INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

SEPTEMBER 30, 2019 AND 2018

~1~

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Innolux Corporation:

Introduction

We have reviewed the accompanying consolidated balance sheets of Innolux Corporation and subsidiaries (the “Group”) as at September 30, 2019 and 2018, and the related consolidated statements of comprehensive income for the three-month and nine-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the nine-month periods then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with the Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at September 30, 2019 and 2018, and of its consolidated financial performance for the three-month and nine-month periods then ended and its consolidated cash flows for the ninemonth periods then ended in accordance with “Regulations Governing the Preparation of Financial

~2~

Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

PricewaterhouseCoopers, Taiwan

November 8, 2019

------------------------------------------------------------------------------------------------------------------------------------------------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, 2019, DECEMBER 31, 2018 AND SEPTEMBER 30, 2018

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of September 30, 2019 and 2018 are reviewed, not audited)

Assets	Notes	September 30, 2018
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Financial assets at amortized cost - current 1170 Accounts receivable, net 1180 Accounts receivable, net - related parties 1200 Other receivables 130X Inventory 1410 Prepayments 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1990 Other non-current assets 15XX Total non-current assets 1XXX Total assets	6(1) 6(2) 6(4) 6(5) 7 7 6(6) 8 6(2) 6(3) 6(7) 6(8)(30), 7 and 8 6(9) 6(10) 6(11)(30) and 8 6(8) and 8	`$` `37,889,585` `53,645` `18,888,750` `46,331,041` `4,189,537` `1,445,101` `32,933,026` `2,154,788` `71,593`
		`143,957,066`
		`1,364,210` `5,050,988` `1,986,572` `209,507,770` `-` `554,651` `17,697,151` `6,509,446` `3,007,059`
		`245,677,847`
		`$` `389,634,913`

~4~

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2019, DECEMBER 31, 2018 AND SEPTEMBER 30, 2018

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of September 30, 2019 and 2018 are reviewed, not audited)

	Liabilities and Equity	Notes			September 30, 2019		December 31, 2018		September 30, 2018
	Current Liabilities
2120	Financial liabilities at fair	6(2)
	value through profit or
	loss - current			`$`	`248,821`	`$`	`23,779`	`$`	`346,577`
2170	Accounts payable				`47,706,481`		`52,350,845`		`51,320,183`
2180	Accounts payable - related	7
	parties				`3,188,459`		`2,652,127`		`2,574,729`
2200	Other payables	6(12) and 7			`27,105,996`		`32,581,609`		`37,064,789`
2230	Current income tax
	liabilities				`2,488,826`		`5,593,063`		`5,508,591`
2250	Provisions - current	6(17) and 9			`6,667,796`		`6,782,914`		`6,337,829`
2280	Lease liabilities - current				`466,574`		`-`		`-`
2320	Long-term liabilities,	6(14)
	current portion				`16,022,951`		`16,194,486`		`10,960,000`
2399	Other current liabilities				`5,030,535`		`4,095,853`		`2,974,679`
21XX	Total current liabilities				`108,926,439`		`120,274,676`		`117,087,377`
	Non-current liabilities
2530	Corporate bonds payable	6(13)			`96,599`		`-`		`-`
2540	Long-term borrowings	6(14)			`24,852,303`		`35,142,090`		`14,867,711`
2570	Deferred income tax
	liabilities				`1,197,569`		`880,013`		`661,380`
2580	Lease liabilities - non-
	current				`5,210,007`		`-`		`-`
2600	Other non-current	6(15)
	liabilities				`656,835`		`632,120`		`691,787`
25XX	Total non-current
	liabilities				`32,013,313`		`36,654,223`		`16,220,878`
2XXX	Total liabilities				`140,939,752`		`156,928,899`		`133,308,255`
	Equity attributable to
	owners of the parent
3110	Share capital - common	6(18)
	stock				`99,520,720`		`99,520,720`		`99,520,720`
3200	Capital surplus	6(19)			`99,633,370`		`99,648,115`		`99,646,960`
	Retained earnings	6(20)
3310	Legal reserve				`7,870,713`		`7,648,437`		`7,648,437`
3320	Special reserve				`4,663,463`		`1,090,721`		`1,090,721`
3350	Unappropriated retained
	earnings				`36,770,508`		`51,746,175`		`52,467,065`
3400	Other equity interest	6(21)	`(`		`5,513,481) (`		`4,663,463) (`		`4,047,245)`
3500	Treasury shares	6(18)	`(`		`1,029,223)`		`-`		`-`
31XX	Equity attributable to
	owners of the parent				`241,916,070`		`254,990,705`		`256,326,658`
36XX	Non-controlling interests				`182,190`		`-`		`-`
3XXX	Total equity				`242,098,260`		`254,990,705`		`256,326,658`
3X2X	Total liabilities and
	equity			`$`	`383,038,012`	`$`	`411,919,604`	`$`	`389,634,913`

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, 2019 AND 2018

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

					Three months ended	September 30		Nine months ended	Nine months ended	September 30
	Items	Notes			2019	2018		2019		2018
4000	Sales revenue	6(22) and 7		`$`	`63,293,735 $`	`73,907,131`	`$`	`186,393,293`	`$`	`207,132,750`
5000	Operating costs	6(6)(26) and 7	`(`		`62,116,985) (`	`66,474,938) (`		`181,997,479) (`		`184,786,697)`
5900	Net operating margin				`1,176,750`	`7,432,193`		`4,395,814`		`22,346,053`
	Operating expenses	6(26)
6100	Selling expenses		`(`		`1,088,171 ) (`	`809,766) (`		`2,825,849) (`		`2,007,849)`
6200	General and administrative expenses		`(`		`1,711,986 ) (`	`1,678,813) (`		`5,092,786) (`		`4,986,577)`
6300	Research and development expenses		`(`		`3,228,671) (`	`3,153,355) (`		`9,278,610) (`		`9,085,754)`
6000	Total operating expenses		`(`		`6,028,828) (`	`5,641,934) (`		`17,197,245) (`		`16,080,180)`
6900	Operating (loss) profit		`(`		`4,852,078)`	`1,790,259 (`		`12,801,431)`		`6,265,873`
	Non-operating income and expenses
7010	Other income	6(23)			`756,790`	`822,015`		`2,287,278`		`2,012,692`
7020	Other gains and losses	6(24)			`830,756 (`	`42,524)`		`1,181,768 (`		`701,927)`
7050	Finance costs	6(25)	`(`		`263,340 ) (`	`111,980) (`		`796,972) (`		`369,035)`
7060	Share of profit of associates and joint ventures	6(7)
	accounted for under equity method				`72,608`	`107,947`		`276,802`		`291,145`
7000	Total non-operating income and expenses				`1,396,814`	`775,458`		`2,948,876`		`1,232,875`
7900	(Loss) profit before income tax		`(`		`3,455,264 )`	`2,565,717 (`		`9,852,555)`		`7,498,748`
7950	Income tax expense	6(28)	`(`		`430,911) (`	`652,769) (`		`728,752) (`		`4,578,998)`
8200	(Loss) profit for the period		`($`		`3,886,175) $`	`1,912,948 ($`		`10,581,307)`	`$`	`2,919,750`

(Continued)

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND 2018 (Expressed in thousands of New Taiwan dollars, except for (loss) earnings per share amounts) (Reviewed, not audited)

						Three months ended September 30	Three months ended September 30			Nine months ended September 30	Nine months ended September 30
	Items		Notes			2019	2018			2019	2018
	Other comprehensive income (loss) (net)
	Components of other comprehensive income (loss)
	that will not be reclassified to profit or loss
8316	Unrealized gains (losses) on financial assets at fair	6(21)
	value through other comprehensive income				`$`		`68,978 ($`	`1,670,324)`	`$`	`266,359 ($`		`1,610,671)`
8349	Income tax related to components of other	6(28)
	comprehensive income that will not be reclassified
	to profit or loss						`-`	`-`		`61,035`		`-`
8310	Components of other comprehensive income
	(loss) that will not be reclassified to profit or
	loss						`68,978 (`	`1,670,324)`		`327,394 (`		`1,610,671)`
	Components of other comprehensive income (loss)
	that will be reclassified to profit or loss
8361	Financial statements translation differences of	6(21)
	foreign operations			`(`			`1,960,536 ) (`	`2,410,807) (`		`1,123,768) (`		`1,460,938)`
8370	Share of other comprehensive (loss) income of	6(21)
	associates and joint ventures accounted for under
	equity method			`(`			`15,676 )`	`1,004 (`		`54,029)`		`115,085`
8360	Components of other comprehensive loss that
	will be reclassified to profit or loss			`(`			`1,976,212 ) (`	`2,409,803) (`		`1,177,797) (`		`1,345,853)`
8300	Other comprehensive loss for the period, net of tax			`($`			`1,907,234 ) ($`	`4,080,127) ($`		`850,403) ($`		`2,956,524)`
8500	Total comprehensive loss for the period			`($`			`5,793,409 ) ($`	`2,167,179) ($`		`11,431,710) ($`		`36,774)`
	(Loss) profit attributable to:
8610	Owners of the parent			`($`			`3,888,393 ) $`	`1,912,948 ($`		`10,583,525)`	`$`	`2,919,750`
8620	Non-controlling interest				`$`		`2,218 $`	`-`	`$`	`2,218`	`$`	`-`
	Other comprehensive (loss) income attributable to:
8710	Owners of the parent			`($`			`5,795,242 ) ($`	`2,167,179) ($`		`11,433,543) ($`		`36,774)`
8720	Non-controlling interest				`$`		`1,833 $`	`-`	`$`	`1,833`	`$`	`-`
	(Loss) earnings per share (in dollars)	6(29)
9750	Basic (loss) earnings per share			`($`			`0.39 ) $`	`0.19 ($`		`1.06)`	`$`	`0.29`
9850	Diluted (loss) earnings per share			`($`			`0.39 ) $`	`0.19 ($`		`1.06)`	`$`	`0.29`

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, 2019 AND 2018 (Expressed in thousands of New Taiwan dollars)

((Reviewed, not audited)

Notes				Equity attributable to	Equity attributable to	owners of the pare	nt			Total	Non-controlling interests	Total
	Common stock	Capital surplus		Retained Earnings	Unappropriated earnings		Other EquityInterest	Unrealized gain (loss) on available-for-sale financial assets	Treasury shares
			Legal reserve	Special reserve		Financial statements translation differences of foreign operations `(` `$ 5,717,223)` `-` `(` `5,717,223)` `-` `(` `1,345,853)` `(` `1,345,853)` `-` `-` `-` `-` `(` `$ 7,063,076)` `(` `$ 6,461,149)` `-` `(` `1,177,412)` `(` `1,177,412)` `-` `-` `-` `-` `-` `-` `-` `(` `$ 7,638,561)`	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
6(21) 6(21) 6(20) 6(19) 6(21) 6(20) 6(19) 6(19) 6(18) 6(30)	`$ 99,520,720` `-` `99,520,720` `-` `-` `-` `-` `-` `-` `-` `$ 99,520,720` `$ 99,520,720` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 99,520,720`	`$ 99,646,919` `-` `99,646,919` `-` `-` `-` `-` `-` `-` `41` `$ 99,646,960` `$ 99,648,115` `-` `-` `-` `-` `-` `-` `(` `14,756)` `11` `-` `-` `$ 99,633,370`	`$ 3,945,576` `-` `3,945,576` `-` `-` `-` `3,702,861` `-` `-` `-` `$ 7,648,437` `$ 7,648,437` `-` `-` `-` `222,276` `-` `-` `-` `-` `-` `-` `$ 7,870,713`	`$ 3,418,804` `-` `3,418,804` `-` `-` `-` `-` `(` `2,328,083)` `-` `-` `$ 1,090,721` `$ 1,090,721` `-` `-` `-` `-` `3,572,742` `-` `-` `-` `-` `-` `$ 4,663,463`	`$ 58,883,750` `-` `58,883,750` `2,919,750` `-` `2,919,750` `(` `3,702,861` `)` `2,328,083` `(` `7,961,657` `)` `-` `$ 52,467,065` `$ 51,746,175` `(` `10,583,525` `)` `-` `(` `10,583,525` `)` `(` `222,276` `)` `(` `3,572,742` `)` `(` `597,124` `)` `-` `-` `-` `-` `$ 36,770,508`		`$` `-` `4,626,502` `4,626,502` `-` `(` `1,610,671)` `(` `1,610,671)` `-` `-` `-` `-` `$ 3,015,831` `$ 1,797,686` `-` `327,394` `327,394` `-` `-` `-` `-` `-` `-` `-` `$ 2,125,080`	`$ 4,626,502` `(` `4,626,502)` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-` `$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-`	`$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-` `$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(` `1,029,223)` `-` `(` `$ 1,029,223)`	`$ 264,325,048` `-` `264,325,048` `2,919,750` `(` `2,956,524)` `(` `36,774)` `-` `-` `(` `7,961,657)` `41` `$ 256,326,658` `$ 254,990,705` `(` `10,583,525)` `(` `850,018)` `(` `11,433,543)` `-` `-` `(` `597,124)` `(` `14,756)` `11` `(` `1,029,223)` `-` `$ 241,916,070`	`$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-` `$` `-` `2,218` `(` `385)` `1,833` `-` `-` `-` `-` `6` `-` `180,351` `$` `182,190`	`$ 264,325,048` `-` `264,325,048` `2,919,750` `(` `2,956,524` `)` `(` `36,774` `)` `-` `-` `(` `7,961,657` `)` `41` `$ 256,326,658` `$ 254,990,705` `(` `10,581,307` `)` `(` `850,403` `)` `(` `11,431,710` `)` `-` `-` `(` `597,124` `)` `(` `14,756` `)` `17` `(` `1,029,223` `)` `180,351` `$ 242,098,260`

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

~8~

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation and amortization

Net (gain) loss on financial assets or liabilities
at fair value through profit or loss
Share of loss of associates and joint ventures
accounted for under equity method

