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INX Interim / Quarterly Report 2022

Dec 30, 2022

52330_rns_2022-12-30_75a3e073-c5e4-438a-9d2a-471230b6740f.pdf

Interim / Quarterly Report

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INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REVIEW REPORT JUNE 30, 2022 AND 2021

~1~

INDEPENDENT AUDITORS’ REVIEW REPORT

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 June 30, 2022 and 2021, and the related consolidated statements of comprehensive income for the three-month and six-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the six-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 the “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 and the reports of other auditors (please refer to the Other matter section), 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 June 30, 2022 and 2021, and of its consolidated financial performance for the three-month and sixmonth periods then ended and its consolidated cash flows for the six-month periods then ended in

~2~

accordance with the “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.

Other matter – Reference to the reviews of other auditors

We did not review the financial statements of certain subsidiaries of the Company for the six-month period ended June 30, 2022, which were reviewed by other auditors. Therefore, our report expressed herein, insofar as it relates to the amounts and Note 13 included in respect of these subsidiaries, is based solely on the reports of the other auditors. Total assets of these subsidiaries included in the Group’s consolidated financial statements amounted to NT$1,829,495 thousand, constituting 0.4% of the consolidated total assets of the Group as at June 30, 2022, and sales revenue of these subsidiaries included in the Group’s consolidated financial statements amounted to NT$456,346 thousand and NT$921,502 thousand, constituting 0.8% and 0.7% of the consolidated total sales revenue of the Group for the three-month and six-month periods ended June 30, 2022.

PricewaterhouseCoopers, Taiwan July 28, 2022

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report 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.

~3~

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022, DECEMBER 31, 2021 AND JUNE 30, 2021

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2022 and 2021 are reviewed, not audited)

Assets Notes June 30, 2022
$
35,079,830
13,974,418
64,614,073
45,143,769
1,043,120
1,963,642
47,108,307
3,434,161
485,938
212,847,258
3,450,752
5,082,868
22,898,971
1,577,884
158,768,911
5,058,327
457,760
17,515,823
3,616,704
24,328,380
242,756,380
$
455,603,638		 December 31, 2021
$
28,667,746
17,358,003
22,633,195
60,528,170
1,351,375
2,378,705
38,278,221
4,345,185
280,623
175,821,223
4,326,863
9,848,126
74,224,423
1,442,684
162,607,908
5,146,768
471,655
17,520,594
3,412,138
12,697,208
291,698,367
$
467,519,590		 June 30, 2021
Current Assets
1100
Cash and cash equivalents
1110
Financial assets at fair
value through profit or
loss - current
1136
Financial assets at
amortized cost - current
1170
Accounts receivable, net
1180
Accounts receivable, net -
related parties
1200
Other receivables
130X
Inventory
1410
Prepayments
1479
Other current assets
11XX
Total current assets
Non-current assets
1510
Financial assets at fair
value through profit or
loss - non-current
1517
Financial assets at fair
value through other
comprehensive income -
non-current
1535
Financial assets at
amortized cost - non-
current
1550
Investments accounted for
under equity method
1600
Property, plant and
equipment
1755
Right-of-use assets
1760
Investment property, net
1780
Intangible assets
1840
Deferred income tax assets
1990
Other non-current assets
15XX
Total non-current
assets
1XXX
Total assets		 6(1)
6(2)
6(4)
6(5)
7
6(2)
6(6)
8
6(2)
6(3)
6(4)
6(7)
6(8), 7 and 8
6(9)
6(10)
6(11)
6(8), 8 and 9		 $
26,824,569
18,878,814
19,379,602
61,205,711
1,808,053
2,528,419
35,082,841
2,401,724
149,642
168,259,375
3,884,903
11,622,873
54,550,981
1,518,772
168,691,782
5,412,081
485,549
17,526,548
4,538,764
5,339,806
273,572,059
$
441,831,434

(Continued)

~4~

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022, DECEMBER 31, 2021 AND JUNE 30, 2021

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of June 30, 2022 and 2021 are reviewed, not audited)

Liabilities and Equity Notes June 30, 2022 December 31, 2021 June 30, 2021
Current Liabilities
2100 Short-term borrowings 6(12) $ 3,272,295 $ - $ -
2120 Financial liabilities at fair 6(2)
value through profit or
loss - current 729,630 198,896 921,053
2170 Accounts payable 49,578,193 52,321,478 51,415,040
2180 Accounts payable - related 7
parties 2,099,349 2,190,308 1,892,420
2200 Other payables 6(13) and 7 47,004,466 36,514,228 35,591,469
2230 Current income tax
liabilities 2,204,842 2,196,227 1,966,245
2250 Provisions - current 6(18) and 9 5,709,145 7,541,182 7,154,308
2280 Lease liabilities - current 657,206 639,969 528,856
2320 Long-term liabilities, 6(14)(15)
current portion 8,769,642 8,770,385 4,485,507
2399 Other current liabilities 6,441,397 6,180,834 5,857,654
21XX Total current liabilities 126,466,165 116,553,507 109,812,552
Non-current liabilities
2530 Corporate bonds payable 6(14) - - 494,291
2540 Long-term borrowings 6(15) 31,216,996 35,592,540 39,284,942
2570 Deferred income tax
liabilities 1,804,616 2,003,404 2,314,063
2580 Lease liabilities - non-
current 4,213,078 4,391,331 4,719,546
2600 Other non-current 6(16)
liabilities 4,109,940 4,181,877 4,554,824
25XX Total non-current
liabilities 41,344,630 46,169,152 51,367,666
2XXX Total liabilities 167,810,795 162,722,659 161,180,218
Equity attributable to owners
of the parent
Share capital 6(19)
3110 Share capital - common
stock 105,596,201 105,596,201 102,483,196
3130 Certificates of entitlement
to new shares from
convertible bonds - - 2,530,883
3200 Capital surplus 6(20) 103,294,247 103,287,482 102,792,458
Retained earnings 6(21)
3310 Legal reserve 13,811,763 8,062,551 8,062,551
3320 Special reserve 3,204,136 6,059,671 6,059,671
3350 Unappropriated retained
earnings 67,899,680 84,545,631 60,114,690
3400 Other equity interest 6(22) ( 5,840,507) ( 3,204,136) ( 1,599,670)
3500 Treasury shares 6(19) ( 650,416) - -
31XX Equity attributable to
owners of the parent 287,315,104 304,347,400 280,443,779
36XX Non-controlling interests 477,739 449,531 207,437
3XXX Total equity 287,792,843 304,796,931 280,651,216
3X2X Total liabilities and
equity $ 455,603,638 $ 467,519,590 $ 441,831,434

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

~5~

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

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

Three months ended June 30 Three months ended June 30 Six months ended June 30 Six months ended June 30
Items Notes 2022 2021 2022 2021
4000 Sales revenue 6(23) and 7 $ 57,901,588 $ 93,235,532 $ 127,787,606 $ 177,074,228
5000 Operating costs 6(6)(28) and 7 ( 57,213,942 ) ( 62,371,832) ( 118,528,153) ( 124,584,028)
5900 Net operating margin 687,646 30,863,700 9,259,453 52,490,200
Operating expenses 6(28)
6100 Selling expenses ( 890,390 ) ( 1,349,350) ( 1,846,460) ( 2,586,750)
6200 General and administrative expenses ( 2,125,040 ) ( 2,006,045) ( 4,208,093) ( 3,989,318)
6300 Research and development expenses ( 3,409,073 ) ( 3,731,367) ( 6,699,133) ( 7,256,455)
6000 Total operating expenses ( 6,424,503 ) ( 7,086,762) ( 12,753,686) ( 13,832,523)
6900 Operating (loss) profit ( 5,736,857 ) 23,776,938 ( 3,494,233) 38,657,677
Non-operating income and expenses
7100 Interest income 6(24) 329,718 196,092 552,230 293,510
7010 Other income 6(25) 2,089,251 526,116 2,998,614 1,007,416
7020 Other gains and losses 6(26) ( 844,868 ) ( 937,928) ( 1,660,314) ( 3,565,113)
7050 Finance costs 6(27) ( 215,968 ) ( 250,289) ( 440,785) ( 517,568)
7060 Share of profit of associates and joint ventures accounted 6(7)
for under equity method ( 2,421 ) 15,148 ( 7,318) 48,013
7000 Total non-operating income and expenses 1,355,712 ( 450,861) 1,442,427 ( 2,733,742)
7900 (Loss) profit before income tax ( 4,381,145 ) 23,326,077 ( 2,051,806) 35,923,935
7950 Income tax expense 6(30) ( 330,629 ) ( 1,906,625) ( 757,536) ( 2,937,465)
8200 (Loss) profit for the period ($ 4,711,774 ) $ 21,419,452 ($ 2,809,342) $ 32,986,470

(Continued)

~6~

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

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

Three months ended June 30 Three months ended June 30 Six months ended June 30 Six months ended June 30
Items Notes 2022 2021 2022 2021
Other comprehensive income (net)
Components of other comprehensive (loss) income that
will not be reclassified to profit or loss
8311 Remeasurement of defined benefit plans 6(16) $ 198,159 $ - $ 232,321 $ -
8316 Unrealized (losses) gains on financial assets at fair value 6(22)
through other comprehensive income ( 1,571,640 ) 640,296 ( 4,816,232) 6,710,647
8320 Share of other comprehensive (loss) income of associates 6(7)(22)
and joint ventures accounted for using equity method,
components of other comprehensive income that will not
be reclassified to profit or loss ( 11,904 ) - 10,452 -
8349 Income tax related to components of other comprehensive
income that will not be reclassified to profit or loss 46,821 ( 103,821) 513,010 ( 952,048)
8310 Components of other comprehensive (loss) income that
will not be reclassified to profit or loss ( 1,338,564 ) 536,475 ( 4,060,449) 5,758,599
Components of other comprehensive (loss) income that
will be reclassified to profit or loss
8361 Financial statements translation differences of foreign 6(22)
operations ( 1,309,517 ) ( 633,614) 1,540,227 ( 1,201,251)
8370 Share of other comprehensive income (loss) of associates 6(7)(22)
and joint ventures accounted for under equity method 38,493 ( 21,610) 68,798 ( 27,053)
8360 Components of other comprehensive (loss) income that
will be reclassified to profit or loss ( 1,271,024 ) ( 655,224) 1,609,025 ( 1,228,304)
8300 Other comprehensive (loss) income for the period, net of
tax ($ 2,609,588 ) ($ 118,749) ($ 2,451,424) $ 4,530,295
8500 Total comprehensive (loss) income for the period ($ 7,321,362 ) $ 21,300,703 ($ 5,260,766) $ 37,516,765
(Loss) profit attributable to:
8610 Owners of the parent ($ 4,740,519 ) $ 21,418,900 ($ 2,850,530) $ 32,990,319
8620 Non-controlling interest $ 28,745 $ 552 $ 41,188 ($ 3,849)
Other comprehensive (loss) income attributable to:
8710 Owners of the parent ($ 7,346,897 ) $ 21,300,441 ($ 5,301,044) $ 37,521,181
8720 Non-controlling interest $ 25,535 $ 262 $ 40,278 ($ 4,416)
(Loss) earnings per share (in dollars) 6(31)
9750 Basic (loss) earnings per share ($ 0.45 ) $ 2.05 ($ 0.27) $ 3.22
9850 Diluted (loss) earnings per share ($ 0.45 ) $ 2.01 ($ 0.27) $ 3.09

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

~7~

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

2021
Balance at January 1
Profit (loss) for the period
Other comprehensive income (loss) for the period
Total comprehensive income (loss)
Appropriation of 2020 earnings:
Legal reserve
Special reserve
Cash dividends
Cash dividends from capital surplus
Recognition of change in equity of associates in proportion to the
Group's ownership
Conversion of convertible bonds
Recognition of changes in ownership interests in subsidiaries
Disposal of investments in equity instruments measured at fair value
through other comprehensive income
Others
Balance at June 30
2022
Balance at January 1
Loss for the period
Other comprehensive income (loss) for the period
Total comprehensive income (loss)
Appropriation of 2021 earnings:
Legal reserve
Special reserve
Cash dividends
Recognition of change in equity of associates in proportion to the
Group's ownership
Recognition of changes in ownership interests in subsidiaries
Purchase of treasury shares
Decrease in non-controlling interests
Others
Balance at June 30		 Notes Equityattributable to Equityattributable to owners of theparen t t Total Non-controlling
interests		 Total
Share Capital
Common stock
Certificate of
entitlement to new
shares from
convertible bonds
$ 97,110,720
$ 2,293,612

-
-

-
-

-
-

-
-
-
-
-
-
-
-
-
-
5,372,476
237,271
-
-

-
-
-
-
$ 102,483,196
$ 2,530,883

$ 105,596,201
$
-

-
-

-
-

-
-

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 105,596,201
$
-		 Capital surplus Retained Earnings Unappropriated
retained earnings		 Other EquityInterest
Financial
statements
translation
differences of
foreign
operations
Unrealized gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income		 Treasuryshares
$
-
-
-
-
-
-
-
-
-
-
-

-
-
$
-
$
-
-

-

-
-
-
-
-
-
(
650,416)
-
-
( $
650,416)
Common stock
$ 97,110,720

-

-

-

-
-
-
-
-
5,372,476
-

-
-
$ 102,483,196

$ 105,596,201

-

-

-

-
-
-
-
-
-
-
-
$ 105,596,201		 Legal reserve Special reserve Financial
statements
translation
differences of
foreign
operations


6(22)


6(21)

6(20)(21)
6(20)
6(19)(20)
6(20)
6(3)(22)
6(20)




6(22)


6(21)

6(20)
6(20)
6(19)
6(20)
 $ 2,293,612
-
-
-
-
-
-
-
-
237,271
-
-
-
$ 2,530,883
$
-
-
-
-
-
-
-
-
-
-
-
-
$
-		 $ 99,707,996
-
-
-
-
-
-
(
1,047,090 )
1,579
4,112,948
13,467
-
3,558
$ 102,792,458
$ 103,287,482
-
-
-
-
-
-
247
633
-
-
5,885
$ 103,294,247		 $ 7,870,713
-
-
-

191,838
-
-

-
-
-
-
-
-
$ 8,062,551

$ 8,062,551
-
-
-

5,749,212
-
-
-
-
-
-
-
$ 13,811,763		 $ 7,325,437
-
-
-

-
(
1,265,766 )
-
-
-
-
-
-
-
$ 6,059,671

$ 6,059,671
-
-
-

-
(
2,855,535 )
-
-
-
-
-
-
$ 3,204,136		 $ 29,120,853
32,990,319
-
32,990,319
(
191,838)
1,265,766
(
3,141,271)
-
-
-
-
70,861
-
$ 60,114,690
$ 84,545,631
(
2,850,530)
185,857
(
2,664,673)
(
5,749,212)
2,855,535
(
11,087,601)
-
-
-
-
-
$ 67,899,680		 ($ 8,879,169 )
-
(
1,227,737 )
(
1,227,737 )

-
-
-
-
-
-
-
-
-
($ 10,106,906 )

($ 9,862,144 )
-
1,609,935
1,609,935

-
-
-
-
-
-
-
-
($ 8,252,209 )		 $ 2,819,498
-
5,758,599
5,758,599
-
-
-
-
-
-
-
(
70,861 )
-
$ 8,507,236
$ 6,658,008
-
(
4,246,306 )
(
4,246,306 )
-
-
-
-
-
-

-
-
$ 2,411,702
 $ 237,369,660
32,990,319

4,530,862

37,521,181

-
-
(
3,141,271)
(
1,047,090)
1,579
9,722,695
13,467
-
3,558
$ 280,443,779
$ 304,347,400
(
2,850,530)
(
2,450,514)
(
5,301,044)
-
-
(
11,087,601)
247
633
(
650,416)
-

5,885
$ 287,315,104		 $
197,386
(
3,849)
(
567)
(
4,416)
-
-
-

-

-
-
14,467
-
-
$
207,437
$
449,531
41,188

(
910)
40,278

-
-
-

-
3,863
-

(
15,933)
-
$
477,739		 $ 237,567,046

32,986,470

4,530,295

37,516,765
-
-
(
3,141,271)
(
1,047,090)
1,579
9,722,695
27,934
-
3,558
$ 280,651,216
$ 304,796,931
(
2,809,342)
(
2,451,424)
(
5,260,766)
-
-
(
11,087,601)
247
4,496
(
650,416)
(
15,933)
5,885
$ 287,792,843

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

~8~

INNOLUX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021 (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 loss on financial assets or liabilities at fair
value through profit or loss
Compensation cost of share-based payments

Share of loss (profit) of associates and joint
ventures accounted for under equity method

Loss on disposal of property, plant and
equipment

Loss on disposal of investments

Gain on lease modification
Interest expense

Interest income

Dividend income

Foreign exchange gain
Changes in operating assets and liabilities
Changes in operating assets
Financial assets /liabilities at fair value
through profit or loss
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Accounts payable
Accounts payable - related parties
Other payables
Provisions - current
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Cash paid for income tax
Net cash flows from operating activities		 Notes
2022
2021
($
2,051,806 ) $
35,923,935
6(28)
16,829,987
18,184,364
1,126,190
1,633,142
6(28)
4,496
14,467
6(7)
7,318 (
48,013 )
6(26)
87,258
72,031
6(26)
-
101,390
- (
9 )
6(27)
440,785
517,568
6(24)
(
552,230 ) (
293,510 )
6(25)
(
1,057,500 ) (
177,765 )
(
1,177,847 ) (
104,893 )
666,344
946,931
15,384,401 (
11,323,795 )
308,255
416,104
715,660
671,316
(
8,830,085 ) (
4,217,571 )
(
10,622,140 )
366,894
(
218,866 )
13,185
(
2,743,285 )
5,591,342
(
90,959 )
171,489
(
1,234,136 )
4,511,894
(
1,050,117 )
1,001,325
(
480,798 )
447,703
758,001
3,994,126
6,218,926
58,413,650
(
738,846 ) (
227,189 )
5,480,080
58,186,461

(Continued)

~9~

INNOLUX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

(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
Proceeds from disposal of financial assets at fair
value through profit or loss
Acquisition of investments in financial assets
measured at fair value through other comprehensive
income
Proceeds from disposal of financial assets measured
at fair value through other comprehensive income
(Increase) decrease in financial assets at amortized
cost - current
Acquisition of financial assets at amortized cost -
non-current
Proceeds from disposal of financial assets at
amortized cost
Proceeds from repayments of financial assets at
amortized cost
Increase in refundable deposits
Increase in investment accounted for under equity
method
Acquisition of property, plant and equipment

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

Interest received
Dividends received
Net cash flows from (used in) investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Interest paid
Repayment of the principal portion of lease
liabilities
Payments to acquire treasury shares

Net change of non-controlling interests
Others

Net cash flows (used in) from financing
activities
Effect of changes in foreign currency exchange
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period		 Notes
2022
2021
($
241,188 ) ($
18,867,806 )
3,253,563
99,638
- (
154,740 )
-
127,315
(
24,880,581 )
23,438,470
- (
70,948,153 )
35,354,250
16,170,000
661,351
-
(
1,138,785 ) (
91,938 )
(
86,829 ) (
250,000 )
6(32)
(
11,151,414 ) (
10,688,528 )
27,076
18,045
6(11)
(
4,968 ) (
10,060 )
461,642
108,351
1,052,679
155,263
3,306,796 (
60,894,143 )
3,225,737
-
-
23,250,000
(
4,394,666 ) (
19,283,000 )
(
424,001 ) (
383,742 )
(
327,030 ) (
22,543 )
6(19)
(
650,416 )
-
(
2,068 )
-
6(20)
5,885
3,558
(
2,566,559 )
3,564,273
191,767 (
564,105 )
6,412,084
292,486
28,667,746
26,532,083
$
35,079,830 $
26,824,569

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 SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

(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 July 28, 2022.

