INX — Interim / Quarterly Report 2016

Dec 16, 2016

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS MARCH 31, 2016 AND 2015

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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.

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Innolux Corporation:

We have reviewed the accompanying consolidated balance sheets of Innolux Corporation and subsidiaries as of March 31, 2016 and 2015, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three-month periods then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express a conclusion on these financial statements based on our reviews.

We conducted our reviews in accordance with the Statement on Auditing Standards No. 36, “Review of Financial Statements” in the Republic of China. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications or adjustments that should be made to the consolidated financial statements referred to above for them to be in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and IAS 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

PricewaterhouseCoopers, Taiwan

May 12, 2016

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

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INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2016, DECEMBER 31, 2015 AND MARCH 31, 2015

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of March 31, 2016 and 2015 are reviewed, not audited)

Assets	Notes	March 31, 2016 $ 38,254,605 391,992 - 33,773,666 2,141,351 3,248,647 29,165,795 1,166,068 570,446 99,815 108,812,385 300,345 6,782,270 1,681,029 193,473,161 581,468 19,090,785 16,052,166 8,252 4,476,500 242,445,976 $ 351,258,361 (Continued)	December 31, 2015 $ 52,522,790 120,036 - 48,189,791 2,632,853 2,024,204 30,198,432 1,107,869 1,979,467 91,545 138,866,987 281,922 7,123,034 1,610,586 199,482,740 680,503 19,342,856 15,888,467 119,703 4,045,538 248,575,349 $ 387,442,336	March 31, 2015
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1125 Available-for-sale financial assets - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 130X Inventory 1410 Prepayments 1476 Other financial assets - current 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1523 Available-for-sale financial assets - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1980 Other financial assets - non-current 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets	6(1) 6(2) 6(3) 6(5)(6) 7 6(6) and 7 6(7) 6(1) and 8 6(2) 6(3) 6(8) 6(9), 7 and 8 6(10) 6(11) 8 6(9)			$ 42,332,691 37,155 220,000 59,677,081 5,013,696 2,713,505 33,300,255 1,124,491 929,759 191,166
				145,539,799
				667,680 5,157,443 2,088,898 222,590,627 690,383 19,968,114 16,579,233 9,883,373 1,301,309
				278,927,060
				$ 424,466,859

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INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2016, DECEMBER 31, 2015 AND MARCH 31, 2015

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of March 31, 2016 and 2015 are reviewed, not audited)

Liabilities and Equity	Notes	March 31, 2016 $ 2,891,950 174,156 44,577,527 2,516,705 19,903,069 1,602,673 2,760,326 16,359,325 1,101,950 91,887,681 35,445,204 536,241 578,943 36,560,388 128,448,069 99,526,816 99,645,204 2,676,947 - 19,079,995 1,881,330 222,810,292 - 222,810,292 $ 351,258,361	December 31, 2015 $ - 265,525 57,069,951 3,359,933 24,912,360 1,819,368 5,551,759 16,361,238 1,131,329 110,471,463 43,629,968 514,094 562,088 44,706,150 155,177,613 99,532,372 99,643,564 2,676,947 - 27,661,503 2,750,337 232,264,723 - 232,264,723 $ 387,442,336	March 31, 2015
Current Liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2250 Provisions - current 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of the parent 3110 Share capital - common stock 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity interest 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments Significant disaster loss 3X2X Total liabilities and equity	6(12) 6(2) 7 7 and 9 6(16) and 9 6(13) 6(13) 9 6(17) 6(18) 6(19) 6(20) 9 10			$ 11,368,898 134,071 64,680,682 3,806,274 23,276,855 578,760 3,732,440 16,346,697 1,852,617
				125,777,294
				51,764,542 455,152 10,047,808
				62,267,502
				188,044,796
				99,542,240 99,602,249 509,272 1,144,229 33,629,780 542,124
				234,969,894
				1,452,169
				236,422,063
				$ 424,466,859

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

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Expressed in thousands of New Taiwan dollars, except for (loss) earnings per share amounts) (Reviewed, not audited)

Items

Notes 2016 2015 7 $ 56,417,120 $ 100,157,867 6(7)(24) and 7 ( 60,454,580) ( 82,413,810) ( 4,037,460) 17,744,057 6(24) ( 577,026) ( 808,245) ( 1,528,832) ( 1,748,759) ( 2,258,969) ( 3,970,262) ( 4,364,827) ( 6,527,266) ( 8,402,287) 11,216,791 6(21) 1,102,758 439,832 6(22) ( 1,013,662) ( 1,372,419) 6(23) ( 306,759) ( 313,935) 86,370 89,960 ( 131,293) ( 1,156,562) ( 8,533,580) 10,060,229 6(26) ( 47,928) ( 1,410,940) ($ 8,581,508) $ 8,649,289 ($ 832,733) ($ 1,329,542) ( 37,760) 164,946 6(4) - ( 297,675) ( 15,927) ( 25,815) 6(26) 3,426 42,842 ($ 882,994) ($ 1,445,244) ($ 9,464,502) $ 7,204,045 ($ 8,581,508) $ 8,650,607 - ( 1,318) ($ 8,581,508) $ 8,649,289 ($ 9,464,502) $ 7,233,249 - ( 29,204) ($ 9,464,502) $ 7,204,045 6(27) ($ 0.86) $ 0.87 ($ 0.86) $ 0.86

4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating (loss) profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit/(loss) of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 (Loss) profit before income tax 7950 Income tax expense 8200 (Loss) profit for the period Other comprehensive (loss) income (net) Components of other comprehensive (loss) income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8362 Unrealized (loss) gain on valuation of available-for-sale financial assets 8363 Cash flow hedges 8370 Share of other comprehensive loss of associates and joint ventures accounted for under equity method 8399 Income tax relating to the components of other comprehensive income 8300 Other comprehensive loss for the period, net of tax 8500 Total comprehensive (loss) income for the period (Loss) profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Total Other comprehensive (loss) income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Total (Loss) earnings per share (in dollars) 9750 Basic (loss) earnings per share 9850 Diluted (loss) earnings per share

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

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

2015 Balance at January 1 Cancellation of restricted stock to employees Changes in restricted stock to employees Compensation related to share-based payment Changes in net equity of long-term equity investments Profit for the period Other comprehensive loss for the period Balance at March 31 2016 Balance at January 1 Cancellation of restricted stock to employees Changes in restricted stock to employees Compensation related to share-based payment Loss for the period Other comprehensive loss for the period Balance at March 31	Notes						Equity attributable to	Equity attributable to	Equity attributable to	ow	ners ofthe parent	ners ofthe parent	ners ofthe parent				Non-controlling interest Total
		Common stock	Capital surplus			R	etainedEarnings					Other EquityIn		terest		Total
					Legal reserve		Special reserve		Unappropriated earnings		Financial statements translation differences of foreign operations	Unrealized gain (loss) on available-for- sale financial assets		Changes in gain (loss) on cash flow hedge	Employee unearned compensation
	6(15) 6(20) 6(15) 6(20)	$ 99,545,364 ( 3,124 ) - - - - - $ 99,542,240 $ 99,532,372 ( 5,556 ) - - - - $ 99,526,816	$ 99,584,369 3,124 ( 2,883 ) 3,788 13,851 - - $ 99,602,249 $ 99,643,564 5,556 ( 3,916 ) - - - $ 99,645,204		$ 509,272 - - - - - - $ 509,272 $ 2,676,947 - - - - - $2,676,947		$ 1,144,229 - - - - - - $ 1,144,229 $ - - - - - - $ -	$ 24,979,173 - - - - 8,650,607 - $ 33,629,780 $ 27,661,503 - - - ( 8,581,508 ) - $19,079,995		$ 3,082,948 - - - - - ( 1,327,471 ) $ 1,755,477 $ 1,695,294 - - - - ( 848,660 ) $ 846,634		($ 1,259,847 ) - - - - - 157,183 ($ 1,102,664 ) $ 1,074,445 - - - - ( 34,334 ) $1,040,111		$ 247,070 - - - - - ( 247,070 ) $ - $ - - - - - - $ -	($ 142,515 ) - 2,411 29,415 - - - ($ 110,689 ) ($ 19,402 ) - 3,977 10,010 - - ($ 5,415 )	$ 227,690,063 $ 1,481,373 $ 229,171,436 - - - ( 472 ) - ( 472 ) 33,203 - 33,203 13,851 - 13,851 8,650,607 ( 1,318 ) 8,649,289 ( 1,417,358 ) ( 27,886 ) ( 1,445,244 ) $ 234,969,894 $ 1,452,169 $ 236,422,063 $ 232,264,723 $ - $ 232,264,723 - - - 61 - 61 10,010 - 10,010 ( 8,581,508 ) - ( 8,581,508 ) ( 882,994 ) - ( 882,994 ) $222,810,292 $ - $222,810,292

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

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

CASH FLOWS FROM OPERATING ACTIVITIES Consolidated profit before tax for the period Adjustments to reconcile net income to net cash provided by operating activities Income and expenses having no effect on cash flows Depreciation and amortization Compensation related to share-based payment Share of loss of associates and joint ventures accounted for under equity method Loss from disposal of investments Loss (gain) on disposal of property, plant and equipment Impairment loss Interest expense Interest income Dividend income Unrealized foreign exchange (gain) loss Changes in assets/liabilities relating to operating activities Net changes in assets relating to operating activities Financial assets /liabilities at fair value through profit or loss Accounts receivable Accounts receivable - related parties Other receivables Inventories Prepayments Other current assets Net changes in liabilities relating to operating activities Derivative financial liabilities for hedging Accounts payable Accounts payable - related parties Other payables Provisions - current Other current liabilities Other non-current liabilities Cash (outflow) inflow generated from operations Cash paid for income tax Net cash flows (used in) from operating activities

Notes 2016 2015 ($ 8,533,580 ) $ 10,060,229 6(24) 11,448,019 14,154,430 6(24) 10,010 33,203 ( 86,370 ) ( 89,960 ) 6(22) 71,030 10,128 6(22) 2,678 ( 1,081 ) 6(22) - 431,155 6(23) 305,943 611,605 6(21) ( 93,023 ) ( 126,496 ) 6(21) - ( 81,214 ) ( 35,244 ) 1,158,856 ( 381,748 ) ( 518,172 ) 14,416,125 11,298,924 491,502 1,098,704 ( 43,367 ) 137,521 176,154 487,587 ( 58,199 ) 317,112 ( 8,270 ) ( 42,097 ) - ( 299,026 ) ( 12,492,424 ) ( 10,273,757 ) ( 843,228 ) ( 1,446,672 ) ( 3,794,355 ) ( 570,414 ) ( 2,791,433 ) 598,951 ( 29,379 ) ( 151,540 ) 16,855 ( 1,390,810) ( 2,252,304 ) 25,407,166 ( 402,749 ) ( 194,740) ( 2,655,053 ) 25,212,426

(Continued)

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

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

Notes 2016 2015 $ 221,479 $ 73,726 1,520,472 1,760,900 6(28) ( 7,459,407 ) ( 6,609,101 ) 1,877 1,786,518 ( 4,197 ) ( 101,989 ) ( 12,651 ) 251,434 105,922 125,059 - 81,214 ( 5,626,505 ) ( 2,632,239 ) 2,927,194 ( 11,077,583 ) - 68,100,131 ( 8,220,000 ) ( 108,203,141 ) ( 884 ) ( 891 ) ( 281,217 ) ( 728,931 ) ( 5,574,907 ) ( 51,910,415 ) ( 411,720 ) 673,178 ( 14,268,185 ) ( 28,657,050 ) 52,522,790 70,989,741 $ 38,254,605 $ 42,332,691

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

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INNOLUX CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

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

(Reviewed, not audited)

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 Republic of China (R.O.C.). The Company was listed on the Taiwan Stock Exchange Corporation (the “TSEC”) in October 2006. The Company merged with TPO Displays Corporation and Chi Mei Optoelectronics Corporation on March 18, 2010, with the Company as the surviving entity.

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

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on May 12, 2016.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) None.

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

None.

