INX - Audit Report / Information 2022

INNOLUX CORPORATION

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT DECEMBER 31, 2022 AND 2021

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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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, 2022 and 2021, 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, 2022 and 2021, 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 Standards on Auditing of 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 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 Company’s 2022 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 our opinion thereon, we do not provide a separate opinion on these matters.

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The key audit matters in relation to the financial statements for the year ended December 31, 2022 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

We compared financial statements to ascertain the provision policy on allowance for inventory valuation losses has been consistently applied, 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).

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.

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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 investments accounted for under the equity method of the Company, 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$24,559,041 thousand and NT$ 3,693,087 thousand, constituting 0.6% and 0.8% of the total assets of the Company as at December 31, 2022 and 2021, respectively, 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 (NT$1,499,789) thousand and (NT$396,765) thousand, constituting 5.0% and (0.7)% of the total other comprehensive income loss of the Company for the years ended December 31, 2022 and 2021, respectively.

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.

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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 Standards on Auditing of 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. As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

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

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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.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 parent company only financial statements for the year ended December 31, 2022 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 14, 2023

Theaccompanyingparentcompanyonlyfinancialstatementsarenotintendedtopresentthefinancialpositionandresultsofoperations andcashflowsinaccordancewithaccountingprinciplesgenerallyacceptedincountriesandjurisdictionsotherthantheRepublicofChi na.Thestandards,proceduresandpracticesintheRepublicofChinagoverningtheauditofsuchfinancialstatementsmaydifferfromth osegenerallyacceptedincountriesandjurisdictionsotherthantheRepublicofChina.Accordingly,theaccompanyingparentcompan yonlyfinancialstatementsandreportofindependentaccountantsarenotintendedforusebythosewhoarenotinformedabouttheaccou ntingprinciplesorauditingstandardsgenerallyacceptedintheRepublicofChina,andtheirapplicationsinpractice.

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INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Assets	Notes	December 31, 2022 December 31, 2021
Current Assets	6(1) 6(2) 6(4) 6(5) 7 7 6(6) 8 6(2)
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		$ 42,742,345 $ 16,209,662 385,503 14,088,473 10,892,226 11,656,499 24,468,596 52,456,333 12,243,100 10,131,776 852,123 1,151,358 688,721 1,786,526 22,427,356 27,072,150 803,956 2,971,775 859,275 104,099 116,363,201 137,628,651 2,011,821 2,293,710 2,100,977 4,706,256 887,093 50,280,918 93,254,285 89,593,974 125,578,587 131,464,114 4,033,355 4,366,436 443,866 471,655 17,342,393 17,378,711 3,513,457 3,391,436 8,556,486 12,705,941 257,722,320 316,653,151 $ 374,085,521 $ 454,281,802
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
	6(3)
1535 Financial assets at amortized cost - non-current	6(4) 6(7) 6(8), 7 and 8 6(9) 6(10) 6(11) 6(27) 6(8),(14)and 8
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)

INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes	December 31, 2022	December 31, 2021
Current Liabilities
2120 Financial liabilities at fair value through profit or loss - current 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2250 Provisions - current 2280 Lease liabilities - current 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2670 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 3500 Treasury shares 3XXX Total equity 3X2X Total liabilities and equity	6(2)	$ 329,181	$ 198,896
	7	18,139,842 15,069,365 25,091,705 142,765 5,634,974 622,990 8,741,407 5,133,343 78,905,572 26,813,109 1,568,321 3,829,647 10,493,648	24,126,922 22,597,631 29,202,566 — 7,512,161 604,191 8,733,552 5,760,846
	6(12) and 7 6(15) and 9 6(13) 6(13) 6(27) 6(14) and 7 6(16) 6(17) 6(18) 6(19) 6(16)
			98,736,765

			35,534,207 2,002,734 4,327,155 9,333,541
		42,704,725 121,610,297	51,197,637
			149,934,402
		95,564,562 103,312,414 13,811,763 3,204,136 42,750,417 (5,565,152) (602,916) 252,475,224 $ 374,085,521

			105,596,201 103,287,482

			8,062,551 6,059,671 84,545,631 (3,204,136) —
			304,347,400
			$ 454,281,802

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

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2022 AND 2021

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

Items	Notes	2022 2021
4000 Sales revenue 5000 Operating costs 5900 Net operating (loss) margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating (loss) profit Non-operating income and expenses 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 (Loss) profit before income tax 7950 Income tax expense 8200 (Loss) profit for the year Other comprehensive income (net) Components of other comprehensive (loss) income that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit plans 8316 Unrealized (losses) gains on financial assets at fair value through other comprehensive income 8330 Share of other comprehensive (loss) 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 (loss) income that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8380 Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for under equity method 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive (loss) income for the year, net of tax 8500 Total comprehensive (loss) income for the year (Loss) earnings per share (in dollars) 9750 Basic (loss) earnings per share 9850 Diluted (loss) earnings per share	6(20) and 7 6(6)(25) and 7	$ 199,721,875 $ 334,328,350 (216,731,878) (253,807,163) (17,010,003) 80,521,187 (1,007,569) (2,610,105) (3,949,817) (4,971,804) (10,759,959) (13,627,216) (15,717,345) (21,209,125) (32,727,348) 59,312,062 660,432 186,553 2,290,247 2,625,559 (1,460,558) (4,162,216) (892,380) (996,566) 4,274,750 4,060,649 4,872,491 1,713,979 (27,854,857) 61,026,041 (135,399) (3,491,580)

	6(25) and 7 6(21) 6(22) and 7 6(23) 6(24) 6(27)
		$ (27,990,256) $ 57,534,461
		$ 220,400 $ (414,486) (2,605,279) 3,534,296 (1,962,499) 1,299,867
	6(14) 6(19) 6(19)
	6(27)	474,360 (623,507)
		(3,873,018) 3,796,170 1,587,253 (948,734) 101,069 (34,241) 1,688,322 (982,975) $ (2,184,696) $ 2,813,195 $ (30,174,952) $ 60,347,656

	6(19) 6(7)(19)



	6(28)
		$ (2.76) $ 5.53 $ (2.76) $ 5.34

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

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2022AND 2021

(Expressed in thousands of New Taiwan dollars)

	Share	Capital			Retained Earnings		Other EquityInterest	Other EquityInterest
Notes	Common stock	Certificate of entitlement to new shares from convertible bonds	Capital surplus	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	Treasuryshares Total
6(19) 6(18) 6(17)(18) 6(17) 6(16)(17) 6(17) 6(17) 6(17) 6(17) 6(19) 6(17) 6(19) 6(18) 6(16) 6(17) 6(17) 6(16) 6(17)	$ 97,110,720 — — — — — — — — 8,485,481 — — — — — — $ 105,596,201 $ 105,596,201 — — — — — — (10,031,639) — — — — $ 95,564,562	$ 2,293,612 — — — — — — — — (2,293,612) — — — — — — $ — $ — — — — — — — — — — — — $ —	$ 99,707,996 — — — — — — (1,047,090) 1,602 4,544,732 11,722 (5,300) (364) 64,494 — 9,690 $ 103,287,482 $ 103,287,482	$ 7,870,713 — — — 191,838 — — — — — — — — — — — $ 8,062,551 $ 8,062,551	$ 7,325,437 — — — — (1,265,766) — — — — — — — — — — $ 6,059,671 $ 6,059,671 — — — — (2,855,535) — — — — — — $ 3,204,136	$ 29,120,853 57,534,461 (331,603) 57,202,858 (191,838) 1,265,766 (3,141,271) — — — — — — — 289,263 — $ 84,545,631 $ 84,545,631 (27,990,256) 176,320 (27,813,936) (5,749,212) 2,855,535 (11,087,601) — — — — — $ 42,750,417	$ (8,879,169) — (982,975) (982,975) — — — — — — — — — — — — $ (9,862,144) $ (9,862,144) — 1,688,322 1,688,322 — — — — — — — — $ (8,173,822)	$ 2,819,498 — 4,127,773 4,127,773 — — — — — — — — — — (289,263) — $ 6,658,008 $ 6,658,008 — (4,049,338) (4,049,338) — — — — — — — — $ 2,608,670	$ — $ 237,369,660 — 57,534,461 — 2,813,195 — 60,347,656 — — — — — (3,141,271) — (1,047,090) — 1,602 — 10,736,601 — 11,722 — (5,300) — (364) — 64,494 — — — 9,690 $ — $ 304,347,400 $ — $ 304,347,400 — (27,990,256) — (2,184,696) — (30,174,952) — — — — — (11,087,601) 47,500 (9,984,139) — 247 — 10,169 (650,416) (650,416) — 14,516 $ (602,916) $ 252,475,224





			— —	— —
			—	—
			— — — — 247 10,169 — 14,516	5,749,212 — — — — — — —
			$ 103,312,414	$ 13,811,763

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

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

	Notes	2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES	6(25) 12(2) 6(25) 6(21) 6(22) 6(24)
(Loss) profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation and amortization Expected credit losses 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 on disposal of property, plant and equipment Gain on disposal of intangible assets Interest income Dividend income Interest expense Foreign exchange gain Unrealized profit (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		$ (27,854,857) $ 61,026,041
		26,864,122 31,238,652 — 53,191 378,875 2,085,055 2,435 8,706 (4,274,750) (4,060,649) — 101,390 12,908 17,765 — (7) (660,432) (186,553) (44,895) (82,601) 892,380 996,566 (2,310,657) (325,247) 251,937 (150,466) — 4,599 (69,970) 714,494 27,987,737 (10,132,598) (2,111,324) (839,677) 323,060 (60,219) 1,285,810 (668,962) 4,644,794 (1,243,448) 1,748,372 (3,526,097) (753) 1,565 (5,987,080) 1,169,532 (7,528,266) (27,020,277) (5,324,980) 8,027,210
		(1,095,267) 1,367,866 (73,152) 489,560 (49,809) 2,616,667
		7,006,238 61,622,058 (64,641) (100) 6,941,597 61,621,958
(Continued)

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

	Notes	2022 2021
CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments in equity instruments measured at fair value through other comprehensive income Decrease 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 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 from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings Repayments of long-term borrowings 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 Payments to acquire treasury shares Cash capital reduction Others Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	6(29) 7 6(18) 6(18) 6(16) 6(16) 6(17)	$ (142,505) $ (19,792,492) 13,948,744 7,266,972 — (214,738) 3,330,220 30,575,701 — (86,019,203) 47,284,750 31,000,000 2,010,343 175,000 — (427,475) (666,798) (1,185,976) (15,532,404) (23,023,785) 318,936 502,247 23,013 116 796,163 139,173 147,945 242,454 51,518,407 (60,762,006) — 23,850,000 (8,750,000) (19,250,000) — 212,402 — (1,047,090) (11,087,601) (3,141,271) — 240,786 (855,012) (826,935) (614,669) (199,659) (602,916) — (10,031,639) — 14,516 9,690 (31,927,321) (152,077) 26,532,683 707,875 16,209,662 15,501,787 $ 42,742,345 $ 16,209,662

INNOLUX CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022 AND 2021

(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.
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 14, 2023.

APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

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

(2)

New Standards,Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’
January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment: proceeds
before intended use’
January 1, 2022
Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling a
contract’
January 1, 2022
Annual improvements to IFRS Standards 2018-2020
January 1, 2022
The above standards and interpretations have no significant impact to the Company’s financial
condition and financial performance based on the Company’s assessment.
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 2023 are as follows:

	Effective date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’

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:

IFRSs issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not as endorsed by the FSC are as follows:	yet included in the IFRSs
	Effective date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback	January 1, 2024
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendments to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 -	January 1, 2023
comparative information'
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2024
current’
Amendments to IAS 1, ‘Non-current liabilities with covenants'	January 1, 2024

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’

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these 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 Reports 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 assets or 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 and issued into effect 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 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 closing 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 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.

(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.

(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 costs of completion and the estimated costs necessary to make the sale.

(14) Investments accounted for using 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.
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

(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 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 long-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) Derecognition of financial liabilities

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

(24) 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.

(25) Employee benefits
A. Short-term employee benefits

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

B. Pensions

(a) Defined contribution plans

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

(b) Defined benefit plans

i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected

unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

     - 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.
(26) 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 non-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.