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 2022 are as follows:

(2) New Standards,Interpretations and Amendments

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

~11~

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

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:

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
----- End of picture text -----

New Standards,Interpretations andAmendments Effective date by
International Accounting
Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets To be determined by
between an investor and its associate or joint venture’ International Accounting
Standards Board
IFRS 17, ‘Insurance contracts’ January 1, 2023
Amendments to IFRS 17, 'Insurance contracts' January 1, 2023
Amendments to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 – January 1, 2023
comparative information'
Amendments to IAS 1, ‘Classification of liabilities as current or non- January 1, 2023
current’

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

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

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

~12~

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, 2021.

(2) Basis of preparation

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

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

  • (b) Financial assets at fair value through other comprehensive income.

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

  • B. The preparation of financial statements in conformity with 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, 2021.

  • B. Subsidiaries included in the consolidated financial statements:
Main
Business
Name of Investor
Name ofSubsidiary
Activities
Innolux
Corporation
Innolux Holding Limited
Investment holdings
Keyway Investment
Management Limited
Investment holdings
Landmark International
Ltd.
Investment holdings
Toppoly Optoelectronics
(B.V.I.) Ltd.
Investment holdings
Innolux Hong Kong
Holding Limited
Investment holdings
Yuan Chi Investment Co.,
Ltd.
Investment company		 June
December
June
30,2022
31,2021
30,2021
Description
100
100
100
-
100
100
100
-
100
100
100
-
100
100
100
-
100
100
100
-
100
100
100
-
Ownership (%)

~13~

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Main Ownership (%)
Business June December June
Name of Investor Name of Subsidiary Activities 30, 2022 31, 2021 30, 2021 Description
----- End of picture text -----

Name of Investor Name ofSubsidiary Activities
 30,2022 31, 2021 30, 2021 Description
Innolux InnoJoy Investment Investment company 100 100 100 -
Corporation Corporation
Innolux Japan Co., Ltd. Investment, R&D 54 54 54 -
and distribution
company
Innolux Singapore Investment holdings 100 100 100 -
Holding Pte. Ltd.
InnoCare Optoelectronics Investment, R&D, 59 59 100 (a)
Corporation manufacturing and
distribution company
GIO Optoelectronics Investment, R&D, 76 76 63 (b)
Corp. manufacturing and
distribution company
INStek Corporation R&D, manufacturing 40 40 - (c)
and distribution
company
Innolux Holding Rockets Holding Limited Investment holdings 100 100 100 -
Limited
Suns Holding Ltd Investment holdings 100 100 100 -
Lakers Trading Limited Distribution - - 100 (e)
company
Keyway Investment Foshan Innolux Logistics Warehousing 100 100 100 -
Management Ltd. company
Limited
Landmark Ningbo Innolux Processing company 100 100 100 -
International Ltd. Optoelectronics Ltd.
Foshan Innolux Processing company 100 100 100 -
Optoelectronics Ltd.
Ningbo Innolux Display Processing company 100 100 100 -
Ltd.
Toppoly Toppoly Optoelectronics Investment holdings 100 100 100 -
Optoelectronics (Cayman) Ltd.
(B.V.I.) Ltd.
Innolux Hong Innolux Hong Kong Distribution 100 100 100 -
Kong Holding Limited company
Limited
Innolux Japan Co., Ltd. Investment, R&D 46 46 46 -
and distribution
company
CarUX Holding Limited Investment holdings 100 100 100 -
InnoJoy Investment Inno Capital Corporation Investment company 100 100 - (d)
Corporation
Innolux Japan Co., Innolux USA Inc. Distribution 100 100 100 -
Ltd. company

~14~

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Main Ownership (%)
Business June December June
Name of Investor Name of Subsidiary Activities 30, 2022 31, 2021 30, 2021 Description
----- End of picture text -----

Innolux Singapore INNOLUX Distribution 100 100 100 -
Holding Pte. Ltd. OPTOELECTRONICS company
INDIA PRIVATE
LIMITED
INNOLUX Manufacturing and 100 100 100 -
OPTOELECTRONICS distribution company
PHILIPPINES CORP.
INNOLUX Manufacturing and - - 100 (f)
OPTOELECTRONICS distribution company
MALAYSIA SDN. BHD.
Rockets Holding Stanford Developments Investment holdings 100 100 100 -
Limited Limited
Nets Trading Ltd. Investment company 100 100 100 -
Suns Holding Ltd Warriors Technology Investment company 100 100 100 -
Investments Ltd
Toppoly Nanjing Innolux Distribution 100 100 100 -
Optoelectronics Technology Ltd. company
(Cayman) Ltd.
Nanjing Innolux Processing company 100 100 100 -
Optoelectronics Ltd.
CarUX Holding CARUX TECHNOLOGY Investment and 100 100 100 -
Limited PTE. LTD. distribution company
CARUX Innolux Optoelectronics Investment holdings 100 100 100 -
TECHNOLOGY Hong Kong Holding
PTE. LTD. Limited
Innolux Europe B.V. Investment, 100 100 100 -
distribution, and
R&D testing
company
CarUX Technology Inc. R&D, manufacturing 100 100 100 -
and distribution
company
Innolux Shanghai Innolux Processing company 100 100 100 -
Optoelectronics Optoelectronics Ltd.
Hong Kong
Holding Limited
Innolux Europe Innolux Technology Testing and 100 100 100 -
B.V. Germany GmbH maintenance
company

~15~

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Main Ownership (%)
Business June December June
Name of Investor Name of Subsidiary Activities 30, 2022 31, 2021 30, 2021 Description
----- End of picture text -----

Name of Investor Name ofSubsidiary Activities
 30,2022 31, 2021 30, 2021 Description
Stanford Innocom Technology Processing company 100 100 100 -
Developments (Shenzhen) Co., Ltd.
Limited
Ningbo Innolux Ningbo CarUX Processing company 100 100 100 -
Optoelectronics Technology Ltd.
Ltd.
Innocom Shenzhen PixinLED R&D and - - 100 (g)
Technology Technology Co., Ltd. distribution company
(Shenzhen) Co.,
LTD.
InnoCare InnoCare Optoelectronics Distribution 100 100 100 -
Optoelectronics Japan Co., Ltd. company
Corporation
InnoCare Optoelectronics Distribution 100 100 100 -
USA, INC. company
Ningbo Innolux Manufacturing and 100 100 100 -
Electornics Ltd. distribution company
Innocare Optoelectronics After-sales service 100 100 100 -
Europe B.V. company
GIO Double Star Inc. Investment holdings 100 100 100 -
Optoelectronics
Corp.
GIO (Maanshan) Processing company 100 100 100 -
Optoelectronics Co., Ltd.

  • (a) The Board of Directors of the Company resolved to implement InnoCare Optoelectronics Corporation’s (“InnoCare Company”) listing plan by releasing its equity interests in the subsidiary in the amount of 10,500 thousand shares in the third quarter of 2021. The Company had released 10,500 thousand shares of InnoCare Company and received proceeds amounting to $240,786.

  • (b) The Company repurchased outstanding domestic convertible bonds of the subsidiary, GIO Optoelectronics Corp. (“GIO Company”), in the third quarter of 2021, and the Company converted those convertible bonds into common shares of GIO Company, please refer to Note 6(14) for further information. The Company repurchased 3,575 thousand shares of outstanding common stock of GIO Company, in the fourth quarter of 2021, and paid fee amounting to $37,720.

  • (c) The Company injected capital and established a new subsidiary, INStek Corporation, and acquired 40% equity interests in the subsidiary in the third quarter of 2021. The Company had ability and had obtained half seats in the Board of Directors, which indicates that the Company has current ability to direct the relevant activities of the subsidiary. The subsidiary shall be included in the consolidated financial statements, and net cash inflow in the consolidated

~16~

financial statements was $39,700.

  • (d) Inno Capital Corporation was established in the third quarter of 2021 and was included in the consolidated financial statements since the date of establishment.

  • (e) In the fourth quarter of 2021, Lakers Trading Limited had completed liquidation and dissolution.

  • (f) In the fourth quarter of 2021, INNOLUX OPTOELECTRONICS MALAYSIA SDN. BHD. had completed liquidation and dissolution.

  • (g) The Company's subsidiary, Innocom Technology (Shenzhen) Co., LTD., sold 100% equity of Shenzhen PixinLED Technology Co., LTD., in the fourth quarter of 2021.

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

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

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

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

(4) 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 2021 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.

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, 2021.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand, demand deposits
and checking accounts
Time deposits		 June30,2022

24,800,305
$
10,279,525
35,079,830
$		 December31,2021
22,769,902
$
5,897,844
28,667,746
$		 June30,2021
22,551,230
$
4,273,339
26,824,569
$

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

  • B. The above time deposits expire in 3 months and risks of changes in their values are remote.

~17~

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

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Assets June 30, 2022 December 31, 2021 June 30, 2021
Current items
Financial assets mandatorily
measured at fair value through
profit or loss
Beneficiary certificates $ 13,924,780 $ 13,903,225 $ 10,007,018
-
Structured products 3,269,530 8,817,245
Forward foreign exchange
contracts 32,612 54,965 21,743
Foreign exchange swap contracts 17,026 130,283 32,808
$ 13,974,418 $ 17,358,003 $ 18,878,814
Non-current items
Financial assets mandatorily
measured at fair value through
profit or loss
Listed stocks $ 892,607 $ 1,224,882 $ 1,072,151
Unlisted stocks 2,301,202 3,063,428 2,812,752
-
Financial products 78,623 38,553
Convertible bonds 178,320 - -
$ 3,450,752 $ 4,326,863 $ 3,884,903
Liabilities June 30, 2022 December 31, 2021 June 30, 2021
Current items
Financial liabilities held for
trading
Convertible bonds derivative - -
$ $ $ 612,296
instruments
Forward foreign exchange
contracts 447,532 198,896 308,757
- -
Foreign exchange swap contracts 282,098
$ 729,630 $ 198,896 $ 921,053
----- End of picture text -----

  • A. The Group sold $2,566,352 of stocks at fair value during 2020 and the amount of receivables (shown as other receivables) outstanding as of June 30, 2021 was $1,259,091, and all of receivables were received in the fourth quarter of 2021.

  • B. The Company entered into a ‘Share Issuance and Asset Purchase Agreement’ with Nanjing Huadong Electronic Information & Technology Co., Ltd (It was renamed as TPV Technology Co.,ltd. in the second quarter of 2021) (“TPV Technology”) during the year ended December 31, 2021. Refer to Note 9(2) for relevant information.

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

~18~

Derivative
financial assets
and liabilities		 June30,2022 December31, 2021
Contract Period
USD (sell)
75,000
$
2022/06-2022/07
RMB (buy)
502,528
2022/06-2022/07
RMB (sell)
668,313
2022/06-2022/07
USD (buy)
100,000
2022/06-2022/07
RMB (sell)
550,000
2022/06-2022/07
TWD (buy)
2,403,070
2022/06-2022/07
USD (sell)
20,000
2022/05-2022/07
JPY (buy)
2,593,370
2022/05-2022/07
TWD (sell)
5,471,966
2022/03-2022/09
JPY (buy)
24,000,000
2022/03-2022/09
EUR (sell)
13,500
2022/04-2022/09
USD (buy)
14,436
2022/04-2022/09
HKD (sell)
47,046
2022/05-2022/07
USD (buy)
6,000
2022/05-2022/07
USD (sell)
997,000
2022/04-2022/08
TWD (buy)
29,413,754
2022/04-2022/08
TWD (sell)
2,518,190
2022/06-2022/07
USD (buy)
85,000
2022/06-2022/07
USD (sell)
795,000
2022/03-2022/08
TWD (buy)
23,356,365
2022/03-2022/08
Contract Amount
(Notional Principal)
(in thousands)		 Contract Amount
(Notional Principal)
(in thousands)		 Contract Period
Current items
Derivative
financial assets
and liabilities
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Foreign exchange
swap contracts
Contract Amount
(Notional Principal)
(in thousands)		 Contract Period
Current items
Foreign exchange
swap contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts
Forward foreign
exchange contracts		 USD (sell)
4,854
$
EUR (buy)
4,000
USD (sell)
95,000
RMB (buy)
614,874
USD (sell)
25,000
JPY (buy)
2,733,825
USD (sell)
855,000
TWD (buy)
23,576,534
TWD (sell)
8,237,991
JPY (buy)
32,500,000
RMB (sell)
500,000
TWD (buy)
2,157,847
HKD (sell)
38,812
USD (buy)
5,000
USD (sell)
345,000
TWD (buy)
9,644,986		 2021/06-2021/07
2021/06-2021/07
2021/06-2021/07
2021/06-2021/07
2021/06-2021/07
2021/06-2021/07
2021/06-2021/07
2021/06-2021/07
2021/04-2021/10
2021/04-2021/10
2021/06-2021/07
2021/06-2021/07
2021/06-2021/07
2021/06-2021/07
2021/06-2021/08
2021/06-2021/08

~19~

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

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

demand. However, these contracts are not accounted for using hedge accounting.
Financial assets at fair value through other comprehensive income
June 30, 2022
December 31, 2021
Non-current items
Equity instruments
Listed stocks
5,051,181
$
9,818,232
$
Unlisted stocks
31,687
29,894
5,082,868
$
9,848,126
$		 June30,2021
11,587,641
$
35,232
11,622,873
$

  • A. The Group has elected to classify equity instruments that are considered to be strategic investments and steady dividend income as financial assets at fair value through other comprehensive income.

  • B. The Group sold $0 and $121,939 of stocks at fair value and resulted in cumulative gains amounting to $0 and $70,861 on disposal which were recognized in unappropriated retained earnings during the six-month periods ended June 30, 2022 and 2021.

  • C. For information on other comprehensive income for fair value change recognized by the Group for the six-month periods ended June 30, 2022 and 2021, please refer to Note 6(22) “Other equity”.

  • (4) Financial assets at amortized cost

Financial assets at amortized cost
Current items
Principal guaranteed financial
assets
Corporate bonds
Fixed income financial products
Non-current items
Principal guaranteed financial
assets
Corporate bonds
Fixed income financial products		 June 30,2022

52,751,142
$
4,837,419
7,025,512
64,614,073
$
19,758,570
$
3,140,401
-
22,898,971
$		 December31,2021
20,637,496
$
1,995,699
-
22,633,195
$
63,343,505
$
5,697,755
5,183,163
74,224,423
$		 June 30,2021
19,199,561
$
180,041
-
19,379,602
$
41,502,824
$
7,837,568
5,210,589
54,550,981
$

  • A. The Group recognized $260,406, $154,244, $440,924 and $218,775 of interest income arising from the financial assets at amortized cost for the three-month and the six-month periods ended June 30, 2022 and 2021, respectively.

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

~20~

(5) Notes receivable and accounts receivable

June 30,2022
December31,2021
Notes receivable
65,608
$
75,311
$
Accounts receivable
45,340,772
60,715,469
45,406,380

60,790,780

Less: Allowance for uncollectible
accounts
262,611)
(
262,610)
(
(
45,143,769
$
60,528,170
$		 June 30,2021
83,095
$
61,332,035
61,415,130
209,419)

61,205,711
$
  • 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		 June 30,2022
43,501,584
$
924,176
681,323
299,297
45,406,380
$		 December31,2021
56,887,325
$
3,418,512
245,769
239,174
60,790,780
$		 June 30,2021
60,408,077
$
635,231
118,047
253,775
61,415,130
$

The above aging analysis was based on past due date.

  • B. As of June 30, 2022, December 31, 2021 and June 30, 2021, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2021, the balance of receivables from contracts with customers amounted to $50,107,177.