(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 2013 version of IFRS as endorsed by the FSC:

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board IFRS 9, ‘Financial instruments’ January 1, 2018 Sale or contribution of assets between an investor and its associate or To be determined by joint venture (amendments to IFRS 10 and IAS 28) International Accounting Standards Board Investment entities: applying the consolidation exception (amendments January 1, 2016 to IFRS 10, IFRS 12 and IAS 28)

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	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	StandardsBoard
Accounting for acquisition of interests in joint operations	January 1, 2016
(amendments to IFRS 11)
IFRS 14, ‘Regulatory deferral accounts’	January 1, 2016
IFRS 15, ‘Revenue from contracts with customers’	January 1, 2018
Clarifications to IFRS 15, ‘Revenue from contracts with customers’	January 1, 2018
(amendments to IFRS 15)
IFRS 16, ‘Leases’	January 1, 2019
Disclosure initiative (amendments to IAS 1)	January 1, 2016
Disclosure initiative (amendments to IAS 7)	January 1, 2017
Recognition of deferred tax assets for unrealised losses (amendments to	January 1, 2017
IAS 12)
Clarification of acceptable methods of depreciation and amortisation	January 1, 2016
(amendments to IAS 16 and IAS 38)
Agriculture: bearer plants (amendments to IAS 16 and IAS 41)	January 1, 2016
Defined benefit plans: employee contributions (amendments to IAS	July 1, 2014
19R)
Equity method in separate financial statements (amendments to IAS 27)	January 1, 2016
Recoverable amount disclosures for non-financial assets (amendments	January 1, 2014
to IAS 36)
Novation of derivatives and continuation of hedge accounting	January 1, 2014
(amendments to IAS 39)
IFRIC 21, ‘Levies’	January 1, 2014
Improvements to IFRSs 2010-2012	July 1, 2014
Improvements to IFRSs 2011-2013	July 1, 2014
Improvements to IFRSs 2012-2014	January 1, 2016

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and operating results based on the Group’s assessment.

• A. IFRS 9, ‘Financial instruments’

• (a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset at fair value through other comprehensive income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to recognize the equity instrument not held for trading at fair value in other comprehensive income.

• (b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’ approach. An entity assesses at each balance sheet date whether there has been a significant

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increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses (‘ECL’) or lifetime ECL (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance).

• (c) The amended general hedge accounting makes the accounting practices consistent with an entity’s risk management strategy. The components and the grouping of non-financial items can be loosened as hedged items. The 80~125% threshold of highly efficient hedge is removed, and that the hedge items and the hedged percentages of the hedge instruments can be rebalance under the unchanged business objectives of risk management is increased.

• B. IFRS 15, ‘Revenue from contracts with customers’

• IFRS 15, ‘Revenue from contracts with customers’ replaces IAS 11, ‘Construction Contracts’, IAS 18, ‘Revenue’, and relevant interpretations and SICs. According to IFRS 15, revenue is recognised when a customer obtains control of goods or services. A customer obtains control of goods or services when a customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset.

The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:

Step 1: Identify contracts with customer

Step 2: Identify performance obligations in the contract(s)

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract(s)

Step 5: Recognise revenue when the performance obligation is satisfied.

Further, IFRS 15 includes a set of comprehensive disclosure requirements that requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

• C. Amendments to IFRS 15, ‘Revenue from Contracts with Customers’

The amendments clarify how to identify a performance obligation (the promise to transfer goods or services to a customer) in a contract; determine whether a company is a principal (the provider of goods or services) or an agent (responsible for arranging for the goods or services to be provided); and determine whether the revenue from granting a license should be recognised at a point in time or a period of time. In addition to the clarifications, the amendments include two additional reliefs to reduce cost and complexity for a company when it first applies the new Standard.

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• D. IFRS 16, ‘Leases’

• IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognise a ‘right-of-use asset’ and a lease liability (except for those leases with terms of less than 12 months and leases of low-value assets). Lessor accounting still uses the dual classification approach: operating leases and finance leases, and only increases the related disclosures.

• E. Amendments to IAS 36, ‘Recoverable amount disclosures for non-financial assets’ The requirement to disclose recoverable amount when a cash generating unit (CGU) contains goodwill or indefinite lived intangible assets but there has been no impairment is removed. When a material impairment loss has been recognised or reversed for an individual asset, including goodwill, or a CGU, it is required to disclose the recoverable amount of the asset or CGU. If the recoverable amount is fair value less costs of disposal, it is required to disclose the level of the fair value hierarchy, the valuation techniques(s) used to measure fair value and key assumptions.

• Except for the above impact, the Group is assessing the potential impact of amendments to other standards and interpretations on financial positions and performance. The impact will be disclosed when the assessment is complete.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except for the compliance statement, basis of preparation, basis of consolidation and additional descriptions that are set out below, the rest of the principal accounting policies applied in the preparation of these consolidated financial statements are the same as those disclosed in Note 4 to the consolidated financial statements as of and for the year ended December 31, 2015. These policies have been consistently applied to all the periods presented, unless otherwise stated.

• (1) Compliance statement

• A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34,“Interim financial reporting” as endorsed by the FSC.

• B. These financial statements should be read with the consolidated financial statements for the year ended December 31, 2015.

(2) Basis of preparation

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

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

• (b) Available-for-sale financial assets measured at fair value.

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

• B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as

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endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements

The basis applied in these consolidated financial statements is consistent with that applied in the consolidated financial statements for the year ended December 31, 2015.

• B. Subsidiaries included in the consolidated financial statements:

Main Business Name of Investor Name of Subsidiary Activities Innolux Corporation Bright Information Holding Ltd. Investment holdings Gold Union Investments Ltd. Investment holdings Golden Achiever International Ltd. Investment holdings Innolux Holding Ltd. Investment holdings Keyway Investment Management Limited Investment holdings Landmark International Ltd. Investment holdings Toppoly Optoelectronics (B.V.I.) Ltd. Investment holdings Innolux Hong Kong Holding Limited Investment holdings Leadtek Global Group Limited Order swapping company Yuan Chi Investment Co., Ltd. Investment company InnoJoy Investment Corporation Investment company Innolux Optoelectronics Europe B.V. Investment and distribution company Innolux Optoelectronics Japan Co., Ltd. Investment and distribution company Chi Mei El Corporation Production and distribution company

March 31, December 31, March 31, 2016 2015 2015 Description 100 100 100 - - - 100 (c) 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 100 100 100 - - - 97 (a) Ownership (%)

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Main Business Name of Investor Name of Subsidiary Activities Bright Information Holding Ltd. Kunpal Optoelectronics Ltd. Processing company Gold Union Investments Ltd. Ningbo Innolux Display Ltd. Processing company Golden Achiever International Ltd. VAP Optoelectronics (Nanjing) Corp. Processing company Innolux Holding Ltd. Rockets Holding Ltd. Investment holdings Suns Holding Ltd. Investment holdings Lakers Trading Ltd. Order swapping company Innolux Corporation Distribution company Ningbo Innolux Logistics Ltd. Warehousing company Foshan Innolux Logistics Ltd. Warehousing company Landmark International Ltd. Ningbo Innolux Optoelectronics Ltd. Processing company Ningbo Innolux Technology Ltd. Processing company Foshan Innolux Optoelectronics Ltd. Processing company Ningbo Innolux Display Ltd. Processing company Toppoly Optoelectronics (B.V.I.) Ltd. Toppoly Optoelectronics (Cayman) Ltd. Investment holdings Innolux Hong Kong Holding Limited Innolux Optoelectronics Hong Kong Holding Ltd. Investment holdings Innolux Hong Kong Ltd. Order swapping company Innolux Technology Europe B.V. Investment and R&D company Innolux Technology Japan Co., Ltd. R&D company Innolux Technology USA Inc. Distribution company Innolux Optoelectronics Europe B.V. Innolux Optoelectronics Germany GmbH (Former Chi Mei Optoelectronics Germany GmbH) After sales service company Keyway Investment Management Limited

March 31, December 31, March 31, 2016 2015 2015 Description 100 100 100 - - - 100 (b) 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 - (b) 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - Ownership (%)

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Main Business Name of Investor Name of Subsidiary Activities Innolux Optoelectronics Japan Co., Ltd. Innolux Optoelectronics USA, Inc. Distribution company Rockets Holding Ltd. Best China Investments Ltd. Investment holdings Mega Chance Investments Ltd. Investment holdings Magic Sun Ltd. Investment holdings Stanford Developments Ltd. Investment holdings Nets Trading Ltd. Investment company Suns Holding Ltd. Warriors Technology Investments Ltd. Investment company Toppoly Optoelectronics Nanjing Innolux Technology Ltd. Distribution company (Cayman) Ltd. Nanjing Innolux Optoelectronics Ltd. Processing company Innolux Optoelectronics Hong Kong Holding Ltd. Shanghai Innolux Optoelectronics Ltd. Processing company Innolux Technology Europe B.V. Innolux Technology Germany GmbH Testing and maintenance company Best China Investments Ltd. Asiaward Investment Ltd. Investment holdings Mega Chance Investments Ltd. Main Dynasty Investment Ltd. Investment holdings Magic Sun Ltd. Sun Dynasty Development Ltd. Investment holdings Stanford Developments Ltd. Innocom Technology (Shenzhen) Co., Ltd. Processing company Ningbo Innolux Display Ltd. Ningbo Innolux Electronics Ltd. Distribution company

March 31, December 31, March 31, 2016 2015 2015 Description 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 - (d) Ownership (%)

• (a) The Board of Directors of the Company in July, 2015 resolved to conduct a simple merger with Chi Mei El Corporation (Chi Mei El), a 97%-owned subsidiary of the Company effective September 1, 2015. The Company was the surviving company while Chi Mei El was dissolved after the merger. Said merger was accounted for an as equity transaction.

• (b) Ningbo Innolux Display Ltd., a wholly-owned subsidiary of Gold Union Investments Ltd., became Landmark International Ltd.’s subsidiary after the reorganization in August 2015.

• (c) Gold Union Investments Ltd. ceased operations and was liquidated in the fourth quarter of 2015.

• (d) Ningbo Innolux Electronics Ltd. was established in November 2015 and was included in the consolidated financial statements since the date of establishment.

~14~

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

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

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

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

(4) Derecognition of financial assets

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

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

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

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

(5) Employee benefits

Except for the following additional accounting policies, the accounting policies on employee benefits are the same as those described in Note 4 of the 2015 consolidated financial statements. Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed accordingly.

(6) Income tax

Except for the following additional accounting policies, the accounting policies on income tax are the same as those described in Note 4 of the 2015 consolidated financial statements.

The interim period income tax expense is calculated according to pretax income times effective income tax rate, and the related information is disclosed accordingly.

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

UNCERTAINTY

For more information, please refer to Note 5 of the consolidated financial statements for the year ended December 31, 2015.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits Cash equivalents - Repurchase bonds	March 31,2016 2,305 $ 18,316,323 19,272,181 37,590,809 663,796 38,254,605 $	December 31,2015 2,255 $ 28,526,258 23,331,155 51,859,668 663,122 52,522,790 $	March 31,2015
			9,704 $ 27,156,350 14,500,203
			41,666,257 666,434
			42,332,691 $

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

• B. The above time deposits and bonds with repurchase agreement expire in 3 months and risks of changes in their values are remote. The remaining time deposits which did not meet the definition of cash equivalents were $564,609, $1,973,263 and $509,600 at March 31, 2016, December 31, 2015 and March 31, 2015, respectively, and were classfied as ‘other financial assets - current’.

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

Assets Current items Financial assets held for trading Forward foreign exchange contracts Non-current items Financial assets held for trading Stock-Advanced Optoelectronic Technology Inc. Valuation adjustment Liabilities Current items Financial liabilities held for trading Forward foreign exchange contracts	March31,2016 391,992 $ 77,019 $ 223,326 300,345 $ 174,156 $	December31,2015 120,036 $ 77,019 $ 204,903 281,922 $ 265,525 $	March31,2015
			37,155 $
			77,019 $ 590,661
			667,680 $
			134,071 $

• A. The Group recognized net gain of $582,918 and $71,273 on the financial instruments for the three-month periods ended March 31, 2016 and 2015, respectively.