Gain from disposal of investments

Loss on disposal of property, plant and
equipment

Gain on lease modification
Interest expense

Interest income

Dividend income

Unrealized foreign exchange (gain) loss
Changes in operating assets and liabilities
Changes in operating assets
Financial assets /liabilities at fair value
through profit or loss - current
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
2019
2018
($
9,852,555 ) $
7,498,748
6(26)
26,472,441
27,210,068
(
1,515,433 )
503,769
6(7)
(
276,802 ) (
291,145 )
6(24)
(
21,069 ) (
1,087 )
6(24)
107,249
205,497
(
457 )
-
6(25)
796,972
369,035
6(23)
(
857,040 ) (
656,009 )
6(23)
(
124,396 ) (
234,902 )
(
170,696 )
68,255
581,125
645,492
83,322 (
2,681,429 )
1,687,921
13,537,760
328,078 (
218,227 )
(
3,195,965 ) (
2,674,005 )
(
3,169,681 ) (
666,956 )
32,054
3,852
(
4,645,718 )
443,683
536,158
9,719
(
3,207,463 ) (
3,558,603 )
(
115,118 )
876,967
758,365 (
750,258 )
20,338
11,108
4,251,630
39,651,332
(
3,186,341 ) (
1,195,323 )
1,065,289
38,456,009

(Continued)

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INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets or liabilities at fair
value through profit or loss - non-current
Proceeds from disposal of financial assets at fair
value through profit or loss
Acquisition of investments in equity instruments
measured at fair value through other
comprehensive income
Decrease (increase) in financial assets at amortized
cost - current
Increase in investment accounted for under equity
method
Proceeds from disposal of investment accounted for
under equity method
Increase in other financial assets
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets

Net cash inflows from business combination

Increase in other non-current assets
Interest received
Dividends received
Net cash flows from (used in) investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings
Payment of long-term borrowings
Interest paid
Payment of the principal portion of lease liabilities
Cash dividends paid
Payments to acquire treasury shares

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
2019
2018
($
148,874 ) ($
141,600 )
35,585
-
(
147,364 ) (
1,568,983 )
35,045,337 (
18,971,750 )
- (
93,443 )
-
28,928
(
3,612 ) (
298,701 )
6(31)
(
20,275,443 ) (
34,915,398 )
5,401
24,627
6(11)
(
34,069 ) (
63,512 )
6(31)
330,546
-
(
397,087 ) (
12,624 )
919,367
643,778
126,510
234,902
15,456,297 (
55,133,776 )
500,000
8,500,000
(
10,960,500 ) (
10,960,000 )
(
764,441 ) (
324,484 )

(
345,083 )
-
(
597,124 ) (
7,961,657 )
6(18)
(
1,029,223 )
-
(
13,196,371 ) (
10,746,141 )
(
331,561 ) (
675,462 )
2,993,654 (
28,099,370 )
33,847,328
65,988,955
$
36,840,982 $
37,889,585

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

~10~

INNOLUX CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND 2018

(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.
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 November 8, 2019.

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 the FSC effective from 2019 are as follows:

follows:
	Effective Date by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative	January 1, 2019
compensation’
IFRS 16, ‘Leases’	January 1, 2019
Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’	January 1, 2019
Amendments to IAS 28, ‘Long-term interests in associates and joint	January 1, 2019
ventures’
IFRIC 23, ‘Uncertainty over income tax treatments’	January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle	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’

A. IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognize a ‘right-of-use asset’ and a lease liability (except for those leases

~11~

with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

B. The Group has elected to apply IFRS 16 by not restating the comparative information (referred herein as the ‘modified retrospective approach’) when applying “IFRSs” effective in 2019 as endorsed by the FSC. Accordingly, the Group increased ‘right-of-use asset’ by $6,935,181, increased ‘lease liability’ by $6,180,682 and has no effect on retained earnings with respect to the lease contracts of lessees on January 1, 2019.
C. The Group has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16:
(a) Reassessment as to whether a contract is, or contains, a lease is not required, and instead, the application of IFRS 16 depends on whether or not the contracts were previously identified as leases applying IAS 17 and IFRIC 4.
(b) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
(c) The accounting for operating leases whose period will end before December 31, 2019 as shortterm leases and accordingly, rent expense recognized in the third quarter of 2019 was included in the expense on short-term lease contracts in Note 6(9).
(d) The exclusion of initial costs for the measurement of ‘right-of-use asset’.
(e) The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
D. The Group recognized lease liabilities which had previously been classified as ‘operating leases’ under the principles of IAS 17, ‘Leases’. The reconciliation between operating lease commitments under IAS 17 measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate and lease liabilities recognized as of January 1, 2019 is as follows:

follows:
Operating lease commitments disclosed by applying IAS 17 as at December	`$`	`3,208,917`
31, 2018
Less: Short-term leases	`(`	`3,250)`
Add/Less: Adjustments as a result of a different treatment of extension and
termination options		`3,728,860`
Total lease contracts amount recognized as lease liabilities by applying IFRS
16 on January 1, 2019	`$`	`6,934,527`
Incremental borrowing interest rate at the date of initial application	`1.8143%~ 3.05%`
Lease liabilities recognized as at January 1, 2019 by applying IFRS 16	`$`	`6,180,682`

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

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

~12~

New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendment to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’	January 1, 2020 January 1, 2020

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

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

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

endorsed by the FSC are as follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’	January 1, 2020 To be determined by International Accounting Standards Board January 1, 2021

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

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, 2018.
(2) Basis of preparation
A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
- (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (b) Financial assets at fair value through other comprehensive income.
- (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligations.

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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, 2018.

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 Limited
Investment
holdings
Innolux Holding Limited
Investment
holdings
Keyway Investment
Management Limited
Investment
holdings
Landmark International Ltd. Investment
holdings
Toppoly Optoelectronics
(B.V.I.) Ltd.
Investment
holdings
Innolux Hong Kong Holding
Limited
Investment
holdings
Leadtek Global Group
Limited
Distribution
company
Yuan Chi Investment Co.,
Ltd.
Investment
company
InnoJoy Investment
Corporation
Investment
company
Innolux Japan Co., Ltd.
Investment, R&D,
manufacturing and
distribution
company
Innolux Singapore Holding
Pte. Ltd.
Investment
holdings
CarUX Technology Inc.
R&D,
manufacturing and
distribution
company

September December September
30,2019
31,2018
30,2018
Description
-
100
100
(i)
-
100
100
(b)
100
100
100
-
100
100
100
-
100
100
100
-
100
100
100
-
100
100
100
-
100
100
100
-
100
100
100
-
100
100
100
-
54
54
54
-
100
100
100
-
100
-
-
(c)
Ownership (%)

~14~

Main
Business
Name of Investor
Name ofSubsidiary
Activities
Innolux Corporation
InnoCare Optoelectronics
Corporation
Investment, R&D,
manufacturing and
distribution
company
GIO Optoelectronics Corp.
Investment, R&D,
manufacturing and
distribution
company
Golden Achiever
International Limited
VAP Optoelectronics
(Nanjing) Corp.
Processing
company
Innolux Holding
Limited
Rockets Holding Ltd.
Investment
holdings
Suns Holding Ltd.
Investment
holdings
Lakers Trading Ltd.
Distribution
company
Keyway Investment
Management Limited
Foshan Innolux Logistics
Ltd.
Warehousing
company
Landmark
International Ltd.
Ningbo Innolux
Optoelectronics Ltd.
Processing
company
Foshan Innolux
Optoelectronics Ltd.
Processing
company
Ningbo Innolux Display Ltd. Processing
company
Toppoly
Optoelectronics
(B.V.I.) Ltd.
Toppoly Optoelectronics
(Cayman) Ltd.
Investment
holdings
Innolux Hong Kong
Holding Limited
Innolux Optoelectronics
Hong Kong Holding Limited
Investment
holdings
Innolux Hong Kong Limited Distribution
company
Innolux Europe B.V.
Investment,
distribution, and
R&D testing
company
Innolux Japan Co., Ltd.
Investment, R&D,
manufacturing and
distribution
company
Innolux Japan Co.,
Ltd.
Innolux USA, Inc.
Distribution
company
Innolux Singapore
Holding Pte. Ltd.
Innolux Optoelectronics
India Private Limited
Distribution
company
Innolux Optoelectronics
Philippines Corp.
Manufacturing
and distribution
company

September December September
30,2019
31,2018
30,2018
Description
Ownership (%)
100
-
-
(e)
63
24
24
(h)
-
-
100
(a)
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
-
46
46
46
-
100
100
100
-
100
100
100
-
100
100
100
-

~15~

Main
Business
Name of Investor
Name ofSubsidiary
Activities
Innolux Singapore
Holding Pte. Ltd.
Innolux Optoelectronics
Malaysia SDN. BHD.
Manufacturing
and distribution
company
Rockets Holding Ltd. Stanford Developments Ltd.
Investment
holdings
Nets Trading Ltd.
Investment
company
Suns Holding Ltd.
Warriors Technology
Investments Ltd.
Investment
company
Toppoly
Optoelectronics
(Cayman) Ltd.
Nanjing Innolux Technology
Ltd.
Distribution
company
Nanjing Innolux
Optoelectronics Ltd.
Processing
company
Innolux
Optoelectronics Hong
Kong Holding
Limited
Shanghai Innolux
Optoelectronics Ltd.
Processing
company
Innolux Europe B.V.
Innolux Technology
Germany GmbH
Testing and
maintenance
company
Stanford
Developments Ltd.
Innocom Technology
(Shenzhen) Co., Ltd.
Processing
company
Ningbo Innolux
Display Ltd.
Ningbo Innolux Electornics
Ltd.
Distribution
company
Ningbo Innolux
Optoelectronics Ltd.
Ningbo Innolux Flent
Electornics Ltd.
Distribution
company
Foshan Innolux
Optoelectronics Ltd.
Foshan Innolux Flent
Electornics Ltd.
Distribution
company
Innocom Technology
(Shenzhen) Co.,
LTD.
Shenzhen PixinLED
Technology Co., LTD.
R&D and
distribution
company
Innolux Automations and
Intelligence Systems
(ShenZhen) Co., Ltd.
R&D and
distribution
company
InnoCare
Optoelectronics
Corporation
InnoCare Optoelectronics
Japan Co., Ltd.
Distribution
company
InnoCare Optoelectronics
USA, INC.
Distribution
company
GIO Optoelectronics
Corp.
Double Star Inc.
Investment
holdings
GIO (Maanshan)
Optoelectronics Co., Ltd.
Processing
company

September December September
30,2019
31,2018
30,2018
Description
Ownership (%)
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
49
49
(d)
100
-
-
(f)
100
-
-
(g)
100
100
100
(h)
100
100
100
(h)

(a) In the fourth quarter of 2018, VAP Optoelectronics (Nanjing) Corp. had completed liquidation and dissolution.

~16~

  - (b) In the first quarter of 2019, Golden Achiever International Limited has completed liquidation.

  - (c) CarUX Technology Inc. was established in the first quarter of 2019 and was included in the consolidated financial statements since the date of establishment.

  - (d) Remaining 51% of shares of Innolux Automations and Intelligence Systems (ShenZhen) Co., Ltd. were acquired in the first quarter of 2019 and Innolux Automations and Intelligence Systems (ShenZhen) Co., Ltd. was included in the consolidated financial statements since the effective date of share transfer.

  - (e) InnoCare Optoelectronics Corporation was established in the second quarter of 2019 and was included in the consolidated financial statements since the date of establishment.

  - (f) InnoCare Optoelectronics Japan Co., Ltd. was established in the third quarter of 2019 and was included in the consolidated financial statements since the date of establishment.

  - (g) InnoCare Optoelectronics USA, INC. was established in the third quarter of 2019 and was included in the consolidated financial statements since the date of establishment.

  - (h) GIO Optoelectronics Corp. and its subsidiaries were formerly associates accounted for under the equity method; the group acquired obtained control over it in the third quarter of 2019. GIO Optoelectronics Corp. and its subsidiaries were included in the consolidated financial statements since the control commenced.

  - (i) In the third quarter of 2019, Bright Information Holding Ltd. 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) Leasing arrangements (lessee) - right-of-use assets / lease liabilities
A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:
- (a) Fixed payments, less any lease incentives receivable; and
- (b) Variable lease payments that depend on an index or a rate.
- The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.
C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

~17~

(a) The amount of the initial measurement of lease liability; and
(b) Any lease payments made at or before the commencement date.

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

(5) Convertible bonds payable

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

A. The host contracts of bonds are initially recognized at fair value. Any difference between the initial recognition and the redemption value is accounted for as the premium or discount on bonds payable and is subsequently amortized in profit or loss as an adjustment to ‘finance costs’ over the period of circulation using the effective interest method.
B. The embedded conversion options which meet the definition of an equity instrument are initially recognized in ‘capital surplus—share options’ at the residual amount of total issue price less the amount of bonds payable as stated above. Conversion options are not subsequently remeasured.
C. Any transaction costs directly attributable to the issuance are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.
D. When bondholders exercise conversion options, the liability component of the bonds (including bonds payable) shall be remeasured on the conversion date. The issuance cost of converted common shares is the total book value of the abovementioned liability component and ‘capital surplus—share options’.
(6) 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 2018 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. And, the related information is disclosed accordingly.

- (7) Employee share based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that

~18~

are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

(8) 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 2018 consolidated financial statements.

A. The interim period income tax expense is calculated according to pretax income times, effective income tax rate, and the related information is disclosed accordingly.
B. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognizes the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognized outside profit or loss is recognized in other comprehensive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss.
(9) Treasury shares

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

(10) Business combinations
A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognized amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.
B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognized and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognized directly in profit or loss on the acquisition date.

~19~

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

For more information, please refer to Note 5 of the consolidated financial statements for the year ended December 31, 2018.

