No.168, Kexue Rd., Zhunan Township, Miaoli County, Hsinchu Science Park Tel: 886-37- 586000 Fab T3: No. 12, Kejung Rd., Zhunan Township, Miaoli County, Hsinchu Science Park Tel: 886-37- 586393 Fab A: No.1, Qiye Rd., Xinshi Dist., Tainan City, Southern Taiwan Science Park Tel: 886-6-5051881 Fab B: No.2, Sect. 2, Huansi Rd., Xinshi Dist., Tainan City, Southern Taiwan Science Park Tel: 886-6-5051889 Fab C: No.12, Nanke 8th Rd., Shanhua Dist., Tainan City, Southern Taiwan Tel: 886-6-5051880 Fab D: No.3, Sect. 1, Huansi Rd., Xinshi Dist., Tainan City, Southern Taiwan Science Park Tel: 886-6-5051888 Fab F: No.11, Luke 10th Rd., Kaohsiung City, Southern Taiwan Science Park Tel: 886-7-6278888 Fab T6: No.11, Luke 10th Rd., Kaohsiung City, Southern Taiwan Science Park Tel: 886-6-6278888 STSP Touch Fab : No.12, Nanke 8th Rd., Shanhua Dist., Tainan City, Southern Taiwan Science Park Tel: 886-6-5051880 Touch Module Fab : No. 12, Nanke 8th Rd., Shanhua Dist., Tainan City, Southern Taiwan Science Park Tel: 886-6-5051880 N 9Fab：No.10, Nanke 9th Rd., Shanhua Dist., Tainan City, Southern Taiwan Science Park Tel: 886-6-5889998

C. Stock Transfer Agent

Grand Fortune Securities Co., Ltd.

Address: 6th Floor, No.6, Sec. 1 Zhongxiao W Rd., Zhongzheng Dist., Taipei City 10041, Taiwan Website: http://www.gfortune.com.tw

Tel: 886-2-23711658

D. Auditors

PricewaterhouseCoopers Auditors: Sheng-Chung Hsu, Hua-Ling Liang Address: 27th Floor, 333 Keelung Rd, Sec. 1, Taipei, Taiwan Website: http://www.pwc.tw Tel: 886-2-27296666

E. Overseas Securities Exchange: N/A.

F. Corporate Website: http://www.innolux.com

	*Contents*	*Contents*
I.	Letter to Shareholders .............................................................................................................. 1
II.	Company Profile ....................................................................................................................... 7
	2.1	Date of Incorporation: ....................................................................................................... 7
	2.2	Company History .............................................................................................................. 7
III.	Corporate Governance Report .............................................................................................. 15
	3.1	Organization .................................................................................................................... 15
	3.2	Directors and Management Team ................................................................................... 17
	3.3	Remuneration of Directors, President, and Vice President ............................................. 35
	3.4	Implementation of Corporate Governance ...................................................................... 41
	3.5	Information Regarding Accountants’ Fees ...................................................................... 76
	3.6	Replacement of CPA ....................................................................................................... 76
	3.7	The Company’s chairman, general manager, or any managerial officer in charge of
		finance or accounting matters has in the most recent year held a position at the
		accounting firm of its CPA or at an affiliated enterprise ................................................. 76
	3.8	Changes in Shareholding of Directors, Managers and Major Shareholders ................... 77
	3.9	Relationship among the Top Ten Shareholders ............................................................... 78
	3.10	Ownership of Shares in Affiliated Enterprises ................................................................ 78
IV.	Capital Overview .................................................................................................................... 80
	4.1	Capital and Shares ........................................................................................................... 80
	4.2	Bonds............................................................................................................................... 87
	4.3	Preferred Shares . ............................................................................................................ 88
	4.4	Global Depository Receipts ............................................................................................ 88
	4.5	Employee Stock Options ................................................................................................. 88
	4.6	Issuance of New Restricted Employee Shares ................................................................ 88
	4.7	Status of New Share Issuance in Connection with Mergers and Acquisitions . .............. 88
	4.8	Financing Plans and Implementation. ............................................................................. 88
V.	Operational Highlights ........................................................................................................... 89
	5.1	Business Activities .......................................................................................................... 89
	5.2	Market and Sales Overview .......................................................................................... 101
	5.3	Human Resources .......................................................................................................... 109
	5.4	Environmental Protection Expenditures ....................................................................... 109
	5.5	Labor Relations ............................................................................................................. 110
	5.6	Information Security Management ............................................................................... 116
	5.7	Important Contracts ....................................................................................................... 116
VI.	Financial Information .......................................................................................................... 119
	6.1	Five-Year Financial Summary....................................................................................... 119
	6.2	Five-Year Financial Analysis ........................................................................................ 124
	6.3	Audit Committee Report in the Most Recent Year ....................................................... 128
	6.4	Consolidated Financial Statements for the Years Ended December 31, 2021 and
		2020, and Independent Auditors’ Report....................................................................... 129
	6.5	Financial Statements for the Years Ended December 31, 2021 and 2020, and
		Independent Auditors’ Report ....................................................................................... 129
	6.6	Disclosure of the Impact on Company’s Financial Status Due to Financial
		Difficulties: ................................................................................................................... 129

VII.	Review of Financial Conditions, Operating Results, and Risk Management ................. 130	Review of Financial Conditions, Operating Results, and Risk Management ................. 130
	7.1	Analysis of Financial Status .......................................................................................... 130
	7.2	Analysis of Financial Performance ............................................................................... 131
	7.3	Analysis of Cash Flow .................................................................................................. 131
	7.4	Major Capital Expenditure Items .................................................................................. 132
	7.5	Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement
		Plans and the Investment Plans for the Coming Year ................................................... 132
	7.6	Analysis of Risk Management ...................................................................................... 132
	7.7	Other Important Matters ................................................................................................ 137
VIII.	Special Disclosure ................................................................................................................. 138
	8.1	Summary of Affiliated Companies ................................................................................ 138
	8.2	Private Placement Securities in the Most Recent Years ................................................ 146
	8.3	Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent
		Years .............................................................................................................................. 146
	8.4	Special Notes ................................................................................................................. 146

IX. Materially might affect shareholders' equity or the price of the Company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of printing of the annual report, such situations shall be listed one by one ..... 147

I. Letter to Shareholders

1.1 Report on operating results for 2021

In early 2021, the global economy was weaker than expected. As the new Omicron variant keeps spreading, governments of various countries are reintroducing strict crowd control. Under the impact of energy price hikes and supply disturbances, both the extent and spillover of inflation went beyond expectations, especially in the U.S. and many emerging and developing economies. The real estate industry in China is shrinking and the recovery in private consumption is slower than expected. Both factors are affecting the outlook of economic growth.

According to IMF’s forecast, global risks are tilted to the downside. The occurrence of new variants may prolong the pandemic and bring volatilities to the economy. Moreover, the supply chain disturbances, the energy price fluctuations and local salary pressures make the trend of inflation and policies more uncertain. Interest rate hikes in developed economies could trigger risks to financial stability and could put capital flow and monetary and fiscal positions in emerging markets and developing economies at risk. This is especially true given the sharp rise in debt levels over the past two years. Geopolitical tensions remain, making it possible for other global risks to emerge. In addition, the current climate crises represent the likelihood of a major natural disaster remains high.

Therefore, the Company needs to expand relevant production and supply chain systems and improve the delivery system to enhance the reliability of the international division of labor. For the financial aspect, many countries continue to tighten their monetary policies to control the inflationary pressures. Under this background, the importance of cross-country cooperation gradually increases. The Company must have continuous liquidity in the face of various situations and accelerate the implementation of an orderly global deployment when necessary. In the meantime, expanding the investment in ESG affairs to meet the rising corporate citizenship standards is also important.

The display technology industry continues to move toward cross-boundary integration and transforming upgrading, which is specifically carried out on strategies for the upgrading of technology, creating product value, new ventures, and field construction, echoing the Company's three-Vs business strategy. The Company's operating performance for the year 2021 reached record highs in gross margin, operating margin and net income margin since the merger. The Company will continue to adjust its business strategies, refine new technologies, develop new applications, continuously increase the added value of its products, pursue high-end technology products and develop emerging markets in order to create maximum benefits for the Company, its shareholders, customers and partners through the improvement of technology and overall product quality.

(I) Results of business plan implementation

For 2021, the Company consolidated sales revenue was NT$ 350,076,690 thousand, up NT$ 80,165,639 thousand, or 29.7%, compared with 2020 (2020’s consolidated net sales revenue was NT$ 269,911,051 thousand). For 2021, the net profit attributable to shareholders of parent company was NT$ 57,534,461 thousand, and the earnings per share was NT$ 5.53.

(II) Results of budget execution

No financial forecast has been disclosed for 2021, therefore there is no need to disclose budget execution.

(III) Analysis of Financial Income and Expenditure and Profitability

	Items	2020	2021
Capital Structure (%)	Debts to assets ratio	37.41	34.81
	Long-term capital to property, plant, and equipment ratio	146.59	209.21
Solvency	Current ratio(%)	145.79	150.85

	Items	2020	2021
	Quick ratio(%)	114.66	114.28
	Interest coverage multiplier(times)	3.49	64.88
Profitability	Return on assets(%)	0.66	13.77
	Return on equity (%)	0.70	21.22
	Operating profits as a percentage of paid-in capital(%)	1.82	59.39
	Net profits before tax as a percentage of paid-in capital(%)	2.57	59.10
	Netprofit margin(%)	0.61	16.44
	Earningsper share(NT$)	0.17	5.53

(IV) Status of Research and Development

Along with the emergence of the metaverse, the new type of display technology that connects the virtual and the real world will play an important role. The Company devotes itself to developing a non-dazzling, highresolution VR LCD that creates a high sense of immersion and resolves the problem of the pane effect caused by the insufficient resolution of VR in the market; besides, with its world-leading N3D technology, the Company has developed an exclusive "consumer multi-person naked eye N3D display" based on intuitive 3D images which do not cause dizziness even after prolonged use. This product can be applied to smart retail. In addition, the “Medical-use Naked Eye 3D Display” will be applied to the smart medical field, providing a more intuitive experience for medical education and medical diagnosis.

In terms of smart mobility, the Company is cooperating with Taipei Metro to design a digital train. It provides a wide range of cross-boundary applications and software and hardware integration solutions for display and communication technologies. By using the arrival billboard and curved billboard as an interface, it assists customers to resolve the problems of time and labor-consuming replacement of the advertisement, poor performance, monotonous marketing, and business model, etc.; and to develop new applications and new business models.

In the field of wireless communications, LC Meta-Surface Antenna products are mass-produced and combined with actively development technology of Panel Level Package in recent years. Compared with traditional dish antennas, the LC Meta-Surface Antenna can track satellites without the need for a motor device, is lightweight and flat, and has the same broadband, high pointing and wide angle scanning performance with lower power consumption, so is very suitable for the future development of low-orbit satellite communication, autonomous vehicles, satellite IoT (Internet of Things) and radio communication for rescue purpose.

In the field of architecture, Smart LC Window is well received after being exhibited in major exhibitions. Its features of heat insulation, energy-saving, and light penetration, in terms of the 2050 net-zero emissions goal, help reduce the energy consumption of buildings. It can reduce the use of indoor air conditioning, which helps to reduce greenhouse gas production, and can be used with smart projection windows for more diversified advertising applications. In this way, the customer can realize the value of energy-saving and sustainability and move towards the UN sustainable development goal of sustainable cities and communities.

The Company has also crossed over into the semiconductor packaging field, Panel Level Package (PLP), to develop advanced packaging technologies that can highly integrate wafers and facilitate the technology innovation of heterogeneous integration. The Company utilizes its existing G3.5 production line to develop midto-high-end semiconductor packaging technology with large G3.5 FOPLP substrates to provide the customers with more competitive costs and create greater profit value.

In terms of automotive display applications, it is expected that the automotive market will develop towards large displays in the future, developing a visual experience suitable for the cabin experience. The cutting technology and curved display technology that match the interior design of automobiles are already being studied and are entering mass production. In addition to the styling advancement of display panels, the high security protective glass required for automotive displays is also the focus of our vertical integration to achieve the stringent requirements of high uniformity, low reflection, and anti-glare for automotive regulations at various viewing angles.

TV panel products continue to implement the strategy of supplying OC (Open-Cell) and complete TV sets in order to provide customers with complete services. To follow the market trend, Innolux develops High PPI (Pixels Per Inch), VRR (Variable Refresh Rate), and HPR (High Frame Rate) TVs and matches backlights of mini LED, in order to level up the quality of moving images. The products are combined with cameras and microphones for creating a multifunctional All-In-One audiovisual entertainment large-screen product.

At the same time, by expanding the application of public information display (PID) in the field market with narrow-bezel splicing screens, the Company has stood in the top three of the display wall market; in response to the post-epidemic era, the Company actively develops the high brightness and weather resistance Outdoor Display which can clearly present images no matter whether or not it is sunny or rainy and can broadcast video entertainment, advertisements, and sports game outdoors; develop the wide viewing angle and low reflection shelf screen to deploy in smart retailing as the online-to-offline push ad to induce more potential consumers; develop a vibration-resistant and low-power-consumption cabin demand display for transmitting traffic network information, as well as the real-time information push of government advocating or advertisements to fully welcome the era of smart field demands.

In terms of Notebook panels, we have been working with major brand customers and providing them with high-end custom products with LTPS (Low Temperature Polycrystalline Silicon)/IGZO, advanced process technology; also, cooperating with three platforms (INTEL, NVIDIA and AMD) to develop low-power technology of 18.0/16.0 (WQXGA 240Hz/FHD 480Hz (High Frame Rate) and 30-120H VRR (Variable Refresh Rate), and exclusively supply to world-class customers. In addition, we have developed 3rd generation lowpower E-Privacy Display to significantly improve the display quality, and combined with various advanced technological breakthroughs, we have also developed new Aspect Ratio 3:2∕16:10 products and mini LED Display, which have improved the performance of TFT-LCD panels over OLED panels in key factors such as cost structure and quality reliability.

Small and medium-sized panels are being diversified in size, from 1.4" to 10", and are widely used in mobile devices and consumer electronics, including smartphones, tablet PCs, smart appliances, smart speakers, smart watches, VR head-mounted displays (HMDs), digital cameras, MFP multi-function printers, and entertainment game consoles. In terms of technology, LTPS and IPS are used to meet the market demand for high resolution and wide viewing angle. The development trend of small and medium-sized panels will move towards new specifications such as low power consumption, dynamic refresh rate, full screen, and narrow bezel to enhance product value. At the same time, we are committed to the full development of mini LED products in various applications, providing high contrast, high brightness, and ultra-low power consumption of the new generation of displays. To add value to the products, small and medium-sized of product lines, and digital camera screens to 17.3" 4K2K products, all apply to the techniques of mini LED.

There were two new applications put into mass production in the small-and-medium-size product lines, i.e. the VR AR relating to the metaverse. Among them, VR started to mass-produce 1200 ppi products and planned to mass-produce the 1411 ppi products by using the LTPS process. As for the 3D printer, it has also expanded its product offerings to 8K resolution to increase the product momentum of small-and-medium-sized products.

(V) The Company's digital transformation

As a key component in the display technology industry, "panel" has a wide range of products with high complexity, and the cost and quality requirements are becoming increasingly challenging. Through the introduction of Industry 4.0 intelligent technology, the Company is committed to speeding up time-to-market, responding quickly to customer needs, and reducing material risks on the management side, and focusing on solving recruitment management problems, improving production quality, and reducing production costs on the production side.

In response to the strategic needs of the market from end-to-end supply chain to design/manufacturing/quality/management, we are promoting digital transformation with two main themes of smart manufacturing and flexible decision making to optimize production processes and organizational

management. And under the operation of dual transformation strategy, with the original advantage and flexible cross-field ability, we create new application fields and inject new vitality into the industry. We continue to combine big data and artificial intelligence to link front and back-end intelligent factories and build decentralized decision-making systems to achieve technological improvement, productivity multiplier benefits and immediate value customers’ service.

1. Intelligent manufacturing:

Our intelligent manufacturing integrates three development axes: X-axis (automation), Y-axis (data), and Z-axis (intelligence), and closely combines three types of talents (field experts, data scientists, and data technology experts) to create the world's leading Zero Worry factory. After years of hard work, the Company has the following advanced 4.0 technologies, which are applied in various areas of the factory.

Precise design: Design combined with Digital Twin technology for high quality and faster product development cycle.

Smart Production: From pre-production intelligent scheduling, intelligent DOE, intelligent dispatching...etc. to in-production and post-production equipment health diagnosis, virtual measurement, intelligent parameter monitoring, intelligent feedback control, intelligent logistics, intelligent monitoring...etc., all 4.0 Solution technologies are integrated into a highly intelligent Zero Worry factory with self-awareness, memory, operation, response and learning.

Intelligent inspection: Develop AI technology to replace manual visual inspection with image big data, significantly reducing inspection manpower and improving overall inspection quality. It could not only apply to panel inspection, but also expand the applying scope to use X- Ray in Smart Healthcare and Smart Detection for Industrial use. Effectively solve the defects of visible, unseen, and even invisible issues.

Further facilitate intelligent energy saving/intelligent factory administration/intelligent storage/intelligent personnel management...etc. With overall increase in quality and efficiency and reduction in costs and inventory and other bright results.

2. Intelligent operating advancement:

Promote intelligent management in all aspects, optimize the quality and efficiency of decision making, and enhance the value of the Company. Use BI (Business Intelligent) operation as the cornerstone to create transparent information for decision making; optimize the data and intelligent application of key processes such as industry analysis, star products, profitability menu, capacity scheduling, and revenue analysis. Effectively link various functional platforms & processes; It provides multi-dimensional, real-time, and accurate visual decision support information to assist decision makers in managing risks and creating opportunities from Top Down; It also extends to Bottom up to improve operational efficiency at all levels, interact, link, and substantiate the results of execution. In 2021, the Company has made achievement digital transformation, and substantially improved efficiency and operating results. The intelligent operation Stage 2.0 of the Company is on the way to proceed five key points, which are three levels of decision assistance system/knowledge graph/strengthen ability of data collection analysis and application/information architecture and data governance. Meanwhile, to nurture our data-driven corporate culture, and to move toward the goal of zero-error decision-making.

As a leading manufacturer of display technology solutions, the Company values the rapid changes in customer needs and is committed to building an intelligent digital system to achieve information value chain integration from customers, suppliers to production, including rapid response to customer needs and use of intelligent material scanning engine for optimal material allocation. Combined with the out-of-materials risk management platform, we are able to fulfill order fill rate and strengthen the competitive advantage of the Company.

Through the implementation of Industry 4.0, in September 2021, the Company received the honor of being a lighthouse factory for smart manufacturing and became a benchmark company with world recognition in the field of management and intelligence. At the same time, it applied intelligence to promote sustainable

development, hoping to enhance smart manufacturing for both competitiveness and sustainable development and to strengthen corporate competitiveness while accelerating sustainable development.

The Company will continue to promote the concept of "Transformation, Reengineering, and Value Advancement" to create a new landscape for next-generation display applications through digital transformation and to solidify its leading position in the display technology industry.

1.2 Summary of Business Plan for 2022

The Company will carry out its 3Vs business strategy with the vision of "Panel Your Future" which enriches the smart display life. Based on its core display business, the Company will continue to add value and flexibly cross over to diversified field economies, and develop towards high-value system integration services to create organic growth and build a complete smart display ecosystem.

3Vs business strategy including:

1V. Create Value - Digital Capability ‧ Flexible Decision-Making: The Company will continue to progress the Industry 4.0 technologies and consolidate its robustness and competitiveness by promoting both smart manufacturing and smart operations.
2V. Drive Value- Visionary Field-Development ‧ Increasing Value: The Company will "vertically cultivate" its core display business and "horizontally cross-boundary" diversified field economies, including smart retail, smart entertainment, smart healthcare, smart mobility, and high value-added product research and development.
3V. Share Value- Sustainable Growth ‧ Social Prosperity: The Company will carry out "manufacturing and environmental sustainability" win-win green production performance so that employees can live a "healthy life", work on "happy work", and devote themselves to public welfare with "spiritual happiness", to build a mutual-benefit society and create corporate sustainable value.
(I) Cultivate core business, add value to innovation:
Starting from the core display business, the Company will continue to add value to the research and development of visionary technologies and innovative and diversified display products: From InnoLED to multi-person naked eye N3D, LTPS Gaming, IGZO Polarblack, miniLED, AR/VR/wearable devices, and Free Form, the Company will keep breaking through the most updated display technology applications to steadily grow its profit in niche markets.
Collaborate with startups to expand the business territory: “InnoCare Optoelectronics Corporation” is developing digital precision inspection applications and aiming to become a TWSE listed company; " CarUX Technology Inc." is committed to capturing the future electric vehicle business opportunities by benchmarking against a leading manufacturer of high-end, large-scale, integrated automotive panels.

(II) Flexibly cross boundary and progress diversely

Catch on the trend of 5G and AIoT, move toward innovative smart field application solutions and integrate the end-market demand with the transparent display, Kirameki display, Smart LC Window, smart automobile cabin, etc. to make the panel value-added and re-engineered.
Enter the smart medical field to start high-end display applications. The Company applies naked-eye 3D displays on the medical teaching site to strengthen its R&D capabilities in hardware and software integration; and becomes a pioneer in the exemplary field.
Panel Semiconductor highly integrates the advanced packaging technology for chips, crosses over to the semiconductor industry for the technological innovation of heterogeneous integration and opens up a new landscape.

(III) Sustainable operation and value sharing

In line with the international trend and the Sustainable Development Goals (SDGs), the Company keeps

investing in ESG sustainable development steadily and implementing the "InnoLux Group Sustainable ongoing 3Gos" of development strategies, including:

1.E- Go Green - Environmental Preservation ‧ Everlasting Determination: the Company will strengthen the green cycle of sustainable development, including waste liquid crystal recycling, chemical recycling, process water recycling, etc., as well as actively promote the Net Zero emissions goal, disclose the volume of greenhouse gas (GHG) emissions and GHG emissions attributed to the products, and set up reduction objectives to save energy and increase the green power ratio from the manufacturing process.
S -Go Sharing - Mutual Benefiting the Society ‧ Caring for the Common Good: The Company will proactively participate in the public welfare of communities and the society, expand corporate influences and build a mutual-benefit society. Enhance the value chain by sharing the value which carries out the interests of all stakeholders and create together the sustainable value of society, environment, economy, etc.
G - Go Responsible - Carrying Out the Integrity ‧ Operating Responsibly: Enhance the communication with stakeholders by using public and transparent information, deepen the sustainable corporate governance culture at the same time and strengthen the sustainable operating strategies of the Board of Directors.

In 2022, with determination of sustainable development to fulfill common prosperity, the Company will continue to promote value innovation, cross-domain integration, and maximize the value of production capacity. We ask for your continued support and encouragement. Lastly, I wish everyone good health and the best of luck. Thank you.

Chairman: Jin-Yang Hung

Managerial Officer: Chu-Hsiang Yang

Chief Accountant: Kun Ma

II. Company Profile

2.1 Date of Incorporation: January 14, 2003

2.2 Company History

January2003	Inception and registration of the Company
March 2003	Invested in a subsidiary,Innolux HoldingLtd.
May2003	Ground breakingceremonyfor the TFT and Color Filter Plant in Zhunan
August 2003	The TFT and Color Filter Plant in Zhunan commenced construction
March 2004	Entered into a 7-year NT$ 20 billion syndicated loan contract with a syndicate including Bank of Communications
June 2004	Machineryinstallation started in the TFT factoryand Color Filter Plant in Zhunan
September 2004	Birth of the first TFT-LCDpanel
October 2004	Invested in Innocom Technology (Shenzhen)Ltd. in China
January2005	Public issuance of the Company’s shares approved bythe Financial SupervisoryCommission
February2005	Invested in Innolux Corporation Ltd. in the U.S.
March 2005	Obtained ISO 9001 certification Granted the “2005 Outstanding Award in Making the Science Park Green by Planting Trees” by the Science Park Administration
July 2005	Registered as an emerging stock on the Taipei Exchange Obtained ISO 14001 and OHSAS 18001 certifications
August 2005	Ranked 51st nationwide in actual import/export performance in 2004 Granted the Excellent Award in Import/Export Performance by the Ministry of Economic Affairs and Bureau of Foreign Trade
November 2005	Recognized as an outstanding waste disposal model factory by the Environmental Protection Administration,Executive Yuan
December 2005	Recognized as an Occupational Safety and Health Administration Voluntary Protection Unit by the Council of Labor Affairs,Executive Yuan
October 2006	Shares became listed on the Taiwan Stock Exchange on 24 October
November 2006	The Boardpassed the resolution of mergingwith Jemitek Electronics Corp. on 21 November
March 2007	Completed merger with Jemitek Electronics Corp.
June 2007	Invested in InnoJoyInvestment Corporation
August 2007	Invested in InnoFun Investment Corporation
November 2007	Global Deposit Receipts became listed on the London Stock Exchange on 7 November
June 2008	Toppingout ceremonyfor the sixthgeneration factoryof the Company
July 2008	Granted the “Outstanding Award in Making Green by Planting Trees” by the Science Park Administration Recognized as one of the TOP 10 Leading Companies among the “Taiwan Technology Top 100” Ranked sixth amongDeloitte TechnologyFAST50 Taiwan in terms ofprofitgrowth
September 2008	Entered into a 5-year NT$ 24 billion and US$ 200 million syndicated loan contract with a syndicate of 20 banks includingMega International Commercial Bank
	Selected as one of the 12 units in the national industrial group by the Water Assessment Programme organized bythe Ministryof Economic Affairs
October 2008	Received the Bronze Award of the National QCC Competition from the Corporate Synergy Development Center of the Industrial Development Bureau, Ministry of Economic Affairs Granted the 2008 Excellence Award in Recycling and Reducing Waste Production by the Environmental Protection Administration,Executive Yuan
November 2008	Recognized as a nationwide friendly workplace in 2008 by the Council of Labor Affairs, Executive Yuan

December 2008	Granted the 2008 Outstanding Water Conservation Award by the Water Resources Agency, Ministryof Economic Affairs
	Honored with the "2008 Taiwan CSR Awards-Silver Award" by the Taiwan Institute for Sustainable Energy
February 2009	Innolux Display’s Fab T1 passed and obtained the Taiwan Occupational Safety and Health Management System(TOSHMS)certification
April 2009	Innolux Display’s Fab T1 was granted the excellent award in achieving zero work accident hours bythe Council of Labor Affairs
May 2009	Innolux Display’s Fab T2 obtained ISO 9001/ISO 14001/OHSAS 18001/QC 080000 4-in-1 management system certification
June 2009	Granted the 2008 excellent personnel award by the national Labor Safety and Health Partnership of the Council of Labor Affairs
September 2009	Issued the 2008 Sustainability Report of Innolux Display Innolux Display’s Fab T0,T1,and T2 obtained the TS 16949qualitysystem certification
October 2009	Innolux Displayannounced a merger with TPO Displays Corp.
	Honored with the “Energy Conservation Outstanding Innovation Award” by the Bureau of Energy, Ministryof Economic Affairs
November 2009	Innolux Displayannounced a merger with Chi Mei Optoelectronics Corporation
	Entered into an NT$ 48 billion syndicated credit facility with a syndicate of 19 banks including Mega International Commercial Bank
	Received two Bronze Awards of the National QCC Competition from the Corporate Synergy Development Center of the Industrial Development Bureau,Ministryof Economic Affairs
	Granted the excellent award in low carbon production and waste reduction by the Industrial Development Bureau,Ministryof Economic Affairs
December 2009	Innolux Display was honored with the "2009 Taiwan CSR Awards-Bronze Award" for its 2008 Sustainability Report by the Taiwan Institute for Sustainable Energy Received the outstanding award in the “2009 Outstanding Energy Saving Companies Selection” from the Science Park Administration Recognized as the Best Managed Company in Taiwan by Asiamoney Granted the excellence award in environmentalprotection bythe Science Park Administration
January2010	Obtained “Labelingof EnergySavingAction” from the Environmental Protection Administration
February 2010	Granted the excellent award for outstanding achievement on training and management for occupational health bythe Council of Labor Affairs,Executive Yuan
March 2010	Completed the merger with Chi Mei Optoelectronics and TPO Displays Innolux Display renamed as Chimei Innolux Granted the outstanding performance award in occupational safety and health on the occasion of the 2009 Nationwide Occupational Safety and Health Week, held by the Council of Labor Affairs, Executive Yuan
May 2010	Winner of Taiwan's Environmental Protection Administration's 2009 Enterprise Green Procurement Performance Award Recognized as an outstanding unit in achieving zero work accident hours bythe Council of Labor Affairs,Executive Yuan
June 2010	18.5-inch LCD panel is awarded 2009 FPD green quality certification 42-inch 120Hz+ MEMC is awarded the best integrated LCD panel at the Taiwan Gold Panel Awards 2010 with the 13 th Annual OutstandingOptoelectronics Product Awards
September 2010	Awarded the Outstanding Energy Conservation Award by the Department of Energy, Ministry of Economic Affairs
October 2010	Passed DNV third-party independent verification for its 18.5-inch LCD flat panel monitor (M185B1-L02), making CMI the first panel maker to receive a supply chain “water footprint” verification statement, Granted “the Excellent Environmental Protection Award” by the Science Park Administration

November 2010	Granted the 2010 excellence award in recycling and reducing waste production by the Environmental Protection Administration
	Completed the merger with Chi Mei Energy
December 2010	Granted “the 2010 Outstanding Energy Saving Award” by the Science Park Administration Granted “the Excellent Award in Low-Carbon Management” by the Science Park Administration Granted “the 2010 Outstanding Award in Making Green by Planting Trees” by the Science Park Administration
January 2011	Became the first manufacturer to obtain “water footprint” verification for its product supply-chain with regard to its desktopLCD monitors and LCD TVs
February2011	Honor Light Services Limited revoked
March 2011	2.65-inch and 5.3-inch Memory-In-Display (Midis) technology, which was a new energy-saving panel technology, obtained the Best Paper Award of the 17th IDW (International Display Workshops),Japan
April 2011	Honored with the 2011 Taiwan Excellence Gold Awards for its ultra-thin 13.3-inch HD notebook displaymodule
May 2011	Kobe site was awarded the Best Safety & Hygiene Company by the Safety Management Committee of Kobe, Japan. Chi Mei EnergyNetherlands revoked
June 2011	Won the Outstanding Photonics Product Award 2011 for its 21.5-inch PCT (Projected Capacitive Touch) display module by the Photonics Industry & Technology Development Association (PIDA).
	Honored with the “2011 Contribution to Job Creation” award by the Ministry of Economic Affairs and Council of Labor Affairs,Executive Yuan
August 2011	Ranked third among the “2010 Outstanding Export Growth Companies” by the Bureau of Foreign Trade,Ministryof Economic Affairs
September 2011	Granted the 2010 Enterprise Green Procurement Performance Award by the Environmental Protection Administration,Executive Yuan
October 2011	STSP Branch was honored with the “Jin-Jhan Award” by the Council of Labor Affairs, Executive Yuan. Honored with “National Industrial Safety and Health Award” by the Council of Labor Affairs, Executive Yuan
April 2012	Entered into the Joint Debt RestructuringAgreement with the syndicate
June 2012	Won the Outstanding Photonics Product Award 2012 for its 50-inch 3D Direct-Type LED panel by the PIDA.
August 2012	Honored with the “Taiwan Excellence Silver Award” for its 23.6-inch USB super energy-saving LCD screen
September 2012	Recognized as an outstandingunit for hiringdisabledpersons bysurpassingthe target
	Granted the 2011 Enterprise Green Procurement Performance Award by the Environmental Protection Administration, Executive Yuan and the only panel factory granted the award for four consecutive years and fulfilling its responsibility of a sustainable environmental protection enterprise
	Chi Mei Optoelectronics UK Limited revoked
December 2012	Changed its name to “群創光電股份有限公司” with the English name of “Innolux Corporation”
January 2013	Global depository receipts listed and traded on the Luxembourg Stock Exchange on 23 January Merger of the subsidiaries InnoJoy Investment Corporation and InnoFun Investment Corporation, in which InnoJoy Investment Corporation was the surviving company Eastern Vision Co.,Ltd. liquidated
March 2013	Toptch Trading Limited liquidated Dragon Flame Industrial Ltd. liquidated

April 2013	Nanhai Plant took the lead in obtaining the first MFCA material flow cost accounting certification in the world The Company’s 65-inch 4K2K TV module was awarded the 21st “Taiwan Excellence Gold Award” The Company’s 4.3-inch active organic light emitting display (TRUEOLED) was awarded the 21st “Taiwan Excellence Silver Award” The Company's 50-inch ultra-high resolution (4K2K) thin narrow frame LCD TV module was awarded the 21st "Taiwan Excellence Award" The Company’s 30-inch six million pixel medical monitor was awarded the 21st "Taiwan Excellence Award" The Company’s 5-inch Full HD LCD panel module was awarded the 21st "Taiwan Excellence Award" The Company’s 3.4-inch active organic light emitting display was awarded the 21st "Taiwan Excellence Award"
June 2013	The Company's 65-inch ultra-high resolution thin narrow frame LCD TV module was recognized by the 16th “Annual Outstanding Optoelectronics Products Awards” Granted the first “National Environmental Education Award – Excellence Award for Private Enterprises Group” by the Environmental Protection Administration Innocom Technology (Jiashan)Co.,Ltd. liquidated
September 2013	Ningbo Chi Mei Electronics Ltd. renamed as Ningbo Innolux Optoelectronics Ltd. Ningbo Chi Mei Optoelectronics Ltd. renamed as Ningbo Innolux Technology Ltd. Ningbo Chi Hsin Electrics Ltd. renamed as Ningbo Innolux Display Ltd. Ningbo Chi Mei Logistics Corprenamed as Ningbo Innolux Logistics Ltd.
October 2013	The Company’s “Intelligent Automation” team was granted the “Annual Innovative Pilot Award” of the Industry Innovation Award for the one-stop touch innovative operating model by the Ministry of Economic Affairs Foshan Chi Mei Logistics Co., Ltd. renamed as Foshan Innolux Logistics Co., Ltd. TPO Displays(Nanjing)Ltd. renamed as NanjingInnolux Optoelectronics Ltd.
November 2013	Awarded the 2013 Green Building Gold Mark by the Ministry of Economic Affairs Awarded the “Premium” honor of the 2013 Taiwan CSR Awards Full LuckyInvestment Limited liquidated
December 2013	Selected as an outstanding water saving unit for 2013 by the Water Resources Agency of the Ministry of Economic Affairs Dongguan Chi Hsin Electrics Ltd. liquidated TPO Displays (Shanghai) Ltd. renamed as Shanghai Innolux Optoelectronics Ltd. Global Deposit Receipts listed on the London Stock Exchange delisted
January 2014	Plant T1 and Plant B, D, TOC, F (Tainan) awarded Health Promotion Label of Healthy Workplace Certification Ningbo site awarded Safe Standard Level 2 Corporation Chi Mei Optoelecttonics (Singapore) Pte. Ltd. liquidated Sonic Trading Limited liquidated Innocom Technology (Xiamen) Co., Ltd. liquidated Merger of Nanhai Chi Mei Electronics Ltd. and Nanhai Chi Mei Optoelectronics Ltd., in which Nanhai Chi Mei Electronics Ltd. was the survivingcompany
February 2014	Foshan site awarded as an Advanced Corporation in Promotion of Environmental Protection in Si- shan town Ningbo site awarded as an Advanced Corporation in Safe Production and Workplace in Ningbo City2013
March 2014	Honored with the Healthy Corporation Award for the 2014 Southern Science Park Ecological and Humanistic Marathon

10 -

April 2014	Nanhai Chi Mei Electronics Ltd. renamed as Foshan Innolux Optoelectronics Ltd. Honored with the Taiwan Excellence Sliver Award for its 65-inch ultra-high-analytic 3D TV panel Awarded a certificate of recognition for offering disability employment opportunities to realize corporate social responsibilities by the Southern Taiwan Science Park Administration, Ministry of Science and Technology Innolux’s 28-inch 4K2K and 23.6-inch touchpanel won the “Taiwan Excellence Silver Award”
September 2014	Chi Mei Optoelectronics USA, Inc. renamed as Innolux Optoelectronics USA, Inc. TPO Displays USA Inc. renamed as Innolux TechnologyUSA Inc.
October 2014	TPO Displays Japan K.K. renamed as Innolux TechnologyJapan Co.,Ltd.
November 2014	Chi Mei Optoelectronics Europe B.V. renamed as Innolux Optoelectronics Europe B.V. TPO Displays (Shinepal) Ltd. renamed as Nanjing Innolux Technology Ltd. Chi Mei Optoelectronics Japan Co., Ltd. renamed as Innolux Optoelectronics Japan Co., Ltd. TPO Displays HongKongLtd renamed as Innolux HongKongLtd.
December 2014	Health Management Award and Nutrition Health Award by the Health Promotion Administration Granted 2014 Taiwan Sustainable Development Awards by National Council for Sustainable Development TPO Displays Hong Kong Holding Ltd. renamed as Innolux Optoelectronics Hong Kong Holding Ltd. TPO Hong Kong Holding Ltd. renamed as Innolux Hong Kong Holding Ltd. TPO Displays Europe B.V. renamed as Innolux TechnologyEurope B.V.
February 2015	Signed an agreement for a syndicated credit line of NT$68.5B with Bank of Taiwan and 15 other banks Innocon Technology (Chengdu)Co.,Ltd. liquidated
March 2015	The Company terminated the debt restructuring negotiation and canceled the debt negotiations Honored with the Enterprise Innovation Award of Excellence
April 2015	The Company’s 100% high color saturation 4K2K TV module was awarded the 21st “Taiwan Excellence Gold Award” Awarded a certificate of recognition for social responsibilities bythe Global Views
July 2015	Innolux as an outstanding import/export company honored The Best Contribution Award of the MOEA's Award for International Trade 2015
August 2015	Foshan Innolux Optoelectronics Ltd was awarded International Carbon-Value Award in China
September 2015	Innolux named to Dow Jones SustainabilityWorld Index
October 2015	Awarded the Outstanding Energy Conservation Award 2015 by the Department of Energy, Ministry of Economic Affairs Completed the merger with Chi Mei EL corporation
November 2015	Inception and registration of Ningbo Innolux Electronics Ltd Innolux honored 2015 Taiwan Corporate Sustainability Report Award-Gold Award. Innolux marked 100 in disclosure score and listed as CDLI (Carbon Disclosure Leadership Index) 2nd year in a row in CDP. Gold union investments Limited liquidated Awarded the MOL TTQS Silver award
June 2016	Ningbo site was awarded an Outstanding Foreign Company Contribution Award by China ZhejiangInvestment and Trade Symposium.
July 2016	Awarded Award for International Trade for consecutive 6 years and Target Market Contribution Award, the only multiple winner in 2016 Fab 8 awarded "Best Performance in Water-Saving Unit" by the Water Resources Agency, Ministryof Economic Affairs.
October 2016	Fab3 and T2 plant passed the Green Factory-Clean Production Certification of Industrial Development Bureau,Ministryof Economic Affairs.

11 -

November 2016	Awarded Taiwan Corporate Sustainability Awards-- Corporate Sustainability Report Golden Awards of ICTgroup.
	Awarded Taiwan Corporate Sustainability Awards--Sustainable Water Management Awards for its outstandingwater managementperformance
December 2016	Innolux was granted the Innovative Product Awards by Hsinchu Science Park for its automotive displaytechnologies: S Shape Display,1-axis Curve Display,Curve with Touch Display
	Merger of the subsidiaries Ningbo Innolux Display Ltd. and Ningbo Innolux Technology Ltd., in which Ningbo Innolux DisplayLtd. was the survivingcompany
February 2017	Honored with Taiwan Excellence Achievement Award and Taiwan Excellence Gold Award
	Asiaward Investment Limited liquidated
	Ningbo Innolux Logistics Limited liquidated
March 2017	Main DynastyInvestment Limited liquidated
	Sun DynastyDevelopment Limited liquidated
August 2017	Innolux ranks the 19th of the Large Enterprise Group in "2017 Common Wealth Magazine's Corporate CitizenshipAward" competition
September 2017	Best China Investments Limited liquidated
	Magic Sun Limited liquidated
	Mega Chance Investments Limited liquidated
October 2017	Merger of the subsidiaries Nanjing Innolux Optoelectronics Ltd. and Kunpal Optoelectronics Ltd., in which NanjingInnolux Optoelectronics Ltd. was the survivingcompany
December 2017	Merger of the subsidiaries Innolux Optoelectronics Japan Co., Ltd and Innolux Technology Japan Co., Ltd in which Innolux Optoelectronics Japan Co., Ltd was the surviving company and change the Companyname into Innolux Japan Co. Ltd
	Merger of the subsidiaries Innolux Technology Europe B.V. and Innolux Optoelectronics Europe B.V. in which Innolux Technology Europe B.V. was the surviving company and change the Companyname into Innolux Europe B.V.
February 2018	Merger of the subsidiaries Innolux Optoelectronics USA, Inc. and Innolux Technology USA, Inc. and Innolux Corporation, in which Innolux Optoelectronics USA, Inc. was the surviving company and change the Companyname into Innolux USA,Inc.
August 2018	Innolux DST 3D touchphone won Taiwan OutstandingProduct Award
September 2018	Innolux named DJSI World and DJSI EmergingMarkets Index 2018
	Innolux Optoelectronics GermanyGmbH liquidated
October 2018	VAP Optoelectronics(Nanjing)Corpliquidated
November 2018	Innolux Tainan Fab 3 awarded EEWH-EC
	Innolux awarded 2018 Taiwan Excellence Gold with DST 3D Touch technology
	Innolux awarded 2018 Taiwan Corporate SustainabilityTOP 50 Awards
January2019	Golden Achiever International Limited liquidated
July2019	The Companywon the 2019 Best Companies to Work for in Asia 2019 Awards
August 2019	Bright Information Holding Ltd. Liquidated The Company was selected as the 2019 CSR Corporate Citizenship Award of the World Magazine- Top50 Enterprises in the Large Enterprise Group
September 2019	Innolux named DJSI World and DJSI EmergingMarkets Index 2019
November 2019	The Company received the "2019 Sports Enterprise Certification" from the Ministry of Education The Company was awarded the "TOP50 Taiwan Enterprise Sustainability Award," the "Taiwan Enterprise Sustainability Report Gold Award," and the best individual performance "Circular Economy Leadership Award" by the Taiwan Sustainable Energy Research Foundation. The Company won the 2019 “Taiwan Excellence Award Quality Award” The capital reduction is NT$97,110,719,770
December 2019	Innolux Tainan Fab B ecological community was selected as the community-type green building that won the Excellent Green BuildingAward in 2019

12 -

January2020	Issued the 1st Overseas Unsecured convertible Bonds of US$300 million
May 2020	Ningbo Innolux Flnet Electronics Ltd. liquidated
	Foshan Innolux Flnet Electronics Ltd. liquidated
July2020	The Companywas awarded “2019 GM Supplier of the Year” byGeneral Motors
September 2020	The Company was awarded “Climate Change Management Excellence Award of 2020 SGS CSR Awards.”
October 2020	Shenzhen Innolux Automations and Intelligence Systems Co.,Ltd. liquidated
November 2020	The Company was awarded “National Occupational Safety and Health Award- Enterprise Benchmarking Award,” due to create a high-quality employee workplace; therefore, won a highest honor
	The Company was picked as “DJSI World Index” and “DJSI Emerging Markets Index,” and the scope of society of the Company was the top one in display industry. Also, the Company ranked as benchmark enterprise
	The Company won four awards, which are 2020 TCSA “Taiwan Sustainable Enterprise Performance Award,” “Taiwan Enterprise Sustainability Report Silver Award,” “Circular Economy LeadershipAward,” and “Sustainable Water Management”
	The Companywas awarded 2ndnational environmentalprotection enterprise-sliver award
	The Company was awarded a badge of 2021 Taiwan Excellence Awards, and “65"Infinity screen and thin 8K TV” won the silver award of 29th,2021 “Taiwan Excellence Awards”
December 2020	The Company’s “Fingerprint Sensor in Display” was awarded Excellent Manufacturer Innovative Product Award byHsinchu Science Park
May2021	Leadtek Global GroupLimited liquidated
August 2021	The average of regenerated water rate in the manufacturing process, 96.2%, was among the top of Display Industry and the 10 plants of the Company were awarded "Best Performance in Water- SavingUnit" bythe Water Resources Agency,Ministryof Economic Affairs
	The 1st Overseas Unsecured convertible Bonds of US $ 300 million was all converted
September 2021	The Company was awarded “Investment in People of 2021” by Asia Responsible Enterprise Awards
	The Companywon “Best Companies to Work For in Asia” by《HR Asia》
	The Company won the award of intelligent manufacturing Lighthouse from World Economic Forum.
October 2021	The Companywon risk ratingas BBB byMSCI ESG
	The Companywas recognized as the HealthyWorkplace unit byBureau of Labor Insurance
	The Companywon Taiwan SustainabilityAction Gold Awards
November 2021	The Company was picked as “DJSI World Index” and “DJSI Emerging Markets Index,” and the scope of societyof the Companywas the topone in Displayindustry
	The Companywon six awards by14thTCSA Taiwan Corporate SustainabilityAward,which are
	Taiwan Corporate SustainabilityAward
	Taiwan Enterprise SustainabilityReport -Gold Award
	Circular EconomyLeadershipAward
	Leader of Water Resource
	Innovativegrowth Leader
	Leader of supplychain
	The Companywon the Gold medal for ESG for Health byCHR2021
	The Companywon the Taiwan Excellence Award in 16 consecutiveyears
	Innolux Optoelectronics Malaysia SDN. BH Liquidated
December 2021	The Companywon CDP(Climate Change) (B-)
	The Companywon CDP(Water Security) (A-)
	Lakers TradingLimited Liquidated

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	100% equityof Shenzhen PixinLED TechnologyCO.,LTD was sold
	The Company’s “Camera screens in Display” was awarded Excellent Manufacturer Innovative Product Award byHsinchu Science Park
	The Companywon National Talent Development Awards byMinistryof Labour
March 2022	Car UX TechnologyInc. received ISO26262 and Automotive SPICE byDERKA
	Car UX Technology Inc. won 2021 Overdrive Award as part of General Motors’ (GM) 30th annual Supplier of the Year awards

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III. Corporate Governance Report

3.1 Organization

3.1.1 Organization Chart

==> picture [455 x 438] intentionally omitted <==

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

Shareholders’
Meeting
Audit Commission
Board of Directors
Chairman & CEO
Audit Office Remuneration
President
Mobile Device Center
Human Resource
AA Product Center
Finance & Accounting &
Business Management ITI Product Center
Center
TV Product Center
Legal Affairs
Technology Development
Center
LCD Applications MFG Center
Modules Manufacturing Center
Quality Management Center
Operation Management Center
Global Procurement Team
Environment Safety Health
Division
----- End of picture text -----

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3.1.2 Major Corporate Functions

Department	Functions
Audit Office	Responsible for assessing the soundness of the internal control system and all the standards, checking whether the internal control system is operating effectively on a continual basis, measuring the operating results of the departments and providingimprovement recommendations for efficient operation.
Mobile Device Center	Responsible for the sales, marketing, and product development of LCD wireless communication and audio-visual systems as well as production of panel production.
AA Product Center	Responsible for vehicle and aerospace product market development and customer service, development and testing of new technologies and new processes, and product manufacturingrelated matters.
ITI Product Center	Responsible for information and general product market development and customer service, new technology and new process development and testing, product manufacturingrelated matters
TV Product Center	Responsible for market development, customer’s service and development, test new technologies and newprocesses of TVproducts.
TechnologyDevelopment Center	Develop,improve,verify,and test new technologies and newprocesses.
LCD Applications MFG Center	Responsible for theproduction of large-size LCDpanelproducts.
Module ManufacturingCenter	Responsible for theproduction of LCD moduleproducts.
Quality Management Center	Responsible for the quality management of the Company, providing the best and the most efficient quality management services (including quality control, product quality guarantee, quality system, and documentary management); and promoting the concept of totalqualitycontrol.
Operation Management Center	Responsible for the industrial engineering and information system of the Company, work-flow efficiency improvement, capacity expansion planning, production efficiency enhancement, hardware and software infrastructure, and information system construction.
Global Procurement Team	Responsible for the overall procurement strategy of the Company, strategic planning of important parts and components, material preparation for the introduction ofproducts and standardized cost management.
Human Resource	Responsible for overall human resources policy, promotion of talent selection, education, deployment and retention, employee communications, general administration,etc.
Finance & Accounting & Business Management Center	Coordinate the business management and capital operating system of the Company; responsible for profits and losses of cost accounting, business strategy consultation, provide financial and accounting information, manage investment plans and risk aversion, and manage overall financial, investment, stock, accounting,and tax matters.
Environmental Safety Health Division	Responsible for handling company-wide issues including environmental protection, occupational safety, damage prevention, and risk control of the factories, staff health management and workplace improvement, and greenhouse gas reduction; implementing and managing the environmental safety and health policies of the Company.
Legal Affairs	Responsible for drafting and reviewing contracts; providing business-related legal consultation services.

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3.2 Directors and Management Team

3.2.1 Directors

																	April 26,2022;Shares	April 26,2022;Shares	April 26,2022;Shares	April 26,2022;Shares
	Title	Nationality/ Place of Incorporation	Name (Note 1)	Gender /Age	Date Elected (Note2)	Term (Y)	Date First Elected	Shareholding when Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience (Education)	Other Position	Executives, Directors who are spouses or within two degrees of kinship
								Shares	`％`	Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relation
	Chairman	TW	Jin-Yang Hung	M 50-59 yrs. old	2019/6/20	3	2018/6/21	－	－	1,116,752	0.01	－	－	－	－	MBA, Columbia University, USA Department of Business Administration, Special Assistant to Chairman, Innolux Corporation Associate Vice President, Foxconn Group President, TCC International Holdings Limited Managing Director, BNP Paribas Asset Management Executive Director, Goldman Sachs Group, Inc	Note 3	－	－	－
- 17 -
	Director	TW	Jyh-Chau Wang	M 60-69 yrs. old	2020/6/19	2.5	2013/7/1	89,000	－	168,000	－	－	－	－	－	M.S., Materials Engineering, National Tsing-Hua University Vice President, Chi Lin Technology Co., Ltd. Deputy Plant Director, Unipac Optoelectronics Corp. Associate Research Fellow, Material Research laboratories, Industrial Technology Research Institute	Chairman, Innolux Education Foundation Director, InnoCare Optoelec- tronics Corporation	－	－	－

	Institutional Director	TW	Hyield Venture Capital Co., Ltd.	－	2019/6/20	3	2002/11/21	176,311,219	1.67	176,311,219	1.67	－	－	－	－	－	－	－	－	－
		TW	Representative: Chu-Hsiang Yang	M 50-59 yrs. old			2019/06/20	N.A.	－	1,871,337	0.02	7,953	－	－	－	M.S., Chemical Engineering, National Central University Vice President, Innolux Corporation Director, Chi Mei Optoelectronics Corporation Deputy Section Manager, Chunghwa Picture Tubes, Ltd.	Note 4	－	－	－

	Title	Nationality/ Place of Incorporation	Name (Note 1)	Gender /Age	Date Elected (Note2)	Term (Y)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Other Position	Executives, Directors who are spouses or within two degrees of kinship	Executives, Directors who are spouses or within two degrees of kinship	Executives, Directors who are spouses or within two degrees of kinship
								Shares	`％`	Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relation
	Institutional Director	TW	Hyield Venture Capital Co., Ltd.	－	2019/6/20	3	2002/11/21	176,311,219	1.67	176,311,219	1.67	－	－	－	－	－	－	－	－	－
		TW	Representative: Chin-Lung Ting	M 50-59 yrs. old			2016/6/24	N.A.	－	1,142,063	0.01	－	－	－	－	M.S., Graduate Institute of Electronics Engineering, National Taiwan University Executive V P, Innolux Corp Manager, Unipac Optoelectronics Corp.	Note 5	－	－	－
	Independent Director	TW	Chi-Chia Hsieh	M 70-79 yrs. old	2019/6/20	3	2013/6/19	－	－	－	－	－	－	－	－	Ph. D of Mechanical Engineering, Santa Clara University, USA Chairman, Microelectronics TechnologyInc.	Note 6	－	－	－
- 18 -
	Independent Director	TW	Zhen-Wei Wang	M 60-69 yrs. old	2019/6/20	3	2011/6/9	－	－	－	－	－	－	－	－	Department of Electronic Engineering, National Chiao Tung University CEO, Quanta Computer Inc. President, Quanta Computer Inc.	Note 7	－	－	－
	Independent Director	HK	Stanley Yuk Lun Yim	M 60-69 yrs. old	2019/6/20	3	2013/6/19	－	－	－	－	－	－	－	－	Honorary Doctor of Business Administration A founder and Executive Director of S.A.S. Dragon Holding Limited	Note 8	－	－	－

Note 1：Existing Directors as of the date of the annual report.

Note 2：The terms of Board members (including Independent Directors) reelected on 2019/6/20 and effective on 2019/7/1. Note 3：CEO of Innolux Corporation

Concurrently as Chairman of the Board：InnoJoy Investment Corporation (Statutory representative), Yuan Chi Investment Co., Ltd. (Statutory representative)

Concurrently as Directors：CarUX Holding Limited, CarUX Technology Pte. Ltd, Innolux Holding Ltd., Innolux Hong Kong Holding Limited, Innolux Hong Kong Limited, Innolux Optoelectronics Hong Kong Holding Ltd., Keyway Investment Management Ltd., Landmark International Ltd., Rockets Holding Ltd., Stanford Developments Ltd., Suns Holding Ltd., Toppoly Optoelectronics (B.V.I.) Ltd., Toppoly Optoelectronics (Cayman) Ltd., Warriors Technology Investments Ltd., FI Medical Device Manufacturing Co., Ltd. (Statutory representative), CarUX Technology Inc. (Statutory representative)

Note 4：COO of Innolux Corporation

Concurrently as Chairman of the Board：InnoCare Optoelectronics Corporation (Statutory representative)

Concurrently as Directors：CarUX Holding Limited, CarUX Technology Pte. Ltd., Innolux Japan Co., Ltd, Innolux Singapore Holding Pte. Ltd., InnoCare Optoelectronics USA, Inc., Yuan Chi investment co., Ltd (Statutory representative), Chi Lin Optoelectronics CO., LTD. (Statutory representative), InnoJoy Investment Corporation (Statutory representative), FI Medical Device

Manufacturing Co., Ltd. (Statutory representative), CarUX Technology Inc. (Statutory representative), Ningbo CarUX Technology Co. Ltd, Epileds Technologies, Inc. (Statutory representative), INStek Corporation (Statutory representative)

Note 5：Concurrently as Chairman of the Board：PanelSemi Corporation, GIO Optoelectronics Corp., CarUX Technology Inc. (Statutory representative), Ningbo CarUX Technology Co. Ltd Concurrently as Directors：CarUX Holding Limited, CarUX Technology Pte. Ltd, Double Star Inc., Innolux Japan Co., Ltd, Innolux Optoelectronics Philippines Corp.
Note 6：Concurrently as Chairman of the Board：Microelectronics Technology, Inc., IQE Taiwan Corporation, Jupiter Network Corp. (Statutory representative), Welltop Technology Co. Ltd (Statutory representative), Taicom Capital Limited (Statutory representative)
Concurrently as Directors：Advanced Wireless Semiconductor Company, Bright LED Electronics Corp., Henan Bright Crystal Company Limited, Sasson International Holdings Inc. (Statutory representative), Kopin Corporation Inc., T’Cement (Statutory representative), Bright Crystal Company Limited, TMC Limited, Jiang Yang Technology (Wuxi) Co., Ltd. (Statutory representative), KoBrite Corp.
Note 7：Concurrently as Independent Directors: Simplo Technology Co., Ltd., Phison Electronics Corp.
Concurrently as Directors: ITIC Co., Ltd (Statutory representative), Give-Circle Co., Ltd. (Statutory representative), B Current Impact Investment, Janus Technologies, Inc., Exyte AG
Note 8：The Justice of the Peace Bronze Bauhinia Star, President of the Hong Kong Justices of Peace Association, Member of Shanghai Municipal Committee of CPPCC,Vice President of ShanghaiHong Kong Economic Development Association, Honorary President of the Hong Kong Committee of Friends of the Yunfu CPPCC, Vice President of Hong Kong Electronics Industry Honor Society, Honorary President of Hong Kong Trade Services Association, Honorary Chairman of Hong Kong Baptist University Foundation, Renji Hospital Advisory Board Forever Consultant, Vice Chairman of the Tsuen Wan District Juvenile Police Honorary Chairman's Association, Chairman of the Tsuen Wan District Civic Education Committee
Note 9：Where the chairperson and president or equivalent position (highest level executive officer) is the same person, the spouse, or a first-degree relative, provide information on the reason, reasonableness, necessity, and future improvement measures (such as increasing the number of Independent Directors seats and more than half of all Directors not concurrently serving as employees or executive officers)：
The Company’s CEO position is responsible for the sustainable development and long-term business strategy of the Company, while the President and COO position is responsible for the planning and management of the Company's daily operation. The responsibilities of the Chairman and CEO position and the President and COO position are clearly defined for an integrated effect. The Chairman of the Company keeps communication channel open with the Directors about the Company's operation and planning in order to implement the Company's corporate governance. In the future, the Company plans to increase the number of Independent Directors to enhance the functions of the Board of Directors and strengthen the supervision function. In addition, the Independent Directors of the Company faithfully perform their duties from a detachment perspective and implement corporate governance, in order to strengthen the independence of the Board.

April 26, 2022

Major shareholders of the institutional shareholders

	April 26,2022
Name of institutional shareholders	Major shareholders
Hyield Venture Capital Co., Ltd.	Hon Hai Precision Components Co., Ltd. (97.95%), Pao Shin International Investment Co., Ltd.(2.05%)

Major shareholders of the Company’s major institutional shareholders

Major shareholders of the Company’s major institutional shareholders	Major shareholders of the Company’s major institutional shareholders
April 26,2022
Name of institutional shareholders	Major shareholders
Hon Hai Precision Ind. Co., Ltd. (Note)	Terry Tai-Ming Guo (12.57%), Citibank in custody for Government of Singapore Investment Accounts (2.37%), Citibank in custody for Hon Hai Precision Industry Co. Ltd. Depositary Receipts Account (1.28%), New Labor Pension Fund (1.26%), Vanguard Emerging Markets Stock Index Fund, a series of Vanguard International Equity Index Funds (1.20%), JPMorgan in custody for Advanced Stars advanced aggregate International Equity Index (1.11%), Citibank in custody for Norges Bank(1.02%), Standard Chartered in custody for Fidelity Puritan Trust-Fidelity Low-Priced Stock Fund (0.96%), Standard Chartered in custody for Furstentum Liechtenstein bank (0.82%), JPMorgan in custodyfor Saudi Central Bank(0.79%)
Pao Shin International Investment Co., Ltd.	Hon Hai Precision Industry Co., Ltd. (100%)

Note: The information is derived from the close of registrar information of the Company dated April 26, 2022.

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Professional qualifications and Independence analysis of Directors ：

Professional qualifications and Independence analysis of Directors：	Professional qualifications and Independence analysis of Directors：
 Professionalqualifications and experience for Directors
Name / Title	Professional qualifications and experience
Chairman Jin-Yang Hung	Mr. Hung graduated as MBA from Columbia University, Department of Business Administration and has been the Chairman and CEO of the Company since 2018. He possesses over 5 years of work experience in Commerce, Finance and otherwise necessary for the Business of the Company and over 20 years of experience in foreign company finance operations, overseas and cross-boundary professional leadership, marketing, operations management, strategic planning and the ability to do crisis management to lead the Company to become an industry pioneer and move towards sustainable management.
Director Jyh-Chau Wang	Mr. Wang was Master in Materials Engineering, National Tsing-Hua University and former Chairman of the Company, with over 30 years of experience in display industry. He possesses over 5 years of work experience in Commerce, Finance and otherwise necessary for the Business of the Company. He experiences in manufacturing and R&D of the display industry and has extensive business experience, internal perspectives and the ability to make professional market competition judgments, leading innovatively, conducting management administration, planningstrategies and conductingcrisis management.
Director Hyield Venture Capital Co., Ltd. Representative: Chu-Hsiang Yang	Mr. Yang was Master in Chemical Engineering, National Central University and now is the COO of the Company. He possesses almost 30 years of display industry and over 5 years of work experience in Commerce, Finance and otherwise necessary for the Business of the Company. He possesses internal perspectives and the ability to make professional market competition judgments, leading innovatively, conducting management administration, planning strategies and conducting crisis management to lead the Company to become an industry pioneer and move towards sustainable management.
Director Hyield Venture Capital Co., Ltd. Representative: Chin-Lung Ting	Mr. Ting was Executive Vice President of the Company and master in Electronics Engineering, National Taiwan University. With almost 30 years of experience in TFT-LCD industry. Specializing in TFT-LCD front-end process and production technologies and can introduce innovative fab designs and process technologies. Possessing over 5 years of work experience in Commerce, Finance and otherwise necessary for the Business of the Company, internal perspectives and the ability to make professional market competition judgments, leading innovatively, conducting management administration, planning strategies and conducting crisis management to lead the Company to become an industry pioneer and move towards sustainable management.
Independent Director Chi-Chia Hsieh	Mr. Hsieh is the Chairman of Microelectronics Technology, Inc. and Ph. D of Mechanical Engineering, Santa Clara University, USA. Being the convener of the Company’s Audit Committee and Remuneration Committee, and possessing over 5 years of work experience in Commerce, Finance and otherwise necessary for the Business of the Company. He specializes in market strategy and investment planningwith extensive business experience.
Independent Director Zhen-Wei Wang	Mr. Wang was master in Department of Electronic Engineering, National Chiao-

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Name / Title	Professional qualifications and experience
	Tung University. And now is an Independent Director of Simplo Technology Co., Ltd. and Phison Electronics Corp. Being the member of the Company’s Audit Committee and Remuneration Committee, and possessing over 5 years of work experience in Commerce, Finance and otherwise necessary for the Business of the Company. He specializes in market strategy and investment planning with extensive business experience.
Independent Director Stanley Yuk Lun Yim	Mr. Yim was Honorary Doctor of Business Administration and a founder/ Executive Director of S.A.S. Dragon Holding Limited. Being the member of the Company’s Audit Committee and Remuneration Committee, and possessing over 5 years of work experience in Commerce, Finance and otherwise necessary for the Business of the Company. He specializes in market strategy and investment planningwith extensive business experience.

Name / Title

Professional qualifications and experience

Tung University. And now is an Independent Director of Simplo Technology Co.,
Ltd. and Phison Electronics Corp. Being the member of the Company’s Audit
Committee and Remuneration Committee, and possessing over 5 years of work
experience in Commerce, Finance and otherwise necessary for the Business of the
Company. He specializes in market strategy and investment planning with
extensive business experience.

Independent Director
Stanley Yuk Lun Yim

Mr. Yim was Honorary Doctor of Business Administration and a founder/
Executive Director of S.A.S. Dragon Holding Limited. Being the member of the
Company’s Audit Committee and Remuneration Committee, and possessing over
5 years of work experience in Commerce, Finance and otherwise necessary for the
Business of the Company. He specializes in market strategy and investment
planningwith extensive business experience.