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

Derivative financial assets and liabilities Current items Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Forward foreign exchange contracts Derivative financial assets and liabilities Current items Forward foreign exchange contracts Forward foreign exchange contracts	Contract Period TWD (sell) 8,840,375 $ 2016/3-2016/6 USD (buy) 270,000 2016/3-2016/6 USD (sell) 332,000 2016/1-2016/6 JPY (buy) 37,975,785 2016/1-2016/6 EUR (sell) 49,000 2016/1-2016/8 JPY (buy) 6,181,220 2016/1-2016/8 HKD (sell) 330,564 2016/1-2016/4 EUR (buy) 39,000 2016/1-2016/4 USD (sell) 300,000 2016/2-2016/6 RMB (buy) 1,969,611 2016/2-2016/6 (in thousands) March 31,2016 Contract Amount (Notional Principal)	Contract Period USD (sell) 150,000 $ 2015/10-2016/2 TWD (buy) 4,896,705 2015/10-2016/2 USD (sell) 295,000 2015/10-2016/3 JPY (buy) 35,649,520 2015/10-2016/3 EUR (sell) 5,000 2015/11-2016/1 TWD (buy) 175,075 2015/11-2016/1 EUR (sell) 80,500 2015/10-2016/3 JPY (buy) 10,668,495 2015/10-2016/3 HKD (sell) 321,477 2015/11-2016/1 EUR (buy) 39,000 2015/11-2016/1 USD (sell) 240,000 2015/10-2016/2 RMB (buy) 1,541,675 2015/10-2016/2 (in thousands) December 31,2015 Contract Amount (Notional Principal) March 31,2015	Contract Period USD (sell) 150,000 $ 2015/10-2016/2 TWD (buy) 4,896,705 2015/10-2016/2 USD (sell) 295,000 2015/10-2016/3 JPY (buy) 35,649,520 2015/10-2016/3 EUR (sell) 5,000 2015/11-2016/1 TWD (buy) 175,075 2015/11-2016/1 EUR (sell) 80,500 2015/10-2016/3 JPY (buy) 10,668,495 2015/10-2016/3 HKD (sell) 321,477 2015/11-2016/1 EUR (buy) 39,000 2015/11-2016/1 USD (sell) 240,000 2015/10-2016/2 RMB (buy) 1,541,675 2015/10-2016/2 (in thousands) December 31,2015 Contract Amount (Notional Principal) March 31,2015
		Contract Amount (Notional Principal) (in thousands)	Contract Period
		USD (sell) 370,000 $ JPY (buy) 43,975,496 EUR (sell) 15,000 USD (buy) 16,089 USD (sell) 85,000 RMB (buy) 532,740	2015/1-2015/6 2015/1-2015/6 2015/3-2015/4 2015/3-2015/4 2015/1-2015/4 2015/1-2015/4

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

(3) Available-for-sale financial assets

Available-for-sale financial assets
Items Current items Bond investments Non-current items Listed stocks and bond investments Emerging and unlisted stocks	March31,2016 - $ 6,047,231 $ 735,039 6,782,270 $	December31,2015 - $ 6,403,449 $ 719,585 7,123,034 $	March31,2015
			220,000 $
			3,229,591 $ 1,927,852
			5,157,443 $

• A. The Group recognised net gain (loss) in other comprehensive income for fair value change and reclassified from equity to profit or loss for the three-month periods ended March 31, 2016 and 2015. Please refer to Note 6(20).

• B. The counterparties of the Group’s debt instrument investments have good credit quality.

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(4) Hedging derivative financial liabilities

• A. The Company was exposed to significant risk of future cash flow changes on principal payments associated with the Company’s floating interest rate bearing borrowings, both current and long-term portion. Therefore, the Company entered into interest rate swap contracts for exchanging floating interest rate for fixed interest rate (TWD90/180CP (Page51328) to hedge such exposures. The contract had matured and was settled in February 2015.

• B. Information about gain or loss arising from cash flow hedges recognized in profit or loss and other comprehensive income:

other comprehensive income:
	For the three-month period
Items		endedMarch31,2015
Amount of gain or loss adjusted in other comprehensive income	$	5
Amount of gain or loss transferred from other comprehensive income
to profit or loss		297,670

(5) Accounts and notes receivable

Accounts and notes receivable
		March31,2016		December31,2015			March31,2015
Notes receivable	$		-	$	-	$		21,447
Accounts receivable			34,657,856		48,944,637			60,237,209
			34,657,856		48,944,637			60,258,656
Less: Allowance for sales returns
and discounts	(		765,685)	(	636,330)	(		441,719)
Allowance for bad debts	(		118,505)	(	118,516)	(		139,856)
	$		33,773,666	$	48,189,791	$		59,677,081

• A. The Group’s accounts receivable that were neither past due nor impaired meet the credit ranking rule based on the counterparties’ industrial characteristics scale of business and profitability.

• B. The aging analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

impaired is as follows:
Up to 60 days 61 to 180 days Over 181 days	March31,2016 December31,2015 402,797 $ 644,656 $ 95,072 42,281 4,371 15,766 502,240 $ 702,703 $	March31,2015
		$ 927,494 36,070 23,704
		987,268 $

• C. Movement analysis of accounts receivable and notes receivable that were impaired is as follows:

• (a) As of March 31, 2016, December 31, 2015 and March 31, 2015, the Group’s accounts receivable that were impaired were $118,505, $118,516 and $139,856, respectively.

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• (b) Movement on allowance for bad debts for impairment loss on individual provision is as follows:

At January 1 Net exchange difference At March 31	2016 118,516 $ 11) ( 118,505 $	2015 139,867 $ 11) ( 139,856 $

(6) Transfer of financial assets

Under the agreement, the Company is not obligated to bear the default risk of the transferred accounts receivable since the Company has no right of recourse to the transferred accounts receivable, but is liable for the losses incurred on any business dispute. The Company does not provide any collateral and does not have any continuing involvement in the transferred accounts receivable. Thus, the Company derecognised the transferred accounts receivable. For the three-month period ended March 31, 2015, the Company has no related transactions. As of March 31, 2016, the related information on accounts receivable that were transferred but not expired is as follows. Partial amounts that were not advanced are recorded in other receivables:

March 31, 2016

Purchaser of accounts receivable CTBC Bank Taipei Fubon Commercial Bank	Accounts receivable transferred that hasnot expired 725,231 $ 358,577 1,083,808 $	Amount derecognised 725,231 $ 358,577 1,083,808 $	Facilities 20,920,250 $ 6,437,000 27,357,250 $	Amount advanced
				652,708 $ 322,719
				975,427 $

(7) Inventories

Inventories
Raw materials and supplies Work in process Finished goods	March31,2016 3,771,734 $ 15,558,772 9,835,289 29,165,795 $	December31,2015 3,952,699 $ 13,906,846 12,338,887 30,198,432 $	March31,2015
			3,399,553 $ 18,488,801 11,411,901 33,300,255 $

Expenses and losses incurred on inventories are as follows:

		For the three-monthperiods	For the three-monthperiods	For the three-monthperiods	ended March 31,
			2016		2015
Cost of inventories sold	$		60,359,308	$	82,352,515
Gain on reversal of decline in market value	(		149,964)	(	136)
Disposal loss and others			245,236		61,431
	$		60,454,580	$	82,413,810

~19~

• A. The Group had disposed its expired and slow-moving inventories for the three-month periods ended March 31, 2016 and 2015. Thus, the risk of reduction in the inventory’s market price had decreased and the net realizable value of inventories had been recovered.

• B. The Company’s partial inventories were damaged due to the earthquake which occurred in Kaohsiung, Taiwan on February 6, 2016. Related information is provided in Note 10.

(8) Investments accounted for under the equity method

Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd. TOA Optronics Corporation Others	March 31,2016 869,210 $ 449,970 263,543 98,306 1,681,029 $	December 31,2015 881,351 $ 321,683 310,074 97,478 1,610,586 $	March 31,2015
			1,512,072 $ 120,645 358,824 97,357
			2,088,898 $

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

below:
Profit for the period from continuing operations Other comprehensive loss - net of tax ( Total comprehensive income	2016 2015 86,370 $ 89,960 $ 15,927) 25,815) ( 70,443 $ 64,145 $ Forthe three-monthperiods endedMarch31,
	2016 86,370 $ 15,927) ( 70,443 $

(9) Property, plant and equipment

2016

							2016
								Transfer, net
									exchange
									differences
	At January1			Additions			Disposals		and others	At March 31
Cost:
Land	3,852,792 $		$	-		$	-	$	-	$	3,852,792
Buildings		185,696,326		35,045	(		780,304)		187,467		185,138,534
Machinery and equipment		432,460,229		85,876	(		1,208,190)		2,549,859		433,887,774
Others		33,632,482		9,698	(		59,232)		575,095		34,158,043
		655,641,829		130,619	(		2,047,726)		3,312,421		657,037,143
Accumulated depreciation
and impairment:
Buildings	(	95,892,428)	(	3,026,348)			409,015		138,301	(	98,371,460)
Machinery and equipment	(	352,326,878)	(	7,077,096)			1,195,000	(	301,750)	(	358,510,724)
Others	(	26,880,493)	(	1,038,082)			58,039		55,954	(	27,804,582)
	(	475,099,799)	(	11,141,526)			1,662,054	(	107,495)	(	484,686,766)
Unfinished construction and
equipment under acceptance		18,940,710		6,169,189	(		2,169)	(	3,984,946)		21,122,784
	$	199,482,740								$	193,473,161

~20~

2015

						2015
							Transfer, net
								exchange
								differences
	At January1			Additions		Disposals		and others	At March 31
Cost:
Land	3,852,792 $		$	-	$	-	$	-	$	3,852,792
Buildings		185,352,098		45,062	(	170)	(	203,153)		185,193,837
Machinery and equipment		432,578,807		499,327	(	1,992,466)		1,277,261		432,362,929
Others		30,029,064		199,445	(	559,228)		772,791		30,442,072
		651,812,761		743,834	(	2,551,864)		1,846,899		651,851,630
Accumulated depreciation
and impairment:
Buildings	(	83,503,695)	(	3,427,546)		123		216,692	(	86,714,426)
Machinery and equipment	(	325,264,992)	(	9,438,645)		790,181		713,912	(	333,199,544)
Others	(	22,124,028)	(	934,663)		527,463	(	150,168)	(	22,681,396)
	(	430,892,715)	(	13,800,854)		1,317,767		780,436	(	442,595,366)
Unfinished construction and
equipment under acceptance		12,689,797		6,219,064	(	550,882)	(	5,023,616)		13,334,363
	$	233,609,843							$	222,590,627

• A. The Group evaluated the recoverable amount for assets with impairment indicators; the impairment loss for the three-month periods ended March 31, 2015 was $431,155, shown under “other gains and losses”.

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

• C. As of March 31, 2016, December 31, 2015, and March 31, 2015, the prepayments for business facilities which have not yet entered the factory (shown as ‘other non-current assets’) amounted to $3,442,181, $3,110,696 and $329,958, respectively.

• D. The Company’s partial property, plant and equipment was damaged due to the earthquake which occurred in Kaohsiung, Taiwan on February 6, 2016. Related information is provided in Note 10.

(10) Investment property

10. Investment property
Cost: Land Buildings Accumulated depreciation and impairment: Buildings (		2016
	At January1 188,247 $ 564,109 752,356 71,853) ( 680,503 $ (	Additions - $ - ( - ( 3,089) 3,089) $ (	Transfers - $ 124,881) 124,881) 28,935 ( 95,946) $	AtMarch31
				188,247 $ 439,228 627,475 46,007) 581,468 $

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Cost: Land Buildings Accumulated depreciation and impairment: Buildings (		2015	AtMarch31 188,247 $ 564,109 752,356 61,973) 690,383 $
	At January1 Additions Disposals 188,247 $ - $ - $ 568,440 - 4,331) ( 756,687 - 4,331) ( 63,010) 3,294) ( 4,331 ( 693,677 $ 3,294) ($ - $

The fair value of the investment property held by the Group as at March 31, 2016, December 31, 2015, and March 31, 2015 was $1,077,466, $1,077,466 and $1,110,523, respectively. The amounts mentioned above represent valuation results of comparative method based on market trading information categorised within Level 3 in the fair value hierarchy.

(11) Intangible assets

• A. Intangible assets are goodwill, payments for TFT-LCD related technology and royalty.

At January1 Additions Cost: Patents and royalty 8,152,685 $ - $ Goodwill 17,096,628 - Others 4,215,500 4,197 ( 29,464,813 4,197 ( Accumulated amortization and impairment: Patents and royalty 6,668,709) ( 220,593) ( Others 3,453,248) ( 82,811) ( 10,121,957) ( 303,404) ( 19,342,856 $ 299,207) ($			2016
			Disposals - $ - 39,407) 39,407) - 39,407 39,407 - $

~22~

2015

At January1 Additions Cost: Patents and royalty 8,137,035 $ - $ Goodwill 17,096,628 - Others 3,993,161 101,723 29,226,824 101,723 Accumulated amortization and impairment: Patents and royalty 5,735,685) ( 273,071) ( Others 3,272,002) ( 77,211) ( 9,007,687) ( 350,282) ( 20,219,137 $ 248,559) ($	Disposals - $ - - - - - ( - ( - $ (	Transfer, net exchange differences and others At March 31 - $ 8,137,035 $ - 17,096,628 12,569 4,107,453 12,569 29,341,116 - 6,008,756) ( 15,033) 3,364,246) ( 15,033) 9,373,002) ( 2,464) $ 19,968,114 $

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

For the three-month periods ended March 31,

Operating costs Operating expenses	2016 252,986 $ 50,418 303,404 $	2015
		251,073 $ 99,209
		350,282 $

• C. The Company performed impairment analysis for recoverable amount of the goodwill at each reporting date and used the value in use as the basis for calculation of the recoverable amount. The value in use was calculated based on the estimated present value of future cash flows for five years. Based on the periodic evaluation, the Company did not recognize impairment loss on goodwill.

(12) Short-term borrowings

on goodwill. Short-term borrowings
Type ofborrowings Bank loans Credit loans Range of interest rates	March31,2016 2,891,950 $ 0.83%~1.23%	March31,2015 11,368,898 $ 1.06%~3.92%	Collateral
			None

As of December 31, 2015, the Group has no short-term borrowings.