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	September30,2019 `19,173,524` `$` `17,667,458` `36,840,982` `-` `36,840,982` `$`	December31,2018 `14,148,462` `$` `19,698,866` `33,847,328` `-` `33,847,328` `$`	September30,2018
			`18,837,790` `$` `18,181,795`
			`37,019,585` `870,000`
			`37,889,585` `$`

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.

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

Assets Current items Financial assets mandatorily measured at fair value through profit or loss Forward foreign exchange contracts Forward exchange swap contracts Non-current items Financial assets mandatorily measured at fair value through profit or loss Listed stocks Unlisted stocks Convertible bonds	September30,2019 `42,810` `$` `-` `42,810` `$` `2,830,037` `$` `361,512` `35,935` `3,227,484` `$`	December31,2018 `398,913` `$` `-` `398,913` `$` `1,221,135` `$` `343,175` `35,559` `1,599,869` `$`	September30,2018
			`8,108` `$` `45,537`
			`53,645` `$`
			`991,908` `$` `372,302` `-`
			`1,364,210` `$`

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Liabilities Current items Financial liabilities held for trading Forward foreign exchange contracts Forward exchange swap contracts	September30,2019 `248,821` `$` `-` `248,821` `$`	December31,2018 `16,644` `$` `7,135` `23,779` `$`	September30,2018
			`346,577` `$` `-`
			`346,577` `$`

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

September30,2019	December31,2018	December31,2018
Contract Period EUR (sell) `44,000` `$` 2019/7-2019/10 HKD (buy) `386,048` 2019/7-2019/10 TWD (sell) `10,368,822` 2019/7-2020/1 JPY (buy) `35,700,000` 2019/7-2020/1 USD (sell) `43,000` 2019/7-2019/12 JPY (buy) `4,600,470` 2019/7-2019/12 USD (sell) `460,000` 2019/7-2019/12 RMB (buy) `3,256,642` 2019/7-2019/12 HKD (sell) `211,749` 2019/8-2019/11 USD (buy) `27,000` 2019/8-2019/11 JPY (sell) `21,062` 2019/8-2019/11 USD (buy) `200` 2019/8-2019/11 Contract Amount (Notional Principal) (in thousands)	Contract Amount (Notional Principal) (in thousands)	Contract Period
	Contract Amount (Notional Principal) (in thousands)	Contract Period
	USD (sell) `392,000` `$` JPY (buy) `43,586,415` EUR (sell) `10,000` JPY (buy) `1,262,925` HKD (sell) `364,400` EUR (buy) `40,000` USD (sell) `900,000` RMB (buy) `6,177,972` USD (sell) `225,000` TWD (buy) `6,910,950`	2018/7-2018/12 2018/7-2018/12 2018/8-2018/11 2018/8-2018/11 2018/8-2018/10 2018/8-2018/10 2018/7-2018/12 2018/7-2018/12 2018/9-2018/10 2018/9-2018/10

~21~

The Group entered into forward foreign exchange contracts to hedge exchange rate risk of import and export proceeds in foreign currency. In addition, forward exchange swap contracts are primarily for the requirement of capital management. However, these contracts are not accounted for using hedge accounting.

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

September 30, 2019 December 31, 2018 September 30, 2018

	September30,2019	December31,2018	September30,2018
Non-current items Equity instruments Listed stocks Unlisted stocks	`3,005,531` `$` `1,244,902` `4,250,433` `$`	`2,661,075` `$` `1,173,301` `3,834,376` `$`	`3,258,050` `$` `1,792,938`
			`5,050,988` `$`

A. The Group has elected to classify equity instruments that are considered to be strategic investments as financial assets at fair value through other comprehensive income.
B. For information about that the Group recognized other comprehensive income for fair value change for the nine-month periods ended September 30, 2019 and 2018, please refer to Note 6(21) “Other equity”.

(4) Financial assets at amortized cost

September 30, 2019 December 31, 2018 September 30, 2018 Current items Time deposits with maturity over three months $ 16,463,737 $ 51,426,053 $ 18,888,750

The Group recognized $80,518, $38,191, $363,220 and $38,191 of interest income arising from the financial assets at amortized cost for the three-month and nine-month periods ended September 30, 2019 and 2018, respectively.

(5) Notes receivable and accounts receivable

Notes receivable Accounts receivable Less: Allowance for uncollectible accounts `(`	September30,2019 `22,771` `$` `45,175,554` `45,198,325` `209,419)` `(` `44,988,906` `$`	December31,2018 `25,132` `$` `45,248,754` `45,273,886` `209,729)` `(` `45,064,157` `$`	September30,2018 `31,827` `$` `46,408,587` `46,440,414` `109,373)` `46,331,041` `$`

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

Not past due Up to 60 days 61 to 180 days Over 180 days	September30,2019 `44,388,114` `$` `642,876` `142,988` `24,347` `45,198,325` `$`	December31,2018 `44,209,582` `$` `1,003,472` `54,125` `6,707` `45,273,886` `$`	September30,2018
			`45,572,904` `$` `845,379` `12,277` `9,854`
			`46,440,414` `$`

~22~

The above aging analysis was based on past due date.

B. As of September 30, 2019 and 2018, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2018, the balance of receivables from contracts with customers amounted to $43,759,108.
C. Information relating to credit risk of accounts receivable is provided in Note 12(2).

(6) Inventories

Inventories
Raw materials and supplies Work in progress Finished goods	September30,2019 `4,604,193` `$` `15,034,710` `14,413,836` `34,052,739` `$`	December31,2018 `4,768,663` `$` `14,071,053` `12,016,836` `30,856,552` `$`	September30,2018
			`5,365,264` `$` `16,377,450` `11,190,312`
			`32,933,026` `$`

For the three-month and nine-month periods ended September 30, 2019 and 2018, the Group recognized cost of goods sold for inventories that have been sold at $62,118,290, $66,510,623, $181,860,950 and $184,916,618 and recognized net inventory gain (loss) at $1,305, $35,685, ($136,529) and $129,921 due to write down (reversal) of cost of scrap inventories to net realizable value, respectively.

(7) Investments accounted for under the equity method

Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd. Others	September30,2019 `904,353` `$` `945,958` `52,012` `1,902,323` `$`	December31,2018 `956,577` `$` `655,827` `190,517` `1,802,921` `$`	September30,2018
			`967,550` `$` `817,967` `201,055`
			`1,986,572` `$`

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

2019 2018 `72,608` `$` `107,947` `$` `15,676)` `1,004` `(` `56,932` `$` `108,951` `$` For the three-month periods endedSeptember30,	For the nine-month periods endedSeptember30,	For the nine-month periods endedSeptember30,
2019 `72,608` `$` `15,676)` `56,932` `$`	2019 `276,802` `$` `54,029)` `222,773` `$`	2018
		`291,145` `$` `115,085`
		`406,230` `$`

~23~

2019

(8) Property, plant and equipment

															Transfer, net
									Acquired						exchange
									from business						differences
			At January1			Additions		combinations				Disposals			and others		At	September 30
Cost:
Land		`$`	`3,852,792`		`$`	`-`		`$`	`240,934`		`$`	`-`		`$`	`-`		`$`	`4,093,726`
Buildings			`199,521,281`			`364,137`			`214,129`	`(`		`15,535)`			`2,287,840`			`202,371,852`
Machinery and equipment			`510,649,778`			`2,023,126`			`184,682`	`(`		`1,980,610)`			`6,784,900`			`517,661,876`
Other equipment			`43,298,695`			`72,792`			`505,875`	`(`		`2,034,712)`			`4,349,661`			`46,192,311`
			`757,322,546`			`2,460,055`			`1,145,620`	`(`		`4,030,857)`			`13,422,401`			`770,319,765`
Accumulated depreciation
and impairment:
Buildings	`(`		`122,903,947)`	`(`		`6,225,953)`	`(`		`139,922)`			`13,814`			`284,746`	`(`		`128,971,262)`
Machinery and equipment	`(`		`403,140,224)`	`(`		`16,222,729)`	`(`		`183,618)`			`1,921,823`	`(`		`163,431)`	`(`		`417,788,179)`
Other equipment	`(`		`36,348,744)`	`(`		`3,413,255)`	`(`		`488,367)`			`1,982,570`	`(`		`872,668)`	`(`		`39,140,464)`
	`(`		`562,392,915)`	`(`		`25,861,937)`	`(`		`811,907)`			`3,918,207`	`(`		`751,353)`	`(`		`585,899,905)`
Unfinished construction
and equipment under
acceptance			`11,688,329`			`15,513,812`			`-`			`-`	`(`		`13,325,020)`			`13,877,121`
		`$`	`206,617,960`														`$`	`198,296,981`

2018

								2018
										Transfer, net
										exchange
										differences
		AtJanuary1			Additions			Disposals		and others	At	September30
Cost:
Land		`$`	`3,852,792`	`$`	`-`		`$`	`-`	`-` `$`		`$`	`3,852,792`
Buildings			`196,417,863`		`255,757`	`(`		`11,524)`		`2,307,940`		`198,970,036`
Machinery and equipment			`496,794,502`		`1,148,626`	`(`		`3,466,477)`		`13,275,765`		`507,752,416`
Other equipment			`39,761,461`		`43,126`	`(`		`1,791,348)`		`4,228,122`		`42,241,361`
			`736,826,618`		`1,447,509`	`(`		`5,269,349)`		`19,811,827`		`752,816,605`
Accumulated depreciation
and impairment:
Buildings	`(`		`114,356,774)`	`(`	`6,637,998)`			`11,066`		`146,503`	`(`	`120,837,203)`
Machinery and equipment	`(`		`384,279,016)`	`(`	`16,743,187)`			`3,262,843`	`(`	`249,677)`	`(`	`398,009,037)`
Other equipment	`(`		`33,205,003)`	`(`	`3,402,655)`			`1,765,315`	`(`	`701,365)`	`(`	`35,543,708)`
	`(`		`531,840,793)`	`(`	`26,783,840)`			`5,039,224`	`(`	`804,539)`	`(`	`554,389,948)`
Unfinished construction
and equipment under
acceptance			`15,878,802`		`15,396,357`			`-`	`(`	`20,194,046)`		`11,081,113`
		`$`	`220,864,627`								`$`	`209,507,770`

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

~24~

B. As of September 30, 2019, December 31, 2018 and September 30, 2018, the prepayments for business facilities which have not yet entered the factory (shown as ‘other non-current assets’) amounted to $1,555,527, $1,559,446 and $1,678,508, respectively.
－
(9) Leasing arrangements lessee
A. The Group leases various assets including land, office and business vehicles. Rental contracts are typically made for periods of 2 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. Short-term leases with a lease term of 12 months or less comprise office, dormitory and equipment. Low-value assets comprise computer equipment.
C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings (Office) Transportation equipment (Business vehicles)	September30,2019 Carryingamount `6,312,617` `$` `47,872` `4,578` `6,365,067` `$`	For the three-month period endedSeptember30,2019 Depreciation charge `123,102` `$` `5,896` `324` `129,322` `$`	For the nine-month period endedSeptember30,2019
			Depreciation charge
			`383,054` `$` `16,397` `968` `400,419` `$`

D. For the three-month and nine-month periods ended September 30, 2019, the additions to right-ofuse assets were $0 and $25,336, respectively.
E. The information on income and expense accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on variable lease payments Expense on short-term lease contracts Expense on leases of low-value assets	For the three-month period endedSeptember30,2019 `26,120` `$` `44,737` `27,743` `9,409`	For the nine-month period endedSeptember30,2019
		`81,169` `$` `99,419` `83,708` `28,271`

F. For the nine-month period ended September 30, 2019, the Group’s total cash outflow for leases was $637,650.

~25~

(10) Investment property

Investment property
Cost: Land Buildings Accumulated depreciation: Buildings `(` Cost: Land Buildings Accumulated depreciation: Buildings `(`		2019	At September30 `188,247` `$` `439,228` `627,475` `93,358)` `534,117` `$` At September30 `188,247` `$` `439,228` `627,475` `72,824)` `554,651` `$`
	At January1 `188,247` `$` `439,228` `627,475` `75,505)` `(` `551,970` `$` `(`	Additions `-` `$` `-` `-` `17,853)` `(` `17,853)` `$` 2018
	At January1 `188,247` `$` `439,228` `627,475` `64,778)` `(` `562,697` `$` `(`	Additions `-` `$` `-` `-` `8,046)` `(` `8,046)` `$`

The fair value of the investment property held by the Group as at September 30, 2019, December 31, 2018 and September 30, 2018 was $1,320,248, $1,660,504 and $1,580,155, respectively. The amounts mentioned above represent valuation results of comparative method based on market trading information categorized within Level 3 in the fair value hierarchy.

(11) Intangible assets

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

AtJanuary1 Additions Cost: Patents and royalty `8,154,685` `$` `-` `$` Goodwill `17,096,628` `-` Others `5,247,197` `34,069` `30,498,510` `34,069` Accumulated amortization and impairment: Patents and royalty `8,147,367)` `(` `3,150)` `(` Others `4,669,658)` `(` `189,082)` `(` `12,817,025)` `(` `192,232)` `(` `17,681,485` `$` `158,163)` `($`			2019	2019
			Acquired from business combinations `-` `$` `20,711` `-` `(` `20,711` `(` `-` `-` `-` `20,711` `$`	Disposals `-` `$` `-` `12,578)` `12,578)` `-` `12,578` `12,578` `-` `$`	Transfer, net exchange differences and others AtSeptember30 `-` `$` `8,154,685` `$` `-` `17,117,339` `52,501` `5,321,189` `52,501` `30,593,213` `-` `8,150,517)` `(` `689` `4,845,473)` `(` `689` `12,995,990)` `(` `53,190` `$` `17,597,223` `$`	AtSeptember30

~26~

2018

AtJanuary1 Additions Cost: Patents and royalty `8,154,685` `$` `-` `$` Goodwill `17,096,628` `-` Others `5,005,156` `63,512` `30,256,469` `63,512` Accumulated amortization and impairment: Patents and royalty `8,143,082)` `(` `3,235)` `(` Others `4,202,479)` `(` `414,947)` `(` `12,345,561)` `(` `418,182)` `(` `17,910,908` `$` `354,670)` `($`	Disposals `-` `$` `-` `18,852)` `(` `18,852)` `(` `-` `18,852` `18,852` `-` `$`	Transfer, net exchange differences and others AtSeptember30 `-` `$` `8,154,685` `$` `-` `17,096,628` `137,809` `5,187,625` `137,809` `30,438,938` `-` `8,146,317)` `(` `3,104` `4,595,470)` `(` `3,104` `12,741,787)` `(` `140,913` `$` `17,697,151` `$`	AtSeptember30

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

2019 2018 `22,208` `$` `89,995` `$` `39,315` `35,823` `61,523` `$` `125,818` `$` For the three-month periods ended September30,	ended September30, For the nine-month periods	ended September30, For the nine-month periods
2019 `22,208` `$` `39,315` `61,523` `$`	2019 `74,316` `$` `117,916` `192,232` `$`	2018
		`320,572` `$` `97,610`
		`418,182` `$`

C. The Group performed impairment assessment on the recoverable amount of goodwill on the financial period-end, and calculated based on the value in use. The computation of value in use was based on the cash flow of financial forecast in the next 5 years. The periodical assessment did not include the impairment loss of goodwill.