 Independence of Directors

Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
Chairman Jin-Yang Hung	Two years before being elected or during the term of office meets the following criteria in: (1) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders. (2) Not a Director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the Company's outstanding shares, a top five shareholder, or appointed as the Company's Director or supervisor in accordance with Article 27, Paragraph 1 or 2 of the Company Act (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (3) Not a Director, supervisor, or employee of other companies controlled by the same person with over half of the Company's Director seats or shares with voting rights (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (4) Not a Director, supervisor, or executive officer of a specific company or institution with financial or business dealings with the Company, or shareholder with 5% or more shares of the Company (not applicable in cases where the specific company or institution holds 20% or more but less than 50% of the Company's outstanding shares, and is an Independent Director of the Company,itsparent	0

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Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
	company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (5) Not a professional individual who, or an owner, partner, Director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the Company or to any affiliate of the Company, or a spouse thereof. This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions. (6) Not having a marital relationship, or a relative within the second degree of kinship to any other Directors of the Company; (7) Not having any of the situations set forth in Article 30 of the Company Act of the ROC. (8) Not a government agency, juristic person, or its representative set forth in Article 27 of the Company Act of the ROC.
Director Jyh-Chau Wang	Two years before being elected or during the term of office meets the following criteria in: (1) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders. (2) Not a Director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the Company's outstanding shares, a top five shareholder, or appointed as the Company's Director or supervisor in accordance with Article 27, Paragraph 1 or 2 of the Company Act (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (3) Not a Director, supervisor, or employee of other companies controlled by the same person with over half of the Company's Director seats or shares with voting rights (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (4) Not a Director, supervisor, or employee of another company or institution who is the same person or spouse of the Company's chairperson, president or equivalent position (not applicable in cases where theperson is an Independent Director of the	0

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Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
	Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (5) Not a Director, supervisor, or executive officer of a specific company or institution with financial or business dealings with the Company, or shareholder with 5% or more shares of the Company (not applicable in cases where the specific company or institution holds 20% or more but less than 50% of the Company's outstanding shares, and is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (6) Not a professional individual who, or an owner, partner, Director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the Company or to any affiliate of the Company, or a spouse thereof. This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions. (7) Not having a marital relationship, or a relative within the second degree of kinship to any other Directors of the Company; (8) Not having any of the situations set forth in Article 30 of the Company Act of the ROC. (9) Not a government agency, juristic person, or its representative set forth in Article 27 of the Company Act of the ROC.
Director Hyield Venture Capital Co., Ltd Representative: Chu-Hsiang Yang	Two years before being elected or during the term of office meets the following criteria in: (1) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders. (2) Not a Director, supervisor, or employee of other companies controlled by the same person with over half of the Company's Director seats or shares with voting rights (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (3) Not a Director, supervisor, or executive officer of a specific company or institution with financial or business dealings with the Company, or shareholder with 5% or more shares of the Company (not	0

24 -

Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
	applicable in cases where the specific company or institution holds 20% or more but less than 50% of the Company's outstanding shares, and is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (4) Not a professional individual who, or an owner, partner, Director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the Company or to any affiliate of the Company, or a spouse thereof. This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions. (5) Not having a marital relationship, or a relative within the second degree of kinship to any other Directors of the Company; (6) Not having any of the situations set forth in Article 30 of the CompanyAct of the ROC.
Director Hyield Venture Capital Co., Ltd Representative: Chin-Lung Ting	Two years before being elected or during the term of office meets the following criteria in: (1) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders. (2) Not a Director, supervisor, or employee of other companies controlled by the same person with over half of the Company's Director seats or shares with voting rights (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (3) Not a Director, supervisor, or employee of another company or institution who is the same person or spouse of the Company's chairperson, president or equivalent position (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (4) Not a Director, supervisor, or executive officer of a specific company or institution with financial or business dealings with the Company, or shareholder with 5% or more shares of the Company (not applicable in cases where the specific company or institution holds 20% or more but less than 50% of	0

25 -

Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
	the Company's outstanding shares, and is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (5) Not a professional individual who, or an owner, partner, Director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the Company or to any affiliate of the Company, or a spouse thereof. This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions. (6) Not having a marital relationship, or a relative within the second degree of kinship to any other Directors of the Company; (7) Not having any of the situations set forth in Article 30 of the CompanyAct of the ROC.
Independent Director Chi-Chia Hsieh	Two years before being elected or during the term of office meets the following criteria in: (1) Not an employee of the Company or any of its affiliates. (2) Not a Director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an Independent Directors of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders. (4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of a manager in (1) or personnel in (2) and (3). (5) Not a Director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the Company's outstanding shares, a top five shareholder, or appointed as the Company's Director or supervisor in accordance with Article 27, Paragraph 1 or 2 of the Company Act (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (6) Not a Director, supervisor, or employee of other companies controlled bythe sameperson with over	0

26 -

Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
	half of the Company's Director seats or shares with voting rights (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (7) Not a Director, supervisor, or employee of another company or institution who is the same person or spouse of the Company's chairperson, president or equivalent position (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (8) Not a Director, supervisor, or executive officer of a specific company or institution with financial or business dealings with the Company, or shareholder with 5% or more shares of the Company (not applicable in cases where the specific company or institution holds 20% or more but less than 50% of the Company's outstanding shares, and is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (9) Not a professional individual who, or an owner, partner, Director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the Company or to any affiliate of the Company, or a spouse thereof. This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions. (10) Not having a marital relationship, or a relative within the second degree of kinship to any other Directors of the Company; (11) Not having any of the situations set forth in Article 30 of the Company Act of the ROC. (12) Not a government agency, juristic person, or its representative set forth in Article 27 of the Company Act of the ROC.
Independent Director Zhen-Wei Wang	Two years before being elected or during the term of office meets the following criteria in: (1) Not an employee of the Company or any of its affiliates. (2) Not a Director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an Independent Directors of the Company, its parent company, subsidiary, or the subsidiary of the sameparent companyin accordance with the Act or	2

27 -

Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
	with local laws). (3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders. (4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of a manager in (1) or personnel in (2) and (3). (5) Not a Director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the Company's outstanding shares, a top five shareholder, or appointed as the Company's Director or supervisor in accordance with Article 27, Paragraph 1 or 2 of the Company Act (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (6) Not a Director, supervisor, or employee of other companies controlled by the same person with over half of the Company's Director seats or shares with voting rights (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (7) Not a Director, supervisor, or employee of another company or institution who is the same person or spouse of the Company's chairperson, president or equivalent position (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (8) Not a Director, supervisor, or executive officer of a specific company or institution with financial or business dealings with the Company, or shareholder with 5% or more shares of the Company (not applicable in cases where the specific company or institution holds 20% or more but less than 50% of the Company's outstanding shares, and is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (9) Not a professional individual who, or an owner, partner, Director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the Companyor to anyaffiliate of the Company,or

28 -

Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
	a spouse thereof. This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions. (10) Not having a marital relationship, or a relative within the second degree of kinship to any other Directors of the Company; (11) Not having any of the situations set forth in Article 30 of the Company Act of the ROC. (12) Not a government agency, juristic person, or its representative set forth in Article 27 of the Company Act of the ROC.
Independent Director Stanley Yuk Lun Yim	Two years before being elected or during the term of office meets the following criteria in: (1) Not an employee of the Company or any of its affiliates. (2) Not a Director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an Independent Directors of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranks as one of its top ten shareholders. (4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of a manager in (1) or personnel in (2) and (3). (5) Not a Director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the Company's outstanding shares, a top five shareholder, or appointed as the Company's Director or supervisor in accordance with Article 27, Paragraph 1 or 2 of the Company Act (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (6) Not a Director, supervisor, or employee of other companies controlled by the same person with over half of the Company's Director seats or shares with voting rights (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (7) Not a Director, supervisor, or employee of another company or institution who is the same person or spouse of the Company's chairperson, president or	0

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Name	Independence	Number of other public companies where the Director concurrently serves as an Independent Director
	equivalent position (not applicable in cases where the person is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (8) Not a Director, supervisor, or executive officer of a specific company or institution with financial or business dealings with the Company, or shareholder with 5% or more shares of the Company (not applicable in cases where the specific company or institution holds 20% or more but less than 50% of the Company's outstanding shares, and is an Independent Director of the Company, its parent company, subsidiary, or the subsidiary of the same parent company in accordance with the Act or with local laws). (9) Not a professional individual who, or an owner, partner, Director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that audited or provided commercial, legal, financial, or accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the Company or to any affiliate of the Company, or a spouse thereof. This does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions. (10) Not having a marital relationship, or a relative within the second degree of kinship to any other Directors of the Company; (11) Not having any of the situations set forth in Article 30 of the Company Act of the ROC. (12) Not a government agency, juristic person, or its representative set forth in Article 27 of the Company Act of the ROC.

30 -

Diversity and independence of the Board:

The Company stipulates guidelines for diversity in its Corporate Governance Best Practice Principles to strengthen the function of the Board of Directors. The nomination and election of the Company’s Board members are in accordance with the provisions of its Articles of Incorporation, adopting the candidates’ nomination system and submitted to the shareholders meeting for election upon the Board of Directors’ resolution. According to Article 20, Paragraph 4 of the Corporate Governance Best Practice Principles of the Company, all Board members shall have the knowledge, skills and experience necessary to perform their duties. To achieve the ideal goal of corporate governance. The Board of Directors shall possess the following abilities:

(1) Ability to make operating judgments.
(2) Ability to perform accounting and financial analysis.
(3) Ability to conduct management administration.
(4) Ability to conduct crisis management.
(5) Knowledge of the industry.
(6) An international market perspective.
(7) Ability to lead.
(8) Ability to make policy decisions.

To strengthen corporate governance and promote the sound development of the Board of Directors’ composition and structure, the Company’s policy on diversity of board members per Article 20, Paragraph 3 of its Corporate Governance Best Practice Principles indicates that: the composition of the board of directors shall be determined by considering diversity. It is advisable that directors con-currently serving as company officers not exceed one-third of the total number of the board members and that appropriate guidelines on diversity based on the Company's business operations, operating dynamics and development requirements shall be formulated, including but not limited to, the following two aspects of standards:

(1) Basic requirements and values: Gender, age, nationality, and culture.
(2) Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology,) professional skills and industry experience.

The Company’s current Board of Directors consists of 7 Directors, including 4 Executive Directors and 3 Independent Directors. All members possess knowledge of finance, business and industry; an international market perspective; and professional ability to lead, make an operating judgment, manage the business and do crisis management. There are not any matters specified in Paragraph 3 and 4 of Article 26-3 of the Securities and Exchange Act. Directors who are also employees of the Company account for 57% of the Board; Independent Directors account for 43%; Female Directors account for 0%. One independent directors has served for less than three years; and the other two independent directors have served for 4-9 years; three directors are aged 50-59 or younger; three directors are aged 60-69 and one director is aged 70-79. The Company values gender equality in the composition of the Board of Directors and has set a target of 10% or more female directors. We expect to elect one female director to the next Board of Directors to achieve the target. Implementation of the diversity of the Board members is as follows:

31 -

Title	Name	Basic requirements and values	Basic requirements and values	Basic requirements and values	Basic requirements and values	Basic requirements and values	Basic requirements and values	Professional knowledge and skills	Professional knowledge and skills	Professional knowledge and skills	Professional knowledge and skills	Professional knowledge and skills	Professional knowledge and skills	Professional knowledge and skills	Professional knowledge and skills	Seniority of Independent Director	Seniority of Independent Director
		Nationality	Gender	Employee Position	Age			Operational Judgments	Management Administration	Accounting & Financial analysis	Business & Economics	Crisis Management	Knowledge of the industry	International market perspective	Ability to lead and to make policy decisions	Below 3 years	4-9 years
					50-59 years old	60-69 years old	70-79 years old
Chairman	Jin-Yang Hung	TW	Male	V	V	－	－	V	V	V	V	V	V	V	V	－	－
Director	Jyh-Chau Wang	TW	Male	V	－	V	－	V	V	V	V	V	V	V	V	－	－
Director	Chu-Hsiang Yang	TW	Male	V	V	－	－	V	V	V	V	V	V	V	V	－	－
Director	Chin-Lung Ting	TW	Male	V	V	－	－	V	V	V	V	V	V	V	V	－	－
Independent Director	Chi-Chia Hsieh	TW	Male	－	－	－	V	V	V	V	V	V	V	V	V	－	V
Independent Director	Zhen-Wei Wang	TW	Male	－	－	V	－	V	V	V	V	V	V	V	V	V	－
Independent Director	Stanley Yuk Lun Yim	HK	Male	－	－	V	－	V	V	V	V	V	V	V	V	－	V

3.2.2 Management Team

3.2.2 Management Team	3.2.2 Management Team	3.2.2 Management Team	3.2.2 Management Team	3.2.2 Management Team
													April 26,2022
Title	Nationality	Name (Note 1)	Gender	Date Effective	Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience (Education)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship
					Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relation
Chairman &CEO	TW	Jin-Yang Hung	M	2018/6/21	1,116,752	0.01	－	－	－	－	MBA, Columbia University, USA Department of Business Administration, Special Assistant to Chairman, Innolux Corporation Associate Vice President, Foxconn Group President, TCC International Holdings Limited Managing Director, BNP Paribas Asset Management Executive Director,Goldman Sachs Group,Inc	Note 2	－	－	－
President &COO	TW	Chu-Hsiang Yang	M	2010/3/18	1,871,337	0.02	7,953	－	－	－	M.S., Chemical Engineering, National Central University Vice President, Innolux Corporation Director, Chi Mei Optoelectronics Corporation DeputySection Manager,Chunghwa Picture Tubes,Ltd.	Note 3	－	－	－
Vice President	TW	Jun-Yi Yu	M	2015/12/25	460,709	－	－	－	－	－	Master of Industrial Engineering, Texas Tech University Production Manager of AU Optronics Corp.	Note 4	－	－	－
Vice President	TW	Hung-Wen Yang	M	2007/6/1	721,769	0.01	－	－	－	－	M.S., Chemical Engineering, National Cheng Kung University Plant Directors, Sintek Photronic Corp Deputy Plant Directors, AU Optronics Corp. Manager,Unipac Optoelectronics Corp.	－	－	－	－
Vice President	TW	Chih-Ming Chen	M	2010/3/18	147,193	－	863	－	－	－	Graduated from Metallurgy and Materials Science Research Institute of National Cheng Kung University Engineer, Shyen Sheng Fuat Steel & Iron Works Co., Ltd Senior Engineer,Unipac Optoelectronics Corp.	－	－	－	－
Vice President	TW	Yu Shui Kuo	M	2014/12/1	525,000	－	－	－	－	－	Master of Mechanical Engineering, Yuan Ze University Associate Manager of Entire Technology Co. Ltd. Manager of AU Optronics Corp. Associate Manager of Prodisc Coordinator of Ritek Corporation	Chairman, INStek Corporation	－	－	－
Associate Vice President	TW	Ke-Yi Kao	M	2010/3/18	779,488	0.01	－	－	－	－	M.S., Chemical Engineering, University of Florida (U.S.A.) Associate Manager,Unipac Optoelectronics Corp.	－	－	－	－
Associate Vice President	TW	Tai-Chi Pan	M	2010/3/18	881,880	0.01	－	－	－	－	Graduated in Electrical Engineering of National Cheng Kung University Associate Manager,Unipac Optoelectronics Corp.	－	－	－	－

Title	Nationality	Name (Note 1)	Gender	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship
					Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relation
Associate Vice President	TW	Qing-Hui Lin	M	2015/12/25	348,039	－	－	－	－	－	Master of institute of science engineering, National Central University R&D Directors,Chunghwa Picture Tubes,Ltd.	Note 5	－	－	－
Associate Vice President	TW	Jing-Wen Huang	F	2019/7/3	265,600	－	－	－	－	－	Bachelor of Taipei Institute of Business Technology Assistant Manager of Unipac Optoelectronics Corp. Assistant Manager of Materials,AUOptronics Corp.	－	－	－	－
Associate Vice President	TW	Jhih-Syuan Wang	M	2020/12/1	102,863	－	1,536	－	－	－	Master of Science, School of Computer Science, The University of Birmingham. Manager of LCD Sales Department, Sharp Opto-electronics Corporation	Director, INStek Corporation (Statutory representative)	－	－	－
Associate Vice President	TW	Chien-Hung Liao (Note 6)	M	2021/12/20	287,340	－	408	－	－	－	Master Program in Industrial Management, Department of Food Science, Tunghai University Special Assistant to President, Sinon Corporation Management Associate, Standard Foods Corporation Engineer, WUS Printed Circuit Co., Ltd. Director, Chi Mei Optoelectronics Corporation General Director,Innolux Corporation	Director, Innolux Optoelectronics India Private Ltd.	－	－	－
Financial Supervisor	TW	Jhih-Siou Liou	F	2020/8/5	43,210	－	－	－	－	－	Master of Finance, National Chiao-Tung University Financial Officer, Ichia Technologies, Inc.	－	－	－	－
Accounting Supervisor	TW	Kun Ma	M	2020/4/21	182,612	－	－	－	－	－	Financial Management of Chung Hua University Bachelor Financial manager of TPO Displays Corp. Financial manager of Fupo Electronics Corporation	Note 7	－	－	－

Note 1：Existing Managers as of the printed date of the annual report. Note 2：Please refer to Note 3 on page 17 of this annual report Note 3：Please refer to Note 4 on page 17 of this annual report Note 4：Corporate Governance Officer

Concurrently as Directors：Innolux Europe B.V., Innolux Hong Kong Holding Limited, Innolux Optoelectronics Hong Kong Holding Ltd., Shanghai Innolux Optoelectronics Ltd., Foshan

Innolux Optoelectronics Ltd, Nanjing Innolux Optoelectronics Ltd., Innocom Technology (Shenzhen) Co., Ltd., Ningbo Innolux Optoelectronics Ltd., Ningbo CarUX Technology Co. Ltd. Note 5：Concurrently as Chairman of the Board：Foshan Innolux Optoelectronics Ltd., Foshan Innolux Logistics Co.

Note 6：Newly appointed on Dec. 20, 2021.

Note 7：Concurrently as Directors：Ningbo Innolux Display Ltd.

Concurrently as Supervisor：Nanjing Innolux Optoelectronics Ltd., Nanjing Innolux Technology Ltd., Ningbo CarUX Technology Co. Ltd.

Note 8：Where the chairperson and president or equivalent position (highest level executive officer) is the same person, the spouse, or a first-degree relative, provide information on the reason, reasonableness, necessity, and future improvement measures (such as increasing the number of Independent Directors seats and more than half of all Directors not concurrently serving as employees or executive officers)：Please refer to Note 9 on page 19 of this annual report.

3.3 Remuneration of Directors, President, and Vice President

3.3.1 Remuneration to Directors and Independent Directors

Unit: NT$; Shares: thousands

Title	Name (Note 1)	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note8)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note8)	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Ratio of Total Remuneration (A+B+C+D+E+ F+G) to Net Income (%) (Note8)	Ratio of Total Remuneration (A+B+C+D+E+ F+G) to Net Income (%) (Note8)	Remuneration Paid to Directors from an Invested Company Other than the Company’s Subsidiary
		Base Remuneration (A) (Note 2)		Severance Pay (B)		Directors Remuneration (C) (Note 3)		Allowances (D) (Note 4)				Salary, Bonuses, and Allowances (E) (Note 5)		Severance Pay (F) (Note 6)		Employees Remuneration (G) (Note 7)
		The Company	All companies in the financial report	The Company	All companies in the financial report	The Company	All companies in the financial report	The Company	All companies in the financial report	The Company	All companies in the financial report	The Company	All companies in the financial report	The Company	All companies in the financial report	The Company		All companies in the financial report		The Company	All companies in the financial report
																Cash	Stock	Cash	Stock
Chairman	Jin-YangHung	6,300	6,347	－	－	40,836	40,851	480	500	0.08	0.08	204,426	205,549	263	263	78,600	－	78,600	－	0.57	0.58	－
Director	Jyh-Chau Wang
Institutional	Hyield Venture Capital
Director	Co.,Ltd
Institutional
	Chu-Hsiang Yang
Director Statutory

representative	Chin-LungTing
Independent		7,200	7,200	－	－	24,502	24,502	340	340	0.06	0.06	－	－	－	－	－	－	－	－	0.06	0.06	－
	Chi-Chia Hsieh
Director

Independent
	Stanley Yuk Lun Yim
Director

Independent Director	Zhen-Wei Wang

Please describe the policy, system, standard, and structure of remuneration to Independent Directors, and the correlation between duties, risk, and time input with the amount of remuneration: For the remuneration of Independent Directors, besides referring to results of Directors performance evaluations, the Remuneration Committee considers each Director's degree of participation and contribution to the Company's operations, links the reasonableness and fairness of performance and risks to remuneration, considers the Company's business performance and the remuneration standards of competitors, and makes recommendations to the Board of Directors in accordance with the Company's Articles of Incorporation.
Other than as disclosed in the above table, the remuneration earned by Directors providing services (e.g. providing consulting services as a non-employee) to the Company and all consolidated entities in the latest fiscal year: None.

Note 1: Existing Directors as of the date 2021.

Note 2: Refers to Directors’ remuneration paid in 2021.

Note 3: The proposal of 2021 profit distribution has resolved by the Board of Directors.

Note 4: Refers to the relevant service execution fees of Directors in 2021.

Note 5: Refers to the salaries, bonuses and special disbursement, etc. received as employees by Directors in 2021. Note 6: Refers to the amounts transferred to government authorities in 2021.

Note 7: The amount of individual employee remuneration has been approved by the Board of Directors. Note 8: Ratio of total net income (Alone).

Range of Remuneration table

	Range of Remuneration table	Range of Remuneration table	Range of Remuneration table	Range of Remuneration table
Range of Remuneration	Name of Directors
	Total(A+B+C+D)		Total(A+B+C+D+E+F+G)
	The Company	All companies in the financial report	The Company	All companies in the financial report
Less than NT$ 1,000,000	Chu-Hsiang Yang, Chin-Lung Ting	Chu-Hsiang Yang, Chin-Lung Ting
NT$1,000,000(inclusive)~ NT$2,000,000(exclusive)
NT$2,000,000(inclusive)~ NT$3,500,000(exclusive)
NT$3,500,000(inclusive)~ NT$5,000,000(exclusive)
NT$5,000,000(inclusive)~ NT$10,000,000(exclusive)	Jyh-Chau Wang	Jyh-Chau Wang
NT$10,000,000(inclusive) ~ NT$15,000,000(exclusive)	Chi-Chia Hsieh, Stanley Yuk Lun Yim,Zhen-Wei Wang	Chi-Chia Hsieh, Stanley Yuk Lun Yim,Zhen-Wei Wang	Chi-Chia Hsieh, Stanley Yuk Lun Yim,Zhen-Wei Wang	Chi-Chia Hsieh, Stanley Yuk Lun Yim,Zhen-Wei Wang
NT$15,000,000(inclusive) ~ NT$30,000,000(exclusive)	Jin-Yang Hung, Hyield Venture Capital Co.,Ltd.	Jin-Yang Hung, Hyield Venture Capital Co.,Ltd.	Hyield Venture Capital Co., Ltd.	Hyield Venture Capital Co., Ltd.
NT$30,000,000(inclusive)~ NT$50,000,000(exclusive)
NT$50,000,000(inclusive) ~ NT$100,000,000(exclusive)			Jin-Yang Hung, Jyh-Chau Wang, Chu-Hsiang Yang, Chin-Lung Ting	Jin-Yang Hung, Jyh-Chau Wang, Chu-Hsiang Yang, Chin-Lung Ting
NT$100,000,000 and above
Total	8	8	8	8

3.3.2 Remuneration of the President and Vice Presidents

														Unit: NT$thousands
Title	Name (Note 1)	Salary (A) (Note 2)		Severance Pay (B) (Note 3)		Bonuses and Allowances (C) (Note 4)		Employee Remuneration (D)(Note 5)				Ratio of Total Remuneration (A+B+C+D) to Net Income (%)(Note 6)		Remuneration Paid to the President and Vice Presidents from an Invested Company Other than the Company’s Subsidiary
		The Company	All companies in the financial report	The Company	All companies in the financial report	The Company	All companies in the financial report	The Company		All companies in the financial report		The Company	All companies in the financial report
								Cash	Stock	Cash	Stock
Chairman &CEO	Jin-Yang Hung	33,499	33,499	723	723	219,322	220,670	96,581	－	96,581	－	0.61	0.61	－
President &COO	Chu-Hsiang Yang
Excutive Vice President	Chin-Lung Ting (Note 7)
Vice President	Hung-Wen Yang
	Chih-MingChen
	Yao-Tong Chen (Note 8)
	Yu Shui Kuo
	Jun-Yi Yu
	Kuo-Hsiung Kuo (Note 9)

Note 1: Existing Management as of the date of 2021. Note 2: Refers to remuneration paid in 2021. Note 3: Refers to amounts transferred to government authorities in 2021. Note 4: Refers to the bonuses, special disbursement. Note 5: The amount of individual employee remuneration has been approved by the Board of Directors. Note 6: Ratio of total net income (Alone). Note 7: Dismissal on 2021/05/07 Note 8: Dismissal on 2021/06/17 Note 9: Promotion on 2021/12/20

Range of Remuneration table

	Range of Remuneration table	Range of Remuneration table
Range of Remuneration	Name of President and Vice President
	The Company	All companies in the financial report
Less than NT$1,000,000	Kuo-HsiungKuo	Kuo-HsiungKuo
NT$1,000,000(inclusive)~ NT$2,000,000(exclusive)
NT$2,000,000(inclusive)~ NT$3,500,000(exclusive)	Yao-TongChen	Yao-TongChen
NT$3,500,000(inclusive)~ NT$5,000,000(exclusive)
NT$5,000,000(inclusive)~ NT$10,000,000(exclusive)
NT$10,000,000(inclusive)~ NT$15,000,000(exclusive)
NT$15,000,000(inclusive)~ NT$30,000,000(exclusive)	Chin-LungTing	Chin-LungTing
NT$30,000,000(inclusive)~ NT$50,000,000(exclusive)	Hung-Wen Yang,Chih-MingChen,Yu Shui Kuo,Jun-Yi Yu	Hung-Wen Yang,Chih-MingChen,Yu Shui Kuo,Jun-Yi Yu
NT$50,000,000(inclusive)~ NT$100,000,000(exclusive)	Jin-YangHung,Chu-HsiangYang	Jin-YangHung,Chu-HsiangYang
NT$100,000,000and above
Total	9	9

3.3.3 Names of managerial officers who received employees’ bonuses in the preceding year and the distribution

Unit: NT$ thousands as of April 30, 2021

	Title	Name (Note 1)	Employee remuneration in stock	Employee remuneration in cash (Note 2)	Total	Ratio of total amount to net income (%) (Note 3)
Executive officers	Chairman & CEO	Jin-Yang Hung	－	178,330	178,330	0.31%
	President & COO	Chu-Hsiang Yang
	Executive Vice President	Chin-Lung Ting (Note 4)
	Vice President	Yao-Tong Chen (Note 5)
	Vice President	Hung-Wen Yang
	Vice President	Chih-Ming Chen
	Vice President	Yu Shui Kuo
	Vice President	Jun-Yi Yu
	Vice President	Kuo-Hsiung Kuo (Note 6)
	Associate Vice President	Ke-Yi Kao
	Associate Vice President	Tai-Chi Pan
	Associate Vice President	Chung-Kuang Wei (Note 7)
	Associate Vice President	Tien-Jen Lin (Note 8)
	Associate Vice President	Qing-Hui Lin
	Associate Vice President	Jing-Wen Huang
	Associate Vice President	Jhih-Syuan Wang
	Associate Vice President	Chien Hung Liao (Note 9)
	Financial Supervisor	Jhih-Siou Liou
	Accounting Supervisor	Kun Ma

Note 1: Existing Management as of the date of 2021. Note 2: The amount of individual employee remuneration has been approved by the Board of Directors. Note 3: Ratio of total net income (Alone). Note 4: Dismissal on 2021/05/17. Note 5: Dismissal on 2021/06/17. Note 6: Promotion on 2021/12/20; Dismissal on 2022/03/01. Note 7: Dismissal on 2022/01/01. Note 8: Dismissal on 2022/03/01. Note 9: Promotion on 2021/12/20.

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3.3.4 Comparison of Remuneration for Directors, Presidents, and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Presidents, and Vice Presidents

A. The ratio of total remuneration paid by the Company and by all companies included in the consolidated

financial statements for the most recent two fiscal years to Directors, presidents, and vice presidents of the Company to the net income.

Year Item	Ratio of total remunerationpaid to net income	Ratio of total remunerationpaid to net income	Ratio of total remunerationpaid to net income	Ratio of total remunerationpaid to net income
	2020		2021
	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements
Directors	5.89	5.89	0.63	0.64
Presidents & Vice Presidents	7.09	7.09	0.61	0.61

B. The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with business performance.

Policies, Standards and Combination of Remuneration of the Company

According to the Company's remuneration policy, the remuneration of Directors, the President and the Vice President shall be determined by the Remuneration Committee after considering the Company's operation performance, personal performance and responsibilities, and incorporating into the contributions and performance of sustainable corporate governance indicators of three aspects, economic, environmental, and social, as well as the relationship and rationality between the industry development trend and future operation risks, and by referring to the level of external remuneration market and similar positions in the industry; the Board of Directors shall comprehensively consider the amount of remuneration, payment method, etc. for a resolution.

The Company's Remuneration Scale and Its Relevance to Business Performance and Future Risks.

In accordance with Article 21 of the Company's Articles of Association, not less than 5% of the pre-tax profit of the current year before deducting the remuneration of employees and Directors may be distributed as the employees’ remuneration, and not more than 0.001% of the amount may be distributed as the Directors’ remuneration.

The Company allocates Directors' and employees' remuneration based on the actual annual profit and the ratio specified in the Articles of Association. The Remuneration Committee shall make a proposal after considering the industrial environment, the Company's operating conditions, as well as the Directors', the President’s and the Vice President 's responsibilities, contribution and goal achievement, and then submit it to the Board of Directors for resolution, and distribute the remuneration after reporting to the shareholders' meeting.

The reasonableness of the remuneration shall be reviewed by the Remuneration Committee and the Board of Directors, and the remuneration system shall be reviewed from time to time according to the actual business situation and relevant laws and regulations, so as to achieve a balance between the Company's sustainable operation and risk control.

40 -

3.4 Implementation of Corporate Governance

3.4.1 Board of Directors

A total of 6 meetings of the Board of Directors were held in the previous (2021) period. Directors’ attendance was as follows:

Title	Name	Attendance in Person	By Proxy	Attendance Rate(%)	Remarks
Chairman	Jin-YangHung	6	`－`	100.00%
Director	Jyh-Chau Wang	6	`－`	100.00%	Appointment on June 19,2020
Director	Hyield Venture Capital Co., Ltd Chu-HsiangYang	6	`－`	100.00%
Director	Hyield Venture Capital Co., Ltd Chin-LungTing	6	`－`	100.00%
Independent Director	Chi-Chia Hsieh	6	`－`	100.00%
Independent Director	Zhen-Wei Wang	5	1	83.33%
Independent Director	Stanley Yuk Lun Yim	6	`－`	100.00%

Note ： The actual attendance (%) was calculated based on the number of Board meetings and the actual number of attendances during his tenure.

Other mentionable items:

1. If any of the following circumstances occur, the dates of the meetings, sessions, and contents of motion, all Independent Directors’ opinions and the Company’s response should be specified:

(1) Matters referred to in Article 14-3 of the Securities and Exchange Act.

Total 8 meetings of the Board were held in the period from 2021 to the date of the annual report printed, all the resolutions please refer the Page 75-76 and there are no opposition opinions remained of the meeting.

(2)Other matters involving objections or expressed reservations by Independent Directors that were recorded or stated in writing that require a resolution by the Board of Directors：None.

2. If there are Directors’ avoidance of motions in conflict of interest, the Directors’ names, contents of motion, causes for avoidance and voting should be specified:

Date	Directors’ Name	Contents of Motions	Causes for Avoidance	Voting
8-11 2021/02/04	All Directors attended	Report to Directors (including Independent Directors) remuneration	As the interest persons in this case, the Directors evaded their interests in accordance with the law in respect of the Directors’ individual remuneration.	Did not participate in discussion or voting
	Jin-Yang Hung Jyh-Chau Wang Chu-Hsiang Yang Chin-LungTing	Report to managerial officers remuneration	Acting concurrently as the Company’s managerial officers, avoiding interests in accordance with the law.	Did not participate in discussion or voting
8-12 2021/05/11	Jyh-Chau Wang	Proposal of donation to Innolux Education Foundation	Acting concurrently as the Chairman, Innolux Education Foundation, avoiding interests in accordance with the law.	Did not participate in discussion or voting
8-15 2021/08/03	Jyh-Chau Wang Chin-Lung Ting	Report to Directors and managerial officers remuneration	Acting concurrently as the Company’s managerial officers, avoiding interests in accordance with the law.	Did not participate in discussion or voting
	Jin-Yang Hung Jyh-Chau Wang Chu-Hsiang Yang Chin-LungTing	Report to 2019 managerial officers remuneration	Acting concurrently as the Company’s managerial officers, avoiding interests in accordance with the law.	Did not participate in discussion or voting

41 -

Date	Directors’ Name	Contents of Motions	Causes for Avoidance	Voting
8-17 2022/02/11	Jin-Yang Hung Jyh-Chau Wang Chu-Hsiang Yang Chin-LungTing	Report to Directors (including Independent Directors) and managerial officers remuneration	Acting concurrently as the Company’s manager, avoiding interests in accordance with the law	Did not participate in discussion or voting

3. Implementation of self-evaluations by the Company's Board of Directors:

(1) Evaluation cycle: Once a year
(2) Evaluation period: Performance evaluation for January 1, 2021 to December 31, 2021
(3) Scope of evaluation: scope covers the evaluation of the Board as a whole, individual Directors and functional committees.
(4) Evaluation method: the internal evaluation of the Board and self-evaluation by individual Board members
(5) Evaluation items:
A. The evaluation of the Board as a whole: which should cover, participation in the operation of the Company; improvement of the quality of the Board of Directors' decision making; composition and structure of the Board of Directors; election and continuing education of the Directors; and internal control
B. Individual Directors: which should cover alignment of the goals and missions of the Company; awareness of the duties of a Director; participation in the operation of the Company; management of internal relationship and communication; the Directors' professionalism and continuing education; and internal control
C. Functional committees: which should cover participation in the operation of the Company; awareness of the duties of the functional committee; improvement of quality of decisions made by the functional committee; makeup of the functional committee and election of its members and internal control.
The 2021 results of self-evaluations by the Company's Board of Directors was reported to the Board of Directors in February 11, 2022 and are as follows:
A. The overall results of the self-evaluation of the Board is good.
B. The overall results of the self-evaluation of Board members is good.
C. The overall results of the self-evaluation of functional committees is excellent.
The evaluation results reveal that the overall operation of the Company’s Board of Directors is well with no significant items for improvement.

4. Measures taken to strengthen the functionality of the Board:

(1) The Board of Directors shall direct the Company’s strategy, supervise the management team, be responsible to the Company and shareholders’ meeting, and make arrangements for the various operations and arrangements of the Company's governance system to ensure that it exercises its authorities in accordance with laws and regulations, the Company's Articles of Association or the resolutions of the shareholders' meeting.
(2) The Company has set up an Audit Committee on July, 2016 to exercise the authorities required by the Securities and Exchange Act, the Company Act and other laws and regulations to assist the Board of Directors in supervising the Company’s quality and integrity in the implementation of relevant accounting, auditing, financial reporting procedures and financial control. Please see page 43-45 for the detail of the Audit Committee’s operation.
(3) The Company has set up Remuneration Committee on August, 2011 and set up standard for the Directors and managers. The Remuneration Committee is also in charge of making regular review of performance of the Directors and managers, and the related remuneration policy, system, standard, and structure. Please see page 54-55 for the detail of the Remuneration Committee’s operation
(4) The Company has re-elected its Board of Directors on June 20, 2019. The new Board is made of 7 Board members, including 3 Independent Directors for strengthening the Board function and Corporate Governance.
(5) The Board members continuing education extending beyond the scope of the professional expertise of the Directors, and to select courses encompassing corporate governance related topics such as finance, risk management, business, commerce, legal affairs, accounting, and corporate social responsibility, or courses relating to internal control systems or liability for financial reports. Please see page 67-68 for the detail of the status of Directors ' participation in corporate governance related courses and trainings.
42 -

5. Attendance of Independent Directors at 2021 Board Meetings

Board Meeting	Independent Director Chi-Chia Hsieh	Independent Director StanleyYuk Lun Yim	Independent Director Zhen-Wei Wang
8-11 2021/02/04	Attend in person	Attend in person	Attend in person
8-12 2021/05/11	Attend in person	Attend in person	Attend in person
8-13 2021/06/07	Attend in person	Attend in person	Attend in person
8-14 2021/06/25	Attend in person	Attend in person	Attend in person
8-15 2021/08/03	Attend in person	Attend in person	Attend in person
8-16 2021/10/28	Attend in person	Attend in person	Attend in person

3.4.2 Audit Committee

A total of 4 Audit Committee meeting were held in the previous (2021) period. The attendance of the Independent Directors was as follows:

Title	Name	Attendance in Person	By Proxy	Attendance Rate
Independent Director	Chi-Chia Hsieh	4	`－`	100.00%
Independent Director	Zhen-Wei Wang	3	1	75.00%
Independent Director	StanleyYuk Lun Yim	4	`－`	100.00%

Note ： The actual attendance (%) was calculated based on the number of meetings and the actual number of attendances during his tenure.

Other mentionable items:

1. The annual work focus and authority of the audit committee

(1) The main function of the Audit Committee is to supervise the following matters:
A. Fair presentation of the financial reports of this Corporation.
B. The hiring (and dismissal), independence, and performance of certificated public accountants of this Corporation.
C. The effective implementation of the internal control system of this Corporation.
D. Compliance with relevant laws and regulations by this Corporation.
E. Management of the existing or potential risks of this Corporation.
(2) The powers of the Audit Committee are as follows:
A. The adoption of or amendments to the internal control system pursuant to Article 14-1 of the Securities and Exchange Act.
B. Assessment of the effectiveness of the internal control system.
C. The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, of the procedures for handling financial or business activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or guarantees for others.
D. Matters in which a Director is an interested party.
E. Asset transactions or derivatives trading of a material nature.
F. Loans of funds, endorsements, or provision of guarantees of a material nature.
G. The offering, issuance, or private placement of equity-type securities.
H. The hiring or dismissal of a certified public accountant, or their remuneration.
I. The appointment or discharge of a financial, accounting, or internal audit officer.
J. Annual and semi-annual financial reports.
K. Other material matters as may be required by this Corporation or by the competent authority.
43 -

2. If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, resolutions of

the Audit Committee and the Company’s response to the Audit Committee’s opinion should be specified: (1) Matters referred to in Article 14-5 of the Securities and Exchange Act.

Board Meeting	Agenda items	Resolution	Company's handling of the members' opinions
8-11 2021/02/04	1. The Company’s 2020 independent financial statements and consolidated financial statements 2. Passed the Accountant assessment of the independence and appropriateness 3. Declaration of the Company’s internal control system 2020	Approved by all Committee members	Approved by all Directors
8-12 2021/05/11	1. Prepare and compile Business Report for 2020 2. Prepare the proposal of 2020 profit distribution plan 3. Proposal to donate Innolux Education Foundation 4. Proposal of stock release plan of the subsidiary, InnoCare Optoelectronics Corporation	Approved by all Committee members	Approved by all Directors
8-15 2021/08/03	1. Share release matters of the subsidiary, InnoCare Optoelectronics Corporation 2. Proposal of singing a long-term supply agreement with the strategicpartner,SDP Global(China)Co.,Ltd.	Approved by all Committee members	Approved by all Directors
8-16 2021/10/28	1. Passed the Audit Plan of 2022.	Approved by all Committee members	Approved by all Directors

(2) Other matters which were not approved by the Audit Committee but were approved by two-thirds or more of all Directors：None.

3. If there are Independent Directors’ avoidance of motions in conflict of interest, the Directors’ names, contents of motion, causes for avoidance and voting should be specified: None.

4. Communications between the Independent Directors, the Company's chief internal auditor and CPAs:

(1) Communication between Independent Directors and internal auditors: The head of Internal Audit send the audit and follow-up reports monthly and presents the findings of all audit reports in the quarterly meetings of the Audit Committee. If material unusual matters occur during the auditing process, the head of Internal Audit will report to the members of the Audit Committee immediately.
(2) The 2021 major matters of the communications between Independent Directors (Audit Committee) and internal auditors

auditors
Date	Descriptions of the major matters	Resolution
	December 2020 Audit Report Findings review by Independent
2021/01/22		No objection
	Directors

		1. No objection
	1. The findings of the internal audit reports for the fourth
2021/02/04		2. After the review and
	quarter of 2020
Audit Committee		approval, report to the Board
	2. Statement of Internal Control System for 2020
		of Directors

	January 2021 Audit Report Findings review by Independent
2021/02/24		No objection
	Directors

2021/03/23	February 2021 Audit Report Findings review by Independent Directors	No objection
2021/04/22	March 2021 Audit Report Findings review by Independent Directors	No objection
2021/05/11 Audit Committee	The findings of the internal audit reports for the first quarter of 2021	No objection

44 -

Date	Descriptions of the major matters	Resolution
2021/05/20	April 2021 Audit Report Findings review by Independent Directors	No objection
2021/06/22	May 2021 Audit Report Findings review by Independent Directors	No objection
2021/07/20	June 2021 Audit Report Findings review by Independent Directors	No objection
2021/08/03 Audit Committee	The findings of the internal audit reports for the second quarter of 2021	No objection
2021/08/16	July 2021 Audit Report Findings review by Independent Directors	No objection
2021/09/14	August 2021 Audit Report Findings review by Independent Directors	No objection
2021/10/19	September 2021 Audit Report Findings review by Independent Directors	No objection
2021/10/28 Audit Committee	The findings of the internal audit reports for the third quarter of 2021	No objection
2021/11/09	October 2021 Audit Report Findings review by Independent Directors	No objection
2021/12/10	November 2021 Audit Report Findings review by Independent Directors	No objection

(3) Communication between Independent Directors (Audit Committee) and independent auditors: The Company CPAs have presented the findings or the comments for the quarterly corporate financial reports, as well as those matters communication of which is required by law, in the regular quarterly meetings of the Audit Committee.
(4) The 2021 major matters of the communications between Independent Directors (Audit Committee) and independent auditors

Date	Descriptions of the major matters	Resolution
	The findings of the audits on the Company’s financial results for 2020
2021/02/04		No objection

	The findings of the review on the Company’s financial results for theQ1 ended March 31,2021
2021/05/11		No objection

	The findings of the review on the Company’s financial results for theQ2 ended June 30,2021
2021/08/03		No objection

	1. The findings of the review on the Company’s financial results for the Q3 ended September 30, 2021 2. The findings of the audits on the Company’s Key Audit Matters,KAM
2021/10/28		No objection

45 -

3.4.3 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1. Does the Company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?	V		The Company has enacted Corporate Governance Best-Practice Principles and disclosed on the official website and M.O.P.S. in addition to protect the rights and interests of shareholders, strengthen the powers of the Board of Directors, respect the rights and interests of stakeholders and enhance information transparency. The INX’s Corporate Governance Best-Practice Principles” please refer to INX official website.	No significant difference compared to corporate governance practice principles
2.Shareholding structure & shareholders’ rights (1)Does the Company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2)Does the Company possess the list of its major shareholders as well as the ultimate owners of those shares? (3)Does the Company establish and execute the risk management and firewall system within its conglomerate structure? (4)Does the Company establish internal rules against insiders trading with undisclosed information?	V V V V		(1) The Company has enacted Operating Procedures for Management over Major Internal Information and has, besides, set up spokesman and acting spokesman to take charge of proposals or disputes from shareholders. (2)The Company is in a position to dominate the name lists of the key shareholders and the terminal controllers of the key shareholders and has duly input such information to public into the Market Observation Post System (MOPS) promulgated. (3)The Company has duly enacted the Regulations Governing Transaction with Related Parties, Regulations Governing Supervision over Subsidiaries and has, besides, set up relevant departments with sound mechanisms to evaluate and monitor potential risks with affiliated enterprises. (4)The Company has duly acted the Operating Procedures for Management over Major Internal Information and further in accordance with the Company’s internal control system, enacted Operating Procedures to Prevent Inside Trading and for Management over Major Information and Code of Ethics for Directors and Officers to ban inside personnel from buying, selling negotiable securities by taking advantage of the information which has notyet been madepublic in the market.	No significant difference compared to corporate governance practice principles
3.Composition and Responsibilities of the Board of Directors (1)Does the Board develop and implement a diversified policy for the composition of its members?	V		(1) A. The Company's Code of Corporate Governance strengthens the functions of the Board of Directors and formulates a diversified approach. The nomination	No significant difference compared to corporate governance practiceprinciples

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(2)Does the Company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? (3) Does the Company establish standards and method for evaluating Board performance, conduct annual performance evaluations, submit performance evaluation results to the Board, and use the results as a basis for determining the remuneration and nomination of individual Directors? (4)Does the Company regularly evaluate the independence of CPAs?	V V	V	and selection of the Board of Directors of the Company is in accordance with the provisions of the Company's articles of association. In addition to assessing the qualifications of each candidate's academic experience, and taking into account the opinions of interested parties, the Company's election rules and corporate governance code are adhered to. To ensure the diversity and independence of the Board of Directors. B. Please refer to on page 31-32 of this annual report for the Company's implementation of the diversification policy. (2)The Company has set up the Audit Committee and Remuneration Committee, the Company’s Independent Directors’ serve as the Committee members. For more details regarding the business performance of the Company’s Audit and Remuneration Committee, please refer to page 43-45 & 54-55 of this Annual Report. The Company, nevertheless, has not yet set up committee of other functions to date. (3)The Board of Directors of the Company passed the “Board Performance Evaluation Method” on November 8, 2019, which stipulates that the Board of Directors shall perform performance evaluations for the Board of Directors, Board members, Remuneration Committee and Audit Committee at least once a year. The internal evaluation shall be conducted at the end of each year, and the current year’s performance evaluation shall be conducted in accordance with this method. Implementation of self-evaluations by the Company's Board of Directors, please refer to page 42 of this annual report. (4) On February 11, 2022, the Board of Directors of the Company regularly evaluates the independence of visa accountants on the basis of the independence of Article 47 of the Accountant Law and the content of the Code of Practice Ethics Bulletin No. 10. For the criteria for evaluating the independence of accountants, please refer to Note 1 on page 52 of this annual report.

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
4. Does the Company have a suitable number of competent corporate governance personnel, and has it appointed a corporate governance officer responsible for corporate governance matters (including but not limited to providing information for Directors and supervisors to perform their duties, assisting Directors with regulatory compliance, handling matters related to Board meetings and shareholders' meetings, and preparing proceedings for Board meetings and shareholders' meetings)?	V		In order to protect shareholders' rights and	No significant difference compared to corporate governance practice principles
			interests and strengthen the functions of the
			Board of Directors, the Board of Directors of
			the Company appointed the Vice President
			Jun-Yi Yu as the Directors of Corporate
			Governance on August 5, 2020. His
			qualification meets the requirements of
			paragraph 1, Article 3-1 of the Corporate
			Governance Best Practice Principles for
			TWSE/TPEx Listed Companies. The
			responsibilities of the Directors of Corporate
			Governance include handling relevant matters
			of the Board of Directors’ meeting and the
			general shareholders’ meeting in accordance
			with the law, taking the minutes of the Board
			of Directors’ meeting and the general
			shareholders’ meeting, assisting the Directors
			in taking office and continuing education,
			providing the information needed for the
			Directors to carry out their business, assisting
			the Directors in legal compliance and
			reporting the operation of corporate
			governance to the Board of Directors on a
			regular basis every year. The secretary unit of
			the Board of Directors is responsible for the
			implementation of corporate governance
			related matters.
			The detail of completed item in 2021 list as
			below, and is reported to the Board of
			Directors on February 11, 2022:
			1. The Company held 6 Board meeting, 4
			Audit committee meeting and 3
			Remuneration Committee Meetings in 2021.
			2. Regular AGM in 2021.
			3. All the members of Board of Directors have
			participated in related courses for 6 hours.
			4. The Company maintains D&O insurance for
			its Directors and key officers and report to
			the Board meeting.
			5. Regularly communicate with Independent
			Directors and accountants about the
			company's financial and business situation.
			Please refer to page 44-45 of annual report
			and our website (http://www.innolux.com)
			for communication.
			6. The Agenda and meeting materials of Board
			meeting mail/send to all Directors 7 days
			before of the Board meeting and remind in
			advance if the issues require interest
			avoidance, and finished the meeting minutes
			in 20 days after the meeting.
			7. Booking the date of AGM, prepare meeting
			notice, handbook and minutes within the
			statutory time limit, and handle change
			registration matters in the amendment of the
			Articles of Association or the re-election of
			Directors.

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			8. Training situation of corporate governance
			officer responsible. Please refer to page 70
			of annual report.
5. Does the Company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers, and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities?	V		The Company’s stakeholders include employees, shareholders/investors, customers, suppliers, society (communities, media, NGOs), etc. Relevant communication channels include the “Investor Service,” “Customer/Supplier Area,” “Product Information” area set up on the Company's official website, as well as mailboxes for media contact, anti-corruption reporting, and corporate social responsibility ([email protected]). To fully respond to the needs of stakeholders, the Company also equates the communication status, implementation plan, goals and results of all stakeholders related to sustainable development with regular reports on the Board's agenda each year. The communication status of all stakeholders in 2021 was reported to the Board of Directors on February 11, 2022. The issues of stakeholders please refer the annual reportpage 52-53 Note 2.	No significant difference compared to corporate governance practice principles
6. Does the Company appoint a professional shareholder service agency to deal with shareholder affairs?	V		The Company has appointed a professional agency to handle shareholder related services for the Company.	No significant difference compared to corporate governance practiceprinciples
7.Information Disclosure (1)Does the Company have a corporate website to disclose both financial standings and the status of corporate governance? (2)Does the Company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)? (3) Does the Company announce and report annual financial statements within two months after the end of each fiscal year, and announce and report Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit?	V V	V	(1)Through the Company’s website (http://www.innolux.com),we provide financial, business, and corporate governance information and keep updating. (2)The Company’s English website announces information and our Public Relations department, Stock department and the related department responsible for collecting and disclosing the related information also set up positions for its spokesperson in accordance with the regulations and the Company provides Investor Conference report on the official website. (3)The Company announce and report annual financial statements within two months after the end of each fiscal year, and early announce monthly operation results, before the prescribed time limit and announce and report Q1, Q2, and Q3 financial statements, before the prescribed time limit.	No significant difference compared to corporate governance practice principles

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Implementation Status Deviations from “the Corporate Governance
Best-Practice Principles
Evaluation Item Yes No Abstract Illustration for TWSE/TPEx Listed Companies” and Reasons
8.Is there any other important information to facilitate a better understanding of the Company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, Directors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for Directors)? (1)Employee's Rights: Please refer to page 111-116 “5.5 Labor Relations” of the annual report (2)Employee Care The Company attaches great importance to the balance of physical and mental health of employees, in addition
to holding a balance of physical and mental activities, it also sets up various physical and mental balance facilities. Through the establishment of the Staff Welfare Committee, the Taiwan factory organizes various leisure and cultural activities, promotes community activities and constructs a website of the Staff Welfare Association, so that employees can balance their health and life while working. In order to improve employees' health awareness, we conduct regular health checkups and provide employee
health consultations every year. In addition, in order to ensure the well-being of female employees, and in accordance with the labor regulations of the locality of the factory, the implementation of the maternity leave pay allowance, the strengthening of the fetus rest and the family care leave, etc., for the female employees of pregnancy, implement the health risk assessment, adjust the work as needed. Under the principle of maternity protection and employment equal rights, create a friendly working environment for female employees.
(3)Investor relations, the rights of suppliers and stakeholders According to different interested groups, Innolux has established multiple and unobstructed communication
channels, such as investors’ service on company’s webpage, suppliers zone, business service and product consulting, media communications, so that we can keep communicating and getting feedback from those interests groups’ needs and expectations. 1. Employees: Establish communication channels such as employee care hotline, employee care mailbox, APP (EAPs), mobilization meeting communication meeting, government decrees on the system, labor-management meetings, and job welfare meetings.
1. Shareholders/Investors: The Company treats our shareholders with the principle of fairness and openness. We call the shareholders meetings according to the Company Act and other related laws every year, encourage stockholders to actively participate in the stockholders meeting with proposals and questions.
1. Customers: We have salespeople and customer service units to reply to customers’ demands effectively, establish a CRM system, monitor the progress of handling issues, field audits and questionnaire feedback, and customers’ satisfaction survey.
1. Suppliers: Setting up an interactive platform for supplier purchasing and procurement management, and a buyer and procurement management department to host regular monthly/quarterly quality meetings with suppliers, and annual supplier conferences, and provide anti-corruption reporting mailboxes.
1. Society (communities, media, non-governmental organizations): There are full-time departments to respond in a timely manner, and the media contact mailboxes and telephones to respond by specified personnel, issue press releases and statement from time to time, and hold press conferences. NGOs: Participate in seminars organized by non-governmental organizations to grasp the trend of the industry, as a reference for policy planning, and cooperate with non-governmental organizations to support the disadvantaged and promote environmental awareness projects to strengthen two-way communication.
(4)Directors Profession Enhancement Status The Company’s Directors have both professional background and practical experience. The Company arranges further studies for Directors and every year. For the latest further study updates please refer to page 67-68 of this annual report.
(5)Risk Management The Board of the Company has established a risk management system to regularly monitor the related financial
risks, regulation risks, climate change risks, hydropower risks, supplier chain risks, information safety risks, and the environment, safety, and health risks to enhance the competitiveness of the industry. The risk management process mainly includes risk identification, risk assessment and risk response. Risk identification: Identify relevant risk items according to regulations, industry standards and international
development trends. Risk assessment: The degree of risk is comprehensively considered according to the severity and frequency of
occurrence Risk response: According to the degree of risk, formulate control measures and response plans. The criteria for
evaluating control plans generally include effectiveness, feasibility and cost.
(6)The implementation of customer policy In addition to attaching importance to the confidentiality and privacy of customer information, the Company is
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	Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Implementation Status
		Yes	No	Abstract Illustration
9.	committed to the establishment of various smart platforms, with a densely structured information network in the
	design, purchase, production, and sales aspects. Quickly drive improvements and meet customer requirements
	through a comprehensive information collection system coupled with intelligent analysis; accurately predict
	customer rankings, achieve customer satisfaction and protect the interests of the Company through risk warning
	with quality indicators and in-depth retaining customer relationships, to become a value-creating information
	center. In addition, in-depth analyzes customers’ requirements and expectations through customer satisfaction
	survey annually. We also set up Task Force teams for major customer complaints and exceptions, and work with
	customers to implement quality improvement projects to satisfy them. This shows that the Company values
	customer feedback and continues to improve and adjust to meet customer expectations.
	(7)The Company implements and maintains D&O insurance for its Directors and key officers by the Company
	The Company maintains D&O insurance for its Directors and key officers
	Please explain the improvements which have been made in accordance with the results of the Corporate Governance
	Evaluation System released by the Corporate Governance Center, Taiwan Stock Exchange, and provide the priority
	enhancement measures.
	The Company governance of the Company was ranked among the top 6%~20%. It has set up its "Company
	Governance Guidelines" according to the revised Corporate Governance Best Practice Principles for TWSE/TPEx
	Listed Companies by the Taiwan Stock Exchange Corporation (TWSE). The Company has been working hard on
	sustainable economy, environment, and society and fulfilling long-term and sustainable responsibility to individual
	stakeholders and the whole society based on business core value of honesty and integrity.
	The areas that require immediate improvement are described below:

	Evaluation Indicators				Priority items to be improved and measures
					The Company will give priority consideration to electing female director candidates at the most recent re-election.
	Whether or not the Board members contains at
	least one female Director.

					The Company will give priority consideration to electing independent directors for at least one-half of the seats on the Board of Directors at the most recent re-election.
	Whether or not the Independent Directors of the
	Company account for one-half of the seats on the
	Board of Directors or more

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Note 1: The independence of CPAs

Note 1: The independence of CPAs	Note 1: The independence of CPAs
		Item		Results
1	No major financial interested relationshipwith the client		V Yes No
2	Avoidinganyimproper relationshipwith the client		V Yes No
3	The accountant should supervise their assistants to strictlycomplywith honesty, justice and independence		V Yes No
4	The accountant isprohibited from auditingcertification for the Company’s financial report where he/she served in within theprevious twoyears		V Yes No
5	The accountant’s identification is forbidden to be infringed byanother individual		V Yes No
6	The accountant does not hold anyshares in the Companyor in its subsidiaries		V Yes No
7	The accountant does not owe anydebt to the Companyor its subsidiaries		V Yes No
8	The accountant is not in any joint investment or benefit-sharingrelationshipwith the Companyor its subsidiaries		V Yes No
9	The accountant is not employed andpaid regularlybythe Companyor its subsidiaries		V Yes No
10	The accountant does not receive anycommission which is occupational-related		V Yes No
11	The accountant is subject to disciplinaryactions does not over 7years or returningdoes not less than 2years		V Yes No
12	The accountant audit experience obtain the Electronic industry		V Yes No

Note 2: The concerned issues of stakeholders, communication channel and response method

Stakeholder	Concerned issues	Major Communication Channel, Response Method, Frequency	Result in 2021
Employees	Recruitment and staffing Human rights Talent development and training Occupational health and safety Digital Transformation	Communication channel: 1. Labor-management meeting: quarterly 2. Unit meeting: irregularly 3. Satisfaction survey: irregularly 4. Care hotline and employee care Mailbox: irregularly Contact person: Ms. Liu/[email protected]/037-586000#64650 Contact person: Ms. Wang/[email protected]/06-5051888#47276	298 labor-management meetings in Chinese area 1,021 internal communication cases in Chinese area
Shareholders/ Investors	Financial performances Recruitment and staffing Emission of greenhouse gases Waste circular economy Social participation and Caring	Communication channel: 1. AGM: yearly 2. Institutional investor conference: half-yearly 3. Investor Forum: quarterly 4. Annual report and ESG report: yearly 5. Investors/Analysts conference: irregularly 6. Investors’ hotline and mailbox: irregularly 7. Releasing material information on MOPS: irregularly Contact person: IR:Ms. Chen/ [email protected] / 06-5051888#47154 Stock Affairs: Ms. Chen/ [email protected]//037-586000#63588	176 pieces of material information (Chinese/English) 62 pieces of announcements 73 hotline and mailbox response Over 40 investors/analysts conference

Stakeholder	Concerned issues	Major Communication Channel, Response Method, Frequency	Result in 2021
Customers	Innovation of products and techniques Financial performance ESG risk management Air pollution control Water resources management	Communication channel: 1. Customer satisfaction survey analysis 2. Voice of customer (VOC) 3. Customer complaint handling and review: irregular 4. Customer meeting 5. Customer auditing Contact person: Ms. Huang/[email protected]/06-5051888#44856	Over 10 large-scale customer cooperative development and quality conferences Over 100 VIP customers audit conferences of quality result Over 1,000 routine communication meeting
Suppliers/ Contractors	Occupational health and safety Human rights Diversity and equality Recruitment and staffing Talent development and training	Communication channel: 1. Supplier communication meeting: biweekly, monthly 2. Annual suppliers’ meeting: yearly 3. On-site audit guidance: irregularly 4. Anti-corruption mailbox: irregularly 5. Suppliers’ self-assessment questionnaire: yearly Contact person: SRM (Supplier Relationship Management): (website address: http://srm.innolux.com/) An interactive platform for information exchange between purchasing/materialcontrolunits and suppliers	395 suppliers’ CIP meetings 85 suppliers’ communication meetings 34 whistleblowing
Society (communities, media, NGOs)	Financial performances Emission of greenhouse gases Waste circular economy Social participation and Caring Recruitment and staffing	Communication channel: 1. Volunteer Service: irregularly 2. Project cooperation and visit: irregularly 3. Neighborhood communication: irregularly 4. Events and forums: irregularly 5. “Innolux ESG DNA” Fan page on FACEBOOK: irregularly 6. Press conference and press releases: irregularly Contact person: CSR: Ms. Yu/ [email protected]/06-5051888#47042 PR: Ms. Chien/ [email protected]/06-5053760#47153 Innolux Corporation Education Foundation: Ms.Guo/ [email protected]/06-5051888 #47060	1,880 beneficiaries 5 rural schools sponsorship program More than 300 media communications via text messages and phone calls 27 press releases and 5 press conferences 9 media events and 9 media interviews

3.4.4 Composition, Responsibilities and Operations of the Remuneration Committee

A. Information on members of the Remuneration Committee

Indentity	Criteria Name	Professional Knowledge and Experience	Independence Attribute	Concurrent independent director position in other publicly traded companies
Independent Director (Convener)	Chi-Chia Hsieh	Please refer to “Directors” in page 17- 18 and “Professional qualifications and experience for Directors” in page 21-22 of annual report.	Please refer to “Independence of Directors” in page 22-30 of annual report.	－
Independent Director	Zhen-Wei Wang			2
Independent Director	Stanley Yuk Lun Yim			－

B. Attendance of Members at Remuneration Committee Meetings

There are 3 members in the Remuneration Committee. A total of 3 (A) Remuneration Committee meetings were held in the previous period. The attendance record of the

Remuneration Committee members was as follows:

Title	Name	Attendance in Person(B)	ByProxy	Attendance rate(%)(B/A)
Convener	Chi-Chia Hsieh	3	－	100.00%
Committee Member	Zhen-Wei Wang	2	1	66.67%
Committee Member	Stanley Yuk Lun Yim	3	－	100.00%

Note: The actual attendance (%) was calculated based on the number of meetings and the actual number of attendances during his tenure.

Other mentionable items:

Scope of duties of the Remuneration Committee
(1) Periodically reviewing this Charter and making recommendations for amendments.
(2) Establishing and periodically reviewing the performance assessment standards, annual and long-term performance goals, and the policies, systems, standards, and structure for the remuneration of the Directors, supervisors, and managerial officers of this Corporation.
(3) Periodically assessing the degree to which performance goals for the Directors and managerial officers of this Corporation have been achieved, setting the types and amounts of their individual remuneration.

The Committee shall perform the duties under the preceding paragraph in accordance with the following principles:

(1) Salary management should conform to the Company's salary concept.
(2) Performance assessments and remuneration levels of Directors and managerial officers shall take into account the general pay levels in the industry. Also, to be evaluated are the reasonableness of the correlation between the individual's performance and this Corporation's operational performance and future risk exposure.
(3) No member of the Committee may participate in discussion and voting when the Committee is deciding on that member's individual remuneration.
If the Board of Directors declines to adopt or modifies a recommendation of the Remuneration Committee, it should specify the date of the meeting, session, content of the motion, resolution by the Board of Directors, and the Company’s response to the Remuneration Committee’s opinion (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the Remuneration Committee, the circumstances and cause for the difference shall be specified): None.

3. The resolutions of the Remuneration Committee and the Company’s response are as follows:

Board Meeting	Remuneration Committee	Agenda items	Resolution	Company's handling of the members' opinions
8-11 2021/02/04	4-7 2021/02/04	1. Proposal of 2020 Allocation on Directors and Employees Remuneration Distribution 2. Proposal for the remuneration of Directors(including Independent Directors) 3. Proposal for the remuneration of managerial officers	Approved by Committee	Approved by all Directors
8-15 2021/08/03	4-8 2021/08/03	1. Proposal for the remuneration of managerial officers and Directors(including Independent Directors) 2. Proposals for managerial officers remuneration in 2020	Approved by Committee	Approved by all Directors
8-16 2021/10/28	4-9 2021/10/28	1. Reporting of execution of Employee Stock Ownership Plans 2. Reporting of shares allocation to managerial officers related to stock release plan of the subsidiary,InnoCare Optoelectronics Corporation	Report to Committee	Report to all Directors

3.4.5 Composition, Responsibilities and Operations of the Nominating Committee: N/A.

3.4.6 Sustainable Development Implementation Status and Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies”

TWSE/TPEx Listed Companies”
Implementation Item	Implementation Status			Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
1. Whether or not the Company establishes a governance framework and sets up a dedicated (concurrent) unit that promotes sustainable development; whether or not senior management is delegated by the Board of Directors to deal with sustainable development issues and the supervision of the Board?	V		1. The Company established the Sustainable Development Committee (formerly known as the Corporate Social Responsibility Committee) in 2011 as the highest-level of the internal organization to promote sustainable development and is responsible for formulating the Company's sustainability policy and the promotion strategy thereof. The Sustainable Development Committee is chaired by the Chairperson with General Manager being the vice chairman and Chief Human Resource Officer being the Chief Sustainable Development Officer. The Committee members consist of the top executives of the manufacturing centers in Taiwan and China and the top executives of the relevant functional departments. 2. The Company has set up a Sustainable Development department as a special promotion organization. The Board of Directors on October 27, 2017 formulated the Company's corporate social responsibility code of practice (December 27, 2021 amended as Sustainable Development Best Practice Principles). To be in line with the global trend, fulfill the goal of sustainable development, strengthen the government's efforts to promote sustainable development of TWSE/TPEx-listed companies and improve the disclosure quality of sustainable development information, the Company amended it as the Sustainable Development Best Practice Principles per Letter 7 Dec. 2021 TWSE-Governance-No. 1100024173 announced by the Taiwan Stock Exchange. The implementation of result for year 2021 and the work plan for next year were reported to the Board of Directors on February 11, 2022, so that the Board could supervise and assist the management team to promote sustainableperformance.	No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies
2. Does the Company assess ESG risks associated with its operations based on the principle of materiality,and establish related	V		The Board of the Company has established a risk management mechanism to regularly review the risks related to finance, laws and regulations, climate change,water and electricityresources,industrial supplychain,information	No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx

Implementation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
risk management policies or strategies?			security and occupational safety and health, so as to improve its competitiveness in the industry. The risk management process mainly includes risk identification, risk assessment and risk response. Risk identification: identifying relevant risk items according to laws and regulations, industrial standards and international development trends. Risk assessment: comprehensive consideration of the severity and frequency of the risk. Risk response: formulating control measures and response plans according to the degree of risk. The criteria for evaluating control plans generally include the effectiveness, feasibility and cost. The Company's relevant risk management policies and effectiveness are disclosed in the annual Sustainable Development report (former: CSR report) and the official website.	Listed Companies
3. Environmental issues (1) Does the Company establish proper environmental management systems based on the characteristics of their industries? (2) Does the Company endeavor to utilize energy resources more efficiently and use renewable materials which have low	V V		(1)The Company has been actively promoting relevant EHS management systems and occupational Safety and Health Management System and so forth in order to facilitate a positive cycle of gradual improvement for green sustainability and safety culture. The Company began to introduce environmental management system and obtained verification as early as 2001, and obtained the ISO14001: 2015 new version of the standard verification certificate issued by the impartial third- party verification agency in 2021. The Company's Taiwan factory EMS certificate is verified by a third-party verification agency (BSI). The latest verification date: December 12, 2019, and the certificate validity period: December 11, 2022. (2) The Company has not only reduced its discharge of contaminants from the source but also reduced the quantity of pollutants in its waste water discharge to increase its recyclingrate bymachine design and technology promotion. The	No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies

Implementation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
impact on the environment? (3) Does the Company evaluate potential risks and opportunities brought by climate change, and take response measures to climate-related issues? (4) Does the Company compile statistics of greenhouse gas emissions, water use, and total weight of waste in the past two years, and does it establish policies for energy conservation, carbon reduction, greenhouse gas emission reduction, water use reduction, and other waste management?	V V		Company successfully achieved the water resource saving goal of reducing water intensity by 12% in 2021 (compared to 2020). (3) The Company follows the “National Climate Change Adaptation Policy Program,” cooperates with the government department's greenhouse gas reduction plan, and also incorporates climate change related information and potential risks and opportunities into the “Sustainable Development Committee” issue. Promote improvement and review of implementation effectiveness, reduce external environment and business risks. Based on the main framework of the TCFD to adjust and mitigate the risk impact of climate change. (4) The Company has counted greenhouse gas emissions, water consumption and total waste weight for many years. Continuously improve electricity efficiency and clean process improvement for specific production to reduce greenhouse gas emissions, complete greenhouse gas inventory in accordance with ISO14064-1 and pass third-party external verification to understand the space for improvement. Both “Climate Change” and “Water Management” received A- Leadership ratings in Carbon Disclosure Project (CDP) of 2021. Facing the challenges of water resources, the Company focused on water saving and recycling, and improved the efficiency of water resources management to effectively respond to the water shortage crisis. In terms of waste reduction, it is implemented to promote waste reduction and recycling at the source. The CSR report is issued every year to disclose the Company's policies and effectiveness ingreenhousegas emissions,water consumption and waste management.	No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies
4.Social issues (1) Does the Company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	V		(1) The Company formulates relevant employee codes in accordance with labor standards law, employment service law and gender work equality law, etc. to protect the rights and interests of colleagues. Also abide by international labor standards such as the "United Nations Universal Declaration of Human Rights", "United Nations Guidelines on Enterprise and Human Rights", the ILO Declaration on Fundamental Principles and Rights at Work, and the "Responsible Business Alliance(RBA)" Based on local labor laws,establish an	No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies

Implementation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
(2) Does the Company have reasonable employee benefit measures (including salaries, leave, and other benefits), and do business performance or results reflect on employee salaries? (3) Does the Company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis? (4) Does the Company provide its employees with career development and training sessions?	V V V		equal opportunity corporate culture. (2) The Company provides employees with work and life leave plans, festive bonuses, and group insurance. It also plans a competitive salary level. In addition to considering the external competitiveness and internal fairness of salary and benefits, it also has an overview of the Company's financial and operating conditions. The industry's annual salary adjustment strategy and personal work performance, improve the planning and execution of annual salary adjustment operations, design and issue incentive bonuses to motivate and retain outstanding talents. (3) The Company sets up the environmental safety unit, which is responsible for planning, implementation, auditing and improvement of the Company's environmental safety and health management system operation and has environmental safety and quality policies. The Company has obtained the occupational health and safety management system verification and requires all departments to implement relevant safety execution of health services and regular education and training, including the planning and execution of fire- fighting equipment (administration) and water and electricity, the monitoring and control of business waste cleaning, and emergency handling procedures, etc. The Company created a high-quality workplace environment for employees. (4) The Company takes "value added, diversification, and platformization" as the key strategic direction. Under the action goal of "stabilizing the foundation, improving efficiency, and driving growth," the training focuses on the professional value-added of personnel, management ability training, language courses. The learning platform is promoted to enhance the company's cross- disciplinary talent capabilities. In addition, to accelerate the digital transformation and enhance various functions and professionalism of employees, the Company organizes three learning environments for different levels, including the Book Club, the Consensus Camp for Junior Executives, and the Class for AI Technology Leader & AI Manager; and encourages employees to actively participate in them.	No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies

Implementation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
(5) Does the Company comply with relevant regulations and international standards in customer health and safety, customer privacy, and marketing and labeling its goods and services etc., and has it established consumer rights protection policies and complaint procedures? (6) Does the Company have a supplier management policy, require suppliers to comply with regulations on environmental protection, occupational safety and health, and labor rights, and what is its implementation status?	V V		(5) The Company’s product safety has always been the most important consideration for consumers. And as such, safe product design and a series of safety specification accreditations have been incorporated at the early stage of product design to ensure the safety of consumers. Innolux has taken the initiative to apply for international standard accreditation labels for its LCD panels in order to help consumers identify safe products at a glance. The Company has established operating principles that are customer-oriented and through means of telephone calls, email exchanges and face-to-face meetings, we are able to have solid grasp of customers’ needs so as to formulate improvement strategies to respond to customers in a timely manner. (6) The Company formulates the "Supplier's Corporate Social Responsibility Management Practices" based on the Responsible Business Alliance Code of Conduct (RBA), and expects suppliers to work together to fulfill corporate social responsibilities in all aspects of ethics, labor human rights, environment, health, safety and management systems, good risk management and continuous operation plan. Implement ESG (Environmental, social and governance) management, and risk management and business continuity plans. New suppliers must sign a vendor commitment letter before cooperation, committing themselves to follow the requirements of the RBA guidelines, and to ensure that the supplier will carry out the relevant requirements to the next level of the supply chain. The existing vendors conducts a corporate social responsibility risk questionnaire (SAQ) for key raw material suppliers every year to evaluate the suppliers' compliance with the five major aspects of RBA, and determine the risk according to the evaluation results. The risk categories are divided into low, medium, medium-high and high risk, if it is determined to be a high-risk supplier, on-site audit will be started, and continuous tracking and supervision will be carried out to ensure that the defects areproperlyimproved.	No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies

Implementation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation
5. Does the Company reference internationally accepted reporting standards or guidelines, and prepare reports that disclose non-financial information of the Company, such as ESG reports? Do the reports above obtain assurance from a third party verification unit?	V		The Company's 2021 ESG Report is based on the GRI Sustainability Reporting Standards (GRI Standards) officially published by the Global Sustainability Reporting Association on October 19, 2016 and passed the third-party verification unit Taiwan Verification Technology Co., Ltd. SGS) guarantees, in line with the spirit of the AA1000AS (Account Ability 1000 Assurance Standard) second application type high assurance level, and the requirements of the GRI Standards comprehensive compliance option (Comprehensive).	No significant difference compared to Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies
6. If the Company has established the Sustainable Development Best Practice Principles based on “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies”, please describe any discrepancy between the Principles and their implementation: The Company formulated Sustainable Development Best Practice Principles and sustainable development code of conduct in accordance with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the Responsible Business Alliance (RBA) code of conduct, emphasizing the inclusion of social environmental opportunities and risks operation management, pursuing the Company's sustainable development. The sustainable development policy is based on the corporate code of conduct and takes the responsible business alliance code as the core, covering five policy directions including corporate governance, environmental protection, employee care, supply chain social and environmental responsibility management, and community participation. Communicate and integrate with interested parties, and strive to achieve a sustainable environment and a human society.
7.Other important information to facilitate better understanding of the Company’s sustainable development implementation: The Company adheres to the concept of corporate management and social co-prosperity, combines corporate sustainable development policies with business strategies, and jointly promotes with the Innolux Education Foundation. In community participation and social care, charitable care and environmental education are the main axes to realize the synergy of sustainable management. The complete and detailed sustainable development performance is divided by the form of issuance report, and relevant information is also published on the Company's website and MOPS. (I) Charity care: In 2021, the Company held a series of activities, together named "Unlimited Charity Love,” including a joint effort with the Taiwan Fund for Children and Families (TFCF) to collect Christmas gifts for disadvantaged children in Miaoli and Tainan area, and provided 1,200 gifts; and The "Donate a Good Book, Read to the Rural Areas" campaign to collect e-readers and used books for schools in the rural areas of Miaoli, Tainan and Nantou counties which collected 1,115 children's books and 62 new e-readers in total. This realized our local care and helped disadvantaged children learn happily and grow positively. We hope to give full play to our corporate influence and do our part for children from disadvantaged families; so that we can brighten up the remote areas and keep the love alive. (II) Environmental education: In recent years, the Company has continued to work on ESG issues, implement InnoLux’s environmental commitments and deepen our environmental protection efforts by promotingvarious environmentalprotection issues and environmental engagement activities,to work towards a sustainable environment. In 2021,we held environmental

Implementation Item	Implementation Status Yes No Abstract Explanation	Implementation Status Yes No Abstract Explanation	Implementation Status Yes No Abstract Explanation	Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
		No	Abstract Explanation
education events and beach and forest cleanup events in the areas where our plants are located; a total of 91 employees and their families participated in environmental education events, and 294 employees and their families participated in beach and forest cleanup events. We expect to increase the knowledge and awareness of environmentalprotection through these environmental activities.