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

(6) Inventories

nventories
Raw materials and supplies
Work in progress
Finished goods		 June 30,2022
9,166,253
$
16,030,339
21,911,715
47,108,307
$		 December31,2021
8,785,532
$
14,575,596
14,917,093
38,278,221
$		 June 30, 2021
8,651,577
$
15,210,400
11,220,864
35,082,841
$

For the three-month and six-month periods ended June 30, 2022 and 2021, the Group recognized cost of goods sold for inventories that have been sold at $57,193,142, $62,362,410, $118,364,293 and $124,390,426 and recognized net inventory loss at $20,800, $9,422, $163,860 and $193,602 due to write down of cost of scrap inventories to net realizable value, respectively.

(7) Investments accounted for under the equity method

Ampower Holding Ltd.
FI Medical Device Manufacturing
Co., Ltd.
PanelSemi Corporation
Others		 June 30,2022
866,243
$
359,821
205,930
145,890
1,577,884
$		 December31,2021
801,157
$
318,640
243,661
79,226
1,442,684
$		 June 30,2021
808,242
$
443,894
248,009
18,627
1,518,772
$

~21~

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

below:
For the three-month periods For the six-month periods
ended June 30, ended June 30,
2022 2021 2022 2021
(Loss) profit for the period from
continuing operations ($ 2,421)
 $ 15,148
 ($ 7,318)
 $ 48,013
Other comprehensive income
(loss) - net of tax 26,589 ( 21,610)
 79,250 ( 27,053)
Total comprehensive income (loss) $ 24,168
 ($ 6,462)
 $ 71,932 $ 20,960

(8) Property, plant and equipment

2022
Transfer, net
exchange
differences
AtJanuary1 Additions Disposals and others AtJune30
Cost:
Land $ 4,093,726
 $ -
 $ -
 $ -
 $ 4,093,726
Buildings 205,568,161 310,566 ( 12,867)
 1,468,916 207,334,776
Machinery and equipment 537,561,904 1,688,777 ( 1,492,924)
 4,965,286 542,723,043
Other equipment 50,862,400 3,504 ( 1,761,334) 2,255,712 51,360,282
798,086,191 2,002,847 ( 3,267,125) 8,689,914 805,511,827
Accumulated depreciation
and impairment:
Buildings ( 147,599,956)
 ( 4,422,494)
 11,949 ( 332,535)
 ( 152,343,036)
Machinery and equipment
(		 453,390,220)
 ( 9,930,561)
 1,413,441 ( 688,838)
 ( 462,596,178)
Other equipment ( 44,323,458) ( 2,132,248) 1,749,936 ( 97,729) ( 44,803,499)
( 645,313,634) ( 16,485,303) 3,175,326 ( 1,119,102) ( 659,742,713)
Unfinished construction
and equipment under
acceptance 9,835,351 8,991,149 - ( 5,826,703) 12,999,797
$ 162,607,908 $ 158,768,911

~22~

2021

2021
Transfer, net
exchange
differences
AtJanuary1 Additions Disposals and others AtJune30
Cost:
Land $ 4,093,726
 $ -
 $ -
 $ -
 $ 4,093,726
Buildings 203,938,280 196,299
 ( 7,352)
 546,284
 204,673,511
Machinery and equipment 526,646,694 1,554,921
 ( 1,035,748)
 7,103,440
 534,269,307
Other equipment 49,731,327 6,632
 ( 872,199) 1,737,633
 50,603,393
784,410,027 1,757,852 ( 1,915,299) 9,387,357
 793,639,937
Accumulated depreciation
and impairment:
Buildings ( 139,325,425)
 ( 4,274,256)
 7,352 192,900 ( 143,399,429)
Machinery and equipment
(		 436,793,758)
 ( 11,262,781)
 956,566 374,890 ( 446,725,083)
Other equipment ( 42,804,109) ( 2,288,970)
 861,347 112,154 ( 44,119,578)
( 618,923,292) ( 17,826,007) 1,825,265 679,944 ( 634,244,090)
Unfinished construction
and equipment under
acceptance 13,414,940 10,149,891 ( 42) ( 14,268,854)
 9,295,935
$ 178,901,675 $ 168,691,782

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

  • B. As of June 30, 2022, December 31, 2021 and June 30, 2021, the prepayments for business facilities which have not yet entered the factory (shown as ‘other non-current assets’) amounted to $7,335,737, $8,530,392 and $3,965,112, respectively.

  • －

  • (9) Leasing arrangements lessee

  • A. The Group leases various assets including land, offices and business vehicles. Rental contracts are typically made for periods of 2 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

  • B. Short-term leases with a lease term of 12 months or less comprise office, dormitory and equipment. Low-value assets comprise computer equipment.

  • C. The carrying amounts of right-of-use assets and the depreciation charge are as follows:

Land
Buildings (Office)
Transportation equipment
(Business vehicles)		 June 30,2022
Carrying amount
4,967,543
$
89,071
1,713
5,058,327
$		 December31,2021
Carrying amount
5,042,470
$
101,957
2,341
5,146,768
$		 June 30,2021
Carrying amount
5,275,648
$
133,303
3,130
5,412,081
$

~23~

For the three-month periods For the three-month periods For the three-month periods For the three-month periods For the six-month periods For the six-month periods For the six-month periods
ended June 30, ended June 30,
2022 2021 2022 2021
Depreciation Depreciation Depreciation Depreciation
charge charge charge charge
Land $ 123,353
 $ 119,260
 $ 244,040
 $ 238,578
Buildings (Office) 10,759
 10,488 19,642 20,460
Transportation equipment
(Business vehicles) 307
 331
 616
 667
$ 134,419
 $ 130,079 $ 264,298
 $ 259,705

  • D. For the three-month and six-month periods ended June 30, 2022 and 2021, the additions to rightof-use assets were $5,897, $101,536, $8,410 and $135,603, 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		 2022
2021
20,793
$
22,260
$
37,046
38,436
15,913
16,656
13,918
9,377
For the three-month periods
endedJune30,		 For the six-month periods
ended June 30,		 For the six-month periods
ended June 30,
2022
20,793
$
37,046
15,913
13,918		 2022
41,561
$
73,964
32,804
28,229		 2021
44,578
$
72,961
36,221
18,757
  • F. For the six-month periods ended June 30, 2022 and 2021, the Group’s total cash outflow for leases were $505,165 and $151,404, respectively.

(10) Investment property

Investment property
Cost:
Land
Buildings
Accumulated depreciation:
Buildings
(		 2022 At June 30
188,247
$
439,228
627,475
169,715)

457,760
$
At January1
188,247
$
439,228
627,475
155,820)

(
471,655
$
(		 Additions
-
$
-
-
13,895)

(
13,895)
$

~24~

2021
At January1 Additions At June 30
Cost:
Land $ 188,247
 $ -
 $ 188,247
Buildings 439,228 - 439,228
627,475 -
 627,475
Accumulated depreciation:
Buildings ( 128,031)
 ( 13,895)
 ( 141,926)
$ 499,444
 ($ 13,895)
 $ 485,549

The fair value of the investment property held by the Group as at June 30, 2022, December 31, 2021 and June 30, 2021 was $1,712,735, $1,978,199 and $2,033,311, respectively. The amounts mentioned above represent valuation results of comparative method based on market trading information categorized within Level 3 in the fair value hierarchy.

(11) Intangible assets

  • A. Intangible assets are goodwill, payments for TFT-LCD related technology and royalty. Details of intangible assets are as follows:
AtJanuary1
Additions
Disposals
Cost:
Patents and royalty
8,232,454
$
-
$
3,000)
($
Goodwill
17,117,339
-
-
Others
4,862,691
4,968
218,981)
(
30,212,484
4,968
221,981)
(
Accumulated amortization
and impairment:
Patents and royalty
8,171,928)
(
9,822)
(
3,000
Others
4,519,962)
(
56,669)
(
218,981
(
12,691,890)
(
66,491)
(
221,981
(
17,520,594
$
61,523)
($
-
$
2022		 2022

~25~

2021

AtJanuary1
Additions
Disposals
Cost:
Patents and royalty
8,184,436
$
-
$
-
$
Goodwill
17,117,339
-

-

Others
5,368,254
10,060
547,054)
(
30,670,029
10,060
547,054)
(
Accumulated amortization
and impairment:
Patents and royalty
8,156,715)
(
5,413)
(
-

Others
5,006,330)
(
79,344)
(
547,054
13,163,045)
(
84,757)
(
547,054
17,506,984
$
74,697)
($
-
$		 Transfer, net
exchange
differences
and others
AtJune30
47,619
$
8,232,055
$
-
17,117,339
36,248
4,867,508
83,867
30,216,902
-
8,162,128)
(
10,394
4,528,226)
(
10,394
12,690,354)
(
94,261
$
17,526,548
$
  • B. Details of amortization of intangible assets are as follows:
Operating costs
Operating expenses		 2022
2021
9,973
$
15,409
$
23,590
27,967
33,563
$
43,376
$
For the three-month periods
ended June 30,		 For the six-month periods
ended June 30,		 For the six-month periods
ended June 30,
2022
9,973
$
23,590
33,563
$		 2022
19,629
$
46,862
66,491
$		 2021
30,428
$
54,329
84,757
$
  • C. The Group performed impairment assessment on the recoverable amount of goodwill on the financial period-end, and used the value in use as the basis for calculation of the recoverable amount.The value in use was calculated based on the estimated present value of future cash flows for five years. Based on the periodical assessment above, the Group did not recognize impairment loss on goodwill for the six-month periods ended June 30, 2022 and 2021, respectively.

(12) Short-term borrowings

Short-term borrowings
Type ofborrowings
Bank borrowings
Unsecured borrowings
Range of interest rates		 June 30,2022
3,272,295
$
1.43%~2.18%		 Collateral
None

As of December 31, 2021 and June 30, 2021, the Group did not hold any short-term borrowings.

~26~

(13) Other payables

Other personnel expenses
Cash dividends payable
Payable on machinery and equipment
Repairs and maintenance expense
payable
Utilities expense payable
Cash dividends from capital surplus
Other payables		 June 30,2022
15,210,473
$
11,103,534
4,014,930
3,219,429
1,364,842
-
12,091,258

47,004,466
$		 December31,2021
16,607,485
$
-
4,172,348
2,993,417

1,163,786

-

11,577,192
36,514,228
$		 June 30,2021
12,022,616
$
3,141,271
4,969,128
2,731,746
1,400,867
1,047,090
10,278,751
35,591,469
$

(14) Bonds payable

Bonds payable
Less: Discount on bonds payable
Less: Current portion of bonds
payable		 June30,2022
-
$
-
-
-
$		 December31,2021
June30,2021
-
$
662,772
$
-
68,912)
(
-

99,569)
(
-
$
494,291
$

  • A. The issuance of unsecured overseas convertible bonds by the Company in 2019

  • The terms of the first unsecured overseas convertible bonds issued by the Company in 2019 are as follows

  • (a) The Company issued USD 300 million, 0% first unsecured overseas convertible bonds, as approved by the regulatory authority on January 15, 2020. The bonds mature 5 years from the issue date (January 22, 2020 ~ January 22, 2025) and will be redeemed in cash at face value at the maturity date.

  • (b) The bondholders have the right to ask for conversion of the bonds into common shares of the Company during the period from the date after three months of the bonds issue to 30 days before the maturity date, except for the stop transfer period as specified in the terms of the bonds or the laws/regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

  • (c) The conversion price of the bonds is adjusted based on the pricing model in the terms of the bonds. As of June 30, 2021, the conversion price was $10.59 (in dollars) (using the exchange rate 1 USD: 29.913 NTD).

  • (d) The bondholders have the right to require the Company to redeem bonds at the price of the bonds’ face value in whole or partially on the date of three years after the bond issuance.

  • (e) Under the terms of the bonds, all bonds repurchased (including from secondary market), early redeemed and matured by the Company, or converted and sold back by the bondholder will be cancelled and not to be reissued.

~27~

  • (f) As of June 30, 2021, some convertible bonds were calculated at the conversion price at the time of conversion. Refer to Note 6(19) for relevant information.

  • (g) As of December 31, 2021, all unsecured overseas convertible bonds issued by the Company had been converted. All convertible bonds were calculated at the conversion price at the time of conversion. Refer to Note 6(18) of the consolidated financial statements for the year ended December 31, 2021.

  • B. Regarding the issuance of convertible bonds, the non-equity conversion options, redeem options and put options were separated from their host contracts and were recognized in ‘financial assets or liabilities at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts.

  • C. The issuance of domestic convertible bonds by the Group’s subsidiary—GIO Company The terms of the first domestic secured convertible bonds issued by GIO Company are as follows:

  • (a) GIO Company issued $100,000, 0% first domestic secured convertible bonds, as approved by the regulatory authority. The bonds mature 3 years from the issue date (October 1, 2018 ~ October 1, 2021) and will be redeemed in cash at face value at the maturity date.

  • (b) The bondholders have the right to ask for conversion of the bonds into common shares of GIO Company during the period from the date after three months of the bonds issue to 10 days before the maturity date, except for the stop transfer period as specified in the terms of the bonds or the laws/regulations. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

  • (c) The conversion price of the bonds is set up based on the pricing model in the terms of the bonds, and is subject to adjustments if the condition of the anti-dilution provisions occurs subsequently. The conversion price was $10.7 (in dollars) per share upon issuance.

  • (d) Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are cancelled and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

  • D. The Company repurchased all the outstanding domestic convertible bonds of GIO Company in the amount of $104,455 in the third quarter of 2021 and converted all those convertible bonds into ordinary shares of GIO Company amounting to 9,901 thousand shares.

~28~

- (15) Long term borrowings

==> picture [481 x 219] intentionally omitted <==

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

Type of borrowings Period June 30, 2022 December 31, 2021 June 30, 2021
Syndicated bank borrowings 2016/12/6 $ 39,375,000 $ 43,750,000 $ 43,750,000
~2024/4/15
Unsecured borrowings 2021/12/2
~2026/11/15 600,000 600,000 -
Secured borrowings 2017/7/28
~2024/9/22 75,500 95,166 21,500
Less:
Administrative expenses
charged by syndicated
banks ( 63,862) ( 82,241) ( 100,620)
Current portion (includes
administrative expenses) ( 8,769,642) ( 8,770,385) ( 4,385,938)
$ 31,216,996 $ 35,592,540 $ 39,284,942
Range of interest rates 0.75%~2.03% 0.75%~1.79% 1.45%~1.79%
----- End of picture text -----

Range of interest rates

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

  • B. The syndicated borrowing agreements specified that the Company shall meet covenants on current ratio, liability ratio, interest coverage, and tangible net equity, based on the Company’s annual consolidated financial statements audited by independent auditors. The Company’s financial ratios on the consolidated financial statements for the year ended December 31, 2021 are in compliance with the covenants on the syndicated borrowing agreement.

  • C. For repayment of borrowings from financial institutions and financing mid-term working capital fund, the Board of Directors approved the signing of a syndicated borrowing with financial institution in the amount of $37.5 billion on May 5, 2020. As of June 30, 2022, the borrowing has yet to be drawn down.

(16) Pensions

  • A. Defined benefit pension plans

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

  • (b) In February 2022, the Science Park, Ministry of Science and Technology approved the Company to stop contributing to the retirement fund temporarily.

  • (c) In the first half of 2022, the Company reached an agreement with part of its employees for terminating their defined benefit pension plans and settled its defined benefit obligation. Accordingly, the Company re-assessed the actuarial assumptions and recognized gain on the settlement and gain on remeasurement of net defined benefit liability.

~29~

(d) The amounts recognized in the balance sheet are as follows:

June 30,2022
Present value of defined benefit obligation $ 234,620
Fair value of plan assets ( 524,882)
Net defined benefit liability (asset) ($ 290,262)

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

Present value of
defined benefit
obligation
2022
Balance at January 1
2,568,347
$
Current service cost
2,666
Interest expense / income
8,578
Gain on settlement
127,244)
(
116,000)
(
Remeasurements:
Return on plan assets
(excluding amounts included in interest
income or expense)
-
Change in financial assumptions
46,580)
(
Experience adjustments
4,802)
(
Paid pension
2,166,345)
(
2,217,727)
(
Balance at June 30
234,620
$		 Fair value of
plan assets		 Net defined
benefit liability
(asset)
2,501,876
$
-
8,412
-
8,412
180,939
-
-
2,166,345)
(
1,985,406)
(
524,882
$		 66,471
$
2,666

166
127,244)
(
124,412)
(
180,939)
(
46,580)
(
4,802)
(
-
232,321)
(
290,262)
($

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

Discount rate
Future salary increases		 For the six-month periods
endedJune30,2022
0.625%~1.40%
2.40%~3.00%

Future mortality rate are estimated based on the 6th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Discount rate Future salary increases Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25%

June 30, 2022 Effect on present value of defined benefit obligation ($ 6,561) $ 6,818 $ 6,145 ($ 5,956)

~30~

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

  • (g) As of June 30, 2022, the weighted average duration of the retirement plan is 12~34.5 years.

  • B. Defined contribution pension plans

  • (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 Company’s foreign subsidiaries have provided the pension in accordance with statutory laws and regulations.

  • C. The pension costs under the above mentioned pension plans of the Group for the three-month and six-month periods ended June 30, 2022 and 2021 were $391,056, $455,156, $895,602 and $925,781, respectively.

(17) Share-based payment

  • A. Details of the share-based payment arrangements of the Group are provided in the 2021 consolidated financial statements.