(27) 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 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 provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. 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.

(28) 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.

(29) 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.

(30) 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.
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 JUDGEMENTS, 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 cash-generating units, and determining the recoverable amounts of related cash-generating units. Please refer to Note 6(11) for the information on 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 Note 6(11) for the information on impairment assessment.
(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

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand, demand deposits and checking accounts	December 31,2022 December 31,2021
	$ 24,679,045 $ 14,462,349 18,063,300 1,747,313 $ 42,742,345 $ 16,209,662
Time deposits

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	December 31,2022 December 31,2021
Current items
Financial assets mandatorily measured at fair value through profit or loss
Beneficiary certificates	$ — $ 13,903,225 342,475 54,965
Forward foreign exchange contracts Forward exchange swap contracts
	43,028 130,283
Non-current items	$ 385,503$ 14,088,473

Financial assets mandatorily measured at fair value through profit or loss Listed stocks Unlisted stocks	$ 834,038 $ 968,335
	1,177,783 1,325,375
	$ 2,011,821 $ 2,293,710
Liabilities
Current items
Financial liabilities held for trading Forward foreign exchange contracts
	$ 289,691 $ 198,896 39,490 —
Forward exchange swap contracts
	$ 329,181 $ 198,896

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

Derivative financial assets and liabilities	December 31, 2022	December 31, 2022	December 31, 2021
	Contract Amount (Notional Principal) (in thousands)	Contract Period	Contract Amount (Notional Principal) (in thousands) Contract Period
Current items
Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts	USD (sell) $ 250,000 RMB (buy) 1,748,133 RMB (sell) 550,000 TWD (buy) 2,417,714 USD (sell) 30,000 JPY (buy) 4,049,825 TWD (sell) 4,850,675 JPY (buy) 22,000,000	2022/12-2023/01 2022/12-2023/01 2022/10-2023/01 2022/10-2023/01 2022/12-2023/01 2022/12-2023/01 2022/10-2023/03 2022/10-2023/03 2022/11-2023/02 2022/11-2023/02 2022/11-2023/01 2022/11-2023/01	RMB (sell) $ 1,020,844 2021/12-2022/01 USD (buy) 160,000 2021/12-2022/01 RMB (sell) 625,000 2021/12-2022/01 TWD (buy) 2,711,077 2021/12-2022/01 USD (sell) 40,000 2021/12-2022/01 JPY (buy) 4,577,300 2021/12-2022/01 TWD (sell) 6,171,025 2021/09-2022/03 JPY (buy) 25,000,000 2021/09-2022/03 EUR (sell) 6,000 2021/12-2022/01 USD (buy) 6,803 2021/12-2022/01 HKD (sell) 66,283 2021/11-2022/02 USD (buy) 8,500 2021/11-2022/02
Forward foreign exchange contracts	EUR (sell) 7,700 USD (buy) 7,994
Forward foreign exchange contracts	HKD (sell) 37,500 USD (buy) 4,800		HKD (sell) 66,283 USD (buy) 8,500

Derivative financial assets and liabilities	December 31, 2022	December 31, 2022	December 31, 2021	December 31, 2021
	Contract Amount (Notional Principal) (in thousands)	Contract Period	Contract Amount (Notional Principal) (in thousands) Contract Period
Current items
Forward foreign exchange contracts Foreign exchange swap contracts	USD (sell) $ 871,860 TWD (buy) 26,492,656 USD (sell) 457,000 TWD (buy) 14,022,914	2022/12-2023/02 2022/12-2023/02 2022/11-2023/02 2022/11-2023/02	USD (sell) $ 930,000 TWD (buy) 25,755,547 USD (sell) 805,000 TWD (buy) 22,406,595	2021/12-2022/01 2021/12-2022/01 2021/10-2022/05 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	December 31,2022 December 31,2021


	$ 2,100,977 $ 4,706,256

A. The Company 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. For information on other comprehensive income for fair value change recognized by the Company for the years ended December 31, 2022 and 2021, please refer to Note 6(19) “Other equity”.

(4) Financial assets at amortized cost

Company for the years ended December 31, 2022 equity”. Financial assets at amortized cost	and 2021, please refer to Note 6(19) “Other
	December 31,2022 December 31,2021
Current items
Corporate bonds	$ 5,186,488 $ 1,995,699 3,685,200 9,660,800 2,020,538 —
Principal guaranteed financial assets
Fixed income financial products Non-current items Corporate bonds Principal guaranteed financial assets Fixed income financial products
	$ 10,892,226 $ 11,656,499

	$ 887,093 $ 5,697,755 — 39,400,000
	— 5,183,163
	$ 887,093 $ 50,280,918

A. The Company recognized $375,203 and $153,830 of interest income arising from the financial assets at amortized cost for the years ended December 31, 2022 and 2021, 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

Accounts receivable
Accounts receivable	December 31,2022 December 31,2021
	$ 24,731,160 $ 52,718,897
Less: Allowance for uncollectible accounts	(262,564) (262,564)
	$ 24,468,596 $ 52,456,333
A. The aging analysis of accounts receivable is as follows: December 31,2022 December 31,2021 Not past due $ 21,919,761 $ 49,124,198 Up to 60 days 1,790,590 3,126,216 61 to 180 days 752,577 230,041 Over 180 days 268,232 238,442 $ 24,731,160 $ 52,718,897

The above aging analysis was based on past due date.

B. As of December 31, 2022 and 2021, accounts receivable were all from contracts with customers.

As of January 1, 2021, the balance of receivables from contracts with customers amounted to $42,586,299.

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	December 31,2022 December 31,2021
	$ 2,921,419 $ 3,866,053
	10,024,876 12,302,547 9,481,061 10,903,550
	$ 22,427,356 $ 27,072,150

For the years ended December 31, 2022 and 2021, the Company recognized cost of goods sold for inventories that have been sold at $216,308,550 and $253,491,278 and recognized net inventory loss at $423,328 and $315,885 due to write down of cost of scrap inventories to net realizable value, respectively.

(7) Investments accounted for under the equity method

respectively. Investments accounted for under the equity method
Subsidiaries: Landmark International Ltd. Innolux Holding Limited Toppoly Optoelectronics (B.V.I.) Ltd. Innolux Hong Kong Holding Limited Others Associates: Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd. PanelSemi Corporation Others	December 31,2022 December 31,2021
	$ 55,243,844 $ 49,835,425 18,569,845 18,012,846 6,631,666 6,186,203 4,984,990 6,355,418
	6,432,687 7,833,667

	904,206 801,157 304,356 318,640
	162,329 243,661
	20,362 6,957
	$ 93,254,285 $ 89,593,974

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, 2022.

B. The Company’s associates

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

(Loss) profit for the year from continuing operations Other comprehensive income (loss) - net of tax Total comprehensive income	Years ended December 31, 2022 2021 $ (6,721) $ 66,673 101,069 (34,241) $ 94,348 $ 32,432

(8) Property, plant and equipment

			2022
Cost: Land Buildings Machinery and equipment Other equipment	At January1	Additions	Disposals	Transfer At December 31
	$ 3,852,792 179,699,574 484,375,727 43,483,603	$ — 605,185 3,331,414	$ — (124,891) (5,658,583) (3,824,012)	$ — $ 3,852,792 966,171 181,146,039 6,227,963 488,276,521 3,408,590 43,068,716
		535
Accumulated depreciation and impairment: Buildings Machinery and equipment Other equipment Unfinished construction and equipment under acceptance	711,411,696	3,937,134	(9,607,486)	10,602,724	716,344,068

	(131,005,345) (418,170,549) (38,755,341)	(6,932,091) (16,016,928) (3,312,432)	123,865 5,620,246 3,535,268	208 (1,035) 4,256	(137,813,363) (428,568,266) (38,528,249)
	(587,931,235)	(26,261,451)	9,279,379	3,429 (604,909,878)
	7,983,653	12,026,858	—	(5,866,114)	14,144,397
	$ 131,464,114			$ 125,578,587

			2021
	At January1	Additions	Disposals	Transfer At December 31
Cost:	$ 3,852,792 178,742,461 475,843,175 42,171,116	$ — 437,968 4,180,852 13,530	$ — (165,791) (5,234,276) (2,034,641)	$ — $ 3,852,792 684,936 179,699,574 9,585,976 484,375,727 3,333,598 43,483,603
Land Buildings Machinery and equipment Other equipment
Accumulated depreciation and impairment:	700,609,544	4,632,350	(7,434,708)	13,604,510 711,411,696

Buildings Machinery and equipment Other equipment	(123,829,844) (403,391,942) (37,029,114)	(7,340,896) (19,486,977) (3,767,158)	165,433 4,745,738 2,003,525	(38) (131,005,345) (37,368) (418,170,549) 37,406 (38,755,341)
	(564,250,900)	(30,595,031)	6,914,696	— (587,931,235)
Unfinished construction and equipment under acceptance	11,259,894	18,785,990	—	(22,062,231) 7,983,653
	$ 147,618,538			$ 131,464,114

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, 2022 and 2021, the prepayments for business facilities which have not yet entered the factory (shown as ‘other non-current assets’) amounted to $3,688,314 and $8,520,889, respectively.

C. Information about impairment assessment is provided in Note 6(11).
(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	December 31,2022 December 31,2021
	Carryingamount Carryingamount
	$ 4,033,355 $ 4,366,436

	Years ended December 31,
	2022 2021
Land	Depreciation Charge Depreciation Charge
	$ 469,041 $ 457,846

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

		Years ended December 31,
		2022 2021
	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	$ 79,747 $ 85,420
		45,934 45,345 28,069 36,127 30,090 20,938

E. For the years ended December 31, 2022 and 2021, the Company’s total cash outflow for leases were $738,199 and $287,809, respectively.

(10) Investment property

Investment property
Cost: Land Buildings Accumulated depreciation and impairment: Buildings		2022
	At January1 $ 188,247 439,228 627,475 (155,820) $ 471,655	Additions At December 31 $ — $ 188,247 — 439,228 — 627,475 (27,789) (183,609) $ (27,789) $ 443,866

Cost: Land Buildings Accumulated depreciation and impairment: Buildings		2021
	At January1 $ 188,247 439,228 627,475 (128,031) $ 499,444	Additions At December 31 $ — $ 188,247 — 439,228 — 627,475 (27,789) (155,820) $ (27,789) $ 471,655

The fair value of the investment property held by the Company as at December 31, 2022 and 2021 was $1,670,276 and $1,978,199, 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:

			2022
Cost: Patents and royalty Goodwill Others	At January1	Additions	Disposals	Transfer At December 31
	$ 8,232,454 17,096,628 4,446,483	$ — — —	$ (3,000) — (336,318)	$ 400 $ 8,229,854 — 17,096,628 92,136 4,202,301
	29,775,565	—	(339,318)	92,536 29,528,783
Accumulated amortization and impairment:
Patents and royalty	(8,171,928) (4,224,926)	(19,657) (86,184)	3,000 313,305	— (8,188,585) — (3,997,805)
Others
	(12,396,854)	(105,841)	316,305	— (12,186,390)
	$ 17,378,711	$ (105,841)	$ (23,013)	$ 92,536	$ 17,342,393

			2021
Cost: Patents and royalty Goodwill Others	At January1	Additions	Disposals	Transfer At December 31
	$ 8,184,435 17,096,628 4,579,812	$ — — —	$ — — (256,266)	$ 48,019 $ 8,232,454 — 17,096,628 122,937 4,446,483
	29,860,875	—	(256,266)	170,956 29,775,565
Accumulated amortization and impairment:
Patents and royalty	(8,156,713) (4,338,312)	(15,215) (142,771)	— 256,157	— (8,171,928) — (4,224,926)
Others
	(12,495,025)	(157,986)	256,157	— (12,396,854)
	$ 17,365,850	$ (157,986)	$ (109)	$ 170,956 $ 17,378,711

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

Operating costs Operating expenses	Years ended December 31,
	2022 2021 $ 28,720 $ 48,629 77,121 109,357
	$ 105,841 $ 157,986

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 and property, plant and equipment 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 9.38% and 12.58%, respectively, for the years ended December 31, 2022 and 2021, 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 and property, plant and equipment for the years ended December 31, 2022 and 2021, respectively.