3.4.7Ethical Corporate Management Implementation Status and Deviations from “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1.Establishment of ethical corporate management policies and programs (1) Does the Company establish an ethical corporate management policy that was approved by the Board of Directors, and declare its ethical corporate management policy and methods in its regulations and external documents, as well as the commitment of its Board and management to implementing the management policies? (2) Does the Company establish mechanisms for assessing the risk of unethical conduct, periodically analyze and assess operatingactivities within the scope of	V V		(1) Integrity and integrity are the Company's most important operating stone, which consolidates the Company's leadership role in the display industry and gains the trust and respect of customers, shareholders, employees, suppliers and society. The Company's integrity management policy has been set out in the Innolux Code of Integrity Management Code, Corporate Governance Practice Code, Sustainable Development Best Practice Principles, Directors and Managers' Code of Ethical Conduct adopted by the Board of Directors. Various internal regulations and external documents, such as employee code of conduct, supplier corporate social responsibility code of conduct, and operating standards, express the policies and practices of operating in good faith, and strictly require employees of the Company to fulfill the Company's integrity policy. At the same time, the Company's annual report and Sustainable Development report and other documents also detail the Company's integrity management policy and the Board of Directors and management's commitment to actively implement the situation. (2) In order to prevent dishonesty, the Company has strengthened relevant prevention measures in regulations and external documents for business activities with a high risk of dishonesty, and regularly checks, analyzes and evaluates whether theprevention measures are operatingeffectivelyto review	No significant difference compared to Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
business with relatively high risk of unethical conduct, and formulate an unethical conduct prevention plan on this basis, which at least includes preventive measures for conduct specified in Article 7, Paragraph 2 of the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies? (3) Does the Company specify operating procedures, guidelines for conduct, punishments for violation, rules of appeal in the unethical conduct prevention plan, and does it implement and periodically review and revise the plan?	V		and correct the prevention measures. In addition, the Company requires all employees to understand the aforementioned specifications in detail, and publish the specifications on the Company's official website and internal website for internal and external personnel to consult at any time. The Company continues to use regular education and training and diversified publicity methods to make employees clearly aware of the norms they should abide by, thereby reducing the occurrence of dishonest behavior. (3) Innolux Code of Integrity Management Code, Directors and Managers' Code of Ethical Conduct, Employee Code of Conduct and Supplier CSR Code of Conduct Operating Norms are set to prevent dishonesty norms, for all employees and suppliers to follow together, but also in the Innolux corruption investigation and management practice norms for dishonest behavior of the whistle-off system, including whistleblowing law, whistleblowing channels and handling process, for internal and external personnel to file a complaint. The Company will take a fair attitude towards dishonesty and investigate and report cases in a rigorous manner, and in the event of a violation, the Company will take appropriate legal action in accordance with the relevant laws and regulations of work.
2.Fulfill operations integrity policy (1)Does the Company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Does the Company establish a dedicated unit under the Board of Directors to promote ethical corporate management, and periodically (at least once a year) report to the Board of Directors and supervise the implementation of the ethical corporate managementpolicyand	V V		(1) The Company requires global suppliers to comply with the supplier's code of social responsibility for corporate behavior and sign a manufacturer's commitment to jointly practice the Company's corporate culture of integrity management. In addition, the Company continues to conduct policy communications to suppliers and customers to communicate the Company's integrity management culture to suppliers and customers, and to understand whether any misconduct has occurred. (2) The Company is led by the Corruption Incident Investigation Team as a special unit. It continues to promote various integrity management plans in accordance with company policies, and promotes integrity and cleanliness matters. Integrity management policies, prevention of dishonesty behavior plans, supervision, and implementation situation in 2021 have been conducted an annual report to the Board of Directors on February 11, 2022. If there is a case of violation of integrityand integrity,the Companywill handle it in accordance with the	No significant difference compared to Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies

- 64 -	Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
		Yes	No	Abstract Illustration
	unethical conduct prevention plan? (3)Does the Company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4) Does the Company have effective accounting system and internal control systems set up to facilitate ethical corporate management, does the internal auditing unit formulate audit plans based on unethical conduct risk assessment results, and does it audit compliance with the unethical conduct prevention plan or commission a CPA to perform the audit? (5)Does the Company regularly hold internal and external educational trainings on operational integrity?	V V V		regulations of the investigation and management of the corruption incident of Innolux. (3) The Company has set out the relevant codes of conduct for the prevention of conflicts of interest in the Code of Ethics and employee code of conduct for Directors and managers. All colleagues are required to voluntarily declare and avoid any conflict of interest. In order to implement the policy, the Company also requires employees to fill out an annual questionnaire survey to voluntarily report any conflicts of interest. (4) The Company establishes a complete and effective accounting system and internal control system to ensure the continuous design and implementation of the system. In addition to regular audits by the internal auditing unit of the Company and its compliance with the anti-corruption measures formulated in accordance with the risk assessment results within the Company, there is also PricewaterhouseCoopers to regularly check the financial statements for the Company. (5) Education and training are the most important part of the Company's implementation of the integrity policy. The Company continues to strengthen the compliance awareness of colleagues through the integrity management education and training courses, and at the same time uses the official website, posters, startup screens, and screen savers to continue to promote integrity management standards. The Company regularly organizes internal education and training on anti-corruption policies. The theme of the 2021 course is the company's anti-corruption policy and related case analysis. It took about one hour (including lectures and quizzes), and the number of participants and completed training was 13,450. In addition, since 2020, the Company has been conducting "Prevention of Insider Trading" courses (including physical and digital courses) for Directors, managerial officers and employees, and the number of trainees has exceeded 7,858. In addition, in order to ensure that suppliers follow the Company’s integrity management policy, in addition to drafting supplier’s corporate social responsibility codes of conduct and operating specifications for suppliers to follow, the Company has also announced the specifications on the Company’s official website for their

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			reference at anytime.
3. The operation of the Company's whistleblowing system (1)Does the Company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up? (2) Does the Company establish standard operating procedures for investigating reported cases, and does it take subsequent measures and implement a confidentiality mechanism after completing investigation? (3)Does the Company provide proper whistleblower protection?	V V V		(1) The Company in the official website to set up a report mailbox, to provide whistleblowing channels, reception procedures and other information (speak- [email protected]) for internal and external personnel at any time to use. In addition, this reporting channel information is disclosed in the Company's boot screen, internal advocacy posters and the commitment letter that suppliers should sign, so that internal and external people are informed and make full use of the whistleblowing channels to report. Report cases according to the Innolux's corruption investigation and management practices set up an investigation team to investigate. (2) The Company has formulated detailed investigation procedures and related confidentiality mechanisms for the investigation and management of the corruption incidents of Innolux Optoelectronics. For investigations of reported cases, the Company conducts investigations in a confidential and rigorous manner. After the investigation of the reported cases is completed, the Company takes follow-up measures according to the severity of the internal rules. If criminal responsibility is involved, it will be transferred to the judicial office for investigation. (3) The Company strictly prohibits any form of retaliation. In order to protect the whistleblower, the Company clearly stated in the Innolux Optoelectronics Code of Conduct that the Company will protect the whistleblower from any retaliation caused by the report, and prohibits colleagues from taking any retaliation measures. In the course of the investigation, the investigation team did abide by the relevant provisions of the confidentiality of the informant’s identity and anonymous reporting, strictly abided by the standard operating procedures for the investigation of the report, and related confidentiality mechanisms, to protect the confidentiality of the informant’s identity, so that the informant would not suffer from the report Improper disposal.	No significant difference compared to Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies
4.Strengthening information disclosure Does the Company disclose its ethical corporate management policies and the results of its implementation on the	V		The Company discloses the Code of Conduct on the Company’s official website and MOPS. It also discloses related information about operational integrity and implements results in the official website and Sustainable Development report.	No significant difference compared to Ethical Corporate Management Best Practice Principles for TWSE/GTSM

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
Company’s website and MOPS?				Listed Companies
5. If the Company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation. The Company has enacted Ethical Corporate Management Best Practice Principles of Innolux Corporation in accordance with Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, and approved by Board of Directors meeting and disclosed on the official website and MOPS. All of the Company's colleagues and affiliates are required to comply with these provisions, there is not conformity with the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies.
6. Other important information to facilitate a better understanding of the ethical corporate management operation of the Company (e.g., review and amend its policies.): (1) Strictly abide by the business conduct regulations and other relevant regulations for TWSE/TPEx Listed Companies as the basis for the implementation of integrity management, and continue to identify and update the regulations to ensure the implementation of the regulations. (2) The Company continues to conduct business ethics regulatory risk assessments every year, and implements the company's business ethics risk management through the internal control system.

Other important information to facilitate a better understanding of the ethical corporate management operation of the Company (e.g., review and amend its policies.): (1) Strictly abide by the business conduct regulations and other relevant regulations for TWSE/TPEx Listed Companies as the basis for the implementation of integrity management, and continue to identify and update the regulations to ensure the implementation of the regulations.
(2) The Company continues to conduct business ethics regulatory risk assessments every year, and implements the company's business ethics risk management through the internal control system.

3.4.8 Corporate Governance Guidelines and Regulations

The Company has established the Corporate Governance Code, which addresses the protection of shareholders’ rights and interests, strengthens the functions of the Board of Directors, respects the rights and interests of stakeholders, and enhances information transparency. It also reviews and evaluates the corporate governance evaluation conducted by the Taiwan Stock Exchange. The actual implementation of the quantitative indicators is expected to assist the Company to gradually establish a good corporate governance system to enhance the effectiveness of corporate governance. For the Company’s corporate governance operation, please refer to the annual report, 3.4 Implementation of Corporate Governance of III. Corporate Governance Report (pages 41-76). For the Company’s corporate governance code and related regulations, please inquire on the MOPS or the Company’s website.

3.4.9 Other Important Information Regarding Corporate Governance

Standard operating procedures for the handling of vital internal information: Innolux has established its Vital Internal Information Handling Procedure that clearly regulates the handling of important internal information. Relevant procedures have been submitted to the Board for approval and internal announcements have been made in the Company along with relevant trainings for all employees.
In order to strengthen our competitive edge, the Company continues to combine operational objectives and R&D resources to formulate intellectual property strategies and to implement intellectual property deployment and protection measures. In particular, we have established tactic deployment strategies for intellectual property management (including patent education and training, proposed evaluation mechanism, incentive system, post-approval evaluation, and patent revitalization strategy), and have also established a patent management system to create a comprehensive patent control framework to strengthen the control, utilization, and deployment of patents. As of printed date of annual report, the Company has an aggregate of approximately 12,000 patents worldwide.

In addition, for trademarks, copyrights, and trade secrets, the Company continues to actively perform trademark examination and arrangement in accordance with the relevant management regulations. As of printed date of annual report, the Company has obtained 133 registered trademarks worldwide. In addition, we control trade secrets and copyrights through strict security measures, and further extend the protection of all intellectual property to effectively control and integrate the superior resources of intellectual property, strengthen the Company's competitiveness, and ensure the competitive advantage.

The implementation of the Company's 2021 intellectual property management plan was reported to the Board of Directors on February 11, 2022.

Status of Directors' participation in corporate governance related courses and trainings in 2021:

Title	Name	Date	Sponsoring Organization	Course	Hours
Chairman	Jin-Yang Hung	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinking on Risk Management	3
Director	Jyh-Chau Wang	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinking on Risk Management	3
		Dec. 5		Case analysis of legal norms and	3

67 -

Title	Name	Date	Sponsoring Organization	Course	Hours
		2021		practical cases of insider trading
Institutional Director	Hyield venture Capital Co., Ltd. Chu-Hsiang Yang	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinking on Risk Management	3
		Dec. 5 2021		Case analysis of legal norms and practical cases of insider trading	3
	Hyield venture Capital Co., Ltd. Chin-Lung Ting	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinking on Risk Management	3
Independent Director	Chi-Chia Hsieh	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Aug. 12 2021	Taiwan Corporate Governance Association	Discussion on Legal Issues of Instant Messaging	3
		Oct. 28 2021	Corporate Operation Association	Digital Transformation, looking Ahead New Future - A New Thinking on Risk Management	3
	Stanley Yuk Lun Yim	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinking on Risk Management	3
	Zhen-Wei Wang	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Dec. 5 2021	Taiwan Corporate Governance Association	Compliance with regulatory laws on Cross-Straits Economic Cooperation	3
		Dec. 5 2021	Corporate Operation Association	Case analysis of legal norms and practical cases of insider trading	3

Status of managerial officers participating in corporate governance related courses and trainings in 2021:

Title	Name	Date	SponsoringOrganization	Course	Hours
Chairman &CEO	Jin-Yang Hung	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance Digital Transformation, looking Ahead New Future - A New Thinkingon Risk Management	3
		Oct. 28 2021			3
		Apr. 26 2021	Innolux Corporation	Information security concept	1

68 -

Title	Name	Date	SponsoringOrganization	Course	Hours
		Sep. 23 2021		Error-free Case Study: Analyzing Strategic Customer and Product Selection from the Perspectives of Zero-error Decision Making and Crisis Management and How To Deal with Supply Chain Disruptions Immediatelyduringthe Pandemic	2
		Oct. 6 2021		Error-free Case Study: Analyzing Process Automation and How to Price from the Perspective of Error- free SOP Designing	2
		Oct. 19 2021		Digital Transformation Lectures: Data Science and Digital Transformation	2
President &COO	Chu-Hsiang Yang	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinkingon Risk Management	3
		Dec. 5 2021		Case analysis of legal norms and practical cases of insider trading	3
		Mar. 3 2021	Innolux Corporation	Digital Transformation: Opportunities and Challenges of QCT's	1.5
		Sep. 16 2021		Digital Transformation: Industry 3.5 Manufacturing Strategy and Big Data Smart Manufacturing Industry Demonstration	2
		Sep. 23 2021		Zero-Error Practice Seminar : Strategic Customer and Product Selection from Zero-Error Decision-Making and Crisis Handling Zero Error Practical	2
		Oct. 6 2021		Error-free Case Study: Analyzing Process Automation and How to Price from the Perspective of Error- free SOP Designing	2
		Oct. 19 2021		Digital Transformation Lectures: Data Science and Digital Transformation	2
Executive Vice President	Chin-Lung Ting	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinkingon Risk Management	3
Consultant	Jyh-Chau Wang	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New	3

69 -

Title	Name	Date	SponsoringOrganization	Course	Hours
				Thinkingon Risk Management
		Apr.26 2021	Innolux Corporation	Information security concept	1
Vice President	Jun-Yi Yu	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinkingon Risk Management	3
		Sep. 1 2021	Taiwan Corporate Governance Association	The 13th Corporate Governance Summit inTaipei	6
		Jan. 6 2021	Innolux Corporation	Digital Transformation Seminar : Flexible Decision- Md/Procurement/Post-production	6
		Apr. 26 2021		Information security concept	1
		Oct. 19 2021		Digital Transformation Lectures: Data Science and Digital Transformation	2
Vice President	Hung-Wen Yang Chih-Ming Chen Yu-Shui Kuo Kuo-Hsiung Kuo	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinkingon Risk Management	3
Vice President	Hung-Wen Yang	Apr. 6 2021	Innolux Corporation	Summary of Trade Secrets Personal Information Law and Anti- Corruption Policy	0.5
		Apr. 26 2021		Information security concept	1
		Aug. 2 2021		Antitrust law compliance	0.5
		Sep. 23 2021		Error-free Case Study: Analyzing Strategic Customer and Product Selection from the Perspectives of Zero-error Decision Making and Crisis Management and How To Deal with Supply Chain Disruptions Immediatelyduringthe Pandemic	2
		Oct. 6 2021		Error-free Case Study: Analyzing Process Automation and How to Price from the Perspective of Error- free SOP Designing	2
Vice President	Chih-Ming Chen	Apr. 6 2021	Innolux Corporation	Summary of Trade Secrets Personal Information Law and Anti- Corruption Policy	0.5
		Apr. 26 2021		Information security concept	1
		Sep. 23 2021		Error-free Case Study: Analyzing Strategic Customer and Product Selection from the Perspectives of Zero-error Decision Making and Crisis Management and How To	2

70 -

Title	Name	Date	SponsoringOrganization	Course	Hours
				Deal with Supply Chain Disruptions Immediatelyduringthe Pandemic
		Oct. 6 2021		Error-free Case Study: Analyzing Process Automation and How to Price from the Perspective of Error- free SOP Designing	2
		Oct. 19 2021		Digital Transformation Lectures: Data Science and Digital Transformation	2
Vice President	Yu-Shui Kuo	Feb. 22 2021	Innolux Corporation	Enterprise and BigData	1
				Intelligence Manufacturing Strategies and Cases	1
				Flexible Decision Strategies and Cases	1
		Mar. 3 2021		Digital Transformation: Opportunities and Challenges of QCT's	1.5
		Apr. 6 2021		Summary of Trade Secrets Personal Information Law and Anti- Corruption Policy	0.5
		Aug. 9 2021		Antitrust law compliance	0.5
		Sep. 16 2021		Digital Transformation Lecture: Industry 3.5 Manufacturing Strategy and Big Data Smart Manufacturing Industry Demonstration	2
		Oct.19 2021		Digital Transformation Lectures: Data Science and Digital Transformation	2
Vice President	Kuo-Hsiung Kuo	May 3 2021	Innolux Corporation	Summary of Confidentiality and Anti-Corruption Policy	0.5
		Jun. 11 2021		Gorgeous transformation from manufacturing, R&D to industry cross-border	1
		Aug. 9 2021		Antitrust law compliance	0.5
Financial Supervisor Accounting Supervisor	Jhih-Siou Liou Kun Ma	Aug. 3 2021	Corporate Operation Association	Intellectual Property Management Becomes a New Subject in Corporate Governance	3
		Oct. 28 2021		Digital Transformation, looking Ahead New Future - A New Thinkingon Risk Management	3
		Feb. 22 2021	Innolux Corporation	Enterprise and BigData	1
				Intelligence Manufacturing Strategies and Cases	1
				Flexible Decision Strategies and Cases	1
		Apr. 6 2021		Summary of Trade Secrets Personal Information Law and Anti- Corruption Policy	0.5
		Apr. 26 2021		Information security concept	1

71 -

Title	Name	Date	SponsoringOrganization	Course	Hours
		Aug. 2 2021		Antitrust law compliance	0.5

Certification Details of Employees, whose Jobs are Related to the Release of the Company’s Financial Information

Information
Certification	Number of Employees
	Finance& Accounting	Internal Audit
Certified Public Accountant(CPA)	2	－
Certified Public Accountant(US CPA)	1	－
Certified Internal Auditor(CIA)	1	1
Chartered Financial Analyst(CFA)	1	－
Certified Management Accountant(CMA)	2	－
Financial Risk Manager(FRM)	1	－
Senior Securities Specialist	9	－
Securities Specialist	7	－
Internal controller test of SFI	2	－
Basic Competency Test of Corporate Governance of SFI	1	－

Succession planning and operation of Board members and important management members

The Company implements the diversification policy of Board members in accordance with the corporate governance code of practice. There are currently 7 Directors (including 3 Independent Directors), all of whom have industry knowledge and international market views, and are good at leadership, operational judgment, operation management, crisis management and other professional capabilities. Four of them concurrently serve as senior management of the Company. In the future, the composition structure of the Board of Directors of the Company and the experience background of members will continue the current structure. The annual "Board Performance Evaluation Results" will be used as a reference for the nomination of Directors for renewal.

Regarding the succession planning of the Board of Directors, the Company cultivates high-level managers to enter the Board to familiarize them with the operations of the Board and the business of the Company's units, and deepen their industry experience through work rotation. At present, the Company has many high-level management professionals, so the Company has ample talent pool to be appointed as future Directors. In addition to considering diversity, it will focus on gender equality and possess the knowledge, skills and literacy necessary for performing duties.

The Company adheres to embracing change and leading the market demand, with the three main directions of "cultivating innovation and arranging succession", "deploying the leadership team" and "deepening the depth of positions". In addition to excellent work ability, the successors should also have the values consistent with those of the Company.

Based on the talents' future development and potential ability, the succession cultivation plan is divided into the three stages of experience cultivation, agency and observation, and formal succession. During the period, courses and action learning, project assignment and management authorization, and assignment and rotation are provided, and the feasibility of formal succession is assessed through performance evaluation and highlevel personnel review. In addition to internal learning, senior executives and potential talents are also encouraged to study in top universities to deepen the knowledge and ability of business management.

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3.4.10 Internal Control System

Statement of internal control system

Innolux Corporation Statement of Internal Controls

Date: Feb 11, 2022

According to the examination on internal control systems done by the Company itself in 2021, we hereby state as follows:

I. The Company’s Board of Directors and management team understand their responsibilities of developing, implementing and maintaining the Company’s internal control system, and such a system has been established. The purpose of establishing the internal control system is to reasonably assure the following objectives: The effectiveness and efficiency of business operation (including earnings, operation performance, and the safeguard of company assets); The reliability of the financial and related reports; and The compliance of the relevant laws/regulations and company policies;
II. Due to the innate limitations in designing a faultless internal control system, this system can only assure that the reasonableness of the above three objectives has been fairly achieved. In addition, the effectiveness of the internal control system may change over time due to the change of the business environment or situation. Since the Company’s internal control system has included a self-examination capability, the Company will make immediate corrections when errors are detected.
III. The evaluation of effectiveness of the internal control system design and implementation is made in accordance with the “Guidelines for the Establishment of Internal Control Systems by Public Companies” (the Guidelines). The Guidelines are made to examine the following five factors during the management and control process: (1) control environment, (2) risk assessment and response, (3) control activities, (4) information and communication, and (5) supervision. Each factor also includes several items. Details of each factor can be found in the Guidelines.
IV. The Company has examined the effectiveness of each respected area in the internal control system based on the Guidelines.
V. The examination results indicated that the Company’s internal control system (including subsidiary governance) dated December 31, 2021 had effectively assured that the following objectives had been reasonably achieved during the assessing period: The degree of effectiveness and efficiency of business operation; The reliability of the financial and related reports; The compliance of the relevant laws/regulations and company policies
VI. This Statement is a significant part of the Company’s annual report and prospectus available to the general public. If it contains false information or omits any material content, the Company is in violation of Article 20, Article 32, Article 171, and Article 174 set forth in the Taiwan’s Securities and Exchange Act.
VII. The Company hereby declares that this statement had been approved by the Board of Directors on Feb 11, 2022. Among the 7 attending Directors, no one raised any objection to the contents of this statement.

Innolux Corporation Chairman: Jin-Yang Hung President: Chu-Hsiang Yang

Hire an accountant to audit the Company’s internal control system and disclose the audit report made by accountants: None.
3.4.11 If any penalties are imposed on the Company and its personnel or punishments are imposed by the Company on personnel in violation of internal control system regulations in the past year and up to the date of report, and the results of the penalty may have a material effect on shareholders equity or stock price, specify the contents of the penalty, major deficiencies and improvement: None.
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3.4.12 Major Resolutions of Shareholders’ Meeting and Board Meetings

Important resolutions and implementation made by the 2021 Shareholders’ Meeting as of the printed date of annual report
(1) Adoption of 2020 Business Report and Financial Statements
- Status of execution: The voting result, the weight of approval was in accordance with the statutory requirements
- Implementation Status: The relevant forms have been submitted to the competent authority for reference and announcement on MOPS in accordance with the Company Law and other relevant laws and regulations.
(2) Adoption of 2020 Earnings Distribution Table
- Status of execution: The voting result, the weight of approval was in accordance with the statutory requirements
- Implementation Status: The Ex-dividend record date was set on August 2, 2021, and payment date of cash dividend distribution was on August 24, 2021. The distribution of cash is NT$ 0.3 per share.
(3) Resolution to the Proposal of stock release plan of the subsidiary, InnoCare Optoelectronics Corporation
- Status of execution: The voting result, the weight of approval was in accordance with the statutory requirements
- Implementation Status: based on the number of shares held by each shareholder in shareholders’ roster of the Company as of July 29, 2021, calculate the number of shares available for subscription by the subscription ratio (per thousand shares can subscribe 0.99986 shares). If the total number of shares subscribed by shareholders is less than 10,500 thousand shares, the Chairperman is authorized to negotiate with a specific person to subscribe. The shares were issued on November 18, 2021.
(4) Resolution to the Proposal of cash distribution from capital surplus
- Status of execution: The voting result, the weight of approval was in accordance with the statutory requirements
- Implementation Status: The Ex-dividend record date was set on August 2, 2021, and payment date of cash dividend distribution was on August 24, 2021. The distribution of cash is NT$ 0.1 per share.
(5) Amendment to the Articles of Incorporation
- Status of execution: The voting result, the weight of approval was in accordance with the statutory requirements
- Implementation Status: It has been registered with the competent authority in accordance with the Company law and other relevant laws and regulations.
(6) Amendment to the rules of shareholders’ meeting
- Status of execution: The voting result, the weight of approval was in accordance with the statutory requirements
- Implementation Status: The Company uploaded to the MOPS and disclosed on the Company website on July 14, 2021, and matters were handled in accordance with the amended procedures.
(7) Amendment to the Election Rules of Directors
- Status of execution: The voting result, the weight of approval was in accordance with the statutory requirements

Implementation Status: The Company uploaded to the MOPS and disclosed on the Company website on July 14, 2021, and matters were handled in accordance with the amended procedures.

74 -
Important resolutions by the Board for 2021 prior to the deadline of annual report publication

Date	Major resolutions
8-11 Board Meeting February 4, 2021	1. The Company's Business Plan in 2021 2. Proposal of the capital expenditures for the Company in 2021 3. Proposal of 2020 Allocation on Directors and Employees Remuneration Distribution 4. Proposals of 2020 Parent company only and Consolidated financial statements 5. Passed the Accountant assessment of the independence and appropriateness 6. Amendments to the Articles of Incorporation 7. Proposal to convene 2021 Annual General Shareholders’ Meeting 8. Declaration of the Company’s internal control system 2020 9. In the fourth quarter of 2020, setting up base date for issuing of new shares for the first issuance of overseas unsecured convertible bonds in 2019 10. Proposal for executing loan agreements with financial institutions. 11. Proposal for the remuneration of Directors(including Independent Directors) 12. Proposal for the remuneration of managerial officers
8-12 Board Meeting May 11, 2021	1. The Company’s Business Report in 2020 2. Proposals of 2020 Earnings Distribution Table 3. Proposal of distributing cash from capital surplus 4. Proposal of stock release plan of the subsidiary, InnoCare Optoelectronics Corporation 5. Amendments to the Articles of Incorporation 6. Amendments to the Election Rules of Directors 7. Proposal to convene 2021 Annual General Shareholders’ Meeting (adding discussion motions) 8. In the first quarter of 2021, setting up base date for issuing of new shares for the first issuance of overseas unsecured convertible bonds in 2019 9. Proposal for executing loan agreements with financial institutions 10. Proposal to donate to Innolux Education Foundation
8-13 Board Meeting June 7,2021	1. Proposal of announcement of change of date for AGM in accordance with Measures for Public Companies to Postpone Shareholders' Meetings for Pandemic Prevention
8-14 Board Meeting June 25,2021	1. Proposal of changes the venue for the AGM in 2021
8-15 Board Meeting August 3, 2021	1. Share release matters of the subsidiary, InnoCare Optoelectronics Corporation 2. The long-term supply agreement between the Company and its strategic partner, S SDP Global (China) Co., Ltd. 3. In the second quarter of 2021, setting up base date for issuing of new shares for the first issuance of overseas unsecured convertible bonds in 2019 4. Proposal of the early redemption and delisting of the Company's first overseas unsecured convertible bonds 5. Proposal for executing loan agreements with financial institutions 6. Proposal for the remuneration of managerial officers and Directors(including Independent Directors) 7. Proposals for managers’ and employees’ remuneration in 2020
8-16 Board Meeting October 28, 2021	1. Proposal of 2022 Audit plan 2. In the third quarter of 2021, setting up base date for issuing of new shares for the first issuance of overseas unsecured convertible bonds in 2019 3. Proposal for executingloan agreements with financial institutions.
8-17 Board Meeting February 11, 2022	1. The Company's Business Plan in 2022 2. Proposal of the capital expenditures for the Company in 2022 3. Proposal of 2021 Allocation on Directors and Employees Remuneration Distribution 4. Proposals of 2021 Parent company only and Consolidated financial statements 5. Passed the Accountant assessment of the independence and appropriateness 6. Amendments to the Articles of Incorporation 7. Proposal to overall re-election of Directors

75 -

Date

Major resolutions

8. Proposal to convene 2022 Annual General Shareholders’ Meeting
9. Declaration of the Company’s internal control system 2021
10. Amendments to Sustainable Development Best Practice Principles and Corporate
Governance Principles
11. Proposal for executing loan agreements with financial institutions.
12. Proposal for the remuneration of managerial officers and Directors(including Independent
Directors)

3.4.13 Major Issues of Record or Written Statements Made by Any Directors Dissenting to Important Resolutions Passed by the Board of Directors: None.

3.4.14 Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO, and Heads of Accounting, Finance, Internal Audit and R&D: None.

3.5 Information Regarding Accountants’ Fees

3.5.1 Accountants’ Fees

	Audit Fee: NT$thousands	Audit Fee: NT$thousands	Audit Fee: NT$thousands	Audit Fee: NT$thousands	Audit Fee: NT$thousands	Audit Fee: NT$thousands
Accounting Firm	Name of CPA	Period Covered by CPA’s	Audit Fee	Non-Audit Fee	Total	Remarks
PwC Taiwan	Sheng-Chung Hsu	2021/01/01	2021/12/31	10,658	6,555	17,213
	Hua-Ling Liang

3.5.2. Replaced the audit firm and the audit fee paid to the new audit firm was less than the payment of the previous year: None.
3.5.3 Audit fee reduced more than 10% year over year, required to disclose the reduced amount, proportion, and reason: None.
3.5.2The professional fees for auditing services referred means the professional fees paid by the Company to a certified public accountant for auditing, review, and secondary reviews of financial reports, financial forecast reviews, and tax certification.

3.6 Replacement of CPA

3.6.1 About predecessor CPA: N/A.

3.6.2 About the Successor CPA: N/A.

3.6.3 Reply of the Previous Accountant: N/A.

3.7 The Company’s chairman, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its CPA or at an affiliated enterprise: None.
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3.8 Changes in Shareholding of Directors, Managers and Major Shareholders

3.8.1 Changes in Shareholding of Directors, Managers and Major Shareholders

Unit: Per share

				Unit: Per share	Unit: Per share
Title	Name (Note 1)	2021		As of Apr. 30, 2022
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman &CEO	Jin-YangHung	17,752	`－`	`－`	`－`
Director	Jyh-Chau Wang	(421,000)	`－`	`－`	`－`
Institutional Director	Hyield Venture Capital Co., Ltd	`－`	`－`	`－`	`－`
	Chu-HsiangYang (Note 2)	17,752	`－`	`－`	`－`
Institutional Director	Hyield Venture Capital Co., Ltd	`－`	`－`	`－`	`－`
	Chin-LungTing (Note 3)	(695,000)	`－`	`－`	`－`
Independent Director	Chi-Chia Hsieh	`－`	`－`	`－`	`－`
Independent Director	Zhen-Wei Wang	`－`	`－`	`－`	`－`
Independent Director	StanleyYuk Lun Yim	`－`	`－`	`－`	`－`
Vice President	Jun-Yi Yu	9,172	`－`	`－`	`－`
Vice President	Hung-Wen Yang	`－`	`－`	`－`	`－`
Vice President	Chih-MingChen	(248,000)	`－`	`－`	`－`
Vice President	Yu Shui Kuo	`－`	`－`	`－`	`－`
Vice President	Ke-Yi Kao	(63,000)	`－`	`－`	`－`
Associate Vice President	Tai-Chi Pan	(381,000)	`－`	(34,000)	`－`
Associate Vice President	Qing-Hui Lin	(36,000)	`－`	`－`	`－`
Associate Vice President	Jing-Wen Huang	`－`	`－`	`－`	`－`
Associate Vice President	Jhih-Syuan Wang	62,716	`－`	`－`	`－`
Associate Vice President	Chien-Hung Liao (Note 4)	`－`	`－`	`－`
Associate Vice President	Jhih-Siou Liou	7,210	`－`	`－`	`－`
Associate Vice President	Kun Ma	34,841	`－`	`－`	`－`

Note 1: Refers to current managerial officers as of the printing date of the annual report Note 2: President & COO Note 3: Dismissal on May 7, 2021 as an Executive Vice President. Note 4: Newly appointed on December 20, 2021; therefore, the changes of shareholding do not count in.

3.8.2 Shares Trading with Related Parties `：` None

3.8.3 Shares Pledge with Related Parties ： None

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3.9 Relationship among the Top Ten Shareholders

Name	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Related Party (Between Top 10 Shareholders)	Related Party (Between Top 10 Shareholders)	Remarks
	Shares	%	Shares	%	Shares	%	Name	Relationship
Yuanta Taiwan Dividend Plus ETF	214,142,866	2.03%	－	－	－	－	N.A.	N.A.	－
Hyield Venture Capital Co., Ltd	176,311,219	1.67%	－	－	－	－	Hon Hai Precision Ind. Co., Ltd.	Subsidiary of Hon Hai Precision Ind. Co.,Ltd.	－
Representative： Te-Tsai Huang	212,619	－	－	－	－	－	N.A.	N.A.	－
Hon Hai Precision Ind. Co., Ltd.	147,965,363	1.40%	－	－	－	－	Hyield Venture Capital Co., Ltd	Parent Company of Hyield Venture Capital Co.,Ltd	－
Representative： Yang-Wei Liu	－	－	－	－	－	－	N.A.	N.A.	－
Foxconn Technology Co., Ltd.	127,556,349	1.21%	－	－	－	－	Hon Hai Precision Ind. Co., Ltd.	Investee under the equity method	－
Representative： Chun-Fu Lu	－	－	－	－	－	－	N.A.	N.A.	－
Hua Zhu Investment Co., Ltd	121,036,800	1.15%	－	－	－	－	Foxconn Technology Co., Ltd.	Subsidiary of Foxconn Technology Co., Ltd.	－
Representative： Yuan-Wen Lan	－	－	－	－	－	－	N.A.	N.A.	－
Vanguard Emerging Markets Stock Index Fund, a series of Vanguard International Equity Index Funds	91,447,372	0.87%	－	－	－	－	N.A.	N.A.	－
Pan-International Industrial Corp.	82,705,987	0.78%	－	－	－	－	Hon Hai Precision Ind. Co.,Ltd.	Investee under the equitymethod	－
Representative： Sung-Fa Lu	－	－	－	－	－	－	N.A.	N.A.	－
Terry Tai-Ming Guo	79,298,000	0.75%	－	－	－	－	Hon Hai Precision Ind. Co.,Ltd.	Director of the Company	－
TaipeiFubon Bank in custody for Innolux Corporation Trust Account	70,647,629	0.67%	－	－	－	－	N.A.	N.A.	－
New Labor Pension Fund	70,020,000	0.66%	－	－	－	－	N.A.	N.A.	－

3.10 Ownership of Shares in Affiliated Enterprises

Unit: Shares; December 31, 2021

Affiliated Enterprises	Ownership by the Company	Ownership by the Company	Direct or Indirect Ownership by Directors/Managers	Direct or Indirect Ownership by Directors/Managers	Total Ownership	Total Ownership
	Shares	%	Shares	%	Shares	%
CarUX Holding Limited	—	—	125,231,749	100%	125,231,749	100%
CarUX Technology Pte. Ltd.	—	—	125,131,749	100%	125,131,749	100%
Double Star Inc.	—	—	10,000,000	100%	10,000,000	100%
Innocare Optoelectronics Europe B.V.	—	—	500	100%	500	100%
InnoCare Optoelectronics Japan Co., Ltd.	—	—	30,010	100%	30,010	100%
InnoCare Optoelectronics USA, INC.	—	—	900,000	100%	900,000	100%

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Affiliated Enterprises	Ownership by the Company	Ownership by the Company	Direct or Indirect Ownership by Directors/Managers	Direct or Indirect Ownership by Directors/Managers	Total Ownership	Total Ownership
	Shares	%	Shares	%	Shares	%
Innolux Europe B.V.	—	—	375,810	100%	375,810	100%
Innolux Holding Ltd.	180,568,185	100%	—	—	180,568,185	100%
Innolux Hong Kong Holding Limited	1,158,844,000	100%	—	—	1,158,844,000	100%
Innolux Hong Kong Limited	—	—	35,000,000	100%	35,000,000	100%
Innolux Japan Co., Ltd.	98	54.44%	82	45.56%	180	100%
Innolux Optoelectronics Hong Kong Holding Ltd.	—	—	162,897,802	100%	162,897,802	100%
Innolux Optoelectronics India Private Limited	—	—	144,095,500	100%	144,095,500	100%
Innolux Optoelectronics Philippines Corp.	—	—	5,000,000	100%	5,000,000	100%
Innolux Singapore Holding Pte. Ltd.	25,400,000	100%	—	—	25,400,000	100%
Innolux Technology Germany GmbH	—	—	100,000	100%	100,000	100%
Innolux USA Inc.	—	—	12,842	100%	12,842	100%
Keyway Investment Management Limited	1,656,410	100%	—	—	1,656,410	100%
Landmark International Ltd.	709,450,000	100%	—	—	709,450,000	100%
Nets Trading Ltd.	—	—	900,001	100%	900,001	100%
Rockets Holding Ltd.	—	—	160,504,550	100%	160,504,550	100%
Stanford Developments Ltd.	—	—	164,000,000	100%	164,000,000	100%
Suns Holding Ltd.	—	—	18,177,052	100%	18,177,052	100%
Toppoly Optoelectronics (B.V.I.) Ltd.	146,847,000	100%	—	—	146,847,000	100%
Toppoly Optoelectronics (Cayman) Ltd.	—	—	146,817,000	100%	146,817,000	100%
Warriors Technology Investments Ltd.	—	—	18,177,052	100%	18,177,052	100%
Shanghai Innolux Optoelectronics Ltd.	—	—	—	100%	—	100%
Yuan Chi investment co., Ltd	—	100%	—	—	—	100%
Foshan Innolux Optoelectronics Ltd.	—	—	—	100%	—	100%
Foshan Innolux Logistics Ltd.	—	—	—	100%	—	100%
NanjingInnolux TechnologyLtd.	—	—	—	100%	—	100%
NanjingInnolux Optoelectronics Ltd.	—	—	—	100%	—	100%
GIO(maanshan) Optoelectronics Corp.	—	—	—	100%	—	100%
GIO Optoelectronics Corp.	41,288,528	76.43%	443,872	0.82%	41,365,763	77.25%
InnoJoyInvestment Corp.	167,405,392	100%	—	—	167,405,392	100%
Innocom Technology(Shenzhen) Ltd.	—	—	—	100%	—	100%
Inno Capital Corporation	—	—	1,500,000	100%	1,500,000	100%
CarUX Technology Inc.	—	—	140,000,000	100%	140,000,000	100%
Ningbo Innolux Electronics Ltd.	—	—	—	100%	—	100%
Ningbo Innolux Optoelectronics Co., LTD	—	—	—	100%	—	100%
Ningbo Innolux DisplayLTD	—	—	—	100%	—	100%
Ningbo CarUX TechnologyLtd.	—	—	—	100%	—	100%
InnoCare Optoelectronics Corporation	20,500,000	58.60%	591,993	1.69%	21,091,993	60.29%
INStek Corporation	2,647,507	40.01%	—	—	2,647,507	40.01%

Note: Long-term equity investment of the Company calculated according to the equity method.

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IV. Capital Overview

4.1 Capital and Shares

4.1.1 Source of Capital

1. Type of Stock

Unit: Shares April, 26, 2022

Share Type	Authorized Capital	Authorized Capital	Authorized Capital	Remarks
	Issued Shares	Un-issued Shares	Total
Common Shares	10,559,620,051	1,440,379,949	12,000,000,000

2. Issued Shares

Unit: Shares thousand; NT thousand

Month/ Year	Par Value	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remark	Remark	Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other than Cash	Other
2003.01	—	120,000	1,200,000	35,000	350,000	Created at inception	None	2003.1.14 Yuan- Shang-Zih No. 0920001669
2003.05	10	120,000	1,200,000	100,000	1,000,000	65 million shares from cash capital increase	None	2003.5.30 Yuan- Shang-Zih No. 0920013164
2003.10	10	1,000,000	10,000,000	300,000	3,000,000	200 million shares from cash capital increase	None	2003.11.7 Yuan- Shang-Zih No. 0920030835
2004.04	10	1,000,000	10,000,000	900,000	9,000,000	600 million shares from cash capital increase	None	2004.5.24 Yuan- Shang-Zih No. 0930013914
2004.09	12	2,500,000	25,000,000	1,500,000	15,000,000	600 million shares from cash capital increase	None	2004.10.26 Yuan- Shang-Zih No. 9300030355
2005.06	14	2,500,000	25,000,000	2,100,000	21,000,000	600 million shares from cash capital increase	None	2005.7.22 Yuan- Shang-Zih No. 0940019992
2006.01	—	2,500,000	25,000,000	2,106,624	21,066,240	6.624 million new shares issued upon the exercise of employee stock options	None	2006.2.13 Yuan- Shang-Zih No. 0950002674
2006.04	—	2,500,000	25,000,000	2,111,856	21,118,560	5.232 million new shares issued upon the exercise of employee stock options	None	2006.5.9 Yuan- Shang-Zih No. 0950011150
2006.09	—	2,500,000	25,000,000	2,112,129	21,121,290	273 thousand new shares issued upon the exercise of employee stock options	None	2006.10.16 Yuan- Shang-Zih No. 0950026853
2006.10	41	3,300,000	33,000,000	2,312,129	23,121,290	200 million shares from cash capital increase	None	2006.12.04 Yuan- Shang-Zih No. 0950032417
2007.01	—	3,300,000	33,000,000	2,326,056	23,260,560	13.927 million new shares issued upon the exercise of employee stock options	None	2007.2.9 Yuan- Shang-Zih No. 0960003715
2007.03	—	3,300,000	33,000,000	2,331,706	23,317,062	5.650 million shares from capital increase in connection with merger	None	2007.5.30 Yuan- Shang-Zih No. 0960014540
2007.04	—	3,300,000	33,000,000	2,331,761	23,317,612	55 thousand new shares issued upon the exercise of employee stock options	None	2007.5.31 Yuan- Shang-Zih No. 0960014605
2007.08	—	3,300,000	33,000,000	2,340,765	23,407,652	9.004 million new shares issued upon the exercise of employee stock options	None	2007.8.30 Yuan- Shang-Zih No. 0960023196
2007.09	—	3,300,000	33,000,000	2,442,155	24,421,550	101.390 million shares from capital increase through capitalization of retained earnings	None	2007.9.19 Yuan- Shang-Zih No. 0960025459
2007.10	—	3,300,000	33,000,000	2,442,372	24,423,720	217 thousand new shares issued upon the exercise of employee stock options	None	2007.10.29 Yuan- Shang-Zih No. 0960029080

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Month/ Year	Par Value	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remark	Remark	Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other than Cash	Other
2007.11	146	3,300,000	33,000,000	2,742,372	27,423,720	300 million shares from cash capital increase to participate in the issuance of overseas depositaryreceipts	None	2007.12.10 Yuan- Shang-Zih No. 0960033616
2008.02	—	3,300,000	33,000,000	2,751,026	27,510,260	8.654 million new shares issued upon the exercise of employee stock options	None	2008.2.12 Yuan- Shang-Zih No. 0970003364
2008.05	—	3,300,000	33,000,000	2,757,583	27,575,830	6.557 million new shares issued upon the exercise of employee stock options	None	2008.5.14 Yuan- Shang-Zih No. 0970012623
2008.08	—	3,300,000	33,000,000	2,770,270	27,702,700	12.687 million new shares issued upon the exercise of employee stock options	None	2008.8.21 Yuan- Shang-Zih No. 0970023231
2008.09	—	4,500,000	45,000,000	3,112,297	31,122,970	342.027 million shares from capital increase through capitalization of retained earnings	None	2008.9.9 Yuan- Shang-Zih No. 0970025445
2008.11	—	4,500,000	45,000,000	3,113,147	31,131,470	850 thousand new shares issued upon the exercise of employee stock options	None	2008.11.18 Yuan- Shang-Zih No. 0970032346
2009.03	—	4,500,000	45,000,000	3,123,695	32,236,950	10.548 million new shares issued upon the exercise of employee stock options	None	2009.3.2 Yuan- Shang-Zih No. 0980005613
2009.05	—	4,500,000	45,000,000	3,128,546	31,285,460	4.851 million new shares issued upon the exercise of employee stock options	None	2009.5.18 Yuan- Shang-Zih No. 0980013470
2009.07	—	4,500,000	45,000,000	3,138,537	31,385,370	9.991 million new shares issued upon the exercise of employee stock options	None	2009.7.23 Yuan- Shang-Zih No. 0980020313
2009.09	—	4,500,000	45,000,000	3,243,122	32,431,222	104.585 million shares from capital increase through capitalization of retained earnings	None	2009.9.7 Yuan- Shang-Zih No. 0980024824
2009.11	—	4,500,000	45,000,000	3,244,596	32,445,960	1.474 million new shares issued upon the exercise of employee stock options	None	2009.11.19 Yuan- Shang-Zih No. 0980032198
2010.02	—	4,500,000	45,000,000	3,254,841	32,548,410	10.245 million new shares issued upon the exercise of employee stock options	None	2010.2.12 Yuan- Shang-Zih No. 0990004357
2010.03	—	10,500,000	105,000,000	8,032,930	80,329,300	4,778,089 thousand common stocks from capital increase in connection with merger; private placement of 731.707 million preferred shares	None	2010.3.30 Yuan- Shang-Zih No. 0990008717
2010.04	—	10,500,000	105,000,000	8,040,837	80,408,370	7.907 million new shares issued upon the exercise of employee stock options	None	2010.4.29 Yuan- Shang-Zih No. 0990011506
2010.08	—	10,500,000	105,000,000	8,043,497	80,434,970	2.660 million new shares issued upon the exercise of employee stock options	None	2010.8.26 Yuan- Shang-Zih No. 0990025097
2010.11	—	10,500,000	105,000,000	7,311,789	73,117,890	Reduced capital by 731.707 million shares through private placement ofpreferred shares	None	2010.11.11 Yuan- Shang-Zih No. 0990033742
2011. 01	—	10,500,000	105,000,000	7,311,809	73,118,090	20 thousand new shares issued upon the exercise of employee stock options	None	2011.1.3 Yuan- Shang-Zih No. 1000000178
2011. 03	—	10,500,000	105,000,000	7,312,674	73,126,740	865 thousand new shares issued upon the exercise of employee stock options	None	2011.3.25 Yuan- Shang-Zih No. 1000007874
2011.05	—	10,500,000	105,000,000	7,312,804	73,128,040	130 thousand new shares issued upon the exercise of employee stock options	None	2011.5.4 Yuan- Shang-Zih No. 1000012352
2011.07	—	10,500,000	105,000,000	7,312,904	73,129,040	100 thousand new shares issued upon the exercise of employee stock options	None	2011.7.26 Yuan- Shang-Zih No. 1000021596
2011.11	—	10,500,000	105,000,000	7,312,970	73,129,708	66 thousand new shares issued upon the exercise of employee stock options	None	2011.11.28 Yuan- Shang-Zih No. 1000035175
2012.10	9	10,500,000	105,000,000	7,912,970	79,129,700	600 million shares from cash capital increase	None	2012.10.15 Yuan-Shang-Zih No. 1010031831

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Month/ Year	Par Value	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remark	Remark	Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other than Cash	Other
2013.02	12.98	10,500,000	105,000,000	9,037,970	90,379,700	1.125 billion shares from cash capital increase to participate in the issuance of overseas depositaryreceipts	None	2013.2.18 Yuan-Shang-Zih No. 1020005087
2013.02	5/-	10,500,000	105,000,000	9,100,272	91,002,720	Issuance of 31,151,000 new shares with restricted employee rights at positive consideration Issuance of 31,151,000 new shares with restricted employee rights at nil consideration	None	2013.2.21 Yuan-Shang-Zih No. 1020005099
2013.04	5/-	10,500,000	105,000,000	9,101,960	91,019,600	Issuance of 844 thousand new shares with restricted employee rights at positive consideration Issuance of 844 thousand new shares with restricted employee rights at nil consideration	None	2013.4.16 Yuan-Shang-Zih No. 1020010954
2013.08	—	10,500,000	105,000,000	9,101,670	91,016,700	Capital reduced by 290 thousand new shares with restricted employee rights	None	2013.8.23 Yuan-Shang-Zih No. 1020025484
2013.11	—	10,500,000	105,000,000	9,100,892	91,008,920	Capital reduced by 778 thousand new shares with restricted employee rights	None	2013.11.27 Yuan-Shang-Zih No. 1020036156
2013.12	5/-	10,500,000	105,000,000	9,109,428	91,094,280	Issuance of 4,268 thousand new shares with restricted employee rights at positive consideration Issuance of 4,268 thousand new shares with restricted employee rights at nil consideration	None	2013.12.27 Yuan-Shang-Zih No. 1020040096
2014.04	—-	10,500,000	105,000,000	9,106,457	91,064,570	Capital reduced by 2,970 thousand new shares with restricted employee rights	None	2014.4.10 Zhu- Shang-Zih No.1030009955
2014.09	12.5	10,500,000	105,000,000	9,956,457	99,564,570	850 million shares from cash capital increase	None	2014.9.5 Zhu- Shang-Zih No.1030026932
2014.09	—	10,500,000	105,000,000	9,955,407	99,554,070	Capital reduced by 1,049 thousand new shares with restricted employee rights	None	2014.9.5 Zhu- Shang-Zih No.1030026932
2014.11	—	10,500,000	105,000,000	9,954,536	99,545,360	Capital reduced by 871 thousand new shares with restricted employee rights	None	2014.11.19 Zhu- Shang-Zih No.1030033761
2015.03	—	10,500,000	105,000,000	9,954,224	99,542,240	Capital reduced by 312 thousand new shares with restricted employee rights	None	2015.3.17 Zhu- Shang-Zih No.1040007082
2015.05	—	10,500,000	105,000,000	9,953,797	99,537,970	Capital reduced by 417 thousand new shares with restricted employee rights	None	2015.5.20 Zhu- Shang-Zih No.1040013755
2015.08	—	10,500,000	105,000,000	9,953,583	99,535,830	Capital reduced by 214 thousand new shares with restricted employee rights	None	2015.8.19 Zhu- Shang-Zih No.1040023797
2015.11	—	10,500,000	105,000,000	9,953,237	99,532,370	Capital reduced by 345 thousand new shares with restricted employee rights	None	2015.11.18 Zhu- Shang-Zih No.1040033254
2016.02	—	10,500,000	105,000,000	9,952,682	99,526,820	Capital reduced by 556 thousand new shares with restricted employee rights	None	2016.2.26 Zhu- Shang-Zih No.1050004985
2016.05	—	10,500,000	105,000,000	9,952,351	99,523,510	Capital reduced by 330 thousand new shares with restricted employee rights	None	2016.5.23 Zhu- Shang-Zih No.1050013777
2016.08	—	10,500,000	105,000,000	9,952,210	99,522,100	Capital reduced by 141 thousand new shares with restricted employee rights	None	2016.8.16 Zhu- Shang-Zih No.1050022641
2016.11	—	10,500,000	105,000,000	9,952,149	99,521,490	Capital reduced by 62 thousand new shares with restricted employee rights	None	2016.11.15 Zhu- Shang-Zih No.1050031553
2017.03	—	10,500,000	105,000,000	9,952,078	99,520,780	Capital reduced by 70 thousand new shares with restricted employee rights	None	2017.3.3 Zhu- Shang-Zih No.1060005404
2017.05	—	10,500,000	105,000,000	9,952,072	99,520,720	Capital reduced by 6 thousand new shares with restricted employee rights	None	2017.5.26 Zhu- Shang-Zih No.1060014186
2019.11	—	10,500,000	105,000,000	9,711,072	97,110,720	Treasury shares canceled 241 thousand shares	None	2019.11.19 Zhu- Shang-Zih

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Month/ Year	Par Value	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remark	Remark	Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other than Cash	Other
								No.1080033144
2021.03	—	12,000,000	120,000,000	9,940,433	99,404,330	Exchanges to new shares (229,361 thousand shares) from overseas convertible corporate Bond	None	2021.3.8 Zhu- Shang-Zih No.1100005722
2021.05	—	12,000,000	120,000,000	10,248,320	102,483,196	Exchanges to new shares (307,886 thousand shares) from overseas convertible corporate Bond	None	2021.5.27 Zhu- Shang-Zih No.1100015162
2021.08	—	12,000,000	120,000,000	10,501,408	105,014,079	Exchanges to new shares (253,088 thousand shares) from overseas convertible corporate Bond	None	2021.8.19 Zhu- Shang-Zih No. 1100023382
2021.11	—	12,000,000	120,000,000	10,559,620	105,596,200	Exchanges to new shares (58,212 thousand shares) from overseas convertible corporate Bond	None	2021.11.16 Zhu- Shang-Zih No.1100033414

3. Information for Shelf Registration: None

4.1.2 Status of Shareholders

		As of April,26,2022	As of April,26,2022	As of April,26,2022	As of April,26,2022	As of April,26,2022
Item	Government Agencies	Financial Institutions	Other Juridical Person	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Number of Shareholders	8	29	677	627,234	1,411	629,359
Shareholding (shares)	83,794,049	261,985,331	1,096,150,792	6,853,623,430	2,264,066,449	10,559,620,051
Percentage	0.79%	2.48 %	10.38 %	64.90 %	21.44 %	100.00%

4.1.3 Shareholding Distribution Status

1. Common Shares

4.1.3 Shareholding Distribution Status 1. Common Shares	4.1.3 Shareholding Distribution Status 1. Common Shares	4.1.3 Shareholding Distribution Status 1. Common Shares	4.1.3 Shareholding Distribution Status 1. Common Shares
As of April,26,2022
Class of Shareholding (Shares)	Number of Shareholders	Shareholding (Shares)	Percentage
1 ~ 999	73,998	21,756,845	0.21%
1,000 ~ 5,000	351,032	847,255,803	8.02%
5,001 ~ 10,000	93,369	756,809,807	7.17%
10,001 ~ 15,000	31,638	408,838,198	3.87%
15,001 ~ 20,000	23,885	448,474,146	2.28%
20,001 ~ 30,000	19,877	516,187,978	4.25%
30,001 ~ 40,000	9,573	347,653,028	3.29%
40,001 ~ 50,000	6,625	312,164,811	2.96%
50,001 ~ 100,000	11,124	813,358,590	7.70%
100,001 ~ 200,000	4,639	664,126,482	6.29%
200,001 ~ 400,000	1,932	542,830,723	5.14%
400,001 ~ 600,000	584	287,413,489	2.72%
600,001 ~ 800,000	263	183,212,590	1.74%
800,001 ~ 1,000,000	159	144,193,312	1.36%
1,000,001 or over	661	4,265,344,249	40.39%
Total	629,359	10,559,620,051	100.00%

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4.1.4 List of Major Shareholders

4.1.4 List of Major Shareholders
	As of April,26,2022
Shareholder's Name	Shareholding
	Shares	Percentage
Yuanta Taiwan Dividend Plus ETF	214,142,866	2.03%
Hyield Venture Capital Co.,Ltd	176,311,219	1.67%
Hon Hai Precision Ind. Co.,Ltd.	147,965,363	1.40%
Foxconn TechnologyCo.,Ltd.	127,556,349	1.21%
Hua Zhu Investment Co.,Ltd	121,036,800	1.15%
Vanguard Emerging Markets Stock Index Fund, a series of Vanguard International EquityIndex Funds	91,447,372	0.87%
Pan-International Industrial Corp.	82,705,987	0.78%
TerryTai-MingGuo	79,298,000	0.75%
TaipeiFubon Bank in custodyfor Innolux Corporation Trust Account	70,647,629	0.67%
New Labor Pension Fund	70,020,000	0.66%

4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share

	Unit: NT$thousand share	Unit: NT$thousand share	Unit: NT$thousand share	Unit: NT$thousand share	Unit: NT$thousand share
Item	Year		2020	2021	As of March 31, 2022
Market Price Per Share	Highest Market Price		15.95	32.55	19.8
	Lowest Market Price		4.85	12.45	16.5
	Average Market Price		8.66	19.01	17.54
Net Worth Per Share	Before Distribution		23.88	28.82	29.02
	After Distribution		23.46	(Note)	－
Earnings Per Share	Weighted Average Shares (thousand shares)		9,664,728	10,395,532	10,559,620
	Earnings Per Share(in dollars)		0.17	5.53	0.18
Dividends Per Share	Cash Dividends		0.4	1.05(Note)	N.A.
	Stock Dividends	Dividends from Retained Earnings	－	－	－
		Dividends from Capital Surplus	－	－	－
	Accumulated Undistributed Dividends		－	－	－
Return on Investment	Price/Earnings Ratio		50.94	3.44	97.44
	Price/Dividend Ratio		21.65	18.10	N.A.
	Cash Dividend Yield Rate		4.62%	5.52%	N.A.

Note: 2021 earnings appropriation has already got approval from the Board of Directors, subject to shareholders’ approval in Annual General Shareholders’ Meeting.

4.1.6 Dividend Policy and Implementation Status

1. Dividend Policy

The annual net profits of final accounts of the Company shall make up for loss first, shall secondly appropriate 10% of profit as legal reserve (however, if legal reserve reaches the total capital amount shall not apply), to make an appropriation of another sum as special reserve or make an reversal of special reserve in accordance with laws and regulation, to distribute dividend for special/preferred shares, and to add into the profit not yet distributed before, the allocation proposal shall be prepared by the Board of Directors and be submitted to and resolved by the shareholders’ meeting.

The Company shall set aside to special reserve, from prior period’s undistributed earnings, an amount equal

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to net deductions from other equity. If the amount is not sufficient, the Company should further set aside from the current period's net profits plus other items to be included in the current period's undistributed earnings.

Depending on the Company's long-term financial planning, investment environment, industry competition, capital expenditure budget, funding requirements and protection of shareholders' equity, dividends should be paid at a rate of no less than 20% of the current year's distributable earnings; however, if the distributable earnings are less than 2% of the paid-in capital, the Company may resolve to transfer the entire amount to retained earnings without distribution. For earnings distribution, cash dividends are preferred but it may also be in the form of stock dividends, with no less than 50% of the earnings to be distributed with cash dividends. The aforementioned dividend distribution percentage may be adjusted based on financial, business and operating factors.

2. Proposed Distribution of Dividend

It is proposed to allocate a dividend of NT$11,087,601,054 to shareholders from the2021 distributable earnings (NT$ 1.05 per share). It is proposed that the Chairman be authorized to decide the distribution record date, the distribution date, and other related matters after this proposal is resolved by the shareholders’ meeting.

3. Significant changes of Dividend policy: None.

4.1.7 Effect of the proposed stock dividends (to be adopted by the shareholders' meeting) on the operating performance and earnings per share:

Not applicable. There is no stock dividend distribution proposed in this shareholders' meeting.

4.1.8 Remuneration of Employees and Directors

1. Information Relating to Remuneration of Employees and Directors in the Articles of Incorporation

Article 21 of the Articles of Incorporation stipulates that: The distribution of employees' remuneration shall not be lower than 5% of and the Directors’ remuneration shall not be higher than 0.1% of the current year pretax income before deducting the distributable employees’ and Directors’ remuneration of the Company. However, the Company's accumulated losses shall have been covered.

The Company shall, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of Directors, have the profit distributable as employees' remuneration distributed in the form of shares or in cash and have the profit distributable as Directors’ remuneration in the form of cash; and in addition, there to a report of such distribution shall be submitted to the shareholders' meeting.

The target to be distributed employees’ remuneration in the form of shares or cash may include employees of subsidiary companies who conform to certain criteria. Relevant regulations shall be authorized to be prescribed by the Board of Directors.

2.The basis for estimating the amount of employee, Directors, and supervisor

remuneration, for calculating the number of shares to be distributed as employee remuneration, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period.

The Company has an amount equivalent to a certain percentage of the current net earnings (net income before tax before deducting the remuneration to employees and the remuneration to Directors) minus the accumulated losses estimated and appropriated as remuneration to employees and remuneration to Directors, which will be reported as operating cost or operating expense. The remuneration to employees paid with stock

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are with the number of shares calculated in accordance with the closing price of common stock in the day prior to the resolution reached by the Board of Directors, and the Company will no longer take account of ex-right and ex-dividend. If there is any change in the estimated stock share to be distributed after the publication of the financial report in the following year, it is to be treated as changes in accounting estimates and with the effect of such change recognized in the profit and loss of the following year.

3. 2021 Distribution of Remuneration of Employees, Directors for Approved in the Board of Directors Meeting

(1) The amount of any employee remuneration distributed in cash or stocks and remuneration for Directors. If there is any discrepancy between that amount and the estimated figure for the fiscal year these expenses are recognized, the discrepancy, its cause, and the status of treatment shall be disclosed：

The Board of Directors of the Company has approved remuneration to employee in cash, NT$

4,246,994,277 and remuneration to Directors in cash, NT$ 65,338,373 on Feb. 11, 2022.

If there is any discrepancy between that amount and the estimated figure for the fiscal year these expenses are recognized, the discrepancy, its cause, and the status of treatment shall be disclosed ： None.

(2) The amount of any employee remuneration distributed in stocks, and the size of that amount as a percentage of the sum of the after-tax net income stated in the parent company only financial reports or individual financial reports for the current period and total employee remuneration：

The Company has not had stock shares distributed as remuneration to employees in the current year; therefore, it is not applicable.