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

  • －

  • (a) Employee stock options GIO Company

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		 Quantity
Weighted-average
(in thousand
exercise price
units)
(indollars)
5,122
7.5
$
-
-
5,122
7.5
5,122
2022		 Quantity
Weighted-average
(in thousand
exercise price
units)
(indollars)
5,122
7.5
$
-
-
5,122
7.5
5,122
2022		 Quantity
Weighted-average
(in thousand
exercise price
units)
(indollars)
6,122
9.4
$
1,000)

9.4
5,122
9.4
5,122
2021		 Quantity
Weighted-average
(in thousand
exercise price
units)
(indollars)
6,122
9.4
$
1,000)

9.4
5,122
9.4
5,122
2021
Quantity
(in thousand
units)		 Quantity
(in thousand
units)
5,122
-
5,122
5,122		 7.5
$
-
7.5		 ( 6,122
1,000)

5,122
5,122		 9.4
$
9.4
9.4

~31~

－ (b) Employee stock options InnoCare Company

Options outstanding at
the beginning of the
period
Options granted
Options outstanding at
the end of the period
Options exercisable at
the end of the period		 Quantity
Weighted-average
(in thousand
exercise price
units)
(indollars)
3,414
14.5
$
-
-
3,414
14.5
-

2022		 Quantity
Weighted-average
(in thousand
exercise price
units)
(indollars)
7,500
22.5
$
-
-

7,500

22.5
-
2021		 Quantity
Weighted-average
(in thousand
exercise price
units)
(indollars)
7,500
22.5
$
-
-

7,500

22.5
-
2021
22.5
$
-

22.5
  • C. The expiry date and exercise price of stock options outstanding at balance sheet date are as follows:

==> picture [458 x 254] intentionally omitted <==

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

June 30, 2022
Quantity Exercise price
Issue date approved Expiry date (in thousand units) (in dollars)
2017.10.1 2022.9.30 5,122 $ 7.5
2020.7.7 2026.7.6 3,414 14.5
December 31, 2021
Quantity Exercise price
Issue date approved Expiry date (in thousand units) (in dollars)
2017.10.1 2022.9.30 5,122 $ 7.5
2020.7.7 2026.7.6 3,414 14.5
June 30, 2021
Quantity Exercise price
Issue date approved Expiry date (in thousand units) (in dollars)
2017.10.1 2022.9.30 5,122 $ 7.9
2020.7.7 2026.7.6 7,500 22.5
----- End of picture text -----

  • D. The fair value of stock options granted is measured using the Black-Scholes option-pricing model. Relevant information is as follows:
Type of
loans
arrangement
Grant date
Employee
stock options
2017.10.01
Employee
stock options
2020.07.07		 Price
(in dollars)
2.18
23.61		 Exercise
price
(in dollars)
10
22.5		 Expected
volatility
(%)
48.38~
48.58
35.59~
45.98		 Expected
duration
(inyears)
3.5~4
1.04~5		 Expected
dividends
-
-		 Risk-free
interest
rate(%)
0.63~
0.68
0.26~
0.37		 Fair value
per unit
(in dollars)
0.0783~
0.1099
4.88~
8.16
  • E. For the three-month and six-month periods ended June 30, 2022 and 2021, the Group recognized

~32~

expenses on share-based payment transaction (equity settlement) were $2,248, $7,234, $4,496 and $14,467, respectively.

(18) Provisions-current

and $14,467, respectively.
Provisions-current
Warranty Litigationand others Total
At January 1, 2022 $ 3,299,156
 $ 4,242,026
 $ 7,541,182
Additions during the period 475,580 335,970 811,550
Used (unused amounts reversed)
during the period ( 991,344)
 ( 1,653,350)
 ( 2,644,694)
Effect of change in exchange rate 1,107 - 1,107
At June 30, 2022 $ 2,784,499
 $ 2,924,646
 $ 5,709,145

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).

(19) Share capital

  • A. As of June 30, 2022, the Company’s authorized and outstanding capital were $120,000,000 and

  • $105,596,201, with a par value of $10 (in dollars) per share, respectively. All proceeds from shares issued have been collected.

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

At January 1
Stocks converted from bonds
Shares retired
(
At June 30		 2022
Number of ordinary
shares (in thousand units)
10,559,620
-
50,000)

10,509,620		 2021
Number of ordinary
shares (in thousand units)
9,940,433
560,975
-
10,501,408

  • B. The Company’s bonds totalling USD 198,600 thousand (face value) had been converted into $5,609,747 of ordinary shares (560,975 thousand shares) with a par value of $10 (in dollars) per share during the six-month period ended June 30, 2021, which resulted in ‘capital surplus, additional paid-in capital arising from bond conversion’ of $4,112,948. As of June 30, 2021, the registration of $2,530,883 (253,088 thousand shares) has not yet been completed and therefore the shares were shown as ‘certificate of entitlement to new shares from convertible bonds’. The registration has been completed in the third quarter of 2021.

  • C. Capital reduction

To increase return on equity and adjust capital structure, the Board of Directors resolved to reduce

~33~

capital on May 11, 2022, which was approved by the shareholders at their meeting on June 24, 2022. The amount of capital reduction was $10,031,639, the numbers of shares eliminated were 1,003,164 thousand shares, and the ratio of capital reduction was 9.5%. After the capital reduction approved by the competent authority, the record dates for the capital reduction, the share exchange from capital reduction, and other related procedures will be set separately.

  • D. Treasury shares

  • (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

==> picture [445 x 64] intentionally omitted <==

  • (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 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 cancelled.

(20) 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.

~34~

2022

2022 2022 2022
Share of
Difference
profit (loss)
between proceeds
of associates
on acquisition or
Changes
accounted
disposal of equity
Treasury
in ownership
for under
interest in a
Share
share
interests in
equity
subsidiary and its
premium
transactions
subsidiaries
method
carryingamount
Total
At January 1
99,992,177
$
3,183,414
$
6,484
$
41,277
$
64,130
$
103,287,482
$
Recognition of changes in
ownership interests in
subsidiaries
-
-
633

-

-
633
Recognition of change in
equity of associates in
proportion to the Group's
ownership
-
-
-
247
-
247
Others
5,885
-
-

-
-
5,885
At June 30
99,998,062
$
3,183,414
$
7,117
$
41,524
$
64,130
$
103,294,247
$
Share of
profit (loss)
Changes
of associates
Treasury
in ownership
accounted
Share
share
interests in
for under
premium
transactions
subsidiaries
equitymethod
Total
At January 1
96,484,845
$
3,183,414
$
62
$
39,675
$
99,707,996
$
Cash dividends from capital
surplus
1,047,090)
(
-
-
-
1,047,090)
(
Conversion of convertible
bonds
4,112,948
-
-
-
4,112,948
Recognition of changes in
ownership interests in
subsidiaries
-
-
13,467
-
13,467
Recognition of change in
equity of associates in
proportion to the Group's
ownership
-
-
-
1,579
1,579
Others
3,558
-
-
-
3,558
At June 30
99,554,261
$
3,183,414
$
13,529
$
41,254
$
102,792,458
$
2021		 Treasury
share
transactions
3,183,414
$
-
-
-
3,183,414
$		 Share of
profit (loss)
of associates
Changes
accounted
in ownership
for under
interests in
equity
subsidiaries
method
6,484
$
41,277
$
633

-

-
247
-

-
7,117
$
41,524
$
2021		 Difference
between proceeds
on acquisition or
disposal of equity
interest in a
subsidiary and its
carryingamount
64,130
$
-
-
-
64,130
$		 Total
103,287,482
$
633
247
5,885
103,294,247
$
Treasury
share
transactions
3,183,414
$
-
-
-
-
-
3,183,414
$		 Changes
in ownership
interests in
subsidiaries
62
$
-
-
13,467
-
-
13,529
$

(21) 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.

~35~

The net decrease in other equity accumulated in prior periods should be appropriated from prior period's undistributed earnings to a special reserve of the same amount, and if there is a deficiency, the same amount should be appropriated from the post-tax profit for the period plus the amount of items other than post-tax profit for the period, and the amount was included in the unappropriated earnings for the period.

Depending on the Company's future long-term financial planning, investment environment, industry competition, capital expenditure budget, capital requirements and protection of shareholders' rights, dividends should account for at less 20% of the distributable earnings for the year. However, as the distributable earnings is lower than 2% of the paid-in capital, the Company may choose not to distribute dividends and transferred dividends to the retained earnings. Earnings shall be preferably distributed using cash dividends and may also be distributed using stock dividends. The ratio for cash dividends shall not be less than 50% of the total amount of dividends distributed. The aforementioned dividend distribution rate may be adjusted based on financial, business and operational factors.

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

  • C. The details of the 2021 net income which was approved at the stockholders’ meeting in June 2022 and the appropriation of 2020 net income which was approved at the stockholders’ meeting in July 2021 are as follows:

Year ended December 31,

2021 2021 2020 2020
Dividends per Dividends per
Amount share (indollars) Amount share (indollars)
Legal reserve $ 5,749,212
 $ 191,838
Reversal of
special reserve ( 2,855,535)
 ( 1,265,766)
Cash dividends 11,087,601 $ 1.05
 3,141,271 $ 0.30
$ 13,981,278
 $ 2,067,343

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

~36~

(22) Other equity items

(23) Operating income
Financial assets at fair
Currency
value through other
translation
comprehensive income
Total
At January 1
9,862,144)
($
6,658,008
$
3,204,136)
($
Revaluation - gross
-

4,816,232)
(
4,816,232)
(
Currency translation differences
1,541,137
-

1,541,137
Share of other comprehensive
gain of associates
68,798
10,452
79,250

Effect of income tax
-
559,474
559,474

At June 30
8,252,209)
($
2,411,702
$
5,840,507)
($
2022
Financial assets at fair
Currency
value through other
translation
comprehensive income
Total
At January 1
8,879,169)
($
2,819,498
$
6,059,671)
($
Revaluation - gross
-

6,710,647
6,710,647
Disposal of investments in equity
instruments measured at fair value
through other comprehensive
-
70,861)
(
70,861)
(
Currency translation differences
1,200,684)
(
-
1,200,684)
(
Share of other comprehensive
loss of associates
27,053)
(
-
27,053)
(
Effect of income tax
-
952,048)
(
952,048)
(
At June 30
10,106,906)
($
8,507,236
$
1,599,670)
($
2021
2022
2021
2022
2021
TFT-LCD products
57,901,588
$
93,235,532
$
127,787,606
$
177,074,228
$
For the three-month periods
For the six-month periods
ended June 30,
endedJune30,

The Group derives revenue from the transfer of goods at a point in time. (24) Interest income

Interest income
Interest income from
bank deposits
Interest income from
financial assets
at amortized cost		 2022
2021
69,312
$
41,848
$
260,406
154,244
329,718
$
196,092
$
For the three-month periods
ended June 30,		 For the six-month periods
ended June 30,
2022
69,312
$
260,406
329,718
$		 2022
111,306
$
440,924
552,230
$		 2021
74,735
$
218,775
293,510
$

~37~

(25) Other income

Dividend income
Grant revenue
Service revenue
Rental revenue
Other income		 2022
2021
2022
2021
855,690
$
120,829
$
1,057,500
$
177,765
$
565,781
90,893

636,448
129,633
207,589
124,486
586,798
234,250

38,004
33,838
82,209
90,364
422,187
156,070
635,659
375,404
2,089,251
$
526,116
$
2,998,614
$
1,007,416
$
For the three-month periods
For the six-month periods
ended June 30,
ended June 30,

(26) Other gains and losses

Other gains and losses
For the three-month periods For the six-month periods
ended June 30, ended June 30,
2022 2021 2022 2021
Net (loss) gain on ($ 2,919,284)
 $ 402,019
 ($ 5,634,288)
 ($ 2,417,154)
financial assets and
liabilities at fair
value through profit
or loss
Net currency exchange
gain (loss) 2,144,904 ( 509,170)
 4,086,831 ( 113,978)
Loss on disposals of
investments - ( 101,390)
 - ( 101,390)
Loss on disposal of
property, plant and
equipment ( 45,258)
 ( 75,824)
 ( 87,258)
 ( 72,031)
Other losses ( 25,230) ( 653,563) ( 25,599) ( 860,560)
($ 844,868) ($ 937,928)
 ($ 1,660,314) ($ 3,565,113)

(27) Finance costs

Finance costs
Interest expense:
Bank borrowings
Convertible bonds
Others		 2022
2021
194,796
$
221,208
$
-
6,550
21,172
22,531
215,968
$
250,289
$
For the three-month periods
ended June 30,		 For the six-month periods
ended June 30,
2022
194,796
$
-
21,172
215,968
$		 2022
398,837
$
-
41,948
440,785
$		 2021
427,917
$
44,793
44,858
517,568
$

~38~

(28) Expenses by nature

Employee benefit
expense:
Salaries and other
short-term employee
benefits
Shared-based payments
Post-employment
benefits
Depreciation
Amortization		 2022
2021
11,276,213
$
11,965,862
$
2,248
7,234

391,056

455,156
8,271,144
9,072,046
33,563
43,376
19,974,224
$
21,543,674
$
For the three-month periods
ended June 30,		 2022
2021
21,964,845
$
23,979,052
$
4,496
14,467
895,602
925,781
16,763,496
18,099,607
66,491
84,757
39,694,930
$
43,103,664
$
For the six-month periods
ended June 30,		 2022
2021
21,964,845
$
23,979,052
$
4,496
14,467
895,602
925,781
16,763,496
18,099,607
66,491
84,757
39,694,930
$
43,103,664
$
For the six-month periods
ended June 30,
43,103,664
$

(29) 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 six-month periods ended June 30, 2022 and 2021, employees’ compensation was reversed at $145,827 and accrued at $1,672,827, $0, $2,525,419, respectively; while the Company did not accrue directors’ remuneration for the six-month periods ended June 30, 2022 and 2021. The aforementioned amounts were recognized in expenses.

  • The employees’ compensation and directors’ remuneration for the year ended December 31, 2021 were $4,246,994 and $65,338, respectively, and will be distributed in the form of cash as resolved by the Board of Directors on February 11, 2022. The resolved amounts were in agreement with the amount of recorded expense for the year ended December 31, 2021. However, as of July 28, 2022, employees’ compensation and directors’ remuneration for 2021 have not yet been distributed.

  • 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.

~39~

(30) Income tax

A. Income tax expense

Components of income tax expense:

2022
2021
Current tax:
Current tax on profit for
the period
596,471
$
448,926
$
Tax on undistributed
surplus earnings
5,818
-
Prior year income tax
over estimation
174,820)
(
84,633)
(
(
Total current tax
427,469
364,293
Deferred tax:
Origination and reversal
of temporary differences
96,840)
(
203,162)
(
Loss carryforward
-
1,745,494
Income tax expense
330,629
$
1,906,625
$
For the three-month periods
ended June 30,		 2022
2021
816,587
$
683,999
$
5,818
-
174,526)

82,758)
(
647,879
601,241
109,657
529,667)
(
-
2,865,891
757,536
$
2,937,465
$
For the six-month periods
ended June 30,

B. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

~40~

(31) (Loss) earnings per share

(Loss) earnings per share
Basic loss per share
Loss attributable to ordinary shareholders
of the parent
(
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent
Diluted earnings per share
Profit attributable to ordinary shareholders
of the parent
Assumed conversion of all dilutive
potential ordinary shares:
- Convertible bonds
- Employees’ compensation
Profit attributable to ordinary shareholders
of the parent plus assumed conversion of
all dilutive potential ordinary shares		 Forthe three-monthperiod ended June Loss
per share
(indollars)
0.45)
$
30,2022
Earnings
per share
(in dollars)
2.05
$
2.01
$
30,2021
Weighted average
number of ordinary
Amount
shares outstanding
aftertax
(sharesinthousands)
4,740,519)
$
10,553,057
(
Weighted average
number of ordinary
Amount
shares outstanding
after tax
(shares in thousands)
21,418,900
$
10,439,675
21,418,900
10,439,675

6,121
116,009
-

121,707
21,425,021
$
10,677,391
For the three-monthperiod endedJune

~41~

For the six-month period ended June 30, 2022

Basic loss per share
Loss attributable to ordinary shareholders
of the parent
(
Basic earnings per share
Profit attributable to ordinary shareholders
of the parent
Diluted earnings per share
Profit attributable to ordinary shareholders
of the parent
Assumed conversion of all dilutive
potential ordinary shares:
- Convertible bonds
- Employees’ compensation
Profit attributable to ordinary shareholders
of the parent plus assumed conversion of
all dilutive potential ordinary shares		 Weighted average
number of ordinary
Loss
Amount
shares outstanding
per share
aftertax
(sharesinthousands)
(indollars)
2,850,530)
$
10,556,320
0.27)
($
Weighted average
number of ordinary
Earnings
Amount
shares outstanding
per share
aftertax
(shares in thousands)
(indollars)
32,990,319
$
10,243,207
3.22
$
32,990,319
10,243,207
43,936
315,259

-
123,006
33,034,255
$
10,681,472
3.09
$
For the six-monthperiod endedJune30,2021

(32) Supplemental cash flow information

Investing activities with partial cash payments:

Supplemental cash flow information
Investing activities with partial cash payments:
all dilutive potential ordinary shares
33,
$		 034,255
10,681,472
3.09
$		 034,255
10,681,472
3.09
$
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		 Forthe six-monthperiods ended June 30,
2022
10,993,996
$
4,172,348
4,014,930)

(
11,151,414
$		 2021
11,907,743
$
3,749,913
4,969,128)

10,688,528
$

(33) Changes in liabilities from financing activities

For the six-month periods ended June 30, 2022 and 2021, liabilities from financing activities include short-term borrowings, bonds payable, long-term borrowings and lease liabilities. Changes in those items result from cash flow from financing activities, conversion, discount and amortization of

~42~

bonds payable as well as changes in exchange rate. The summarized significant changes are as follows and other information is provided in the consolidated statements of cash flows.