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- (13) Long term borrowings

Type of loans Syndicated bank loans Less: Administrative expenses charged by syndicated banks Current portion Range of interest rates	Period March31,2016 December31,2015 March31,2015 2015/3/12 ~2018/3/12 52,060,000 $ 60,280,000 $ 68,500,000 $ 255,471) ( 288,794) ( 388,761) ( 16,359,325) ( 16,361,238) ( 16,346,697) ( 35,445,204 $ 43,629,968 $ 51,764,542 $ 1.83%~2.19% 1.90%~2.19% 2.19%

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

• B. The syndicated loan agreements specified that the Company shall meet covenants on current ratio, liability ratio, interest coverage, and tangible net equity, which were 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 year ended December 31, 2015 are in compliance with the covenants on the syndicated loan agreement.

• C. In order to repay the unpaid balance of the medium and long-term syndicated loans as specified in the “Agreed-upon Repayment Agreement” which was signed on April 5, 2012, the Board of Directors during its meeting on February 10, 2015 approved the proposal for the Company to apply for a new syndicated credit line of $68.5 billion with certain financial institutions. Subsequently, on March 12, 2015, the Company acquired consent of all financial institution creditors to terminate the ‘‘Agreed-upon Repayment Agreement’’, and waive negotiation on the debt issue.

(14) Pensions

• A. Defined benefit pension plan

• (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005, and service years thereafter of employees who choose to continue to be subject to the pension mechanism under the Law.

• (b) The Company suspended its contributions to the pension reserve as agreed by the Science Park Administration in June 2013.

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• B. Defined contribution pension plan

  • (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan under the Labor Pension Act, covering all regular employees with R.O.C. nationality.

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

  • (c) The pension costs under the defined contribution pension plans of the Group for the three-month periods ended March 31, 2016 and 2015 were $515,429 and $552,966, respectively.

• (15) Share-based payment

• A. The information on the Company’s share-based payment compensation plan negotiated with employees is provided in Note 6(14) of the consolidated financial statements for the year ended December 31, 2015.

• B. The details of the employee stock option plan for the three-month periods ended March 31, 2016 and 2015 are as follows:

employees is provided in Note 6(14) of the consolidated financial statements December 31, 2015. B. The details of the employee stock option plan for the three-month periods 2016 and 2015 are as follows:	ote 6(14) of the consolidated financial statements ee stock option plan for the three-month periods ws:	ote 6(14) of the consolidated financial statements ee stock option plan for the three-month periods ws:	ote 6(14) of the consolidated financial statements ee stock option plan for the three-month periods ws:	ote 6(14) of the consolidated financial statements ee stock option plan for the three-month periods ws:	for the year ended ended March 31,
Weighted Weighted average Range of average Quantity (in exercise exercise remaining thousand price price vesting StockOptions units) (indollars) (indollars) period Outstanding options at the beginning of the period 50,000 21.87 $ Options exercised - - Options expired - - Outstanding options at the end of the period 50,000 21.87 21.87 $ 0.14 years Exercisable options at the end of the period 50,000 21.87 Forthe three-monthperiod endedMarch	Forthe three-monthperiod endedMarch				31,2016
		Weighted average exercise price (indollars) 21.87 $ - - 21.87 21.87	Range of exercise price (indollars) 21.87 $	Weighted average remaining vesting period 0.14 years	Weighted average stock price of stock options at exercise date (indollars)
					9.89 $

~25~

Weighted Weighted average Range of average Quantity (in exercise exercise remaining thousand price price vesting Stock Options units) (in dollars) (in dollars) period Outstanding options at the beginning of the period 70,000 25.63 $ Options exercised - - Options expired - - Outstanding options at the end of the period 70,000 25.63 32.59 $ 0.13 years 22.85 1.14 years Exercisable options at the end of the period 50,000 26.75 Forthe three-monthperiod endedMarch	Forthe three-monthperiod endedMarch	Forthe three-monthperiod endedMarch	Forthe three-monthperiod endedMarch	Forthe three-monthperiod endedMarch	31,2015
		Weighted average exercise price (in dollars) 25.63 $ - - 25.63 26.75	Range of exercise price (in dollars) 32.59 $ 22.85	Weighted average remaining vesting period 0.13 years 1.14 years	Weighted average stock price of stock options at exercise date(in dollars)
					15.95 $

• C. For the three-month periods ended March 31, 2016 and 2015, the expenses incurred from share-based payment arrangements were $10,010 and $33,203, respectively.

(16) Provisions-current

Provisions-current
At January 1, 2016 Additions during the period Used during the period ( At March 31, 2016	Warranty 808,136 $ 340,000 306,623) ( 841,513 $	Litigation and others 4,743,623 $ 1,406,727 4,231,537) ( 1,918,813 $	Total
			5,551,759 $ 1,746,727 4,538,160) 2,760,326 $

A. Warranty

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

B. Litigation and others

Litigation and other provisions for the Group are related to patents of TFT-LCD panel products

and anti-trust litigations. For information on estimation of provisions, please refer to Note 9(1).

(17) Share capital

A. As of March 31, 2016, the Company’s authorized and outstanding capital were $120,000,000 (including $500,000 reserved for employee stock options) and $99,526,816, respectively, with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

~26~

Movements in the number of the Company’s ordinary shares outstanding are as follows:

At January 1 Cancellation of restricted stock to employees ( At March 31	2016 Number of ordinary shares (inthousands) 9,953,237 555) ( 9,952,682	2015 Number of ordinary shares (inthousands) 9,954,536 312) 9,954,224

• B. The Board of Directors of the Company resolved to increase capital for cash by issuing the GDR and had been completed in January 2013. The Company issued 1,125,000 thousand shares of common stock for cash, with a unit of GDR representing 10 shares of common stock at the Luxembourg Stock Exchange which raised a total of $14,519,051, net of issuance cost. As of March 31, 2016, there were 193 thousand units outstanding, representing 1,939 thousand shares of common stocks.

• C. The Company adopted a resolution in 2013 to issue restricted shares to employees, consisting of 36,263 thousand shares without consideration and 36,263 thousand shares with consideration (the price for subscription is $5 per share). Until the vesting conditions are met by employees, those shares are restricted with regard to transfer of voting rights, dividend and other rights. As of March 31, 2016 and 2015, the Company bought back 555 and 312 thousand shares of unvested restricted stocks to employees, respectively, and decreased capital in accordance with related regulation.

• D. The common stock issued by the Company in 2006 through private placement was 570,929 thousand shares. The rights and obligations of the private common shares were the same as other issued common shares, except for the transfer restriction under R.O.C. Securities and Exchange Act and the listing restriction that no public listing will be allowed within three years since the day of issuance and only if the Company completes the application to publicly issue the shares. The Board of Directors of the Company approved the public issuance of the above private common shares on April 28, 2015. As approved by Financial Supervisory Committee on July 30, 2015, the stocks were officially listed in the Taiwan Stock Exchange starting from August 7, 2015.

(18) 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 Law 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.

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2016

		2016
At January 1 Cancellation of restricted stock to employees Vested restricted stock to employees Changes in restricted stock to employees At March 31 At January 1 Cancellation of restricted stock to employees Vested restricted stock to employees Changes in restricted stock to employees Compensation related to share-based payment Changes in net equity of long-term equity investments At March 31	Share of profit (loss) of associates accounted for under equity Sharepremium method 99,101,649 $ 36,458 $ - - 117,103 - - - 99,218,752 $ 36,458 $	Restricted Employee stock to stock options employees 393,500 $ 111,957 $ - 5,556 - 117,103) ( - 3,916) ( ( 393,500 $ 3,506) ($ 2015	Total
			99,643,564 $ 5,556 - 3,916) 99,645,204 $
	Share of profit (loss) of associates accounted for under equity Sharepremium method 97,972,912 $ 9,273 $ - - 123,286 - - - - - - 13,851 98,096,198 $ 23,124 $	Restricted Employee stock to stock options employees Total 1,373,859 $ 228,325 $ 99,584,369 $ - 3,124 3,124 - 123,286) ( - - 2,883) ( 2,883) ( 3,788 - 3,788 - - 13,851 1,377,647 $ 105,280 $ 99,602,249 $	Total

(19) Retained earnings

• A. In accordance with the Company’s Articles of Incorporation, net income must be distributed in the following order:

• (a) To pay all tax accruals and payables arising from the current year and to cover prior years’ losses, if any;

• (b) As legal reserve equal to 10% of net income after tax and distribution pursuant to clause (a);

• (c) As any special reserve;

• (d) To pay dividends on preferred shares;

• (e) To pay bonuses to employees not less than 5% of net income after tax and distribution pursuant to clauses (a) to (d); and

• (f) The remaining amount, if any, shall be distributed pursuant to the proposal of the Board of

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Directors in accordance with the Company’s dividend policy and the resolution approved at the stockholders’ meeting, of which 0.1% should be paid as remuneration to directors and supervisors and the remaining amount as dividends to stockholders.

Dividends distributed in respect of any fiscal year in the form of shares shall not exceed two-thirds of total dividends to stockholders.

• 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 appropriation of 2015 net income which was proposed at the Board of Directors’ meeting in May 2016 and the appropriation of 2014 net income which was approved at the stockholders’ meeting in June 2015 are as follows:

Years ended December 31,

Legal reserve Cash dividends	Dividends per Amount share(in dollars) 1,081,559 $ 1,989,810 0.20 $ 3,071,369 $ 2015	2014	2014
	Amount 1,081,559 $ 1,989,810 3,071,369 $	Amount 2,167,675 $ 6,947,188 9,114,863 $	Dividends per share(in dollars)
			0.70 $

• D. For the information relating to employees’ compensation (bonuses) and directors’ and supervisors’ remuneration, please refer to Note 6(25).

• (20) Other equity items

Other equity items
						2016
						Available-		Employee
			Currency			for-sale		unearned
			translation			investments	compensation				Total
At January 1	$		1,695,294	$		1,074,445	($	19,402)	$		2,750,337
Revaluation of available-for-sale
investments - gross			-	(		108,790)		-	(		108,790)
Revaluation transfer of
available-for-sale investment - gross			-			71,030		-			71,030
Currency translation differences	(		832,733)			-		-	(		832,733)
Changes in restricted stocks to
employees			-			-		3,977			3,977
Compensation related to share-based
payment			-			-		10,010			10,010
Share of subsidiaries and other
comprehensive loss of associates	(		15,927)			-		-	(		15,927)
Effect of income tax			-			3,426		-			3,426
At March 31		$	846,634		$	1,040,111	($	5,415)		$	1,881,330

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Available- Currency for-sale translation investments At January 1 3,082,948 $ 1,259,847) ($ Fair value losses of cash flow hedges - - Reclassified as current income of cash flow hedges - - Revaluation of available-for-sale investments - gross - 100,076 Revaluation transfer of available-for- sale investment - gross - 64,870 Currency translation differences 1,301,656) ( - Changes in restricted stocks to employees - - Compensation related to share-based payment - - Share of subsidiaries and other comprehensive loss of associates 25,815) ( - Effect of income tax - 7,763) ( At March 31 1,755,477 $ 1,102,664) ($			2015
			Employee Hedging unearned reserve compensation Total 247,070 $ 142,515) ($ 1,927,656 $ 5) ( - 5) ( 297,670) ( - 297,670) ( - - 100,076 - - 64,870 - - 1,301,656) ( - 2,411 2,411 - 29,415 29,415 - - 25,815) ( 50,605 - 42,842 - $ 110,689) ($ 542,124 $		Total

(21) Other income

Other income
Rental revenue Interest income Dividend income Other income	For the three-monthperiods ended March31,
	2016 44,319 $ 93,023 - 965,416 1,102,758 $	2015
		43,042 $ 126,496 81,214 189,080
		439,832 $

(22) Other gains and losses

Other gains and losses
		For the three-monthperiods			ended March31,
			2016		2015
Net gain on financial assets and liabilities at fair	$		582,918	$	71,273
value through profit or loss
Net currency exchange (loss) gain	(		637,835)		184,030
Loss on disposal of investments	(		71,030)	(	10,128)
(Loss) gain on disposal of property, plant and
equipment	(		2,678)		1,081
Impairment loss			-	(	431,155)
Litigation loss and others	(		885,037)	(	1,187,520)
	($		1,013,662)	($	1,372,419)

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(23) Finance costs

For the three-month periods ended March 31,

Interest expense: Bank borrowings Others (Gain) loss on fair value change of financial instruments: Gain on cash flow hedges, reclassified from equity Factoring expense of accounts receivable	2016 2015 305,720 $ 607,666 $ 223 3,939 - 297,670) ( 816 - 306,759 $ 313,935 $

(24) Expenses by nature

For the three-month periods ended March 31,

Employee benefit expense: Salaries and other short-term employee benefits Share-based payments Post-employment benefits Depreciation Amortization	2016 9,385,684 $ 10,010 515,429 11,144,615 303,404 21,359,142 $	2015
		11,989,116 $ 33,203 552,966 13,804,148 350,282
		26,729,715 $

(25) Employees’ compensation and directors’ and supervisors’ remuneration

• A. According to the Articles of Incorporation of the Company, when distributing earnings, the Company shall distribute bonus to the employees and pay remuneration to the directors and supervisors that account for 5% and 0.1%, respectively, of the total distributed amount.