4. Information of 2021 Distribution of Remuneration of Employees, Directors (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed) and, if there is any discrepancy between the actual distribution and the recognized employee, Directors remuneration, additionally the discrepancy, cause, and how it is treated. ：

(1) Actual distribution amount:

) Actual distribution amount:	) Actual distribution amount:	) Actual distribution amount:	) Actual distribution amount:
Unit: NT$ Share Remuneration of Employees Remuneration of Directors Distributed in Shares: Amount Distributed in Shares: Number of Shares Distributed in Cash －－ 139,348,956 2,143,830
Remuneration of Employees			Remuneration of Directors
Distributed in Shares: Amount	Distributed in Shares: Number of Shares	Distributed in Cash
－	－	139,348,956	2,143,830

(2) If there is any discrepancy between that actual and the recognized amount; the discrepancy, its cause, and the status of treatment shall be disclosed ： There is no discrepancy between the actual distribution amount and the recognized amount.

4.1.9 Buyback of Treasury Stock

There is no share buy-back status in most recent year and as of the printed date of the annual report.

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4.2 Bonds

4.2.1 Corporate Bonds:

4.2 Bonds 4.2.1 Corporate Bonds:	4.2 Bonds 4.2.1 Corporate Bonds:
Corporate Bond Type		First issue of overseas unsecured convertible corporate bonds of 2019
Issue date		January22,2020
Denomination		USD$200,000 or its integral multiple
Issuingand transaction location		Singapore Stock Exchange
Issueprice		The bond is issued at full face value
Totalprice		USD$300,000,000
Coupon rate		Coupon rate: 0%
Tenor		5 years Maturity: January22,2025
Guarantee agency		None
Consignee		BNY Mellon
Underwriting institution		UBS AG, Hong Kong Branch, Credit Suisse(HongKong)Limited
Certified lawyer		Baker Mckenzie Yu-Jie Shiau,Attorney-at-Law
CPA		PwC Taiwan Han-Chi Wu,CPA
Repayment method		Unless previously early redeemed, repurchased and cancelled or converted by the Bondholders, the Bonds will be redeemed at their principal amount with a yield calculated at the rate of 0%per annum on the MaturityDate.
Outstanding principal		USD$31,000,000
Terms of redemption or advance repayment		(1)The Issuer may, at its option, redeem the Bonds, in whole or in part, at an amount equal to the principal amount of the Bonds plus a tentative yield of 0% per annum (the “Early Redemption Amount”) if at any time after three years of the Issue Date, the closing price (converted into US dollars by using the prevailing exchange rate) for 20 consecutive trading days (in the event of ex-rights or ex-dividends, the closing price on each applicable trading days the period from the ex-rights or ex-dividends trading day to the ex-rights or ex-dividends record date, as the case may be, shall be adjusted to the price taking into account of impact of the ex-rights or ex- dividends) of the Issuer’s common shares on the Taiwan Stock Exchange (“TWSE”) is at least 130% of the Early Redemption Amount (as defined above) multiplied by the Conversion Price (converted into US dollar using the Fixed Exchange Rate on the pricing date) divided by the principal amount of the Bonds; or (2)The Issuer may, at its option, redeem the Bonds, in whole but not in part, at the Early Redemption Amount if more than 90% of the Bonds have been previously redeemed, repurchased and cancelled or converted; or (3)The Issuer may, at its option, redeem the Bonds, in whole but not in part, at the Early Redemption Amount if there is any change in ROC taxation resulting in increase of tax obligation or the necessity to pay additional interest expense or an increase of additional costs to the Issuer, Bondholders may elect not to have their Bonds redeemed but with no entitlement to anyadditional amount or reimbursement of additional tax.
Restrictive clause		None
Name of credit rating agency, rating date,ratingof corporate bonds		None
Other rights attached	As of the printing date of this annual report, converted amount of ordinary shares securities	USD$ 300,000,000
	Issuance and conversion method	Please refer to MOPS-various exclusive sections-bond section
Issuance and conversion, issuing condition dilution, and impact on existing shareholders’ equity		If the bond is fully converted, the maximum dilution ratio of the original shareholders’ equity is about 8.04%, but there is no significant dilution that affects the shareholders’ equity. It will increase equity fund, decline debt ratio, and strengthen financial structure. Thus, it will be more beneficial to the Company's future operation and development.
Transfer agent		None

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4.2.2 Convertible Bonds:

Corporate bond type		First issue of overseas unsecured convertible corporate bonds of 2019
Item	Year	2021
Market price of the convertible bond	Highest	US$307.75
	Lowest	US$129.00
	Average	US$185.18
Convertible Price		NT$10.38/Share
Issue date and conversion price at issuance		Issue Date: Jan. 22, 2020 Conversionprice at issuance: NT$10.72/share
Conversion methods		Issuingof new stocks

4.2.3 Exchangeable Bonds: None.

4.2.4 Shelf Registration for Issuing Bonds: None.

4.2.5 Corporate Bond with Warrants: None.

4.3 Status of preferred shares: None.

4.4 Global Depository Receipts: None.

4.5 Employee Stock Options: None.

4.6 Issuance of New Restricted Employee Shares: None.

4.7 Status of New Share Issuance in Connection with Mergers and Acquisitions: None.

4.8 Financing Plans and Implementation

The Company doesn’t have any uncompleted issuance plan or completed plan with unrealized benefit within the latest three years.

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V. Operational Highlights

5.1Business Activities

5.1.1Business Scope

A. Main areas of business operations

The combined operating revenue of the Company is derived from TFT-LCD Flat Panel Displays and its main commodities include large-sized and small-to-medium-sized TFT-LCD related products. Large-sized products are generally applied to Liquid Crystal Displays, BillBoards, Desktop Monitors, and notebooks, and industrial control. Small-to-medium-sized products are used to manufacture tablet computers, portable audio players, GPS for automobiles, aviation, smart home and mobile phones, wearable devices and other applications, while various types of touch-control panels could be selected. Besides, for the purpose of special usage, the Company also provides products used for medical, military, educational purposes, and electronic paper application. Given that the business of the Company covers the entire world and the size mix of panels is complete, the Company is a comprehensive LCD provider.

B. Revenue distribution

enue distribution	enue distribution	enue distribution
Unit: NT$thousand
Major Divisions	Total Sales in Year 2021	(%) of total sales
TFT-LCD	350,076,690	100%
Total	350,076,690	100%

C. Main products

The Company’s main products are TFT-LCD panels and touch-control modules and TV machine OEM. The products lines cover small, medium, and large sized panels mainly for a wide range of applications, such as LCD televisions, desktop monitors, notebook computers, tablets, mobile phones, portable audio players, wearable devices, automotive displays, medical, X-Ray, industrial, aeronautic, and educational products. The whole machine OEM uses the LCD TV as the main axis to assist the TV brand’s OEM manufacturing and realize the Company’s vision from the panel to the whole machine.

D. New products development

New products the company plans to develop are derived from flat panel displays with high technology extensions. For large size applications, the Company will continue to improve on enlargement, high resolution, high color saturation, high contrast, narrow bezel, high refresh rate, low blue light, and power saving; for small and medium size applications, the Company will develop products with high pixel, shaped cut, and integrated touch technology panels. The Company will continue to develop consumer electronics products such as smart home applications, electronic labels, and wearable devices, as well as special applications such as large public displays, next-generation automotive displays, medical displays, X-Rays, and LCD antennas.

5.1.2 Industry Overview

1. Current status and development of the industry

Due to the excellent product characteristics, competitive costs, and constantly differentiated and refined products, TFT-LCD has become the mainstream of all kinds of displays, with the expansion of size and applications, making the demand for panels is increasing year by year. In recent years, China-based factories have been expanding their production capacity due to massive subsidies from the Chinese government. According to Omdia's data, TFT-LCD production capacity in China has surpassed that of Korea and Taiwan since 2017, and continued to climb until 2022, before slowing down. In 2021, China's production capacity accounted for 61% of the world and it is estimated that it will reach 75% in 2026. In terms of production

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capacity above G7, China's production capacity accounted for 71% of the world in 2021, and it is expected to reach 80% in 2026.

From the perspective of OLED production capacity, it is mainly supplied by China and South Korea. Korean manufacturers focus on the improvement of OLED technology. In 2021, South Korea's production capacity accounted for 58% of the world, and China accounted for 41%. However, as the production capacity of China actively climbed, it is estimated that China's production capacity (49%) will surpass South Korea's production capacity (47%) in 2026. Korean manufacturers will withdraw from LCD production in 2023 (only P9 and some P8 factories of LGD will remain).

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Source: Omdia Research

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With the continuous increase in production capacity of China-based factories, the display industry then entered the price competition, making the panel prices have been falling since 2018, so that Korean factories cannot afford to bear losses. From 2019 onwards, gradually reduce production and plans to withdraw from the LCD market, so that by the end of 2019, the overall industry supply and demand was in a tight situation. At the beginning of 2020, the outbreak of COVID-19 pandemic, the overall display industry operation was once faced with a great challenge. In response to the pandemic, many countries adopted measures such as home office, remote education, and emergency city lockdown, which led to a significant growth in demand for monitors, and the undersupply also led to a strong rebound in panel prices, bringing about an unexpected increase, and Korean factories have also followed this trend and postponed their plans to close their factories. Covid-19 is driving the change of consumers' usage habits and pull up the demand of normal end demands, which will drive the display industry to a healthy cycle.

The stay-at-home-economy demand kept growing in the first half of 2021, but the supply of panels was limited due to the shortage of materials upstream, pushing the panel price to its peak in recent years. The market turned down quickly in the second half of 2021. With the rising costs of panel procurement and transportation and the weakening end-user demand, branding companies had slowed down their procurement which resulted in a rapid decline in prices due to oversupply and the shrink in profitability in the fourth quarter. However, in general, with the outstanding sales in 2021, the Company was still honored to have its highest profitability in the last decade. In 2022, manufacturers in China will suppress the supply of panels by controlling the capacity utilization rate to accelerate the price rebound. The market will turn from oversupply to supply-demand equivalent or even tighter supply. The outlook for overall shipment will remain good, and the Company will keep moving toward maintaining high profitability.

After the gradual slowdown in capacity expansion, and with the trend of size enlargement and application expansion, the supply and demand of the display industry will show a balanced or even slightly tight situation in the long run. In the spirit of sustainable development, the Company continues to refine our technology and promote digital transformation in order to maintain our leading position in the industry.

2. Association of upstream, mid-stream, and downstream industries

The Company is an IDM product manufacturer which covers the upstream TFT-LCD Panel production and the downstream System Assembly, the association diagram of upstream, mid-stream and downstream industries which the Company belongs to are shown below:

==> picture [406 x 290] intentionally omitted <==

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

Glass Panel Reticle ITO Conduct
LCD
Polarized Driving IC PCB Backit Modules
Colour Filter
LCD Panel
LCM Modules
LCD Monitor LCD TVs NB Mobile, PDA Others
Consumers
Upstream
Midstream INXs’ products
Downstream
----- End of picture text -----

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Source: Organized from Material Laboratories, ITRI

3. Development trend of products

TFT-LCD has a low energy consumption rate, small size, low weight, and low radiation features. With years of active investment and research and development by manufacturers in China, Korea, and Taiwan, the development of production technology has become more mature and diversified. At present, TFT-LCD is widely used in various display devices and related derivative products; among them, flat panel TVs, desktop monitors, notebooks and tablet PCs are still the most widely used. The future trends of each of these products are described below:

(i) Mobile Computers (Notebooks & Tablets)

In recent years, the market has become saturated and stable after the rapid growth of mobile computer sales due to affordable price and improved computing performance, so brands and panel makers have started to develop differentiated products to drive consumer desire. Manufacturers continue to segment the market by considering the needs of users with different requirements for business, mobility, word processing, education market, professional (gaming, design workers) and audio-visual performance. The LCD panels on board are differentiated by size, resolution, wide viewing angle, and color saturation.

Among the mobile computers, the smaller ones are tablets. The main market is for consumers who are more concerned about personalized mobile devices, work wear, and audio-visual entertainment needs. They emphasize the characteristics of small size, strong endurance, light and thin, easy to carry, etc., and continue to move toward the demand for display panels with high display quality, lightness and thinness, high screen-to-body ratio, low energy consumption and wide viewing angles is developing.

Nearly years high end tablets not only have improved computational efficiency and completeness of software function, in the same time there has been emphasized multi-tasking and stability. The demand of high end tablets has increased significantly due to large size with high resolution, narrow border, wide viewing angle, high color saturation, stylus pen products continuing to be released.

For many computer users, the high stability, high processing performance, high storage capacity and the use of a keyboard as an input device make traditional notebooks a stable market. In response to the rise of tablet PCs, PC manufacturers are actively introducing new concepts in notebook design, such as detachable laptops that can switch between tablet and notebook modes of use at any time, gaming laptops with high performance, high refresh rate, fast response time and high color saturation, antisnooping laptops that focus on business secrets, laptops that can be unfolded at a 360-degree angle, and dual-screen laptops with a main screen and touchpad screen to drive growth in different markets.

For the low-end education and business markets, the mainstream specifications for notebooks are thin and light, with low power consumption and touch functionality as the main demands, while the size is 11.6 inches for the education market and 13.3 inches and 14 inches for business. For the mid-to-highend business market and mainstream consumer market, 13.3" to 16" products are the mainstream, with FHD resolution and wide viewing angle, and narrow bezel design to reduce the size of the whole machine for easy portability. For the high-end market that emphasizes functionality such as design creation and gaming needs, larger 15" to 17" panels with high refresh rate, fast response time, high color gamut and above QHD resolution are available to differentiate the market needs.

In terms of panel specifications, the thin and narrow bezel design has become a must for notebook panels to match the trend of slim and stylish designs. Aspect ratio 16:9 is still the most mainstream product, while the penetration rate of IPS wide viewing angle is increasing year by year, so far more than one half of the products have wide viewing angle specifications, narrow bezel is the fastest growing trend and will become the standard specification for notebook panels in recent years. In addition, there are notebook panels with 16:10 or 3:2 aspect ratios, which are mainly designed for high-end models. In addition, high refresh rate notebook panels are mainly for the gaming market, with 120Hz and 144Hz as the mainstream specifications. The future will be towards 240Hz or 360Hz with HDR1000 or more for

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high-end models, and the development of privacy panels to protect trade secrets is the answer to the market for high-end models; there has always the demand for endurance for notebooks, and the continuous reduction of panel power consumption has become one of the key development points, and in the future there is a demand for mini LED backplanes to improve resolution and enhance contrast. Laptop panels are an application with higher technology contents, and in the future, specifications will become more diversified to meet different market needs and drive consumers' willingness to replace their laptops. Differentiate market demand with advanced products such as Super Low Power, HCR (High Contrast), Mini LED, and LTPS.

==> picture [398 x 199] intentionally omitted <==

Source: Omdia Research

(ii) LCD Monitor

LCD monitors mainly go with desktops; two mainstream markets are office use and personal video and audio entertainment use. Office use LCD monitors are generally sold by brand manufacturers with the host machine; product specifications are relatively simple with moderate cost and small size to meet the budgets of enterprises and government agencies. In terms of personal video and entertainment products, as consumers focus on video and audio usage, the size has been increasing recently, and products equipped with wide viewing angle and borderless technology have become the standard specification. At the same time, consumer demand for high-definition products is expected to rise, and the market for QHD and UHD high resolution products is expected to continue to expand and gradually become the mainstream of the high-end market. Continuing to promote and develop low-power screens (ES8.0) is also the main direction of the product.

In the future, LCD monitors will move towards four-sided narrow-bezel products to seize the narrow-bezel market, and emerging products such as Curve, ultra-thin, and Ultra-wide Monitor are also the future development direction. In addition to toward large sizing, new technical products such as Privacy, IGZO, Mini-LED Monitor are also the main development goals.

About size, due to an increase in the manufacturing efficiency and efficiency of product design structure, the price of TFT-LCD products is dropping and accelerating market demand for a transfer to the bigger size. Office use products have gradually shifted from 18.5”, 19.5”, and 21.5” models to 23.8” models. The average size of personal audio-video entertainment products has also gradually increased, with 23.8," 27," 32" and 34" increasing in proportion, and large desktop monitors with curved specifications are becoming popular. In addition, the 21:9 and 32:9 aspect ratios of ultra-wide screens with curved design and dual-window multiplexing can improve productivity in the commercial market and enhance the visual enjoyment in the consumer market, promoting the high-end market to large-scale development.

Except for standard LCD monitors, All-In-One (AIO) which is an integrated design of the desktop

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host and monitor. Because of advantages in functionality saving space, the product is winning customers. As the Windows 10 operating system penetration rate increases, it accompanies the All-in-One product with touch function and accessories design adding greater entertainment function. It also shows a new appearance for the market of LCD monitors.

With the rise of the digital gaming market in recent years, e-sports has officially become one of the international sports events. Compared to mature desktop monitors, the average replacement cycle for gamers is only 2-3 years, and the specifications and prices of e-sports monitors are higher than those of products in general demand, making computer brands to actively deploy. Currently, gaming monitors are 27" and above, with curved surfaces and 144Hz refresh rates as the mainstream, and in the future, they are moving towards 240Hz or 360Hz and above. In addition, for people who use computers for a long time, low blue light protection function has been developed to prevent the damage of blue light to users' eyes, and the emerging specifications in the future also focus on the development of mini LED, Privacy, Megazone and other technologies to layer the market demand.

Source: Omdia Research

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(iii) LCD TV

In recent years, LCD TVs fast popularization due to each manufacturer developing G8.5 and G10.5 capacity, goes with the improvement of each phase of production technology. It not only has become customers’ first choice when buying a new TV, but also has stimulated the traditional TV refresh cycle.

Meanwhile, when the market is warming up and products becomes popular. Innolux is the pioneer of providing differentiated large size models (especially 50-inch, 58-inch and 65-inch, 75-inch, 85-inch, 100-inch, 120-inch), dedicated to effectively improving the technology of each product to significantly increase the panel’s added value, gain customers’ brand recognition, and market segmentation, and increase the market share of large sizes. At the same time, we provide the services of the whole machine, so that the panel manufacturing can be assembled in one machine, providing one-stop overall service.

With the trend of high-resolution mobile display devices, consumers are meeting the demand for high-definition TVs. In the second half of 2017, 4K2K ultra-high resolution products were launched, which is the fastest manufacturer and the highest market share in the industry. The Company is leading the industry to promote ultra-high resolution 8K4K (7680x 4320) with high color saturation (NTSC >100%) panel, has been promoted to customers in 2020 is expected to grab the market in the 2021. In terms of technology, the Company proposed in the 4K2K LCD TV module in 2018 that the Mega-Zone achieves pixel-level regional dimming control with dual panels, which enhances the display quality of the dark state and deep black performance to improve the visibility of the screen. With the development of 8K high-definition transmission protocol, 5G signal transmission standard, high-efficiency video coding and multimedia transmission interface specifications, the penetration rate of 8K4K image specifications will continue to increase in 2020. Various manufacturers have successively launched 8K4K-level photographic equipment, and cooperated with audio and video media to launch 8K movies and broadcast programs. The subsequent 8K4K has become a must-have specification for large-size TVs, and with the new transmission specifications of 5G, it will create 8K+5G future life.

On the design of panel appearance, the company provides ultra-narrow frames (<5mm) and ultra-thin design (thickness <4mm) using on products over 40-inch, integrate paint design on appearance to make client rapid input and mass production. End customers not only enjoy the real 4K image, also provide the real high quality of excellent vision and sensual experience. Innolux provide client and customer comprehensive and high competitive TV panel by innovation continually, and continue to lead the market trend and become lead firm of the industry.

The Company is constantly developing new and improved TV products. In recent years, we have developed new models using technologies such as Kirameki, naked eye 3D, VRR (60Hz~240Hz), and rollable TVs using AM MiniLED, all of which are industry leaders. In addition, we increased the development of high-niche products (special product specifications: such as 24:9, 32:9, etc.), strengthened customer loyalty and mass-produced new technology products (MiniLED B/L Module, VRR and Outdoor PID). With the spirit of continuous innovation and digital transformation, the Company is seeking for new changes in the TV display industry and creating the expectation of sustainable development.

(iv) Medium and small size panel

Since panel makers started mass production of cell phone panels in G6+ generation, the competition in the small and medium-sized display industry is not only price competition, but also the market demand for higher resolution, higher quality panels and full-screen, customized designs, making it necessary for small and medium-sized panel makers to refine their product technologies, specifications and integration with other applications. In addition to the wide viewing angle technology that has become the standard for cell phone panels, with the increasing size of cell phone screens, manufacturers continue to launch high-resolution products and further promote thinner, narrower bezel and more power-efficient product specifications. At the same time, we are optimizing our competitiveness with embedded integrated touch technology, providing customers with high performance, extremely thin and light, and integrated touch and LCD module services to enhance product design flexibility and time-to-

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market advantages.

With the rapid penetration of full-screen cell phones, the Company is also rapidly adjusting its production lines and specifications, developing and producing a large number of competitive full-screen products to capture the market, shaped cutting and integrating touch technologies, introducing advanced technologies such as multi-touch, tactile feedback and underwater touch, and continuing to refine cell phone panel applications. In addition to this, the Company has been expanding into applications such as game consoles, wearable devices and smart living homes, developing ultra-high resolution smart watch panels, VR glasses, smart mirrors and other products.

We have been actively investing in the research and development of next-generation panel technologies. Among them, Mini-LED has entered mass production in 2021 and has become a new generation panel technology; its goal in 2022 is to increase the product penetration, besides price competition, we have developed more niche and high value-added products; for the VR market, we have also continued to develop high-resolution and high-brightness technologies for this application market. We hope to widen the gap with competitors with technology and achieve sustainable operation in the industry.

4. Competition in the market

With the integration and merger of China-based manufacturers and the gradual withdrawal of Korean manufacturers from the TFT-LCD market, Taiwanese manufacturers’ market share of 2021 large-size shipping area was about 20% (market share eroded by China manufacturers) with the leading technology, perfect supply chain integration and high production efficiency, and the main players are Innolux and AUO. Japan manufacturers’ market share decrease gradually due to higher production cost, decreased in new factory investment plan, plant shutdowns, transfer to niche markets like high end mobile display, automotive display panels, and ultra-big TV market.

Due to the government's high-tech policy, the support of the vast domestic market, and the high subsidies from the central and local governments, mainland panel makers have been investing heavily. In recent years, BOE, ChinaStar, HKC, CHOT, and CEC have taken advantage of government resources to enter into the production of G8.5, G8.6, and G10.5 generations, making the competition in the display industry increasingly fierce. As a result, many panel makers with poor business performance are planning to merge, and the expansion of large-generation production capacity of mainland makers is still in progress, which is expected to slow down after 2022.

In the face of the aggressive panel manufacturers in China continuing to seize the market and share the market at lower prices as a latecomer, the panel manufacturers have developed towards strategic competition. Korean manufacturers have led a trend in the market with differentiated products, including OLED TVs, QDLED TVs, and curved displays and gaming monitors. Taiwan manufacturers have taken their place in the market with high specifications and high quality and are striving to break through with new technologies (ex. Mini/Micro LED). In the face of the ever-changing panel industry, the operation will become more critical in the future, and every panel manufacturer will always be cautious about costs and prices and will deem steady profitability as a necessity.

5.1.3 Research and Development

1. Technical Level and Research Development

We keep helping clients to intensify product competitiveness, fit market demand, and be friendly to the environment as our main objective of display technique development. About the development, it mainly includes environment protection materials, electronic saving and low power consumption, large-sized and high pixel, high chroma, thin, narrow frame, high dynamic displays, touch, wide viewing angle, curve and allaround system services integration. We already have obtained remarkable achievements. These results of technical development are applying to TV, desktop monitor, Notebook, Tablet, Cell Phone, Medical, Industrial Display and automobile. Moreover, the integrated development on the touch components and panels of more advanced techniques and portable and wearable product applications are the key points of our future product

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design and development.

2. Facts of research & development:

With incessant efforts, the Company has insistently invested significant human resources, resources and funds in research & development to continually upgrade the quality of products, technology & know-how of new manufacturing process and application for new products. The Company would like to depict performance in research & development through three aspects below:

(1) In the aspect of upgrade of product quality:

Including the technology & know-how for broad visual angle, high solution, low energy consumption, thin thickness, high hue, Frame Rate, high dynamic range, narrow frames, new touch panel and soft display manufacture process

(2) New material technical process:

Including Oxide, LTPS, Mini LED, Mirco LED, In-Cell Touch Technique, Copper Manufacture Procedure, COA (Color Filter on Array), Photo-Alignment, Horizontal Electronic Field High Transparency and High Contract Positive Magnetic Susceptibility, Reducing Mask and Automotive wide temperature range display material technique, material development and production process for curved touch control display.

(3) In the aspect of new product application:

The up-to-date technology & know-how developed by the Company have been put into volume production one after another and applied onto a good number of products, including notably general cell phones, cameras, MPD, electronic paper, tablets, notebooks, desk monitors, AIO, television, medical treatment services, vehicular carriage, aerospace, industrial control, smart home, outdoor PID and touch panel and the like, in the dimensions ranging from 1.36” to 120” TFT-LCD products. In the days and years ahead, we will continually invest in the research & development oriented human resources and fund to develop more and more TFT-LCD display and monitor products of added dimensions, application ranges, thinner, more environmental protection friendly and high efficiency to live up to the future trends in application and satisfy customers in varied ranges.

3. The consolidated research & development costs invested in the latest year as of the Annual Report date.

Annual Report date.	Annual Report date.	Annual Report date.
Unit: NT$thousand
Item	2021	As of March 31,2022
R & D expense	15,044,650	3,290,060
Net Revenue	350,076,690	69,886,018
Percentage of revenue	4.30%	4.71%

4. Successful development technical or product

The Company’s develop technical and products for each direction are listed below.

(1) TV:

A. The Company has mass produced 23.6-inch/40-inch/50-inch/58-inch/65-inch the best cutting efficiency size, we creating market differentiation and improve add-value of product.
B. Introduce 4Kx2K ultra high definition and high resolution TV display, the product line is complete, product size from 40-inch to 100-inch, providing higher quality TV image and better product competitiveness, lead 4K TV industry going to fast development and trend.
C. Introduce new size 75-inch/85-inch/100-inch/120-inch TV display, overall arrangement in big size application, creating more differentiation product than competitors.
D. Develop high chroma technique, increasing to over 130% sRGB colour range and without increase energy consumption, not only increase the performance of display, but also make customers feeling
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more about the value-added of big size TV product. It has successfully developed a high-efficiency BT.2020 90% technology without Cd / Pb and other heavy metal materials, which can reduce the image distortion, caused by the adjustment of color and faithfully present all real-world images.

E. Develop new MEMC improvement technique, apparent improving dynamic quality and integrate IC, increase dynamic picture quality and integrated technique.
F. Develop and mass produce a series of over 40-inch thin TV model (<4mm), providing artistic and fashion appearance model to clients.
G. Develop 0.5mm thin glass and apply to TV display, reduce glass usage and cost. Whole series big size TV import and mass production successfully.
H. Develop narrow border model (<5MM) successfully, and provide customers with beautiful and stylish modular design.
I. Develop Inno Module model, combine narrow frames and front and back appearance, provide clients high competitive module and reduce assembled time and cost. In 2020, our production lines for all sorts of panels were complete and comprehensive and were in an excellent position to enable customers to enjoy the excitements of one-stop shopping.
J. Mass produced of 65-inch/75-inch large 8K4K (7680X4320) panels with the highest resolution in the world, in order to show the next generation of ultra-high-resolution picture quality, make the picture more natural, so that end consumers can enjoy large-size high-resolution TV panel products with highfidelity picture quality.
K. Mass produced of outdoor PID and promoted outdoor TV, and developed high-niche products (special product specifications: such as 24:9, 32:9, etc.), strengthened customer loyalty.
(2) LCD Monitor:
A. Launch whole series wide viewing angle VA/AAS bezel-less desktop monitor panels, and launched 28" and 32" 4K2K monitor panels. with high brightness, high contrast, high saturation, not only increase product quality and value, but also provide client the best choice of high end monitor LCD panel.
B. Develop several model of globally new Inno-touch monitor and AIO personal computer, by integrate touch as multi-function use can reduce module thickness to become light, increase touch functional can close to end customers’ need.
C. In response to the demand of the gaming market, develop high refresh rate LCD monitors, introducing 27," 28" and 31.5" panels with 144Hz and 23.8" panels with 240Hz refresh rate, and improving the LCD response time to provide customers with the best visual experience during gaming.
D. Expect to continue to invest in development in 2021 to 2022, and expect to launch differentiated products such as 21.5" adjustable anti-snooping display panels, 27" IGZO screens, 34" curved screens, and 32" Mini LEDs, in order to maintain the Company's leading position in desktop displays with these high-end products, and to increase profitability and improve overall revenue.
(3) Notebook:
A. Launch a full range of thin and light notebook panels with 2.0mm thickness for notebook sizes (11.6"/12.5"/13.3"/14"/14.5"/15.6"/16.1"/17.3") and differentiated with FHD, AAS wide viewing angle, narrow bezel, low power consumption and high color gamut specifications to provide a comprehensive solution for notebooks.
B. Interface technical of Notebook panel is totally from LVDS to eDP. It can connect to high resolution trend, also can save space to help thinner design of the system and lower the energy consumption.
C. Develop TOD technical on notebook panel, through touch integration, notebook not only can be thinner but also can reduce produce process of the module and simplify the complexity of new product.
D. Introduced 14.5" and 16" with 16:10 aspect ratio, realizing the design trend of high screen-to-body ratio, and continuously reducing the frame design to expand the user's field of vision.
E. Develop 15.6," 16.1," 17.3" with 144Hz and 15.6" with 165Hz high speed response, low blue light, no color shift gaming panel, using the patented LED chip design of the Company, effectively reduce 70% of blue light energy, the product through the TUV Germany Rhein low blue light certification, can relieve eye fatigue and provide more comfortable enjoyment for long-time gamers.
F. Developed dual 13.3” and 14” privacy panel, which does not affect the brightness and chroma of the
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panel under better concealment effect, and is adopted by high-end commercial laptops of first-line pen power plants.

G. In 2021 to 2022, we will continue to invest in development and expect to launch new products such as LTPS, Oxide Polar black, and Mini LED. And power-saving and frequency conversion (30~120Hz) products will be developed to take notebook panels to a higher level of development.
(4) Small/Medium:
A. Develop a smart phone panel, which resolution can reach above 400ppi, in high yield and stable processes. The product successfully built advantage.
B. Develop LTPS QHD and a-si FHD 0.6mm panels with bezels smaller than 0.45mm to reduce panel module size and effectively increase screen-to-body ratio to meet the demand of smartphone and tablet users for narrow bezels. We have successfully developed a full-screen bezel-less 6" wide color gamut touch panel with precise control of the plastic frame, cutting accuracy and exterior glass design to make the module surface aggressively small and ultra-slim to push the specification advantage to the extreme and increase the freedom of portable mobile device display appearance design.
C. Adopt less power hungry design to lower power consumption by the panel drive chip. Optimize panel production process and material with high color saturation, high transmittance color photo-resistor to ramp up panel efficiency and product competitiveness with balanced low power consumption and production costs.
D. Launching a series of Touch On Display (TOD) integrated touch control devices. Coupled with modular and compact design and good optical performance, this company is providing customers with comprehensive and full range touch control integration services with vertically integrated LCD panels and touch control production.
E. Deep Sensing Technology using a special electrode design to simulate 3D multi-finger-touch tactile sensation, combined with dual advantages of capacitive touch and resistance, highly identification surpasses 2D touch.
F. UTID technology (Underwater Touch in Display) solves the problem of touch failure in water and enhances the application of more scenes for users.
G. Mini-LED has entered mass production in 2021 and has become a new generation panel technology; its goal in 2022 is to increase the product penetration.
H. Expect to continue to invest in research and development in 2021 to 2022, and will continue to introduce curved, fast-response high refresh rate gaming and integrated under-screen fingerprint recognition panel specifications and develop high-resolution and high-brightness technologies for the VR application markt to enable small and medium size across more consumer electronics applications.
(5) Special Application

Release 21.3-inch to 30-inch (AAS; 5/6/10/14 MegaPixel) medical LCD display, with high resolution, high brightness, high contrast, adopt 10 bits drive new technology and high efficiency LED BL, to make the image more delicate and medical personnel can make more precise judgment.

Large-size public displays span from 21" to 100" applications, present natural high color gamut and give consideration to both indoor and outdoor environment. It also provides a very narrow frame design so that PID can be seamlessly spliced into different scenes to meet screen requirements. 85-inch UHD also support portrait. Also first release horizon LCD display (bar type) presents multiple sizes can fit for multiple environments. In 2018, a 100-inch high-luminosity quantum dot public display module was introduced to replace the traditional four-panel 55-inch panel mosaic to present the visual effects of a large-scale video wall, which is widely used in large-size billBoards.

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5.1.4 Long- and Short-Term Business Development Plans

1. Short-term plan

(1) TV: Increase shipments of large size (82" or more), 8K, VRR, and other products with high gold content, and increase the development of high-niche products (special product specifications: such as 24:9, 32:9, etc.)
(2) Desktop monitor: production size moved to 23.8" mainstream specifications, and continue to increase shipments of large size (27" or more), QD/UD, increase the percentage of IPS, borderless, high refresh rate (Gaming) shipments, and mass production of new product specifications such as IPS Curve, Privacy, four-sided borderless, PM Mini LED backplane, Ultra-wide Monitor. Continuing to promote and develop low-power screens (ES8.0).
(3) Mobile computer: Increase the shipment of IPS, HFR (Gaming) and TOD panels, continue to reduce panel power consumption to achieve more power-saving performance, enlarge the shipment performance of Privacy, and develop high-end products such as LTPS, Oxide, Polar black, and Mini LED. In addition, the continuation of high refresh rate gaming products (240~480Hz) and the development of power-saving and variable frequency (30~120Hz) products are also important product development directions.
(4) Cell phone: Continuously improve cell phone panel pixel and color performance, integrate Touch module and narrow bezel, and improve cell phone panel refresh and response time performance.
(5) In-vehicle: Deepen the cooperation model with car manufacturers to improve the shipment of integrated modules for automotive applications, expand the capacity of automotive applications and continue to penetrate into larger sizes, and reduce the cost of automotive panels by standardizing production.
(6) Special applications: Provide full size and develop more life scenes applications, cooperate with government, medical institutions or private enterprises to provide a full range of solutions.

2. Long-term development

Continue to improve our advanced flat panel display technologies, enhance our manufacturing capabilities, and optimize our existing production capacity so that our panels can move toward larger sizes (120" and above), higher resolutions (16K), thinner and lighter, high color gamut, ultra-high contrast ratio, extreme borderlessness, and low power consumption. In response to the rise of new display technologies, we continue to invest in the development of integrated applications such as free-form and curved panel applications, Polar Black technology, under-screen fingerprint recognition, and naked-eye 3D technology, and we continue to aim to reduce the spacing of active Mini LEDs and to develop mass production of large-size AM Mini LEDs and Rollable panels, ultimately moving toward Micro LEDs.

In the future, we will focus on cross-domain expansion to non-display field, and move towards Panel Semiconductor by developing new forms of business such as X-ray sensors, fingerprint recognition sensors, flat panel antennas, and fan-out panel packaging (FOPLP). We expect to be able to make the most suitable strategic deployment in new application areas at an early stage. Meanwhile, we shall further stress value chain integration and development of products high added values, to make our products more competitive in both pricing and specifications to provide customers with added solutions and services.

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5.2 Market and Sales Overview

5.2.1 Market Analysis

1. Main products selling area

Unit: NT$ thousand ； %

			Unit: NT$ thousand`；`%
	Area	Amount of Sales 2021	%
	Domestic sales	84,022,636	24.00%
Foreign sales	China	40,760,938	11.64%
	HongKong	117,554,017	33.58%
	Europe	11,276,151	3.22%
	America	40,031,179	11.44%
	Other Area	56,431,769	16.12%
	Total amount of F/S	266,054,054	76.00%
	Total	350,076,690	100.00%

2. Market Share

According to the statistic of Omedia research report, until 2021, the market of the Company’s big size panel shipment is 10.6%, which is the 4[th] largest supplier of the world LCD display industry. Based on application product shipment quantity distinction, global market share of LCD display panel is 11.7%, maintains world’s 4[th] ranking performance; global market share of LCD TV panel is 14.2%, world’s 4[th] ranking performance; global market share of notebook (excluding tablet) is 20.0%, which is the world’s 3[rd] ranking, global market share of tablet is 20.0%, which is the world’s 2[nd] ranking, global market share of car panel (excluding navigator) is 8.1%, which is the world’s 6[th] ranking. The market share of smart phone is 10.4%, which is the world’s 3[rd] ranking. Overall, the strong continuous demand of panels from 2021has been benefited the Company and arrangement on each products has enabled the market share of various application products to maintain a certain level, and will continue to seek growth in 2022.

3. The supply and demand situation and growth of the future market

Due to the outstanding product feature and the continuous improvement of cost and quality, TFT-LCD already become the mainstream of flat display and the sales will keep growth as the improvement of application level and penetration. According to the estimation of IHS, the global shipment of big size (over 9- inch) TFT-LCD panel will be 977 million chips in 2021.

If we analyze the market size of several major applications, in the LCD TV, with the continuous opening of large generation production capacity, in order to stabilize prices to maintain profitability, the market has changed from the growth of volume to the enlargement of the average size. Under the pandemic in 2020, the home economy in Europe and the United States has been on the rise, making the end demand strong and supply shortage. The global LCD TV shipments are estimated to be 220 million units in 2020, with the average size of LCD TVs growing by 1.2," and with the rising panel prices in 2021, the end-user prices are also expected to increase. However, due to the shortage of IC/T-con materials, soaring prices of TV, and the unblocking of Europe and the United States, the terminal demand was affected, and the brand shipments were not as expected. Only 207 million units were shipped in 2011. In terms of LCD monitors, due to the strong demand for home office and e-sports, the shipment of LCD monitors (Korean AIOs) is estimated to be 148 million units in 2020. The penetration rate of high-value products will gradually increase as user demand for large-size and highresolution products rises. The stay-at-home-economy demand kept growing in the first half of 2021, and the consumer market demand was still strong, but due to the shift in consumption power and the shortage of raw materials, the market turned weak, and the demand shifted to the small-sized business market, while the demand for large-sized sizes was slightly weak; shipments grew slightly to 155 million units. In terms of mobile computers (notebooks and tablets), the mobile computer market is optimistic in 2021 as the demand for home office and distance learning continues to be strong, with 370 million units shipped in 2020. The end-user market is expected to continue to boom in 2021, and the overall shipment is expected to grow to 406 million units, representing a growth rate of 9.7%.

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==> picture [396 x 199] intentionally omitted <==

Source: Omdia Research (Unit:K)

According to Omdia's estimation, the global shipment of small and medium-sized panels is estimated to be 2.91 billion units (including OLEDs) in 2021, up 10% from 2020. As for cell phones, according to Omdia's estimation, the number of cell phones shipped in 2020 was 1.77 billion. In 2011, although the impact of the pandemic result in shortage of some components and price hikes, which affected shipments. With the low base period in 2020 and the continued increase in the market volume of 5G models, the whole shipment volume still climbed to 1.94 billion. As the pandemic is expected to become influenza, the market will return to steady growth, driven by 5G deployment and the feature phone users in emerging markets to buy lower-priced smartphones. In-vehicle, according to Omdia's estimation, the shipment of automotive panels was 149 million units in 2020, a decline of 13.6% from 2019, and the automotive market is expected to stabilize to 187 million units in 2021. As in the first half of 2020, we were mainly affected by the epidemic, disruption of raw material supply and plant closures, and the global economic turmoil also affected end-use sales. However, as the penetration rate of automotive displays continues to rise and promotion of the environmental protection policies drive growth in the automotive displays. With the gradual opening of the 5G communication network in the future, it is expected that the Internet lifestyle will drive the demand for panels for smartphones, automotive panels and wearable devices, becoming the main growth driver for small and medium-sized panels.

==> picture [454 x 171] intentionally omitted <==

Source: Omdia Research (Unit:K )

Faced with a strong rebound in demand in 2020 to 2021, the changes lifestyle and work are expected to bring a wave of activity to the display market, which has been slowing down for years, and boost end-user demand. However, the high degree of uncertainty in the global economy, the expansion of production and competition with new players, and the rapid changes in new technologies and product applications have caused the TFTLCD industry to face a rapid cycle of high volatility in supply and demand. In the face of the mounting

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cutthroat competition, we shall launch overall upgrade of all substances to deal with all sorts of challenges.

(1) We shall boost marketing by means of improved operating efficiency, refined management, product development, customer services, technical research & development and such efforts. In turn, we will be able to intensify gross profit in sales, cost control to further intensify competitive edge.
(2) Continued investment in research & development to suffice technical talents, improve product design and application of materials. We shall proceed with research & development of advanced and improved manufacturing process and new generation monitor technology & know-how so as to create added lead in know-how of products and production costs.
(3) With wholehearted efforts, we shall deploy integrated product lines for new products. The products manufactured by our Company cover televisions, computers, mobile devices, vehicles- and medical treatment oriented products. We provide varied modes to sell panels, whole machines, touch integration and the like. Through such efforts, we virtually bring down the potential risks of fluctuation with single products.
(4) Strengthen supply chain integration, work closely with suppliers to ensure stable supply of raw materials and cost competitiveness, and deepen the deployment of strategic customers and develop market niche products to boost end-user demand and increase our responsiveness to market changes, while enhancing customer satisfaction and consolidating market share.
(5) Promote flexible decision making and digital transformation by digitally integrating production information, monitoring risk factors in real time and responding to them early, and combine big data and AI analysis to improve employee value, predict future uncertainty and explore potential opportunities to achieve the goal of sustainable development.

4. Niches in competition

(1) Business model:

The company takes TFT-LCD as its business, and uses the business policy of " leadership with knowhow and quality, boosting of production efficiency and quality " to provide products with stable output, high quality and competitive prices, and is committed to expanding new application, stepping into new fields, in this fiercely competitive industry gradually break new ground.

(2) Vertical and horizontal integration:

In an attempt to strengthen integration of our products, boost cost competitiveness, demonstrate maximum possible benefit in supply chain management, other than production of TFT-LCD panel modules, we dominate a significant ratio of design and manufacture of parts & components, including LED panels, color filter, light guide plate, Backlight Module, PCBA and such structure pieces which could be manufactured inside our home factory or overseas subsidiaries. Meanwhile development automatic product line to decrease the human resource and upgrade the product design. Thanks to such high level vertical integration, we have taken advantage in lowering costs, prompt response to assure top level quality.

(3) Product development:

The Company mainly produces TFT-LCD panel modules, and the bulk products cover large-size panels for LCD TVs, desktop monitors and notebooks, as well as small and medium-size mature display products for cell phones, tablet PCs and car monitors. We have advanced and complete production technologies for narrow-bezel, wide-angle and high-resolution panels to meet customers' needs for various products, and are committed to expanding applications in new fields. We are committed to expanding into new applications. Continue to develop new products, use new manufacturing processes, materials and technologies to develop differentiated high-value products and accelerate mass production in order to capture market share and increase profitability.

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(4) Our advantages in costs:

Through our experienced technical and development team, we are constantly refining our processes to reduce production costs and improve yields, and integrating with suppliers to develop high performance, high quality raw materials to improve product performance and competitiveness; together with our aforementioned business model and the advantages of self-production and automated technology, we have a cost advantage over our competitors in production.

(5) Concerted performance (synergy) in marketing:

The Company has diversified products and good marketing channels, which can be quickly integrated with world-class customers. For world-class brand manufacturers, the Company also provides rapid design, timely delivery, machine manufacturing and global services. Integrated services give customers the convenience of a one-time purchase.

(6) Customization capability:

With our excellent R&D and design capabilities, modular manufacturing, excellent supply chain management, vertical integration management and manufacturing cost advantages, we provide customized products to our customers.

Looking back at 2021, our product line for each application panel size has become more complete, and the design and specifications are in line with the future trend, and we are able to provide customers with services from panel manufacturing to complete product OEM, and have the ability to develop new and high-end products. We have further improved our production capacity and scale, design capability, quality and yield, supply and logistic management and financial stability. In the future, we will continue to develop more diversified and cross-domain products, and continue to improve quality and expand into higher-end and multi-markets in order to maintain our market share.

5. Advantage and disadvantage of long term development and reaction strategy

(1) Advantage:

A. New application products continue to drive growth

With the rapid development of wireless communication technology and cloud computing, displays have become the core interface for content transmission and operation in the era of information explosion, and the new "5G+8K" lifestyle has become a strategic focus for manufacturers. The content of information becomes more sophisticated, which pushes up the consumer demand for size, resolution, wide viewing angle, and lightweight and thin design, and drives higher the unit value of TFT-LCD products, bringing new applications and demand growth.

With the increase of Internet audio and video services and the diversification of content to provide more real-time and high-definition programs, smart TV is a signal that cloud applications will start to enter the TV field rapidly. The Company will continue to launch more large 8K4K LCD TVs in 2021 to provide consumers with a higher level of visual enjoyment in current year. With the construction and popularization of 5G devices, 8K4K ultra-high resolution will be a must-have specification in mid-range and high-end products in the future, which will definitely trigger a wave of replacement. In terms of LCD monitors, the business market maintains steady replacement demand, while the emerging e-sports market, high-definition, curved and bezel-less elements are driving LCD monitors to larger sizes and driving consumers to upgrade their existing products. In terms of laptops, the business market will continue to see steady replacement demand, while the education market will continue to grow and the consumer market will continue to be driven by operating system upgrades, performance upgrades, energy efficiency, gaming, narrow bezels and privacy PCs.

For tablet PCs, the Company is targeting the education market to increase the shipment of mediumsized panels. In terms of small and medium-sized panels, as the price of mid- to low-end smartphones decreases, they will become the preferred choice in emerging regions for the mobile device consumer

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market. With the popularization of 5G wireless communication and the promotion of bendable screens, smartphone shipments will continue to rise in the future.

B. Stable customer base

Our major customers are global consumer electronics companies, which have important stands in TV, PC and mobile communication, and special application industry globally. Moreover, the display market will still be dominated by the international big companies in the future, and develops with the direction of “the big ones get bigger”. Therefore, in the Company’s perspective, we not only can grow our revenue rapidly, the market share of us is also expected to keep increasing with our major customer basis. Under the synthesized effects of the three factors: rise of production line completion, stronger customer base, keep developing new customers in newly developed market on the current customer basis.

C. Globalized strategy and vertical integration in depth

Innolux has been recognized as the best LCD panel supplier in all aspects, and had been setting up global strategy aggressively. Now we have production base of post-production LCD panel module and monitor in Shenzhen，Ningbo, Foshan, Nanjing in China, and we also have delivery hubs in major cities in Asia, Europe, and America, so that we can achieve “deliver just in time” object and strengthen the long term cooperative relationship with customers.

Innolux has been working in TFT-LCD industry for a long time, and we have the professional knowledge and managing capability in LCD panel, module, mechanism, and optical components’ R&D, production, and selling. We are more cost-effective and have better capability to service the customers timely than unitary TFT-LCD factory.

D. Growth in size, withdrawal of Korean manufacturers, slowdown in production expansion of China-based factories, long-term supply and demand balance

The cost of Korean panel makers is relatively high, so from a long term perspective, these less profitable players will gradually withdraw from TFT-LCD, and the production capacity of Chinese manufacturers will not be further expanded after 2022. With the increase of large size of each application, the demand for glass area will continue to grow, so the supply and demand of TFT-LCD will be balanced in the long run.

(2) Disadvantage and Reaction Strategy
A. Fierce competition in the industry and rising uncertainty in supply and demand

As panel prices continue to rise, the prices of end products are also poised to increase, which in turn affects consumers' willingness to purchase, causing a slight correction in the originally high demand. In addition, the rising panel prices have increased the profitability of the industry, so that the industry, which was originally expected to withdraw or slow down the expansion of production, has become more aggressive and swarmed to the development of high-profit applications, making the supply and demand for each application more volatile and uncertain.

The Company follows the market trend and keeps an eye on the market risks, and uses a flexible manufacturing approach to respond to market changes and develop mainstream and profitable models to ensure product sales and stable profits, and prioritizes production capacity to high-profit products in order to maximize revenue and ensure the Company's goal of sustainable operation.

B. The complicated technology and patent portfolio

The design and production of TFT-LCD requires highly professional technology. All companies that in this industry are aggressively making their portfolio in technology and patent applications. To avoid the violation of patent rights in the production process, Innolux has been developing our own patents and technology since the beginning of this company. We recruited domestic and international talents to join the research team, and evaluate the feasibility of getting the usage rights of some key technology from foreign companies at the same time.

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Regarding to intellectual poverty, we not only aggressively conduct R&D and the patent applications, we also keep strong legal support team to protect our intellectual poverty.

C. The global economy affects consumption and supply

The International Monetary Fund (IMF) predicts that the global economy will remain highly uncertain, with economic indicators showing recession in all countries affected by the epidemic. Although a significant rebound is expected in 2021, the economy is still weak and the developed countries are heavily providing subsidies and easing monetary policies to stimulate strong demand in 2020. It is worth observing whether consumers are still willing to buy when subsidies are no longer available in the future, or whether the future stable demand will be moved earlier. In addition, the U.S.-China trade war originated in 2019 and extended to 2020 has become a technology war, and the future relationship between the U.S. and China will deepen uncertainty, and will also expand to other countries with cooperation or boycott between countries, leading to increased economic volatility, and will also have a considerable impact on consumer demand.

Although there are many uncertainties, the development of the needs of emerging markets is still the goal of consumer electronics brands. We provide products that are competitive for its cost and specifications by constantly optimizing our products and technology. We also help our supply chain partners to develop business to diminish the operation disadvantages of fluctuation of external demands.

D. Raw material shortage on the supply side

TFT-LCD has a mature manufacturing process, and as production capacity continues to expand with the expansion of display applications, the supply chain has not yet kept up with related materials production capacity, making the shortage of raw materials to limit the supply of display panels, but also the possibility of price increases at the end, which in turn affects the consumer's willingness to buy.

Taiwan has a well-established supply chain cluster, and we have been strengthening our supply chain partnerships and developing our own raw material production capability, so that our material supply is relatively stable and competitive in terms of cost.

5.2.2 Production Procedures of Main Products

1. Major Products and Their Main Uses

(1) TFT-LCD

TFT-LCD products are display application for digital information delivery, its wide application including information display equipment for business and industry, computer, telecom related and consumer electronics display equipment, etc. As the development of integrated digital age 3C market, the main area of TFT-LCD product are:

A. Information Technology, IT: such as Desktop monitor and Notebooks, etc.

B. LCD TV and PID

C. Communications and Consumer Electronics: Tablet, smart phone, smart watch, digital camera, digital video, digital photo frame, portable game console, smart home and other high mobility and portable electronic products application.
D. Automotive Display: Gauge board, dashboard, digital reflecting mirror, head-up display, audiovisual TV at back seat, and navigator.
E. X-Ray
F. Special application: medical display, Avionics display, automotive display and other touch panel application.
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(2) Touch Panel business
A. Small size (below 7 inch) products mainly apply to smart phone, multimedia player, GPS and digital camera, etc.
B. Medium size (7 inch to 19 inch) products mainly apply to tablet, eBook, Ultrabook, notebook, etc.
C. Large size (above 20 inch) products mainly apply to All-in-one computer (AIO), Public Information Display, etc.
(3) Other emerging businesses
A. Manufacture of LCD TVs
B. LC Meta-Surface Antenna

2. Major Products and Their Production Processes

(1) Three Steps in the TFT-LCD Production Process:
A. In the Array or TFT Process mentioned in the preceding paragraph, injection and washing for glass baseplates→gate metallic layer sputtered coating→gatemetallic layer lithography→Semiconductor layer continued filming→Semiconductor lithography→source/drain film-forming→source/ drain medal sputtered coating→source/drain lithography→Protection film manufacturing process→Protection film lithography→Transparent conducting layer sputtered coating transparent conducting layer lithography→ thin film transistor electrical analysis→thin film transistor completion.
B. Cell or LCD Process: The Cell process fits the Array substrate to a color-filter substrate; liquid crystal is then inserted between the two substrate layers.
C. Module Assembly or LCM Process: taking the panel from the Cell process and bonding the assembling backlights, IC and frame and other components to make the Open cell, module and system and other types based on clients’ demand.
(2) Touch Panel business
A. Sensor Process: Use Semiconductor Litho process to put sensor on the glass.
B. Lamination & FPC Bonding Process:
C. Touch panel modules and LCD/LCM assembling process (TP & LCD/LCM Direct Bonding & Advanced Direct Bonding): A.TP & LCM: taking LCM as the baseplates to be attached to the touch panel modules for overall combination. B.TP & LCD: LCD (Open-Cell) as the baseplates to be attached to the touch panel modules for overall combination before being assembled with Back Light modules(BLM).
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5.2.3 Supply Status of Main Materials

Major Raw Materials	Source of Supply	Supply Situation
Driver IC	Supplier U,Supplier O,Supplier L,Supplier K	Good
Glass	Supplier S,Supplier P,SupplierQ	Good
Polarizer	Supplier W,Supplier T,Supplier R,Supplier V	Good

5.2.4 Major Suppliers and Clients

A. Major Clients Information for the Last Two Calendar Years

Unit ： NT$ thousand

					Unit`：`NT$ thousand	Unit`：`NT$ thousand	Unit`：`NT$ thousand	Unit`：`NT$ thousand
Item	2020				2021
	Company name	Amount	Percent	Relation with Issuer	Company name	Amount	Percent	Relation with Issuer
1	Others	269,911,051	100.00	None	Others	350,076,690	100.00	None
	Net Total Supplies	269,911,051	100.00	－	Net Total Supplies	350,076,690	100.00	－

B. Major Suppliers Information for the Last Two Calendar Years

Unit ： NT$ thousand

					Unit`：`NT$ thousand	Unit`：`NT$ thousand	Unit`：`NT$ thousand	Unit`：`NT$ thousand
Item	2020				2021
	Company name	Amount	Percent	Relation with Issuer	Company name	Amount	Percent	Relation with Issuer
1	Others	162,158,768	100.00	None	Others	169,326,637	100.00	None
	Net Sales	162,158,768	100.00	－	Net Sales	169,326,637	100.00	－

5.2.5 Production in the Last Two Years

Unit: NT$ thousand

				Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Year Major Products	2020			2021
	Capacity	Quantity	Amount	Capacity	Quantity	Amount
TFT-LCD	419,160	389,600	246,800,000	507,000	479,600	258,800,000
Total	419,160	389,600	246,800,000	507,000	479,600	258,800,000

5.2.6 Shipments and Sales over the Last Two Years

Unit ： NT$ Thousand

					Unit`：`NT$ Thousand	Unit`：`NT$ Thousand	Unit`：`NT$ Thousand	Unit`：`NT$ Thousand
Year Major Product	2020				2021
	Local		Export		Local		Export
	Quantity	Amount	Quantity	Amount	Quantity	Amount	Quantity	Amount
TFT-LCD	71,507	52,975,743	353,893	216,935,308	71,154	84,022,636	408,801	266,054,054
Total	71,507	52,975,743	353,893	216,935,308	71,154	84,022,636	408,801	266,054,054

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5.3 Human Resources

	Year	2020	2021	As of April 30, 2022
Number of Employees	Managerial Officers	2,769	2,871	2,891
	IDL	12,387	12,552	12,659
	DL	42,981	37,430	37,066
	Total	58,047	52,853	52,616
Average Age		32.81	34.29	34.56
Average Years of Service		6.01	7.12	7.26
Education	Ph. D.	0.13%	0.16%	0.15%
	Masters	9.70%	11.19%	11.14%
	Bachelor’s Degree	68.60%	43.96%	45.04%
	Senior High School	14.94%	27.26%	26.17%
	Below Senior High School	6.62%	17.44%	17.50%
	Total	100%	100%	100%

5.4 Environmental Protection Expenditures

5.4.1 Any losses suffered by the Company in the most recent fiscal year and up to the annual report publication date due to environmental pollution incidents (including any remuneration paid and any violations of environmental protection laws or regulations found in environmental inspection, specifying the disposition dates, disposition reference numbers, the articles of law violated, and the content of the dispositions), and disclosing an estimate of possible expenses that could be incurred currently and in the future and measures being or to be taken. If a reasonable estimate cannot be made, an explanation of the facts of why it cannot be made shall be provided ：

The Company's T2 plant in Zhunan was fined NT$12,000 by the Environmental Protection Bureau of the Miaoli County Government for "Violating Article 18 of the Water Pollution Control Act and Article 65, Paragraph 1 of the Water Pollution Control Measures and Test Reporting Management Regulations" because its cumulative water measurement facility at the effluent discharge point did not conduct the calibration at least once a year per the regulations.

In response to the above-mentioned sanction by the competent authorities, the plant immediately arranged to perform the annual external calibration of the water measurement facility. Inventory the equipment that requires regular calibration and register it in the equipment calibration management system for tracking and management.

In 2017 and 2018, the Company's Plant D in Tainan was fined NT$288,000 in total by the Environmental Protection Bureau of the Tainan City Government for "violating Article 28, Paragraph 1, Article 31, Paragraph 1, Subparagraph 2, and Article 36, Paragraph 1 of the Waste Disposal Act and Article 43, Paragraph 1 of the Methods and Facilities Standards for the Storage, Clearance and Disposal of Industrial Waste" because the reusable packaging materials of the polarizing plates were not properly disposed of after being retrieved by agents and discarded.

In response to the aforementioned penalty imposed by the competent authority, the Company had prepared and submitted a discarded site cleanup plan by the law and completed the cleanup of the discarded packaging materials after the local authorities had reviewed and approved the plan. Besides, the Company has commissioned a legal waste disposal facility for proper disposal of polarizer packaging materials and no longer made recyclable items be retrieved by suppliers

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5.5 Labor Relations

5.5.1 List any employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests.

1. Employee welfare and the situation of implementation

Employee remuneration and benefits

Our Employees have the labor insurance, citizen health insurance, and group insurance from the very first day of employment. Besides the basic monthly salary, we also provide Luna Festival, dragon boat festival, New Year and retention bonus, and proper performance bonus according to the Company operation revenue； Employee remuneration is issued after the Board of Directors’ resolution and the shareholders’ meeting report. According to the position, performance and contribution, the amount of each employee is determined to motivate and retain outstanding talents

The Company deems “talent” as its valued asset, it expanded the implementation of “Employee Stock Ownership Trust” in 2021 to share the business results with employees and assist employees to start the longterm wealth management and saving plan in the early stage so that it can combine employee performance and shareholder interests to create a win-win situation; at the same time, it provides first time in Taiwan the lifestage leave, including filial leave, accompanying obstetric inspection leave, accompanying study leave and refresher leave, allows employees to schedule their leaves according to their personal needs, taking care of both work and life balance. Making good use of the travel/study fund, the Company can provide the employees with a good life in InnoLux that brings them peace of mind at work, peace of mind for their families, and enriches their bodies and minds.

In welfare, we have employee restaurants in all factories, and provide meal substitutes according to the Company rules. At the same time provide convenience stores, cafes, banks, insurance, tourism, telecommunications and other diverse assistance. And with the concepts of energy, comfortable life, and happiness, we built the employee’s center, which provides leisure and exercise functions to release our employees’ mental and physical stress. We cooperate with manufacturers in sports subsidy programs to provide employee with more flexible sports and leisure venues, and encourages employee to exercise and apply for subsidies. In addition, the Company holds regular health examinations, and provides consultation for anomaly and health guidance after the health examination and cancer screening to assist employees in early detection of diseases and early treatment. Introducing personal medical images into health management APP since 2021. It provides complete and convenient information for employees when seeking medical treatment. Meanwhile, professional doctors are stationed in the plant to provide various health promotion and psychological consultation programs to care for the physical and mental well-being of employees. Besides, we provide multiple self-financed health check-up programs for family members, which not only takes care of employees, but also extends to family members, providing more comprehensive life care.

Based on adhering to the concept of sharing business results with employees, the Employee Welfare Committee is established in accordance with the law to be responsible for the planning and implementation of various welfare programs; including community activities, sports seasons, movie banquets, family days, departmental dedication activities, seminars by talents from different industries, discounts for special stores, etc., and subsidies for festivals, weddings and funerals, emergency relief, etc. To encourage colleagues to cultivate personal interests outside of work and promote work-life balance, through the establishment of diversified clubs, and the three key points of enrichment, activism, and life-oriented management of the clubs, to meet the different preferences of employees through cross-field, same-interest activities and exchanges, and create both Energetic, creative, caring and joyful workplace environment.

Employee development

Established Innolux University, with "3 colleges and 1 center (Technology College, Management College and Pioneer College, and General Education Center)" to integrate company-wide learning resources, and offer a sound certification development framework, and continuously integrate and improve the system, process and

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development blueprint of human resources development, with professional positions and management functions certification as the cornerstone; including vertically promote quality, green products, legal affairs and other related courses, and then horizontally promote the training of various departments, and also develop business ability training in line with the Company's operation strategy. The Company carries out various talent development projects, such as: E+ talent plan, business courses, etc.

By combining internal/external training channels, such as language learning, E-book learning, E course learning, on-the-job training, headquarters training, overseas experience and other talent development networks, we aim to enhance the professional knowledge and skills of our employees. At the same time, cultivate management talents, carry out "Zero Error Practice", "Factory and Division-level Management Battle Camp" and "Senior Supervisor Workshop" project courses, in order to improve the talent development network and develop the diversified career path of the Company's operating strategy and organization needs.

We continuously offer a series of courses on digital transformation, plan learning blueprints according to different targets, and cooperate with academic institutions to introduce online and physical learning courses to enhance the intelligent thinking of employee. With the strategic direction of “Digital Transformation ”and “Increasing Value”, the Company reflects intelligent manufacturing and operation and continues to increase and strengthen the overall competitiveness of its staff and organization in response to the AI wave of Industry 4.0 and the integration of cross-domain management talents and technology leaders.

2. Retirement structure and the situation of implement

At present, there are two kinds of labor pension systems, the old system of retired labor implemented by the accordance with the Labor Standards Law and the new system of retired labor implemented by the accordance with the Labor Pension Regulations.

(1) The company formulates employee retirement measures in accordance with the Labor Standards Act, and establishes a Labor Retirement Reserve Supervision Committee.
(2) We hire actuary to evaluate our employees’ retirement preparation fund and issue the evaluation report according to the IAS19R financial principles.
(3) We transfer 2%~15% monthly salary to retirement preparation every month.
(4) Since July 1, 2005, the new labor pension system has been implemented in accordance with the law. If a labor retirement pension system is established, the Company will allocate 6% of the insured salary to the employees’ personal account established by the Labor Insurance Bureau on a monthly basis. Protect employees' rights.

3. Labor and management agreement

The Company has always attached importance to labor relations and emphasized labor harmony. In order to maintain two-way communication, management and exchange, the company has been promoting zero distance communication with employees through various measures.

(1) Quarterly labor-management meetings and employee welfare meetings are held, in which representatives from the employer side, composed of senior management, and representatives from the labor side, selected by employees, to communicate directly face-to-face and exchange opinions with each other in an open manner.
(2) Regularly hold relevant communication meetings, as if the appointment is an obligation, inviting all management and employees to attend, so that employees can understand the current status of the Company's operations and align with the future goals and development.
(3) Construct a comprehensive communication channel, announcing important information and issues through e-newsletters, boot and screen protection screens, the WingHR app, iMedia video channels, and the iFB company Facebook; provide all-day communication platforms such as employee care hotline, employee care mailbox, WingHR-I want to complain and suggestion boxes in each factory. Employees can choose to escalate their problems by name or anonymously, so that their problems can be solved immediately and
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effectively, and a harmonious labor relations can be established.

4. Working environment and individual safety protection

(1) Safety and Health organization and operation

The Company has set up a central coordinating unit for the development of environmental safety and health management systems and establishing risk management strategies under the President's office, and a dedicated unit for comprehensive environmental and sanitation management affairs in the factory. Each factory invites the top executives of the plant area, various authorities and labor representatives to convene a "Safety, Health and Environmental Protection Committee" on a quarterly basis to discuss the progress of the target plan, internal and external concerns and communication, environmental safety and health and damage prevention management plans, occupational disease prevention and Issues such as health promotion matters, epidemic prevention management matters, and environmental safety and health management performance appraisal.

The Company has an environmental safety office to be in charge of all safety and health risks in company operation management, and to integrate the safety and health departments in all factories. The environmental safety office reports to the factory manager, related departments and the soviet in “factory fields’ safety and environmental protection committee” every season.

In 2021, there are 749 participants at 40% attend the meeting in Taiwan and 280 participants at 45% in Mainland China.

The ISO50001 energy management system was introduced in 2019, and the pilot plant successfully passed the ISO50001 management system verification in 2020, and the system will continue to be deduced to the front-end process plant. In April, 2021, the Taiwan front-end process plant passed the external verification to obtain the energy management system certificate. Combine with ISO45001 occupational safety and health management system and ISO14001 environmental management system to make the environmental safety and health management system more comprehensive and complete, provide a better working environment for factory workers, fulfill social responsibilities and enhance competitiveness to implement the sustainable business philosophy.

Analysis and Statistics of Occupational Hazards

The Company has built an electronic and database based environmental safety and health management system to improve the communication efficiency of environmental safety and health information within the organization. Since 2016, an operational and intelligent environmental safety and health management system has been developed to establish management indicators for environmental safety, health management and risk management in the plant, so as to measure the performance level of environmental safety and health management, and supervise the operation status of risk management to grasp the trend change.

Through the electronic system, the hazard identification and the risk assessment system are interconnected, as well as the operation safety observation system and the work safety analysis, in order to eliminate the potential hazard factors of the operation activities of employees and contractors, and improve the safety of the operation environment; in addition, the "parallel implementation system" is used to carry out in parallel the corrective and preventive measures of exceptional events to all domestic and overseas plants to avoid the recurrence of similar exceptional events.

The frequency of disability injury (FR) and the severity of disability injury (SR) decreased gradually, during 2013 to 2019. In 2020, the proportion of injuries caused by non-operating processes tended to increase year by year, resulting in an increase in the "Disabling Injury Frequency Rate (FR)" to 0.36. In 2021, the Company promoted an occupational safety and health program to enhance the safety and health awareness of employees and contractors, and strengthen the safety and health management of the job sites through observing, analyzing, and inspecting the job safety, therefore the Disabling Injury Frequency Rate (FR)" became 0.25 and the Disabling Injury Severity Rate (SR) was 4 in 2021, both lower than in 2020.

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The Company will continue to promote the implementation of job site safety observation, analyzation, and management program to reduce the unsafe job sites and behaviors and enhance the intrinsic safety design of the equipment; promote process automation to reduce the human-machine interaction; implement improvement projects such as Human Factors Engineering Risk Assessment and Hazard Prevention, as well as encourage employees to participate in the plant performance evaluation and activities to reduce occupational hazards and provide a safe and healthy job site for employees.