2021
Bonds payable
At January 1 $ 5,473,004
Conversion of convertible bonds ( 4,887,306)
Amortization of discounts on convertible bonds 44,793
Impact of changes in foreign exchange rate ( 36,631)
At June 30 $ 593,860

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 PanelSemi Corporation and its subsidiaries Associate FI Medical Device Manufacturing Co., Ltd. Associate

(2) Significant related party transactions

A. Operating revenue

Operating revenue
Sales of goods:
Other related parties
Associates		 2022
2021
527,155
$
1,476,138
$
98,648
1,553
625,803
$
1,477,691
$
For the three-month periods
endedJune30,		 For the six-month periods
endedJune30,
2022
527,155
$
98,648
625,803
$		 2022
1,620,093
$
210,474
1,830,567
$		 2021
3,222,255
$
2,736
3,224,991
$

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

B. Purchases of goods

Purchases of goods
Purchases of goods:
Other related parties
Associates		 2022
2021
1,282,388
$
1,125,562
$
76,397
248,257
1,358,785
$
1,373,819
$
For the three-month periods
endedJune30,		 For the six-month periods
endedJune30,
2022
1,282,388
$
76,397
1,358,785
$		 2022
2,769,199
$
185,533
2,954,732
$		 2021
2,122,612
$
587,424
2,710,036
$

The payment term was 30~120 days to related parties after transaction date, and 30~180 days to non-related parties after delivery or on a monthly-closing basis. The purchase prices and the payment terms from related parties above were not materially different from those of purchases

~43~

from third parties.

C. Receivables from related parties

Accounts receivable:
Other related parties
Associates		 June30,2022
December31,2021
959,309
$
1,277,931
$
83,811

73,444

1,043,120
$
1,351,375
$		 June30,2021
1,770,436
$
37,617
1,808,053
$

The receivables from related parties arise mainly from sales transactions. The receivables are due 30~90 days after the date of sale. The receivables are unsecured in nature and bear no interest.

D. Payables to related parties

Accounts payable:
Other related parties
Associates		 June30,2022
1,992,160
$
107,189
2,099,349
$		 December31,2021
2,069,083
$
121,225
2,190,308
$		 June30,2021
1,786,062
$
106,358
1,892,420
$

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

  • E. Property transactions

Purchase of property

(a) Acquisition of property, plant and equipment:

Other related parties
Associates		 2022
2021
3,740
$
2,688
$
10,540
262

14,280
$
2,950
$
For the three-month periods
ended June 30,		 For the six-month periods
ended June 30,		 For the six-month periods
ended June 30,
2022
3,740
$
10,540
14,280
$		 2022
6,298
$
11,260
17,558
$		 2021
10,356
$
262
10,618
$
  • (b) Period-end balances arising from purchases of property (shown as ‘Other payables’):
Other related parties June 30,2022
1,865
$		 December31,2021
-
$		 June 30,2021
2,778
$

Disposal of other assets

In the second quarter of 2022, the Company and its subsidiaries sold certain other assets to associates and recognised gain on disposal of $3,033.

~44~

(3) Key management compensation

Salaries and other
short-term employee
benefits
Share-based payments
Post-employment benefits		 2022
2021
24,097
$
15,697
$
323
521
375
230
24,795
$
16,448
$
For the three-month periods
ended June 30,		 For the six-month periods
ended June 30,		 For the six-month periods
ended June 30,
2022
49,294
$
645

730

50,669
$		 2021
36,080
$
1,105
507
37,692
$

8. PLEDGED ASSETS

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

==> picture [506 x 32] intentionally omitted <==

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

Book value
Pledged asset June 30, 2022 December 31, 2021 June 30, 2021 Purpose
----- End of picture text -----

Property, plant and
equipment
Other assets - others
-Demand deposits
-Time deposits
-Refundable deposits		 57,399,399
$
50
50,430
818,762
58,268,641
$		 63,366,908
$
350

48,430

762,562
64,178,250
$		 72,952,214
$
Long-term borrowings
650
Long-term borrowings
19,180
Tariff guarantee and
performance bond
770,908
Litigation guarantee
73,742,952
$

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

－ (1) Contingencies Significant Litigations

  • A. The Company’s subsidiary in U.S. received a civil complaint from the government of Puerto Rico in September 2018, claiming that the company, together with other defendants of Taiwan, Japan and South Korea TFT - LCD companies, had unjustified enrichment from the TFT-LCD pricing collaborations in 2006 and requested monetary compensation. The U.S. subsidiary of the company has retained lawyers to handle the lawsuit.

  • B. Eidos Displays, LLC and Eidos III, LLC (“Eidos”) filed a lawsuit against the Company and American subsidiary with the United States District Court for the Eastern District of Texas on April 25, 2011, alleging infringement of its patent. In December 2013, the magistrate judge granted summary judgment that the Eidos patent is invalid. In January 2014, the presiding judge confirmed the summary judgment.

  • In February 2014, Eidos appealed to the United States Court of Appeals for the Federal Circuit (CAFC). In March 2015, the CAFC reversed the district court’s judgment and remanded the case back to the district court for further proceedings. In June 2017, the jury determined that some

~45~

products of the Company and American subsidiary directly infringed the patent and awarded damages for Eidos. On March 5, 2018, the district court entered judgment. In January 2020, the Company reached an agreement on the main settlement terms with Eidos during the third mediation. In April 2020, the court granted the judgment that the case shall be closed by mutually performing the settlement terms. The tax liability to be borne by Eidos has not yet been determined and both parties will conclude the case in accordance with the ruling of the relevant authorities and the law, and the lawsuits have no effect on the Company’s financial position and operations.

  • C. On September 1, 2020, the Company received a civil complaint joint filed by Granville Technology Group Limited, VMT Limited, and OT Computers Limited (all in liquidation) in the High Court of England and Wales, claiming that the Company, together with other defendants of Taiwan and South Korea TFT - LCD companies, shall be liable for damages incurred from the TFT-LCD pricing collaborations in 2006. The Company reached a settlement with the claimants in November 2021.

  • D. On December 18, 2020 and March 19, 2021, the Company received civil complaints jointly filed by SAMSUNG ELECTRONICS CO. LIMITED, SAMSUNG ELECTRONICS TAIWAN CO. LIMITED, SAMSUNG ELECTRONICS (UK) LIMITED, SAMSUNG SEMICONDUCTOR EUROPE LIMITED and SAMSUNG DISPLAY CO. LMITED in the Business and Property Courts of England and Wales, claiming that the Company shall have the responsibility to pay equitable and fair share of compensation in terms of the settlement agreement that the first to fourth claimants entered into with the particular UK authorities and another settlement agreement that the first to fifth claimants entered into with Ingram Micro (UK) Limited for the TFT-LCD pricing collaborations in 2006. The Company reached a settlement with the claimants in May 2021.

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

  • (2) Commitments

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

June 30, 2022 December 31, 2021 June 30, 2021 Property, plant and equipment $ 26,511,760 $ 18,481,181 $ 17,110,107

  • B. Outstanding letters of credit

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

June 30, 2022 December 31, 2021 June 30, 2021 Outstanding letters of credit $ 229,474 $ 59,655 $ 65,773

  • C. In the second quarter of 2022, the Company entered into a contract with non-related parties for the use of product technology and has been fulfilling the related requirements specified in the contract year by year.

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

~46~

Technology. TPV Technology plans to issue shares to the shareholders of TPV Technology Limited, including the Company, in order to obtain 49% equity interest of TPV Technology Limited. However, the transaction will take effect when all preconditions are met.

  • E. On August 3, 2021, the Board of Directors of the Company resolved to enter into a long-term strategic partnership supply contract with SDP Global (China) Co., LTD. The total price of the contract amounted to RMB 4 billion and will be prepaid based on agreed payment terms. As of June 30, 2022 , the remaining amount the Group hasn't paid was RMB 1.1 billion. SDP Global (China) Co., LTD. committed to supply certain products in specified quantities each year from January 1, 2022 to December 31, 2033 to the Company and its subsidiary, Foshan Innolux Optoelectronics Ltd. As of June 30, 2022, the abovementioned prepayments of the Group shown as ‘other non-current assets’ based on liquidity amounted to $12,669,846.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

  • None.

12. OTHERS

(1) Capital management

No significant changes during the period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2021.

  • (2) Financial instruments

  • A. Financial instruments by category

    • For information of the Group’s financial assets (financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income, financial assets at amortized cost, cash and cash equivalents, accounts receivable (including related parties) and other receivables) and financial liabilities (short-term borrowings, 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. Financial risk management policies

    • No significant changes during the period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2021.

  • 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 in the consolidated financial statements for the year ended December 31, 2021.

  • (a) Market risk

Foreign exchange risk

  • i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Group used in various functional currency, primarily with respect

~47~

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 and USD). Based on the simulations performed, the impact on pre-tax profit of a 1% exchange rate fluctuation would be an increase of $528,603 and $317,597 for the six-month periods ended June 30, 2022 and 2021, respectively. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:
Foreign
Currency
Exchange
Amount
Rate
Book Value
(In Thousands)
(Note)
(NTD)
Financial assets
Monetary items
USD
4,936,723
$
29.72
146,719,408
$
RMB
571,131
4.43
2,530,110
JPY
6,459,756
0.22
1,421,146
EUR
16,908
31.05
524,993
HKD
65,845
3.79
249,553
Non-monetary items
USD
2,863,413
$
29.72
85,100,634
$
JPY
7,945,680
0.22
1,748,050
RMB
283,982
4.43
1,258,040
USD
3,078,926
$
29.72
91,505,681
$
JPY
30,860,194
0.22
6,789,243
EUR
9,340
31.05
290,007
June30,2022
Financial liabilities
Monetary items		 December31,2021 December31,2021
Foreign
Currency
Exchange
Amount
Rate
(In Thousands)
(Note)
4,962,088
$
27.68
613,827
4.34
8,857,030
0.24
8,035
31.32
65,269
3.55
3,102,225
$
27.68
8,192,139
0.24
289,659
4.34
3,352,724
$
27.68
35,625,094
0.24
7,930
31.32		 Book Value
(NTD)
137,350,596
$
2,664,009
2,125,687
251,656
231,705
85,869,588
$
1,966,113
1,257,120
92,803,400
$
8,550,023
248,368



~48~

June30,2021
Foreign
Currency Exchange
Amount Rate Book Value
(In Thousands) (Note) (NTD)
Financial assets
Monetary items
USD $ 5,072,871
 27.86 $ 141,330,186
RMB 498,617 4.31 2,149,039
JPY 1,601,737 0.25 400,434
EUR 10,925 33.15 362,164
HKD 60,484
 3.59 217,138
Non-monetary items
USD $ 3,068,449
 27.86 $ 85,486,989
JPY 8,532,593 0.25 2,133,148
HKD 359,471
 3.59 1,290,501
Financial liabilities
Monetary items
USD $ 3,716,560
 27.86 $ 103,543,362
JPY 35,578,142 0.25
 8,894,536
EUR 7,882 33.15 261,288

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

  • iii.Total exchange gain (loss), including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three-month and six-month periods ended June 30, 2022 and 2021 amounted to $2,144,904, ($509,170), $4,086,831 and ($113,978), respectively.

Price risk

  • i. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done by the Group in respect of the targets and stages.

  • ii. The Group’s investments in equity securities comprise domestic listed and unlisted stocks, beneficiary certificates and financial products. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 20% with all other variables held constant, pre-tax profit for the six-month periods ended June 30, 2022 and 2021 would have increased/decreased by $3,439,442and $2,778,384, respectively; other comprehensive gains and losses would have increased/decreased by $1,016,574 and $2,324,575, respectively.

~49~

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 six-month periods ended June 30, 2022 and 2021, 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, pre-tax profit for the six-month periods ended June 30, 2022 and 2021 would have decreased/increased by $50,063 and $54,714, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

  • (b) Credit risk

  • i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows. As at June 30, 2022, December 31, 2021 and June 30, 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortized cost and accounts receivable held by the Group was its carrying amount.

  • ii. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the managements. The utilization of credit limits is regularly monitored.

  • iii. The Group adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments are past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

  • iv. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.

  • v. The Group classifies customer’s accounts receivable in accordance with credit rating of customer, credit risk on trade and customer types. The Group applies the simplified approach using provision matrix to estimate expected credit loss.

  • 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;

~50~

  • (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:
At January 1
Provision for impairment
At June 30
At June 30 (January 1)		 2022
Accounts receivable
262,610
$
1

262,611
$
2021
Accountsreceivable
209,419
$

  • ix. The Group’s financial assets at amortized cost have low credit risk, the Group did not recognize significant loss allowance in accordance with 12 months expected credit losses.

  • (c) Liquidity risk

The information below analyses the Group’s non-derivative financial liabilities and netsettled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative 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:

June30,2022
Lease liability (Note)
Long-term borrowings
(including current
portion)
December31,2021
Lease liability (Note)
Long-term borrowings
(including current
portion)		 Less than
1year
734,827
$
8,783,833
Less than
1year
719,125
$
8,786,833		 Between 1
and3 years
1,298,975
$
30,865,278
Between 1
and3 years
1,349,526
$
35,115,277		 Between 3
and5 years
1,052,762
$
401,389
Between 3
and5 years
1,044,263
$
543,056		 Over
5 years
2,201,255
$
-
Over
5 years
2,361,435
$
-		 Total
5,287,819
$
40,050,500
Total
5,474,349
$
44,445,166

~51~

Non-derivative financial liabilities:

==> picture [445 x 26] intentionally omitted <==

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

Less than Between 1 Between 3 Over
June 30, 2021 1 year and 3 years and 5 years 5 years Total
----- End of picture text -----

June 30, 2021 1 year a nd3 years a nd 5 years 5 years Total
Lease liability (Note) $ 611,342
 $ 1,422,088
 $ 1,085,896
 $ 2,615,254
 $ 5,734,580
Bonds payable 100,000 562,772 - -
 662,772
Long-term borrowings
(including current
portion) 4,396,000 39,375,500 - -
 43,771,500

Note: The Company applied a 1-year grace period for land rental payment starting from September 2020. The payment is repayable in 36 equal monthly installments for 3 years.

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

(3) Fair value information

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

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

  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in derivative instruments and financial products is included in Level 2.

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

  • B. Fair value information of investment property at cost is provided in Note 6(10).

  • C. Financial instruments not measured at fair value

  • Except for those listed in the table below, the carrying amounts of cash and cash equivalents, accounts receivable (including related parties), other receivables, financial assets at amortized cost, accounts payable (including related parties), other payables, lease liability, short-term borrowings and long-term borrowings (including current portion) are approximate to their fair values.

values.
Financial assets:
Corporate bonds		 June30,2022
Bookvalue
7,977,820
$		 Fairvalue
Level 1
-
$		 Level 2
7,824,124
$		 Level3
-
$

~52~

Financial assets:
Corporate bonds
Financial assets:
Corporate bonds
Financial liabilities:
Bonds payable		 Bookvalue
7,693,454
$
Book value
8,017,609
$
593,860
$		 Level 1
Level 2
-
$
7,830,698
$
Level 1
Level 2
-
$
7,942,615
$
-
$
627,261
$
Fairvalue
December31,2021
Fairvalue
June 30, 2021		 Level3
-
$
Level 3
-
$
-
$

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:

June30,2022
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities
Forward foreign exchange contracts
Convertible bonds
Foreign exchange swap contracts
Beneficiary certificates
Financial instruments
Financial assets at fair value through
other comprehensive income
Equity securities
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Forward foreign exchange contracts
Foreign exchange swap contracts		 Level 1
892,607
$
-
-
-
13,924,780
-
5,051,181
19,868,568
$
-
$
-
-
$		 Level 2
-
$
32,612

-
17,026
-

78,623
-
128,261
$
447,532
$
282,098
729,630
$		 Level3
2,301,202
$
-
178,320
-
-
-
31,687
2,511,209
$
-
$
-
-
$		 Total
3,193,809
$
32,612
178,320
17,026
13,924,780
78,623
5,082,868
22,508,038
$
447,532
$
282,098
729,630
$

~53~

December 31,2021
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities
Forward foreign exchange contracts
Foreign exchange swap contracts
Beneficiary certificates
Structured products
Financial instruments
Financial assets at fair value
through other comprehensive income
Equity securities
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Forward foreign exchange contracts
June30,2021
Assets
Recurring fair value measurements
Financial assets at fair value
through profit or loss
Equity securities
Forward foreign exchange contracts
Foreign exchange swap contracts
Beneficiary certificates
Structured products
Financial assets at fair value through
other comprehensive income
Equity securities
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Forward foreign exchange contracts
Convertible bonds derivative
instruments		 Level 1
1,224,882
$
-

-

13,903,225
-

-

9,818,232
24,946,339
$
-
$
Level 1
1,072,151
$
-
-
10,007,018
-
5,871,373
16,950,542
$
-
$
-
-
$		 Level 2
-
$
54,965
130,283
-
3,269,530
38,553
-
3,493,331
$
198,896
$
Level 2
-
$
21,743
32,808
-
8,817,245
-
8,871,796
$
308,757
$
-
308,757
$		 Level 3
3,063,428
$
-

-

-

-

-

29,894
3,093,322
$
-
$
Level3
2,812,752
$
-
-
-
-
5,751,500
8,564,252
$
-
$
612,296
612,296
$		 Total
4,288,310
$
54,965
130,283
13,903,225
3,269,530
38,553
9,848,126
31,532,992
$
198,896
$
Total
3,884,903
$
21,743
32,808
10,007,018
8,817,245
11,622,873
34,386,590
$
308,757
$
612,296
921,053
$

(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

~54~

1) are listed below by characteristics:

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

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

  • iii. When assessing non-standard and low-complexity financial instruments, for example, foreign exchange swap contracts and financial products, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

  • iv. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward foreign exchange contracts and foreign exchange swap contracts are usually valued based on the current forward exchange rate. Convertible bonds derivative instruments are measured by using appropriate option pricing models (binary tree model for convertible bond pricing).

  • 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 six-month periods ended June 30, 2022 and 2021, there was no transfer between Level 1 and Level 2.