(12) Other payables

respectively. Other payables	respectively. Other payables
		December 31,2022 December 31,2021
Other personnel expenses Payable on machinery and equipment Repairs and maintenance expense payable Utilities expense payable Processing fee payable Other payables Long-term borrowings		$ 9,518,891 $ 14,204,879
		3,522,683 3,091,095
		2,317,720 2,525,072 1,044,406 1,057,459 527,983 398,624 8,160,022 7,925,437
		$ 25,091,705 $ 29,202,566
		December 31,2022 December 31,2021 $ 35,000,000 $ 43,750,000 600,000 600,000 (45,484) (82,241) (8,741,407) (8,733,552) $ 26,813,109 $ 35,534,207 0.75%~2.26% 0.75%~1.79%
Type of borrowings	Period	December 31,2022	December 31,2021
Syndicated bank borrowings	2019/4/15 ~2024/4/15 2021/12/2 ~2026/11/15	$ 35,000,000 600,000	$ 43,750,000
Unsecured borrowings			600,000
Less: Administrative expenses charged by syndicated banks		(45,484)	(82,241)
Current portion (includes administrative expenses) Range of interest rates

- (13) Long term borrowings

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, 2022 and 2021 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, 2022, the borrowing has yet to be drawn down.

(14) 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) In February 2022, the Science Park, Ministry of Science and Technology approved the Company to stop contributing to the retirement fund temporarily.
(c) In the first half of 2022, the Company reached an agreement with part of its employees for terminating their defined benefit pension plans and settled its defined benefit obligation. Total pension payment paid from the plan assets was $2,166,345. Accordingly, the Company re-assessed the actuarial assumptions and recognized gain on the settlement amounting to $127,244 and gain on remeasurement of net defined benefit liability amounting to $232,321.
(d) The amounts recognized in the balance sheet are as follows:

	December 31,2022 December 31,2021
Present value of defined benefit obligation Fair value of plan assets Net defined benefit (asset) liability	$ 238,892 $ 2,568,227
	(516,912) (2,501,851)
	$ (278,020) $ 66,376

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

	Present value of defined benefit obligation $ 2,568,227 5,454 10,493 (127,244) (111,297) — 9,909 (15,839) (37,818) (2,174,290) (2,218,038)	Fair value of plan assets Net defined benefit liability (asset) $ 2,501,851 $ 66,376 — 5,454 12,699 (2,206) — (127,244) 12,699 (123,996) 176,652 (176,652) — 9,909 — (15,839) — (37,818) (2,174,290) — (1,997,638) (220,400) $ 516,912 $ (278,020) Fair value of plan assets Net defined benefit liability $ 1,970,661 $ 157,039 — 5,637 7,883 628 7,883 6,265 27,371 (27,371) — 3,884 — 120,136 — 317,837 (15,478) — 11,893 414,486 511,414 (511,414) $ 2,501,851 $ 66,376
Year ended December 31, 2022 Balance at January 1 Current service cost Interest expense/income Gain on settlement Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in demographic assumptions Change in financial assumptions Experience adjustments Paid pension Balance at December 31
	$ 238,892
	Present value of defined benefit obligation $ 2,127,700 5,637 8,511 14,148 — 3,884 120,136 317,837 (15,478) 426,379 — $ 2,568,227

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 Paid pension Contribution for the year Balance at December 31

(f) 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 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-thecounter, 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, 2022 and 2021 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

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

	Years ended December 31,
Discount rate Future salary increases	2022 2021 1.30% 0.70% 2.40% 2.40%

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, 2022 Effect on present value of defined benefit obligation December 31, 2021 Effect on present value of defined benefit obligation	Discount rate Increase 0.25% Decrease 0.25% $ (6,589) $ 6,848 Discount rate Increase 0.25% Decrease 0.25% $ (89,861) $ 94,591	Future salaryincreases
		Increase 0.25% Decrease 0.25% $ 6,158 $ (5,966) Future salaryincreases
	Increase 0.25% $ (89,861)	Increase 0.25% Decrease 0.25% $ 85,132 $ (82,767)

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.

(h) As of December 31, 2022, the weighted average duration of the retirement plan is 12 years.
(i) During the years ended December 31, 2022 and 2021, the subsidiary of the Company recognized other comprehensive loss amounting to $0 and $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, 2022 and 2021 were $958,788 and $931,808, respectively.

(15) Provisions-current

Provisions-current
At January 1, 2022 Additions during the year Reversed during the year At December 31, 2022	Warranty $ 3,270,135 759,897 (1,380,915)	Litigation and others Total $ 4,242,026 $ 7,512,161 397,181 1,157,078 (1,653,350) (3,034,265)
	$ 2,649,117	$ 2,985,857 $ 5,634,974

A. Warranty

The Company 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 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).

(16) Share capital

A. As of December 31, 2022, the Company’s authorized and outstanding capital were $120,000,000 and $95,564,562, with a par value of $10 (in dollars) per share, respectively. All proceeds from shares issued have been collected.

Movements in the number of the Company’s ordinary shares outstanding (including certificate of entitlement to new shares from convertible bonds) are as follows:

At January 1	2022	2021
	Number of ordinary shares(in thousand units)	Number of ordinary shares(in thousand units)
	10,559,620	9,940,433
Cash capital reduction	(1,003,164)	—
Stocks converted from bonds Shares retired At December 31	— 619,187
	(45,250) —
	9,511,206 10,559,620

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. Capital reduction
To adjust the capital structure, the stockholders of the Company during their meeting on June 24, 2022 resolved to implement a capital reduction and return capital in cash to stockholders. The registration of the capital reduction was approved by the Taiwan Stock Exchange in accordance with the Letter No.Tai-Zheng-Shang-Yi-Zi-1111803817, dated August 10, 2022. The capital reduction amounted to $10,031,639 for a total of 1,003,164 thousand shares, and the ratio of capital reduction was 9.5%. The effective date of the capital reduction was August 15, 2022. The change of registration was completed on August 23, 2022. The effective date of the replacement of shares due to the capital reduction was October 7, 2022.
D. 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:
		December 31,2022
Name of company holdingthe shares	Reason for reacquisition	Quantity (in thousand units)	Book Value
The Company	To be reissued to employees	45,250	$ 602,916

(b) The Company acquired a total of 50,000 thousand treasury shares at $650,416 in the second quarter of 2022. After the cash capital reduction declaration became effective and the change registration was completed in the third quarter of 2022, the Company eliminated 4,750 thousand shares and reduced cost of treasury shares by $47,500. Please refer to the above description for relevant cash capital reduction information.
(c) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and shareholder's rights should not be enjoyed before it is reissued.
(e) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be cancelled.
(17) 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 paid-in capital each year. Accumulated deficit shall first be covered by retained earnings before the capital reserve can be used to cover the accumulated deficit.

2022

	Share premium	Treasury share transactions	Changes in ownership interests in subsidiaries	Share of profit (loss) of associates accounted for under equity method	Difference between proceeds on acquisition or disposal of equity interest in a subsidiary and its carrying amount Total
At January 1 Recognition of changes in ownership interests in subsidiaries Recognition of change in equity of associates in proportion to the Company's ownership	$ 99,992,177 — — 14,516	$ 3,183,414 — — —	$ 6,484 10,169 — —	$ 41,277 — 247 —	$ 64,130 $ 103,287,482 — 10,169 — 247 — 14,516
Others
At December 31	$ 100,006,693	$ 3,183,414	$ 16,653	$ 41,524	$ 64,130 $ 103,312,414

			20	21
	Share premium	Treasury share transactions	Changes in ownership interests in subsidiaries	Share of profit (loss) of associates accounted for under equity method	Difference between proceedson acquisitionor disposalof equityinterest inasubsidiary andits carrying amount 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	$ 96,484,845 (1,047,090) 4,544,732 — — — — — 9,690	$ 3,183,414 — — — — — — — —	$ 62 — — 11,722 — — — (5,300) —	$ 39,675 — — — 1,602 — — — —	$ — $ 99,707,996 — (1,047,090) — 4,544,732 — 11,722 — 1,602 (364) (364) 64,494 64,494 — (5,300) — 9,690
Differencebetweenconsiderationand carryingamountofsubsidiariesacquired
Differencebetweenconsiderationand carryingamountofsubsidiariesdisposed
Establishmentofsubsidiaries
Others
At December 31	$ 99,992,177	$ 3,183,414	$ 6,484	$ 41,277	$ 64,130 $ 103,287,482

(18) 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 2021 net income which was approved at the stockholders’ meeting in June 2022 and the appropriation of 2020 net income which was approved at the stockholders’ meeting in July 2021 are as follows:

meeting in July 2021 are	as follows:	as follows:
Legal reserve Reversal of special reserve Cash dividends	Years ended December 31,
	2021 Amount Dividends per share (in dollars) $ 5,749,212 (2,855,535) 11,087,601 $ 1.05 $ 13,981,278	2020 Amount Dividends per share (in dollars) $ 191,838 (1,265,766) 3,141,271 $ 0.30 $ 2,067,343

The stockholders’ meeting in July 2021 approved a resolution to distribute cash dividends amounting to $1,047,090 at $0.1 (in dollars) per share from capital surplus.

(19) Other equity items

(19)Other equity items	(19)Other equity items
2022 Currency translation Financial assets at fair value through other comprehensive income Total At January 1 $ (9,862,144) $ 6,658,008 $ (3,204,136) Revaluation - gross — (2,605,279) (2,605,279) Currency translation differences 1,587,253 — 1,587,253 Share of other comprehensive loss of subsidiaries and associates 101,069 (1,962,499) (1,861,430) Effect of income tax — 518,440 518,440 At December 31 $ (8,173,822) $ 2,608,670 $ (5,565,152) 2021 Currency translation Financial assets at fair value through other comprehensive income Total At January 1 $ (8,879,169) $ 2,819,498 $ (6,059,671) Revaluation - gross — 3,534,296 3,534,296 Disposal of investments in equity instruments measured at fair value through other comprehensive income — (289,263) (289,263) Currency translation differences (948,734) — (948,734) Share of other comprehensive loss of subsidiaries and associates (34,241) 1,299,881 1,265,640 Effect of income tax — (706,404) (706,404) At December 31 $ (9,862,144) $ 6,658,008 $ (3,204,136) (20)Operating income Years ended December 31, 2022 2021 TFT-LCD products $ 199,721,875 $ 334,328,350 The Company derives revenue from the transfer of goods at a point in time. (21)Interest income			2022
		Currency translation $ (9,862,144) — 1,587,253 101,069 — $ (8,173,822)	Financial assets at fair value through other comprehensive income Total $ 6,658,008 $ (3,204,136) (2,605,279) (2,605,279) — 1,587,253 (1,962,499) (1,861,430) 518,440 518,440 $ 2,608,670 $ (5,565,152) 2021
		Currency translation $ (8,879,169) — — (948,734) (34,241) — $ (9,862,144)	Financial assets at fair value through other comprehensive income Total $ 2,819,498 $ (6,059,671) 3,534,296 3,534,296 (289,263) (289,263) — (948,734) 1,299,881 1,265,640 (706,404) (706,404) $ 6,658,008 $ (3,204,136)
			Years ended December 31, 2022 2021
			$ 199,721,875 $ 334,328,350
	The Company derives revenue from the transfer of goods at a point in time. Interest income

Interest income
	Years ended December 31, 2022 2021
Interest income from financial assets at amortized cost Interest income from bank deposits	$ 375,203 $ 153,830 285,229 32,723
	$ 660,432 $ 186,553

(22) Other income

Other income
	Years ended December 31,
	2022 2021
Service revenue Rental revenue Compensation income Dividend income Other income	$ 1,242,398 $ 1,588,676
	198,573 176,765 81,961 136,411 44,895 82,601 722,420 641,106
	$ 2,290,247 $ 2,625,559

(23) Other gains and losses

Compensation income Dividend income Other income Other gains and losses	81,961 136,411 44,895 82,601 722,420 641,106 $ 2,290,247 $ 2,625,559
	Years ended December 31,
	2022 2021
Net loss on financial assets and liabilities at fair value through profit or loss Net currency exchange gain (loss) Other gains (losses)	$ (7,280,022) $ (3,313,240)
	5,741,912 (42,190) 77,552 (806,786)
	$ (1,460,558) $ (4,162,216)

(24) Finance costs

fair value through profit or loss Net currency exchange gain (loss) Other gains (losses) Finance costs	fair value through profit or loss Net currency exchange gain (loss) Other gains (losses) Finance costs	5,741,912 (42,190) 77,552 (806,786) $ (1,460,558) $ (4,162,216)
		Years ended December 31,
		2022 2021
Interest expense: Bank borrowings Convertible bonds Others
		$ 789,855 $ 841,110
		— 45,441 102,525 110,015
		$ 892,380 $ 996,566
	Expenses by nature
		Years ended December 31,
		2022 2021
Employee benefit expense: Salaries and other short-term employee benefits Post-employment benefits Share-based payments Depreciation Amortization
		$ 26,355,057 $ 34,561,790
		834,792 938,073 2,435 8,706 26,758,281 31,080,666 105,841 157,986
		$ 54,056,406 $ 66,747,221

(25) Expenses by nature

(26) 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, 2022 and 2021, employees’ compensation was accrued at $0 and $4,246,994, respectively; while directors’ remuneration was accrued at $0 and $65,338, respectively. The aforementioned amounts were recognized in expenses.
For the year ended December 31, 2022, the Company incurred net loss and had an accumulated deficit. Thus, there was no distribution of employees' compensation and directors’ remuneration as resolved by the Board of Directors on February 14, 2023.
The employees’ compensation and directors’ remuneration for the year ended December 31, 2021 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 resolved amounts were in agreement with the amount of recorded expense for the year ended December 31, 2021. As of February 14, 2023, employees’ compensation and directors’ remuneration for 2021 have been distributed completely.

