INX — Interim / Quarterly Report 2017

Dec 8, 2017

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

SEPTEMBER 30, 2017 AND 2016

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 September 30, 2017 and 2016, and the related consolidated statements of comprehensive income for the three-month and nine-month periods ended September 30, 2017 and 2016, and the consolidated statements of changes in equity and of cash flows for the nine-month periods ended September 30, 2017 and 2016. 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 the Financial Reports by Securities Issuers” and IAS 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

PricewaterhouseCoopers, Taiwan

October 27, 2017

------------------------------------------------------------------------------------------------------------------------------------------------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 SEPTEMBER 30, 2017, DECEMBER 31, 2016 AND SEPTEMBER 30, 2016

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of September 30, 2017 and 2016 are reviewed, not audited)

Assets	Notes	September30,2017 $ 55,769,747 183,790 48,119,910 12,319,712 1,470,001 32,244,641 1,607,642 150,578 151,866,021 242,355 9,512,077 1,315,877 192,924,285 565,379 17,872,401 7,256,210 1,208,914 230,897,498 $ 382,763,519	December31,2016 $ 35,384,839 64,241 52,855,632 11,599,359 2,034,427 23,401,728 1,552,373 105,532 126,998,131 250,101 5,840,929 1,517,418 201,360,858 573,425 18,446,321 14,698,143 1,794,222 244,481,417 $ 371,479,548	September30,2016
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 130X Inventory 1410 Prepayments 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 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 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets	6(1) 6(2) 6(4)(5) 7 7 6(6) 6(1) and 8 6(2) 6(3) 6(7) 6(8), 7 and 8 6(9) 6(10) and 8 6(8) and 8			$ 32,585,966 354,487 39,100,561 4,989,639 3,573,806 24,339,134 2,002,205 167,821
				107,113,619
				260,708 5,598,029 1,528,181 202,438,870 576,106 18,642,727 16,245,019 2,507,284
				247,796,924
				$ 354,910,543

(Continued)

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INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2017, DECEMBER 31, 2016 AND SEPTEMBER 30, 2016 (Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of September 30, 2017 and 2016 are reviewed, not audited)

	Liabilities and Equity	Notes			September30,2017	December31,2016		September30,2016
	Current Liabilities
2100	Short-term borrowings	6(11)		$	- $	11,583,750	$	15,985,949
2120	Financial liabilities at fair	6(2)
	value through profit or
	loss - current				367,897	1,190,148		275,457
2170	Accounts payable				50,880,750	51,875,305		48,851,691
2180	Accounts payable - related	7
	parties				2,316,499	5,120,235		2,663,176
2200	Other payables	6(12) and 7			32,000,491	22,916,097		20,798,253
2230	Current income tax
	liabilities				1,111,284	1,912,797		1,513,017
2250	Provisions - current	6(16) and 9			5,072,166	3,765,234		2,652,177
2320	Long-term liabilities,	6(13)
	current portion				10,937,785	16,381,686		16,369,190
2399	Other current liabilities				1,056,141	1,420,652		1,865,566
21XX	Total current liabilities				103,743,013	116,165,904		110,974,476
	Non-current liabilities
2540	Long-term borrowings	6(13)			17,258,929	28,128,467		27,281,983
2570	Deferred income tax
	liabilities				659,777	672,971		752,247
2600	Other non-current	6(14)
	liabilities				554,938	505,843		556,893
25XX	Total non-current
	liabilities				18,473,644	29,307,281		28,591,123
2XXX	Total liabilities				122,216,657	145,473,185		139,565,599
	Equity attributable to
	owners of the parent
3110	Share capital - common	6(17)
	stock				99,520,720	99,521,488		99,522,104
3200	Capital surplus	6(18)			99,646,905	99,647,810		99,647,346
	Retained earnings	6(19)
3310	Legal reserve				3,945,576	3,758,507		3,758,507
3320	Special reserve				3,418,804	-		-
3350	Unappropriated retained
	earnings				54,629,939	26,497,362		15,591,363
3400	Other equity interest	6(20)	(		615,082 )(	3,418,804) (		3,174,376)
3XXX	Total equity				260,546,862	226,006,363		215,344,944
3X2X	Total liabilities and
	equity			$	382,763,519 $	371,479,548	$	354,910,543

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 AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2017 AND 2016

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

					Three months ended September 30	Three months ended September 30	Three months ended September 30		Nine months ended September 30	Nine months ended September 30	Nine months ended September 30
	Items	Notes			2017		2016		2017			2016
4000	Sales revenue	7		$	79,507,678	$	74,484,602	$	250,042,399		$	197,706,910
5000	Operating costs	6(6)(24) and 7	(		63,342,544 ) (		65,715,562) (		192,487,132)	(		191,420,305)
5900	Net operating margin				16,165,134		8,769,040		57,555,267			6,286,605
	Operating expenses	6(24)
6100	Selling expenses		(		504,411 ) (		523,514) (		1,444,920)	(		1,747,965)
6200	General and administrative expenses		(		1,716,114 ) (		1,539,999) (		5,052,263)	(		4,626,643)
6300	Research and development expenses		(		3,049,288 ) (		2,847,409) (		9,707,501)	(		7,494,096)
6000	Total operating expenses		(		5,269,813 ) (		4,910,922) (		16,204,684)	(		13,868,704)
6900	Operating profit (loss)				10,895,321		3,858,118		41,350,583	(		7,582,099)
	Non-operating income and expenses
7010	Other income	6(21)			590,298		440,372		1,702,669			2,639,534
7020	Other gains and losses	6(22)			404,829 (		676,884)		613,066	(		2,376,213)
7050	Finance costs	6(23)	(		279,557 ) (		166,618) (		562,033)	(		765,179)
7060	Share of profit/(loss) of associates and joint ventures accounted	6(7)
	for under equity method				65,533		80,266		110,298			215,524
7000	Total non-operating income and expenses				781,103 (		322,864)		1,864,000	(		286,334)
7900	Profit (loss) before income tax				11,676,424		3,535,254		43,214,583	(		7,868,433)
7950	Income tax expense	6(26)	(		2,919,106 ) (		476,988) (		10,480,929)	(		1,130,337)
8200	Profit (loss) for the period			$	8,757,318	$	3,058,266	$	32,733,654	(	$	8,998,770)
	Other comprehensive income (loss) (net)
	Components of other comprehensive income (loss) that will be	6(20)
	reclassified to profit or loss
8361	Financial statements translation differences of foreign operations			$	1,018,476 (	$	2,483,243) (	$	1,428,349)	(	$	4,652,473)
8362	Unrealized gain (loss) on valuation of available-for-sale financial
	assets				1,703,528		96,941		4,273,605	(		1,214,400)
8370	Share of other comprehensive income of associates and joint
	ventures accounted for under equity method				1,844 (		28,844) (		44,243)	(		44,984)
8399	Income tax relating to the components of other comprehensive	6(26)
	income				34,809		14,448		2,709	(		30,743)
8360	Components of other comprehensive income (loss) that will
	be reclassified to profit or loss				2,758,657(		2,400,698)		2,803,722	(		5,942,600)
8300	Other comprehensive income (loss) for the period, net of tax			$	2,758,657 (	$	2,400,698)	$	2,803,722	(	$	5,942,600)
8500	Total comprehensive income (loss) for the period			$	11,515,975	$	657,568	$	35,537,376	(	$	14,941,370)
	Profit (loss) attributable to:
8610	Owners of the parent			$	8,757,318	$	3,058,266	$	32,733,654	(	$	8,998,770)
	Other comprehensive income (loss) attributable to:
8710	Owners of the parent			$	11,515,975	$	657,568	$	35,537,376	(	$	14,941,370)
	Earnings (loss) per share (in dollars)	6(27)
9750	Basic earnings (loss) per share			$	0.88	$	0.31	$	3.29	(	$	0.90)
9850	Diluted earnings (loss) per share			$	0.87	$	0.31	$	3.24	(	$	0.90)

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 NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2017 AND 2016 (Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

2016 Balance at January 1 Appropriations of 2015 earnings: Legal reserve Cash dividends Cancellation of restricted stock to employees Changes in restricted stock to employees Compensation related to share-based payment Recognition of change in equity of associates in proportion to the Group's ownership Loss for the period Other comprehensive loss for the period Balance at September 30 2017 Balance at January 1 Appropriations of 2016 earnings: Legal reserve Special reserve Cash dividends Cancellation of restricted stock to employees Recognition of change in equity of associates in proportion to the Group's ownership Profit for the period Other comprehensive income (loss) for the period Balance at September 30	Notes				Equityattributable to owners of theparent	Equityattributable to owners of theparent	Equityattributable to owners of theparent	Equityattributable to owners of theparent				Total
		Common stock	Capital surplus				Retained Earnings			Other Equity Intere	st
					Legal reserve		Special reserve	Unappropriated earnings	Financial statements translation differences of foreign operations	Unrealized gain (loss) on available-for- sale financial assets	Employee unearned compensation
	6(19) 6(15) 6(18) 6(20) 6(19) 6(18) 6(20)	$ 99,532,372 - - ( 10,268 ) - - - - - $ 99,522,104 $ 99,521,488 - - - ( 768 ) - - - $ 99,520,720	$ 99,643,564 - - 10,268 ( 3,916 ) - ( 2,570 ) - - $ 99,647,346 $ 99,647,810 - - - 768 ( 1,673 ) - - $ 99,646,905		$ 2,676,947 1,081,560 - - - - - - - $ 3,758,507 $ 3,758,507 187,069 - - - - - - $ 3,945,576		$ - - - - - - - - - $ - $ - - 3,418,804 - - - - - $ 3,418,804	$ 27,661,503 ( 1,081,560 ) ( 1,989,810 ) - - - - ( 8,998,770 ) - $ 15,591,363 $ 26,497,362 ( 187,069 ) ( 3,418,804 ) ( 995,204 ) - - 32,733,654 - $ 54,629,939	$ 1,695,294 - - - - - - - ( 4,697,457 ) ($ 3,002,163 ) ($ 4,040,408 ) - - - - - - ( 1,472,592 ) ($ 5,513,000 )	$ 1,074,445 - - - - - - - ( 1,245,143 ) ($ 170,698 ) $ 621,604 - - - - - - 4,276,314 $ 4,897,918	($ 19,402 ) - - - 3,977 13,910 - - - ($ 1,515 ) $ - - - - - - - - $ -	$ 232,264,723 - ( 1,989,810 ) - 61 13,910 ( 2,570 ) ( 8,998,770 ) ( 5,942,600 ) $ 215,344,944 $ 226,006,363 - - ( 995,204 ) - ( 1,673 ) 32,733,654 2,803,722 $ 260,546,862

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 NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

CASH FLOWS FROM OPERATING ACTIVITIES Profit (loss) before tax for the period Adjustments Adjustments to reconcile profit (loss) Depreciation and amortization Compensation related to share-based payment Share of loss of associates and joint ventures accounted for under equity method (Gain) loss from disposal of investments Loss on disposal of property, plant and equipment Impairment loss Interest expense Interest income Dividend income Unrealized foreign exchange (gain) loss Changes in operating assets and liabilities Changes in operating assets Financial assets /liabilities at fair value through profit or loss Accounts receivable Accounts receivable - related parties Other receivables Inventories Prepayments Other current assets Changes in operating liabilities Accounts payable Accounts payable - related parties Other payables Provisions - current Other current liabilities Other non-current liabilities Cash inflow generated from operations Cash paid for income tax Net cash flows from operating activities