(12) Other payables

Other payables
Other personnel expenses Payable on machinery and equipment Repairs and maintenance expense payable Utilities expense payable Other payables	September30,2019 `7,717,976` `$` `5,681,402` `2,443,446` `1,289,484` `9,973,688` `27,105,996` `$`	December31,2018 `10,642,647` `$` `7,982,978` `2,625,869` `1,093,497` `10,236,618` `32,581,609` `$`	September30,2018
			`9,733,331` `$` `14,309,806` `2,370,849` `1,268,227` `9,382,576`
			`37,064,789` `$`

~27~

(13) Bonds payable

Bonds payable Less: Discount on bonds payable

	September	30,2019
`$`		`100,000`
`(`		`3,401)`
`$`		`96,599`

A. The issuance of domestic convertible bonds by the Group’s subsidiary GIO Optoelectronics Corp. (referred herein as “GIO Company”):
- The terms of the first domestic secured convertible bonds issued by GIO Company are as follows:
- (a) GIO Company issued $100,000, 0% first domestic secured convertible bonds, as approved by the regulatory authority. The bonds mature 3 years from the issue date (October 1, 2018 ~ October 1, 2021) and will be redeemed in cash at face value at the maturity date.
- (b) The bondholders have the right to ask for conversion of the bonds into common shares of GIO Company during the period from the date after three months of the bonds issue to 10 days before the maturity date, except for the stop transfer period as specified in the terms of the bonds or the laws/regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.
- (c) The conversion price of the bonds is set up based on the pricing model in the terms of the bonds, and is subject to adjustments if the condition of the anti-dilution provisions occurs subsequently. The conversion price was $10.7 (in dollars) per share upon issuance.
- (d) Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are retired and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.
B. Regarding the issuance of convertible bonds, the equity conversion options of GIO company amounting to $4,778 were separated from the liability component and were recognized in ‘capital surplus—share options’ in accordance with IAS 32.
(14) Long term borrowings

Type of loans Syndicated bank loans Secured borrowings Less: Administrative expenses charged by syndicated banks Current portion (includes administrative expenses) Range of interest rates	Period September30,2019 December31,2018 September30,2018 2015/3/12 ~2024/4/15 `40,980,000` `$` `51,440,000` `$` `25,940,000` `$` 2014/3/19 ~2022/7/28 `137,000` `-` `-` `241,746)` `(` `103,424)` `(` `112,289)` `(` `16,022,951)` `(` `16,194,486)` `(` `10,960,000)` `(` `24,852,303` `$` `35,142,090` `$` `14,867,711` `$` `1.79%~2.07%` `1.74%~1.96%` `1.74%~1.96%`	September30,2018

~28~

A. Please refer to Note 8 for the information on assets pledged as collateral for long-term borrowings.
B. The syndicated loan agreements specified that the Company shall meet covenants on current ratio, liability ratio, interest coverage, and tangible net equity, based on the Company’s annual consolidated financial statements audited by independent auditors. The Company’s financial ratios on the consolidated financial statements for the year ended December 31, 2018 are in compliance with the covenants on the syndicated loan agreement.
C. For repayment of borrowings from financial institutions and financing mid-term working capital fund, the Board of Directors approved the signing of a syndicated loan with financial institution in the amount of NT$43.75 billion on June 20, 2018.
(15) Pensions
A. Defined benefit pension plan

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. 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 three-month and nine-month periods ended September 30, 2019 and 2018 were $454,001, $507,878, $1,395,885 and $1,506,152, respectively.
(16) Share-based payment
A. For the nine-month period ended September 30, 2019, the Group’s subsidiary — GIO Optoelectronics Corp.’s (referred herein as “GIO Company”) share-based payment arrangements were as follows:

Contract
Quantity granted period
Type ofarrangement Grant date (inthousand units) (inyears) Vesting conditions
Employee stock options 2017.10.1 `6,600` `5` Note
Note: The employees’ stock options is based on the issue date. According to the date of issuance
(2 to 3 years), the employees can exercise their employee stock options in batch at the ratio
of 60% and 40%. Stock options which are not exercised before the expiry date are
permanently forfeited.

~29~

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

Options outstanding at the beginning of the period Options forfeited `(` Options outstanding at the end of the period Options exercisable at the end of the period		2019
	Quantity (inthousand units) `6,372` `140)` `6,232` `-`	Weighted-average exercise price (indollars)
		`9.8` `$` `-`
		`9.8` `$`
		`-` `$`

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

Expiry date 2022.9.30	September	30,2019
	Quantity (inthousand units) `6,232`	Exercise price (indollars)
		`$ 9.8`

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

Type of arrangement	Grant date	Price (in dollars)	Exercise price (in dollars) `10` `$`	Expected volatility (%)	Expected duration (inyears) `3.5~4`	Expected dividends	Risk-free interest rate(%)	Fair value per unit (in dollars)
Employee stock options	2017.10.1	`$ 2.18`		`48.38` `~48.58`		`-`	`0.63~` `0.68`	`$0.0783` `~0.1099`

E. For the nine-month period ended September 30, 2019, the Group recognized expense on share-

based payment transaction (equity settlement) in the amount of $8.

(17) Provisions-current

Provisions-current
At January 1, 2019 Additions during the period Used during the period `(` At September 30, 2019	Warranty `3,773,214` `$` `773,201` `688,644)` `(` `3,857,771` `$`	Litigation and others `3,009,700` `$` `-` `199,675)` `(` `2,810,025` `$`	Total
			`6,782,914` `$` `773,201` `888,319)`
			`6,667,796` `$`

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).

~30~

(18) Share capital
A. As of September 30, 2019, 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.
B. Treasury shares
- (a) Reason for share reacquisition and number of the Company’s treasury shares are as follows:

Name of company holding the shares	Reason for reacquisition	September30,2019	September30,2019
		Quantity (inthousand units) `138,200`	Bookvalue
The Company	To be reissued to employees and maintain the company's credit and shareholders' rights		`1,029,223` `$`

(b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and the shareholder's rights should not be enjoyed before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired. Treasury shares to maintain the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.
(19) Capital surplus

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

~31~

	2019	2019	2019
Sharepremium `99,614,690` `$` `-` `-` `99,614,690` `$`	Changes Share of profit (loss) in ownership of associates interests in accounted for under subsidiaries equitymethod `-` `$` `33,425` `$` `11` `-` `-` `14,756)` `(` `11` `$` `18,669` `$` 2018
	`$`
	`$`

Sharepremium		Share of profit (loss) of associates accounted for under equitymethod `32,229` `$` `41` `32,270` `$`
			`$`
			`$`

(20) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be offset against prior years’ operating losses, then set aside 10% of the remaining amount as legal reserve (until the legal reserve equals the paid-in capital). Preferred dividend shall be distributed after setting aside or reversing a special reserve according to related regulations. The appropriation of the remaining amount along with the unappropriated earnings from previous years shall be proposed by the Board of Directors and resolved by the shareholders. The Company is in an emerging industry which is growing rapidly, and has a capital intensive business. The Company is at the stage of stable growth. In line with the Company’s long-term financial plan in the future, investment environment and business competition situation, the appropriation of dividends shall be proposed by the Board of Directors and resolved by the shareholders, taking into account the future capital expenditure budget and capital requirement of the Company. However, the stock dividends distributed to shareholders shall not exceed twothirds of distributable dividends in current period.
B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve exceeds 25% of the Company’s paid-in capital.
C. The details of the appropriation of 2018 and 2017 net income which was approved at the stockholders’ meeting in June 2019 and 2018, respectively, are as follows:

~32~

Years ended December 31,

		Ye	Ye	ars ended	Dece	mber31,	mber31,
		2018				2017
			Dividends per				Dividends per
		Amount	share (in dollars)			Amount	share (in dollars)
Legal reserve	`$`	`222,276`			`$`	`3,702,861`
Provision (reversal)
of special reserve		`3,572,742`			`(`	`2,328,083)`
Cash dividends		`597,124`	`$`	`0.06`		`7,961,657`	`$`	`0.80`
	`$`	`4,392,142`			`$`	`9,336,435`

D. For the information relating to employees’ compensation and directors’ remuneration, please refer to Note 6(27).

(21) Other equity items

refer to Note 6(27). Other equity items
Currency translation At January 1 `6,461,149)` `($` Revaluation - gross `-` Currency translation differences `1,123,383)` `(` Share of other comprehensive loss of associates `54,029)` `(` Effect of income tax `-` At September 30 `7,638,561)` `($`		2019
		Financial assets at fair value through other comprehensive income Total `1,797,686` `$` `4,663,463)` `($` `266,359` `266,359` `-` `1,123,383)` `(` `-` `54,029)` `(` `61,035` `61,035` `2,125,080` `$` `5,513,481)` `($`	Total

Currency translation At January 1 `5,717,223)` `($` Effect of modified retrospectvie approach under IFRS 9 `-` `(` Balance after retropective adjustment `5,717,223)` `(` Revaluation - gross `-` Currency translation differences `1,460,938)` `(` Share of other comprehensive income of associates `115,085` At September 30 `7,063,076)` `($`			2018
		Financial assets Available- at fair value through for-sale other comprehensive investments income Total `4,626,502` `$` `-` `$` `1,090,721)` `($` `4,626,502)` `4,626,502` `-` `-` `4,626,502` `1,090,721)` `(` `-` `1,610,671)` `(` `1,610,671)` `(` `-` `-` `1,460,938)` `(` `-` `-` `115,085` `-` `$` `3,015,831` `$` `4,047,245)` `($`		Total

~33~

(22)	Operating income
					For the nine-month			periods endedSeptember30,
						2019				2018
	TFT-LCD products				`$`	`186,393,293` `$`				`207,132,750`
	The Group derives revenue from		the transfer of goods at a point				in time.
(23)	Other income
			For the three-month periods					For the nine-month periods
			ended September30,					ended September				30,
			2019			2018		2019			2018
	Interest income
	Interest income from bank	`$`	`94,256`	`$`		`187,700`	`$`	`493,820`	`$`			`617,818`
	deposits
	Interest income from
	financial assets at
	amortized cost		`80,518`			`38,191`		`363,220`				`38,191`
			`174,774`			`225,891`		`857,040`				`656,009`
	Rental revenue		`33,195`			`37,568`		`146,265`				`126,094`
	Dividend income		`14,587`			`17,986`		`124,396`				`234,902`
	Other income		`534,234`			`540,570`		`1,159,577`				`995,687`
		`$`	`756,790`	`$`		`822,015`	`$`	`2,287,278`	`$`		`2,012,692`
(24)	Other gains and losses
			For the three-month periods					For the nine-month periods
			ended September30,					ended September				30,
			2019			2018		2019			2018
	Net gain (loss) on financial	`$`	`283,711`	`($`		`1,251,965)`	`$`	`1,414,996`	`($`		`2,150,099)`
	assets and liabilities at fair
	value through profit or loss
	Net currency exchange
	gain (loss)		`627,557`			`1,339,262`	`(`	`38,244)`			`1,716,431`
	Gain (loss) on disposal of
	investments		`10,916`	`(`		`15,141)`		`21,069`				`1,087`
	Loss on disposal of
	property, plant and
	equipment	`(`	`20,498)`	`(`		`51,864)`	`(`	`107,249)`	`(`			`205,497)`
	Other losses	`(`	`70,930)`	`(`		`62,816)`	`(`	`108,804)`	`(`			`63,849)`
		`$`	`830,756`	`($`		`42,524)`	`$`	`1,181,768`	`($`			`701,927)`

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(25) Finance costs

Finance costs
Expenses by nature Interest expense: Bank borrowings Others Employee benefit expense: Salaries and other short-term employee benefits Share-based payment Post-employment benefits Depreciation Amortization	2019 2018 `236,766` `$` `111,978` `$` `26,574` `2` `263,340` `$` `111,980` `$` For the three-month periods endedSeptember30, 2019 2018 `9,161,869` `$` `9,549,775` `$` `8` `-` `454,001` `507,878` `8,801,090` `8,767,429` `61,523` `125,818` `18,478,491` `$` `18,950,900` `$` For the three-month periods endedSeptember30,	endedSeptember30, For the nine-month periods
		2019 2018 `715,349` `$` `368,822` `$` `81,623` `213` `796,972` `$` `369,035` `$` endedSeptember30, For the nine-month periods	2018
			`368,822` `$` `213`
			`369,035` `$`
	2019 `9,161,869` `$` `8` `454,001` `8,801,090` `61,523` `18,478,491` `$`	2019 `27,419,845` `$` `8` `1,395,885` `26,280,209` `192,232` `55,288,179` `$`	2018
			`28,426,826` `$` `-` `1,506,152` `26,791,886` `418,182`
			`57,143,046` `$`