In order to seek improvement, all the Company’s plants continue to set the annual goal challenge for Lost Workday Event, Restrictive Workday Event, Chemical use management and employee physical and mental health management in 2022, so as to achieve the commitment the commitment to care for employee safety and SDGs sustainable development goals; pursue the vision of zero occupational diseases.

Contractor management

Through regular two-way communication meetings and irregular construction safety courses to strengthen contractors' awareness of environmental safety and health management, they also cooperate with contractors to complete job hazard identification, risk assessment and analysis, and emergency response plans for high-risk operations. In the event of an accident, the Company’s "Accident Electronic Management System" will conduct accident investigation and analysis and implement corrective and preventive measures; in order to prevent accidents, the contractor’s hazard assessment and prevention capabilities will be promoted and strengthened through education and training activities, and the operation activities may trigger rescue and response drills for accidents. The contractor accident rate of 0.26, IR 0.11, and LDR 3 in 2021 are lower, compared with the year 2020. And the work-related fatalities rate is 0, thus the construction work of the contractor will continue to implement the safety analysis of the contractor's work, take preventive measures, toolbox meetings and other measures to prevent the recurrence of accidents in 2022.

ESH Training and Contingency drill

Employees are the most valuable asset. Training is an investment that never depreciates. ESH training is the basis for the promotion and practical implementation of our ESH management. We make long-term investments in human and material resources according to the hazard profile of each plant. We plan, design and deliver training to the staff regarding ESH knowledge and skills, such as injury prevention, machinery safety, fire safety management, and plant safety management. We also monitor and control the training quality and effectiveness. In 2021, 2,774 ESH training sessions were held, for a total of 184,598 participants. On average, employees joined over 3 training sessions per person per year.

The Company builds emergency response organizations and develops contingency plans and preparation procedures for various situations such as fires, earthquakes, chemical leaks, and fires on renewable energy generation equipment etc., and through daily education, training and drills to enable the Company to deal with them quickly and effectively Disasters and loss reduction.

(2) Loss Prevention Management Projects

The Company has long been committed to the establishment and improvement of damage prevention systems and regulations, annual damage prevention inspections and audits, and continuous implementation of improved technology in risk management and control standards, in order to continuously improve and strengthen the Company's physical fitness.

In recent years, the implementation of inspection projects for the construction or expansion of new plants, new processes and major changes, fire and natural disaster risks has comprehensively strengthened the Company's physical risk management to enhance the Company's risk tolerance and recovery ability after facing shock

The Company will implement programs for Infrared Intelligent Detection System, the chemical pipeline deterioration assessment mechanism and non-destructive inspection to eliminate process hazards, reduce uncertainty risks, and ensure process safety; in response to Taiwan's water shortage and drought situation

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in early each year, the Company will launch a drought backup plan and prepare guidelines for water shortage and drought backup to strengthen the future business risk management capabilities. In the future, the Company will continue the past experience, and consider internal, external and industry concerns about major risk trends, such as climate change threats, fires and explosions, external service supply and other operational interruption threats; the Company's internal execution and optimization of the continuous operation management system extend outward Go to the environmental safety and operational risk check of the factory-resident suppliers, complete the collaborative operation robot safety evaluation report project in accordance with the automation development strategy, etc., to strengthen the mutual coexistence of stakeholders inside and outside the Company, and implement sustainable business operation

Prevention of manmade disasters

Due to musculoskeletal disorders percentage increase this few years, prevention of company as below:

A. Identification and analysis of the risk of job-specific processes of a systematic, resource and continuous improvement mode execution.
B. Occupational Safety and Health Act will trigger repetitive operations, such as pre-musculoskeletal diseases Anti concept implanted "hazard identification and risk assessment norms" to implement career In order to effectively prevent and control concepts, health management must be through hazard awareness, assessment and control improvement.

Disease prevention and management of workload

The Company aims to effectively prevent abnormal workloads from causing diseases and ensure the safety and health of employees as follow:

A. Ensure that employees’ working hours, rest, and vacation conditions are in line with local labor regulations.
B. Perform workload level assessment, including employee overload and work pattern assessment, and assess the risk of cardiovascular disease incidence of employees based on health examination results, and adopt health management
C. The health management system was implemented, including annual regular health checkups, risk case identification and management, anomaly tracking management, mental health management, matching work, fitness adjustment, etc.
D. Active promotion of cardiovascular disease ,promote mental health management plans and stress management-related preventive education and dissemination on the rules of working hours, knowledge of preventing workplace fatigue related diseases, and health management strategies to employees through various ways.

Management of Female Health Protection

In order to ensure the well-being of female employees and protect their health, Innolux Corporation, taking into consideration the impact of gender differences and pregnancy on health risks, has implemented maternal health protection activities and management, including:

A. In conjunction with the local labor laws, parental leave allowance is implemented, miscarriage prevention leave and family care leave rights are reinforced, related health protection measures are established, internal standard operating procedures are set up. For pregnant female employees, health risk assessments are implemented, hazard control and risk communication are carried out, and work adjustments are made as needed.
B. Health guidance during pregnancy and breastfeeding is provided to pregnant employees. Rest areas and breastfeeding rooms are provided to create a friendly working environment for female employees, taking into account the principles of maternity protection and gender equality in employment.
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(3) Recruitment and Staffing

The Company’s goal is to employ qualified personnel to create the best possible performance. Our company cares about diversity and equal opportunity. We do not allow employment discrimination based on race, color, age, gender, sexual orientation, ethnicity, disability, pregnancy, religion, political affiliation, union membership, and marital status or otherwise. In our day-to-day operations, this means that we monitor and manage our human resources consciously. We analyze and improve turnover patterns. We build a labor force with a balanced structure, which was also integrated into our recruiting policy.

At the same time, adhering to the "take from society, use to society" concept, promote employees with physical and mental disabilities, consider different physical and mental conditions to arrange work appropriately, provide a friendly working environment and strengthen their work functions, so that the work performance of colleagues with disabilities and general colleagues go hand in hand, and the Company also fully fulfill corporate social responsibility

(4) Zero Distance Communication

The Company emphasizes harmonious labor relations. To this end, we convene quarterly meetings with the labor-capital committee and the Employee Welfare Committee. High-level managers from the capital side and grassroots level representatives from the labor side engage in two-way face-to-face communications, to exchange views in an open atmosphere. We also have built a full range of communication channels, which employees can use under their names or anonymously, the Employee 24 hours Care Hotline, the Employee Care Mailbox, I Want to Speak-up, Two-way communication responds to issues such as human rights, labor management and sexual harassment, help employees to find quick solutions to their problems. And Sets up a special unit to handle appeal cases, supervise relevant positions, and protect employees’ rights.

Workplace Free from Workplace Violence

To prevent the employees from the threat of workplace violence, the Company has continued to promote the "Workplace Violence Prevention Program" throughout its factories to build a friendly workplace and to develop supervisors' sensitivity and advanced caring skills, so that it can actively create a physically and mentally healthy workplace. Therefore, it was awarded the recognition of the Best Employer in Asia (HR ASIA) 2021.

EAPs Employee Assistance Programs

Employees are company's most important asset. Innolux understands how difficulties may affect an individual’s work and life. Promote Employee Assistance Programs (EAPs), which are integrated into the Wing HR APP platform to provide employees with 24-hour uninterrupted consultation services to assist employees in real time, such as employee communications, psychological counseling, and healthcare, in an effort to reduce the impact that problems may have on our employees' work and lives. We hope to enable our employees to work with a fit body and a healthy mind and improve productivity.

5.5.2 List any losses suffered by the Company in the most recent 2 fiscal years and up to the annual report publication date due to labor disputes (including any violations of the Labor Standards Act found in labor inspection, specifying the disposition dates, disposition reference numbers, the articles of law violated, the substance of the legal violations, and the content of the dispositions), and disclosing an estimate of possible expenses that could be incurred currently and in the future and measures being or to be taken. If a reasonable estimate cannot be made, an explanation of the facts of why it cannot be made shall be provided.

The Company and its subsidiaries have recently and until the annual report dated, and the estimated cost of labor disputes is NT$ 712 thousand. However, there is no other case of paying fines due to labor inspections that violate the relevant regulations of the Labor Standards Law.

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5.6 Information Security Management

5.6.1 Information security risk management framework, information security policy, management plan and resources invested in information security management, etc.:

The Company established the Chief Information Security Officer position in 2020 and has set up a dedicated unit for information security by government regulations in 2011. The Chief Information Security Officer reports the implementation results of information security to the Board of Directors on an annual basis. The information security dedicated unit is responsible to coordinate and implement the Company’s information security policies; advocate the information security to enhance employees’ information security awareness; regularly report to Chief Information Security Office, General Manager, and Chairman the implementation result of information security; review and assess the effectiveness of internal controls over the Company's information operations; and build an "Active Information Security Detection and Defense" framework to protect the confidentiality, integrity, and availability of information, reducing the risk of unauthorized use, damage, or leakage of information.

Information Security Policy

Items	Content
Passed ISO27001 certification for information management system	1. Implemented information security policy management 2. Control the information security compliance and continue to conduct the business contingency drills to protect the Company’s critical systems and information security. 3. Passed the ISO27001 certification at the end of 2021.
Induced TISAX certification system to the automobile panel department of the Company.	1. Netherland plants passed the AL2 certification at the end of 2020. 2. Shanghai plants obtained the temporary label of TISAX AL3 in 2021. 3. The remaining plants will continue to take TISAX certification in 2022. It is expected that the Netherland plant, Ningbo plant and Taiwanplants will obtain the AL3 certification.
Promoting information security awareness	Promote the “Month of Information Security” campaign, and hold information security educational training and drills periodically to upgrade employees’ information security awareness.

5.6.2 If, in the latest publication of the annual report, any losses, possible impacts and countermeasures caused by major information security incidents cannot be reasonably estimated, the facts that cannot be reasonably estimated shall be stated: N/A

5.7 Important Contracts

5.7 Important	Contracts
Agreement	Counterparty	Period	Major Contents	Restrictions
Lease Agreement of the Land	Science-based Industrial Park Administration	May 28, 2003 - Dec 31, 2022	Leasehold of land	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	Science-based Industrial Park Administration	Apr. 6, 2004 – Dec. 31, 2023	Leasehold of land	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	Science-based Industrial Park Administration	Dec. 1, 2007 – Dec. 31, 2026	T2 Leasehold of land oriented for factory	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	Science-based Industrial Park Administration	Feb. , 2001- Dec. , 2020	Lease of land for Zhunan Site, Hsinchu Science Park in Miaoli County (Plant No. I)	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	Science-based Industrial Park Administration	Feb. , 2004 – Dec. , 2023	Lease of land for Zhunan Site, Hsinchu Science Park in Miaoli County (Plant No. II)	Pursuant to the terms and conditions set forth under the Agreement

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Agreement	Counterparty	Period	Major Contents	Restrictions
Lease Agreement of the Land	South Taiwan Science- based Industrial Park Administration	Mar. 9, 2015 – Mar. 8, 2035	Leasehold of land	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	South Taiwan Science- based Industrial Park Administration	Jun. 1, 2019- Apr. 30,2031	Leasehold of land	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	South Taiwan Science- based Industrial Park Administration	Jan. 1, 2020- Nov. 30, 2026	Leasehold of land	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	South Taiwan Science- based Industrial Park Administration	Jan. 1, 2020- Apr. 30, 2028	Leasehold of land	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	South Taiwan Science- based Industrial Park Administration	Jan. 1, 2020- Dec. 31, 2029	Leasehold of land	Pursuant to the terms and conditions set forth under the Agreement
Lease Agreement of the Land	Science-based Industrial Park Administration	Jan. 1, 2021 – Sep. 30, 2028	T3 Leasehold of land oriented for factory	Pursuant to the terms and conditions set forth under the Agreement
Engineering Project Agreement	Chung Lin Construction Co., Ltd.	Feb. ,2001 till expiry of warranty period	FAB I Project of Civil Engineering Construction	Pursuant to the terms and conditions set forth under the Agreement
Engineering Project Agreement	Hu Tzu Construction Co., Ltd.	Jul. ,2005 till expiry of warranty period	FAB II Newly constructed project	Pursuant to the terms and conditions set forth under the Agreement
Engineering Project Agreement	Cheng Teh Fireproof Industrial Co., Ltd.	Sep. ,2005 till expiry of warranty period	New construction of Plant No. II, award of the fire prevention project contract	Pursuant to the terms and conditions set forth under the Agreement
Equipment Purchase	Hon Hai Precision Ind. Co., Ltd.	Nov. 29, 2017 till expiry of warranty period	Machinery equipment	Pursuant to the terms and conditions set forth under the Agreement
Syndicated Loans	Bank of Taiwan and bank groups	Mar. 12, 2015 – Mar. 12, 2020	1. To be used by the Loanee to reimburse, under the syndicated accord, the mid- term and long-term syndicated loans, for all fund required for the outstanding balance of principal as mentioned above. 2. In the amount of NT$68.5 billion	Pursuant to the terms and conditions set forth under the Agreement
Syndicated Loans	Bank of Taiwan, CTBC and bank groups	Sep. 6,2016- Dec. 6,2021	1.To be used to reimburse the mid-term loan 2. In the amount of NT$35 billion	Pursuant to the terms and conditions set forth under the Agreement
Syndicated Loans	Bank of CTBC,TFC and bank groups	Jul. 16, 2018- Jul. 16, 2023	1. To be used to reimburse the mid-term loan 2. In the amount of NT$43.75 billion 3. Medium-term guarantee loan for 5 years (subject to 2 years under the joint credit agreement)	Pursuant to the terms and conditions set forth under the Agreement
Syndicated Loans	Bank of CTBC, Mega Bank, and bank groups	Jun. 24, 2020- Jun. 24, 2025	1. To be used to reimburse the mid-term loan 2. In the amount of NT$37.5 billion 3. Medium-term guarantee loan for 5years(subject to 2years	Pursuant to the terms and conditions set forth under the Agreement

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Agreement	Counterparty	Period	Major Contents	Restrictions
			under the joint credit agreement)
Patent authorization	Multinational Enterprise A	Jun. 17, 2013 – Jun. 30, 2021	3D Relevant technology & know-how	Pursuant to the terms and conditions set forth under the Agreement
Patent authorization	Multinational Enterprise B.	Jan. 1, 2015 – Dec. 31, 2020	IPS Relevant patents	Pursuant to the terms and conditions set forth under the Agreement
Cross-licensing	Multinational Enterprise C	Jul. 2, 2012 – Jul. 2, 2022	Display of the relevant cross- patent licensing within the regions.	Pursuant to the terms and conditions set forth under the Agreement
Cross-licensing	Multinational Enterprise D	Jul. 1, 2013 – Jul. 1, 2023	LCD Relevant technology & know-how	Pursuant to the terms and conditions set forth under the Agreement
Patent authorization	Multinational Enterprise E	Sep. 5, 2013 – Sep. 5, 2021	LCD Relevant technology & know-how	Pursuant to the terms and conditions set forth under the Agreement
Cross-licensing	Multinational Enterprise F	Oct. 1, 2017– Sep. 30, 2022	LCD Relevant technology & know-how	Pursuant to the terms and conditions set forth under the Agreement
Patent authorization	Multinational Enterprise G	Jan. 1, 2019- Dec. 31, 2028	LCD Relevant technology & know-how	Pursuant to the terms and conditions set forth under the Agreement
Patent authorization	Multinational Enterprise H	Feb. 28, 2019- Permanent authorization	LCD Relevant technology & know-how	Pursuant to the terms and conditions set forth under the Agreement
Patent authorization	Multinational Enterprise I	Jan. 1, 2020 – Dec 31, 2024	LCD Relevant technology & know-how	Pursuant to the terms and conditions set forth under the Agreement

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VI. Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed Balance Sheets and Statements of Comprehensive Income for the Most Recent Five Fiscal Years

1. International Financial Reporting Standards - Consolidated Financial Statements

Condensed Consolidated Balance Sheet

Unit: NT thousands

Year Item	Year Item	Financial Summaryfor The Last Five Years(Note1)	Financial Summaryfor The Last Five Years(Note1)	Financial Summaryfor The Last Five Years(Note1)	Financial Summaryfor The Last Five Years(Note1)	Financial Summaryfor The Last Five Years(Note1)	As of Mar. 31, 2022
		2017	2018	2019	2020	2021
Current assets		158,529,955	169,734,116	133,118,249	159,162,307	175,821,223	190,592,611
Property,Plant and Equipment		220,864,627	206,617,960	194,382,436	178,901,675	162,607,908	160,700,466
Intangible assets		17,910,908	17,681,485	17,577,644	17,506,984	17,520,594	17,523,477
Other assets		17,553,268	17,886,043	24,686,017	23,988,871	111,569,865	97,908,218
Total assets		414,858,758	411,919,604	369,764,346	379,559,837	467,519,590	466,724,772
Current liabilities	Before distribution	131,894,172	120,274,676	110,818,145	109,170,648	116,553,507	114,329,880
	After distribution	139,855,829	120,871,800	111,781,252	113,359,009	Note 2	Note 2
Non-current liabilities		18,639,538	36,654,223	26,836,172	32,822,143	46,169,152	45,532,165
Total liabilities	Before distribution	150,533,710	156,928,899	137,654,317	141,992,791	162,722,659	159,862,045
	After distribution	158,495,367	157,526,023	138,617,424	146,181,152	Note 2	Note 2
Equity attributable to shareholders of theparent		264,325,048	254,990,705	231,927,704	237,369,660	304,347,400	306,396,524
Capital stock		99,520,720	99,520,720	97,110,720	99,404,332	105,596,201	105,596,201
Capital surplus		99,646,919	99,648,115	100,362,379	99,707,996	103,287,482	103,290,753
Retained earnings	Before distribution	66,248,130	60,485,333	42,398,622	44,317,003	98,667,853	100,585,171
	After distribution	58,286,473	59,888,209	42,398,622	41,175,732	Note 2	Note 2
Other equityinterest		(1,090,721)	(4,663,463)	(7,325,437)	(6,059,671)	(3,204,136)	(3,075,601)
Treasurystock		`－`	`－`	(618,580)	`－`	`－`	`－`
Non-controllinginterest		`－`	`－`	182,325	197,386	449,531	466,203
Total equity	Before distribution	264,325,048	254,990,705	232,110,029	237,567,046	304,796,931	306,862,727
	After distribution	256,363,391	254,393,581	231,146,922	233,378,685	Note 2	Note 2

Note 1: Financial summary for the last five years audited and certified by accountants.

Note 2: Pending on approval of shareholders at Annual General Shareholders’ Meeting

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Condensed Consolidated Statement of Comprehensive Income

Unit: NT thousands

Year Item	Financial Summaryfor The Last Five Years(Note1)	Financial Summaryfor The Last Five Years(Note1)	Financial Summaryfor The Last Five Years(Note1)	Financial Summaryfor The Last Five Years(Note1)	Financial Summaryfor The Last Five Years(Note1)	As of Mar. 31, 2022
	2017	2018	2019	2020	2021 (Note2)
Operatingrevenue	329,174,401	279,376,115	251,971,209	269,911,051	350,076,690	69,886,018
Grossprofit	68,738,677	26,813,558	3,014,080	23,833,098	91,499,680	8,571,807
Income from operations	47,022,209	4,835,296	(19,933,896)	1,811,797	62,713,075	2,242,624
Non-operating income and expenses	1,918,980	1,734,134	3,408,468	745,334	(301,978)	86,715
Income before tax	48,941,189	6,569,430	(16,525,428)	2,557,131	62,411,097	2,329,339
Net income(Loss)	37,028,609	2,222,762	(17,440,272)	1,639,824	57,545,123	1,902,432
Profit (loss) from discontinued operations	－	－	－	－	－	－
Net income(Loss)	37,028,609	2,222,762	(17,440,272)	1,639,824	57,545,123	1,902,432
Other comprehensive income(income after tax)	2,286,939	(3,596,644)	(2,709,329)	1,548,600	2,811,713	158,164
Total comprehensive income	39,315,548	(1,373,882)	(20,149,601)	3,188,424	60,356,836	2,060,596
Net income attributable to shareholders of theparent	37,028,609	2,222,762	(17,442,990)	1,636,144	57,534,461	1,889,989
Net income attributable to non-controllinginterest	－	－	2,718	3,680	10,662	12,443
Comprehensive income attributable to Shareholders of theparent	39,315,548	(1,373,882)	(20,151,561)	3,184,147	60,347,656	2,045,853
Comprehensive income, attributable to non- controllinginterests	－	－	1,960	4,277	9,180	14,743
Earningsper share	3.72	0.22	(1.77)	0.17	5.53	0.18

Note 1: Financial summary for the last five years audited and certified by accountants.

Note 2: Pending on approval of shareholders at Annual General Shareholders’ Meeting

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2. International Financial Reporting Standards – Parent-company-only Financial Statement

Condensed balance sheet

Unit: NT thousands

		Unit: NT thousands	Unit: NT thousands	Unit: NT thousands	Unit: NT thousands	Unit: NT thousands
Year Item		Financial Summaryfor The Last Five Years(Note1)
		2017	2018	2019	2020	2021
Current assets		129,298,905	149,336,693	112,321,779	136,264,073	137,628,651
Property,Plant and Equipment		191,778,224	176,216,141	164,083,562	147,618,538	131,464,114
Intangible assets		17,681,078	17,599,664	17,446,858	17,365,850	17,378,711
Other assets		91,173,093	95,105,109	101,914,217	103,499,227	167,810,326
Total assets		429,931,300	438,257,607	395,766,416	404,747,688	454,281,802
Current liabilities	Before distribution	147,100,829	146,751,492	137,327,341	134,766,729	98,736,765
	After distribution	155,062,486	147,348,616	138,290,448	138,955,090	Note 2
Non-current liabilities		18,505,423	36,515,410	26,511,371	32,611,299	51,197,637
Total liabilities	Before distribution	165,606,252	183,266,902	163,838,712	167,378,028	149,934,402
	After distribution	173,567,909	183,864,026	164,801,819	171,566,389	Note 2
Equity attributable to shareholders of theparent		264,325,048	254,990,705	231,927,704	237,369,660	304,347,400
Capital stock		99,520,720	99,520,720	97,110,720	99,404,332	105,596,201
Capital surplus	Before distribution	99,646,919	99,648,115	100,362,379	99,707,996	103,287,482
	After distribution	99,646,919	99,648,115	99,399,272	98,660,906	Note 2
Retained earnings	Before distribution	66,248,130	60,485,333	42,398,622	44,317,003	98,667,853
	After distribution	58,286,473	59,888,209	42,398,622	41,175,732	Note 2
Other equityinterest		(1,090,721)	(4,663,463)	(7,325,437)	(6,059,671)	(3,204,136)
Treasurystock		`－`	`－`	(618,580)	－	－
Non-controllinginterest		`－`	`－`	`－`	－	－
Total equity	Before distribution	264,325,048	254,990,705	231,927,704	237,369,660	304,347,400
	After distribution	256,363,391	254,393,581	230,964,597	233,181,299	Note 2

Note 1: Financial summary for the last five years audited and certified by accountants.

Note 2: Pending on approval of shareholders at Annual General Shareholders’ Meeting

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Condensed Statement of Comprehensive Income

Unit: NT thousands

	Unit: NT thousands	Unit: NT thousands	Unit: NT thousands	Unit: NT thousands	Unit: NT thousands
Year Item	Financial Summaryfor The Last Five Years(Note1)
	2017	2018	2019	2020	2021 (Note2)
Operatingrevenue	323,687,952	278,407,555	249,384,126	265,436,103	334,328,350
Grossprofit	57,451,834	18,005,702	(5,413,355)	14,983,862	80,521,187
Income from operations	40,633,793	356,315	(22,891,507)	(1,628,571)	59,312,062
Non-operatingincome and expenses	4,441,800	3,872,395	5,076,526	3,630,908	1,713,979
Income before tax	45,075,593	4,228,710	(17,814,981)	2,002,337	61,026,041
Net income(Loss)	37,028,609	2,222,762	(17,442,990)	1,636,144	57,534,461
Profit (loss) from discontinued operations	`－`	`－`	`－`	－	－
Net income(Loss)	37,028,609	2,222,762	(17,442,990)	1,636,144	57,534,461
Other comprehensive income (income after tax)	2,286,939	(3,596,644)	(2,708,571)	1,548,003	2,813,195
Total comprehensive income	39,315,548	(1,373,882)	(20,151,561)	3,184,147	60,347,656
Net income attributable to shareholders of theparent	37,028,609	2,222,762	(17,442,990)	1,636,144	57,534,461
Net income attributable to non- controllinginterest	`－`	`－`	`－`	－	－
Comprehensive income attributable to Shareholders of theparent	39,315,548	(1,373,882)	(20,151,561)	3,184,147	60,347,656
Comprehensive income attributable to non-controllinginterest	`－`	`－`	`－`	－	－
Earningsper share	3.72	0.22	(1.77)	0.17	5.53

Note 1: Financial summary for the last five years audited and certified by accountants.

Note 2: Pending on approval of shareholders at Annual General Shareholders’ Meeting

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6.1.2 CPA name and Audit Opinions of the Last 5 Years

Year	CPA	Auditing Opinion
2017	Han-Chi Wu & Sheng-ChungHsu	Unqualified wording
2018	Han-Chi Wu & Hua-LingLiang	Unqualified wording
2019	Han-Chi Wu & Hua-LingLiang	Unqualified wording
2020	Sheng-ChungHsu & Hua-LingLiang	Unqualified wording
2021	Sheng-Chung Hsu & Hua-Ling Liang	Unqualified wording

6.1.3 If there was change/replacement of the CPA within the most recent 5 fiscal years, explanation made by the Company’s previous and current CPA over the causes for such change/replacement shall be set forth.

Year	Former CPA's Name	Current CPA's Name	Reason
2017	None
2018	Han-Chi Wu & Sheng-Chung Hsu	Han-Chi Wu & Hua-Ling Liang	Internal adjustment of the accountingfirm
2019		None
2020	Han-Chi Wu & Hua-Ling Liang	Sheng-Chung Hsu & Hua-Ling Liang	Internal adjustment of the accountingfirm
2021	None

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6.2 Five-Year Financial Analysis

1. Consolidated Financial Analysis

Item	Year (Note 1)	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	Financial Analysis for the Last Five Years	As of Mar. 31, 2022
		2017	2018	2019	2020	2021
Financial structure (%)	Debt Ratio	36.29	38.10	37.23	37.41	34.81	34.25
	Ratio of long-term capital to property, plant and equipment	128.12	141.15	129.16	146.59	209.21	212.41
Solvency (%)	Current ratio	120.19	141.12	120.12	145.79	150.85	166.70
	Quick ratio	96.12	113.81	88.51	114.66	114.28	126.77
	Interest earned ratio(times)	53.16	12.59	(15.02)	3.49	64.88	11.36
Operating performance	Accounts receivable turnover(times)	5.32	5.13	5.46	5.69	6.12	4.71
	Average collectionperiod	69	71	67	64	60	78
	Inventoryturnover(times)	8.91	7.69	7.58	7.50	7.05	5.84
	Accounts payable turnover (times)	4.72	4.66	4.68	4.97	5.07	4.53
	Average days in sales	41	47	48	49	52	63
	Property, plant and equipment turnover(times)	1.56	1.31	1.24	1.40	1.99	1.68
	Total assets turnover(times)	0.84	0.68	0.64	0.72	0.83	0.60
Profitability	Return on total assets(%)	9.57	0.64	(4.25)	0.66	13.77	0.45
	Return on stockholders' equity(%)	15.10	0.86	(7.16)	0.70	21.22	0.62
	Pre-tax income to paid-in capital(%)	49.18	6.60	(17.02)	2.57	59.10	2.21
	Profit ratio(%)	11.25	0.80	(6.92)	0.61	16.44	2.72
	Earningsper share(NT$)	3.72	0.22	(1.77)	0.17	5.53	0.18
Cash flow	Cash flow ratio(%)	62.66	43.72	12.48	20.52	87.30	4.63
	Cash flow adequacyratio(%)	236.36	187.54	135.92	110.77	129.26	104.96
	Cash reinvestment ratio(%)	10.02	5.22	1.56	2.41	9.79	0.53
Leverage	Operatingleverage	1.97	10.13	－	24.87	1.78	6.13
	Financial leverage	1.02	1.13	－	2.31	1.02	1.11
Analysis of financial ratio change in the last two years. (If the difference does not exceed 20%, the analysis is not
required.) 1 i f l il l i i il h i f il
. Rato o ong-term capta to property, pant and equpment ncrease: many due to te converson o convertbe bonds increases the share capital and capital surplus in 2021 compared with 2020
, . 2. The ratios of interest protection multiples and profitability increase: mainly due to the significant increase in Profit
Before Credit for Income Tax. 3. Property, plant and equipment turnover increase: mainly due to the increase in net sales. 4. Cash flow ratio and Cash reinvestment ratio increase: mainly due to cash inflow from operating activities increase in 2021, compared with 2020. 5. Operatingleverage and financial leverage: mainlydue to the increase in Operatingincome in 2021.

Note 1: Financial summary for the last five years audited and certified by accountants.
Note 2: Financial Ratio Formula
Financial Structure analysis
- (1) Debt ratio= Total Liabilities / Total Assets
- (2) Long-term funds to property, plant and equipment = (Total equity + Non-current liabilities ) / Property, plant and equipment, net
Liquidity analysis
- (1) Current ratio = Current assets / Current liability
- (2) Quick ratio = (Current Assets - Inventories - Prepaid expenses) / Current liability
- (3) Times interest earned = Profit Before Credit for Income Tax / Current interest expense
Operating performance analysis
- (1) Average collection turnover(Including Accounts Receivable and Notes Receivable from operation) = Sales / Average trade receivables
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(2) Days to collect accounts receivable = 365 / Average collection turnover
(3) Average inventory turnover = Cost of goods sold / Average inventories
(4) Average payment turnover (Including Accounts Payable and Notes Payable from operation) = operating costs / Average trade payables
(5) Average days to sell inventory = 365 / Average inventory turnover
(6) Property, plant and equipment turnover = Sales / Average property, plant and equipment, net
(7) Total assets turnover = Sales / Average total assets
Return on investment analysis
(1) Rate of return on assets = [Profit + Interest expense X (1 - Tax rate)] / Average assets
(2) Rate of return on equity = Profit / Average total Equity
(3) Profit to sales = Profit / Sales
(4) Earnings per share = (Equity attributable to owners of parent - Dividend-preferred stock ) / Weighted average outstanding shares
Cash flow
(1) Cash flow ratio = Net cash provided by operating activities / Current liability
(2) Cash flow adequacy ratio = 5-year net cash provided by operating activities / 5-year (Capital expense + Increase in inventories + Cash dividend)
(3) Cash flow reinvestment ratio = (Net cash provided by operating activities - Cash dividend) - (Property, plant and equipment, net + Long-term investments + Other non-current assets + Operating Capital)
Leverage
(1) Operating Leverage= (Net sales – Variable cost) / Operating income
(2) Financial leverage = Operating income / (Operating income – Interest expenses)
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2. Financial Analysis -Alone

Item	Year	Financial analysis in thepast fiveyears(Note 1)	Financial analysis in thepast fiveyears(Note 1)	Financial analysis in thepast fiveyears(Note 1)	Financial analysis in thepast fiveyears(Note 1)	Financial analysis in thepast fiveyears(Note 1)
		2017	2018	2019	2020	2021
Financial structure (%)	Debt Ratio	38.52	41.82	41.10	41.35	33.00
	Ratio of long-term capital to property, plant and equipment	147.48	165.43	152.53	177.10	261.76
Solvency (%)	Current ratio	87.90	101.76	81.79	101.11	139.39
	Quick ratio	69.93	83.01	60.16	80.72	108.96
	Interest earned ratio(times)	49.02	8.47	(16.33)	2.95	62.24
Operating performance	Accounts receivable turnover(times)	5.90	5.77	5.69	5.79	5.83
	Average collectionperiod	62	63	64	63	63
	Inventoryturnover(times)	11.00	9.28	8.95	8.97	8.98
	Accountspayable turnover(times)	3.47	3.19	2.90	3.15	4.25
	Average days in sales	33	39	41	41	41
	Property, plant and equipment turnover(times)	1.79	1.51	1.47	1.70	2.40
	Total assets turnover(times)	0.79	0.64	0.60	0.66	0.78
Profitability	Return on total assets(%)	9.19	0.62	(3.99)	0.61	13.58
	Return on stockholders' equity (%)	15.10	0.86	(7.16)	0.70	21.24
	Pre-tax income topaid-in capital(%)	45.29	4.25	(18.35)	2.01	57.79
	Profit ratio(%)	11.44	0.80	(6.99)	0.62	17.21
	Earningsper share(NT$)	3.72	0.22	(1.77)	0.17	5.53
Cash flow	Cash flow ratio(%)	55.59	34.02	5.79	5.91	62.41
	Cash flow adequacyratio(%)	215.66	174.92	122.84	107.31	121.46
	Cash reinvestment ratio(%)	10.55	5.22	0.92	0.84	6.09
Leverage	Operatingleverage	2.04	118.97	－	－	1.74
	Financial leverage	1.02	－	－	－	1.02
Analysis of financial ratio change in the last two years. (If the difference does not exceed 20%, the analysis is not required.) 1. Debt Ratio decrease: mainly due to the significant decrease in Accounts payable - related parties and obtains Financial assets at amortized cost - non-current in 2021, compared with 2020. 2. Ratio of long-term capital to property, plant and equipment increase: mainly due to the conversion of convertible bonds increases the share capital and capital surplus in 2021, compared with 2020. 3. The ratios of interest protection multiples and profitability increase: mainly due to the significant increase in Profit Before Credit for Income Tax. 4. Current ratio and Quick ratio increase: mainly due to the significant decrease in Accounts payable - related parties in 2021, compared with 2020. 5. Accounts payable turnover increase: mainly due to the significant decrease in Accounts payable - related parties in 2021, compared with 2020. 6. Property, plant and equipment turnover increase: mainly due to the increase in net sales. 7. Cash flow ratio and Cash reinvestment ratio increase: mainly due to cash inflow from operating activities increase in 2021, compared with 2020. 8. Operatingleverage and financial leverage: mainlydue to the increase in Operatingincome in 2021.

Note 1: Financial summary for the last five years audited and certified by accountants. Note 2:Financial Ratio Formula

Financial Structure analysis
(1) Debt ratio= Total Liabilities / Total Assets
(2) Long-term funds to property, plant and equipment = (Total equity + Non-current liabilities ) / Property, plant and equipment, net
Liquidity analysis
(1) Current ratio = Current assets / Current liability
(2) Quick ratio = (Current Assets - Inventories - Prepaid expenses) / Current liability
(3) Times interest earned = Profit Before Credit for Income Tax / Current interest expense
Operating performance analysis
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(1) Average collection turnover(Including Accounts Receivable and Notes Receivable from operation) = Sales / Average trade receivables
(2) Days to collect accounts receivable = 365 / Average collection turnover
(3) Average inventory turnover = Cost of goods sold / Average inventories
(4) Average payment turnover (Including Accounts Payable and Notes Payable from operation) = operating costs / Average trade payables
(5) Average days to sell inventory = 365 / Average inventory turnover
(6) Property, plant and equipment turnover = Sales / Average property, plant and equipment, net
(7) Total assets turnover = Sales / Average total assets
Return on investment analysis
(1) Rate of return on assets = [Profit + Interest expense X (1 - Tax rate)] / Average assets
(2) Rate of return on equity = Profit / Average total Equity
(3) Profit to sales = Profit / Sales
(4) Earnings per share = (Equity attributable to owners of parent - Dividend-preferred stock ) / Weighted average outstanding shares
Cash flow
(1) Cash flow ratio = Net cash provided by operating activities / Current liability
(2) Cash flow adequacy ratio = 5-year net cash provided by operating activities / 5-year (Capital expense + Increase in inventories + Cash dividend)
(3) Cash flow reinvestment ratio = (Net cash provided by operating activities - Cash dividend) - (Property, plant and equipment, net + Long-term investments + Other non-current assets + Operating Capital)
Leverage
(1) Operating Leverage= (Net sales – Variable cost) / Operating income
(2) Financial leverage = Operating income / (Operating income – Interest expenses)
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6.3 Audit Committee Report in the Most Recent Year

Audit Committee Report

The Board of Directors has duly submitted the 2021 operating report, financial statements, and the proposal of earnings distribution. The financial statements have been duly reviewed and approved by CPAs of PwC Taiwan with the issuance of Independent Auditor’s Report.

The Audit Committee have completed the audit and review, and had found nothing inconsistent with any of the above. Therefore, I issue this audit report for acknowledgment in accordance with Securities and Exchange Act and the Company Act. For your approval.

General Shareholders Meeting of the Company in 2022

Audit Committee Chairman: Chi-Chia Hsieh

Date: May 11, 2022

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6.4 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report

Please refer to page 148 of the annual report.

6.5 Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report

Please refer to page 243 of the annual report.

6.6 Disclosure of the Impact on Company’s Financial Status Due to Financial Difficulties: None.

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VII.Review of Financial Conditions, Operating Results, and Risk Management

7.1 Analysis of Financial Status

Unit: NT thousands

			Unit: NT thousands	Unit: NT thousands
Year Item	2020	2021	Difference
			Amount	%
Current Assets	159,162,307	175,821,223	16,658,916	10.47
Fixed Assets	178,901,675	162,607,908	(16,293,767)	(9.11)
Intangible assets	17,506,984	17,520,594	13,610	0.08
Other Assets-non-current(1)	23,988,871	111,569,865	87,580,994	365.09
Total Assets (2)	379,559,837	467,519,590	87,959,753	23.17
Current Liabilities	109,170,648	116,553,507	7,382,859	6.76
Other Liabilities-non-current(3)	32,822,143	46,169,152	13,347,009	40.66
Total Liabilities	141,992,791	162,722,659	20,729,868	14.60
Capital stock	99,404,332	105,596,201	6,191,869	6.23
Capital surplus	99,707,996	103,287,482	3,579,486	3.59
Retained earnings(4)	44,317,003	98,667,853	54,350,850	122.64
Other equity (5)	(6,059,671)	(3,204,136)	2,855,535	(47.12)
Treasuryshares	－	－	－
Non-controllingequity (6)	197,386	449,531	252,145	127.74
Total Stockholders' Equity (7)	237,567,046	304,796,931	67,229,885	28.30
Analysis of changes in financial ratios: 1. Mainly due to the increase in financial assets at amortized cost - non-current and unfinished construction and equipment under acceptance this year. 2. Mainly due to the increase of other Assets-non-current this year. 3. Mainly due to the increase of Long-term borrowings. 4. Mainly due to the increase of net income. 5. Mainly due to increase of unrealized gain on the financial assets at fair value through other comprehensive income. 6. Mainly due to the difference between disposal of consideration and carrying amount of subsidiaries. 7. Mainlydue to the increase of retained earnings.

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7.2 Analysis of Financial Performance

Unit: NT thousands

			Unit: NT thousands	Unit: NT thousands
Year Item	2020	2021	Difference
			Amount	%
Sales Revenue(1)	269,911,051	350,076,690	80,165,639	29.70
Operatingcosts	246,077,953	258,577,010	12,499,057	5.08
Gross Profit(1)	23,833,098	91,499,680	67,666,582	283.92
OperatingExpenses(2)	22,021,301	28,786,605	6,765,304	30.72
OperatingIncome(3)	1,811,797	62,713,075	60,901,278	3,361.37
Non-operatingIncome and Expenses(4)	745,334	(301,978)	(1,047,312)	(140.52)
Income Before Tax(5)	2,557,131	62,411,097	59,853,966	2,340.67
Tax Benefit(Expense) (6)	917,307	4,865,974	3,948,667	430.46
Net income(6)	1,639,824	57,545,123	55,905,299	3,409.23
Other comprehensive income(7)	1,548,600	2,811,713	1,263,113	81.56
Total comprehensive income(8)	3,188,424	60,356,836	57,168,412	1,793.00
Analysis of changes in financial ratios:
1. Mainly due to the fact that the fluctuation of the display industry, changes of the market demand and price, resulting
in an increase in sales revenue and gross profit.
2. Mainly due to the increase of labor expense.
3. Mainly due to the increase in gross profit.
4. Mainly due to the increase in business interests.
5. Mainly due to the increase in operating income.
6. Mainly due to increase in income before tax.
7. Mainly due to increase of unrealized gains on financial assets measured at fair value through other comprehensive
income.
8. Mainlycaused byincrease of net income thisyear.

Mainly due to the fact that the fluctuation of the display industry, changes of the market demand and price, resulting in an increase in sales revenue and gross profit.

7.3 Analysis of Cash Flow

7.3.1 Cash Flow Analysis for the Current Year

Unit: NT thousands

		Unit: NT thousands
Year	2021	Ali
Items		nayss
Net cash provided by operating activities	101,752,198	Net cash inflow mainly due to depreciation and increase in net income andproper control of workingcapital
Net cash used in investing activities	(98,421,583)	Mainly used for capital expenditures and acquired financial instruments
Net cash used in financing activities	(528,776)	Mainly due to the long-term loans and distribution of cash
		dividends

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7.3.2 Cash Flow Analysis for the Coming Year

Unit: NT thousands

				Unit: NT thousands	Unit: NT thousands
Estimated Cash and Cash Equivalents, Beginning of Year (1)	Estimated Net Cash Flow from Operating Activities (2)	Estimated Cash Outflow (3)	Cash Surplus (Deficit) (1)+(2)-(3)	Leverage of Cash Surplus (Deficit)
				Investment Plan	Financing Plan
28,873,000	42,491,000	42,750,000	28,615,000	－	－
2022 Analysis of changes in cash flow: Operating Activities: Net Cash inflow due to the Company continuously optimize product portfolio and adjust cost structure. Investing Activities: Net cash outflow due to continuous technological advancement and capital expenditures for new technologies Financing Activities: Net cash inflow mainly due to appropriation and bank repayment. RemedyActions for Cash Shortfall: None.

7.4 Major Capital Expenditure Items

The Company's 2021 annual capital expenditure, it mainly consists of automotive/profile/large-sized curvature manufacturing process, large-sized TV of 8K production capacity, narrow edge/thin/full screen, high precision production with wide viewing angle/machine module line, public display, automation upgrade, yield quality improvement, new product and new technology (Micro-LED/Mini-LED), and Green Energy Environmental Protection, etc., the actual capital expenditure is about NT$ 28,138,827 thousand. It will help the Company's revenue growth and profit improvement in 2022.

7.5 Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year

In terms of outward investment, the Company focused on the up- and down-streams of TFT-LCD industries to assure effective vertical integration as the final objectives. Given the worsening fluctuation of display industry and the mature development of the industrial chains, the Company held a policy of being increasingly conservative. Other than the efforts we try to refrain from investing toward the businesses irrelevant to the Company’s principal business, the Company disposed non-core investment and investment insignificant in strategies. The Company will cooperate with the group's overall investment plan and make the most appropriate use of resources in the future.

In the consolidated financial report of the Company in 2021, the investment gain recognized in equity method came to NT$ 65,134 thousand, thanks primarily to the strong demand of the LCD industry and the strong profitability in the field of special application of the panel is quite successful. Overall, the performance with the Company’s outward reinvestments have been well up to our expectation and have been continually integrated with our business development.

7.6 Analysis of Risk Management

7.6.1 Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future Response Measures

1. Change in interest rate

In order to avoid fluctuations caused by changes in interest rates, resulting in rising or falling interest rates and thus affecting the increase or decrease of income or expenses, the principles of capital allocation are primarily conservative, stable and liquidity to ensure the safety of principal and liquidity.

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2. Foreign exchange rates

(1) To prevent a potential disadvantage to the foreign currencies in input, output, investment and financing activities to the Company’s assets, liabilities values, operating results due to fluctuation in exchange rates, the Company, in due time, would undertake forward foreign exchange to evade potential risks in fluctuation in exchange rates.
(2) The Company evades exchange rate risks by obtaining financial products with a simple structure and liquidity. The trading party are mainly financial institutions.
(3) In the Company, majority the operating revenues came from US Dollars and other foreign currencies. For capital expenditures and manufacturing costs, the primary demand for foreign currencies came from US Dollars and Japanese yen. Any unfavorable significant change in exchange rate would lead to a passive impact upon the financial profit and/or loss.

3. Inflation

Since the middle of 2021, domestic inflationary pressure has arising, but the overall price increase in Taiwan has been moderate compared with that of European and American countries. The main reason is that the domestic epidemic situation is properly controlled, there is no obstacles of supply chain such as poor logistics, and labor market is not tightness. The overall average Wage growth has been modest. To prevent potential impact on the negative aspect from high-speed inflation which would, in turn, dampen investment, consumption and savings, the communications has tried by all means of lower various costs to enhance competitive edge and would be closely watchful the change in the supply and demand in the market, to flexibly adjust product portfolio to closely live up to actual demand in the market.

7.6.2 Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions

The Company had not engaged in highly risky and high financial leverage investment. Exactly as required by the Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan and the laws and ordinances concerned, we have set up wholesome financial and operating grounds in the managerial regulations and operating procedures, including “Procedures to Engage in Transaction and Disposal of Derivatives”, “Procedures for Loaning of Funds to Others” and “Operating Procedures of Endorsements/Guarantees”.
In an attempt to control potential risks in finance, we hold a very wholesome and conservative principle in derivative financial instruments to primarily evade the potential risks of the exchange rates in the substantial positions incurred by input, output and financing activities. In the days and years ahead, we shall stick to such same principle to coordinate with the trends of exchange rates and interest rates as well as the Company’s business operation, we shall adjust the financial risk management in real time in accordance with laws and ordinances concerned, internal managerial rule and operating procedures.

7.6.3 Future Research & Development Projects and Corresponding Budget

The Company's future technology development continues to be in the field of display applications. Mainly wide viewing angle TFT LCD display technology to improve the contrast and color of TFT LCD large viewing angle; high transmittance to improve the optical utilization of display; Mega Zone, Mini-LED technology to improve the color saturation, brightness and contrast; TFT LCD module technology with thin and narrow frame for display panel; continuous improvement with high resolution, high brightness, wide temperature and low energy consumption technology; endeavor to develop high-end technologies such as naked-eye stereo display, Privacy, Mirco-LED, etc. to continuously lead TFT-LCD in new field applications; embedded integrated touch technology (TOD, TID, Hybrid), bonding process technology and automated assembly technology. The Company's research and development expenditure in 2021 is NT$15,044,650 thousand. In 2022, the Company expects to invest another R&D fee of NT$ 15.8 billion. However, it will adjust according to the global market conditions and actual operating conditions, and continue to maintain its leading edge in technological

133 -

development.

7.6.4 Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Sales

As of the Annual Report’s publication date, there has been no adversely impact on financial or business due to any policy and law changed. All the Company’s teammates would be closely watchful of potential changes in major policies and laws and ordinances concerned at home and abroad and set up legal personnel to help such issues. Through such efforts, we shall be able to take right countermeasures in real-time to minimize the potential impact upon the Company’s financial standing which might be incurred by major policies at home and abroad and change in laws.

7.6.5 Effects of and Response to Changes in Technology (Risk for Information and Communication Security) and the Industry Relating to Corporate Finance and Sales

Technology Change

The TFT-LCD industry is challenged by the constantly upgraded know-how and new products while the mainstream products are being replaced by new generation at a quickening pace. Should we fail to deal with the impact incurred by the change in science and technology that would be an impact upon the business and financial standing on the seamy sides. Since the Company first came into being, we have spared no effort to accumulate the technical capability of TFT-LCD displays to deal with the impact incurred by the change in science and technology. Other than investment in high level research & development toward high display quality, high solution, broad vision angles, high open rates, quick response, thin and light designs, narrow frames, ultra energy conservation, flexible display and such technology & know-how, we have, as well, tried to develop low temperature LTPS, Oxide, Mini LED, and organic lighting display OLED and such technology & know-how to assure firm competitive edge and effective growth in the Company’s business and financial standing.

Industry Change

TFT-LCD features high economic cycle and drastic fluctuation. Any sort of economic trend drops, competitor dynamics, and changes in end-user demand all might lead to a shock to the Company’s business operation on the seamy side. Here at the Company, all our teammates would be closely watchful of fluctuation that might hit the Company into passive aspect and work out sound countermeasures beforehand. In terms of financial operation, we adopt sound and stable financial operation to deal with potential fluctuation in the businesses.

Control on risk of information and communication security and Implementation

The Company is committed to protecting the confidential information of the Company, our clients, suppliers, and employees, as well as company intellectual property which is the key of the competitive advantage. This is to ensure the overall benefit of the Company, our clients, employee, and shareholders, and to maintain company competitiveness.

Improvement of risk of information and communication

Regularly auditing information security to ensure the implementation of information and communication security. Introduce external information security defense solutions and improve internal information maintenance procedures.

Information security risk control

Insured cybersecurity insurance in order to minimize the Company’s potential losses.

The Company has an information software operation system and an information security disaster recovery mechanism to regulate the control of information assets such as computer mainframes, database systems, application software systems and personal computers, operational information, personal privacy information, and others on the Company's information service system. The Company also established guidelines pursuant to the Information Security Management System (ISMS) to ensure the three targets, including confidentiality,

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integrity and availability of information, and to strengthen information security management, established a secure and reliable electronic information operation environment, and established an emergency response mechanisms that conducts timely notification and adoption of countermeasures when the Company’s information system and operational information encounter an information security breach to recover to normal operation in the shortest possible time in order to ensure the sustainable operation of the Company's business.

The contents of the company's enhancement of the security and strengthening management and defense the company are described as follows:

company are described	as follows:
Items	Contents
Structure of Defense	1. To avoid hacker attacks, invest the construction of DDoS defense architecture. 2. To avoid the harm of ransomware, install endpoint detection to important equipment. 3. To avoid penetration of unknown phishing emails, optimize the spam blocking mechanism, and purchase additional email gateway anti-attack protection system equipment. 4. Key tasks of protection of information security completed in 2011 (1) Cross-site firewall - completed (2) OA-Fab firewall - completed (3) Firewall on equipment – ongoing 5. Backup software expand: strengthen backup of SeverFarm in 2011, to avoid the hazard of ransomware attack.
Information Security Governance and Advocacy	1. Educate employees on information security concepts through the boot-up promotion platform, screensaver and LCS (Learning and Certification System). 2. Reduce the risk of phishing emails through the use of email source verification mechanisms. 3. Organize INX Month of Information Security to perform employee social engineeringdrills,and raisingawareness of employees' Information Security.
Strengthen the Information Security management mechanism	1. Join TWCERT as member of Information Security alliance, and exchange information with the other alliance members. 2. Cooperate with the SP-ISAC to conduct the first Information Security attack and defense drill. 3. Participated in the exhibition, "Smart Manufacturing Information Security Enhancement Case" of IDB at the Shalun, Tainan. 4. Join the RAT community of IDB to exchange information. 5. Participate in the development plan of key machine assets and sustainable operation operations of IDB, implement information security monitoring of key asset management of production lines, and technical mechanisms such as availability maintenance, install firewalls on equipment, and strengthen important euipment information security Protection energy, such as network security protection, active information security protection mechanisms such as virtual patching of key machines that cannot be repaired for weaknesses, and integrating information security protection and maintenance mechanisms into the physical information security war room to solve the problem of old machines and computers information security protection issues. 6. Participated in the Ministry of Science and Technology Information Security Elite Talent Training Course and Information Security Attack and Defense Competition, won the 4th and 6th place, and won the Information Security Talent Potential Award from the organizer. 7. Subscribe to domestic and international information security organizations to obtain information on hackingattacks in real time.

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7.6.6 The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures

Faithful law compliance, focus on employees’ and shareholders’ equity represents the very bounden duties to the Company’s management. In case of a contingency, the Company’s ranking department head would serve as the emergency convener to immediately set up the Crisis Task Force to defuse the crisis forthwith. As of the Annual Report’s publication date, there has been no event that adversely impacts Innolux’s corporate image and impacts on corporate risk management.

7.6.7 Expected Benefits from, Risks Relating to and Response to Merger and Acquisition Plans

At the moment, the Company has no plan to launch a merger with another enterprise. Toward potential strategic investment or vertical integration, and the cost benefit and the potential risk so arising, the Company’s management would conduct appropriate evaluation and evasion as appropriate.

7.6.8 Expected Benefits from, Risks Relating to and Response to Factory Expansion Plans

We all have those related technical groups to perform the professional feasibility assessment for expansion and build out of new generation factory.

7.6.9 Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive Customer Concentration

There is no risk associated with excessive customer concentration, due to the plenty production line and the main customers are international brand manufacturers. Innolux’s usually have two or more suppliers for main material. Therefore, there is no risk associated with excessive concentration of purchasing. We will keep developing new products and new customers in the future and seeking for the better quality and the lower cost of purchase sources to reduce the risk of excessive customer concentration or excessive purchasing concentration.

7.6.10 Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors or Shareholders with Shareholdings of over 10%

As of the date of this Annual Report, there were no such risks for Innolux.

7.6.11 Effects of, Risks Relating to and Response to Changes in Management Rights

As of the date of this Annual Report, there were no such risks for Innolux.

7.6.12 Litigation or Non-litigation Matters

The lawsuits, non-contentious cases, administrative litigation that are decided by the court or still in proceeding in recent years until this report was issued.
A. 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.
B. 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.

136 -

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.

C. On September 1, 2020, the Company received a civil complaint joint filed by Granville Technology Group Limited, VMT Limited and OT Computers Limited (all in liquidation) in the High Court 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 reached a settlement with the claimant in November 2021.
D. On December 18, 2020 and March 19, 2021, the Company received civil complaints jointly filed by SAMSUNG ELECTRONICS CO. LIMITED, SAMSUNG ELECTRONICS TAIWAN CO. LIMITED, SAMSUNG ELECTRONICS (UK) LIMITED, SAMSUNG SEMICONDUCTOR EUROPE LIMITED and SAMSUNG DISPLAY CO. LMITED in 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 and the first to fifth claimants entered into with Ingram Micro (UK) Limited for the TFT-LCD pricing collaborations in 2006. The Company reached a settlement with the claimant in May 2021.
Board members, monitors, CEO, responsible person in fact, shareholders and their companies holding more than 10% shares that involved in lawsuits, non-contentious cases, administrative litigation that were decided by the court or still in proceeding in recent years until this report was issued and might cause major influence on Innolux stockholder's equity and securities price: None.

7.6.13 Other Major Risks: None.

7.7 Other Important Matters: None.

137 -

VIII.Special Disclosure

8.1 Summary of Affiliated Companies

==> picture [496 x 466] intentionally omitted <==

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

GIO (Maanshan)
Ningbo CarUX
Optoelectronics
Technology Ltd.
Co., Ltd.
100% 100%
Innolux
Innolux
Foshan InnoluxLogistics Ltd. Optoelectronics Ltd.Ningbo Innolux Ningbo InnoluxDisplay Ltd. Optoelectronics Ltd.Foshan Innolux Double Star Inc OptoelectronicsIndia Private Optoelectronics Inno CapitalCorporation
Limited Philippines Corp.
100.00% 100.00% 100.00% 100.00% 100% 0.00% 100% 100% 100%
0.14%
Keyway InvestmentManagementLimited International Ltd.Landmark INStek Corporation OPTOELECTRONICS CORP.GIO Investment Co., Ltd.Yuan Chi Innolux SingaporeHolding Pte. Ltd. InnoJoy InvestmentCorporation
100.00% 100.00% 40.01% 76.43% 100.00% 100.00% 100.00%
Innolux Corporation
Innolux Corporation
Tree Valley Branch
100.00% 100.00% 54.44% 100.00% 58.60%
45.56%
Toppoly Innocare InnoCare
Innolux Hong Kong Innolux Japan Innolux Holding Ningbo Innolux
Optoelectronics Holding Limited Co., Ltd. Limited Optoelectronics Optoelectronics Electronics Ltd.
(B.V.I.) Ltd. Europe B.V. Corporation
100.00% 100%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Toppoly InnoCare InnoCare
CarUX Holding Innolux Hong Kong Rockets Holding
Optoelectronics Limited Limited Innolux USA, INC. Suns Holding Ltd Limited Optoelectronics Optoelectronics
(Cayman) Ltd. Japan Co., Ltd. USA, INC.
100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
CARUX Warriors Stanford
Nanjing Innolux Nanjing Innolux TECHNOLOGY Technology Developments Nets Trading Ltd.
Technology Ltd. Optoelectronics Ltd. PTE. LTD. Investments Ltd Limited
100.00% 100.00% 100.00% 100.00%
Innolux
Innocom
Optoelectronics CarUX Technology
Hong Kong Holding Innolux Europe B.V. Inc. Technology
Limited (Shenzhen) Ltd.
100.00% 100.00%
Shanghai Innolux Innolux Technology
Optoelectronics Ltd. Germany GmbH
----- End of picture text -----

8.1.2 Innolux Subsidiaries

December 31,2021 Company Date of Incorporation Address Capital Stock Business Activities CarUX Holding Limited Aug. 23, 2019 The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands USD$ 125,232 Controlling Company CarUX Technology Pte. Ltd. Oct. 2, 2019 112 ROBINSON ROAD #05-01 ROBINSON 112 SINGAPORE 068902 USD$ 125,131,749Controlling and Distribution Company Double Star Inc. Jul. 15, 2009Level 3, Alexander House, 35 Cybercity,Ebene,Mauritius USD$ 10,000,000 Controlling Company Innocare Optoelectronics Europe B.V. Aug. 11, 2020Stationstraat 39 G, 6411NK Heerlen, The Netherlands EUR 50,000After-sales service Company InnoCare Optoelectronics Japan Co., Ltd. Jun. 17, 2019 210-0024 Kawasaki Nisshincho Building 14F, 7-1 Nisshincho, Kawasaki-ku, Kawasaki-shi, Kanagawa JPY¥ 300,100,000 Distribution company InnoCare Optoelectronics USA, INC. Feb. 9, 2018101 Metro Drive Suite 510, San Jose, CA 95110, United States USD$ 900,000 Distribution company Innolux Europe B.V. Mar. 8, 2006Stationstraat 39G, 6411NK, Heerlen, The Netherlands EUR€ 3,006,480 Controlling, R&D Testing and Distribution Company Innolux Holding Ltd. Feb. 28, 2002 Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa USD$ 191,927,259 Controlling Company Innolux Hong Kong Holding Limited Dec. 14, 2005 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 1,441,092,339 Controlling Company Innolux Hong Kong Limited Feb. 15, 2006 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 453,342,352 Distribution company Innolux Japan Co., Ltd. Aug. 20, 1991 8F, kowa kawasaki-nishiguchi Bldg., 66-2 horikawa-cho, Saiwai-ku, Kawasaki-City, Kanagawa 212-0013,Japan JPY¥314,258,270 Controlling, R&D, and Distribution Company Innolux Optoelectronics Hong KongHoldingLtd. Nov. 16, 2001 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong. HKD$ 162,897,802 Controlling Company Innolux Optoelectronics India Private Limited Mar. 07,2018 HD-021, WeWork Enam Sambhav, C - 20, G Block Rd, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra400051 INR$ 1,440,955,000 Distribution company Innolux Optoelectronics Philippines CORP. Oct. 06, 2017 Km 23 West Service Road, South Superhighway, Alabang, Muntinlupa City, 1770, Philippines PHP$ 50,000,000Manufacturing and Distribution company Innolux Singapore Holding Pte. Ltd. Jun. 28, 2017 6 TEMASEK BOULEVARD, #09-05, SUNTEC TOWER FOUR,SINGAPORE(038986) USD$ 25,400,000 Controlling Company Innolux Technology Germany GmbH Feb. 17, 2006Kaiserswerther Strasse 115, D- 40880 Ratingen, Germany EUR€ 100,000 Testing & Maintenance Company Innolux USA, INC. May 9, 2002101 Metro Drive Suite 510, San Jose,CA95110,United States USD$ 11,842,010 Distribution company	December 31,2021 Company Date of Incorporation Address Capital Stock Business Activities CarUX Holding Limited Aug. 23, 2019 The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands USD$ 125,232 Controlling Company CarUX Technology Pte. Ltd. Oct. 2, 2019 112 ROBINSON ROAD #05-01 ROBINSON 112 SINGAPORE 068902 USD$ 125,131,749Controlling and Distribution Company Double Star Inc. Jul. 15, 2009Level 3, Alexander House, 35 Cybercity,Ebene,Mauritius USD$ 10,000,000 Controlling Company Innocare Optoelectronics Europe B.V. Aug. 11, 2020Stationstraat 39 G, 6411NK Heerlen, The Netherlands EUR 50,000After-sales service Company InnoCare Optoelectronics Japan Co., Ltd. Jun. 17, 2019 210-0024 Kawasaki Nisshincho Building 14F, 7-1 Nisshincho, Kawasaki-ku, Kawasaki-shi, Kanagawa JPY¥ 300,100,000 Distribution company InnoCare Optoelectronics USA, INC. Feb. 9, 2018101 Metro Drive Suite 510, San Jose, CA 95110, United States USD$ 900,000 Distribution company Innolux Europe B.V. Mar. 8, 2006Stationstraat 39G, 6411NK, Heerlen, The Netherlands EUR€ 3,006,480 Controlling, R&D Testing and Distribution Company Innolux Holding Ltd. Feb. 28, 2002 Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa USD$ 191,927,259 Controlling Company Innolux Hong Kong Holding Limited Dec. 14, 2005 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 1,441,092,339 Controlling Company Innolux Hong Kong Limited Feb. 15, 2006 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 453,342,352 Distribution company Innolux Japan Co., Ltd. Aug. 20, 1991 8F, kowa kawasaki-nishiguchi Bldg., 66-2 horikawa-cho, Saiwai-ku, Kawasaki-City, Kanagawa 212-0013,Japan JPY¥314,258,270 Controlling, R&D, and Distribution Company Innolux Optoelectronics Hong KongHoldingLtd. Nov. 16, 2001 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong. HKD$ 162,897,802 Controlling Company Innolux Optoelectronics India Private Limited Mar. 07,2018 HD-021, WeWork Enam Sambhav, C - 20, G Block Rd, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra400051 INR$ 1,440,955,000 Distribution company Innolux Optoelectronics Philippines CORP. Oct. 06, 2017 Km 23 West Service Road, South Superhighway, Alabang, Muntinlupa City, 1770, Philippines PHP$ 50,000,000Manufacturing and Distribution company Innolux Singapore Holding Pte. Ltd. Jun. 28, 2017 6 TEMASEK BOULEVARD, #09-05, SUNTEC TOWER FOUR,SINGAPORE(038986) USD$ 25,400,000 Controlling Company Innolux Technology Germany GmbH Feb. 17, 2006Kaiserswerther Strasse 115, D- 40880 Ratingen, Germany EUR€ 100,000 Testing & Maintenance Company Innolux USA, INC. May 9, 2002101 Metro Drive Suite 510, San Jose,CA95110,United States USD$ 11,842,010 Distribution company	December 31,2021 Company Date of Incorporation Address Capital Stock Business Activities CarUX Holding Limited Aug. 23, 2019 The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands USD$ 125,232 Controlling Company CarUX Technology Pte. Ltd. Oct. 2, 2019 112 ROBINSON ROAD #05-01 ROBINSON 112 SINGAPORE 068902 USD$ 125,131,749Controlling and Distribution Company Double Star Inc. Jul. 15, 2009Level 3, Alexander House, 35 Cybercity,Ebene,Mauritius USD$ 10,000,000 Controlling Company Innocare Optoelectronics Europe B.V. Aug. 11, 2020Stationstraat 39 G, 6411NK Heerlen, The Netherlands EUR 50,000After-sales service Company InnoCare Optoelectronics Japan Co., Ltd. Jun. 17, 2019 210-0024 Kawasaki Nisshincho Building 14F, 7-1 Nisshincho, Kawasaki-ku, Kawasaki-shi, Kanagawa JPY¥ 300,100,000 Distribution company InnoCare Optoelectronics USA, INC. Feb. 9, 2018101 Metro Drive Suite 510, San Jose, CA 95110, United States USD$ 900,000 Distribution company Innolux Europe B.V. Mar. 8, 2006Stationstraat 39G, 6411NK, Heerlen, The Netherlands EUR€ 3,006,480 Controlling, R&D Testing and Distribution Company Innolux Holding Ltd. Feb. 28, 2002 Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa USD$ 191,927,259 Controlling Company Innolux Hong Kong Holding Limited Dec. 14, 2005 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 1,441,092,339 Controlling Company Innolux Hong Kong Limited Feb. 15, 2006 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 453,342,352 Distribution company Innolux Japan Co., Ltd. Aug. 20, 1991 8F, kowa kawasaki-nishiguchi Bldg., 66-2 horikawa-cho, Saiwai-ku, Kawasaki-City, Kanagawa 212-0013,Japan JPY¥314,258,270 Controlling, R&D, and Distribution Company Innolux Optoelectronics Hong KongHoldingLtd. Nov. 16, 2001 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong. HKD$ 162,897,802 Controlling Company Innolux Optoelectronics India Private Limited Mar. 07,2018 HD-021, WeWork Enam Sambhav, C - 20, G Block Rd, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra400051 INR$ 1,440,955,000 Distribution company Innolux Optoelectronics Philippines CORP. Oct. 06, 2017 Km 23 West Service Road, South Superhighway, Alabang, Muntinlupa City, 1770, Philippines PHP$ 50,000,000Manufacturing and Distribution company Innolux Singapore Holding Pte. Ltd. Jun. 28, 2017 6 TEMASEK BOULEVARD, #09-05, SUNTEC TOWER FOUR,SINGAPORE(038986) USD$ 25,400,000 Controlling Company Innolux Technology Germany GmbH Feb. 17, 2006Kaiserswerther Strasse 115, D- 40880 Ratingen, Germany EUR€ 100,000 Testing & Maintenance Company Innolux USA, INC. May 9, 2002101 Metro Drive Suite 510, San Jose,CA95110,United States USD$ 11,842,010 Distribution company	December 31,2021 Company Date of Incorporation Address Capital Stock Business Activities CarUX Holding Limited Aug. 23, 2019 The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands USD$ 125,232 Controlling Company CarUX Technology Pte. Ltd. Oct. 2, 2019 112 ROBINSON ROAD #05-01 ROBINSON 112 SINGAPORE 068902 USD$ 125,131,749Controlling and Distribution Company Double Star Inc. Jul. 15, 2009Level 3, Alexander House, 35 Cybercity,Ebene,Mauritius USD$ 10,000,000 Controlling Company Innocare Optoelectronics Europe B.V. Aug. 11, 2020Stationstraat 39 G, 6411NK Heerlen, The Netherlands EUR 50,000After-sales service Company InnoCare Optoelectronics Japan Co., Ltd. Jun. 17, 2019 210-0024 Kawasaki Nisshincho Building 14F, 7-1 Nisshincho, Kawasaki-ku, Kawasaki-shi, Kanagawa JPY¥ 300,100,000 Distribution company InnoCare Optoelectronics USA, INC. Feb. 9, 2018101 Metro Drive Suite 510, San Jose, CA 95110, United States USD$ 900,000 Distribution company Innolux Europe B.V. Mar. 8, 2006Stationstraat 39G, 6411NK, Heerlen, The Netherlands EUR€ 3,006,480 Controlling, R&D Testing and Distribution Company Innolux Holding Ltd. Feb. 28, 2002 Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa USD$ 191,927,259 Controlling Company Innolux Hong Kong Holding Limited Dec. 14, 2005 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 1,441,092,339 Controlling Company Innolux Hong Kong Limited Feb. 15, 2006 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 453,342,352 Distribution company Innolux Japan Co., Ltd. Aug. 20, 1991 8F, kowa kawasaki-nishiguchi Bldg., 66-2 horikawa-cho, Saiwai-ku, Kawasaki-City, Kanagawa 212-0013,Japan JPY¥314,258,270 Controlling, R&D, and Distribution Company Innolux Optoelectronics Hong KongHoldingLtd. Nov. 16, 2001 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong. HKD$ 162,897,802 Controlling Company Innolux Optoelectronics India Private Limited Mar. 07,2018 HD-021, WeWork Enam Sambhav, C - 20, G Block Rd, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra400051 INR$ 1,440,955,000 Distribution company Innolux Optoelectronics Philippines CORP. Oct. 06, 2017 Km 23 West Service Road, South Superhighway, Alabang, Muntinlupa City, 1770, Philippines PHP$ 50,000,000Manufacturing and Distribution company Innolux Singapore Holding Pte. Ltd. Jun. 28, 2017 6 TEMASEK BOULEVARD, #09-05, SUNTEC TOWER FOUR,SINGAPORE(038986) USD$ 25,400,000 Controlling Company Innolux Technology Germany GmbH Feb. 17, 2006Kaiserswerther Strasse 115, D- 40880 Ratingen, Germany EUR€ 100,000 Testing & Maintenance Company Innolux USA, INC. May 9, 2002101 Metro Drive Suite 510, San Jose,CA95110,United States USD$ 11,842,010 Distribution company	December 31,2021 Company Date of Incorporation Address Capital Stock Business Activities CarUX Holding Limited Aug. 23, 2019 The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands USD$ 125,232 Controlling Company CarUX Technology Pte. Ltd. Oct. 2, 2019 112 ROBINSON ROAD #05-01 ROBINSON 112 SINGAPORE 068902 USD$ 125,131,749Controlling and Distribution Company Double Star Inc. Jul. 15, 2009Level 3, Alexander House, 35 Cybercity,Ebene,Mauritius USD$ 10,000,000 Controlling Company Innocare Optoelectronics Europe B.V. Aug. 11, 2020Stationstraat 39 G, 6411NK Heerlen, The Netherlands EUR 50,000After-sales service Company InnoCare Optoelectronics Japan Co., Ltd. Jun. 17, 2019 210-0024 Kawasaki Nisshincho Building 14F, 7-1 Nisshincho, Kawasaki-ku, Kawasaki-shi, Kanagawa JPY¥ 300,100,000 Distribution company InnoCare Optoelectronics USA, INC. Feb. 9, 2018101 Metro Drive Suite 510, San Jose, CA 95110, United States USD$ 900,000 Distribution company Innolux Europe B.V. Mar. 8, 2006Stationstraat 39G, 6411NK, Heerlen, The Netherlands EUR€ 3,006,480 Controlling, R&D Testing and Distribution Company Innolux Holding Ltd. Feb. 28, 2002 Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa USD$ 191,927,259 Controlling Company Innolux Hong Kong Holding Limited Dec. 14, 2005 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 1,441,092,339 Controlling Company Innolux Hong Kong Limited Feb. 15, 2006 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong HKD$ 453,342,352 Distribution company Innolux Japan Co., Ltd. Aug. 20, 1991 8F, kowa kawasaki-nishiguchi Bldg., 66-2 horikawa-cho, Saiwai-ku, Kawasaki-City, Kanagawa 212-0013,Japan JPY¥314,258,270 Controlling, R&D, and Distribution Company Innolux Optoelectronics Hong KongHoldingLtd. Nov. 16, 2001 Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong. HKD$ 162,897,802 Controlling Company Innolux Optoelectronics India Private Limited Mar. 07,2018 HD-021, WeWork Enam Sambhav, C - 20, G Block Rd, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra400051 INR$ 1,440,955,000 Distribution company Innolux Optoelectronics Philippines CORP. Oct. 06, 2017 Km 23 West Service Road, South Superhighway, Alabang, Muntinlupa City, 1770, Philippines PHP$ 50,000,000Manufacturing and Distribution company Innolux Singapore Holding Pte. Ltd. Jun. 28, 2017 6 TEMASEK BOULEVARD, #09-05, SUNTEC TOWER FOUR,SINGAPORE(038986) USD$ 25,400,000 Controlling Company Innolux Technology Germany GmbH Feb. 17, 2006Kaiserswerther Strasse 115, D- 40880 Ratingen, Germany EUR€ 100,000 Testing & Maintenance Company Innolux USA, INC. May 9, 2002101 Metro Drive Suite 510, San Jose,CA95110,United States USD$ 11,842,010 Distribution company
Company	Date of Incorporation	Address	Capital Stock	Business Activities
CarUX Holding Limited	Aug. 23, 2019	The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands	USD$ 125,232	Controlling Company
CarUX Technology Pte. Ltd.	Oct. 2, 2019	112 ROBINSON ROAD #05-01 ROBINSON 112 SINGAPORE 068902	USD$ 125,131,749	Controlling and Distribution Company
Double Star Inc.	Jul. 15, 2009	Level 3, Alexander House, 35 Cybercity,Ebene,Mauritius	USD$ 10,000,000	Controlling Company
Innocare Optoelectronics Europe B.V.	Aug. 11, 2020	Stationstraat 39 G, 6411NK Heerlen, The Netherlands	EUR 50,000	After-sales service Company
InnoCare Optoelectronics Japan Co., Ltd.	Jun. 17, 2019	210-0024 Kawasaki Nisshincho Building 14F, 7-1 Nisshincho, Kawasaki-ku, Kawasaki-shi, Kanagawa	JPY¥ 300,100,000	Distribution company
InnoCare Optoelectronics USA, INC.	Feb. 9, 2018	101 Metro Drive Suite 510, San Jose, CA 95110, United States	USD$ 900,000	Distribution company
Innolux Europe B.V.	Mar. 8, 2006	Stationstraat 39G, 6411NK, Heerlen, The Netherlands	EUR€ 3,006,480	Controlling, R&D Testing and Distribution Company
Innolux Holding Ltd.	Feb. 28, 2002	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	USD$ 191,927,259	Controlling Company
Innolux Hong Kong Holding Limited	Dec. 14, 2005	Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong	HKD$ 1,441,092,339	Controlling Company
Innolux Hong Kong Limited	Feb. 15, 2006	Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong	HKD$ 453,342,352	Distribution company
Innolux Japan Co., Ltd.	Aug. 20, 1991	8F, kowa kawasaki-nishiguchi Bldg., 66-2 horikawa-cho, Saiwai-ku, Kawasaki-City, Kanagawa 212-0013,Japan	JPY¥314,258,270	Controlling, R&D, and Distribution Company
Innolux Optoelectronics Hong KongHoldingLtd.	Nov. 16, 2001	Unit 2003, 20/F., Millennium City 3, 370 Kwun Tong Road, Kowloon,HongKong.	HKD$ 162,897,802	Controlling Company
Innolux Optoelectronics India Private Limited	Mar. 07,2018	HD-021, WeWork Enam Sambhav, C - 20, G Block Rd, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra400051	INR$ 1,440,955,000	Distribution company
Innolux Optoelectronics Philippines CORP.	Oct. 06, 2017	Km 23 West Service Road, South Superhighway, Alabang, Muntinlupa City, 1770, Philippines	PHP$ 50,000,000	Manufacturing and Distribution company
Innolux Singapore Holding Pte. Ltd.	Jun. 28, 2017	6 TEMASEK BOULEVARD, #09-05, SUNTEC TOWER FOUR,SINGAPORE(038986)	USD$ 25,400,000	Controlling Company
Innolux Technology Germany GmbH	Feb. 17, 2006	Kaiserswerther Strasse 115, D- 40880 Ratingen, Germany	EUR€ 100,000	Testing & Maintenance Company
Innolux USA, INC.	May 9, 2002	101 Metro Drive Suite 510, San Jose,CA95110,United States	USD$ 11,842,010	Distribution company