  • F. The following table presents the changes in Level 3 instruments for the six-month periods ended June 30, 2022 and 2021:

~55~

2022

2022
Financial assets at fair value through
profit or loss / Financial assets at
fair value through other
comprehensive income
Equitysecurities
At January 1
3,093,322
$
Gains and losses recognized in profit
or loss
834,643)
(
Gains and losses recognized
in other comprehensive income
10,056)
(
Acquired in the period
29,526
Effect on exchange rate changes
54,740
At June 30
2,332,889
$
Financial assets at fair value through
profit or loss / Financial assets at
fair value through other
comprehensive income
At January 1
Gains and losses recognized in profit
or loss
Gains and losses recognized
in other comprehensive income
Disposed in the period
Proceeds from capital reduction
Effect on exchange rate changes
At June 30
Financial liabilities at fair value through profit or loss
At January 1
Gains and losses recognized in profit or loss
Conversion in the period
At June 30		 Hybrid instrument
-
$
-
-
178,320
-
178,320
$		 Total
3,093,322
$
834,643)
(
10,056)
(
207,846
54,740
2,511,209
$
2021
Equitysecurities
3,477,039
$
486,278
4,835,615
115,154)
(
99,638)
(
19,888)
(
8,564,252
$
2021
Derivative instruments
3,208,560
$
2,239,124
4,835,388)
(
612,296
$

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

Investment management segment set up valuation policies, valuation processes, and rules for measuring fair value of financial instruments and ensure compliance with the related requirements in IFRS.

~56~

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

Non-derivative
equity instrument:
Unlisted shares
Venture capital
shares
Private equity
fund investment
Hybrid instrument:
Convertible bond
Non-derivative
equity instrument:
Unlisted shares		 Fair value
at June 30,
2022		 Valuation
technique
Significant
unobservable input
Market
comparable
companies
Price to sales ratio
multiple, price to book
ratio multiple
Discount for lack of
marketability
Using the last
transaction
price in an
inactive market
Discount for lack of
marketability
Net asset
value
Discount for lack of
marketability
Net asset
value
Not applicable
Discounted
cash flow
method and
Option
pricing model
Volatility and Discount
rate
Valuation
technique
Significant
unobservable input
Market
comparable
companies
Price to sales ratio
multiple, price to book
ratio multiple
Discount for lack of
marketability		 Valuation
technique
Significant
unobservable input
Market
comparable
companies
Price to sales ratio
multiple, price to book
ratio multiple
Discount for lack of
marketability
Using the last
transaction
price in an
inactive market
Discount for lack of
marketability
Net asset
value
Discount for lack of
marketability
Net asset
value
Not applicable
Discounted
cash flow
method and
Option
pricing model
Volatility and Discount
rate
Valuation
technique
Significant
unobservable input
Market
comparable
companies
Price to sales ratio
multiple, price to book
ratio multiple
Discount for lack of
marketability		 Range
(weighted
average)		 Relationship of
inputs to fairvalue
435,123
$
1,847,758
27,726
22,282
178,320
Fair value at
December
31,2021		 1.36~5.19
(2.10)
30%~80%
(35%)
25%~30%
(26%)
12%
(12%)
Not
applicable
3.14%~
38.98%
(18.94%)
Range
(weighted
average)		 The higher the
multiple, the higher
the fair value
The higher the
discount for lack of
marketability, the
lower the fair value
The higher the
discount for lack of
marketability, the
lower the fair value
The higher the
discount for lack of
marketability, the
lower the fair value
Not applicable
The higher the
volatility, the higher
the fair value; the
higher the discount
rate, the lower the
fair value
Relationship of
inputs to fairvalue
392,225
$		 Price to sales ratio
multiple, price to book
ratio multiple
Discount for lack of
marketability		 1.36~5.19
(2.09)
30%~80%
(35%)		 The higher the
multiple, the higher
the fair value
The higher the
discount for lack of
marketability, the
lower the fair value

~57~

==> picture [469 x 42] intentionally omitted <==

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

Fair value at Range
December Valuation Significant (weighted Relationship of
31, 2021 technique unobservable input average) inputs to fair value
----- End of picture text -----

Fair value at
December
31, 2021		 Valuation
technique
Significant
unobservableinput		 Valuation
technique
Significant
unobservableinput		 Range
(weighted
average)		 Relationship of
inputs to fair value
Unlisted shares
Venture capital
shares
Private equity
fund investment
Non-derivative
equity instrument:
Listed/Unlisted
shares
Venture capital
shares
Private equity
fund investment
Derivative instrument
liabilities:
Convertible bond		 2,652,619
27,726
20,752
Fair value
at June 30,
2021		 Using the last
transaction
price in an
inactive market
Discount for lack of
marketability
Net asset
value
Discount for lack of
marketability
Net asset
value
Not applicable
Valuation
technique
Significant
unobservable input
Market
comparable
companies
Price to earnings ratio
multiple, price to sales
ratio multiple, price to
book ratio multiple
Discount for lack of
marketability
Using the last
transaction
price in an
inactive
Discount for lack of
marketability
Net asset
value
Discount for lack of
marketability
Net asset
value
Not applicable
Binary tree
model for
convertible
bond pricing
Volatility rate		 25%~31%
(28%)
12%
(12%)
Not
applicable
Range
(weighted
average)		 The higher the
discount for lack of
marketability, the
lower the fair value
The higher the
discount for lack of
marketability, the
lower the fair value
Not applicable
Relationship of
inputs to fairvalue
271,359
$
8,178,233
91,822
22,838
612,296		 Market
comparable
companies
Using the last
transaction
price in an
inactive
Net asset
value
Net asset
value
Binary tree
model for
convertible
bond pricing		 Price to earnings ratio
multiple, price to sales
ratio multiple, price to
book ratio multiple
Discount for lack of
marketability
Discount for lack of
marketability
Discount for lack of
marketability
Not applicable
Volatility rate		 1.19~4.50
(1.85)
30%~70%
(32%)
10%~30%
(14%)
5%
(5%)
Not
applicable
56.90%		 The higher the
multiple, the higher
the fair value
The higher the
discount for lack of
marketability, the
lower the fair value
The higher the
discount for lack of
marketability, the
lower the fair value
The higher the
discount for lack of
marketability, the
lower the fair value
Not applicable
The higher the
volatility, the higher
the fair value

~58~

  • I. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:
have changed:
Financial assets Input Change
± 1%

± 1%

Change
± 1%

Change
± 1%

± 1%
 June30,2022
Recognized in Recognized in other
comprehensive income
Unfavourable
change
Equity instrument
Hybrid instrument
Financial assets		 Liquidity
discount
Volatility and
Discount
rate
Input
Equity instrument
Financial assets		 Liquidity
discount
Input
Equity instrument
Financial liabilities		 Liquidity
discount
Volatility rate
Derivative instrument

(4) Other matter

The Company and the subsidiaries implemented epidemic prevention measures in response to the Covid-19 outbreak and numbers of the government's epidemic prevention measures. The epidemic

did not make a significant impact on the Group’s operation and business in the second quarter of 2022.

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

~59~

and joint ventures): Please refer to Table 2.

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

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

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

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

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

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

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

(2) Information on investees

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

(3) Information on investments in Mainland China

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

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

(4) Major shareholders information

Names, number of shares and ownership of shareholders whose equity interest is greater than 5%: None.

14. SEGMENT INFORMATION

(1) General information

The Group is primarily engaged in the research, development, design, manufacture and sales of TFTLCD panels, modules and monitors of LCD, color filter, and low temperature poly-silicon TFT-LCD. The Group operates TFT-LCD business only in a single industry. The chief operating decision-maker who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

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

(2) Segment information

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

~60~

For the three-month periods For the three-month periods For the three-month periods For the six-month periods For the six-month periods For the six-month periods
ended June 30, ended June 30,
2022 2021 2022 2021
TFT LCD TFT LCD TFT LCD TFT LCD
Segment revenue $ 57,901,588
 $ 93,235,532
 $ 127,787,606 $ 177,074,228
Segment income (loss) ($ 4,381,145)
 $ 23,326,077
 ($ 2,051,806)
 $ 35,923,935
Depreciation and
amortization $ 8,304,707
 $ 9,115,422
 $ 16,829,987
 $ 18,184,364
Capital expenditure-
property, plant and
equipment		 $ 5,954,369
 $ 7,218,573
 $ 11,151,414
 $ 10,688,528
Segment assets $ 455,603,638 $ 441,831,434

(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.

~61~

Table 1

Innolux Corporation and Subsidiaries

Loans to others

For the six-month period ended June 30, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

No. Creditor Borrower General
ledger
account		 Is a
related
party		 Maximum
outstanding
balance during
the six-month
period ended
June 30, 2022		 Balance as at
June 30, 2022		 Actual amount
drawn down		 Interest
rate		 Nature of
loan		 Amount of
transactions
with the
borrower		 Reason for
short-term
financing		 Allowance
for
doubtful
accounts		 Collateral Collateral Limit on loans
granted to a
singleparty		 Ceiling on total
loansgranted		 Footnote
Item Value
1
1
1
1
1
1
2
3
4		 Innocom Technology
(Shenzhen) Co., Ltd.
Innocom Technology
(Shenzhen) Co., Ltd.
Innocom Technology
(Shenzhen) Co., Ltd.
Innocom Technology
(Shenzhen) Co., Ltd.
Innocom Technology
(Shenzhen) Co., Ltd.
Innocom Technology
(Shenzhen) Co., Ltd.
Innolux Japan Co.,
Ltd.
Innolux Holding
Limited
Warriors Technology
Investments Ltd		 Foshan Innolux
Optoelectronics Ltd.
Ningbo Innolux
Optoelectronics Ltd.
Ningbo Innolux
Display Ltd.
Shanghai Innolux
Optoelectronics Ltd.
Nanjing Innolux
Optoelectronics Ltd.
Ningbo CarUX
Technology Ltd.
Innolux Corporation
Innolux Corporation
Innolux Corporation		 Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables
Other
receivables		 Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes		 4,428,280
$ 2,214,140
2,214,140
1,328,484
3,099,796
2,479,837
2,185,380
226,501
3,506,960		 4,428,280
$ 2,214,140
2,214,140
1,328,484
3,099,796
2,479,837
2,185,380
226,501
3,506,960		 4,428,280
$ 1,151,352
1,948,444
1,151,353
3,011,230
531,394
2,185,380
226,501
3,506,960		 2.00%
2.00%
2.00%
2.00%
2.00%
2.00%
1.00%
0.00%
0.00%		 Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Short-term
financing
Long-term
and
short-term
financing
Long-term
and
short-term
financing
Long-term
and
short-term
financing		 $ -
-
-
-
-
-
-
-
-		 Operating
support
Operating
support
Operating
support
Operating
support
Operating
support
Operating
support
Operating
support
Operating
support
Operating
support		 $ -
-
-
-
-
-
-
-
-		 -

-
-
-
-
-
-
-
-		 $ -
-
-
-
-
-
-
-
-		 24,316,944
24,316,944
24,316,944
24,316,944
24,316,944
24,316,944
6,369,388
36,333,298
11,514,152		 24,316,944
24,316,944
24,316,944
24,316,944
24,316,944
24,316,944
6,369,388
36,333,298
11,514,152		 A
A
A
A
A
A
A
A
A

Note A:

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

  • 2.The financial limit on loans granted shall not exceed 40% of the creditor’s net equity. If it is for short-term capital needs, the limit shall not exceed 30% of the creditor’s net equity, based on the most recent audited or reviewed financial

  • statements of the creditor.

  • 3.The policy for loans granted to direct or indirect wholly-owned ultimate parent company or overseas subsidiaries is as follows: for short-term capital needs, financial limit is not restricted to the abovementioned two rules, however,

  • financial limit on total loans granted and limit on loans granted to a single party for the overseas subsidiaries should not exceed 200% of the creditor’s net equity.

Table 1, Page 1

Innolux Corporation and Subsidiaries

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

June 30, 2022

Table 2

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by Marketable securities Relationship
with the
securities issuer		 General ledger account As of June 30,2022 As of June 30,2022 Footnote
Shares/Units Book value Ownership (%) Fair value
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Yuan Chi Investment Co., Ltd.
Yuan Chi Investment Co., Ltd.
Yuan Chi Investment Co., Ltd.
Yuan Chi Investment Co., Ltd.
Yuan Chi Investment Co., Ltd.		 Common stock None
None
Other related
party
None
None
None
None
None
None
None
None
None
None
None
None
Other related
party		 Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income		 900,000
60,200,000
4,270,212
57,211,305
1,669,000
477,142
8,347,068
1,027,000
263,000
674,000
1,110,000
1,439,180
315,000
1,520,000
176,000
1,200,000		 $ 15,929
1,257,556
27,726
580,695
127,679
24,164
1,691,871
64,187
14,123
66,928
68,931
-
3,197
75,772
8,510
5,572		 1
3
19
8
-
12
4
-
-
-
-
3
-
1
-
12		 $ 15,929
1,257,556
27,726
580,695
127,679
24,164
1,691,871
64,187
14,123
66,928
68,931
-
3,197
75,772
8,510
5,572
AvanStrate Inc.
TPV Technology Limited
Chi Lin Optoelectronics Co., Ltd.
Cheng Mei Materials Technology
Corporation
General Interface Solution (GIS) Holding
Limited
Obsidian Sensors, Inc.
VIZIO Holding Corp.
Cathay Financial Holding Co., Ltd.
Preferred Stock A
TAISHIN FINANCIAL HOLDING CO.,
LTD. Preferred Stock E
Chailease Holding Company Limited Class
A Preferred Shares
Fubon Financial Holding Co., Ltd. Preferred
Shares B
Trillion Science, Inc.
Cheng Mei Materials Technology
Corporation
WPG Holdings Limited Preferred Share A
WT MICROELECTRONICS CO., LTD.
Preferred Shares A
VISIONATICS INC.

Table 2, Page 1

Securities held by Marketable securities Relationship
with the
securities issuer		 General ledger account As of June 30,2022 As of June 30,2022 Footnote
Shares/Units Book value Ownership (%) Fair value
Yuan Chi Investment Co., Ltd.
InnoJoy Investment Corporation
InnoJoy Investment Corporation
InnoJoy Investment Corporation
InnoJoy Investment Corporation
Ningbo Innolux Optoelectronics Ltd.
Ningbo Innolux Optoelectronics Ltd.
Warriors Technology Investments Ltd
Warriors Technology Investments Ltd
Warriors Technology Investments Ltd
Warriors Technology Investments Ltd
Warriors Technology Investments Ltd
Warriors Technology Investments Ltd
Warriors Technology Investments Ltd
Warriors Technology Investments Ltd
Nets Trading Ltd.
Warriors Technology Investments Ltd
Warriors Technology Investments Ltd		 Common stock None
None
None
Other related
party
None
None
None
None
None
None
None
None
None
Other related
party
Other related
party
None
Other related
party
None		 Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss		 113,033
6,964,222
954,000
7,347,144
9,000,000
-
30,599,775
16,000,000
414,136
2,016,000
1,027,371
22,525,000
4,000
1,900
1,819,240
90
-
-		 $ 29,526
132,668
48,368
122,697
1,215,000
575,292
232,465
40,660
22,519
53,083
14,910
1,723,162
1,547
-
9,658
22,282
89,160
89,160		 1
5
-
7
5
-
8
6
11
3
-
7
14
19
11
-
Not applicable
Not applicable		 $ 29,526
132,668
48,368
122,697
1,215,000
575,292
232,465
40,660
22,519
53,083
14,910
1,723,162
1,547
-
9,658
22,282
89,160
89,160
Clarix Imaging Corporation
Advanced Optoelectronic Technology, Inc.
ENNOSTAR Inc.
EPILEDS Co., Ltd.
Fitipower Integrated Technology Inc.
上海辰岱投資中心(有限合夥)
Shenzhen Tiandeyu Electronics Co., Ltd.
OED Holding Ltd.
Obsidian Sensors, Inc.
Reco Technology Holding Limited
Kymeta Corporation
General Interface Solution (GIS) Holding
Limited
CJK Associates Co., Ltd.
Perinnova Limited
KA Imaging Inc.
PilotTech Global Fund
Convertible Bond
KA Imaging Inc.
Obsidian Sensors, Inc.