(26) Expenses by nature

(27) 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 periods ended September 30, 2019 and 2018, the amount of employees’ compensation was accrued (reversed) at $0, $113,750, $0 and $284,619, respectively. For the nine-month periods ended September 30, 2019 and 2018, the Group did not recognize directors’ remuneration, aforementioned amounts were accounted as expenses.
The employees’ compensation and directors’ remuneration for the year ended December 31, 2018 were $294,289 and $4,528, respectively, and were estimated based on the profit of current year. The employees’ compensation will be distributed in the form of cash. The Board of Directors resolved to distribute employees’ compensation and directors’ remuneration in the amount of $294,289 and $4,528, respectively, in the form of cash. The actual distributed amount were in consistent with the amounts recognized as expense in 2018.
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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(28) Income tax

A. Income tax expense

(a) Components of income tax expense:

	For the three-month periods	For the three-month periods	For the three-month periods	For the three-month periods	For the three-month periods			For the nine-month periods	For the nine-month periods	For the nine-month periods	For the nine-month periods	For the nine-month periods
		ended September30,							ended September30,
		2019			2018				2019			2018
Current tax:
Current tax on profit	`$`	`572,098`		`$`	`507,158`	`$`		`1,032,617`			`$`	`2,008,296`
for the period
Tax on undistributed
surplus earnings		`-`			`-`				`-`			`2,704,311`
Prior year income tax
(over) under estimation	`(`	`5,043)`	`(`		`894)`	`(`			`943,256)`			`100,119`
Total current tax		`567,055`			`506,264`				`89,361`			`4,812,726`
Deferred tax:
Origination and reversal
of temporary
differences	`(`	`136,144)`			`146,505`				`639,391`			`735,558`
Impact of change in tax
rate		`-`			`-`				`-`	`(`		`969,286)`
Income tax expense	`$`	`430,911`		`$`	`652,769`	`$`			`728,752`	`$`		`4,578,998`
The income tax (charge)/credit		relating to	components of other					comprehensive			income is as
follows:
		For the three-month periods						For the nine-month periods
		endedSeptember30,							endedSeptember30,
		2019			2018				2019			2018
Changes in fair value of
financial assets at fair value
through other
comprehensive income		`$`	`-`	`$`	`-`		`($`		`61,035)`		`$`	`-`

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

B. The Company’s income tax returns through 2016 have been assessed and approved by the Tax Authority.
C. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Group has assessed the impact of the change in income tax rate.

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(29) (Loss) earnings per share

(Loss) earnings per share
(Loss) profit attributable to ordinary shareholders of the parent `(` Weighted average number of ordinary shares outstanding (shares in thousands) Basic (loss) earnings per share (in dollars) `(` Diluted (loss) earnings per share Basic (loss) earnings per share	2019 2018 `3,888,393)` `$` `1,912,948` `$` `(` `9,880,993` `9,952,072` `0.39)` `$` `0.19` `$` `(` `3,888,393)` `$` `1,912,948` `$` `(` `9,880,993` `9,952,072` `-` `26,851` `9,880,993` `9,978,923` `0.39)` `$` `0.19` `$` `(` For the three-month periods ended September30,	For the nine-month periods ended September30,
	2019 `3,888,393)` `$` `9,880,993` `0.39)` `$` `3,888,393)` `$` `9,880,993` `-` `9,880,993` `0.39)` `$`	2019 `10,583,525)` `$` `9,928,118` `1.06)` `$` `10,583,525)` `$` `9,928,118` `-` `9,928,118` `1.06)` `$`	2018
			`2,919,750` `$`
			`9,952,072`
			`0.29` `$`
			`2,919,750` `$`
(Loss) profit attributable to ordinary shareholders of the parent `(` Weighted average number of ordinary shares outstanding (shares in thousands) Assumed conversion of all dilutive potential ordinary shares: - Employees’ compensation Diluted (loss) earnings per share (in dollars) `(`
			`9,952,072` `70,212`
			`10,022,284`
			`0.29` `$`

(30) Business combinations

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

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

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

C. The Group recognized a gain of $10,915 as a result of measuring at fair value its 24% equity interest in GIO Optoelectronics Corp. held before the business combination.
D. The operating revenue included in the consolidated statement of comprehensive income since September 18, 2019 contributed by GIO Optoelectronics Corp. was $1,788. GIO Optoelectronics Corp. also contributed profit before income tax of $6,029 over the same period. Had GIO Optoelectronics Corp. been consolidated from January 1, 2019, the consolidated statement of comprehensive income would show operating revenue of $186,477,863 and loss before income tax of $9,856,820.
E. As of September 30, 2019, the allocation of the purchase price of the acquisition is still in process, and the Group is still assessing the fair value of the identifiable assets.
(31) Supplemental cash flow information
A. Investing activities with partial cash payments:

Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment `(` Cash paid during the period	2019 2018 `17,973,867` `$` `16,843,866` `$` `7,982,978` `32,381,338` `5,681,402)` `14,309,806)` `(` `20,275,443` `$` `34,915,398` `$` Forthenine-monthperiods ended September30,
	2019 `17,973,867` `$` `7,982,978` `5,681,402)` `(` `20,275,443` `$`

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B. Cash received for the acquisition of business subsidiary:

Total consideration Less: Cash of subsidiary Net cash received for the acquisition of business subsidiary

For the nine-month period
endedSeptember30,2019
`192,405` `$`
`522,951)` `(`
`330,546)` `($`

(32) Changes in liabilities from financing activities

For the nine-month periods ended September 30, 2019 and 2018, all changes in liabilities from financing activities are changes in cash flow from financing activities. Please refer to consolidated statements of cash flows.

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 subsidiaries Other related party CHENG MEI MATERIALS TECHNOLOGY Other related party CORPORATION and its subsidiaries Fu Lian Net International (Hong Kong) Limited Other related party Pan Zhou Fu Gui Kang Precision Electronic Co. Ltd. Other related party Chongqing Fuyusheng Electronics Technology Co., Ltd. Other related party FI Medical Device Manufacturing Co., Ltd. Associate GIO Optoelectronics Corp. (Note) Associate

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

(2) Significant related party transactions

A. Operating revenue

Operating revenue
Sales of goods: Other related parties Associates	2019 2018 `1,988,096` `$` `3,042,279` `$` `7,859` `-` `1,995,955` `$` `3,042,279` `$` For the three-month periods endedSeptember30,	endedSeptember30, For the nine-month periods
	2019 `1,988,096` `$` `7,859` `1,995,955` `$`	2019 `7,003,557` `$` `15,206` `7,018,763` `$`	2018
			`16,097,784` `$` `21,418`
			`16,119,202` `$`

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

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B. Purchases of goods

Purchases of goods
Purchases of goods: Other related parties Associates	2019 2018 `2,536,275` `$` `1,576,112` `$` `396,505` `387,133` `2,932,780` `$` `1,963,245` `$` For the three-month periods endedSeptember30,	For the nine-month periods endedSeptember30,
	2019 `2,536,275` `$` `396,505` `2,932,780` `$`	2019 `6,359,844` `$` `1,248,897` `7,608,741` `$`	2018
			`3,825,875` `$` `1,078,374` `4,904,249` `$`

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.

C. Receivables from related parties

Accounts receivable: Other related parties Associates Less: Transferred other receivables	September30,2019 `2,721,975` `$` `51,265` `2,773,240` `24)` `(` `(` `2,773,216` `$`	December31,2018 `5,087,175` `$` `47,881` `5,135,056` `685,079)` `(` `4,449,977` `$`	September30,2018 `4,521,724` `$` `36,152` `4,557,876` `368,339)` `4,189,537` `$`

(a) The receivables from related parties arise mainly from sales transactions. The receivables are due 30~90 days after the date of sale. The receivables are unsecured in nature and bear no interest.
(b) The abovementioned receivables from related parties that exceed normal granting periods were transferred under ‘Other receivables – related parties’.

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D. Other receivables from related parties

E.	Payables to related parties Other receivables: Accounts receivable transferred to other receivables - Other related parties - Fu Lian Net International (Hong Kong) Limited - Pan Zhou Fu Gui Kang Precision Electronic Co. Ltd. - Chongqing Fuyusheng Electronics Technology Co., Ltd. - Others Other receivables - Other related parties - Associates Accounts payable: Other related parties Associates	September30,2019 `-` `$` `-` `-` `24` `7,841` `10,670` `18,535` `$` September30,2019 `3,031,023` `$` `157,436` `3,188,459` `$`	December31,2018 `369,837` `$` `178,663` `136,555` `24` `9,832` `7,820` `702,731` `$` December31,2018 `2,382,269` `$` `269,858` `2,652,127` `$`	September30,2018
				`367,549` `$` `-` `-` `790` `12,978` `9,494`
				`390,811` `$`
				September30,2018
				`2,373,530` `$` `201,199`
				`2,574,729` `$`

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

F. Property transactions

Purchase of property

(a) Acquisition of property, plant and equipment:

2019 2018 `421` `$` `11,510` `$` `263` `-` `684` `$` `11,510` `$` For the three-month periods ended September30,	ended September30, For the nine-month periods	ended September30, For the nine-month periods
2019 `421` `$` `263` `684` `$`	2019 `31,174` `$` `3,031` `34,205` `$`	2018
		`47,783` `$` `2,458`
		`50,241` `$`

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

September 30, 2019 December 31, 2018 September 30, 2018

Other related parties - Hon Hai Precision Industry Co., Ltd. - Others	`1,114,213` `$` `454` `1,114,667` `$`	`2,225,585` `$` `378` `2,225,963` `$`	`9,053,325` `$` `5,939`
			`9,059,264` `$`

Sale of property

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

Other related parties	Disposal Gain on proceeds disposal `-` `$` `-` `$` endedSeptember30,2019 For the three-month period	endedSeptember30,2018 For the three-month period	endedSeptember30,2018 For the three-month period
	Disposal proceeds `-` `$`	Disposal proceeds `537` `$`	Gain on disposal
			`48` `$`

Other related parties	Disposal Gain on proceeds disposal `828` `$` `141` `$` ended September30,2019 For the nine-month period	ended September30,2018 For the nine-month period	ended September30,2018 For the nine-month period
	Disposal proceeds `828` `$`	Disposal proceeds `537` `$`	Gain on disposal
			`48` `$`

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

Other related parties	September30,2019 `-` `$`	December31,2018 `269` `$`	September30,2018
			`534` `$`

(3) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits	2019 2018 `8,991` `$` `138,185` `$` `151` `197` `9,142` `$` `138,382` `$` For the three-month periods endedSeptember30,	For the nine-month periods endedSeptember30,	For the nine-month periods endedSeptember30,
	2019 `8,991` `$` `151` `9,142` `$`	2019 `32,350` `$` `555` `32,905` `$`	2018
			`241,761` `$` `591` `242,352` `$`

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8. PLEDGED ASSETS

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

Pledged asset Other current assets -Demand deposits -Time deposits Property, plant and equipment Intangible assets Other non-current assets -Time deposits -Refundable deposits		Bookvalue	September30,2018 Purpose `-` `$` Long-term loans `444` Tariff and credit card guarantee `63,383,215` Long-term loans `2,439` Long-term loans `-` Tariff guarantee `365,916` Guarantee for litigation `63,752,014` `$`	Purpose
	September30,2019 `1,850` `$` `78,372` `99,608,495` `73` `1,240` `372,090` `100,062,120` `$`	December31,2018 `-` `$` `77,849` `111,162,901` `1,122` `-` `368,194` `111,610,066` `$`

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

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 agreement with the Department of Justice of the U.S. and paid off the fines. Later, Brazil government initiated an investigation case against the Company. In March 2019, the Company received a sanction from the Brazil Administrative Council for Economic Defense - CADE and paid all fines on May 8, 2019 also obtained the confirmation from the representative lawyer of CADE that the Company complied with the sanction. 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. The Company’s subsidiary in the U.S. received a civil complaint from the government of Puerto Rico in September 2018, claiming that the Company, together with other defendants of Taiwan, Japan and South Korea panel factories, had unjustified enrichment from the TFT-LCD pricing collaborations in 2006 and requested monetary compensation. The U.S. subsidiary of the company has appointed a lawyer to handle the lawsuit.
B. Eidos Displays, LLC and Eidos III, LLC (“Eidos”) filed a lawsuit against the Company and American 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

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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. On March 5, 2018, the court made first instance judgement and the Company had appealled. 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. On July 10, 2018, Vista Peak Ventures, LLC (VPV) filed four complaints against the Company in the United States District Court for the Eastern District of Texas, alleging the infringement of several of its patents. The Company reached settlements with VPV for the aforementioned lawsuits and acquired relevant patent portfolio licensing in the first quarter of 2019. VPV also dismissed the action and the lawsuits have no effect on the Company’s financial position and results of operations.
D. On March 23, 2018, Chongqing HKC Optoelectronics Technology Co., Ltd. (HFC) filed five complaints against the subsidiaries of the Company, Ningbo Innolux Optoelectronics Ltd., Foshan Innolux Optoelectronics Ltd. as well as their customers and terminal distributors of TV products with the Fifth Intermediate People’s Court in Chongqing, alleging the infringement of its patents. Ningbo Innolux Optoelectronics Ltd. submitted a request of patent invalidity to the National Intellectual Property Administration, PRC upon the patents asserted in the complaints. As of May 21, 2019, all five patents asserted by HKC were declared invalid by the National Intellectual Property Administration, PRC. The five lawsuits that were previously disclosed were allegedly withdrawn by the Chongqing court on June 18, 2019. Thus, the lawsuits have no effect on the Company’s financial position and results of operations.
E. The Company had assessed and recognized related losses and liabilities as shown in ‘provisionscurrent’ for the aforementioned investigation relating to anti-trust laws and patent litigation.
(2) Commitments

A. Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows: September 30, 2019 December 31, 2018 September 30, 2018 Property, plant and equipment $ 16,535,499 $ 22,914,278 $ 23,209,615 B. Outstanding letters of credit The outstanding letters of credit for the purchase of property, plant and equipment are as follows: September 30, 2019 December 31, 2018 September 30, 2018 Outstanding letters of credit $ 194,999 $ 445,458 $ 298,634 10. SIGNIFICANT DISASTER LOSS None.