139 -

Company	Date of Incorporation	Address	Capital Stock	Business Activities
Keyway Investment Management Limited	Mar. 30, 2005	Portcullis TrustNet Chambers, P.O Box 1225,Apia,Samoa	USD$ 1,656,410	Controlling Company
Landmark International Ltd.	Apr. 24, 2003	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	USD$ 709,450,000	Controlling Company
Nets Trading Ltd.	May 2, 2008	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	USD$ 900,001	Investment Company
Rockets Holding Ltd.	Dec. 18, 2002	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	USD$ 171,669,290	Controlling Company
Stanford Developments Ltd.	Aug. 12, 1999	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	USD$ 164,000,000	Controlling Company
Suns Holding Ltd.	Dec. 18, 2006	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	USD$ 18,177,052	Controlling Company
Toppoly Optoelectronics (B.V.I.)Ltd.	Jul. 17, 2001	Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands	USD$ 146,847,000	Controlling Company
Toppoly Optoelectronics (Cayman) Ltd.	Jul. 17, 2001	Grand Pavilion, Hibiscus Way, 802 West Bay Road, P. O. Box 31119, KY1-1205, Cayman Islands	USD$ 146,817,000	Controlling Company
Warriors Technology Investments Ltd.	Jan. 3, 2007	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	US$ 18,177,052	Investment Company
Shanghai Innolux Optoelectronics Ltd.	Jan. 9, 2006	No. 272-2, Ba Sheng Road, New Customs, Wai Gao Qiao Free Trade Zone, 200131 Pudong, Shanghai, China	USD$ 21,000,000	Manufacturing & selling LCD back-end module related technologies and products.
Yuan Chi investment co., Ltd	Jul. 6, 2005	No.8, Zhongxin Rd., Xinshi Dist., Tainan City 74148, Taiwan(R.O.C.)	NTD$ 2,100,000,000	Investment Company
Foshan Innolux Optoelectronics Ltd.	Apr. 21, 2006	Xingye North Rd., Foshan Science & Technology Industry Garden, Foshan, Guangdong, 528325, China	USD$ 383,000,000	Manufacturing & selling LCD back-end module related technologies and products.
Foshan Innolux Logistics Ltd.	Jul. 17, 2008	North Factory, Xingye Rd., Nanhai Economic Zone, Foshan, Guangdong,528325,China	USD$ 1,500,000	Warehousing Company
Nanjing Innolux Technology Ltd.	Oct. 24, 2007	No. 93, Fu Cheng West Road, Jiangning Economic and Technical Development Zone, Nanjing, Jiangsu,China	USD$ 2,100,000	Business of display and related product.
Nanjing Innolux Optoelectronics Ltd.	May 23, 2001	No. 93, Fu Cheng West Road, Jiangning Economic and Technical Development Zone, Nanjing, Jiangsu, China	USD$ 156,000,000	Manufacturing & selling LCD back-end module related technologies and products.
GIO(maan shan) Optoelectronics Corp.	Sep.15, 2010	Cihu Economic Development Zone,Ma'anshan City,	USD$ 10,000,000	Manufacturing Company

140 -

Company	Date of Incorporation	Address	Capital Stock	Business Activities
		Anhui,China
GIO Optoelectronics Corp.	Apr. 21, 2004	No. 5, Titanggang Rd., Xinshi Dist., Tainan City 744, Taiwan (R.O.C.)	NTD$ 540,236,110	Controlling, R&D, manufacturing and Distribution company
InnoJoy Investment Corp.	Jun. 26, 2007	No.8, Zhongxin Rd., Xinshi Dist., Tainan City 74148, Taiwan(R.O.C.)	NTD$ 1,674,053,920	Investment Company
Innocom Technology (Shenzhen) Co., LTD	Jun. 24, 2004	1F, Zone 4, G2 Zone 2F A region, 3F, 4F and 5F Foxconn Technology Industrial Park E, Bao'an District, Shenzhen City, GuangdongProvince,China	USD$ 164,000,000	Manufacturing & selling LCD back-end module related technologies and products.
Inno Capital Corporation	Jul. 28, 2021	No. 8, Zhongxin Rd., Xinshi Dist., Tainan City 744092 , Taiwan(R.O.C.)	NTD$ 15,000,000	Investment Company
CarUX Technology Inc.	Mar. 15, 2019	Rm. A No. 12, Nanke 8th Rd., Shanhua Dist., Tainan City 741, Taiwan(R.O.C.)	NTD$ 1,400,000,000	R & D, manufacturing and distribution companies
Ningbo Innolux Electronics Ltd.	Nov. 04, 2015	No.8, Cao E River Rd., Ningbo Bonded Zone Building 2 2F	CNY¥ 15,370,000	Selling LCD back-end module related technologies and products.
Ningbo Innolux Optoelectronics Co., LTD	Dec. 14, 2004	No.16, YangZi River North Rd., Ningbo Export Processing Zone, 315800, China; No. 6, YangZi River South Rd., Ningbo Export ProcessingZone,315800,China	USD$ 310,000,000	Manufacturing & selling LCD back-end module related technologies and products.
Ningbo Innolux Display LTD	Dec. 05, 2006	No.8, Cao E River Rd., Ningbo Bonded Zone	USD$ 160,000,000	Manufacturing & selling LCD back-end module related technologies and products.
Ningbo CarUX Technology Ltd.	Mar. 25, 2020	3F, Building 2, No.8, Cao E River Rd., Ningbo Bonded Zone	CNY 280,000,000	Manufacturing & selling LCD back-end module related technologies and products.
InnoCare Optoelectronics Corporation	Apr. 02, 2019	Rm. B, No. 2, Sec. 2, Huanxi Rd., Xinshi Dist., Tainan City 744,Taiwan(R.O.C.)	NTD$ 349,845,000	Controlling, R & D, manufacturing and Distribution company
INStek Corporation	Jun. 07, 2021	1F., No. 2, Ln. 258, Sec. 5, Anhe Rd., Annan Dist., Tainan City 709019,Taiwan(R.O.C.)	NTD$ 66,175,070	R & D, Manufacturing and Distribution company

8.1.3 Shareholders in Common of INX and Its Subsidiaries with Deemed Control and Subordination: None.

8.1.4 Business Scope of INX and Its Subsidiaries:

The Company and its subsidiary operating business include the development, manufacture, after service and sale of TFT-LCD.

By the layout of globalization, combine the distribution of Taiwan and China production base; provide downstream manufacturer or panel module manufacturer to have high flexibility supply capacity.

There are a small number of affiliated companies are setting investment business as operating scope, to strength vertical integration and strategy investment and coordinate the Company’s future operation.

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8.1.5 Rosters of Directors, Supervisors, and Presidents of INX’s Subsidiaries:

As of December, 31, 2021

			As of December,31,2021	As of December,31,2021
Company	Title	Name	Shareholding
			Shares	% (Investment Holding)
CarUX Holding Limited	Director	Jin-YangHung	—	100%
	Director	Chu-HsiangYang	—	100%
	Director	Ching-LungTing	—	100%
CarUX Technology Pte. Ltd.	Director	Ching-LungTing	—	100%
	Director	Jin-YangHung	—	100%
	Director	Chu-HsiangYang	—	100%
	Director	Ngoo Sin HungJustin	—	100%
Double Star Inc.	Director	Ching-LungTing	—	77%
InnoCare Optoelectronics Europe B.V.	Director	Lu-Ting Yang	—	59%
InnoCare Optoelectronics Japan Co., Ltd.	Director	Jhih-ShengLi	—	59%
	Director	Ming-Hsien Sun	—	59%
	Director	Chien-LangLo	—	59%
InnoCare Optoelectronics USA, INC.	Director	Ishii Junichi	—	59%
	Director	Chu-HsiangYang	—	59%
	Director	Jhih-ShengLi	—	59%
Innolux Europe B.V.	Director	Tien-Jen Lin	—	100%
	Director	van Riel, Lucien Franciscus Henricus	—	100%
	Director	Jun-Yi Yu	—	100%
Innolux HoldingLimited	Director	Jin-YangHung	—	100%
Innolux Hong Kong Holding Limited	Director	Jin-YangHung	—	100%
	Director	Chao-Hsien Liu	—	100%
	Director	Jun-Yi Yu	—	100%
Innolux Hong Kong Limited	Director	Jin-YangHung	—	100%
	Director	Pei-Yu Lu	—	100%
	Director	Rou-Li Cheng	—	100%
Innolux Japan Co., Ltd.	Director	Makoto Kaneda	—	100%
	Director	Chu-HsiangYang	—	100%
	Director	Ching-LungTing	—	100%
	Supervisor	Jun-Hao Peng	—	100%
	Supervisor	Chin-Yuan Chang	—	100%
Innolux Optoelectronics Hong Kong Holding Ltd.	Director	Jin-YangHung	—	100%
	Director	Shu-Mei Ho	—	100%
	Director	Jun-Yi Yu	—	100%
Innolux Optoelectronics India Private Limited	Director	Wun-Sian Li	—	100%
	Director	Chien-HungLiao	—	100%
	Director	Sonu	—	100%
Innolux Optoelectronics Philippines Corp.	Director	Chin-LungTing	—	100%
	Director	Cheng-ChungChiang	—	100%
	Director	Cherrylyn T. Singzon	—	100%
Innolux Singapore Holding Pte. Ltd.	Director	Chu-HsiangYang	—	100%
	Director	Chao-Hsien Liu	—	100%
	Director	Tan Sze Lian Celine	—	100%
Innolux Technology Germany GmbH	Director	Tien-Jen Lin	—	100%
	Director	van Riel, Lucien Franciscus Henricus	—	100%
	Director	Adrianus Gosuinus Marie Kersten	—	100%
Innolux USA, INC.	Director	Yu-Hao Wu	—	100%
	Director	Kanada Makoto	—	100%
	Director	Sato Takahiro	—	100%

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Company	Title	Name	Shareholding	Shareholding
			Shares	% (Investment Holding)
Keyway Investment Management Limited	Director	Jin-Yang Hung	—	100%
Landmark International Ltd.	Director	Jin-YangHung	—	100%
Nets TradingLtd.	Director	Guang-SiangLi	—	100%
Rockets HoldingLtd.	Director	Jin-YangHung	—	100%
Stanford Developments Ltd.	Director	Jin-YangHung	—	100%
Suns HoldingLtd.	Director	Jin-YangHung	—	100%
ToppolyOptoelectronics(B.V.I.)Ltd.	Director	Jin-YangHung	—	100%
Toppoly Optoelectronics (Cayman) Ltd.	Director	Jin-Yang Hung	—	100%
Warriors Technology Investments Ltd.	Director	Jin-Yang Hung	—	100%
Shanghai Innolux Optoelectronics Ltd	Chairman	Zhi-Yuan Tsai	—	100%
	Director	Jun-Yi Yu	—	100%
	Director	Chin-Yuan Chang	—	100%
Yuan Chi investment co., Ltd	Chairman	Innolux Corporation Representative - Jin-YangHung	—	100%
	Director	Innolux Corporation Representative - Chu-HsiangYang	—	100%
	Director	Innolux Corporation Representative - Chien-LangLo	—	100%
Foshan Innolux Optoelectronics Ltd.	Chairman	Ching-Hui Lin	—	100%
	Director	Xiao-MinQuyang	—	100%
	Director	Jun-Yi Yu	—	100%
	Supervisor	Chin-Yuan Chang	—	100%
Foshan Innolux Logistics Ltd.	Chairman	Ching-Hui Lin	—	100%
	Director	QiongGu	—	100%
	Director	Ai-Qun Wang	—	100%
	Supervisor	Chin-Yuan Chang	—	100%
Nanjing Innolux Technology Ltd.	Chairman	Shi-Xian Hsu	—	100%
	Director	Chin-Yuan Chang	—	100%
	Director	Chih-ChiangLu	—	100%
	Supervisor	Kun Ma	—	100%
Nanjing Innolux Optoelectronics Ltd.	Chairman	Shi-Xian Hsu	—	100%
	Director	Jun-Yi Yu	—	100%
	Director	Chin-Yuan Chang	—	100%
	Supervisor	Kun Ma	—	100%
GIO(maan shan) Optoelectronics Corp.	Chairman	Cheng-Che Pan	—	77%
	Director	Min-Chih Fan	—	77%
	Director	Chi-Chih Hsu	—	77%
	Supervisor	Yu-Yuan Huang	—	77%
GIO Optoelectronics Corp.	Chairman	Ching-LungTing	326,529	1%
	Director	Innolux Corporation Representative - Chao-Hsien Liu	41,288,528	76%
	Director	Innolux Corporation Representative - Syuan-Da Liu	41,288,528	76%
	Director	Chiu-Lin Chen	2,123	—
	Supervisor	Chi-HuangChen	9,759	—
	Supervisor	Lun-Pin Tseng	7,180	—
InnoJoy Investment Corp	Chairman	Innolux Corporation Representative - Jin-YangHung	167,405,392	100%
	Director	Innolux Corporation Representative - Chu-HsiangYang	167,405,392	100%
	Director	Innolux Corporation Representative - Chien-LangLo	167,405,392	100%
	Supervisor	Innolux Corporation	167,405,392	100%

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Company	Title	Name	Shareholding	Shareholding
			Shares	% (Investment Holding)
		Representative -Chin-Yuan Chang
Innocom Technology (Shenzhen) Ltd.	Chairman	Jen-YungChang	—	100%
	Director	Jun-Yi Yu	—	100%
	Director	Chin-Yuan Chang	—	100%
Inno Capital Corporation	Chairman	InnoJoy Investment Corp Representative – Li-Wei Hsu	1,500,000	100%
	Supervisor	InnoJoy Investment Corp Representative - Chao-Hsien Liu	1,500,000	100%
CarUX Technology Inc.	Chairman	CarUX Technology Pte. Ltd. Representative - Ching-LungTing	140,000,000	100%
	Director	CarUX Technology Pte. Ltd. Representative - Chu-HsiangYang	140,000,000	100%
	Director	CarUX Technology Pte. Ltd. Representative - Jin-YangHung	140,000,000	100%
	Supervisor	CarUX Technology Pte. Ltd. Representative - Chao-Hsien Liu	140,000,000	100%
Ningbo Innolux Electronics Ltd.	Chairman	Chih-ShengLee	—	100%
	Supervisor	Chao-Hsien Liu	—	100%
Ningbo Innolux Optoelectronics Co., LTD	Chairman	Kuo-HsiungKuo	—	100%
	Director	Jun-Yi Yu	—	100%
	Director	Chien-LangLo	—	100%
	Supervisor	Chin-Yuan Chang	—	100%
Ningbo Innolux Display LTD	Chairman	Kuo-HsiungKuo	—	100%
	Director	Chien-LangLo	—	100%
	Director	Chia-ChangTsai	—	100%
	Supervisor	Chin-Yuan Chang	—	100%
Ningbo CarUX Technology Ltd.	Chairman	Chin-LungTing	—	100%
	Director	Chu-HsiangYang	—	100%
	Director	Jun-Yi Yu	—	100%
	Supervisor	Kun Ma	—	100%
InnoCare Optoelectronics Corporation	Chairman	Innolux Corporation Representative - Chu-HsiangYang	20,500,000	58.6%
	Director	Innolux Corporation Representative - Tien-Jen Lin	20,500,000	58.6%
	Director	Jyh-Chau Wang	20,588	—
	Director	Da-Lun Huang	—	—
	Independent Director	Hung-Chi Li	—	—
	Independent Director	Chi-Tsung Huang	—	—
	Independent Director	I-Hung Chou	—	—
INStek Corporation	Chairman	Innolux Corporation Representative - Yu Shui Kuo	2,647,507	40%
	Director	Innolux Corporation Representative - Chu-HsiangYang	2,647,507	40%
	Director	Innolux Corporation Representative - Chih-Hsuan Wang	2,647,507	40%
	Director	LIEN YU Company Limited Representative – Chih-YungHsu	3,970,000	60%
	Director	LIEN YU Company Limited Representative – Ching-I Lin	3,970,000	60%
	Independent Director	Chao-Hsien Liu	—	—
	Independent Director	I-Ming Huang	—	—

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8.1.6 Operational Highlights of INX Subsidiaries

Unit: NT$ thousands, December, 31, 2021

Company	Capital Stock	Assets	Liabilities	Net Worth	Net Revenue	Income (Loss) from Operation	Net Income (Loss)	Basic Earnings (Loss) Per Share
CarUX HoldingLimited	3,466,415	3,008,984	—	3,008,984	—	(316)	(723,008)	(5.77)
CarUX TechnologyPte. Ltd.	3,463,647	12,416,789	9,410,189	3,006,600	22,611,179	(1,277,761)	(722,695)	(5.78)
Double Star Inc.	276,800	98,017	—	98,017	—	—	(583)	(0.06)
InnoCare Optoelectronics Europe B.V.	1,661	3,268	1,305	1,963	9,251	499	419	840.33
InnoCare Optoelectronics Japan Co.,Ltd.	87,149	404,742	328,519	76,223	1,763,876	23,450	6,233	207.70
InnoCare Optoelectronics USA,INC.	27,963	189,673	157,866	31,808	456,630	4,008	3,473	3.86
Innolux Europe B.V.	94,163	614,686	181,861	432,825	927,589	54,830	44,816	119.25
Innolux HoldingLtd.	5,312,547	18,012,846	—	18,012,846	—	—	271,650	1.50
Innolux Hong Kong HoldingLimited	5,114,437	6,203,468	—	6,203,468	—	—	(280,423)	(0.24)
Innolux Hong Kong Limited	1,608,912	6,137,785	4,592,858	1,544,927	33,276,436	370,339	370,155	10.58
Innolux Japan Co.,Ltd.	75,579	3,774,143	155,096	3,619,047	447,335	15,695	158,977	887,378.1
Innolux Optoelectronics HongKongHoldingLtd.	578,124	2,100,614	—	2,100,614	—	—	239,280	1.47
Innolux Optoelectronics India Private Limited	529,407	85,358	1,041	84,317	(633)	(10,855)	(11,158)	(0.08_
Innolux Optoelectronics Philippines Corp.	27,530	26,305	295	26,010	—	(125)	(98)	(0.02)
Innolux Singapore HoldingPte. Ltd.	703,072	223,254	127	223,127	—	(361)	(19,791)	(0.78)
Innolux Technology GermanyGmbH	3,132	45,124	25,137	19,987	35,688	6,260	4,664	46.64
Innolux USA,Inc.	327,787	9,850,556	8,951,897	898,659	19,314,252	122,533	88,395	6,883.31
Keyway Investment Management Limited	45,849	98,524	—	98,524	—	—	5,815	3.51
Landmark International Ltd.	19,637,576	49,835,425	—	49,835,425	—	—	3,602,032	5.08
Nets TradingLtd.	24,912	22,713	—	22,713	—	—	(1,961)	(2.18)
Rockets HoldingLtd.	4,751,806	11,842,308	—	11,842,308	—	—	168,142	1.05
Stanford Developments Ltd.	4,539,520	11,819,471	—	11,819,471	—	—	170,103	1.04
Suns HoldingLtd.	503,141	5,959,558	—	5,959,558	—	—	103,482	5.69
Toppoly Optoelectronics (B.V.I.)Ltd.	4,064,725	6,186,203	—	6,186,203	—	—	170,034	1.16
Toppoly Optoelectronics (Cayman)Ltd.	4,063,895	6,185,879	—	6,185,879	—	—	170,034	1.16
Warriors Technology Investments Ltd.	503,141	5,959,557	—	5,959,557	—	—	103,482	5.69
Shanghai Innolux Optoelectronics Ltd.	581,280	6,839,095	4,738,481	2,100,614	13,472,006	241,805	239,280	—
Yuan Chi investment co., Ltd	2,100,000	878,358	471	877,887	—	(451)	5,779	—
Foshan Innolux Optoelectronics Ltd.	10,601,440	45,137,046	23,097,638	22,039,408	63,664,540	1,151,165	1,342,743	—
Foshan Innolux Logistics Ltd.	41,520	98,051	4,044	94,007	32,460	4,327	5,806	—
Nanjing Innolux TechnologyLtd.	58,128	768,598	138,457	630,141	5,440,428	862	23,602	—

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Company	Capital Stock	Assets	Liabilities	Net Worth	Net Revenue	Income (Loss) from Operation	Net Income (Loss)	Basic Earnings (Loss) Per Share
Nanjing Innolux Optoelectronics Ltd.	4,318,080	13,952,334	8,396,615	5,555,719	19,415,299	293,641	146,432	—
GIO(maan shan) Optoelectronics Corp.	276,800	97,984	35	97,949	—	(280)	(583)	—
GIO Optoelectronics Corp.	540,236	921,912	384,058	537,854	97,887	(49,169)	(30,145)	(0.64)
InnoJoyInvestment Corp.	1,674,054	3,844,984	290	3,844,694	—	(455)	(8,570)	(0.05)
Innocom Technology (Shenzhen)Ltd.	4,539,520	12,405,788	586,363	11,819,425	304,485	7,426	17,103	—
Inno Capital Corporation	15,000	20,737	3,960	16,777	3,177	628	415	0.28
CarUX TechnologyInc.	1,400,000	4,543,431	2,927,673	1,615,758	5,224,031	224,362	185,695	1.33
Ningbo Innolux Electronics Ltd.	66,729	173,586	69,616	103,970	373,388	(5,884)	(524)	—
Ningbo Innolux Optoelectronics Co.,LTD	8,580,800	37,129,796	14,937,423	22,192,373	50,758,510	804,897	1,807,694	—
Ningbo Innolux Display LTD	4,428,800	18,650,452	12,969,103	5,681,349	42,341,291	656,138	449,408	—
Ningbo CarUX TechnologyLtd.	1,215,620	1,897,181	876,086	1,021,095	317,764	(150,718)	(194,220)	—
InnoCare Optoelectronics Corporation	349,845	1,613,027	976,345	636,682	1,783,822	87,180	198,600	6.05
INStek Corporation	66,175	75,096	987	74,109	—	(1,605)	(891)	(0.13)

8.1.7 Consolidated Financial Statements of Affiliated Enterprises:

Representation Letter

The entities that are required to be included in the combined financial statements of Innolux Corporation as of and for the year ended December 31, 2021, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Innolux Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Very Truly Yours,

Company name: INNOLUX CORPORATION Chairman Hung, Jin-Yang Date: February 4, 2022

8.1.8 Affiliation report: N/A.

8.2 Private Placement Securities in the Most Recent Years: None.

8.3 Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years: None.

8.4 Special Notes: None.

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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, 2021 and 2020, 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, based on our audits and the reports of other auditors (please refer to the Other matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. 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 of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the reports of other auditors (please refer to the Other matter section), 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 2021 consolidated financial statements. These matters were addressed in the context

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of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

The key audit matters in relation to the consolidated financial statements of the Group for the year ended December 31, 2021 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(6). There is a risk of the excess of the cost of inventory over the net realizable value of inventory as a result of that the amounts of inventories are material and the sales 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(8) and 6(11).

The Group measures the recoverable amount of the cash generating unit to determine whether goodwill

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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 projected income and expenses in the future. As these estimates, which are uncertain and dependent upon significant judgment 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 – Reference to the audits of other auditors

We did not audit the financial statements of certain subsidiaries and investments accounted for under the equity method of the Company for the year ended December 31, 2021, which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts and Note 13 included in respect of these subsidiaries and investments accounted for under the equity method, is based solely on the reports of the other auditors. Total assets of these subsidiaries and the balances of these investments accounted for under the equity method included in the Group’s consolidated financial statements amounted to NT$17,666,179 thousand, constituting 3.8% of the consolidated total assets of the Group as at December 31, 2021, and sales revenue of these subsidiaries included in the Group’s consolidated financial statements amounted to NT$25,269,413 thousand, constituting 7.2% of the consolidated total sales revenue of the Group for the year ended December 31, 2021.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion with other matter paragraph on the parent company only financial statements of Innolux Corporation as at and for the years ended December 31, 2021 and 2020.

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

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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.

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 auditors’ 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
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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 auditors’ 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 auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
E. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain 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

152 -

December 31, 2021 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 11, 2022

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.

153 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 7 6(2) 6(6) 8 6(2) 6(3) 6(4) 6(7) 6(8), 7 and 8 6(9) 6(10) 6(11) 6(29) 6(8) and 8	December 31, 2021 � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � ��	December 31, 2020
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 1535 Financial assets at amortised cost - 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			� �� �� �� �� �� �� �� �� ��
			��
			�� �� � �� �� �� �� �� �� ��
			��
			� ��

(Continued)

154 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

Notes
December 31, 2021
December 31, 2020
6(2)
�
��
�
��
��
��
7
��
��
6(12) and 7
��
��
��
��
6(17) and 9
��
��
��
��
6(13)(14)
��
��
��
��
��
��
6(13)
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6(14)
��
��
6(29)
��
��
��
��
6(15)
��
��
��
��
��
��
6(18)
��
��
�
��
6(19)
��
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6(20)
��
��
��
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��
��
6(21)
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��
��
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��
��
��
��
�
��
�
��

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
Certificate of entitlement to new shares
from convertible bond
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
3400
Other equity interest
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.

155 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Items

Notes
2021
2020
6(22) and 7

��

��
6(6)(27) and 7
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6(27)
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��
6(23)
��
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6(24)
��
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6(25)
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6(26)
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6(7)
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6(29)
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��

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(Continued)

156 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Items

Notes
2021
2020
6(15)
��
��
��
6(21)
��
��
6(29)
�
��
��
��
��
6(21)
�
��
��
6(7)(21)
�
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��

��

��

��

��

��

��

��

��

��

��

��

��
6(30)

��

��

��

��

Other comprehensive income
(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 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 (loss) income 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 (loss) income
that will be reclassified to
profit or loss
8300
Other comprehensive income for
the year, net of tax
8500
Total comprehensive income for
the year
Profit attributable to:
8610
Owners of the parent
8620
Non-controlling interest
Other comprehensive income
attributable to:
8710
Owners of the parent
8720
Non-controlling interest
Earnings per share (in dollars)
9750
Basic earnings per share
9850
Diluted earnings per share

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

157 -

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

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 2021 Balance at January 1 Profit for the year Other comprehensive (loss) income for the year Total comprehensive (loss) income Appropriation of 2020 earnings: Legal reserve Special reserve Cash dividends 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 Decrease in non-controlling interests Establishment of subsidiaries Difference between consideration and carrying amount of subsidiaries acquired Difference between consideration and carrying amount of subsidiaries disposed Disposal of investments in equity instruments measured at fair value through other comprehensive income Others Balance at December 31	Notes	Share Capital	Share Capital		Capital surplus	Equity attributable to Retained Earnings	Equity attributable to Retained Earnings	Equity attributable to Retained Earnings	Equity attributable to Retained Earnings	owners of the paren Unappropriated retained earnings	t Other EquityInterest Financial statements translation differences of foreign operations Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income	t Other EquityInterest Financial statements translation differences of foreign operations Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income	t Other EquityInterest Financial statements translation differences of foreign operations Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income	Treasuryshares �� �� � � � � � � � � � �� � � � � � � � � � � � � � � � � � � � � � � � �	Total		Non-controlling interests	Total
		Common stock �� � � � � � � � � � � � � �� �� � � � � � � � � �� � � � � � � � ��	Certificate of entitlement to new shares from convertible bond			Legal reserve		Special reserve			Financial statements translation differences of foreign operations
	6(21) 6(20) 6(19)(20) 6(19) 6(18)(19) 6(19) 6(3)(21) 6(18)(19) 6(19) 6(21) 6(20) 6(19)(20) 6(19) 6(18)(19) 6(19) 6(19) 6(19) 6(19) 6(3)(21)		� � � � � � � � �� � � � � � �� �� � � � � � � � � � �� � � � � � � � � �		�� � � � � � �� �� �� �� � �� � �� �� �� � � � � � � � �� �� �� �� � � �� � �� �� � �� ��	�� � � � � � � � � � � � � �� �� � � � �� � � � � � � � � � � � � ��		�� � � � �� � � � � � � � � �� �� � � � � � �� � � � � � � � � � � � ��		�� �� �� � �� �� �� �� � �� � � � � � � � � � �� � � � � � � � �� �� �� �� �� � � �� �� �� � �� � �� � �� � � �� � � � � � � � � � � � � � � � � � �� � � � �� ��			�� � �� �� � � � � � � �� � � � �� �� � �� �� � � � � � � � � � � � � �� � ��		�� � �� �� �� �� �� �� �� �� �� �� �� � � � � �� � � �� �� � �� �� � �� �� �� �� � � � �� � �� � � �� �� �� � �� �� � �� �� �� � �� �� �� �� �� �� � �� �� �� �� �� � � � � � � � �� � � �� � �� � � �� �� � �� �� � �� �� �� �� � � �� �� � �� �� �� � �� �� �� �� �� �� � � � �� � �� �� � �� ��

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

158 -

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation and amortization
Net loss (gain) on financial assets or liabilities at fair value
through profit or loss
Compensation cost of share-based payments
Expected credit loss
Share of profit of associates and joint ventures accounted for
under equity method
Loss on disposal of Investments
Loss (gain) on disposal of property, plant and equipment
Gain on lease modification
Interest expense
Interest income
Dividend income
Foreign exchange gain
Others
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
2021
2020
�
��
�
��
6(27)
��
��
��
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6(27)
��
��
12(2)
��
�
6(7)
�
��
�
��
6(25)
��
�
6(25)
��
�
��
�
��
�
6(26)
��
��
6(23)
�
��
�
��
6(24)
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(Continued)

159 -

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(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 financial assets measured at fair
value through other comprehensive income
Proceeds from disposal of financial assets measured at fair value
through other comprehensive income
Decrease (increase) in financial assets at amortized cost -current
Acqusition of financial assets at amortized cost - non-current
Proceeds from disposal of financial assets at amortized cost
Proceeds from repayments of financial assets at amortised cost
Increase in refundable deposits
Increase in investment accounted for under equity method
Joint venture to establish a subsidiary
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Interest received
Dividends received
Net cash flows used in 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 dividends paid to non-controlling interests
Treasury shares transferred to employees
Repurchase of bonds payable
Cash paid from capital surplus
Cash dividends paid
Proceeds from acquisition of shares of subsidiaries
Proceeds from disposal of shares of subsidiaries
Employee share options exercised
Others
Net cash flows (used in) from financing activities
Effect of changes in foreign currency exchange
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Notes
2021
2020
��
��
��
��
��
��
�
��
�
��
6(3)
��
��
��
�
��
�
��
�
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�
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�
�
��
�
��
�
��
�
4(3)
��
�
6(31)
�
��
�
��
��
��
6(11)
�
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�
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��
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�
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�
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�
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�
�
��
�
��
6(13)
�
��
�
6(20)
�
��
�
��
6(20)
�
��
�
4(3)
�
��
�
4(3)
��
�
��
�
6(19)
��
��
�
��
��
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��
��
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��
�
��
�
��

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

160 -

INNOLUX CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(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.

2. 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 11, 2022.

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 the FSC effective from 2021 are as follows:

follows:
New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform - Phase 2’ Amendment to IFRS 16, ‘Covid-19 - related rent concessions beyond 30 June 2021’	January 1, 2021 January 1, 2021 April 1, 2021 (Note)

Note � Earlier application from January 1, 2021 is allowed by the 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 2022 are as follows:

161 -

New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts - cost of fulfilling a contract Annual improvements to IFRSs 2018-2020 cycle	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

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:

endorsed by the FSC are as follows:

New Standards,InterpretationsandAmendments

Effective date by
International Accounting
StandardsBoard

Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, 'Insurance contracts'
Amendments to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 -
comparative information'
Amendments to IAS 1, ‘Classification of liabilities as current or non-
current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities
arising from a single transaction’

To be determined by
International Accounting
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

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.

162 -

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.

(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 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
163 -

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.

(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
InnoCare Optoelectronics
Corporation
Investment, R&D,
manufacturing and
distribution company
GIO Optoelectronics Corp.
Investment, R&D,
manufacturing and
distribution company
INStek Corporation
R&D, manufacturing
and distribution
company
Innolux Holding
Limited
Rockets Holding Limited
Investment holdings
Suns Holding Ltd
Investment holdings
Lakers Trading Limited
Distribution
company

December
December
31,2021
31,2020
Description
100
100
-
100
100
-
100
100
-
100
100
-
100
100
-
-
100
(c)
100
100
-
100
100
-
54
54
-
100
100
-
59
100
(d)
76
63
(e)
40
-
(f)
100
100
-
100
100
-
-
100
(h)
Ownership (%)

164 -

Main
Business
Name of Investor
Name ofSubsidiary
Activities
Keyway Investment
Management Limited
Foshan Innolux Logistics
Ltd.
Warehousing
company
Landmark
International Ltd.
Ningbo Innolux
Optoelectronics Ltd.
Processing company
Foshan Innolux
Optoelectronics Ltd.
Processing company
Ningbo Innolux Display Ltd. Processing company
Toppoly
Optoelectronics
(B.V.I.) Ltd.
Toppoly Optoelectronics
(Cayman) Ltd.
Investment holdings
Innolux Hong Kong
Holding Limited
Innolux Hong Kong Limited
Distribution
company
Innolux Japan Co., Ltd.
Investment, R&D
and distribution
company
CarUX Holding Limited
Investment holdings
InnoJoy Investment
Corporation
Inno Capital Corporation
Investment company
Innolux Japan Co.,
Ltd.
Innolux USA, Inc.
Distribution
company
Innolux Singapore
Holding Pte. Ltd.
INNOLUX
OPTOELECTRONICS
INDIA PRIVATE LIMITED
Distribution
company
INNOLUX
OPTOELECTRONICS
PHILIPPINES CORP.
Manufacturing and
distribution company
INNOLUX
OPTOELECTRONICS
MALAYSIA SDN. BHD
Manufacturing and
distribution company
Rockets Holding
Limited
Stanford Developments
Limited
Investment holdings
Nets Trading Ltd.
Investment company
Suns Holding Ltd
Warriors Technology
Investments Ltd
Investment company
Toppoly
Optoelectronics
(Cayman) Ltd.
Nanjing Innolux Technology
Ltd.
Distribution
company
Nanjing Innolux
Optoelectronics Ltd.
Processing company
CarUX Holding
Limited
CARUX TECHNOLOGY
PTE. LTD.
Investment and
distribution company
CARUX
TECHNOLOGY
PTE. LTD.
Innolux Optoelectronics
Hong Kong Holding Limited
Investment holdings

December
December
31,2021
31,2020
Description
Ownership (%)
100
100
-
100
100
-
100
100
-
100
100
-
100
100
-
100
100
-
46
46
-
100
100
-
100
-
(g)
100
100
-
100
100
-
100
100
-
-
100
(i)
100
100
-
100
100
-
100
100
-
100
100
-
100
100
-
100
100
-
100
100
-

165 -

Main
Business
Name of Investor
Name ofSubsidiary
Activities
CARUX
TECHNOLOGY
PTE. LTD.
Innolux Europe B.V.
Investment,
distribution, and
R&D testing
company
CarUX Technology Inc.
R&D, manufacturing
and distribution
company
Innolux
Optoelectronics Hong
Kong Holding
Limited
Shanghai Innolux
Optoelectronics Ltd.
Processing company
Innolux Europe B.V. Innolux Technology
Germany GmbH
Testing and
maintenance
company
Stanford
Developments
Limited
Innocom Technology
(Shenzhen) Co., Ltd.
Processing company
Ningbo Innolux
Optoelectronics
Ltd.
Ningbo CarUX Technology
Ltd.
Processing company
Innocom Technology
(Shenzhen) Co., Ltd.
Shenzhen PixinLED
Technology Co., LTD.
R&D and
distribution company
InnoCare
Optoelectronics
Corporation
InnoCare Optoelectronics
Japan Co., Ltd.
Distribution
company
InnoCare Optoelectronics
USA, INC.
Distribution
company
Ningbo Innolux Electornics
Ltd.
Distribution
company
Innocare Optoelectronics
Europe B.V.
After-sales service
company
GIO Optoelectronics
Corp.
Double Star Inc.
Investment holdings
GIO (Maanshan)
Optoelectronics Co., Ltd.
Processing company

December
December
31,2021
31,2020
Description
Ownership (%)
100
100
-
100
100
-
100
100
-
100
100
-
100
100
-
100
-
(a)
-
100
(j)
100
100
-
100
100
-
100
100
-
100
-
(b)
100
100
-
100
100
-

(a) Ningbo CarUX Technology Ltd. was established in the first quarter of 2021 and was included in the consolidated financial statements since the date of establishment.
(b) Innocare Optoelectronics Europe B.V. was established in the first quarter of 2021 and was included in the consolidated financial statements since the date of establishment.
(c) In the second quarter of 2021, Leadtek Global Group Limited had completed liquidation and dissolution.
(d) The Board of Directors of the Company resolved to implement InnoCare Optoelectronics Corporation’s (“InnoCare Company”) listing plan by releasing its equity interests in the subsidiary in the amount of 10,500 thousand shares in the third quarter of 2021.The Company
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had released 10,500 thousand shares of InnoCare Company and received proceeds amounting to $240,786.

(e) The Company repurchased outstanding domestic convertible bonds of the subsidiary, GIO Optoelectronics Corp. (“GIO Company”), in the third quarter of 2021, and the Company converted those convertible bonds into common shares of GIO Company, please refer to Note 6(13) for further information. The Company repurchased 3,575 thousand shares of outstanding common stock of GIO Company, in the fourth quarter of 2021, and paided fee amounting to $37,720.
(f) The Company injected capital and established a new subsidiary, INStek Corporation, and acquired 40% equity interests in the subsidiary in the third quarter of 2021. The Company had ability and had obtained half seats in the Board of Directors, which indicates that the Company has current ability to direct the relevant activities of the subsidiary. The subsidiary shall be included in the consolidated financial statements, and net cash inflow in the consolidated financial statements was $39,700.
(g) Inno Capital Corporation was established in the third quarter of 2021 and was included in the consolidated financial statements since the date of establishment.
(h) In the fourth quarter of 2021, Lakers Trading Limited had completed liquidation and dissolution.
(i) In the fourth quarter of 2021, INNOLUX OPTOELECTRONICS MALAYSIA SDN. BHD. had completed liquidation and dissolution.
(j) The Company's subsidiary, Innocom Technology (Shenzhen) Co., LTD., sold 100% equity of Shenzhen PixinLED Technology Co., LTD., in the fourth quarter of 2021.
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
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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.
- (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
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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.
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
169 -

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.
(11) Impairment of financial assets
For financial assets at amortized cost, 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 the contractual rights to receive the cash flows from the financial asset expire.

(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 labor, 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

170 -

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.
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.
171 -
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:

Buildings and structures 2~51years 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.

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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 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.
173 -

(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.
(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
174 -

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.
(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

175 -

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.

     - 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 year 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
176 -

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.

(30) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. 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) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are resolved by the Company's shareholders' meeting. Cash dividends are recorded as liabilities.

(32) 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 and 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
177 -

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.

(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(11) 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(8) and 6(11) 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

178 -

the net realizable value of inventories on balance sheet date using judgments and estimates. Due 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, demand deposits and checking accounts Time deposits	December31,2021 December31,2020 �� � �� � �� �� �� � �� �	December31,2020

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		December31,2021		December31,2020
Current items
Financial assets mandatorily measured at fair
value through profit or loss
Beneficiary certificates �� � � � Structured products �� � Forward foreign exchange contracts �� �� Foreign exchange swap contracts �� � �� � �� � Non-current items
Financial assets mandatorily measured at fair
value through profit or loss
Listed stocks �� � �� � Unlisted stocks �� �� Financial products �� � �� � �� �

179 -

December 31, 2020

Liabilities

December 31, 2021

Liabilities	Dece	mber31,2021	Dece	mber31,2020
Current items
Financial liabilities held for trading
Convertible bonds derivative instruments � � �� � Forward foreign exchange contracts �� �� �� � �� �

A. The Group sold $3,115 and $2,566,352 of stocks at fair value during the years ended December 31, 2021 and 2020 and the amount of receivables (shown as other receivables) outstanding as of December 31, 2021 and 2020 was $0 and $1,259,091.
B. The Company entered into a ‘Share Issuance and Asset Purchase Agreement’ with Nanjing Huadong Electronic Information & Technology Co., Ltd (It was renamed as TPV Technology Co.,ltd. in the second quarter of 2021) (“TPV Technology”) during the year ended December 31, 2021. Refer to Note 9(2) for relevant information.
C. The non-hedging derivative financial assets and liabilities transaction information are as follows:

Current items Forward foreign exchange contracts Foreign exchange swap contracts Forward foreign exchange contracts Derivative financial assets and liabilities Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts	December 31,2021	December 31,2020	December 31,2020
	Contract Period RMB (sell) �� � 2021/12-2022/01 USD (buy) �� 2021/12-2022/01 RMB (sell) �� 2021/12-2022/01 TWD (buy) �� 2021/12-2022/01 USD (sell) �� 2021/12-2022/01 JPY (buy) �� 2021/12-2022/01 TWD (sell) �� 2020/09-2021/03 JPY (buy) �� 2020/09-2021/03 EUR (sell) �� 2021/12-2022/01 USD (buy) �� 2021/12-2022/01 HKD (sell) �� 2021/11-2022/02 USD (buy) �� 2021/11-2022/02 USD (sell) �� 2021/12-2022/01 TWD (buy) �� 2021/12-2022/01 USD (sell) �� 2021/10-2022/05 TWD (buy) �� 2021/10-2022/05 Contract Amount (Notional Principal) (in thousands)	Contract Amount (Notional Principal) (in thousands)	Contract Period

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

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

December 31, 2021 December 31, 2020

Non-current items
Equity instruments
Listed stocks �� � �� � Unlisted stocks �� �� �� � �� �

A. The Group has elected to classify equity instruments that are considered to be strategic investments and steady dividend income as financial assets at fair value through other comprehensive income.
B. The Group sold $358,212 and $283,212 of stocks at fair value resulting in cumulative gains amounting to $289,263 and $236,126 on disposal which were recognized in unappropriated retained earnings during the years ended December 31, 2021 and 2020.
C. For information on other comprehensive income for fair value change recognized by the Group for the years ended December 31, 2021 and 2020, please refer to Note 6(21) “Other equity”.

(4) Financial assets at amortized cost

Financial assets at amortized cost
	December31,2021	December31,2020
Current items
Principal guaranteed financial assets �� � �� � Corporate bonds �� � �� � �� �
Non-current items
Principal guaranteed financial assets �� � � � Corporate bonds �� � Fixed income financial products �� � �� � � �

A. The Group recognized $771,602 and $164,623 of interest income arising from the financial assets at amortized cost for the years ended December 31, 2021 and 2020, respectively.
B. The Group associates with a variety of financial institutions and counterparties all with high credit quality to disperse credit risk, so it expects that the probability of financial institution and counterparty defaults is remote.

(5) Notes receivable and accounts receivable

counterparty defaults is remote. Notes receivable and accounts receivable
		December31,2021		December31,2020
Notes receivable �� � �� � Accounts receivable �� �� �� �� Less: Allowance for uncollectible accounts �� � �� � �� � �� �

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

181 -

		December31,2021		December31,2020
Not past due �� � �� � Up to 60 days �� �� 61 to 180 days �� �� Over 180 days �� �� �� � �� �

The above aging analysis was based on past due date.

B. As of December 31, 2021 and 2020, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2020, the balance of receivables from contracts with customers amounted to $40,099,225.

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

(6) Inventories

Inventories
Raw materials and supplies Work in progress Finished goods	December31,2021 �� � �� �� �� �	December31,2020
		�� � �� �� �� �

For the years ended December 31, 2021 and 2020, the Group recognized cost of goods sold for inventories that have been sold at $258,315,997 and $246,024,010 and recognized net inventory loss at $261,013 and $53,944 due to write down of cost of scrap inventories to net realizable value, respectively.

(7) Investments accounted for under the equity method

Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd. PanelSemi Corporation Others	December31,2021 �� � �� �� �� �� �	December31,2020
		�� � �� � �� �� �

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

below:
Profit for the year from continuing operations Other comprehensive loss - net of tax � Total comprehensive income	2021 2020 �� � �� � �� �� � �� � �� � Years endedDecember31,
	2021 �� � �� � �� �

182 -

2021

(8) Property, plant and equipment

						2021
								Transfer, net
								exchange
								differences
			At January1		Additions	Disposals		and others		At December 31
Cost:
Land �� � � � � � � � �� � Buildings �� �� �� � �� �� Machinery and equipment �� �� �� � �� �� Other equipment �� �� �� � �� ��
		��			�� �� � �� ��
Accumulated depreciation
and impairment:
Buildings	�� �			�	�� �� �� �� �
Machinery and equipment	�� �			�	�� �� �� �� �
Other equipment	�		�� �� � �� �� �� �
	�� �			�	�� �� �� �� �
Unfinished construction
and equipment under
acceptance			�� �� �� �				�	�� ��
		�� �							�� �
						2020
								Transfer, net
								exchange
								differences
			At January1		Additions	Disposals		and others		At December 31
Cost:
Land �� � � � � � � � �� � Buildings �� �� �� � �� �� Machinery and
equipment		�� �� �� � �� ��
Other equipment			�� �� �� � �� ��
		��			�� �� � �� ��
Accumulated depreciation
and impairment:
Buildings	�� �			�	�� �� �� � �� �
Machinery and
equipment	�� �			�	�� �� �� � �� �
Other equipment	�		�� �� � �� �� � �� �
	�� �			�	�� �� �� � �� �
Unfinished construction
and equipment under
acceptance			�� �� �				�	�� ��
		�� �							�� �

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, 2021 and 2020, the prepayments for business facilities which have not yet entered the factory (shown as ‘other non-current assets’) amounted to $8,530,392 and $242,041,

183 -

respectively.

`�` (9) 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) Land Buildings (Office) Transportation equipment (Business vehicles)	December31,2021 Carryingamount �� � �� �� �� � Year ended December31,2021 Depreciationcharge �� � �� �� �� �	December31,2020
		Carryingamount
		�� � �� ��
		�� �
		Year ended December31,2020
		Depreciationcharge
		�� � �� ��
		�� �

D. For the years ended December 31, 2021 and 2020, the additions to right-of-use assets were $135,603 and $5,245, respectively.
E. The information on profit and loss accounts relating to lease contracts is as follows:

	Year ended	Year ended
	December31,2021	December31,2020
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 �� ��

F. For the years ended December 31, 2021 and 2020, the Group’s total cash outflow for leases were $541,789 and $687,179, respectively.
184 -

(10) Investment property

Investment property
Cost: Land Buildings Accumulated depreciation: Buildings � Cost: Land Buildings Accumulated depreciation: Buildings �		2021	At December31 �� � �� �� �� �� � At December31 �� � �� �� �� �� �
	AtJanuary1 �� � �� �� �� � �� � �	Additions � � � � �� � �� � 2020
	AtJanuary1 �� � �� �� �� � �� � �	Additions � � � � �� � �� �

The fair value of the investment property held by the Group as at December 31, 2021 and 2020 was $1,978,199 and $2,035,178, 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.

(11) Intangible assets

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

						2021
							Transfer, net
							exchange
							differences
		AtJanuary1			Additions	Disposals	and others	At December 31
Cost:
Patents and royalty		�� �		�	� � � �� � �� �
Goodwill �� � � � �� Others �� �� �� � �� ��
		��			�� �� � �� ��
Accumulated amortization
and impairment:
Patents and royalty	�� �		�		�� �		�	�� �
Others	�� �		�		�� �� �� �� �
	�� �		�		�� �� �� �� �
		�� �	��		�� � � �� � �� �

185 -

2020

					2020
						Transfer, net
						exchange
						differences
	AtJanuary1			Additions	Disposals	and others	At December 31
Cost:
Patents and royalty	�� �		�	� � � �� � �� �
Goodwill �� � � � �� Others �� �� �� � �� ��
	��			�� �� � �� ��
Accumulated amortization
and impairment:
Patents and royalty	�� �	�		�� �		�	�� �
Others	�� �	�		�� �� �� �� �
	�� �	�		�� �� �� �� �
	�� �	��		�� � � �� � �� �

B. Details of amortization of intangible assets are as follows:

Operating costs Operating expenses	Years endedDecember31,	Years endedDecember31,
	2021 �� � �� �� �	2020
		�� � ��
		�� �

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 12.58% and 12.07% , respectively, for the years ended December 31, 2021 and 2020, 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, 2021 and 2020, respectively.

(12) Other payables

respectively. Other payables
Other personnel expenses Payable on machinery and equipment Repairs and maintenance expense payable Utilities expense payable Other payables	December31,2021 �� � �� �� �� �� �� �	December31,2020
		�� � �� �� �� ��
		�� �

186 -

(13) Bonds payable

December31,2021 December31,2020
Bonds payable � � �� � Less: Discount on bonds payable � �� � Less: Current portion of bonds payable � �� � � � �� �
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, 2020. 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.
(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, 2021, the conversion price was $10.38 (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, 2021, all unsecured overseas convertible bonds issued by the Company had been converted. All convertible bonds were calculated at the conversion price at the time of conversion. Refer to Note 6(18) 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 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
187 -
- ~ 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.
D. The Company repurchased all the outstanding domestic convertible bonds of GIO Company in the amount of $104,455 in the third quarter of 2021 and converted all those convertible bonds into ordinary shares of GIO Company amounting to 9,901 thousand shares.

- (14) Long term borrowings

Type of loans Syndicated bank borrowings Unsecured bank borrowings Secured borrowings Less: Administrative expenses charged by syndicated banks Current portion (includes administrative expenses) Range of interest rates	Period December31,2021 December31,2020 �� �� �� � �� � �� �� �� � �� �� �� �� �� � �� � �� � �� � �� � �� � �� ��

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 borrowing 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, 2021 and 2020 are in compliance with the covenants on the syndicated borrowing 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 borrowing with financial institution in the amount of $37.5 billion on May 5, 2020. As of December 31, 2021, the borrowing has yet to be drawn down.
188 -

(15) 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 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:

	December31,2021	December31,2020
Present value of defined benefit obligations �� � �� � Fair value of plan assets �� � �� � Net defined benefit liability �� � �� �

Year ended December 31, 2021 Balance at January 1 Current service cost Interest expense / income Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Benefits paid � Contribution for the year Balance at December 31	Present value of defined benefit obligations �� � �� �� �� � �� �� �� �� � �� � �� �	Fair value Net defined ofplan assets benefit liability �� � �� � � �� �� �� �� �� �� �� � � �� � �� � �� �� � �� �� �� �� � �� � �� �

189 -

Present value of
defined benefit
obligations
Year ended December 31, 2020
Balance at January 1
��
�
Current service cost
��
Interest expense / income
��
��
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)
�
Change in financial
assumptions
��
Experience adjustments
��
�
Benefits paid
��
�
�
��
�
Contribution for the year
�
Balance at December 31
��
�

Fair value
Net defined
ofplan assets
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, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.
190 -

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

Discount rate Future salary increases	Years endedDecember31,	Years endedDecember31,
	2021 �� ��	2020
		��
		��

Future mortality rate was estimated based on the 6th 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, 2021 Effect on present value of defined benefit obligation � December 31, 2020 Effect on present value of defined benefit obligation �	Increase Decrease 0.25% 0.25% �� � �� � Increase Decrease 0.25% 0.25% �� � �� � Discount rate Discount rate	Increase Decrease 0.25% 0.25% �� � �� �� Increase Decrease 0.25% 0.25% �� � �� �� Future salaryincreases Future salaryincreases
	Increase 0.25% �� �	Increase 0.25% �� � �

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, 2021, the weighted average duration of the retirement plan is 16 ~ 34.5 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 Company's foreign subsidiaries contribute pension in accordance with the pension regulations in their territory respectively.
C. The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2021 and 2020 were $1,859,850 and $1,682,528, respectively.
191 -

(16) Share-based payment

A. For the years ended December 31, 2021 and 2020, the share-based payment arrangements of the Group’s subsidiary were as follows:

Type of loans arrangement Employee stock options Employee stock options Treasury stock transferred to employees	Grant date �� �� ��	Quantity granted (in thousand units)

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 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 Quantity Weighted-average (in thousand exercise price (in thousand exercise price units) (indollars) units) (indollars) �� �� � �� �� � �� �� �� � �� �� �� �� �� �� �� 2021 2020			Weighted-average exercise price (indollars) 2020
		Quantity (in thousand units)		Quantity (in thousand units)

192 -

� (b) Employee stock options InnoCare Company

		2021	2021			2020	2020
	Quantity	Weighted-average			Quantity	Weighted-average
	(in thousand		exercise price	(in thousand			exercise price
	units)		(indollars)		units)		(indollars)
Options outstanding	�� �� � �					�	�
at the beginning of
the year
Options granted � � �� �� Options exercised �� � �� � � Options expired �� � �� � � Options outstanding
at the end of the
year �� �� �� �� Options exercisable
at the end of the
year	� �

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 2020.7.7	Expiry date 2022.9.30 2026.7.6 Expiry date 2022.9.30 2026.7.6	December	31,2021
		Quantity Exercise price (in thousand units) (indollars) �� �� �� �� December31,2020	Exercise price (indollars)
		Quantity Exercise price (in thousand units) (indollars) �� �� �� ��

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 interest rate(%) 0.63~ 0.68 0.26~ 0.37	Fair value per unit (in dollars)
								0.0783~ 0.1099 4.88~ 8.16

193 -

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

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

F. For the years ended December 31, 2021 and 2020, the Group recognized expenses on share-based payment transaction (equity settlement) were $19,280 and $395,669, respectively.

(17) Provisions-current

Provisions-current
At January 1, 2021 Additions during the year Used (unused amounts reversed) during the year � At December 31, 2021	Warranty �� � �� �� � �� �	Litigation and others �� � �� �� � �� �	Total
			�� � �� �� �� �

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).

(18) Share capital

A. As of December 31, 2021, the Company’s authorized and outstanding capital were $120,000,000 and $105,596,201, 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:

	2021	2020
	Number of ordinary	Number of ordinary
	shares (in thousand units)	shares (in thousand units)
At January 1 �� �� Stocks converted from bonds �� �� Treasury stock transferred
to employees	�	��
At December 31	�� ��

194 -
B. The Company’s bonds totalling USD 281,800 thousand (face value) had been converted into $6,191,869 of ordinary shares (619,187 thousand shares) with a par value of $10 (in dollars) per share during the year ended December 31, 2021, which resulted in ‘capital surplus, additional paid-in capital arising from bond conversion’ of $4,544,732.
C. Treasury shares
(a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

At January 1 Treasury stock transferred to employees At December 31	Number of ordinary shares (in thousand units) Bookvalue �� �� � �� � �� � � � � 2020

(b) 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.

(19) 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.

195 -

2021

														Difference between	Difference between	Difference between
											Share of				proceeds on
											profit		(loss)		acquisition or
								Changes			of associates			disposal of equity
					Treasury			in ownership			accounted				interest in a
		Share			share			interests in			for under			subsidiary and its
		premium		transactions				subsidiaries			equitymethod			carryingamount				Total
At January 1	�� �			�� �				�� �			�� �			�		� �� �
Cash dividends from capital surplus	�� �						�		� � �								�� �
Conversion of convertible bonds �� � � � � �� Recognition of changes in
ownership interests in subsidiaries			�				�	�� � �										��
Recognition of change in equity of
associates in proportion to the
Group's ownership			�				�		� �� �									��
Difference between consideration
and carrying amount of subsidiaries
acquired			�				�		� � �� �								�� �
Difference between consideration
and carrying amount of subsidiaries
disposed			�				�		� � �� ��
Establishment of Subsidiaries			�				�	�� �					� �				�	��
Others			�� �						� � �									��
At December 31	�� �			�� �				�� �			�� �			�	�� ��
											2020
														Share of
														profit (loss)
									Changes					of associates
					Treasury				in	ownership				accounted
		Share				share			interests in					for under
		premium			transactions				subsidiaries				equity		method			Total
At January 1	�� �				�� �				�		�� �� � �� �
Cash dividends from capital
surplus �� � � � � �� � Conversion of convertible
bonds			�� � �												�			��
Recognition of changes in
ownership interests in
subsidiaries			�					� �� �										��
Recognition of change in equity of
associates in proportion to the
Group's ownership � � � �� �� Treasury shares transferred
to employees			�				��					�			�			��
Others			�� � �												�			��
At December 31	�� �				�� �				�		�� �� � �� �

196 -

(20) 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 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 net decrease in other equity accumulated in prior periods should be appropriated from prior period's undistributed earnings to a special reserve of the same amount, and if there is a deficiency, the same amount should be appropriated from the post-tax profit for the year plus the amount of items other than post-tax profit for the year, and the amount was included in the unappropriated earnings for the year.
Depending on the Company's future long-term financial planning, investment environment, industry competition, capital expenditure budget, capital requirements and protection of shareholders' rights, dividends should account for at less 20% of the distributable earnings for the year. However, as the distributable earnings is lower than 2% of the paid-in capital, the Company may choose not to distribute dividends and transferred dividends to the retained earnings. Earnings shall be preferably distributed using cash dividends and may also be distributed using stock dividends. The ratio for cash dividends shall not be less than 50% of the total amount of dividends distributed. The aforementioned dividend distribution rate may be adjusted based on financial, business and operational factors.
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 2020 net income which was approved by the stockholders during their meeting in July 2021 and the appropriation of 2019 deficit compensation which was approved at the stockholders’ meeting in June 2020 are as follows:

Years ended December 31,

	2020	2020			2019
		Dividends per			Dividends per
	Amount	share (in	dollars)	Amount	share (in	dollars)
Legal reserve �� � � � (Reversal of)
provision for
special reserve �� � �� Cash dividends �� �� � � � � �� � �� �

197 -

In July 2021, the shareholders at their meeting resolved to distribute cash dividends amounting to $1,047,000 at $0.1 (in dollars) per share from capital surplus, and 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.