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.

(27) Income tax
A. Income tax expense
- (a) Components of income tax expense:

website of the Taiwan Stock Exchange. e tax ome tax expense Components of income tax expense:
	Years ended December 31,
	2022 2021
Current tax: Current tax on profit for the year Tax on undistributed surplus earnings Prior year income tax underestimation (overestimation) Total current tax Deferred tax: Origination and reversal of temporary differences Loss carryforward Income tax expense	$ 3,714 $ 134
	196,544 —
	17,215 (34) 217,473 100 (82,074) (438,513) — 3,929,993
	$ 135,399 $ 3,491,580

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

follows:
	Years ended December 31,
	2022 2021
Changes in fair value of financial assets at fair value through other comprehensive income	$ (518,440) $ 706,404
Remeasurements of defined benefit obligations	44,080 (82,897)
	$ (474,360) $ 623,507

B. Reconciliation between income tax expense and accounting profit:

	Years ended December 31,
	2022 2021
Tax calculated based on profit before tax and statutory tax rate Effects from items disallowed by tax regulation Prior year income tax underestimation (overestimation) Separate taxation Tax on undistributed surplus earnings Change in assessment of realization of deferred tax assets Income Tax expense	$ (5,570,971) $ 12,205,208
	(751,353) (301,338) 17,215 (34) 3,714 134
	196,544 —
	6,240,250 (8,412,390)
	$ 135,399 $ 3,491,580

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

carryforward are as follows:
		2022
Deferred tax assets: -Temporary differences: Sales returns and discount provisions Accrued royalties and warranty provisions Unrealized exchange loss Unrealized loss on financial instruments Others - Deferred tax liabilities: Unrealized exchange gain Unrealized gain on financial instruments Amortization charges on goodwill Others	January1	Recognized in profit or loss	Recognized in other comprehensive income December 31

	$ 686,356	$ (136,758) 152,155 68,369 (2,729) 40,984 $ 122,021 $ 16,551 21,838 (96,905) 18,569	$ — $ 549,598
	1,579,496 — 520,072 605,512		— 1,731,651 — 68,369 — 517,343 — 646,496
	$ 3,391,436		$ — $ 3,513,457

	$ (16,551)		$ — $ —
	(813,416)		518,440 (273,138)
	(1,142,674) (30,093)		— (1,239,579) (44,080) (55,604)
	$ (2,002,734) $ 1,388,702	$ (39,947) $ 82,074	$ 474,360 $ (1,568,321) $ 474,360 $ 1,945,136

		2021	2021
Deferred tax assets: -Temporary differences: Sales returns and discount provisions Accrued royalties and warranty provisions Unrealized loss on financial instruments Others	January1	Recognized in profit or loss	Recognized in other comprehensive income December 31
	$ 634,935 1,309,803 594,116 637,125 3,929,993 $ 7,105,972 $ (147,874) — (1,045,769) (408,640) $ (1,602,283) $ 5,503,689	$ 51,421 269,693 2,729 (114,510) (3,929,993) $ (3,720,660) $ 131,323 (183,785) (96,905) 378,547 $ 229,180 $ (3,491,480)	$ — $ 686,356 — 1,579,496 (76,773) 520,072 82,897 605,512 — — $ 6,124 $ 3,391,436 $ — $ (16,551) (629,631) (813,416) — (1,142,674) — (30,093) $ (629,631)$ (2,002,734) $ (623,507) $ 1,388,702
Loss carryforward

- Deferred tax liabilities: Unrealized exchange gain
Unrealized gain on financial instruments
Amortization charges on goodwill Others

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

December 31, 2022

are as follows:	December 31,2022	December 31,2022
Year incurred 2016 2019 2022	Amount filed / assessed Unused amount $ 1,051,680 $ 1,051,680 21,206,403 21,206,403 32,774,644 32,774,644 $ 55,032,727 $ 55,032,727 December 31,2021		Unrecognized deferred tax assets Usable untilyear $ 1,051,680 2026 21,206,403 2029 32,774,644 2032 $ 55,032,727
Year incurred 2012 2016 2019	Amount filed / assessed $ 42,430,348 1,051,680 21,206,403 $ 64,688,431	Unused amount $ 3,546,716 1,051,680 21,206,403 $ 25,804,799	Unrecognized deferred tax assets Usable untilyear $ 3,546,716 2022 1,051,680 2026 21,206,403 2029 $ 25,804,799

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

Deductible temporary differences

	December 31,2022		December 31,2021
	$ 1,483,018		$ 1,532,571

F. The Company has not recognized taxable temporary differences associated with investment in subsidiaries as deferred tax liabilities. As of December 31, 2022 and 2021, the amounts of temporary differences unrecognized as deferred tax liabilities were $39,360,172 and $34,176,731, respectively.
G. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

(28) (Loss) earnings per share

Authority. (Loss) earnings per share
Basic loss per share Net loss for the year	Year ended December 31, 2022 Amount after tax Weighted average number of ordinary shares outstanding (shares in thousands) Loss per share (in dollars) $ (27,990,256) 10,152,560 $ (2.76) Year ended December 31, 2021 Amount after tax Weighted average number of ordinary shares outstanding (shares in thousands) Earnings per share (in dollars) $ 57,534,461 10,395,532 $ 5.53 57,534,461 10,395,532 45,441 164,088 — 217,365 $ 57,579,902 10,776,985 $ 5.34

	Amount after tax $ 57,534,461 57,534,461 45,441 — $ 57,579,902
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

(29) Supplemental cash flow information

Investing activities with partial cash payments:

Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares $ 57,579,902 Supplemental cash flow information Investing activities with partial cash payments:	10,776,985 $ 5.34
	Years ended December 31,
	2022 2021
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	$ 15,963,992 $ 23,418,340
	3,091,095 2,696,540 (3,522,683) (3,091,095)
	$ 15,532,404 $ 23,023,785

(30) Changes in liabilities from financing activities

For the years ended December 31, 2022 and 2021, 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, conversion, discount 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
At January 1 Impact of changes in foreign exchange rate Conversion of convertible bonds Amortization of discounts on convertible bonds At December 31	Bondspayable
	$ 5,374,293
	(38,240) (5,381,494) 45,441
	$ —

7. RELATED PARTY TRANSACTIONS

(1) Names and relationship of related parties

Conversion of convertible bonds Amortization of discounts on convertible bonds At December 31 LATED PARTY TRANSACTIONS Names and relationship of related parties	(5,381,494 45,441 $ —
Names of relatedparties	Relationshipwith the Company
Hon Hai Precision Industry Co., Ltd. and its subsidiaries	Other related party
PanelSemi Corporation	Associate
Foshan Innolux Optoelectronics Ltd.	The Company’s subsidiary
Innolux USA Inc.	The Company’s subsidiary
CARUX TECHNOLOGY PTE. LTD.	The Company’s subsidiary
CarUX Technology Inc.	The Company’s subsidiary
Ningbo Innolux Optoelectronics Ltd.	The Company’s subsidiary
Ningbo Innolux Display Ltd.	The Company’s subsidiary
Warriors Technology Investments Ltd	The Company’s subsidiary
Innolux Japan Co., Ltd.	The Company’s subsidiary

For 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, 2022.

(2) Significant related party transactions

A. Operating revenue

gnificant related party transactions Operating revenue
	Years ended December 31,
	2022 2021
Sales of goods: Subsidiaries Other related parties Associates
	$ 30,510,455 $ 36,251,987
	2,543,723 5,972,039 451,833 65,407
	$ 33,506,011 $ 42,289,433

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

significantly different from those of sales to third parties. Purchases of goods
	Years ended December 31,
	2022 2021
Purchases of goods:
Other related parties	$ 670,248 $ 326
Subsidiaries	50,773 105,508
Associates	434 —
	$ 721,455 $ 105,834

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. Consigned processing

(a) Consigned processing

m third parties. nsigned processing Consigned processing
	Years ended December 31,
	2022 2021
Processing expense: Subsidiaries - Foshan Innolux Optoelectronics Ltd. $ 26,847,900 $ 30,985,143 - Others 53,733,883 66,566,548 Other related parties 25,207 40,368 Associates 56 — $ 80,607,046 $ 97,592,059 Balance of consigned processing at the end of year (shown as “other payables”) December 31,2022 December 31,2021 Payables to related parties: Subsidiaries $ 442,901 $ 324,850 Other related parties 63,554 39,919 Associates 58 — $ 506,513 $ 364,769

	$ 26,847,900 $ 30,985,143
	53,733,883 66,566,548 25,207 40,368 56 —
	$ 80,607,046 $ 97,592,059
	$ 442,901 $ 324,850
	63,554 39,919
	58 —
	$ 506,513 $ 364,769

(b) Balance of consigned processing at the end of year (shown as “other payables”)

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”)

E.	Service revenue: Subsidiaries - CARUX TECHNOLOGY PTE. LTD. - Others Associates Service expense (Shown as“manufacturing costs and	Years ended December 31,
		2022 2021


		$ 322,919 $ 914,202
		54,757 12,935
		128,249 84,422
		$ 505,925 $ 1,011,559
		operating expenses”) Years ended December 31,
	Service expense: Subsidiaries
		2022 2021

		$ 294,561 $ 566,722

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F. Receivables from related parties

Receivables from related parties
	December 31, 2022 December 31, 2021
Accounts receivable: Subsidiaries - CARUX TECHNOLOGY PTE. LTD. - Others Other related parties Associates

	$ 8,636,351 $ 4,068,272
	2,928,070 4,739,284 572,491 1,259,528
	106,188 64,692 $ 12,243,100 $ 10,131,776

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

interest. Other receivables from related parties
	December 31, 2022 December 31, 2021
Other receivables:
Subsidiaries - CARUX TECHNOLOGY PTE. LTD. - CarUX Technology Inc. - Innolux USA Inc. - Others Associates Other related parties Payables to related parties
	$ 359,471 $ 1,335,185
	214,551 59,433
	55 332,658
	92,659 46,224 21,022 7,246 963 5,780
	$ 688,721 $ 1,786,526

	December 31, 2022 December 31, 2021
Accounts payable: Subsidiaries - Ningbo Innolux Optoelectronics Ltd. - Ningbo Innolux Display Ltd. - Others Other related parties Associates

	$ 6,315,270 $ 6,502,696
	2,614,755 6,339,613
	5,744,636 9,144,141 390,482 611,181 4,222 —
	$ 15,069,365 $ 22,597,631