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11. SUBSEQUENT EVENTS AFTER THE BALANCE SHEET DATE

(1) On November 8, 2019, the Board of Directors of the Company at their meeting resolved to adjust the overseas business investment structure, whereby the company’s subsidiary, Innolux Hong Kong Holding Limited, transferred its 100% equity interest in Innolux Optoelectronics Hong Kong Holding Limited and 100% equity interest in Europe BV, to CarUX Holding Limited and CarUX Technology Pte. Ltd., subsidiaries of the Company.
(2) On November 8, 2019, the Board of Directors of the Company at their meeting resolved to cancel the total of 241,000 thousand shares of treasury shares, and set November 8, 2019 as the record date of capital reduction. The amount of share capital after the capital reduction was 9,711,072 thousand shares, with a par value of $10 (in dollars) per share, for a total of $97,110,720.

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, 2018.

(2) Financial instruments
A. Financial instruments by category

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

B. 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, 2018.

C. Significant financial risks and degrees of financial risks
Except for the following, there was no significant change in the period. Please refer to Note 12. (a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.
ii. 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 $194,310 and $340,699 for the nine-month periods ended September 30, 2019 and 2018, respectively. The

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information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

September30,2019	September30,2019		December31,2018	December31,2018
Exchange Rate (Note) `31.04` `0.29` `3.96` `33.95` `31.04` `3.96` `0.29` `31.04` `0.29` `33.95`	Book Value (NTD)			Book Value (NTD)
	`149,949,491` `$` `2,419,871` `736,413` `1,710,537` `79,963,944` `$` `2,217,046` `2,190,928` `125,299,758` `$` `9,914,760` `170,769`
		Foreign Currency Amount (In Thousands) `5,653,543` `$` `8,017,434` `12,797` `2,551,723` `$` `103,845` `13,313,597` `4,167,525` `$` `45,281,881` `47,656`	Exchange Rate (Note) `30.53` `0.27` `35.48` `30.53` `3.90` `0.27` `30.53` `0.27` `35.48`

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

iii.Total exchange loss, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three-month and

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nine-month periods ended September 30, 2019 and 2018 amounted to $627,557, $1,339,262, $(38,244) and $1,716,431, respectively.

Price risk

i. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
ii. The Group’s investments in equity securities comprise domestic listed and unlisted stocks. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 20% with all other variables held constant, post-tax profit for the nine-month periods ended September 30, 2019 and 2018 would have increased/decreased by $638,310 and $272,842, respectively; other comprehensive gains and losses would have increased/decreased by $850,087 and $1,010,198, respectively.

Cash flow and fair value interest rate risk

i. The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. During the nine-month periods ended September 30, 2019 and 2018, the Group’s borrowings at variable rate were denominated in the NTD.
ii. If the borrowing interest rate of NTD had increased/decreased by 0.25% with all other variables held constant, profit, net of tax for the nine-month periods ended September 30, 2019 and 2018 would have decreased/increased by $102,793 and $64,850, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows.
ii. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the managements. The utilization of credit limits is regularly monitored.
iii. The Group adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

~47~

If the contract payments are past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

iv. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.
v. The Group classifies customer’s accounts receivable in accordance with credit rating of customer, credit risk on trade and customer types. The Group applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis.
vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;
(ii) Default or delinquency in interest or principal repayments;
(iii) Adverse changes in national or regional economic conditions that are expected to cause a default.
vii. The Group uses the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable.
According to abovementioned consideration and information, the Group does not expect any significant default possibility of accounts receivable.
viii. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

llowance for accounts receivable are as follows:
			2019
		Accountsreceivable
At January 1	`$`		`209,729`
Provision			`-`
Reversal	`(`		`310)`
At September 30	`$`		`209,419`
			2018
		Accountsreceivable
At January 1_IAS 39	`$`		`109,496`
Adjustments under new standards			`-`
At January 1_IAS 9	`$`		`109,496`
Write-offs	`(`		`123)`
Effect of exchange rate changes			`-`
At September 30	`$`		`109,373`

ix. The Group did not recognize significant impairment provision in accordance with 12 months expected credit losses, because the Group’s financial assets/loans to others and receivables at amortized cost all with low credit risk.

~48~

(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

Non-derivative financial liabilities
Less than September30,2019 1year Lease liability `565,770` `$` Bonds payable `-` Long-term borrowings (including current portion) `16,046,000` Less than December31,2018 1year Long-term borrowings (including current portion) `16,210,000` `$` Less than September30,2018 1 year Long-term borrowings (including current portion) `10,960,000` `$`	Between 1 and3 years `1,100,858` `$` `100,000` `24,621,000` Between 1 and3 years `35,230,000` `$` Between 1 and3 years `11,180,000` `$`	Between 3 and5 years `1,088,207` `$` `-` `450,000` Between 3 and5 years `-` `$` Between 3 and5 years `3,800,000` `$`	Over 5 years `3,577,109` `$` `-` `-` Over 5 years `-` `$` Over 5 years `-` `$`	Total
				`6,331,944` `$` `100,000` `41,117,000` Total
				`51,440,000` `$` Total
				`25,940,000` `$`

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

(3) Fair value estimation

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in derivative instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(10).
C. Financial instruments not measured at fair value
The carrying amounts of cash and cash equivalents, accounts receivable, other receivables,

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

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

September30,2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Convertible bonds Financial assets at fair value through other comprehensive income Equity securities Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange contracts December31,2018 Assets Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Convertible bonds Financial assets at fair value through other comprehensive income Equity securities Recurring fair value measurements	Level 1 `2,830,037` `$` `-` `-` `3,005,531` `5,835,568` `$` `-` `$` Level 1 `1,221,135` `$` `-` `-` `2,661,075` `3,882,210` `$`	Level 2 `-` `$` `42,810` `-` `-` `42,810` `$` `248,821` `$` Level 2 `-` `$` `398,913` `-` `-` `398,913` `$`	Level3 `361,512` `$` `-` `35,935` `1,244,902` `1,642,349` `$` `-` `$` Level3 `343,175` `$` `-` `35,559` `1,173,301` `1,552,035` `$`	Total
				`3,191,549` `$` `42,810` `35,935` `4,250,433`
				`7,520,727` `$`
				`248,821` `$`
				Total
				`1,564,310` `$` `398,913` `35,559` `3,834,376`
				`5,833,158` `$`

~50~

December31,2018 Liabilities Financial liabilities at fair value through profit or loss Forward exchange contracts Forward exchange swap contracts Recurring fair value measurements September30,2018 Assets Financial assets at fair value through profit or loss Equity securities Forward exchange contracts Forward exchange swap contracts Financial assets at fair value through other comprehensive income 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 `-` `$` `-` `-` `$` Level 1 `991,908` `$` `-` `-` `3,704,850` `4,696,758` `$` `-` `$`	Level 2 `16,644` `$` `7,135` `23,779` `$` Level 2 `-` `$` `8,108` `45,537` `-` `53,645` `$` `346,577` `$`	Level3 `-` `$` `-` `-` `$` Level3 `372,302` `$` `-` `-` `1,346,138` `1,718,440` `$` `-` `$`	Total
				`16,644` `$` `7,135`
				`23,779` `$`
				Total
				`1,364,210` `$` `8,108` `45,537` `5,050,988`
				`6,468,843` `$`
				`346,577` `$`

(b) The methods and assumptions the Group used to measure fair value are as follows:
i. The instruments the Group used market quoted prices as their fair values (that is, Level
- 1) are listed below by characteristics:

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

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

~51~

foreign exchange swap contracts, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

iv. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts and foreign exchange swap contracts are usually valued based on the current forward exchange rate.
v. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.
vi. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.
E. For the nine-month periods ended September 30, 2019 and 2018, there was no transfer between Level 1 and Level 2.
F. The following table presents the changes in level 3 instruments for the nine-month periods ended September 30, 2019 and 2018:

Equitysecurities At January 1 `1,516,476` `$` Gains and losses recognized in profit or loss `5,501` Gains and losses recognized in other comprehensive income `75,475)` `(` Acquired in the period `198,768` Proceeds from capital reduction `35,585)` `(` Effect on exchange rate changes `3,271)` `(` At September 30 `1,606,414` `$`		2019

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		2018
	Equity securities
At January 1	`$`	`313,724`
Gains and losses recognized in profit or loss	`(`	`83,042)`
Gains and losses recognized in other
comprehensive income	`(`	`44,951)`
Acquired in the period		`1,532,689`
Effect on exchange rate changes		`20`
At September 30	`$`	`1,718,440`

G. For the nine-month periods ended September 30, 2019 and 2018, there was no transfer into or out from Level 3.
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.
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	Fair value at September 30,2019	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	`1,580,052` `$` `26,362`	Market comparable companies Net asset value	Price to earnings ratio multiple, price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability Not applicable	`0.62~41.52` `(5.45)` `30%~70%` `(33%)` Not applicable	The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable

~53~

Fair value at September 30,2019	Fair value at September 30,2019	Valuation technique	Significant unobservable input
`35,935` Fair value at December 31,2018
`1,490,390` `$` `26,086` `35,559` Fair value at September 30,2018	Market comparable companies Net asset value Discounted cash flow method and Option pricing model Valuation technique	Price to earnings ratio multiple, price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability Not applicable Volatility and Discount rate Significant unobservable input	`0.58~41.52` `(5.06)` `30%~70%` `(33%)` Not applicable `2.5%~46.7%` `(24.6%)` Range (weighted average)
`1,692,515` `$`	Market comparable companies	Price to earnings ratio multiple, price to sales ratio multiple, price to book ratio multiple Discount for lack of marketability	`0.68~43.54` `(5.1)` `30%~70%` `(33%)`

~54~

Non-derivative equity instrument: Venture capital shares Private equity fund investment	Fair value at September 30,2018	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	`25,925`	Net asset value	Not applicable	Not applicable	Not applicable

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

Financial assets	Input		30,2019	30,2019
		Recognized in	Recognized in other comprehensive income
			Favourable Unfavourable change change `$ 12,449` `($ 12,449)` `-` `-` 31,2018	Unfavourable change
Equity instrument Hybrid instrument Financial assets	`$ 1,606,414` `35,935` Input
			Recognized in other comprehensive income
			Favourable Unfavourable change change `$ 11,733` `($ 11,733)` `-` `-` 30,2018	Unfavourable change
Equity instrument Hybrid instrument Financial assets	`$ 1,516,476` `35,559` Input
		Favourable Unfavourable change change `$ -` `$ -` comprehensive income Recognized in other	comprehensive income Recognized in other
		Favourable change `$ -`	Favourable Unfavourable change change `$ 17,184` `($ 17,184)`	Unfavourable change
Equity instrument	`$ 1,718,440`

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.

~55~

D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to Table 3.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to Table 4.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2)
J. Significant inter-company transactions during the reporting period: Please refer to Table 5.

(2) Information on investees

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

(3) Information on investments in Mainland China

A. Basic information: Please refer to Table 7.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to Table 1, 3, 4 and 5.

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in research, development, manufacture, and sale of TFT LCD. The chief operating decision-maker considered the business from a perspective of product size of TFT LCD. TFT LCD products are currently classified into big size and small-medium size. Because the 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:

~56~

2019 2018 TFT LCD TFT LCD `63,293,735` `$` `73,907,131` `$` `3,455,264)` `$` `2,565,717` `$` `(` `8,862,613` `$` `8,893,247` `$` `5,033,775` `$` `12,017,347` `$` For the three-month periods ended September30,	ended September30, For the nine-month periods	ended September30, For the nine-month periods
2019 TFT LCD `63,293,735` `$` `3,455,264)` `$` `8,862,613` `$` `5,033,775` `$`	2019 TFT LCD `186,393,293` `$` `9,852,555)` `$` `26,472,441` `$` `20,275,443` `$`	2018
		TFT LCD
		`207,132,750` `$`
		`7,498,748` `$`
		`27,210,068` `$`
		`34,915,398` `$`

(3) Reconciliation for segment income

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

~57~

Innolux Corporation and Subsidiaries

Table 1

Loans to others

For the nine-month period ended September 30, 2019

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, 2019	Balance as at September 30,2019	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
`1` `1` `1` `1` `1` `2` `3` `4` `4` `5` `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. Nanjing Innolux Technology Ltd. Innolux USA, Inc. Innolux Europe B.V. Innolux Europe B.V. Innolux Japan Co., Ltd. Innolux Japan Co., Ltd. Warriors Technology Investments Ltd.	Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Lakers Trading Ltd. Innolux Hong Kong Limited Lakers Trading Ltd. Leadtek Global Group Limited 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 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 Related parties	$4,388,600 2,194,300 2,501,502 1,316,580 2,808,704 219,430 310,400 1,289,483 44,135 2,216,060 2,216,060 3,343,026	$4,388,600 - 1,711,554 1,184,922 2,720,932 219,430 - - - - 2,216,060 3,343,026	$4,388,600 - 1,711,554 1,184,922 2,720,932 219,430 - - - - 2,216,060 3,343,026	2.00% 0.00% 2.00% 2.00% 2.00% 2.00% 0.00% 0.00% 0.00% 0.00% 1.00% 0.00%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing 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 Operating support	$ - - - - - - - - - - - -	- - - - - - - - - - - -	$ - - - - - - - - - - - -	241,916,070 $ 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070	241,916,070 $ 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070 241,916,070	A A 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 1