(21) Other equity items

(21)	In July 2021, the shareholders at their meeting resolved to distribute cash dividends amounting to $1,047,000 at $0.1 (in dollars) per share from capital surplus, and 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. Other equity items	In July 2021, the shareholders at their meeting resolved to distribute cash dividends amounting to $1,047,000 at $0.1 (in dollars) per share from capital surplus, and 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. Other equity items
(22)	Operating income Financial assets at fair Currency value through other translation comprehensiveincome Total At January 1 �� �� �� � �� �� Revaluation - gross � �� �� Disposal of investments in equity instruments measured at fair value through other comprehensive income � �� � �� � Currency translation differences �� � � �� � Share of other comprehensive loss of associates �� � � �� � Effect of income tax � �� � �� � At December 31 �� �� �� � �� �� 2021 Financial assets at fair Currency value through other translation comprehensiveincome Total At January 1 �� �� �� � �� �� Revaluation - gross � �� �� Disposal of investments in equity instruments measured at fair value through other comprehensive income � �� � �� � Currency translation differences �� � �� Share of other comprehensive loss of associates �� � � �� � Effect of income tax � �� �� At December 31 �� �� �� � �� �� 2020 2021 2020 TFT-LCD products �� � �� � Years endedDecember31,
		2020
		�� �

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

198 -

(23) Interest income

Interest income from bank deposits Interest income from financial assets at amortized cost

Years endedDecember31,	Years endedDecember31,
2021 �� � �� �� �	2020
	�� � ��
	�� �

(24) Other income

Service revenue

Dividend income Grant revenue Rental revenue

Compensation income Other income

Years endedDecember31,	Years endedDecember31,
2021 �� � �� �� �� �� �� �� �	2020
	�� � �� �� �� �� ��
	�� �

(25) Other gains and losses

Net (loss) gain on financial assets and liabilities at fair value through profit or loss

Net currency exchange loss

Loss on disposal of investments

(Loss) gain on disposal of property, plant and equipment

Other losses

	Years ended	31,
	2021	2020
��	�� �� �
�	�� �� �
�	�� �
�	�� ��
� ��	�� �� � �� �� ��

(26) Finance costs

Interest expense: Bank borrowings Convertible bonds Others

Years endedDecember31,	Years endedDecember31,
2021 �� � �� �� �� �	2020
	�� � �� ��
	�� �

199 -

(27) Expenses by nature

Expenses by nature
Employee benefit expense: Salaries and other short-term employee benefits Shared-based payments Post-employment benefits Depreciation Amortization	Years endedDecember31,
	2021 �� � �� �� �� �� �� �	2020
		�� � �� �� �� ��
		�� �

(28) 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, 2021 and 2020, employees’ compensation was accrued at $4,246,994 and $139,349, respectively; while directors’ remuneration was accrued at $65,338 and $2,144, respectively. The aforementioned amounts were recognized in expenses.
The expenses recognized for 2021 were accrued based on the earnings of current year. The employees’ compensation and directors’ remuneration were $4,246,994 and $65,338, respectively, and will be distributed in the form of cash as resolved b y the Board of Directors on February 11, 2022. The accrued amounts were in agreement with the amount of recorded expense for the year ended December 31, 2021.
The employees’ compensation and directors’ remuneration for the year ended December 31, 2020, were $139,349 and $2,144, respectively, and will be distributed in the form of cash as resolved by the Board of Directors during their meeting on February 4, 2021. The resolved amounts were in agreement with the amount of recorded expense for the year ended December 31, 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.
200 -

(29) Income tax

A. Income tax expense

(a)Components of income tax expense:

e tax ome tax expense Components of income tax expense:
		Years ended	December31,
		2021		2020
Current tax:
Current tax on profit for the year �� � �� � Prior year income tax under (over)
estimation	�	�� ��
Total current tax		�� ��
Deferred tax:
Origination and reversal of temporary
differences �� � �� Loss carryforward �� �� �
Income tax expense	�	�� �� �

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

follows:
			Years ended	December31,
			2021		2020
Changes in fair value of financial	�		�� �� ��
assets at fair value through other
comprehensive income
Remeasurements of defined benefit
obligations	�	�	�� �� �� �� �
Reconciliation between income tax expense and	accounting profit:
			Years ended	December31,
			2021		2020
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		�	�� �� �

B. Reconciliation between income tax expense and accounting profit:

201 -

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

carryforward are as follows:
		2021
			Recognized
		Recognized		in other
		in profit	comprehensive
	January1	or loss		income	December31
Deferred tax assets:
-Temporary differences:
Sales returns and discount provisions	�� �	�� �	�	� �� �
Accrued royalties and warranty provisions	�� �� �				��
Unrealized exchange loss	�	�� �			��
Unrealized loss on financial instruments	�� �� �� �				��
Others	�� �� �		�� ��
Loss carryforward	�� �� �			�	�
	�� �	�� ��	�� �		�� �
- Deferred tax liabilities:
Unrealized exchange gain	�� ��	�� �	�	� �� ��
Unrealized gain on financial instruments	�	�� �	�� �		�� �
Amortization charges on goodwill	�� �	�� �		�	�� �
Others	�� �	�� �			�� �
	�� ��	�� �	�� ��		�� ��
	�� �	�� ��	�� ��		�� �
		2020
			Recognized
		Recognized		in other
		in profit	comprehensive
	January1	or loss		income	December31
Deferred tax assets:
-Temporary differences:
Sales returns and discount provisions	�� �	�� ��	�	� �� �
Accrued royalties and warranty provisions	�� �� �			�	��
Unrealized loss on financial instruments	�� �� �			�� ��
Others	�� �� �� �				��
Loss carryforward	�� �� �				��
	�� �	�� ��	�� ��		�� �
- Deferred tax liabilities:
Unrealized exchange gain	�� ��	�� �	�	� �� ��
Amortization charges on goodwill	�� �	�� �		�	�� �
Others	�� �	�� �		�	�� �
	�� ��	�� ��	�	� �� ��
	�� �	�� ��	�� ��		�� �

202 -
D. Expiration dates of unused loss carryforward and amounts of unrecognized deferred tax assets are as follows:

December 31, 2021

Year incurred 2012 2016 2019	Amount filed / assessed Assessed Assessed Filed	Unrecognized Unused deferred Usable amount taxassets untilyear �� � �� � 2022 �� �� 2026 �� �� 2029 �� � �� �	Usable untilyear

December 31, 2020

Year incurred 2011 2012 2016 2019	Amount filed / assessed Assessed Assessed Assessed Filed	Unrecognized Unused deferred Usable amount tax assets untilyear �� � �� � 2021 �� �� 2022 �� �� 2026 �� �� 2029 �� � �� �	Usable untilyear

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

Deductible temporary differences	December31,2021 �� �	December31,2020
		�� �

F. The Company has not recognized taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2021 and 2020, the amounts of temporary differences unrecognized as deferred tax liabilities were $34,176,731 and $33,493,308, respectively.
G. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.
203 -

(30) Earnings per share

Earnings per share
	Year	endedDecember31,2021
		Weighted average
		number of ordinary		Earnings
	Amount	shares outstanding		per share
	after tax	(sharesin thousands)	(indollars)
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent	�� �	�� �� �
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	�� ��
Assumed conversion of all dilutive
potential ordinary shares:
-Convertible bonds �� �� -Employees’ compensation � �� Profit attributable to ordinary shareholders
of the parent plus assumed conversion of
all dilutive potential ordinary shares	�� �	�� �� �
	Year	endedDecember31,2020
		Weighted average
		number of ordinary		Earnings
	Amount	shares outstanding		per share
	after tax	(sharesin thousands)	(indollars)
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent	�� �	�� �� �
Diluted earnings per share
Profit attributable to ordinary shareholders of the parent	�� ��
Assumed conversion of all dilutive
potential ordinary shares:
-Employees’ compensation � �� Profit attributable to ordinary shareholders
of the parent plus assumed conversion of
all dilutive potential ordinary shares	�� �	�� �� �
For the year ended December 31, 2020, the	Company’s convertible bonds were not		included in the
calculation of diluted earnings per share due to its anti-dilutive effect.

204 -

(31) Supplemental cash flow information

A. Investing activities with partial cash payments:

		Years ended	December31,	December31,
		2021		2020
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	�� �		�� �

(32) Changes in liabilities from financing activities

For the years ended December 31, 2021 and 2020, liabilities from financing activities include 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.

		2021		2020
		Bonds payable		Bonds payable
At January 1 �� � �� � Conversion of convertible bonds �� � �� � Amortization of discounts on convertible bonds �� �� Impact of changes in foreign exchange rate �� � �� � Changes in cash flow from financing activities � �� Convertible bonds derivative instruments on the
issue date		�	�	��
At December 31	�	� �� �

7. RELATED PARTY TRANSACTIONS

(1) Names and relationship of related parties

LATED PARTY TRANSACTIONS Names and relationship of related parties Convertible bonds derivative instruments on the issue date At December 31 �	� �� � � �� �
Names of related parties	Relationship with the Group
Hon Hai Precision Industry Co., Ltd. and its subsidiaries CHENG MEI MATERIALS TECHNOLOGY CORPORATION and its subsidiaries (Note) FI Medical Device Manufacturing Co., Ltd.	Other related party Other related party Associate

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

205 -

(2) Significant related party transactions

A. Operating revenue

nificant related party transactions Operating revenue
Sales of goods: Other related parties Associates	Years endedDecember31,
	2021 �� � �� �� �	2020
		�� � ��
		�� �

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.

B. Purchases of goods

different from those of sales to third parties. Purchases of goods
Purchases of goods: Other related parties Associates	Years endedDecember31,
	2021 �� � �� �� �	2020
		�� � �� �� �

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
Accounts receivable: Other related parties Associates	December31,2021 �� � �� �� �	December31,2020
		�� � �� �� �

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

Payables to related parties
Accounts payable: Other related parties Associates	December31,2021 �� � �� �� �	December31,2020
		�� � �� �� �

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.

206 -

E. Property transactions

Purchase of property

(a) Acquisition of property, plant and equipment:

		Years ended	December31,
		2021	2020
Other related parties �� � �� � Associates �� �
	�	�� �� �
Period-end balances arising from purchases of		property (shown as ‘Other payables’):
		December31,2021	December31,2020
Other related parties	�	� �� �

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

(3) Key management compensation

Salaries and other short-term employee benefits Shared-based payments Post-employment benefits	2021 2020 �� � �� � �� �� �� �� �� � �� � Years endedDecember31,

8. PLEDGED ASSETS

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

Book value

Pledged asset Property, plant and equipment Other assets - others -Demand deposits -Time deposits -Refundable deposits	December31,2021 �� � �� �� �� �� �	December31,2020 Purpose �� � Long-term borrowings �� Long-term borrowings �� Tariff guarantee and performance bond �� Litigation guarantee �� �

207 -

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Contingencies Significant Litigations
A. 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.
B. 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.
C. On September 1, 2020, the Company received a civil complaint joint filed by Granville Technology Group Limited, VMT Limited and OT Computers Limited (all in liquidation) in the High Court 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 reached a settlement with the claimant in November 2021.
D. On December 18, 2020 and March 19, 2021, the Company received civil complaints jointly filed by SAMSUNG ELECTRONICS CO. LIMITED, SAMSUNG ELECTRONICS TAIWAN CO. LIMITED, SAMSUNG ELECTRONICS (UK) LIMITED, SAMSUNG SEMICONDUCTOR EUROPE LIMITED and SAMSUNG DISPLAY CO. LMITED in 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 and the first to fifth claimants entered into with Ingram Micro (UK) Limited for the TFT-LCD pricing collaborations in 2006. The Company reached a settlement with the claimant in May 2021.
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E. 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, 2021 December 31, 2020 Property, plant and equipment � � ��

B. Outstanding letters of credit

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

December 31, 2021 December 31, 2020 Outstanding letters of credit � � ��

C. The Company entered into a conditional ‘Share Issuance and Asset Purchase Agreement’ with TPV Technology. TPV Technology 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.

D. On August 3, 2021, the Board of Directors of the Company resolved to enter into a long-term strategic partnership supply contract with SDP Global (China) Co., LTD. The total price of the contract amounted to RMB 4 billion and will be paid periodically. As of December 31, 2021, the group not yet paid amount was RMB 3.5 billion. The supply term is from January 2022 to December 31, 2033, during this period, the Company and the subsidiary, Foshan Innolux Optoelectronics Ltd., obtained a multi-year commitment from SDP Global (China) Co., LTD for supplying certain products in specified quantities each year.

10. SIGNIFICANT DISASTER LOSS

None.

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.

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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 Group’s treasury departments. To manage their foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, entities in the Group use forward foreign exchange contracts and foreign exchange swap 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 $410,217 and $259,928 for the years ended December 31, 2021 and 2020, 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:
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Foreign Foreign Currency Exchange Currency Exchange Amount Rate Book Value Amount Rate Book Value (In Thousands) (Note) (NTD) (In Thousands) (Note) (NTD) Financial assets Monetary items USD �� � �� �� � �� � �� �� � RMB �� �� �� �� �� �� JPY �� �� �� �� �� �� EUR �� �� �� �� �� �� HKD �� �� �� �� �� �� Non-monetary items USD �� � �� �� � �� � �� �� � JPY �� �� �� �� �� �� RMB �� �� �� � �� � HKD � �� � �� �� �� USD �� � �� �� � �� � �� �� � JPY �� �� �� �� �� �� EUR �� �� �� �� �� �� HKD �� �� �� �� �� �� December 31,2021 December 31,2020 Financial liabilities Monetary items	December 31,2020	December 31,2020
		Book Value (NTD)

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, 2021 and 2020 amounted to $50,011 and $3,113,179, 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 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, beneficiary certificates and financial products. 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, 2021 and 2020 would have increased/decreased by $3,646,018 and $696,036, respectively; other comprehensive gains and losses would have increased/decreased by $1,969,625 and $977,536, respectively.
211 -

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, 2021 and 2020, the Group’s borrowings at variable rate were denominated in the NTD.
ii. The Group analysis 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, 2021 and 2020 would have decreased/increased by $111,113 and $99,511, 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, 2021 and 2020, 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 analysing 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 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.
212 -
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:

llowance for accounts receivable are as follows:
At January 1 Provision for impairment At December 31 At January 1 Provision for impairment At December 31	2021
	Accountsreceivable
	�� � ��
	�� �
	2020
	Accountsreceivable
	�� � �
	�� �

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.
(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
213 -
forecasts. These are expected to readily generate cash inflows for managing liquidity risk.
iii. The information below analysis 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:

	Less than	Between 1	Between 3	Over
December31,2021	1year	and 3 years	and 5 years	5 years	Total
Lease liability (Note)	�� �	�� �	�� �	�� �	�� �
Long-term borrowings
(including current
portion)	�� �� �� �				��
	Less than	Between 1	Between 3	Over
December31,2020	1year	and 3 years	and 5 years	5 years	Total
Lease liability (Note)	�� �	�� �	�� �	�� �	�� �
Bonds payable �� �� � � �� Long-term borrowings
(including current
portion)	�� �� �� �				��

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.

(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 and beneficiary certificates 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 and financial products 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(10).
C. Financial instruments not measured at fair value
Except for those listed in the table below, the carrying amounts of cash and cash equivalents,
214 -

accounts receivable (including related parties), other receivables, financial assets at amortized cost, accounts payable (including related parties), other payables, lease liability and long-term borrowings (including current portion) are approximate to their fair values.

	December	31,2021
Bookvalue �� �		Fair value
	Level 1 � � December	Level 2 �� � 31,2020	Level3
			� �
Bookvalue �� �		Fairvalue
	Level 1 � �	Level 2 �� �	Level3
			� �

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 31,2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Forward foreign exchange contracts Forward exchange swap contracts Beneficiary certificates Structured products Financial instruments 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 foreign exchange contracts	Level 1 �� � � � �� � � �� �� � � �	Level 2 � � �� �� � �� �� � �� � �� �	Level 3 Total �� � �� � � �� � �� � �� � �� � �� �� �� �� � �� � � � �� �	Total

215 -

December 31,2020		Level 1		Level 2			Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities	�� �		�	� �� �		�� �
Forward foreign 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 foreign exchange contracts � � �� � � � �� � Convertible bonds derivative
instruments	�	� � �� �� � � � �� � �� �

(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 and financial products, 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 foreign 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).
216 -
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 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, 2021 and 2020, 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, 2021 and 2020:

31, 2021 and 2020:
			2021
Financial assets at fair value through
profit or loss / Financial assets at
fair value through other
comprehensive income			Equity securities
At January 1 �� � Gains and losses recognized
in profit or loss �� Gains and losses recognized
in other comprehensive income �� Acquired in the year �� Disposed in the year �� � Proceeds from capital reduction �� � Transfers to Level 1 �� �
Effect on exchange rate changes	�		��
At December 31		�	��

217 -

2020

				2020
Financial assets at fair value through
profit or loss / Financial assets at
fair value through other
comprehensive income		Equity securities		Hybridinstrument		Total
At January 1 �� � �� � �� � Gains and losses recognized
in profit or loss		�� �				��
Gains and losses recognized
in other comprehensive income �� � � �� � Acquired in the year �� � �� Disposed in the year �� � � �� � Conversion in the year �� �� � � Effect on exchange rate changes �� � �� � �� �
At December 31	�	�� � �			�	��
				2021		2020
Financial liabilities at fair value				Derivative		Derivative
through profit or loss				instruments		instruments
At January 1 �� � � � Gains and losses recognized
in profit or loss �� �� Conversion in the year �� � �
Issued in the year				�		��
At December 31			�	�	�	��

G. 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.
H. 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:
218 -

Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment Non-derivative equity instrument: Unlisted shares	Fair value at December 31,2021	Valuation technique	Significant unobservableinput	Range (weighted average)	Relationship of inputstofairvalue
			Price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability Discount for lack of marketability Discount for lack of marketability Not applicable Significant unobservableinput	�� �� �� �� �� �� �� �� Not applicable Range (weighted average)	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 Relationship of inputstofairvalue
			Price to earnings ratio multiple, price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability Discount for lack of marketability	�� �� �� �� �� ��	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

219 -

Non-derivative equity instrument: Unlisted shares Venture capital Private equity fund investment Derivative instrument liabilities: Convertible bond	Fair value at December 31,2020	Valuation technique	Significant unobservableinput	Range (weighted average)	Relationship of inputstofairvalue
			Discount for lack of marketability Not applicable Volatility rate	�� �� Not applicable ��	The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the volatility, the higher the fair value

I. 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, 2021

		December 31,2021	31,2021	31,2021
Financial assets	Input	Favourable Unfavourable Favourable Unfavourable Change change change change change �� �� �� �� �� �� Favourable Unfavourable Favourable Unfavourable Change change change change change �� �� �� �� �� �� �� � � � Recognized in other Recognizedinprofitor loss comprehensiveincome December 31,2020 Recognized in other Recognizedinprofitor loss comprehensiveincome	Recognized in other comprehensiveincome
				Unfavourable change
Equity instrument Financial assets	Liquidity discount Input
Equity instrument Financial liabilities	Liquidity discount Volatility rate
Derivative instruments

(4) Other matter

The Company and the subsidiaries implemented epidemic prevention measures in response to the Covid-19 outbreak and numbers of the government's epidemic prevention measures. The epidemic did not make a significant impact on the Group’s operation and business in the third quarter of 2021.

220 -

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.
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.

221 -

(2) Segment information

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

is as follows:
Segment revenue Segment income Depreciation and amortization Capital expenditure-property, plant and equipment Segment assets	Years endedDecember31,
	2021 TFT LCD �� � �� � �� � �� � �� �	2020
		TFT LCD
		�� �
		�� �
		�� �
		�� �
		�� �

(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, 2021 and 2020 is as follows:

Years ended December 31,

	2021	2021	2020	2020
	Revenue	Non-current assets	Revenue	Non-current assets
Taiwan	�� �	�� �	�� �	�� �
Hong Kong	�� �		�� �
China �� �� �� �� US �� �� �� �� Singapore �� �� �� �
Europe �� �� �� �� Others �� �� �� ��
Total	�� �	�� �	�� �	�� �

(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 years ended December 31, 2021 and 2020.

222 -

Innolux Corporation and Subsidiaries

Table 1

Loans to others

Year ended December 31, 2021

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, 2021	Balance as at December 31, 2021	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 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. Innolux Japan Co., Ltd. Innolux Holding Limited Warriors Technology Investments Ltd	Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Corporation Innolux Corporation Innolux Corporation	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes Yes Yes Yes	4,340,224 $ 2,170,112 2,387,123 1,779,492 3,689,190 2,322,410 210,954 3,266,240	4,340,224 $ 2,170,112 2,170,112 1,302,067 3,038,157 2,322,410 210,954 3,266,240	4,340,224 $ 1,736,090 1,909,699 1,128,459 2,604,134 2,322,410 210,954 3,266,240	2.00% 2.00% 2.00% 2.00% 2.00% 1.00% 0.00% 0.00%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Long-term and short-term financing Long-term and short-term financing Long-term and short-term financing	$ - - - - - - - -	Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support	$ - - - - - - - -	- - - - - - - -	$ - - - - - - - -	23,638,850 23,638,850 23,638,850 23,638,850 23,638,850 7,238,094 36,025,692 11,919,114	23,638,850 23,638,850 23,638,850 23,638,850 23,638,850 7,238,094 36,025,692 11,919,114	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.
223 -

Innolux Corporation and Subsidiaries

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

December 31, 2021

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 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair 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 Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd.	Common stock	None None Other related party None None None None None None None None None None None None None	900,000 60,200,000 4,270,212 57,211,305 1,669,000 1,209 477,142 8,347,068 1,027,000 263,000 674,000 1,110,000 1,439,180 315,000 1,520,000 176,000 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 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 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		$ 15,929 1,257,556 27,726 798,097 170,238 - 24,164 4,489,240 64,599 13,965 68,411 70,041 - 4,394 75,316 8,615	1 3 19 8 - - 12 4 - - - - 3 - 1 -	$ 15,929 1,257,556 27,726 798,097 170,238 - 24,164 4,489,240 64,599 13,965 68,411 70,041 - 4,394 75,316 8,615
	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 Holding Corp. Cathay Financial Holding Co., Ltd. Preferred Stock A TAISHIN FINANCIAL HOLDING CO., LTD. Preferred Stock E Chailease Holding Company Limited Class A Preferred Shares Fubon Financial Holding Co., Ltd. Preferred Shares B Trillion Science, Inc. Cheng Mei Materials Technology Corporation WPG Holdings Limited Preferred Share A WT MICROELECTRONICS CO., LTD. Preferred Shares A

224 -

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair value
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. 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 Warriors Technology Investments Ltd Nets Trading Ltd. Innolux Corporation Innolux Corporation Innolux Corporation	Common stock	Other related party None None Other related party None None None None None None None None None Other related party Other related party None None None None	1,200,000 6,964,222 954,000 7,347,144 9,000,000 - 30,599,775 16,000,000 414,136 2,016,000 1,027,371 22,525,000 4,000 1,900 1,819,240 90 69,820,457 180,718,346 5,164,587 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 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 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 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 Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss		$ 5,571 178,981 73,172 192,495 2,538,000 1,381,176 227,843 37,869 20,973 49,440 13,887 2,297,550 1,441 - 8,995 20,752 1,001,952 2,471,974 930,746	12 5 - 7 5 - 8 6 11 3 - 7 14 19 11 - - - -	$ 5,571 178,981 73,172 192,495 2,538,000 1,381,176 227,843 37,869 20,973 49,440 13,887 2,297,550 1,441 - 8,995 20,752 1,001,952 2,471,974 930,746
	VISIONATICS INC. Advanced Optoelectronic Technology, Inc. ENNOSTAR Inc. EPILEDS Co., Ltd. Fitipower Integrated Technology Inc. ��(��) Shenzhen Tiandeyu Electronics Co., Ltd. OED Holding Ltd. Obsidian Sensors, Inc. Reco Technology Holding Limited Kymeta Corporation General Interface Solution (GIS) Holding Limited CJK Associates Co., Ltd. Perinnova Limited KA Imaging Inc. PilotTech Global Fund Beneficiarycertificates
	Taishin Ta-Chong Money Market Fund Taishin 1699 Money Market Fund FSITC Money Market

225 -

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair value
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Display Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Electronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo CarUX Technology Ltd. Nanjing Innolux Optoelectronics Ltd. Innocom Technology (Shenzhen) Co., Ltd. Shanghai Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd.	Beneficiarycertificates	None None None None None None 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 profit or loss Financial assets at amortized cost Financial assets at amortized cost 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 profit or loss Financial assets at fair value through profit or loss	150,267,533 92,184,251 66,065,266 7,975,245 181,530,803 90,561,003 18,225,781 46,301,937 - - - - - - - - - - -	$ 2,252,075 1,502,336 881,066 100,160 2,301,375 1,401,096 300,186 760,259 477,563 4,705,600 2,926 10,715 84 13,950 417 6,014 2,512 1,935 1,315,317	- - - - - - - - Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	$ 2,252,075 1,502,336 881,066 100,160 2,301,375 1,401,096 300,186 760,259 477,563 4,705,600 2,926 10,715 84 13,950 417 6,014 2,512 1,935 1,315,317
	Jih Sun Money Market Fund Capital Money Market Fund Union Money Market Fund Cathay Taiwan Money Market Fund Mega Diamond Money Market Fund FSITC Taiwan Money Market Yuanta De-Li Money Market Fund Hua Nan Phoenix Money Market Fund Financialproducts
	Fixed Income RMB-Structured Deposits Fixed Income Structured Linked Deposit Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Structuredproducts
	Floating Income RMB-Structured Deposits

226 -

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair value
Ningbo Innolux Optoelectronics Ltd. 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	Structuredproducts	None None None None None None None None None 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 amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost	- - - - - - - - - - - - - - - - - - - - - -	$ 1,954,213 201,588 251,530 201,188 100,946 251,833 252,140 200,877 251,300 100,892 100,791 202,028 101,901 251,096 50,413 100,750 125,888 151,198 144,582 264,031 157,374 167,210	Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	$ 1,954,213 201,422 252,175 201,186 100,947 251,840 252,033 200,876 251,923 100,892 100,685 201,202 100,713 251,093 100,825 100,750 251,775 151,209 143,151 261,210 156,610 166,856
	Floating Income RMB-Structured Deposits Bonds
	Taiwan Mobile Co., Ltd. Nan Ya Plastics Corporation Hon Hai Precision Industry Co., Ltd., 2017, Third Taiwan Power Company,2012,Fourth Fubon Financial Holding Co., Ltd. Highwealth Construction corp. Hon Hai Precision Industry Co., Ltd., 2017, Second Far Eastern New Century Corporation Co., Ltd. Far Eastone Telecommunications,2017, Third Far Eastone Telecommunications,2018, First Taipei Financial Center Corporation Taiwan Semiconductor Manufacturing Co., Ltd. Chang Chun Petrochemical Co., Ltd. CPC Corporation, Taiwan Taiwan Power Company,2012,Third China Steel Corporation CTBC Financial Holding Co., Ltd. ADCB Finance Cayman LTD. Agricultural Bank of China (New York Branch) Arab Petroleum Investments Corporation Bank of Communications (Hong Kong Branch)

227 -

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair 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 Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Bonds	None None None None None None None None None None None None None None None None None None None None	Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost	- - - - - - - - - - - - - - - - - - - -	$ 144,459 223,010 276,800 229,679 145,117 34,852 253,295 250,544 276,420 288,891 173,638 262,143 267,107 264,742 195,482 32,600 145,923 264,830 56,167 278,199	Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	$ 143,386 221,061 276,100 229,411 143,785 34,512 252,155 248,587 274,565 287,339 171,915 259,906 264,009 261,935 193,728 32,326 144,483 261,756 56,041 274,325
	Daimler Finance North America LLC Doosan Infracore Co., Ltd. Emirates NBD Bank PJSC FAB Sukuk Co. Ltd. GS Caltex Corporation Hyundai Capital America Hyundai Capital Services, Inc. Industrial and Commercial Bank of China Limited (Hong Kong Branch) KIA Corporation Korea Resources Corporation NongHyup Bank POSCO Saudi Electricity Global SUKUK Company 4 Shinhan Bank Siam Commercial Bank Cayman Islands Sinopec Capital 2013 LTD. SK broadband CO.LTD. Societe Generale SA Sumitomo Corporation Sumitomo Mitsui Trust Bank

228 -

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, 2021

Investor Table 3	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2021	Balance as at January1,2021	Addition(Note 3)	Addition(Note 3)		Disposal(Note 3)	Disposal(Note 3)		Balance as at December 31,2021(Note 6) Expressed in thousands of NTD (Except as otherwise indicated)	Balance as at December 31,2021(Note 6) Expressed in thousands of NTD (Except as otherwise indicated)
					Shares/Units	Amount	Shares/Units	Amount	Shares/Units	Selling price	Book value	Gain (loss) on disposal	Shares/Units	Amount
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	Taishin Ta-Chong Money Market Fund CTBC Hwa-win Money Market Fund Fubon Chi-Hsiang Money Market Fund Jih Sun Money Market Fund Capital Money Market Fund TCB Taiwan Money Market Fund Union Money Market Fund Taishin 1699 Money Market Fund FSITC Money Market Fund Mega Diamond Money Market Fund FSITC Taiwan Money Market Yuanta De-Li Money Market Fund Hua Nan Phoenix Money Market Fund	Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4	- - - - - - - - - - - - -	- - - - - - - - - - - - -	- - - - - - - - - - - - -	$ - - - - - - - - - - - - -	69,820,457 234,022,269 82,245,047 150,267,533 92,184,251 185,531,904 66,065,266 180,718,346 5,164,587 181,530,803 90,561,003 18,225,781 46,301,937	$ 1,000,000 2,600,000 1,300,000 2,250,000 1,500,000 1,900,000 880,000 2,470,000 930,000 2,300,000 1,400,000 300,000 760,000	- 234,022,269 82,245,047 - - 185,531,904 - - - - - - -	$ - 2,602,655 1,301,010 - - 1,901,368 - - - - - - -	$ - 2,602,655 1,301,010 - - 1,901,368 - - - - - - -	$ - - - - - - - - - - - - -	69,820,457 - - 150,267,533 92,184,251 - 66,065,266 180,718,346 5,164,587 181,530,803 90,561,003 18,225,781 46,301,937	$ 1,001,951 - - 2,252,075 1,502,336 - 881,066 2,471,974 930,746 2,301,375 1,401,096 300,186 760,259

229 -

Investor	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2021	Balance as at January1,2021	Addition(Note 3)	Addition(Note 3)		Disposal(Note 3)	Disposal(Note 3)		Balance as at December 31,2021(Note 6)	Balance as at December 31,2021(Note 6)
					Shares/Units	Amount	Shares/Units	Amount	Shares/Units	Selling price	Book value	Gain (loss) on disposal	Shares/Units	Amount
Innolux Corporation Innolux Corporation Ningbo Innolux Display Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd.	Fixed Income RMB-Structured Deposits Fixed Income Structured Linked Deposit Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits	Note 5 Note 5 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -	$ - - - - - - - - -	- - - - - - - - -	$ 475,530 4,699,650 436,480 875,743 1,969,461 3,583,083 1,287,909 1,910,123 1,983,118	- - - - - - - - -	$ - - 443,212 889,175 1,998,283 3,639,591 - - 2,012,359	$ - - 443,212 889,175 1,998,283 3,639,591 - - 2,012,359	$ - - - - - - - - -	- - - - - - - - -	$ 477,563 4,705,600 - - - - 1,315,317 1,954,213 -

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: Code of general ledger account is "financial assets at fair value through profit or loss". Due to adoption of IFRS, it would be valued at fair value rather than recognized disposal gain or loss. Note 5: Code of general ledger account is "financial assets at amortized cost". The gain or loss due to disposal is interest income.

Note 6: The carrying amount as at December 31, 2021 included gains or losses on valuation.

230 -

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, 2021

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. CARUX TECHNOLOGY PTE. LTD. Innolux Hong Kong Limited HONGFUJIN PRECISION ELECTRONICS (YANTAI) CO., LTD. Hon Hai Precision Industry Co., Ltd. Foshan Innolux Optoelectronics Ltd. Honfujin Precision Electronics (Chongqing) Co., Ltd. InnoCare Optoelectronics Corporation COMPETITION TEAM IRELAND LIMITED Innolux Japan Co., Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd.	An indirect wholly-owned subsidiary 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 of Hon Hai Precision Industry Co., Ltd. A subsidiary of the Company An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Processing expense Processing expense Processing expense	16,314,528 $ 11,843,010 5,784,107 2,397,790 1,900,182 1,584,421 1,176,963 490,580 174,399 119,443 30,985,143 25,322,932 22,975,073	5 4 2 1 1 - - - - - 12 10 9	90~120 days 60 days 60 days 60 days 90 days 60 days 45 days 90 days 45 days 60 days 60 days 60 days 60 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 Cost plus Cost plus Cost plus	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	3,550,091 $ 4,068,272 - 112,170 896,570 118,073 214,075 482,752 4,979 33,330 4,459,942) ( 6,339,613) ( 6,502,696) (	6 7 - - 1 - - 1 - - 10 14 14

231 -

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 Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. CarUX Technology Inc. Shanghai Innolux Optoelectronics Ltd. CarUX Technology Inc. Innolux Japan Co., Ltd. Innolux Europe B.V. Ningbo Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Ningbo Innolux Display Ltd. InnoCare Optoelectronics Corporation	Innolux Hong Kong Limited Innocom Technology (Shenzhen) Co., Ltd. Ningbo CarUX Technology Ltd. Innolux Hong Kong Limited CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Innolux Hong Kong Limited Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Display Ltd. Nanjing Innolux Technology Ltd. Ningbo Innolux Optoelectronics Ltd. InnoCare Optoelectronics Japan Co., Ltd.	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 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	Processing expense Processing expense Processing expense Processing revenue Processing revenue Processing revenue Processing revenue Processing revenue Service revenue Service revenue Sales Sales Sales Sales	17,233,139 $ 322,283 203,034 15,253,655 5,698,685 4,714,830 1,618,206 508,031 294,548 253,499 7,382,709 5,392,767 1,668,187 651,531	7 - - 100 54 90 13 10 66 27 15 16 4 37	60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days	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 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 No material difference	4,597,097) ($ 318,529) ( 75,293) ( 2,949,684 1,329,482 1,842,178 - - 54,907 - 1,461,181 135,428 324,867 250,550	10 1 - 100 64 98 - - 80 - 16 3 4 50

232 -

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)
InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Foshan Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Europe B.V.	InnoCare Optoelectronics USA, INC. Ningbo Innolux Electronics Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. CARUX TECHNOLOGY PTE. LTD.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder Same major stockholder Same major stockholder Same major stockholder An indirect wholly-owned subsidiary	Sales Sales Purchases Purchases Purchases Purchases Service revenue	451,166 $ 258,284 2,192,021 2,185,769 144,442 105,979 672,777	25 14 4 5 - 1 73	60 days 60 days 90 days after acceptance 90 days after acceptance 90 days after acceptance 90 days after acceptance 60 days	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	151,578 $ 34,120 656,912) ( 710,978) ( 30,889) ( 14,282) ( 143,660	30 7 6 7 - - 100

233 -

Innolux Corporation and Subsidiaries

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

December 31, 2021

Table 5 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2021 (Note A)	Turnover rate	Overdue receivables	Overdue receivables	Allowance for doubtful accounts Amount collected subsequent to the balance sheet date Expressed in thousands of NTD (Except as otherwise indicated)	Allowance for doubtful accounts Amount collected subsequent to the balance sheet date Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Innolux Hong Kong Limited Foshan Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. CarUX Technology Inc. Innolux Corporation Innolux Corporation	CARUX TECHNOLOGY PTE. LTD. Innolux USA Inc. Hon Hai Precision Industry Co., Ltd. CarUX Technology Inc. InnoCare Optoelectronics Corporation Honfujin Precision Electronics (Chongqing) Co., Ltd. Foshan Innolux Optoelectronics Ltd. HONGFUJIN PRECISION ELECTRONICS (YANTAI) CO., LTD. Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Hong Kong Limited CARUX TECHNOLOGY PTE. LTD. Innolux USA Inc. CARUX TECHNOLOGY PTE. LTD.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. Ultimate parent company 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	4,068,272 $ 3,550,091 1,335,185 (Shown as other receivables) 896,570 534,716 482,752 332,658 (Shown as other receivables) 214,075 118,073 112,170 6,502,696 6,339,613 4,597,097 4,459,942 2,949,684 1,842,178	4.16 4.13 - 1.82 0.34 0.70 - 8.91 17.94 6.75 2.22 4.16 2.53 2.53 2.85 5.12	2,560,260 $ - - 134,769 527,846 342,022 - 62,407 - - - - - - - -	Subsequent collection - - Subsequent collection Subsequent collection Subsequent collection - Subsequent collection - - - - - - - -	279,519 $ 1,182,303 199,783 691 145,316 - 46,342 118,073 - 3,836,063 3,349,598 - 4,459,942 1,479,383 955,002 -	- $ - - - - - - - - - - - - - - -

234 -

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2021 (Note A)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Ningbo Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Innocom Technology (Shenzhen) Co., Ltd. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation Innolux Europe B.V. Innolux Hong Kong Limited Foshan Innolux Optoelectronics Ltd.	Ningbo Innolux Display Ltd. CARUX TECHNOLOGY PTE. LTD. Ningbo Innolux Optoelectronics Ltd. Innolux Corporation InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. CARUX TECHNOLOGY PTE. LTD. Nanjing Innolux Technology Ltd. Hongfujin Precision Industry (Wuhan) Co.,Ltd.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary 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 of Hon Hai Precision Industry Co., Ltd.	1,461,181 $ 1,329,482 324,867 318,529 250,550 151,578 143,660 135,428 104,277 (Shown as other receivables)	4.63 8.57 5.78 2.02 5.65 2.40 9.37 5.38 -	- $ - - 262,115 - 67,041 - - 12,923	- - - Subsequent collection - Subsequent collection - - Subsequent collection	696,265 $ 1,051,045 152,493 262,115 111,697 41,563 73,136 125,586 47,120	- $ - - - - - - - -

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.

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Innolux Corporation and Subsidiaries

Table 6

Expressed in thousands of NTD

Significant inter-company transactions during the reporting period

Year ended December 31, 2021

(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 0 0 0	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 Innolux Corporation Innolux Corporation Innolux Corporation	Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Innolux Hong Kong Limited Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Innolux Japan Co., Ltd. Innolux USA Inc. 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. CARUX TECHNOLOGY PTE. LTD.	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	Processing expense Accrued expenses Sales Processing expense Accrued expenses Processing expense Accrued expenses Sales Processing expense Accounts receivable Accrued expenses Processing expense Accrued expenses Sales Sales Accounts receivable Other receivables Accounts receivable Sales Accounts receivable Sales Service revenue Accounts receivable Other receivables	322,283 $ 318,529) ( 5,784,107 17,233,139 4,597,097) ( 22,975,073 6,502,696) ( 1,584,421 30,985,143 118,073 4,459,942) ( 25,322,932 6,339,613) ( 119,443 16,314,528 3,550,091 332,658 534,716 490,580 482,752 11,843,010 914,202 4,068,272 1,335,185	- - - - - - - - - - - - - - - - - - - - - - - -	- - 2 5 1 7 1 - 9 - 1 7 1 - 5 1 - - - - 3 - 1 -

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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 1 1 2 2 3 3 3 4 4 4 5 5 6 6 7 8 8 8 9 9 9 9 9	Innolux Corporation Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Innolux Europe B.V. Innolux Europe B.V. Innolux Europe B.V. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Innolux Japan Co., Ltd. CarUX Technology Inc. CarUX Technology Inc. CarUX Technology Inc. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation	Ningbo CarUX Technology Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Nanjing Innolux Technology Ltd. Nanjing Innolux Technology Ltd. Innolux Hong Kong Limited CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Innolux Corporation CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Corporation Innolux Corporation CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Ningbo Innolux Electronics Ltd. InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. InnoCare Optoelectronics USA, INC.	1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Processing expense Processing revenue Accounts receivable Sales Accounts receivable Processing revenue Processing revenue Accounts receivable Service revenue Service revenue Accounts receivable Sales Accounts receivable Sales Accounts receivable Service revenue Processing revenue Processing revenue Accounts receivable Sales Sales Accounts receivable Sales Accounts receivable	203,034 $ 15,253,655 2,949,684 5,392,767 135,428 1,618,206 5,698,685 1,329,482 253,499 672,777 143,660 7,382,709 1,461,181 1,668,187 324,867 294,548 508,031 4,714,830 1,842,178 258,284 651,531 250,550 451,166 151,578	- - - - - - - - - - - - - - - - - - - - - - - -	- 4 1 2 - - 2 - - - - 2 - - - - - 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 30~120 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.

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Innolux Corporation and Subsidiaries

Information on investees

Year ended December 31, 2021

Table 7

Expressed in thousands of NTD

Table 7										Expressed in thousands of NTD
Investor	Investee	Location	Main business activities	Initial investment amount		Shares held	as at December 31,2021		Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by the Company for the year ended December 31,2021 Footnote (Except as otherwise indicated)
				Balance as at December 31, 2021	Balance as at December 31, 2020	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 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. Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoCare Optoelectronics Corporation Innolux Japan Co., Ltd. iZ3D, Inc. GIO Optoelectronics Corp. INStek Corporation Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd.	Samoa Samoa Samoa BVI Hong Kong Singapore Taiwan Taiwan Taiwan Japan USA Taiwan Taiwan Cayman Taiwan	Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings 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 R&D, manufacturing and distribution company Investment holdings Production and selling of the absorption for medical element	$ 6,192,509 62,197 33,438,542 3,674,115 3,231,780 754,943 1,217,235 1,674,054 205,000 1,682,751 - 451,167 35,300 1,717,714 73,500	$ 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 73,500	180,568,185 1,656,410 709,450,000 146,847,000 1,158,844,000 25,400,000 - 167,405,392 20,500,000 98 4,333 41,288,528 2,647,507 14,062,500 7,350,000	100 100 100 100 100 100 100 100 59 54 35 76 40 50 49	$ 18,012,846 98,524 49,835,425 6,186,203 6,355,418 223,127 877,887 3,844,694 365,463 1,970,209 - 424,120 29,643 801,157 318,640	$ 271,650 5,815 3,602,032 170,034 ( 280,423) ( 19,791) 5,779 ( 8,570) 198,600 158,977 - ( 30,145) ( 891) 397 205,597	$ 271,650 5,815 3,602,032 170,034 ( 278,939) ( 19,791) 5,779 ( 8,570) 180,426 86,547 - ( 20,650) ( 357) 199 100,742

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Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2021	as at December 31,2021	Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by the Company for the year ended December 31,2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Innolux Corporation Innolux Corporation 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. Innolux Singapore Holding Pte. Ltd.	eLux Inc. PanelSemi Corporation Rockets Holding Limited Suns Holding Ltd 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 INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED	USA Taiwan Samoa Samoa Cayman Hong Kong Japan Cayman Singapore Hong Kong Netherlands Taiwan USA Samoa Samoa Samoa Germany India	R&D of MicroLED technology Manufacturing of electronic parts Investment holdings Investment holdings 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 Distribution company	$ 91,155 250,000 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 33,735 607,284	$ 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 33,735 607,284	300,000 25,000,000 160,504,550 18,177,052 146,817,000 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 18,177,052 100,000 144,095,499	28 45 100 100 100 100 46 100 100 100 100 100 100 100 100 100 100 100	$ 6,957 243,661 11,842,308 5,959,558 6,185,879 1,544,927 1,648,838 3,008,984 3,006,600 2,012,564 432,825 1,435,384 898,659 11,819,471 22,713 5,959,557 19,987 84,317	($ 62,015) ( 13,945) 168,142 103,482 170,034 370,155 158,977 ( 723,008) ( 722,695) 239,280 44,816 185,695 88,395 170,103 ( 1,961) 103,482 4,664 ( 11,158)	($ 27,929) ( 6,339) 168,142 103,482 170,034 370,155 72,430 ( 723,008) ( 722,695) 150,184 44,816 3,177 88,395 170,103 ( 1,961) 103,482 4,664 ( 11,158)

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Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2021	as at December 31,2021	Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by the Company for the year ended December 31,2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Innolux Singapore Holding Pte. Ltd. Innolux Singapore Holding Pte. Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoJoy Investment Corporation Inno Capital Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation GIO Optoelectronics Corp.	INNOLUX OPTOELECTRONICS PHILIPPINES CORP. INNOLUX OPTOELECTRONICS MALAYSIA SDN. BHD. GIO Optoelectronics Corp. INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED Inno Capital Corporation CDIB-Innolux Limited Partnership CDIB-Innolux Limited Partnership InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. Innocare Optoelectronics Europe B.V. Double Star Inc.	Philippines Malaysia Taiwan India Taiwan Taiwan Taiwan Japan USA Netherlands Mauritius	Manufacturer and distribution company Manufacturer and distribution company Holdings, R&D, manufacturing and distribution company Distribution company Investment company Investment company Investment company Distribution company Distribution company After-sales service company Investment holdings	$ 28,733 - 858 - 15,000 47,139 2,861 87,149 27,963 1,661 298,113	$ 28,733 121,179 858 - - - - 87,149 27,963 - 298,113	5,000,000 - 77,235 1 1,500,000 - - 30,010 900,000 500 10,000,000	100 - - - 100 16 1 100 100 100 100	$ 26,010 - 805 - 16,777 68,134 4,135 76,223 23,788 1,963 98,017	($ 98) ( 93) ( 30,145) ( 11,158) 415 ( 8,809) ( 8,809) 6,233 3,473 419 ( 583)	($ 98) ( 93) ( 48) - 415 ( 1,451) ( 88) 3,975 3,473 419 ( 583)

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Innolux Corporation and Subsidiaries

Table 8

Information on investments in Mainland China

Year ended December 31, 2021

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, 2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2021	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Net income of investee for the year ended December 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for year ended December 31, 2021(Note B)	Book value of investments in Mainland China as of December 31,2021	Accumulated amount of investment income remitted back to Taiwan as of December 31,2021	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 CarUX Technology Ltd. Ningbo Innolux Electronics 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 Manufacturing and selling of LCD backend module and related components Manufacturing and selling of medical equipment	$ 4,539,520 332,125 8,580,800 10,601,440 4,428,800 58,128 4,318,080 581,280 41,520 276,800 1,215,620 66,729	2 2 2 2 2 2 2 2 2 2 3 1	$ 3,512,917 55,360 203,865 10,601,440 4,428,800 58,128 3,986,905 - 41,520 276,800 - -	$ - - - - - - - - - - - 87,799	$ - - - - - - - - - - - -	$ 3,512,917 55,360 203,865 10,601,440 4,428,800 58,128 3,986,905 - 41,520 276,800 - 87,799	$ 170,103 ( 92,889) 1,807,694 1,342,743 449,408 23,602 146,432 239,280 5,806 ( 583) ( 194,220) ( 524)	100 3 100 100 100 100 100 100 100 77 100 59	$ 170,103 - 1,807,694 1,344,930 449,408 23,602 146,432 239,280 5,806 ( 445) ( 193,461) ( 555)	$ 11,819,425 25,717 22,192,373 21,960,654 5,681,349 630,141 5,555,719 2,100,614 94,007 74,859 1,021,853 103,970	$ 1,026,603 - 4,778,535 - - - - - - - - -	2.1 2.2 2.3 2.3 2.3 2.4 2.4 2.5 2.6 2.7

241 -

Ceiling on investments in Mainland China:

Accumulated amount of remittance from Taiwan to Investment amount approved by the Investment Ceiling on investments in Mainland China Mainland China as of Commission of the Ministry of Economic Affairs imposed by the Investment Commission of Company name December 31, 2021 (MOEA) MOEA Innolux Corporation $ 22,445,799 $ 29,983,852 (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, 2021 was audited by independent auditors.

Note C: The investment methods are as follows:

Directly investing in Mainland China.
Through investing in companies in the third area, which then invested in the investee in Mainland China.
2.1. Through investing in Stanford Developments Limited in the third area, which then invested in the investee in Mainland China.
2.2. Through investing in Warriors Technology Investments Ltd in the third area, which then invested in the investee in Mainland China.
2.3. Through investing in Landmark International Ltd. in the third area, which then invested in the investee in Mainland China.
2.4. Through investing in Toppoly Optoelectronics (Cayman) Ltd. in the third area, which then invested in the investee in Mainland China.
2.5. Through investing in Innolux Optoelectronics Hong Kong Holding Limited in the third area, which then invested in the investee in Mainland China.
2.6. Through investing in Keyway Investment Management Limited in the third area, which then invested in the investee in Mainland China.
2.7. Through investing in Double Star Inc. in the third area, which then invested in the investee in Mainland China.
Others.

The company invested via the company investment entities in Mainland China to invest in Ningbo CarUX Technology 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.

�. 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.
242 -

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders of Innolux Corporation:

Opinion

We have audited the accompanying parent company only balance sheets of Innolux Corporation (the “Company”) as at December 31, 2021 and 2020, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the Other matter section), the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2021 and 2020, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the reports of other auditors (please refer to the other matter section), 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 Company’s 2021 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming

243 -

our opinion thereon, we do not provide a separate opinion on these matters.

The key audit matters in relation to the financial statements for the year ended December 31, 2021 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 Company 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(6). There is a risk of the excess of the cost of inventory over the net realizable value of inventory as a result of that the amounts of inventories are material and the sales 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

Valuation and impairment of goodwill and property, plant and equipment

Description

For details of the impairment valuation of goodwill and property, plant and equipment, please refer to Notes 6(8) and 6(11).

244 -

Innolux Corporation 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 projected income and expenses in the future. As these estimates, which are uncertain and dependent upon significant judgment 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

Other matter – Reference to the audits of other auditors

We did not audit the financial statements of certain investments accounted for under the equity method of the Company for the year ended December 31, 2021, which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts and Note 13 included in respect of these investments accounted for under the equity method, is based solely on the reports of the other auditors. The balances of these investments accounted for under the equity method included in the Company’s financial statements amounted to NT$ 3,693,087 thousand, constituting 0.8% of the total assets of the Company as at December 31, 2021, and other comprehensive income loss of theses investments accounted for under the equity method and associates included in the Company’s financial statements amounted to loss NT$ 396,765 thousand, constituting (0.7)% of the total other comprehensive income loss of the Company for the year ended December 31, 2021.

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

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

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

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

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 parent company only financial statements.

A. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
246 -
B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
E. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.

247 -

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31,2021 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 11, 2022

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

248 -

INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(5) 7 6(2) 7 6(6) 6(2) 6(3) 6(4) 6(7) 6(8), 7 and 8 6(9) 6(10) 6(11) 6(29) 6(8) and 8	December 31, 2021 � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � ��	December 31, 2020
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortized cost - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1410 Prepayments 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non- current 1535 Financial assets at amortized cost - 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			� �� �� �� �� �� �� �� �� �� ��
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(Continued)

249 -

INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

Notes
December 31, 2021
December 31, 2020
6(2)
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6(12) and 7
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6(17) and 9
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6(29)
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6(15) and 7
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6(20)
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Current Liabilities
2120
Financial liabilities at fair value
through profit or loss - current
2170
Accounts payable
2180
Accounts payable - related parties
2200
Other payables
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
2670
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
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
3XXX
Total equity
3X2X
Total liabilities and equity

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

250 -

INNOLUX CORPORATION PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Items

Notes
2021
2020
6(22) and 7
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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
7070
Share of profit of subsidiaries, associates
and joint ventures accounted for under
equity method
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year
Other comprehensive income (net)
Components of other comprehensive
income that will not be reclassified to
profit or loss
8311
Remeasurement of defined benefit plans
8316
Unrealized gains (losses) on financial
assets at fair value through other
comprehensive income
8330
Share of other comprehensive income of
subsidiaries, associates and joint ventures
accounted for under equity method
8349
Income tax related to components of
other comprehensive income that will not
be reclassified to profit or loss
8310
Components of other comprehensive
income that will not be reclassified to
profit or loss
Components of other comprehensive
(loss) income that will be reclassified to
profit or loss
8361
Financial statements translation
differences of foreign operations
8380
Share of other comprehensive loss of
subsidiaries, associates and joint ventures
accounted for under equity method
8360
Components of other comprehensive
(loss) income that will be reclassified
to profit or loss
8300
Other comprehensive income for the year,
net of tax
8500
Total comprehensive income for the year
Earnings per share (in dollars)
9750
Basic earnings per share
9850
Diluted earnings per share

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

251 -

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

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 Company'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 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 2020 earnings: Legal reserve Special reserve Cash dividends Cash dividends from capital surplus Recognition of change in equity of associates in proportion to the Company's ownership Conversion of convertible bonds Recognition of changes in ownership interests in subsidiaries Establishment of subsidiaries Difference between consideration and carrying amount of subsidiaries acquired Difference between consideration and carrying amount of subsidiaries disposed Disposal of investments in equity instruments measured at fair value through other comprehensive income Others Balance at December 31	Notes		Share	Capital	Capital		Capital surplus				Retained Earnings				Other EquityInterest	Other EquityInterest	Other EquityInterest	Treasuryshares		Total
			Common stock		Certificate of entitlement to new shares from convertible bond				Legal reserve		Special reserve		Unappropriated retained earnings		Financial statements translation differences of foreign operations		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
	6(21) 6(20) 6(19)(20) 6(19) 6(18)(19) 6(19) 6(21) 6(18)(19) 6(19) 6(21) 6(20) 6(19)(20) 6(19) 6(18)(19) 6(19) 6(19) 6(19) 6(19) 6(21) 6(19)		�� � � � � � � � � � � � �� �� � � � � � � � � �� � � � � � � ��		� � � � � � � � �� � � � � � �� � �� � � � � � � � � � �� � � � � � � � �		�� � � � � � �� �� �� �� � �� �� � �� � �� � � � � � � � �� �� �� �� � �� � �� �� � �� ��		�� � � � � � � � � � � � �� �� � � � �� � � � � � � � � � � � ��		�� � � � �� � � � � � � � �� �� � � � � � �� � � � � � � � � � � ��		�� �� �� �� � �� � � � � �� � � �� �� �� � �� �� � �� �� � �� � � � � � � � �� � ��		�� � �� �� � � � � � � � � �� �� � � �� � �� � � � � � � � � � � � � ��		� �� � �� �� � � � � � � �� � � � �� � �� � �� �� � � � � � � � � � � � �� � � ��	�� �� � � � � � � � � � �� � � � � � � � � � � � � � � � � � � � � � �		�� �� �� �� � � �� �� �� �� � �� �� �� �� �� �� �� � � � �� � �� �� �� �� � �� � �� �� � �� ��

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

252 -

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation and amortization
Expected credit loss
Net loss on financial assets or liabilities at fair value
through profit or loss
Compensation cost of share-based payments
Share of profit of subsidiaries and associates
accounted for under equity method
Loss on disposal of Investments
Loss (gain) on disposal of property, plant and
equipment
Gain on disposal of intangible assets
Interest income
Dividend income
Interest expense
Foreign exchange gain
Unrealized loss from sale
Others
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
Other receivables - related parties
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

YearendedDecember 31
Notes
2021
2020
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(Continued)

253 -

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan dollars)

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

YearendedDecember 31
Notes
2021
2020
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6(32)
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6(12) and 7
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6(20)
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6(20)
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6(19)
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The accompanying notes are an integral part of these parent company only financial statements.

254 -

INNOLUX CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2021 AND 2020

(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 engages 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.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These parent company only financial statements were authorized for issuance by the Board of Directors on February 11, 2022.

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 the FSC effective from 2021 are as follows:

follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform - Phase 2’ Amendment to IFRS 16, ‘Covid-19 - related rent concessions beyond 30 June 2021’	January 1, 2021 January 1, 2021 April 1, 2021(Note)

Note: Earlier application from January 1, 2021 is allowed by the FSC.

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

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

the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

255 -

New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment : proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts - cost of fulfilling a contract’ Annual improvements to IFRSs 2018-2020 cycle	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’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:

endorsed by the FSC are as follows:

New Standards,InterpretationsandAmendments

Effective date by
International Accounting
StandardsBoard

Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 -
comparative information'
Amendments to IAS 1, ‘Classification of liabilities as current or non-
current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities
arising from a single transaction’

To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

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

256 -

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

These parent company only financial statements are prepared by the Company in accordance with the Regulations Governing the Preparation of Financial Statements by Securities Issuers.

(2) Basis of preparation
A. Except for the following items, these parent company only 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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3) Foreign currency translation

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional and 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
257 -

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.

(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 Company 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 Company 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.

(4) 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
258 -

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.

(5) 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.

(6) 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.
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 Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
D. The Company recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
(7) 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 Company 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 Company measures the financial assets at fair value plus transaction costs. The Company 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 Company and the amount of the dividend can be measured reliably.
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(8) 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 Company’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 Company 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 Company’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.
(9) Accounts receivable
A. Accounts receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
(10) Impairment of financial assets
For financial assets at amortized cost, at each reporting date, the Company 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 Company recognizes the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(12) 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.

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(13) 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 labor, 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.

(14) Investments accounted for under the equity method / subsidiaries and associates

A. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company 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.
B. Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Company are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
C. The Company's share of its subsidiaries' 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 Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize losses proportionate to its ownership.
D. Associates are all entities over which the Company 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.
E. The Company’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 Company’s share of losses in an associate equals or exceeds its interest in the associate, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
F. 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 Company’s ownership percentage of the associate, the Company recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.
G. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’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 Company.
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H. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’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 Company’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.
I. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.
(15) 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 Company 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:

Buildings and structures 3~51years Machinery and equipment 5~9 years Other equipment 2~6 years

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(16) 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 Company. For short-term leases or leases of low-value 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 Company 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.

(17) 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.

(18) 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.

(19) Impairment of non-financial assets

A. The Company 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 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
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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.
(20) Borrowings
A. Borrowings comprise long-term and short-term bank borrowings and other short-term loans. 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 prepayment for liquidity services and amortized over the period of the facility to which it relates.
(21) 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.

(22) 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 Company measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.
(23) Convertible bonds payable (convertible bonds which are hybrid financial instruments) 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
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amount of cash for a fixed number of common shares), call options and put options. The Company 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.
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.

(24) Derecognition of financial liabilities

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

(25) Provisions

Provisions (including warranties, litigations, etc.) are recognized when the Company 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.

(26) Employee benefits

A. Short-term employee benefits

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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.

     - 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.
(27) 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 nonvesting 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.

(28) Income tax
A. The tax expense for the year 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.
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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 Company 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 parent company only 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.

(29) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. 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.

(30) Dividends

Dividends are recorded in the Company's financial statements in the period in which they are resolved by the Company's shareholders’ meeting. Cash dividends are recorded as liabilities.

(31) Revenue recognition
A. The Company is primarily engaged in manufacture and sale of TFT-LCD panel products. The Company recognizes revenue when the right of control is transferred to the customer when the products are delivered to customer and the Company 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 Company has objective evidence that all criteria for acceptance have been satisfied.
267 -
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 and 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.

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

UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgments in applying the Company’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:

Critical accounting estimates and assumptions

The Company 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:

(1) Impairment assessment of goodwill
The impairment assessment of goodwill relies on the Company’s subjective judgment, including identifying cash-generating units, allocating assets and liabilities as well as goodwill to related cashgenerating units, and determining the recoverable amounts of related cash-generating units. Please refer to Note 6(11) for the information of goodwill impairment.
(2) Impairment assessment of tangible and intangible assets (excluding goodwill)
The Company 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 Company strategy might cause material impairment on assets in the future. Please refer to Notes 6(8) and 6(11) for the information of impairment assessment impairment.
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(3) Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date using judgments and estimates. Due to the rapid technology innovation, the Company 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, demand deposits and checking accounts Time deposits	December31,2021 �� � �� �� �	December31,2020 �� � � �� �

A. The Company 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 Beneficiary certificates Forward foreign exchange contracts Foreign exchange swap contracts Non-current items Financial assets mandatorily measured at fair value through profit or loss Listed stocks Unlisted stocks Liabilities Current items Financial liabilities held for trading Convertible bonds derivative instruments Forward foreign exchange contracts	December31,2021 �� � �� �� �� � �� � �� �� � � � �� �� �	December31,2020
		� � �� �
		�� �
		�� � ��
		�� �
		�� � ��
		�� �

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A. The Company sold $3,115 and $2,536,122 of stocks at fair value during the years ended December 31, 2021 and 2020 and the amount of receivables (shown as other receivables) outstanding as of December 31, 2021 and 2020 was $0 and $1,259,091.
B. The Company entered into a ‘Share Issuance and Asset Purchase Agreement’ with Nanjing Huadong Electronic Information & Technology Co., Ltd (It was renamed as TPV Technology Co.,ltd. in the second quarter of 2021) (“TPV Technology”) during the year ended December 31, 2021. Refer to Note 9(2) for relevant information.
C. The non-hedging derivative financial assets and liabilities transaction information are as follows:

		December 31,	2021		December 31,	2020
	Contract Amount			Contract Amount
Derivative financial	(Notional Principal)			(Notional Principal)
assets and liabilities	(in	thousands)	Contract Period	(in	thousands)	Contract Period
Current items
Forward foreign	RMB (sell)	�� �	2021/12-2022/01	USD (sell)	�� �	2020/11-2021/02
exchange contracts	USD (buy)	�� 2021/12-2022/01		JPY (buy)	�� 2020/11-2021/02
Forward foreign	RMB (sell)	�� 2021/12-2022/01		TWD (sell)	�� 2020/11-2021/02
exchange contracts	TWD (buy)	�� 2021/12-2022/01		JPY (buy)	�� 2020/11-2021/02
Forward foreign	USD (sell)	�� 2021/12-2022/01		USD (sell)	�� 2020/10-2021/04
exchange contracts	JPY (buy)	�� 2021/12-2022/01		RMB (buy)	�� 2020/10-2021/04
Forward foreign	TWD (sell)	�� 2021/09-2022/03		USD (sell)	�� 2020/12-2021/01
exchange contracts	JPY (buy)	�� 2021/09-2022/03		TWD (buy)	�� 2020/12-2021/01
Forward foreign	EUR (sell)	�� 2021/12-2022/01
exchange contracts	USD (buy)	�� 2021/12-2022/01
Forward foreign	HKD (sell)	�� 2021/11-2022/02
exchange contracts	USD (buy)	�� 2021/11-2022/02
Forward foreign	USD (sell)	�� 2021/12-2022/01
exchange contracts	TWD (buy)	�� 2021/12-2022/01
Foreign exchange	USD (sell)	�� 2021/10-2022/05
swap contracts	TWD (buy)	�� 2021/10-2022/05

The Company entered into forward foreign exchange contracts to hedge exchange rate risk of import and export proceeds in foreign currency, foreign exchange swap contracts are to meet fund procurement demand. 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	December31,2021 �� � � �� �	December31,2020
		� � ��
		�� �

A. The Company has elected to classify equity instruments that are considered to be strategic

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investments and steady dividend income as financial assets at fair value through other comprehensive income.

B. For information on other comprehensive income for fair value change recognized by the Company for the years ended December 31, 2021 and 2020, please refer to Note 6(21) “Other equity”.

(4) Financial assets at amortized cost

Financial assets at amortized cost
Current items Principal guaranteed financial assets Corporate bonds Non-current items Principal guaranteed financial assets Corporate bonds Fixed income financial products	December31,2021 �� � �� �� � �� � �� �� �� �	December31,2020
		�� � � �� � � � � � � �

A The Company recognized $153,830 and $148,649 of interest income arising from the financial assets at amortized cost for the years ended December 31, 2021 and 2020, respectively.
B. The Company associates with a variety of financial institutions and counterparties all with high credit quality to disperse credit risk, so it expects that the probability of financial institution and counterparty defaults is remote.

(5) Accounts receivable

counterparty defaults is remote. Accounts receivable
A. The aging analysis of accounts receivable is as follows: December31,2021 Accounts receivable �� � Less: Allowance for uncollectible accounts �� � � �� � December31,2021 Not past due �� � Up to 60 days �� 61 to 180 days �� Over 180 days �� �� �	December31,2020 �� � �� �� � December31,2020
	�� � �� �� �� �� �

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

The above aging analysis was based on past due date.

B. As of December 31, 2021 and 2020, accounts receivable were all from contracts with customers. As of January 1, 2020, the balance of receivables from contracts with customers amounted to $31,557,983.
C. Information relating to credit risk of accounts receivable is provided in Note 12(2).
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(6) Inventories

nventories
Raw materials and supplies Work in progress Finished goods	December31,2021 �� � �� �� �� �	December31,2020
		�� � �� ��
		�� �

For the years ended December 31, 2021 and 2020, the Company recognized cost of goods sold for inventories that have been sold at $253,491,278 and $250,353,029 and recognized net inventory loss at $315,885 and $99,212 due to write down (reversal) of cost of scrap inventories to net realizable value, respectively.

(7) Investments accounted for under the equity method

value, respectively. nvestments accounted for under the equity method
Subsidiaries: Landmark International Ltd. Innolux Holding Limited Innolux Hong Kong Holding Limited Toppoly Optoelectronics (B.V.I.) Ltd. Leadtek Global Group Limited Others Associates: Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd. PanelSemi Corporation Others	December31,2021 �� � �� �� �� � �� �� �� �� �� �� �	December31,2020
		�� � �� �� �� �� �� �� �� � ��
		�� �

A. The Company’s subsidiaries

Details of the Company’s subsidiaries are provided in Note 4(3) of the Company’s consolidated financial statements as of and for the year ended December 31, 2021.

B. The Company’s associates

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

summarized below:
		Years ended	December31,
		2021		2020
Profit for the year from continuing operations �� � �� � Other comprehensive loss - net of tax �� � �� �
Total comprehensive income	�	�� �� �

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(8) Property, plant and equipment

AtJanuary1 Additions Disposals Transfer At December 31 Cost: Land �� � � � � � � � �� � Buildings �� �� �� � �� �� Machinery and equipment �� �� �� � �� �� Other equipment �� �� �� � �� �� �� �� �� � �� �� Accumulated depreciation and impairment: Buildings �� � �� � �� �� � �� � Machinery and equipment �� � �� � �� �� � �� � Other equipment �� � �� � �� �� �� � �� � �� � �� � �� � Unfinished construction and equipment under acceptance �� �� � �� � �� �� � �� � 2021 AtJanuary1 Additions Disposals Transfer At December 31 Cost: Land �� � � � � � � � �� � Buildings �� �� �� � �� �� Machinery and equipment �� �� �� � �� �� Other equipment �� �� �� � �� �� �� �� �� � �� �� Accumulated depreciation and impairment: Buildings �� � �� � �� � �� � Machinery and equipment �� � �� � �� �� � �� � Other equipment �� � �� � �� �� �� � �� � �� � �� � �� � Unfinished construction and equipment under acceptance �� �� � �� � �� �� � �� � 2020			2021
					At December 31

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, 2021 and 2020, the prepayments for business facilities which have not yet entered the factory (shown as ‘other non-current assets’) amounted to $8,520,889 and $234,124, respectively.
C. Information on impairment assessments is provided in Note 6(11).
273 -

`�` (9) Leasing arrangements lessee

A. The Company leases various assets including land. Rental contracts are typically made for periods of 9 to 28 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 and equipment. Lowvalue assets comprise computer equipment.
C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Land	December31,2021 December31,2020 Carryingamount Carryingamount �� � �� � Years endedDecember31,	December31,2020
		Carryingamount
	2021 Depreciationcharge �� �	2020
		Depreciationcharge
		�� �

D. 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 leases of low-value assets Expense on short-term lease contracts	Years endedDecember31,	Years endedDecember31,
	2021 �� � �� �� ��	2020
		�� � �� �� ��

E. For the years ended December 31, 2021 and 2020, the Company’s total cash outflow for leases were $287,809 and $450,234, respectively.