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. Property transactions

Purchase of property

(a) Acquisition of property, plant and equipment:

perty transactions rchase of property Acquisition of property, plant and equipment:
	Years ended December 31,
	2022 2021
Associates Subsidiaries Other related parties	$ 8,258 $ —
	6,957 9,019 4,202 16,218
	$ 19,417 $ 25,237

~48~

(b) Period-end balances arising from purchases of property (shown as “other payables”):

Period-end balances arising from purchases of property (shown as “other payables”):	Period-end balances arising from purchases of property (shown as “other payables”):	Period-end balances arising from purchases of property (shown as “other payables”):	property (shown as “other payables”):	property (shown as “other payables”):
December 31,2022 December 31,2021 Subsidiaries $ 1,406 $ 8,368 le of property Proceeds from sale of property and gain on disposal: Year ended December 31,2022 Year ended December 31,2021 Disposal proceeds Gain (loss) on disposal Disposal proceeds Gain (loss) on disposal Subsidiaries $ 337,898 $ 1,228 $ 129,335 $ 1,634			December 31,2022 December 31,2021
			$	1,406 $ 8,368
				Year ended December 31,2021
	Disposal proceeds			Disposal proceeds Gain (loss) on disposal
	$ 337,898	$ 1,228		$ 129,335 $ 1,634

Sale of property

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

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

parties’):
Subsidiaries	December 31,2022 December 31,2021
	$ 115,288 $ 35,731

J. Loans to/from related parties

Loans from related parties

(a) For the years ended December 31, 2022 and 2021, outstanding balance shown as 'other noncurrent liabilities':

current liabilities':
Subsidiaries - Warriors Technology Investments Ltd - Innolux Japan Co., Ltd. Others	December 31,2022 December 31,2021
	$ 3,623,780 $ 3,266,240 2,311,550 2,322,410 234,046 210,954 $ 6,169,376 $ 5,799,604

For the years ended December 31, 2022 and 2021, the loans from subsidiaries are repayable with five years. Refer to table 1 for information on loans to/from related parties.

(b) Interest expense

	(b) Interest expense
(3)	Subsidiaries Key management compensation	Year ended December 31,2022 Year ended December 31,2021
		$ 22,585 $ 24,595
		Years ended December 31, 2022 2021

	Salaries and other short-term employee benefits Share-based payments Post-employment benefits	$ 76,078 $ 393,112 354 1,349 540 723
		$ 76,972 $ 395,184

~49~

8. PLEDGED ASSETS

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

	Book	value
Pledged asset	December 31,2022	December 31,2021 Purpose
Property, plant and equipment Other assets - others -Refundable deposits	$ 53,534,257 846,036 $ 54,380,293	$ 63,072,940 Long-term borrowings 762,562 Litigation guarantee $ 63,835,502

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 price conspiracy in 2006 and requested monetary compensation. The U.S. subsidiary of the Company retained lawyers to handle the lawsuit. On October 31, 2022, the court dismissed the case for lack of diligent prosecution.
B. Bishop Display Tech LLC (Bishop) filed a lawsuit against the Company with the United States District Court for the Eastern District of Texas on October 3, 2022, alleging infringement of its US patent. The Company received the service of a complaint on October 28, 2022 and subsequently filed an answer to the complaint on January 26, 2023. Currently, the lawsuit has no impact on the Company’s operations and financial position.
C. 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:

Property, plant and equipment	December 31,2022 December 31,2021 $ 21,412,542 $ 18,095,013

B. Outstanding letters of credit

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

Outstanding letters of credit	December 31,2022 December 31,2021 $ 349,512 $ 59,655

C. 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 prepaid based on agreed payment terms. As of December 31, 2022, the remaining amount the Group hasn't paid was RMB 1.1 billion. SDP Global (China) Co., LTD. committed to supply certain products in specified quantities each year from January 1, 2022 to December 31, 2033 to the Company and its subsidiary, Foshan Innolux Optoelectronics Ltd. The abovementioned prepayments to suppliers of the Company are shown

~50~

as ‘prepayments’ and ‘other non-current assets’ based on liquidity amounting to $0 and $2,033,258, respectively, as of December 31, 2022 and $434,150 and $1,736,600, respectively, as of December 31, 2021.

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), other receivables (including related parties) and partial other assets-others (including current and non-current portion)) and financial liability (financial liabilities at fair value through profit or loss, accounts payable (including related parties), other payables, lease liability, 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 Note 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.
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

~51~

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 $408,148 and $433,798 for the years ended December 31, 2022 and 2021, 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:

Financial assets Monetaryitems USD RMB HKD JPY EUR Non-monetary items USD JPY RMB Financial liabilities Monetaryitems USD JPY EUR	December 31,2022	December 31,2022	Book Value (NTD) $ 80,690,525 2,518,635 211,602 198,293 127,870 $ 88,618,956 2,081,954 1,115,338 $ 36,880,499 5,902,579 149,072	December 31,2021	December 31,2021
	Foreign Currency Amount (In Thousands) $ 2,627,500 571,119 53,706 862,142 3,908 $ 2,885,671 9,051,976 252,911 $ 1,200,928 25,663,387 4,556	Exchange Rate (Note) 30.71 4.41 3.94 0.23 32.72 30.71 0.23 4.41 30.71 0.23 32.72		Foreign Currency Amount (In Thousands) $ 3,317,956 613,815 65,269 8,354,507 3,107 $ 3,102,225 8,192,139 289,659 $ 1,623,051 35,304,252 1,918	Exchange Rate (Note) Book Value (NTD) 27.68 $ 91,841,022 4.34 2,663,957 3.55 231,705 0.24 2,005,082 31.32 97,311 27.68 $ 85,869,588 0.24 1,966,113 4.34 1,257,120 27.68 $ 44,926,052 0.24 8,473,020 31.32 60,072

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

iv. Total exchange gain (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, 2022 and 2021 amounted to $5,741,912 and $(42,190), 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

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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, 2022 and 2021 would have increased/decreased by $402,364 and $3,239,387, respectively; other comprehensive gains and losses would have increased/decreased by $420,195 and $941,251, 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, 2022 and 2021, 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, 2022 and 2021 would have decreased/increased by $89,000 and $110,875, 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, 2022 and 2021, 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 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

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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 uses the forecastability to adjust 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:

Movements in relation to the Company applying the simplified allowance for accounts receivable are as follows:	approach to provide loss
At December 31 (January 1) At January 1 Provision for impairment At December 31	2022
	Accounts receivable
	$ 262,564
	2021
	Accounts receivable
	$ 209,373 53,191
	$ 262,564

ix. The Company’s financial assets at amortized cost have low credit risk, and 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

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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 net-settled 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：

December 31,2022 Lease liability (Note) Long-term borrowings (including current portion) Other non-current liabilities December 31,2021 Lease liability (Note) Long-term borrowings (including current portion) Other non-current liabilities	Less than 1year $ 694,870 8,752,778 — Less than 1year $ 681,819 8,750,000 —	Between 1 and 3years $ 1,162,466 26,587,500 — Between 1 and 3years $ 1,306,820 35,056,944 —	Between 3 and 5years $ 1,022,382 259,722 6,169,376 Between 3 and 5years $ 1,020,866 543,056 5,799,604	Over 5years Total $ 1,947,699 $ 4,827,417 — 35,600,000 — 6,169,376 Over 5years Total $ 2,361,435 $ 5,370,940 — 44,350,000 — 5,799,604

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 Company 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 Company’s investment in listed stocks and beneficiary certificates is included in Level 1.

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

o their fair values.
Financial assets: Corporate bonds Financial assets: Corporate bonds		December	31,2022
	Book value		Fair value
		Level 1	Level 2 Level 3
	$ 6,073,581	$ — December	$ 5,943,761 $ — 31,2021
	Book value		Fair value
		Level 1	Level 2 Level 3
	$ 7,693,454	$ —	$ 7,830,698 $ —

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:

Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Forward foreign exchange contracts Foreign exchange swap contracts Financial assets at fair value through other comprehensive income Equity securities December 31,2022	$ 834,038 — — 2,100,977 $ 2,935,015 Level 1	$ — 342,475 43,028 — $ 385,503 Level 2	$ 1,177,783 $ 2,011,821 — 342,475 — 43,028 — 2,100,977 $ 1,177,783 $ 4,498,301 Level 3 Total

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Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward foreign exchange contracts Foreign exchange swap contracts December 31,2022 December 31,2021 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Forward foreign exchange contracts Foreign 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	$ — — $ — Level 1 Level 1 $ 968,335 — — 13,903,225 4,706,256 $ 19,577,816 $ —	$ 289,691 39,490 $ 329,181 Level 2 Level 2 $ — 54,965 130,283 — — $ 185,248 $ 198,896	$ — $ 289,691 — 39,490 $ — $ 329,181 Level 3 Total Level 3 Total $ 1,325,375 $ 2,293,710 — 54,965 — 130,283 — 13,903,225 — 4,706,256 $ 1,325,375 $ 21,088,439 $ — $ 198,896

(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

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

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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, 2022 and 2021, 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, 2022 and 2021:

31, 2022 and 2021:
Financial assets at fair value through profit or loss / Financial assets at fair value through other comprehensive income At January 1 Gains and losses recognized in profit or loss Gains and losses recognized in other comprehensive income Transfers to Level 1 Proceeds from capital reduction At December 31 Financial liabilities at fair value through profit or loss At January 1 Gains and losses recognized in profit or loss Conversion during the year At December 31	2022 2021 Equitysecurities $ 1,325,375 $ 2,484,769 (147,592) (102,533) — 3,980,352 — (4,937,575) — (99,638) $ 1,177,783 $ 1,325,375 2021 Derivative instruments $ 3,208,560 2,146,546 (5,355,106) $ —
	$ 1,325,375 (147,592) — — —
	$ 1,177,783

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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:

Non-derivative equity instrument: Unlisted shares	Fair value at December 31,2022	Valuation technique	Significant unobservable input	Range (weighted average) Relationship of inputs to fair value
	$ 1,132,134 45,649	Market comparable companies Net asset value	Price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability Discount for lack of marketability	1.04~2.40 (1.19) The higher the multiple, the higher the fair value 30% (30%) The higher the discount for lack of marketability, the lower the fair value 27% (27%) The higher the discount for lack of marketability, the lower the fair value

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	Fair value at December 31, 2021	Valuation technique	Significant unobservable input	Range (weighted average) Relationship of inputs to fair value
Non-derivative equity instrument:
Unlisted shares	$ 40,093	Market comparable companies	Price to sales ratio multiple, price to book ratio multiple	1.39~2.73 (2.20) The higher the multiple, the higher the fair value
			Discount for lack of marketability	30% (30%) The higher the discount for lack of marketability, the lower the fair value
	1,257,556 27,726	Using the last transaction price in an inactive market Net asset value	Discount for lack of marketability Discount for lack of marketability	25% (25%) The higher the discount for lack of marketability, the lower the fair value 12% (12%) The higher the discount for lack of marketability, the lower the fair value

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 measurement. The following is the effect on 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, 2022

			December 31,2022	31,2022
Financial assets Equity instrument Financial assets Equity instrument	Input Liquidity discount Input Liquidity discount	Change ± 1% Change ± 1%	Recognized inprofit or loss Recognized in other comprehensive income Favourable change Unfavourable change Favourable change Unfavourable change $ 16,796 $ (16,796) $ — $ — December 31,2021	Recognized in other comprehensive income
			Favourable change $ 16,796
			Recognized inprofit or loss Favourable change Unfavourable change $ 17,609 $ (17,609)	Recognized in other comprehensive income
			Favourable change $ 17,609	Favourable change Unfavourable change $ — $ —

(4) Other matter

The Company implemented epidemic prevention measures in response to the Covid-19 outbreak and the government's epidemic prevention measures. The epidemic did not make a significant impact on the Company’s operations and business for the year ended December 31, 2022.

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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.

(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.