Expressed in thousands of NTD

Innolux Corporation and Subsidiaries

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

September 30, 2019

Table 2

(Except as otherwise indicated)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As ofSeptember30,2019	As ofSeptember30,2019		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation InnoJoy Investment Corporation InnoJoy Investment Corporation InnoJoy Investment Corporation Ningbo Innolux Optoelectronics Ltd. Warriors Technology Investments Ltd.	Common stock (Note) AvanStrate Inc. TPV Technology Limited Chi Lin Optoelectronics Co., Ltd. Epistar Corporation Cheng Mei Materials Technology Corporation Allied Material Technology Corp. Obsidian Sensors, Inc. VIZIO. Inc. Trillion Science, Inc. Cheng Mei Materials Technology Corporation Advanced Optoelectronic Technology, Inc. eChem solutions Corp. EPILEDS Co., Ltd. Fitipower Integrated Technology Inc. `上海辰岱投資中心`(`有限合夥`) OED Holding Ltd.	None None Other related party None Other related party None None None None Other related party None None None None None None	Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss	900,000 150,500,000 14,234,041 89,072 57,211,305 1,209 238,571 927,452 1,439,180 315,000 6,964,222 2,750,000 7,347,144 10,000,000 - 16,000,000	$ 29,034 2,215,926 29,662 2,160 505,748 - 49,904 1,035,913 - 2,784 103,419 61,912 101,758 375,500 135,278 4,026	1 6 19 - 9 - 6 4 2 - 5 5 7 6 - 6	$ 29,034 2,215,926 29,662 2,160 505,748 - 49,904 1,035,913 - 2,784 103,419 61,912 101,758 375,500 135,278 4,026

Table 2, Page 1

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As ofSeptember30,2019	As ofSeptember30,2019		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Warriors Technology Investments Ltd. Warriors Technology Investments Ltd. Warriors Technology Investments Ltd. Warriors Technology Investments Ltd. Warriors Technology Investments Ltd. Warriors Technology Investments Ltd. Nets trading Ltd. GIO Optoelectronics Corp.	Obsidian Sensors, Inc. Kymeta Corporation’s convertible bonds General Interface Solution (GIS) Holding Limited CJK Associates Co., Ltd. Perinnova Limited KA Imaging Inc. PilotTech Global Fund ISON Corporation	None None None None Other related party Other related party None None	Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income	414,136 - 24,194,000 4,000 1,900 1,819,240 90 150,000	$ 87,246 35,935 2,528,273 15,519 5,898 124,160 26,362 1,500	11 - 7 14 19 12 - 2	$ 87,246 35,935 2,528,273 15,519 5,898 124,160 26,362 1,500

Note: Except as otherwise indicated, marketable securities in the table are all stocks.�

Table 2, Page 2

Table 3

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, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationshipwith 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	Hon Hai Precision Industry Co., Ltd. Lakers Trading Ltd. Hongfujin Precision Electronics (Yantai) Co., Ltd. Hongfutai Precision Electronics (Yantai) Co., Ltd. Innolux Japan Co., Ltd. Innolux Hong Kong Limited Hongfujin Precision Electronics (Chongqing) Co., Ltd. Innolux USA Inc. INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED Shenzhen Fugui Precision Industrial Co., LTD COMPETITION TEAM IRELAND 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. 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 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.	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	2,424,535 $ 2,713,122 298,642 785,242 1,807,811 2,000,596 960,882 12,236,120 412,165 488,258 618,126	1 1 - - 1 1 1 7 - - -	90 days 60 days 60 days 90 days 60 days 60 days 45 days 60-90 days 60-90 days 60 days 45 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	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	1,470,069 $ - 24,887 165,182 403,569 - 389,067 4,989,796 332,658 87,410 154,604	3 - - - 1 - 1 11 1 - -

Table 3, Page 1

Purchaser/seller	Counterparty	Relationshipwith 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	Futaijing Precision Electronics (Beijing) Co., Ltd. FIH (Hong Kong) Limited Hongfujin Precision Industry (Wuhan) Co., Ltd. Guizhou Fuzhikang Precision Electronics Co., Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Europe B.V. FI Medical Device Manufacturing Co., Ltd. Cheng Mei Materials Technology Corporation Hon Hai Precision Industry Co., Ltd. Lakers Trading Ltd. Innolux Hong Kong Limited Leadtek Global Group Limited	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 Investee accounted for under the equity method Other related party Same major stockholder An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary A subsidiary of the Company	Sales Sales Sales Sales Sales Sales Purchases Purchases Purchases Processing expense Processing expense Processing expense	188,023 $ 794,461 187,548 125,250 154,517 123,079 1,180,662 978,353 977,070 38,253,703 12,844,964 13,782,308	- - - - - - 1 1 1 20 7 7	60 days 60 days 90 days 60 days 90 days 60 days 30 days after acceptance 90 days after acceptance 60-90 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 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	39,068 $ 323,231 35,570 - 143,789 16,925 157,436) ( 456,677) ( 688,276) ( 30,354,955) ( 9,019,764) ( 18,208,176) (	- 1 - - - - - - 1 36 11 22

Table 3, Page 2

Purchaser/seller	Counterparty	Relationshipwith 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)
Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Innocom Technology (Shenzhen) Co., LTD Ningbo Innolux Optoelectronics Ltd. Innolux Hong Kong Limited Lakers Trading Ltd. Innolux Europe B.V. Innolux Japan Co., Ltd. Ningbo Innolux Display Ltd.	Lakers Trading Ltd. Leadtek Global Group Limited Lakers Trading Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Lakers Trading Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Technology Ltd. Ningbo Innolux Electronics Ltd. Innolux Corporation Innolux Corporation Hon Hai Precision Industry Co., 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 An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary Same major stockholder	Processing revenue Processing revenue Processing revenue Processing revenue Processing revenue Processing revenue Sales Sales Sales Service revenue Service revenue Purchases	23,680,242 $ 14,254,499 13,979,251 8,444,781 4,151,364 191,469 3,286,926 1,358,992 238,025 679,326 218,742 1,214,363	90 81 100 100 84 100 10 6 - 84 10 7	60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 30 days 60 days 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 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	17,280,526 $ 15,115,286 4,807,257 6,261,631 1,653,606 254,418 1,007,678 774,561 49,205 80,178 51,922 402,149) (	96 94 99 100 81 100 5 7 - 90 10 6

Table 3, Page 3

Purchaser/seller	Counterparty	Relationshipwith 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)
Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Foshan Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd.	Hon Hai Precision Industry Co., Ltd. Ningbo Cheng Mei Materials Technology Co., Ltd. Hon Hai Precision Industry Co., Ltd. Hongfujin Precision Industry (Shenzhen) Co., Ltd. Cheng Mei Materials Technology Corporation Ningbo Cheng Mei Materials Technology Co., Ltd. Ningbo Cheng Mei Materials Technology Co., Ltd. Hon Hai Precision Industry Co., Ltd.	Same major stockholder Other related party Same major stockholder An indirect wholly-owned subsidiary of Hon Hai Precision Industry Co., Ltd. Other related party Other related party Other related party Same major stockholder	Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	730,634 $ 829,964 471,559 192,292 351,244 198,756 188,950 107,309	2 3 1 1 1 1 - 1	90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 90 days after goods are shipped 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	($ 346,858) 440,769) ( 197,669) ( - 216,746) ( 117,944) ( 99,696) ( 30,442) (	3 4 1 - 1 2 - 1

Table 3, Page 4

Innolux Corporation and Subsidiaries

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

September 30, 2019

			September 30, 2019
Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as at September30,2019	Turnover rate	Overdue receivables		Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Foshan Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Ningbo Innolux Display Ltd. Shanghai Innolux Optoelectronics Ltd.	Hon Hai Precision Industry Co., Ltd. HongFuTai Precision Electronics (YanTai) Co., Ltd. Foshan Innolux Optoelectronics Ltd. Honfujin Precision Electronics (Chongqing) Co., Ltd. Innolux Japan Co., Ltd. Innolux USA Inc. INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED COMPETITION TEAM IRELAND LIMITED Ningbo Innolux Optoelectronics Ltd. FIH (Hong Kong) Limited Lakers Trading Ltd. Leadtek Global Group Limited Innolux Hong Kong Limited Lakers Trading Ltd. Innolux Hong Kong Limited	Same major stockholder 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. 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 of Hon Hai Precision Industry Co., 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	$ 1,470,069 165,182 102,474 389,067 403,569 4,989,796 332,658 154,604 143,789 323,231 17,280,526 15,115,286 6,261,631 4,807,257 1,653,606	1.72 2.05 0.67 3.70 5.70 3.85 3.28 6.46 2.87 6.55 1.92 1.09 1.60 3.86 2.94	$ 39,183 - - 166,109 - - 279,940 - - - 5,345,736 8,958,784 1,843,872 262,540 -	Subsequent collection - - Subsequent collection - - Subsequent collection - - - Subsequent collection Subsequent collection Subsequent collection Subsequent collection -	$ 348,046 77,720 - 108,154 - 1,796,271 - 19,322 79,363 156,597 4,985,071 1,798,226 1,562,303 2,358,218 645,264	$ - - - - - - - - - - - - - - -

Table 4, Page 1

Creditor	Counterparty	Relationship with the counterparty	Balance as at September30,2019	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Innocom Technology (Shenzhen) Co., Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Hong Kong Limited	Lakers Trading Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Technology Ltd.	An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary An indirect wholly-owned subsidiary	$ 254,418 1,007,678 774,561	0.44 4.77 3.71	$ 185,938 - -	Subsequent collection - -	$ - 502,329 128,139	- - -

Table 4, Page 2

Innolux Corporation and Subsidiaries Significant inter-company transactions during the reporting period For the nine-month period ended September 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Table 5

Transaction (Note D)

Number (Note A)	Companyname	Counterparty	Relationship (Note B)	General ledger account	Amount	Transaction terms (NoteC)	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	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.	Lakers Trading Ltd. Lakers Trading Ltd. Lakers Trading Ltd. Innolux Japan Co., Ltd. Innolux Japan Co., Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Innolux Hong Kong Limited Leadtek Global Group Limited Leadtek Global Group Limited Foshan Innolux Optoelectronics Ltd. Innolux USA Inc. Innolux USA Inc. INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED INNOLUX OPTOELECTRONICS INDIA PRIVATE LIMITED Ningbo Innolux Optoelectronics Ltd. Ningbo Innolux Optoelectronics Ltd. Innolux Europe B.V. Lakers Trading Ltd. Lakers Trading Ltd. Leadtek Global Group Limited Leadtek Global Group Limited	`1` 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 3 3 3 3	Sales Processing expense Accrued expenses Sales Accounts receivable Sales Processing expense Accrued expenses Processing expense Accrued expenses Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Processing revenue Accounts receivable Processing revenue Accounts receivable	2,713,122 $ 38,253,703 30,354,955) ( 1,807,811 403,569 2,000,596 12,844,964 9,019,764) ( 13,782,308 18,208,176) ( 102,474 12,236,120 4,989,796 412,165 332,658 154,517 143,789 123,079 23,680,242 17,280,526 14,254,499 15,115,286	`-` - - - - - - - - - - - - - - - - - - - - -	1 21 8 1 - 1 7 2 7 5 - 7 1 - - - - - 13 5 8 4

Table 5, Page 1

Transaction (Note D)

Number (Note A)	Companyname	Counterparty	Relationship (Note B)	General ledger account	Amount	Transaction terms (NoteC)	Percentage of consolidated total operating revenues or total assets
3 3 4 4 5 5 6 6 7 7 8 8 9 10 11	Ningbo Innolux Display Ltd. Ningbo Innolux Display Ltd. Nanjing Innolux Optoelectronics Ltd. Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. 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 Europe B.V. Lakers Trading Ltd. Innolux Japan Co., Ltd.	Lakers Trading Ltd. Lakers Trading Ltd. Innolux Hong Kong Limited Innolux Hong Kong Limited Innolux Hong Kong Limited 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 Corporation Ningbo Innolux Electronics Ltd. Innolux Corporation	3 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Processing revenue Accounts receivable Processing revenue Accounts receivable Processing revenue Accounts receivable Sales Accounts receivable Sales Accounts receivable Processing revenue Accounts receivable Service revenue Sales Service revenue	13,979,251 $ 4,807,257 8,444,781 6,261,631 4,151,364 1,653,606 3,286,926 1,007,678 1,358,992 774,561 191,469 254,418 679,326 238,025 218,742	- - - - - - - - - - - - - - -	7 1 5 2 2 - 2 - 1 - - - - - -

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

(1) Number 0 represents the parent company.
(2) The subsidiaries are numbered in order from number 1.

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

3 refers to the subsidiary to the subsidiary.