Notes 2017 2016 $ 43,214,583 ($ 7,868,433 ) 6(24) 24,992,670 31,749,232 6(24) - 13,910 6(7) ( 110,298 ) ( 215,524 ) 6(22) ( 2,492,927 ) 70,990 6(22) 238,860 80,021 6(22) 120,000 - 6(23) 562,033 749,794 6(21) ( 306,021 ) ( 212,458 ) 6(21) ( 152,087 ) ( 177,880 ) ( 4,725 ) 37,319 ( 934,054 ) ( 203,305 ) 4,735,722 9,089,230 ( 720,353 ) ( 2,356,786 ) 579,762 102,483 ( 8,842,913 ) 4,926,909 ( 55,269 ) ( 717,038 ) ( 50,150 ) ( 64,853 ) ( 994,555 ) ( 8,218,260 ) ( 2,803,736 ) ( 696,757 ) 8,293,282 ( 4,867,898 ) 1,306,932 ( 2,899,582 ) ( 364,511 ) 734,237 49,095 ( 5,195 ) 66,261,340 19,050,156 ( 3,850,994 ) ( 1,585,830 ) 62,410,346 17,464,326

(Continued)

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2017 AND 2016

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Proceeds from capital reduction of available-for-sale financial assets Proceeds from capital reduction of investments accounted for under equity method 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 in prepayments (Decrease) increase in short-term borrowings Payment of long-term borrowings Repurchase from issuance of restricted stock to employees Interest paid Cash dividends paid Net cash flows used in financing activities Effect of changes in foreign currency exchange Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Notes 2017 2016 ($ 122,755 ) $ - 2,916,892 222,372 145,575 - - 23,680 5,134 2,086,995 6(28) ( 15,257,169 ) ( 34,902,350 ) 256,423 18,982 ( 217,192 ) ( 6,389 ) ( 1,477 ) 10,550 290,685 254,348 418,010 404,576 ( 11,565,874 ) ( 31,887,236 ) - ( 177,298 ) ( 11,579,025 ) 15,948,630 ( 16,440,000 ) ( 16,440,000 ) - ( 1,248 ) ( 463,595 ) ( 657,044 ) 6(19) ( 995,204 ) ( 1,989,810 ) ( 29,477,824 ) ( 3,316,770 ) ( 981,740 ) ( 2,197,144 ) 20,384,908 ( 19,936,824 ) 35,384,839 52,522,790 $ 55,769,747 $ 32,585,966

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 NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2017 AND 2016

(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 reported to the Board of Directors on October 27, 2017.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

New standards, interpretations and amendments endorsed by FSC effective from 2017 are as follows:

New Standards,Interpretations and Amendments

Effective date by International Accounting Standards Board

Investment entities: applying the consolidation exception (amendments to IFRS 10, IFRS 12 and IAS 28) Accounting for acquisition of interests in joint operations (amendments to IFRS 11) IFRS 14, ‘Regulatory deferral accounts’ Disclosure initiative (amendments to IAS 1) Clarification of acceptable methods of depreciation and amortisation (amendments to IAS 16 and IAS 38) Agriculture: bearer plants (amendments to IAS 16 and IAS 41) Defined benefit plans: employee contributions (amendments to IAS 19R) Equity method in separate financial statements (amendments to IAS 27) Recoverable amount disclosures for non-financial assets (amendments to IAS 36) Novation of derivatives and continuation of hedge accounting (amendments to IAS 39)

January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2016 January 1, 2014 January 1, 2014

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New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
IFRIC 21, ‘Levies’ Improvements to IFRSs 2010-2012 Improvements to IFRSs 2011-2013 Improvements to IFRSs 2012-2014	January 1, 2014 July 1, 2014 July 1, 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.

Annual improvements to IFRSs 2010-2012 cycle - IFRS 8, ‘Operating segments’

The standard is amended to require disclosure of judgments made by management in aggregating operating segments. This amendment also clarifies that a reconciliation of the total of the reportable segments’ assets to the entity’s assets is required only when segment asset is provided to chief operating decision maker regularly.

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

the Group

New standards, interpretations and amendments as endorsed by the FSC effective from 2018 are as follows:

follows:
New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Classification and measurement of share-based payment transactions (amendments to IFRS 2) Applying IFRS 9, ‘Financial instruments’ with IFRS 4 ‘Insurance contracts’ (amendments to IFRS 4) IFRS 9, ‘Financial instruments’ IFRS 15, ‘Revenue from contracts with customers’ Clarifications to IFRS 15, ‘Revenue from contracts with customers’ (amendments to IFRS 15) Disclosure initiative (amendments to IAS 7) Recognition of deferred tax assets for unrealised losses (amendments to IAS 12) Transfers of investment property (amendments to IAS 40) IFRIC 22, ‘Foreign currency transactions and advance consideration’ Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 1, ‘First-time adoption of International Financial Reporting Standards’ Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12, ‘Disclosure of interests in other entities’ Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28, ‘Investments in associates and joint ventures’	January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2017 January 1, 2017 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2017 January 1, 2018

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Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. 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 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). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.

• (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 that 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

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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, ‘Clarifications 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.

• D. Amendments to IAS 7, ‘Disclosure initiative’

This amendment requires that an entity shall provide more disclosures related to changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.

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

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

endorsed by the FSC are as follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Prepayment features with negative compensation (amendments to IFRS 9) Sale or contribution of assets between an investor and its associate or joint venture (amendments to IFRS 10 and IAS 28) IFRS 16, ‘Leases’ IFRS 17, ‘Insurance contracts’ Long-term interests in associates and joint ventures (amendments to IAS 28) IFRIC 23, ‘Uncertainty over income tax treatments’	January 1, 2019 To be determined by International Accounting Standards Board January 1, 2019 January 1, 2021 January 1, 2019 January 1, 2019

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. 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 financial leases, and only increases the related disclosures.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

• 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, 2016.

• (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 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, 2016.

• B. Subsidiaries included in the consolidated financial statements:

Main Business Name of Investor Name ofSubsidiary Activities Innolux Corporation Bright Information Holding Ltd. Investment holdings Golden Achiever International Ltd. Investment holdings	September December 31, September 30,2017 2016 30,2016 Description 100 100 100 - 100 100 100 - Ownership (%)

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Main Business Name of Investor Name ofSubsidiary Activities Innolux Corporation Innolux Holding Limited Investment holdings Keyway Investment Management Limited Investment holdings Landmark International Ltd. Investment holdings Toppoly Optoelectronics (B.V.I.) Ltd. Investment holdings Innolux Hong Kong Holding Limited Investment holdings Leadtek Global Group Limited Distribution company Yuan Chi Investment Co., Ltd. Investment company InnoJoy Investment Corporation Investment company Innolux Optoelectronics Europe B.V. Investment and distribution company Innolux Optoelectronics Japan Co., Ltd. Investment and distribution company Golden Achiever International Ltd. VAP Optoelectronics (Nanjing) Corp. Processing company Innolux Holding Limited Rockets Holding Ltd. Investment holdings Suns Holding Ltd. Investment holdings Lakers Trading Ltd. Distribution 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 Keyway Investment Management Limited

September December 31, September 30,2017 2016 30,2016 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 (c) 100 100 100 - 100 100 100 - - - 100 (b) 100 100 100 - 100 100 100 (b) 100 100 100 - Ownership (%)

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Main Business Name of Investor Name ofSubsidiary Activities Innolux Hong Kong Holding Limited Innolux Optoelectronics Hong Kong Holding Limited Investment holdings Innolux Hong Kong Limited Distribution 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 After sales service company 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 Kunpal Optoelectronics Ltd. Processing company Innolux Optoelectronics Hong Kong Holding Limited 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

September December 31, September 30,2017 2016 30,2016 Description 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - 100 100 100 - - 100 100 (d) - 100 100 (d) - 100 100 (d) 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 (c) - 100 100 (c) - 100 100 (c) Ownership (%)

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Main Business Name of Investor Name ofSubsidiary Activities Stanford Developments Ltd. Innocom Technology (Shenzhen) Co., Ltd. Processing company Ningbo Innolux Display Ltd. Ningbo Innolux Electronics Ltd. Distribution company Ningbo Innolux Optoelectronics ltd. Ningbo Innolux Flnet Electronics ltd. Distribution company Foshan Innolux Optoelectronics ltd. Foshan Innolux Flnet Electronics ltd. Distribution company

September December 31, September 30,2017 2016 30,2016 Description Ownership (%) 100 100 100 - 100 100 100 - 100 100 - (a) 100 100 - (a)

  - (a) Ningbo Innolux Flnet Electronics Ltd. and Foshan Innolux Flnet Electronics Ltd. were established in October 2016 and were included in the consolidated financial statements since the date of establishment.

  - (b) In October 2016, the Board of Directors of the Group resolved to merge Ningbo Innolux Technology Ltd., which was wholly owned by the Group, with Ningbo Innolux Display Ltd., and Ningbo Innolux Display Ltd. was the surviving company. The effective date was set on December 1, 2016, and was accounted as a reorganisation.

  - (c) In the first quarter of 2017, the subsidiary had completed liquidation and dissolution.

  - (d) In the third quarter of 2017, ths subsidiary had completed liquidation and dissolution.

• 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) 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 2016 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.

• (5) 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 2016 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.

1. 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, 2016.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand, checking accounts and demand deposits Time deposits Cash equivalents - repurchase bonds	September30,2017 38,634,973 $ 16,467,936 55,102,909 666,838 55,769,747 $	December31,2016 8,392,955 $ 26,326,649 34,719,604 665,235 35,384,839 $	September30,2016
			24,039,746 $ 7,881,412
			31,921,158 664,808
			32,585,966 $

• 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 unpledged time deposits which did not meet the definition of cash equivalents were $0, $4,998 and $5,048 at September 30, 2017, December 31, 2016 and September 30, 2016, respectively, and were classfied as ‘other current assets’.

(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 Forward exchange swap contracts	September30,2017 183,790 $ 48,040 $ 194,315 242,355 $ 315,948 $ 51,949 367,897 $	December31,2016 64,241 $ 77,019 $ 173,082 250,101 $ 1,190,148 $ - 1,190,148 $	September30,2016
			354,487 $
			77,019 $ 183,689
			260,708 $
			275,457 $ -
			275,457 $

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• A. The Group recognized net gain (loss) of $336,231, ($120,870), $1,521,531 and $1,026,300 on the financial instruments for the three-month and nine-month periods ended September 30, 2017 and 2016, respectively.

• 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 Forward foreign swap contracts 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 Forward foreign exchange contracts Forward foreign exchange contracts	September 30,2017	December 31,2016	December 31,2016
	Contract Period USD (sell) 414,000 $ 2017/7-2017/12 JPY (buy) 45,556,986 2017/7-2017/12 EUR (sell) 36,100 2017/7-2017/12 USD (buy) 42,440 2017/7-2017/12 EUR (sell) 25,000 2017/8-2017/12 JPY (buy) 3,298,950 2017/8-2017/12 HKD (sell) 364,760 2017/7-2017/10 EUR (buy) 40,000 2017/7-2017/10 USD (sell) 430,000 2017/6-2018/2 RMB (buy) 2,889,557 2017/6-2018/2 USD (sell) 410,000 2017/9-2017/10 TWD (buy) 12,362,900 2017/9-2017/10 (in thousands) Contract Amount (Notional Principal)	(in thousands) Contract Amount (Notional Principal)	Contract Period
		(in thousands) Contract Amount (Notional Principal)	Contract Period
		TWD (sell) 28,458,208 $ USD (buy) 905,000 USD (sell) 390,000 JPY (buy) 39,812,858 EUR (sell) 12,000 USD (buy) 13,568 EUR (sell) 66,000 JPY (buy) 7,561,997 HKD (sell) 333,353 EUR (buy) 39,000 USD (sell) 890,000 RMB (buy) 5,962,493 RMB (sell) 502,737 USD (buy) 75,260	2016/6-2017/3 2016/6-2017/3 2016/7-2016/12 2016/7-2016/12 2016/8-2016/12 2016/8-2016/12 2016/6-2017/1 2016/6-2017/1 2016/7-2016/10 2016/7-2016/10 2016/7-2017/1 2016/7-2017/1 2016/9-2016/10 2016/9-2016/10

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 primarily for the requirement of capital management and not accounted for using hedge accounting.