Innolux Corporation Loans to others For the year ended December 31, 2022

Table 1

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, 2022	Balance as at December 31, 2022	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Coll	ateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
1 1 1 1 1 1 2 3 4 5 6	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. Innocom Technology (Shenzhen) Co., Ltd. Innolux Japan Co., Ltd. Innolux Holding Limited Warriors Technology Investments Ltd Innolux Hong Kong Limited Innolux Hong Kong Holding Limited	Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Ningbo CarUX Technology Ltd. Innolux Corporation Innolux Corporation Innolux Corporation Innolux Hong Kong Holding Limited CARUX TECHNOLOGY PTE. LTD.	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	$ 6,614,934 2,204,978 3,086,969 1,322,987 3,086,969 2,469,575 2,311,550 234,046 3,623,780 1,701,334 1,698,263	$ 6,614,934 2,204,978 3,086,969 1,322,987 3,086,969 2,469,575 2,311,550 234,046 3,623,780 1,701,334 1,698,263	$ 6,614,934 220,498 2,513,675 1,146,588 793,792 749,692 2,311,550 234,046 3,623,780 1,701,334 1,698,263	2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 1.00% 0.00% 0.00% 0.00% 3.82%	Short-term financing 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 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 Operating support Operating support Operating support	$ — — — — — — — — — — —	— — — — — — — — — — —	$ — — — — — — — — — — —	24,417,738 24,417,738 24,417,738 24,417,738 24,417,738 24,417,738 7,728,432 37,139,690 12,205,078 3,424,240 10,166,738	24,417,738 A 24,417,738 A 24,417,738 A 24,417,738 A 24,417,738 A 24,417,738 A 7,728,432 A 37,139,690 A 12,205,078 A 3,424,240 A 10,166,738 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 or reviewed 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, based on the most recent audited or reviewed financial statements of the creditor.

3.The policy for loans granted to direct or indirect wholly-owned ultimate parent company or overseas subsidiaries is as follows: for short-term capital needs, financial limit is not restricted to the abovementioned two rules, however, financial limit on total loans granted and limit on loans granted to a single party for the overseas subsidiaries should not exceed 200% of the creditor’s net equity.

Table 1, Page 1

Table 2

Innolux Corporation

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

		Relationship with the securities issuer			As of December 31, 2022	As of December 31, 2022
Securities held by	Marketable securities		General ledger account	Shares/Units	Book value	Ownership (%)	Fair value Footnote
	Common stock
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. Yuan Chi Investment Co., Ltd.	AvanStrate Inc. TPV Technology Limited Chi Lin Optoelectronics Co., Ltd. Cheng Mei Materials Technology Corporation General Interface Solution (GIS) Holding Limited 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 ENNOSTAR Inc. Trillion Science, Inc. Cheng Mei Materials Technology Corporation WPG Holdings Limited Preferred Share A WT MICROELECTRONICS CO., LTD. Preferred Shares A VISIONATICS INC.	None None Other related party None None None None None None None None None None None None None Other related party	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 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	900,000 60,200,000 4,270,212 57,211,305 1,669,000 477,142 8,347,068 1,027,000 263,000 674,000 1,110,000 2,750,000 1,439,180 315,000 1,520,000 176,000 300,000	$ 10,789 1,115,187 45,649 564,103 146,872 6,158 1,899,468 58,128 13,571 65,985 63,825 123,063 — 3,106 74,480 8,404 1,673	1 3 19 8 — 12 4 — — — — — 3 — 1 — 10	$ 10,789 1,115,187 45,649 564,103 146,872 6,158 1,899,468 58,128 13,571 65,985 63,825 123,063 — 3,106 74,480 8,404 1,673

Table 2, Page 1

		Relationship with the securities issuer			As of December 31, 2022	As of December 31, 2022
Securities held by	Marketable securities		General ledger account	Shares/Units	Book value	Ownership (%)	Fair value Footnote
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. Warriors Technology Investments Ltd Warriors Technology Investments Ltd Innolux Corporation Innolux Corporation Ningbo Innolux Display Ltd.	Common stock Clarix Imaging Corporation Advanced Optoelectronic Technology, Inc. ENNOSTAR Inc. EPILEDS Co., Ltd. Fitipower Integrated Technology Inc. 上海⾠岱投資中⼼(有限合夥) 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 Convertible bonds KA Imaging Inc. Obsidian Sensors, Inc. Financialproducts Fixed Income RMB-Structured Deposits Fixed Income Structured Linked Deposit Chang Jiang Sheng Shih Ru Yi Serials A congregate group pension plan	None None None Other related party None None None None None None None None None Other related party Other related party None Other related party 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 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 amortized cost Financial assets at amortized cost Financial assets at fair value through profit or loss	113,033 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 — — — — —	$ 2,105 118,740 42,692 104,329 1,039,500 — 2,263,005 40,042 5,345 23,805 15,407 1,982,200 693 — 3,343 21,997 98,808 95,180 485,038 1,535,500 8,455	1 5 — 7 5 — 8 6 11 3 — 7 14 19 12 — Not applicable Not applicable Not applicable Not applicable Not applicable	$ 2,105 118,740 42,692 104,329 1,039,500 — 2,263,005 40,042 5,345 23,805 15,407 1,982,200 693 — 3,343 21,997 98,808 95,180 485,038 1,535,500 8,455

Table 2, Page 2

		Relationship with the securities issuer			As of December 31, 2022	As of December 31, 2022
Securities held by	Marketable securities		General ledger account	Shares/Units	Book value	Ownership (%)	Fair value Footnote
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. 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	Financialproducts 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 Bonds Taiwan Mobile Co., Ltd. Nan Ya Plastics Corporation Highwealth Construction corp. 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. ADCB Finance Cayman LTD. Agricultural Bank of China (New York Branch) Arab Petroleum Investments Corporation Bank of Communications (Hong Kong Branch) Daimler Finance North America LLC Doosan Infracore Co., Ltd. Emirates NBD Bank PJSC FAB Sukuk Co. Ltd. GS Caltex Corporation Hyundai Capital America Industrial and Commercial Bank of China Limited (Hong Kong Branch) KIA Corporation	None None None None None 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 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 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	— — — — — — — — — — — — — — — — — — — — — — — — — — —	$ 31,813 272 41,300 1,327 17,913 7,917 5,785 200,329 125,442 250,586 125,339 100,285 100,177 200,029 100,013 154,912 292,361 168,609 184,774 155,276 246,308 307,100 247,081 156,016 37,365 276,960 299,324	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 Not applicable Not applicable Not applicable Not applicable Not applicable	$ 31,813 272 41,300 1,327 17,913 7,917 5,785 199,960 124,887 249,975 124,875 99,970 99,980 199,980 99,990 153,191 279,977 162,794 184,561 152,804 240,346 300,348 245,046 152,575 36,572 270,712 295,106

Table 2, Page 3

		Relationship with the securities issuer			As of December 31, 2022	As of December 31, 2022
Securities held by	Marketable securities		General ledger account	Shares/Units	Book value	Ownership (%)	Fair value Footnote
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Bonds 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 Mitsui Trust Bank	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	— — — — — — — — — —	$ 310,206 186,388 281,750 286,768 284,358 212,201 35,289 156,751 283,620 307,964	Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable	$ 306,131 181,387 274,157 273,937 273,715 208,592 34,808 152,378 274,122 290,885

Table 2, Page 4

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 For the year ended December 31, 2022

Table 3

==> picture [235 x 41] intentionally omitted <==

Expressed in thousands of NTD (Except as otherwise indicated)

	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2022	Balance as at January1,2022	Addition(Note 3)	Addition(Note 3)		Disposal(Note 3)	Disposal(Note 3)		Balance as at December 31,2022(Note 6)	Balance as at December 31,2022(Note 6)
Investor					Shares/Units	Amount	Shares/Units	Amount	Shares/ Units	Selling price	Book value	Gain (loss) on disposal	Shares/Units Amount
Innolux Corporation	Taishin Ta- Chong Money Market Fund	Note 4	— —	— —	69,820,457 150,267,533	$ 1,001,951	— —	$ —	69,820,457 150,267,533	$ 1,004,968	$ 1,004,968	$ —	— —	$ —
Innolux Corporation	Jih Sun Money Market Fund	Note 4				2,252,075		—		2,259,483	2,259,483	—		—
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Capital 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 Fixed Income Structured Linked Deposit Fixed Income Structured Linked Deposit	Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 5 Note 5	— — — — — — — — — —	— — — — — — — — — —	92,184,251 66,065,266 180,718,346 5,164,587 181,530,803 90,561,003 18,225,781 46,301,937 — —	1,502,336 881,066 2,471,974 930,746 2,301,375 1,401,096 300,186 760,259 4,705,600 —	— — — — — — — — — —	— — — — — — — — — 1,490,250	92,184,251 66,065,266 180,718,346 5,164,587 181,530,803 90,561,003 18,225,781 46,301,937 — —	1,507,056 884,178 2,480,938 933,318 2,308,636 1,405,525 301,214 762,982 4,792,941 1,508,402	1,507,056 884,178 2,480,938 933,318 2,308,636 1,405,525 301,214 762,982 4,699,650 1,490,250	— — — — — — — — 93,291 18,152	— — — — — — — — — —	— — — — — — — — — —

Table 3, Page 1

	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2022	Balance as at January1,2022	Addition(Note 3)	Addition(Note 3)		Disposal(Note 3)	Disposal(Note 3)		Balance as at December 31,2022(Note 6)	Balance as at December 31,2022(Note 6)
Investor					Shares/Units	Amount	Shares/Units	Amount	Shares/ Units	Selling price	Book value	Gain (loss) on disposal	Shares/Units Amount
Innolux Corporation Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd.	Fixed Income Structured Linked Deposit Floating Income RMB-Structured Deposits Floating Income RMB-Structured Deposits	Note 5 Note 4 Note 4	— — —	— — —	— — —	$ —	— — —	$ 1,594,750	— — —	$ —	$ —	$ —	— — —	$ 1,535,500
						1,315,317 1,954,213		— —		1,308,119 1,944,648	1,308,119 1,944,648	— —		— —

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, 2022 included gains or losses on valuation.

Table 3, Page 2

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Innolux Corporation

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

For the year ended December 31, 2022

				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)
Purchaser/seller	Counterparty	Relationship with the counterparty	Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable) Footnote
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	CARUX TECHNOLOGY PTE. LTD. Innolux USA Inc. Foshan Innolux Optoelectronics Ltd. Hon Hai Precision Industry Co., Ltd. HONGFUJIN PRECISION ELECTRONICS (YANTAI) CO., LTD. InnoCare Optoelectronics Corporation PanelSemi Corporation Honfujin Precision Electronics (Chongqing) Co., Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Japan Co., Ltd. Hon Hai Precision Industry Co., Ltd. FORTUNEBAY TECHNOLOGY PTE LTD. Foshan Innolux Optoelectronics Ltd.	An indirect wholly- owned subsidiary An indirect wholly- owned subsidiary An indirect wholly- owned subsidiary Same major stockholder An indirect wholly- owned subsidiary of Hon Hai Precision Industry Co., Ltd. A subsidiary of the Company Associates An indirect wholly- owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly- owned subsidiary A subsidiary of the Company Same major stockholder An indirect wholly- owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly- owned subsidiary	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Purchases Purchases Processing expense	$ 14,285,493 13,596,799 1,678,216 1,088,144 1,004,164 485,000 382,607 363,565 184,656 169,530 508,674 161,574 26,847,900	7 7 1 1 1 — — — — — — — 12	60 days 120 days 60-90 days 90 days 60 days 90 days 60 days 45 days 90 days 60 days 90 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 Single purchases target, no basis for comparison Single purchases target, no basis for comparison 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	$ 8,636,351 2,707,347 59,044 239,433 284,302 131,258 76,578 44,127 — 13,318 (351,866) (38,616) (3,036,042)	24 7 — 1 1 — — — — — 1 — 9