(10) Investment property

Investment property
Cost: Land Buildings Accumulated depreciation and impairment: Buildings �		2021
	AtJanuary1 Additions At December31 �� � � � �� � �� � �� �� � �� �� �� � �� � �� � �� �		At December31

274 -

Cost: Land Buildings Accumulated depreciation and impairment: Buildings �		2020

The fair value of the investment property held by the Company as at December 31, 2021 and 2020 was $1,978,199 and $2,035,178, 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.

(11) Intangible assets

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

of intangible assets are as follows:	s follows:
AtJanuary1 Additions Disposals Transfer At December 31 Cost: Patents and royalty �� � � � � � �� � �� � Goodwill �� � � � �� Others �� � �� � �� �� �� � �� � �� �� Accumulated amortization and impairment: Patents and royalty �� � �� � � � �� � Others �� � �� � �� � �� � �� � �� � �� � �� � �� � �� � 2021			2021
					At December 31

AtJanuary1 Additions Disposals Transfer At December 31 Cost: Patents and royalty �� � � � � � �� � �� � Goodwill �� � � � �� Others �� � �� � �� �� �� � �� � �� �� Accumulated amortization and impairment: Patents and royalty �� � �� � � � �� � Others �� � �� � �� � �� � �� � �� � �� � �� � �� � �� � 2020			2020
					At December 31

275 -

B. Details of amortization on intangible assets are as follows:

Details of amortization on intangible assets are as	follows:
Operating costs Operating expenses	Years endedDecember31,
	2021 2020 �� � �� � �� �� �� � �� �

C. The Company is primarily engaged in the manufacture of TFT-LCD products, which is a single cash-generating unit. The Company 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 12.58% and 12.07%, respectively, for the years ended December 31, 2021 and 2020, 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 Company did not recognize impairment loss on goodwill for the years ended December 31, 2021 and 2020, respectively.

(12) Other payables

Bonds payable Other personnel expenses Payable on machinery and equipment Repairs and maintenance expense payable Utilities expense payable Processing fee payable Loans from related parties Other payables Bonds payable Less: Discount on bonds payable	December31,2021 �� � �� �� �� �� � �� �� � December31,2021 � � � � �	December31,2020 �� � �� �� �� �� �� �� �� � December31,2020 �� � �� � �� �

(13) Bonds payable

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, 2020. 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.

276 -
(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, 2021, the conversion price was $10.38 (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, 2021, all unsecured overseas convertible bonds issued by the Company had been converted. All convertible bonds were calculated at the conversion price at the time of conversion. Refer to Note 6(18) 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.
(14) Long term borrowings

Type ofborrowings Syndicated bank borrowings Unsecured bank borrowings Less: Administrative expenses charged by syndicated banks Current portion (includes administrative expenses) Range of interest rates	Period December31,2021 December31,2020 �� �� �� � �� � �� �� �� � �� � �� � �� � �� � �� � �� � �� ��

A. Please refer to Note 8 for the information on assets pledged as collateral for long-term borrowings.
277 -
B. The syndicated borrowing 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, 2021 and 2020 are in compliance with the covenants on the syndicated borrowing 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 borrowing with financial institution in the amount of $37.5 billion on May 5, 2020. As of December 31, 2021, the borrowing has yet to be drawn down.
(15) Pensions
A. Defined benefit pension plan
- (a) The Company has 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 contributes 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 of the independent retirement fund committee. Also, the Company 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 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 obligation Fair value of plan assets � Net defined benefit liability	December31,2021 �� � �� � �� �	December31,2020 �� � �� �� �

278 -

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

Present value of
defined benefit
obligations
Year ended December 31, 2021
Balance at January 1
��
�
Current service cost
��
Interest expense/income
��
��
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)
�
Change in demographic
assumptions
��
Change in financial assumptions
��
Experience adjustments
��
Benefits paid
��
�
�
��
Contribution for the year
�
Balance at December 31
��
�
Present value of
defined benefit
obligations
Year ended December 31, 2020
Balance at January 1
��
�
Current service cost
��
Interest expense/income
��
��
Remeasurements:
Return on plan assets
(excluding amounts included in
interest income or expense)
�
Change in financial assumptions
��
Experience adjustments
��
�
Benefits paid
��
�
�
��
�
Contribution for the year
�
Balance at December 31
��
�

Fair value of
Net defined
plan assets
benefit liability
��
�
��
�
�
��
��
��
��
��
��
��
�
�
��
�
��
�
��
��

�
��
��
��
��
�
��
�
��
�
Fair value of
Net defined
plan assets
benefit liability
��
�
��
�
�
��
��
��
��
��
��
��
�
�
��
�
��
�
��

�
��
��
�
��
��
�
��
�
��
�

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s 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

279 -

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 has no right to participate in managing and operating that fund and hence the Company is 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, 2021 and 2020 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

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

Discount rate Future salary increases	Years endedDecember31,	Years endedDecember31,
	2021 �� ��	2020
		�� ��

Future mortality rate was estimated based on the 6th 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:

obligation is affected.	The analysis was as follows:	The analysis was as follows:	The analysis was as follows:
December 31, 2021 Effect on present value of defined benefit obligation December 31, 2020 Effect on present value of defined benefit obligation	Discount rate			Future salaryincreases
	Increase 0.25%		Decrease 0.25%	Increase 0.25%		Decrease 0.25%
	�
	Increase 0.25%		Decrease 0.25%	Increase 0.25%		Decrease 0.25%
	�	�� �			�� �	�	�� �

280 -
- (f) As of December 31, 2021, the weighted average duration of the retirement plan is 16 years.
(g) During the year ended December 31, 2021, the subsidiary of the Company recognized other comprehensive loss amounting to $14 for remeasurements arising from defined benefit plans.
B. Defined contribution pension plan
- (a) Effective July 1, 2005, the Company has 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 pension costs under the defined contribution pension plans of the Company for the years ended December 31, 2021 and 2020 were $931,808 and $930,738, respectively.
(16) Share-based payment
A. For the year ended December 31, 2020, the share-based payment arrangements of the Company were as follows. Refer to Note 6(16) of the consolidated financial statements for the year ended December 31, 2021 for the information regarding the share-based payment arrangements of the Company’s subsidiaries.

Company’s subsidiaries.
Type of loans arrangement Treasury stock transferred to employees	Grantdate ��	Quantity granted (in thousand units) ��	Contract period (inyears) �	Vesting conditions
				Vested immediately

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

Type of loans arrangement Treasury stock transferred to employees	Grantdate ��	Price (indollars) ��	Exercise Price (indollars) ��	Fair value per unit (indollars)
				��

C. For the years ended December 31, 2021 and 2020, the Company recognized expenses on sharebased payment transaction (equity settlement) were $8,706 and $378,311, respectively.

(17) Provisions-current

Provisions-current
		Warranty	Litigation and others		Total
At January 1, 2021		�� �	�� �	�� �
Additions during the year �� �� �� Used (unused amounts
reversed) during the year	�	�� �� � �� �
At December 31, 2021		�� �	�� �		�� �

A. Warranty

The Company provides warranty on TFT-LCD panel products sold. Provision for warranty is

281 -

estimated based on historical warranty data of TFT-LCD panel products.

B. Litigation and others
Litigation and other provisions for the Company 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).

(18) Share capital

A. As of December 31, 2021, the Company’s authorized and outstanding capital were $120,000,000 and $105,596,201, 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:

	2021	2020
	Number of ordinary	Number of ordinary
	shares (in thousand units)	shares (in thousand units)
At January 1 �� �� Stocks converted from bonds �� �� Treasury stock transferred
to employees	� ��
At December 31	�� ��

B. The Company’s bonds totalling USD 218,800 thousand (face value) had been converted into $6,191,869 of ordinary shares (619,187 thousand shares) with a par value of $10 (in dollars) per share during the year ended December 31, 2021, which resulted in ‘capital surplus, additional paid-in capital arising from bond conversion’ of $4,544,732.
C. Treasury shares
(a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

shares are as follows:
At January 1 Treasury stock transferred to employees � At December 31	Number of ordinary shares (in thousands) Bookvalue �� �� � �� �� � � � � 2020
	Number of ordinary shares (in thousands) �� �� � �

(b) 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.
282 -

(19) Capital surplus

2021

Sharepremium
At January 1
��
�
Cash dividends from capital surplus
��
�
Conversion of convertible bonds
��
Recognition of changes in
ownership interests in subsidiaries
�
Recognition of change in equity of
associates in proportion to the
Company's ownership
�
Difference between consideration and
carrying amount of subsidiaries
acquired
�
Difference between consideration and
carrying amount of subsidiaries
disposed
�
Establishment of Subsidiaries
�
Others
��
At December 31
��
�

Difference between
Share of
proceeds on
profit (loss)
acquisition or
Changes in
of associates
disposal of equity
ownership
accounted
interest in a
Treasury share
interests in
for under
subsidiary and its
transactions
subsidiaries
equitymethod
carryingamount
Total
��
�
��
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					2020
					Changes in	Share of profit (loss) of
			Treasury share	ownership interests			associates accounted
		Sharepremium	transactions		in subsidiaries	for under equitymethod			Total
At January 1		�� �	�� �	�	�� �� � �� �
Cash dividends from capital surplus	�	�� � � �						�	��
Conversion of convertible bonds		�� � � �							��
Recognition of changes in
ownership interests in subsidiaries � � �� � �� Recognition of change in equity of
associates in proportion to the
Company's ownership � � � �� �� Treasury shares transferred to
employees � �� � � �� Others �� � � � ��
At December 31		�� �	�� �	�	�� �� � �� �

283 -

(20) 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 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 net decrease in other equity accumulated in prior periods should be appropriated from prior period's undistributed earnings to a special reserve of the same amount, and if there is a deficiency, the same amount should be appropriated from the post-tax profit for the year plus the amount of items other than post-tax profit for the year, and the amount was included in the unappropriated earnings for the year.
Depending on the Company's future long-term financial planning, investment environment, industry competition, capital expenditure budget, capital requirements and protection of shareholders' rights, dividends should account for at less 20% of the distributable earnings for the year. However, as the distributable earnings is lower than 2% of the paid-in capital, the Company may choose not to distribute dividends and transferred dividends to the retained earnings. Earnings shall be preferably distributed using cash dividends and may also be distributed using stock dividends. The ratio for cash dividends shall not be less than 50% of the total amount of dividends distributed. The aforementioned dividend distribution rate may be adjusted based on financial, business and operational factors.
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 2020 net income which was approved by the stockholders during their meeting in July 2021 and the appropriation of 2019 deficit compensation which was approved at the stockholders’ meeting in June 2020 are as follows:

		Years endedDecember31,	Years endedDecember31,
	2020			2019
		Dividends			Dividends
		per share			per share
	Amount	(indollars)	Amount		(indollars)
Legal reserve �� � � � (Reversal of)
provision for
special reserve �� � �� Cash dividends �� �� � � � � �� � �� �

284 -

(21) Other equity items

(21)	(in dollars) per share from capital surplus. Other equity items	(in dollars) per share from capital surplus. Other equity items
(22)	Operating income Financial assets at fair value through Currency other comprehensive translation income Total At January 1 �� �� �� � �� �� Revaluation - gross � �� �� Disposal of investments in equity instruments measured at fair value through other comprehensive income � �� � �� � Currency translation differences �� � � �� � Share of other comprehensive loss of subsidiaries and associates �� � �� �� Effect of income tax � �� � �� � At December 31 �� �� �� � �� �� 2021 Financial assets at fair value through Currency other comprehensive translation income Total At January 1 �� �� �� � �� �� Revaluation - gross � �� � �� � Disposal of investments in equity instruments measured at fair value through other comprehensive income � �� � �� � Currency translation differences �� � �� Share of other comprehensive loss of subsidiaries and associates �� � �� �� Effect of income tax � �� �� At December 31 �� �� �� � �� �� 2020 2021 2020 TFT-LCD products �� � �� � Years endedDecember31,
		2020
		�� �

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

285 -

(23) Interest income

Interest income
Interest income from bank deposits Interest income from financial assets at amortized cost	Years endedDecember31,
	2021 �� � �� �� �	2020
		�� � �� �� �

(24) Other income

Other income
Service revenue Rental revenue Compensation income Dividend income Other income	Years endedDecember31,
	2021 �� � �� �� �� �� �� �	2020
		�� � �� �� �� �� �� �

(25) Other gains and losses

Other gains and losses
Finance costs 2021 2020 Net (loss) gain on financial assets and liabilities at fair value through profit or loss �� �� �� � Net currency exchange loss �� � �� � Other losses �� � �� � �� �� �� � Years endedDecember31, 2021 2020 Interest expense: Bank borrowings �� � �� � Convertible bonds �� �� Others �� �� �� � �� � Years endedDecember31,	Years endedDecember31,
		2020
	2021 �� � �� �� �� �	2020
		�� � �� �� �� �

(26) Finance costs

286 -

(27) Expenses by nature

Expenses by nature
Employee benefit expense: Salaries and other short-term employee benefits Post-employment benefits Shared-based payments Depreciation Amortization	Years endedDecember31,
	2021 �� � �� �� �� �� �� �	2020
		�� � �� �� �� ��
		�� �

(28) 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, 2021 and 2020, employees’ compensation was accrued at $4,246,994 and $139,349, respectively; while directors’ remuneration was accrued at $65,338 and $2,144, respectively. The aforementioned amounts were recognized in expenses.
The expenses recognized for 2021 were accrued based on the earnings of current year. The employees’ compensation and directors’ remuneration were $4,246,994 and $65,338, respectively, and will be distributed in the form of cash as resolved by the Board of Directors on February 11, 2022. The accrued amounts were in agreement with the amount of recorded expense for the year ended December 31, 2021.
The employees’ compensation and directors’ remuneration for the year ended December 31, 2020, were $139,349 and $2,144, respectively, and will be distributed in the form of cash as resolved by the Board of Directors during their meeting on February 4, 2021. The resolved amounts were in agreement with the amount of recorded expense for the year ended December 31, 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.
287 -

(29) 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,
		2021		2020
Current tax:
Current tax on profit for the year �� � �� � Prior year income tax overestimation �� � �
Total current tax �� �� Deferred tax:
Origination and reversal of temporary
differences �� � �� Loss carryforward �� �� �
Income tax expense	�	�� �� �

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

Changes in fair value of financial assets at fair value through other comprehensive Remeasurement of defined benefit obligation �	2021 2020 �� � �� �� �� �� �� � �� � Years endedDecember31,

B. Reconciliation between income tax expense and accounting profit:

		Years ended	31,
		2021	2020
Tax calculated based on profit before tax and	�	�� �� �
statutory tax rate
Effects from items disallowed by tax regulation	�	�� ��
Prior year income tax overestimation	�� �		�
Separate taxation �� �� Change in assessment of realization of
deferred tax assets	�	�� �� �
Tax expense	�	�� �� �

288 -
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 in other Recognized in comprehensive January1 profitor loss income December 31 Deferred tax assets: -Temporary differences: Sales returns and discount provisions �� � �� � � � �� � Accrued royalties and warranty provisions �� �� � �� Unrealized loss on financial instruments �� �� �� � �� Others �� �� � �� �� Loss carryforward �� �� � � � �� � �� �� �� � �� � -Deferred tax liabilities: Unrealized exchange gain �� �� �� � � � �� �� Unrealized gain on financial instruments � �� � �� � �� � Amortization charges on goodwill �� � �� � � �� � Others �� � �� � �� � �� �� �� � �� �� �� �� �� � �� �� �� �� �� � 2021 Recognized in other Recognized in comprehensive January1 profitor loss income December 31 Deferred tax assets: -Temporary differences: Sales returns and discount provisions �� � �� �� � � �� � Accrued royalties and warranty provisions �� �� � � �� Unrealized loss on financial instruments �� �� � �� �� Others �� �� �� � �� Loss carryforward �� �� � �� �� � �� �� �� �� �� � -Deferred tax liabilities: Unrealized exchange gain �� �� �� � � � �� �� Amortization charges on goodwill �� � �� � � �� � Others �� � �� � � �� � �� �� �� �� � � �� �� �� � �� �� �� �� �� � 2020		2021
			December 31

289 -
D. Expiration dates of unused loss carryforward and amounts of unrecognized deferred tax assets are as follows:

are as follows:
		December31,2021
Year incurred �� �� ��	Amount filed /assessed Assessed Assessed Filed	Unrecognized deferred Usable Unusedamount tax assets untilyear �� � �� � �� �� �� �� �� �� �� �� � �� � December31,2020	Usable untilyear
Year incurred �� �� �� ��	Amount filed / assessed Assessed Assessed Assessed Filed	Unrecognized deferred Usable Unused amount taxassets untilyear �� � �� � �� �� �� �� �� �� �� �� �� �� �� � �� �	Usable untilyear

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

Deductible temporary differences

December31,2021 �� �	December31,2020
	�� �

F. The Company has not recognized taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2021 and 2020, the amounts of temporary differences unrecognized as deferred tax liabilities were $34,176,731 and $33,493,308, respectively.
G. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.
290 -

(30) Earnings per share

Basic earnings per share Net income for the year Diluted earnings per share Net income for the year Assumed conversion of all dilutive potential ordinary shares: -Convertible bonds -Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Net income for the year Diluted earnings per share Net income for the year Assumed conversion of all dilutive potential ordinary shares: -Employees’ compensation Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares	YearendedDecember31,2021	YearendedDecember31,2021
	Weighted average number of ordinary Earnings Amount shares outstanding per share after tax (sharesin thousands) (indollars) �� � �� �� � �� �� �� �� � �� �� � �� �� � YearendedDecember31,2020	Earnings per share (indollars)
		�� �
		�� �
	Weighted average number of ordinary Amount shares outstanding after tax (sharesin thousands) �� � �� �� �� � �� �� � ��	Earnings per share (indollars)
		�� �
		�� �

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

291 -

(31) Supplemental cash flow information

Investing activities with partial cash payments:

Supplemental 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	2021 2020 �� � �� � �� �� �� �� � �� � �� � Years endedDecember31,
	2021 �� � �� �� � �� �

(32) Changes in liabilities from financing activities

For the years ended December 31, 2021 and 2020, liabilities from financing activities include other payables - related parties, 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 parent company only statements of cash flows.

	2021	2020
	Bonds payable	Bonds payable
At January 1 �� � � � Changes in cash flow from financing activities � �� Impact of changes in foreign exchange rate �� � �� � Conversion of convertible bonds �� � �� � Convertible bonds derivative instruments on the
issue date � �� � Amortization of discounts on convertible bonds �� �� At December 31 � � �� �

7. RELATED PARTY TRANSACTIONS

(1) Names and relationship of related parties

Names of related parties

Hon Hai Precision Industry Co., Ltd. and its subsidiaries CHENG MEI MATERIALS TECHNOLOGY CORPORATION and its subsidiaries (Note) FI Medical Device Manufacturing Co., Ltd. Foshan Innolux Optoelectronics Ltd. Lakers Trading Limited Innolux USA Inc. CarUX Technology PTE. LTD. CarUX Technology Inc. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd.

Relationship with the Company Other related party Other related party

Associate

The Company’s subsidiary The Company’s subsidiary The Company’s subsidiary The Company’s subsidiary The Company’s subsidiary The Company’s subsidiary The Company’s subsidiary

292 -

Names of related parties

Relationship with the Company

Innolux Hong Kong Limited	The Company’s subsidiary
Warriors Technology Investments Ltd	The Company’s subsidiary
Innolux Japan Co., Ltd.	The Company’s subsidiary
Innolux Holding Limited	The Company’s subsidiary

(Note ) In May 2020, the Company no longer serves as a director, so it is listed as a non-related party. For the more information about the Company and other subsidiaries, please refer to Note 4(3) of the consolidated financial report for the year ended December 31, 2021.

(2) Significant related party transactions

A. Operating revenue

nificant related party transactions Operating revenue
Sales of goods: Subsidiaries Other related parties Associates	Years endedDecember31,
	2021 �� � �� �� �� �	2020
		�� � �� ��
		�� �

The collection period was mainly 30~120 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.

B. Purchases of goods

different from those of sales to third parties. Purchases of goods
Purchases of goods: Subsidiaries Other related parties Associates	Years endedDecember31,
	2021 �� � �� � �� �	2020
		�� � �� ��
		�� �

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C. Consigned processing

(a) Consigned processing

signed processing onsigned processing
Processing expense: Subsidiaries - Foshan Innolux Optoelectronics Ltd. - Lakers Trading Ltimited - Others Other related parties	Years endedDecember31,
	2021 �� � � �� �� �� �	2020
		�� � �� �� ��
		�� �

(b) Balance of consigned processing at the end of year (shown as “other payables”)

Payables to related parties: Subsidiaries Other related parties	December31,2021 �� � �� �� �	December31,2020
		�� � ��
		�� �

The Company subcontracted the processing of products of associates in Mainland China. The processing fees were mainly charged based on cost plus method.

D. Service revenue (Shown as “other revenue”)

Service revenue (Shown as“other revenue”)
ervice expense (Shown as“manufacturing costs Service revenue: Subsidiaries - CARUX TECHNOLOGY PTE. LTD. - Others Associates	Years endedDecember31,
	and operating expenses”) 2021 2020 �� � �� � �� �� �� �� �� � �� � Years endedDecember31,	2020
		�� � �� ��
		�� �
Service expense: Subsidiaries
	2021 �� �	2020
		�� �

E. Service expense (Shown as “manufacturing costs and operating expenses”)

294 -

F. Receivables from related parties

Receivables from related parties
Accounts receivable: Subsidiaries Other related parties Associates	December31,2021 �� � �� �� �� �	December31,2020
		�� � �� �
		�� �

The receivables from related parties arise mainly from sales transactions. The receivables are due 30~120 days after the date of sale. The receivables are unsecured in nature and bear no interest. G. Other receivables from related parties

Payables to related parties Other receivables: Subsidiaries - CARUX TECHNOLOGY PTE. LTD. - Innolux USA Inc. - CarUX Technology Inc. - Others Associates Other related parties Accounts payable: Subsidiaries - Ningbo Innolux Optoelectronics Ltd. - Ningbo Innolux Display Ltd. - Innolux Hong Kong Limited - Foshan Innolux Optoelectronics Ltd. - Others Other related parties	December31,2021 �� � �� �� �� �� �� �� � December31,2021 �� � �� �� �� �� �� �� �	December31,2020 �� � � �� �� �� �� �� � December31,2020 �� � �� �� �� �� �� �� �

H. Payables to related parties

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

I. Advance receipts

Advance receipts
Advance receipts: Subsidiaries Other related parties	December31,2021 � � � � �	December31,2020
		�� � ��
		�� �

295 -

J. Property transactions

Purchase of property

(a) Acquisition of property, plant and equipment:

		Years ended	December31,
		2021	2020
Other related parties �� � �� � Subsidiaries �� �� �� � �� �
Period-end balances arising from purchases of		property (shown as “other payables”):
	December31,2021		December31,2020
Subsidiaries �� � �� � Other related parties � �� �� � �� �

(b) Period-end balances arising from purchases of property (shown as “other payables”):

Sale of property

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

Subsidiaries	Disposal Gain (loss) Disposal Gain (loss) proceeds ondisposal proceeds ondisposal �� � �� � �� � �� � YearendedDecember31,2021 YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
	Disposal proceeds �� �		Gain (loss) ondisposal
			�� �

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

Subsidiaries - CarUX Technology Inc. - Others	December31,2021 �� � �� �� �	December31,2020
		�� � ��
		�� �

Disposal of other assets

In the first quarter of 2020, the Company disposed its subsidiary, CarUX Technology Inc., for proceeds of $197,629 to adjust the investment structure. The transaction pertained to reorganization so that no gain or loss is recognized. The difference between consideration and carrying amount is recognized as capital surplus.

K. Loans to/from related parties

Loans from related parties

(a) For the years ended December 31, 2021 and 2020, outstanding balance shown as ‘other noncurrent liabilities’ and ‘other payables’:
296 -

Subsidiaries - Warriors Technology Investments Ltd - Innolux Japan Co., Ltd. - Innolux Holding Limited	December31,2021 �� � �� �� �� �	December31,2020
		�� � �� � �� �

For the years ended December 31, 2021 and 2020, the loans from subsidiaries are repayable with five years and one year, respectively. Refer to table 1 for information on loans to/from related parties.

(b) Interest expense

Subsidiaries

Year ended December31,2021 �� �	Year ended December31,2020
	�� �

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits Shared-based payments Post-employment benefits	Years endedDecember31,
	2021 �� � �� �� �� �	2020
		�� � �� ��
		�� �

8. PLEDGED ASSETS

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

Pledged asset Property, plant and equipment Other non-current assets - Refundable deposits	Book	December31,2020 Purpose �� � Long-term borrowings �� Litigation guarantee �� � value	Purpose
	December31,2021 �� � �� �� �

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

`�` (1) Contingencies Significant Litigations

A. 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.
B. 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
297 -

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.

C. On September 1, 2020, the Company received a civil complaint joint filed by Granville Technology Group Limited, VMT Limited, and OT Computers Limited (all in liquidation) in the High Court 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 reached a settlement with the claimant in November 2021.
D. On December 18, 2020 and March 19, 2021, the Company received civil complaints jointly filed by SAMSUNG ELECTRONICS CO. LIMITED, SAMSUNG ELECTRONICS TAIWAN CO. LIMITED, SAMSUNG ELECTRONICS (UK) LIMITED, SAMSUNG SEMICONDUCTOR EUROPE LIMITED and SAMSUNG DISPLAY CO. LMITED in 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 and the first to fifth claimants entered into with Ingram Micro (UK) Limited for the TFT-LCD pricing collaborations in 2006. The Company reached a settlement with the claimant in May 2021.
E. 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:

B. Outstanding letters of credit The outstanding letters of credit for the purchase Property, plant and equipment Outstanding letters of credit	of property, plant and equipment are as follows: December31,2021 December31,2020 �� � �� � December31,2021 December31,2020 �� � �� �

C. The Company entered into a conditional ‘Share Issuance and Asset Purchase Agreement’ with TPV

298 -

Technology. TPV Technology 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.

D. On August 3, 2021, the Board of Directors of the Company resolved to enter into a long-term strategic partnership supply contract with SDP Global (China) Co., LTD. The total price of the contract amounted to RMB 4 billion and will be paid periodically. As of December 31, 2021, the group not yet paid amount was RMB 3.5 billion. The supply term is from January 2022 to December 31, 2033, during this period, the Company and the subsidiary, Foshan Innolux Optoelectronics Ltd., obtained a multi-year commitment from SDP Global (China) Co., LTD for supplying certain products in specified quantities each year.

10. SIGNIFICANT DISASTER LOSS

None.

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 Company’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 (including related parties)) and financial liability (financial liabilities at fair value through profit or loss, accounts payable (including related parties), other payables, lease liability, corporate bonds payable, long-term borrowings (including current portion) and certain other non-current liabilities), please refer to Note 6 and parent company only balance sheets.
B. Financial risk management policies
(a) The Company’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 Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial position and financial performance. The Company 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 Company’s treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’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 non-derivative financial instruments, and investment by excess liquidity.
299 -
C. Significant financial risks and degrees of financial risks
(a) Market risk

Foreign exchange risk

i. The Company operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company 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 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 and foreign exchange swap 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 Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). Based on the simulations performed, the impact on pre-tax profit of a 1% exchange rate fluctuation would be an increase of $433,798 and decrease of $46,132 for the years ended December 31, 2021 and 2020, 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:

	December 31,	December 31,	2021	December 31,	December 31,	2020
	Foreign			Foreign
	Currency	Exchange		Currency	Exchange
	Amount	Rate	Book Value	Amount	Rate	Book Value
	(In Thousands)	(Note)	(NTD)	(In Thousands)	(Note)	(NTD)
Financial asstes
Monetary items
USD	�� �	��	�� �	�� �	��	�� �
RMB �� �� �� �� �� �� JPY �� �� �� �� �� �� HKD �� �� �� �� �� �� EUR �� �� �� �� �� �� Non-monetary items
USD	�� �	��	�� �	�� �	��	�� �
JPY �� �� �� �� �� �� RMB �� �� �� � �� � HKD � �� � �� �� ��
Financial liabilities
Monetary items
USD	�� �	��	�� �	�� �	��	�� �
JPY �� �� �� �� �� �� EUR �� �� �� �� �� �� HKD �� �� �� �� �� ��

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

300 -
iv. Total exchange loss including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2021 and 2020 amounted to $42,190 and $980,511, respectively.

Price risk

i. The Company is exposed to equity securities price risk because of investments held by the Company and classified on the parent company only balance sheet as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done by the Company in respect of the targets and stages.
ii. The Company’s investments in equity securities comprise domestic listed and unlisted stocks and beneficiary certificates. 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, 2021 and 2020 would have increased/decreased by $3,239,387 and $470,167, respectively; other comprehensive gains and losses would have increased/decreased by $941,251 and $191,444, respectively.

Cash flow and fair value interest rate risk

i. The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During the years ended December 31, 2021 and 2020, the Company’s borrowings at variable rate were denominated in the NTD.
ii. The Company analysis 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 Company 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, 2021 and 2020 would have decreased/increased by $110,875 and $99,375, 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 Company 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, 2021 and 2020, 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
301 -

amortized cost and accounts receivable held by the Company was its carrying amount.

ii. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing 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 monitored.
iii. The Company 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 Company adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.
v. The Company classifies customer’s accounts receivable in accordance with credit rating of customer, credit risk on trade and customer types. The Company 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 Company adjusted forward looking information based on historical and timely information to assess the default possibility of accounts receivable.
According to abovementioned consideration and information, the Company does not expect any significant default possibility of accounts receivable.
viii. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable are as follows:

allowance for accounts receivable are as follows:
At January 1 Provision for impairment At December 31 At January 1 (December 31)	2021
	Accountsreceivable
	�� � ��
	�� �
	2020
	Accountsreceivable
	�� �

302 -
ix. The Company’s financial assets at amortized cost have low credit risk, the Company did not recognize significant loss allowance in accordance with 12 months expected credit losses.
(c) Liquidity risk
i. Company treasury monitors rolling forecasts of the Company’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 Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’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 Company’s treasury. Company treasury invests surplus cash in interest bearing savings accounts, time deposits, money market deposits and marketable securities. The Company 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 analysis the Company’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:

		Less than	Between 1	Between 3		Over
December 31,2021		1year	and3years	and5years		5years		Total
Lease liability (Note)	�� �		�� �	�� �	�� �		�� �
Long-term borrowings
(including current
portion)	�� �� �� �							��
Other non-current
liabilities		�	�	�� �				��
		Less than	Between 1	Between 3		Over
December 31,2020		1year	and3years	and5years		5years		Total
Bonds payable	�	� �� �		� � � � �� �
Lease liability (Note) �� �� �� �� �� Long-term borrowings
(including current
portion)	�� �� �� �							��

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

303 -

years.

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

(3) Fair value estimation

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 Company’s investment in listed stocks and beneficiary certificates 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 Company’s investment in derivative instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’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(10).
C. Financial instruments not measured at fair value
Except for those listed in the table below, the carrying amounts of cash and cash equivalents, accounts receivable (including related parties), other receivables, financial assets at amortized cost, accounts payable (including related parties), other payables, lease liability, long-term borrowings (including current portion) and part of other non-current liabilities are approximate to their fair values.

	December	31,2021
Bookvalue �� �		Fairvalue
	Level 1 � � December	Level 2 �� � 31,2020	Level3
			� �
Bookvalue �� �		Fairvalue
	Level 1 � �	Level 2 �� �	Level3
			� �

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:
304 -

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

December 31,2021		Level 1		Level 2		Level 3		Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities	�� �		�	�	�� �		�� �
Forward foreign exchange contracts		�		��		�		��
Forward exchange swap contracts		�		��		�		��
Beneficiary certificates	�� � � ��
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 foreign exchange contracts	�	�	�	�� � �			�	��
December 31,2020		Level 1		Level 2		Level 3		Total
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities	�� �		�	�	�� �		�� �
Forward foreign 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 foreign exchange contracts � � �� � � � �� � Convertible bonds derivative
instruments		� � �� ��
	�	�	�	�� �� �			�� �

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

i. The instruments the Company 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

305 -
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 parent company only balance sheet date.
iii. When assessing non-standard and low-complexity financial instruments, for example, foreign exchange swap contracts, the Company 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 foreign 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 Company’s financial and non-financial 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 Company’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 parent company only balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.
vi. The Company 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 Company’s credit quality.
E. For the years ended December 31, 2021 and 2020, 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, 2021 and 2020:
306 -

		2021		2020
Financial assets at fair value through profit or loss
/ Financial asset at fair value through
other comprehensive income		Equity securities
At January 1	�� �		�� �
Gains and losses recognized in profit or loss �� � �� Gains and losses recognized in other comprehensive
income �� �� � Acquired in the year � �� Disposed in the year � �� � Transfers to Level 1 �� � �
Proceeds from capital reduction	�	�� �
At December 31	�� �		�� �
		2021		2020
Financial liabilities at fair value through profit or loss		Derivative	instruments
At January 1 �� � � � Gains and losses recognized in profit or loss �� �� Conversion in the year �� � �
Issued in the year		�		��
At December 31	�	� �� �

G. 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.
H. 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:
307 -

Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares Derivative instrument liabilities: Convertible bond	Fair value Significant at December Valuation unobservable 31,2021 technique input �� � Market comparable companies Price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability �� Using the last transaction price in an inactive market Discount for lack of marketability �� Net asset value Discount for lack of marketability Fair value Significant at December Valuation unobservable 31,2020 technique input �� � Market comparable companies Price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability �� Using the last transaction price in an inactive market Discount for lack of marketability �� Net asset value Discount for lack of marketability �� Binary tree model for convertible bond pricing Volatility rate	Range (weighted Relationship of average) inputstofairvalue �� �� 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 Range (weighted Relationship of average) inputstofairvalue �� �� 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 �� The higher the volatility, the higher the fair value	Relationship of inputstofairvalue

I. The Company 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

308 -

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:

have changed:
Financial assets Equity instrument Financial assets Equity instrument Financial liabilities Derivative instruments	Input Liquidity discount Input Liquidity discount Volatility rate	Change �� Change �� ��		December	Favourable Unfavourable change change � � � � Favourable Unfavourable change change �� � �� �� � � � � Recognized in other comprehensiveincome 31,2020 31,2021 Recognized in other comprehensiveincome
			Recognizedin

(4) Other matter

The Company implemented epidemic prevention measures in response to the Covid-19 outbreak and numbers of the government's epidemic prevention measures. The epidemic did not make a significant impact on the Group’s operation and business for the year ended December 31, 2021.

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.
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 periods: Please refer to Table 6.
309 -

(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

None.

310 -

Table 1

Innolux Corporation

Loans to others

Year ended December 31, 2021

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, 2021	Balance as at December 31, 2021	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 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. Innolux Japan Co., Ltd. Innolux Holding Limited Warriors Technology Investments Ltd	Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Corporation Innolux Corporation Innolux Corporation	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes Yes Yes Yes	4,340,224 $ 2,170,112 2,387,123 1,779,492 3,689,190 2,322,410 210,954 3,266,240	4,340,224 $ 2,170,112 2,170,112 1,302,067 3,038,157 2,322,410 210,954 3,266,240	4,340,224 $ 1,736,090 1,909,699 1,128,459 2,604,134 2,322,410 210,954 3,266,240	2.00% 2.00% 2.00% 2.00% 2.00% 1.00% 0.00% 0.00%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Long-term and short-term financing Long-term and short-term financing Long-term and short-term financing	$ - - - - - - - -	Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support	$ - - - - - - - -	- - - - - - - -	$ - - - - - - - -	23,638,850 23,638,850 23,638,850 23,638,850 23,638,850 7,238,094 36,025,692 11,919,114	23,638,850 23,638,850 23,638,850 23,638,850 23,638,850 7,238,094 36,025,692 11,919,114	A A A A A A A A

Note A:

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.

311 -

Innolux Corporation

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

December 31, 2021

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 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair 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 Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd.	Common stock	None None Other related party None None None None None None None None None None None None None	900,000 60,200,000 4,270,212 57,211,305 1,669,000 1,209 477,142 8,347,068 1,027,000 263,000 674,000 1,110,000 1,439,180 315,000 1,520,000 176,000 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 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 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		$ 15,929 1,257,556 27,726 798,097 170,238 - 24,164 4,489,240 64,599 13,965 68,411 70,041 - 4,394 75,316 8,615	1 3 19 8 - - 12 4 - - - - 3 - 1 -	$ 15,929 1,257,556 27,726 798,097 170,238 - 24,164 4,489,240 64,599 13,965 68,411 70,041 - 4,394 75,316 8,615
	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 Holding Corp. Cathay Financial Holding Co., Ltd. Preferred Stock A TAISHIN FINANCIAL HOLDING CO., LTD. Preferred Stock E Chailease Holding Company Limited Class A Preferred Shares Fubon Financial Holding Co., Ltd. Preferred Shares B Trillion Science, Inc. Cheng Mei Materials Technology Corporation WPG Holdings Limited Preferred Share A WT MICROELECTRONICS CO., LTD. Preferred Shares A

312 -

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair value
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. 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 Warriors Technology Investments Ltd Nets Trading Ltd. Innolux Corporation Innolux Corporation Innolux Corporation	Common stock	Other related party None None Other related party None None None None None None None None None Other related party Other related party None None None None	1,200,000 6,964,222 954,000 7,347,144 9,000,000 - 30,599,775 16,000,000 414,136 2,016,000 1,027,371 22,525,000 4,000 1,900 1,819,240 90 69,820,457 180,718,346 5,164,587 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 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 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 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 Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss		$ 5,571 178,981 73,172 192,495 2,538,000 1,381,176 227,843 37,869 20,973 49,440 13,887 2,297,550 1,441 - 8,995 20,752 1,001,952 2,471,974 930,746	12 5 - 7 5 - 8 6 11 3 - 7 14 19 11 - - - -	$ 5,571 178,981 73,172 192,495 2,538,000 1,381,176 227,843 37,869 20,973 49,440 13,887 2,297,550 1,441 - 8,995 20,752 1,001,952 2,471,974 930,746
	VISIONATICS INC. Advanced Optoelectronic Technology, Inc. ENNOSTAR Inc. EPILEDS Co., Ltd. Fitipower Integrated Technology Inc. ��(��) Shenzhen Tiandeyu Electronics Co., Ltd. OED Holding Ltd. Obsidian Sensors, Inc. Reco Technology Holding Limited Kymeta Corporation General Interface Solution (GIS) Holding Limited CJK Associates Co., Ltd. Perinnova Limited KA Imaging Inc. PilotTech Global Fund Beneficiarycertificates
	Taishin Ta-Chong Money Market Fund Taishin 1699 Money Market Fund FSITC Money Market

313 -

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair value
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Display Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Electronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo CarUX Technology Ltd. Nanjing Innolux Optoelectronics Ltd. Innocom Technology (Shenzhen) Co., Ltd. Shanghai Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd.	Beneficiarycertificates	None None None None None None 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 profit or loss Financial assets at amortized cost Financial assets at amortized cost 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 profit or loss Financial assets at fair value through profit or loss	150,267,533 92,184,251 66,065,266 7,975,245 181,530,803 90,561,003 18,225,781 46,301,937 - - - - - - - - - - -	$ 2,252,075 1,502,336 881,066 100,160 2,301,375 1,401,096 300,186 760,259 477,563 4,705,600 2,926 10,715 84 13,950 417 6,014 2,512 1,935 1,315,317	- - - - - - - - Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	$ 2,252,075 1,502,336 881,066 100,160 2,301,375 1,401,096 300,186 760,259 477,563 4,705,600 2,926 10,715 84 13,950 417 6,014 2,512 1,935 1,315,317
	Jih Sun Money Market Fund Capital Money Market Fund Union Money Market Fund Cathay Taiwan Money Market Fund Mega Diamond Money Market Fund FSITC Taiwan Money Market Yuanta De-Li Money Market Fund Hua Nan Phoenix Money Market Fund Financialproducts
	Fixed Income RMB-Structured Deposits Fixed Income Structured Linked Deposit Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan Structuredproducts
	Floating Income RMB-Structured Deposits

314 -

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair value
Ningbo Innolux Optoelectronics Ltd. 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	Structuredproducts	None None None None None None None None None 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 amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost	- - - - - - - - - - - - - - - - - - - - - -	$ 1,954,213 201,588 251,530 201,188 100,946 251,833 252,140 200,877 251,300 100,892 100,791 202,028 101,901 251,096 50,413 100,750 125,888 151,198 144,582 264,031 157,374 167,210	Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	$ 1,954,213 201,422 252,175 201,186 100,947 251,840 252,033 200,876 251,923 100,892 100,685 201,202 100,713 251,093 100,825 100,750 251,775 151,209 143,151 261,210 156,610 166,856
	Floating Income RMB-Structured Deposits Bonds
	Taiwan Mobile Co., Ltd. Nan Ya Plastics Corporation Hon Hai Precision Industry Co., Ltd., 2017, Third Taiwan Power Company,2012,Fourth Fubon Financial Holding Co., Ltd. Highwealth Construction corp. Hon Hai Precision Industry Co., Ltd., 2017, Second Far Eastern New Century Corporation Co., Ltd. Far Eastone Telecommunications,2017, Third Far Eastone Telecommunications,2018, First Taipei Financial Center Corporation Taiwan Semiconductor Manufacturing Co., Ltd. Chang Chun Petrochemical Co., Ltd. CPC Corporation, Taiwan Taiwan Power Company,2012,Third China Steel Corporation CTBC Financial Holding Co., Ltd. ADCB Finance Cayman LTD. Agricultural Bank of China (New York Branch) Arab Petroleum Investments Corporation Bank of Communications (Hong Kong Branch)

315 -

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2021	As of December 31,2021
				Shares/Units	Book value	Ownership (%)	Fair 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 Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Bonds	None None None None None None None None None None None None None None None None None None None None	Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost Financial assets at amortized cost	- - - - - - - - - - - - - - - - - - - -	$ 144,459 223,010 276,800 229,679 145,117 34,852 253,295 250,544 276,420 288,891 173,638 262,143 267,107 264,742 195,482 32,600 145,923 264,830 56,167 278,199	Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	$ 143,386 221,061 276,100 229,411 143,785 34,512 252,155 248,587 274,565 287,339 171,915 259,906 264,009 261,935 193,728 32,326 144,483 261,756 56,041 274,325
	Daimler Finance North America LLC Doosan Infracore Co., Ltd. Emirates NBD Bank PJSC FAB Sukuk Co. Ltd. GS Caltex Corporation Hyundai Capital America Hyundai Capital Services, Inc. Industrial and Commercial Bank of China Limited (Hong Kong Branch) KIA Corporation Korea Resources Corporation NongHyup Bank POSCO Saudi Electricity Global SUKUK Company 4 Shinhan Bank Siam Commercial Bank Cayman Islands Sinopec Capital 2013 LTD. SK broadband CO.LTD. Societe Generale SA Sumitomo Corporation Sumitomo Mitsui Trust Bank

316 -

Innolux Corporation

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, 2021

Investor Table 3	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2021	Balance as at January1,2021	Addition(Note 3)	Addition(Note 3)		Disposal(Note 3)	Disposal(Note 3)		Balance as at December 31,2021(Note 6) Expressed in thousands of NTD (Except as otherwise indicated)	Balance as at December 31,2021(Note 6) Expressed in thousands of NTD (Except as otherwise indicated)
					Shares/Units	Amount	Shares/Units	Amount	Shares/Units	Selling price	Book value	Gain (loss) on disposal	Shares/Units	Amount
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	Taishin Ta-Chong Money Market Fund CTBC Hwa-win Money Market Fund Fubon Chi-Hsiang Money Market Fund Jih Sun Money Market Fund Capital Money Market Fund TCB Taiwan Money Market Fund Union Money Market Fund Taishin 1699 Money Market Fund FSITC Money Market Fund Mega Diamond Money Market Fund FSITC Taiwan Money Market Yuanta De-Li Money Market Fund Hua Nan Phoenix Money Market Fund	Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4	- - - - - - - - - - - - -	- - - - - - - - - - - - -	- - - - - - - - - - - - -	$ - - - - - - - - - - - - -	69,820,457 234,022,269 82,245,047 150,267,533 92,184,251 185,531,904 66,065,266 180,718,346 5,164,587 181,530,803 90,561,003 18,225,781 46,301,937	$ 1,000,000 2,600,000 1,300,000 2,250,000 1,500,000 1,900,000 880,000 2,470,000 930,000 2,300,000 1,400,000 300,000 760,000	- 234,022,269 82,245,047 - - 185,531,904 - - - - - - -	$ - 2,602,655 1,301,010 - - 1,901,368 - - - - - - -	$ - 2,602,655 1,301,010 - - 1,901,368 - - - - - - -	$ - - - - - - - - - - - - -	69,820,457 - - 150,267,533 92,184,251 - 66,065,266 180,718,346 5,164,587 181,530,803 90,561,003 18,225,781 46,301,937	$ 1,001,951 - - 2,252,075 1,502,336 - 881,066 2,471,974 930,746 2,301,375 1,401,096 300,186 760,259

317 -

Investor	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2021	Balance as at January1,2021	Addition(Note 3)	Addition(Note 3)		Disposal(Note 3)	Disposal(Note 3)		Balance as at December 31,2021(Note 6)	Balance as at December 31,2021(Note 6)
					Shares/Units	Amount	Shares/Units	Amount	Shares/Units	Selling price	Book value	Gain (loss) on disposal	Shares/Units	Amount
Innolux Corporation Innolux Corporation Ningbo Innolux Display Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd.	Fixed Income RMB-Structured Deposits Fixed Income Structured Linked Deposit Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits	Note 5 Note 5 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -	$ - - - - - - - - -	- - - - - - - - -	$ 475,530 4,699,650 436,480 875,743 1,969,461 3,583,083 1,287,909 1,910,123 1,983,118	- - - - - - - - -	$ - - 443,212 889,175 1,998,283 3,639,591 - - 2,012,359	$ - - 443,212 889,175 1,998,283 3,639,591 - - 2,012,359	$ - - - - - - - - -	- - - - - - - - -	$ 477,563 4,705,600 - - - - 1,315,317 1,954,213 -

Note 6: The carrying amount as at December 31, 2021 included gains or losses on valuation.

318 -

Innolux Corporation

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, 2021

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. CARUX TECHNOLOGY PTE. LTD. Innolux Hong Kong Limited HONGFUJIN PRECISION ELECTRONICS (YANTAI) CO., LTD. Hon Hai Precision Industry Co., Ltd. Foshan Innolux Optoelectronics Ltd. Honfujin Precision Electronics (Chongqing) Co., Ltd. InnoCare Optoelectronics Corporation COMPETITION TEAM IRELAND LIMITED Innolux Japan Co., Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd.	An indirect wholly-owned subsidiary 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 of Hon Hai Precision Industry Co., Ltd. A subsidiary of the Company An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Processing expense Processing expense Processing expense	16,314,528 $ 11,843,010 5,784,107 2,397,790 1,900,182 1,584,421 1,176,963 490,580 174,399 119,443 30,985,143 25,322,932 22,975,073	5 4 2 1 1 - - - - - 12 10 9	90~120 days 60 days 60 days 60 days 90 days 60 days 45 days 90 days 45 days 60 days 60 days 60 days 60 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 Cost plus Cost plus Cost plus	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	3,550,091 $ 4,068,272 - 112,170 896,570 118,073 214,075 482,752 4,979 33,330 4,459,942) ( 6,339,613) ( 6,502,696) (	6 7 - - 1 - - 1 - - 10 14 14

319 -

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 Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. CarUX Technology Inc. Shanghai Innolux Optoelectronics Ltd. CarUX Technology Inc. Innolux Japan Co., Ltd. Innolux Europe B.V. Ningbo Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Ningbo Innolux Display Ltd. InnoCare Optoelectronics Corporation	Innolux Hong Kong Limited Innocom Technology (Shenzhen) Co., Ltd. Ningbo CarUX Technology Ltd. Innolux Hong Kong Limited CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Innolux Hong Kong Limited Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Display Ltd. Nanjing Innolux Technology Ltd. Ningbo Innolux Optoelectronics Ltd. InnoCare Optoelectronics Japan Co., Ltd.	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 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	Processing expense Processing expense Processing expense Processing revenue Processing revenue Processing revenue Processing revenue Processing revenue Service revenue Service revenue Sales Sales Sales Sales	17,233,139 $ 322,283 203,034 15,253,655 5,698,685 4,714,830 1,618,206 508,031 294,548 253,499 7,382,709 5,392,767 1,668,187 651,531	7 - - 100 54 90 13 10 66 27 15 16 4 37	60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days	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 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 No material difference	4,597,097) ($ 318,529) ( 75,293) ( 2,949,684 1,329,482 1,842,178 - - 54,907 - 1,461,181 135,428 324,867 250,550	10 1 - 100 64 98 - - 80 - 16 3 4 50

320 -

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)
InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Foshan Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Europe B.V.	InnoCare Optoelectronics USA, INC. Ningbo Innolux Electronics Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. CARUX TECHNOLOGY PTE. LTD.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder Same major stockholder Same major stockholder Same major stockholder An indirect wholly-owned subsidiary	Sales Sales Purchases Purchases Purchases Purchases Service revenue	451,166 $ 258,284 2,192,021 2,185,769 144,442 105,979 672,777	25 14 4 5 - 1 73	60 days 60 days 90 days after acceptance 90 days after acceptance 90 days after acceptance 90 days after acceptance 60 days	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	151,578 $ 34,120 656,912) ( 710,978) ( 30,889) ( 14,282) ( 143,660	30 7 6 7 - - 100

321 -

Innolux Corporation

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

December 31, 2021

Table 5 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2021 (Note A)	Turnover rate	Overdue receivables	Overdue receivables	Allowance for doubtful accounts Amount collected subsequent to the balance sheet date Expressed in thousands of NTD (Except as otherwise indicated)	Allowance for doubtful accounts Amount collected subsequent to the balance sheet date Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Innolux Hong Kong Limited Foshan Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. CarUX Technology Inc. Innolux Corporation Innolux Corporation	CARUX TECHNOLOGY PTE. LTD. Innolux USA Inc. Hon Hai Precision Industry Co., Ltd. CarUX Technology Inc. InnoCare Optoelectronics Corporation Honfujin Precision Electronics (Chongqing) Co., Ltd. Foshan Innolux Optoelectronics Ltd. HONGFUJIN PRECISION ELECTRONICS (YANTAI) CO., LTD. Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Hong Kong Limited CARUX TECHNOLOGY PTE. LTD. Innolux USA Inc. CARUX TECHNOLOGY PTE. LTD.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. Ultimate parent company 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	4,068,272 $ 3,550,091 1,335,185 (Shown as other receivables) 896,570 534,716 482,752 332,658 (Shown as other receivables) 214,075 118,073 112,170 6,502,696 6,339,613 4,597,097 4,459,942 2,949,684 1,842,178	4.16 4.13 - 1.82 0.34 0.70 - 8.91 17.94 6.75 2.22 4.16 2.53 2.53 2.85 5.12	2,560,260 $ - - 134,769 527,846 342,022 - 62,407 - - - - - - - -	Subsequent collection - - Subsequent collection Subsequent collection Subsequent collection - Subsequent collection - - - - - - - -	279,519 $ 1,182,303 199,783 691 145,316 - 46,342 118,073 - 3,836,063 3,349,598 - 4,459,942 1,479,383 955,002 -	- $ - - - - - - - - - - - - - - -

322 -

Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2021 (Note A)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Ningbo Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Innocom Technology (Shenzhen) Co., Ltd. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation Innolux Europe B.V. Innolux Hong Kong Limited Foshan Innolux Optoelectronics Ltd.	Ningbo Innolux Display Ltd. CARUX TECHNOLOGY PTE. LTD. Ningbo Innolux Optoelectronics Ltd. Innolux Corporation InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. CARUX TECHNOLOGY PTE. LTD. Nanjing Innolux Technology Ltd. Hongfujin Precision Industry (Wuhan) Co.,Ltd.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary 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 of Hon Hai Precision Industry Co., Ltd.	1,461,181 $ 1,329,482 324,867 318,529 250,550 151,578 143,660 135,428 104,277 (Shown as other receivables)	4.63 8.57 5.78 2.02 5.65 2.40 9.37 5.38 -	- $ - - 262,115 - 67,041 - - 12,923	- - - Subsequent collection - Subsequent collection - - Subsequent collection	696,265 $ 1,051,045 152,493 262,115 111,697 41,563 73,136 125,586 47,120	- $ - - - - - - - -

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.

323 -

Innolux Corporation

Table 6

Expressed in thousands of NTD

Significant inter-company transactions during the reporting period

Year ended December 31, 2021

(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 0 0 0	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 Innolux Corporation Innolux Corporation Innolux Corporation	Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Innolux Hong Kong Limited Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Innolux Japan Co., Ltd. Innolux USA Inc. 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. CARUX TECHNOLOGY PTE. LTD.	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1	Processing expense Accrued expenses Sales Processing expense Accrued expenses Processing expense Accrued expenses Sales Processing expense Accounts receivable Accrued expenses Processing expense Accrued expenses Sales Sales Accounts receivable Other receivables Accounts receivable Sales Accounts receivable Sales Service revenue Accounts receivable Other receivables	322,283 $ 318,529) ( 5,784,107 17,233,139 4,597,097) ( 22,975,073 6,502,696) ( 1,584,421 30,985,143 118,073 4,459,942) ( 25,322,932 6,339,613) ( 119,443 16,314,528 3,550,091 332,658 534,716 490,580 482,752 11,843,010 914,202 4,068,272 1,335,185	- - - - - - - - - - - - - - - - - - - - - - - -	- - 2 5 1 7 1 - 9 - 1 7 1 - 5 1 - - - - 3 - 1 -

324 -

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 1 1 2 2 3 3 3 4 4 4 5 5 6 6 7 8 8 8 9 9 9 9 9	Innolux Corporation Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Innolux Europe B.V. Innolux Europe B.V. Innolux Europe B.V. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Innolux Japan Co., Ltd. CarUX Technology Inc. CarUX Technology Inc. CarUX Technology Inc. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation	Ningbo CarUX Technology Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Nanjing Innolux Technology Ltd. Nanjing Innolux Technology Ltd. Innolux Hong Kong Limited CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Innolux Corporation CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Corporation Innolux Corporation CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Ningbo Innolux Electronics Ltd. InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. InnoCare Optoelectronics USA, INC.	1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Processing expense Processing revenue Accounts receivable Sales Accounts receivable Processing revenue Processing revenue Accounts receivable Service revenue Service revenue Accounts receivable Sales Accounts receivable Sales Accounts receivable Service revenue Processing revenue Processing revenue Accounts receivable Sales Sales Accounts receivable Sales Accounts receivable	203,034 $ 15,253,655 2,949,684 5,392,767 135,428 1,618,206 5,698,685 1,329,482 253,499 672,777 143,660 7,382,709 1,461,181 1,668,187 324,867 294,548 508,031 4,714,830 1,842,178 258,284 651,531 250,550 451,166 151,578	- - - - - - - - - - - - - - - - - - - - - - - -	- 4 1 2 - - 2 - - - - 2 - - - - - 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.

325 -

Innolux Corporation Information on investees Year ended December 31, 2021

				Year ended December 31, 2021	Year ended December 31, 2021
Investor Table 7	Investee	Location	Main business activities	Initial investment amount		Shares held	as at December 31,2021		Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by the Company for the year ended December 31,2021 Footnote Expressed in thousands of NTD (Except as otherwise indicated)
				Balance as at December 31, 2021	Balance as at December 31, 2020	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 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. Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoCare Optoelectronics Corporation Innolux Japan Co., Ltd. iZ3D, Inc. GIO Optoelectronics Corp. INStek Corporation Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd.	Samoa Samoa Samoa BVI Hong Kong Singapore Taiwan Taiwan Taiwan Japan USA Taiwan Taiwan Cayman Taiwan	Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings 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 R&D, manufacturing and distribution company Investment holdings Production and selling of the absorption for medical element	$ 6,192,509 62,197 33,438,542 3,674,115 3,231,780 754,943 1,217,235 1,674,054 205,000 1,682,751 - 451,167 35,300 1,717,714 73,500	$ 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 73,500	180,568,185 1,656,410 709,450,000 146,847,000 1,158,844,000 25,400,000 - 167,405,392 20,500,000 98 4,333 41,288,528 2,647,507 14,062,500 7,350,000	100 100 100 100 100 100 100 100 59 54 35 76 40 50 49	$ 18,012,846 98,524 49,835,425 6,186,203 6,355,418 223,127 877,887 3,844,694 365,463 1,970,209 - 424,120 29,643 801,157 318,640	$ 271,650 5,815 3,602,032 170,034 ( 280,423) ( 19,791) 5,779 ( 8,570) 198,600 158,977 - ( 30,145) ( 891) 397 205,597	$ 271,650 5,815 3,602,032 170,034 ( 278,939) ( 19,791) 5,779 ( 8,570) 180,426 86,547 - ( 20,650) ( 357) 199 100,742

326 -

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2021	as at December 31,2021	Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by the Company for the year ended December 31,2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Innolux Corporation Innolux Corporation 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. Innolux Singapore Holding Pte. Ltd.	eLux Inc. PanelSemi Corporation Rockets Holding Limited Suns Holding Ltd 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 INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED	USA Taiwan Samoa Samoa Cayman Hong Kong Japan Cayman Singapore Hong Kong Netherlands Taiwan USA Samoa Samoa Samoa Germany India	R&D of MicroLED technology Manufacturing of electronic parts Investment holdings Investment holdings 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 Distribution company	$ 91,155 250,000 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 33,735 607,284	$ 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 33,735 607,284	300,000 25,000,000 160,504,550 18,177,052 146,817,000 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 18,177,052 100,000 144,095,499	28 45 100 100 100 100 46 100 100 100 100 100 100 100 100 100 100 100	$ 6,957 243,661 11,842,308 5,959,558 6,185,879 1,544,927 1,648,838 3,008,984 3,006,600 2,012,564 432,825 1,435,384 898,659 11,819,471 22,713 5,959,557 19,987 84,317	($ 62,015) ( 13,945) 168,142 103,482 170,034 370,155 158,977 ( 723,008) ( 722,695) 239,280 44,816 185,695 88,395 170,103 ( 1,961) 103,482 4,664 ( 11,158)	($ 27,929) ( 6,339) 168,142 103,482 170,034 370,155 72,430 ( 723,008) ( 722,695) 150,184 44,816 3,177 88,395 170,103 ( 1,961) 103,482 4,664 ( 11,158)

327 -

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2021	as at December 31,2021	Net profit (loss) of the investee for the year ended December 31, 2021	Investment income (loss) recognized by the Company for the year ended December 31,2021	Footnote
				Balance as at December 31, 2021	Balance as at December 31, 2020	Number of shares	Ownership (%)	Book value
Innolux Singapore Holding Pte. Ltd. Innolux Singapore Holding Pte. Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoJoy Investment Corporation Inno Capital Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation GIO Optoelectronics Corp.	INNOLUX OPTOELECTRONICS PHILIPPINES CORP. INNOLUX OPTOELECTRONICS MALAYSIA SDN. BHD. GIO Optoelectronics Corp. INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED Inno Capital Corporation CDIB-Innolux Limited Partnership CDIB-Innolux Limited Partnership InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. Innocare Optoelectronics Europe B.V. Double Star Inc.	Philippines Malaysia Taiwan India Taiwan Taiwan Taiwan Japan USA Netherlands Mauritius	Manufacturer and distribution company Manufacturer and distribution company Holdings, R&D, manufacturing and distribution company Distribution company Investment company Investment company Investment company Distribution company Distribution company After-sales service company Investment holdings	$ 28,733 - 858 - 15,000 47,139 2,861 87,149 27,963 1,661 298,113	$ 28,733 121,179 858 - - - - 87,149 27,963 - 298,113	5,000,000 - 77,235 1 1,500,000 - - 30,010 900,000 500 10,000,000	100 - - - 100 16 1 100 100 100 100	$ 26,010 - 805 - 16,777 68,134 4,135 76,223 23,788 1,963 98,017	($ 98) ( 93) ( 30,145) ( 11,158) 415 ( 8,809) ( 8,809) 6,233 3,473 419 ( 583)	($ 98) ( 93) ( 48) - 415 ( 1,451) ( 88) 3,975 3,473 419 ( 583)

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Innolux Corporation

Table 8

Information on investments in Mainland China

Year ended December 31, 2021

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, 2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2021	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31,2021	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2021	Net income of investee for the year ended December 31, 2021	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for year ended December 31, 2021(Note B)	Book value of investments in Mainland China as of December 31,2021	Accumulated amount of investment income remitted back to Taiwan as of December 31,2021	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 CarUX Technology Ltd. Ningbo Innolux Electronics 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 Manufacturing and selling of LCD backend module and related components Manufacturing and selling of medical equipment	$ 4,539,520 332,125 8,580,800 10,601,440 4,428,800 58,128 4,318,080 581,280 41,520 276,800 1,215,620 66,729	2 2 2 2 2 2 2 2 2 2 3 1	$ 3,512,917 55,360 203,865 10,601,440 4,428,800 58,128 3,986,905 - 41,520 276,800 - -	$ - - - - - - - - - - - 87,799	$ - - - - - - - - - - - -	$ 3,512,917 55,360 203,865 10,601,440 4,428,800 58,128 3,986,905 - 41,520 276,800 - 87,799	$ 170,103 ( 92,889) 1,807,694 1,342,743 449,408 23,602 146,432 239,280 5,806 ( 583) ( 194,220) ( 524)	100 3 100 100 100 100 100 100 100 77 100 59	$ 170,103 - 1,807,694 1,344,930 449,408 23,602 146,432 239,280 5,806 ( 445) ( 193,461) ( 555)	$ 11,819,425 25,717 22,192,373 21,960,654 5,681,349 630,141 5,555,719 2,100,614 94,007 74,859 1,021,853 103,970	$ 1,026,603 - 4,778,535 - - - - - - - - -	2.1 2.2 2.3 2.3 2.3 2.4 2.4 2.5 2.6 2.7

329 -

Ceiling on investments in Mainland China:

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, 2021 was audited by independent auditors.

Note C: The investment methods are as follows:

Directly investing in Mainland China.
Through investing in companies in the third area, which then invested in the investee in Mainland China.
2.1. Through investing in Stanford Developments Limited in the third area, which then invested in the investee in Mainland China.
2.2. Through investing in Warriors Technology Investments Ltd in the third area, which then invested in the investee in Mainland China.
2.3. Through investing in Landmark International Ltd. in the third area, which then invested in the investee in Mainland China.
2.4. Through investing in Toppoly Optoelectronics (Cayman) Ltd. in the third area, which then invested in the investee in Mainland China.
2.5. Through investing in Innolux Optoelectronics Hong Kong Holding Limited in the third area, which then invested in the investee in Mainland China.
2.6. Through investing in Keyway Investment Management Limited in the third area, which then invested in the investee in Mainland China.
2.7. Through investing in Double Star Inc. in the third area, which then invested in the investee in Mainland China.
Others.

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.
�. 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.
330 -

AI assistant

INX — Annual Report 2021

52330_rns_2022-07-08_6a664e5f-3f17-4324-a189-8eb57dfc0f64.pdf

Innolux Corporation 2021 Annual Report

Notice to readers

A. Spokesperson & Deputy Spokesperson information.

B Headquarters, Branches and Plant.

C. Stock Transfer Agent

D. Auditors

E. Overseas Securities Exchange: N/A.

F. Corporate Website: http://www.innolux.com

Contents

I. Letter to Shareholders

1.1 Report on operating results for 2021

(I) Results of business plan implementation

(II) Results of budget execution

(III) Analysis of Financial Income and Expenditure and Profitability

(IV) Status of Research and Development

(V) The Company's digital transformation

1. Intelligent manufacturing:

2. Intelligent operating advancement:

1.2 Summary of Business Plan for 2022

II. Company Profile

2.1 Date of Incorporation: January 14, 2003

2.2 Company History

III. Corporate Governance Report

3.1 Organization

3.1.1 Organization Chart

3.1.2 Major Corporate Functions

3.2 Directors and Management Team

3.2.1 Directors

Major shareholders of the institutional shareholders

Major shareholders of the Company’s major institutional shareholders

Professional qualifications and Independence analysis of Directors ：

 Independence of Directors

Diversity and independence of the Board:

3.2.2 Management Team

3.3 Remuneration of Directors, President, and Vice President

3.3.1 Remuneration to Directors and Independent Directors

3.3.2 Remuneration of the President and Vice Presidents

3.3.3 Names of managerial officers who received employees’ bonuses in the preceding year and the distribution

3.3.4 Comparison of Remuneration for Directors, Presidents, and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Presidents, and Vice Presidents

3.4 Implementation of Corporate Governance

3.4.1 Board of Directors

1. If any of the following circumstances occur, the dates of the meetings, sessions, and contents of motion, all Independent Directors’ opinions and the Company’s response should be specified:

2. If there are Directors’ avoidance of motions in conflict of interest, the Directors’ names, contents of motion, causes for avoidance and voting should be specified:

3. Implementation of self-evaluations by the Company's Board of Directors:

4. Measures taken to strengthen the functionality of the Board:

3.4.2 Audit Committee

1. The annual work focus and authority of the audit committee

2. If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, resolutions of

4. Communications between the Independent Directors, the Company's chief internal auditor and CPAs:

3.4.3 Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Note 1: The independence of CPAs

Note 2: The concerned issues of stakeholders, communication channel and response method

3.4.4 Composition, Responsibilities and Operations of the Remuneration Committee

A. Information on members of the Remuneration Committee

B. Attendance of Members at Remuneration Committee Meetings

3. The resolutions of the Remuneration Committee and the Company’s response are as follows:

3.4.5 Composition, Responsibilities and Operations of the Nominating Committee: N/A.

3.4.6 Sustainable Development Implementation Status and Deviations from “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies”

3.4.7Ethical Corporate Management Implementation Status and Deviations from “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”

3.4.8 Corporate Governance Guidelines and Regulations

3.4.9 Other Important Information Regarding Corporate Governance

3.4.10 Internal Control System

3.4.12 Major Resolutions of Shareholders’ Meeting and Board Meetings

3.4.13 Major Issues of Record or Written Statements Made by Any Directors Dissenting to Important Resolutions Passed by the Board of Directors: None.

3.5 Information Regarding Accountants’ Fees

3.5.1 Accountants’ Fees

3.6 Replacement of CPA

3.6.1 About predecessor CPA: N/A.

3.6.2 About the Successor CPA: N/A.

3.6.3 Reply of the Previous Accountant: N/A.

3.8 Changes in Shareholding of Directors, Managers and Major Shareholders

3.8.1 Changes in Shareholding of Directors, Managers and Major Shareholders

3.8.2 Shares Trading with Related Parties ： None

3.9 Relationship among the Top Ten Shareholders

3.10 Ownership of Shares in Affiliated Enterprises

IV. Capital Overview

4.1 Capital and Shares

INX Annual Report 2021

3.8.2 Shares Trading with Related Parties `：` None