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(3) Available-for-sale financial assets

Available-for-sale financial assets
Items Non-current items Listed stocks Emerging and unlisted stocks	September30,2017 8,906,141 $ 605,936 9,512,077 $	December31,2016 5,295,578 $ 545,351 5,840,929 $	September30,2016
			4,936,453 $ 661,576 5,598,029 $

• 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 and nine-month periods ended September 30, 2017 and 2016. Please refer to Note 6(20).

• B. For the nine-month period ended September 30, 2017, the Company and its subsidiary assessed that investment value of certain investee companies was impaired and recognized impairment loss of $120,000 which is listed as ‘other gains and losses’.

(4) Notes receivable and accounts receivable

	September30,2017	September30,2017	December31,2016	December31,2016	September30,2016	September30,2016
Notes receivable	$	24,851	$	-	$	-
Accounts receivable		49,784,589		53,798,678		39,945,649
		49,809,440		53,798,678		39,945,649
Less: Allowance for sales returns
and discounts	(	1,580,033)	(	833,545)	(	727,444)
Allowance for bad debts	(	109,497)	(	109,501)	(	117,644)
	$	48,119,910	$	52,855,632	$	39,100,561

• 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:

is as follows:
Up to 60 days 61 to 180 days Over 180 days	September30,2017 2,986,772 $ 1,274 1,214 2,989,260 $	December31,2016 391,369 $ 8,364 - 399,733 $	September30,2016
			$ 760,379 3,082 2,501
			765,962 $

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

• (a) As of September 30, 2017, December 31, 2016 and September 30, 2016, the Group’s accounts receivable that were impaired were $109,497, $109,501 and $117,644, respectively.

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

At January 1 Allowance for bad debts - write-offs Net exchange difference ( At September 30	2017 2016 109,501 $ 118,516 $ - 850) ( 4) 22) ( 109,497 $ 117,644 $

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(5) Transfer of financial assets

The Company entered into a factoring agreement with financial institutions to sell its accounts receivable. Under the agreement, the Company is not obligated to bear the default risk of the transferred accounts receivable and this is without right of recourse. However, the Company is liable for the losses incurred on any business dispute.

The Company does not provide collateral, and has no continuous involvement in the transferred accounts receivable. As a result, the Company derecognized the transferred accounts receivable. As of September 30, 2017, all the accounts receivable sold were collected and the Company entered into factoring agreements with CTBC Bank, Taipei Fubon Commercial Bank, and Bank of Taiwan in the amount of $18,761,200, $6,052,000, and $1,210,400, respectively.

As of September 30, 2016, the related information on accounts receivable that were transferred but not expired is as follows. Partial amounts that were not advanced were recorded in other receivables:

September 30, 2016

Purchaser of accounts receivable CTBC Bank Taipei Fubon Commercial Bank	Accounts receivable transferred that hasnot expired 2,451,201 $ 343,243 2,794,444 $	Amount derecognised 2,451,201 $ 343,243 2,794,444 $	Facilities 20,384,000 $ 6,272,000 26,656,000 $	Amount advanced
				2,206,081 $ 308,919
				2,515,000 $

(6) Inventories

Raw materials and supplies Work in process Finished goods	September30,2017 3,992,571 $ 15,217,110 13,034,960 32,244,641 $	December31,2016 3,352,916 $ 12,345,964 7,702,848 23,401,728 $	September30,2016
			3,225,830 $ 13,744,949 7,368,355 24,339,134 $

• A. For the three-month and nine-month periods ended September 30, 2017 and 2016, the Company and subsidiaries recognized cost of goods sold for inventories that have been sold at $63,312,098, $65,695,648, $192,437,555 and $191,514,273, and recognized net inventory loss (gain) at $30,446, $19,914, $49,577 and ($93,968) due to write down (reversal) of cost of scrap inventories to net realizable value, respectively.

• B. Due to the earthquake which occurred in Kaohsiung, Taiwan on February 6, 2016, certain inventories were destroyed. Please refer to Note 10 for details.

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(7) Investments accounted for under the equity method

Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd. TOA Optronics Corporation Others	September30,2017 836,356 $ 370,999 - 108,522 1,315,877 $	December31,2016 870,941 $ 451,943 89,366 105,168 1,517,418 $	September30,2016
			851,080 $ 331,174 244,208 101,719
			1,528,181 $

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

Profit for the period from continuing operations Other comprehensive income (loss) - net of tax Total comprehensive income	2017 2016 65,533 $ 80,266 $ 1,844 28,844) ( 67,377 $ 51,422 $ For the three-month period endedSeptember30,	2017 2016 110,298 $ 215,524 $ 44,243) ( 44,984) ( 66,055 $ 170,540 $ For the nine-month period endedSeptember30,
	2017 65,533 $ 1,844 ( 67,377 $	2017 110,298 $ 44,243) ( ( 66,055 $

(8) Property, plant and equipment

AtJanuary1 Additions Disposals Cost: Land 3,852,792 $ - $ - $ Buildings 193,290,765 3,039 97,759) ( Machinery and equipment 438,234,703 50,950 4,062,990) ( Other equipment 36,511,450 22,307 737,332) ( 671,889,710 76,296 4,898,081) ( Accumulated depreciation and impairment: Buildings 105,693,860) ( 6,871,526) ( 56,798 Machinery and equipment 371,358,748) ( 13,996,478) ( 3,738,247 Other equipment 29,890,362) ( 3,100,406) ( 704,712 ( 506,942,970) ( 23,968,410) ( 4,499,757 Unfinished construction and equipment under acceptance 36,414,118 16,000,108 105,943) ( ( 201,360,858 $ 2017			2017

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2016

AtJanuary1 Additions Disposals Cost: Land 3,852,792 $ - $ - $ Buildings 185,696,326 60,144 1,095,110) ( Machinery and equipment 432,460,229 208,797 3,211,841) ( Other equipment 33,632,482 33,880 386,715) ( 655,641,829 302,821 4,693,666) ( Accumulated depreciation and impairment: Buildings 95,892,428) ( 8,561,012) ( 620,827 Machinery and equipment 352,326,878) ( 19,097,286) ( 3,040,275 Other equipment 26,880,493) ( 3,183,541) ( 455,995 475,099,799) ( 30,841,839) ( 4,117,097 Unfinished construction and equipment under acceptance 18,940,710 35,080,088 2,260) ( ( 199,482,740 $	Transfer, net exchange differences and others AtSeptember30 - $ 3,852,792 $ 7,356,452 192,017,812 6,952,984 436,410,169 2,622,209 35,901,856 16,931,645 668,182,629 783,437 103,049,176) ( 1,562,473 366,821,416) ( 169,565 29,438,474) ( 2,515,475 499,309,066) ( 20,453,231) 33,565,307 202,438,870 $	AtSeptember30

• A. Amount of borrowing costs capitalized as part of property, plant and equipment and the range of the interest rates for such capitalization are as follows:

Capitalized amount Range of the interest rates for capitalization	2017 2016 - $ 144,629 $ - 2.12%~2.26% For the three-month period ended September30,	For the nine-month period ended September30,	For the nine-month period ended September30,
	2017 - $ -	2017 203,902 $ 2.15%~2.41%	2016
			144,629 $ 2.00%~2.26%

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

• D. As of September 30, 2017, December 31, 2016, and September 30, 2016, the prepayments for business facilities which have not yet entered the factory (shown as ‘other non-current assets’) amounted to $290,616, $896,996 and $1,563,475, respectively.

• E. Due to the earthquake in Kaohsiung, Taiwan on February 6, 2016, a portion of property, plant and equipment were damaged. Please refer to Note 10 for details.

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(9) Investment property

nvestment property
				2017
		AtJanuary1		Additions			Transfers		AtSeptember30
Cost:
Land	$	188,247	$	-	$		-	$	188,247
Buildings		439,228		-			-		439,228
		627,475		-			-		627,475
Accumulated
depreciation and
impairment:
Buildings	(	54,050)	(	8,046)			-	(	62,096)
	$	573,425	($	8,046)	$		-	$	565,379
				2016
		AtJanuary1		Additions			Disposals		AtSeptember30
Cost:
Land	$	188,247	$	-		$	-	$	188,247
Buildings		564,109		-	(		124,881)		439,228
		752,356		-	(		124,881)		627,475
Accumulated
depreciation and
impairment:
Buildings	(	71,853)	(	8,451)			28,935	(	51,369)
	$	680,503	($	8,451)	($		95,946)	$	576,106

The fair value of the investment property held by the Group as at September 30, 2017, December 31, 2016, and September 30, 2016 was $977,231, $1,109,891, and $1,077,466, respectively. The amounts mentioned above represent valuation results of comparative method based on market trading information categorized within Level 3 in the fair value hierarchy.

(10) Intangible assets

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

2017

AtJanuary1 Additions Cost: Patents and royalty 8,154,685 $ - $ Goodwill 17,096,628 - Others 4,417,732 217,192 ( 29,669,045 217,192 ( Accumulated amortization and impairment: Patents and royalty 7,528,072) ( 613,875) ( Others 3,694,652) ( 402,339) ( 11,222,724) ( 1,016,214) ( 18,446,321 $ 799,022) ($	Disposals - $ - 47,369) 47,369) - 47,369 47,369 - $	Transfer, net exchange differences and others AtSeptember30 - $ 8,154,685 $ - 17,096,628 220,495 4,808,050 220,495 30,059,363 - 8,141,947) ( 4,607 4,045,015) ( 4,607 12,186,962) ( 225,102 $ 17,872,401 $

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2016

AtJanuary1 Additions Cost: Patents and royalty 8,152,685 $ - $ Goodwill 17,096,628 - Others 4,215,500 6,389 29,464,813 6,389 Accumulated amortization and impairment: Patents and royalty 6,668,709) ( 652,979) ( Others 3,453,248) ( 245,963) ( 10,121,957) ( 898,942) ( 19,342,856 $ 892,553) ($	Disposals - $ - 49,932) ( 49,932) ( - 49,932 49,932 - $	Transfer, net exchange differences and others AtSeptember30 2,000 $ 8,154,685 $ - 17,096,628 176,110 4,348,067 178,110 29,599,380 - 7,321,688) ( 14,314 3,634,965) ( 14,314 10,956,653) ( 192,424 $ 18,642,727 $

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

Operating costs Operating expenses	2017 2016 316,829 $ 249,536 $ 35,939 47,488 352,768 $ 297,024 $ For the three-month period ended September30,	For the nine-month period ended September30,	For the nine-month period ended September30,
	2017 316,829 $ 35,939 352,768 $	2017 904,102 $ 112,112 1,016,214 $	2016
			752,512 $ 146,430
			898,942 $

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.

(11) Short-term borrowings

goodwill. Short-term borrowings
Type ofborrowings Bank loans Credit loans Range of interest rates	December31,2016 11,583,750 $ 0.83%~1.59%	September30,2016 15,985,949 $ 0.8%~1.31%	Collateral
			None

As of September 30, 2017, the Group has no short-term borrowings.