Table 4, Page 1

				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)
Purchaser/seller	Counterparty	Relationship with the counterparty	Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable) Footnote
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Shanghai Innolux Optoelectronics Ltd. CarUX Technology Inc. Innolux Japan Co., Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd.	Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Ningbo CarUX Technology Ltd. Innocom Technology (Shenzhen) Co., Ltd. CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Innolux Corporation Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd. InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. Ningbo Innolux Electronics Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. PanelSemi Corporation	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 An indirect wholly- owned subsidiary An indirect wholly- owned subsidiary An indirect wholly- owned subsidiary An indirect wholly- owned subsidiary An indirect wholly- owned subsidiary Same major stockholder Same major stockholder Associates	Processing expense Processing expense Processing expense Processing expense Processing expense Processing revenue Processing revenue Service revenue Sales Sales Sales Sales Sales Purchases Purchases Purchases	$ 21,075,839 20,459,820 10,780,704 1,046,685 363,236 9,915,759 8,202,602 290,198 6,824,316 1,370,786 676,264 394,403 227,435 1,732,954 1,566,932 211,771	10 9 5 — — 79 100 59 17 4 41 24 14 5 4 1	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 90 days 90 days 60 days	Cost plus Cost plus Cost plus Cost plus Cost plus Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions 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 No material difference No material difference	$ (2,614,755) (6,315,270) (2,582,151) (116,848) (438,899) 1,266,921 2,142,022 47,846 557,713 87,780 240,817 67,105 43,082 (260,648) (263,603) (45,239)	8 19 8 — 2 63 98 82 8 2 56 15 10 5 6 1

Table 4, Page 2

				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)
Purchaser/seller	Counterparty	Relationship with the counterparty	Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable) Footnote
Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Innolux Europe B.V.	FORTUNEBAY TECHNOLOGY PTE LTD. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. CARUX TECHNOLOGY PTE. LTD.	An indirect wholly- owned subsidiary of Hon Hai Precision Industry Co., Ltd. Same major stockholder Same major stockholder An indirect wholly- owned subsidiary	Purchases Purchases Purchases Service revenue	$ 112,271 110,996 107,328 841,485	— 1 — 99	60 days 90 days 90 days 60 days	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	$ (62,340) (35,938) (22,934) 140,133	2 3 — 99

Table 4, Page 3

Innolux Corporation

Receivables from related parties reaching $100 million or 20% of paid-in capital or more December 31, 2022

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Optoelectronics Ltd. Creditor	CARUX TECHNOLOGY PTE. LTD. Innolux USA Inc. CARUX TECHNOLOGY PTE. LTD. HONGFUJIN PRECISION ELECTRONICS (YANTAI) CO., LTD. Hon Hai Precision Industry Co., Ltd. CarUX Technology Inc. InnoCare Optoelectronics Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Counterparty	Relationship with the counterparty	$ 8,636,351 2,707,347 359,471 (Shown as other receivables) 284,302 239,433 214,551 (Shown as other receivables) 131,258 6,315,270 3,036,042 2,614,755 2,582,151 Balance as at December 31, 2022 (Note A)	Turnover rate	Overdue receivables Amount Action taken	Overdue receivables Amount Action taken	$ 1,198,355 $ — 1,063,951 — 1,692 — 182,908 — 49,248 — — — 56,054 — 430,727 — 2,057,586 — 1,996,453 — 441,515 — Amount collected subsequent to the balance sheet date Allowance for doubtful accounts
					Amount
		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 A subsidiary of the Company Ultimate parent company Ultimate parent company Ultimate parent company Ultimate parent company		2.25 4.35 — 5.07 1.92 — 1.58 3.19 7.16 4.71 8.35	$ 3,604,698 707,536 103,728 — 3,673 178,436 — 2,397,662 — — 463,939	Subsequent collection Subsequent collection Subsequent collection — Subsequent collection Subsequent collection — Subsequent collection — — Subsequent collection

Table 5, Page 1

CarUX Technology Inc. Shanghai Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Innocom Technology (Shenzhen) Co., Ltd. InnoCare Optoelectronics Corporation Innolux Europe B.V. Ningbo CarUX Technology Ltd. Creditor	CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Ningbo Innolux Display Ltd. Innolux Corporation InnoCare Optoelectronics Japan Co., Ltd. CARUX TECHNOLOGY PTE. LTD. Innolux Corporation Counterparty	Relationship with the counterparty	$ 2,142,022 1,266,921 557,713 438,899 240,817 140,133 116,848 Balance as at December 31, 2022 (Note A)	Turnover rate	Overdue receivables Amount Action taken	Overdue receivables Amount Action taken	$ 1,228,421 $ — 1,266,921 — 270,703 — — — 123,037 — — — 116,848 — Amount collected subsequent to the balance sheet date Allowance for doubtful accounts
					Amount
		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 Ultimate parent company		4.12 7.64 6.76 0.96 5.99 5.93 10.90	$ — — — 390,503 5,461 74,674 —	— — — Subsequent collection Subsequent collection Subsequent collection —

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

Table 5, Page 2

Table 6

Innolux Corporation

Significant inter-company transactions during the reporting period

For the year ended December 31, 2022

Expressed in thousands of NTD

(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	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. Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Innolux Japan Co., Ltd. Innolux USA Inc. Innolux USA Inc. CarUX Technology Inc. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation 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	Processing expense Accrued expenses Processing expense Accrued expenses Sales Processing expense Accrued expenses Sales Processing expense Accrued expenses Processing expense Accrued expenses Sales Sales Accounts receivable Other receivables Sales Accounts receivable Sales Service revenue	$ 363,236 (438,899) 10,780,704 (2,582,151) 184,656 20,459,820 (6,315,270) 1,678,216 26,847,900 (3,036,042) 21,075,839 (2,614,755) 169,530 13,596,799 2,707,347 214,551 485,000 131,258 14,285,493 322,919	— — — — — 5 — 1 — — — 9 — 2 — 1 — 12 — 1 — 9 — 1 — — — 6 — 1 — — — — — — — 6 — —

Table 6, Page 1

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 1 1 2 2 3 3 4 5 6 6 7 7 7 7	Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Innolux Europe B.V. Innolux Europe B.V. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Innolux Japan Co., Ltd. CarUX Technology Inc. CarUX Technology Inc. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation	CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Ningbo CarUX Technology Ltd. Ningbo CarUX Technology Ltd. CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. CARUX TECHNOLOGY PTE. LTD. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd. 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.	1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Accounts receivable Other receivables Processing expense Accrued expenses Processing revenue Accounts receivable Service revenue Accounts receivable Sales Accounts receivable Sales Service revenue Processing revenue Accounts receivable Sales Sales Accounts receivable Sales	$ 8,636,351 359,471 1,046,685 (116,848) 9,915,759 1,266,921 841,485 140,133 6,824,316 557,713 1,370,786 290,198 8,202,602 2,142,022 227,435 676,264 240,817 394,403	— 2 — — — — — — — 4 — — — — — — — 3 — — — 1 — — — 4 — 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.

Table 6, Page 2

Innolux Corporation Information on investees

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

For the year ended December 31, 2022

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2022	as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognized by the Company for the year ended December 31,2022 Footnote
				Balance as at December 31, 2022	Balance as at December 31, 2021	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 Corporation Innolux Corporation Innolux Holding Limited	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. eLux Inc. PanelSemi Corporation Rockets Holding Limited	Samoa Samoa Samoa BVI Hong Kong Singapore Taiwan Taiwan Taiwan Japan USA Taiwan Taiwan Cayman Taiwan USA Taiwan Samoa	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 R&D of MicroLED technology Manufacturing of electronic parts Investment holdings	$ 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 — 451,168 35,300 1,717,714 73,500 91,155 250,000 5,222,180	$ 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 — 451,168 35,300 1,717,714 73,500 91,155 250,000 5,222,180	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 7,350,000 300,000 25,000,000 160,504,550	100 100 100 100 100 100 100 100 57 54 35 76 40 50 49 28 45 100	$ 18,569,845 108,042 55,243,844 6,631,666 4,984,990 156,225 849,226 2,309,803 468,187 2,103,679 — 409,914 27,611 904,206 304,356 20,362 162,329 12,233,230	$ 262,774 7,553 4,640,996 347,997 (1,158,721) (83,839) (23,718) 62,083 198,717 232,217 — (20,019) (5,095) 4,232 121,372 73,791 (178,930) 199,679	$ 262,774 7,553 4,640,996 347,997 (1,157,113) (83,839) (23,718) 62,083 115,656 126,419 — (15,299) (2,038) 2,116 59,472 13,023 (81,332) 199,679

Table 7, Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2022	as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognized by the Company for the year ended December 31,2022 Footnote
				Balance as at December 31, 2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value
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. Innolux Singapore Holding Pte. Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd.	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 INNOLUX OPTOELECTRONICS PHILIPPINES CORP. INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED GIO Optoelectronics Corp.	Samoa Cayman Hong Kong Japan Cayman Singapore Hong Kong Netherlands Taiwan USA Samoa Samoa Samoa Germany India Philippines India Taiwan	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 Manufacturer and distribution company Distribution company Holdings, R&D, manufacturing and distribution company	$ 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 — — 858	$ 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 28,733 — 858	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 — 1 77,235	100 100 100 46 100 100 100 100 100 100 100 100 100 100 100 — — —	$ 6,102,541 6,631,307 1,712,120 1,760,537 1,609,488 1,608,067 2,255,634 495,090 1,913,980 1,131,446 12,208,921 24,172 6,102,539 25,290 6,663 — — 779	$ 63,095 347,997 (1,866) 232,217 (1,263,066) (1,261,879) 113,615 41,111 326,404 130,450 200,676 (997) 63,095 4,225 (79,905) (3) (79,905) (20,019)	$ 63,095 347,997 (1,866) 105,798 (1,263,066) (1,261,879) 216,472 41,111 493,270 130,450 200,676 (997) 63,095 4,225 (79,905) (3) — (29)

Table 7, Page 2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2022	as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognized by the Company for the year ended December 31,2022 Footnote
				Balance as at December 31, 2022	Balance as at December 31, 2021	Number of shares	Ownership (%)	Book value
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.	InnVasLinx Inc. 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.	Taiwan Taiwan Taiwan Taiwan Japan USA Netherlands Mauritius	E-Paper Module/Assembly Investment company Investment company Investment company Distribution company Distribution company After-sales service company Investment holdings	$ 6,829 15,000 122,561 7,439 87,149 27,963 1,661 298,113	$ — 15,000 47,139 2,861 87,149 27,963 1,661 298,113	599,799 1,500,000 — — 30,010 900,000 500 10,000,000	45 100 16 1 100 100 100 100	$ 6,492 16,635 131,114 7,958 99,823 33,491 2,718 103,289	$ 602 448 (16,525) (16,525) 25,604 3,783 640 3,840	$ (338) 448 (2,723) (165) 25,604 3,783 640 3,840

Table 7, Page 3

Table 8

Innolux Corporation

Information on investments in Mainland China

For the year ended December 31, 2022

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, 2022	Amount rem Taiwan to Mai Amount remi Taiwan for th December	itted from nland China/ tted back to e year ended 31, 2022	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2022	Net income of investee for the year ended December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the year ended December 31, 2022(Note B)	Book value of investments in Mainland China as of December 31, 2022	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Innocom Technology (Shenzhen) 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.	Manufacturing and selling of LCD backend module and related components	$ 5,036,440	2 2 2 2 2 2 2 2 2	$ 3,897,459	$ —	$ —	$ 3,897,459	$ 200,676	100	$ 200,676	$ 12,208,869	$ 1,138,981	2.1 2.2 2.2 2.2 2.3 2.3 2.4 2.5 2.6
	Manufacturing and selling of LCD backend module and related components	9,520,100 11,761,930 4,913,600 64,491 4,790,760 644,910 46,065 307,100 1,234,632 67,772		226,181 11,761,930 4,913,600 64,491 4,423,333 — 46,065 307,100 — 97,412	— — — — — — — —	— — — — — — — —	226,181 11,761,930 4,913,600 64,491 4,423,333 — 46,065 307,100	3,088,258 828,043 722,365 6,570 341,427 113,615 7,486 3,852	100 100 100 100 100 100 100 77	3,088,258	25,619,829 23,131,916 6,490,934 646,798 5,984,488 2,247,340 102,961 79,104	5,301,619 — — — — — — —
	Manufacturing and selling of LCD backend module and related components									830,370 722,365 6,570 341,427 113,615 7,486 2,949 5,518 2,529
	Manufacturing and selling of LCD backend module and related components Purchases and sales of monitor-related components company Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Warehousing services Manufacturing
Ningbo CarUX Technology Ltd.	Manufacturing and selling of LCD backend module and related components		3		—	—	—	4,767	100		1,043,757	—
Ningbo Innolux Electronics Ltd.	Manufacturing and selling of medical equipment		1		—	—	97,412	4,415	57		62,999	—

Table 8, Page 1

Ceiling on investments in Mainland China:

Companyname Innolux Corporation	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022 $ 22,492,357	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA) Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA $ 30,620,133 (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, 2022 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 Landmark International Ltd. in the third area, which then invested in the investee in Mainland China.
2.3. Through investing in Toppoly Optoelectronics (Cayman) Ltd. in the third area, which then invested in the investee in Mainland China.
2.4. Through investing in Innolux Optoelectronics Hong Kong Holding Limited in the third area, which then invested in the investee in Mainland China.
2.5. Through investing in Keyway Investment Management Limited in the third area, which then invested in the investee in Mainland China.
2.6. Through investing in Double Star Inc. in the third area, which then invested in the investee in Mainland China.