Table 2, Page 2

Securities held by Marketable securities Relationship
with the
securities issuer		 General ledger account As of June 30,2022 As of June 30,2022 Footnote
Shares/Units Book value Ownership (%) Fair value
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Ningbo Innolux Display Ltd.
Foshan Innolux Optoelectronics Ltd.
Ningbo Innolux Electronics Ltd.
Ningbo Innolux Optoelectronics Ltd.
Ningbo CarUX Technology Ltd.		 Beneficiarycertificates None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None		 Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at 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		 69,820,457
180,718,346
5,164,587
150,267,533
92,184,251
66,065,266
7,975,245
181,530,803
90,561,003
18,225,781
46,301,937
-
-
-
-
-
-
-
-		 $ 1,003,299
2,476,076
932,053
2,255,606
1,504,696
882,513
100,291
2,304,715
1,403,378
300,662
761,491
487,112
5,052,400
1,486,000
5,864
21,816
172
28,236
869		 -
-
-
-
-
-
-
-
-
-
-
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable		 $ 1,003,299
2,476,076
932,053
2,255,606
1,504,696
882,513
100,291
2,304,715
1,403,378
300,662
761,491
487,112
5,052,400
1,486,000
5,864
21,816
172
28,236
869
Taishin Ta-Chong Money Market Fund
Taishin 1699 Money Market Fund
FSITC Money Market
Jih Sun Money Market Fund
Capital Money Market Fund
Union Money Market Fund
Cathay Taiwan Money Market Fund
Mega Diamond Money Market Fund
FSITC Taiwan Money Market
Yuanta De-Li Money Market Fund
Hua Nan Phoenix Money Market Fund
Financialproducts
Fixed Income RMB-Structured Deposits
Fixed Income Structured Linked Deposit
Fixed Income Structured Linked Deposit
Chang Jiang Sheng Shih Ru Yi Serials A
congregate group pension plan
Chang Jiang Sheng Shih Ru Yi Serials A
congregate group pension plan
Chang Jiang Sheng Shih Ru Yi Serials A
congregate group pension plan
Chang Jiang Sheng Shih Ru Yi Serials A
congregate group pension plan
Chang Jiang Sheng Shih Ru Yi Serials A
congregate group pension plan

Table 2, Page 3

Securities held by Marketable securities Relationship
with the
securities issuer		 General ledger account As of June 30,2022 As of June 30,2022 Footnote
Shares/Units Book value Ownership (%) Fair value
Nanjing Innolux Optoelectronics Ltd.
Innocom Technology (Shenzhen) Co.,
Ltd.
Shanghai Innolux Optoelectronics Ltd.
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation		 Financialproducts None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None		 Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 $ 12,409
5,301
3,956
200,880
250,888
200,516
100,383
250,140
251,315
200,155
250,684
100,591
100,433
200,621
100,610
250,305
50,128
100,152
125,140
150,189
152,581		 Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable		 $ 12,409
5,301
3,956
199,914
249,645
200,108
100,223
249,998
249,875
200,058
249,608
99,950
99,910
199,980
100,320
250,085
50,085
100,103
125,096
150,144
149,083
Chang Jiang Sheng Shih Ru Yi Serials A
congregate group pension plan
Chang Jiang Sheng Shih Ru Yi Serials A
congregate group pension plan
Chang Jiang Sheng Shih Ru Yi Serials A
congregate group pension plan
Bonds
Taiwan Mobile Co., Ltd.
Nan Ya Plastics Corporation
Hon Hai Precision Industry Co., Ltd., 2017,
Third
Taiwan Power Company,2012,Fourth
Fubon Financial Holding Co., Ltd.
Highwealth Construction corp.
Hon Hai Precision Industry Co., Ltd., 2017,
Second
Far Eastern New Century Corporation Co.,
Ltd.
Far Eastone Telecommunications,2017,
Third
Far Eastone Telecommunications,2018,
First
Taipei Financial Center Corporation
Taiwan Semiconductor Manufacturing Co.,
Ltd.
Chang Chun Petrochemical Co., Ltd.
CPC Corporation, Taiwan
Taiwan Power Company,2012,Third
China Steel Corporation
CTBC Financial Holding Co., Ltd.
ADCB Finance Cayman LTD.

Table 2, Page 4

Securities held by Marketable securities Relationship
with the
securities issuer		 General ledger account As of June 30,2022 As of June 30,2022 Footnote
Shares/Units Book value Ownership (%) Fair value
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation		 Bonds None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None		 Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost
Financial assets at amortized cost		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 $ 283,213
166,076
179,175
152,690
238,908
297,200
242,866
153,403
36,791
268,574
268,521
293,238
305,202
183,410
277,073
282,166
279,727
207,628
34,578
154,191
279,419
59,690
298,370		 Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable		 $ 271,594
160,079
178,678
149,020
232,016
289,938
238,345
149,129
35,710
267,176
261,372
286,168
298,592
177,876
268,732
270,698
269,251
202,462
33,852
149,385
267,952
59,641
282,273
Agricultural Bank of China (New York
Branch)
Arab Petroleum Investments Corporation
Bank of Communications (Hong Kong
Branch)
Daimler Finance North America LLC
Doosan Infracore Co., Ltd.
Emirates NBD Bank PJSC
FAB Sukuk Co. Ltd.
GS Caltex Corporation
Hyundai Capital America
Hyundai Capital Services, Inc.
Industrial and Commercial Bank of China
Limited (Hong Kong Branch)
KIA Corporation
Korea Resources Corporation
NongHyup Bank
POSCO
Saudi Electricity Global SUKUK
Company 4
Shinhan Bank
Siam Commercial Bank Cayman Islands
Sinopec Capital 2013 LTD.
SK broadband CO.LTD.
Societe Generale SA
Sumitomo Corporation
Sumitomo Mitsui Trust Bank

Table 2, Page 5

Innolux Corporation and Subsidiaries

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

For the six-month period ended June 30, 2022

Investor
Table 3		 Marketable
securities
(Note 1)		 General ledger
account		 Counterparty
(Note 2)		 Relationship
with the
investor
(Note 2)		 Balance as at
January1,2022		 Balance as at
January1,2022		 Addition(Note 3) Addition(Note 3) Disposal(Note 3) Disposal(Note 3) Balance as at
June 30,2022
Expressed in thousands of NTD
(Except as otherwise indicated)		 Balance as at
June 30,2022
Expressed in thousands of NTD
(Except as otherwise indicated)
Shares/Units Amount Shares/Units Amount Shares/Units Selling price Book value Gain (loss)
on disposal		 Shares/Units Amount
Ningbo Innolux
Optoelectronics
Ltd.
Ningbo Innolux
Optoelectronics
Ltd.		 Floating Income
RMB-Structured
Deposits
Floating Income
RMB-Structured
Deposits		 Note 4
Note 4		 -
-		 -
-		 -
-		 $ 1,315,317
1,954,213		 -
-		 $ -
-		 -
-		 $ 1,308,119
1,944,648		 $ 1,308,119
1,944,648		 $ -
-		 -
-		 $ -
-

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

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for using the equity method; otherwise leave the columns blank. Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more. Note 4: Code of general ledger account is "financial assets at fair value through profit or loss". Due to adoption of IFRS, it would be valued at fair value rather than recognized disposal gain or loss.

Table 3, Page 1

Innolux Corporation and Subsidiaries

Table 4

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

For the six-month period ended June 30, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller Counterparty Relationship with the
counterparty		 Transaction Transaction Differences in transaction
terms compared to third party
transactions		 Differences in transaction
terms compared to third party
transactions		 Notes/accounts receivable(payable) Notes/accounts receivable(payable) Footnote
Purchases
(sales)		 Amount Percentage of
total purchases
(sales)		 Credit term Unitprice Credit term Balance Percentage of total
notes/accounts
receivable(payable)
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation		 Innolux USA Inc.
CARUX TECHNOLOGY PTE.
LTD.
Foshan Innolux Optoelectronics
Ltd.
Hon Hai Precision Industry Co.,
Ltd.
HONGFUJIN PRECISION
ELECTRONICS (YANTAI) CO.,
LTD.
InnoCare Optoelectronics
Corporation
Honfujin Precision Electronics
(Chongqing) Co., Ltd.
PanelSemi Corporation
Hon Hai Precision Industry Co.,
Ltd.
Foshan Innolux Optoelectronics
Ltd.
Ningbo Innolux Display Ltd.
Ningbo Innolux Optoelectronics
Ltd.
Nanjing Innolux Optoelectronics
Ltd.
Ningbo CarUX Technology Ltd.		 An indirect wholly-owned
subsidiary
An indirect wholly-owned
subsidiary
An indirect wholly-owned
subsidiary
Same major stockholder
An indirect wholly-owned
subsidiary of Hon Hai Precision
Industry Co., Ltd.
A subsidiary of the Company
An indirect wholly-owned
subsidiary of Hon Hai Precision
Industry Co., Ltd.
Associates
Same major stockholder
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		 Sales
Sales
Sales
Sales
Sales
Sales
Sales
Sales
purchase
Processing
expense
Processing
expense
Processing
expense
Processing
expense
Processing
expense		 7,002,448
$ 4,544,942
832,450
819,239
493,311
257,119
216,691
189,985
237,960
14,777,675
14,009,573
11,802,790
6,122,561
211,013		 6
4
1
1
-
-
-
-
-
13
13
11
5
-		 120 days
60 days
60~90 days
90 days
60 days
90 days
45 days
60 days
90 days
60 days
60 days
60 days
60 days
60 days		 Similar with
general sales
Similar with
general sales
Similar with
general sales
Similar with
general sales
Similar with
general sales
Similar with
general sales
Similar with
general sales
Similar with
general sales
Single
purchases
target, no basis
for comparison
Cost plus
Cost plus
Cost plus
Cost plus
Cost plus		 No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference		 2,805,639
$ 5,288,027
4,389
770,276
127,199
174,307
55,358
64,045
547,661)
(
4,457,548)
(
6,579,569)
(
9,251,891)
(
2,671,359)
(
81,245)
(		 6
11
-
2
-
-
-
-
1
9
14
19
6
-

Table 4, Page 1

Differences in transaction

Differences in transaction Differences in transaction
Purchaser/seller Counterparty Relationship with the
counterparty		 Transaction terms compared to third party
transactions		 Notes/accounts receivable(payable) Footnote
Purchases
(sales)		 Amount Percentage of
total purchases
(sales)		 Credit term Unitprice Credit term Balance Percentage of total
notes/accounts
receivable(payable)
Innolux Corporation
CarUX Technology Inc.
Shanghai Innolux
Optoelectronics Ltd.
Innolux Japan Co., Ltd.
Ningbo Innolux
Optoelectronics Ltd.
Ningbo Innolux Display
Ltd.
InnoCare Optoelectronics
Corporation
InnoCare Optoelectronics
Corporation
InnoCare Optoelectronics
Corporation
Ningbo Innolux Display
Ltd.
Ningbo Innolux
Optoelectronics Ltd.
Ningbo Innolux Display
Ltd.
Innolux Europe B.V.		 Innocom Technology (Shenzhen)
Co., Ltd.
CARUX TECHNOLOGY PTE.
LTD.
CARUX TECHNOLOGY PTE.
LTD.
Innolux Corporation
Ningbo Innolux Display Ltd.
Ningbo Innolux Optoelectronics
Ltd.
InnoCare Optoelectronics Japan
Co., Ltd.
InnoCare Optoelectronics USA,
INC.
Ningbo Innolux Electronics Ltd.
Hon Hai Precision Industry Co.,
Ltd.
Hon Hai Precision Industry Co.,
Ltd.
PanelSemi Corporation
CARUX TECHNOLOGY PTE.
LTD.		 An indirect wholly-owned
subsidiary
An indirect wholly-owned
subsidiary
An indirect wholly-owned
subsidiary
Ultimate parent company
An indirect wholly-owned
subsidiary
An indirect wholly-owned
subsidiary
An indirect wholly-owned
subsidiary
An indirect wholly-owned
subsidiary
An indirect wholly-owned
subsidiary
Same major stockholder
Same major stockholder
Associates
An indirect wholly-owned
subsidiary		 Processing
expense
Processing
revenue
Processing
revenue
Service
revenue
Sales
Sales
Sales
Sales
Sales
Purchases
Purchases
Purchases
Service
revenue		 196,912
$ 3,699,637
3,277,440
144,956
4,797,351
955,651
326,480
263,226
113,964
1,263,017
1,003,863
118,086
429,423		 -
100
72
57
19
4
38
31
13
6
4
1
99		 60 days
60 days
60 days
60 days
60 days
60 days
60 days
60 days
60 days
90 days
90 days
60 days
60 days		 Cost plus
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions
Similar with
general
transactions		 No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference
No material
difference		 263,773)
($ 1,967,315
125,345
51,793
1,636,058
249,207
243,510
123,356
48,035
678,377)
(
581,869)
(
38,978)
(
145,349		 1
97
13
70
13
3
52
26
10
7
5
-
99

Table 4, Page 2

Innolux Corporation and Subsidiaries

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

June 30, 2022

June 30, 2022
Table 5
Creditor		 Counterparty Relationship
with the counterparty		 Balance as at
June 30, 2022
(Note A)		 Turnover
rate		 Overdue receivables Expressed in thousands of NTD
(Except as otherwise indicated)
Allowance for
doubtful accounts
Amount collected
subsequent to the
balance sheet date
Amount Action taken
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Ningbo Innolux Optoelectronics
Ltd.
Ningbo Innolux Display Ltd.
Foshan Innolux Optoelectronics
Ltd.
Nanjing Innolux Optoelectronics
Ltd.
CarUX Technology Inc.
Ningbo Innolux Optoelectronics
Ltd.
Innocom Technology (Shenzhen)
Co., Ltd.
Ningbo Innolux Display Ltd.
Innolux Corporation
Innolux Corporation		 CARUX TECHNOLOGY PTE.
LTD.
Innolux USA Inc.
Hon Hai Precision Industry Co.,
Ltd.
InnoCare Optoelectronics
Corporation
CarUX Technology Inc.
HONGFUJIN PRECISION
ELECTRONICS (YANTAI) CO.,
LTD.
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
CARUX TECHNOLOGY PTE.
LTD.
Ningbo Innolux Display Ltd.
Innolux Corporation
Ningbo Innolux Optoelectronics
Ltd.
Innolux USA Inc.
CARUX TECHNOLOGY PTE.
LTD.		 An indirect wholly-owned subsidiary
An indirect wholly-owned subsidiary
Same major stockholder
A subsidiary of the Company
An indirect wholly-owned subsidiary
An indirect wholly-owned subsidiary of
Hon Hai Precision Industry Co., Ltd.
Ultimate parent company
Ultimate parent company
Ultimate parent company
Ultimate parent company
An indirect wholly-owned subsidiary
An indirect wholly-owned subsidiary
Ultimate parent company
An indirect wholly-owned subsidiary
An indirect wholly-owned subsidiary
An indirect wholly-owned subsidiary		 5,288,027
$ 2,805,639
1,194,271
(Shown as other
receivables)
770,276
358,171
(Shown as other
receivables)
174,307
159,674
127,199
9,251,891
6,579,569
4,457,548
2,671,359
1,967,315
1,636,058
263,773
249,207		 1.94
4.41
-
1.97
-
1.57
0.02
8.24
3.00
4.34
6.63
9.17
3.88
6.20
1.35
6.66		 3,607,216
$ -
744,578
-
357,175
-
158,041
-
907,471
-
-
159,805
18,639
-
197,040
-		 Subsequent collection
-
Subsequent collection
-
Subsequent collection
-
Subsequent collection
-
Subsequent collection
-
-
Subsequent collection
Subsequent collection
-
Subsequent collection
-		 251,931
$ 242,928
210,908
335,038
67,456
156,649
86,773
3,023,751
4,096,868
4,457,548
1,337,803
1,104,405
922,032
-
166,173
-		 -
$ -
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Table 5, Page 1

Creditor Counterparty Relationship
with the counterparty		 Balance as at
June 30, 2022
(Note A)		 Turnover
rate		 Overdue receivables Overdue receivables Amount collected
subsequent to the
balance sheet date		 Allowance for
doubtful accounts
Amount Action taken
InnoCare Optoelectronics
Corporation
Innolux Europe B.V.
Shanghai Innolux Optoelectronics
Ltd.
InnoCare Optoelectronics
Corporation		 InnoCare Optoelectronics Japan Co.
CARUX TECHNOLOGY PTE.
LTD.
CARUX TECHNOLOGY PTE.
LTD.
InnoCare Optoelectronics USA,
INC.		 An indirect wholly-owned subsidiary
An indirect wholly-owned subsidiary
An indirect wholly-owned subsidiary
An indirect wholly-owned subsidiary		 243,510
$ 145,349
125,345
123,356		 5.64
5.94
9.01
3.83		 -
$ -
-
58,788		 -
-
-
Subsequent collection		 118,236
$ 76,770
125,345
30,292		 -
$ -
-
-

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

Table 5, Page 2

Innolux Corporation and Subsidiaries

Table 6

Significant inter-company transactions during the reporting period

For the six-month period ended June 30, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Number
(Note A)		 Companyname Counterparty Relationship
(Note B)		 Transaction(Note D and E) Transaction(Note D and E)
General ledger account Amount Transaction terms
(Note C)		 Percentage of consolidated total
operatingrevenues or total assets
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0		 Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation		 Innocom Technology (Shenzhen) Co., Ltd.
Innocom Technology (Shenzhen) Co., Ltd.
Nanjing Innolux Optoelectronics Ltd.
Nanjing Innolux Optoelectronics Ltd.
Ningbo Innolux Optoelectronics Ltd.
Ningbo Innolux Optoelectronics Ltd.
Foshan Innolux Optoelectronics Ltd.
Foshan Innolux Optoelectronics Ltd.
Foshan Innolux Optoelectronics Ltd.
Ningbo Innolux Display Ltd.
Ningbo Innolux Display Ltd.
Innolux USA Inc.
Innolux USA Inc.
Innolux USA Inc.
CarUX Technology Inc.
InnoCare Optoelectronics Corporation
InnoCare Optoelectronics Corporation
CARUX TECHNOLOGY PTE. LTD.
CARUX TECHNOLOGY PTE. LTD.
CARUX TECHNOLOGY PTE. LTD.
CARUX TECHNOLOGY PTE. LTD.		 1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1		 Processing expense
Accrued expenses
Processing expense
Accrued expenses
Processing expense
Accrued expenses
Sales
Processing expense
Accrued expenses
Processing expense
Accrued expenses
Sales
Accounts receivable
Other receivables
Accounts receivable
Sales
Accounts receivable
Sales
Service revenue
Accounts receivable
Other receivables		 196,912
$ 263,773)
(
6,122,561
2,671,359)
(
11,802,790
9,251,891)
(
832,450
14,777,675
4,457,548)
(
14,009,573
6,579,569)
(
7,002,448
2,805,639
358,171
159,674
257,119
174,307
4,544,942
175,444
5,288,027
1,194,271		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 -
-
5
1
9
2
1
12
1
11
1
5
1
-
-
-
-
4
-
1
-

Table 6, Page 1

Number
(Note A)		 Companyname Counterparty Relationship
(Note B)		 Transaction(Note D and E) Transaction(Note D and E)
General ledger account Amount Transaction terms
(Note C)		 Percentage of consolidated total
operatingrevenues or total assets
0
1
1
2
2
3
3
4
4
5
6
6
7
7
7
7
7		 Innolux Corporation
Shanghai Innolux Optoelectronics Ltd.
Shanghai Innolux Optoelectronics Ltd.
Innolux Europe B.V.
Innolux Europe B.V.
Ningbo Innolux Optoelectronics Ltd.
Ningbo Innolux Optoelectronics Ltd.
Ningbo Innolux Display Ltd.
Ningbo Innolux Display Ltd.
Innolux Japan Co., Ltd.
CarUX Technology Inc.
CarUX Technology Inc.
InnoCare Optoelectronics Corporation
InnoCare Optoelectronics Corporation
InnoCare Optoelectronics Corporation
InnoCare Optoelectronics Corporation
InnoCare Optoelectronics Corporation		 Ningbo CarUX Technology Ltd.
CARUX TECHNOLOGY PTE. LTD.
CARUX TECHNOLOGY PTE. LTD.
CARUX TECHNOLOGY PTE. LTD.
CARUX TECHNOLOGY PTE. LTD.
Ningbo Innolux Display Ltd.
Ningbo Innolux Display Ltd.
Ningbo Innolux Optoelectronics Ltd.
Ningbo Innolux Optoelectronics Ltd.
Innolux Corporation
CARUX TECHNOLOGY PTE. LTD.
CARUX TECHNOLOGY PTE. LTD.
Ningbo Innolux Electronics Ltd.
InnoCare Optoelectronics Japan Co., Ltd.
InnoCare Optoelectronics Japan Co., Ltd.
InnoCare Optoelectronics USA, INC.
InnoCare Optoelectronics USA, INC.		 1
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3		 Processing expense
Processing revenue
Accounts receivable
Service revenue
Accounts receivable
Sales
Accounts receivable
Sales
Accounts receivable
Service revenue
Processing revenue
Accounts receivable
Sales
Sales
Accounts receivable
Sales
Accounts receivable		 211,013
$ 3,277,440
125,345
429,423
145,349
4,797,351
1,636,058
955,651
249,207
144,956
3,699,637
1,967,315
113,964
326,480
243,510
263,226
123,356		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 -
3
-
-
-
4
-
1
-
-
3
-
-
-
-
-
-

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

(1) Number 0 represents the parent company.