However, in accordance with the Company Act amended on May 20, 2015, a company shall distribute employee remuneration, based on the current year's profit condition, in a fixed amount or a proportion of profits. If a company has accumulated deficit, earnings should be channeled to cover losses. Aforementioned employees’ compensation could be paid by cash or stocks. Specifics of the compensation are to be determined in a board meeting that registers two-thirds of directors in attendance, and the resolution must receive support from half of participating members. The resolution should be reported during the shareholders' meeting. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive aforementioned stock or cash may be specified in the Articles of Incorporation. The Board of Directors of the Company has approved the amended Articles of Incorporation of the Company on February 2, 2016. According to the amended articles, a ratio of profit of the current year distributable, after covering accumulated losses, shall be distributed as employees' compensation and directors’

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and supervisors’ remuneration. The ratio shall not be lower than 5% for employees’ compensation and shall not be higher than 0.1% for directors’ and supervisors’ remuneration. The amended articles will be resolved during the shareholders’ meeting in 2016.

• B. For the three months ended March 31, 2016, the employees’ compensation has not been accrued. For the three-month period ended March 31, 2015, employees’ compensation was accrued at $766,697. The aforementioned amount was recognized in expenses.

• Employees’ bonus and directors’ and supervisors’ remuneration were accrued at $734,524 and $5,000, respectively, based on the earnings of current year distributable for the year ended December 31, 2015 and the employees’ compensation will be distributed in the form of cash. Employees’ bonus and directors’ and supervisors’ remuneration for 2015 as resolved by the Board of Directors were $734,524 and $4,490, respectively. The difference of $510 between employees’ bonus (directors’ and supervisors’ remuneration) as resolved by the Board of Directors and the amount recognized in the 2015 financial statements was caused by a different accrual ratio and had been recorded as expense in 2016.

• Information about employees’ compensation and directors’ and supervisors’ 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.

(26) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

For the three-month periods ended March 31,

Current tax: Current tax on profit for the period Adjustments in respect of prior years Total current tax Deferred tax: Origination and reversal of temporary differences ( Income tax expense	2016 981,995 $ 558 ( 982,553 934,625) 47,928 $	2015 282,808 $ 50,960) 231,848 1,179,092 1,410,940 $

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

follows:
	For the three-monthperiods			ended March31,
	2016			2015
Fair value gains/losses on available-for-sale	($	3,426)	$	7,763
financial assets
Cash flow hedges		-	(	50,605)
	($	3,426)	($	42,842)

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• B. The Company’s income tax returns through 2013 have been assessed and approved by the Tax Authority.

• C. Unappropriated retained earnings recorded by the Company pertain to retained earnings after 1998.

• D. The details of imputation system are as follows:

B. The Company’s income tax returns through 2013 have been assessed and approved by the Tax Authority. C. Unappropriated retained earnings recorded by the Company pertain to retained earnings after 1998. D. The details of imputation system are as follows:	B. The Company’s income tax returns through 2013 have been assessed and approved by the Tax Authority. C. Unappropriated retained earnings recorded by the Company pertain to retained earnings after 1998. D. The details of imputation system are as follows:	B. The Company’s income tax returns through 2013 have been assessed and approved by the Tax Authority. C. Unappropriated retained earnings recorded by the Company pertain to retained earnings after 1998. D. The details of imputation system are as follows:	proved by the Tax ned earnings after
Earnings per share March31,2016 December31,2015 March31,2015 (a) Balance of tax credit account 761,660 $ 761,660 $ 738,931 $ 2015 (Estimate) 2014(Actual) (b) Estimated (actual) creditable tax rate 6.06% 3.9% 2016 2015 Basic (loss) earnings per share (Loss) profit attributable to ordinary shareholders of the parent 8,581,508) ($ 8,650,607 $ Weighted average number of ordinary shares outstanding (shares in thousands) 9,941,843 9,916,297 Basic (loss) earnings per share (in dollars) 0.86) ($ 0.87 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 8,650,607 $ Weighted average number of ordinary shares outstanding (shares in thousands) 9,916,297 Assumed conversion of all dilutive potential ordinary shares: -Employees’ bonus 147,350 -Restricted stocks 25,744 10,089,391 Diluted earnings per share (in dollars) 0.86 $ For the three-monthperiods ended March31,			March31,2015
			738,931 $
			2014(Actual)
			3.9%
	2016 8,581,508) ($ 9,941,843 0.86) ($	2015
		8,650,607 $ 9,916,297 0.87 $ 8,650,607 $ 9,916,297 147,350 25,744 10,089,391 0.86 $

• (27) Earnings per share

As employee stock options had anti-dilutive effect for the three-month periods ended March 31, 2016 and 2015, they were not included in the calculation of diluted earnings per share.

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(28) Non-cash transaction

Investing activities with partial cash payments:

For the three-month periods ended March 31,

Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the period

2016 6,299,808 $ 3,974,152 2,814,553) ( 7,459,407 $	2015 6,962,898 $ 2,688,976 3,042,773) 6,609,101 $

7. RELATED PARTY TRANSACTIONS

(1) Significant related party transactions

A. Operating revenue

For the three-month periods ended March 31,

Sales of goods: Others Associates	2016 1,657,274 $ 67,358 1,724,632 $	2015
		4,624,468 $ 69,216 4,693,684 $

The collection period was 30~120 days upon delivery or on a monthly-closing basis to related parties, and 30~90 days to non-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

For the three-month periods ended March 31,

Purchases of goods: Others Associates	2016 1,673,986 $ 376,107 2,050,093 $	2015
		2,259,387 $ 30,997 2,290,384 $

The payment term was 30~120 days to related parties after delivery, 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. signed processing Consigned processing
Processing costs: Others	Forthe three-monthperiods endedMarch31,
	2016 28,554 $	2015
		13,590 $

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(b) Balance of consigned processing at the end of period (shown as “Other payables”)

March 31, 2016 December 31, 2015 March 31, 2015 Payables to related parties: Others $ 9,150 $ 70,229 $ 2,126,580

The Group subcontracted the processing of products of associates in Mainland China. The processing fees were mainly charged based on cost plus method.

D. Accounts receivable

Accounts receivable
Receivables from related parties: Others Associates	March31,2016 2,057,136 $ 84,215 2,141,351 $	December31,2015 2,551,425 $ 81,428 2,632,853 $	March31,2015
			4,943,421 $ 70,275 5,013,696 $

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. There are no provisions held against receivables from related parties.

E. Accounts payable

Accounts payable
Payables to related parties: Others Associates	March31,2016 2,355,045 $ 161,660 2,516,705 $	December31,2015 3,284,529 $ 75,404 3,359,933 $	March31,2015
			3,773,121 $ 33,153 3,806,274 $

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

F. Property transactions

Purchase of property

(a) Acquisition of property, plant and equipment:

payables to related parties arise mainly from purchase transactions and are due 30~120 days r the date of purchase. The payables bear no interest. erty transactions hase of property Acquisition of property, plant and equipment:	purchase transactions and are due 30~120 days terest.	purchase transactions and are due 30~120 days terest.	purchase transactions and are due 30~120 days terest.
Period-end balances arising from purchases of property (shown as “Other payables”): 2016 2015 Others 3,148 $ 4,407 $ For the three-monthperiods ended March 31, March 31,2016 December 31,2015 March 31,2015 Others 9,910 $ 7,365 $ 5,855 $	For the three-monthperiods ended March 31,
			2015
		$	4,407
			payables”): March 31,2015 5,855 $

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

Sale of property

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

Others

on disposal:	on disposal:
For the three-monthperiod ended March31,2015
Disposalproceeds 1,789 $	Gain on disposal
	35 $

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(b) Period-end balances arising from sale of property (shown as “Other receivables”):

Others

March31,2016 1,047 $	December31,2015 794 $	March31,2015
		46,678 $

For the three months ended March 31, 2016, there was no significant sales of property between related parties.

(2) Key management compensation

For the three-month periods ended March 31,

Salaries and other short-term employee benefits Share-based payments Post-employment benefit	2016 66,290 $ 652 112 67,054 $	2015
		10,943 $ 1,500 54 12,497 $

8. PLEDGED ASSETS

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

Pledged asset Other financial assets-current Demand deposits Time deposits Property, plant and equipment Other financial assets-non- current Refundable deposits Time deposits		Bookvalue	March 31,2015 Purpose 379,879 $ Guarantee for letter of credit 40,280 Tariff guarantee and land lease 151,858,672 Long-term loans and performance guarantee for lease payable 9,691,200 Guarantee to European Commission for litigation 192,173 Tariff guarantee, land lease and guarantee for contract 162,162,204 $	Purpose
	March 31,2016 - $ 5,837 56,436,434 - 8,252 56,450,523 $	December 31,2015 - $ 6,204 59,669,639 - 119,703 59,795,546 $

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1. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

2. －

3. (1) Contingencies Significant Litigations

   • A. Chi Mei Optoelectronics Corporation (the “CMO”), Chi Mei Optoelectronics Japan Co., Ltd., Chi Mei Optoelectronics UK Ltd., Chi Mei Optoelectronics Europe B.V., and Chi Mei Optoelectronics USA Inc. were investigated by the United States (the “U.S.”) Department of Justice in December 2006 for alleged violation of the anti-trust laws. Moreover, authorities of some U.S state governments, as well as the governments of the European Union, China, Brazil and Korea also started to investigate this case. In addition, certain downstream customers and consumers brought class-actions and/or individual civil lawsuits in the U.S. and Canada against the TFT-LCD companies; and in certain lawsuits, CMO and Chi Mei Optoelectronics USA Inc. were listed as defendants. Details of the investigations on significant cases related to the alleged violation of the anti-trust laws are as follows:

     • (a) The Company had reached a plea agreement with the U.S. Department of Justice in December 2009, agreeing to pay a fine of US$220 million through installment over five years. The fine had been fully paid as of February 2015.

       • The Company had also reached out-of-court settlement agreements with the plaintiffs on separate civil lawsuits in the U.S. since 2012 and recognized related losses. Further, the Company had reached out-of-court settlement agreements with fourteen State Governments since November 2011, agreeing to pay civil statutory damages in order to settle these civil lawsuits. All civil lawsuits between the Company and the U.S state governments have been settled.

     • (b) In December 2010, the Company had been ordered by the European Commission to pay a fine of EUR 300 million. After the Company appealed the case, the General Court of the European Union rendered a judgment in February 2014 lowering the fine from EUR 300 million to EUR 288 million. The Company further filed an appeal against a part of the judgment and the Court of Justice of the European Union has adjudicated to maintain the aforementioned amount of fine in July 2015.

     • (c) Except for those anti-trust litigations for which the ultimate results cannot be reliably estimated, the Company has recognized actual or estimated losses or liabilities in “other payables” and “other non-current liabilities”.

   • B. Eidos Displays, LLC and Eidos III, LLC (“Eidos”) filed a lawsuit with the United States District Court for the District of East Texas on April 25, 2011, alleging infringement of its patent. The administrative law judge has ruled a summary judgment for the lawsuit in December 2013 rendering Eidos’ patent as invalid, and the presiding judge has confirmed the summary judgment in January 2014. Eidos has filed a complaint in February 2014. The United States Court of Appeals for the Federal Circuit has rejected the judgement and sent back to the United States District Court in March 2015. The Company submitted an application to ask the United States Court of Appeals for the Federal Circuit to rehear en banc in April 2015. Though the United

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States Court of Appeals rejected the request in June 2015, the Company appealed to the Supreme Court in September 2015 and petitioned for writ of certiorari. The Supreme Court of the United States has denied the appeal of the Company in November 2015. The case remains at the ruling by the United States Court of Appeals for the Federal Circuit in March 2015. However, the results of the litigation are uncertain and are dependent on the future litigation progress. The Company does not expect that the lawsuit would have a material adverse effect on the Company’s financial position or results of operations in the short-term.

(2) Commitments

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

March 31, 2016 December 31, 2015 March 31, 2015 Property, plant and equipment $ 42,650,100 $ 37,625,398 $ 16,185,448

B. Operating lease commitments

The Group leases plant, land and warehouses under non-cancellable operating lease agreements. The majority of lease agreements are renewable at the end of the lease period at market rate. The Group has no significant additional operating lease agreement for the period. Please refer to Note 9(2) of the consolidated financial statements for the year ended December 31, 2015 for the related information.