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(12) Other payables

Other payables
Wages and salaries payable and bonus Payable on machinery and equipment Repairs and maintenance expense payable Utilities expense payable Other payables	September30,2017 11,338,726 $ 4,158,999 2,283,366 1,296,814 12,922,586 32,000,491 $	December31,2016 6,566,523 $ 3,339,764 1,974,059 1,064,275 9,971,476 22,916,097 $	September30,2016
			4,317,930 $ 4,454,711 2,001,576 1,206,624 8,817,412
			20,798,253 $

- (13) Long term borrowings

Type of loans Syndicated bank loans Less: Administrative expenses charged by syndicated banks Current portion (includes administrative expenses) Range of interest rates	Period September30,2017 December31,2016 September30,2016 2015/3/12 ~2021/12/6 28,400,000 $ 44,840,000 $ 43,840,000 $ 203,286) ( 329,847) ( 188,827) ( 10,937,785) ( 16,381,686) ( 16,369,190) ( 17,258,929 $ 28,128,467 $ 27,281,983 $ 1.75%~2.06% 1.77%~2.06% 1.77%~2.06%

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

• B. In the third quarter of 2017, the Company applied to extend the expiry date for 2 years pursuant to the NT$68.5 billion syndicated loan agreement. On August 2, 2017, the Company was informed of the banks’ unanimous consent.

• C. The syndicated loan agreements specified that the Company shall meet covenants on current ratio, liability ratio, interest coverage, and tangible net equity, based on the Company’s annual consolidated financial statements audited by independent auditors. The Company’s financial ratios on the consolidated financial statements for the year ended December 31, 2016 are in compliance with the covenants on the syndicated loan agreement.

(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 (the “New Plan”) under the Labor Pension Act (the “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 threemonth and nine-month periods ended September 30, 2017 and 2016 were $486,225, $499,603, $1,448,714 and $1,525,726, 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(15) of the consolidated financial statements for the year ended December 31, 2016.

• B. The details of the employee stock option plan for the nine-month period ended September 30, 2016 is as follows:

A. The information on the Company’s share-based payment compensation plan negotiated with employees is provided in Note 6(15) of the consolidated financial statements for the year ended December 31, 2016. B. The details of the employee stock option plan for the nine-month period ended September 30, 2016 is as follows:	ompany’s share-based payment compensation plan negotiated with ote 6(15) of the consolidated financial statements for the year ended e stock option plan for the nine-month period ended September 30,	ompany’s share-based payment compensation plan negotiated with ote 6(15) of the consolidated financial statements for the year ended e stock option plan for the nine-month period ended September 30,	ompany’s share-based payment compensation plan negotiated with ote 6(15) of the consolidated financial statements for the year ended e stock option plan for the nine-month period ended September 30,	ompany’s share-based payment compensation plan negotiated with ote 6(15) of the consolidated financial statements for the year ended e stock option plan for the nine-month period ended September 30,	ompany’s share-based payment compensation plan negotiated with ote 6(15) of the consolidated financial statements for the year ended e stock option plan for the nine-month period ended September 30,
Weighted Weighted Weighted average average Range of average stock price of Quantity (in exercise exercise remaining stock options thousand price price vesting at exercise StockOptions units) (in dollars) (in dollars) period date(in dollars) Outstanding options at the beginning of the period 50,000 22.85 $ Options exercised - - 9.99 $ Options expired 50,000) ( 21.87 Outstanding options at the end of the period - - - $ - Exercisable options at the end of the period - - For the nine-monthperiod endedSeptember30,2016	For the nine-monthperiod endedSeptember30,2016
		Weighted average exercise price (in dollars) 22.85 $ - 21.87 - -	Range of exercise price (in dollars) - $	Weighted average remaining vesting period -	Weighted average stock price of stock options at exercise date(in dollars)
					9.99 $

• There was no employee stock option plan for the nine-month period ended September 30, 2017.

• C. For the three-month and nine-month periods ended September 30, 2017 and 2016, the expenses incurred from share-based payment arrangements were $1,950 and $13,910, respectively.

(16) Provisions-current

At January 1, 2017 Additions during the period Used during the period ( At September 30, 2017	Warranty 1,634,234 $ 1,615,000 946,768) 2,302,466 $	Litigation and others 2,131,000 $ 638,700 - ( 2,769,700 $	Total 3,765,234 $ 2,253,700 946,768) 5,072,166 $

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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

As of September 30, 2017, the Company’s authorized and outstanding capital were $105,000,000 and $99,520,720, with a par value of $10 (in dollars) per share, respectively. All proceeds from shares issued have been collected.

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

At January 1 Cancellation of restricted stock to employees ( At September 30	2017 Number of ordinary shares (inthousands) 9,952,149 77) ( 9,952,072	2016 Number of ordinary shares (inthousands) 9,953,237 1,027) 9,952,210

• A. The Board of Directors of the Company resolved to increase capital for cash by issuing the GDR which 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 September 30, 2017, there were 213 thousand units outstanding, representing 2,134 thousand shares of common stocks. On July 26, 2017, the Board of Directors approved the proposal to terminate the circulation of GDR and its contracts in order to lower administrative costs.

• B. 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 September 30, 2017 and 2016, the Company has retired 77 thousand and 1,027 thousand shares of unvested restricted stocks to employees, respectively, and decreased capital in accordance with related regulation.

(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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2017

		2017	2017
At January 1 Cancellation of restricted stock to employees Vested restricted stock to employees Recognition of change in equity of associates in proportion to the Group's ownership At September 30 At January 1 Cancellation of restricted stock to employees Vested restricted stock to employees Changes in restricted stock to employees Expiration of employee stock options Recognition of change in equity of associates in proportion to the Group's ownership At September 30	Sharepremium 99,614,516 $ - 167 - ( 99,614,683 $	Share of profit (loss) of associates accounted for Restricted under equity stock to method employees 33,888 $ 594) ($ - 768 - 167) ( 1,673) - ( 32,215 $ 7 $ 2016			Total 99,647,810 768 - 1,673) 99,646,905
				$
				$
	Share of profit (loss) of associates accounted for Restricted under equity Employee stock to Sharepremium method stock options employees Total 99,101,649 $ 36,458 $ 393,500 $ 111,957 $ 99,643,564 $ - - - 10,268 10,268 117,457 - - 117,457) ( - - - - 3,916) ( 3,916) ( 393,500 - 393,500) ( - - - 2,570) ( - - 2,570) ( 99,612,606 $ 33,888 $ - $ 852 $ 99,647,346 $		Restricted stock to employees		Total

(19) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be offset against prior years’ operating losses, then set aside 10% of the remaining amount as legal reserve (until the legal reserve equals the paid-in capital). Preferred dividend shall be distributed after setting aside or reversing a special reserve according to related regulations. The appropriation of the remaining amount along with the unappropriated earnings from previous years shall be proposed by the Board of Directors and resolved by the shareholders. The Company is in an emerging industry which is growing rapidly, and has a capital intensive business. The Company is at the stage of stable growth. In line with the Company’s long-term

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financial plan in the future, investment environment and business competition situation, the appropriation of dividends shall be proposed by the Board of Directors and resolved by the shareholders, taking into account the future capital expenditure budget and capital requirement of the Company. However, the stock dividends distributed to shareholders shall not exceed twothirds of distributable dividends in current period.

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

• C. The details of the appropriation of 2016 and 2015 net income which was approved at the stockholders’ meeting in June 2017 and 2016, respectively, are as follows:

stockholders’ meeting in	June 2017 and 2016, respectively, are as follows:	June 2017 and 2016, respectively, are as follows:	June 2017 and 2016, respectively, are as follows:
Legal reserve Special reserve Cash dividends	Years endedDecember31,
	Dividends per Amount share (indollars) 187,069 $ 3,418,804 995,204 0.10 $ 4,601,077 $ 2016	2015
	Amount 187,069 $ 3,418,804 995,204 4,601,077 $	Amount 1,081,560 $ - 1,989,810 3,071,370 $	Dividends per share (indollars)
			0.20 $

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

(20) Other equity items

refer to Note 6(25). Other equity items
				2017
				Available-
		Currency		for-sale
		translation		investments		Total
At January 1	($	4,040,408)	$	621,604	($	3,418,804)
Revaluation of available-for-sale
investments - gross		-		6,637,038		6,637,038
Revaluation transfer of
available-for-sale investment - gross		-	(	2,363,433)	(	2,363,433)
Currency translation differences	(	1,428,349)		-	(	1,428,349)
Share of other comprehensive loss of
associates	(	44,243)		-	(	44,243)
Effect of income tax		-		2,709		2,709
At September 30	($	5,513,000)	$	4,897,918	($	615,082)

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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 - 1,285,390) ( - 1,285,390) ( Revaluation transfer of available-for- sale investment - gross - 70,990 - 70,990 Currency translation differences 4,652,473) ( - - 4,652,473) ( Changes in restricted stocks to employees - - 3,977 3,977 Compensation related to share-based payment - - 13,910 13,910 Share of other comprehensive loss of associates 44,984) ( - - 44,984) ( Effect of income tax - 30,743) ( - 30,743) ( At September 30 3,002,163) ($ 170,698) ($ 1,515) ($ 3,174,376) ($ 2016		2016
			Total

(21) Other income

Other income
Rental revenue Interest income Dividend income Payables reclassified to other income Other income	2017 2016 39,760 $ 40,613 $ 110,352 40,434 12,679 50,157 - 25,014 427,507 284,154 590,298 $ 440,372 $ For the three-month period endedSeptember30,	For the nine-month period endedSeptember30,
	2017 39,760 $ 110,352 12,679 - 427,507 590,298 $	2017 104,464 $ 306,021 152,087 - 1,140,097 1,702,669 $	2016
			123,408 $ 212,458 177,880 859,983 1,265,805 2,639,534 $

(22) Other gains and losses

Net gain (loss) on financial assets and liabilities at fair value through profit or loss Net currency exchange (loss) gain Gain (loss) on disposal of investments Loss on disposal of property, plant and equipment Impairment loss Litigation loss and others	2017 2016 2017 2016 336,231 $ 120,870) ($ 1,521,531 $ 1,026,300 $ 377,601) ( 99,182 1,652,661) ( 1,101,980) ( 168,083 - 2,492,927 70,990) ( 104,836) ( 44,084) ( 238,860) ( 80,021) ( - - 120,000) ( - 382,952 611,112) ( 1,389,871) ( 2,149,522) ( 404,829 $ 676,884) ($ 613,066 $ 2,376,213) ($ For the three-month period For the nine-month period endedSeptember30, endedSeptember30,

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(23) Finance costs

Finance costs
Interest expense: Bank borrowings Others Factoring expense of accounts receivable	2017 2016 279,544 $ 154,944 $ 13 - - 11,674 279,557 $ 166,618 $ For the three-month period endedSeptember30,	For the nine-month period endedSeptember30,
	2017 279,544 $ 13 - 279,557 $	2017 562,011 $ 22 - 562,033 $	2016
			749,794 $ - 15,385
			765,179 $

(24) Expenses by nature

Expenses by nature
Employee benefit expense: Salaries and other short - term employee benefits Share-based payments Post-employment benefits Depreciation Amortization	2017 2016 10,445,947 $ 9,427,225 $ - 1,950 486,225 499,603 7,980,355 9,557,994 352,768 297,024 19,265,295 $ 19,783,796 $ For the three-month period endedSeptember30,	For the nine-month period endedSeptember30,
	2017 10,445,947 $ - 486,225 7,980,355 352,768 19,265,295 $	2017 34,574,521 $ - 1,448,714 23,976,456 1,016,214 61,015,905 $	2016
			28,035,492 $ 13,910 1,525,726 30,850,290 898,942
			61,324,360 $

(25) Employees’ compensation and directors’ remuneration

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

• B. For the three-month and nine-month period ended September 30, 2017, employees’ compensation was accrued at $559,168 and $2,111,036, respectively; while no directors’ remuneration was accrued. For the nine-month period ended September 30, 2016, no employees’ compensation was accrued. The aforementioned amounts were recognized in expenses.