3. 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.

Table 8, Page 2

INNOLUX CORPORATION SUMMARY OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 1

Item	Abstract	Amount
Petty cash Cash in banks Demand deposits Foreign deposits	USD 697,545 In thousands Exchange rate 30.71 JPY 74,713 In thousands Exchange rate 0.232 EUR 256 In thousands Exchange rate 32.72 KRW 123,689 In thousands Exchange rate 0.024 HKD 133 In thousands Exchange rate 3.938 TWD 11,000,000 In thousands Exchange rate 1 USD 230,000 In thousands Exchange rate 30.71	$ 465 3,227,696 21,421,620 17,363 8,370 3,006 525 11,000,000 7,063,300

Time deposits

		$ 42,742,345

Summary 1, Page 1

INNOLUX CORPORATION SUMMARY OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 2
Items	Abstract	Amount	Remark
Third parties
Company A		$ 3,994,037
Company B		3,264,959
Company C		3,093,846
Company D		2,503,048
Company E		1,493,498
Others		10,381,772	Balance of individual
			customers is under 5% of
			this account's balance.
		24,731,160
Less: Allowance loss		(262,564)
		$ 24,468,596
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Summary 1, Page 2

INNOLUX CORPORATION SUMMARY OF INVENTORY

DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 3

Item Raw materials Work in process Finished goods	Abstract	Cost $ 2,921,419 10,024,876 9,481,061 $ 22,427,356	Marketprice Remark $ 2,996,805 Use net realizable value as market price 18,134,319 Use net realizable value as market price 12,190,135 Use net realizable value as market price $ 33,321,259

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Summary 3, Page 1

INNOLUX CORPORATION

MOVEMENT SUMMARY OF INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 4

BeginningBalance In Thousand Shares Amount 709,450 $ 49,835,425 180,568 18,012,846 146,847 6,186,203 1,158,844 6,355,418 — 1,970,209 167,405 3,844,694 — 877,887 20,500 365,463 25,400 223,127 41,289 424,120 14,063 801,157 7,350 318,640 25,000 243,661 — 135,124 $ 89,593,974	Addition In Thousand Shares Amount — $ 5,408,419 — 917,578 — 445,463 — 38,622 — 133,470 — 62,083 — 2 — 127,709 — 16,936 — 1,094 — 103,049 — 59,472 — — — 22,929 $ 7,336,826	Deductions In Thousand Shares Amount — $ — — (360,579) — — — (1,409,050) — — — (1,596,974) — (28,663) — (24,985) — (83,838) — (15,300) — — — (73,756) — (81,332) — (2,038) $ (3,676,515)		EndingBalance	Market value or net equityvalue Unit Price Total Amount $ — $ 55,243,844 — 18,569,845 — 6,631,666 — 5,083,369 — 2,103,679 — 2,309,803 — 849,226 84 1,722,000 — 156,225 — 396,860 — 904,206 — 304,356 — 162,329 — 151,774 $ 94,589,182	Valuation Basis Pledged as Collateral Equity method None " " " " " " " " " " " " " " " " " " " " " "
In Thousand Shares 709,450 180,568 146,847 1,158,844 — 167,405 — 20,500 25,400 41,289 14,063 7,350 25,000 —	In Thousand Shares — — — — — — — — — — — — — —	In Thousand Shares — — — — — — — — — — — — — —	In Thousand Shares 709,450 180,568 146,847 1,158,844 — 167,405 — 20,500 25,400 41,289 14,063 7,350 25,000 —	Percentage of Ownership 100% 100% 100% 100% 54% 100% 100% 57% 100% 76% 50% 49% 45%	Unit Price $ — — — — — — — 84 — — — — — —
						" "
						" "

Note 1：Additions include gains on investment accounted for using equity method, change in investee's net equity value, cumulative translation adjustment and recognition of unrealized gain on investees' financial instruments. Note 2：Deductions include losses on investment accounted for using equity method, change in investee's net equity value, cumulative translation adjustment,cash dividend received and recognition of unrealized loss on investees' financial instruments.

Summary 4, Page 1

INNOLUX CORPORATION SUMMARY OF ACCOUNTS PAYABLE

DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 5 Items Third parties Company A Company B Company C Others	Abstract	Amount Remark $ 1,978,675 1,495,155 938,971 13,727,041 Balance of individual suppliers is under 5% of this account's balance. $ 18,139,842

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Summary 5, Page 1

INNOLUX CORPORATION SUMMARY OF OPERATING REVENUE

YEAR ENDED DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary	6
	Item	Quantity (in thousands)		Amount
TFT-LCD	products	443,958	$	199,721,875
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Summary 6, Page 1

INNOLUX CORPORATION SUMMARY OF OPERATING COSTS YEAR ENDED DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 7 Item	Amount
Beginning raw materials Incoming inventory Less: Ending raw materials Scrapping materials Sale of materials Material consumption Direct labor Manufacturing expenses Manufacturing costs Add: Beginning work in process Incoming inventory Less: Ending work in process Scrapping work in process Cost of finished goods Add: Beginning finished goods Acquisition of finished goods Less: Ending finished goods Cost of goods manufactured Add: Cost of sales of materials Loss on scrapping inventory Loss on decline in inventory valuation Operating cost	$ 4,129,041 54,494,199 (3,183,428) (59,939) (487,502)
	54,892,371 10,787,722 141,032,932
	206,713,025 13,139,429 4,110,123 (10,923,963) (193,564)
	212,845,050 11,645,264 1,662,109 (10,331,375)
	215,821,048 487,502 253,503 169,825
	$ 216,731,878

Summary 7, Page 1

INNOLUX CORPORATION SUMMARY OF MANUFACTURING EXPENSES

YEAR ENDED DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(EXPRESSED IN	THOUSANDS OF NEW TAIWAN DOLLARS)
Summary 8 Items	Amount Remark $ 81,714,777 24,253,666 11,699,467 9,169,749 8,127,932 6,067,341 Balance of individual accounts is under 5% of this account's balance. $ 141,032,932
Processing fee Depreciation and amortization Utilities expense Repairs and maintenance expense Indirect labor Others

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Summary 8, Page 1

INNOLUX CORPORATION SUMMARY OF OPERATING EXPENSES YEAR ENDED DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 9

Summary 9
Items	Sellingexpenses $ 308,639 799 289 — 697,842 $ 1,007,569	General and administrative expenses	Research and development expenses	Total Remark
Wages and salaries Depreciation expenses Indirect materials Royalty expenses Others		$ 1,440,030 473,015 5,723 — 2,031,049	$ 4,487,808 2,030,528 1,278,257 1,187,592 1,775,774	$ 6,236,477 2,504,342 1,284,269 1,187,592 4,504,665 Balance of individual accounts is under 5% of this account’s balance. $ 15,717,345
		$ 3,949,817	$ 10,759,959

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Summary 9, Page 1

INNOLUX CORPORATION

SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION

YEAR ENDED DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 10

	Year ended December 31,2022	Year ended December 31,2022			Year ended December 31,2021	Year ended December 31,2021
Classified as OperatingCosts	Classified as OperatingExpenses	Classified as Non- operatingExpenses	Total	Classified as OperatingCosts	Classified as OperatingExpenses	Classified as Non- operatingExpenses Total
$ 16,796,318 1,597,434 601,310 — 727 879,511	$ 6,236,477 532,102 233,482 17,290 1,708 295,925	$ — — — — — —	$ 23,032,795 2,129,536 834,792 17,290 2,435 1,175,436	$ 22,468,615 1,487,991 658,565 — 2,726 928,562	$ 8,810,077 498,626 279,508 83,708 5,980 284,211	$ — $ 31,278,692 — 1,986,617 — 938,073 — 83,708 — 8,706 — 1,212,773
$ 19,875,300	$ 7,316,984	$ —	27,192,284	$ 25,546,459	$ 9,962,110	$ — $ 35,508,569
$ 24,224,946	$ 2,504,342	$ 28,993	26,758,281	$ 28,226,138	$ 2,825,535	$ 28,993 $ 31,080,666
$ 28,720	$ 77,121	$ —	105,841	$ 48,629	$ 109,357	$ — $ 157,986

Note:

As at December 31, 2022 and 2021, the average number of employees was 25,795 and 27,009, respectively. Among them, the average number of non-employee directors was 4 and 3, respectively.
Average employee benefit expense in current year was $1,054, average employee benefit expense in previous year was $1,312.
Average employees salaries in current year was $893, average employees salaries in previous year was $1,158.
Adjustments of average employees salaries was -22.88%.
The Company has set up an audit committee so there is no supervisor’s remuneration.

Summary 10, Page 1

INNOLUX CORPORATION

SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION

YEAR ENDED DECEMBER 31, 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Summary 10

The Company puts emphasis on employee compensation and benefits, and sets up a reward policy that is reasonable internally and competitive externally.
(1) Directors and managers: The remuneration committee is responsible for setting up the remuneration for directors and managers. After taking into comprehensive consideration the Company’s operational performance (including financial and non-financial points of view), personal performance and responsibilities the correlation and rationality between the development trend of the industry and the future operational risks, as well as referring to the external market levels, the remuneration committee reviews the individual salary and remuneration for directors and managers and proposes it to the Board of Directors for approval.
(2) Employees: The Company conducts periodical market surveys and reviews to provide a salary level that surpasses the laws and regulations and is externally competitive. Each of employees' salaries are determined by their positions, education and work experience, length of professional service and work performance. The Company also considers and compares with the external market salary surveys to plan a more competitive salary and compensation scheme for employees, which will not be different because of the factors such as gender, age, marriage, race, nationality, religion and political views. The Company strives to build a high-quality work environment with well-established benefits.

Summary 10, Page 2

AI assistant

INX — Audit Report / Information 2022

52330_rns_2022-12-30_cb0913c1-a3c7-4e85-a6fa-4e88a135540b.pdf

INNOLUX CORPORATION

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for opinion

Key audit matters

Inventory valuation

Description

How our audit addressed the matter

Valuation and impairment of goodwill and property, plant and equipment

Description

How our audit addressed the matter

Other matter – Reference to the audits of other auditors

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

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

INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2022 AND 2021

INNOLUX CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2022 AND 2021

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2022 AND 2021

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2022AND 2021

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021

INNOLUX CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021

INNOLUX CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022 AND 2021

1. HISTORY AND ORGANIZATION

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(5) Cash equivalents

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

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

(8) Financial assets at amortized cost

(9) Accounts receivable

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

(17) Investment property

(18) Intangible assets

(19) Impairment of non-financial assets

(21) Notes and accounts payable

(22) Financial liabilities at fair value through profit or loss

(23) Derecognition of financial liabilities

(a) Defined contribution plans

(b) Defined benefit plans

(28) Share capital

(29) Dividends

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

Critical accounting estimates and assumptions

6. DETAILS OF SIGNIFICANT ACCOUNTS

(4) Financial assets at amortized cost

(5) Accounts receivable

(6) Inventories

(7) Investments accounted for under the equity method

A. The Company’s subsidiaries

B. The Company’s associates

(8) Property, plant and equipment

(10) Investment property

(11) Intangible assets

(12) Other payables

- (13) Long term borrowings

(14) Pensions

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

(15) Provisions-current

(16) Share capital

(18) Retained earnings

(19) Other equity items

(22) Other income

(23) Other gains and losses

(24) Finance costs

B. Reconciliation between income tax expense and accounting profit:

INX Audit Report / Information 2022