• C. Outstanding letters of credit

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

March 31, 2016 December 31, 2015 March 31, 2015 Outstanding letters of credit $ 769,348 $ 474,222 $ 704,678

10. SIGNIFICANT DISASTER LOSS

The Company’s partial inventories and buildings were damaged due to the earthquake which occurred in Kaohsiung, Taiwan on February 6, 2016. The Company has conducted a preliminary disaster assessment and a conservative estimation on insurance claim to assess possible disaster loss. However, the Company has full earthquake insurance and business interruption insurance to cover the operating costs of inventories and building during the repairing period. The Company is actively processing the insurance claims. According to the initial assessment, the Company has no other material loss on property after taking the insurance claims into account.

11. SUBSEQUENT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

No significant changes during the period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2015.

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(2) Financial instruments

A. Fair value information of financial instruments

• The carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, accounts receivable, other receivables, other financial assets-current, short-term loans, accounts payable, other payables and long-term loans) are approximate to their fair values. The fair value information of financial instruments measured at fair value is provided in Note 12(3).

• B. Financial risk management policies

No significant changes during the period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2015.

• C. Significant financial risks and degrees of financial risks

• Except for the following description, there is no significant changes during the period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2015. (a) Market risk

Foreign exchange risk

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

• b) The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: RMB). Based on the simulations performed, the impact on post-tax profit of a 1% exchange rate fluctuation would be an increase of $77,313 and $79,281 for the three-month periods ended March 31, 2016 and 2015, respectively. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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Foreign Currency Exchange Amount Rate Book Value (In Thousands) (Note) (NTD) Financial assets Monetary items USD 3,855,729 $ 32.19 124,115,917 $ JPY 8,155,700 0.29 2,365,153 EUR 38,852 36.51 1,418,487 Non-monetary items USD 2,372,449 $ 32.19 76,369,133 $ HKD 177,256 4.15 735,612 JPY 5,419,096 0.29 1,571,538 EUR 3,609 36.51 131,765 USD 3,498,637 $ 32.19 112,621,125 $ JPY 25,330,064 0.29 7,345,719 EUR 5,516 36.51 201,389 March 31,2016 Financial liabilities Monetary items Financial assets Monetary items USD JPY EUR Non-monetary items USD HKD JPY EUR USD JPY EUR Financial liabilities Monetary items	December 31,2015	December 31,2015
	Foreign Currency Exchange Amount Rate Book Value (In Thousands) (Note) (NTD) 4,589,186 $ 32.83 150,662,976 $ 9,363,752 0.27 2,528,213 75,963 35.88 2,725,552 2,342,530 $ 32.83 76,905,260 $ 178,232 4.24 755,704 5,527,619 0.27 1,492,457 3,697 35.88 132,648 4,009,239 $ 32.83 131,623,316 $ 29,629,471 0.27 7,999,957 3,440 35.88 123,427 March 31,2015
	Foreign Currency Amount (In Thousands) 5,365,318 $ 3,861,229 335,496 2,607,492 $ 323,897 5,399,874 3,897 4,940,034 $ 30,143,225 292,404	Exchange Rate Book Value (Note) (NTD) 31.30 167,934,453 $ 0.26 1,003,920 33.65 11,289,440 31.30 81,614,500 $ 4.04 1,308,544 0.26 1,403,967 33.65 131,134 31.30 154,623,064 $ 0.26 7,837,239 33.65 9,839,395

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

c) Total exchange gain (loss), including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three-month periods ended March 31, 2016 and 2015 amounted to ($637,835) and $184,030, respectively.

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Price risk

The Group’s investments in equity securities comprise domestic listed and unlisted stocks. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 20% with all other variables held constant, post-tax profit for the three-month periods ended March 31, 2016 and 2015 would have increased/decreased by $60,069 and $133,536, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss; other components of equity would have increased/decreased by $1,356,454 and $1,031,489, respectively, as a result of gains/losses on equity securities classified as available-for-sale.

Interest rate risk

• a) The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During the three-month periods ended March 31, 2016 and 2015, the Group’s borrowings at variable rate were denominated in the NTD, USD and RMB.

• b) Based on the simulations performed, the impact on post-tax profit of a 0.25% shift would be a maximum increase of $130,150 or decrease of $171,250 for the three-month periods ended March 31, 2016 and 2015, respectively. The simulation is done on a quarterly basis to verify that the maximum loss potential is within the limit given by the management.

• (b) Credit risk

No significant changes during the period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2015.

• (c) Liquidity risk

• a) The table below analyses the Group’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

March 31,2016 Short-term borrowings Accounts payable Other payables Long-term borrowings (including current portion)	Less than 1year 2,891,950 $ 47,094,232 19,903,069 16,440,000	Between 1 and 3years - $ - - 35,620,000	Between 3 and 5years - $ - - -	Over 5 years - $ - - -	Total
					2,891,950 $ 47,094,232 19,903,069 52,060,000

~41~

		Less than		Between 1		Between 3	Over	Over	5
December 31,2015		1year	and 3years			and 5years		years			Total
Accounts payable	$	60,429,884	$	-		- $	$		-	$	60,429,884
Other payables		24,912,360		-		-			-		24,912,360
Long-term borrowings
(including current portion)		16,440,000		43,840,000		-			-		60,280,000
		Less than		Between 1		Between 3	Over		5
March 31,2015		1year	and 3years			and 5years		years			Total
Short-term borrowings	$	11,368,898	$	-		- $	$		-	$	11,368,898
Accounts payable		68,486,956		-		-			-		68,486,956
Other payables		23,276,855		-		-			-		23,276,855
Long-term borrowings
(including current portion)		16,440,000		52,060,000		-			-		68,500,000
Other financial liabilities		33,438		9,604,428		7,542	27,967				9,673,375
Derivative financial liabilities
		Less		than		Between 1
March 31,2016			1year			and 3years					Total
Forward exchange contracts $			174,156		$		-		$		174,156
		Less		than		Between 1
December31,2015			1year			and 3 years					Total
Forward exchange contracts $			265,525		$		-		$		265,525
		Less		than		Between 1
March 31,2015			1year			and 3years					Total
Forward exchange contracts $			134,071		$		-		$		134,071

• b) The related information on the repayment of the medium and long-term syndicated loans from the ‘‘Agreed-upon Agreement’’ is described in Note 6(13).

(3) Fair value estimation

• A.Details of the fair value of the Group’s financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. Details of the fair value of the Group’s investment property measured at cost are provided in Note 6(10).

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

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and on-the-run bonds 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 Group’s investment in derivative instruments is included in Level 2.

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

• C.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 at March 31, 2016, December 31, 2015 and March 31, 2015 is as follows:

March31,2016 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Available-for-sale financial assets Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange contracts December31,2015 Assets Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Available-for-sale financial assets Equity securities Liabilities Financial liabilities at fair value through profit or loss Forward exchange contracts Recurring fair value measurements Recurring fair value measurements	Level 1 300,345 $ - 6,047,231 6,347,576 $ - $ Level 1 281,922 $ - 6,403,449 6,685,371 $ - $	Level 2 - $ 391,992 - 391,992 $ 174,156 $ Level 2 - $ 120,036 - 120,036 $ 265,525 $	Level3 - $ - 735,039 735,039 $ - $ Level3 - $ - 719,585 719,585 $ - $	Total
				300,345 $ 391,992 6,782,270
				7,474,607 $
				174,156 $
				Total
				281,922 $ 120,036 7,123,034
				7,524,992 $
				265,525 $

~43~

March31,2015 Assets Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Available-for-sale financial assets Equity securities Debt securities Liabilities Financial liabilities at fair value through profit or loss Forward exchange contracts Recurring fair value measurements Recurring fair value measurements	Level 1 667,680 $ - 3,241,581 220,000 4,129,261 $ - $	Level 2 - $ 37,155 - - 37,155 $ 134,071 $	Level3 - $ - 1,915,862 - 1,915,862 $ - $	Total
				667,680 $ 37,155 5,157,443 220,000
				6,082,278 $
				134,071 $

• D.The methods and assumptions the Group used to measure fair value are as follows:

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

Listed shares Emerging stocks Corporate bond Market quoted price Closing price Last transaction price Weighted average quoted price

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

• (c)When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• (d)The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.

• (e)The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the

~44~

Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

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

• E.For the three-month periods ended March 31, 2016 and 2015, there was no transfer between Level 1 and Level 2.

• F.The following table presents the changes in level 3 instruments as at March 31, 2016 and 2015:

At January 1 Gains and losses recognized in other comprehensive income At March 31	Equity securities	Equity securities
	2016 719,585 $ 15,454 735,039 $	2015
		1,841,097 $ 74,765
		1,915,862 $

• G.For the three-month periods ended March 31, 2016 and 2015, there was no transfer into or out from Level 3. As the shares of General Interface Solution (GIS) Holding Limited had been listed in June 2015, the Group transferred the fair value from Level 3 into Level 1 at the end of month when the event occurred.

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

• 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.

~45~

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

Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment Private placement shares (emerging companies) Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment Private placement shares (emerging companies)	Fair value at March 31, 2016	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
	378,477 $ 27,842 328,720 Fair value at December 31,2015	Market comparable companies Net asset value Market price method Valuation technique	Price to earnings ratio multiple, price to book ratio multiple, control premium Discount for lack of marketability Not applicable Discount for lack of marketability Significant unobservable input	0.62~1.39 (0.74) 30%~70% (31%) 309 (309) 30% (30%) Range (weighted average)	The higher the multiple and control premium, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the discount for lack of marketability, the lower the fair value Relationship of inputs to fair value
	388,799 $ 28,596 302,190	Market comparable companies Net asset value Market price method	Price to earnings ratio multiple, price to book ratio multiple, control premium Discount for lack of marketability Not applicable Discount for lack of marketability	0.56~1.41 (0.70) 20%~70% (22%) 318 (318) 30% (30%)	The higher the multiple and control premium, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the discount for lack of marketability, the lower the fair value

~46~

Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment Private placement shares (emerging companies)	Fair value at March 31, 2015	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
	1,558,269 $ 27,893 329,700	Market comparable companies Net asset value Market price method	Price to earnings ratio multiple, price to book ratio multiple, control premium Discount for lack of marketability Not applicable Discount for lack of marketability	0.67~1.16 (1.05) 10%~70% (15%) 310 (310) 30% (30%)	The higher the multiple and control premium, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the discount for lack of marketability, the lower the fair value

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

Financialassets	Period	Input	Change	Recognised in other comprehensive income	Recognised in other comprehensive income
				Favourable change	Unfavourable change
Equity instrument Equity instrument Equity instrument	2016/3/31 2015/12/31 2015/3/31	$ 735,039 719,585 1,915,862	± 1% ± 1% ± 1%	$ 7,350 7,196 19,159	($ 7,350) ( 7,196) ( 19,159)

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: None.

• 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.

~47~

• 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 3.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 6(2) and 6(4).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 5.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 6.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 1, 3, 4 and 5.

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in research, development, manufacture and sale of TFT LCD. The chief operating decision-maker considered the business from a perspective of product size of TFT LCD. TFT LCD products are currently classified into big size and small-medium size. Because the Company met the criteria for combining the segment information of big-size and small-medium-size TFT LCD departments, the Company disclosed only one reportable operating segment for all TFT LCD products.