The expense recognized for the nine-month period ended September 30, 2017 was accrued based on the earnings of current year.

Employees’ compensation and directors’ remuneration were accrued at $192,788 and $1,928, respectively, based on the earnings of current year distributable for the year ended December 31, 2016 and the employees’ compensation will be distributed in the form of cash. Employees’ compensation and directors’ remuneration for 2016 as resolved by the Board of Directors were $231,338 and $3,856, respectively. The difference of $40,478 between employees’ compensation (directors’ remuneration) as resolved by the Board of Directors and the amount recognized in the 2016 financial statements was caused by a different accrual ratio and had been recorded as expense in 2017.

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

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(26) Income tax

A. Income tax expense

• (a) Components of income tax expense:

Current tax: Current tax on profit for the period Tax on undistributed surplus earnings Prior year income tax (overestimation) underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense	2017 2016 1,082,115 $ 13,442) ($ - - 34,610) ( 14,646) ( ( 1,047,505 28,088) ( 1,871,601 505,076 2,919,106 $ 476,988 $ For the three-month period ended September30,	For the nine-month period ended September30,	For the nine-month period ended September30,
		2017 3,126,145 $ - 76,662) ( 3,049,483 7,431,446 ( 10,480,929 $	2016
			698,971 $ 590,712 10,205) 1,279,478 149,141) 1,130,337 $

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

follows:
Fair value gains/losses on available-for-sale financial assets	2017 2016 34,809) ($ 14,448) ($ For the three-month period ended September30,	For the nine-month period ended September30,
		2017 2,709) ($	2016
			30,743 $

• B. The Company’s income tax returns through 2014 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:

(a) Balance of tax credit account (b) Estimated (actual) creditable tax rate	September30,2017 2,043,097 $	December31,2016 1,420,948 $ 2017(Estimated) 3.74%	September30,2016
			1,407,490 $
			2016 (Actual)
			7.47%

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(27) Earnings per share

==> picture [481 x 396] intentionally omitted <==

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

For the three-month period For the nine-month period
ended September 30, ended September 30,
2017 2016 2017 2016
Basic earnings (loss) per share
Profit (loss) attributable to
ordinary shareholders of
the parent $ 8,757,318 $ 3,058,266 $ 32,733,654 ($ 8,998,770)
Weighted average number of
ordinary shares outstanding
(shares in thousands) 9,952,068 9,949,107 9,952,045 9,946,680
Basic earnings (loss) per share
(in dollars) $ 0.88 $ 0.31 $ 3.29 ($ 0.90)
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent $ 8,757,318 $ 3,058,266 $ 32,733,654
Weighted average number of
ordinary shares outstanding
(shares in thousands) 9,952,068 9,949,107 9,952,045
Assumed conversion of all
dilutive potential ordinary
shares:
-
-Employees’ compensation 149,190 156,975
-Restricted stocks 4 2,887 28
10,101,262 9,951,994 10,109,048
Diluted earnings per share
(in dollars) $ 0.87 $ 0.31 $ 3.24
----- End of picture text -----

As employee stock options had anti-dilutive effect for the nine-month period ended September 30, 2016, they were not included in the calculation of diluted earnings per share.

(28) Supplemental cash flow information

Investing activities with partial cash payments:

For the nine-month period ended September 30,

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	2017 16,076,404 $ 3,339,764 4,158,999) ( 15,257,169 $	2016 35,382,909 $ 3,974,152 4,454,711) 34,902,350 $

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7. RELATED PARTY TRANSACTIONS

(1) Names and relationship of related parties

Names of related parties Relationship with the Group Hon Hai Precision Industry Co., Ltd. and its The related party is owned by the same major subsidiaries shareholder of the Company Chi Lin Optoelectronics Co., Ltd. and its The related party’s director is the Company subsidiaries FI Medical Device Manufacturing Co., Ltd. Associate GIO Optoelectronics Corp. Associate

(2) Significant related party transactions

A. Operating revenue

Operating revenue
Sales of goods: Others Associates	2017 2016 11,518,588 $ 4,102,121 $ - 4,469 11,518,588 $ 4,106,590 $ For the three-month period endedSeptember30,	For the nine-month period endedSeptember30,
	2017 11,518,588 $ - 11,518,588 $	2017 34,104,697 $ 36,545 34,141,242 $	2016
			7,852,627 $ 88,379
			7,941,006 $

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

Purchases of goods
Purchases of goods: Others Associates	2017 2016 1,362,892 $ 1,681,227 $ 316,965 360,283 1,679,857 $ 2,041,510 $ For the three-month period endedSeptember30,	For the nine-month period endedSeptember30,
	2017 1,362,892 $ 316,965 1,679,857 $	2017 11,033,008 $ 928,973 11,961,981 $	2016
			5,041,768 $ 976,272
			6,018,040 $

The payment term was 30~120 days to related parties after delivery, and 30~180 days to nonrelated 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.

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C. Receivables from related parties

September 30, 2017 December 31, 2016 September 30, 2016

Accounts receivable:

Accounts receivable:	September30,2017	December31,2016	September30,2016
Others - Hon Hai Precision Industry Co., Ltd. - Others Associates	3,437,376 $ 8,849,808 32,528 12,319,712 $	7,605,574 $ 3,946,042 47,743 11,599,359 $	2,916,546 $ 2,043,031 30,062
			4,989,639 $

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. D. Payables to related parties

==> picture [314 x 13] intentionally omitted <==

	September30,2017	December31,2016	September30,2016
Accounts payable: Others - Hon Hai Precision Industry Co., Ltd. - Others Associates	1,902,122 $ 233,338 181,039 2,316,499 $	4,152,828 $ 737,598 229,809 5,120,235 $	1,602,781 $ 862,476 197,919
			2,663,176 $

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

E. Property transactions

Purchase of property

(a) Acquisition of property, plant and equipment:

Period-end balances arising f Others Others	rom purchases of property (shown as “Other payables”): 2017 2016 2017 2016 5,296 $ 66,352 $ 55,775 $ 69,745 $ For the three-month period For the nine-month period endedSeptember30, endedSeptember30, September30,2017 December31,2016 September30,2016 5,034 $ 27,031 $ 13,541 $	For the nine-month period endedSeptember30,	For the nine-month period endedSeptember30,	For the nine-month period endedSeptember30,
				2016
			13,541 $

(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:

For the three-month period For the nine-month period ended September 30, 2017 ended September 30, 2017 Disposal proceeds Gain on disposal Disposal proceeds Gain on disposal Others $ - $ - $ 716 $ 34

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

Key management compensation Others Salaries and other short-term employee benefits Share-based payments Post-employment benefit	September30,2017 December31,2016 September30,2016 - $ 1,570 $ - $ 2017 2016 2017 2016 73,408 $ 48,821 $ 117,505 $ 127,682 $ - - - 665 108 108 324 350 73,516 $ 48,929 $ 117,829 $ 128,697 $ For the three-month period For the nine-month period ended September30, ended September30,	September30,2017 December31,2016 September30,2016 - $ 1,570 $ - $ 2017 2016 2017 2016 73,408 $ 48,821 $ 117,505 $ 127,682 $ - - - 665 108 108 324 350 73,516 $ 48,929 $ 117,829 $ 128,697 $ For the three-month period For the nine-month period ended September30, ended September30,	September30,2016	September30,2016
	2017 73,408 $ - 108 73,516 $	2017 117,505 $ - 324 117,829 $		2016
				127,682 $ 665 350 128,697 $

(3) Key management compensation

8. PLEDGED ASSETS

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

Pledged asset Other current assets Time deposits Property, plant and equipment Intangible assets Other non-current assets Time deposits		Bookvalue	September30,2016 Purpose 6,375 $ Tariff and credit card guarantee 84,786,280 Long-term loans and performance guarantee for lease payable 17,817 Long-term loans and performance guarantee for lease payable 752 Guarantee for contract and performance bond 84,811,224 $
	September30,2017 1,620 $ 73,346,775 9,348 722 73,358,465 $	December31,2016 1,726 $ 80,828,544 15,551 752 80,846,573 $

1. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRAC T COMMITMENTS

－ (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. In December 2009, the Company reached a plea

~35~

agreement with Department of Justice of the U.S. and paid off the fines. Later, Brazil government initiated an investigation case against the Company. The investigation is still ongoing and the Company has been cooperative with the investigation. As for civil lawsuits filed by some state governments in the U.S., downstream panel makers, and customers, the Company had reached settlement agreement individually.

• B. Eidos Displays, LLC and Eidos III, LLC (“Eidos”) filed a lawsuit against the Company and American subsidiaries 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.

In February 2014, Eidos appealed to the US Court of Appeals for the Federal Circuit (CAFC). In March 2015, the CAFC overruled the decision rendered by the district court and ordered a retrial. In June 2017, the jury determined that some products of the Company and American subsidiaries constituted direct infringement of patent and ordered an infringement compensation for Eidos. The Company continued the legal fight by filing a post-trial motion in July 2017. 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.

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

• (2) Commitments

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

September 30, 2017 December 31, 2016 September 30, 2016 Property, plant and equipment $ 17,870,704 $ 17,531,784 $ 27,275,234

• 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, 2016 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:

September 30, 2017 December 31, 2016 September 30, 2016 Outstanding letters of credit $ 209,648 $ 245,565 $ 1,888,358

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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 disaster assessment and a conservative estimation on insurance claim to assess possible disaster loss. The insurance claim has been paid as of September 30, 2017. The Company accrued gain of $755,413 after offsetting the loss with insurance claim.

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, 2016.

(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, 2016.

• 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, 2016. (a) Market risk

Foreign exchange risk

• i. 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.

• ii. 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 $232,050 and $399,822 for the nine-month periods ended September 30, 2017 and 2016, 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:

~37~

Foreign currency Exchange amount rate Book value (In thousands) (Note) (NTD) Financial assets Monetary items USD 5,114,741 $ 30.26 154,772,063 $ JPY 8,063,015 0.27 2,177,014 EUR 64,671 35.75 2,311,988 Non-monetary items USD 2,613,281 $ 30.26 79,077,883 $ HKD 234,320 3.87 906,818 JPY 5,647,329 0.27 1,524,779 EUR 3,829 35.75 136,887 USD 4,039,725 $ 30.26 122,242,079 $ JPY 40,111,281 0.27 10,830,046 EUR 83,468 35.75 2,983,981 September30,2017 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	December31,2016	December31,2016	December31,2016
	Foreign currency Exchange amount rate Book value (In thousands) (Note) (NTD) 7,224,538 $ 32.25 232,991,351 $ 8,114,141 0.28 2,271,959 85,344 33.90 2,893,162 2,337,217 $ 32.25 75,375,248 $ 223,521 4.16 929,847 5,619,277 0.28 1,573,398 3,703 33.90 125,532 4,947,745 $ 32.25 159,564,776 $ 35,248,180 0.28 9,869,490 42,379 33.90 1,436,648 September30,2016		Book value (NTD)
	Foreign currency amount (In thousands) 6,741,318 $ 8,008,600 80,299 2,388,718 $ 232,569 5,286,173 3,646 5,286,992 $ 30,225,250 44,333	Exchange rate (Note) 31.36 0.31 35.08 31.36 4.04 0.31 35.08 31.36 0.31 35.08	Book value (NTD)
			211,407,732 $ 2,482,666 2,816,889 74,910,196 $ 939,579 1,638,714 127,902 165,800,069 $ 9,369,828 1,555,202

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

iii. Total exchange (loss) gain, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three-month and nine-month periods ended September 30, 2017 and 2016 amounted to ($377,601), $99,182, ($1,652,661) and ($1,101,980), respectively.