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

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

Table 5, Page 2

Innolux Corporation and Subsidiaries

Table 6

Information on investees

For the nine-month period ended September 30, 2019

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 atSeptember30,2019	s atSeptember30,2019	Net profit (loss) of the investee for the nine-month period ended September 30, 2019	Investment income (loss) recognized by the Company for the nine-month period ended September 30, 2019	Footnote
				Balance as at September 30, 2019	Balance as at December 31, 2018	Number of shares	Ownership (%)	Bookvalue
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation Innolux Corporation	Golden Achiever International Limited Innolux Holding Limited Keyway Investment Management Limited Landmark International Ltd. Toppoly Optoelectronics (B.V.I.) Ltd. Innolux Hong Kong Holding Limited Innolux Singapore Holding Pte. Ltd. Leadtek Global Group Limited Yuan Chi Investment Co., Ltd. InnoJoy Investment Corporation CarUX Technology Inc. InnoCare Optoelectronics Corporation Innolux Japan Co., Ltd. iZ3D, Inc. Chi Mei Lighting Technology Corporation GIO Optoelectronics Corp.	BVI Samoa Samoa Samoa BVI Hong Kong Singapore BVI Taiwan Taiwan Taiwan Taiwan Japan USA Taiwan Taiwan	Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Investment holdings Distributor company Investment company Investment company R&D, manufacturing and Distributor company Holdings, R&D, manufacturing and Distributor company Holdings, R&D, and Distributor company Research and development and sale of 3D flat monitor Manufacturing of electronic equipment and lighting equipment Holdings, R&D, manufacturing and Distributor company	$ - 6,192,509 62,197 33,438,542 3,674,115 3,231,780 754,943 - 1,217,235 1,674,054 200,000 200,000 1,682,751 - 819,312 308,993	$ 119,106 6,192,509 62,197 33,438,542 3,674,115 3,231,780 754,943 - 1,217,235 1,674,054 - - 1,682,751 - 819,312 800,892	- 180,568,185 1,656,410 709,450,000 146,847,000 1,158,844,000 25,400,000 50,000,000 - 167,405,392 20,000,000 20,000,000 98 4,333 78,195,856 27,812,188	- 100 100 100 100 100 100 100 100 100 100 100 54 35 33 63	- $ 18,254,311 88,917 45,224,953 6,253,669 6,118,969 506,706 1,552,000 876,610 1,299,547 199,928 187,023 2,174,307 - - 312,145	48 $ 204,398 8,512 1,537,244 131,634) ( 453,381 237,905) ( - 3,859 2,326 72) ( 12,171) ( 199,740 - - 61) (	48 $ 204,398 8,512 1,537,244 131,634) ( 453,381 237,905) ( - 3,859 2,326 72) ( 12,171) ( 108,738 - - 2,352

Table 6, Page 1

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held a	s atSeptember30,2019	s atSeptember30,2019	Net profit (loss) of the investee for the nine-month period ended September 30, 2019	Investment income (loss) recognized by the Company for the nine-month period ended September 30, 2019	Footnote
				Balance as at September 30, 2019	Balance as at December 31, 2018	Number of shares	Ownership (%)	Bookvalue
Innolux Corporation Innolux Corporation Innolux Corporation Innolux Holding Limited Innolux Holding Limited Innolux Holding Limited Toppoly Optoelectronics (B.V.I.) Ltd. Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Hong Kong Holding Limited Innolux Japan Co., Ltd. Rockets Holding Ltd. Rockets Holding Ltd. Suns Holding Ltd. Innolux Europe B.V. Innolux Singapore Holding Pte. Ltd. Innolux Singapore Holding Pte. Ltd.	Ampower Holding Ltd. FI Medical Device Manufacturing Co., Ltd. eLux, Inc. Rockets Holding Ltd. Suns Holding Ltd. Lakers Trading Ltd. Toppoly Optoelectronics (Cayman) Ltd. Innolux Optoelectronics Hong Kong Holding Limited Innolux Hong Kong Limited Innolux Europe B.V. Innolux Japan Co., Ltd. Innolux USA, Inc. Stanford Developments Ltd. Nets Trading Ltd. Warriors Technology Investments Ltd. Innolux Technology Germany GmbH Innolux Optoelectronics India Private Limited Innolux Optoelectronics Philippines Corp.	Cayman Taiwan USA Samoa Samoa Samoa Cayman Hong Kong Hong Kong Netherlands Japan USA Samoa Samoa Samoa Germany India Philippines	Investment holdings Production and selling of the absorption for medical element R&D of MicroLED technology Investment holdings Investment holdings Distributor company Investment holdings Investment holdings Distributor company Holding, R&D testing and Distributor company Holdings, R&D, and Distributor company Distributor company Investment holdings Investment company Investment company Testing and maintenance company Distributor company Manufacturer and distributor	$ 1,717,714 73,500 91,155 5,222,180 555,422 - 3,650,192 - - 1,643,631 1,815,603 369,092 5,391,125 27,477 555,422 33,735 302,198 28,733	$ 1,717,714 73,500 91,155 5,222,180 555,422 - 3,650,192 - - 1,994,102 1,815,603 369,092 5,391,125 27,477 555,422 33,735 176,997 28,733	14,062,500 7,350,000 300,000 160,504,550 18,177,052 1 146,817,000 162,897,802 35,000,000 375,810 82 12,842 164,000,000 900,001 18,177,052 100,000 67,000,000 5,000,000	50 49 38 100 100 100 100 100 100 100 46 100 100 100 100 100 100 100	904,353 $ 945,958 52,012 11,626,555 6,391,195 236,481 6,253,307 1,637,658 786,605 361,903 1,819,644 836,605 11,597,856 28,559 6,391,193 70,520 34,459 28,671	21,385 $ 592,105 45,629) ( 99,490 104,908 - 131,634) ( 113,720 276,957 42,836 199,740 163,612 99,489 1 104,908 1,022 239,555) ( 330) (	10,693 $ 290,131 22,563) ( 99,490 104,908 - 131,634) ( 113,720 276,957 42,836 91,002 163,612 99,489 1 104,908 1,022 239,555) ( 330) (

Table 6, Page 2

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held a	s atSeptember30,2019	s atSeptember30,2019	Net profit (loss) of the investee for the nine-month period ended September 30, 2019	Investment income (loss) recognized by the Company for the nine-month period ended September 30, 2019	Footnote
				Balance as at September 30, 2019	Balance as at December 31, 2018	Number of shares	Ownership (%)	Bookvalue
Innolux Singapore Holding Pte. Ltd. Yuan Chi Investment Co., Ltd. Yuan Chi Investment Co., Ltd. InnoCare Optoelectronics Corporation InnoCare Optoelectronics Corporation GIO Optoelectronics Corp.	Innolux Optoelectronics Malaysia SDN. BHD. Chi Mei Lighting Technology Corporation GIO Optoelectronics Corp. InnoCare Optoelectronics Japan Co., Ltd. InnoCare Optoelectronics USA, INC. Double Star Inc.	Malaysia Taiwan Taiwan Japan USA Mauritius	Manufacturer and distributor Manufacturing of electronic equipment and lighting equipment Holdings, R&D, manufacturing and Distributor company Distributor company Distributor company Investment holdings	$ 121,179 263,812 858 87,149 27,963 298,113	$ 121,179 263,812 6,881 - - 298,113	16,000,000 19,673,402 77,235 30,010 900,000 -	100 8 - 100 100 100	$ 119,751 - 867 86,369 27,877 101,740	$ 742 - 61) ( - 59) ( 1,388	$ 742 - - - 59) ( 1,388

Table 6, Page 3

Table 7

Innolux Corporation and Subsidiaries Information on investments in Mainland China

For the nine-month period ended September 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital (Note A)	Investment method (Note C)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2019	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September 30,2019	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September 30,2019	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2019	Net income of investee for the nine-month period ended September 30, 2019	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the nine- month period ended September 30, 2019 (Note B)	Book value of investments in Mainland China as of September 30,2019	Accumulated amount of investment income remitted back to Taiwan as of September 30,2019	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. Nanjing Innolux Technology Ltd. Nanjing Innolux Optoelectronics Ltd. Shanghai Innolux Optoelectronics Ltd. Foshan Innolux Logistics Ltd. Amlink (Shanghai) 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 Manufacturing and selling of LCD backend module and related components Manufacturing and selling of LCD backend module and related components Warehousing services Manufacturing and selling of power supply, modem, ADSL, and other IT equipments	$ 5,090,560 282,227 9,622,400 11,888,320 4,966,400 65,184 4,842,240 651,840 46,560 248,320	2 2 2 2 2 2 2 2 2 2	$ 3,939,340 62,080 228,611 11,888,320 4,966,400 65,184 4,470,865 - 46,560 310,400	$ - - - - - - - - - -	$ - - - - - - - - - -	$ 3,939,340 62,080 228,611 11,888,320 4,966,400 65,184 4,470,865 - 46,560 310,400	$ 99,489 38,898 386,861 751,777 396,790 ( 10,380) ( 121,254) 113,720 8,421 -	100 4 100 100 100 100 100 100 100 50	$ 99,489 - 386,861 753,590 396,790 ( 10,380) ( 121,254) 113,720 8,421 -	$ 11,597,804 7,868 19,892,390 20,530,694 4,800,697 530,421 5,722,864 1,637,658 83,932 188,083	$ 1,151,220 - 5,358,589 - - - - - - -	2.1 2.2 2.3 2.3 2.3 2.4 2.4 2.5 2.6 2.7

Table 7, Page 1

Investee in Mainland China	Main business activities	Paid-in capital (Note A)	Investment method (Note C)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2019	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September 30,2019	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the nine-month period ended September 30,2019	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2019	Net income of investee for the nine-month period ended September 30, 2019	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the nine- month period ended September 30, 2019(Note B)	Book value of investments in Mainland China as of September 30,2019	Accumulated amount of investment income remitted back to Taiwan as of September 30,2019	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Interface Technology (ChengDu) Co., Ltd. GIO (Maanshan) Optoelectronics Co., Ltd. Ningbo Innolux Electronics Ltd. Foshan Innolux Flnet Electronics Ltd. Ningbo Innolux Flnet Electronics Ltd. Shenzhen PixinLED Technology Co., Ltd. Innolux Automations and Intelligence Systems (ShenZhen) Co., Ltd.	Manufacturing and selling of flat panel display and display materials of TFT-LCD Manufacturing R&D, Manufacturing and selling of LCD backend module and related components Commodity agency Commodity agency Development and selling of MINI LED Development and selling of software	$ 9,893,357 310,400 131,658 4,389 4,389 43,886 4,389	2 2 3 3 3 3 3	$ 419,040 310,400 - - - - -	$ - - - - - - -	$ - - - - - - -	$ 419,040 310,400 - - - - -	$ 1,722,184 1,393 10,345 605 1,581 1,416 2,827	7 63 100 100 100 100 100	$ - 359 10,345 605 1,581 1,416 2,827	$ 2,528,273 64,872 461,984 6,467 10,382 43,455 2,578	$ - - - - - - -	2.2 Note E 2.8 3.1 3.2 3.2 3.3 3.3

Table 7, Page 2

Ceiling on investments in Mainland China:

Investment amount approved Ceiling on investments in Accumulated amount of remittance by the Investment Mainland China imposed by the from Taiwan to Mainland China as Commission of the Ministry Investment Commission of Company name of September 30, 2019 of Economic Affairs (MOEA) MOEA Innolux Corporation $ 27,885,824 $ 37,187,773 (Note D)

Note A: The relevant figures were listed in NT$. Where foreign currencies were involved, the figures were converted to NT$ using exchange rate. Note B: Profit or loss recognized for the nine-month period ended September 30, 2019 was reviewed by independent accountants. Note C: The investment methods are as follows:

Directly investing in Mainland China.
Through investing in companies in the third area, which then invested in the investee in Mainland China.
2.1. Through investing in Stanford Developments Ltd. in the third area, which then invested in the investee in Mainland China.
2.2. Through investing in Warriors Technology Investments Ltd. in the third area, which then invested in the investee in Mainland China.
2.3. Through investing in Landmark International Ltd. in the third area, which then invested in the investee in Mainland China.
2.4. Through investing in Toppoly Optoelectronics (Cayman) Ltd. in the third area, which then invested in the investee in Mainland China.
2.5. Through investing in Innolux Optoelectronics Hong Kong Holding Limited in the third area, which then invested in the investee in Mainland China.
2.6. Through investing in Keyway Investment Management Limited in the third area, which then invested in the investee in Mainland China.
2.7. Through investing in Ampower Holding Ltd. in the third area, which then invested in the investee in Mainland China.
2.8. Through investing in Double Star Inc. in the third area, which then invested in the investee in Mainland China.
Others.
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 not be approved by Investment Commission of the Ministry of Economic Affairs.
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 Flent Electronics Ltd. and Ningbo Innolux Flent Electronics Ltd. Except for the investment via the holding companies in Mainland China, other investments shall not be approved by Investment Commission of the Ministry of Economic Affairs.
3.3. The company invested via Innocom Technology (Shenzhen) Co., Ltd., which is the company investment entity in Mainland China to invest in Shenzhen PixinLED Technology Co.,Ltd., Innolux Automations
and Intelligence Systems (ShenZhen) Co., Ltd. Except for the investment via the holding companies in Mainland China, other investments shall not be approved by Investment Commission of the Ministry of Economic Affairs.
Note D : In accordance with “Rules Governing Applications for Investment or Technical Cooperation in Mainland China”, the Company has obtained the certificate of being qualified for operating headquarters, issued by the Industrial Development Bureau of the Ministry of Economic Affairs, the ceiling amount of the investment in Mainland China is not applicable to the Company.

Note E: Interface Technology (ChengDu) Co., Ltd acquired 100% of shares of Interface Optoelectronics (Shenzhen) Co., Ltd. due to the restructuring of General Interface Solution (GIS) Holding Limited in April 2019.

Table 7, Page 3

AI assistant

INX — Interim / Quarterly Report 2019

52330_rns_2019-12-13_52ce7f7b-4143-4a36-9a6c-ed9bc1cf6949.pdf

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

Introduction

Scope of Review

Conclusion

PricewaterhouseCoopers, Taiwan

November 8, 2019

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2019, DECEMBER 31, 2018 AND SEPTEMBER 30, 2018

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2019, DECEMBER 31, 2018 AND SEPTEMBER 30, 2018

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND 2018

INNOLUX CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2019 AND 2018

1. HISTORY AND ORGANIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(3) Basis of consolidation

(5) Convertible bonds payable

- (7) Employee share based payment

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

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

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

(4) Financial assets at amortized cost

(5) Notes receivable and accounts receivable

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

(6) Inventories

(7) Investments accounted for under the equity method

(8) Property, plant and equipment

(10) Investment property

(11) Intangible assets

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

(12) Other payables

(13) Bonds payable

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

(17) Provisions-current

(20) Retained earnings

Years ended December 31,

(21) Other equity items

(25) Finance costs

(26) Expenses by nature

(28) Income tax

A. Income tax expense

(a) Components of income tax expense:

(32) Changes in liabilities from financing activities

7. RELATED PARTY TRANSACTIONS

(1) Names and relationship of related parties

(2) Significant related party transactions

A. Operating revenue

B. Purchases of goods

C. Receivables from related parties

D. Other receivables from related parties

Purchase of property

(a) Acquisition of property, plant and equipment:

Sale of property

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

11. SUBSEQUENT EVENTS AFTER THE BALANCE SHEET DATE

12. OTHERS

Foreign exchange risk

Price risk

Cash flow and fair value interest rate risk

(c) Liquidity risk

INX Interim / Quarterly Report 2019