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

(2) Segment information

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

For the three-month periods ended March 31,

Segment revenue Segment (loss) income ( Depreciation and amortization Capital expenditure-property, plant and equipment Segment assets	2016 TFT LCD 56,417,120 $ 8,533,580) $ 11,448,019 $ 7,459,407 $ 351,258,361 $	2015
		TFT LCD
		100,157,867 $
		10,061,344 $
		14,149,652 $
		6,609,101 $
		422,985,216 $

~48~

(3) Reconciliation for segment income (loss)

A reconciliation of reported segment income (loss) and income from continuing operations before tax is provided as follows:

• A. Reconciliation of segment revenue with operating revenue:

Segment revenue Other revenue Operating revenue	Forthe three-monthperiods endedMarch31,	Forthe three-monthperiods endedMarch31,
	2016 56,417,120 $ - 56,417,120 $	2015
		100,157,867 $ - 100,157,867 $

• B. Reconciliation of segment income with income (loss) from continuing operations before income tax:

tax:
Reconciliation of segment assets with total assets: Other significant reconciliation: 2016 2015 Reportable segments (loss)/income 8,533,580) ($ 10,061,344 $ Others - 1,115) ( (Loss)/income before tax from continuing operations 8,533,580) ($ 10,060,229 $ Forthe three-monthperiods endedMarch31, March31,2016 March31,2015 Segment assets 351,258,361 $ 422,985,216 $ Others - 1,481,643 351,258,361 $ 424,466,859 $ 2016 2015 Depreciation and amortization 11,448,019 $ 14,149,652 $ Others - 4,778 11,448,019 $ 14,154,430 $ Capital expenditure - property, plant and equipment 7,459,407 $ 6,609,101 $ Others - - 7,459,407 $ 6,609,101 $ Forthe three-monthperiods endedMarch31,	Forthe three-monthperiods endedMarch31,
		2015
		10,061,344 $ 1,115) 10,060,229 $ March31,2015
	2016 11,448,019 $ - 11,448,019 $ 7,459,407 $ - 7,459,407 $	2015
		14,149,652 $ 4,778 14,154,430 $ 6,609,101 $ - 6,609,101 $

• C. Reconciliation of segment assets with total assets:

• D. Other significant reconciliation:

~49~

Innolux Corporation and Subsidiaries

Loans to others

For the three months ended March 31, 2016

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Table 1
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Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the three months ended March 31, 2016	Balance at March 31, 2016	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
1 1 1 1 1 2 3 4 5	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 Technology USA Inc. Innolux Technology Europe B.V. Innolux Technology Japan Co., Ltd. Innolux Optoelectronics Japan Co., Ltd.	Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Technology Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Hong Kong Ltd. Innolux Hong Kong Ltd. Leadtek Global Group Limited Leadtek Global Group Limited	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties	4,483,170 $ 1,245,325 697,382 1,145,699 3,038,593 193,110 1,415,707 1,488,760 715,750	$1,992,520 1,245,325 697,382 1,145,699 3,038,593 193,110 1,415,707 1,488,760 715,750	$1,992,520 1,245,325 697,382 1,145,699 3,038,593 193,110 1,386,716 1,488,760 715,750	1.5%~2% 1.5% 2% 1.5%~2% 1.5%~2% 0.65%~0.81% 0%~0.269% 1% 1%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - - - - -	Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -	222,810,292 $ 222,810,292 222,810,292 222,810,292 222,810,292 222,810,292 222,810,292 222,810,292 222,810,292	222,810,292 $ 222,810,292 222,810,292 222,810,292 222,810,292 222,810,292 222,810,292 222,810,292 222,810,292	A A A A A A A A A

Note A: The Company - Innolux Corporation

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

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

• 3.The policy for loans granted to direct or indirect wholly-owned overseas subsidiaries is as follows: for short-term capital needs, financial limit shall not be below the 40% requirement, but should not exceed 100% of the company’s net equity.

Table 1, Page 1

Table 2

Innolux Corporation and Subsidiaries

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

March 31, 2016

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of March31,2016	As of March31,2016		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoJoy Investment Corporation InnoJoy Investment Corporation Warriors Technology Investments Ltd. Warriors Technology Investments Ltd. Nets trading Ltd.	Common stock	None None None None None None None None None None None None None None	Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Financial asset at fair value through profit or loss Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current Available-for-sale financial assets - non-current	900,000 150,500,000 48,283,725 89,072 44,741,305 1,209 1,439,180 9,375,000 11,165,222 10,000,000 6,311,734 16,000,000 40,500,000 90	$ 54,987 637,067 316,017 2,071 876,930 - 979 86,156 300,345 328,720 71,007 6,494 4,374,000 27,842	1 6 19 - 9 - 2 2 8 7 2 6 13 -	$ 54,987 637,067 316,017 2,071 876,930 - 979 86,156 300,345 328,720 71,007 6,494 4,374,000 27,842
	AvanStrate Inc. TPV Technology Ltd. Chi Lin Optoelectronics Co., Ltd. Epistar Corporation Chimei Materials Technology Corp. Allied Material Technology Corp. Trillion Science Inc. China Electric Mfg. Corp. Advanced Optoelectronic Technology, Inc. Fitipower Integrated Technology Inc. G-TECH Optoelectronics Corporation OED Holding Ltd. General Interface Solution (GIS) Holding Limited PilotTech Global Fund

Table 2, Page 1

Innolux Corporation and Subsidiaries

Table 3

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

For the three months ended March 31, 2016

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Lakers Trading Ltd. Hon Hai Precision Industry Co., Ltd. Innolux Optoelectronics Japan Co., Ltd. Honfujin Precision Electronics (Chongqing) Co., Ltd. Innolux Technology USA Inc. Hongfujin Precision Electronics (Yantai) Co., Ltd. Hongfujin Precision Electronics (Zhengzhou) Co., Ltd. Innolux Hong Kong Ltd. Innolux Optoelectronics USA, Inc. Competition Team Technology (India) Private Limited Hon Hai Precision Industry Co., Ltd.	An indirect wholly-owned subsidiary Same major stockholder A subsidiary of the Company An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. Same major stockholder	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Purchases	1,461,735 $ 588,887 544,359 429,457 406,333 286,383 191,477 187,517 128,527 102,173 580,774	3 1 1 1 1 1 - - - - 1	60 days 45~90 days 45 days 45~60 days 60 days 60 days 60 days 60 days 45 days 90 days 60~90 days after acceptance	Similar with general sales Similar with general sales Single sales target, no basis for comparison 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	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	- $ 911,295 115,872 461,497 117,958 148,127 105,603 - 63,691 99,649 747,897) (	- 3 - 1 - - - - - - 1

Table 3, Page 1

Differences in transaction

terms compared to third party

							Differences in transaction terms compared to third party	Differences in transaction terms compared to third party
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			transactions		Notes/accounts receivable(payable)		Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Ningbo Innolux Technology Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Ningbo Innolux Technology Ltd. Ningbo Innolux Display Ltd.	FI Medical Device Manufacturing Co., Ltd. Lakers Trading Ltd. Innolux Hong Kong Ltd. Leadtek Global Group Limited Ningbo Innolux Display Ltd. Nanjing Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Lakers Trading Ltd. Leadtek Global Group Limited Lakers Trading Ltd. Lakers Trading Ltd. Innolux Hong Kong Ltd. Leadtek Global Group Limited Hon Hai Precision Industry Co., Ltd.	The company's investments accounted for under the equity method An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company Same major stockholder	Purchases Processing expense Processing expense Processing expense Sales Sales Sales Processing revenue Processing revenue Processing revenue Processing revenue Processing revenue Processing revenue Purchases	331,897 $ 12,883,760 4,554,005 4,540,177 874,154 207,014 138,630 5,793,875 3,802,634 3,598,910 3,501,890 4,627,313 305,632 222,050	1 21 7 7 9 4 33 77 77 93 94 95 68 5	30 days after acceptance 60~90 days 60~90 days 60~90 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 90 days after goods are shipped	Single purchases target, no basis for comparison 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	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	121,980) ($ 15,973,693) ( 6,755,087) ( 19,691,067) ( 297,407 141,240 139,183 8,165,758 15,302,345 2,483,415 2,065,618 6,603,136 686,737 257,468) (	- 24 10 29 1 4 10 88 92 91 94 97 83 6

Table 3, Page 2

Differences in transaction

terms compared to third party

							Differences in transaction terms compared to third party	Differences in transaction terms compared to third party
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			transactions		Notes/accounts receivable(payable)		Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd.	Hon Hai Precision Industry Co., Ltd. Ningbo Lin Moug Optronics Co., Ltd. Ningbo Lin Moug Optronics Co., Ltd. Hon Hai Precision Industry Co., Ltd.	Same major stockholder An indirect wholly-owned subsidiary of Chi Lin Optoelectronics Co., Ltd. An indirect wholly-owned subsidiary of Chi Lin Optoelectronics Co., Ltd. Same major stockholder	Purchases Purchases Purchases Purchases	205,004 $ 171,408 148,305 125,347	1 2 3 1	90 days after goods are shipped 120 days after goods are shipped 120 days after goods are shipped 60 days after goods are shipped	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	237,464) ($ 332,416) ( 146,676) ( 153,759) (	1 3 3 1

Table 3, Page 3

Innolux Corporation and Subsidiaries

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

March 31, 2016

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship withthe counterparty	Balance as atMarch31,2016	Turnover rate	Overduereceivables	Overduereceivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Actiontaken
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Technology Ltd. Ningbo Innolux Technology Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innocom Technology (Shenzhen) Co., Ltd.	Hon Hai Precision Industry Co., Ltd. Honfujin Precision Electronics (Chongqing) Co., Ltd. Kangzhun Electronics Technology (Kunshan) Co., Ltd. Honfujin Precision Electronics (Yantai) Co., Ltd. Innolux Technology USA Inc. Innolux Optoelectronics Japan Co.,Ltd. Hongfujin Precision Electronics (Zhengzhou) Co., Ltd. Leadtek Global Group Limited Ningbo Innolux Technology Ltd. Ningbo Innolux Display Ltd. Leadtek Global Group Limited Ningbo Innolux Display Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Nanjing Innolux Optoelectronics Ltd. Lakers Trading Ltd. Innolux Hong Kong Ltd. Lakers Trading Ltd.	Same major stockholder An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary	$ 911,295 461,497 195,541 148,127 117,958 115,872 105,603 15,302,345 835,096 297,407 686,737 139,183 2,483,415 2,065,618 141,240 8,165,758 6,603,136 3,297,451	0.61 0.99 - 2.80 2.79 4.27 2.12 1.02 - 15.24 0.85 7.10 8.20 6.65 6.36 2.86 2.56 0.03	$ 26,169 71,338 49,914 - - - - 15,302,345 835,096 - 686,737 5,895 836,522 256,858 - 8,165,758 4,557,806 -	Subsequent collection Subsequent collection Subsequent collection - - - - Subsequent collection Subsequent collection - Subsequent collection Subsequent collection Subsequent collection Subsequent collection - Subsequent collection Subsequent collection -	$ 34,366 131,301 59,910 48,242 99,457 - - 2,546,385 - 233,267 420,064 5,641 959,729 708,041 - 31,200,876 1,561,263 -	- - - - - - - - - - - - - - - - - -

Table 4, Page 1

Innolux Corporation and Subsidiaries

Table 5

Expressed in thousands of NTD

Significant inter-company transactions during the reporting periods

For the three months ended March 31, 2016

(Except as otherwise indicated)

Transaction (Note C)

Number	Companyname	Counterparty	Relationship (Note A)	General ledger account	Amount	Transaction terms (Note B)	Percentage of consolidated total operating revenues or total assets
0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 2 2 3 3 4 5 5 5 5	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 Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innocom Technology (Shenzhen) Co., Ltd. Ningbo Innolux Technology Ltd. Ningbo Innolux Technology Ltd. Ningbo Innolux Technology Ltd. Ningbo Innolux Technology Ltd.	Innolux Hong Kong Ltd. Innolux Hong Kong Ltd. Innolux Hong Kong Ltd. Innolux Optoelectronics Japan Co.,Ltd. Innolux Optoelectronics Japan Co.,Ltd. Innolux Optoelectronics USA, Inc. Innolux Technology USA Inc. Innolux Technology USA Inc. Lakers Trading Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Leadtek Global Group Limited Leadtek Global Group Limited Lakers Trading Ltd. Lakers Trading Ltd. Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Innolux Hong Kong Ltd. Innolux Hong Kong Ltd. Lakers Trading Ltd. Leadtek Global Group Limited Leadtek Global Group Limited Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd.	1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3	Sales Processing expense Accrued expenses Sales Accounts receivable Sales Sales Accounts receivable Sales Processing expense Accrued expenses Processing expense Accrued expenses Processing revenue Accounts receivable Sales Accounts receivable Processing revenue Accounts receivable Processing revenue Accounts receivable Accounts receivable Processing revenue Accounts receivable Sales Accounts receivable	187,517 $ 4,554,005 6,755,087) ( 544,359 115,872 128,527 406,333 117,958 1,461,735 12,883,760 15,973,693) ( 4,540,177 19,691,067) ( 3,501,890 2,065,618 207,014 141,240 5,793,875 8,165,758 4,627,313 6,603,136 3,297,451 305,632 686,737 138,630 139,183	- - - - - - - - - - - - - - - - - - - - - - - - - -	- 8 2 1 - - 1 - 3 23 5 8 6 6 1 - - 10 2 8 2 1 1 - - -

Table 5, Page 1

Transaction (Note C)

Number	Companyname	Counterparty	Relationship (Note A)	General ledger account	Amount	Transaction terms (Note B)	Percentage of consolidated total operating revenues or total assets
6 6 6 6 6 7 7	Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd.	Leadtek Global Group Limited Leadtek Global Group Limited Ningbo Innolux Technology Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Lakers Trading Ltd. Lakers Trading Ltd.	3 3 3 3 3 3 3	Processing revenue Accounts receivable Accounts receivable Sales Accounts receivable Processing revenue Accounts receivable	3,802,634 $ 15,302,345 835,096 874,154 297,407 3,598,910 2,483,415	- - - - - - -	7 4 - 2 - 6 1

Note A: 1. The parent company to the subsidiary.

1. The subsidiary to the subsidiary.

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

Note C: Amount disclosure standard: purchases, sales and receivables from related parties in excess of $100 million or 20% of capital.