~38~

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 nine-month periods ended September 30, 2017 and 2016 would have increased/decreased by $48,471 and $52,142, 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 $1,902,415 and $1,119,606, respectively, as a result of gains/losses on equity securities classified as available-for-sale.

Interest rate risk

• i. 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 nine-month periods ended September 30, 2017 and 2016, the Group’s borrowings at variable rate were denominated in the NTD.

• ii. Based on the simulations performed, the impact on post-tax profit of a 0.25% shift would be a maximum increase of $71,000 or decrease of $109,600 in the latest year for the ninemonth periods ended September 30, 2017 and 2016, 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, 2016.

• (c) Liquidity risk

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

September30,2017 Accounts payable Other payables Long-term borrowings (including current portion)	Less than 1year 53,197,249 $ 32,000,491 10,960,000	Between 1 and3 years - $ - 16,740,000	Between 3 and5 years - $ - 700,000	Total
				53,197,249 $ 32,000,491 28,400,000

~39~

Less than December31,2016 1year Short-term borrowings 11,583,750 $ Accounts payable 56,995,540 Other payables 22,916,097 Long-term borrowings (including current portion) 16,440,000 Less than September30,2016 1year Short-term borrowings 15,985,949 $ Accounts payable 51,514,867 Other payables 20,798,253 Long-term borrowings (including current portion) 16,440,000 September30,2017 Derivative financial liabilities	Between 1 and3 years - $ - - 27,550,000 Between 1 and3 years - $ - - 27,400,000 Less $ Less $ Less $	Between 1 and3 years - $ - - 27,550,000 Between 1 and3 years - $ - - 27,400,000 Less $ Less $ Less $	Between 3 and5 years		Total 11,583,750 $ 56,995,540 22,916,097 44,840,000 Total 15,985,949 $ 51,514,867 20,798,253 43,840,000 Total
			- $ - - 850,000 Between 3 and5 years
			- $ - - - than 1year 315,948 51,949 than 1year 1,190,148 than 1year 275,457
Forward exchange contracts Forward exchange swap contracts December31,2016		$ Less		315,948 $ 51,949 Total
Forward exchange contracts September30,2016		$ Less		1,190,148 $ Total
Forward exchange contracts		$		275,457 $

(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(9).

• 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.

• 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.

~40~

C. The related information of financial and non-financial instruments measured at fair on the basis of the nature, characteristics and risks of the assets and liabilities as 30, 2017, December 31, 2016 and September 30, 2016 is as follows: September30,2017 Level 1 Level 2 Level3 Assets Financial assets at fair value through profit or loss Equity securities 242,355 $ - $ - $ Forward exchange contracts - 183,790 - Available-for-sale financial assets Equity securities 9,206,941 - 305,136 9,449,296 $ 183,790 $ 305,136 $ Liabilities Financial liabilities at fair value through profit or loss Forward exchange contracts - $ 315,948 $ - $ Forward exchange swap contracts - 51,949 - - $ 367,897 $ - $ Recurring fair value measurements Recurring fair value measurements December31,2016 Level 1 Level 2 Level3 Assets Financial assets at fair value through profit or loss Equity securities 250,101 $ - $ - $ Forward exchange contracts - 64,241 - Available-for-sale financial assets Equity securities 5,598,578 - 242,351 5,848,679 $ 64,241 $ 242,351 $ Liabilities Financial liabilities at fair value through profit or loss Forward exchange contracts - $ 1,190,148 $ - $ Recurring fair value measurements Recurring fair value measurements

value by level of September Total 242,355 $ 183,790 9,512,077 9,938,222 $ 315,948 $ 51,949 367,897 $ Total 250,101 $ 64,241 5,840,929 6,155,271 $ 1,190,148 $

~41~

September30,2016 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 1 260,708 $ - 4,936,453 5,197,161 $ - $	Level 2 - $ 354,487 - 354,487 $ 275,457 $	Level3 - $ - 661,576 661,576 $ - $	Total
				260,708 $ 354,487 5,598,029
				6,213,224 $
				275,457 $

• 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 and foreign exchange swap 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

~42~

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 nine-month period ended September 30, 2017 and 2016, there was no transfer between Level 1 and Level 2.

• F. The following table presents the changes in level 3 instruments as at September 30, 2017 and 2016:

2016:
			Equity securities
			2017		2016
At January 1		$	242,351	$	719,585
Gains and losses recognized in profit or loss	(		120,000)		-
Gains and losses recognized in other comprehensive
income			205,605	(	58,009)
Acquired in the period			122,755		-
Proceeds from capital reduction	(		145,575)		-
At September 30		$	305,136	$	661,576

• G. The Group holds private equity shares issued by Fitipower Integrated Technology Inc. The required procedures for becoming publicly traded were completed and its shares started to be traded as emerging stock in the Taipei Exchange from October 2016. The Group has 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.

~43~

• 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 Non-derivative equity instrument: Unlisted shares Venture capital shares Private equity fund investment	Fair value at September 30, 2017	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	279,217 $ 25,919 Fair value at December 31,2016	Market comparable companies Net asset value Valuation technique	Price to earnings ratio multiple, price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability Not applicable Significant unobservable input	1.05~64.25 (27.82) 30%~70% (31%) Not applicable Range (weighted average)	The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable Relationship of inputs to fairvalue
	214,665 $ 27,686	Market comparable companies Net asset value	Price to earnings ratio multiple, price to book ratio multiple, control premium Discount for lack of marketability Not applicable	0.68~1.55 (0.88) 30%~70% (31%) 308 (308)	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

~44~

Fair value at September 30, 2016 Non-derivative equity instrument: Unlisted shares 383,029 $ Venture capital shares Private equity fund investment 27,107 Private placement shares (emerging companies) 251,440	Valuation technique	Significant unobservable input Range (weighted average) Price to earnings ratio multiple, price to book ratio multiple, control premium 0.68~1.47 (0.59) Discount for lack of marketability 30%~70% (31%) Not applicable 310 (310) Discount for lack of marketability 30% (30%)	Relationship of inputs to fair value
	Market comparable companies Net asset value Market price method		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:

Financial assets	Period	Input	Change	Recognised in other comprehensive income	Recognised in other comprehensive income
				Favourable change	Unfavourable change
Equity instrument Equity instrument Equity instrument	2017/9/30 2016/12/31 2016/9/30	$ 305,136 242,351 661,576	± 1% ± 1% ± 1%	$ 3,051 2,424 6,616	($ 3,051) ( 2,424) ( 6,616)

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

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

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

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

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

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

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

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

~45~

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

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

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

(2) Information on investees

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

(3) Information on investments in Mainland China

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

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

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 Group met the criteria for combining the segment information of big size and small-medium size TFT LCD departments, the Group disclosed only one reportable operating segment for all TFT LCD products.

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

(2) Segment information

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

s as follows:
Segment revenue Segment income (loss) Depreciation and amortization Capital expenditure- property, plant and equipment	2017 2016 TFT LCD TFT LCD 79,507,678 $ 74,484,602 $ 11,676,424 $ 3,535,254 $ 8,333,123 $ 9,855,018 $ 5,097,808 $ 20,584,961 $ For the three-month period ended September30,	2017 2016 TFT LCD TFT LCD 250,042,399 $ 197,706,910 $ 43,214,583 $ 7,868,433) ($ 24,992,670 $ 31,749,232 $ 15,257,169 $ 34,902,350 $ For the nine-month period ended September30,
	2017 TFT LCD 79,507,678 $ 11,676,424 $ 8,333,123 $ 5,097,808 $	2017 TFT LCD 250,042,399 $ 43,214,583 $ ( 24,992,670 $ 15,257,169 $

(3) Reconciliation for segment income (loss)

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

~46~

Innolux Corporation and Subsidiaries

Loans to others

For the nine-month period ended September 30, 2017

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the nine-month period ended September 30, 2017	Balance as at September 30, 2017	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
1 1 1 1 1 2 3 3 4 5 6	Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Nanjng Innolux Technology Ltd. Innolux Technology USA Inc. 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 Display Ltd. Shanghai Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Lakers Trading Ltd. Innolux Hong Kong Limited 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 Other receivables Other receivables	Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties	7,419,820 $ 3,419,550 1,914,948 1,048,662 3,601,926 364,752 181,560 181,560 1,386,237 1,399,320 672,750	6,052,000 $ 2,507,670 1,778,166 1,048,662 2,826,828 227,970 - 181,560 1,357,850 1,399,320 672,750	$ 3,026,000 2,507,670 1,778,166 1,048,662 2,826,828 227,970 - 181,560 1,357,850 1,399,320 672,750	2.00% 1.50%~ 2.00% 2.00% 2.00% 2.00% 2.00% 0% 1.01%~ 1.29% 0.626% ~0.629% 1.00% 1.00%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - - - - - - - - -	Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support	$ - - - - - - - - - - -	- - - - - - - - - - -	$ - - - - - - - - - - -	260,546,862 $ 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862	260,546,862 $ 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862	A A A A A A A A A A A

Table 1, Page 1

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the nine-month period ended September 30, 2017	Balance as at September 30, 2017	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
7 8 9 10 11 12 13 14 15 16	Asiaward Investment Ltd. Best China Investments Ltd. Main Dynasty Investment Ltd. Mega Chance Investments Ltd. Sun Dynasty Development Limited Magic Sun Limited Warriors Technology Investments Ltd. Innolux Optoelectronics USA, Inc. Innolux Optoelectronics Europe B.V. Bright Information Holding Ltd.	Best China Investments Ltd. Lakers Trading Ltd. Mega Chance Investments Ltd. Lakers Trading Ltd. Magic Sun Limited Lakers Trading Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Lakers Trading Ltd.	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties Related parties	245,539 $ 245,539 404,359 404,359 1,007,833 1,007,833 3,259,019 121,040 46,475 97,419	- $ - - - - - 3,259,019 121,040 46,475 97,419	$ - - - - - - 3,259,019 121,040 46,475 97,419	0% 0% 0% 0% 0% 0% 0% 1.04% 1.60% 0%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - - - - - - - -	Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support Operating support	$ - - - - - - - - - -	- - - - - - - - - -	$ - - - - - - - - - -	260,546,862 $ 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862	260,546,862 $ 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862 260,546,862	A 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 2

Innolux Corporation and Subsidiaries

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

September 30, 2017

			September 30, 2017
Securities held by Table 2	Marketable securities	Relationship with the securities issuer	General ledger account		As of September 30,2017		Fair value Footnote Expressed in thousands of NTD (Except as otherwise indicated)
				Number of shares	Book value	Ownership (%)	Fair value
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoJoy Investment Corporation Ningbo Innolux Optoelectronics Ltd. Warriors Technology Investments Ltd. Warriors Technology Investments Ltd. Nets trading Ltd.	Common stock AvanStrate Inc. TPV Technology Ltd. Chi Lin Optoelectronics Co., Ltd. Epistar Corporation Chimei Materials Technology Corp. Allied Material Technology Corp. Trillion Science, Inc. Advanced Optoelectronic Technology, Inc. Fitipower Integrated Technology Inc. 上海辰岱投資中心(有限合伙) OED Holding Ltd. General Interface Solution (GIS) Holding Limited PilotTech Global Fund	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 Financial assets 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 17,792,552 89,072 44,741,305 1,209 1,439,180 6,964,222 10,000,000 - 16,000,000 24,194,000 90	$ 53,452 810,212 102,013 3,465 628,615 - 164 242,355 300,800 117,488 6,100 7,463,849 25,919	1 6 19 - 7 - 2 5 7 - 6 7 -	$ 53,452 810,212 102,013 3,465 628,615 - 164 242,355 300,800 117,488 6,100 7,463,849 25,919

Table 2, Page 1

Innolux Corporation and Subsidiaries

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

For the nine-month period ended September 30, 2017

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January 1, 2017 (Note 5)	Balance as at January 1, 2017 (Note 5)	Addition(Note 3)	Addition(Note 3)		Disposal(Note3)	Disposal(Note3)		Balance as at September 30, 2017(Note 5)	Balance as at September 30, 2017(Note 5)
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain on disposal	Number of shares	Amount
Warriors Technology Investments Ltd.	General Interface Solution (GIS) Holding Limited (Stock)	Available-for- sale financial assets - non- current	Not applicable	Not applicable	40,500,000	$ 3,705,750	-	$ -	16,306,000	$ 2,762,551	$ 166,001	$2,596,550	24,194,000	$ 7,463,849

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

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

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more.

Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Note 5: It includes unrealized gains (losses) on available-for-sale financial assets.

Table 3, Page 1

Table 4

Innolux Corporation and Subsidiaries Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more For the nine-month period ended September 30, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Hon Hai Precision Industry Co., Ltd. Lakers Trading Ltd. Guizhou Fuzhikang Electronic Co., Ltd. Hongfujin Precision Industry (Yantai) Co., Ltd. Honfujin Precision Electronics (Chongqing) Co., Ltd. Innolux Optoelectronics Japan Co., Ltd. Innolux Hong Kong Limited Hongfutai Precision Electrons (Yantai) Co., Ltd. eCMMS Precision Singapore Pte. Ltd. Hongfujin Precision Industry (Wuhan) Co., Ltd. FIH (Hong Kong) Limited Ningbo Innolux Display Ltd. Competition Team Technology (India) Private Limited	Same major stockholder An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd.	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	$ 14,878,407 8,565,445 2,492,649 1,922,377 1,614,071 1,366,696 1,222,106 868,530 847,669 557,584 534,432 437,930 377,539	6 3 1 1 1 1 - - - - - - -	90 days 60 days 60 days 60-90 days 45 days 45-90 days 60 days 90 days 90 days 90 days 60 days 90 days 90 days	Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales	No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference	$ 3,437,376 - 669,002 651,336 621,983 139,198 - 628,367 369,896 256,105 11,164 131,574 187,818	6 - 2 1 1 - - 1 1 - - - -

Table 4, Page 1

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Innolux Optoelectronics USA, Inc. Chi Lin Optoelectronics Co., Ltd. Innolux Technology USA Inc. COMPETITION TEAM IRELAND LIMITED NANJING HONGFUSHARP PRECISION ELECTRONICS CO., LTD. Innolux Optoelectronics Europe B.V. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Hon Hai Precision Industry Co., Ltd. FI Medical Device Manufacturing Co., Ltd. GIO Optoelectronics Corp. Chi Lin Optoelectronics Co., Ltd. Lakers Trading Ltd. Innolux Hong Kong Limited Leadtek Global Group Limited	An indirect wholly-owned subsidiary The company is a corporate director of Chi Lin Optoelectronics 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. A subsidiary of the Company An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder Investee accounted for under the equity method Investee accounted for under the equity method The company is a corporate director of Chi Lin Optoelectronics An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company	Sales Sales Sales Sales Sales Sales Sales Sales Purchases Purchases Purchases Purchases Processing expense Processing expense Processing expense	$ 347,344 272,635 244,728 200,926 140,605 129,801 109,310 108,154 5,715,174 760,020 165,567 152,040 24,962,252 16,369,167 13,334,263	- - - - - - - - 3 - - - 13 8 7	45 days 45 days 60 days 90 days 90 days 30-60 days 90 days 90 days 60-90 days after acceptance 30 days after acceptance 60 days after acceptance 120 days after acceptance 60-90 days 60-90 days 60-90 days	Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Similar with general sales Single purchases target, no basis for comparison Single purchases target, no basis for comparison Single purchases target, no basis for comparison Single purchases target, no basis for comparison Cost plus Cost plus Cost plus	No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference No material difference	$ 72,245 - 27,517 91,571 140,082 48,027 21,298 83,356 ( 1,180,381) ( 141,424) ( 37,960) ( 67,978) ( 13,370,573) ( 9,052,538) ( 21,014,299)	- - - - - - - - 2 - - - 18 12 28

Table 4, Page 2

Differences in transaction terms

							Differences in transaction terms	Differences in transaction terms
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			compared to third party transactions		Notes/accounts receivable(payable)		Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Innocom Technology (Shenzhen) Co., Ltd.	Lakers Trading Ltd. Leadtek Global Group Limited Lakers Trading Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Foxconn Precision Electronics (YanTai) Co., Ltd. Ningbo Innolux Display Ltd. NANJING HONGFUSHARP PRECISION ELECTRONICS CO., LTD. Premier Image Technology (China) Ltd. Futaijing Precision Electronics (Beijing) Co., Ltd. Nanjing Innolux Technology Ltd. Lakers Trading Ltd.	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 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 of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary	Processing revenue Processing revenue Processing revenue Processing revenue Processing revenue Sales Sales Sales Sales Sales Sales Processing revenue	$ 11,534,946 13,203,492 13,150,890 8,998,807 6,521,131 3,766,770 3,462,586 2,495,025 1,652,389 1,109,974 1,216,772 192,552	47 79 99 100 100 6 11 4 3 2 4 100	60 days 60 days 60 days 60 days 60 days 90 days 60 days 90 days 90 days 90 days 60 days 60 days	Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions 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	$ 2,504,406 16,676,249 2,960,640 6,661,199 2,020,063 586,106 724,735 2,965,101 823,266 594,455 291,181 835,523	29 96 100 100 100 2 3 10 3 2 3 100

Table 4, Page 3

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)
Lakers Trading Ltd. Innolux Technology Europe B.V. Innolux Technology Japan Co., Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd.	Ningbo Innolux Electronics Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Industry (Shenzhen) Co., Ltd. Hon Hai Precision Industry Co., Ltd.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder Same major stockholder Same major stockholder An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. Same major stockholder	Sales Service revenue Service revenue Purchases Purchases Purchases Purchases Purchases	$ 137,212 481,025 200,018 3,272,498 868,045 453,999 339,172 105,262	- 100 92 6 5 1 1 1	60 days 60 days 60 days 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped	Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions Similar with general transactions 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	$ 38,946 57,249 41,865 ( 83,723) ( 367,334) ( 220,064) ( 136,607) ( 50,620)	- 73 91 - 7 2 1 1

Table 4, Page 4

Innolux Corporation and Subsidiaries Receivables from related parties reaching $100 million or 20% of paid-in capital or more September 30, 2017

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at September 30,2017	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Hon Hai Precision Industry Co., Ltd. Guizhou Fuzhikang Electronic Co., Ltd. Hongfujin Precision Industry (Yantai) Co., Ltd. Hongfutai Precision Electrons (Yantai) Co., Ltd. Honfujin Precision Electronics (Chongqing) Co., Ltd. Foshan Innolux Optoelectronics Ltd. eCMMS Precision Singapore Pte. Ltd. Hongfujin Precision Industry (Wuhan) Co., Ltd. Competition Team Technology (India) Private Limited NANJING HONGFUSHARP PRECISION ELECTRONICS CO., LTD. Innolux Optoelectronics Japan Co., Ltd. Ningbo Innolux Display 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 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 of Hon Hai Precision Industry Co., Ltd. An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. A subsidiary of the Company An indirect wholly-owned subsidiary	$ 3,437,376 669,002 651,336 628,367 621,983 401,102 369,896 256,105 187,818 140,082 139,198 131,574	3.59 9.90 5.03 2.16 3.63 0.04 4.62 4.19 1.99 2.68 12.52 8.76	$ - 16,826 - 50 165,937 9,139 48 - - - - -	- Subsequent collection - Subsequent collection Subsequent collection Subsequent collection Subsequent collection - - - - -	$ 1,140,876 265,293 249,924 151,936 65,119 2,834 - 81,648 - - - 19,729	$ - - - - - - - - - - - -

Table 5, Page 1

Creditor	Counterparty	Relationship with the counterparty	Balance as at September 30,2017	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Foshan Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Innocom Technology (Shenzhen) Co., Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Innolux Hong Kong Limited	Lakers Trading Ltd. Leadtek Global Group Limited Innolux Hong Kong Limited Lakers Trading Ltd. NANJING HONGFUSHARP PRECISION ELECTRONICS CO., LTD. Innolux Hong Kong Limited Lakers Trading Ltd. Premier Image Technology (China) Ltd. Ningbo Innolux Display Ltd. Futaijing Precision Electronics (Beijing) Co., Ltd. Foxconn Precision Electronics (YanTai) Co., Ltd. Nanjing Innolux Technology Ltd.	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 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. 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	$ 2,504,406 16,676,249 6,661,199 2,960,640 2,965,101 2,020,063 835,523 823,266 724,735 594,455 586,106 291,181	1.91 1.09 1.99 5.52 2.24 4.6 0.34 4.17 4.33 3.00 5.58 5.16	$ - 9,641,570 3,100,009 - - 244,359 758,736 - - 256,534 - 1,141	- Subsequent collection Subsequent collection - - Subsequent collection Subsequent collection - - Subsequent collection - Subsequent collection	$ 2,360,281 3,126,011 1,726,789 1,818,092 - 843,045 - 131,114 363,018 68,810 586,106 146,753	$ - - - - - - - - - - - -

Table 5, Page 2

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Innolux Corporation and Subsidiaries

Significant inter-company transactions during the reporting period For the nine-month period ended September 30, 2017

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 0 0 0 0 0 1 1 2 2 3 3 4 4 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 Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Foshan Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd.	Lakers Trading Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Innolux Optoelectronics Japan Co.,Ltd. Innolux Optoelectronics Japan Co.,Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Innolux Hong Kong Limited Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Innolux Optoelectronics USA, Inc. Innolux Technology USA Inc. Innolux Optoelectronics Europe B.V. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Leadtek Global Group Limited Leadtek Global Group Limited Foshan Innolux Optoelectronics Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Leadtek Global Group Limited Leadtek Global Group Limited Lakers Trading Ltd. Lakers Trading Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Innolux Hong Kong Limited	1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3	Sales Processing expense Accrued expenses Sales Accounts receivable Sales Processing expense Accrued expenses Sales Accounts receivable Sales Sales Sales Sales Sales Processing expense Accrued expenses Accounts receivable Processing revenue Accounts receivable Processing revenue Accounts receivable Processing revenue Accounts receivable Processing revenue Accounts receivable Processing revenue	$ 8,565,445 24,962,252 ( 13,370,573) 1,366,696 139,198 1,222,106 16,369,167 ( 9,052,538) 437,930 131,574 347,344 244,728 129,801 109,310 108,154 13,334,263 ( 21,014,299) 401,102 11,534,946 2,504,406 13,203,492 16,676,249 13,150,890 2,960,640 8,998,807 6,661,199 6,521,131	- - - - - - - - - - - - - - - - - - - - - - - - - - -	3 10 3 1 - - 7 2 - - - - - - - 5 5 - 5 1 5 4 5 1 4 2 3