(2) The subsidiaries are numbered in order from number 1.

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

3 refers to the subsidiary to the subsidiary.

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

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

Note E: For the information on transactions between the Company and the consolidated subsidiaries relating to nature of loan, please refer to Table 1.

Table 6, Page 2

Innolux Corporation and Subsidiaries

Table 7

Information on investees

For the six-month period ended June 30, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at June 30,2022 Shares held as at June 30,2022 Shares held as at June 30,2022 Net profit (loss) of
the investee for
the six-month
period ended June
30,2022		 Investment income
(loss) recognized by
the Company for the
six-month period
ended June 30,2022		 Footnote
Balance as at
June 30,2022		 Balance as at
December
31,2021		 Number of shares Ownership
(%)		 Book value
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation
Innolux Corporation		 Innolux Holding Limited
Keyway Investment
Management Limited
Landmark International Ltd.
Toppoly Optoelectronics
(B.V.I.) Ltd.
Innolux Hong Kong Holding
Limited
Innolux Singapore Holding Pte.
Ltd.
Yuan Chi Investment Co., Ltd.
InnoJoy Investment Corporation
InnoCare Optoelectronics
Corporation
Innolux Japan Co., Ltd.
iZ3D, Inc.
GIO Optoelectronics Corp.
INStek Corporation
Ampower Holding Ltd.
FI Medical Device
Manufacturing Co., Ltd.		 Samoa
Samoa
Samoa
BVI
Hong Kong
Singapore
Taiwan
Taiwan
Taiwan
Japan
USA
Taiwan
Taiwan
Cayman
Taiwan		 Investment holdings
Investment holdings
Investment holdings
Investment holdings
Investment holdings
Investment holdings
Investment company
Investment company
Holdings, R&D,
manufacturing and
distribution company
Holdings, R&D and
distribution company
Research and development
and sale of 3D flat monitor
Holdings, R&D,
manufacturing and
distribution company
R&D, manufacturing and
distribution company
Investment holdings
Production and selling of the
absorption for medical
element		 $ 6,192,509
62,197
33,438,542
3,674,115
3,231,780
754,943
1,217,235
1,674,054
205,000
1,682,751
-
451,168
35,300
1,717,714
73,500		 $ 6,192,509
62,197
33,438,542
3,674,115
3,231,780
754,943
1,217,235
1,674,054
205,000
1,682,751
-
451,168
35,300
1,717,714
73,500		 180,568,185
1,656,410
709,450,000
146,847,000
1,158,844,000
25,400,000
-
167,405,392
20,500,000
98
4,333
41,288,528
2,647,507
14,062,500
7,350,000		 100
100
100
100
100
100
100
100
59
54
35
76
40
50
49		 $ 18,166,649
104,195
51,816,617
6,452,260
5,774,868
151,842
878,440
2,360,744
404,624
1,733,747
-
415,867
28,739
866,243
359,821		 $ 197,941
3,433
975,085
140,655
( 354,326)
( 81,014)
200
( 77,796)
110,104
( 229,595)
-
( 12,948)
( 2,273)
( 8,163)
84,041		 $ 197,941
3,433
975,085
140,655
( 353,413)
( 81,014)
200
( 77,796)
64,601
( 124,992)
-
( 9,896)
( 910)
( 4,081)
41,180

Table 7, Page 1

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at June 30,2022 Shares held as at June 30,2022 Shares held as at June 30,2022 Net profit (loss) of
the investee for
the six-month
period ended June
30,2022		 Investment income
(loss) recognized by
the Company for the
six-month period
ended June 30,2022		 Footnote
Balance as at
June 30,2022		 Balance as at
December
31,2021		 Number of shares Ownership
(%)		 Book value
Innolux Corporation
Innolux Corporation
Innolux Holding
Limited
Innolux Holding
Limited
Toppoly Optoelectronics
(B.V.I.) Ltd.
Innolux Hong Kong
Holding Limited
Innolux Hong Kong
Holding Limited
Innolux Hong Kong
Holding Limited
CarUX Holding Limited
CARUX
TECHNOLOGY PTE.
LTD.
CARUX
TECHNOLOGY PTE.
LTD.
CARUX
TECHNOLOGY PTE.
LTD.
Innolux Japan Co., Ltd.
Rockets Holding
Limited
Rockets Holding
Limited
Suns Holding Ltd
Innolux Europe B.V.
Innolux Singapore
Holding Pte. Ltd.		 eLux Inc.
PanelSemi Corporation
Rockets Holding Limited
Suns Holding Ltd
Toppoly Optoelectronics
(Cayman) Ltd.
Innolux Hong Kong Limited
Innolux Japan Co., Ltd.
CarUX Holding Limited
CARUX TECHNOLOGY PTE.
LTD.
Innolux Optoelectronics Hong
Kong Holding Limited
Innolux Europe B.V.
CarUX Technology Inc.
Innolux USA Inc.
Stanford Developments Limited
Nets Trading Ltd.
Warriors Technology
Investments Ltd
Innolux Technology Germany
GmbH
INNOLUX
OPTOELECTRONICS INDIA
PRIVATE LIMITED		 USA
Taiwan
Samoa
Samoa
Cayman
Hong Kong
Japan
Cayman
Singapore
Hong Kong
Netherlands
Taiwan
USA
Samoa
Samoa
Samoa
Germany
India		 R&D of MicroLED
technology
Manufacturing of electronic
parts
Investment holdings
Investment holdings
Investment holdings
Distribution company
Holdings, R&D and
distribution company
Investment holdings
Holdings and distribution
company
Investment holdings
Holding, distribution and
R&D testing company
R&D, manufacturing and
distribution company
Distribution company
Investment holdings
Investment company
Investment company
Testing and maintenance
company
Distribution company		 $ 91,155
250,000
5,222,180
555,422
3,650,192
-
1,815,603
3,772,473
3,769,371
1,818,180
464,341
1,400,000
369,092
5,391,125
27,477
555,422
33,735
607,284		 $ 91,155
250,000
5,222,180
555,422
3,650,192
-
1,815,603
3,772,473
3,769,371
1,818,180
464,341
1,400,000
369,092
5,391,125
27,477
555,422
33,735
607,284		 300,000
25,000,000
160,504,550
18,177,052
146,817,000
35,000,000
82
125,231,749
125,131,749
162,897,802
375,810
140,000,000
12,842
164,000,000
900,001
18,177,052
100,000
144,095,499		 28
45
100
100
100
100
46
100
100
100
100
100
100
100
100
100
100
100		 $ 1,939
205,930
12,183,042
5,757,078
6,451,912
1,658,623
1,450,947
2,692,664
2,690,630
2,047,353
448,827
1,631,851
618,097
12,158,522
24,387
5,757,076
20,399
6,827		 ($ 22,058)
( 83,009)
99,339
98,602
140,655
( 159)
( 229,595)
( 249,565)
( 249,058)
( 52,847)
19,938
160,612
( 335,176)
99,339
-
98,602
590
( 79,430)		 ($ 4,895)
( 37,731)
99,339
98,602
140,655
( 159)
( 104,603)
( 249,565)
( 249,058)
( 3,110)
19,938
208,114
( 335,176)
99,339
-
98,602
590
( 79,430)

Table 7, Page 2

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at June 30,2022 Shares held as at June 30,2022 Shares held as at June 30,2022 Net profit (loss) of
the investee for
the six-month
period ended June
30,2022		 Investment income
(loss) recognized by
the Company for the
six-month period
ended June 30,2022		 Footnote
Balance as at
June 30,2022		 Balance as at
December
31,2021		 Number of shares Ownership
(%)		 Book value
Innolux Singapore
Holding Pte. Ltd.
Yuan Chi Investment
Co., Ltd.
Yuan Chi Investment
Co., Ltd.
Yuan Chi Investment
Co., Ltd.
InnoJoy Investment
Corporation
InnoJoy Investment
Corporation
Inno Capital
Corporation
InnoCare
Optoelectronics
Corporation
InnoCare
Optoelectronics
Corporation
InnoCare
Optoelectronics
Corporation
GIO Optoelectronics
Corp.		 INNOLUX
OPTOELECTRONICS
PHILIPPINES CORP.
INNOLUX
OPTOELECTRONICS INDIA
PRIVATE LIMITED
GIO Optoelectronics Corp.
VASTOUCH OPTRONICS
INC.
Inno Capital Corporation
CDIB-Innolux Limited
Partnership
CDIB-Innolux Limited
Partnership
InnoCare Optoelectronics Japan
Co., Ltd.
InnoCare Optoelectronics USA,
INC.
Innocare Optoelectronics
Europe B.V.
Double Star Inc.		 Philippines
India
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Japan
USA
Netherlands
Mauritius		 Manufacturer and
distribution company
Distribution company
Holding, R&D,
manufacturing and
distribution company
E-Paper Module / Assembly
Investment company
Investment company
Investment company
Distribution company
Distribution company
After-sales service company
Investment holdings		 $ 28,733
-
858
6,829
15,000
122,561
7,439
87,149
27,963
1,661
298,113		 $ 28,733
-
858
-
15,000
47,139
2,861
87,149
27,963
1,661
298,113		 5,000,000
1
77,235
599,799
1,500,000
-
-
30,010
900,000
500
10,000,000		 100
-
-
45
100
16
1
100
100
100
100		 $ 25,554
-
790
6,829
16,458
129,275
7,847
79,780
19,956
2,315
102,339		 $ 13
( 79,430)
( 12,948)
1,135
445
( 10,247)
( 10,247)
11,485
595
373
2,172		 $ 13
-
( 19)
-
445
( 1,688)
( 103)
11,485
595
373
2,172

Table 7, Page 3

Innolux Corporation and Subsidiaries

Information on investments in Mainland China

For the six-month period ended June 30, 2022

Table 8
Investee in Mainland
China		 Main business activities Paid-in capital
(Note A)		 Investment
method
(Note C)		 Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January 1,
2022		 Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the six-
month period ended June
30,2022		 Amount remitted from
Taiwan to Mainland
China/Amount remitted
back to Taiwan for the six-
month period ended June
30,2022		 Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of June 30,
2022		 Net income of
investee for
the six-month
period ended
June 30,2022		 Ownership
held by the
Company
(direct or
indirect)		 Investment
income (loss)
recognized by
the Company
for the six-
month period
ended June 30,
2022(Note B)		 Book value of
investments in
Mainland China
as of June 30,
2022
Accumulated
amount of
investment
income remitted
back to Taiwan
as of June 30,
2022
Footnote
Expressed in thousands of NTD
(Except as otherwise indicated)		 Book value of
investments in
Mainland China
as of June 30,
2022
Accumulated
amount of
investment
income remitted
back to Taiwan
as of June 30,
2022
Footnote
Expressed in thousands of NTD
(Except as otherwise indicated)		 Book value of
investments in
Mainland China
as of June 30,
2022
Accumulated
amount of
investment
income remitted
back to Taiwan
as of June 30,
2022
Footnote
Expressed in thousands of NTD
(Except as otherwise indicated)
Remitted to
Mainland
China		 Remitted
back to
Taiwan
Innocom Technology
(Shenzhen) Co., Ltd.
Guangzhou OED
Technologies Co., Ltd.
Ningbo Innolux
Optoelectronics Ltd.
Foshan Innolux
Optoelectronics Ltd.
Ningbo Innolux Display
Ltd.
Nanjing Innolux
Technology Ltd.
Nanjing Innolux
Optoelectronics Ltd.
Shanghai Innolux
Optoelectronics Ltd.
Foshan Innolux Logistics
Ltd.
GIO (Maanshan)
Optoelectronics Co., Ltd.
Ningbo CarUX
Technology Ltd.
Ningbo Innolux
Electronics Ltd.		 Manufacturing and selling
of LCD backend module
and related components
Manufacturing and selling
of electronic paper
Manufacturing and selling
of LCD backend module
and related components
Manufacturing and selling
of LCD backend module
and related components
Manufacturing and selling
of LCD backend module
and related components
Purchases and sales of
monitor-related components
Manufacturing and selling
of LCD backend module
and related components
Manufacturing and selling
of LCD backend module
and related components
Warehousing services
Manufacturing
Manufacturing and selling
of LCD backend module
and related components
Manufacturing and selling
of medical equipment		 $ 4,874,080
338,765
9,213,200
11,382,760
4,755,200
62,412
4,636,320
624,120
44,580
297,200
1,239,924
68,063		 2
2
2
2
2
2
2
2
2
2
3
1		 $ 3,771,817
59,440
218,889
11,382,760
4,755,200
62,412
4,280,738
-
44,580
297,200
-
94,272		 $ -
-
-
-
-
-
-
-
-
-
-
-		 $ -
-
-
-
-
-
-
-
-
-
-
-		 $ 3,771,817
59,440
218,889
11,382,760
4,755,200
62,412
4,280,738
-
44,580
297,200
-
94,272		 $ 99,339
( 209,681)
178,140
294,991
500,841
1,178
139,477
( 52,847)
3,427
2,175
( 139,088)
( 4,962)		 100
3
100
100
100
100
100
100
100
77
100
59		 $ 99,339
-
178,140
296,103
500,841
1,178
139,477
( 52,847)
3,427
1,665
( 138,658)
( 2,908)		 $ 12,158,472
22,948
22,820,603
22,697,875
6,297,014
644,103
5,807,789
2,090,432
99,339
78,162
904,049
59,236		 $ 1,102,263
-
5,130,711
-
-
-
-
-
-
-
-
-		 2.1
2.2
2.3
2.3
2.3
2.4
2.4
2.5
2.6
2.7

Table 8, Page 1

Ceiling on investments in Mainland China:

Companyname Accumulated amount of
remittance from Taiwan to
Mainland China a as of
June 30,2022		 Investment amount approved by the Investment
Commission of the Ministry of Economic Affairs
(MOEA)		 Ceiling on investments in Mainland China
imposed by the Investment Commission of
MOEA
Innolux Corporation 21,581,110
$		 29,539,951
$		 (Note D)

Note A: The relevant figures were listed in NT$. Where foreign currencies were involved, the figures were converted to NT$ using exchange rate. Note B: Profit or loss recognized for the year ended December 31, 2021 was audited by independent auditors.

Note C: The investment methods are as follows:

  1. Directly investing in Mainland China.

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

  3. 2.1. Through investing in Stanford Developments Limited in the third area, which then invested in the investee in Mainland China.

  4. 2.2. Through investing in Warriors Technology Investments Ltd in the third area, which then invested in the investee in Mainland China.

  5. 2.3. Through investing in Landmark International Ltd. in the third area, which then invested in the investee in Mainland China.

  6. 2.4. Through investing in Toppoly Optoelectronics (Cayman) Ltd. in the third area, which then invested in the investee in Mainland China.

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

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

  9. 2.7. Through investing in Double Star Inc. in the third area, which then invested in the investee in Mainland China.

  10. Others.

The company invested via the company investment entities in Mainland China to invest in Ningbo CarUX Technology Ltd. Except for the investment via the holding companies in Mainland China,

other investments shall not be approved by Investment Commission of the Ministry of Economic Affairs.

Note D: In accordance with “Rules Governing Applications for Investment or Technical Cooperation in Mainland China”, the Company has obtained the certificate of being qualified for operating headquarters, issued by the Industrial Development Bureau of the Ministry of Economic Affairs, the ceiling amount of the investment in Mainland China is not applicable to the Company.

  • Ⅰ. The amount approved by the Investment Commission of Ministry of Economic Affairs (MOEA) is USD 10,000 thousand, Amlink (Shanghai) Ltd. has finished liquidation in December 2019 but has not yet applied for the cancellation of investment with the Investment Commission of MOEA.

II. The amount approved by the Investment Commission of Ministry of Economic Affairs (MOEA) is USD 34,676 thousand, Interface Technology (ChengDu) Co., Ltd. disposed the equity interest held in its parent company, General Interface Solution (GIS) Holding Limited, on the open market but has not yet applied for the cancellation of investment with the Investment Commission of MOEA.

Table 8, Page 2

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