Table 5, Page 2

Innolux Corporation and Subsidiaries

Information on investees

For the three months ended March 31, 2016

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Sharesheld as atMarch31,2016	Sharesheld as atMarch31,2016	Sharesheld as atMarch31,2016	Net profit (loss) of the investee for the three months ended March31,2016	Investment income (loss) recognised by the Company for the three months ended March 31, 2016	Footnote
				Balance as at March31,2016	Balance as at December 31, 2015	Numberofshares	Ownership (%)	Bookvalue
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	Bright Information Holding Ltd. Golden Achiever International Ltd. Innolux Holding Ltd. Keyway Investment Management Limited Landmark International Ltd. Toppoly Optoelectronics (B.V.I.) Ltd. Innolux Hong Kong Holding Limited Leadtek Global Group Limited Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation Innolux Optoelectronics Europe B.V. Innolux Optoelectronics Japan Co., Ltd. Ampower Holding Ltd. Jetronics International Corp.	Hong Kong BVI Samoa Samoa Samoa BVI Hong Kong BVI Taiwan Taiwan Netherlands Japan Cayman Samoa	Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Order swap company Investment company Investment company Importing, exporting, buying, selling and logistics services of electronic equipment and TFT-LCD monitors Researching, manufacturing and selling of the film transistor liquid crystal display Investment holdings Investment holdings	119,724 $ 119,106 7,858,300 197,554 33,438,542 3,596,307 2,107,291 - 1,217,235 1,674,054 121,941 1,335,486 1,717,714 86,149	119,724 $ 119,106 7,858,300 197,554 33,438,542 3,596,307 2,107,291 - 1,217,235 1,674,054 121,941 1,335,486 1,717,714 86,149	4,910,000 40,250 246,768,185 5,656,410 709,450,000 144,447,000 1,158,844,000 50,000,000 - 167,405,392 180 80 14,062,500 726,941	100 100 100 100 100 100 100 100 100 100 100 100 50 32	98,545 $ 65,561 19,868,856 265,260 44,965,151 6,982,204 3,097,158 114,515 1,110,706 1,282,898 131,752 1,551,487 869,210 3,036) (	4,566) ($ 61) ( 13,860) ( 38,375 304,009) ( 298,100 69,425 353,038 43,401) ( 55,190) ( 3,217) ( 11,956) ( 6,268 486) (	4,566) ($ 556 32,662) ( 38,375 267,631) ( 298,100 59,444 353,038 43,401) ( 55,190) ( 3,217) ( 11,956) ( 3,134 156) (

Table 6, Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Sharesheld as atMarch31,2016	Sharesheld as atMarch31,2016	Sharesheld as atMarch31,2016	Net profit (loss) of the investee for the three months ended March31,2016	Investment income (loss) recognised by the Company for the three months ended March 31, 2016	Footnote
				Balance as at March31,2016	Balance as at December 31, 2015	Numberofshares	Ownership (%)	Bookvalue
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Holding Ltd. Innolux Holding Ltd. Innolux Holding Ltd. Innolux Holding Ltd. Toppoly Optoelectronics (B.V.I.) Ltd. Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Optoelectronics Europe B.V. Innolux Optoelectronics Japan Co., Ltd.	FI Medical Device Manufacturing Co., Ltd. iZ3D, Inc. Chi Mei Lighting Technology Corporation GIO Optoelectronics Corp. Rockets Holding Ltd. Suns Holding Ltd. Lakers Trading Ltd. Innolux Corporation Toppoly Optoelectronics (Cayman) Ltd. Innolux Optoelectronics Hong Kong Holding Ltd. Innolux Hong Kong Ltd. Innolux Technology Europe B.V. Innolux Technology Japan Co., Ltd. Innolux Technology USA Inc. Innolux Optoelectronics Germany GmbH Innolux Optoelectronics USA, Inc.	Taiwan USA Taiwan Taiwan Samoa Samoa Samoa USA Cayman Hong Kong Hong Kong Netherlands Japan USA Germany USA	Production and selling of the absorption for medical element Research and development and sale of 3D flat monitor Manufacturing of electronic equipment and lighting equipment Developing, designing, manufacturing and selling of components of back light module on TFT-LCD Investment holdings Investment holdings Order swap company Distribution company Investment holdings Investment holdings Order swap company Holding company and R&D testing company R&D testing company Distribution company Importing, exporting, buying, selling and logistics services of electronic equipment and TFT-LCD monitors Selling of electronic equipment and computer monitors	73,500 $ - 819,312 800,892 7,296,530 555,422 - 6,348 3,572,384 - - 3,073,072 1,815,603 263,685 10,324 2,400	73,500 $ - 819,312 800,892 7,296,530 555,422 - 6,348 3,572,384 - - 3,073,072 1,815,603 263,685 10,324 2,400	7,350,000 4,333 78,195,856 63,521,501 226,504,550 18,177,052 1 2,000 144,417,000 162,897,802 35,000,000 375,810 201 1,000 250 1,000	49 35 33 24 100 100 100 100 100 100 100 100 100 100 100 100	449,970 $ - - 100,582 14,824,936 4,929,498 245,204 91,416) ( 6,981,829 1,209,812 1,919,922) ( 2,328,964 1,795,153 359,139 14,403 268,036	261,811 $ - - 8,065 13,492) ( 5 - 373) ( 298,100 172,334 114,173) ( 7,842 490 2,815 2,918) ( 4,380) (	128,287 $ - - 1,918 13,492) ( 5 - 373) ( 298,100 172,334 114,173) ( 7,842 490 2,815 2,918) ( 4,380) (

Table 6, Page 2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Sharesheld as atMarch31,2016	Sharesheld as atMarch31,2016	Sharesheld as atMarch31,2016	Net profit (loss) of the investee for the three months ended March31,2016	Investment income (loss) recognised by the Company for the three months ended March 31, 2016	Footnote
				Balance as at March31,2016	Balance as at December 31, 2015	Numberofshares	Ownership (%)	Bookvalue
Rockets Holding Ltd. Rockets Holding Ltd. Rockets Holding Ltd. Rockets Holding Ltd. Rockets Holding Ltd. Suns Holding Ltd. Innolux Technology Europe B.V. Best China Investments Ltd. Mega Chance Investments Ltd. Magic Sun Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd.	Best China Investments Ltd. Mega Chance Investments Ltd. Magic Sun Ltd. Stanford Developments Ltd. Nets Trading Ltd. Warriors Technology Investments Ltd. Innolux Technology Germany GmbH Asiaward Investment Ltd. Main Dynasty Investment Ltd. Sun Dynasty Development Ltd. Chi Mei Lighting Technology Corporation GIO Optoelectronics Corp. TOA Optronics Corporation	Samoa Samoa Samoa Samoa Samoa Samoa Germany Hong Kong Hong Kong Hong Kong Taiwan Taiwan Taiwan	Investment holdings Investment holdings Investment holdings Investment holdings Investment company Investment company Testing and maintenance company Investment holdings Investment holdings Investment holdings Trading business, manufacturing of electronic equipment and lighting equipment Developing, designing, manufacturing and selling of components of back light module on TFT-LCD Selling electronic materials, trading business, manufacturing of electronic equipments and lighting equipments	314,740 $ 573,940 1,146,370 5,391,125 27,477 555,422 33,735 314,740 573,940 1,146,370 263,812 6,881 423,606	314,740 $ 573,940 1,146,370 5,391,125 27,477 555,422 33,735 314,740 573,940 1,146,370 263,812 6,881 423,606	10,000,001 18,000,000 38,000,001 164,000,000 900,001 18,177,052 100,000 77,830,001 139,623,801 295,969,001 19,673,402 467,519 58,007,000	100 100 100 100 100 100 100 100 100 100 8 - 40	260,924 $ 429,696 1,070,982 13,033,097 30,117 4,929,497 60,230 260,924 429,695 1,070,982 - 761 263,543	2 $ 4 9 13,507) ( - 5 116 2 4 9 - 8,065 117,070) (	2 $ 4 9 13,507) ( - 5 116 2 4 9 - 15 46,828) (

Table 6, Page 3

Innolux Corporation and Subsidiaries

Information on investments in Mainland China

For the three months ended March 31, 2016

Table 7

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, 2016	Amount remitted Mainlan Amount re to Taiwan for ended Marc	from Taiwan to d China/ mitted back three months h 31,2016	Accumulated amount of remittance from Taiwan to Mainland China as of March 31, 2016	Net income (loss) of investee for the three months ended March 31, 2016	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended March 31, 2016 (Note B)	Book value of investments in Mainland China as of March 31, 2016	Accumulated amount of investment income remitted back to Taiwan as of March 31,2016	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Innocom Technology (Shenzhen) Co., Ltd. OED Company Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Technology Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Technology Ltd. Kunpal Optoelectronics Ltd. VAP Optoelectronics (Nanjing) Corp. Nanjing Innolux Optoelectronics Ltd. Ningbo Innolux Logistics Ltd. Shanghai Innolux Optoelectronics Ltd. Foshan Innolux Logistics Ltd. Amlink (Shanghai) Ltd. Kunshan Guann-Jye Electronics Co., Ltd. Interface Optoelectronics (Shenzhen) Co., Ltd. Ningbo Innolux Electronics Ltd.	Manufacturing and selling of LCD backend module and related components Manufacturing and selling of electronic paper Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Purchases and sales of monitor-related components company Glass thinning processing service Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Warehousing services Manufacturing and selling of LCD backend module and related components Warehousing services Manufacturing and selling of power supply, modem, ADSL, and other IT equipments Manufacturing of transformers Development of new type of flat panel display, monitor and peripherals, production and management, and offer of after-sales service Manufacturing and selling of LCD backend module and related components	$ 5,278,340 320,343 9,977,350 4,184,050 12,326,855 965,550 67,589 128,740 325,069 4,570,270 128,740 675,885 48,278 257,480 - 3,096,197 149,439	2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3	$ 4,084,654 64,370 237,044 4,184,050 12,326,855 965,550 67,589 121,719 122,303 4,570,270 128,740 - 48,278 321,850 86,578 434,498 -	$ - - - - - - - - - - - - - - - - -	$ - - - - - - - - - - - - - - - - -	$ 4,084,654 64,370 237,044 4,184,050 12,326,855 965,550 67,589 121,719 122,303 4,570,270 128,740 - 48,278 321,850 86,578 434,498 -	($ 13,507) ( 20,634) ( 77,410) 22,696 ( 228,634) ( 21,306) 3,278 ( 4,475) ( 61) 294,821 35,996 172,334 2,379 - - - 7,257	100 4 100 100 100 100 100 100 100 100 100 100 100 50 32 13 100	($ 13,507) - ( 77,410) 22,696 ( 227,989) ( 21,306) 3,278 ( 4,475) ( 61) 294,821 35,996 172,334 2,379 - - - 7,257	$ 13,033,084 17,080 21,907,776 3,414,986 19,330,906 333,101 600,610 72,334 65,159 6,381,196 190,741 1,209,812 69,619 - - 4,374,000 156,599	$ 1,193,686 - 5,556,256 - - - - - - - - - - - - - -	2.1 2.1 2.2 2.2 2.2 2.2 2.3 2.4 2.5 2.3 2.7 2.6 2.7 2.8 2.9 2.1 3.1

Table 7, Page 1

Ceiling on investments in Mainland China:

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of March 31,2016	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Innolux Corporation	29,240,299 $	39,756,684 $	133,686,175 $

Note A: The relevant figures are listed in NT$. Where foreign currencies were involved, the figures were converted to NT$ using exchange rate. Note B: Profit or loss recognised for the three months ended March 31, 2016 was reviewed by independent accountants. Note C: The investment methods are as follows:

1. Directly investing in Mainland China.

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

3. 2.1.Through investing in Innolux Holding Ltd. in the third area, which then invested in the investee in Mainland China.

4. 2.2.Through investing in Landmark International Ltd. in the third area, which then invested in the investee in Mainland China.

5. 2.3.Through investing in Toppoly Optoelectronics (B.V.I.) Ltd. in the third area, which then invested in the investee in Mainland China.

6. 2.4.Through investing in Bright Information Holding Ltd. in the third area, which then invested in the investee in Mainland China.

7. 2.5.Through investing in Golden Achiever International Ltd. in the third area, which then invested in the investee in Mainland China.

8. 2.6.Through investing in Innolux Hong Kong Holding Limited in the third area, which then invested in the investee in Mainland China.

9. 2.7.Through investing in Keyway Investment Management Limited in the third area, which then invested in the investee in Mainland China.

10. 2.8.Through investing in Ampower Holding Ltd. in the third area, which then invested in the investee in Mainland China.

11. 2.9.Through investing in Jetronics International Corporation in the third area, which then invested in the investee in Mainland China.

12. Others.

13. 3.1.The company invests in the company via investee companies in Mainland China is Ningbo Innolux Electronics Ltd. Except for the investment via the holding companies in Mainland China, other investments shall be approved by Investment Commission of the Ministry of Economic Affairs.

Table 7, Page 2