Table 6, 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
5 6 6 7 7 8 8 9 9 10	Shanghai Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Innocom Technology (Shenzhen) Co., Ltd. Innocom Technology (Shenzhen) Co., Ltd. Innolux Technology Europe B.V. Innolux Technology Japan Co., Ltd. Lakers Trading Ltd.	Innolux Hong Kong Limited Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Technology Ltd. Nanjing Innolux Technology Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Ningbo Innolux Electronics Ltd.	3 3 3 3 3 3 3 3 3 3	Accounts receivable Sales Accounts receivable Sales Accounts receivable Processing revenue Accounts receivable Service revenue Service revenue Sales	$ 2,020,063 3,462,586 724,735 1,216,772 291,181 192,552 835,523 481,025 200,018 137,212	- - - - - - - - - -	1 1 - - - - - - - -

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

3 refers to 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 6, Page 2

Table 7

Innolux Corporation and Subsidiaries

Information on investees

For the nine-month period ended September 30, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held a	s at September 30,2017	s at September 30,2017	Net profit (loss) of the investee for the nine-month period ended September 30, 2017	Investment income (loss) recognised by the Company for the nine-month period ended September 30, 2017	Footnote
				Balance as at September 30, 2017	Balance as at December 31, 2016	Number of shares	Ownership (%)	Book value
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Bright Information Holding Ltd. Golden Achiever International Ltd. Innolux Holding Limited 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. FI Medical Device Manufacturing Co., Ltd. iZ3D, Inc.	Hong Kong BVI Samoa Samoa Samoa BVI Hong Kong BVI Taiwan Taiwan Netherlands Japan Cayman Taiwan USA	Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Distributor 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 Production and selling of the absorption for medical element Research and development and sale of 3D flat monitor	119,724 $ 119,106 6,192,679 62,179 33,438,542 3,674,115 2,107,291 - 1,217,235 1,674,054 121,941 1,335,486 1,717,714 73,500 -	119,724 $ 119,106 7,858,300 197,554 33,438,542 3,674,115 2,107,291 - 1,217,235 1,674,054 121,941 1,335,486 1,717,714 73,500 -	4,910,000 40,250 180,768,185 1,656,410 709,450,000 146,847,000 1,158,844,000 50,000,000 - 167,405,392 180 80 14,062,500 7,350,000 4,333	100 100 100 100 100 100 100 100 100 100 100 100 50 49 35	97,311 $ 32,624 23,067,091 78,804 43,952,668 6,492,903 3,738,970 749,927 842,744 1,394,204 136,886 1,519,696 836,356 370,999 -	1,037 $ 27,161) ( 2,703,349 13,017 925,892) ( 90,096) ( 291,581 1,062,757 92,652) ( 49,133 4,282 18,619 13,876 377,507 -	1,037 $ 27,161) ( 2,703,349 13,017 1,029,523) ( 92,455) ( 289,463 1,062,757 92,652) ( 49,133 4,282 18,619 6,938 184,978 -

Table 7, Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held a	s at September 30,2017	s at September 30,2017	Net profit (loss) of the investee for the nine-month period ended September 30, 2017	Investment income (loss) recognised by the Company for the nine-month period ended September 30, 2017	Footnote
				Balance as at September 30, 2017	Balance as at December 31, 2016	Number of shares	Ownership (%)	Book value
Innolux Corporation Innolux Corporation Innolux Holding Limited Innolux Holding Limited Innolux Holding Limited Innolux Holding Limited Toppoly Optoelectronics (B.V.I.) Ltd. Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Optoelectronics Europe B.V. Innolux Optoelectronics Japan Co., Ltd. Rockets Holding Ltd. Rockets Holding Ltd. Suns Holding Ltd. Innolux Technology Europe B.V.	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 Limited Innolux Hong Kong Limited Innolux Technology Europe B.V. Innolux Technology Japan Co., Ltd. Innolux Technology USA Inc. Innolux Optoelectronics Germany GmbH Innolux Optoelectronics USA, Inc. Stanford Developments Ltd. Nets Trading Ltd. Warriors Technology Investments Ltd. Innolux Technology Germany GmbH	Taiwan Taiwan Samoa Samoa Samoa USA Cayman Hong Kong Hong Kong Netherlands Japan USA Germany USA Samoa Samoa Samoa Germany	Manufacturing of electronic equipment and lighting equipment Manufacturing and selling of components of TFT-LCD Investment holdings Investment holdings Distributor company Distributor company Investment holdings Investment holdings Distributor company Holding company and R&D testing company R&D testing company Distributor company Importing, exporting, buying, selling and logistics services of electronic equipment and TFT-LCD monitors Selling of electronic equipment and computer monitors Investment holdings Investment company Investment company Testing and maintenance company	819,312 $ 800,892 5,222,180 555,422 - 6,348 3,650,192 - - 3,073,072 1,815,603 263,685 10,324 2,400 5,391,125 27,477 555,422 33,735	819,312 $ 800,892 7,296,530 555,422 - 6,348 3,650,192 - - 3,073,072 1,815,603 263,685 10,324 2,400 5,391,125 27,477 555,422 33,735	78,195,856 10,494,001 160,504,550 18,177,052 1 2,000 146,817,000 162,897,802 35,000,000 375,810 201 1,000 250 1,000 164,000,000 900,001 18,177,052 100,000	33 24 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100	- $ 107,707 11,953,404 10,971,050 230,538 87,933) ( 6,495,628 1,351,868 1,348,305) ( 2,346,012 1,682,843 354,712 14,154 276,716 11,925,209 28,059 10,971,048 60,325	- $ 22,047 27,690) ( 2,732,047 - 1,032) ( 90,096) ( 120,684 133,115 35,076 5,626) ( 7,466 632 9,589 29,312) ( - 2,732,047 865	- $ 5,243 27,690) ( 2,732,047 - 1,032) ( 90,096) ( 120,684 133,115 35,076 5,626) ( 7,466 632 9,589 29,312) ( - 2,732,047 865

Table 7, Page 2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held a	s at September 30,2017	s at September 30,2017	Net profit (loss) of the investee for the nine-month period ended September 30, 2017	Investment income (loss) recognised by the Company for the nine-month period ended September 30, 2017	Footnote
				Balance as at September 30, 2017	Balance as at December 31, 2016	Number of shares	Ownership (%)	Book value
Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd.	Chi Mei Lighting Technology Corporation GIO Optoelectronics Corp. TOA Optronics Corporation	Taiwan Taiwan Taiwan	Manufacturing of electronic equipment and lighting equipment Manufacturing and selling of components of TFT-LCD Selling of electronic materials, trading business, manufacturing of electronic equipment and lighting equipments	263,812 $ 6,881 423,606	263,812 $ 6,881 423,606	19,673,402 77,235 58,007,000	8 - 40	- $ 815 -	- $ 22,047 220,982) (	- $ 40 86,901) (

Table 7, Page 3

Innolux Corporation and Subsidiaries

Information on investments in Mainland China

For the nine-month period ended September 30, 2017

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital (Note A)	Investment method (NoteC)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September30,2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September30,2017	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2017	Net income of investee for the nine-month period ended September 30, 2017	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine-month period ended September 30, 2017(Note B)	Book value of investments in Mainland China as of September 30, 2017	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2017	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Innocom Technology (Shenzhen) Co., Ltd. OED Company Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Nanjng Innolux Technology Ltd. Kunpal Optoelectronics Ltd. VAP Optoelectronics (Nanjing) Corp. Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd.	Manufacturing and selling of LCD backend module and related components Manufacturing and selling of electronic paper Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Purchases and sales of monitor-related components 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 Manufacturing and selling of LCD backend module and related components	$ 4,962,640 293,211 9,380,600 11,589,580 4,841,600 63,546 121,040 305,626 4,296,920 635,460	2 2 2 2 2 2 2 2 2 2	$ 3,840,349 60,520 222,867 11,589,580 4,841,600 63,546 114,439 114,988 4,296,920 -	$ - - - - - - - - - -	$ - - - - - - - - - -	$ 3,840,349 60,520 222,867 11,589,580 4,841,600 63,546 114,439 114,988 4,296,920 -	($ 29,312) ( 75,422) ( 2,084,980) 804,951 352,353 14,714 ( 2,290) ( 27,161) ( 102,520) 120,684	100 4 100 100 100 100 100 100 100 100	($ 29,312) - ( 2,084,980) 806,735 352,353 14,714 ( 2,290) ( 27,161) ( 102,520) 120,684	$ 11,925,197 7,603 19,258,042 20,622,704 4,210,443 553,250 60,559 32,245 5,881,798 1,351,868	$ 1,122,291 - 5,223,933 - - - - - - -	2.1 2.1 2.2 2.2 2.2 2.3 2.3 2.4 2.3 2.5

Table 8, Page 1

Investee in Mainland China	Main business activities	Paid-in capital (Note A)	Investment method (NoteC)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September30,2017	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September30,2017	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2017	Net income of investee for the nine-month period ended September 30, 2017	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine-month period ended September 30, 2017(Note B)	Book value of investments in Mainland China as of September 30, 2017	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2017	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Foshan Innolux Logistics Ltd. Warehousing services $ 45,390 Amlink (Shanghai) Ltd. Manufacturing and selling of power supply, modem, ADSL, and other IT equipments 242,080 Interface Optoelectronics (Shenzhen) Co., Ltd. Development of new type of flat panel display, monitor and peripherals, production and management, and offer of after-sales service 2,911,012 Ningbo Innolux Electronics Ltd. Manufacturing and selling of LCD backend module and related components 136,782 Foshan Innolux Flnet Electronics Ltd. Commodity agency 4,559 Ningbo Innolux Flnet Electronics Ltd. Commodity agency 4,559 Ceiling on investments in Mainland China: Companyname Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2017			2 $ 45,390 $ - 2 302,600 - 2 408,510 - 3 - - 3 - - 3 - - Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)			$ - $ 45,390 $ 4,624 - 302,600 - - 408,510 2,356,600 - - 116,607 - - 940 - - 873 Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA			100 50 7 100 100 100	$ 4,624 - - 116,607 940 873	$ 74,054 192,427 7,463,849 358,578 5,513 5,154	$ - - - - - -	2.6 2.7 2.1 3.1 3.2 3.2
Innolux Corporation	27,264,245 $		36,529,137 $			156,328,117 $

Note A: The relevant figures were listed in NT$. Where foreign currencies were involved, the figures were converted to NT$ using exchange rate. Note B: Profit or loss recognised for the nine-month period ended September 30, 2017 was reviewed by independent accountants.

Table 8, Page 2

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 Limited 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 Golden Achiever International Ltd. in the third area, which then invested in the investee in Mainland China.

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

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

9. 2.7. Through investing in Ampower Holding Ltd. in the third area, which then invested in the investee in Mainland China.

10. Others.

11. 3.1. The company invested in the company via investee company in Mainland China, Ningbo Innolux Display Ltd. Except for the investment via the holding companies in Mainland China, other investments shall be not approved by Investment Commission of the Ministry of Economic Affairs.

12. 3.2 The company invested via Foshan Innolux Optoelectronics Ltd. and Ningbo Innolux Optoelectronics Ltd. which are the company investment entities in Mainland China to invest in Foshan Innolux Flnet Electronics Ltd. and Ningbo Innolux Flnet Electronics Ltd. Except for the investment via the holding companies in Mainland China, other investments shall be not approved by Investment Commission of the Ministry of Economic Affairs.

Table 8, Page 3